Sky and SkyKick case clarifies trademark law on bad faith

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The appeals raised by the two companies have been considered by the Court of Appeal. The aspect of its judgment most relevant to other businesses was the court’s assessment of whether Sky had acted in bad faith when applying for its marks covering a wide range of goods and services.

On this issue, Sir Christopher Floyd, who delivered the main judgment of the tribunal with which the other two judges who sat agreed, felt that it was “without question that Sky’s appeal… should be allowed and the judge’s order quashed to the extent that it reduced the specifications of the brands’ products and services…”.

In reaching this decision, the Court of Appeal conducted a detailed review of existing EU and UK case law on bad faith. What emerges from the judgment is a clarification of when a trademark applicant will be considered to be acting in bad faith when claiming to cover a wide range of goods and services. The position taken by the Court of Appeal is different from that taken by the High Court.

To analyse

The Court of Appeal’s main criticism of the Lord Justice Arnold judgment concerned its interpretation of the CJEU’s bad faith test. The judge’s approach was that an applicant would be acting in bad faith if he simply did not intend to use the mark for some of the goods or services covered by the registration, with the result that the mark would be partially invalidated for such goods and services. According to Lord Justice Arnold, this lack of intent in itself justifies a finding of bad faith.

The Court of Appeal held that this approach was wrong. She confirmed that the mere fact of applying for a trademark to cover a very wide range of goods and services does not constitute evidence of bad faith. Likewise, he stated that he will not automatically be in bad faith if the applicant does not intend to use the marks for all these goods and services. It takes more to demonstrate a registration in bad faith.

The Court of Appeal stated that it was necessary to show that the plaintiff had no commercial justification for claiming cover for these goods and services, i.e. no intention to use the mark in respect of them, so that the sole purpose of the plaintiff is to harm the interests of third parties or obtain an exclusive trademark right for any purpose other than to indicate that these goods and services originate from the plaintiff.

In light of these findings, the Court of Appeal reversed Lord Justice Arnold’s finding of bad faith on the facts. The court found that Sky had a good business justification for requesting general specifications of goods and services. This included high levels of Sky brand recognition, meaning a wider protection penumbra was justifiable, as well as its previous prolific business growth and future expansion plans.

Other important observations of the Court of Appeal

Both High Court decisions in this case have been interpreted to mean that a trade mark applicant must provide business justification for all goods and services included in the application, thereby indicating an intention to use the mark for all such goods. and services, or risk partial invalidation of the mark for any product or service which cannot be so justified. The judgment of the Court of Appeal suggests that the plaintiffs have more latitude than that.

While it is still true that a plaintiff must generally be able to justify commercially why the goods and services are included in the claim, the Court of Appeal clarified that a plaintiff need not have a plan to use the mark for all goods and services. in each category of goods or services for which the mark is registered.

The category in question will be important for the assessment of bad faith. The Court of Appeal took the category of “computer software” as an example and said that it would be possible for a small computer software company marketing a single program to file a bona fide trademark application for “computer software”. It wouldn’t be bad faith simply because that company had no intention of using, and there was no prospect of it using, the mark for every conceivable subdivision of computer software.

The Court of Appeal also confirmed several times in its judgment that the burden of proving bad faith lies with the party alleging it. Mere general accusations will not be accepted, and a plaintiff will be required to spell out their allegations of bad faith in detail, including providing revisions to the trademark specification at issue if a court so requires.

Takeaways from the decision

The Court of Appeal’s ruling has come under heavy criticism but will be seen by others as a pragmatic approach to bad faith. The decision will be welcomed by trademark applicants seeking a broad penumbra of protection. According to the judgment of the Court of Appeal, such an approach is admissible provided that the extent of the protection claimed can be generally commercially justified, assessed category by category, provided that no one reasonably expects that a business uses a mark for all the goods and services claimed.

The decision will, however, make it difficult to authorize the use of a new mark. Long and broad specifications of goods and services will undoubtedly result in a more “crowded” register, making it increasingly difficult to find trademarks that do not pose a risk to new trademark applicants.

It remains to be seen whether the UK Supreme Court will further recalibrate the law in this area.

A version of this article was first published by the International Law Office in its Intellectual Property Newsletter.

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