Sky case reaches its limit as Supreme Court judgment is delivered

The Supreme Court’s long awaited decision in SkyKick UK Ltd v Sky Ltd, which has continued for the last eight years, has now been delivered and “unanimously allows the appeal in part”. A copy of the judgment is here.

The key takeaway is that bad faith can be inferred from the overall width and size of the trade mark specifications. Whether bad faith is inferred will depend on all the circumstances of the case.

Background

Sky, claimed that SkyKick, a UK-based technology company, had infringed four of its registered EU trade marks and one UK trade mark (the “SKY marks”) by using the mark “SkyKick” for email migration and cloud storage services. The SKY marks cover a wide range of goods and services and Sky argued that SkyKick’s use of similar trade marks created confusion among consumers.

SkyKick argued that the SKY marks were invalid because they had been registered in bad faith, particularly because Sky had applied for them in relation to goods and services it never intended to use.

Initially, the High Court, after considering the case and referring specific issues to the Court of Justice of the European Union (CJEU), found that Sky’s registration of the SKY marks had been made partly in bad faith. It determined that Sky’s broad and ambiguous specifications to the SKY marks were inconsistent with their actual business practices and for which there was no conceivable commercial rationale.

On appeal to the Court of Appeal, this aspect of the High Court’s decision was reversed. The Court of Appeal ruled that Sky had not acted in bad faith in relation to certain specific goods and services. The Court of Appeal also disagreed with the High Court’s finding of infringement regarding SkyKick’s Cloud Migration service. SkyKick appealed the decision to the Supreme Court.

Legal issues

The Supreme Court considered three key issues:

1. Bad Faith Registration: Whether Sky’s trade mark applications for the SKY marks were deemed to have been made in bad faith on the basis that Sky had no intention to use them.
2. Infringement: Whether SkyKick’s use of the name “SkyKick” infringed on Sky’s registered trade marks, particularly with regard to the specific services provided by SkyKick (i.e. cloud migration and cloud backup services).
3. Impact of Brexit: How the UK’s departure from the EU affected the application of EU trade mark laws in ongoing UK cases.

Outcome

1. The Supreme Court allowed SkyKick’s appeal in part and held that the High Court had been correct in finding that Sky’s registration of the SKY marks was made in bad faith due to the broad and vague specifications used by Sky. Bad faith can be inferred from the overall width and size of the trade mark specifications. To say that the contrast between the size of the list of goods/services for which protection is sought and the nature of the business can never justify a finding of bad faith would leave the system open to abuse. Whether bad faith is inferred will depend on all the circumstances of the case. The Court of Appeal was therefore wrong to reverse this part of the High Court’s decision.
2. The Supreme Court agreed with the Court of Appeal that SkyKick’s “cloud migration” service had not infringed the SKY marks, as it was not sufficiently related to Sky’s registered goods and services. However, it did uphold the Court of Appeal’s finding that the cloud backup services had infringed the SKY marks because they fell within the scope of the relevant registered services.
3. In relation to Brexit, the Supreme Court confirmed that the EU Trade Mark Regulation continued to have a direct effect in UK courts (acting as EU trade mark courts) that were the subject of proceedings before the end of the Brexit transition period of 31 December 2020. This decision therefore applies to Sky’s UK and EU trade marks.

Comment

Going forward this decision will impact trade mark filing strategies as businesses who have typically adopted very broad specifications will need to take a more careful and considered approach, based on the intended use. For businesses looking to register new marks, this decision is a forewarning that the UKIPO will take a robust approach when faced with wide and vague specifications which are being used to secure a monopoly over an ordinary word without intention to use.

If you have any questions concerning this decision, please contact Charlotte Bolton or Iain Connor in our Intellectual Property team.

This article is for general information only and does not, and is not intended to, amount to legal advice and should not be relied upon as such. If you have any questions relating to your particular circumstances, you should seek independent legal advice.