SkyKick found to infringe SKY trade mark on return to High Court, in a bold decision on bad faith

Sky has succeeded in its claim of infringement by SkyKick of its SKY trade mark, though suffers some collateral damage in having parts of certain of its trade mark registrations found invalid for being filed in bad faith.   Whilst the decision shows that the English Courts are prepared to strike down parts of wide trade mark specifications years later, the "bad faith" needed to do this requires a high evidential burden and cannot be presumed on the basis of the mere finding that, at the time of filing, the applicant had no economic activity corresponding to the goods and services referred to in that application.

On the case's return to the High Court, following the decision of the CJEU in January (Case C-371/18) on the questions he had referred, Lord Justice Arnold found SkyKick liable for trade mark infringement, whilst also giving Sky the opportunity to withdraw allegations of infringement based upon elements of its trade mark registration specification that he found to be registered in bad faith (Sky v SkyKick [2020] EWHC 990 (Ch), 29 April 2020)

A bold decision opens a new line of attack for defendants

The decision is a bold one, driven by policy, which builds upon the CJEU's judgment (see our commentary on the CJEU decision here): parts of wide trade mark specifications will be struck down, if certain terms seek over broad protection not justified by actual use or the reasonable prospect of use at the time and not filed for legitimate business reasons.  It also opens a new line of attack for parties defending trade mark claims against brand owners, to force them to open up the history of why broad registrations were filed and seek extensive disclosure as to the trade mark proprietor's motives at the date of filing.  This will run into uncomfortable areas for in-house teams, either seeking to preserve legally privileged communications or waive privilege to fight.

Bad faith: The CJEU had held that bad faith would only be established in the exceptional circumstances where it could be demonstrated that the applicant deliberately sought to monopolize classes of goods or services in order to block or undermine the interests of other businesses.  Bad faith could not be presumed on the basis of the mere finding that, at the time of filing, the applicant had no economic activity corresponding to the goods and services referred to in that application. The court should look at the motives of the trade mark owner when they filed their application and at whether they intended to abuse the system by blocking a competitor at that time.

This is a very high evidential burden to meet and should only rarely be found – however, today's High Court decision has shown it is possible to succeed.

Limitation of the specification:The High Court held that certain of Sky's trade marks were partially invalid on grounds that they were filed in bad faith.  Lord Justice Arnold had already found that certain registrations had been applied for in respect of certain goods and services for which Sky had no reasonable commercial rationale to do so. The Judge innovatively decided to cut down Sky's registration for "computer software" to arrive at what he believed to be a fair specification, rather than rely upon Skykick's or Sky's submissions.  He has given Sky 7 days to withdraw that part of the infringement claim that relates to the removed part of the specification, in return for the court making no order as to the declaration of invalidity sought by SkyKick on that part of the registration.  That leaves Sky not being compelled by court order to adjust its specification.

Infringement by SkyKick: However, crucially for Sky, Skykick did not allege bad faith in relation to two elements of Sky's registration – "telecommunication services" and "electronic mail services".  This left the Court able to find SkyKick liable for infringement of "electronic mail services" for SkyKick's use of email services, under Article 9(2)(b) of the Regulation/Article 10(2)(b) of the Directive.

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