SkyKick goes to the Court of Appeal

About the author

Chris Thomas is an IP Solicitor at Appleyard Lees IP LLP. Chris’ commercial practice involves handling trade mark and design portfolios nationally and internationally. He also advises clients on a range of IP related queries, including drafting assignments and licences to NDAs and R&D agreements.

 

The Court of Appeal has allowed an appeal in proceedings between the well-known satellite TV broadcaster, Sky Ltd (“Sky”) and the UK company SkyKick UK Ltd (“SkyKick”). This is the latest round in a long-running battle, which has been of particular interest to trade mark owners, as it has implications for how trade mark applications should be made and how trade mark portfolios are managed.

 

Summary of SkyKick proceedings

 

High Court claim

Sky issued a claim for trade mark infringement against SkyKick for using a number of SkyKick signs in the UK, which it claimed infringed its EU and UK trade mark registrations for “SKY”. SkyKick counterclaimed, seeking cancellation of Sky’s trade marks, claiming that the specifications for goods and services were so broad as to lack clarity. SkyKick also claimed that Sky’s applications for its trade marks were made in bad faith because there was not an intention to use all of the goods and services registered.

SkyKick’s counterclaim, if successful, challenged many existing trade mark registrations, in which broad descriptions of goods and services had been used to claim extensive coverage for a trade mark. Moreover, the possibility of a trade mark registration being declared entirely invalid because a proprietor did not have the intention of using all of the goods and services registered raised the prospect of invalidity proceedings being brought against many existing registrations.

 

Referral to the CJEU

In the original High Court proceedings, Mr Justice Arnold referred the case to the European Court of Justice for a determination on a point of law. The CJEU ruled that it was not a ground for invalidity of a trade mark that the specification of goods and services was imprecise or vague and that whilst an intention not to use goods or services could constitute grounds for bad faith, this would only affect the goods or services which were not intended to be used and not the entire registration[1].

 

Return to the High Court

The case was referred back to the High Court for a ruling following the CJEU decision. HHJ Arnold made  a finding of infringement, but also held that Sky had made its application partly in bad faith as it did not intend to use all the goods and services of the registrations. The judge found that these goods fell into three different categories, the first being where there was no intention to use the goods and services, for example “bleaching preparations”. The second category was where the specification was so broad, there was no intention to use all of the goods and services within the category claimed, including the category of “computer software”. The third category was where Sky had sought to cover all the goods and services of a particular class by using class headings to describe its goods and services. HHJ Arnold ruled that he would not consider the validity of those parts of Sky’s trade mark specifications, which were not expressly relied on in the claim for infringement at trial, for the reason that the counterclaim was essentially defensive in nature. He held that the category of “computer software” had been registered partly in bad faith and provided his own specification limiting the category of goods covered by the registration.

 

Appeal to the Court of Appeal

Sky appealed to the Court of Appeal, which upheld Sky’s appeal. The Court of Appeal reviewed the CJEU ruling and further jurisprudence of the trade mark courts of the EU and UK and ruled that for a finding of bad faith, it must be the sole intention of the proprietor to use the mark in a manner inconsistent with the functions of a trade mark or were designed to promote unfair competition. Where a trade mark proprietor seeks to prevent third parties from taking unfair advantage of a mark where it has a reputation in a mark, this may justify seeking broader protection. A broad trade mark specification is not a ground for concluding that an application for a trade mark was made in bad faith.

Sky’s reputation and brand recognition justified a wide claim to cover goods and services. It could also not be expected to know what its future use of goods and services would be when applying for trade mark protection. Sky’s trade mark filing practices had sought to cover specifications of goods and services in which it had a substantial trade and future expectation of trade. This meant that it could not be established that Sky’s sole intention was one of bad faith. In relation to computer software, Sky had a substantial business and was justified in seeking trade mark protection. The onus was on SkyKick to identify which of the goods and services were filed in bad faith and not to challenge a broad trade mark specification in entirety.

 

Where does this leave the trade mark filing practises?

The decision of the Court of Appeal confirms that existing trade mark filing practises are unlikely to be radically changed as a result of the SkyKick litigation. However, it does show that the courts are prepared to closely examine the validity of broad trade mark specifications as the trade mark register becomes increasingly crowded. Sky’s position was arguably distinguishable from many applicants due to its broad reputation, which was considered a relevant factor justifying its filing practices. Whilst it may be difficult to seek to invalidate a broad trade mark registration on the grounds of bad faith, after 5 years an applicant can seek revocation of goods and services which have not been used. This is still likely to be the preferred strategy for competitors seeking to reduce the scope of protection of a registered trade mark.

 

[1]https://www.appleyardlees.com/ecj-skykick-case-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-differen/

 

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