Following the Court of Justice (CJEU)’s ruling in Sky v SkyKick[i] - see our previous article - the English High Court has held[ii] that Sky acted in bad faith by pursuing a “deliberate strategy of seeking very broad protection for [its] trade marks regardless of whether this was commercially justified”. As a result, Sky’s marks were invalid in relation to a substantial number of the goods and services for which protection had been claimed. Nevertheless, the court gave the final victory to Sky by holding that SkyKick infringed elements of the surviving specification.
Sky had registered its SKY trade mark for a long list of goods and services. These included some items which were obviously outside Sky’s areas of operation such as bleach and whips, as well as some very broad terms and categories such as “computer software” in relation to which it was questionable whether Sky – or any business – could use a mark across their full breadth. SkyKick argued that the list (or ‘specification’) went well beyond what Sky had any intention of using the mark for. The High Court agreed with SkyKick, and effectively narrowed down Sky’s specification, restricting the goods and services for which Sky’s marks are protected. Unfortunately for SkyKick, however, this did not go far enough to avoid overlap with SkyKick’s services. The judge, Arnold LJ, held that, at the very least, the migration service provided by SkyKick infringed Sky’s legitimate registration in respect of “electronic mail services”.
The implications for trade mark owners
The phrase ‘use it or lose it’ is often applied to trade marks referring to the fact that the mark will be vulnerable to cancellation if not used. However, trade mark owners have an initial five year grace period in which use does not have to be proved. This means that by registering a broad specification of goods and services, they can enforce a monopoly on the use of their marks in fields well beyond those in which they actually operate during the initial five years. The Sky v SkyKick judgment potentially puts a stop to this by making the trade marks vulnerable to cancellation - even within the initial five years - in respect of goods or services for which registration was not commercially justified at the time of filing. For brand owners, this increases the risks associated with enforcing their rights outside their established areas of business as this may lead to partial invalidity, adverse judgments and the reputational risk of being seen to go too far.
How broadly is it legitimate to file?
Both the CJEU and the English High Court have made it clear that it is legitimate to register a mark not only in relation to the core areas of the business’s operation but also in other fields where there is a commercial rationale for registration. Examples of situations where there is a reasonable commercial rationale and therefore no bad faith are likely to include registration prior to an anticipated product launch or in areas of – realistic – potential expansion, such as, for example, where a luxury clothing brand registers for perfume with an eye to a possible future expansion in that area.
Will trade mark filing strategies change?
A number of recent trade mark judgments have been critical of trade mark filing strategies pursued by the big brands, so this is an area where reforms might be expected. SkyKick’s original argument was that broad filing strategies of the kind pursued by Sky should result in the invalidity of the whole registration rather than merely a narrowing down of the scope of protection. Had this argument succeeded we would have seen an immediate change to more cautious filing strategies and, potentially, many existing marks would have been vulnerable to cancellation. However, as explained above, the SkyKick judgment provides only for partial invalidity in relation to the overbroad elements of the specification. Some brand owners may, therefore, take the view that they lose little by continuing to file broadly and then cutting down the specifications if challenged. We can, however, expect an increase in objections to broad specifications from trade mark registries, both in the UK and across the EU so that over time excessively broad specifications may begin to disappear.