December 2024 The Supreme Court has delivered its judgment on the long standing SkyKick v Sky dispute, overturning the Court of Appeal’s decision and confirming that the High Court was correct in their findings regarding bad faith on the filing of the SKY marks.
This judgement marks an important step forward in clarifying the definition of ‘bad faith’ and highlights the importance of having a genuine intent to the use trade marks for all goods and services covered.
Background
Sky, the well-known television, telephone, broadband provider and TV broadcaster in the UK, has multiple trade marks registered to cover a broad range of goods and services.
SkyKick, the defendants, are a US-based IT company that produces software for use by Microsoft® users, as part of cloud migration, backup, and management products.
In 2016, Sky filed an invalidation claim against Skykick, based on five of their registrations, together with a claim for passing off. This application was filed against SkyKick’s existing registrations, all being variations of the term “SKYKICK”.
The alleged infringement was denied by SkyKick who also counterclaimed for whole or partial invalidity of Sky’s registrations, on the basis that the goods and services of Sky’s registrations lacked clarity and that they had been filed in bad faith, according to Section 3(6) of the UK Trade Marks Act 1994, whereby “A trade mark shall not be registered if or to the extent that the application is made in bad faith.”
In more detail, SkyKick argued that the goods and services registered for the SKY marks were too broad and not filed with genuine intent to use. Instead, SkyKick claimed that they were registered as an attempt to stifle competition. For example, these marks were registered to cover a wide range of goods in multiple classes, including “bleaching preparations”, “insulation materials” and “whips”, which it is reasonable to assume that Sky never have and never will intend to trade in.
In the High Court, Mr Justice Arnold noted that there was a large array of goods that Sky had no intention of ever using, as well as overly broad terminology in class 9, which was intended to cover all “computer software”, rather than just the products and services the company provides.
The High Court Judge found that Sky had filed the marks in bad faith in respect of some of the goods applied for. The marks were therefore found partially invalid. Nevertheless, Arnold J also found that the Skykick marks had infringed on Sky’s IP.
The case was additionally referred to the Court of Justice of the European Union with questions on the law of bad faith. The CJEU confirmed that trade marks can be found to be partially invalid if they are registered for goods and services with no genuine intention to use them, especially if this has been done to monopolize the mark and have an unfair competitive advantage.
The Court of Appeal
Sky appealed the High Court decision at the Court of Appeal. There, the judge overturned the High Court Judge’s ruling, and found that Sky had not acted in bad faith when filing the applications for registration.
The Supreme Court
SkyKick then appealed the Court of Appeal’s decision on bad faith, this time to the Supreme Court, the panel of judges being overseen by Lord Kitchin.
The Supreme Court Judge agreed with the High Court and concluded that the SKY marks were indeed filed in bad faith.
He said:
“The application was made with the intention of securing an exclusive right for purposes other than those falling within the exclusive functions of a trade mark, in other words it constituted an abuse in so far as the applications had been made to register the SKY marks in respect of goods and services which Sky had no intention to supply and where there was no realistic prospect of them ever doing so.”
The Sky registrations remain valid only for the goods and services on which the marks were to be genuinely used on, namely in:-
Class 9
Computer software
Computer software supplied from the internet
Computer software and telecoms apparatus to enable connection to databases and the internet
Data storage
Class 38
Telecommunications services
Electronic mail services
Internet portal services
Computer services for accessing and retrieving information/data via a computer or computer network
Infringement
Concerning the infringement of Sky’s marks, the High Court found that SkyKick had indeed infringed against the SKY marks. This finding was upheld throughout the Court of Appeal and by Lord Kitchin in the Supreme Court. Namely, SkyKick infringed the SKY marks with a likelihood of confusion and unfair advantage of reputation, despite them being filed in bad faith.
Conclusion
This ruling clarifies the position of UK trade mark law with regards to genuine intention to use trade marks on goods.
A key take-away from this judgment is that filing of applications can be found to be in bad faith if they are filed for overly broad goods and services, with the intent to monopolize and restrict competition.
It warns proprietors of marks to avoid filing marks with overly broad goods and services if they have no real intent to use the mark on these goods.
