Skyscape Cloud Services Ltd v Sky Plc & Ors

The Claimant (“Skyscape”) supplies what are known as ‘cloud computer services’ to organisations within the UK public sector. Remote computer facilities are provided to customers who can then store, manage and process their data on line. The customers share and pay for use of the remote facilities, thus avoiding the need to invest in an installation which is dedicated to their own use.

Skyscape’s services are provided under the umbrella of a government scheme called ‘G-Cloud’. G-Cloud enables public sector organisations to use cloud services provided by companies in the private sector on a pay-as-you-go basis. In some cases the G-Cloud service enables the public sector body to provide access to the general public. An example mentioned in evidence was the facility created for HMRC which enables taxpayers to file returns online as well as permitting HMRC to process the returns.

The Defendants (“Sky”) form part of a group of companies (“the Sky Group”) which provides broadcasting and other communication services under the well-known mark SKY.

On 28 July 2014 Sky’s solicitors wrote to Skyscape alleging that Skyscape was infringing registered trade marks owned by companies within the Sky Group. Full details of four European Union trade marks and one United Kingdom trade mark were annexed to the letter (“the Cited Marks”) together with a list of 27 others. It drew attention to what was then the quite recent judgment of Asplin J in British Sky Broadcasting Group plc v Microsoft Corporation [2013] EWHC 1826 (Ch); [2014] IP & T 1, in which it was held, among other things, that the defendants’ use of the sign ‘SkyDrive’ for a product providing an on-line storage facility infringed the Sky Group’s registered trade marks for the word SKY. Sections of the judgment were quoted in the letter. A deadline of 4pm on 14 August 2014 was given to Skyscape to provide specified undertakings, in default of which the Sky Group reserved the right to bring proceedings.

Skyscape declined to give the undertakings in the form sought, although more limited undertakings were offered. For their part, the Sky Group declined to strike. Further correspondence ensued, but so far no proceedings for infringement have been brought by the Sky Group against Skyscape.

Skyscape say that they wish to have commercial certainty regarding the conduct of their business. They have therefore brought the present proceedings against Sky in which they seek a declaration that their use of the sign ‘Skyscape’ in relation to their services does not infringe any of the five Cited Marks. Four of the Cited Marks are owned by the third defendant and the other is owned by the second defendant. There is no counterclaim for infringement by Sky and no challenge by Skyscape to either the validity or scope of the Cited Marks.

In contrast with the Patents Act 1977 (see s.71), UK trade mark legislation does not include any express provision for the grant of a declaration of non-infringement (“DNI”) in the absence of a threat to bring infringement proceedings. Outside the threats provisions of the Trade Marks Act 1994 (s.21) the English jurisdiction for a DNI in relation to trade mark rights is derived solely from CPR Part 40.20 and the common law. Council Regulation (EC) No. 207/2009 (“the Trade Mark Regulation”) as amended by Regulation (EU) 2015/2424 of 16 December 2015 provides that an EU Trade Mark Court has jurisdiction to grant a declaration of non-infringement of an EU Trade Mark if such an action is permitted under national law (art.96(b)).

In Well Barn Shoot Ltd v Shackleton [2003] EWCA Civ 2; [2003] All ER (D) 182 Carnwath LJ traced the increasing acceptance by English courts that it can be appropriate and useful to exercise the discretion to grant a negative declaration, beginning from a low start:

“[50] … For example, in Guarantee Trust Co of New York v Hannay and Co [1915] 2KB 536, 564 Pickford LJ said:

“I think that a declaration that a person is not liable in an existing or possible action is one that will hardly ever be made, but that in practically every case the person asking it will be left to set up his defence in the action when it is brought.”

However, as Mr Mann accepts, recent cases have adopted a more flexible approach. Thus, in Camilla Cotton Oil Co v Granadex SA [1975] 1 LLR 470, [1976] 2 LLR 10, Lord Denning MR in the Court of Appeal and Lord Wilberforce in the House of Lords indicated, with varying degrees of emphasis, that the jurisdiction was not as confined as suggested by Pickford LJ, although Lord Wilberforce accepted that his words “warn us that we must apply some careful scrutiny” ([1976] 2 LLR 10, 14).

[51] In Messier-Dowty Ltd v SABENA SA [2001] WLR 2040, 2050, Lord Woolf MR summarised the modern approach as follows:

“41.

The approach is pragmatic. It is not a matter of jurisdiction, it is matter of discretion. The deployment of negative declarations should be scrutinised and their use rejected where it would serve no useful purpose. However, where a negative declaration would help to ensure that the aims of justice are achieved the court should not be reluctant to grant such declarations. They can and do assist in achieving justice ….

A specific hurdle that used to be in the way of a grant of a DNI has gone. Re Clay [1919] 1 Ch 66 was once authority for the proposition that a court will not grant a negative injunction unless a claim of right has been made by the defendant against the party seeking the declaration. This proposition was doubted by Lord Denning in Camilla CottonOil Co v Granadex SA [1975] 1 LLR 470, but anyway the introduction of the civil procedure rules, and specifically CPR 40.20 which permits the court to make “binding declarations whether or not any other remedy is claimed”, ushered in the new approach to negative declarations explained by Lord Woolf in Messier-Dowty. It requires no prior claim of right.

As has been seen, Lord Woolf said that an application for a negative declaration requires appropriate circumspection on the part of the court. In Nokia Corp v InterDigital Corp [2006] EWHC 802 (Pat) Pumfrey J said this:

“[20] … A line of authority running from Guaranty Trust Company of New York v Hannay & Co [1915] 2 KB 536 through Messier-Dowty Ltd v. Sabena SA [2001] 1 All ER 275, culminating in the judgment of Neuberger J in Financial Services Authority v Rourke (unreported) 19th October 2001, establishes three relevant principles:

i)

The correct approach to the question of whether to grant negative declarations was one of discretion rather than jurisdiction.

ii)

The use of negative declarations should be scrutinised and their use rejected where it would serve no useful purpose, but where such a declaration would help ensure that the aims of justice were achieved, the court should not be reluctant to grant a negative declaration.

iii)

Before a court can properly make a negative declaration, the underlying issue must be sufficiently clearly defined to render it properly justiciable.”

This seems to have been approved on appeal, [2006] EWCA Civ 1618; [2007] F.S.R. 23. The third principle was accepted by Arnold J in Actavis UK Ltd v Eli Lilly & Co [2016] EWHC 234 (Pat), at [34].

The third principle recited by Pumfrey J in Nokia has particular relevance in the present case. Attached as Annex 1 to this judgment is the relevant part of the order sought by Skyscape at the start of the trial.

The final sentence of the skeleton argument of Ms Michaels, who appeared for Skyscape, was:

“Obviously, it is open to the Court, if it sees fit, and depending upon the extent of any findings it makes, to grant a DNI in different terms to those sought.”

This seemed possibly to be not as innocuous as it looked. During Ms Michaels’ opening speech I asked her to elaborate on Skyscape’s idea of the correct approach by the court to an application for a DNI. It became clear that the real application being made by Skyscape, couched in reassuring and characteristically persuasive language by Ms Michaels, was that were I to decide that the declaration in Annex 1 was too wide in this or that regard, I should make a declaration in whatever narrower form I thought appropriate. Putting it bluntly (which Ms Michaels understandably did not), if I was not prepared to grant the DNI sought in full, Skyscape was willing to take whatever declaration it could get, at least pending any appeal.

To see where this would lead, the starting point was the specific order sought by Skyscape. It appears as Appendix 1 to this judgment. It is a DNI relating to (i) the sign SKYSCAPE in a variety of fonts, alternative colours and in upper and lower case, (ii) the sign SKYSCAPE CLOUD SERVICES in similarly various presentations, and (iii) 18 logos. For each of these signs the DNI is sought in relation to (a) 10 different types of service provided to the UK public sector in the UK and (b) the provision of services enabling transition to each of those 10 services. It can be seen that the DNI sought covers a very large number of combinations of signs and services.

Potentially all of these combinations had to be compared with the Cited Marks. The specifications of the five Cited Marks were long – in the case of four of them, spectacularly long. So the possibility of infringement would have to be assessed by comparing all the combinations of signs and services contemplated in the DNI with the Cited Marks across the range of goods and services specified in each of them. The logic of Skyscape’s case was that in the event that I were not prepared to accept the proposed DNI in full form, I should ring fence all of the combinations of Skyscape’s signs and services encompassed by the proposed order in respect of which I was prepared to grant a DNI.

I took the view that this would have been very unfair to Sky. Sky was entitled to direct my attention to what, from its standpoint, was the most vulnerable part of the DNI. It could point to a narrow range of Skyscape’s signs when used for a narrow range of services, or even just one of each. In other words Sky could attempt to persuade me that Skyscape’s sign X, when used for Y services, would infringe part P of the specification of Cited Mark Q. If I were convinced by Sky’s argument, the DNI sought would be refused. It would be irrelevant that other combinations of Skyscape’s sign and service within the draft Order would not infringe any part of the specifications of any of the Cited Marks.

By contrast, according to Skyscape’s preferred approach and assuming that I was not prepared to grant the DNI sought as a whole, after hearing the evidence I would be required to consider all combinations of sign and service within the draft order and then compare each combination with each field in the endless prairie of goods and services specified in Sky’s five Cited Marks. No doubt some uses of Skyscape’s signs would not infringe some parts of the specifications (bleaching preparations, vehicles adapted for use with tidal power, vanity cases, horticulture and forestry services, etc.). But the variables were such that there was a kaleidoscope of possible outcomes. The point was that during the trial Mr Roberts, who appeared for Sky, would have had no clear idea where I might be tempted to draw the dividing lines between infringement and non-infringement – where I might draw the ring fences – and therefore where to direct his arguments. Taken to extreme, his only alternative would have been exhaustively to go through all combinations of Skyscape’s signs and services, each combination to be compared with each of the goods and services specified in each of the five Cited Marks, or at least the ones that mattered to Sky, to make sure that I had been addressed on all such comparisons. That was never going to happen.

Ms Michaels addressed my concerns. First, she submitted, Mr Roberts’ task would not be nearly as bad as it seemed. Groups of signs as used with particular groups of services could be lumped together, as could sections of the specification of each of the Cited Marks. Ms Michaels suggested that Mr Roberts would be able to make submissions directed at groupings of signs and services when compared with just targeted sections of the specification of each of the Cited Marks. His arguments on infringement for these groupings of sign and service would then stand or fall together.

Taking things out of order, on the second day of the trial and in support of this submission, Ms Michaels handed up a table. The specifications of Sky’s Cited Marks were each divided into groups. The goods or services which Sky had highlighted as being of particular concern were identified for each group. If I understood correctly, 12 relevant groups were identified. For each of these groups, another column stated whether any of Skyscape’s services were either (a) similar, (b) complementary or (c) dissimilar. Unfortunately the supposed exercise in simplification broke down at this point because for many of the groups Skyscape’s services were not alleged to fall into just one of these three alternatives: some were similar, others complementary and others again dissimilar, depending on which part of the specification of the Cited Mark the comparison was directed to. Also, the table was only concerned with similarity between Skyscape’s services and the goods and services specified in the Cited Marks. It ignored whether, and the extent to which, each of Skyscape’s many signs identified in the draft DNI were identical or similar to each of the Cited Marks. Nor did it take into account whether there might be different average consumers through whose eyes the comparison of mark and sign would have to be made. Two layers of complexity were left out. I have to say that the table had the opposite effect of the one intended.

The real problem with the table, though, was that it was produced far too late. The categorisations of goods and services as being similar, complementary or dissimilar was Skyscape’s. Sky was entitled to challenge the table, to direct evidence to those categorisations and to cross-examine Skyscape’s witnesses. None of that was possible because the table emerged only after cross-examination was over.

I would accept that to some degree, perhaps to a large degree, argument about which parts of which Cited Marks may not be infringed by the use of any of Skyscape’s signs for any of its services (assuming the blanket DNI sought was not appropriate) could have been simplified for trial. I am not sure this would have been easy, but to stand any chance of working it would have been essential for Skyscape to address this at an early stage, before the CMC, so that by the time of the CMC it could present alternative draft DNIs, of sufficiently small number to be manageable. Both parties could then have prepared for trial on that basis. I would add that on the facts of this case I doubt that it would ever have been appropriate for Skyscape to seek one or more alternative DNIs in any form other than being fully set out and fixed in a draft order filed in good time before the trial.

In this context Ms Michaels referred me to the judgment of Kitchin J (as he then was) in Kingspan Group plc v Rockwool Limited [2011] EWHC 1066 (Ch). This followed an earlier judgment in the trial of two actions. In the first action Kingspan sued Rockwool and in the second action it was the other way around. The companies were competitors and hotly contested what each was lawfully allowed to say about the other in comparative advertising campaigns. They agreed to seek rival declarations from the court about what could be said, based on the laws of registered trade mark infringement and malicious falsehood. In the first judgment certain declarations sought by Kingspan were made, those sought by Rockwool were not. But Rockwell sought to make the most of the findings of fact contained in the judgment. At a subsequent hearing Rockwool asked the court to make five alternative declarations based on those earlier findings. Kitchin J agreed to consider this and the second time around made two of the five alternative declarations sought. Ms Michaels said that Kitchin J’s willingness to contemplate making alternative declarations after giving judgment demonstrated just the sort of flexibility that I should emulate in the present case.

I do not think that this compares like with like. It is true that the declarations sought by Rockwool had not been identified until after the trial, but the parties had apparently had a full and fair opportunity to address the factual disputes on which they were based. The court was being asked to formalise findings of fact already made in a series of alternative declarations. Moreover Kitchin J was requested to review the consequences of five issues contested at trial. He was not being asked to make fresh findings on a long series of points which neither party had directly addressed.

Ms Michaels’ final argument was that Skyscape should be no worse off just because it was the claimant seeking a DNI. She submitted that there would have been no difficulty if Sky were the claimant alleging that Skyscape’s various uses of its signs infringed Sky’s Cited Marks.

If Sky had been the claimants, alleging infringement of the Cited Marks by Skyscape, I do not at all believe that Sky would have been given free scope to argue the case as they pleased. It seems to me that there would have been the potential for some severe case management at the CMC, assuming Sky had not already streamlined their case. Sky would first have been obliged to limit the scope of the specification of the Cited Marks on which they relied. Secondly, Sky may have been ordered to adopt the grouping approach – grouping combinations of Skyscape’s signs with Skyscape’s services – so that infringement could be considered under a limited number of grouped heads. Alternatively, Sky would have been invited to nominate a limited number of specific alleged infringements by Skyscape. All this would have been argued out at the CMC.

In fact, the problem about Skyscape’s approach to the DNI sought was aired to some extent at the CMC in the present proceedings. It resulted in my making an Order at the CMC on 15 June 2015, the first paragraph of which was:

“1.

The Claimant [shall] serve on the Defendants by 4pm on 26 June 2015 an exhaustive and unambiguous list of the acts carried out by the Claimant for which the Declaration is sought (the ‘Claimant’s Particulars of Non-Infringement’).”

Skyscape can have been in no doubt that it was required to list, exhaustively and unambiguously, all acts in respect of which it wanted a DNI – all combinations of sign and services in conjunction with all the goods and services specified in the Cited Marks. The Particulars of Non-Infringement, later to be presented in the form of the draft DNI sought, were not served until 24 July 2015. The document was amended twice. The final version was not served until 8 April 2016, two and a half weeks before the trial (Appendix 1). In my view Sky was entitled to regard this document as Skyscape’s last word on the scope of the declaration it wanted. That being so, Sky was entitled to take the position that if the court were to be persuaded that Skyscape was not entitled to any part of the declaration, the DNI would be refused.

Applications for a DNI in relation to trade mark rights are unusual but can serve a useful purpose. For instance, I can see no real difficulty in granting a trade mark DNI if the declaration sought is in relation to, say, all fair and notional use of one or even a number of identified signs. In such a case the court would test the application for a DNI by comparing the trade mark and the signs in relation to goods or services of the alleged infringer which are identical or closest to those for which the trade mark is registered – since, as I have said, the hypothesis would be that the defendant could use the sign for any goods or services. And in such a case the court might be prepared hold that a DNI should be granted in relation to sign A, though not sign B. Flexibility of outcome in that sense would be possible.

But where the applicant seeks a qualified and detailed DNI and wants complete flexibility in the possible outcome, it risks the sort of difficulties that Skyscape has run into in this case. The number of combinations of sign and service which would benefit from Skyscape’s proposed DNI is large. In Skyscape’s perception, effectively all of them must be considered by the court so that a conclusion can be reached on infringement in respect of each of them. In my view this contravenes Pumfrey J’s third principle in Nokia: the issue to be decided by the court has not been sufficiently clearly defined to render it properly justiciable.

Going back to Ms Michaels’ opening speech on the first day of the trial, I said that I would only consider Skyscape’s draft DNI as a whole and that Sky need not address possible subsets of Skyscape’s signs and services that might merit a DNI and therefore need not cross-examine on that basis. However I informed Ms Michaels that if Skyscape felt that it was able to present more limited proposed DNIs that could fairly be addressed as a whole by the court after the evidence was closed, Skyscape could serve them by the start of the following day and I would hear argument as to whether they should be considered.

Two revised proposed DNIs were provided by Skyscape at the start of the second day of the trial. They form Appendices 2 and 3 respectively, each shown with alterations from Appendix 1.

There were two principal changes embodied in the first alternative draft order. First, the number of signs to be considered was reduced by deleting Annex B. Second and most significantly, the proposed DNI was limited by reference to what Skyscape had done in the past. Ms Michaels explained that a DNI in this form would clear any uses of the signs made by Skyscape so far, but would have no effect on anything Skyscape may do in the future. The cut-off date would presumably be the date on which judgment is handed down.

I would be uneasy about making a negative declaration clearing only acts done in the past. I think it is almost inevitable that Skyscape would be tempted to say that since the court has ruled that act A did not infringe in the past then the same act could not infringe in the future, so the declaration might in practice be treated as if it had ongoing effect. That being so, Skyscape and indeed the court should come clean and make a declaration (if any) which clearly relates both to past and potential future acts of the claimant.

However the main difficulty with the first revised draft order was that it introduced an unacceptable degree of uncertainty as to the effect of the proposed DNI. Its scope would depend on what Skyscape has done in the past. The precise nature of all relevant uses of its signs by Skyscape so far has not been explored because it has not been directly in issue. The limits of the proposed order are in practice known only to Skyscape. If they had been explored, such as to make it possible to draw up an unambiguous list of Skyscape’s uses of its signs to date, any DNI could and should then have been drafted by reference to that list. The scope of a DNI should be apparent from the words of the declaration itself and should not require the reader to conduct research into related facts.

The most important change embodied in Skyscape’s second revised draft order was that in place of limiting its use of the signs by a general reference to use only for services to the UK public sector entities, the limitation was made more precise by listing the public sector bodies to which the services must be provided. They are set out in Annex C to the proposed order. I was told that the list is drawn from, and is a sub-set of, UK public sector bodies identified on a government website.

This was intended to get around an ambiguity inherent in the qualification on use contained in the original DNI. As can be seen in Appendix 1, in order to limit the declaration sought and thus to distance its scope from that of the Cited Marks, the original proposed DNI cleared use of the signs by Skyscape only where that use was made in relation to a specified list of services, and even then only services

“…provided by or with the licence of the Claimant to UK public sector entities either through G-Cloud or otherwise in compliance with public procurement requirements, and in accordance with the security standards required therefor”

The second revised draft order was potentially an improvement over the original order sought. But Mr Roberts complained that he had not had the opportunity properly to consider the quite lengthy Annex C, to determine whether it was sufficiently clear and if necessary to cross-examine Skyscape’s witnesses on it. I think that complaint was justified.

Having heard argument on Skyscape’s two alternative draft orders, at the trial I ruled that I would consider neither of them. My reasons are as stated above.

I doubt it makes any difference. Sky would still have been entitled to focus on a limited number of combinations of a Skyscape sign and a Skyscape service (or even just one combination) within the scope of each of the orders sought and say that this would infringe at least one of the Cited Marks. Sky’s focussed argument may well have been the same for all three draft DNIs so that in practice they would have stood or fallen together.

Mr Roberts therefore addressed me only on the declaration sought in the form set out in Appendix 1. He also narrowed his attack at my request by advancing his best case for infringement of the Cited Marks by Skyscape’s use of signs for services which fall within the draft order. The best case was that EU Trade Mark No. 6870992 (which I will refer to as “the SKY Mark”) had been infringed in relation to the following parts of the specification of that mark:

Of these, Skyscape admitted that it provided the services identical to ‘electronic mail services’ in Class 38. Skyscape also admitted providing one other category of service which did not appear in Sky’s shortlist (computer services for accessing and retrieving information, messages, text, sound, images and data via a computer or computer network). Sky alleged that the Class 9 goods were extremely similar to services offered by Skyscape and that the two types of service in Class 42 were identical or extremely similar. It is not necessary for me to resolve the arguments about similarity and identicality. I can test Skyscape’s application by reference to electronic mail services: email services.

The acts of infringement relied on by Sky within its narrowed best case were all uses by Skyscape of its word sign – Skyscape’s various logos fell away from argument. So the comparison of mark and sign I had to consider was just ‘Sky’ and ‘Skyscape’ in relation to email services.

An important part of Skyscape’s case was that the draft DNI limited the use of its signs by reference in particular to G-Cloud and the public sector. I will therefore say something more about how and to whom Skyscape’s services are supplied. This is not directly relevant to anything I have to decide since I am only concerned with the notional acts set out in the draft order. But when I asked, Ms Michaels emphasised that the declaration was intended to be comprehensive: to clear all past uses by Skyscape of its signs and all uses contemplated for the future. It follows that what Skyscape has done in the past and intends to do in the future provides a guide at least to what Skyscape thinks the draft DNI means.

Cloud computing is a development of the computer industry dating from the first decade of the century. Simon Hansford, who is the CEO of Skyscape, explained in his witness statement that Skyscape’s business has been built on the government ‘G-Cloud’ initiative, under which suppliers from the private sector, approved by the government, offer cloud services to public sector bodies. The services are accessed via an online catalogue called ‘the Digital Marketplace’. A prospective customer follows a six-step process to identify the services it requires. The catalogue will produce a list of results which can be further filtered. Ultimately the potential customer will be presented with a shortlist of suitable suppliers of that service. Mr Hansford emphasised that the search would be done by reference to function, not by a supplier’s name.

The services offered on the Digital Marketplace divide into four categories, of which Skyscape offers the first three:

Mr Hansford said that Skyscape had a turnover of £16.5 million from the provision of IaaS, PaaS and SaaS in 2015 and he estimated that this would rise to £31.8 million in 2016. Skyscape currently has 30% of the market in all IaaS offered under the G-Cloud scheme. Its customers include DVLA (Driver and Vehicle Licensing Agency) in Swansea and the Border Services division of the Home Office. Skyscape also offers services which enable its customers to transition from conventional computer systems to cloud computing.

The Trade Mark Regulation has been amended by the entry into force of Regulation (EU) 2015/2424 on 23 March 2016. No transitional provisions were identified in the latter Regulation but counsel were agreed that I should apply the Trade Mark Regulation in its earlier form because these proceedings were started before the Regulation was amended. Whether or not that is right, counsel were also agreed that the changes made no difference here and in no way affected the authority of the various judgments cited.

The point at issue was whether any of the uses of the sign ‘Skyscape’ contemplated in the draft DNI would infringe those parts of the specification of EU Trade Mark No. 6870992 – SKY – identified above, pursuant either to art.9(1)(b) or 9(1)(c) of the Trade Mark Regulation (which have become art.9(2)(b) or 9(2)(c) in its amended form).

The Court of Appeal in Comic Enterprises Ltd v Twentieth Century Fox Film Corporation [2016] EWCA Civ 41; [2016] E.T.M.R. 22, at [28] identified six criteria to be satisfied in order to establish infringement under art.5(1)(b) of Directive 2008/95/EC (“the Trade Mark Directive”), the provision equivalent to art.9(1)(b) of the Regulation:

“[28] A proprietor of a registered trade mark alleging infringement under art.5(1)(b) of the Directive must satisfy six conditions, namely: (i) there must be use of a sign by a third party within the relevant territory; (ii) the use must be in the course of trade; (iii) it must be without the consent of the proprietor; (iv) it must be of a sign which is identical with or similar to the trade mark; (v) it must be in relation to goods or services which are identical with or similar to those for which the trade mark is registered; and (vi) it must give rise to a likelihood of confusion.”

Conditions (i) to (iii) would undoubtedly be satisfied by Skyscape’s use of its signs as contemplated in the DNI so I need say no more about them.

In an action for infringement pursuant to art.9(1)(b) or its equivalent in the Trade Mark Directive, before the court considers whether there is a likelihood of confusion it must consider whether the trade mark proprietor has satisfied threshold conditions (iv) and (v) identified in Comic Enterprises. In Maier v Asos plc [2015] EWCA Civ 220; [2015] F.S.R. 20, Kitchin LJ said (at [73]):

“… liability is confined to those cases in which the registered trade mark and the sign complained of are the same or similar and where the goods or services in issue are the same or similar. Similarity is not just a matter to be taken into account in the assessment of the likelihood of confusion; it is also a threshold requirement before infringement can be found.”

In J.W. Spear & Sons Ltd v Zynga, Inc [2015] EWCA Civ 290; [2015] F.S.R. 19, Floyd LJ considered the threshold requirement of similarity between mark and sign and said this:

“[60] Thus I would summarise the position in the following way:

(i)

The court should assess the phonetic, visual and conceptual similarity of mark and sign and decide whether, overall, mark and sign would be perceived as having any similarity by the average consumer.

(ii)

If no overall similarity at all would be perceived, the court would be justified in declining to go on and consider the likelihood of confusion applying the global appreciation test, as art.9(1)(b) is conditional on the existence of some similarity. Such situations are not likely to occur often in contested litigation, but where they do occur, it is not legitimate to take account of any enhanced reputation or recognition of the mark.

(iii)

Where the average consumer would perceive some overall similarity, however faint, the court must go on to conduct the global appreciation test for the likelihood of confusion, taking account where appropriate of any enhanced reputation or recognition of the mark.

(iv)

In conducting the global appreciation test the court must take forward its assessment of the degree of similarity perceived by the average consumer between mark and sign.”

The two threshold requirements are thus not onerous. If there is no identity of mark and sign, or of goods or services, the trade mark proprietor need only satisfy the court that there is at least some faint similarity between mark and sign to satisfy condition (iv) and likewise at least some faint similarity between goods and/or services to satisfy condition (v).

In the case of an application for a DNI the burden is of course reversed and becomes a correspondingly heavy one: with regard to each of conditions (iv) and (v), has the applicant established that there is not even some faint similarity?

In Comic Enterprises Kitchin LJ set out the correct approach to the likelihood of confusion:

“[31] Turning to Condition (vi), this court explained the general approach to be adopted to the assessment of the likelihood of confusion in Specsavers International Healthcare Ltd v Asda Stores Ltd [2012]EWCA Civ 24; [2012] F.S.R.19 at [51]–[52]. We endorsed at [52] the following summary of the key principles developed by the Trade Marks Registry as being sufficient for the determination of many of the disputes coming before it:

“52.

…

(a)

the likelihood of confusion must be appreciated globally, taking account of all relevant factors;

(b)

the matter must be judged through the eyes of the average consumer of the goods or services in question, who is deemed to be reasonably well informed and reasonably circumspect and observant, but who rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind, and whose attention varies according to the category of goods or services in question;

(c)

the average consumer normally perceives a mark as a whole and does not proceed to analyse its various details;

(d)

the visual, aural and conceptual similarities of the marks must normally be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive and dominant components, but it is only when all other components of a complex mark are negligible that it is permissible to make the comparison solely on the basis of the dominant elements;

(e)

nevertheless, the overall impression conveyed to the public by a composite trade mark may, in certain circumstances, be dominated by one or more of its components;

(f)

and beyond the usual case, where the overall impression created by a mark depends heavily on the dominant features of the mark, it is quite possible that in a particular case an element corresponding to an earlier trade mark may retain an independent distinctive role in a composite mark, without necessarily constituting a dominant element of that mark;

(g)

a lesser degree of similarity between the goods or services may be offset by a greater degree of similarity between the marks, and vice versa;

(h)

there is a greater likelihood of confusion where the earlier mark has a highly distinctive character, either per se or because of the use that has been made of it;

(i)

mere association, in the strict sense that the later mark brings the earlier mark to mind, is not sufficient;

(j)

the reputation of a mark does not give grounds for presuming a likelihood of confusion simply because of a likelihood of association in the strict sense;

(k)

if the association between the marks causes the public to wrongly believe that the respective goods [or services] come from the same or economically-linked undertakings, there is a likelihood of confusion.”

[32] In Maier we explained (at [76]) that to this summary should be added the further guidance provided by the Court of Justice in Canon (at [29]) that the risk that the public might believe that the goods or services in question come from the same undertaking or, as the case may be, from economically-linked undertakings, constitutes a likelihood of confusion for the purposes of the provision.

[33] The decision in Specsavers clarified one further important point concerning the context of the accused use. As this court said at [87]:

“… In assessing the likelihood of confusion arising from the use of a sign the court must consider the matter from the perspective of the average consumer of the goods or services in question and must take into account all the circumstances of that use that are likely to operate in that average consumer’s mind in considering the sign and the impression it is likely to make on him. The sign is not to be considered stripped of its context.”

I should mention two further principles, both discussed in Maier v Asos. First, with regard to likelihood of confusion, the trade mark proprietor is entitled to rely on a notional and fair use of the mark in relation to all of the goods and services in respect of which it is registered, see Maier at [78]. In the present case I must therefore assess the likelihood of confusion by reference to that part, or those parts, of the specifications of the Cited Marks closest to any of the services encompassed by the draft DNI. The actual use of the Cited Marks by Sky has a bearing on whether a mark has a distinctive character, and this can affect the likelihood of confusion, but is otherwise irrelevant to the assessment under art.9(1)(b).

Secondly, the Court of Appeal in Maier discussed the relevance of evidence of actual confusion among individuals and the weight to be given to the absence of actual confusion. Kitchin LJ said this at [80]:

“ … the likelihood of confusion must be assessed globally taking into account all relevant factors and having regard to the matters set out in Specsavers [2012] F.S.R. 19 at [52] and repeated above. If the mark and the sign have both been used and there has been actual confusion between them, this may be powerful evidence that their similarity is such that there exists a likelihood of confusion. But conversely, the absence of actual confusion despite side by side use may be powerful evidence that they are not sufficiently similar to give rise to a likelihood of confusion. This may not always be so, however. The reason for the absence of confusion may be that the mark has only been used to a limited extent or in relation to only some of the goods or services for which it is registered, or in such a way that there has been no possibility of the one being taken for the other. So there may, in truth, have been limited opportunity for real confusion to occur.”

Returning to Comic Enterprises, Kitchin LJ considered the characteristics of the average consumer and in particular, how the court should put itself into the position of the average consumer when assessing the likelihood of confusion:

“[34] All of this guidance makes clear that the matter must be assessed from the perspective of the average consumer. This court considered the characteristics of the average consumer at some length in Interflora Inc v Marks and Spencer plc [2015] EWCA Civ 1403; [2014] F.S.R. 10 from [107]-[130]. The following general points emerge further to those set out above:

(i)

the average consumer is a hypothetical person or, as he has been called, a legal construct; he is a person who has been created to strike the right balance between the various competing interests including, on the one hand, the need to protect consumers and, on the other hand, the promotion of free trade in an openly competitive market, and also to provide a standard, defined in EU law, which national courts may then apply;

(ii)

the average consumer is not a statistical test; the national court must exercise its own judgment in accordance with the principle of proportionality and the principles explained by the Court of Justice to determine the perceptions of the average consumer in any given case in the light of all the circumstances; the test provides the court with a perspective from which to assess the particular question it has to decide;

(iii)

in a case involving ordinary goods and services, the court may be able to put itself in the position of the average consumer without requiring evidence from consumers, still less expert evidence or a consumer survey. In such a case, the judge can make up his or her own mind about the particular issue he or she has to decide in the absence of evidence and using his or her own common sense and experience of the world. A judge may nevertheless decide that it is necessary to have recourse to an expert’s opinion or a survey for the purpose of assisting the court to come to a conclusion as to whether there is a likelihood of deception;

(iv)

the issue of a trade mark’s distinctiveness is intimately tied to the scope of the protection to which it is entitled. So, in assessing an allegation of infringement under art.5(1)(b) of the Directive arising from the use of a similar sign, the court must take into account the distinctiveness of the trade mark, and there will be a greater likelihood of confusion where the trade mark has a highly distinctive character either per se or as a result of the use which has been made of it. It follows that the court must necessarily have regard to the impact of the accused sign on the proportion of consumers to whom the trade mark is particularly distinctive; and

(v)

if, having regard to the perceptions and expectations of the average consumer, the court concludes that a significant proportion of the relevant public is likely to be confused such as to warrant the intervention of the court then it may properly find infringement.”

There are issues concerning the average consumer which arise in this case and which are not spelt out in the foregoing judgments, so I must discuss them further.

It is well established that the relevant average consumer is the average consumer of “the goods or services in question”, see, for example, the judgment of the CJEU in Specsavers International Healthcare Ltd v Asda Stores Ltd (C-252/12) [2014] F.S.R. 4, at [35].

It would seem that the goods or services in question are those supplied by the alleged infringer. For instance, in Interflora the alleged infringement consisted of the use of the trade mark INTERFLORA as a ‘key word’ in the Google ‘Adwords’ referencing service purchased by the defendant, Marks & Spencer. An internet user using ‘Interflora’ as a search term would find Marks & Spencer’s sponsored adverting link appearing on his screen. The Court of Justice (C-323/09) [2011] E.C.R. I-212) held (at [44] and [50]) that the average consumer was an internet user. Although not stated, the logic would appear to be that an internet user would come across the alleged sign whereas a consumer who shops exclusively in the high street would not. (See also Google France Sarl v Louis Vuitton Mallettier SA (C-236/08) [2010] R.P.C. 19 at [84].)

I turn to what such an average consumer is deemed to know or recall. It is useful to repeat here one of the principles applied by the Trade Marks Registry as approved by the Court of Appeal in Specsavers and also an observation of Kitchin LJ in the same case, both quoted above in their respective contexts:

“(b)

the matter must be judged through the eyes of the average consumer of the goods or services in question, who is deemed to be reasonably well informed and reasonably circumspect and observant, but who rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind, and whose attention varies according to the category of goods or services in question;”

“[87] In my judgment the general position is now clear. In assessing the likelihood of confusion arising from the use of a sign the court must consider the matter from the perspective of the average consumer of the goods or services in question and must take into account all the circumstances of that use that are likely to operate in that average consumer’s mind in considering the sign and the impression it is likely to make on him. The sign is not to be considered stripped of its context.”

The average consumer thus relies on an imperfect picture of the mark or marks, kept in his mind, when he or she encounters the sign in context. In my view this imperfect picture is not confined to the mark itself. The average consumer might clearly recall the mark but not so clearly remember matters such as whether it is used by the proprietor with other words or symbols and if so, what they are.

The hypothesis is therefore that the average consumer is someone who a consumer of the type of goods or services supplied by the alleged infringer and as a consequence is liable to come across the accused sign. He or she has the trade mark alleged to be infringed, and/or the way in which it is used by the proprietor, imperfectly in mind when he or she sees the sign used in its context. Since the trade mark proprietor is entitled to rely on a notional and fair use of the mark in relation to all of the goods and services in respect of which it is registered, the average consumer must be deemed to have imperfectly in mind the mark as used across the full range of specified goods and services. To the extent that the mark has a reputation – a distinctive character – in relation to any of those goods or services, the average consumer will be aware of that too.

It seems to me that this hypothesis applies both to the assessment of whether there a likelihood of confusion under art.9(1)(b) and to whether there is a link between mark and sign under art.9(1)(c) in the mind of the average consumer.

In Comic Enterprises the Court of Appeal reviewed the law in relation to art.5(2) of the Trade Mark Directive, the provision equivalent to art.9(1)(c) in the Trade Mark Regulation:

“[110] Further, infringement under this provision requires a degree of similarity between the mark and the sign such that the average consumer makes a connection between them. It is not necessary that the degree of similarity be such as to create a likelihood of confusion, but it must be such that the average consumer establishes a link between the mark and the sign; and this is to be assessed globally having regard to all of the circumstances of the case: Specsavers at [120]; Adidas-Salomon at [29]–[30]. The fact that for the average consumer the sign would call the mark to mind is tantamount to the existence of such a link: Specsavers at [122]; Intel Corp Inc v CPM United Kingdom Ltd (C-252/07) EU:C:2008:655; [2009] R.P.C. 15 at [60].

[111] In Interflora this court explained (at [69]) that a proprietor of a registered trade mark alleging infringement under art.5(2) must therefore show that the following requirements are satisfied: (i) the registered trade mark must have a reputation in the relevant territory; (ii) there must be use of a sign by a third party in the relevant territory; (iii) the use must be in the course of trade; (iv) it must be without the consent of the proprietor; (v) it must be of a sign which is identical with or similar to the trade mark; (vi) it must be in relation to goods or services; (vii) it must give rise to a link between the sign and the trade mark in the mind of the average consumer; (viii) it must give rise to one of three types of injury, that is to say: (a) detriment to the distinctive character of the trade mark; (b) detriment to the repute of the trade mark; or (c) unfair advantage being taken of the distinctive character or repute of the trade mark; and (ix) it must be without due cause.

[112] In this case we are concerned only with the first and second of these types of damage, that is to say detriment to the distinctive character of the Mark and detriment to the repute of the Mark.

[113] The Court of Justice explained what is meant by detriment to the distinctive character of a mark in Intel at [29]:

“As regards, in particular, detriment to the distinctive character of the earlier mark, also referred to as ‘dilution’, ‘whittling away’ or ‘blurring’, such detriment is caused when that mark’s ability to identify the goods or services for which it is registered and used as coming from the proprietor of that mark is weakened, since use of the later mark leads to dispersion of the identity and hold upon the public mind of the earlier mark. That is notably the case when the earlier mark, which used to arouse immediate association with the goods and services for which it is registered, is no longer capable of doing so.”

[114] The Court then went on (at [72]–[76]) to explain how such injury might be established. In summary, it is not necessary for the earlier mark to be unique, although the more “unique” it appears, the greater the likelihood that a later identical or similar mark will be detrimental to its distinctive character; second, the use of an identical or similar mark may suffice, in some circumstances, to cause actual and present detriment to the distinctive character of the earlier mark or to give rise to a serious likelihood that such detriment will occur in the future; and third, detriment to the distinctive character of the earlier mark is caused when that mark’s ability to identify the goods or services for which it is registered and used as coming from the proprietor of that mark is weakened. There followed at [77] this important explanation of what is needed by way of proof:

“77.

It follows that proof that the use of the later mark is or would be detrimental to the distinctive character of the earlier mark requires evidence of a change in the economic behaviour of the average consumer of the goods or services for which the earlier mark was registered consequent on the use of the later mark, or a serious likelihood that such a change will occur in the future.”

[115] Then, at [78], the Court emphasised that it is immaterial for the purposes of assessing whether the use of the later mark is or would be detrimental to the distinctive character of the earlier mark, whether or not the proprietor of the later mark draws real commercial benefit from the distinctive character of the earlier mark.

[116] The need for evidence of a change in the economic behaviour of the average consumer, or a real likelihood that such a change will occur in the future, was considered by the Court of Justice once again in Environmental Manufacturing LLP v Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) (C-383/12) given on 14 November 2013 at [34]–[43] in considering the similar provisions in Regulation 207/2009. The Court said this:

“34.

According to the Court’s case-law, proof that the use of the later mark is, or would be, detrimental to the distinctive character of the earlier mark requires evidence of a change in the economic behaviour of the average consumer of the goods or services for which the earlier mark was registered, consequent on the use of the later mark, or a serious likelihood that such a change will occur in the future (Intel Corp , paragraphs 77 and 81, and also paragraph 6 of the operative part of the judgment).

Arnold J considered the concept of taking unfair advantage of the distinctive character or repute of a trade mark in Enterprise Holdings Inc. v Europcar Group UK Ltd [2015] EWHC 17; [2015] F.S.R. 22:

“[125] Unfair advantage. The Court of Justice described taking unfair advantage of the distinctive character or repute of a trade mark in L’Oréal SA v Bellure NV (C-487/07) [2009] E.C.R. I-5185; [2009] E.T.M.R. 55; [2010] R.P.C. 1 at [41] as follows:

“As regards the concept of ‘taking unfair advantage of the distinctive character or the repute of the trade mark’, also referred to as ‘parasitism’ or ‘free-riding’, that concept relates not to the detriment caused to the mark but to the advantage taken by the third party as a result of the use of the identical or similar sign. It covers, in particular, cases where, by reason of a transfer of the image of the mark or of the characteristics which it projects to the goods identified by the identical or similar sign, there is clear exploitation on the coat-tails of the mark with a reputation.”

[126] The Court of Justice explained the correct approach to determining whether unfair advantage has been taken of the distinctive character or repute of the trade mark in that case as follows:

“44.

In order to determine whether the use of a sign takes unfair advantage of the distinctive character or the repute of the mark, it is necessary to undertake a global assessment, taking into account all factors relevant to the circumstances of the case, which include the strength of the mark’s reputation and the degree of distinctive character of the mark, the degree of similarity between the marks at issue and the nature and degree of proximity of the goods or services concerned. As regards the strength of the reputation and the degree of distinctive character of the mark, the Court has already held that, the stronger that mark’s distinctive character and reputation are, the easier it will be to accept that detriment has been caused to it. It is also clear from the case law that, the more immediately and strongly the mark is brought to mind by the sign, the greater the likelihood that the current or future use of the sign is taking, or will take, unfair advantage of the distinctive character or the repute of the mark or is, or will be, detrimental to them (see, to that effect, Intel Corporation at [67]–[69]).

The foregoing summaries of the law are of course premised on the trade mark proprietor bearing the burden of proof – having to show that there would be infringement. In the present case Skyscape must establish that the use of its sign would not infringe Sky’s Cited Marks and specifically the one relied on in Sky’s best case.

I did not detect any suggestion on Skyscape’s part that an allegation of infringement of any of the Cited Marks under art.9(1)(b) would fail to satisfy either of the threshold conditions of similarity. If that point was taken, I find that both threshold conditions were satisfied.

The uses of the ‘Skyscape’ sign contemplated by the draft DNI are uses in relation to services which are

In the present case the average consumer will carry out a role (typically but not necessarily as employee) within a UK public sector body which obtains services through G-Cloud or otherwise in compliance with public procurement requirements. It is inevitable that such a person would be aware of SKY as a trade mark, at the minimum in relation to the core consumer services, such as TV services.

Ms Michaels argued that this was not the average consumer of high street consumer goods – not the person in the street – and referred me to another case about computer systems. This was RxWorks Ltd v Hunter [2007] EWHC 3061 (Ch); [2008] R.P.C. 13, in which Daniel Alexander QC, sitting as a High Court judge, said the following about the average consumer (at [63]-[64]):

“The assessment must take account of the goods and services in question and, as the Court of Appeal said in L’Oréal, albeit in another context: ‘A touch of reality is called for’.

“That must particularly be borne in mind in this case, which involves computer systems which are selected and installed with care and used over a lengthy period and where maintenance is provided by system administrators. In such a context, expectations of the average consumer’s ability to perceive and discriminate must not be set too low.”

Mr Hansford in his first witness statement distinguished the broad consumer market in which he said Sky operated from Skyscape’s market and thus from the market of the average consumer in this case:

“[71] In reality, given the ways we promote our services and the procurement frameworks through which we contract, I do not believe the general public is ever likely to become aware of our business or the services we offer; they simply are not relevant to consumers.

[72] On the contrary, as will be very apparent from the description of the services which I have provided above, the services are of a kind which are purchased only after a great deal of careful research and consideration and a tendering process (if the services are not being provided via the G-Cloud framework). The ‘average purchaser’ for these services (for the great majority of our actual customers) is a well-informed and careful civil servant, purchasing on behalf of a public sector body, generally spending a substantial amount of money and needing to be in a position to justify doing so. A very high level of care will be expended in making the appropriate choice of service provider, and the purchaser’s decision will be subject to validation through a formal approvals process.”

Mr Hansford went on to state that Skyscape’s customers include smaller customers such as charities. He said

“[74] … However, even where our customer is a small entity they will normally engage someone appropriately IT-skilled to assist in selecting the services, in order to ensure they are buying the right services, and would not learn about our services except through the public sector sources I have described above.”

Ms Michaels submitted that there were in fact two average consumers to be taken into account – one from larger public sector bodies such as DVLA and a second from bodies such as smaller charities. But their characteristics, in particular their ability to discriminate between mark and sign, would be in all material respects the same, so I need not distinguish between them.

I accept Mr Hansford’s evidence as an indication of what Skyscape’s customers are typically like. This would be relevant if it were right to identify the average consumer, or consumers, by reference to Skyscape’s typical customers. But it is not. The identification must be done by reference to the draft DNI.

As I have said, the average consumer is a person within a UK public sector entity which obtains services through G-Cloud or otherwise in compliance with public procurement requirements. What constitutes a ‘public sector entity’ within the meaning of the draft DNI was explored with Mr Hansford in cross-examination. Mr Hansford said that public sector entities would include any of the 29,000 or so entities which appear on a government website, the address of which he gave in his witness statement. Mr Hansford described the list as ‘dynamic’, in the sense that entities are constantly being added to, or taken off the list. It includes the British Film Institute, The Church Conservation Trust, the BBC, Channel 4. Surprisingly, the list also includes Acer Ltd, British Telecom and KPMG. The definition of ‘public sector entities’ is apparently fluid.

More significantly, the entities can be small. Several schools, several care homes and social clubs are included. Mr Roberts, by way of example, drew my attention to Abergavenny Baptist Church and Ammanford Nursery School in Carmarthenshire. I cannot assume that either of them has a skilled IT individual to sort out, for instance, obtaining an email account. In all likelihood this would be done by a pastor or nursery teacher with no IT skills above those of any other person delivering the sermon or teaching in the classroom.

The public sector entity must obtain services through G-Cloud or otherwise in compliance with public procurement requirements. This does not seem to be limiting. I was given no reason to suppose that any of the 29,000 public service entities appearing on the government website did not use G-Cloud. I must therefore take the average consumer on Sky’s best case to be in someone with knowledge of IT and the IT industry equivalent to that of the person in the street, save that this particular average consumer is also aware of G-Cloud.

Skyscape admitted that the mark SKY has a distinctive repute for what it described as Sky’s core business: Class 9 goods for recording, transmission or reproduction of sound and images, Class 38 telecommunications services and Class 41 entertainment services.

Skyscape accepted that Sky’s business went further, including cloud storage services, cloud-based email, calendar, contact and archive services and so on, but Skyscape denied that these enjoyed any reputation or that they had any relevance to the case.

Bearing in mind that this is an application for a DNI and the matters discussed above, I should summarise the hypothesis that I will apply to my assessment of a likelihood of confusion under art.9(1)(b) (and later to the matters arising under art.9(1)(c)). I emphasise that it is no more than one of a number of alternative hypotheses which could be applied to test Skyscape’s application.

The average consumer in this hypothesis is employed by or otherwise carries out a role in a small public entity such as a nursery school, a church or a social club, that role including the arrangement of an email account. He or she uses G-Cloud on behalf of the public entity but otherwise need not have a knowledge of IT or the IT industry significantly greater than that of an ordinary member of the public. The average consumer is aware of email services being provided under the SKY Mark although he or she has imperfectly in mind how the SKY Mark is used in the context of email services. He or she is aware that SKY is a very well known mark for TV and the other core services supplied by Sky. The key event in the hypothesis is that the average consumer encounters the use of the ‘Skyscape’ sign for email services.

Ms Michaels relied quite heavily on the absence of any evidence of confusion. I think this proves nothing one way or the other. Mr Hansford said in his witness statement that the general public will not have been aware of Skyscape or the services it offers and that the great majority of Skyscape’s sales to date have been through “a well-informed and careful civil servant”. The type of confusion I am considering here has had little or no chance of arising.

I must therefore assess the likelihood of confusion by reference to the criteria identified by the CJEU and summarised in the list used by the Trade Mark Registry as approved by the Court of Appeal (see above). The visual and aural similarities between ‘Sky’ and ‘Skyscape’ are obvious. Ms Michaels concentrated, rightly in my view, on the conceptual aspects of mark and sign. She said that although ‘scape’ was a word in the dictionary, it was not in common usage and therefore ‘Skyscape’ would be perceived only as a single word, connoting an image of the sky. The ‘sky’ part of the word would not be singled out as having any prominence in the sign. The average consumer would regard the mark and sign as conceptually distinct, with no real likelihood of confusion between them.

I believe that for this purpose I am entitled to put myself in the position of the average consumer. ‘Scape’ is not a word I hear every day but I am well aware of the words ‘landscape’, ‘seascape’, ‘cityscape’ and ‘cloudscape’. There may be other such scape words that don’t come to mind. I think the average consumer would likewise be familiar with those words. As it happens, in my copy of the Shorter OED, among the other definitions of ‘scape’ (a transgression due to thoughtlessness; a flower stalk arising directly from the root or rhizome; the first joint of the antenna of an insect, and so on) there is this:

“Scape 1773. [Abstracted from LANDSCAPE]. A view of scenery of any kind. Also as the second element of combs., as in as SEA-SCAPE, cloud-scape, etc.”

Although this reinforces my impression of how ‘Skyscape’ would be perceived, really the contents of the dictionary are beside the point. I think that the average English-speaking consumer would instinctively split Skyscape into two conceptual parts: ‘sky’ defining a type of ‘scape’ in the sense of a view.

Turning to the registered mark, the average consumer would be familiar with the use of ‘Sky’ together with another word as composite names for services offered by Sky: ‘Sky Sports’, ‘Sky News’, ‘Sky 1’, ‘Sky Arts’, ‘Sky Living’, ‘Sky Atlantic’ and so on, all of which form part of the business for which Sky has a distinctive repute. Neil Peers, Director of Operations and Customer Service at Sky UK Limited referred to these. However the average consumer would have no exact idea of the many ways in which Sky uses that mark with another word or words.

Elizabeth Darren, Director of Brand and Creative at Sky UK Limited, gave evidence that Sky has offered a Sky-branded email service since July 2006 and until August 2012 all Sky’s broadband customers received a free email account.

In my judgment, despite ‘Skyscape’ being one word there is a likelihood that a significant proportion of the relevant public and thus the average consumer, encountering the sign ‘Skyscape’ used for an email service, would take it to be yet another service offered by Sky. If the average consumer was already familiar with Sky email, he or she would probably take it to be a replacement or modified Sky email service. Consequently Skyscape has not proved that the SKY Mark would not be infringed pursuant to art.9(1)(b) by the use of ‘Skyscape’ for email services.

It was admitted by Skyscape that the SKY Mark has a reputation in the Community within the meaning of art.9(1)(c) for its core business (see above).

I have no doubt that if, contrary to my conclusion above, the use of ‘Skyscape’ for an email service would not give rise to a likelihood of confusion, it would certainly give rise to a link – the sign would call the SKY Mark to the average consumer’s mind.

The main issues arising case under art.9(1)(c) are whether use of the sign would give rise to either (a) detriment to the distinctive character of the SKY Mark, (b) detriment to the repute of the SKY Mark or (c) unfair advantage being taken of the distinctive character or repute of the SKY Mark and finally (d) whether such use would be without due cause.

Skyscape filed no evidence in relation to these four issues. In Sky’s relatively extensive evidence Ms Darren made one brief assertion about the risk of “Sky’s level of distinctiveness” being eroded and another to the judgment of Asplin J in British Sky Broadcasting regarding an inference of loss of distinctiveness in the SKY Mark. In cross-examination it emerged that Ms Darren knew almost nothing about trade marks – for instance she was not clear what a trade mark specification is. This is not to criticise Ms Darren, but the statements on trade mark distinctiveness and similar matters introduced into her witness statement can carry little weight.

Ms Michaels said that Ms Darren’s speculations should be ignored. Mr Roberts relied heavily on the burden of proof and largely left things at that.

It is true that the overall burden in these proceedings rests on Skyscape. However it seems to me that in the context of an application for a DNI, there are several potential questions of where the evidential burden rests. For instance, as I will discuss below, in an action for infringement there can be no finding of detriment to the distinctive character of a trade mark unless the proprietor has established a change in the economic behaviour of the average consumer. Arguably even in the context of an application for a DNI the evidential burden in respect of that issue remains with the proprietor. Equally, detriment to the repute of a trade mark depends on the alleged infringer’s use of the mark generating a negative impact on the image of the trade mark. Again, the evidential burden arguably remains on the proprietor even in the context of an application for a DNI.

None of the questions of evidential burden were explored by the parties even in summary. Resolving the issues arising under art.9(1)(c) is made more difficult by the fact that there is no direct evidence of any real value in relation to any of them. This is not a criticism, but I am left to consider the evidence overall on each point, such as it is.

I have already mentioned that there will have been no detriment to the distinctive character of the SKY Mark and there will be no likelihood of the same unless there has been, or is likely to be, a change in the economic behaviour of the average consumer – see the Intel Corp Inc v CPR United Kingdom Ltd (C-252/07) EU:C:2008:655; [2009] R.P.C. 15, at [77]; Environmental Manufacturing LLP v OHIM (C-383/12) EU:C:2013:741; [2012] E.T.M.R. 54, at [34]-[43] as summarised in Comic Enterprises quoted above.

There was no evidence about change in economic behaviour. But I know that Sky offers a cloud-based email service. I think it is likely that a link between ‘Sky’ and ‘Skyscape’ is bound to lead to a ‘dilution’, ‘whittling away’ or ‘blurring’ of the SKY Mark such as to weaken its ability to serve as a badge of origin for email services, see Intel at [29], and thus, by inference, a change in the economic behaviour of the average consumer. In my view Skyscape has failed to establish that there is no likelihood of detriment to the distinctive character of the SKY Mark.

I have no reason to think that the services offered by Skyscape are such as to be liable to have a negative impact on the image of the SKY Mark, see L’Oréal SA v Bellure NV (C-487/07) EU:C:2009:378; [2010] R.P.C. 1, at [40]. I think that there is no risk of detriment to the repute of the SKY Mark.

With regard to unfair advantage, Mr Roberts relied on a concession by Mr Hansford that there had been a trade mark search in 2012 by Skyscape, after Skyscape started to provide its cloud services in 2011. The search presumably made Skyscape aware of the enormous breadth of Sky’s trade mark specifications. Beyond that, I do not see that there is anything I can infer from the search.

I think the only material consideration available to the court, which did not require evidence, is that SKY is a very well known mark indeed. It is likely that a significant proportion of all those interested in email services, and thus the average consumer, regard the mark favourably as denoting a large and competent supplier of TV and related services. On balance I take the view that the link between ‘Sky’ and ‘Skyscape’ in the mind of the average consumer would enable Skyscape to benefit from the Sky’s undoubted reputation and goodwill. Consequently Skyscape has failed to establish that unfair advantage would not be taken of the distinctive character or repute of the SKY Mark.

Ms Michaels did not submit that Skyscape had due cause to injure the SKY Mark in any of the three ways otherwise prohibited by art.9(1)(c).

Skyscape’s application for a DNI is dismissed.

are established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character;

have legal personality; and

have any of the following characteristics:—

fall within the following exhaustive list of organisation types: