This post has been contributed by Dr Luke McDonagh, Module Convenor for Intellectual Property.
Section 3(6) of the Trade Marks Act 1994 prohibits the registration of a trade mark to the extent that the application was made in “bad faith”. But what exactly does this mean? It relates to a core assumption of trade mark law: that the applicant must intend to actually use the mark. ‘Trade mark squatting’ – i.e. registering marks without a good faith intention to use them – is not allowed.
The saga of Sky v Skykick [2024] UKSC 36 gives us a clear understanding that claiming a trade mark for an “overbroad” range of goods and services can lead to invalidation (at least in part) of registered trade marks. The case began when Sky plc asserted a number of broad trade mark registrations for the word “SKY” in an infringement action against SkyKick. The Sky plc registrations for “SKY” included several different classifications, including not only the ones that applied to its core business of TV and broadband, but also wide categories such as ‘computer software’ (the core business of Skykick), and even unorthodox goods such as ‘bleaching preparations’. Skykick claimed that Sky was acting like a ‘trademark bully’ because it was asserting marks for goods/services for which it had no plausible prospect of use. Hence, Skykick argued that Sky plc had made the applications in ‘bad faith’ and thus, they ought to be invalidated.
The CJEU decision and the High Court judgment
IAfter the case was filed, the Chancery Division of the High Court in England and Wales made a preliminary reference for guidance on the meaning of bad faith, referring the case to the CJEU in C-371/18 Sky plc v SkyKick UK Ltd (decided before the end of the Brexit transition period). The referred questions concerned the circumstances when registered marks might be found invalid on the ground of bad faith, such as where the applicant had had no intention of using the mark (at all, or across the full range of goods and services specified). The CJEU held that registration without an intention to use a mark could indeed constitute bad faith for the purposes of the EU Trademark Regulation and the accompanying Directive (and therefore for the purposes of the UK Trade Marks Act 1994).
However, this would only be the case:
“…if the applicant for registration of that mark had the intention either of undermining, in a manner inconsistent with honest practices, the interests of third parties, or of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark. When the absence of the intention to use the trade mark in accordance with the essential functions of a trade mark concerns only certain goods or services referred to in the application for registration, that application constitutes bad faith only in so far as it relates to those goods or services.” [81]
Applying this guidance in Sky plc v SkyKick UK Ltd [2020] EWHC 990 (Ch), the court found that several trade marks registered by Sky plc were invalid on the ground of bad faith and that a number of registered marks were partially invalid (as interpreted by the CJEU). The court held Sky plc could not have had the good faith intention to use the marks across the entire range of goods/services. Sky plc’s trade mark registration strategy appeared to function purely as a cudgel to be used against third parties who featured the name ‘Sky’ in their company name. This was a purpose at odds with the intention of trade mark law.
The Court of Appeal Decision
However, in Sky Ltd v SkyKick UK Ltd [2021] EWCA Civ 1121 the Court of Appeal of England and Wales held that the High Court had erred in relation to assessing bad faith. It noted that a finding of bad faith is akin to a finding of dishonesty and that it was therefore important to distinguish between an application to register a mark that the applicant had no intention of using and an application to register a mark for a wider category of goods of services than they actually used or intended to use. It was consistent with good faith for an applicant to claim a wider category of goods than they had actually used or intended to use. The parties appealed to the UK Supreme Court.
The UK Supreme Court ruling
In November 2024, the UK Supreme Court gave the final ruling in the long running saga. The UKSC ruled in favor of SkyKick, partially invalidating Sky plc’s broad trade mark registrations for “SKY”. The UKSC held that Sky had clearly acted in bad faith by registering trade marks for goods/services that it had no intention of using. The court also upheld SkyKick’s infringement claims against Sky plc for using the “SKYKICK” mark for its software/email and cloud storage services.
Conclusion
The UKSC has struck a blow against alleged ‘trade mark bullies’. Firms need to take greater care in their applications for trade marks, including keeping notes at time of filing if their intention for the filing in relation to those particular goods/services. Only by showing a plausible intention to use can they maintain that the filings were made in good faith. If firms fail to do this, they may stray into bad faith filings, which can be invalidated in court.