The Court of Justice of the European Union (‘CJEU’) handed down its eagerly awaited judgement of Case C-371/18 Sky plc et. -v- SkyKick UK Ltd et., on 29th January 2020. In this judgement, the CJEU addressed a number of key issues, namely: the use of specifications covering broad terms such as ‘computer software’ and whether an EU mark which is registered for these goods but does not intend to use the mark on these goods  constitutes bad faith, thereby invalidating the mark. The CJEU also determined whether the English law requirement that an applicant has a bona fide intention to use a mark is compatible with EU law. Read on to see what M&D makes of this interesting case.

Background

The defendant, SkyKick is a company offering cloud-based software management services to small and medium-sized businesses. The main claimant, Sky Plc. (‘Sky’) is the household name for television, broadband, mobile and telephone services. Sky actively trades in the UK and  elsewhere under the SKY brand and is the proprietor of several EU registered trade marks across a broad range of classes including Classes 9 and 38. One such mark is Sky’s UK trade mark which covers inter alia broad terms such as ‘computer software’ and ‘telecommunications services’.

In 2016, Sky brought an action for trade mark infringement and passing off against SkyKick in the High Court of Justice in England and Wales. Sky claimed that Skykick was relying on SKY’s goodwill and claimed that use of the signs ‘SkyKick’, ‘skykick’ (and respective figurative marks) would lead to a likelihood of confusion, effecting the character and repute of the SKY trade marks.

The SkyKick companies denied the claims brought by Sky and counterclaimed for a declaration that Sky’s trade marks were either wholly or partly invalid, on the grounds that they are (1) registered in respect of goods/services that are not specified with sufficient clarity and precision and as a result, were contrary to public policy, and (2) Sky had applied for the trade marks in connection with goods it did not intend to use the marks on, thereby implying bad faith.

Ultimately, the High Court held that it considers that registration of a trade mark for ‘computer software’ is too broad and thus contrary to the public interest, because it confers on the proprietor a monopoly of immense breadth, which cannot be justified commercially. However, the Court preferred to clarify its interpretation with the CJEU and referred various questions to it for guidance.

 

Questions Referred to the CJEU

The main focus of the referral was:

  1. Whether an EU trade mark or a national trade mark registered in an EU Member State using broad terms could be declared wholly or partially invalid if that registration is unclear or imprecise.
  2. Whether general terms like ‘computer software’ cover goods that are too variable to be sufficiently clear and precise.
  3. Whether an EU mark which is registered without the intention to use it in relation to all the specified goods and services, can alone make the mark invalid (or partly invalid) on the basis of bad faith. If so, whether an application can be made partly in good faith and partly in bad faith (if the applicant intended to use the mark for some of the goods/services but not all).

Decision of CJEU

In its decision, the CJEU concluded that even if a term like ‘computer software’ lacks clarity and precision, a trade mark cannot be declared wholly or partially invalid because of that. Moreover, the CJEU confirmed that it is not contrary to public policy to allow such registrations.

In relation to point 3 above, the Court decided that when an application to register an EU or national trade mark without any intention to use it in relation to the goods/services covered by the application, can constitute bad faith where there is no rationale for the application for registration. There are two circumstances where this might arise:

  • where the trade mark proprietor has filed the application with the intention of purely preventing a third party from registering and using that mark, for purposes other than the functions of a trade mark,
  • when, if not purely to preclude a third party from using the mark, the applicant had no intention of using the mark for those goods/services

It is not enough to show that the applicant had no economic activity in relation to the goods and services indicated at the time of application to prove that an application was made without the intention to use and as a result, in bad faith. Such bad faith (as indicated in (i) and (ii) above) must be establishing through “objective, relevant and consistent indicia” at the time of filing the application. Moreover, the CJEU also established that where there is proven bad faith in relation to only part of a specification, it is only that part which would be invalidated.

Implications

This case is being described as the most important trade mark case in the EU in the past few years. While at first sight, the CJEU’s decision will be welcomed by brand owners who rely on broad terms, it is advisable to err on the side of caution when making these sort of trade mark applications. The CJEU decision establishes that there is still the possibility of such trade marks being invalidated (or partially invalidated) on the grounds of bad faith where there is no rationale for such a broad specification. Additionally, it is still a requirement to show that within a continuous period of 5 years, the trade mark has been put to genuine use in the territory concerned and in connection with the goods or services for which it is registered.

If you are applying to register a trade mark and you are unsure whether the goods or services you are covering are correct, please do not hesitate to contact us and we can assist you further.

Please contact MacLachlan and Donaldson at mail@maclachlan.ie or to Ansons at info@ansons.co.uk.