Sky vs Skykick – a brief summary of the long-running dispute

Trade mark attorney, Rebecca Atkins, summarises the long running dispute between Sky and Skykick.

Background

SkyKick is a global provider of cloud management software for IT solution providers.

Back in 2018, Sky initiated proceedings against SkyKick claiming that they were infringing Sky’s EU Trade Marks. Sky’s EU Trade Marks covered a very wide range of goods and services, including, “computer software”, "telecommunications services" and "electronic mail services" and others which were far removed from its core business such as “whips”, “furs” and “fire extinguishers”.

In an attempt to avoid a finding of infringement, SkyKick claimed that Sky’s EU Trade Marks were invalid, on the grounds that some of the terms in the specification of goods and services (for example, “computer software”) lacked clarity and precision, and that the applications were filed in bad faith as Sky could never have intended to use the mark SKY in relation to all of the goods and services listed.

SkyKick did not allege that the trade marks were applied for in bad faith specifically in relation to "telecommunications services" and "electronic mail services". It claimed, however, that partial bad faith should infect and invalidate an entire trade mark registration.

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Questions for the CJEU

The High Court asked the CJEU to clarify the following points:

• Whether an EU or national trade mark may 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 to enable the competent authorities and third parties to determine on the basis of those terms alone the extent of the protection conferred by the trade mark

• In case that answer to the question above is in the affirmative, whether a term like 'computer software' is too general to be considered 'sufficiently clear and precise'

• Whether it is bad faith simply to apply to register a trade mark without any intention to use it in relation to the specified goods or services

• If so, whether it is possible to conclude that the applicant made the application partly in good faith and partly in bad faith if and to the extent that the applicant had an intention to use the trade mark in relation to some of the specified goods or services, but no intention to use the trade mark in relation to other specified goods or services

• Whether Section 32(3) of the UK Trade Marks Act 1994[1] is compatible with the EU Trade Mark Directive and its predecessors

The CJEU ruled as follows:

• A EU or national trade mark cannot be declared wholly or partially invalid on the ground that terms used to designate the goods and services in respect of which that trade mark was registered lack clarity and precision

• A trade mark application made without any intention to use the trade mark in relation to the goods and services covered by the registration constitutes bad faith, if the applicant for registration of that mark had the intention either of undermining, in a manner inconsistent with honest practices, the interests of third parties, or of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark

• When the absence of the intention to use the trade mark in accordance with the essential functions of a trade mark concerns only certain goods or services referred to in the application for registration, that application constitutes bad faith only in so far as it relates to those goods or services

• EU law does not preclude a provision of national law under which an applicant for registration of a trade mark must state that the trade mark is being used in relation to the goods and services in relation to which it is sought to register the trade mark, or that he or she has a bona fide intention that it should be so used, in so far as the infringement of such an obligation does not constitute, in itself, a ground for invalidity of a trade mark already registered.

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Decision

Back at the High Court, the Judge applied the CJEU’s decision to the facts of the case and found that Sky had applied for the relevant trade marks “pursuant to a deliberate strategy of seeking very broad protection of the trade marks regardless of whether it was commercially justified...with the intention of obtaining an exclusive right for purposes other than those falling within the functions of a trade mark, namely as a legal weapon against third parties..." and had made a partly false declaration of intention to use.

Accordingly, Sky’s registrations were found to be partially invalid. The Judge therefore reviewed the list of goods and services which he deemed relevant to the proceedings (he had earlier excluded from his assessment of the likelihood of confusion those goods and services which were entirely unrelated to SkyKick’s services) and limited some of the goods in Class 9 and services in Class 38. The Judge confirmed that this process of limitation did not necessarily mean leaving only the goods and services in respect of which Sky has actually used the trade marks. It is acceptable for trade mark owners to seek protection in respect of goods and services in relation to which they might use the mark in the future, and also a "modest penumbra of protection" beyond those goods and services in relation to which the mark has been used.

However, the outcome for SkyKick was unaffected by the limitations to the goods and services, as Sky retained protection for “telecommunications services", "electronic mail services", and "internet portal services", which were found to be identical or similar to SkyKick’s services and the Court held that SkyKick infringed Sky’s trade mark under Article 9(2)(b) of the EUTMR.

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Comment

There was some concern amongst brand owners that their EU Trade Mark registrations might be deemed invalid in their entirety simply because they covered a very broad range of goods and services.

The CJEU’s decision provides some reassurance that there is no blanket risk to existing EU Trade Marks with broad or imprecise specifications; whether a trade mark has been applied for, or partially applied for, in bad faith will depend on the intention of the trade mark owner at the time of filing, and other factors, beyond their lack of intention to use the mark, must be taken into account.

However, it must be borne in mind that if a mark is not used in relation to all the goods and/or services covered by the registration then the Registration will, after 5 years, become vulnerable to cancellation in respect of those goods and services.

Furthermore, if there was clearly no intention to use the mark in relation to some of the goods and services, and it is held that the application was filed partially in bad faith (following the criteria set out above by the CJEU), then the Registration could be found to be invalid in respect of those goods and services.

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[1] Section 32(3) of the UK Trade Marks Act 1994 stipulates that when filing a UK Trade Mark Application, the Applicant must confirm that the trade mark is being used, by the applicant or with his consent, in relation to those goods or services, or that he has a bona fide intention to use the mark.