In the recent case of Starbucks (HK) Limited and anor v British Sky Broadcasting Group plc and others UKSC 31 the Supreme Court in the UK was asked to consider the issue of whether a claimant in a passing off action need only establish a reputation among a significant section of the public within the jurisdiction, or whether (as previously held by the High Court and Court of Appeal in this case) a claimant must also establish a business with customers within the jurisdiction.

Despite there being conflicting jurisprudence on this issue in the common law world, the UK Supreme Court held that a claimant had to establish that it had actual goodwill in the jurisdiction, and that such goodwill involved the presence of clients or customers in the jurisdiction for the products or services in question.

This case concerned a passing off action brought by the claimant to stop the defendant using the mark NOW TV in respect of its internet protocol television (IPTV) service. The claimant has been operating its IPTV service since 2006 under the name NOW TV in Hong Kong and this service had become the largest pay TV operator in Hong Kong.

It was accepted by the UK Court that whilst the claimant’s NOW TV service was not available in the UK a number of UK residents could become acquainted with it due to their exposure to it whilst residing in or visiting Hong Kong, the accessibility to certain content and trailers on YouTube and on the claimant’s own website and the availability of particular programmes on international airlines.

Lord Neuberger held as follows:

• It would tip the balance too much in favour of protection if a claimant merely had to establish a reputation within the jurisdiction to maintain a passing off action.
• He was unpersuaded by the claimant’s arguments regarding global travel and global electronic communications as he observed it would effectively mean that a claimant could stop the use of a mark in a jurisdiction even though it had no customers or business there and had not spent any time or money developing the market.
• The people who get access to the claimant’s service via the websites and on international airlines are not customers in the UK because there is no payment involved and the availability of these products was intended to promote the Hong Kong business.
• A claimant must show that it has significant goodwill in the form of customers in the jurisdiction however the claimant does not have to have an establishment or office in this country.
• Where the claimant’s business is carried on abroad, it is not enough for a claimant to show that there are people in the jurisdiction who happen to be customers when they are abroad. However, it may be sufficient if the claimant could show that there are people in the jurisdiction who, by booking with, or purchasing from, an entity in this country, obtained the right to receive the claimant’s service abroad.

Lord Neuberger left open, for a future case, the question of whether a passing off claim could be brought by a claimant who has not yet attracted goodwill in the UK, but has launched a substantial advertising campaign within the UK making it clear that it will immediately be marketing its goods or services in the UK under the mark.

Contributed by: Colette Brady, Laura Scott