Sky v SkyKick – CJEU Decision

On 29^th January 2020, the Court of Justice of the European Union (CJEU) handed down the long awaited decision in Sky v Skykick.

Following the release of the Advocate General’s (AG) opinion in October 2019, we wrote about the potentially wide reaching implications of that opinion for trade mark proprietors.

If the CJEU had followed that opinion, trade mark owners would have to have been prepared for the validity (and therefore the enforceability) of their trade marks to be challenged on the basis that the specification (e.g. the description of goods and services for which the trade mark is registered) was not sufficiently clear and precise.

Allowing a registered trade mark to be challenged in this way would have marked a significant departure from the law.

Sky v SkyKick – CJEU Decision

However, the CJEU has not followed the AG’s opinion; it held that a trade mark may not be found to be invalid (either in whole or in part) on the basis that its specification is not sufficiently clear and precise.

In so doing, the Court considered that clarity and precision was a relevant consideration only at application stage.

Further, it found that a cancellation applicant (or counterclaimant, in the context of infringement proceedings) cannot argue that a trade mark with an insufficiently clear and precise specification should be cancelled as contrary to public policy. Whilst it is well established that a trade mark may be invalidated if registered contrary to public policy, the CJEU has made it clear, in direct contrast to the AG’s opinion, that considerations of public policy do not apply to the specification of a trade mark, when considered in isolation from sign for which registration was sought or granted.

The lack of clarity and precision of the specification (which related to the term ‘computer software’) was however only one of the grounds on which validity of the Sky trade marks were challenged. As set out in our earlier blog, SkyKick also seek to invalidate Sky’s trade marks on the basis that they were filed in bad faith.

Here, in part at least, the CJEU agreed with the AG. Bad faith, if established in relation to only some of the goods and services for which the trade mark was registered (at the time that the application for registration was made), would invalidate the trade mark in relation to those goods and services only, i.e. unless bad faith was found in relation to all goods and services, the mark as a whole would not fall.

However, the Court did go further than the AG, in making it plain that 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 has the intention of either:

1. Undermining, in a manner which is inconsistent with honest practices, the interests of a third party; or
2. Obtaining, without targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark.

Analysis

Trade mark owners may well be breathing a sigh of relief. Terms that may once have been clear and precise, such as “computer software”, may (as a consequence of technological developments) later cover a much broader range of goods and/or services than was contemplated at registration, thereby conferring a much wider monopoly right than would now be permitted by the EU or UK Intellectual Property Office (UK IPO), if the application were submitted today.

However, whilst not as dramatic an outcome as foreshadowed by the AG’s opinion, trade mark proprietors should remain very much alive to the issues raised by this case, not only when considering the specification for any new trade mark applications but also when reviewing their trade mark portfolios.

At application stage, plainly an applicant will not want the inconvenience, hassle and cost of becoming embroiled in an argument with the EU or UK IPO regarding their trade mark’s specification. It is advisable that contemporaneous records are kept as to why a specification includes a wider range of goods and services than those the applicant is currently supplying, to try to head off any later argument that the mark was applied for in bad faith.

Further, arguments over the clarity and precision of a specification raise issues as to how genuine use of a trade mark will be assessed. Broadly speaking, lack of genuine use is an entirely separate and well-established ground of challenge, allowing a defendant in a trade mark action to require that a claimant prove that it has put the trade mark to genuine use in respect of the goods and services on which it relies, within a specific period of time. If the Claimant is unable to prove such use, then the trade mark will be vulnerable to revocation.

Consequently, what remains to be seen is how a Court (or the EU and UK IPO) will assess whether a trade mark proprietor has put the trade mark to genuine use, if the specification of a registered mark is (at the time that a challenge is made) considered to be insufficiently clear and precise. This remains an issue, as alluded to by the CJEU at paragraph 70 of its decision.

It is worth noting that SkyKick’s counterclaim did not include an application that the trade marks be revoked on the basis that they had not been put to genuine use.

Whilst we wait to see how the High Court applies the CJEU decision to the substantive litigation between Sky and SkyKick (in view of the CJEU decision, bad faith will no doubt take centre stage), the issue of genuine use and imprecise specifications will remain unresolved.

How can Nelsons help?

Emma Ward is a Partner in our Dispute Resolution team, specialising in contentious intellectual property matters.

For more information on the subjects discussed in this article, please contact Emma on 0800 024 1976 or via our online form, and she will be happy to assist.