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13 May 2020

Sky v Skykick: A sigh of relief for trade mark owners?

On 29 April 2020, the High Court handed down a decision in the Sky v Skykick case that should generally be considered as good news by businesses owning trade marks with broad specifications – although they can’t relax completely. 

Background

The case begun when Sky plc (“Sky”), the well-known media and telecommunications company, sued SkyKick UK Ltd (“Skykick”), a medium sized computer software company, for trade mark infringement and passing off.

Lord Justice Arnold agreed that Skykick’s marks were similar to Sky’s marks, and that they were being used on products and services covered by Sky’s trade mark registrations. He also found that consumers may be confused into thinking that Skykick was part of the Sky brand. Prima facie, then, it appeared that trade mark infringement had occurred.

However, Skykick counterclaimed that a number of their apparent infringements were in services that Sky did not offer, and that Sky should not have trade mark rights in such services. It argued that terms within Sky’s specification, such as ‘computer software,’ were too broad and were filed in bad faith.

Arnold LJ referred the matter to the CJEU for clarity. The CJEU issued their decision on 29 January 2020 and the key points were that:

  1. Lack of clarity or precision of a specification is not in itself a ground for invalidity;
  2. General terms such as ‘computer software’ are not challengeable on a public policy ground;
  3. The lack of intention to use a mark for a good or service that it has been registered for could amount to an application filed in bad faith, which in turn could be grounds to invalidate the part of the specification which had been applied for in bad faith.

Our IP team further discussed the January judgment in the first episode of our IP in a Pod podcast, which can be accessed here:   (and for further reading our article is available here).

High Court Judgment

Last month, the case returned to the High Court where Arnold LJ applied the clarification provided by the CJEU to the facts of the case in front of him. Given the practical restrictions arising from the coronavirus pandemic that are currently affecting court hearings, the case was decided ‘on the papers.’

Applying points 1 and 2 above, he held that although parts of Sky’s specification were indeed unclear and imprecise, they could not be invalidated solely on that basis, nor could they be challenged on a public policy basis.

However, considering bad faith, Arnold LJ found that:

  • there was there was no evidence that Sky ever offered or intended to offer some of the goods and services that could come under the areas that it had applied for protection in;
  • there was no foreseeable prospect of Sky intending to do so; and
  • Sky’s strategy of applying for extremely broad registrations was “purely a legal weapon” to use against third parties, as it had sought to do in this case.

The conclusion drawn from this was that parts of Sky’s registrations had been made in bad faith. He further criticised Sky by remarking that its declarations of ‘intention to use’ on trade mark application forms was “inconsistent with honest practices.”

Having found evidence of bad faith, Justice Arnold was then tasked with determining how to effect the invalidation of the parts of Sky’s registrations that were made in bad faith.

In the case of “computer software,” which was too broad, he narrowed it down to “computer software supplied as part of” followed by a list of Sky’s areas of services, such as television and home entertainment.

He also narrowed down “data storage” to “storage of audio, visual and/or audio-visual content and documents.”

A number of terms were found to not be too broad and were therefore left untouched. Further, Justice Arnold found that Skykick’s migration service was identical to Sky’s e-mail service, and that a number of Skykick’s products were similar to those offered within Sky’s telecommunication services. Accordingly, he held that Skykick had indeed infringed Sky’s trade mark rights in these areas.

An additional point noted by the Court was that Sky had registered its marks in a number of specific areas that it had no intention to ever trade in, such as “whips” and “bleaching preparations.” However, as Sky’s infringement claim was based on areas that Sky felt had been infringed by Skykick (i.e. not these goods), Arnold LJ did not have to consider whether or not they had been filed in bad faith.As Sky had not formally withdrawn its allegation of infringement based on the broader specifications, it was set a deadline to withdraw the claim based on such terms; failure to do so would lead to an assessment by the Court of the validity of such goods and services. 

Although Sky was therefore successful in its claim of infringement, this came at the cost of having some of its specifications narrowed by the Court, as well as the reputational damage arising from its bad faith applications.

Implications

The two important points for trade mark owners to take away from this decision are that:

  1. Broad specifications are permitted, and cannot be invalidated solely on the basis that they are broad. This is good news for – and should bring a sigh of relief from – owners whose existing specifications are broad. 
  2. However, if a third party challenges a specification that it considers to be too broad, and demonstrates that the owner had no established or intended use for its mark for goods and services covered, then the specification may be significantly narrowed down by the Court. This may have unintended consequences.

The decision should help to inform businesses on their strategy when deciding how broad or specific to make their trade mark specifications going forward. Clearly, it is important for trade mark owners to receive sound advice on these matters in order to understand the legal and commercial exposure of filing a broad or narrow specification. Broad specifications may still be justified but where such terms are covered, there should be a paper trail documenting the commercial justification for seeking such wide protection.

Our IP team is on hand to assist with all future trade mark applications, as well as advise on existing registrations that trade mark owners may be concerned about.

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