On 29 April 2020, the Sky and SkyKick saga came to a conclusion. The High Court, despite finding Sky’s trade marks to be partially invalid on the ground of bad faith, found in favour of Sky regarding their trade mark infringement claim against SkyKick.
Sky is Europe’s largest media and telecommunications company. SkyKick is a global provider of cloud management software for IT solution providers. On paper, it may seem that Sky and SkyKick do not appear to be competitors.
Despite this, in 2016, Sky issued proceedings against SkyKick in the High Court for trade mark infringement and passing off. SkyKick counterclaimed that Sky’s trade marks were invalid on the grounds that “(i) the specifications of goods and services lacked clarity and precision and (ii) the applications were made in bad faith”.
Questions were referred to the CJEU, who did not follow the AG’s opinion that the whole mark should be declared invalid as opposed to only the parts deemed to be registered in bad faith as reported here.
The CJEU held, amongst other things, that lack of clarity or precision of goods and services are not an absolute ground for invalidity as discussed here.
The case returned to the High Court where Lord Justice Arnold was required to apply the law from the CJEU decision.
CLARITY AND PRECISION
The Judge quickly dismissed SkyKick’s allegation that Sky’s trade marks are invalid on the grounds of clarity and precision, following the decision of the CJEU: “[i]t is clear from the CJEU’s first ruling that the Trade Marks cannot be declared wholly or partly invalid on the ground that their specifications are lacking in clarity or precision.” .
Firstly, the Judge highlighted SkyKick’s attempt to amend their general pleading in the Reply stage to allege bad faith specifically in relation to “telecommunications services” and “electronic mail services“. The Judge commented that this deprived Sky of the “opportunity of adducing evidence to answer such an allegation” and was of the opinion it was too late for SkyKick to seek to raise this now as bad faith is “a serious allegation which must be distinctly pleaded and proved.” .
Secondly, the Judge determined whether SkyKick had established that the trade marks were applied for in bad faith to any extent at all. The Judge emphasised Sky’s lack of intention to use the marks and stated their applications were “pursuant to a deliberate strategy of seeking very broad protection…regardless of whether it was commercially justified…with the intention of obtaining an exclusive right… purely as a legal weapon against third parties” .
The Judge strengthened this argument with the additional finding that Sky made a partly false section 32(3) declaration by stating that they intend to use the mark for the goods and services for which they applied, against honest practices, in order to obtain such protection.
The Judge then looked at other goods and services. In relation to “computer software” the Judge stated: “[t]he fact that Sky did not intend to use the Trade Marks across the breadth of this category of goods does not mean that they did not intend to use the Trade Marks in relation to any computer software” . The Judge noted that proprietors may “have a legitimate interest in seeking a modest penumbra of protection extending beyond the specific goods and services in relation to which use had been proved (but not to distinct categories or subcategories of goods and services)” .
In relation to goods and services that are unrelated to Sky’s activities (for example “whips” and “bleaching preparations”) the Judge gave Sky seven days from the date of the judgment to withdraw their infringement claim based on these goods and services. If Sky fail to do so, the Judge will determine the validity of those parts of the trade marks and make the appropriate declarations. This is despite the first judgment where the Judge highlighted these specific named goods and services and used these specifications as a ground to prove that Sky had no intention to use the marks.
The fact that the trade marks were found to be partially invalid does not affect a finding of infringement.
The Judge summarised the relevant principles of interpretation for terms of goods and services:
“(1) General terms are to be interpreted as covering the goods or services clearly covered by the literal meaning of the terms, and not other goods or services.
(2) In the case of services, the terms used should not be interpreted widely, but confined to the core of the possible meanings attributable to the terms.
(3) An unclear or imprecise term should be narrowly interpreted as extending only to such goods or services as it clearly covers.
(4) A term which cannot be interpreted is to be disregarded” .
Applying these principles, the Judge found infringement in relation to “electronic mail services” (the identical service Skykick offers).
This case reconsiders the interpretation of terms and listing of classes of good and services. The High Court’s decision suggests that proprietors can continue to register marks across a broad range of goods and services without being declared wholly invalid for imprecision or clarity.
However, the judgment also warns proprietors who register marks in certain goods or services without commercial justification that they might be exposed to scrutiny for lack of intention to use the mark, even within the initial five year grace period.
Regarding bad faith, the Judge’s allowance for a revision of Sky’s specification suggests that proprietors might be able to alter the scope of protection in future by submitting a proposal to the Court.
Ultimately, brand owners should ensure their specifications accurately reflect the goods and services they offer as the judgment may pave the way for an increase in objections to broad specifications.