UK Supreme Court Dismisses Passing Off Action: Court Rules Reputation Is Not Sufficient to Establish Goodwill in a Trademark

The Supreme Court of the United Kingdom has clarified that reputation among consumers in the UK is not enough to establish goodwill in passing off actions. Claimants must demonstrate goodwill generated by customers buying the product or service in the UK.

The claimants, Starbucks (HK) Limited, brought a passing off and a trademark infringement action against the defendant, British Sky Broadcasting Group plc, for using the NOW TV mark. The trademark infringement claim was dismissed by a lower court and not considered by the Supreme Court.

Starbucks operated a digital television channel in Hong Kong, NOW TV, almost exclusively in the Chinese language. The channel had approximately 1.2 million subscribers in Hong Kong. It did not have any subscribers in the UK. However, a number of Chinese speakers permanently or temporarily resident in the UK in 2012 were aware of the NOW TV service through exposure to it when residing in or visiting Hong Kong.

The issue the Supreme Court had to consider was whether a plaintiff in a passing off action must also sell its goods or services to customers while the customers are in the UK, or whether it is sufficient to have a reputation among a significant section of the public within the UK.

The Court stated that where the claimant’s business is carried on abroad, it is not enough for a claimant to show that there are people in the UK who happen to be its customers when they are abroad. The Court noted that goodwill could be established if a claimant could show that there were people in the UK who, by booking with, or purchasing from, an entity in the UK, obtained the right to receive the claimant’s service abroad. However, Starbucks (HK) Limited was unable to establish facts to fall within this scenario.

For the reasons of the judgment in Starbucks (HK) Ltd & Anor v British Sky Broadcasting Group plc & Ors, [2015] UKSC 31 see:http://tinyurl.com/qztkhwg.

Additional Commentary is provided here.