SKYKICK Case – Good and Bad News for UK Trade Mark Owners

Readers of our e-publication may recall that last year we wrote about the High Court of England and Wales’ judgment in what has become known as the ‘SkyKick’ case.

Recently, the Court of Appeal handed down its judgment in the appeal of the case.

It is the writer’s considered opinion that what it says is both good and bad news for UK TM owners.

The facts - a recap

In summary, Sky (the well-known television and broadband internet service, fixed line and mobile telephone service provider) is the proprietor of several EU registered trade marks and a UK registered trade mark for the word "SKY"/figurative marks which include the word "SKY".  Those trade marks are registered in respect of a very large number of goods and services.  The registrations cover, inter-alia, broad terms, such as "computer software" and "telecommunications services". 

Sky brought an action for registered trade mark infringement in the High Court of Justice in England and Wales against SkyKick.  The SkyKick companies filed a counterclaim for a declaration that the trade marks in issue were invalid, because they are either registered in respect of goods/services that are not specified with sufficient clarity and precision, or they were filed in bad faith, due to the breadth of the goods and services covered by them. 

In February 2018, the High Court of England and Wales held that, as far as it was concerned, a registration of a trade mark for "computer software" was too broad in scope and thus contrary to the public interest, because it confers on the proprietor a monopoly of immense breadth, which cannot be justified commercially.  However, as the Court considered the law in this area to be unclear, it referred certain questions to the CJEU for clarification.

What was the CJEU asked to decide?

The High Court of Justice in England and Wales asked the CJEU to determine various questions, including the following:-

  1. Whether an EU trade mark or a national trade mark registered in an EU Member State could be declared wholly or partially invalid on the ground that some or all of the terms in the specification of goods and services are lacking in sufficient clarity and precision.
  2. If the answer to question 1. is yes, is a term such as "computer software" too general and covers goods which are too variable to be sufficiently clear and precise?
  3. Can it constitute bad faith to register a trade mark without any intention to use it in relation to all the specified goods and services? If yes, can an application be made partly in good faith and partly in bad faith, to the extent that the applicant intended to use the mark for some goods/services?

What did the CJEU decide?

The Court decided that an EU trade mark or a national trade mark filed in an EU Member State cannot be declared invalid or partially invalid on the ground that terms used to designate the goods and services in respect of which the trade mark was registered lacked clarity and precision.  In other words, even if a term like "computer software" lacks clarity and precision, a trade mark cannot be declared wholly or partially invalid because of that.  Furthermore, it is not contrary to public policy to allow such registrations to exist.    

In addition, the Court held that when an applicant files an application to register an EU or national trade mark without any intention to use it in relation to all the goods/services covered by the application, this can constitute bad faith.  There are two circumstances where this might arise.  First, if the applicant filed the application purely to prevent a third party from registering and using that mark.  The second scenario is where the applicant did not file the application because it wants to prevent a specific third party from using and registering the mark for certain goods/services, but the applicant itself had no intention of using the mark for those goods/services.  This would be the case where there is no rationale for the application for registration. This might cover the situation where the applicant applied to register a trade mark in respect of a very broad range of goods/services and yet the applicant had no reasonable commercial rationale for seeking such projection (e.g. because the goods and services are very far removed from the goods and services for which, viewed objectively, the applicant would need to register its trade mark).

What did the high court decide? 

The High Court held, among other things, that bad faith was proved in so far as Sky applied to register its trade marks for “computer software”. As a result, the Court narrowed down the trade mark registrations, so that they covered only limited types of computer software, for which Sky had commercial justification for seeking coverage.

As readers will appreciate, a broad term such as "computer software" covers an enormous range of different types of software. For example, software for entertainment purposes (e.g. computer games), software used to operate an aeroplane and software used to operate medical devices.

What did the court of appeal decide?

The Court of Appeal held that the High Court had misunderstood the CJEU’s judgment. The CJEU did not declare that it is bad faith to seek to register a trade mark for a category of goods or services (e.g. computer software) unless the applicant intends to use the mark for all goods/services falling within that category (e.g. ALL different types of computer software, for example, computer games, software used to operate an aeroplane, software used to operate medical devices, etc.).

Whilst the Court acknowledged that Sky had no prospect of using its marks in relation to every conceivable sub-division of computer software, that is not an indication of bad faith on its part. As long as it had an intention to use for one item of goods falling within the broad category of computer software (e.g. computer games software) then that would suffice and Sky could register its marks for the broad category ‘computer software’.

Why is this good and bad news for UK TM owners?

Owners of UK TMs that are registered for broad categories of goods and services (e.g. computer software; financial services; land vehicles; etc.), but in respect of which they only sell or plan to sell/supply a sub-division of those goods/services (e.g. computer games; tax advice; motor cars) can breathe a sigh of relief. Their UK TMs cannot be declared invalid, in whole or part, due to an allegation of bad faith based purely on the breadth of the category of goods/services covered by the registration.

However, this will be bad news for some TM owners, due to the fact that it will be possible for a trader to register a UK TM for a broad category of goods/services, for example ‘computer software’, and then be able to prevent others from subsequently registering/using the same, or a similar, mark for any type of ‘computer software’. This will be the case even if the earlier trade mark owner only uses/plans to use its mark for, say, ‘computer games’, whereas the latter trade mark owner uses/plans to use its mark for, say, ‘software used to operate medical devices’.

After 5 years of registration, a UK TM can be revoked in part, so that it only covers the type of goods for which genuine use of the mark in trade has been made in the UK during the previous 5 years (e.g. a registration for ‘computer software’ could be narrowed down to ‘computer games’ – meaning that, in many cases, it would not then be possible to prevent another trader from registering/using the same, or a similar, mark for computer software used in a very different field of activity, for example software used to operate medical devices). But this means a 5 year wait, during which time the owner of the UK TM will have a very broad scope of protection.

The writer understands that SkyKick intends to apply to appeal the case before the Supreme Court. Should an appeal proceed, we will report on the case in due course. So, watch this space….

For an more information please contact Carl Steele.

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