On 29 January 2020, the CJEU issued its judgement on the Sky v. Skykick case, one of the most awaited trademark decisions of the past years.
As anticipated in our previous article posted last October 2019 (you can find it here: https://blogs.dlapiper.com/iptitaly/2019/10/sky-v-skykick-or-on-the-meaning-of-computer-software/), the dispute came up when Sky, active in the satellite and digital television broadcast service, sued before the High Court of Justice of the UK Skykick, which supplies cloud migration information technology services, for the infringement of the EU trademarks consisting in the word “SKY”. Skykick denied the infringement and counterclaimed that Sky’s trademarks registrations were invalid since made in bad faith, in particular given that the relevant specifications of goods and services lack the clarity and precision requirements.
Last time, we discussed the conclusions reached by Advocate General Tanchev (“AG”), according to which the term “computer software” could indeed lack the precision requirement stemmed by the IP Translator CJEU judgement of 19 June 2012, covering goods that are too variable in their function and field of use to be compatible with the function of a trademark. As a result, the AG concluded that registration of a trademark for “computer software” could be unjustified and contrary to the public interest, conferring on the owner a too large monopoly that cannot be justified by any legitimate commercial interest.
Now, on 29 January 2020 the CJEU released its decision on the case, mostly taking the distance from the conclusions reached by the AG.
Indeed, the CJEU firstly ruled that a EU or national trademark cannot be declared wholly or partially invalid on the ground that the terms used to identify the goods and services in respect of which that trademark was registered lack clarity and precision. In this way, the CJEU has spelled out that the clarity and precision requirements set forth in the IP Translator judgement must not be interpreted as implying that the Court intended to provide an additional invalidity ground for trademark registrations that was not already included in EU regulations.
In addition, the Court confirmed that an application made without any intention to use the trademark in relation to the goods and services covered by the registration constitutes bad faith. However, the CJEU specified that bad faith in the registration will occur only in exceptional circumstances, which demonstrate that the applicant had the intention either (i) of undermining, in a manner inconsistent with honest practices, the interests of third parties, or (ii) of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trademark. As a guideline to its approach, the CJEU has pointed out that bad faith will not arise per se if, at the time of filing of the trademark registration, the applicant had no economic activity related to the goods and services included in the trademark registration.
Further, the Court clarified that when the absence of the intention to use the trademark concerns only certain goods or services referred to in the application, then that application could have been made in bad faith only in relation to those specific goods or services, therefore not implying the invalidity of the trademark registration as a whole.
In light of the conclusions of the Court, trademark owners will not be required to run and amend their trademark registrations in order to limit and specify the list of goods and service, dropping broad and generic terms.
Although this scenario has not seen the light through the Sky v. Skykick decision, we still believe that trademark owners should implement a more specific approach in relation to the goods and services protected under their trademark registrations, in order to avoid any possible bad faith claim raised by third parties. Indeed, the AG evoked a risk that cannot be easily and simply put aside.