Sky’s the Limit – SkyKick UK Ltd v Sky Ltd [2024] UKSC 36

The Supreme Court has delivered its much-anticipated judgment for SkyKick v Sky more than eight years after initial proceedings between the parties began in 2016.

Following a raft of judgments in the High Court, the CJEU and the Court of Appeal, the Supreme Court delivered its verdict on the case, despite SkyKick’s withdrawal of its appeal following settlement with Sky. The Court chose to deliver its judgment nonetheless due to the general importance of several issues in the case which could affect other traders and the public, while also citing the lateness of the withdrawal request as a factor.

Background

Sky originally brought an action against SkyKick for infringement of various of its SKY trade marks and passing off, in relation to the cloud migration and cloud backup services offered by SkyKick under its SkyKick marks.

SkyKick denied infringement and passing off, and counterclaimed that the SKY marks were invalid on the basis that the specification lacked clarity and precision, and that the applications had been made in bad faith because Sky had no genuine intention of using the SKY marks in relation to at least some of the goods and services for which they were registered.

Decision

The Supreme Court agreed with the High Court findings on bad faith and therefore reversed the Court of Appeal’s decision on this point. The Court found that Sky’s marks were partially invalid for bad faith due to a lack of genuine intention to use the marks across the full specification of goods and services.

A key point highlighted by the Court was that Sky had originally relied upon the full range of goods and services but had then narrowed the scope five weeks before trial, providing powerful support for SkyKick’s position that Sky had been prepared to deploy the full armoury of goods and services including those which they had never intended to sell or provide.

The Court made the following observations on bad faith:

• Bad faith can be inferred from the length and breadth of trade mark specifications and broad terms.
• If the applicant has no genuine intention to supply or provide the goods or services, but still intends vigorously to enforce the mark across the full range of goods and services, this can constitute bad faith.
• If the applicant has a reputation that renders the mark more distinctive or confers on the owner a broader degree of protection, this does not justify applying to register a mark in respect of goods or services which that applicant has never had any intention to supply or provide.
• Traders should not benefit from an overly broad category of goods or services where they only intend to use it in relation to a smaller sub-category.
• Traders should not escape the consequences of acting in bad faith simply because they have framed their specification using general terminology (e.g. “computer software”).
• If bad faith is found in relation to certain goods and services, the registration will be invalidated only in relation to those goods and services.

On infringement, the Court agreed with the Court of Appeal. SkyKick had infringed in relation to cloud backup services, but not in relation to cloud migration services. The Court found that:

• The cloud migration services provided by SkyKick were not considered to be “electronic mail services”. Cloud migration was deemed to involve migrating email accounts from one set of infrastructure to another, which was not an aspect or a feature of an electronic mail service but a different service. Therefore, the Court found there to be no infringement.
• The cloud backup services provided by SkyKick fell within the scope of “computer services for accessing and retrieving audio, visual and/or audio-visual content and documents via a computer or a computer network”. Therefore, there was found to be infringement.

The Court also considered a separate issue regarding whether it had jurisdiction to decide the case, given that the proceedings were pending before the UK court as of IP completion day (31 December 2020). The Court found that Articles 122-135 of the EUTM Regulation had direct effect in the UK, in the context of proceedings pending before a UK court designated as an EU trade mark court prior to IP completion day, and therefore the Court had jurisdiction to hear the case.

Comment

Following this judgment, brand owners must take extra care when deciding which goods and services to include in their trade mark specifications. Overly broad terms such as “computer software” and “telecommunications services” should be avoided in favour of more specific sub-categories.

Brand owners should avoid including goods and services in their specifications if they have no genuine intention of selling or supplying them under the mark, and there is no realistic prospect of ever doing so.

There may be a greater risk of bad faith actions following this judgment. Brand owners should be wary of an increase in invalidity actions based on bad faith (and may want to amend their specifications) but can also consider bringing such arguments themselves.