By applying for the Sky Marks to be registered in respect of a broad range of goods and services (some of which fell outside Sky’s core business activities and which Sky had no intention of using as at the date the Sky Marks were applied for), are the Sky Marks rendered wholly or partially invalid on the basis the applications for the Sky Marks were made in bad faith?

The Supreme Court found that the High Court was right to decide that the Sky Marks had partially been applied for in bad faith. Further, a finding of bad faith will be supported in circumstances where an applicant intends to enforce a registration across the specification of goods and services for which it is registered despite the fact it does not have a genuine intention to use the trade mark in relation to those services within the 5 years after the mark was registered.

It was noted that before the trial of this case, Sky relied upon the full (and broad) range of goods and services for which the Sky Marks were registered. As trial approached, Sky sought to rely upon an increasingly narrower range of goods and services in support of their claim.  The Court held that this was a significant fact which the Court of Appeal failed to meaningfully consider. Further, this conduct supports Skykick’s position that:

“Sky had applied for and secured these registrations across a great range of goods and services which they never had any intention to sell or provide, and yet they were prepared to deploy the full armoury presented by these SKY marks against a trader whose activities were not likely to cause confusion and did not amount to passing off.” [318]

Overall, the Supreme Court held that the following categorisation is a useful guide to circumstances which may give rise to a finding that an application has been made in bad faith:

“(i) where the application was made, not with the intention of engaging fairly in competition but with the intention of undermining, in a manner inconsistent with honest practices, the interests of third parties; or

(ii) where the application was made with the intention 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, in particular the essential function of indicating origin – and so enabling the consumer to distinguish the goods and services of one undertaking from others which have a different origin.” [155]

The Court ultimately held that this case fell under the second category as Sky had applied to register the Sky Marks for goods and services it did not genuinely to intend to offer.

More generally, is it permissible to infer from the size and nature of a list of goods and services for which registration is sought that a trade mark application was made in bad faith in respect of some or all of them?

The Court clarified that an applicant can apply to register a trade mark for a broad range of goods and services. Indeed, it is not necessary to commercially plan to use a trade mark for every single good and/or service within a specification. In this vein, the Court is alive to the commercial realities which impact business and brand owners: plans can change and businesses can evolve in ways which are unanticipated.

However, applicants should give careful consideration to the specification of goods and services which they apply for as broad descriptions such as “computer programs” may invite findings of bad faith in the event a genuine intent to use cannot be evidenced. Moreover, the Court will not support applicants using general terminology strategically in a specification, in a bid to broaden the scope of the protection afforded to their trade mark.

In proceedings of this nature, an applicant may provide the Court with an explanation and rationale which may rebut the allegation of bad faith. If it fails to do so, is it permissible to find the registration is partially or wholly invalid because the application was made in bad faith?

It was confirmed that a party failing to provide the Court with sufficient explanation as to its commercial rationale for registering a trade mark in respect of the applicable goods and services may persuade the Court to find the application was made in bad faith. It is therefore permissible for the Court to declare that a registration is invalid (either wholly or in part) on that basis.

Should the same or different approach be adopted in respect of an applicant who uses broad general terms to describe and encompass what are distinct categories or subcategories of goods and services?

It appears that the same approach as detailed above at “Query 3” will apply to an applicant who uses broad and general terms in its specification.

The overarching requirement of fairness and steps that must be taken to ensure any decision of this kind is made only after each side has had an appropriate opportunity to address the case against it.

The Court emphasised that the Court is obligated to ensure that its processes are fair to the respective parties in a dispute of this nature. As part of this, each party must be afforded the opportunity to be properly heard and to address the case made against it by the other side.  Additionally, each party should be able to resist any order which a judge may be minded to make against it, or be given the opportunity to set such an order aside.

Has Skykick infringed the Sky Marks?

It was held that the Court of Appeal was correct in deciding that Skykick had infringed some of the Sky Marks through its cloud backup services offering, despite the finding of bad faith on Sky’s part.

The Supreme Court also agreed with the Court of Appeal’s finding that Skykick’s cloud migration activities had not infringed the Sky Marks.

The Court also flagged that the Supreme Court will respect the conclusions of the Court of Appeal on an issue such as trade mark infringement and will only interfere in the event there has been an error of principle or obvious mistake.

The impact of Brexit on cases involving EU trade marks before the courts.

It was confirmed that in the context of proceedings pending before a UK court designated as an EU trade mark court prior to IP completion day (i.e. 31 December 2020 – the end of the transition period where arrangements were made for the UK’s withdrawal from the EU), courts in the UK will retain jurisdiction in actions concerning EU trade marks protected by registration for the territory of the EU. Any domestic courts hearing an appeal of any such decisions will also have jurisdiction.