The UK Supreme Court has given the final judgment in the long-running SkyKick case. The judgment mainly addresses whether a trade mark registration can be invalidated on the basis that the application was made in bad faith because the applicant did not, at the time of filing, have a genuine intention to use the mark in relation to some or all of the goods or services for which protection was sought.
The litigation concerned four EU trade marks and one UK trade mark for SKY (word and figurative) covering what the Court described as an “enormous” range of goods and services across many classes.
Sky alleged that use of the SKYKICK mark in various versions infringed the SKY marks. SkyKick sought to invalidate the SKY marks wholly or partly including on the basis that the applications had been made in bad faith.
Following a referral to the CJEU, Arnold J (as he was) found the SKY marks were partly invalid but were infringed by SkyKick’s email migration and cloud storage services. The Court of Appeal upheld Sky’s appeal and restored the specifications to their full width.
The Supreme Court's SkyKick judgment
The Supreme Court, in a judgment written by Lord Kitchin, upheld SkyKick’s appeal and found that Arnold J was entitled to find that the SKY marks were applied for in part in bad faith. It also upheld the Court of Appeal’s finding on infringement, namely that there was infringement by SkyKick’s Cloud Backup service but not by its Cloud Migration service.
There were four main reasons for the Court’s finding on bad faith:
The Court of Appeal “failed properly to appreciate the scope and component elements of the bad faith objection to the validity of a trade mark that the application was made in bad faith in respect of some or all of the goods or services for which protection was sought”.
Arnold J made no material error in applying the relevant principles to the facts such as to justify interference.
The Court of Appeal “did not take into account properly or at all a number of highly significant facts and matters” namely Sky’s initial reliance on the full range of goods and services and that it maintained its position nearly up to the trial. This supported the argument that Sky had applied for registrations for goods and services which they never had any intention to sell or provide.
The judge could not be criticised for approaching the matter as he did and finding that Sky had applied for and were prepared to enforce marks in respect of goods and services “of such a range and breadth that it was implausible that Sky would ever provide them, or that Sky ever had any genuine intention (whether provisional or conditional) to provide them under the SKY marks”.
The Court reversed the Court of Appeal’s finding that the procedure adopted by Arnold J to determine the appropriate specification of goods and services was unfair to Sky, saying: “There was no surprise here and neither side was materially disadvantaged for any reason which could justify setting aside the order he made.”
The case also addressed the impact of Brexit on the Court’s jurisdiction over EU trade marks. The Court concluded that Articles 122-135 of the EUTM Regulation have direct effect in the UK in the context of proceedings pending before a UK court designated as an EU trade mark court prior to IP completion day (31 December 2020):
“These courts continue to have the jurisdiction provided for by those articles until the conclusion of the cases before them, as do any domestic courts hearing an appeal from their decisions in those cases.”
The Brexit issue was also the subject of a concurring judgment by Lord Reed, President of the Supreme Court.
What does this mean?
The SkyKick judgment covers many important issues relating to bad faith applications, trade mark infringement, unfairness and the impact of Brexit. It is a long judgment but given its importance, it is worth reading in full.
The key takeaway is that trade mark registrations may be found to be partially invalid on the grounds of bad faith if they extend to goods and services that the owner would not plausibly provide. Trade mark owners should therefore review their portfolios if they include marks with very broad specifications.
Finally, it is notable that the parties informed the Court before the judgment was delivered that they had settled their dispute and they wanted to withdraw the appeal. However, the Comptroller-General of the UK IPO invited the Court to give judgment anyway given the importance of the issues raised.
To find out more about the issues raised in this blog contact Rosie Burbidge