Sky v Skykick: Clarity, precision and bad faith in trademark applications

A recent judgement by the Court of Justice of the EU has considered whether failing to specify goods and services clearly and precisely in trademark applications is a sign that the applicant acted in bad faith. Frouke Hekker outlines the ruling and its implications for trademark owners.

In Sky v Skykick, the Court of Justice of the EU (CJEU) has issued an important ruling on the requirement to define goods and services in a sufficiently clear and precise manner, and whether failure to do so constitutes bad faith. 

Two doctrines of interest

• The need to be ‘clear and precise’

When applying for a trademark in the EU, an applicant must indicate the goods and/or services for which it intends to use the trademark by specifying the relevant class or classes. This is organised on the basis of the 'Nice International Classification' of goods and services, a list of 45 classes, of which 34 are for products and 11 for services. 

The specification of goods and services has implications for the scope of protection of a trademark once registered. It is important to note that a trademark that is used for (partly) different goods and services than those for which it was registered, during an uninterrupted period of five years, may be declared (partly) revoked on the grounds of non (genuine) use. 

Further, the CJEU’s landmark 2012 judgement in IP Translator, since codified into EU trademark law and the national trademark laws of the EU member states, established that the goods and services must be specified in a manner that is sufficiently ‘clear and precise’. 

• Bad faith in trademark law

On the basis of EU trademark legislation and national trademark laws within the EU, a trademark can be declared invalid if the trademark owner acted in bad faith when the trademark application was filed. 

The term 'bad faith' has not been defined in legislation, but the CJEU has given a more detailed interpretation in several judgements. In particular, bad faith can be shown to exist when the trademark holder has not applied to register that trademark in order to participate honestly in competition, but rather:

• with the intention of causing detriment to the interests of third parties, 
• in a manner inconsistent with honest practices; or 
• with the intention of obtaining an exclusive right for purposes other than those covered by the functions of a trademark, in particular the essential function of indication of origin.

The Sky v Skykick judgement

On 29 January this year, the CJEU issued its long-awaited ruling in the dispute between the UK TV broadcaster Sky and SkyKick, a cloud management software company. Sky had sued SkyKick for infringement of its UK and EU trademarks covering the word ‘Sky’ for downloadable software and other services. SkyKick had counterclaimed that Sky’s mark were invalid due to lack of clarity and precision in the specifications; and, were registered in bath faith, as Sky’s commercial activities did not cover all the goods/services specified in the trademark applications.

This second point was referred to the CJEU by the High Court of England and Wales. In particular, the court asked whether failure by the trademark owner to comply with the requirement for clarity and precision in trademark applications is a grounds for invalidity on the basis of bad faith. 

The CJEU found that this was not the case and referenced the following factors in its decision:

• The EU Trademark (EUTM) Regulation and Directive contain an exhaustive list of the grounds for absolute invalidity of an EUTM;
• The lack of clarity and precision of the terms used to specify the goods and services does not form part of these absolute grounds for invalidity;
• This is also not covered by the requirement of graphical representation (this requirement was still in force at the commencement of these proceedings but has since been replaced by the requirement of clear and precise representation) nor is it contrary to public policy, as argued by SkyKick;
• A trademark application filed without any intention to use the trademark for the goods and services indicated in the registration will only constitute an act of bad faith if the applicant for that trademark had the intention to harm the interests of third parties; and
• Bad faith on the part of the trademark applicant cannot be assumed merely because, at the time of filing of the trademark application, they were not engaged in any economic activity corresponding to the goods and services specified in the application.

In other words, an EUTM or a national trademark registered in an EU member state, cannot be declared invalid, wholly or partly, on the grounds of bad faith, merely because the terms used to specify the goods and services in the trademark application are insufficiently clear and precise.

For more information on this subject or for advice protecting and enforcing your trademarks, please speak to your Novagraaf attorney or contact us below. 

Frouke Hekker works at Novagraaf’s Competence Centre. She is based in Amsterdam.