SkyKick UK Ltd and another v Sky Ltd and others (Rev 1) [2024] UKSC 36

SkyKick provided cloud migration and backup services under the 'SkyKick' mark. Sky alleged trade mark infringement based on its broad SKY marks. SkyKick counterclaimed that Sky's applications were made in bad faith due to lack of intention to use the marks across all registered goods and services. The Supreme Court clarified when lack of intention to use constitutes bad faith filing.

Facts

Sky Ltd and related companies owned various EU and UK trade marks for the word ‘SKY’ and figurative variants, registered across an extremely broad range of goods and services in multiple Nice Classification classes. SkyKick UK Ltd offered cloud migration and backup products and services under the ‘SkyKick’ mark to Microsoft Partners. Sky brought infringement proceedings against SkyKick. SkyKick counterclaimed that the SKY marks were invalid on the grounds of bad faith filing, arguing that Sky had applied for registration across goods and services it never intended to use the marks for, and had done so as a deliberate strategy to obtain broad protection regardless of commercial justification.

Issues

Bad Faith Filing

The central issue was whether a trade mark registration can be declared wholly or partly invalid because the application was made in bad faith, specifically where the applicant had no genuine intention to use the mark in relation to some or all of the goods or services specified. Related questions included: (i) the effect of finding partial bad faith on the registration; (ii) the approach to broad or general terms in specifications; and (iii) whether the procedure adopted by the trial judge was fair.

Infringement

Whether SkyKick’s Cloud Migration and Cloud Backup services infringed the SKY marks as registered, particularly in respect of ‘electronic mail services’ and ‘computer services for accessing and retrieving audio, visual and/or audio-visual content and documents via a computer or computer network’.

Jurisdiction Post-Brexit

Whether UK courts retained jurisdiction after IP completion day (31 December 2020) to decide issues concerning the validity and infringement of EU trade marks in proceedings instituted before that date.

Judgment

The Supreme Court allowed SkyKick’s appeal in part. Lord Kitchin, delivering the main judgment with which all other Justices agreed, held:

Bad Faith

The Court of Appeal erred in reversing the trial judge’s finding of partial bad faith. Lord Kitchin confirmed that the registration of a trade mark without any intention to use it in relation to the goods and services covered may constitute bad faith where there is no rationale for the application in light of the functions of a trade mark, particularly the essential function of indicating origin.

“the registration of the mark by the applicant without any intention to use it in relation to the goods and services covered by the registration may constitute bad faith where there is no rationale for the application for registration in the light of the aims referred to in Regulation 40/94 and Directive 89/104”

The judge was entitled to find that Sky had applied for marks far more broadly than any genuine commercial rationale supported, and had done so as part of a strategy to obtain an exclusive right for purposes other than those falling within the functions of a trade mark. The specifications were properly modified by the judge.

Infringement

The Court of Appeal was correct to find that Cloud Migration was not an ‘electronic mail service’ and thus no infringement was established on that basis. However, the judge and Court of Appeal were entitled to find that Cloud Backup did amount to infringement of the SKY marks in respect of ‘computer services for accessing and retrieving audio, visual and/or audio-visual content and documents via a computer or computer network’.

Jurisdiction

By operation of Article 67(1)(b) of the Withdrawal Agreement and section 7A of the European Union (Withdrawal) Act 2018, UK courts designated as EU trade mark courts retain jurisdiction under the EU Trade Mark Regulation for proceedings instituted before IP completion day. The court therefore had jurisdiction to determine issues of validity and infringement concerning the EU trade marks in these proceedings.

Implications

This judgment is significant for trade mark law in several respects. It clarifies that filing trade mark applications across an excessively broad range of goods and services, without any genuine intention to use the mark, may constitute bad faith and render the registration partially or wholly invalid. The width of a specification, and the contrast with the applicant’s actual business, can justify a finding of abuse of the system. The judgment also provides important guidance on post-Brexit jurisdiction, confirming that UK courts retain jurisdiction under the EU Trade Mark Regulation for proceedings pending before IP completion day.

Verdict: Appeal allowed in part. The trial judge’s finding of partial bad faith and modification of the specifications of goods and services was restored. Infringement was established only in respect of the Cloud Backup service. UK courts retain jurisdiction over the EU trade marks in these proceedings.

Source: SkyKick UK Ltd and another v Sky Ltd and others (Rev 1) [2024] UKSC 36