Sky High Stakes: Supreme Court Clarifies Trade Mark Boundaries in Sky v SkyKick
On 13 November 2024 the Supreme Court delivered its decision in SkyKick UK Ltd and another (Appellants) v Sky Ltd and others (Respondents), which gave a pivotal interpretation of trade mark law, particularly on the concept of “bad faith” in registering trade marks under section 3(6) of the Trade Marks Act 1994. The case also addressed the permissible scope of trade mark specifications when allegations of bad faith arise. This article will primarily focus on the trade mark infringement aspects of the case.
Background
The protracted dispute arose when Sky (a prominent UK broadcasting company) initiated legal proceedings against SkyKick (a SaaS provider specialising in cloud migration and backup software) for trade mark infringement and passing off. SkyKick countered, claiming Sky’s trade marks were invalid due to bad faith, accusing Sky of registering overly broad trade marks with no intention of genuine use for certain goods and services.
In 2018, the High Court judgment referred questions about the validity of the trade marks to the Court of Justice of the European Union (CJEU). Among the issues raised was whether it could constitute bad faith to register a trade mark without any intention to use it in relation to certain goods or services covered the registration.
The CJEU ruled that a trade mark cannot be deemed wholly or partially invalid due to a lack of clarity or precision in specifying goods and services. It further held that merely lacking an intention to use a mark for certain goods or services does not automatically constitute bad faith. It held that to establish bad faith, it must be shown that the applicant acted dishonestly to undermine third party interests or sought exclusive rights for purposes beyond the trade mark's legitimate functions. In this case, the CJEU concluded that partial bad faith could be established.
As the case returned to the High Court, it was ruled that Sky had acted in bad faith by applying to register trade marks for which it had “no foreseeable prospect that they would ever intend to use the Trade Marks in relation to such goods and services” and that Sky had sought this broad protection for the sole purpose of using the trade marks as a “legal weapon” for enforcement.
The Court of Appeal overturned this ruling following Sky's appeal against the findings of bad faith and partial invalidity. It held that a broad specification or the lack of intent to use a mark for the entire scope of the specification does not, in itself, constitute evidence of bad faith.
SkyKick appealed the decision, asking the Supreme Court to decide on the following issues:
(1) What is the test for determining bad faith in accordance with section 3(6) of the Trade Marks Act 1994 and;
(2) If such bad faith is found, what is the correct approach to determining the specification that the proprietor of the trade mark should be permitted to retain?
The Supreme Court’s Ruling
The Supreme Court clarified the test of bad faith trade mark registration. It held that bad faith occurs when a trade mark application is made with no intention to use the mark for the claimed goods or services, and the intent is to obstruct others or secure unfair competitive advantages. However, while filing overly broad specifications could indicate bad faith, not all broad or speculative applications would constitute bad faith; it must involve conduct that departs from accepted commercial standards.
Regarding broad specifications which could be broken down into categories or subcategories, such as "computer software", the Supreme Court noted that while an applicant need not have a commercial justification "for every possible species of goods or services falling within the specification", it should not escape a finding of bad faith merely because it has decided to use general terms rather than specifying categories or subcategories within the general term.
Ultimately, the Supreme Court found that portions of Sky’s trade mark portfolio were indeed registered in bad faith due to the excessively broad specifications that Sky could not justify. It endorsed a partial invalidation approach, narrowing the scope of affected trade marks rather than striking them entirely.
Impact on Businesses
The decision sets a significant precedent for trade mark law in the UK and underscores the importance of balancing protection for trade mark owners with safeguarding fair competition and innovation.
The decision will further hold significance in how businesses determine their trade mark filing strategies. Companies will need to carefully consider narrowing the scope of their intended activities when preparing applications to avoid potential claims of bad faith. Trade mark applicants must ensure their trade mark specifications align with their actual or planned use.
If you are planning to file a trade mark application, our Intellectual Property specialists can assist you in selecting appropriate specifications to avoid overly broad filings and guide you through the application process.
Contact us for expert advice and support on your trade mark needs.
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Written by:
Head of Litigation, IP & Art Law
Trainee Solicitor