The long running saga of the battle between Sky Ltd (“Sky”) and SkyKick UK Ltd (“SkyKick”) is finally over. And finally, not just because of the recent decision of the UK Supreme Court in SkyKick UK Ltd and another (“SkyKick”) v Sky Ltd [2024] UKSC 36 but because a settlement was also reached between the parties just before the decision was issued.
Background
In the initial action between the parties in the High Court [2018] EWHC 155 (Ch) (covered here in our earlier article), Sky sued SkyKick for passing off and infringement of its trade mark registrations, while SkyKick challenged the validity of those registrations on the basis that Sky had applied for its trade mark registrations in bad faith by filing for overly broad specifications of goods and services. The Judge held that there was no passing off but that, following a reference to the CJEU on potential validity of trade mark registrations, Sky had acted in bad faith and that its trade mark registrations were partially invalid. The reasoning was that Sky had filed applications for goods and services which it had never intended to use and for categories of goods and services which were so broad that Sky could not have intended to use them and for which it had no conceivable commercial rationale. However, the Judge also found that certain of SkyKick’s services still infringed Sky’s registrations, even after they were limited to take account of the successful validity challenges.
Both parties appealed to the Court of Appeal [2021] EWCA Civ 1121, which allowed Sky’s appeal that it had not acted in bad faith, and therefore restored the registrations to their full width, which meant that SkyKick’s appeal on infringement failed.
Final Decision
SkyKick then appealed to the Supreme Court, which held that the High Court was entitled to find that Sky’s trade mark registrations were filed in bad faith but that, after taking into account the subsequent narrowed range of services covered by Sky’s registrations, the Court of Appeal was right to find that SkyKick had infringed the registrations in relation to Cloud Backup services.
Key Elements of the Case
Bad Faith
It was decided that the overall width or size of the specifications of goods and services filed is not determinative of whether the applications will be held to be filed in bad faith.
The fact that an application covered goods or services that were not eventually used by the proprietor of the subsequent registration is also not determinative of bad faith.
However, the risk of a finding of bad faith is particularly high where there are 'red flags' in a specification. These include the inclusion of terms considered very broad (such as 'computer software', telecommunications' and 'pharmaceuticals'), long lists of goods or services, and goods or services seemingly not connected to the applicant's business. It will not have helped Sky’s case that at least two of their registrations covered the class headings of 22 classes, and included goods far removed from their business such as “bleaching preparations” and “insulation materials”. The fact that Sky was a leading brand throughout the UK also did not help justify registrations that covered goods and services outside its area of business.
Even if there is a finding of bad faith, only those goods or services which are seen to be affected will be deleted from the relevant applications or registrations.
Brexit
In UK trade mark law and practice, Brexit always seems to be with us. In this case, the Supreme Court confirmed that the EU Trade Mark Regulation continues to have direct effect in relation to proceedings pending before a UK court (designated as an EU trade mark court) prior to the end of the transition period on 31 December 2020, so the decision affected Sky’s EU trade mark registrations as well.
Public Importance
Despite the parties requesting that the decision not be delivered following their settlement, the Court determined that the issues in the case were of sufficient general public importance, and sufficiently affected other traders and the public, to justify handing down its judgment. This approach was supported by the fact that the UKIPO had intervened to request a ruling to provide clarity on future practice.
Key Takeaways
Following the decision, filing UK trade mark applications for broad specifications of goods and/or services could leave new applications, and consequent trade mark registrations, open to attack on the ground of bad faith, either at the opposition stage for applications or else as a post-grant invalidity action. Therefore, if broad applications, or applications for goods and/or services outside the current business are seen to be needed to protect future interests, it seems important for brand owners to record the commercial rationale for the decision as that evidence could be useful in the event of a possible bad faith attack, which may not arise until long into the future.
General terms such as “telecommunications” and “pharmaceuticals” should be avoided and the practice of the USPTO which prefers descriptions which more particularly specify the type of good or services provided should be considered.
It is expected that the UKIPO will now issue a Practice Amendment Notice to clarify their approach to bad faith in examination of trade mark applications, which will be of assistance to applicants. Decisions of the UKIPO in a number of opposition and cancellations actions that have been stayed pending the outcome of the case will also be helpful in determining the extent of the impact of the case.
Delays may now occur in the examination of UK trade mark applications as the UKIPO will need to scrutinise the goods and/or services filed to potentially check for use of over-broad terms, which may signify bad faith and be liable to be refused under section 3(6) of the Trade Marks Act 1994. It is also likely that there may also be a greater number of bad faith-based oppositions and invalidity actions.
A review of trade mark portfolios should be undertaken to check if any registrations should be voluntarily limited to avoid a potential future attack on the ground of bad faith.
If you wish to discuss the points covered in this article or need advice on any aspect of your trade mark portfolio, please get in touch with our trade mark team who would be delighted to assist you.
This blog was co-authored by Kate O'Rourke and Andy King.
Kate is a Solicitor and Chartered Trade Mark Attorney with over 25 years’ experience in relation to trade marks and related copyright, design and internet matters. Her work includes advising on the adoption, registration and enforcement of trade marks internationally, with a particular focus on the leisure and retail industries with a global reach. She has a particular expertise in counselling clients on international filing and enforcement strategies and avoiding dilution of the value of trade marks. Advising charities has also been a key aspect of Kate’s work and she was awarded an MBE in 2016 for services to education. Kate is the former President of the Chartered Institute of Trade Mark Attorneys and currently chairs the Representation Advisory and Working Groups of CITMA.
Email: kate.o'rourke@mewburn.com
