29 January 2020TrademarksRory O'Neill

Breaking: SkyKick ruling a ‘big win’ for brand owners

This morning’s Court of Justice of the European Union (CJEU) ruling in  Sky v SkyKick is a “big win for brand owners” and a positive result for Sky, lawyers have said.

In its decision, issued this morning, January 29 the CJEU ruled that a trademark could not be invalidated on the grounds that the specified goods and services lack clarity or precision.

SkyKick had argued that Sky’s registration for computer software should be invalidated as it was overly broad.

Tristan Sherliker, associate at  Bird & Bird, said the case was “widely regarded as the most important EU trademark case of the last decade”.

Last October,  EU advocate general Evgeni Tanchev advised the court that registrations for computer software granted the trademark owner an unfair monopoly over an overly broad range of goods, and were therefore contrary to public policy.

But in this morning’s ruling, the CJEU appears to have pulled back from what was anticipated  could be a far-reaching decision  putting all registrations for ‘computer software’ at risk.

In the decision, the court also ruled that a trademark filing could not be considered to be in bad faith solely on the basis that the applicant had “no economic activity” corresponding to the relevant goods and services at the time of filing.

The CJEU also clarified that where a trademark applicant did not intend to use the mark with respect to certain goods and services, only those elements of the mark would be invalidated, rather than the entire registration.

“It’s a much more conservative opinion than what the AG advised,” Bonita Trimmer, legal director at  Browne Jacobson, told WIPR.

“It’s also much better for Sky than it would have feared from the opinion, as the court hasn’t adopted the AG’s position on overly broad marks being contrary to public policy,” she said.

It had been touted in the wake of the opinion that  trademark filing practices in the EU would have to change, and broad registrations would no longer be accepted.

More concerning for rights owners was the prospect of existing registrations being invalidated due to overly broad terms, but that part of the AG opinion was absent from this morning’s judgment.

According to Charlotte Duly, head of brand protection at  Charles Russell Speechlys, “trademark owners will be breathing a sigh of relief at today’s decision”.

“It essentially confirms the status quo and does not introduce a new route for potentially disruptive challenges to trademarks with broad specifications,” Duly added.

Bad faith

The judgment also set what Trimmer called a “rather high threshold” for a finding of bad faith.

“They’re effectively looking for a positive indication of intention not to use the mark, and that’s going to be quite hard to find,” she said.

According to the judgment, a trademark application is in bad faith if it is filed with the “intention either of undermining, in a manner inconsistent with honest practices, the interests of third parties, or of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trademark".

“There will be debate about how to apply this new subjective test,” Sherliker said.

“National courts will also need to consider what it means for them and the individual circumstances of each case,” he added.

The CJEU decision adds that a trademark cannot be found to be in bad faith just because the applicant was not engaged in economic activity relating to the applied-for goods and services at the time of filing the mark.

‘Positive’ for Sky

Aaron Wood, consultant at  Keystone Law, agreed that the decision was a “big win” for trademark owners and more positive for Sky than anticipated.

Wood added that it was likely to be “business as usual day to day” in the wake of the judgment.

The case was referred to the CJEU by the English High Court, where it will now return.

“The most interesting thing about the judgment will be what respective national courts do with it,” Trimmer said.

“I suspect that UK courts will use it to try and trim down registrations where other EU courts may want to do the opposite,” she added.

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