Trade marks: Specifications and bad faith
Sky Plc & Ors v SkyKick UK Ltd & AnrThe question
Is an EU trade mark invalid on the basis of an overly broad specification of goods/services?
The key takeaway
An EU trade mark will not be declared invalid on the ground of lack of clarity and precision of its specifications. Further, a lack of intention to use an EU trade mark is not in itself a ground for bad faith.
Sky Plc (Sky), the large media and telecommunications company, brought trade mark infringement and passing off claims against SkyKick UK Limited (SkyKick), a business that provides software solutions to SMEs.
Initially, it was determined that SkyKick had infringed some of Sky’s UK and EU trade marks as SkyKick were using marks that were similar to Sky’s trade marks in the same goods and services categories and some customers would confuse the two brands.
The relevant issues arose on SkyKick’s counterclaim where they argued that Sky should not be able to assert their rights over industries where they do not act, eg cloud computing software tools. As
Sky technically had protected marks in respect of computer software and data storage, SkyKick argued that Sky’s marks (i) should be invalid as their trade mark specifications lacked clarity and precision and (ii) were registered in bad faith as Sky lacked intention to use them in relation to the specified goods or services.
The High Court referred these questions to the CJEU.
Departing from the Advocate General’s Opinion on the matter, the CJEU ruled that:
- an EU trade mark cannot be deemed wholly or partially invalid after registration on the ground that the specification lacks clarity or precision. Using broad terms such as “computer software” (which Sky had used to assert their rights), were not contrary to public policy and did not “confer on the proprietor a monopoly of immense breadth which cannot be justified by a commercial interest”.
- a lack of intention to use an EU trade mark is not in itself a ground for bad faith. The CJEU did however set out a test for finding bad faith, noting that a trade mark application will only be found to have been made in bad faith if the trade mark applicant had the intention 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.
The CJEU also confirmed that, where bad faith was established in respect of certain categories applied for, then only that part of the trade mark will be invalidated.
Why is this important?
There could have been significant implications for trade mark owners if the CJEU had decided that a finding of bad faith against part of a trade mark registration would result in the whole of that registration being invalidated – leaving those holding wide registrations vulnerable to wholesale strike out of their trade mark rights as a result of invalidity challenges.
This decision should therefore be a welcome relief for brand owners seeking to maintain broader protection (albeit less so for companies seeking to clear new brands, as this decision will do little to “de-clutter” the trade mark register of overly broad registrations).
When considering making trade mark applications with wide specifications, it remains prudent to balance the scope of possible protection (and opportunity for further growth) against seeking to cover industries where you do not plan to operate.
Despite the CJEU’s decision, trade mark applicants should remember that the bad faith test will still apply (and the UK does require an intention to use). In addition, whilst trade mark applicants will not be unduly restricted in applying for trade marks with wider specifications, that does not remove the benefit of appropriate specifications to reduce the risk of objections from third parties at the application stage and avoid possible disputes.