Trademark dispute between the pay-TV broadcaster and the IP telephony provider
In recent years, Skype has managed to establish the product name as a term. However, following the decision of the European Court of Justice on May 5, 2015 (Ref.: T-423/12, T-183/13 and T-184/13), it looks more likely that no one will be allowed to “Skype” in the future.
Founded in 2003 in Luxembourg by the Swedish software developer Niklas Zennström and the Danish entrepreneur Janus Friis, Skype was acquired by eBay in 2005 for USD 3.1 million. US dollars. The internet telephony service enjoyed steadily growing popularity in the following years and was acquired by Microsoft for USD 8.5 million in 2011.
After the word and figurative mark SKYPE was registered as a Community trademark at the Office for Harmonization in the Internal Market (OHIM) in 2004 and 2005, the British pay-TV broadcaster Sky (British Sky Broadcasting Group, currently Sky and Sky IP International) filed an opposition against the registration in 2005 and 2006. The argument for this was that there was a likelihood of confusion between the two trademarks.
The Office for Harmonization upheld the opposition
Sky had the name protected as a joint word mark in 2003 and therefore had earlier rights than Skype.
The telephone service provider Skype protected its trademark for goods in the field of audio and video equipment, telephony and photography as well as for IT services in connection with software, the creation of websites or website hosting and thus for the same goods and services as the opposing word mark Sky.
In decisions from 2012 and 2013, the OHIM ruled in favor of the British pay-TV broadcaster Sky. The Office for Harmonization held that there was a likelihood of confusion between the two marks due to the medium degree of visual, phonetic and conceptual similarity. Furthermore, the conditions for a future reduction of the likelihood of confusion were not met.
The ECJ judges confirm the assessment of the Trademark Office
Skype opposed these decisions and applied to the ECJ to have them annulled. However, in its current decision, the court confirmed the position of the trademark office and confirmed the visual, phonetic and conceptual similarity of both signs.
The etymology of the word mark – a major cause of confusion
The judges dealt very precisely with the sound of the word “Skype”. The “Y” in both words, which is pronounced as a vowel, is pronounced the same length in both cases. In addition, the noun “Sky” is also contained as a word stem in the word mark “Skype” and is very clearly recognizable for the relevant public, according to the court. This reinforces the phonetic and conceptual similarity.
The registered figurative sign
Although the outline of the Skype logo in the shape of a cloud or speech bubble is not capable of evoking phonetic associations from a phonetic point of view, the shape of a cloud gives rise to associations with the sky. Therefore, from a conceptual point of view, this circumstance is a possible cause of confusion.
The public’s awareness of the Skype trademark does not rule out the possibility of confusion
Skype argued against the court’s statements by arguing that the public’s awareness of the trademark contributed to its increased distinctiveness. The ECJ judges did not accept this argument either. The court does not dispute that the internet telephony service provider has achieved a certain popularity in society. However, the judges found that the word “skype” is a general and therefore descriptive term for this type of service. Therefore, the likelihood of confusion cannot be ruled out despite the reputation.
Peaceful coexistence not possible in UK after EGC
The Luxembourg judges also rule out the possibility of a peaceful coexistence of both signs in the UK. According to the judges, the fact that this has worked in the past only concerns an isolated and very specific service, namely point-to-point communication. Therefore, in the opinion of the judges, there is a likelihood of confusion in the future if the business activity spreads to other areas of the claimed and registered services.
Now not only the apple belongs to a company, but also the sky
The decision means that Microsoft is not permitted to register the Skype trademark as a Community trademark in the EU for the time being. However, the company has officially announced that it will appeal against this decision to the ECJ. This is possible within six months of notification and is limited to legal issues only.
For the normal consumer, the judicial demarcation standards are sometimes difficult to understand. However, the decision of the EGC shows that the sequence of the signs, the formal orientation of the logo as well as phonetic criteria can play a role as differentiation criteria. A likelihood of confusion may seem remote to a consumer who associates one mark with pay-TV and the other with internet telephony, but the likelihood of confusion is assessed by the courts according to trademark law criteria. Particularly in view of the rapidly developing service industry, it cannot be ruled out that companies that have a wide range of services protected may unintentionally find themselves on a collision course under trademark law. It is therefore advisable to seek professional trademark law advice before embarking on such a venture.