Saturday, 1 February 2020

Sky v Skykick: not as exciting as I had hoped

I blogged here about the Advocate General's opinion in Sky v Skykick a while ago, and now the Court of Justice has given its opinion. After the Advocate General's remarks, I was rather disappointed by what the Court said. It seemed like an excellent opportunity to deal sensibly with problems of monopolisation (about which the Advocate eneral was rather critical) and the related issues of depletion and foreclosure, but the Court seems to have missed it.

The story so far is that Sky (the broadcaster, just to be clear) has been trying to exercise its trade mark rights against Skykick, a US business which is involved in facilitating cloud computing and storage (I'm being a bit axiomatic, I suppose: cloud computing must  include cloud storage.) Because, cutting a long story short, Sky's trade mark covers computer software, questions arise about whether that is acceptable. It clearly gives Sky a very broad monopoly. Skykick argued that Sky had acted in bad faith by registering for goods and services that it was unlikely ever to be providing. It also argued that the specification was unclear and that Sky's rights should therefore be cut back.

The Court of Justice has made three important rulings:

  1. A lack of clarity and precision in a trade mark specification is not of itself (my additional words, which I think are improtant) grounds for validity. That should come as no surprise, given that the list of absolute grounds for refusal of registration in the Directive is exhaustive. It is not open to the national authorities or the courts to add more grounds. Nor does a lack of clarity or precision support an argument (such as that put forward by Skykick) that the trade mark is contrary to public policy: the Court makes clear that this is a critrion concerned with the trade mark itself, the sign, not with factors such as the goods or services for which it was registered.
  2. Registering a trade mark with no intention to use it in relation to te goods or services covered by the registration may constitute bad faith. However bad faith is to be identified by using an objective test: there he to be "objective, relevant nd consistent indicia tending to show" that when it filed the application the applicant intended "undermining, in a mannerr inconsistent with honest practices, the interests of third parties, or ... obtaining, without even targetting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark." The mere fact that the applicant "had no economic actiivity corresponding to" the specified goods or services did not automatically mean taht the application was in bad faith: of course not, it could have ben filed on a perrfectly valid intent to use basis, with the applicant anticipating that it would expand its economic activities in due course. If a lack of intention to use the trade mark led to a finding of bad faith, the Court decided that the registration should be cancelled only for the goods and services for which the applicant had no intention of using the trade mark.
  3. The requirement in UK trade mark law that an applicant declare on the application form that they intend to use the mark for the specified goods and services is OK by the Court: it is not precluded by the Directive. However, it cannot be a ground for invalidity in itself - it can only be evidence of bad faith.
It must be absolutely right that a lack of intention to use the trade mark on all the goods and services for which it is registered cannot amount to an absolute ground for refusal. The list of absolute grounds is a closed one, and the judges canot add to it. Neither can whoever wrote the declaration into form TM3. But both of those matters must logically raise questions about good faith: not only raise, but usually answer them too. It might be harder in the EU trade mark system to show that there was no intent to use, so an over-wide specification should not be immediately open to criticism, but surely it needs to be possible to call the validity of an outrageously wide trade mark into question early in its life (and again I refer the reader to the EU trade mark ROYAL MARINE COMMANDO and device, registered for a wide range of goods including IIRC bird tables - the  link i s to one of two very similar trade marks, and there are another two later related ones as well).

In the UK system, though, signing the declaration should open the door to a bad faith challenge as soon as the ink is dry. It is no longer a matter of being able to argue that bird tables feature in Her Majesty's Forces' long-term plans: the declaration should be taken as indicating that they definitely have that intention. Now that the UK has taken back control of its trade mark law, perhaps it will exercise that new freedom so as to make some real progress with clearing the junk off the trade marks register.

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