On 13 November 2024, the Supreme Court handed down its much-anticipated judgement, which concluded the long-standing dispute between Sky Ltd and SkyKick UK Ltd.

This article focuses on the Supreme Court’s findings on bad faith and the implications this could have in practice in the UK when drafting specifications of goods/services for trade mark applications and for the enforcement of registrations.

In this case, the key question on bad faith was whether a trade mark registration can be invalidated (in whole or in part) on the basis that, at the time it was filed, the application contained goods/services for which the applicant did not have any intention to use the mark.

Background

In 2016, Sky brought proceedings for trade mark infringement against SkyKick regarding its use of SKYKICK in connection with email migration and cloud storage services. The proceedings were based on four of Sky’s EU trade mark registrations and one UK.

The specifications of Sky’s registrations contained a number of broad categories (such as computer software and telecommunications/telecommunications services) and items that would not be expected to form part of Sky’s business, such as bleaching preparations, insulation materials and whips.

SkyKick therefore counterclaimed for invalidity of Sky’s trade mark registrations on the ground of bad faith. SkyKick argued that some of the goods/services covered by the registrations and relied on in the infringement proceedings were never intended to be offered by Sky, but rather had been filed as part of a deliberate enforcement strategy regardless of commercial justification. Despite a lack of intention to use the marks on a number of goods/services, Sky was still prepared to rely on those in infringement proceedings when, in practice, a third party’s use of the same or a similar mark on such goods/services would not have caused confusion amongst consumers in the marketplace.

The High Court (after referring some questions to the European Court of Justice) found that Sky had applied for its trade marks (in part) in bad faith due to the broad specifications for which it could not have intended to use the marks for all the goods/services covered. This rendered Sky’s trade marks relied on in the infringement proceedings partially invalid and the specifications were narrowed accordingly.

The Court of Appeal reversed the High Court’s decision on bad faith and reinstated the specifications.

SkyKick appealed to Supreme Court.

Supreme Court Decision on Bad Faith

The Supreme Court found that the High Court was right in its finding that Sky’s marks were applied for in bad faith and the Court of Appeal was wrong to reverse that finding.

It held that a broad specification could lead to an inference of bad faith, but drawing such an inference would depend on all the circumstances of the case. Such circumstances might include the size and nature of the specification compared to the size and nature of the applicant’s business, the applicant’s general enforcement strategy and any reasons behind the filing strategy. Reputation and brand recognition would not be relevant circumstances to be considered.

A broad specification of goods/services will not in itself be sufficient for a finding of bad faith. But where a specification includes broad categories of goods/services, it is possible for a registration to be partially invalidated on the ground of bad faith if there are specific and distinct sub-categories within a broad category for which the applicant had no genuine intention to use the mark when the application was filed. In this sense, broad terms such as computer software can be restricted to specific sub-categories for which a genuine intention to use could be shown.

Accordingly, the Supreme Court found that Sky’s registrations were invalid in part on the basis that they were filed in bad faith due the breadth of the specifications and lack of genuine intention to use the marks across the full specification of goods and services applied for. Sky’s enforcement strategy was a key consideration in reaching this decision. Sky had deployed its “full armoury” against SkyKick relying in the proceedings on goods/services it never had any intention to provide. Accordingly, the registrations remained valid only for goods and services for which there was a genuine intention to use.

Takeaways

Following this decision, UK business owners are encouraged to carefully consider their trade mark filing and enforcement strategies so as to avoid accusations of bad faith and an abuse of the trade mark system when trying to enforce their rights in the UK.

There may be circumstances in which filing for a broad specification of goods/services will be acceptable and where there are commercial justifications for doing so. However, if a broad specification is filed and this includes goods/services for which there could be no genuine intention to use the mark, this could lead to an accusation that there was bad faith at the time the application was filed.

Businesses will need to strike a balance that secures a sufficiently broad specification of goods/services that adequately protects their interests without opening themselves up to the risk of counterattack on the ground of bad faith.

Businesses which blindly adopt a strategy of filing for a broad range of goods/services with a relaxed attitude when it comes to having a genuine intention to use on those goods/services could potentially find themselves in hot water if they try to enforce rights in the UK for goods/services for which they could not have intended to use the mark.

We consider this decision to support the integrity of the trade mark system. It should not have a detrimental impact on brand owners applying to register marks for which there is a genuine intention to use on the goods/services applied for and their business plan/records can support this.

Where brand owners already have rights covering broad specifications that are within the five-year grace period to commence use, they should think carefully about enforcement strategy and are encouraged to seek professional advice before relying on rights for goods/services they may not have had a genuine intention to use their trade mark on at the time they filed their application(s).

Wilson Gunn can provide businesses with the required expertise when it comes to trade mark filing and enforcement. If you require advice regarding trade marks, please get in touch and speak to one of our attorneys.