Wide Trade Mark Specifications and Bad Faith – the SkyKick v Sky Decision

Landmark Decision Issued Which Paves The Way for New Practice Governing Wide Goods and Services Specifications

On 15th November 2024, the Supreme Court handed down its long-awaited decision in the case of SkyKick v Sky.

The decision is a very important one for the trade mark profession because it significantly reshapes the landscape of UK trade mark law.

In essence, there are now grounds to argue (and succeed) for a case of “bad faith” where a trade mark application has been filed using a very broad specifications of goods and/or services. Until now, this broad filing has long been common UK practice.

The new ruling now questions this practice. A trade mark applicant needs be more sure than ever that it has a genuine intention to use a mark when making an application to register it covering a broad specification of goods and/or services.

The case began when Sky, a major telecommunications and media company, initiated legal action against SkyKick, a cloud email migration company, alleging trade mark infringement of its SKY marks.

Sky’s claim had been based on five registered trade marks encompassing both the UK and EU, which Sky had applied for between April 2003 to October 2008.

In response to this claim, SkyKick mounted a robust defence and argued that Sky’s marks were invalid.

SkyKick’s invalidity challenge focused on two main arguments:

• Lack of clarity and precision: SkyKick contended that the specifications of goods and services covered by Sky’s trade marks were so broad that they “lacked sufficient clarity and precision”, making it difficult to determine the extent of protection afforded; and

• Bad faith: SkyKick asserted that Sky had originally applied to register its trade marks in bad faith because it had no genuine or reasonable intention to use the marks for many of the goods and services listed in the specifications. In so doing, SkyKick alleged that Sky’s strategy was to secure overly broad rights that it could use as legal weapons against competitors as and when it chose to, regardless of whether it had any commercial interest in the full spectrum of goods and services protected.

The legal battle involved judgments from the High Court, a referral to the Court of Justice of the European Union (CJEU), a full appeal before the Court of Appeal, and finally, the Supreme Court’s decision handed down in November 2024.

The central legal issue considered by the Courts was whether a trade mark registration could be invalidated, in whole or in part, based on the applicant’s lack of genuine intention to use the mark for some or all of the specified goods or services at the time of filing.

The Supreme Court ultimately ruled in SkyKick’s favour, finding Sky’s trade marks partially invalid due to bad faith.

The Supreme Court’s judgment clarified several critical points regarding bad faith in trade mark applications:

• Inference of bad faith from broad specifications: A broad specification, while not inherently proving bad faith, can contribute to such an inference depending on the circumstances. Factors to consider include the breadth of the specification relative to the applicant’s business, their enforcement strategy and their documented rationale for the filing.

• Genuine intention to use for sub-categories: Even when using broad terms like “computer software”, applicants must show a genuine intention to use the mark for specific sub-categories within that broader term. Failure to demonstrate this intention for particular sub-categories can lead to partial invalidity.

• Shifting burden of proof: While the burden of proving bad faith rests with the challenger in the first instance, this burden can shift to the trade mark owner when a plausible explanation for their application is required if the circumstances of its filing suggest bad faith.

The ruling has significantly lowered the bar for establishing bad faith in trade mark applications where broad specifications are at play and has made it easier for challengers to contest such registrations by asserting a lack of genuine intention to use a mark across the entire scope of claimed goods and services.

The SkyKick v. Sky decision has several implications for brand owners and potential challengers:

For brand owners:

• Careful drafting of specifications: Brand owners must now exercise greater diligence in drafting trade mark specifications. Finding the right balance between claiming sufficient breadth for current and potential future use while avoiding overly broad claims that could trigger bad faith concerns is crucial. Employing sub-categories instead of broad categories and meticulously documenting the rationale for selected goods and services at the time of filing are highly recommended.

• Enforcement strategy: Brand owners must also carefully consider their enforcement strategies. Asserting overly broad trade marks, especially against businesses whose activities are unlikely to cause confusion, could be construed as an attempt to wield the trade mark as a legal weapon, potentially signalling bad faith.

For challengers:

• Greater scope for invalidity challenges: This ruling provides challengers with more ammunition to invalidate trade mark registrations based on bad faith in so far as those asserted which cover very broad specifications. Demonstrating that the trade mark owner lacks a genuine intention to use the mark across the entire scope of the specification is crucial for success.

• Focusing on sub-categories: Challengers should focus on pinpointing specific sub-categories within broad terms where the trade mark owner lacks a genuine intention to use the mark. This strategic approach enhances the likelihood of securing at least partial invalidity.

The SkyKick v. Sky decision is a significant milestone in UK trade mark law. It underscores the crucial role of genuine intention to use in trade mark applications, particularly those with broad specifications, and is likely to encourage a more balanced approach to trade mark protection. This ruling should ultimately foster fairer competition and prevent gross misuse of the trade mark system.

With all that said, it remains to be seen how far this will influence trade mark practices and broad filing strategies. In this case, Sky clearly met their match and SkyKick had the resources and the will to fight all the way. That will not be the case for all businesses and many will not have the resources or the will to defend and counterclaim bad faith by citing the SkyKick case. In our view, broad filing of specifications will remain a good deterrent against competitors because every single case will still need to be judged on its merits through evidence, incurring time and resources.

The UK Intellectual Property Office (UKIPO) has indicated that it is reviewing the decision and considering any necessary policy changes. This may include potential modifications to the acceptability of broad terms like “computer software” and a more proactive approach to addressing bad faith concerns during the application stage.

Posted: 2nd January 2025