Much of UK trade mark law derives from the law of the European Union in the form of regulations, directives or the case law of the European Court of Justice (ECJ). A regulation is a binding legislative act applicable directly throughout the European Union. A directive sets out a legislative goal which each member state must enact legislation to achieve. Back in 2004, the UK Parliament enacted the Trade Marks Act 1994 to implement Articles 10 and 12 of the Trade Marks Directive EEC/89/104 into UK law.

With the UK set to leave the EU on 29 March 2019, how the country will formulate and prosecute UK and European trade mark strategy will depend on the trade mark laws after the transition period ends on 31 December 2020.

But the problem with that analysis is that no one—no lawyer, no politician, no soothsayer—can say what is going to be left on the date of departure, let alone after the transition period. The EU Withdrawal Bill will incorporate all of EU law on the date of departure and then provide for the extraction of objectionable European regulations one by one, but information will be needed sooner.

On the likelihood that trade mark law as applied by the English courts for EU marks and UK marks will continue at least for the post-Brexit transition period, a recent trade mark infringement/invalidity case in the English High Court’s Chancery Division will soon provide extremely useful guidance for all practitioners.

In (1) Sky Plc (2) Sky International AG (3) Sky UK Ltd v (1) Skykick UK Ltd (2) Skykick Inc., [1] Mr Justice Arnold had to consider the law on two trade mark invalidity defences to infringement where the law was unclear and necessitated requests to the ECJ to clarify European law on those points. That is a common procedure to ensure that European law is applied uniformly by all the courts in the Union. Those could be the last such questions on trade marks from the UK courts, and the ECJ’s answers might signal the arrival of further grounds to invalidate trade marks in the EU. After ruling on two further defences, he then considered the defendants’ submission that a recent amendment to an EU regulation was invalid.

The Parties

The two claimants (plaintiffs) are part of the Sky group of companies. Sky is a household name brand in the UK and Ireland. It uses its “SKY” brand extensively in its core business areas of television broadcasting, telephony and broadband.

The second defendant, Skykick Inc, had developed its “SkyKick” product to enable Microsoft Partners (who provide general IT services to their SME clients) to migrate their clients’ email accounts and settings from the Microsoft Office platform to its Office 365 cloud infrastructure.

The claimants pleaded that the defendants had infringed their four European trade marks and one UK trade mark in each case for the figurative mark “SKY” by the defendants’ use of the figurative marks “SkyKick” and “skykick”.

Skykick denied infringement. Of its six defences, this article addresses the three that raised significant European law trade mark issues.

The First Skykick Defence

The first was that the SKY marks had not been registered with sufficient clarity and precision, which would require Arnold J to declare them partly invalid. Skykick cited an ECJ ruling[2] which was itself a response to a question on the ambit of Directive 2008/95/EC. The ECJ had declared that the directive: “must be interpreted as meaning that it requires the goods and services for which the protection of the trade mark is sought to be identified by the applicant with sufficient clarity and precision to enable the competent authorities and economic operators, on that basis alone, to determine the extent of the protection conferred by the trade mark”.

On that basis, Skykick’s counsel submitted that in each of the SKY marks the following specifications lacked clarity and precision; “computer software”; “computer software supplied from the Internet” and “computer software and telecoms apparatus to enable connection to databases and the internet”. That was because the specifications were claimed to be too broad. Arnold J contemplated whether, if there was such a ground, it could be asserted against a trade mark which had already been registered, or was only a ground for the national trade marks authority to refuse to register it in the first place. He framed two questions for a reference to the ECJ: Can an EU trade mark or a national trade mark be declared wholly or partially invalid because some or all of its terms are lacking sufficient clarity or precision? If so, is a term such as “computer software” lacking that requisite clarity and precision?

The Second Skykick Defence

Skykick’s second defence was also a plea that the SKY marks were invalid; this time because Sky had allegedly registered them in bad faith. Skykick claimed that when registering its marks, Sky had not intended to use the SKY marks for all of the goods and services set out in their specifications (descriptions). Sky responded that if it had not intended to use the marks to the full extent of their registrations, then that could not qualify as bad faith. Even if it were bad faith, that could only lead to some sort of partial invalidity.

That raised an issue of some significance to trade marks practice. European law allows an application for revocation of a mark for non-use after five years. If the ECJ was not going to permit a registered mark to be challenged for insufficient clarity or precision (see above), then the only means of securing the revocation of a mark before expiry of five years’ non-use would be the bad-faith ground. All the more so because it is standard practice to register a trade mark both for goods and services already being provided and for those which the applicant might intend to provide or consider providing in the future.

After reviewing the EU and the English law case authorities on bad faith, Arnold J submitted a second set of questions to the European Court of Justice. Is it bad faith to apply to register a trade mark without any intention to use it for the specified goods and services? If so, could an applicant for a trade mark have registered it partly in good faith with an intention to use the mark on some of the specified goods and services, and partly in bad faith, having no intention to use it for others?

The Third Skykick Defence

Arnold J ruled that Skykick could not rely on the “own name” defence because it had not acted in accordance with honest practices. Nevertheless, he considered Skykick’s plea that an amendment to an EU regulation had been invalid. In essence, European law had permitted an individual to use his or her own name to trade under, whether as a sole trader or as a company, where that same name would otherwise infringe a trade mark. In either case, the name had to be used fairly and in accordance with honest practices in industrial and commercial matters. But then the EU brought in two regulations whose effect was to remove this entitlement for corporate names.

Skykick contended that the amendments were invalid. They interfered with the Charter of Fundamental Rights’ provisions which guaranteed freedom of expression and information; freedom to conduct a business, the right to property, equality before the law and non-discrimination. Arnold J agreed that the amendments were an interference with freedom of expression and the freedom to conduct a business. However, they were justified by the need to protect intellectual property: trade marks.

So, whilst there are not definite answers on the scope of these trade mark validity challenges just yet, it is only a matter of time.