SkyKick – Bad Faith & Broad Trade Mark Specifications: What Do We Know Now?

SkyKick Court AppealWhilst we’ve written about the SkyKick trade mark litigation already (here and here), before we look at the implications of the latest Court of Appeal decision, it’d be useful to just summarise the facts and the earlier decisions.

Case background and previous decisions

In brief, well-known broadcasting, telephony and broadband provider, Sky, considered that their EU and UK trade marks for ‘SKY’ were infringed by the use of SKYKICK, where such use was in relation to email migration and cloud storage services. Sky also alleged that such use of SKYKICK constituted passing off.

Following a number of UK High Court decisions and one judgment of the Court of Justice of the European Union, by July 2020, Sky was, overall, the successful party. However, Sky did take a bit of a kicking (pun intended). Whilst finding in Sky’s favour, the High Court decision found Sky’s trade marks to be partially invalid (modifying the specification of the trade marks accordingly) and also dismissed its passing off claim.

However, crucially for Sky, whilst the specification for its trade marks (i.e. the list of goods and services for which the marks were registered) was significantly restricted following the Court’s rewrite of it, the services supplied under the mark SKYKICK were still found to infringe Sky’s now reduced rights.

Recent decision of the Court of Appeal

Fast forward to 2021 and Sky appealed against the finding of partial invalidity, as well as the dismissal of the passing off claim. Skykick cross-appealed against the finding of infringement and further argued that the decision of the High Court in July 2020 did not go far enough in reducing the scope of Sky’s registered rights.

Before the Court of Appeal, Sky successfully argued that the High Court’s decision should be overruled.

The Court of Appeal noted:

  • That there were good and bad reasons for applying to register the trade marks in the way that Sky did; and
  • That some of the goods and services included in the registrations may have been applied for in bad faith did not invalidate the registration in its entirety. This had been established by the CJEU.

Consequently, it was necessary to determine which of the goods and services actually relied on by Sky in the litigation (which was not all of the goods and services included within the specification) was (or was not) applied for in good faith.

The Court of Appeal considered that the High Court had not undertaken that exercise and had instead used its finding that the trade marks (as a whole) were applied for partly in good faith, partly in bad faith, as a justification to restrict the specification in relation to the goods/services actually relied upon.

Put another way, the Court of Appeal determined that the High Court should have assessed whether the goods/services relied upon in the litigation had been applied for in good or bad faith before moving to rewrite those parts of the trade marks specification.

The passing off decision of the High Court remained undisturbed and Skykick’s cross-appeal against the infringement finding was unsuccessful.

Comment

At various points in its history, Skykick has had the potential to be disruptive; following the Advocate General’s (AG) opinion in 2019 (see here) there was concern that a trade mark could be found to be invalid if any (i.e. not all) of the goods and services applied for, were applied for in bad faith. Further, the AG considered that a broad specification could form the basis of a validity challenge, as being contrary to public policy.

The ramifications had such opinion been followed by the CJEU and then applied by the UK’s High Court (as it was bound to, pre Brexit), would have been significant.

The CJEU did not follow the AG’s opinion but the High Court decision that followed still had the potential to cause consternation amongst those who had taken an expansive approach to their specifications in the past.

So is it now time for those who were concerned to relax? I would say not; in part, Sky was successful because the Court of Appeal disapproved of the reasoning adopted by the High Court. It did not agree that because bad faith was found in respect of some goods and services included within the specifications, this entitled the Judge to rewrite those goods and services actually relied upon. Had the Judge in the High Court found bad faith in relation to the goods and services relied upon, then the same result could well have followed at appeal level.

However, the Court of Appeal decision does also adopt a more moderate and commercially minded approach, one that is alive to the challenges of drafting trade mark specifications – broad enough to provide sufficient protection as a business evolves over the next five years but narrow enough so as not to invite a rewrite on a validity challenge.

Of particular interest is the Court of Appeal’s comments in relation to broad specifications. As per the appellate Court, ‘computer software’ (one of the terms used in Sky’s trade marks and rewritten by the High Court) could not be declared invalid as a whole, just because Sky might not have intended to use the mark in relation to some goods that fall within such a broad category.

That Sky had no prospect of using their marks in relation to every conceivable sub-division of ‘computer software’ would not be a sound basis for finding bad faith.

SkyKick Court AppealHow can Nelsons help?

Emma Toes (née 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 or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.

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