SkyKick UK Ltd and another v Sky Ltd and others [2024] UKSC 36
In its long-awaited judgment in SkyKick v Sky, the Supreme Court reversed significant aspects of the Court of Appeal’s decision on bad faith. This landmark ruling reshapes the interpretation of bad faith in UK trade mark law, with wide-ranging implications for the filing, enforcement, and scope of trade marks. Businesses and legal advisers must now carefully evaluate existing and prospective broad specifications, as this judgment leaves room for such filings to be challenged on the grounds of bad faith.
Background
The dispute between Sky and SkyKick began in 2016 when Sky accused SkyKick of infringing its SKY-formative trade mark registrations through the use of the signs “skykick,” “SkyKick,” and associated figurative marks in respect of email migration and cloud storage services. Sky also alleged passing off.
However, the case soon expanded beyond standard infringement claims to address a pivotal issue: whether parts of Sky’s trade mark registrations were invalid on the grounds of bad faith. SkyKick argued that Sky had no intention to use its marks for many of the goods and services listed in its specifications, which included “computer software,” alongside items such as “bleaching preparations” and “whips.” This dispute raised fundamental questions about overly broad trade mark specifications and the balance between legitimate protection and the misuse of the trade mark system.
The High Court
The High Court, following a referral to the CJEU, held that Sky’s trade marks were partially invalid due to bad faith. Arnold J (as he then was) found that Sky’s specifications included goods and services that were far removed from its actual commercial activities. For example, “computer software” encompassed an excessively broad range of goods, many of which Sky had no intention to market. This overreach rendered the applications commercially unjustifiable in part.
Although the specifications were narrowed, the High Court held that SkyKick’s use in respect of cloud migration and cloud backup services had still infringed the remaining, valid parts of Sky’s registrations. Both parties appealed the decision, with Sky contesting the finding of bad faith, and SkyKick challenging the infringement ruling.
The Court of Appeal
The Court of Appeal overturned the High Court’s finding of bad faith, emphasising that the breadth of a specification alone could not constitute an act of bad faith. The Court of Appeal held that a trade mark owner could have a commercial justification for seeking broad protection, particularly where the marks enjoy a reputation in the marketplace.
The Court of Appeal restored the full specifications of Sky’s marks. Whilst it upheld the infringement finding for cloud backup services, it held that SkyKick’s use for cloud migration did not infringe. SkyKick then appealed to the Supreme Court, which was asked to determine the correct test for bad faith and the appropriate approach for restricting trade mark specifications where bad faith is found.
The Final Word: The Supreme Court on Bad Faith
The Supreme Court reinstated the High Court’s findings of bad faith and partial invalidity of Sky’s registrations, delivering an important judgment with implications for broad trade mark specifications.
Long, Broad Specifications
The Supreme Court found that an overly broad trade mark specification could support an inference of bad faith, depending on the circumstances of the case.
Sky’s case was undermined by its initial reliance on the full range of goods and services protected by its registrations in its infringement claim against SkyKick. This strategy was maintained until close to the trial, which supported SkyKick’s general argument that Sky had pursued coverage for its SKY marks across a “great range of goods and services” which it never intended to sell or provide but was “prepared to deploy the full armoury presented by these SKY marks against a trader whose activities were not likely to cause confusion and did not amount to passing off”. Fundamentally, Sky had pursued broad protection as a so-called “legal weapon” against competitors, rather than for legitimate commercial purposes aligned with the fundamental function of a trade mark in signifying commercial origin.
Attention was also drawn to Sky’s history of aggressively enforcing its trade mark rights, including taking advantage of the five-year non-use ‘grace period’ following registration to enforce its registrations for a wide range of goods and services that were far removed from Sky’s actual commercial activities.
The circumstances of the case led to the presumption of good faith being dispelled, shifting the burden of proof onto Sky to justify its broad filing strategy. As Sky was unable to provide a valid rationale for its approach, the Court concluded that seeking protection for goods and services it never intended to market amounted to bad faith.
Wide, General Terms in Specifications
The Supreme Court also addressed the issue of vague and general terms, such as “computer software,” within trade mark specifications. It held that where such terms encompass distinct categories of goods or services, the applicant’s decision to file for overly broad protection could amount to bad faith, leading to the registration being partially invalidated. For instance, the term “computer software” covers a broad spectrum of software goods with vastly different purposes and users. The Court found it unreasonable for Sky to claim blanket protection across such a vast category of goods without any intention to use the mark across its full width.
Infringement Findings
The Supreme Court confirmed infringement in relation to SkyKick’s use for cloud backup services, which was captured by Sky’s narrowed specifications. However, the Court ruled that SkyKick’s cloud migration software did not infringe, finding that “electronic mail services” in Sky’s specifications could not reasonably include all services simply related to email.
Conclusion and Takeaways
The Supreme Court’s judgment represents a turning point in UK trade mark law, lowering the bar for bad faith claims, whilst setting stricter standards for the scope and specificity of trade mark specifications. Filing strategies that prioritise broad protection without cogent reasoning now face greater scrutiny and the risk of partial invalidity.
As highlighted in this author’s article on the Lidl v Tesco Court of Appeal judgment earlier this year, bad faith requires an assessment of the applicant’s state of mind at the time the contested application is filed. That article emphasised the importance of contemporaneously documenting the rationale behind applications. However, it now seems that this should be even more granular, with particular attention paid to the inclusion of specific goods and/or services in a specification, particularly regarding their scope and breadth.
Trade mark owners, prospective applicants, and legal advisers should take care to assess the scope of trade mark specifications, particularly given the implications this judgment may have on enforcement strategies. This saga also serves as a cautionary tale against aggressive enforcement tactics that could backfire in future disputes, now that defendants may have an additional defence strategy at their disposal in the form of bad faith.
Ultimately, this judgment is a stark reminder to trade mark owners that overly ambitious filings may be vulnerable if they lack genuine commercial intent. In navigating the fine balance between comprehensive protection and overreach, trade mark filers must tread carefully — lest they risk a fall from the sky.