Sky Plc v Skykick, UK Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Kitchin,Lord Justice Floyd |
| Judgment Date | 06 September 2018 |
| Neutral Citation | [2018] EWCA Civ 2004 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2018/1026 |
| Date | 06 September 2018 |
[2018] EWCA Civ 2004
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (CHANCERY DIVISION)
EUROPEAN UNION TRADE MARK COURT
MR JUSTICE ARNOLD
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Kitchin
and
Lord Justice Floyd
Case No: A3/2018/1026
Geoffrey Hobbs QC (instructed by Mishcon de Reya LLP) for the Appellants
Simon Malynicz QC (instructed by FieldFisher LLP) for the Respondents
Hearing date: 30 July 2018
Judgment Approved
This is an adjourned application for permission to appeal from two judgments of Arnold J in an action for passing off and trade mark infringement. In the course of his main judgment Arnold J decided certain questions of fact and law, but referred questions of EU law to the Court of Justice of the European Union (“CJEU”). Those questions have been transmitted to the CJEU, who have registered the reference as Case C-371/18. At the conclusion of the oral hearing we announced our decision that permission to appeal would be refused. These are my reasons for joining in the decision to refuse permission to appeal.
In order to understand how the appeal comes to this court at this stage it is necessary to set out the issues, which I shall attempt to do as concisely as possible.
The applicants (together Sky) have made extensive use of the trade mark SKY in relation to a large range of goods and services, and in particular, in relation to (i) television broadcasting (ii) telephony and (iii) broadband provision. The mark SKY is very well known in the UK, at least in relation to those goods and services. The judge made extensive findings as to the breadth of Sky's use of the marks, in relation to television, telephony, internet, email, online data storage, online music downloads, computer software, betting services, tickets, games, magazines, financial services, insurance, educational services, travel, installation services, and transport. By 30 June 2006 the turnover of Sky's business was over £4.1 billion.
Sky own, between them, four registered EU trade marks and one registered UK trade mark either for the word SKY or for figurative depictions of that word. These marks were registered for a wide range of goods and services, either by reference to class headings of the Nice classification, or by reference to those class headings supplemented by a series of increasingly detailed descriptions of more specific goods and services.
For the purpose of their infringement claim Sky relied on the registration of their marks in eight descriptions of goods and services, namely:
i. computer software (Class 9);
ii. computer software supplied from the internet (Class 9);
iii. computer software and telecoms apparatus to enable connection to databases and the internet (Class 9);
iv. data storage (Class 9);
v. telecommunications services (Class 38);
vi. electronic mail services (Class 38);
vii. internet portal services (Class 38); and
viii. computer services for accessing and retrieving information/data via a computer or computer network (Class 38).
The respondent, SkyKick, is a small to medium sized enterprise which was set up in 2010. Its core idea was to develop a product which would largely automate the process of migrating from Microsoft Office to Office 365. As Office 365 provides access to cloud based productivity services, SkyKick considered the name SKYKICK to be appropriate, because the company's service would “kick” i.e. migrate the client's data into the “sky” i.e. the cloud.
Sky took objection to that choice of name and commenced these proceedings in May 2016. They complained of infringement under what were Articles 9(2)(b) and 9(2)(c) of Regulation 207/2009. In return, SkyKick contended that the marks should be declared partly invalid on the ground that they were registered for goods and services that are not specified with sufficient clarity and precision. This is a contention which derives from the decision of the CJEU in Case C-307/10Chartered Institute of Patent Attorneys v Registrar of Trade Marks (IP Translator) [2013] Bus LR 740, but it has never been recognised that the contention gives rise to a ground of invalidity. SkyKick also contended that the trade marks were registered in bad faith because, at the date of the application for registration, Sky did not intend to use the marks for all the goods and services which fell within the specification. The consequence was that the marks were either invalid in their entirety, or alternatively invalid to the extent that there was no genuine intention to use. Although a trade mark can be declared invalid for non-use when five years have elapsed from the date of registration, there is no express ground of invalidity based on lack of intention to use at the date of registration.
SkyKick's first point, based on IP Translator, raised two issues. The first was whether lack of clarity or precision could be a ground of invalidity of a mark once registered. The second was whether the specification of any of the marks were objectionable on that ground. Sky accepted that the first point was not acte clair. They contended, however, that the present case was one where it could be decided that the specifications were not objectionable on this ground, even if such a ground were available.
The judge considered the second issue at [162] to [173] of his first judgment. He recited SkyKick's contention that the terms “computer software”, “computer software supplied from the internet”, and “computer software and telecoms apparatus to enable connection to databases and the internet” were lacking in clarity and precision, and Sky's contrary contention that they were not. He accordingly decided to refer two questions to the CJEU:
“(1) Can an EU trade mark or a national trade mark registered in a Member State be declared wholly or partially invalid on the ground that some or all of the terms in the specification of goods and services are lacking in sufficient clarity and precision to enable the competent authorities and third parties to determine on the basis of those terms alone the extent of the protection conferred by the trade mark?
(2) If the answer to (1) is yes, is a term such as “computer software” too general and [does it] cover[s] goods which are too variable to be compatible with the trade marks' function as an indication of origin for that term to be sufficiently clear and precise to enable the competent authorities and third parties to determine on the basis of that term the extent of the protection conferred by the trade mark?”
Next the judge turned to SkyKick's second ground of attack on the trade marks based on whether the marks were registered in bad faith because Sky did not intend to use the marks in relation to all the goods and services for which they were registered. Sky's response was that the act of applying for trade marks without any intention to use them cannot constitute bad faith, and even if it does, it cannot result in total as opposed to partial invalidity.
The judge conducted a wide-ranging survey of EU and domestic cases, none of which had gone as far as to hold that a mere intention not to use a trade mark could amount to bad faith. He summarised the position at [224] to [229]:
“224. I draw the following conclusions from this review of the case law.
225. First, although there is no express requirement of an intention to use in either the Regulation or the Directive, and a registered trade mark cannot be revoked for non-use until five years have expired, the jurisprudence of the CJEU and the General Court suggests that, at least in certain circumstances, it may constitute bad faith to apply to register a trade mark without any intention to use it in relation to the specified goods or services.
226. Secondly, the case law indicates that it is not sufficient to demonstrate bad faith that the applicant has applied to register the trade mark in respect of a broad range of goods or services if the applicant has a reasonable commercial rationale for seeking for such protection having regard to his use or intended use of the trade mark. Nor is it sufficient to demonstrate bad faith that the applicant only has a contingent intention to use the trade mark in relation to certain goods or services in the future.
227. Thirdly, although the court or tribunal must exercise caution for the reasons given in the preceding paragraph, the case law suggests that, in an appropriate case, it may be 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.
228. Fourthly, provided that section 3(6) of the 1994 Act is interpreted and applied consistently with European law, then it appears probable that section 32(3) is compatible with European law.
229. Neither side contended that the law on these points was acte clair, and in my judgment they were right not to do so. As counsel for Sky submitted, however, it does not necessarily follow that questions should be referred to the CJEU. That depends on whether SkyKick's case is factually well-founded. Before turning to consider the facts, however, I must first consider a distinct, although related, issue of law.”
The judge next considered whether the legal consequence of a finding of bad faith in relation to some of the goods covered by the registration was total or alternatively partial invalidity. He concluded at [234] that the better view was...
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