On 29 January 2020 the Court of Justice of the European Union (CJEU) handed its decision in the referral from the English High Court in the Sky v SkyKick case. We have previously covered this case and its importance for EU and UK trade mark law (including with our summary of the opinion issued by Advocate General Tanchev, which can be seen here).

The CJEU’s ruling provides good news for trade mark owners as it largely maintains the status quo for EU and UK trade mark law, departing from the AG’s Opinion in a number of important ways.

Three key takeaway points from the CJEU’s decision are that:

1. trade marks cannot be ruled wholly or partially invalid on the basis of a lack of clarity and precision (as there is no separate ground for invalidity, nor is it objectionable on the basis of public policy);

2. the relevant test for whether there has been “bad faith” is whether there has been “objective, relevant and consistent indicia to show…” that the applicant for the mark has acted in a manner inconsistent with honest practices. The mere fact that the applicant had no “economic activity” corresponding to some or all of the relevant goods and services at the time of filing is insufficient, in and of itself, for a finding of bad faith; and

3. there is no inconsistency with EU law that a member state requires an applicant to make a declaration of bona fide intention to use a trade mark upon filing (as is required in the UK) but such a declaration is not, in and of itself, a basis for a finding of bad faith.

Background

By way of reminder, the case concerned a dispute between British broadcasting company Sky and cloud management software company SkyKick over the use of the trade mark ‘Skykick’. Sky originally brought the claim of infringement but SkyKick counterclaimed on the basis Sky registered the trade mark in “bad faith” and that the mark covered goods and services that lacked clarity and precision. The crucial issues for the CJEU to consider from the counterclaim were:

1. the registrability of a trade mark claiming “computer software”, which the AG considered was contrary to the public interest because it conferred on the proprietor a monopoly of immense breadth which cannot be justified and that lacks sufficient clarity and precision; and

2. if a trade mark registration is made with no intention to use it, in relation to the specified goods and services, would this constitute bad faith (and if so, would the entirety of the trade mark be at risk?).

Answers to the questions referred

The answers provided by the CJEU in response to the questions asked by the English High Court can be summarised as follows:

1. Were some terms uncertain, lacking sufficient clarity and precision to determine the extent of the trade mark protection?
   The CJEU determined that a trade mark cannot be declared wholly or partially invalid on the ground that the terms used to designate the goods and services covered by the trade mark lack clarity and precision.

2. If so, were the Sky trade marks invalid as regard those terms, in particular “computer software”?
   As the CJEU found negatively on question 1, it made no comment in this regard. As a result, we have no definitive ruling on such claims. However, the CJEU’s decision does identify that such issues are issues to be determined at the time of application or in response to a revocation. Accordingly, it will be worth watching the practice of the EUIPO and other bodies in the coming months and years, as there have already been indications that they are already wary to grant protection for unclear and imprecise terms.

3. Were the marks registered in bad faith?

4. If so, would the bad faith mean that the whole mark is rendered invalid?
   With regard to questions three and four the CJEU found that bad faith of the trade mark applicant cannot be presumed on the basis of the mere finding that, at the time of filing the application, the applicant had no economic activity to the corresponding goods and services referred to in the application. In order to determine that a trade mark was filed in “bad faith” it needs to be filed with the “intention either of undermining, in a manner consistent 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 ruling highlights that the CJEU is looking for an affirmative indication that the applicant will not be using the trade mark which raises the threshold required to prove bad faith.

5. Is section 32(3) of the UK Trademarks Act 1994 compatible with [Directive (EU) 2015/2436] and its predecessors
   The CJEU concluded that EU law does not preclude a provision of national law that the trade mark applicant must state that the trade mark is being used in relation to the goods and services registered, or that they have a bona fide intention to do so.

Implications and next steps

The decision of the CJEU largely departs from the recommendations of the AG in key sections, whilst maintaining the status quo.

The AG’s Opinion put many brand owners on hold as the position of trade marks claiming “computer software” became particularly precarious, as well as leaving many other trade marks claiming similarly broad terms in the firing line. However, the CJEU appears to have adopted a more conservative position than the AG by following the conventional approach and providing some much needed certainty for brand owners (protecting them from potentially wide ranging disruptive challenges to their trade marks). The usual practice of drafting broad trade mark specifications to reflect how a brand owner’s commercial exploitation of a trade mark may grow and develop over time remains good practice.

For the Sky v Skykick case though specifically, it will now return to the English High Court and it will be interesting to see how national courts follow the judgment and the implications this will have for trade mark registrations more generally.