Bad Faith Trade Mark Applications – (Sky)Kicked Into Touch?

29th April 2020 marked the end (possibly – there might still be an appeal) of the long running claim for trade mark infringement, brought by Sky Plc against SkyKick. We’ve written about this case before but at the end of April, the High Court handed down its judgment, applying the decision of the CJEU on the questions referred.

Sky v SkyKick [2020] EWHC 990 (Ch), 29 April 2020

Recap and CJEU Decision

Sky claimed that SkyKick infringed a number of its trade marks – these were registered for a multitude of goods and services ranging from ‘computer software’ to ‘whips’ and ‘bleaching preparations.’  The allegations of infringement only applied to certain of the goods and services – referred to as ‘relevant goods and services’ for the rest of this article – computer software, computer software supplied from the internet, computer software and telecoms apparatus to enable connection to databases and the internet, data storage, telecommunications services, electronic mail services, internet portal services and  computer services for accessing and retrieving information/data via a computer or computer network.

SkyKick sought to invalidate Sky’s trade marks on two grounds – firstly, they argued that the specification for the relevant goods and services lacked clarity and precision. Secondly, they argued that the applications for the trade marks in respect of some of the relevant goods and services had been made in bad faith. That argument was not made in relation to all of the relevant goods and services but SkyKick contended that the bad faith infected the entirety of the registrations, such that the registrations as a whole should fail.

The CJEU found that a lack of clarity and precision in a trade mark specification could not be relied upon to invalidate a trade mark – registration of a trade mark can be refused because the specification is not sufficiently clear and precise, but a lack of clarity and precision cannot be used to attack the mark, post registration.

The CJEU also concluded that an application will have been made in bad faith when made without the intention to use the mark, if the application was intended to undermine a third party’s interests in a commercially unacceptable way. Bad faith can also be established even if a specific third party’s interests was not targeted by the application but the intention was to acquire exclusive rights for a reason other than to fulfil the functions of a trade mark (for example, to threaten infringement proceedings).

If bad faith was established, the trade mark could be declared invalid, but only in relation to goods and services for which bad faith had been established.

Back to the High Court

Prior to the referral to the CJEU, the High Court had already made various findings, including that if Sky’s trade marks were validly registered in relation to the relevant goods and services, then SkyKick had infringed Sky’s trade marks.

The latest decision therefore concerned High Court’s application of the CJEU’s decision of bad faith and validity.

The first decision was whether the trade marks had been applied for in bad faith in their entirety, in part or at all. The High Court found that bad faith on Sky’s part had been demonstrated in three ways – firstly, it didn’t intend to use the trade marks in relation to some of the goods and services; secondly, it had deliberately pursued a strategy of seeking broad trade mark protection, regardless of whether it was commercially justified and finally, it had applied for those broad rights so as to be able to use the trade marks to threaten third parties with infringement actions.

Crucially for Sky, this had not been demonstrated in relation to all goods and services.

In addition, where unjustifiably broad protection had been sought (as in the case, for example of computer software – which can describe all manner of smart goods, from toys through to avionics), this did not invalidate the registration in respect of all forms of computer software but instead allowed the Court to limit the specification to those categories of computer software where bad faith had not been established. For example, “computer software supplied as part of or in connection with any television, video recording or home entertainment apparatus or service.”

In adopting this approach of narrowing the specification for all relevant goods and services (with the exception of “telecommunications services” and “electronic mail services” where bad faith had not been alleged), SkyKick were found to have infringed Sky’s trade marks in relation to electronic mail services only.

Comment

Whilst Sky did obtain a judgment that SkyKick had infringed the trade marks through its use of SkyKick for email services, it’s unlikely that Sky are celebrating too enthusiastically. Not only has its trade mark filing practices been subject to strident criticism (which I would expect to be reflected in the costs orders made by the Court) but the effect of the Court’s judgment is to invalidate vast swathes of Sky’s trade mark registrations.

So where does this take brand owners? Although the outcome of the referral to the CJEU has not been as dramatic as we might have imagined following the attorney general’s opinion in October last year (if that had been followed, the trade marks would have been declared invalid in relation to all forms  of computer software), trade marks with broad specifications will be subject to increased scrutiny. Counterclaims for invalidity based on bad faith are likely to become more prevalent, which will increase the cost and the risks of litigation.

For new applications, brand owners who have previously adopted a similar filing strategy to Sky should reassess the wisdom of such an approach.

For those with existing registrations, now might be the time to quietly surrender the registration of goods and services that are not exploited. After all, following Sky/SkyKick nothing will flag the possibility to challenge a registration for bad faith challenge quite like a lengthy and disparate specification.

Sky SkyKick High CourtHow 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.

 

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