Sky v SkyKick – Opinion Could Have Serious Ramifications For All Trade Marks

On 16th October 2019, Advocate General Tanchev handed down his opinion in the on-going trade mark dispute between Sky (the digital and satellite television broadcaster) and SkyKick, a supplier of cloud migration technology services.

Whilst the case has its origins in an allegation of infringement, it is clear that if followed, the opinion has the potential to have serious repercussions for all trade marks.

C-371/18 Sky v SkyKick

Background

Sky commenced trade mark infringement proceedings against SkyKick in May 2016, arguing that the sign ‘SkyKick’ infringed four of Sky’s European trade marks.

SkyKick denied the infringement and counterclaimed that Sky’s trade marks should be declared invalid, either in whole or in part. The validity challenge was put forward on two alternative bases:

  1. Parts of the specification for the Sky marks were alleged to lack clarity and precision; and
  2. The applications for the trade marks were made in bad faith.

During the course of the High Court proceedings, several questions were referred to the Court of Justice of the European Union regarding the challenge to validity.

Lack of clarity and precision

The first challenge on validity was based on the trade mark specification: Skykick argued ‘computer software’ was insufficiently clear and precise and, as a consequence, should not benefit from protection as a trade mark.

The Advocate General considered that the term was clear (in that computer software comprises computer code) but that it was imprecise because it covered goods that were too variable in their function and field of use to be compatible with the function of a trade mark.

The Advocate General agreed with Skykick, who had asserted that ‘computer software’ would cover a potentially limitless array of smart goods, including games consoles, e-books, toys, clocks, etc. Accordingly, the monopoly conferred by the trade mark was too broad and could not be justified.

The implications for the Sky marks are significant, as the Advocate General opined that an insufficiently clear or precise specification could be taken into account when assessing the scope of protection to be given to a trade mark registration. Further, a lack of clarity and/or precision may also allow for a successful challenge to the validity of the trade mark, on the basis that registration of the mark was contrary to public policy.

Bad faith

SkyKick’s second challenge to the validity of the Sky marks was premised on bad faith; Sky had been found by the UK High Court to have no intention at the time of application to use the trade marks for a number of goods/services for which they were registered (including whips, bleaching preparations and insulation materials).

In his discussion of this issue, the Advocate General considered that where there was (as in the case of Sky) a deliberate intention to acquire rights that it had no intention to use, potentially to prevent third parties from using the mark for the goods/services in question, then the application was made in bad faith. As an aside, in the section of the Opinion where the referred questions are answered, the conclusion appears different – that applying for registration of a trade mark without any intention to use it may constitute an element of bad faith. It’ll be interesting to see how or if this is reconciled by the CJEU.

In his discussion of the issue, the Advocate General equated the deliberate intention not to use the trade mark for the goods/services with an intention to abuse the trade mark system. However, the Advocate General was also of the view that, if a finding of bad faith was made, then the invalidity challenge would be successful only in relation to the goods/services in respect of which bad faith was found.

Put another way, bad faith in relation to some of the goods/services listed in the specification, will not necessarily be fatal to the trade mark registration as a whole.

Analysis

The terms of the Advocate General’s opinion will not make comfortable reading for Sky. If the CJEU answer the questions posed by the High Court in line with the views in the Opinion (assuming the ruling is handed down before Brexit), Sky’s position in the High Court infringement proceedings would appear precarious, particularly in view of the opinion on lack of clarity of ‘computer software.’ Sky may however take comfort in the fact that it would appear, for the moment at least, that Sky’s registrations are unlikely to be declared invalid in their entirety.

Future and significance

The potential ramifications for trade mark proprietors and their portfolios are clear: if upheld by the CJEU prior to Brexit, then the clarity and precision (or otherwise) of a specification could take centre stage in invalidity actions. Trade mark proprietors should therefore assess their portfolios accordingly and, if necessary, consider submitting new applications with alternative specifications.

How Nelsons can helpSky SkyKick

Kristina Ford is a Trainee Solicitor at Nelsons.

If you would like any advice in relation to the subjects discussed in this article, please contact Kristina or another member of our Dispute Resolution team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.