On 29 January 2020, the Court of Justice of the European Union (CJEU) issued its decision in Sky v SkyKick. The judgment provides important guidance on the grounds available to an applicant seeking to challenge a trade mark post-grant, especially where the registration include general terms such as "computer software" and "financial services".
In April 2018, Mr Justice Arnold of the High Court in London referred the following questions to the CJEU:
- 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?
- If the answer to question (1) is yes, is a term such as “computer software” too general and covers goods which are too variable to be compatible with the trade mark’s 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 alone the extent of the protection conferred by the trade mark?
- Can it constitute bad faith simply to apply to register a trade mark without any intention to use it in relation to the specified goods or services?
- If the answer to question (3) is yes, is it possible to conclude that the applicant made the application partly in good faith and partly in bad faith if and to the extent that 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?
- Is section 32(3) of the UK Trade Marks Act 1994 compatible with EU law?
In its judgment the CJEU decided as follows:
- It is not possible to challenge a registered EU or national trade mark for lack of clarity or precision. The CJEU held that the grounds for challenging a trade mark registration are exhaustively set out in the EU Trade Mark Regulation (which governs EU trade marks) and the EU Trade Marks Directive (which governs trade mark law at the Member State level), and they do not include "lack of clarity and precision". Accordingly, it is not open to applicants challenging trade mark registrations to argue that general terms such as "computer software" or "financial services" lack clarity and precision. Rather, such a challenge is the preserve of the relevant trade mark office during the examination of an application. In reaching this conclusion the CJEU expressly rejected the Advocate-General's suggestion that a trade mark registration covering goods or services which lack clarity and precision can be challenged as being contrary to public policy (contrary to public policy being a ground of invalidity – the relevant provision in the Trade Mark Regulation is Art. 7(1)(f)). As the CJEU noted: "…the concept of ‘public policy’…cannot be construed as relating to characteristics concerning the trade mark application itself, such as the clarity and precision of the terms used to designate the goods or services covered by that registration, regardless of the characteristics of the sign for which the registration as a trade mark is sought."
- The CJEU made clear that there is no per se rule that a lack of intention to use amounts to bad faith. Rather, bad faith may be established only where there is "objective, relevant and consistent indicia" which tends to show that the applicant intended, when filing its application, to undermine, in a manner inconsistent with honest practices, third parties' interests or to obtain, without targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark. Whilst this will require a consideration of the facts in any given case, the CJEU did confirm that an applicant is not acting in bad faith simply because it had no economic activity corresponding to the goods or services applied for at the time of filing the application.
- Importantly, the CJEU went on to determine (consistent with the express language of the Regulation and the Directive) that where bad faith is established it will apply only to those goods or services to which the finding of bad faith attaches, not all goods and services of the mark.
- The CJEU confirmed that the requirement in the UK that an applicant must declare that it is using or has a bona fide intention to use the applied for mark on the goods and services of the application is not contrary to EU law. However, the CJEU went on to hold that infringement of such a declaration would not, of itself, constitute a ground for invalidity; rather it was a factor the tribunal may take into account when considering whether the applicant acted in bad faith.
The decision of the CJEU will now be applied when the case returns to the High Court.
Mishcon de Reya is acting for Sky in these proceedings.