Supreme Court sides with High Court not Court of Appeal on Sky v SkyKick trade mark case
Intention to use it or lose it? Trainee trade mark attorney Joe Gargano explains that while Sky and SkyKick settled their trade mark dispute following a Court of Appeal ruling, the Supreme Court largely agreed with the High Court’s decision.
Parties – SkyKick UK Ltd and another (appellants) v Sky Ltd and others (respondents)
Background
Sky alleged that SkyKick infringed its registered trade marks by offering email migration and cloud storage services under the SkyKick mark. Sky based its claim on five registered trade marks, all of which covered a broad range of goods and services, including both class headings and specific terms such as ‘computer software’. SkyKick counterclaimed that the SKY marks were invalid due to unclear and imprecise specifications and bad faith on the basis that Sky had no intention to use the marks for the broad range of goods and services protected.
The High Court held that the case required input from the Court of Justice of the European Union (CJEU). The CJEU ruled that an applicant does not need a fully developed intention to use a mark, but they must have a genuine intention to explore the mark’s viability. If no such intention exists, and the applicant seeks to enforce the mark across a broad range of goods and/or services, this could be considered bad faith. However, the CJEU also stated that a bad faith claim could be rebutted if the applicant is able to provide a legitimate commercial rationale for broad goods and/or services.
The High Court subsequently found that Sky’s registrations had been partly filed in bad faith, as Sky had no intention to use the marks for certain goods and services, applying for those terms only to use them to prevent others from registering/using the same. The High Court reframed Sky’s limited specification to provide it fair protection.
The Court of Appeal reversed the High Court’s findings, ruling that SkyKick had failed to prove bad faith, thereby seemingly raising the bar for third parties to succeed in a bad faith claim where there is no intention to use.
Supreme Court Case
The case was appealed and although the parties had already settled, the Supreme Court took the unusual step of issuing its decision due to the important underlying principles for trade mark law, agreeing largely with the High Court approach rather than the Court of Appeal.
The Supreme Court ruled as follows:-
Use of broad specifications
- If the applicant applies to register the mark in all 45 classes or for broad wide ranging goods and/or services, without an explanation, the broad scope of the application could lead to a finding of bad faith. Once it is suggested the applicant may have filed in bad faith, the size and scope of the specifications, relative to the size and nature of the applicant’s business should be assessed and it should then be considered whether the aforementioned is enough to justify a bad faith claim.
- Ultimately, without a justifiable explanation for the application’s scope, it is reasonable to infer that the application constitutes abuse/bad faith based on the size and nature of the listed goods and services and other circumstances. The Supreme Court held that the Court of Appeal had failed to take into consideration Sky’s behaviour in the lead up to the trial which supported the view that Sky had “secured these registrations across a great range of goods and services which they never had any intention to sell or provide, and yet they were prepared to deploy the full armoury presented by these SKY marks against a trader whose activities were not likely to cause confusion”.
- Importantly, the Supreme Court held that the applicant’s reputation alone does not justify applying to register a trade mark for goods and services the applicant never intended to use, even though the Court of Appeal had given significant weight to Sky’s UK reputation in its earlier decision.
Class headings and broad terms
It would be unfair for traders using broad terms to be in a more favourable position than those using specific sub-categories.
- The matter should be assessed at the time of application, considering whether the applicant was ‘required’ or ‘encouraged’ to use class headings when evaluating a bad faith claim.
- There is no doubt that an application to register a mark for a broad category of goods and services may be partly in bad faith if it includes distinct sub-categories in respect of which the applicant never had a genuine intention to use, whether conditionally or otherwise.
- The Supreme Court held that the “opponent” and party alleging bad faith may not know the applicant’s true intentions at the time of filing and is unlikely to be able to specify the exact specification the registration should cover. The Supreme Court acknowledged that the party making the claim may be constrained to relying on the objective facts available in order to shift the burden of no bad faith on to the applicant.
What does this mean moving forward?
- There will now be a careful balance to strike between a sufficiently broad specification that adequately covers the applicant’s commercial interests and not inviting unnecessary bad faith attacks. There will be no ‘one size fits all’ approach – what is right for one brand owner might not be right for another.
- The applicant should record in writing at the time of filing their rationale for the filing and for the particular goods/services applied for, particularly where the applied for goods/services are broad in nature, for example, ‘computer software’.
- Brand owners should take advice on what goods/services to enforce even if the respective registration is within the five-year grace period following registration.
The UK office (UKIPO) has stated that it is considering the decision and any appropriate changes of policy, therefore, brand owners (and their counsel) should watch for future developments.
If you would like to discuss this article further, please contact the author, or your usual Barker Brettell trade mark attorney.
