Is the sky no longer the limit?
Brand owners should consider filing narrower specifications, cautions Désirée Fields.  EWHC 155 (Ch), Sky plc v SkyKick UK Ltd, High Court, 6th February 2018
 EWHC 155 (Ch), Sky plc v SkyKick UK Ltd, High Court, 6th February 2018
- In the future, EU trade mark owners may need to consider a US-style approach to specifications, clearly indicating the field of use and purpose of goods and services
- Brand owners should avoid claiming wide-ranging goods and services that they do not intend to use
- Owners of trade marks with broad specifications should consider filing narrower trade mark applications for core goods and services
Sky is one of Europe’s largest media and telecommunications companies and an active enforcer of its vast trade mark portfolio, which includes several EU and UK trade marks for a mixture of “Sky” figurative and word marks. When SkyKick, a US cloud-based IT services start-up, expanded into Europe in May 2016, Sky brought an action in the High Court alleging that SkyKick had committed trade mark infringement and passing off through use of its SkyKick signs.
Sky relied on specific registrations in classes 9 and 38 (including “computer software” and “telecommunications services”). However, the full specifications of goods and services covered by Sky’s registrations were extremely broad (with some specifications exceeding 8,000 words).
In response, SkyKick sought a declaration that Sky’s trade marks were wholly or partially invalid on two grounds:
- The specifications of the goods and services lacked sufficient clarity and precision; and
- The applications had been made in bad faith.
In relation to the first, SkyKick argued that Sky’s registrations for goods such as “computer software” lacked sufficient clarity and precision (as required by IP TRANSLATOR).
In relation to the second, SkyKick argued that Sky had no intention to use its trade marks in relation to all of the goods or services covered, hence the allegation of bad faith. Indeed, under cross-examination, Sky was unable to produce a commercial rationale for some of the goods and services listed (such as “insulation materials” and “whips”).
No passing off
Arnold J dismissed Sky’s claim for passing off (due to lack of consumer confusion and misrepresentation), but held that, if Sky’s trade marks were validly registered for the goods and services relied on by Sky, SkyKick had infringed them, because the average consumer was capable of perceiving “SkyKick” as a sub-brand of Sky.
As established in IP TRANSLATOR, class headings only cover those goods and services that are clearly encompassed by the literal meaning of the class heading, and, therefore, applicants should specify with sufficient clarity and precision the scope of goods and services included in their application.
As an example, Arnold J held that the general term “computer software” was too broad, as it covers any type of computer software, regardless of its function, and confers on the owner “a monopoly of immense breadth which cannot be justified by any legitimate commercial interest” (at 171). However, he held that it did not necessarily follow that such a term lacked clarity and precision. He considered (and favoured) the US-style approach, which necessitates specifying both the function and field of any software.
Arnold J concluded that the law was unclear as to whether a trade mark should be found invalid (either in whole or in part) because parts of its specifications are lacking in clarity and precision.
He further concluded that (at the date of filing) Sky’s trade mark applications had included goods and services for which Sky had “no reasonable commercial rationale for seeking registration” (at 250) and no intention to use. He also noted that the law was not clear on whether a trade mark application could be made partly in good faith and partly in bad faith, and whether this would invalidate the entire registration.
Questions for the CJEU
Accordingly, Arnold J referred the following questions to the CJEU:
- Can an EU or a national trade mark be declared wholly or partially invalid on the ground that some or all of the terms in the specification are lacking in sufficient clarity or precision to enable the competent authorities and third parties to determine the extent of the protection conferred by it?
- If the answer is “yes”, is a term such as “computer software” lacking in sufficient clarity or precision?
- Can it constitute bad faith to apply to register a trade mark without an intention to use it in relation to the specified goods or services?
- If the answer is “yes”, is it possible to conclude that the applicant made the application partly in good faith and partly in bad faith if it had no intention to use the trade mark in relation to some of the specified goods or services?
The notion that a trade mark could be found invalid because it contains unclear terms or cites irrelevant goods and services is, for brand owners, a cause for concern. To maximise protection, many brand owners file broad specifications of goods and services, often using class headings followed by more specific terms. Depending on the CJEU’s answers, this may no longer be the best approach.
In addition, brand owners should review their existing registrations and current use of their marks. Where specifications are very broad, a cautious approach would be to file new and narrower applications covering only those goods and services that are fundamental to their business.
Arnold J’s comments indicate that, in line with IP TRANSLATOR, it would be best practice to adopt a US-style approach to specifications, where the field of use and purpose of goods and services are clearly indicated.
Depending on the CJEU decision, there is a possibility that a trade mark registration could be cancelled for lack of clarity or precision, or at least significantly narrowed in scope. The CJEU may take a similar approach as it does in situations where a trade mark owner has to prove use of a mark: if use is proven in relation to some, but not all, goods and services, the mark remains valid in respect of the goods and services where use can be proven. Similarly, as bad faith is a serious allegation, it would seem draconian for a registered trade mark to be declared invalid in its entirety on the basis of covering a broad range of goods and services where many are, indeed, being put to genuine use. However, until the CJEU provides answers to these questions, the position is unknown.
There is further uncertainty regarding how the CJEU’s answers will be applicable in the UK post-Brexit. According to the draft Withdrawal Agreement published on 19th March 2018, the EU’s position is that CJEU decisions handed down either before the end of the transition period (31st December 2020), or after the end of the transition period but where proceedings were started before that date, shall have full binding effect within the UK. The UK Government has not accepted this position. It is therefore unclear whether the English courts will apply the answers of the CJEU post-Brexit.
Désirée Fields is Legal Director at DLA Piper UK LLP
James Tighe, a Trainee Solicitor at DLA Piper UK LLP, contributed to this article.