Out-Law / Your Daily Need-To-Know

SkyKick case could overhaul trade mark practice

Out-Law Analysis | 27 Jan 2020 | 9:47 am | 4 min. read

A ruling anticipated later this week has the potential to deliver the most far reaching reform of trade mark practice since EU trade mark laws were first drawn up in 1989.

The eagerly awaited judgment of the Court of Justice of the EU (CJEU) on Wednesday could force brand owners to be more precise in future in identifying the goods and services their trade marks should apply to when they go to register those marks.

If it does, the ruling could also put thousands of trade marks already registered across the EU at risk of invalidation. Trade mark owners may have to take proactive steps by specifying general terms if they wish to avoid putting their marks at risk.


Pinsent Masons is providing a rapid response webinar following the ruling on 5 February 2020 from 12:30 to 13:30 GMT. If you would like to attend, please register here.


The underlying dispute

The case before the CJEU stems from the High Court in London which is considering a dispute over trade mark rights asserted by broadcaster and telecoms provider Sky.

Sky has claimed that SkyKick, a US supplier of cloud migration software, is responsible for infringing five of its UK and EU trade marks, but SkyKick has counter-challenged the validity of Sky's marks, arguing that they are insufficiently clear and precise and should be revoked.

Connor Iain

Iain Connor

Partner

This decision could result in the most far reaching reform of trade mark practice since the Trade Mark Directive was introduced over 30 years ago 

The High Court has asked the CJEU to answer questions relating to how EU law should be interpreted to help it rule on the dispute between the companies.

What the law says

Trade mark protection in the UK and EU is granted on the basis of specification – that is, the nature of the goods and services to which the mark relates. In this case, Sky claimed infringement of trade marks registered in respect of, amongst others, various categories of 'computer software'.

Trade mark law sets out both absolute and relative grounds on which trade marks should not be registered or where they are liable to be declared invalid. There is no provision in the legislation for invalidity of a registered trade mark on the ground that some or all of the terms in the specification of goods or services lack sufficient clarity and precision.

However, previous EU case law provides that trade mark offices should refuse an application for the registration of a sign that is not sufficiently clear and precise. However, the question of whether a trade mark can be retrospectively declared invalid based on the clarity and precision of the specification has never been decided by the court.

In this case, SkyKick has argued that each of Sky's five trade marks at issue should be declared partially invalid on the ground 'computer software' is not "specified with sufficient clarity and precision".

The opinion

Clues as to how the CJEU might rule in the case were provided when an advocate general to the court issued their opinion in October last year. The views expressed by advocate generals in their opinions are non-binding, but the CJEU often follows them when issuing a formal judgment.

The advocate general said that clarity and precision are "issues that must be examined by the competent trade mark offices when they are dealing with an application for registration of a mark".

He went on to consider whether SkyKick's claim was covered by any of the grounds for refusal or invalidity of marks specified by the law. One such ground is where trade marks are contrary to public policy or to accepted principles of morality.

The advocate general said that "the requirement of clarity and precision may be covered by the ground for refusal or invalidity of marks which are contrary to public policy". He further considered that it was within the scope of that exception for the court to determine that the registration of a trade mark for 'computer software' was so broad as to be "unjustified and contrary to the public interest".

"A term such as ‘computer software’ is too general and covers goods and services 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," the advocate general said.

The opinion also explored how the concept of a 'bad faith' registration could also be evidenced from an overly broad specification of a trade mark. The application for registration of a trade mark made in bad faith is an absolute ground for the refusal of registration or subsequent revocation of the mark.

The advocate general said 'bad faith' could be established if trade mark holders have no intention of using the mark "in connection with the specified goods or services", and "in particular where the sole objective of the applicant is to prevent a third party from entering the market, including where there is evidence of an abusive filing strategy".

The ruling

The CJEU is expected to rule definitely on the issue of clarity and precision on Wednesday.

This decision could result in the most far reaching reform of trade mark practice since the Trade Mark Directive was introduced over 30 years ago and have even more of an impact than the IP Translator case which changed the practice of registering trade marks by reference to class headings.

If it is found that trade marks registered with overly broad classes of goods and services were registered in bad faith then vast swathes of the trade mark registers across Europe will have marks which are liable for revocation for having been registered without any genuine intention to use.

Since the decision will be rendered before Brexit, it will be binding for the UK's Intellectual Property Office and courts. The decision will therefore have implications for UK law and practice as well.

Pinsent Masons is providing a rapid response webinar following the ruling on 5 February 2020 from 12:30 to 13:30 GMT. If you would like to attend, please register here.