Wednesday, 13 May 2015

Starbucks (HK) v British Sky Broadcasting Group (Supreme Court)

One thing that baffled me about this case when I saw the first instance judgment ([2012] EWHC 3074 (Ch) (02 November 2012), on appeal [2013] EWCA Civ 1465 (15 November 2013)) was the claimant's name. It turns out that I should have read Arnold J's judgment more carefully, because a footnote tells the reader that "Starbucks HK’s name came from the bucks raised by the sale of Star [a Chinese-language TV station] by Richard Li’s Pacific Century group to Rupert Murdoch’s News Corporation", who of course were the parent company of the defendants in the present case. So the claimant is nothing to do with the purveyor of what my great friend Markus, from Munich, is pleased to refer to as "brown liquid", a generic beverage which he maintains is drunk on every occasion by every American, whether its is masquerading as coffee, tea, or beer or is some sort of soft drink.
Originally a trade mark infringement (and validity) and passing-off case, by the time it reached the Supreme Court (which has now handed down its judgment: [2015] UKSC 31 (13 May 2015)) it was only concerned with passing off and in particular whether it is good enough for the claimant to have international goodwill. That's a very important point in the law of passing off, so this is an interesting and (sad to admit) exciting case.
However, the outcome doesn't appear to be as exciting as I would have liked. Because they didn't actually have any paying customers in the UK, the claimants have no goodwill to protect (and having goodwill is essential for a passing-off action to lie, of course - part of Lord Oliver's classic trinity from the JIF Lemon case, Reckitt & Colman Products Ltd v Borden Inc [1990] 1 WLR 491). Old cases show that sometimes a foreign trade can generate some goodwill in this country - taking bookings, for example - but making its TV programmes available online in the UK amounted to nothing more than advertising and created no protectable goodwill.
I am disappointed that the court should have taken such a narrow view of what constitutes goodwill. It is, of course, a tricky thing to define (and you should read my Dictionary of Intellectual Property Law to learn more on that score), but in the modern age (by which I mean on the Internet) surely businesses create what most people would recognise as goodwill by promoting their services in other jurisdictions. Goodwill is, certainly, local in nature, but I think it is time to move on from the old view of goodwill and to embrace the idea that a trade reputation (is it the same thing?) can exist without money changing hands. It is a small step from making the TV programmes available to online viewers in the UK and charging them even a small amount to watch, and it should not be on such small steps that these things turn. (But perhaps when I read the judgment carefully I will find the answer to that.)
It need not even make any difference to the final result. The court could have distinguished the old cases and held that there was protectable goodwill, but gone on to hold that no damage had been suffered. To my mind, that would be a more logical place for the law to have ended up in. I certainly don't say that the court was wrong in any way, and those old cases can't just be wished away, but I do think the ratio does not reflect what people who commonly use the world wide web expect, and the alternative route to the same result might have given a more satisfactory ride.
You can conveniently watch the hearing using these links, which I have copied from the Supremes' website:
Watch hearing
25 Mar 2015Morning sessionAfternoon session
26 Mar 2015Morning sessionAfternoon session

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