UK Supreme Court hands down its long-awaited decision in the “SkyKick” case

The UK Supreme Court recently handed down its judgment in “Sky v SkyKick”1, which helps clarify the meaning of “bad faith” under UK (and potentially EU) trade mark law. The decision was long in coming, but carries significant practical consequences for UK (and EU) trade mark owners.

The case

Sky had registered various SKY marks in the UK and EU for an extremely wide range of goods and services – including amongst others goods such as “…computer software…” at large. SkyKick used its mark SKYKICK for various software applications.

Sky sued SkyKick for trade mark infringement and passing-off. One of SkyKick’s defences was that Sky’s marks were invalid as having been filed in bad faith, because viewed objectively Sky could not have had a genuine intention to use the SKY marks for all (or at least, a great many) of their goods and services.

At first instance, the judge indeed found that Sky could not have intended to use its marks for a range of “quirky” goods, such as “…bleaching preparations…”, “…insulating materials…” and “…whips…”, which were obviously unconnected with Sky’s current or sensibly intended future business. However he also found that other more prosaic terms within the SKY specifications, precisely such as “…computer software…” (amongst others) were so broad Sky cannot have intended to use across the full category of those broad terms, either. Sky’s goods and services were therefore considerably cut back on the register; but even so, certain of SkyKick’s uses still infringed. Upon Sky’s appeal to the UK Court of Appeal, those findings were overturned; and SkyKick appealed again to the UK Supreme Court.

The Supreme Court essentially overturned the decision again, restoring the findings at first instance.
Sky’s goods and services were therefore considerably cut back.

Notably, and although the UK has now left the EU following Brexit, the Supreme Court made clear that since the claim originated in the UK prior to Brexit before the UK Courts sitting as EU trade mark courts under EU law, its decision this week was still issued in that capacity. The decision is therefore of definite relevance in the UK, and potentially (depending on how EU courts and tribunals apply it – or not) the EU.

What was the central issue?

It has long been more than a little unclear what “bad faith” means under UK and EU law, although various cases have elaborated that it effectively amounts to the filing of a mark with a subjectively dishonest intent, as revealed by objective evidence from all the surrounding circumstances. In the context of the UK and EU trade mark regime, that is particularly so where the intention is to dishonestly undermine the interests of third parties, and / or to obtain an exclusive right for purposes other than the fundamental functions of a trade mark, especially to indicate trade origin.

Therefore it is not automatically “bad faith” to file a mark similar to that of a third party, since honest competition is generally permitted; or even to claim wider goods / services than are currently in use, since an applicant might plan to expand its business in future.

Here, however, it was clear to the Supreme Court from both:

1. the sheer breadth of Sky’s goods and services (which covered those far outside its current or foreseeable business); and
2. the fact Sky had previously enforced its wide goods and services against other third party users for goods / services that Sky did not trade in and had never traded in;

… that Sky cannot have had an honest intention to use its marks for all of their goods and services. In particular, the Supreme Court took heavily into account, as did the judge at first instance, that in these proceedings Sky had originally asserted its very broad goods / services against SkyKick at the outset of the proceedings (i.e. a “kitchen sink” approach in the litigation), only to cut them back to a narrowed list very shortly before trial (i.e. after the invalidity counterattack materialised from SkyKick). Neither did the Court have before it any evidence from Sky’s legal team as to “why” such broad goods and services had been filed in the first place, leaving it to the evidence of a director to say, post-facto, why he thought they had been.

In effect, it became apparent to the Supreme Court that Sky had – inappropriately for the purposes of the UK and EU trade mark system – filed for a broad range of goods and services in order to “weaponise” its marks and obtain broad protection far beyond its current (or reasonably foreseeable) business. Therefore, its marks should be significantly cut back.

Why does it matter?

The Supreme Court’s judgement could in theory have gone much further, and found that the filing of a mark for any goods and services beyond those actually in use, or very soon to be so, might be invalid as being filed in bad faith. It did not go that far. It is still acceptable to file for broad goods or services, provided there is a legitimate commercial rationale for doing so (for example, to protect those goods or services that might be used in future).

However the decision will inevitably have a number of practical impacts when filing, opposing, or defending oppositions / other actions against UK and / or EU trade marks:

• Applicants and practitioners will now be forced to give greater consideration to the breadth of the goods / services they file – since it is now clear that, at least in theory, filing “too wide” could potentially constitute bad faith, rendering any resulting registrations vulnerable.
• Trade mark proprietors and practitioners should now give greater consideration to which goods / services they choose to enforce – including from the earliest stages of a dispute, such as a cease and desist letter, grounds of opposition, and so on. Swinging too broad a sword may simply draw attention, valid or otherwise, to the question of whether a proprietor’s rights are “too wide” and potentially invalid.
• All trade mark proprietors can reasonably expect an increase in the frequency of similar “bad faith” invalidation attacks, certainly on UK marks, but potentially EU marks as well.

Overall, therefore, the decision does not fundamentally “change the game” so far as the concept of bad faith is concerned in the UK or the EU. The litmus test still remains whether particular goods / services were filed for “dishonestly”, or conversely as a genuine attempt to secure a valid trade mark right in goods / services of present or future interest to the proprietor.

However it certainly does urge caution from this point onward when filing, enforcing, or otherwise dealing with wide trade mark specifications in the UK and EU.