After 7 years of protracted legal proceedings, commencing in the High Court and culminating in the Supreme Court, the Supreme Court have ruled, in SkyKick UK Ltd & Ors (Appellants) v Sky Ltd & Ors (Respondents) [2024] UKSC 36, that Sky acted in bad faith in their registration of various trademarks, opening up the likelihood for more invalidity applications against trade mark holders, particularly those registered by the so-called “monopolistic” brand owners.
The Supreme Court’s recent judgment in SkyKick v Sky1 found that the Court of Appeal were wrong to overturn the High Court’s decision that Sky had acted in bad faith when registering some of their broad trade mark registrations in relation to the specifications.
This now means that brand owners should carefully and diligently consider the specifications used for their trade mark applications, partly to ensure that they are not subject to invalidity applications, which brand owners are liable to face when enforcing their trade marks.
Any prospective owner of a registered trade mark must have the intent to use said trade mark for the goods and services listed in the specification filed with the application. Making an application to register a trade mark, with no intention to use it for the listed goods/services, is one example of a “bad faith” application (the mark must then be used in respect of each of those goods and services or will be vulnerable to attack for non-use2).
Other examples which the courts consider as examples of bad faith include:
Bad Faith Against Third Parties
Bad Faith Against The Trade Mark System
Any findings of bad faith may lead to an application being refused or trade marks being invalidated for the goods and/or services wherein there has been a finding of bad faith.
In May 2016, Sky, well known around the world (particularly in the UK), issued trade mark infringement claims against US-based company SkyKick in respect of its four EU and one UK “SKY” trade marks and a passing off claim for “SKYKICK” in respect of cloud-based technology migration, email and management services.
In response, SkyKick defended and challenged Sky’s trade marks, arguing that Sky’s applications to register the marks in the first place had been filed in bad faith and that Sky never intended to utilise the trade marks in respect of its broad specifications for goods and/or services.
The High Court ruled that Sky’s trade marks had been infringed (and dismissed the passing off claim), but also that Sky had acted in bad faith in relation to a number of their trade mark registrations which contained broad specifications (effectively to create as wide a “monopoly” as possible in respect of the marks), with these having been solely registered as a “legal weapon”.
On appeal by all the parties, the Court of Appeal ruled that it was “in no doubt” that Sky had not acted in bad faith, citing that bad faith cannot be inferred from the breadth of specifications and it was "implicit" that Sky's applications were made with the intention of protecting (and that Sky were entitled to protect) the use of the marks in relation to goods and/or services in which Sky had a substantial present trade and a future expectation of trade.
The Court of Appeal also introduced a requirement that it is for the party alleging invalidity to identify which goods/or and services the trade mark owner should have applied for and how the specifications should be restricted for any application to be successful.
The Supreme Court, rather unsurprisingly, overturned the Court of Appeal’s decision on bad faith (but upheld one finding of trade mark infringement), stating that the High Court were entitled to find that a number of Sky’s trade mark registrations had been filed in bad faith from the breadth of the specifications, that there was no genuine intention to use the marks for the specifications listed and that the Court of Appeal had failed to appreciate the scope and component elements of bad faith when overturning the High Court’s decision.
The Supreme Court also held that it is not up to the party alleging invalidity to suggest a suitable amendment to the specifications, instead it being the responsibility of the trade mark owner on the basis that these are matters within the knowledge of the trade mark owner.
Sky were therefore ordered to make modifications to the goods and/or services where there was a lack of intention to use them for the full specifications applied for.
Separately, there was a jurisdiction argument (following Brexit) which centred around the law applicable to the proceedings and whether the governing EU Directive and Regulation, in place at the time Sky’s applications were filed, included a provision/consideration for the national laws of the Member States (who may have their own definitions/interpretations of bad faith) in the determination of bad faith. Whilst SkyKick contended that EU law was still applicable and Sky argued that, due to Brexit, the English courts could not no longer decide matters pertaining to EU trade mark registrations, the Supreme Court held that the courts of England and Wales continued to act as an EU court for any proceedings initiated in England and Wales prior to Brexit, and so the bad faith ruling applied to both the EU and UK marks held by Sky.
What this means, going forwards, is that any trade mark registrations with broad specifications may be found to be wholly/partially invalid and/or modified to be narrower if there is no genuine intention to use the mark for said specifications – particularly if the trade mark owner provides no reasoning or rationale for them. Furthermore, one must consider that, in spite of the commercial realities faced by brand owners, there is an openness for the English courts to rule that large brand owners may not take advantage of their status in the market(s) to enforce their brands, particularly if they cannot be commercially justified.
The English courts continue to demonstrate their willingness to protect the commonly named “smaller” brands from the “larger” brands who may use their commercial muscle to try to dominate the space by registering trade marks with broad specifications, when the intention to actually use them for all the goods and/or services listed is questionable.
Given that broad specifications may lead to inferences of bad faith, and hence held to be partially invalid, applicants for trade marks may wish to think carefully about limiting the application to only those good and services which can be defended in the face of an invalidity application. Brand owners should not simply produce as long a list of items as they can think of in the specification; they must be realistic. This is also of importance where protection is required in other jurisdictions and filings may be made there; some countries are even more stringent than the UK (as mentioned above, the sanction for non-use of a UK trade mark is whole/partial revocation, demonstrating the need to consider the specifications carefully), notably in the US.
Brand owners should also ensure that they note, in writing, their thought processes and justifications for the specifications when considering and preparing their trade mark applications, to try and defeat any allegations of bad faith.
How to Get in Contact
If you are interested in protecting your brand or enforcing your intellectual property rights, or wish to discuss your intellectual property needs and required tailored advice, please contact Wing Ming Choi at wingming.choi@ilaw.co.uk or on +44 (0)203 987 0222.
[1] The judgment was handed down and published despite the parties settling the case beforehand, with the Comptroller General requesting that the Supreme Court give judgment in the usual way on the basis of the issues being so significant and considering the importance and public policy interest in the legal matters at hand.
[2]For UK trade marks, non-use applies if the registered proprietor has not used the mark in the five years since it was registered, or if there has been uninterrupted non-use for a period of five years.
