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Delaying tactics

Starbucks v British Sky Broadcasting and EMI (IP) Ltd v British Sky Broadcasting

The Court of Appeal considered in these two cases whether or not the lower court Judges came to the right decision when they were asked to stay UK court proceedings for trade mark infringement/passing off pending the outcome of trade mark revocation/invalidity proceedings at the Community Trade Mark Registry which had been commenced beforehand.

The usual rule in such cases is that infringement proceedings should be stayed except where there exists “special grounds” not to do so in order to avoid parallel proceedings on the same issue and the risk of inconsistent judgments.

Both Claimants sought to prevent the launch of NOW TV by Sky on the grounds of trade mark infringement. For tactical reasons Sky brought revocation/invalidity proceedings against both Claimants’ trade marks at the Registry and then asked the High Court to stay the infringement proceedings later brought against it pending the decisions in the revocation/invalidity cases.

The High Court granted a request by Sky for a stay in the EMI case but refused Sky’s request for a stay in the Starbucks case and instead ordered an expedited trial. In the Starbucks case, the Judge found that all of the reasons advanced for not staying the action such as Sky commencing invalidity proceedings after receiving the cease and desist letter in an attempt to delay matters, there being a passing off claim and the case being suitable for a speedy trial “cumulatively constituted special grounds”. In the EMI case the Deputy Judge ruled that EMI had shown no urgency in launching its own channel using the mark complained of and still did not have definite or firm plans to do so.

The Court of Appeal stated that “special grounds” would exist only in a very “rare and exceptional case” and it must relate to factual circumstances specific to the given case. Further, the Court of Appeal rejected many of the grounds accepted by the Judge in the Starbucks case as constituting “special grounds” such as the existence of passing off claims, the length of time it might take for invalidity proceedings to come before OHIM and the reactive nature of an application to OHIM.

Despite this, after considering the facts, the Court of Appeal refused to overturn the earlier decisions of the High Court in both cases and stated that each Judge was entitled to come to the conclusions which they did.