Does use of a trade mark within the UK constitute valid use within the EU to evidence enhanced distinctiveness of an EU trade mark?
The judgement of the Shopify vs Shoppi case has important implications for UK trade mark owners.
On 29 January 2020, the CJEU issued an eagerly awaited decision in the case of Sky v SkyKick.
Sky plc (“Sky”), the well-known British telecommunications company, brought proceedings against SkyKick, a US-based provider of cloud migration software and services. Sky alleged, amongst other grounds, infringement of four of its EU trade marks and one UK trade mark. Sky’s trade mark registrations all comprise the word ‘SKY’ and are registered for a very broad range of goods and services, including ‘computer software’ broadly.
SkyKick counterclaimed that Sky’s trade mark registrations were invalid, arguing that (i) the specification of goods and services lacked clarity and precision, and (ii) the applications were filed in bad faith since Sky had no intention of using the SKY trade mark for all of the goods and services covered.
The UK Court hearing the matter opined that, whilst ‘computer software’ was a term that appeared to be “reasonably clear and precise”, a registration listing it broadly was “unjustified and contrary to the public interest because it confers on the proprietor a monopoly of immense breadth which cannot be justified by any legitimate commercial interest of the proprietor”.
To seek clarity, the UK Court referred several questions to the CJEU, which effectively related to the following issues:
For (1) above, the CJEU ruled that a trade mark cannot be declared invalid on these grounds. The absolute grounds for invalidity of an EU or national trade mark as set out in the EU Trade Mark Directive are exhaustive. As a lack of clarity and precision is not included in the Directive, a trade mark cannot be declared wholly or partially invalid on this ground.
As the answer to the first part of the question was ‘no’, the CJEU made no comment on whether the term ‘computer software’ was too general. However, the CJEU did make it clear that if a trade mark has not been put to genuine use during the five-year period following its registration, it may still be revoked.
For (2) above, the CJEU held that, whilst an applicant is not required to indicate, or even know upon filing that they will make use of the mark, a trade mark application made without intention to use it in relation to the goods or services applied for could constitute bad faith where there is no rationale for the application. Whether or not there was a rationale for the application would be determined by establishing if it was:
(a) filed with the intention of dishonestly undermining the interests of third parties; or
(b) filed with the intention of obtaining exclusive rights for purposes which fall foul of the functions of a trade mark, e.g. use of a trade mark to indicate the quality or origin of the products and services.
The CJEU also held that where a finding of bad faith is made, it will only arise for the specific goods or services concerned. So, a partial finding of bad faith is possible.
This decision will be largely welcomed by brand owners, since it clarifies that (i) a trade mark registration cannot be invalidated on the basis of terms in the specification lacking clarity and precision, (ii) the standard for establishing that an application has been filed in bad faith appears to still be high, and (iii) a trade mark cannot be cancelled in its entirety if a finding of bad faith is made, provided the owner acted partly in good faith.
However, for many who have called for a restriction on the practice of obtaining and enforcing registrations that are broader than the goods or services provided by the proprietor, this decision will be less well received.
That said, brand owners should still be cautious when filing trade mark applications with overly broad specifications which go beyond the scope of their business interests, as such applications are vulnerable to attack on the grounds of bad faith if it can be established that there was no rationale for the broad scope of goods and services.
Please contact one of our attorneys for any trade mark advice.