After an almost a year and a half wait, the Supreme Court in the United Kingdom has finally issued a decision in the much anticipated case of Sky v Skykick – a link to the decision can be found HERE. The long running saga which pitted the Sky Group (a conglomerate of media and telecommunications companies) and Skykick (a provider of cloud management software) against each other has rumbled on since 2016, and while the dispute between the parties was settled out of court in the months leading up to the decision, the Supreme Court has chosen to issue a decision which will undoubtedly change the landscape of trade mark practice for decades to come.
Meissner Bolte’s team of Chartered UK Trade Mark Attorneys have now closely reviewed the decision as well as considering its potential impact. We believe this is the first step on the road towards UK trade mark specifications having a narrower scope and being more targeted on relevant sub-categories of goods that the applicant intends to use. We believe that applicants would be well advised to begin to steer away from overly broad specifications following this decision. Terms like “computer software” should be treated with caution going forward.
From a lay person’s perspective, the outcome of the case should come as no real surprise, as trade mark law serves the purpose of preventing actual confusion on the part of the public in the marketplace. From a modern perspective, it is reasonably clear that the general public were not going to confuse Sky Group and Skykick’s products, as while both companies are offering types of “software”, the types of software being provided are distinct, target different customers, have different intended purposes and are sold through different channels of trade. This renders the different sub categories of “software” provided by Sky Group and Skykick to be dissimilar.
The problem that arose in this case is while practically the distinction is clear, the application of the law does not reflect the reality. Currently, the UK Intellectual Property Office considers overly broad terms such as “computer software” to be registerable even though the term contains distinct sub-categories which are dissimilar. In the first instance case of Sky v Skykick, Skykick contended that Sky Group’s registrations were partially invalid on three grounds: first, that Sky Group’s specification lacked clarity and precision; second, that the overly broad terms covered by Sky’s registration were contrary to public policy; and third, that the Sky Group’s registrations were filed in “bad faith” as it had no intention to use the “Sky” mark on all the goods filed/ covered by the distinct sub-categories encompassed in the broad terms. Following a referral to the Court of Justice of the European Union which ruled that a “lack of clarity and precision” was not a valid ground to invalidate a registration in and of itself and that a “lack of clarity and precision” could not give rise to an invalidity ground – the High Court determined that Sky Group’s earlier registrations were partially invalid on the basis of bad faith stating that Sky Group intended to obtain broad rights for terms such as “software” “purely as a legal weapon”.
The case was subsequently appealed to the UK’s Court of Appeal which was very critical of the High Court’s decision and determined that while “Sky has no prospect of using the mark in relation to every conceivable sub-division of “computer software”, this is not in and of itself sufficient to demonstrate bad faith. The Appeal Court determined that Sky Group did not need a commercial reason for every item in a category to justify obtaining for protection as a whole. As a result, the Court of Appeal effectively shut down all routes for challenging broad terms such as “computer software”, and created a situation where broad terms could be retained and used to challenge the use and/or registration of marks where no actual consumer confusion was possible between two distinct sub-categories of the term.
It is a relatively trite legal principle that “when the law ceases to reflect the realities of life, it is the law, not life, that will change”, and therefore it was of little surprise that Skykick was granted permission to appeal to the Supreme Court, and that the Court of Appeal decision was overturned.
The Supreme Court ultimately determined that:
However, while both of these factors are useful in terms of creating an inference of “bad faith” they alone are not sufficient
This determination while providing a sound justification, on the basis of the facts of this case, undoubtedly sows the seeds for significant debate and controversy. Foremost, a possible interpretation of the case is that the concept of bad faith has been extended from an action which is one that is almost exclusively based on the conduct of the parties on the run up to the filing of the earlier registration, to one that can largely rest on how the earlier registration is enforced in the years (and given the state of the UK registers, potentially decades) after the mark has been registered.
In addition, at paragraph 32-33 of the decision, the Supreme Court definitively shut down the avenue of claiming a lack of clarity and precision as a ground for invalidity resulting in a bad faith claim based on the nature of the enforcement of a registered right seemingly being the only route to challenge a broad term which has been registered for less than five years. A further difficultly here is that bad faith has traditionally been considered as one of the most difficult grounds to run in opposition and invalidity proceedings, and it is considered to have a high bar – it therefore remains to be seen if Sky v Skykick has lowered this bar substantially enough for it to be used as an effective remedy to the overly broad filing strategies and aggressive enforcement strategies employed by the large companies that dominate contentious trade mark proceedings in the United Kingdom.
What is apparent at this point is that for the time being broad terms, such as computer software remain registerable and notionally remain a “legal weapon” that can be brandished and enforced broadly – the burden has been firmly placed on the Defendants to disarm these attacks via widely regarded high bar of a bad faith counterclaim.
It remains to be seen how this decision will be interpreted such that it equitably balances the interests of brand owners, but the decision of the Supreme Court has left significant uncertainty and it is clear that a number of test cases will follow.
The comments made at paragraphs 260 of the Judgement perhaps hint at things to come in terms of trade mark practice in the United Kingdom where Lord Kitchen stated in response to the submissions of Comptroller-General of UK Patents, Designs and Trade Marks (i.e. the Head of the UK Intellectually Property Office):
“It would in my view be anomalous for traders who use broad terminology to describe the goods and services for which they seek protection to find themselves in a more favourable position than those who use appropriate sub-categories to describe the same goods and services, and I would reject any interpretation of the legislation that necessarily leads to that conclusion. Of course, the matter must be judged as at the time of the application. Further, in so far as the applicant was required or encouraged to use class headings or other terminology to describe the goods and services which are the subject of the application, this may be a matter properly to take into account in assessing whether the application was made in bad faith. But subject to considerations such as these, I see no reason why a person should be permitted to apply to register a mark or retain a registration in respect of distinct categories of goods or services in relation to which it never had any intention to use the mark, simply because it chose to use a broad description of those goods and services which meant they were encompassed together with goods or services about which no complaint is made.”
We believe it would be beneficial for the United Kingdom Intellectual Property Office to issue a Tribunal Practice note, clarifying whether broad terms such as “computer software” will continue to be accepted by the office in new applications. If we are correct this may be the first tentative step toward a more strict and precise approach in terms of specification drafting which would improve legal certainty for applicants and third parties. A practice note would also ensure that UK TM practice stays in line with changes to how we live our lives – and the ubiquity of computer software.
