Key questions on bad faith and the clarity and precision of trade mark specifications referred to the CJEU

Key questions on bad faith and the clarity and precision of trade mark specifications referred to... Sky v Skykick [2018] EWHC 155, 6 February 2018 The High Court has referred a number of questions to the Court of Justice of the European Union (CJEU) on bad faith and the clarity and precision of trade mark specifications, the answers to which may have significant implications for trade mark owners—particularly those holding very broad registrations. Legal context Clarity and precision of the trade mark specification The IP Translator case (Case C-307/10 Chartered Institute of Patent Attorneys v Registrar of Trade Marks [2012] EU:C:2012:361, [2013] Bus LR 740) established that a trade mark applicant must specify the goods and services to which its application relates, with sufficient clarity and precision to enable the competent authorities and third parties to determine the extent of protection conferred. Failure to do so can result in the application being refused. It is not clear, however, whether lack of sufficient clarity and precision in the specification can be a ground on which to invalidate a trade mark once it has already been registered. Bad faith Under section 32(3) Trade Marks Act 1994 (TMA), where an application is made to register a UK trade mark, the application must contain a signed statement confirming that the applicant is using, or has a bona fide intention to use, the trade mark in relation to the goods or services listed in the application. There is no such requirement when filing European Union (EU) trade marks applications. Under section 3(6) and 47(1) TMA, a UK trade mark may be declared invalid if the application was made in bad faith and, as per section 47(5) TMA, where such a ground of invalidity exists in relation to only some of the goods or services, the trade mark shall be declared invalid in relation to those goods or services only. Similar provisions are contained in the Articles 59(1)(b) and 59(3), respectively of Regulation 2017/1001 relating to EU trade marks. UK case law suggests that it is bad faith to register a trade mark with no genuine intention to use it in relation to the specified goods or services and, also, that it may be possible to conclude that an application has been made partly in good faith and partly in bad faith. CJEU case law has not directly addressed these questions, although recent decisions (including most recently in Case T-132/16 PayPal, Inc v European Union Intellectual Property Office [2017] EU:T:2017:316, ETMR 30) have indicated that the position may be similar to that in the UK. This, however, is not acte clair, particularly in relation to the legal effect of a finding of partial bad faith—ie whether this invalidates the whole trade mark registration or only the part made in bad faith. Facts The claimant, Sky, claimed that Skykick had infringed four of its EU trade marks and one UK trade mark (a mixture of ‘SKY’ figurative and word marks) (the Trade Marks) and had also committed passing off by using the sign ‘Skykick’ in relation to its provision of cloud management products. In response, Skykick sought a declaration that Sky’s Trade Marks were wholly or partly invalid on the basis that the specifications of the goods and services lacked sufficient clarity and precision and that the applications had been made in bad faith. For the purposes of its infringement claim against Skykick, Sky relied on specific registrations in classes 9 and 38 (including ‘computer software’ and ‘telecommunications services’). However, Arnold J noted that the full Trade Mark specifications were extremely broad, covering a number of classes and with some registrations stretching to over 8000 words. Skykick pointed to the breadth of Sky’s Trade Mark specifications to argue that the applications had been made in bad faith because Sky had no intention to use the Trade Marks in relation to all of the specified goods or services. In particular, Skykick highlighted Sky’s registration for ‘whips’ and ‘bleaching materials’ which, on cross-examination, was unable to provide any commercial rationale for registering. Skykick also argued that Sky’s registrations for goods such as ‘computer software’ lacked sufficient clarity or precision (as required by the IP Translator case). For these reasons, Skykick argued that Sky’s Trade Marks were invalid either in whole or in part. Analysis Trade mark infringement and passing off Arnold J dismissed Sky’s claim for passing off but held that, if the Trade Marks were validly registered for the goods and services relied on by Sky (ie in classes 9 and 38), Skykick had infringed them. This was because the ‘average consumer’ (ie customers or end users of Skykick’s cloud management products) would perceive ‘Skykick’ as a sub-brand of Sky. The key question in this case—as a result—turned to the validity of Sky’s Trade Mark registrations. Clarity and precision of the trade mark specification Whilst Arnold J commented that registration of a trade mark for ‘computer software’ is contrary to public interest (because it confers on the owner a monopoly which cannot be justified by any legitimate commercial interest), he held that it did not necessarily follow that such a term lacked clarity and precision. Further it was unclear whether insufficient clarity and precision was a legitimate ground for invalidating a trade mark either in whole or in part. For these reasons Arnold J sought guidance from the CJEU, in particular on the following questions: Can an EU or a national trade mark be declared wholly or partially invalid on the ground that some or all of the terms in the specification are lacking in sufficient clarity or precision? If yes, is a term such as ‘computer software’ lacking in sufficient clarity or precision? Bad faith On the bad faith allegation, Arnold J concluded that at the date of filing the Trade Mark applications, Sky did not intend to use the Trade Marks in relation to all of the goods and services covered by the applications. Further, it was unclear from recent case law whether a trade mark application could be found to have been made partly in good faith and partly in bad faith and, if so, what the legal implication would be of this—whether such a finding would invalidate the entire registration or just the part made in bad faith. For these reasons, Arnold J proposed the following reference to the CJEU: Can it constitute bad faith to apply to register a trade mark without any intention to use it in relation to the specified goods or services? If yes, is it possible to conclude that the applicant made the application partly in good faith and partly in bad faith if the applicant had an intention to use the trade mark in relation to some of the specified goods or services, but no intention to use the trade mark in relation to other specified goods or services? Practical significance Arnold J’s referred questions leave open the possibility that where part of a trade mark application is found to have been made in bad faith the whole registration could be invalidated. This would clearly have significant implications for trade mark owners holding wide registrations as these could become vulnerable to wholesale strike out as a result of invalidity challenges for bad faith. A response from the CJEU on this point is not likely to be returned for some time, and certainly not before the UK leaves the EU on 29 March 2019. Whist referrals to the CJEU may stay in motion after we leave the EU and may not be deemed withdrawn, it is unclear at this stage what weight the English courts could give to any CJEU judgment post-Brexit. In the meantime, trade mark owners should review their existing registrations and their current use of their marks to identify any potential areas of vulnerability. They should also consider the potential benefits of filing new (narrower) applications covering just essential goods and services to ensure that these, at the very least, are protected regardless of the CJEU’s decision. © The Author(s) 2018. Published by Oxford University Press. All rights reserved. This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/about_us/legal/notices) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Intellectual Property Law & Practice Oxford University Press

Key questions on bad faith and the clarity and precision of trade mark specifications referred to the CJEU

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Publisher
Oxford University Press
Copyright
© The Author(s) 2018. Published by Oxford University Press. All rights reserved.
ISSN
1747-1532
eISSN
1747-1540
D.O.I.
10.1093/jiplp/jpy051
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Abstract

Sky v Skykick [2018] EWHC 155, 6 February 2018 The High Court has referred a number of questions to the Court of Justice of the European Union (CJEU) on bad faith and the clarity and precision of trade mark specifications, the answers to which may have significant implications for trade mark owners—particularly those holding very broad registrations. Legal context Clarity and precision of the trade mark specification The IP Translator case (Case C-307/10 Chartered Institute of Patent Attorneys v Registrar of Trade Marks [2012] EU:C:2012:361, [2013] Bus LR 740) established that a trade mark applicant must specify the goods and services to which its application relates, with sufficient clarity and precision to enable the competent authorities and third parties to determine the extent of protection conferred. Failure to do so can result in the application being refused. It is not clear, however, whether lack of sufficient clarity and precision in the specification can be a ground on which to invalidate a trade mark once it has already been registered. Bad faith Under section 32(3) Trade Marks Act 1994 (TMA), where an application is made to register a UK trade mark, the application must contain a signed statement confirming that the applicant is using, or has a bona fide intention to use, the trade mark in relation to the goods or services listed in the application. There is no such requirement when filing European Union (EU) trade marks applications. Under section 3(6) and 47(1) TMA, a UK trade mark may be declared invalid if the application was made in bad faith and, as per section 47(5) TMA, where such a ground of invalidity exists in relation to only some of the goods or services, the trade mark shall be declared invalid in relation to those goods or services only. Similar provisions are contained in the Articles 59(1)(b) and 59(3), respectively of Regulation 2017/1001 relating to EU trade marks. UK case law suggests that it is bad faith to register a trade mark with no genuine intention to use it in relation to the specified goods or services and, also, that it may be possible to conclude that an application has been made partly in good faith and partly in bad faith. CJEU case law has not directly addressed these questions, although recent decisions (including most recently in Case T-132/16 PayPal, Inc v European Union Intellectual Property Office [2017] EU:T:2017:316, ETMR 30) have indicated that the position may be similar to that in the UK. This, however, is not acte clair, particularly in relation to the legal effect of a finding of partial bad faith—ie whether this invalidates the whole trade mark registration or only the part made in bad faith. Facts The claimant, Sky, claimed that Skykick had infringed four of its EU trade marks and one UK trade mark (a mixture of ‘SKY’ figurative and word marks) (the Trade Marks) and had also committed passing off by using the sign ‘Skykick’ in relation to its provision of cloud management products. In response, Skykick sought a declaration that Sky’s Trade Marks were wholly or partly invalid on the basis that the specifications of the goods and services lacked sufficient clarity and precision and that the applications had been made in bad faith. For the purposes of its infringement claim against Skykick, Sky relied on specific registrations in classes 9 and 38 (including ‘computer software’ and ‘telecommunications services’). However, Arnold J noted that the full Trade Mark specifications were extremely broad, covering a number of classes and with some registrations stretching to over 8000 words. Skykick pointed to the breadth of Sky’s Trade Mark specifications to argue that the applications had been made in bad faith because Sky had no intention to use the Trade Marks in relation to all of the specified goods or services. In particular, Skykick highlighted Sky’s registration for ‘whips’ and ‘bleaching materials’ which, on cross-examination, was unable to provide any commercial rationale for registering. Skykick also argued that Sky’s registrations for goods such as ‘computer software’ lacked sufficient clarity or precision (as required by the IP Translator case). For these reasons, Skykick argued that Sky’s Trade Marks were invalid either in whole or in part. Analysis Trade mark infringement and passing off Arnold J dismissed Sky’s claim for passing off but held that, if the Trade Marks were validly registered for the goods and services relied on by Sky (ie in classes 9 and 38), Skykick had infringed them. This was because the ‘average consumer’ (ie customers or end users of Skykick’s cloud management products) would perceive ‘Skykick’ as a sub-brand of Sky. The key question in this case—as a result—turned to the validity of Sky’s Trade Mark registrations. Clarity and precision of the trade mark specification Whilst Arnold J commented that registration of a trade mark for ‘computer software’ is contrary to public interest (because it confers on the owner a monopoly which cannot be justified by any legitimate commercial interest), he held that it did not necessarily follow that such a term lacked clarity and precision. Further it was unclear whether insufficient clarity and precision was a legitimate ground for invalidating a trade mark either in whole or in part. For these reasons Arnold J sought guidance from the CJEU, in particular on the following questions: Can an EU or a national trade mark be declared wholly or partially invalid on the ground that some or all of the terms in the specification are lacking in sufficient clarity or precision? If yes, is a term such as ‘computer software’ lacking in sufficient clarity or precision? Bad faith On the bad faith allegation, Arnold J concluded that at the date of filing the Trade Mark applications, Sky did not intend to use the Trade Marks in relation to all of the goods and services covered by the applications. Further, it was unclear from recent case law whether a trade mark application could be found to have been made partly in good faith and partly in bad faith and, if so, what the legal implication would be of this—whether such a finding would invalidate the entire registration or just the part made in bad faith. For these reasons, Arnold J proposed the following reference to the CJEU: Can it constitute bad faith to apply to register a trade mark without any intention to use it in relation to the specified goods or services? If yes, is it possible to conclude that the applicant made the application partly in good faith and partly in bad faith if the applicant had an intention to use the trade mark in relation to some of the specified goods or services, but no intention to use the trade mark in relation to other specified goods or services? Practical significance Arnold J’s referred questions leave open the possibility that where part of a trade mark application is found to have been made in bad faith the whole registration could be invalidated. This would clearly have significant implications for trade mark owners holding wide registrations as these could become vulnerable to wholesale strike out as a result of invalidity challenges for bad faith. A response from the CJEU on this point is not likely to be returned for some time, and certainly not before the UK leaves the EU on 29 March 2019. Whist referrals to the CJEU may stay in motion after we leave the EU and may not be deemed withdrawn, it is unclear at this stage what weight the English courts could give to any CJEU judgment post-Brexit. In the meantime, trade mark owners should review their existing registrations and their current use of their marks to identify any potential areas of vulnerability. They should also consider the potential benefits of filing new (narrower) applications covering just essential goods and services to ensure that these, at the very least, are protected regardless of the CJEU’s decision. © The Author(s) 2018. Published by Oxford University Press. All rights reserved. This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/about_us/legal/notices)

Journal

Journal of Intellectual Property Law & PracticeOxford University Press

Published: May 9, 2018

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