The High Court has issued its decision in the long-running high-profile case between SkyKick, a software provider, and Sky, the broadcaster and television company.
SkyKick had argued (amongst other things) that Sky had acted in bad faith by protecting its marks for an overly broad list of goods and services, which limited what other companies could do in terms of their own brands in these areas (see our previous article here).
Although the concept of acting in bad faith is not defined in legislation, over the years it's been developed by case law to cover "dealings which fall short of the standard of acceptable commercial behaviour".
In its earlier decision, the court found that "Sky could not, and did not, intend to use the Trade Marks across the breadth of the category [goods and services]" and some of its applications were filed "pursuant to a deliberate strategy of seeking very broad protection of the Trade Marks regardless of whether it was commercially justified".
In other words, Sky was deliberately filing trade marks in areas in which they had no plans of using them, with the aim of preventing third party use of brands incorporating the word SKY.
Following a Court of Justice of the European Union decision on the case in January this year, it fell for the High Court to decide the extent to which Sky's trade marks had been filed in bad faith.
Sky was found to have applied for some of its trade marks "purely as a legal weapon against third parties" as it had not intended to use the trade marks for all of the goods and services covered. As these actions are inconsistent with honest practices (having been filed, at least in part, in bad faith), the court ruled that some of Sky's trade mark registrations were to be partially invalidated.
This finding affected perhaps one of the most contentious terms – computer software – with Lord Justice Arnold limiting this term to reflect the finding of bad faith.
Notwithstanding the above, SkyKick were still found liable for trade mark infringement in respect of "electronic mail services".
What next?
Overzealous brand enforcement can be a problem for any company seeking to launch a new brand. This problem is only exacerbated by the position of many trade mark systems around the world, which allow brand owners to protect trade marks for a very broad list of goods and services.
This decision suggests a change in practice and may, at least in the long term, reduce the number of unnecessary conflicts based on enforcing broad terms against parties operating in completely different industries. In the short term however, this decision may result in a spike of invalidity actions citing bad faith.
This decision highlights that the commercial interests of the brand owner will be more relevant than ever when it comes to clearing new brands.
This is another decision in a line of cases where it is for the courts, rather than Intellectual Property Offices, that are the key to challenging the scope of registrations.
If you would like advice on Trade Marks for your brand, don't hesitate to get in touch.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
