Microsoft to appeal High Court ruling on 'SkyDrive' trade mark rights

Mrs Justice Asplin ruled that Microsoft infringed on UK and Community registered trade marks belonging to the pay-TV and broadband provider by marketing its cloud computing file storage product as 'SkyDrive'. The judge also ruled that Microsoft was guilty of 'passing off' its SkyDrive product as being connected to Sky.

A Microsoft spokesperson confirmed that the company intends to appeal against the ruling.

"This case is only about the SkyDrive name and has nothing to do with service availability or future innovation," the spokesperson said in a statement. "The decision is one step in the legal process and Microsoft intends to appeal."

Sky owns UK and Community trade marks for the word 'Sky' in a number of classes.

One of the classes in which Sky's Community trade marks apply include for "online technical storage facilities, online technical back-up facilities, software as a service [SaaS] services, and electronic hosting of files, data, photographs graphics, documents, videos images, audio files, audio-visual files, computer applications, information for others and video-conferencing services, but excluding the performance of chemical analyses".

Under the UK's Trade Marks Act and the EU's Community Trade Mark Regulation, trade mark owners generally have the right to restrict the use of signs that are identical or similar to the ones they hold rights to for identical or similar goods or services that the a protected mark covers where the public is likely to be confused and link ownership of the sign to the trade mark holder.

Mrs Justice Asplin ruled that Microsoft infringed Sky's trade mark rights in relation to both the identity and similarity of the goods and services Sky's rights covered.

The judge said that the 'average consumer', who in this case was described as someone who is "a reasonably well informed and reasonably observant user of broadband internet services", would have been likely to confuse Microsoft's SkyDrive product as belonging to Sky.

The judge made her ruling on the basis that the 'Sky' part of the 'SkyDrive' mark was the "dominant element of the sign". This fact meant that the average consumer would consider the 'Sky' part as "fulfilling a trade mark function" on its own as opposed to just forming a "composite part" of the SkyDrive mark as whole, she said.

"I consider that there is a manifest likelihood of confusion on the part of the consumer with regard to the SkyDrive sign," Mrs Justice Aplin said.

The judge assessed the way that Microsoft had branded SkyDrive. Even prior to launching SkyDrive as a stand-alone brand in 2011, the SkyDrive product was often presented "free of all Microsoft context" and this was a factor in confusing consumers as to the origin of the SkyDrive mark, she said.

Mrs Justice Asplin also said accepted evidence provided by Sky of "actual confusion" of Sky customers as to the origins of SkyDrive.

"I consider that each of the individuals who contacted the Sky helpline can be viewed as spontaneous real life examples of confusion," the judge said. "I also take the view that although they were not numerous, there were enough examples to give rise to the conclusion that confusion is sufficiently likely to warrant the court's intervention. Although those who called the helpline were Sky customers, they nevertheless displayed confusion and sought to attribute the shortcomings of the SkyDrive system to Sky."

Mrs Justice Asplin added that evidence also showed that there is a "close and complementary connection" between the services to which SkyDrive relates and the core goods and services to which Sky's Community trade mark rights apply.

The judge said that Sky had also shown that there was a link between the SkyDrive sign and its trade marks in the mind of the average consumer. She said that there was a "serious risk of loss of distinctiveness in the sense of 'dilution, whittling away or blurring' in the minds of average, reasonably informed consumers of the goods and services for which the mark is registered". Microsoft's use of the 'SkyDrive' sign was also "without due cause".