Sky v SkyKick - Don't Panic

The Sky v SkyKick decision: don't panic but… do prepare!

The recent Court decision for Sky v SkyKick in Europe has implications for the trademark world. Even though the Sky v SkyKick case went from the UK Courts to the European Court of Justice, this is an issue which is not just for Europe, but one for us all to consider. How best can you prepare for the future world of trademark filing?

The background of Sky v SkyKick

We all know Sky Inc is a behemoth, they specialize in digital satellite television and broadcasting. They've got revenues in the billions of pounds. They are big!

They have European trademark registrations for the word mark SKY in many classes. Their class 9 registrations (“EU112” and “EU992”) cover “computer software”.

In fact, Sky really only uses the SKY mark on tv broadcasting, telephony and broadband provision. Importantly, they do not use the mark on email migration or cloud backup.

Along comes SkyKick. This company’s business is cloud migration. Apparently the CEO/founder liked the brand  because it sounded like sidekick. They were essentially an assistant service. Sky did not like this! 

First trial in the UK

Sky brought infringement proceedings in the UK  with two main causes of action, trademark infringement and passing off.

Justice Arnold (now Lord Justice Arnold)’s decision was fantastic. He held that all of SkyKick's defences to infringement under both EU and national laws failed. That is, if the trademark registrations are valid, SkyKick is infringing. This view was based on similarity of marks and based on an actual overlap of goods. This was due to the breadth of the goods covered in the specification.

And here’s where it gets interesting - Justice Arnold says:

"I think that registration for computer software is unduly broad. It's unjustified and contrary to public interest. However, that doesn't mean that the registration is invalid." 

As a result, the UK High Court referred five questions to the European Court of Justice (CJEU):

• Is lack of clarity and precision a ground for invalidity?

• If so, are terms like “computer software” sufficiently clear and precise?

• Is it bad faith to register without intention to use for the specified goods?

• If so, can this apply only to some goods?

• Is the UK Act compatible with EU Directive?

At Sortify.tm we are particularly interested in the first two questions and how they relate to specifications of goods and services. 

The Advocate General’s opinion of 16 October 2019 

Following the UK judgment, the Advocate General was tasked with providing an opinion on the matter. To be clear, the Advocate General provides an initial opinion – taking into account views of various IP offices. It is opinion only; it is not binding on the CJEU.

Notwithstanding this fact, his opinion generated considerable anxiety in the trademark world! Rightly, practitioners were concerned about the potential invalidity of thousands of trademarks on the register.

The Advocate General found that, “Lack of clarity or precision of some or all terms in a specification is not an invalidity ground”.  BUT he included a public policy sting in the tail: He said that registration for “computer software” is unjustified and contrary to public interest. 

He considered that bad faith can come from lack of intention to use based on subjective matters, for example, an abusive filing strategy.

His opinion came about because he stepped back and really looked at the role of specifications of goods and services. Because of this approach, his opinion has some big implications for everyone who drafts specifications of goods, not just those in Europe.

The European Court of Justice Decision of 29 January 2020 in a nutshell

Practitioners were on tenterhooks about this decision for Sky v SkyKick. Would the Court follow the Advocate General’s opinion? Ultimately their decision was very close to the opinion except they chose not to get into the “public policy” question. Specifically, the CJEU found:

• Lack of clarity or precision of specification terms is not a ground for invalidity

• Public policy cannot relate to characteristics of the application itself, such as clarity and precision of goods

• As a result, there is no need to look at the “computer software” question

• Bad faith cannot be presumed based on lack of economic activity

• Invalidity for some goods impacts only those goods – not the entire registration

So there was a win for Sky at CJEU on technical interpretation, but not on those real issues dealt with by the Advocate General.

What are the implications of Sky v SkyKick today?

There is now no need to panic, but we think you should prepare for the future - it’s time to adopt best practice specification drafting.

We think best practice drafting is to:

• use IP Office approved goods/services to minimise bad faith risk (check out the sortify.tm attorney tool to help you work out what these are) 

• include the broad approved terms – but include specifics too

• separate your terms, so if a broad one is challenged, the narrow term will remain safe; embrace the semicolon!

What about the future?

Here’s what we think at Sortify.tm:

• Registrations which provide unclear and imprecise exclusive rights, are bad news!  

• In line with the need to clean up trademark registers, imprecise specifications seem a good place to start. 

• Strong “clarity and precision” arguments will exist wherever the legislation leaves this argument open.

• The CJEU’s narrow approach to “public policy” is likely to be argued about elsewhere.

• Expect IP Offices to tighten up on some of their acceptable terms.

• The Advocate General’s thinking will be looked back on positively in future.