The Sky v. SkyKick case, which received its long-awaited judgment at the Court of Justice of the European Union (CJEU) in January 2020, has been called “the most important EU trademark case of the decade.” While IP professionals have dissected the importance of the ruling from a precedential standpoint, the case’s importance for brands and those who work in the brand protection industry has been less well discussed.
What does the Sky v. SkyKick case mean for businesses and what impact could it have on brand protection efforts? One of Pointer Brand Protection’s analysts, Roberto Gabriel Nieto, has followed the case and here outlines his thoughts on the result.
After a long delay, the recent ruling on Sky Plc and Others v. SkyKick UK Limited (C-371/18) has cleared much of the dark cloud that has been hanging over rightsholders who own EU and UK trademarks. The resolution of the case at the EU level has brought brighter skies (pun intended) not only for the well-known British broadcasting company, but for all companies that follow a similarly broad trademark strategy of covering a vast range of goods and services in their applications for new marks.
Sky v. SkyKick Case Background
In 2018, based on a claim that four of its EU trademarks and one UK mark were being infringed, the British broadcaster Sky Plc (Sky) sued the software company SkyKick UK and SkyKick Inc (SKYKICK) for trademark infringement. The claim was based on Sky’s rights in the word mark SKY, which was the subject of numerous registrations in the UK across many different classes. Additionally, much attention was given throughout the case to the meaning of ‘computer software’ in class 9, and ‘telecommunication services’ in class 38. In response, SKYKICK filed a counterclaim and requested a Declaration of Invalidity for Sky’s trademarks on the basis that:
(i) certain terms used to specify the goods and services covered by the marks were lacking clarity and precision, and
(ii) Sky acted in bad faith since it had no intention to use the mark in connection with all the goods and services covered by their registrations (e.g., fire-extinguisher apparatus).
Sky v. SkyKick at the High Court
The Judge in the original case at the High Court, Lord Justice Arnold, dismissed some of Sky’s claims on the basis that he did find that SKYKICK was sufficiently similar in relation to certain classes so that customers would be confused into believing the two companies were related or that the goods/services emanated from a single source. However, he also found Sky’s registration of the mark SKY for ‘computer software’ to be too broad. Lord Justice Arnold referred the case to the CJEU for their decision on whether general terms such as ‘computer software’ are so imprecise that it could be a basis for revocation, and also whether registering EU marks in categories where there is no intention to use them can also lead to invalidation.
The Importance of Sky v. SkyKick for Brands
The CJEU found that: an EU or national trademark cannot be declared wholly or partially invalid on the grounds that the terms used to designate the goods and services lack clarity and precision.
This first point is important to brand owners because the CJEU recognized, based on the Trademark Directive 89/104 and the Regulation 40/94, that National or EU trademarks cannot be invalidated on the basis that the use of generic or broad terms to designate the goods and services covered by the marks lack clarity and precision.
In the case of Sky, for example, the SKY word mark remains valid in the ‘computer software’ class despite the breadth of the meaning or category of goods. This was a big concern for brands, especially larger businesses with complex IP portfolios, and it means they can now continue to cover an extremely wide range of products and services which may be part of their future plans, as well as current business structure and set-up.
This is also an important point in terms of brand protection because this decision also means that there will not now be a sudden rush of invalidity actions proposed by competitors (both direct and indirect) using the bad faith argument. If the CJEU had decided that invalidation was a reasonable response to wide trademark filings, this could have provoked a rash of invalidity claims. If trademarks had been revoked in these cases (ahead of the five-year grace period for non-use), this could have curtailed how widely brands were able to monitor and enforce against IP infringement. The recent decision means that brand protection efforts can continue in line with the status quo.
One key learning that came from the case then was:
1. a trademark application made without any intention to use the trademark in relation
to the goods and services covered by the application constitutes bad faith only in the
following two cases. First, if the applicant had the intention of undermining, in a manner
inconsistent with honest practices, the interest of third parties. Secondly, if the
applicant sought to obtain, without even targeting a third party, an exclusive right in a
term which is not protectable as a trademark or not for or beyond the scope of the stated
general goods/services (i.e., to establish a commercial monopoly).
Ultimately, the CJEU did not provide any detailed reasoning in relation to the broad scope of terms such as ‘computer software.’ While it did not outline in depth what that particular term should mean, nor whether such terms can potentially give a trademark owner a monopoly over a vast range of goods covered under this class heading, it did bring some important relief for trademark owners who now know that their marks cannot yet be invalidated for filing overly wide or imprecise terms in their registrations.
In this sense, the CJEU appears to recognize the importance of allowing trademark owners to expand and grow their businesses beyond those goods and services which they may or may not consider at the time of filing. This means, at least for now, that new registrations which plan for a broad portfolio and future growth can still be made – an important development that supports entrepreneurship and economic growth.
It will still be interesting to see how the EUIPO and the National Trademark offices treat this ruling; whether the examination of new trademark applications demands that terms used by the applicant are clear and precise enough for offices and third parties to understand the scope of protection of their marks.
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