February 10, 2020

The High Court referred various questions to the CJEU in relation to a request for a declaration of invalidity brought by the defendant, SkyKick UK Ltd, which supplies cloud migration information technology services, in proceedings brought in the UK by the claimant, Sky plc, for infringement by SkyKick of four of Sky’s EU trade marks and one UK trade mark for SKY registered in relation to various services, including “computer software”.

In its counterclaim, SkyKick contended that the trade marks should be declared (partly) invalid on the ground that they are registered for goods and services that are not specified with sufficient clarity and precision. SkyKick also said that the trade marks were registered in bad faith because Sky did not intend to use them in relation to all of the goods and services specified.

The High Court asked the CJEU whether Articles 7 and 51 of the Trade Mark Regulation (40/94/EC) and Article 3 of the Trade Mark Directive (89/104/EEC) (being the relevant legislation according to the filing dates of the marks in question) mean that a trade mark can be declared wholly or partially invalid on the ground that the specification of the goods and services lacks clarity and precision. If so, whether the term “computer software” is sufficiently clear and precise.

The CJEU noted that Article 3 of the Directive provides a list of the absolute grounds of invalidity, which does not include a lack of clarity and precision of the specification as one of them. Further, the list is exhaustive, even if some are optional for Member States. The same is true under the Trade Mark Regulation.

Further, in Case C-307/10 Chartered Institute of Patent Attorneys EU:C:2012:361 the court did not intend to recognise any additional grounds for invalidity not included in the list. That judgment only clarified the requirements for new trade mark applications and did not cover registered marks.

The CJEU also dismissed SkyKick’s argument that a lack of clarity and precision in the specification could be related to the requirement for graphic representation under Article 7 of the Trade Mark Regulation and therefore count as an absolute ground of invalidity under Article 51. The CJEU said that the graphic representation requirement relates only to the need to be able to identify the mark and it could not be inferred that it also applied to specifications.

The CJEU also dismissed SkyKick’s argument that a lack of clarity and precision could render a mark invalid on the ground of it being contrary to public policy. The CJEU said that the concept of “public policy” did not relate to the characteristics of the trade mark application, e.g. the clarity and precision of the specification, regardless of the characteristics of the sign for which registration is sought.

In any event, the CJEU said, under Article 50(1), a trade mark owner’s rights can only be revoked if the mark has not been put to genuine use in the territory concerned in connection with the goods or services for which it is registered within a continuous period of five years. Further, this applies only to those goods and services for which there has been no genuine use. Therefore, a mark registered for a specification that lacks clarity and precision is, in any event, capable of being protected only in respect of the goods and services for which it has been put to genuine use.

In conclusion, therefore, a trade mark cannot be declared wholly or partially invalid on the ground that the specification lacks clarity and precision.

The High Court also asked whether Article 51(1)(b) of the Trade Mark Regulation means that a trade mark application made without any intention to use it in relation to the goods and services covered by it constitutes “bad faith” and, if so, whether Article 51(3) means that any resulting invalidity only covers those goods and services to which “bad faith” applies.

The CJEU noted that the legislation does not give a definition of “bad faith”. The CJEU has held in the past that “bad faith” presupposes the presence of a dishonest state of mind or intention. However, consideration must also be given to the specific context of trade mark law, i.e. in the course of trade. This covers, in particular, contributing to a system of undistorted competition in the EU, in which each undertaking must be able to register signs that enable the consumer to distinguish its goods and services from others in order to attract and retain customers by the quality of its goods or services.

Therefore, “bad faith” applies where a trade mark owner has filed a trade mark application, not with the aim of engaging fairly in competition, but with the intention of undermining, in a manner inconsistent with honest practices, the interests of third parties, or with the intention of obtaining, not necessarily by targeting a particular third party, an exclusive right for purposes other than those falling within the functions of a trade mark, in particular the essential function of indicating origin.

A trade mark applicant has five years in which to begin actual use of the mark, but the filing can still constitute “bad faith” where there is no rationale for the application in accordance with the objectives of trade mark law. However, such bad faith is only established if there are objective, relevant and consistent indications showing that, at the date of filing, the applicant was acting in “bad faith”, as described above.

The “bad faith” of the applicant cannot, therefore, be presumed solely on the basis that, at the time of filing, the applicant had no economic activity corresponding to the specification.

As for whether “bad faith” can apply to just some of the goods and services in the specification, the CJEU agreed with the Advocate General that it can, and that the mark can therefore be declared invalid solely for those goods or services.

Finally, the High Court asked whether the Directive precludes a provision of national law under which an applicant must state that the mark is being used in relation to the specification or that he or she has a bona fide intention of doing so.

The CJEU again pointed out that the list of absolute grounds for invalidity in the Directive is exhaustive, so Member States cannot introduce any other grounds for refusal or invalidity. However, Member States are free to set the rules of registration procedure, revocation and invalidity. Nonetheless, such provisions cannot, in practice, have the effect of introducing grounds of refusal of registration or invalidity not provided under the Directive. Therefore, providing that an applicant must state use of the mark or a bona fide intention to use the mark cannot be considered incompatible with the Directive. The CJEU added that while infringement of such an obligation may constitute evidence for the purposes of establishing possible bad faith, such an infringement cannot constitute a ground for invalidity of the mark in question. (Case C-371/18 Sky plc v SkyKick UK Ltd EU:C:2020:45 (29 January 2020) — to read the judgment in full, click here)