Earlier this month the long-anticipated opinion from Evgeni Tanchev, the EU Advocate General (AG) was released following the UK’s High Court referral of five questions to the CJEU in respect of the infamous Sky vs Skykick case [2018] EWHC 155.

In the words of the AG “The case is significant since it allows the Court to address issues relating to a number of deficiencies that have emerged in the EU trade mark system”. The importance of this opinion, if followed by the CJEU is twofold. Firstly, trade mark applicants will soon find broad terms including ‘computer software, financial services and telecommunications’ objected to in examination reports. This can only be seen as a positive step which will bring trade mark practice into the modern age and ensure the Register goes some way to reflect the market in practice as best it can. Secondly, where defensive and broad filing strategies were historically followed, trade mark owners will need to recognise that it may be possible for third parties to invalidate a registration in part on the grounds of bad faith where there was no true intention to use the mark for the specified goods or services at issue.

By way of background, Sky (a well-known satellite and digital television broadcaster), filed an infringement action against Skykick, (a start-up company which supplies cloud migration information technology services) relating to their use of the SKYKICK mark based on Sky’s earlier rights in the mark SKY. SkyKick counterclaimed stating that Sky’s trade marks, which included 5 European trade mark registrations, were invalidly registered on the basis that

the specification of goods and services lacked clarity and precision in respect of terms like “computer software”. Also, Skykick claimed that Sky’s applications were made in bad faith as Sky had no intention of using some of the more far-fetched goods or services listed specifications (e.g. whips and fire extinguishers).

The UK’s High Court asked the CJEU for further guidance in respect of the following questions.

  1. Can an EU trade mark or a national trade mark registered in a Member State be declared wholly or partially invalid on the ground that some or all of the terms in the specification of goods and services are lacking in sufficient clarity and precision to enable the competent authorities and third parties to determine on the basis of those terms alone the extent of the protection conferred by the trade mark?
  2. If the answer to question (1) is yes, is a term such as ‘computer software’ too general and covers goods which are too variable to be compatible with the trade mark’s function as an indication of origin for that term to be sufficiently clear and precise to enable the competent authorities and third parties to determine on the basis of that term alone the extent of the protection conferred by the trade mark?
  3. Can it constitute bad faith simply to apply to register a trade mark without any intention to use it in relation to the specified goods or services?
  4. If the answer to question (3) is yes, is it possible to conclude that the applicant made the application partly in good faith and partly in bad faith if and to the extent that the applicant had an intention to use the trade mark in relation to some of the specified goods or services, but no intention to use the trade mark in relation to other specified goods or services?
  5. Is section 32(3) of the UK Trade Marks Act 1994 compatible with Parliament and Council Directive 2015/2436/EU1 and its predecessors?

In respect of the first question, the AG opined that the requirement of clarity and precision within a specification of a registration may not be, by itself, a ground for invalidity. The scope of protection of a mark should be addressed at the examination stage by national offices. That said, the AG stressed that terms like ‘computer software’ as well as ‘financial services’ and ‘telecommunications’ by implication are unjustifiably broad and hence contrary to public interest. Such terms within a trade mark registration which are found to lack clarity and precision (and are hence contrary to public policy) may be invalided in part. Fundamentally, the AG agreed with the High Court that if “registrations can be obtained too easily and/or too widely, then the result will be mounting barriers to entry for third parties as the supply of suitable trade marks is diminished, increasing costs which may be passed on to consumers, and an erosion of the public domain”.

The AG then considered whether a trade mark obtained with no requisite intention to use it for the specified goods or services would constitute bad faith. The AG took the view that in some particular circumstances, for instance where the trade mark owner had registered the mark to block third parties from entering the market, and had no intention of using the

mark, it could be challenged post-registration on the grounds of bad faith, but only for the goods or services at issue and not for the registration as a whole.

What’s next?

The CJEU will issue a formal ruling answering these questions, which the UK IPO and UK Courts are likely to follow.

Recommendations

When considering future filing strategies special consideration should be given to the specification of goods and services to ensure terms are sufficiently clear and precise and in line with future commercial plans.

Prior to asserting trade mark rights, consider whether any broad terms are included in the specification and particularise these to suit your business interests rather than risk a challenge by an alleged infringer.

If you have received an allegation of trade mark infringement, consider the breadth of the marks asserted and whether bad faith could be used as a defence.