Trademark with broad claim: the pendulum has swung

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Trademark monopolies for goods and/or services specified in general terms such as software have always been controversial in modern trademark law.

Shortly after the introduction of the new trade mark law into the UK Trade Marks Act 1994, Laddie J said in Mercury Communications vs. Mercury Interactive (1995) his view that:

[I]It is absolutely undesirable for a trader who is interested in a limited field of computer software to obtain, by registration, an indefinite legal monopoly covering all types of software, including those which are far removed from his own area of ​​commercial interest.

In January 2020, the Court of Justice of the EU (“CJEU”) rendered a decision on the trademark-wide claim in Sky vs. SkyKick. The decision was in response to questions put to the CJEU by Arnold J who was hearing the case in the High Court.

The CJEU essentially ruled that the broad claim in a trademark application was not in itself a ground for nullity of any resulting registration. Although applying for a trademark without intent to use could render a registration invalid for reasons of bad faith in the application, that was only if culpable conduct was also present. An example of the latter case is renewal, i.e. reapplying for a trademark in order to circumvent the 5-year usage requirement with respect to registered goods and/or services, such as happened in the MONOPOLY Case.

Under normal EU procedure, the judgment was issued by the CJEU for application by the national court to the facts at issue.

Post-Brexithowever, it is likely that the English judiciary may express different views, which is exactly what happened here.

When Sky vs. SkyKick referred to the High Court, Arnold LJ (who had in the meantime been promoted to the Court of Appeal) ruled at first instance that Sky’s trade mark registrations were partially invalid for software. Sky did not intend to use its marks to software in a broad sense, but only the types of software related to Sky’s broadcast, telephony and broadband business. Sky’s trademarks had been partially requested in bad faith. Arnold LJ Cut Sky’s software specifications to reflect Sky’s commercial interests.

Arnold LJ’s decision provided a useful counterattack to defendants accused of trademark infringement of broad terms such as software or financial services at times when claimant enrollments were too young for the standard 5-year non-use challenges.

That defense is gone (at least for now) following the outcome of Sky’s appeal to the Court of Appeal, which was delivered and published on July 26, 2021.

Sir Christopher Floyd (a retired member of the Court of Appeal) delivering the judgment of the Court found that Arnold LJ erred at first instance. Sky’s listings for software were on the contrary valid in their entirety. Sky had intended, on request, to use its marks in connection with Sky’s material activities in software but not everything software. There was no bad faith:

The applicant for a mark is not required to formulate a commercial strategy for the use of the mark for each type of goods or services covered by a general description.”.

The decision was welcomed by owners whose existing registrations covered broad terms.

However, it is always prudent to frame trademark registration applications in a way that reflects a merchant’s current and future business interests.

A trademark registration must be genuinely used in the specification within 5 years of registration and within any 5 year period thereafter.

If a specified term of goods or services includes recognizable sub-categories (such as software), it is likely to be reduced to match only proven uses once the recording has passed its 5th anniversary.

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