Trade mark owners survive a kicking

Many trade mark owners are relieved following today’s long awaited decision of the Court of Justice of the European Union (CJEU) in the Sky vs SkyKick case. The CJEU has in essence held – contrary to the Advocate General’s previous opinion – that overly-broad specifications of the goods and services covered by the trade mark registrations are not contrary to public policy or giving rise to invalidity of the mark. Moreover, filing broadly without any intention to use the mark in relation to (all) such goods and services constitutes bad faith only if the applicant 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.

The Court’s preliminary ruling follows the referral from the UK High Court in proceedings brought by Sky (a well-known satellite and digital television broadcaster) against SkyKick (a start-up supplying email migration and cloud backup services). Sky commenced infringement proceedings against SkyKick based on its earlier SKY marks and passing off. SkyKick counterclaimed that Sky’s marks were invalid on the basis that some of the goods and services applied for, including specifically “computer software”, lacked sufficient clarity and precision. SkyKick also claimed that Sky’s marks had been filed in bad faith, as Sky had no intent to use the marks for all the goods and services covered, many of them being very broad terms and often completely unrelated to Sky’s business. Considering SkyKick’s claims, and noting that the case raised important issues of EU trade mark law, the UK High Court sought the CJEU’s guidance on both points.

Lack of clarity and precision:

The CJEU confirmed that lack of clarity in the goods and services is not a ground to wholly or partially invalidate a registered trade mark. The grounds of invalidity are exhaustively listed in the EUTM Regulation/Trade Marks Directive and lack of clarity and precision is not among them. Moreover, and contrary to the Advocate General’s opinion, the CJEU stated that such lack of clarity and precision of the goods or services did not fall within the scope of the public policy ground for invalidity, as the concept of ‘public policy’ could not be construed as relating to characteristics concerning the trade mark application itself (including the clarity and precision of the goods or services covered by it).

The Court reminded that, following a five-year non-use grace period, a trade mark registration can be revoked for unused goods or services. Therefore, if the mark covers a (broad) range of goods and services which lack clarity and precision, such mark would be capable of being protected only for those goods and services for which it had been put to genuine use.

Bad faith:

According to the CJEU, registering a mark for a broad range of goods and services is itself not sufficient to show bad faith. Although registering a trade mark without any intention to use it for (all) the goods and services covered may constitute bad faith where there is no commercial rationale for seeking such (a broad) protection, such bad faith may only be established if there is objective, relevant and consistent indicia tending to show that, at the time of filing, the trade mark applicant 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. Consequently, bad faith cannot be presumed merely based on the fact that, at the time of filing, that applicant had no economic activity corresponding to the goods and services applied for.

The Court also confirmed that it is possible to partially invalidate the mark based on bad faith, when the absence of the intention to use the trade mark in accordance with its essential functions concerned only certain goods or services.

Finally, the UK provisions related to the applicant’s statement of (intention to) use at the time of the filing of a trade mark application are not contrary to EU law, as long as an infringement of such a statement is not, in itself, a ground for invalidity of a registered trade mark (it is not, being considered part of the bad faith ground).

Comments:

The conclusions of the CJEU confirm its previous case law and the principles of the EU first-to-file trade mark system which does not require a trade mark applicant to demonstrate intention to use. Nevertheless, although there seems to be – at least for now – no imminent pressure for trade mark owners that filed broadly, recent developments warrant a more cautious approach when seeking a trade mark protection.