After four first instance judgments, a referral to the CJEU and a full appeal before the Court of Appeal, the Supreme Court has handed down its long-awaited judgment in the longstanding battle between SkyKick UK Ltd and Sky Ltd. There had been some uncertainty (given rumours of a confidential settlement) whether a decision would be handed down at all. Having regard to the issues of ‘public importance’ to which the appeal gives rise and the effect that the outcome of the proceedings would have on other traders and the public, the Supreme Court exercised its discretion to hand down a judgment regardless. The decision emphasises the necessity for businesses to ensure their trade mark applications are specific and genuinely intended for use, avoiding overly broad goods and services that could be deemed bad faith.
Background
The legal battle between SkyKick UK Ltd and Sky Ltd is longstanding. The claim concerned allegations of trade mark infringement and passing off arising from use of “SkyKick”, “skykick” and other figurative variants for email and cloud storage services and raised significant questions about the scope and validity of Sky’s trade mark registrations, particularly concerning claims of bad faith. For further information on the background to the action please see our earlier articles here, here and here.
Earlier Judgments
The High Court, after a series of judgments and consulting the CJEU, ultimately determined that Sky had applied for the SKY marks partly in bad faith. The Court found that Sky included goods and services in its specifications without any genuine intention to use the marks for those items. Additionally, some categories were so broad that Sky could not have intended to use the marks across their entire scope. This broad protection, sought without commercial justification, rendered the SKY marks partially invalid. The High Court also found that SkyKick’s use of “SkyKick” and its variations for their email migration and cloud storage services did infringe the valid parts of the SKY marks, notwithstanding their partial invalidity. Where the goods or services were identical or very similar, there was a likelihood of confusion.
Both parties appealed the decision. Sky against the finding of partial invalidity and the dismissal of the passing off action, and SkyKick against the finding of infringement and arguing for further limitations of the SKY marks. The Court of Appeal overturned the High Court’s finding of bad faith and restored the full specifications. The High Court had initially found that both Sky’s infringement claims against SkyKick’s service packages - Cloud Migration and Cloud Backup - infringed the SKY marks, despite the bad faith finding. However, the Court of Appeal disagreed regarding Cloud Migration, concluding there was no infringement. It upheld the infringement finding for Cloud Backup.
Supreme Court judgment
SkyKick appealed the finding to the Supreme Court, which heard the appeal in June 2023. Over a year later, the Supreme Court has handed down its long-awaited judgment. In summary:
- The Supreme Court upheld the High Court’s finding that Sky had applied for some trade marks in bad faith on the basis that Sky appeared to have no genuine intention to use the trade marks for certain goods and services listed in their applications. The High Court correctly applied the principles of bad faith, and the Court of Appeal failed to identify any significant errors in the High Court’s reasoning. Additionally, the Court of Appeal overlooked key facts, such as Sky’s initial reliance on a broad range of goods and services in its infringement claim and its subsequent narrowing of that claim ahead of trial. These factors supported the argument that Sky sought extensive trade mark protection without intending to use the marks for all specified goods and services. The High Court had sufficient evidence to conclude that SkyKick had proven Sky’s bad faith and that Sky was prepared to enforce these broad registrations against other traders.
- On infringement, the Supreme Court confirmed that SkyKick’s use of “SkyKick” did not infringe Sky’s trade marks for Cloud Migration services but did infringe for Cloud Backup services. Agreeing with the Court of Appeal, it ruled that Sky’s registration for “electronic mail services” did not cover Cloud Migration, as the term should be confined to clearly covered services. Cloud Migration, involving wholesale data migration, was deemed distinct from the services covered by the SKY marks. Cloud Backup, however, did fall within the category of “computer services for accessing and retrieving content and documents via a computer or network,” as modified by the High Court. SkyKick’s Cloud Backup services, which allow users to back up and retrieve Office 365 data, were found to infringe the SKY marks. The Supreme Court emphasised that it would not overturn concurrent findings without a clear error of principle or a plainly wrong conclusion.
- Finally, the Supreme Court confirmed that UK courts retain jurisdiction over EU trade mark cases initiated before the end of the Brexit transition period. UK courts, designated as EU trade mark courts, retain jurisdiction to decide on infringement and validity issues and grant relief in cases initiated before 31 December 2020. This continuity prevents uncertainty and additional costs for traders and authorities.
Comment
The Supreme Court’s decision has significant implications for trade mark law and practice and businesses and legal practitioners have been waiting eagerly for this ruling in the hope that it may provide some useful guidance on the complexities of trade mark registrations and associated strategies.
The Supreme Court decision underscores the necessity for stricter scrutiny of trade mark applications, including to ensure that there is a genuine intention to use the mark for the specified goods and services, and that they are drafted with sufficient specificity. That said, filing for terms which account for reasonable expansion and development would not fall foul of bad faith and bad faith does require some form of dishonest intention in order to bite. Here it was relevant that Sky had not only filed for broad specifications but had also used them against third parties in enforcement action. The key practical takeaway is to think about the scope of goods and services before you file and also before you enforce.
How can Burges Salmon help
If you would like to discuss any of the issues raised in this article or would like further information, please contact Chloe Perea Poole, Emily Roberts or your usual intellectual property team contact.
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