Court of Justice of the EU issues judgment in Sky v Skykick

Court of Justice of the EU issues judgment in Sky v Skykick

In a long-awaited decision, the Court has held that trade mark registrations:

  • may not be declared invalid on the basis that they include “imprecise” terms such as “computer software” within their specifications;
  • may be declared invalid for bad faith where the applicant has covered goods or services within its specification for which there is no commercial rationale; and
  • may be declared partially invalid for bad faith where the applicant has a commercial rationale for some goods/services but not others.

The Court also held that the requirement in UK law for an applicant to state on its trade mark application form that it intends to use the mark for the goods and services specified is compatible with EU law – since it does not create an additional ground for invalidity of a trade mark but may provide evidence relevant to the existing ground of invalidity on the basis of bad faith.

This judgment forms part of the long-running dispute between the well-known broadcaster Sky plc and Skykick UK Ltd, a company which provides software and services which assist businesses in email account migration and cloud back-up. Sky Plc claimed that use of the trade mark SKYKICK in respect of such software and services infringed its registered trade marks for SKY which covered goods and services including “computer software” without limitation and “electronic mail services”. Skykick counterclaimed that all of SKY’s registrations were (a) invalid, as a whole or in part, on the basis that they were filed in bad faith without an intention to use the mark for all the goods and services specified (given that Sky’s registrations did in some cases cover thousands of different terms, some of which were far removed from its business) and/or (b) invalid to the extent that they included impermissibly broad terms such as “computer software”.

Skykick’s challenge went to the heart of the philosophy of how registered trade marks should be protected in the UK and EU. In particular, the challenge that a registration might be declared invalid on the basis that it included a term such as “computer software” in its specification could have had very significant ramifications for all existing registered trade marks.

In that context, the court has, accordingly, sought to chart a middle course. Its rejection of the claim that use of a term such as “computer software” in a specification inevitably leads to that registration being declared invalid will be of comfort to trade mark proprietors of registrations which were obtained in the last five years and which include such terms (of which there must be many thousands).

On the ground of invalidity for bad faith, the court has again sought to chart a middle course and has made clear:

  • bad faith cannot be presumed on the basis of a finding that “at the time of filing of his or her application, … [the] applicant had no economic activity corresponding to the goods and services referred to in that application”;
  • the applicant for a trade mark “is not required to indicate or even to know precisely, on the date of his or her application…the use he or she will make of the mark applied for…”;
  • BUT bad faith may be found “where there is no rationale for the application for registration in the light of the aims referred to in [the EUTM Regulation and Directive];
  • and it may be found where there is “objective, relevant and consistent indicia tending to show that…the trade mark applicant 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.”

This might be roughly summarised as requiring an applicant to show a “commercial rationale” for the goods and services it specifies in its trade mark application and permitting third parties to successfully challenge registrations where there is good evidence to show there was no commercial rationale for the specification the applicant chose to adopt. Nevertheless, it will be for later national courts to decide precisely in practice what leeway trade mark applicants might be given in their choice of goods and services.

Sky v Skykick will now return to the UK High Court for a decision on the facts. Since the UK court has already made preliminary findings that Sky did not have a bona fide intention to use its marks on at least some of the goods within its specifications, it is likely that it will find that some of Sky’s registrations are at least partially invalid. But it will be a harder question to decide whether the SKY registrations are partially invalid to such an extent that Skykick avoids infringement entirely.

By Peter Houlihan

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Posted on: 29th January 2020