Long-running SkyKick bad faith trademark dispute with Sky arrives at UK Supreme Court

Victory for SkyKick would spark rethink among trademark applicants leading to narrower specifications, reports Maura O'Malley

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In a case that has had its fair share of twists and turns, SkyKick v Sky finally landed in the UK’s Supreme Court last week, amid expectations the law lords will set out the UK’s approach to bad faith trademark applications post Brexit.

The long-running trademark case began seven years ago when Sky brought actions against SkyKick for infringement of its EU and UK trademark registrations for SKY across a range of goods and services, while SkyKick challenged those trademarks’ validity.

In the High Court, Lord Justice Arnold declared Sky had acted in bad faith by including the term “computer software” in its trademark specification as, at the date of filing, Sky had no intention of using the mark in relation to all computer software. The order declared its trademarks partially invalid, but also found that SkyKick’s email migration and cloud storage services had infringed some of Sky’s valid trademarks.

In July 2021, the Court of Appeal allowed Sky’s appeal, ruling that bad faith required more than merely applying for a trademark to cover a broad range of goods and services without intending to use it for them. Largely confirming the status quo, it determined there was commercial justification for Sky to apply for marks in the computer software category as it had a very substantial business in that field. SkyKick’s cross appeal on infringement was also dismissed.

The Supreme Court bench made up of Lords Reed, Lloyd-Jones, Kitchin, Hamblen and Burrows is focusing on whether Sky applied for its trademarks in “bad faith” within the meaning of the Trade Marks Act 1994 thereby rendering its trademarks invalid.

SkyKick alleges that Sky employs a strategy of applying for overly broad trademarks for goods and services which it does not deal in, and for which it has no conceivable commercial rationale. 

On the second day of the hearing on 30 June, Geoffrey Hobbs KC, instructed by Mishcon de Reya for Sky, said a lot of time had been spent over the past two days trying to define what constituted an overly broad term in a trademark application, an investigation that required criteria that “nobody has identified this side of the bar anyway”.

Representing SkyKick, Adrian Spec KC, instructed by Fieldfisher, claimed Sky was asking the Lords to “airbrush from history” the vast swathes of the specification listed in Sky’s application, which included bleaching preparations for laundry use, fuel additives and tuxedos, and treat the specification as if it had only ever referred to very selected goods and services.

Concluding the hearing, Lord Robert Reed said it would “take them some time to produce a judgment in this case”.

Commenting on the hotly anticipated hearing, Olexandr Kyrychenko, a partner at London-based IMD Solicitors, said: “Noting the well-reasoned decision of the Court of Appeal, SkyKick will face an uphill battle in seeking to overturn the decision, however it should be said that the appeal to the Supreme Court is welcome as it should result in an established and consolidated test for ‘bad faith’ under the act.”

Peter Vaughan, a practising chartered trademark attorney and senior lecturer at Nottingham Law School, noted that SkyKick wants to see bad faith extend to the situation where a trademark specification is so broad that there can have been no intention to use it.

There is a reluctance to “dive too deeply into the commercial intentions of a trademark owner at the time of filing especially in categories where there is use on some sub-sets as was the case here with ‘software’,” he added. “The question of where the balance between broad and narrow specifications lies is difficult and it would seem that deference is currently being given to larger corporations.”

Discussing the potential impact of the case, Kyrychenko believes that if SkyKick succeeds it is likely to result in “many established trademarks facing upheaval” as it would mean swathes of specific goods and/or services which currently enjoy protection even where they are not being supplied by the trademark holder would be stripped back.

Vaughan added: “Should SkyKick prevail it should cause a rethink among trademark applicants around specifications; narrower being the order of the day. Registrations with specifications that are too broad create a difficult environment for new marks. A reduction in the scope of specifications would be a welcome start to decluttering the register.”

However, he went on to question whether expanding bad faith is the best way to achieve decluttering. “It is an imperfect sticking plaster solution where more drastic surgery is required; fundamental changes around how trademarks are registered would be a better solution. But these are a matter for policy discussion and legislation outside the court’s remit.”

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