In a key ruling in case C-371/18 (“Skykick”), and a rare departure from the AG Opinion, the European Court of Justice (CJEU) has held that trade marks protected in relation to wide specifications of goods or services, such as the term “computer software” are not liable to be declared invalid, even where they are so imprecise that the scope of protection they provide is not clear to third parties. However, it has held it can constitute bad faith to apply to register a trade mark in relation to goods and services where the trade mark owner has no intention to use them and that a mark can be declared invalid in respect of those goods and services only.
The judgment provides welcome clarity for brand owners who had faced the spectre of defending invalidity actions for their existing trade mark registrations had the CJEU decided differently.
Key points from Ruling
The CJEU answered the following key questions which were referred by the High Court of England and Wales for a preliminary ruling (summarised below):
- Can an EU trade mark or national mark be declared wholly or partly invalid if some of the terms in the goods/services specification are lacking in sufficient clarity/precision [to enable third parties to determine the extent of the protection]?
The CJEU has ruled that it is not a ground for invalidity of a trade mark that its terms lack clarity or are imprecise (as it is not specified as a ground for invalidity in the exhaustive list contained in the Trade Marks Directive 89/104/ or Regulation 40/94). The CJEU also ruled that a lack of clarity/ precision in a trade mark specification cannot invalidate the trade mark on grounds of public policy.
- If the answer to 1 is yes, is the term “computer software” lacking in sufficient clarity or precision to enable a third party to determine the extent of the protection it covers?
The use of the term “computer software” was not specifically addressed by the CJEU. However, it follows from its answer to the first question that an existing specification for “computer software” cannot be declared invalid for lacking precision/clarity, or on grounds of public policy.
- Can it constitute bad faith to apply to register a trade mark without any intention to use it in relation to the specified goods/services?
The CJEU has confirmed that it can constitute bad faith to apply to register a trade mark without any intention to use it in relation to the specified goods/services. A mark can be declared invalid on grounds of bad faith in these circumstances. However, the CJEU reiterated that the applicant of a mark is not required to know on the date of application for the mark what use it will make of the mark and that bad faith cannot be presumed on the basis of the absence of a business activity corresponding to the specified goods/services at the time of the application.
- Is it possible to conclude that an applicant has acted partly in good faith and partly in bad faith if it had an intention to use some of the goods and services?
The CJEU has confirmed that where there is a lack of the intention to use some goods and services, the trade mark will only be declared in valid in respect of those goods/services and the remaining registration will be valid.
The preliminary ruling of the CJEU was in response to a referral from the High Court of England and Wales in trade mark infringement proceedings between Sky plc, Sky International AG and Sky UK Ltd (Sky) and SkyKick UK Ltd and SkyKick Inc. (SkyKick).
Sky issued proceedings against SkyKick for infringing its four EU trade marks and national United Kingdom trade mark (Sky Marks). The Sky Marks protect a wide range of services including “computer software” in class 9.
Skykick counterclaimed that Sky’s trade mark registrations were so widely drawn as to be imprecise and therefore should be declared invalid. Skykick further counterclaimed that the marks had been filed in bad faith as Sky had no intention of using the marks across the full range of goods and services registered.
Before referring the matter to the CJEU for a preliminary ruling, both the High Court in England and Wales and the Attorney General (delivering his opinion before the CJEU handed down its decision) had opined that the term “computer software” was too general and contrary to the public policy as it conferred a monopoly for the trade mark owner over an increasingly wide range of services.
On 20 November 2013 the trade mark offices forming the European Trade Mark and Design Network (TMDN) issued a common communication warning that certain general indications of goods/services were too imprecise and could not be accepted without further specification. This included for example in class 7 the designation “machines”.
In Skykick both the High Court and the Attorney General expressed the opinion that the same must apply in relation to computer software because it covers an increasingly and “impossibly” wide range of services.
It is likely that national trade mark offices will in future be paying increasingly close attention to trade mark applications which use general and imprecise terms such as “computer software” or “financial services” without further specifying a specific sub-set of goods/services within this heading. This reflects a reality that with around two million EU trade marks registered, the trade mark register is becoming increasingly crowded and a monopoly over such a wide range of goods and services may be contrary to the public interest.
For registered mark owners, however, the CJEU has confirmed that existing registrations are not liable to be declared invalid where the protection they provide is too wide so as to be imprecise. Instead a registered mark can be challenged five years after registration in relation to the goods and services which are not in use.
Whilst a trade mark registration can be declared invalid on grounds of bad faith where there is no intention to use goods and services, in practice the intention of the trade mark owner is difficult to prove. Even if bad faith can be proven this will only invalidate a trade mark if there was no intention to use any of the goods and services where an intention to use is shown to be lacking.
Skykick confirms the value of an EU trade mark, in particular in the first five years of registration to protect and enhance the business interests of the trade mark owner.