Sky v SkyKick: a relevant post-Brexit test bed for bad faith
After seven years, the die is now finally cast for Sky and SkyKick after the Supreme Court hearing concluded on Thursday, June 29.
The panel of five judges heard submissions from both sides and, briefly, the view from the UK Intellectual Property Office ( UK IPO).
How much this will matter to the world is hard to say. IP lawyers like to keep our field comfortably separate from other disciplines. We operate in a narrow, sometimes abstruse world of intangibles governed by a blend of international treaties and national glosses on them. Other disciplines will rarely reach for an IP case—why would they want to?
And even at the UK Supreme Court, where issues of general public importance are the daily bread, IP cases tend to address the most narrow edge-cases of the law and how it is to be applied. Invariably (indeed in the past five years, exclusively) it is only certain patent cases that make it to our top court.
So, of course, those in the world of trademarks will be looking very closely at the result. Bad faith has been a fashionable attack for the past ten years, perhaps because of the uncertainty surrounding its application. This is an uncertainty that Sky v SkyKick both exemplifies, and seeks to resolve—and it will inform the daily work of trademark filing for many years.
Broad relevance
But will there be any relevance to the wider world? I believe so, for a number of reasons.
First, because this is not a mere procedural abstraction, it is serious stuff. Sky is accused very definitely of abusing the legal system and doing so “deliberately” in the context of monopoly protection.
‘Bad faith’ means many things in many disciplines. Even though the legislation they are looking at is quite insulated, the Supreme Court may well view this in the context of the whole legal landscape—that is part of their judicial function after all. So, it’s quite possible that the Supreme Court’s approach will be of some broader relevance in that way.
Second, it will be relevant because of the awkward interplay between EU and UK law. This case brewed before we all turned out to cast our vote on Brexit, and the entire thing has played out in the background.
While the UK Supreme Court should still be technically a ‘European Union Court’ because of pending proceedings provisions, what does that mean for them in practice?
It’s not clear what precedents are strictly binding on them and what are merely informative, so how will they apply the law, and how will they deal with the more recent EU precedents?
The Lords were keen to address this question from the off, and the question came up again and again during submissions (and with each side re-characterising the other’s position, it felt at times like there were at least four points of view in the room).
It may make no difference to the outcome, but we can expect to see clear statements from the court to explain how this has been addressed, and whether they consider the formal status as an EU court makes a difference or not.
Effect on EU
Third, the Supreme Court has been left with the rump of another Brexit issue—what relief are they empowered to grant? A strict reading of the Brexit Agreement suggests that the court is, in this case, entitled to make orders affecting the whole of the EU. Will they wish to do so? And if so, will the EU take notice, or just blink it away?
There is a fourth and more domestic point—the apparent conflict between the two Court of Appeal decisions: one of Christopher Floyd LJ in SkyKick (Court of Appeal, overturning Justice Richard Arnold in the High Court); and the second, the decision of Lord Justice Arnold, as he soon after became, in Lidl v Tesco (2022). The difference of opinion is stark and was a focus of argument on behalf of Sky—although SkyKick only addressed it quite very briefly.
The outcome is impossible to predict, but the Lords were clearly highly engaged, and well on top of the issues (as may be expected in particular from Lord David Kitchin a lifelong IP specialist, and from the bench as a whole as they have grappled with issues of extraterritorial effect in other cases very recently).
So we can expect to receive authoritative guidance on the issue of bad faith, which has been a difficult point of detail for decades. Whether SkyKick wins or Sky, that now doesn’t matter to many—the real story will be in the journey that the judges take to get to their conclusion.
Will we see an admonition to stick close to EU principles, or will this be the beginning of a divergence?
Tristan Sherliker is a senior associate at Bird & Bird. He can be contacted at: Tristan.Sherliker@twobirds.com
Today’s top stories
SCOTUS ruling on foreign reach of Lanham Act 'leaves more questions'
