The Sky's the limit for trade mark applications. Or is it?

On 28 and 29 June 2023, in the first case of its kind since the UK's departure from the EU, the Supreme Court was asked to consider what it means to register a UK trade mark in 'bad faith'. In anticipation of this landmark decision, we reflect on how Sky v SkyKick made it all the way to the Supreme Court.

Background 

For many, the Sky v SkyKick dispute, will require little introduction. In May 2016, media and telecoms giant, Sky, issued proceedings against software solution provider, SkyKick. Sky claimed that SkyKick's use of its name (i.e. SkyKick) in relation to 'Cloud Migration' and 'Cloud Backup' services, infringed various of Sky's EU trade marks (the EUTMs), which were registered for computer software and electronic mail services. SkyKick issued a counterclaim for a declaration of invalidity in relation to Sky's EUTMs, alleging that those registrations had been applied for in bad faith, as they covered very broad categories of services, such as 'computer software'. By adopting this expansive approach, SkyKick alleged that Sky had deliberately sought to restrict other third party registrations featuring the term 'Sky', even where Sky had no genuine interest in protecting its brand for the applicable services.

From first instance to the Court of Appeal

At first instance (prior to Brexit and following a CJEU referral), the High Court held that Sky had acted in bad faith by registering its trade marks for goods and services that it had no intention or prospect of using them for (the No Prospect Ground). The High Court also found that seeking such broad protection without any commercial justification (the No Commercial Justification Ground) could itself amount to bad faith. The EUTMs were therefore declared partially invalid, and Sky was ordered to remove the unused goods and services from them. To the extent that SkyKick's activities infringed the reduced registrations, Sky's infringement claims against SkyKick were successful. 

Sky appealed the decision to the Court of Appeal and SkyKick cross-appealed against the infringement finding. Following the UK's departure from the EU, the Court of Appeal overturned the High's Court's decision, ruling that Sky had not acted in bad faith. It concluded that there could be no finding of bad faith without both a lack of intention to use and some dishonest intention from the applicant.  

1. In relation to the No Prospect Ground, the Court of Appeal considered that Sky's applications had been made with the intention of protecting its use of the marks for services in which Sky already had substantial trade. Sky did not have to demonstrate it intended to use the EUTMs in every sub-division of the categories featured in the specifications. 
2. The Court of Appeal also overturned the No Commercial Justification Ground, on the basis that "an applicant… does not have to formulate a commercial strategy for using the mark in relation to every species of goods or services falling within a general description." 

SkyKick appealed the decision to the Supreme Court, and permission to appeal was granted in July 2022. In its appeal, SkyKick emphasised how important the trade mark register is to determine which trade marks are available for use. It suggested that the Court of Appeal decision, which would allow broad registrations, will lead to a cluttering of the register and will make trade mark registration for new brands challenging. 

Issues before the Supreme Court 

The Supreme Court has been asked to consider what constitutes bad faith when applying for a trade mark, specifically: 

1. What the correct test should be for determining bad faith under UK trade mark law; and
2. Where bad faith is found, what approach should be taken to determine which parts of the specification the trade mark owner should be allowed to retain? 

The Supreme Court will essentially be deciding whether to maintain the status quo (and align with EU law on bad faith, which allows a broad approach to specifications) or whether UK law should diverge from EU law and require narrower and more precise specifications (potentially creating a system more akin to the US). Either way, brands will need to consider whether their approach (to both future and past filings) aligns with the Supreme Court's decision, which is expected to be published in the coming months.