Robert Guthrie, Chair of the MARQUES European Trade Mark Law and Practice Team, and Richard May consider the significance of last week’s CJEU ruling in the SkyKick case.

On 29 January 2020, the CJEU delivered its judgment in Sky v SkyKick (Case C-371/18). The CJEU was being asked to rule on two important areas of trade mark law:

1. whether a trade mark can be declared invalid in whole or in part for having a specification that lacks “clarity and precision” if it is registered for broad terms such as computer software; and
2. whether a trade mark can be declared invalid on grounds of bad faith if there was no intent to use for some of the goods and services covered.

MARQUES members were awaiting the CJEU’s judgment with some concern as it has been a common practice in the EU to use broad terms and specifications to obtain as much coverage as possible across the classes of goods and services applied for. This practice has been encouraged by the EUIPO – especially before the CJEU’s previous judgment in IP TRANSLATOR ruled that the use of the entirety of the Nice class headings should no longer be treated as a claim to all goods and services that fell within the relevant Nice class.

However, the decision is largely brand owner friendly:

• The CJEU has confirmed that trade mark registrations containing broad terms such as ‘computer software’, ‘financial services’ or ‘telecommunications services’ cannot be invalidated in whole or in part due to an alleged lack of clarity and precision of such terms.
• Despite the earlier Advocate General Opinion, the inclusion of broad terms in trade mark specifications cannot be regarded as contrary to public policy.
• The CJEU did confirm that the registration of a trade mark without any intention to use it in relation to the goods and services covered will constitute bad faith, but only if the applicant intended to (a) undermine, in a manner inconsistent with honest practices, the interest of third parties or (b) obtain a monopoly for purposes other than to fulfil the functions of a trade mark.  
• Importantly, the CJEU ruled that a finding of bad faith on the basis of a lack of intention to use for some of the goods and services covered will only invalidate the registration for those goods and services and not the whole registration.

Background to the case

In the underlying UK proceedings, Sky, the well-known satellite and digital television broadcaster, sued SkyKick, a start-up company that supplies cloud migration services, for trade mark infringement for use of the word SkyKick and other similar signs.

SkyKick denied infringement and counterclaimed for a declaration that Sky’s trade marks were invalidly registered, either wholly or partially, because (i) Sky’s specifications of goods and services lack clarity and precision; and (ii) Sky’s marks were applied for in bad faith because Sky had no intention to use all the protected goods and services.

Implications for brand owners

The decision is good news for brand owners because it effectively maintains the status quo for trade mark registrations and there is no need to spend time and money narrowing down broad terms. Indeed, the possibility of a bad faith challenge on the basis of a lack of intention to use suggests that the use of broad terms, where acceptable by trade mark offices, will be a more secure way to obtain broad coverage than the use of large numbers of narrow terms.

The question remains whether the EUIPO and national offices should continue to accept terms such as “computer software” because the CJEU failed to address whether the broadness of such terms does mean they are “insufficiently clear and precise”. What we know from this ruling is that there is no ability for brand owners to challenge trade mark applications or registrations for containing broad terms so it will be down to the EUIPO and national offices to decide the matter pending further guidance from the CJEU and/or their respective national courts and tribunals. MARQUES members are referred to the TMclass search tool linked to the Harmonised Database of Goods and Services database which includes information as to which terms are accepted by all participating offices.

In respect of bad faith, the CJEU did decide that this may be established when there were “objective, relevant and consistent indicia” that tended to show that an applicant intended to “obtain a monopoly for purposes other than to fulfil the functions of a trade mark”. This suggests that for marks to be invalidated on this basis it may be necessary to establish not only that an applicant had no specific plans to use the mark for the goods and services concerned but also that they knew that they would not or were unlikely to use the mark for those goods and services.

In any event, because the CJEU ruled that any finding of bad faith on the basis of a lack of intention to use does not invalidate the entire registration, it would seem that applicants will not generally have to worry that the use of broad specifications could invalidate or weaken their rights in respect of those goods and services for which they do have an intent to use. We can therefore expect the practice of using broad terms and specifications in the EU to continue.

The CJEU did not expressly address the hot topic of re-filing or “ever greening” trade marks every five years to avoid proof of use requirements – although it is certainly arguable that such practices fall within the test set out by the CJEU for those goods and services where there is no intent to use and the reference to bad faith requiring ’consistent’ indicia of the relevant intention may perhaps have been included with such practices in mind. In the MONOPOLY case (Kreativni v Hasbro) the Board of Appeal decided that re-filling could amount to bad faith and we may get more guidance on this if and when the case progresses to the CJEU.

Robert Guthrie is Chair of the MARQUES European Trade Mark Law and Practice Team and a Partner of Osborne Clarke in London. Richard May is also a lawyer with the firm