SkyKick case: applicants cannot undermine the trade mark system

According to the Court of Justice of the EU (CJEU), EU trade marks or national trade marks registered in an EU country "cannot be declared wholly or partially invalid on the ground that terms used to designate the goods and services in respect of which that trade mark was registered lack clarity and precision". It explained, though, that a lack of clarity and precision could lead to subsequent revocation if it can be shown the marks have not been put to "genuine use" in respect of the goods or services for which they were registered.

It also ruled that trade mark applications made without any intention to use the trade mark in relation to the goods and services specified will be considered to have been registered in 'bad faith' and subject to revocation "if the applicant for registration of that mark had the intention either of undermining, in a manner inconsistent with honest practices, the interests of third parties, or of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark".

The CJEU issued its ruling in a case referred to it by the High Court in London, which is considering a dispute over trade mark rights asserted by broadcaster and telecoms provider Sky. Sky has claimed that SkyKick, a US supplier of cloud migration software, is responsible for infringing five of its UK and EU trade marks, but SkyKick has counter-challenged the validity of Sky's marks, arguing that they are insufficiently clear and precise and should be revoked. SkyKick's claims centre on Sky's broad specification of 'computer software' as the goods and services to which its marks apply to.

Pinsent Masons is providing a rapid response webinar following the ruling on 5 February 2020 from 12:30 to 13:30 GMT. If you would like to attend, please register here.

Trade mark law sets out both absolute and relative grounds on which trade marks should not be registered or where they are liable to be declared invalid. There is no provision in the legislation for invalidity of a registered trade mark on the ground that some or all of the terms in the specification of goods or services lack sufficient clarity and precision.

EU trade mark offices should refuse an application for the registration of a sign that is not sufficiently clear and precise following a 2015 change in the law which meant that only marks with 'clear and precise subject matter' are afforded protection. However, the question of whether a trade mark can be retrospectively declared invalid based on the clarity and precision of the specification had previously not been ruled on by the CJEU.

The court said that trade mark law does not provide expressly for such invalidation, and nor can invalidation of trade marks that lack clarity and precision be justified as being contrary to public policy. On this point, the court declined to follow the advice of an advocate general who had recommended that it rule that a lack of clarity and precision in a trade mark registration would be contrary to public policy and therefore a basis for invalidation of such marks.

EU trade mark law provides that trade marks deemed contrary to public policy or to accepted principles of morality can be refused registration or invalidated post-registration. However, the CJEU said "a lack of clarity and precision of the terms designating the goods or services covered by a trade mark registration cannot be considered contrary to public policy". This, it said, is because the concept of 'public policy' "cannot be construed as relating to characteristics concerning the trade mark application itself, such as the clarity and precision of the terms used to designate the goods or services covered by that registration, regardless of the characteristics of the sign for which the registration as a trade mark is sought".

According to the CJEU, EU trade mark law does contain provisions that protect against overly broad specification of goods and services for trade marks. It pointed to the fact the law provides for revocation of trade marks if they have not "within a continuous period of five years, … been put to genuine use in the territory concerned in connection with the goods or services in respect of which it is registered".

Florian Traub, trade mark law and brand protection expert at Pinsent Masons, the law firm behind Out-Law, said: "Today’s judgment on 'clarity and precision' will come as a welcome relief not only to Sky but to big brands that have trade marks across a vast range of goods and services. A ruling the other way could have seen thousands of trade marks already registered across the EU at risk of invalidation and a complete overhaul of the EU trade mark system as we know it today."

The court has, though, left open to attack all trade marks which have been registered in a ‘manner inconsistent with honest practices’ without an intention to use. This means that if you can show a trade mark application was made with the intention either of undermining the interests of third parties, or of obtaining an exclusive right for purposes other than those falling within the functions of a trade mark, the mark will be found to have been registered in bad faith and declared invalid.

Iain Connor, trade mark expert at Pinsent Masons said: "The court is keen to ensure that trade marks are not 'ever-greened' where there is no intention to use the mark. For Sky this decision could mean that the High Court in London declares a number of its marks invalid for non-use in respect of those goods and services outside its core areas of ‘television broadcasting, telephony and broadband provision’. For example, one mark covers ‘fire-extinguishing apparatus’ and ‘cash registers’ which it might be argued fall outside the core areas of Sky's business and might therefore be vulnerable to invalidation. If Sky tried to reregister 'Sky' for those goods, this type of ever-greening could be construed as being in bad faith as an application inconsistent with honest practices."

It will now be up to the High Court in London to interpret the CJEU's ruling and determine the outcome of the dispute between Sky and SkyKick.

Pinsent Masons is providing a rapid response webinar following the ruling on 5 February 2020 from 12:30 to 13:30 GMT. If you would like to attend, please register here.