By Malcom McBratney, Partner

Last week, the Court of Justice of the European Union (CJEU) handed down its decision in Sky v SkyKick. The decision has been described as one of the most important decisions in trade mark law in the last decade.

The case was referred by the High Court of Justice of England and Wales to the CJEU for clarity. It involved Sky, a British broadcasting company, objecting to SkyKick, a cloud management software company, registering a trade mark for its name in connection with Software as a Service and cloud migration services.

Sky relied on its existing trade mark registrations to oppose SkyKick’s trade mark applications. In response, SkyKick counterclaimed that Sky’s registrations were invalid because: (1) their specifications (e.g. ‘computer software’) were too broad; and (2) Sky acted in bad faith as it had no intention to use its marks for all of the goods and services described in its registrations.

Questions for the CJEU’s consideration

The CJEU was asked by the High Court to consider the following:

1. whether a trade mark claiming “computer software”, should be declared wholly or partially invalid on the basis that it is too broad and lacks sufficient clarity and precision; and
2. whether a trade mark can be declared wholly or partially invalid on the basis that the applicant operated in bad faith by registering a trade mark with no intention of using it in relation to the specified goods and services.

CJEU ruling

In an unexpected (but welcomed) ruling, the CJEU found as follows:

1. trade marks cannot be ruled wholly or partially invalid on the basis of a lack of clarity and precision (as this is not a ground upon which invalidity may be established, nor is it objectionable on the basis of public policy). That said, the registered mark is capable of being protected only in respect of the goods and services for which it has been put to genuine use; and
2. the test for whether there has been “bad faith” is whether there has been “objective, relevant and consistent indicia” to show that when the application for a trade mark was filed, either: (1) the trade mark applicant intended to dishonestly undermine third parties, or (2) obtain exclusive rights for purposes other than those falling within the functions of a trade mark.

However, bad faith cannot be presumed on the basis of the mere finding that at the time of the application the applicant had no ‘economic activity’ corresponding to some or all of the relevant goods and services.

Rather, it appears there must be an affirmative indication that the applicant will not be using the trade mark.

Further, if bad faith is established, it is only established in so far as it relates to the particular goods and services in question.

What does this mean for trade mark owners?

The CJEU’s ruling is largely good news for trade mark owners as it alleviated the concerns of many trade mark owners who were (understandably) worried about the legitimacy of their potentially overly broad registrations. For example, if ‘computer software’ was deemed too broad, many other trade marks in other industries may have been in the firing line. Fortunately, the CJEU has now provided greater clarity in this respect.

That said, the CJEU has raised the bar for establishing bad faith, which makes it more difficult for trade mark applicants to dispute the legitimacy of owners of conflicting marks.

It will be interesting to see if the same outcome is achieved if (and when) the question is pursued in Australian courts.

In the meantime, the ruling in Sky v SkyKick is a solitary reminder for trade mark owners to show careful consideration when drafting the class specifications for their trade marks.

If you would like assistance with your trade marks, please contact us.