SkyKick v Sky - A Clearer Sky?

Summary

In a seminal case that could have wider implications for trade mark owners, the UK’s Supreme Court has ruled that use of an unreasonably broad trade mark specification at the time of filing can lead to a finding of bad faith and consequential invalidity. As such, trade mark owners must carefully consider the goods and services they are intending to provide at the time of filing and throughout the lifetime of the mark.

The recent decision in the SkyKick v Sky case could be a watershed moment for trade mark owners and change some of the established practices associated with the way trade mark applications are secured and maintained.

We set out below key takeaways and an analysis of the decision.

Takeaways

In the UK, a trade mark may be held invalid in whole or part where an application was made in bad faith, i.e. there was no intention by the applicant to use the mark in relation to the goods/services covered by the application, usually for the purpose of unfairly blocking others who may wish to use the same or similar marks.

This important decision should instigate a review of the filing and enforcement strategy of brand owners, in light of the increased risk of challenge for invalidity. In fact, a number of cases have been on hold pending this decision, and following the decision, the IPO has already seen an influx of cancellation actions being filed on the basis of bad faith.

Applicants for UK Trade Marks will need to consider:

• In the UK there is a requirement to make a declaration at the time of filing that the Applicant is using, or has a genuine intention to use, a trade mark across all the goods and services applied for. Applicants should therefore consider making a record of their assessment and commercial logic as to why a particular class has been chosen at the time of filing and the individuals involved in that decision making. This exercise should take place each time a mark is filed with the same or similar application.

• Filing under a particularly broad term could, in light of this decision, increase the risk of a challenge on the grounds of bad faith. Make sure that the specification accurately reflects what the business does, or is likely to do, and where broad terms such as “software” are used, ensure that the specification also uses narrower terms which define clearly what the business does or intends to do.

• As to genuine intention, the Applicant does not need a settled or developed intent to sell the goods or services, but there must be genuine intent to explore the viability of a business under the mark across the full range of the filing during the five year period. A broad specification does not automatically mean there will be a finding of bad faith as businesses do prepare to move into new areas, however the reason for the decision should be recorded.

• Do not be surprised if the IPO increasingly challenge broad terms at examination stage going forward, and require that they are further specified (similar to the US examination system). This would be a proactive step by the IPO in light of the potential for an increase in bad faith claims.

If you are currently a trade mark owner, here are points you should consider:

• Where you initiate or consider initiating opposition/infringement proceedings, give due consideration to the specification that you are relying on. Overly broad specifications may result in a counterclaim on the grounds of bad faith, which could be time-consuming and costly to manage. Enforcement strategies should therefore be re-considered.
  

• Audit/review existing registrations and align to business use. If use of the mark is not being made for some or all terms, consider appropriate action.

While the case has attracted a lot of attention, it has only re-confirmed what most trade mark owners already knew; which is that trade marks should only be applied for where there is a genuine intention to provide the goods and services listed by the trade mark owner.

The decision in more detail

In a dispute dating back to 2018, Sky Ltd, owner of the “SKY” trade mark registrations, first challenged SkyKick for using “SkyKick” in its branding for cloud-based software services. SkyKick responded by seeking to invalidate Sky’s trade marks. In its appeal to the Supreme Court, SkyKick argued that the “SKY” registrations were too broadly worded (e.g. “computer software”) and lacked a genuine intention to use (e.g. “bleaching preparations”). SkyKick alleged that filing broad registrations such as the “SKY” registrations clutters the trade mark register, making it difficult for new brands to enter the market.

The Supreme Court agreed with SkyKick that some parts (not all) of Sky’s trade marks were registered in bad faith. It was found that the breadth of a trade mark specification, as well as registering a trade mark without any intention to use it, can lead to an inference of bad faith. This assessment included consideration of the wider context. The Supreme Court made it clear that Sky’s behaviour (including waiting until around five weeks before trial before narrowing their reliance on all goods or services in the specification) contributed to a finding of bad faith.

Only some parts of Sky’s marks were held to be invalid, where bad faith was established. Some of Sky’s trade marks with modified specifications were allowed to survive. This indicates that trade mark owners subject to a challenge of bad faith will not be unduly punished for an adverse finding.

Further comment

The High Court noted that trade marks could be used by business as a “legal weapon” to attack third parties The Supreme Court went one further and detailed how Sky were prepared to deploy a “full armoury” of their trade mark portfolio. This wording indicates that trade mark owners should carefully consider the extent to their defensible trade marks rights before threatening infringement proceedings, otherwise they may face criticism for being heavy handed and that can contribute to a finding of bad faith in relation to the mark relied on.

In a welcome clarification of procedure and burden of proof, the Supreme Court held that it is not for the party attacking validity to identify at the outset a more limited list of goods and services. The party will just need to rely on the objective facts available to it to support its assertion that there was no genuine intention for use.

We do not know how the judgment was received by the parties because the parties had agreed to settle the dispute before the decision was issued.  In an unusual move, the Supreme Court went onto issue a judgment on the ground that the issues being decided were of wider public interest for the reasons summarised above.

Should you have any queries in relation to your trade mark portfolio in light of this decision, please reach out to the IP team at TLT.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at November 2024. Specific advice should be sought for specific cases. For more information see our terms & conditions.