NOW That's What I Call Goodwill (or not)

The UK Supreme Court has issued a much anticipated decision on the issue of Passing Off and in particular the nature of Goodwill. In Starbucks (HK) v BSkyB [2015] UKSC 31 the Court rejected the final appeal (in favour of Sky and of no Passing Off) in the long running dispute over the use of the NOW TV mark by Sky in the UK. In summary, the Court put the issue as: is it sufficient (for the first element of Passing Off Goodwill) to establish a reputation among a significant section of the public in the UK, or must there also be a business with customers in the UK? On the facts there were a significant number of UK viewers who watched the Starbucks NOW channels (for free online), but that strictly speaking the NOW service (based in Hong Kong) was a paid subscription model. On those facts we can see how the Court came to this position. However, as Starbucks argued, the concept of jurisdictional presence and “customers” in Passing Off has expanded over time and the economic realities of services available online pose new issues for this right. There were clearly consumers here in the jurisdiction who knew the NOW brand and would be confused by the launch of Sky’s service. We feel that this decision missed the opportunity to explore what the Goodwill position could have been if the business model had been identical in both territories i.e. free-to-air service in the UK and Hong Kong (as many such online services are).

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