SkyKick: trade marks with broad specifications are valid unless registered in bad faith

The CJEU has held that the use of broad terms in a trade mark specification is not grounds for invalidity but a lack of intention to use the mark for those goods and services could amount to bad faith

14 February 2020

The Court of Justice of the EU (CJEU) has passed its eagerly awaited judgment on a number of key questions referred by the UK High Court which centred around whether trade marks which contained specifications covering broad terms such as 'computer software' were capable of being found invalid due to a lack of clarity and precision or for creating a monopoly which is contrary to public policy. The answer to this question was no. However, the CJEU did hold that a trade mark can be invalidated on grounds of bad faith where there was no intention to make use of the trade mark for the goods and services covered and a broad specification had been filed without any rationale.

Background

SkyKick is a company offering cloud-based software management services. Sky Plc, a household name in relation to TV broadcasting, communications and broadband, has traded extensively in the UK and elsewhere under the SKY brand for many years. In 2016, Sky brought proceedings against SkyKick in the UK courts for trade mark infringement and passing off in reliance on its goodwill and portfolio of 'SKY' trade mark registrations which covered, amongst other things, cloud-based software services and related products (the SKY trade marks). Sky claimed that use of the signs 'SkyKick', 'skykick' (and figurative variants thereof) would lead to a likelihood of confusion and/or would take unfair advantage of, or cause detriment to, the character and repute of the SKY trade marks.

SkyKick denied trade mark infringement and passing off, and counterclaimed for a declaration that the SKY trade marks were either wholly or partly invalid primarily on the grounds that: the broad specifications of goods and services covered by the SKY trade mark registrations (including ‘computer software’, ‘telecommunications services’ and ‘internet portal services’) lacked clarity and precision (following IP TRANSLATOR); and Sky had acted in bad faith in applying for the SKY trade marks on the basis that, at the time of filing the applications, Sky did not intend to use the trade marks concerned for all of those goods and services covered by the registrations.

Sky’s response to this was that it had a commercial rationale for seeking a broad scope of protection for the SKY trade marks given that the SKY brand was (and remains) a key asset of the business. Sky also contend that, even if they made an error of judgment in framing the specifications more broadly than was objectively reasonable, that could not amount to bad faith.

The CJEU’s Judgment

The UK High Court referred five questions in total which, in summary, asked the CJEU to decide: (1) whether a mark could be declared wholly or partially invalid if some or all of the terms in the specification of goods and services lack sufficient clarity and precision (and, if yes, did the term “computer software” lack clarity and precision)?; and (2) could it constitute bad faith to register a mark without any intention to use it in relation to the specified goods or services (and, if yes, could an application be made partly in good faith and partly in bad faith)?

The answer to (1) was no. The CJEU determined that a lack of clarity or precision in the specification terms of goods and services cannot be considered as a sufficient ground for invalidity of either a national or EU trade mark. In its decision, the CJEU also held that a lack of clarity and precision of the terms used to designate goods and services was not capable of invalidating the trade mark on the grounds of public policy. In light of such reasoning the CJEU also determined that 'computer software' was an acceptable term to describe the goods and services in respect of which that trade mark was registered.

The answer to (2) was yes. A trade mark application made without any intention to use the trade mark in relation to the goods and services covered by the registration could constitute bad faith. Applying the CJEU’s recent decision in Koton, if an applicant had an intention to undermine the interests of a third party or of obtaining an exclusive right for purposes other than those falling within the functions of the trade mark, bad faith could apply. However, the court accepted that there may be instances where applications could be made partly in good faith and partly in bad faith, and the mark would only be invalid for the goods and services in relation to which bad faith was found.

Commentary

The decision comes as a welcome relief for trade mark owners who may continue to rely on broad terms in their specifications. However, where there is no rationale for such broad terms, such marks may be subject to partial invalidation on the ground of bad faith.

The case will now go back to the UK High Court who will determine the outcome on the facts. Despite the UK formally leaving the EU on the 31 January 2020 the transition period will continue until 31 December 2020 and as such the UK High Court will be bound to follow the CJEU’s ruling.

On a practical note, caution should always be exercised when making trade mark applications with broad specifications, especially if such applications are made strategically rather than with a genuine intention to use the marks for all of the goods and service covered. 

Sky Plc & Ors v SkyKick UK Ltd & Anr (Case C-371/18)

How can Burges Salmon help?

If you would like to discuss any of the issues raised in this article or would like further information, please contact Jeremy Dickerson, Emily Roberts or your usual intellectual property team contact.

Key contact

Jeremy Dickerson

Jeremy Dickerson Partner

  • Head of International 
  • Head of Intellectual Property, Media and Sport
  • Defamation and Reputation Management

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