UK Supreme Court: mere reputation not sufficient to succeed in passing off

In Starbucks (HK) Limited v British Sky Broadcasting Group plc ([2015] UKSC 31), the UK Supreme Court held that a claimant in a passing-off action must establish that it has actual goodwill in the United Kingdom, which involves the presence of customers in the jurisdiction for the products and services at issue.

The case pitted Starbucks (HK) Ltd, which has provided an internet television service in Hong Kong under the name NOW TV since 2003, against Sky, which launched a new internet television service in the United Kingdom in 2012 under the name NOW TV.

The court held that mere reputation is insufficient to amount to goodwill. If the claimant’s business is abroad, it is insufficient to show that there are people in the United Kingdom who happen to be customers when they are abroad. The mere accessibility of a website in the United Kingdom is insufficient without UK customers - this simply amounts to advertising in the jurisdiction, and a reputation acquired through advertising is insufficient to found a claim in passing off.

Counsel comment:

The judges ruled that reputation is not enough to support a passing-off case in the United Kingdom – you must enjoy actual goodwill there in the form of a paying customer base. The ruling comes despite the fact that Now TV Hong Kong started trading some years before Sky and provides a very similar service. Courts in other countries, such as Australia, may view these matters differently. This case provides important clarity and may affect the expansion plans of some companies. Businesses from outside the United Kingdom may find it difficult to challenge the use of similar trademarks to their own in the United Kingdom, so long as they do not have customers there.

Simon Ayrton, partner at Powell Gilbert