The Supreme Court’s decision [Sky]kicks into touch

The UK Supreme Court has recently issued its long-awaited judgment on the case of Sky vs SkyKick, overturning the previous decision of the Court of Appeal on the issue of bad faith in trade mark filings.

Background

In 2016, a well-known British broadcasting and telecommunications company, Sky, sued SkyKick, a cloud migration and backup service provider, for infringement of its SKY trade marks and passing off. SkyKick argued that Sky’s trade marks should be invalidated because they were applied for in bad faith since Sky had no genuine intention of using them in relation to all of the goods and services for which they were registered. Instead, Sky had made the applications for an extremely wide range of goods and services for purposes other than those falling within the functions of a trade mark, namely, solely for the purposes of restricting other traders.

The High Court initially found that Sky had filed its applications in bad faith in respect of some categories of goods and services.  The Court of Appeal then overturned the first instance Court’s decision to partially invalidate the trade marks, indicating that there should have been no requirement for using the trade marks for each specific type of goods or services falling within a more broadly construed term.

The Supreme Court has adopted a stricter approach, and has upheld the High Court’s findings, asserting that the applicant's intention is crucial when seeking a broad scope of protection for a trade mark and, in Sky’s case, the circumstances weighed against them.

Supreme Court’s Decision

Bad Faith

The Supreme Court found that in cases where the range of goods or services is excessively wide, it can imply a lack of genuine commercial intention and indicate acting in bad faith. In particular, it was said that bad faith could be found in cases where an application covers class headings or other general descriptions, such as “computer programs” or “computer software”, which would not be sufficient to designate a legitimate commercial intent:

“Where…the broad description includes distinct categories or subcategories of goods or services, as “computer programs” and “computer services” undoubtedly do, then…the proprietor may be found to have acted in bad faith in relation to one or more of those, and it would be manifestly unjust if it escaped that consequence simply because it had framed its specification using general terminology” [323].

The Supreme Court confirmed that Sky’s approach of  originally relying in its claim against SkyKick upon the full range of goods and services and later narrowing down the specification just before the trial suggested that it had registered the trade marks to use as a legal weapon against third parties.

Trade Mark Infringement

Despite the findings of partial invalidity of Sky's trade marks based on bad faith, the Supreme Court agreed with the Court of Appeal's decision that SkyKick's "cloud migration" services did not infringe Sky's trade marks, as those did not fall within the defined scope of "electronic mail services." However, infringement was found in relation to SkyKick’s "cloud backup" services as overlapping with Sky’s remaining data retrieval services.

Brexit

Another crucial aspect addressed by the Supreme Court in its judgment was Brexit and its impact on the enforceability of EU trade marks in the UK. It was confirmed that under the Withdrawal Agreement, UK courts retain jurisdiction over European trade mark cases started before the end of the Brexit transition period, i.e., 31 December 2020. This approach was taken to provide consistency and legal certainty in any ongoing disputes.

Comment

The outcome of this case will undoubtedly serve as a warning for brand owners to reconsider the coverage of their existing portfolios and re-evaluate their approach to any to future trade mark filings. The Supreme Court's emphasis on the risk of bad faith findings highlights the importance of aligning trade mark registrations with genuine commercial plans.

Furthermore, this highly anticipated judgment of the Supreme Court may potentially lead to significant changes in UK trade mark practices generally, whereby a more disciplined and precise attitude to securing trade mark protection is adopted.