Skykick kicked sky-high by the CJEU

7th February 2020 Intellectual Property

On 29 January 2020, the Court of Justice of the European Union (CJEU) handed down a key judgment on EU and UK trade mark law in the case of Sky plc, Sky International AG, Sky UK Limited (together ‘Sky’) v Skykick UK Limited, Skykick Inc. (together ‘Skykick’), Case C-371/18.

The CJEU considered questions referred by Arnold J, as he then was, sitting in the High Court of Justice of England & Wales (‘High Court’).

In Part 1 of this blog we consider the facts of the case, the questions referred to the CJEU and the issue of whether a trade mark registration lacking in clarity and precision amounts to an absolute ground for invalidity. In part 2 we consider the arguments raised by Skykick on bad faith and the practical implications of the decision for trade mark holders.

The issues considered by the CJEU

The CJEU considered whether a lack of clarity and precision in a trade mark’s goods and services specification was an absolute ground on which the mark could be declared invalid. In such an instance, would the specification might be considered so general and covering so many different goods/services that it would be incompatible with a trade mark’s function of a sign of origin. In addition, the High Court referred a question of whether it would amount to bad faith to apply to register a mark where the applicant had no intention to use it for the specified goods or services applied.

The Law

EU and UK trade mark laws largely mirror each other when determining whether an application to register a mark should be accepted. In particular, the UK, through the Intellectual Property Office, follows the EU’s absolute and relative grounds for the refusal of a registration.

An application will be refused if one of the absolute grounds applies – for instance, if the trade mark is “devoid of any distinctive character”. The relative grounds were not relevant for the purposes of this case, but relate to whether another business already uses the particular brand (or similar brand) an applicant is trying to register.

The key difference between UK and EU trade mark law is that UK law requires a trade mark to be sufficiently clear and precise in what goods and services it intends to cover, while EU law does not.

The Skykick Case

Sky, the well-known broadcasting and media conglomerate, brought an action against Skykick for infringing its various trade marks that include the word ‘Sky’ and which Sky has registered in respect of a broad range of goods and services including “computer software”.

Skykick argued that Sky’s trade marks were invalid because they failed to satisfy the relevant test of sufficient clarity and precision in the specification of goods and services. Skykick argued a term such as “computer software” was too broad and general, and covered goods and services that were too variable to be understood by a third party. An important by-product of this was Skykick’s secondary argument that an applicant should be said to have acted in bad faith if at the time of filing the application they did not intend to use the trade mark in relation to all of the goods and services within the class applied for. In the circumstances, the marks should be declared invalid.

In practice, the effect of the CJEU accepting these arguments would have been that the UK would have created its own absolute ground – namely, the absolute ground of not satisfying the a test of sufficient clarity and precision in the definition of goods or services. However, Member States have no authority to be such creators.

Part 1

The CJEU’s response to Arnold J’s questions – lack of clarity and precision

The CJEU concluded that there is no requirement for precision and clarity so that it might amount to an absolute ground of invalidity and nor was this objectionable on the basis of the ground of public policy.

The CJEU said that EU law provides an exhaustive list of absolute grounds of invalidity. Goods and services lacking in clarity and precision is not within this list and therefore cannot be a ground for invalidating a national mark or a CTM. The CJEU also confirmed that Member States are prohibited from adding to the list any additional requirements or absolute refusal grounds, other than when “expressly provided for” by EU law.

The CJEU also held that lack of precision and clarity would not fall within the absolute grounds for invalidity of either (a) a requirement of graphic representation or (b) being contrary to public policy.

In regards to the requirement of graphic representation, the CJEU held this was not relevant, as the requirement for competitors to understand with clarity and precision marks, that related to being able to identify the signs a mark consisted of, and not terms used to refer to goods or services for which the mark had been registered.

Turning to the absolute ground of a trade mark being ‘contrary to public policy’ the CJEU held that this is not concerned with the characteristics of the trade mark application itself. This means a trade mark challenger cannot argue that an applicant’s failure to set out with clarity and precision the goods and services to which the trade mark would apply means that the trade mark application is invalid on the ground of public policy. Disappointingly, the CJEU did not provide any explanation of this conclusion – perhaps because the issue of public policy was uncontended among the parties and not asked about by Arnold J.

In Part 2 we consider the CJEU’s decision on bad faith and the practical implications of this decisions for trade mark holders.

Part 2

Bad faith and lack of intention

In Part 1 of our consideration of the recent Skykick decision, we considered the CJEU’s decision on the need (or lack thereof) for clarity and precision in the specification of goods or services in the registration of a mark. We now turn to consider the CJEU’s decision on the implications of bad faith and the lack of an intention to use a mark at the point of registration.

By way of a recap, the CJEU was to consider whether marks were invalid if registered with bad faith. Skykick pointed to the large number of trade marks obtained by Sky, for goods ranging from computer software to furs or fire extinguishers. Skykick argued that the class of goods was so wide, and so far removed from Sky’s core business that there could be no intention to be used by Sky in that manner.

The CJEU concluded that a filing for goods and services in which the applicant has no intention to use the trade mark in relation to those goods and services is not bad faith by itself.

Rather, in relying upon an earlier decision in Koton Magazacilik Tekstil Sanayi ve Ticare v EUIPO, the CJEU held that to satisfy the absolute ground of invalidly for bad faith it must be shown that the trade mark holder had applied to register the mark, not with the aim of protecting their brand or engaging fairly in competition, but with the:

(a)  dishonest intention of undermining the interests of third parties; or

(b)  intention of obtaining a monopoly for purposes other than those falling within the functions of a trade mark, for instance to denote origin.

In our view, this threshold seems to be quite a high one.

The CJEU said that to establish bad faith where there is an absence of intention, the challenger will need to demonstrate “objective, relevant and consistent indicia tending to show that…” the trade mark applicant was seeking to undermine the system in a way inconsistent with honest practices. Reference to “consistent” suggests a pattern of behavior is required. In addition, it appears that bad faith cannot be presumed merely because, at the point of filing an application, the applicant had no economic activity corresponding to the goods or services appearing in the application.

Where there is a finding of bad faith, it will only arise in relation to those certain goods or services and a partial finding of bad faith is possible.

The worst outcome for a trade mark holder who might apply for a trade mark in regards to certain goods and services that they did not intend to deal in would therefore be a partial revocation of their trade mark, if parts of the trade mark specification were made in bad faith. The trade mark itself would remain intact for those goods and services specified in good faith in the same application and in which the holder trades in.

This will be re-assuring news to trade mark holders with large and often uncertain plans for their proposed trade mark. It is particularly good news for businesses who lead in technological advancements, as the precise scope of their brand is often unknown at the time of filing.

What Does This Mean For You?

Trade mark applicants and holders should welcome the decision. It is now a bit harder for someone to pick holes in your trade marks. However, it is still important to ensure your trade mark filing is watertight, and to carefully consider how you intend to use a mark, in order to avoid the possibility of becoming embroiled in unwanted litigation.

It is also possible that those applying for trade marks may experience push back by the relevant trade mark office, as greater scrutiny may be placed at the point of registration given the decision in Skykick relating to challenges post grant of a registration. We will have to watch this space to see how this might develop in practice.

For trade mark challengers, the decision means you will have to think more carefully when making a challenge. Some good news is that the relevant provisions of UK law are alive and well, so UK trade mark applicants and holders must remain aware of these additional requirements.

The case serves as an important reminder of the need for trade mark applicants and challengers to obtain specialist legal advice before embarking on either route. We are a specialist IP team at JMW Solicitors LLP London, led by Philip Partington, and advise clients, large and small, on their IP rights.

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Philip Partington is a Partner located in Londonin our Intellectual Property department

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