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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Sky Plc & Ors v Skykick UK Ltd & Anor [2018] EWHC 155 (Ch) (06 February 2018) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2018/155.html Cite as: [2018] EWHC 155 (Ch), [2018] RPC 5, [2018] ETMR 23 |
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Neutral Citation Number: [2018] EWHC 155 (Ch)
Case No: HC-2016-001587
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
INTELLECTUAL PROPERTY LIST (CHANCERY DIVISION)
Rolls Building
Fetter Lane, London, EC4A 1NL
Date: 6 February 2018
Before :
MR JUSTICE ARNOLD
- - - - - - - - - - - - - - - - - - - - -
Between :
|
(1) (2) (3) |
Claimants |
|
- and - |
|
|
(1) (2) |
Defendants |
- - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - -
Philip Roberts and Jeremy Heald (instructed by Mishcon de Reya LLP) for the Claimants
Simon Malynicz QC, Tom Hickman and Stuart Baran (instructed by Dentons UKMEA LLP) for the Defendants
Hearing dates: 16-19, 23 January 2018
- - - - - - - - - - - - - - - - - - - - -
Judgment Approved
MR JUSTICE ARNOLD :
Contents
Topic Paragraphs
Introduction 1
The Trade Marks 2-7
The signs complained of 8-9
The witnesses 10-22
Factual background 23-113
Sky’s
business and use
of the
SKY
trade mark 24-68
Television 27-36
Telephony 37
Internet 38-43
Email 44
Online data storage 45-48
Online music downloads and streaming 49
Other online services 50-51
Computer software 52-54
Merchandising and promotional goods 55
Betting services 56
Tickets 57
Games 58
Magazines 59
Financial services 60
Insurance 61
Educational services 62
Travel 63
Installation services 64
Transport 65
The scale of
Sky’s
business and its advertising 66
and promotion
The
geographical extent of Sky’s
use of the
SKY
68
trade mark
Sky’s
enforcement of
their trade mark 69-72
SkyKick
and their
business 73-103
The idea for the business 73-76
The choice of
the name SkyKick
77-79
Trade mark clearance and filing 80-88
Launch in the USA 89
Expansion into the EU 94
Another warning about Sky
95-96
Partners, Customers and End Users 100-103
The scale of
SkyKick’s
business in the EU 104
The proceedings 105-107
Third party SKY
formative marks 108-113
Key legislative provisions 114-119
Relevant dates for assessment 120-123
The law 120-121
The present case 122
The NICE Agreement and Classification 124-139
The NICE Agreement 126-128
The NICE Classification 129-131
Legislative framework concerning the use of the Nice 132-135
Classification for Community and EU trade marks
Legislative framework concerning the use of the Nice 136-139
Classification for UK trade marks
The IP TRANSLATOR case and its aftermath 140-153
Validity
of the Trade Marks:
clarity and precision of the 154-174
specification of goods and services
Can lack of clarity and precision of the specification be 158-161
asserted as a ground of invalidity?
Are the specifications of the Trade Marks lacking in clarity or 162-173
precision?
Conclusion 174
Validity
of the Trade Marks: bad
faith 175-257
TRILLIUM 178-179
Case law of the CJEU 180-189
Case law of the General Court 190-207
The UK legislative framework 208
Case law of UK courts and tribunals 209-223
Summary of the present state of the law on lack of intent to use 224-229
Extent of invalidity 230-234
The facts in the present case 235-257
Conclusion 258
Territorial aspects of Sky’s
claim for infringement of the EU Trade Marks 259-267
Contextual assessment of Sky’s
infringement claims 268-273
The average consumer 274-283
The law 274
The present case 275-283
Infringement under Article 9(2)(b) of the Regulation/Article 10(2)(b) 284-303
of the Directive
The law 285-290
Comparison of goods and services 286
Likelihood of confusion 287-290
Assessment 291-303
The distinctive character of the Trade Marks 292-294
Comparison of goods and services 295-298
Comparison of the Trade Marks and the sign 299
Absence of evidence of actual confusion 300-301
Overall assessment 302
Conclusion 303
Infringement under Article 9(2)(c) of the Regulation/Article 10(2)(c) 304-322
of the Directive
The law 305-316
Reputation of the trade mark 307-308
Link 309
Detriment to the distinctive character of the trade mark 310-312
Unfair advantage 313-315
Due cause 316
Assessment 317-321
Reputation 317
Link 318
Detriment to the distinctive character of the Trade Marks 319
Unfair advantage 320
Due cause 321
Conclusion 322
Own name defence 323-355
Is SkyKick’s
use of the
sign in accordance with honest practices? 327-335
The law 325-333
Assessment 334-335
Was the amendment to Article 12(a) of Regulation 207/2009 invalid? 336-353
The legislative history in more detail 337-347
Relevant provisions of the Charter 348-349
Relevant principles 350-352
Assessment 353-355
Passing off 356
Reference to the CJEU 357
Summary of principal conclusions 358
Introduction
1.
In this case the Claimants (collectively “Sky”)
contend that the
Defendants (collectively “
SkyKick”)
have infringed four European Union trade
marks owned by the Second Claimant (“
Sky
AG”) and one United Kingdom trade mark
owned by the First Claimant (
Sky
plc) comprising the word
SKY
(“the Trade
Marks”) by use of the sign “
SkyKick”
and
variants
thereof, and have committed
passing off.
SkyKick
deny infringement and passing off, and counterclaim for a
declaration that the Trade Marks are wholly or partly invalidly registered on
the grounds that the specifications of goods and services lack clarity and
precision and that the applications were made in bad faith. The allegations of
infringement of the EU Trade Marks cover the whole of the EU, whereas the
allegations of infringement of the UK Trade Mark are necessarily confined to
the UK. The case raises some important issues of European trade mark law.
The Trade Marks
2.
Sky
AG is the registered proprietor of the following EU Trade Marks:
i) No. 3 166 352 filed on 14 April 2003 and registered on 12 September 2012 (“EU352”) for the figurative mark shown below in respect of goods and services in Classes 9, 16, 18, 25, 28, 35, 38, 41 and 42, including “apparatus for recording, transmission or reproduction of sound or images” (Class 9), “telecommunications” (Class 38) and “entertainment” (Class 41).
ii) No. 3 203 619 filed on 30 April 2003 and registered on 6 September 2012 (“EU619”) for the figurative mark shown below in respect of goods and services in Classes 9, 16, 18, 25, 28, 35, 38, 41 and 42, including “apparatus for recording, transmission or reproduction of sound or images” (Class 9), “telecommunications” (Class 38) and “entertainment” (Class 41). Unlike EU352, this trade mark is registered in black and white, without any indication of colour.
iii)
No. 5 298 112 filed on 6 September 2006 and registered on 18 June 2015
(“EU112”) for the word SKY
in respect of goods and services in Classes 9, 16,
28, 35, 37, 38, 41 and 42, including “apparatus for recording, transmission,
reproduction or reception of sound, images or audiovisual content; computer
software; computer software and telecommunications apparatus to enable
connection to databases and the Internet; computer software supplied from the
Internet; data storage” (Class 9), “telecommunications services; electronic
mail services; internet portal services” (Class 38) and “entertainment
services” (Class 41).
iv)
No. 6 870 992 filed on 18 April 2008 and registered on 8 August 2012
(“EU992”) for the word SKY
in respect of goods and services in Classes 3, 4, 7,
9, 11, 12, 16, 17, 18, 25, 28, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44 and 45, including
“apparatus for recording, transmission, reproduction or reception of sound,
images or audiovisual content; computer software; computer software and
telecommunications apparatus to enable connection to databases and the
Internet; computer software supplied from the Internet; data storage; all the
aforesaid including remote and computer apparatus and instruments” (Class 9),
“telecommunications services; electronic mail services; internet portal
services; computer services for accessing and retrieving information, messages,
text, sound, images and data
via
a computer or computer network” (Class 38) and
“entertainment services” (Class 41).
3.
Sky
plc is the registered proprietor of UK Trade Mark No. 2 500 604
filed on 20 October 2008 and registered on 7 September 2012 (“UK604”) for the
word
SKY
in respect of goods and services in 3, 4, 7, 9, 11, 12, 16, 17, 18,
25, 28, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44 and 45, including “apparatus for
recording, transmission, reproduction or reception of sound, images or
audiovisual content; computer software; computer software and
telecommunications apparatus to enable connection to databases and the
Internet; computer software supplied from the Internet” (Class 9),
“telecommunications services; electronic mail services; internet portal
services; computer services for accessing and retrieving information, messages,
text, sound, images and data
via
a computer or computer network” (Class 38) and
“entertainment services” (Class 41).
i) When the application for EU352 was filed, the specification of goods and services consisted of the class headings of the 8th edition of the Nice Classification (as to which, see below) for each of the classes in question. The specification which was ultimately registered consisted of the class headings, but with two qualifications. The first was to “printed matter” in the Class 16 specification: “excluding publications distributed in-flight to airline travellers in connection with airline services and not being predominantly a television or cinema listings magazine”. The second qualification was to the Class 18 specification: “none of the aforementioned being made from imitations of leather”. Those qualifications came about as a result of settlements of oppositions filed by two third parties. The resulting specification runs to 238 words.
ii) What I have said about the specification of EU352 is equally applicable to the specification of EU619. Again, the specification runs to 238 words.
iii)
When the application for EU112 was filed, the specification of goods and
services consisted of the class headings of the 9th edition of the Nice
Classification for each of the respective classes (or slight variants
thereof)
supplemented by a series of increasingly detailed descriptions of the
various
types of goods and services. The specification which was registered does not
differ materially from that applied for. The specification runs to 2,836 words.
iv) What I have said about the specification of EU112 is equally applicable to the specification of EU992. The specification runs to 8,127 words.
v)
style='font:7.0pt "Times New Roman"'>
What I have said about the specification of EU112 is equally applicable
to the specification of UK604. The specification runs to 8,255 words.
“apparatus for recording television programmes; apparatus for
recording, transmission, reproduction or reception of sound, images or audio
visual
content; electrical and electronic apparatus for use in the reception of
satellite, terrestrial or cable broadcasts; televisions; LCD and plasma
screens; home cinema systems; amplifiers; speakers; radios; wireless audio
and/or audio
visual
devices; portable wireless audio and/or audio
visual
devices; remote controls; games controllers; wireless gaming controllers;
wireless keypads; television receivers including a decoder; set-top boxes;
digital set-top boxes; high definition set top boxes; personal
video
recorder;
set-top boxes for use in decoding and reception of satellite, terrestrial and
cable broadcasts; apparatus for decoding encoded signals including set top
boxes for television reception; set top box apparatus including a decoder and
an interactive
viewing
guide; set top box apparatus including a decoder and a
recorder for recording television and audio programmes; set top box apparatus
including a decoder and a recorder programmable to transfer stored recordings
to storage and also to delete the older recordings; satellite dishes.”
6.
For the purposes of their infringement claim under Article 9(2)(b) of
the Regulation/Article 10(2)(b) of the Directive (as to which, see below), Sky
rely upon the registrations of the Trade Marks in respect of the following
goods and services (it can be seen from paragraphs 2 and 3 above that not every
Trade Mark is registered for all these goods and services):
i) computer software (Class 9);
ii) computer software supplied from the internet (Class 9);
iii) computer software and telecoms apparatus to enable connection to databases and the internet (Class 9);
iv) data storage (Class 9);
v)
style='font:7.0pt "Times New Roman"'>
telecommunications services (Class 38);
vi)
style='font:7.0pt "Times New Roman"'>
electronic mail services (Class 38);
vii)
style='font:7.0pt "Times New Roman"'>
internet portal services (Class 38); and
viii)
style='font:7.0pt "Times New Roman"'>
computer services for accessing and retrieving information/data
via
a
computer or computer network (Class 38).
7.
It should be noted that SkyKick
do not contend that any of the Trade
Marks lack distinctive character in relation to any goods or services for which
they are registered. Nor have
SkyKick
counterclaimed for either total or
partial revocation of any of the Trade Marks on the ground of non-use even
though all but one of the Trade Marks were registered more than five years ago.
(It should be noted, however, that that was not the case when these proceedings
were commenced. Counsel for
SkyKick
suggested that
SkyKick
had not had time,
given the trial date which had been fixed, in which to make such a
counterclaim, but I do not accept this.
SkyKick
could have warned
Sky
shortly
in advance that it intended to make such a counterclaim and then applied to
amend its statement of case once the five year periods had expired: cf. Premier
Brands UK Ltd
v
Typhoon Europe Ltd [2005] FSR 767 at 805. If the trial had
been fixed for an earlier date, on the other hand, that would not have been
possible.)
The signs complained of
8.
Sky
complain of the use of the signs “
SkyKick”,
“
skykick”
and the
figurative signs shown below.
9.
Both sides proceeded upon the basis that, in substance, all these signs
were variants
of the sign “
SkyKick”.
The witnesses
10.
Neil Peers has been Director of Operations and Customer Service in Sky
Business,
Sky’s
business-to-business (“B2B”) division, since 2006. He has been
an employee of the Third Claimant (“
Sky
UK”) since 2003. His evidence addressed
the nature of
Sky’s
business, its scope and scale and its reputation. It also
addressed the overlap between the goods and services specified in the Trade Mark
registrations and the goods and services offered by
SkyKick
and the likelihood
of confusion with, and damage to, the
SKY
brand.
11.
Mr Peers had previously given evidence in proceedings between Skyscape
Cloud Services Ltd and
Sky
(see
Skyscape
Cloud Services Ltd
v
Sky
plc [2016] EWHC 1340 (IPEC), [2017] FSR 6). He exhibited his own witness statement
and two witness statements of Elizabeth Darran from the
Skyscape
litigation. Ms
Darren was employed by
Sky
UK as Director of Brand and Creative from December
2012 to July 2017. Her evidence covered the history of the
SKY
brand,
Sky’s
investment in marketing and advertising, the recognition of the
SKY
brand and
Sky’s
enforcement activities.
Sky
relied upon Ms Darran’s evidence as hearsay
evidence in the interests of saving costs. Although counsel for
SkyKick
was
mildly critical of this, Mr Peers was able to speak to the points that matter
for the purposes of the present case in cross-examination.
12.
More importantly, counsel for SkyKick
submitted that Mr Peers’ evidence
was partial and exaggerated, although he did not suggest that it was untrue. I
do not consider that Mr Peers’ evidence was partial or exaggerated, although
inevitably he saw matters from
Sky’s
perspective. I accept Mr Peers’ evidence
so far as it goes.
13.
Robert Tansey has been employed by Sky
UK since July 2004. Since then,
he has held a succession of positions beginning with Director of DTH (Direct To
Home) and Sports Marketing and ending with his current position as Director,
Group Internal Communications. From 2004 to 2011 Mr Tansey was the person on
the commercial side of
Sky’s
business responsible for the protection of
Sky’s
trade marks. He was also Chairman of the Team
Sky
professional cycling
team owned by
Sky
from November 2009 to September 2015. His evidence addressed
the status of the
SKY
brand as a key asset of
Sky,
his relationship with the
Sky
IP Legal Team, protection of the
SKY
brand, the circumstances in which three
of the applications for the Trade Marks were filed (the applications for EU352
and EU619 were filed before Mr Tansey joined
Sky)
and the allegation of bad
faith made against
Sky.
14.
Counsel for SkyKick
submitted that Mr Tansey’s evidence was untruthful.
This allegation was not put to Mr Tansey, and in any event I do not accept it.
Counsel for
SkyKick
also submitted that significant parts of Mr Tansey’s testimony
amounted to attempted ex post facto rationalisation of
Sky’s
filing
strategy rather than first-hand evidence of what
Sky’s
reasons had actually
been at the time. I agree with this, as I will explain in more detail
below.
15.
Emma Campbell is a solicitor who has been employed by Sky
UK since January
2005. She is currently Head Counsel of IP and Operations and has been
responsible for managing
Sky’s
UK IP Legal Team since April 2015. Her evidence covered
Sky’s
enforcement actions against third parties using so-called
SKY
formative trade
marks (as to which, see below). She also responded to evidence given by Mr
Linneker for
SkyKick
regarding third party users of
SKY
formative marks. Ms
Campbell’s witness statements did not address the allegation of bad faith,
because she was not personally involved in making the applications for the
Trade Marks. No criticism was made of her evidence.
16.
Mr Tansey’s evidence was that the senior member of the Sky
IP Legal Team
(and Head of IP from 2006) at the dates relevant to the bad faith allegation
was Simon MacLennan. Mr MacLennan left
Sky
in 2014. Apart from that, no
explanation was given by
Sky
as to why he was not called as a witness. Counsel
for
SkyKick
did not suggest that any adverse inference should be drawn from
Sky’s
failure to call Mr MacLennan, but he did point out that the consequence
was that
Sky
had not called anyone who was able to speak to
Sky’s
filing
strategy from the legal side.
17.
Todd Schwartz is the co-founder and co-CEO, together with Evan Richman,
of the Second Defendant. He has general executive responsibility for SkyKick’s
global business and operations. His evidence covered the origins of the
SkyKick
business and name and
SkyKick’s
subsequent activities. He also explained the
nature of
SkyKick’s
products and how they are presented to users.
18.
Counsel for Sky
submitted that Mr Schwartz was an unreliable witness.
This submission was based on two main points. First, Mr Schwartz stated in
paragraph 29 of his first witness statement that neither
Sky
nor its registered
trade marks were ever mentioned to him as a potential problem at any point by
any of his advisors prior to receipt of the letter before claim from
Sky
- not
his attorneys, brand consultants or anyone else. He also stated in paragraphs
9-11 of his second statement that he was not aware of the judgment obtained by
Sky
against Microsoft concerning
SkyDrive
(as to which, see below). Those
statements were inaccurate. As discussed in more detail below, two emails
drawing
Sky
and/or the
SkyDrive
judgment to Mr Schwartz’s attention were
disclosed by
SkyKick
prior to trial and a third during the course of the trial.
Mr Schwartz’s explanation was that, at the time he made his first and second
statements, he had forgotten about those emails. He did not correct his first
and second statements in any of his subsequent three witness statements,
however, and he
verified
their accuracy in his evidence in chief. Both Mr
Linneker (as to whom, see below) and counsel for
SkyKick
rightly accepted
responsibility for this omission, however.
19.
Secondly, Mr Schwartz gave evidence that he had received advice with
regard to trade mark searches orally rather than in writing. That evidence was
inaccurate. While Mr Schwartz was giving evidence, Mr Richman authorised
SkyKick’s
legal team to waive privilege in, and disclose, the relevant
communications so as to enable this inaccuracy to be corrected. The problem
could have been avoided, however, if
SkyKick
had not sought to maintain what in
my
view
was an unsustainable claim to privilege in these documents (given that
SkyKick
were positively relying upon the trade mark searches they had carried
out in support of their own name defence) up until then.
21.
Counsel for Sky
also submitted that the Court should draw an adverse
inference from
SkyKick’s
failure to call Mr Richman as a witness. I do not
accept this. Mr Richman’s evidence would inevitably have been largely, if not
entirely, duplicative of that of Mr Schwartz.
22.
John Linneker is the solicitor with conduct of this action on behalf of
SkyKick.
He gave evidence derived from searches of public domain sources
carried out by his team under his supervision. Counsel for
Sky
submitted that
Mr Linneker’s evidence was inadmissible, since the proper way in which to put
the search results into evidence was by way of a hearsay notice. Moreover, some
of Mr Linneker’s evidence consisted of argument and opinion. Strictly speaking,
these submissions are well founded.
Sky
made no application for any part of Mr
Linneker’s evidence to be excluded, however. On the contrary, counsel for
Sky
cross-examined him upon it. Moreover, I would observe that it is not uncommon
in cases of this nature for solicitors to give evidence about searches of
public domain sources. This has the advantage compared to a hearsay notice that,
if appropriate, the solicitor can be questioned about the nature of the
searches that were carried out, how they were carried out and in accordance
with what parameters.
Factual background
23.
Although much of the factual background is common ground, some is
disputed. I will set out my findings of fact topic by topic and approximately
chronologically in relation to each topic. There is a considerable amount of
detailed evidence concerning Sky’s
business and brands, and therefore it is
necessary for me to summarise.
Sky’s
business and use of the
SKY
trade mark
24.
Sky
have made extensive use of the trade mark
SKY
in relation to a range
of goods and services, and in particular goods and services relating to
Sky’s
core business areas of (i) television broadcasting, (ii) telephony and (iii)
broadband provision.
SkyKick
accept that, by November 2014,
SKY
was a household
name in the UK and Ireland in those areas.
25.
Sky
rely upon such use for the purposes of: (a) enhancing the inherent
distinctive character of the word
SKY
(which is relevant to the assessment of
likelihood of confusion); (b) establishing a broader reputation than that
admitted by
SkyKick
(which is relevant to the assessment of
Sky’s
infringement
claim under Article 9(2)(c) of the Regulation/Article 10(2)(c) of the
Directive); (c) rebutting the allegation that
Sky
applied for the Trade Marks
in bad faith because it did not intend to use the marks across the full width
of the specifications; and (d) their claim for passing off.
26.
As will become apparent from the discussion below, many of Sky’s
products comprise a package of goods and/or services which may fall within a
number of terms in a specification of goods and services.
27.
Television. Sky
started business as a
satellite television broadcaster in 1982 under the corporate and trading name
SATELLITE TELEVISION, but adopted the brand name
SKY
CHANNEL in 1984. By 1988
the service was available in 19 countries in Europe including the UK and
Ireland.
Sky
launched a DTH satellite television service in 1989. In November
1990
Sky
Television merged with a rival satellite broadcaster, British
Satellite Broadcasting, and the
SKY
brand was used by the merged company
thereafter.
28.
In 1998 Sky
launched a digital service,
SKY
DIGITAL, accessible through
a set top box (“STB”) branded
SKY
DIGIBOX. This development allowed additional
interactive services to be offered alongside the television broadcasts. They
included shopping services and email services made available through websites
managed by third parties. By July 1999
SKY
DIGITAL had acquired 1.2 million
subscribers.
29.
In 2001 Sky
launched their
SKY+
integrated personal
video
recorder
(“PVR”). The
SKY+
PVR recorded television programmes to a hard disk at the same
quality as broadcast, unlike
VHS
tapes. The number of households subscribing to
SKY+
during the period 2002 to 2009 (when
Sky
stopped reporting the number)
rose from 28,000 on 30 June 2002 to 6,455,000 on 31 December 2009.
30.
In 2006 Sky
launched the UK’s first high definition (HD) television
service along with an upgraded STB capable of decoding and recording HD
signals.
31.
By 2012 there were 24.24 million “SKY
households” in the UK and Ireland,
that is to say, households receiving
SKY
branded television channels either as
pay TV channels (whether DTH, cable or digital) or as free-to-air channels.
32.
In March 2014 the cumulative monthly reach of the SKY
1,
SKY
2 and PICK
channels in the UK was just under 34 million people, representing 58% of all
television homes, accordingly to data from the Broadcasters’ Audience Research
Board.
33.
By 2015 SKY
branded channels included, in addition to
SKY
1 and
SKY
2,
SKY
ARTS,
SKY
ATLANTIC,
SKY
LIVING,
SKY
MOVIES,
SKY
NEWS and
SKY
SPORTS.
34.
Sky’s
latest STB is
SKY
Q, which is a wireless home entertainment system
which additionally allows the user to download or stream content, alongside
music from services like Spotify or play music from another device such as a
phone or computer connected
via
means such as Bluetooth.
SKY
Q provides access
to “cloud-based” services, meaning that they are hosted on remote IT
infrastructure and are accessible online.
35.
Sky
also offer two services which allow the user to watch television
programmes over the internet,
SKY
GO and NOW TV.
36.
Sky’s
television business is not limited to domestic customers – it also
provides television services to a substantial number of business customers.
37.
Telephony. In 1997/8 Sky
launched their first telephone
service,
SKY
DIAL. This was replaced by
SKY
TALK in 1999.
SKY
TALK was
re-launched in 2006 to coincide with the launch of
SKY
BROADBAND (as to which,
see below). The number of subscribers to
SKY
TALK increased from 2.37 million
in June 2010 to just under 5 million in June 2014.
38.
Internet. In 1999 Sky
became an internet service provider
(“ISP”) under the name
SKY
NOW, offering a dial-up service. From 2003 to 2004
Sky
offered a subscription broadband service under the name
SKYSCAPE,
which was
then re-branded
SKY
SPORTS BROADBAND.
39.
In January 2006 Sky
acquired Easynet, a broadband telecommunications
specialist, in a £211 million takeover. Following the acquisition,
Sky
launched
its broadband internet access service,
SKY
BROADBAND, in July 2006. By
September 2012
SKY
BROADBAND had become the UK’s third biggest ISP, with 4.1 million
subscribers. By June 2014 that figure had risen to 5.24 million subscribers.
40.
In 2012 Sky
launched
SKY
FIBRE, a broadband service which provides
faster speeds of up to 76 Mbps.
41.
As with television, Sky’s
broadband services are not limited to the
domestic market.
Sky
also provide connectivity services to businesses,
including advisory services. In particular,
Sky
have an Ethernet fibre leasing
business.
42.
WiFi. Sky
acquired a leading public WiFi network, The Cloud,
in 2011, now branded
SKY
WIFI.
Sky
have set up over 20,000 WiFi access points
across the UK allowing
Sky
customers free internet access.
43.
As well as offering WiFi access directly to consumers, Sky
offer the
installation of WiFi access points to businesses so that their customers may
access the internet whilst on site. In doing so,
Sky
also offer consultancy
services regarding how best to satisfy the business’s requirements.
44.
Email. Sky
have offered
SKY-branded
email services to
SKY
BROADBAND customers since July 2006. The service is not offered separately, but
as a “bolt-on” to the broadband service. From July 2006 to August 2007 the
service was provided in-house. From August 2007 to April 2013 the service was
provided by Google (but under the
SKY
brand), and since April 2013 it has been
provided by Yahoo! (still under the
SKY
brand).
45.
Online data storage. From May 2005 to July 2012 Sky
offered a
service called
SKY
PHOTOS, which allowed users to create,
view,
organise,
store, print and share photographs online.
46.
From February 2008 to December 2011 Sky
also offered
SKY
STORE AND
SHARE, which allowed users to upload, store and share photographs,
videos,
music and documents online. At the time that it closed, this service had just
under 40,000 active users.
47.
In March 2016 Sky
launched
SKY
SNAPSHOTS, which allows customers to
view
photos stored on a mobile device on their television using the
SKY+
app.
48.
SKY
Q allows photographs on mobile phones to be transferred to and
access
via
the
SKY
Q STB. It also allows for the transfer and storage of music.
49.
Online music downloads and streaming. From October 2009 to
December 2010 Sky
offered the
SKY
SONGS service, which offered downloads and
ad-free streaming of over four million music tracks.
50.
Other online services. Sky
also offer a range of other
SKY-branded
online services to
Sky
Broadband customers including:
SKY
CALENDAR
(electronic calendar);
SKY
CHAT (instant messaging); and
various
tools for
monitoring and/or securing broadband connections -
SKY
IDENTITY SHIELD,
SKY
BROADBAND SHIELD,
SKY
PARENTAL ALERT and
SKY
IDENTITY PATROL.
51.
In addition Sky
offer
SKY
TOOLS, a portal through which other
Sky
services can be accessed by customers using their
SKY
ID, a unique identifier,
and a password.
52.
Computer software. Sky
supply and/or make available
various
kinds
of software to customers in order to make possible the delivery of the services
outlined above, for example, the software running on each STB.
Sky
also use the
SKY
mark in relation to software provided by third parties which support such
services (such as
SKY
email).
53.
Sky
also provide software as a service (“SaaS”), in particular
SKY
ADSMART. This is a B2B targeted advertising service utilising commoditised
application programming interfaces. It is not clear from the evidence when this
was launched.
54.
In addition, Sky
have offered a wide range of mobile and tablet applications
or apps for accessing
Sky
content over the years:
Application |
Date of first release |
![]() |
April 2009 (iPhone). Since made available on Android. |
|
May 2009 (iPhone). Since made available on Android, Blackberry and Windows phone. |
|
June 2009 (iPhone) |
|
September 2009 (iPhone) |
Team |
August 2010 (iPhone). |
|
August 2010 (iPhone). Since made available on Android and Blackberry. |
|
March 2011 (iPad). |
|
July 2011 (iPhone). Since made available on Android. |
|
August 2011 (iPhone). Since made available on Android. |
|
August 2011 (iPhone). Since made available on Android. |
|
November 2011. |
|
December 2011. |
|
November 2012. |
|
April 2012 (iPhone). Since made available on Android. |
|
April 2012 (iPhone). Since made available on Android. |
NOW TV Powered by ![]() |
August 2012 (iPhone). Since made available on Android. |
55.
Merchandising and promotional goods. Sky
have used the
SKY
mark on items such as clothing and bags since at least 2004.
56.
Betting services. Sky
have offered betting services under the
SKY
BET trade mark since August 2002. By July 2013
SKY
BET was the
fourth-largest online bookmaker in the UK.
Sky
sold a majority stake in the
SKY
BET business in 2014, but it continues to operate under an exclusive licence to
use marks including
SKY
BET,
SKY
VEGAS,
SKY
BINGO,
SKY
CASINO, and
SKY
POKER.
57.
Tickets. SKY
TICKETS was launched in 2014 and offers tickets
for a wide range of sports and entertainment events.
58.
Games. Sky
have offered games to consumers
via
an interactive
television service and the website www.
skygames.com
under the names
SKY
GAMESTAR (2001 to 2007) and
SKY
GAMES (2007 onwards).
59.
Magazines. Up to July 2011, Sky
published a monthly TV
highlights and information magazine under
various
names:
SKY
TV GUIDE,
SKY
VIEW,
SKY
CUSTOMER MAGAZINE,
SKY
THE MAGAZINE,
SKY
MAG and
SKY
MAGAZINE.
SKY
also published
SKY
MOVIES MAGAZINE and
SKY
SPORTS MAGAZINE. It continues to
publish
SKY
SPORTS PREVIEW, a monthly magazine for business customers.
60.
Financial services. Sky
first offered a
SKY-branded
credit
card in 1995. In 2005 the
SKYCARD
credit card was launched. In addition to the
usual credit card services, it could be inserted into and used to make payments
through a
Sky
STB.
SKY-branded
payment protection services were also offered
alongside the credit card.
61.
Insurance. Sky
have offered insurance and warranty services
in relation to
Sky
hardware such as STBs under the following names:
SKY
CARE
(from 1999),
SKY
PROTECTION PLAN (from 2001),
SKY
REPAIR PLAN (from 2007) and
SKY
PROTECT (from 2008). In 2013 the
SKY
PROTECT service was extended to cover
phones, tablets, laptops and the like.
62.
Educational services. The SKY
LEARNING service launched in
2007 and offered the ability to search for specific subjects or topics across
the
SKY
television platform.
Sky
have also provided study guides, sample exam
questions, online testing tools and educational information. It is not clear
from the evidence whether
SKY
still provide these services.
63.
Travel. The SKY
TRAVEL channel was
set up in 1994 and three travel-themed channels were subsequently offered by
Sky:
SKY
TRAVEL,
SKY
TRAVEL EXTRA and
SKY
TRAVEL SHOP.
SKY
TRAVEL SHOP operated
as a travel agent both through teleshopping and through a website located at www.
skytravel.co.uk.
The
SKY
TRAVEL business closed in 2010.
64.
Installation services. The installation of satellite dishes and STBs
has always been a core part of Sky’s
television business, but they do not
provide installation services separately from the supply of television
equipment.
65.
Transport. The SKY
mark is used prominently on
Sky’s
vehicle
fleet, particularly their installation
vans,
but the only transport service
provided by
Sky
is a bus service for employees and
visitors
to their Isleworth
site which Mr Tansey said was “known as the
Sky
Bus”.
66.
The scale of Sky’s
business and of its advertising and promotion.
By 2006, and even more so by 2014,
Sky’s
business was
very
large. The
Sky
group
of companies’ turnover in the year ending 30 June 2006 was over £4.1 billion,
while the turnover in the year ending 30 June 2014 was over £7.6 billion. In
2006
Sky
had over 13,300 employees, while in 2016 they had over 30,000
employees.
Sky
also spent
very
large sums on advertising and promotion. In each
of the years 2010-11, 2011-12, 2012-13 and 2013-14
Sky
spent over £1 billion on
marketing in the UK and Ireland.
67.
Sky
Business.
Sky
Business’ turnover in the year ended 30 June
2014 was a
very
small fraction of
Sky’s
total turnover (the precise figure is
confidential). Most of
Sky
Business’ revenue comes from the provision of
television broadcasting services and equipment to businesses. It is clear from
Mr Peers’ evidence, however, that one of
Sky’s
motives for bringing the present
claim is that
Sky
are in the process of trying to expand
Sky
Business, and in
particular its business in the communications and IT fields. As such, Microsoft
Partners represent a potential target market for some of
Sky’s
existing and
contemplated future services, but so far
Sky
have just three Partners as
customers.
Sky
do not currently offer email migration or cloud backup goods or
services, nor is there is any evidence that they plan to do so in the immediate
future.
68.
The geographical extent of Sky’s
use of the
SKY
trade mark. Until
November 2014,
Sky’s
main television, telephony and broadband businesses
covered the UK and Ireland. In addition, however,
Sky’s
licensees
Sky
Italia
and
Sky
Deutschland used the
SKY
trade mark in Italy and in Germany and Austria
respectively. (In November 2014
Sky
acquired
Sky
Italia and a majority interest
in
Sky
Deutschland, and in September 2015
Sky
acquired the remainder of
Sky
Deutschland.) In addition, the
SKY
NEWS channel was broadcast across Europe. I
note that Ms Campbell described Spain as being one of
Sky’s
core territories,
but it is not clear from the evidence what use there was in Spain as at
November 2014 apart from
SKY
NEWS.
Sky’s
enforcement of their trade marks
69.
It is common ground that Sky
are, and have long been, active in enforcing
their trade marks worldwide, both against actual use of signs used by others
(in the first instance by sending cease-and-desist letters and, where
considered appropriate, by infringement proceedings) and against applications
for registration (or registrations) of trade marks by others. Most of
Sky’s
enforcement actions concern the use or registration of what have been referred
to in these proceedings as “
SKY
formative marks”, that is to say,
SKY
followed
by another word (or sometimes part of a word), whether combined to form a
single word (e.g.
SKYLAND)
or as two separate words (e.g.
SKY
MOTION). Some
have concerned other kinds of marks which incorporate the word
SKY.
70.
Ms Campbell exhibited to her second witness statement a remarkable list
of no less than 808 “positive” decisions in countries ranging alphabetically
from Austria to Yemen and ranging in date from September 2000 to October 2017.
The decisions are “positive” in the sense that Sky
was wholly or partially
successful. It is clear that the number will have increased since the date of
the statement.
71.
Sky
do not pretend that they have always been in successful in such
efforts. Moreover,
Sky
do not claim that they always take enforcement against
third parties. The resources
Sky
devote to enforcement are finite, and
Sky
prioritise their efforts. As
Sky
acknowledge, in some cases,
Sky
take action to
prevent or challenge a third party registration at least in part, but either do
not try to prevent, or do not succeed in preventing, actual use of the trade
mark in question. A prominent example of this is
SKYPE:
Sky
enjoyed
considerable success in opposing registration of this trade mark (see in
particular Case T-183/13
Skype
Ultd
v
Office for Harmonisation in the
Internal Market [EU:C:2015:359], an appeal against which was withdrawn
following a settlement between the parties), but
Skype
continues to use the
trade mark in relation to its
VOIP
service on a
very
substantial scale (as at
September 2017 it had over 300 million users worldwide). There are a number of
other instances of cases where
Sky
have obtained a positive decision in
relation to a
SKY
formative mark, but nevertheless the third party is using
that trade mark.
72.
It is common ground that the positive decisions relied upon by Sky
include cases in which
Sky
has successfully opposed or cancelled
SKY
formative
marks for goods or services which
Sky
do not trade in. Examples of such
oppositions in the European Union Intellectual Property Office (“EUIPO”)
include
SKYTRON
for goods including automatic
vending
machines, cash registers
and fire-extinguishing apparatus, LittleSky for animal skins and footwear,
Diamond
Sky
for goods including motor
vehicles
and synthetic gemstones and
SKYLITE
for goods including Gladstone bags.
73.
The idea for the business. Mr Schwartz and Mr Richman came up
with the idea for SkyKick
in November 2010. At that time, they were both living
in Seattle in the USA and working for Microsoft. Mr Richman was working as a
Group Product Manager for the Office 365 Partner team.
77.
The choice of the name SkyKick.
Mr Schwartz and Mr Richman
started establishing their business in February 2011. Initially, they used the
name CloudVisors as a temporary name. CloudVisors, Inc was incorporated in the
State of Delaware on 28 March 2011. In August 2011 they began searching for a permanent
name for the business. Mr Schwartz contacted Natalie Bowman, Director of Brand
for Bing at Microsoft. She put him in contact with a branding consultant called
Jason Gingold, who suggested three names including Rocketship. That name was
considered, but abandoned when it was discovered that another business had registered
the name as a trade mark.
78.
In October 2011 a second branding consultant, Britt Stromberg, was
engaged. On 22 November 2011 Ms Stromberg proposed ten names, of which the top
three were SkyKick,
Billoh and Levver. Ms Stromberg strongly favoured
SkyKick,
because it sounded like “sidekick” and it was evocative of the company’s
service, in which users would “kick” (migrate) their data into the “
sky”
(cloud). Mr Schwartz and Mr Richman accepted her recommendation.
79.
Mr Schwartz’s evidence was that the name was picked without any
particular thought or attention to Sky.
Mr Schwartz accepted that he was aware
of the existence of
Sky
as a television broadcaster in Germany, where he lived
for three years in the 1990s, but disclaimed any more detailed knowledge than
that.
80.
Trade mark clearance and filing. On 16 December 2011 Mr Schwartz instructed
Perkins Coie (a large and well-established US law firm) to conduct a US trade
mark clearance search for SKYKICK
for use in connection with the cloud
computing services and related consultation and support services which they
intended to provide in connection with email migration. Lynne Graybeal of Perkins
Coie sent them the results of that search, together with her advice, by email on
22 December 2011. Although the search turned up trade marks containing
SKY,
KICK and both
SKY
and KICK, Ms Graybeal advised that the risk associated with
the proposed trade mark was no more than a “moderate risk”, which was “generally
considered a reasonable business risk”. She also recommended performing
international searching in key markets if it was believed that there would be
significant international use of the mark.
82.
On 20 January 2012 Ms Graybeal replied setting out further information
and recommendations regarding both a US application and international
searching. In the case of international searching, she offered three options: a
Seagis international search (the least expensive), a World Wide Screen Search
or engaging a local agent in each country of interest (the most expensive). She
also stated that Perkins Coie typically recommended the Seagis search to most
clients. The typical cost of a Seagis search was quoted as $1000-2000, although
she cautioned that it could be more if they searched for SKY
and KICK marks and
not just
SKYKICK
and
variants.
Mr Schwartz accepted that $1000-2000 would have
been affordable for
SkyKick
at that time. There is no reason to think that a
slightly higher amount would not been affordable.
“Please review the above descriptions, we have drafted broadly in order to provide the broadest scope of protection and most room for expansion of the offered services. Given the technical nature of your services, however, please advise (1) if you do not intend to offer any of the goods or services; and (2) if they are any functionalities of the goods or services which you don’t believe are encompassed in the above descriptions.
Please note that we have included very
broad descriptions
[between brackets] for both classes. We recommend including these broad
descriptions for two reasons: (i) it will allow to you [sic] include additional
types of computer services/computer software in the applications phase if your
business focus expands and (ii) it will allow you to seek broader protection
internationally, should you decide to file in other jurisdictions.”
85.
On 9 February 2012 Mr Schwartz replied approving the draft
specifications and confirming that “we do offer a downloadable migration and
support application, which is key to our support and pricing strategy”. On 12
March 2012 Mr Schwartz sent a further email saying that all their future plans
fell into the categories of computer software and SaaS services. Ms Graybeal
replied the same day saying that Perkins Coie would file applications to
register SKYKICK
in Classes 9 and 42 with specifications essentially as
previously proposed the next day.
“The wording ‘computer software’ in the first clause of the identification of goods is indefinite and must be clarified because its purpose must be listed. See TMEP §1402.01. An identification for computer software must specify the purpose or function of the software. See TMEP §14.02.03(d). If the software is field-specific, the identification must also specify the field of use. Id. Clarification of the purpose, function, or field of use of the software is necessary for the USPTO to properly examine the application and make appropriate decision concerning possible conflicts between the applicant’s mark and other marks. See In re N.A.D. Inc., 57 USPQ2s 1872, 1874 (TTAB 2000).”
87.
As I understand it, SkyKick’s
applications subsequently proceeded to
registration with more restricted specifications.
88.
It appears from Ms Graybeal’s email of 10 August 2015 (as to which, see
below) that in December 2012 Perkins Coie gave SkyKick
estimates of the costs
of filing trade mark applications in Australia, Canada and the EU, but no
action was taken by
SkyKick
at that stage.
89.
Launch in the USA. CloudVisors, Inc changed its name to SkyKick,
Inc (the Second Defendant) on 29 March 2012.
SkyKick’s
website was launched in
the USA on 15 April 2012.
SkyKick’s
first beta Partner was signed up on 8 November
2012.
90.
Warnings about Sky.
On 20 September 2013 Michael Kophs (a
Microsoft employee) sent Mr Schwartz and Mr Richman an email saying:
“On another note, did you guys hear that UK based Sky
network
is coming after MS
SkyDrive
and making us change the name? I haven’t heard
anything internally on it, just the public rumors. Wouldn’t be surprise [sic]
if you guys got a letter too☺.”
Mr Kophs was referring to a claim
brought by Sky
against Microsoft in this Court for trade mark infringement by
use of the sign
SkyDrive.
In a judgment handed down on 28 June 2013, Asplin J
(as she then was) found in favour of
Sky:
see British
Sky
Broadcasting Group
plc
v
Microsoft Corp [2013] EWHC 1826 (Ch).
91.
Although he replied to the email later the same day, Mr Schwartz did not
respond to the point about Sky.
Mr Schwartz’s evidence was that he paid it
little attention.
92.
On 7 February 2014 Sunil Thambidurai (a former colleague of Mr Schwartz
at Microsoft) sent Mr Schwartz an email with the subject “Sky”
saying “Does
this mean you have to rename your company too?” followed by links to two
articles reporting on
Sky’s
successful infringement claim against Microsoft and
Microsoft’s subsequent change of the name
SkyDrive
to OneDrive.
93.
Mr Schwartz replied on 12 February 2014, saying “No I think we’re ok”.
Mr Schwartz’s evidence was that he could not recall clicking on the links and
again paid the matter little attention. He accepted, however, that by this
point he was aware of Sky,
that it had a reputation in the EU, that it had
trade marks that it sued on and that the facts related by Mr Kophs and Mr
Thambidurai were serious.
94.
Expansion into the EU. SkyKick
UK Ltd (the First Defendant) was
incorporated on 14 November 2014. At around the same time,
SkyKick
hired its
first employee in the UK (or elsewhere in the EU). As Mr Schwartz accepted, it
was at this point that
SkyKick
first started meaningfully targeting the EU, and
in particular the UK.
95.
Another warning about Sky.
On 10 May 2015 Marcelo Halpern of
Perkins Coie sent Mr Schwartz and Mr Richman an email with the subject “
SkyKick
Trademark in International markets” saying:
“Not sure if you guys have looked into trademark issues as
you continue SkyKick
continues to expand internationally, but one of my
colleagues just stumbled across this article that we thought might be of
interest to you. …”
Mr Halpern forwarded an email from
his colleague Neal Cohen which linked to a BBC article which Mr Cohen described
as being about “Skype’s
inability to trademark its name in Europe due to its similarity
to
Sky
(the broadcaster)”.
96.
Mr Schwartz’s evidence was again that he paid this email little
attention. Mr Schwartz replied to the email on 10 August 2015, copying in Ms
Graybeal, saying “Didn’t we do an international TM search when we TM’d SkyKick?”.
Ms Graybeal replied the same day explaining that Perkins Coie had not received
any instructions to proceed with international searching. She said that Perkins
Coie had provided an estimate for filing in Australia, Canada and the EU in
December 2012. Mr Schwartz replied later the same day asking for an updated
estimate, which Ms Graybeal supplied the next day. Mr Schwartz did not take the
matter further at that stage, however.
97.
SkyKick’s
products.
SkyKick
has three main products:
i)
Cloud Migration. This is the email migration product. Although it is
primarily a SaaS-based application, the majority of migrations involve end
users downloading a piece of software called the SkyKick
Outlook Assistant. The
mean number of seats per migration is around 12 and
SkyKick’s
revenue per seat
in the EU is about £17. Thus it is an affordable product, and promoted as such.
Cloud Migration accounted for approximately 60% of
SkyKick’s
revenue in 2017.
ii)
Cloud Backup. This is a SaaS-based product which provides cloud-based
wholesale backups of Customers’ Office 365 data. It can be provided by Partners
to their customers either under the Partner’s brand name or under the SkyKick
brand name. It is an inexpensive product: one Partner in the UK offers it for
£1.88 per month including
VAT.
Cloud Backup accounted for approximately 40% of
SkyKick’s
revenue in 2017. As I understand it, the product was launched more
recently than Cloud Migration, although the evidence does not disclose the
precise date.
iii) Cloud Manager. This is a SaaS-based product which provides Partners with a dashboard to administer cloud-based software applications used by their customers from a central portal. For example, it allows Partners to manage groups of end users, including their permissions to use particular applications or features. It is in its beta phase, meaning that it is available for use and testing by Partners, but it is not finalised and does not yet generate any revenue.
98.
Most of the evidence focussed on Cloud Migration. Without a product such
as Cloud Migration, there are many details that have to be gathered in order
successfully to migrate a business’s data as part of a transfer project. These
may include recording precisely what data are hosted where, on what types of
server, what structure those data (and the various
accounts) are held in, to
whom they belong, and how they are interlinked. These are aspects that IT
professionals would previously have to seek out for themselves. Often they
would draw up complex spreadsheets to hold details of exactly how the client
business had organised its IT infrastructure, and to try to map that onto an
infrastructure that was compatible with Office 365. In a typical SME with just
30 user accounts,
SkyKick’s
research showed that this project would take around
40 man-hours of a specialist IT technician, with tasks naturally prone to
mistakes, mistranscriptions and so on. Cloud Migration does much of this work
for the technician, with the effect of reducing that typical 40 hour migration
project to just 4 hours.
99.
SkyKick’s
products are all adjuncts to Office 365. At present, they have
no application outside that environment.
100.
Partners, Customers and End Users. SkyKick
do not sell their
products to anyone other than Microsoft Partners. This is an important part of
encouraging Partners to work with
SkyKick,
since Partners know that
SkyKick
will not compete with them. It is not possible even to access a trial of
SkyKick’s
products without a
valid
Microsoft Partner ID. Partners find
SkyKick
principally
via
word of mouth
via
Microsoft or from other Partners or through reading
articles in specialist blogs or attending Microsoft trade fairs.
101.
A survey (carried out before, and not for the purposes of, the litigation)
of SkyKick’s
target Partners in 2015 characterised them as:
“small business leaders who are highly cerebral, hardworking,
and discerning … highly experienced in both IT and business entrepreneurship
issues … immensely cynical towards marketers … thoroughly vet
potential
products or services using multiple channels and a small set of trusted
sources”.
102.
As discussed above, the Partners provide products and services to their
own customers (“Customers”). The Partners will typically deal with the
Customer’s IT personnel. In a migration, the email accounts of the Customer’s
ordinary employees (“End Users”, also referred to by SkyKick
as “seats”) will
be migrated.
103.
Although SkyKick
only sell to Partners, Mr Schwartz accepted that some
of
SkyKick’s
promotional activities were directed at Customers. Furthermore,
SkyKick
contracts directly with the Customer in every case. The contract deals
with
various
matters including
SkyKick’s
access to the Customer’s systems, the
Customer’s licence to use
SkyKick’s
software and limitations upon
SkyKick’s
liability.
104.
The scale of SkyKick’s
business in the EU.
SkyKick
now have six
employees in the UK, and have generated a total revenue of over $3 million.
SkyKick
have registered over 6,200 Partners in the EU, of whom just over 1,300 have
completed transactions. Those Partners have carried out over 4,100 migrations
in the EU, comprising the email accounts of over 121,000 End Users.
The proceedings
105.
Sky
sent
SkyKick
a letter before claim on 18 January 2016 and commenced
these proceedings on 23 May 2016. The proceedings have had a slightly unfortunate
procedural history, including an application by
SkyKick
for a pre-trial
reference to the Court of Justice of the European Union which was dismissed by
Birss J on 13 July 2017 (see
Sky
plc
v
SkyKick
UK Ltd [2017] EWHC 1769 (Ch), [2018] FSR 2), which accounts for the slight delay in the matter coming
on for trial.
106.
On 17 February 2016 SkyKick
applied to the EUIPO for cancellation of
each of
Sky’s
EU Trade Marks. All of these applications have subsequently been
abandoned.
107.
On 29 February 2016 SkyKick
filed an international trade mark
application designating the EU for the trade mark
SKYKICK,
but subsequently
withdrew the EU designation following an opposition brought by
Sky.
Third party SKY
formative marks
108.
SkyKick
contend that, because “
sky”
is a common English word, many
traders in English-speaking countries (and some in non-English-speaking
countries) legitimately wish to, and do, adopt and use
SKY
formative marks in a
wide range of fields of trade, including in particular IT-related fields. Much
of Mr Linneker’s evidence was directed to this issue. As noted above, he
exhibited the results of searches of public domain sources carried out by his
team under his supervision. There was little challenge to the accuracy of this
evidence, so far as it goes, as opposed to the conclusions and inferences to be
drawn from it. I would summarise the evidence as follows.
109.
First, there are over 1,000 trade marks which have been registered in
the UK or EU beginning with the word SKY.
Even if one limits the search to
classes 9 and 42, there are 112.
Sky
point out that registration is not
evidence of actual use of a trade mark, particularly given that some of the
registrations are rather old.
SkyKick
accept that, but nevertheless contend
that this evidence shows the desire of third parties to register, and by
inference to use, such marks.
110.
Secondly, there are 3,346 companies currently registered in England and
Wales with SKY
formative names. Again, it is common ground that this does not
establish use of those names, particularly since some of the companies may well
be dormant, but
SkyKick
contend that it again shows the desire of traders to
use such names.
111.
Thirdly, searches of the internet provide evidence of use of a large
number of SKY
formative marks in the EU by third parties, including:
SKYWORKS
(analogue semi-conductors);
SKYLINE
(3D imaging and modelling software);
SKYSCANNER
(online flight comparison and booking);
SKY
AIR TEAM (software
development);
SKYBOOK
AVIATION CLOUD (software for airlines and airports);
SKYLINE
(display and exhibit design and manufacture);
SKYFILE
(mail, fax, SMS
messaging);
SKYLYZE
(data analytics software);
SKYHIGH
(cloud security);
SKYWARE
(satellite communication and signal receiver equipment);
SKYLER
(financial software);
SKYBLUE
(web design and marketing);
SKYDIVE
TRIBE
(downloadable software for use by
skydivers);
SKYTEST
(aviation software);
SKY
HIGH CREATIVE (website design, brand creation and public relations);
SKYTECH
SOLUTIONS (secure data destruction and IT disposal);
SKYTECH
RESEARCH (satellite
hardware);
SKY
ANALYTICS (legal expenditure analytics and benchmarking);
SKY
KID (title of a series of
video
games);
SKYEDGE
(satellite tech);
SKYVENTURE
(hot air balloon adventures);
SKYSOFT
(IT solutions including data migration);
SKYTRONIC
(consumer electronics);
SKYDREAMS
(online market software
development);
SKYTEC
(consumer electronics);
SKYWARE
(software development);
SKYROAM
(software-based mobile connectivity);
SKYLANDERS
(title of a series of
computer games); and
SKYFISH
(online data storage).
112.
Ms Campbell gave evidence that, based on a review of the materials
exhibited by Mr Linneker, many of these third parties appeared to have little
or no presence in Sky’s
core markets; that
Sky
had entered into settlement
agreements with four of these third parties and was taking enforcement action
against three more; and that some were in fields (such as hot air ballooning
and legal expenditure analytics) which were remote from
Sky’s
interests.
113.
It is also fair to say that many of these third parties are small and/or
relatively recently established and/or in somewhat niche fields, but at least
one (SKYSCANNER)
is long established and well known and a number are
substantial concerns (for example,
Skyworks
Solutions Inc is publicly traded on
NASDAQ and has revenues exceeding $3 billion,
SkyHigh
Networks Inc was
valued
at $400 million in 2017 and Gilat Satellite Networks Inc, which uses
SKYEDGE,
has revenues exceeding $235 million). In the case of
SKYSCANNER,
Sky
have
entered into a settlement agreement; but that does alter the fact that
SKYSCANNER
would have been known to many consumers in the EU, and in particular
the UK, in November 2014.
Key legislative provisions
114.
At the dates when the applications for the Trade Marks were filed, the
legislation which governed what were then called Community trade marks, and are
now called EU trade marks, was Council Regulation 40/94/EC of 20 December 1993 on the Community trade mark.
This was subsequently replaced by Council Regulation 207/2009/EC of 26
February 2009, which has in turn
been amended by European Parliament and Council Regulation 2015/2424/EU of 16
December 2015 and then replaced by European Parliament and Council Regulation
2017/1001/EU of 14 June 2017 (“the Regulation”). Sky’s
infringement allegations
relate to periods covered by Regulation 207/2009, Regulation 2007/2009 as
amended by Regulation 2015/2424 and the Regulation. Save in two respects, there
is no material difference for present purposes between the relevant provisions
of Regulation 40/94 and their successors, although the numbering of the
articles has changed. There have been two amendments which are relevant,
however.
115. The key provisions of Regulation 40/94 for present purposes were as follows:
“Article 4
Signs of which a Community trade mark may consist
A Community trade mark may consist of any signs capable of being represented graphically, particularly words, including personal names, designs, letters, numerals, the shape of goods or of their packaging, provided that such signs are capable of distinguishing the goods or services of one undertaking from those of other undertakings.
Article 7
Absolute grounds for refusal
1. The following shall not be registered:
(a) signs which do not conform to the requirements of Article 4;
…
Article 9
Rights conferred by a Community trade mark
1. A Community trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:
…
(b) any sign where, because of its identity with or similarity to the Community trade mark and the identity or similarity of the goods or services covered by the Community trade mark and the sign, there exists a likelihood of confusion on the part of the public; the likelihood of confusion includes the likelihood of association between the sign and the trade mark;
(c) any sign which is identical with or similar to the Community trade mark in relation to goods or services which are not similar to those for which the Community trade mark is registered, where the latter has a reputation in the Community and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the Community trade mark.
…
Article 12
Limitation of the effects of a Community trade mark
A Community trade mark shall not entitle the proprietor to prohibit a third party from using in the course of trade:
(a) his own name or address;
…
provided he uses them in accordance with honest practices in industrial or commercial matters.
Article 15
Use of Community trade marks
1. If, within a period of five years following registration, the proprietor has not put the Community trade mark to genuine use in the Community in connection with the goods or services in respect of which it is registered, or if such use has been suspended during an uninterrupted period of five years, the Community trade mark shall be subject to the sanctions provided for in this Regulation, unless there are proper reasons for non-use.
…
Article 50
Grounds for revocation
1. The rights of the proprietor of the Community trade mark shall be declared to be revoked on application to the Office or on the basis of a counterclaim in infringement proceedings:
(a) if, within a continuous period of five years, the trade mark has not been put to genuine use in the Community in connection with the goods or services in respect of which it is registered, and there are no proper reasons for non-use; …
2. Where the grounds for revocation of rights exist in respect of only some of the goods or services for which the Community trade mark is registered, the rights of the proprietor shall be declared to be revoked in respect of those goods or services only.
Article 51
Absolute grounds for invalidity
1. A Community trade mark shall be declared invalid on application to the Office or on the basis of a counterclaim in infringement proceedings,
…
(b) where the applicant was acting in bad faith when he filed the application for the trade mark.
…
3. Where the ground for invalidity exists in respect of only some of the goods or services for which the Community trade mark is registered, the trade mark shall be declared invalid as regards those goods or services only.”
“Article 4
Signs of which an EU trade mark may consist
An EU trade mark may consist of any signs, in particular words, including personal names, or designs, letters, numerals, colours, the shape of goods or of the packaging of goods, or sounds, provided that such signs are capable of:
(a) distinguishing the goods or services of one undertaking from those of other undertakings; and
(b) being represented on the Register of European Union trade marks, (‘the Register’), in a manner which enables the competent authorities and the public to determine the clear and precise subject matter of the protection afforded to its proprietor.
Article 14
Limitation of the effects of an EU trade mark
1. An EU trade mark shall not entitle the proprietor to prohibit a third party from using, in the course of trade:
(a) the name or address of the third party, where that third party is a natural person;
…
2. Paragraph 1 shall only apply where the use made by the third party is in accordance with honest practices in industrial or commercial matters.”
“the sign is identical with, or similar to, the EU trade mark irrespective of whether it is used in relation to goods or services which are identical with, similar to, or not similar to, those for which the trade mark is registered, where the latter has a reputation in the Union and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the EU trade mark.”
119.
The provisions of Directive 89/104 listed in
paragraph 117 above were implemented in the UK by sections 1(1), 3(1)(a),(6),
10(2),(3), 11(2)(a), 46(1)(a) and 47(1) of the Trade Marks Act 1994. By
virtue
of Article 54(1) of the Directive, the UK has until 14 January 2019 to
amend section 1(1) of the 1994 Act so as to remove the requirement that a trade
mark be capable of graphical representation in accordance with Article 3 of the
Directive and to amend 11(2)(b) of the 1994 Act so as to restrict the
availability of the “own name” defence to natural persons in compliance with
Article 14(1) of the Directive. At present, the UK has not done so.
Relevant dates for assessment
The law
120.
The relevant date for the assessment of whether a trade mark was applied
for in bad faith is the date when the application was made: see Case C-529/07 Chocoladefabriken
Lindt & Sprungli AG v
Franz Hauswirth GmbH [2009] ECR I-4893 at [35].
It is not in dispute that, although the relevant date is the application date,
later evidence is relevant if it casts light backwards on the position as at
the application date: cf. Case C-259/02 La Mer Technology Inc
v
Laboratoires
Goemar SA [2004] ECR I-1159 at [31] and Case C-192/03 Alcon Inc
v
Office
for Harmonisation in the Internal Market [2004] ECR I-8993 at [41].
121.
The question whether the use of a sign infringes a trade mark pursuant
to Article 10(2)(a),(b) of the Directive falls to be assessed as at the date
that the use of the sign was commenced: see Case C-145/05 Levi Strauss &
Co v
Casucci SpA [2006] ECR I-3703. It is common ground that the same
approach applies to Article 10(2)(c) of the Directive and the corresponding
provisions of the Regulation.
The present case
122.
There is no dispute that the relevant dates for the assessment of
SkyKick’s
claim that
Sky
applied for the Trade Marks in bad faith range from 14
April 2003 to 20 October 2008.
123.
Nor is there any dispute that the relevant date for the assessment of
Sky’s
infringement claims is November 2014, when
SkyKick
started to target the
EU, and in particular the UK.
The Nice Agreement and Classification
124.
In order to address SkyKick’s
contentions with respect to the
validity
of the Trade Marks, it is first necessary put them into context by explaining
two areas of trade mark law. The first concerns the Nice Agreement and
Classification, and the legal frameworks governing the use of the Nice
Classification for Community/EU trade marks and for UK trade marks.
125.
Trade marks may be registered for any of the vast
range of goods and
services which are traded. For administrative reasons, in particular so as to
facilitate searching, it has long been the practice of trade mark registries
throughout the world to classify those goods and services into numbered
classes. Although the UK adopted a classification system in conjunction with
the first Trade Marks Act in 1875, the present system has its origins in an
international conference in London in 1934 when an internationally-agreed list
of classes was drawn up. This was adopted in the UK as Schedule IV to the Trade
Marks Rules 1938 made under section 40(1)(c) of the Trade Marks Act 1938.
The Nice Agreement
126.
In 1957 an international convention concerning the classification of
goods and services, the Nice Agreement Concerning the International
Classification of Goods and Services for the Purposes of the Registration of
Marks, was agreed. This came into force in 1961 and has subsequently been
revised or amended on three occasions, the current version
dating from 1979.
The Nice Agreement provides for the establishment and periodic revision of a
Classification consisting of: (i) a numbered list of classes (each of which includes
a “class heading” which describes the goods or services comprised in that
class) together with explanatory notes; and (ii) an alphabetical list of goods
and services with an indication of the class into which each of the goods or
services falls: see Article 1(2). The Nice Classification is based on that
drawn up at the London conference in 1934.
“Subject to the requirements prescribed by this Agreement, the effect of the Classification shall be that attributed to it by each country of the Special Union. In particular, the Classification shall not bind the countries of the Special Union in respect of either the evaluation of the extent of the protection afforded to any given mark or the recognition of service marks.”
The Nice Classification
129.
The Nice Classification is revised by a Committee of Experts appointed
under the Nice Agreement every five years. The 8th edition of the
Nice Classification entered into force on 1 January 2002. The 9th
edition entered into force on 1 January 2007. The 10th edition
entered into force on 1 January 2012. The 11th edition entered into
force on 1 January 2017. Recently, the Committee of Experts has adopted the
practice of promulgating amended versions
of the Nice Classification between
editions, which are referred to by reference to the year in which they come
into effect. Thus the 2016
version
of the 10th edition came into
force on 1 January 2016.
130.
The changes to the Nice Classification between editions or versions
can
be quite subtle. An example of this which is relevant to the present case is
that, in the 8th and 9th editions, the term “computer
software” did not appear in the class heading to Class 9, although the
explanatory note stated that Class 9 included “all computer programs and
software regardless of recording media or means of dissemination”, while in the
10th edition “computer software” was included in the class heading.
A more obvious change which is relevant to the present case is that in the 2016
edition of the 10th edition a considerable number of terms were
deleted from the class headings, and in particular the class headings to
Classes 6, 14, 16, 17, 18 and 20 (see further below).
131.
The terms used in the class headings vary
between relatively precise
ones (such as “cash registers” in Class 9) and much more open-textured ones
(such as “telecommunications” or “telecommunications services” in Class 38).
Legislative framework concerning the use of the Nice Classification for Community and EU trade marks
132. Articles 26 and 28 of Regulation 40/94, and of Regulation 207/2009, provided:
“Article 26
Conditions with which applications must comply
1. An application for a Community trade mark shall contain:
…
(c) a list of goods and services in respect of which the registration is requested;
…
3. An application for a Community trade mark must comply with the conditions laid down in the Implementing Regulation …
Article 28
Classification
Goods and services in respect of which Community trade marks are applied for shall be classified in conformity with the system specified in the Implementing Regulation.”
“Rule 2
List of goods and services
(1) The common classification referred to in Article 1 of the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended, shall be applied to the classification of the goods and services.
(2) The list of goods and services shall be worded in such a way as to indicate clearly the nature of the goods and services and to allow each item to be classified in only one class of the Nice Classification.
…”
“Article 33
Designation and classification of goods and services
1. Goods and services in respect of which trade mark registration is applied for shall be classified in conformity with the system of classification established by the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957 (‘the Nice Classification’).
2. The goods and services for which the protection of the trade mark is sought shall be identified by the applicant with sufficient clarity and precision to enable the competent authorities and economic operators, on that sole basis, to determine the extent of the protection sought.
3. For the purposes of paragraph 2, the general indications included in the class headings of the Nice Classification or other general terms may be used, provided that they comply with the requisite standards of clarity and precision set out in this Article.
4. The Office shall reject an application in respect of indications or terms which are unclear or imprecise, where the applicant does not suggest an acceptable wording within a period set by the Office to that effect.
5. The use of general terms, including the general indications of the class headings of the Nice Classification, shall be interpreted as including all the goods or services clearly covered by the literal meaning of the indication or term. The use of such terms or indications shall not be interpreted as comprising a claim to goods or services which cannot be so understood.
…
8. Proprietors of EU trade marks applied for before 22 June 2012 which are registered in respect of the entire heading of a Nice class may declare that their intention on the date of filing had been to seek protection in respect of goods or services beyond those covered by the literal meaning of the heading of that class, provided that the goods or services so designated are included in the alphabetical list for that class in the edition of the Nice Classification in force at the date of filing.
The declaration shall be filed at the Office by 24 September 2016, and shall indicate, in a clear, precise and specific manner, the goods and services, other than those clearly covered by the literal meaning of the indications of the class heading, originally covered by the proprietor's intention. The Office shall take appropriate measures to amend the Register accordingly. The possibility to make a declaration in accordance with the first subparagraph of this paragraph shall be without prejudice to the application of Article 18, Article 47(2), Article 58(1)(a), and Article 64(2).
EU trade marks for which no declaration is filed within the period referred to in the second subparagraph shall be deemed to extend, as from the expiry of that period, only to goods or services clearly covered by the literal meaning of the indications included in the heading of the relevant class.
…”
“Article 2
Content of the application
1. The application for an EU trade mark shall contain:
…
(c) a list of the goods or services for which the trade mark is to be registered, in accordance with Article 28(2) of Regulation (EC) No 207/2009. That list may be selected, in whole or in part, from a database of acceptable terms made available by the Office;
…”
Legislative framework concerning the use of the Nice Classification for UK trade marks
137. Section 34(1) of the 1994 Act provides:
“Goods and services shall be classified for the purposes of the registration of trade marks according to a prescribed system of classification.”
“(1) The prescribed system of classification for the purposes of the registration of trade marks is the Nice Classification.
(2) When
a trade mark is registered it shall be classified according to the version
of
the Nice Classification that had effect on the date of application for
registration.”
The IP TRANSLATOR case and its aftermath
140.
The second matter is which it is necessary to explain concerns the judgment
of the Grand Chamber of the CJEU in Case C-307/10 Chartered Institute of
Patent Attorneys v
Registrar of Trade Marks (IP TRANSLATOR)
[EU:C:2012:361], [2013] Bus LR 740 and its aftermath.
142. Paragraph III(2) of Communication 4/03 stated:
“It constitutes a proper specification of goods and services
in a [Community Trade Mark] application if the general indications or the whole
class headings provided for in the Nice Classification are used. The use of
these indications allows a proper classification and grouping. [OHIM] does not
object to the use of any of the general indications and class headings as being
too vague
or indefinite, contrary to the practice which is applied by some
national offices in the European Union and in third countries in respect of
some of the class headings and general indications.”
143. Paragraph IV(1) of Communication 4/03 stated:
“The 34 classes for goods and the 11 classes for services comprise the totality of all goods and services. As a consequence of this, the use of all the general indications listed in the class heading of a particular class constitutes a claim to all the goods or services falling within this particular class.”
“1. Is
it necessary for the various
goods or services covered by a trade mark
application to be identified with any, and if so what particular, degree of
clarity and precision?
2. Is
it permissible to use the general words of the class headings of the [Nice
Classification] for the purpose of identifying the various
goods or services
covered by a trade mark application?
3. Is it necessary or permissible for such use of the general words of the Class Headings of [the Nice Classification] to be interpreted in accordance with Communication No 4/03 ...?”
145. The CJEU answered these questions as follows:
“- Directive 2008/95/EC must be interpreted as meaning that it requires the goods and services for which the protection of the trade mark is sought to be identified by the applicant with sufficient clarity and precision to enable the competent authorities and economic operators, on that basis alone, to determine the extent of the protection conferred by the trade mark;
- Directive 2008/95 must be interpreted as meaning that it does not preclude the use of the general indications of the class headings of the Nice Classification to identify the goods and services for which the protection of the trade mark is sought, provided that such identification is sufficiently clear and precise;
- an applicant for a national trade mark who uses all the general indications of a particular class heading of the Nice Classification to identify the goods or services for which the protection of the trade mark is sought must specify whether its application for registration is intended to cover all the goods or services included in the alphabetical list of that class or only some of those goods or services. If the application concerns only some of those goods or services, the applicant is required to specify which of the goods or services in that class are intended to be covered.”
146. In the course of its judgment, the CJEU stated at [54]:
“… it must be observed that some of the general indications
in the class headings of the Nice Classification are, in themselves,
sufficiently clear and precise to allow the competent authorities to determine
the scope of the protection conferred by the trade mark, while others are not
such as to meet that requirement where they are too general and cover goods or
services which are too variable
to be compatible with the trade mark’s function
as an indication of origin.”
148.
On 20 November 2013 the Trade Mark Offices forming the European Trade
Mark and Design Network (“TMDN”) (namely, EUIPO, the Offices of the Member
States and the Norwegian Office) issued version
1.0 of a Common Communication on the Common Practice on the
General Indications of the Nice Class Headings as part of a Convergence
Programme initiated by EUIPO to harmonise practice. The Common Communication
explained that, having reviewed all the general indications in the Nice class
headings in order to determine which were sufficiently clear and precise, the
TMDN had concluded that the 11 general indications set out below were not clear
and precise, and consequently could not be accepted without further
specification, whereas the remaining general indications were considered
acceptable:
i) Class 6 – goods of common metal not included in other classes;
ii) Class 7 – machines;
iii) Class 14 – goods in precious metals or coated therewith;
iv) Class 16 – goods made from these materials [paper and cardboard];
v)
Class
17 – goods made from these materials [rubber, gutta-percha, gum, asbestos and
mica];
vi)
Class
18 – goods made of these materials [leather and imitations of leather];
vii)
Class
20 – goods (not included in other classes) of wood, cork, reed, cane, wicker,
horn, bone, ivory, whalebone, shell, amber, mother-of-pearl, meerschaum and
substitutes for all these materials, or of plastics;
viii)
Class
37 – repair;
ix) Class 37 – installation services;
x) Class 40 – treatment of materials; and
xi) Class 45 – personal and social services rendered by others to meet the needs of individuals.
“… the term ‘machines’ does not provide a clear indication of
what machines are covered. Machines can have different characteristics or
different purposes, they may require very
different levels of technical
capabilities and know-how to be produced and / or used, could be targeting
different consumers, be sold through different sales channels, and therefore
relate to different market sector.”
Similar reasons were given in relation to “repair” (Class 37), “installation services” (Class 37), “treatment of materials” (Class 40) and “personal and social services rendered by others to meet the needs of individuals” (Class 45).
150.
On 20 February 2014 the TMDN issued version
1.1 of the Common
Communication, but this only differed from
version
1.0 in setting out the
respective dates on which the participating Offices had implemented, or planned
to implement, the Common Practice.
152.
On 28 October 2015 the TMDN issued version
1.2 of the Common
Communication, concluding that just five of the general indications in the
class headings lacked clarity and precision:
i) Class 7 – machines;
ii) Class 37 – repair;
iii) Class 37 – installation services;
iv) Class 40 – treatment of materials; and
v)
style='font:7.0pt "Times New Roman"'>
Class 45 – personal and social services rendered by others to meet the
needs of individuals.
153.
The reason for this change was that the other six general indications
had been deleted from the class headings to Classes 6, 14, 16, 17, 18 and 20 in
the 2016 version
of the 10th edition of the Nice Classification.
Validity
of the Trade Marks:
clarity and precision of the specifications of goods and services
154.
SkyKick
contend that each of 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. This contention derives from the first
ruling in IP TRANSLATOR. Although that ruling concerned the
interpretation of Directive 2008/95, it is common ground that the Regulation
must be interpreted in the same way.
156.
Before turning to consider those issues, I should note that it is not in
dispute that, since all the applications for the Trade Marks were still pending
as at the date of the IP TRANSLATOR judgment, that judgment is
temporally applicable to them: cf. Case C-577/14 Brandconcern BV v
European Union
Intellectual Property Office [EU:C:2017:122] and Case C-501/15 European Union
Intellectual Property Office
v
Cactus SA [EU:C:2017:750], [2018] ETMR 4.
157.
Nor is it in dispute that, in the cases of EU352 and EU619, although the
applications were filed using the class headings as specifications, Sky
have
not filed any declaration under Article 33(8) of the Regulation, and
accordingly the specifications must now be deemed to extend only to goods and
services “clearly covered by the literal meaning of the indications included in
the heading of the relevant class”. (I must, however, return to
Sky’s
intention
when using the class headings at the time of the applications below.)
Can lack of clarity and precision of the specification be asserted as a ground of invalidity?
159.
In the case of an EU trade mark, Article 128(1) of the Regulation (ex
Article 100(1) of Regulation 207/2009, ex Article 96(1) of Regulation 40/94)
provides that a counterclaim for declaration of invalidity “may only be based
on the grounds for … invalidity mentioned in this Regulation”. The only ground
of invalidity relied on by SkyKick
is Article 59(1)(a) of the Regulation (ex
Article 52(1)(a) of Regulation 207/2009, ex Article 51(1)(a) of Regulation
40/94) in conjunction with Article 7(1)(a). Article 7(1)(a) provides that
“signs which do not conform to the requirements of Article 4” shall not be
registered. Article 4 governs the signs of which an EU trade mark may consist.
Although Article 4 was amended by Regulation 2015/2424, it still does not
contain any express requirement that the specification of goods and services in
an EU trade mark registration should be clear and precise.
161.
In Stitching BDO v
BDO Unibank Inc [2013] EWHC 418 (Ch), [2013] FSR 35 I held at [42]-[49] that lack of clarity and precision in the
specification of goods and services was not a ground of invalidity which could
be asserted against a trade mark after registration. In Total Ltd
v
YouView
TV Ltd [2014] EWHC 1963 (Ch), [2015] FSR 7 at
[48]-[55] Sales J (as he then was) concluded, however, that the contrary was
arguable and that the matter was not acte clair. Accordingly,
Sky
accept
that it is likely that this question will have to be referred to the CJEU at
some point.
Sky
contend, however, that it is not necessary to do so in the
present case because it is clear that the specifications of the Trade Marks are
not lacking in clarity or precision.
Are the specifications of the Trade Marks lacking in clarity or precision?
162.
SkyKick
contend that each of the parts of the specifications of the
Trade Marks relied upon by
Sky
for the purposes of their infringement claim
under Article 9(2)(b) of the Regulation/Article 10(2)(b) of the Directive (see
paragraph 6 above) lacks clarity and precision, except for “telecommunications
services” and “electronic mail services” in Class 38. In the case of
“telecommunications services” and “electronic mail services”,
SkyKick
contend
that, if these are interpreted so broadly as to include the services provided
by
SkyKick
as being identical, then they too lack clarity and precision.
163.
SkyKick’s
case can be exemplified by considering the first three
indications relied upon by
Sky,
namely “computer software”, “computer software
supplied from the Internet” and “computer software and telecoms apparatus to
enable connection to databases and the internet”. It is not necessary
separately to consider the other indications relied upon, because they all to a
greater or lesser extent give rise to similar points (including
“telecommunications services”, although “electronic mail services” is in my
view
less problematic than the others).
164.
So far as “computer software” is concerned, counsel for SkyKick
submitted
that this term lacked clarity and precision because it was hopelessly broad. In
support of this submission, he relied upon the reasoning of the TMDN in the
Common Communication in relation to “machines” (paragraph 149 above) and argued
that it was equally applicable to “computer software”.
165.
Counsel for SkyKick
also relied upon what Laddie J said
in Mercury Communications Ltd
v
Mercury Interactive (UK) Ltd
[1995] FSR 850 at 864-865:
“The defendant argues that on its present wording, the plaintiff’s registration creates a monopoly in the mark (and confusingly similar marks) when used on an enormous and enormously diffuse range of products, including products in which the plaintiff can have no legitimate interest. In the course of argument I put to [counsel for the plaintiff] that the registration of a mark for ‘computer software’ would cover any set of recorded digital instructions used to control any type of computer. It would cover not just the plaintiff’s type of products but games software, accounting software, software for designing genealogical tables, software used in the medical diagnostic field, software used for controlling the computers in satellites and the software used in the computers running the London Underground system. I think that in the end he accepted that some of these were so far removed from what his client marketed and had an interest in that perhaps a restriction on the scope of the registration to exclude some of the more esoteric products might be desirable.
In any event, whether that was accepted or
not, in my view
there is a strong argument that a registration of a mark simply
for ‘computer software’ will normally be too wide. In my
view
the defining
characteristic of a piece of computer software is not the medium on which it is
recorded, nor the fact that it controls a computer, nor the trade channels
through which it passes but the function it performs. A piece of software which
enables a computer to behave like a flight simulator is an entirely different
product to software which, say, enables a computer to optically character read
text or design a chemical factory. In my
view
it is thoroughly undesirable that
a trader who is interested in one limited area of computer software should, by
registration, obtain a statutory monopoly of indefinite duration covering all
types of software, including those which are far removed from his own area of
trading interest.”
166.
Finally, counsel for SkyKick
relied upon the US Patent and Trademark Office’s
Trademark Manual of Examining Procedure (“TMEP”), which states at §1402.03(d):
“Any identification of goods for computer programs must be sufficiently specific to permit determinations with respect to likelihood of confusion. The purpose of requiring specificity in identifying computer programs is to avoid the issuance of unnecessary refusals of registration under 15 U.S.C. §1052(d) where the actual goods of the parties are not related and there is no conflict in the marketplace. See In re Linkvest S.A., 24 USPQ2d 1716 (TTAB 1992). Due to the proliferation and degree of specialization of computer programs, broad specifications such as ‘computer programs in the field of medicine’ or ‘computer programs in the field of education’ will not be accepted, unless the particular function or purpose of the program in that field is indicated. For example, ‘computer programs for use in cancer diagnosis’ or ‘computer programs for use in teaching children to read’ would be acceptable.
Typically, indicating only the intended users, field, or industry will not be deemed sufficiently definite to identify the nature of a computer program. However, this does not mean that user, field, or industry indications can never be sufficient to specify the nature of the computer program adequately. For example, ‘downloadable geographical information system (GIS) software’ would be acceptable. Geographical information systems, also known in the industry as GIS, are well-defined computer applications that do not need further definition. ….
If an applicant asserts that the computer programs at issue serve a wide range of diverse purposes, the applicant must submit appropriate evidence and/or specimens to substantiate such a broad identification of goods. See 37 C.F.R. §2.61(b); TMEP §§1402.03(b)–(c).
Generally, an identification for ‘computer software’ will be acceptable as long as both the function/purpose and the field of use are set forth. However, specifying the field of use is not required when the identified software has a clear function and is not field-specific/content-specific. Further, some general wording is allowed. …”
It was this practice that the
examiner of SkyKick’s
US applications invoked when objecting to the term
“computer software” (see paragraph 86 above).
167.
As for “computer software supplied from the Internet”, counsel for
SkyKick
submitted that this term was equally lacking in clarity. It made no
difference that the software was supplied from the internet, because almost any
software could be supplied from the internet.
168.
Turning to “computer software and telecoms apparatus to enable
connection to databases and the Internet”, counsel for SkyKick
submitted that
this term was equally lacking in clarity. It made no difference that the software
or apparatus enable connections to databases and the internet, because most
software these days enabled connection to a database (which was in itself a
broad term) and/or the internet.
169.
Counsel for Sky
submitted that the term “computer software” was clear
and precise. He pointed out that the TMDN had concluded that it was
unobjectionable in the Common Communication, that it was a
very
common term in
specifications of both EU and national trade marks and that courts and
tribunals in Europe had often issued decisions (for example, in opposition
proceedings) in cases involving it. He also relied upon the observations of
Sales J in Total at [57]-[63] to the effect that it was inevitable that
terms used in specifications of goods and services would have some uncertainty
at the margins and that the terms in issue in that case, which included
“telecommunications services”, were sufficiently certain. He submitted that, as
with “telecommunications services”, it was immaterial that the term “computer
software” was of broad scope.
170.
Counsel for Sky
also submitted that, even if “computer software” was
unclear or imprecise because it was too broad, the second and third terms were
unobjectionable since they were more specific.
171.
In my view,
registration of a trade mark for “computer software” is too
broad for the reasons given by Laddie J in Mercury
v
Mercury, which
apply with even more force 23 years later now that computer software is even
more ubiquitous than it was in 1995. In short, registration of a trade mark for
“computer software” is 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. This is
clearly recognised by the USPTO’s practice quoted above.
172.
It does not necessarily follow, however, that the term “computer
software” is lacking in clarity and precision. Indeed, at first blush, it
appears to be a term whose meaning is reasonably clear and precise. Indeed, as
will appear, it is sufficiently clear and precise to make it possible to decide
whether SkyKick’s
goods are identical to it. On the other hand, I find it
difficult to see why the reasoning of the TMDN with respect to “machines” in
Class 7 is not equally applicable to “computer software”.
173.
For reasons that will appear, it could make a real difference to the
outcome of this case if SkyKick
are correct that the Trade Marks are partly
invalid because the relevant parts of the specifications are lacking in clarity
and precision. Accordingly, I have concluded that this is an issue of
interpretation of the Regulation and the Directive on which it is necessary to
seek guidance from the CJEU.
Conclusion
(1) 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 are lacking in sufficient clarity or precision to enable the competent authorities and third parties to determine the extent of the protection conferred by the trade mark?
(2) If the answer to (1) is yes, is a term such as “computer software” lacking in sufficient clarity or precision to enable the competent authorities and third parties to determine the extent of the protection conferred by the trade mark?
Validity
of the
Trade Marks: bad faith
175.
SkyKick
contend that the Trade Marks were registered in bad faith
because
Sky
did not intend to use the Trade Marks relation to all of the goods
and services specified in the respective specifications.
SkyKick
accept that
Sky
intended to use the Trade Marks in relation to some of the goods and
services specified. Nevertheless,
SkyKick’s
primary case is that the Trade
Marks are invalid in their entirety. In the alternative,
SkyKick’s
secondary
case is that the Trade Marks are invalid to the extent to that the
specifications cover goods and services in relation to which
Sky
had no
intention to use the trade marks.
Sky
dispute the factual basis for
SkyKick’s
contentions, but in any event contend that applying to register a trade mark
without intending to use it in relation to all of the goods and services
covered by the specification cannot constitute bad faith, and that, even if it
does, it cannot have the consequence that the registration is wholly (rather
than partly) invalid. These contentions raise important issues of European
trade mark law, most of which I considered at some length in Red Bull GmbH
v
Sun Mark Ltd [2012] EWHC 1929 (Ch), [2013] ETMR 53 at [113]-[163], but now
I must reconsider them afresh.
TRILLIUM
“8. The request is unfounded because, under European trade mark law, there is no ‘intention to use’ requirement, and thus the United Kingdom and CTM systems are different. Under UK law an application for registration of a trade mark is required to contain a statement to the effect that the mark is being used by the applicant, or with his consent, in relation to the relevant goods or services, or that he has a bona fide intention to so use the mark. Any registration applied for without such bona fide intention would be regarded, under Sections 32(3) and 3(6) of the UK Trade Marks Act 1994, as having been applied for in bad faith. In comparison with the CTM system, the UK 1994 Act differs completely because the use in commerce is not a prerequisite for a CTM registration. In general, and as a matter of principle, it is entirely left to the applicant to file a list of goods and services as long as he sees fit, i.e. a list exceeding his actual scope of business activity, and try later to expand his activities in order to be able to show genuine use of his CTM or face revocation under Article 50(1)(a) CTMR and other sanctions, respectively. It is exactly this ‘liberal’ concept which underlies Articles 15 and 50 CTMR because otherwise a grace period of five years would make little sense, if any.
9. There may be cases where an applicant files a list of goods and services where all or part of it does not have the slightest connection with his actual economic activity, and where it might even appear unimaginable that said applicant would ever be able to expand. If in such case the holder of the CTM immediately took action, based on ‘remote’ goods or services, against third parties, it might be worth considering Article 51(1)(b) CTMR. But this can be left undecided because it is not the case in the present proceedings before us. The CTM is registered, in class 9, for computer software, and the actual activities of the proprietor relate to software.”
Case law of the CJEU
182. The following passage in the judgment is of particular relevance for present purposes:
“41. … in order to determine whether there was bad faith, consideration must also be given to the applicant’s intention at the time when he files the application for registration.
42. It must be observed in that regard that, as the Advocate General states in point 58 of her Opinion, the applicant’s intention at the relevant time is a subjective factor which must be determined by reference to the objective circumstances of the particular case.
43. Accordingly, the intention to prevent a third party from marketing a product may, in certain circumstances, be an element of bad faith on the part of the applicant.
44. That is in particular the case when it becomes apparent, subsequently, that the applicant applied for registration of a sign as a Community trade mark without intending to use it, his sole objective being to prevent a third party from entering the market.
45. In such a case, the mark does not fulfil its essential function, namely that of ensuring that the consumer or end-user can identify the origin of the product or service concerned by allowing him to distinguish that product or service from those of different origin, without any confusion …”
184.
The CJEU has also considered the impact of bad faith in the context of Commission
Regulation 874/2004/EC of 28 April 2004 laying down public policy rules
concerning the implementation and functions of the .eu top level domain and the
principles governing registration in Case C-569/08 Internetportal und
Marketing GmbH v
Schlicht [2010] ECR I-4871. In that case Internetportal
and Marketing GmbH (“IMG”) registered 33 Swedish trade marks each consisting of
a generic term, but with the special character “&” before and after each
letter. One of the trade marks it registered was
&R&E&I&F&E&N& in respect of “safety belts” in Class
9. It did not intend to use the trade mark for safety belts. Subsequently it
registered the domain name www.reifen.eu during the sunrise period on the basis
of the trade mark by
virtue
of the fact that Article 11 of Regulation 874/2004
provided for special characters such as “&” to be ignored. Its intention in
registering the domain name was to operate an internet portal for trading in
tyres, “reifen” being German for “tyres”. It had applied to register 180
generic terms as domain names.
“With regard to the conditions under which registration of the trade mark was obtained, the national court must take into consideration, in particular:
– the intention not to use the trade mark in the market for which protection was sought;
– the presentation of the trade mark;
– the fact of having registered a large number of other trade marks corresponding to generic terms; and
– the fact of having registered the trade mark shortly before the beginning of phased registration of .eu top level domain names.
With regard to the conditions under which the .eu top level domain name was registered, the national court must take into consideration, in particular:
– the abusive use of special characters or punctuation marks, within the meaning of Article 11 of Regulation No 874/2004, for the purposes of applying the transcription rules laid down in that article;
– registration during the first part of the phased registration provided for in that regulation on the basis of a mark acquired in circumstances such as those in the main proceedings; and
– the fact of having applied for registration of a large number of domain names corresponding to generic terms.”
187. So far as the first of these factors was concerned, the Court held as follows:
“45. In that regard, consideration must first be given to the intention of the appellant in the main proceedings at the time when it filed the application for registration of that mark as a subjective factor which must be determined by reference to the objective circumstances of the particular case (see, to that effect, Chocoladefabriken Lindt & Sprüngli, paragraphs 41 and 42).
46. The fact of applying for registration of a mark without the intention of using it as such but for the sole purpose of subsequently registering, on the basis of the right to that mark, a .eu top level domain name during the first part of the phased registration provided for in Regulation No 874/2004 may, under certain circumstances, indicate conduct in bad faith within the meaning of Article 21(1)(b) of that regulation.
47. In the present instance, it is apparent from the order for reference that, although the appellant registered the word mark &R&E&I&F&E&N& in Sweden for safety belts, it actually intended to operate an internet portal for trading in tyres, which it intended to register.
48. Consequently, according to the national court’s findings, and as the appellant in the main proceedings itself admits, the latter had no intention of using the mark which it had thus registered for the goods covered by that registration.”
188.
This reasoning appears to support the view
that it is bad faith to apply
to register a trade mark without intending to use it in relation to the
specified goods and services.
189.
Case C-320/12 Malaysia Dairy Industries Pte. Ltd v
Ankenævnet for
Patenter og
Varemærker
[EU:C:2013:435], [2013] Bus LR 1106 adds
little to the Lindt case, but should be mentioned for completeness. The
CJEU confirmed that “bad faith” is an autonomous concept of European Union law
which must be given a uniform interpretation. In order to permit the conclusion
that the person making the application for registration of a trade mark is
acting in bad faith, it is necessary to take into consideration all the
relevant factors specific to the particular case which pertained at the time of
filing the application for registration. The fact that the person making that
application knows or should know that a third party is using a mark abroad at
the time of filing his application which is liable to be confused with the mark
whose registration has been applied for is not sufficient, in itself, to permit
the conclusion that the person making that application is acting in bad faith
within the meaning of that provision.
Case law of the General Court
191.
One of the first cases on bad faith in the General Court was Case
T-507/08 Psytech International Ltd v
Office for Harmonisation in the
Internal Market [2011] ECR II-165. The respondent had registered the trade
mark 16PF in classes 9, 16, 35, 41 and 42. The appellant applied for a
declaration of invalidity on
various
grounds, one of which was that the
application had been made in bad faith. The application was dismissed by the
Cancellation Division. Successive appeals by the appellant to the Second Board
of Appeal and the General Court of the European Union were dismissed. The
appellant advanced three arguments in support of its case on bad faith before
the General Court. The first of these was that “the number of goods and
services in respect of which the intervener applied for and obtained registration
is too large and that the intervener had no intention of using the mark at
issue for the entire list of goods and services in the application for
registration”. That argument was rejected by the General Court for the
following reasons:
“88. In
the present case it must be pointed out, first, that neither Regulation No
40/94 nor the case-law provides a basis that would enable the Court to find
that there is bad faith in view
of the size of the list of goods and services
in the application for registration …
89. In any event, an examination of the goods and services in respect of which the intervener applied for and obtained registration shows that they are precisely the kind of goods and services which it provides in the context of its commercial activities. The intervener filed its application in respect of the goods and services for which it was using the mark 16PF or for which it intended to do so and the specifications in the list are not too extensive in relation to its activities. Furthermore, on the basis of the material in the file, it may be stated that the mark 16PF is already widely used for a number of goods and services designated in the registration document.”
193.
Case T-33/11 Peeters Landbouwmachines BV v
Office for Harmonisation
in the Internal Market [EU:T:2012:77] was a case in which the applicant
alleged that the intervener had applied to register the trade mark BIGAB in bad
faith because the intervener’s sole intention was to prevent the applicant from
marketing agricultural goods under a
very
similar mark (BIGA). The General
Court upheld the rejection of this claim by the First Board of Appeal. Part of
the General Court’s reasoning was as follows:
“24. … it cannot be claimed that the intervener registered the mark at issue with no intention of using it and with the sole objective of preventing a third party from entering the market, since the goods have been marketed under that mark in a great many areas of the European Union since the date of that registration.”
25. In that connection, it should be noted that, as a rule, it is legitimate for an undertaking to seek registration of a mark, not only for the categories of goods and services which it markets at the time of filing the application, but also for other categories of goods and services which it intends to market in the future.
26. In the present case, it has not been shown in any way that in so far as the application for registration of the mark at issue concerned the goods in Class 7 – in particular, cranes – it was artificial and not commercially logical for the intervener. That is all the more so because it is not disputed that the goods in that class were marketed by the intervener, even if under another mark. Accordingly, the mere fact that the application for registration covered goods in Class 7, to which the goods marketed by the applicant belong, does not demonstrate that the application was motivated solely by the intervener’s intention of preventing the applicant from continuing to use the mark BIGA.”
195.
In Case T-136/11 Pelicantravel.com sro v
Office for Harmonisation in
the Internal Market [EU:T:2012:689] the intervener had registered a
figurative trade mark containing the word Pelikan as a Community trade mark in
respect of services in inter alia Classes 35 and 39. The applicant contended
that the intervener had applied to register the trade mark in bad faith. One of
the applicant’s arguments was that the length of the list of services in
Classes 35 and 39, together with the fact that the intervener had not shown use
of the trade mark in relation to those services, showed that it had acted in
bad faith. The General Court rejected this argument for the following reasons:
“54. As
regards the applicant’s argument that the range of proposed services in
Classes 35 and 39 is too wide, the Board of Appeal was correct in stating,
in paragraph 41 of the contested decision, that ‘the mere registration of a
large variety
of goods and services as such is a rather common practice of
companies trying to obtain a (Community) trade mark registration; it does not
involve conduct that departs from accepted principles of ethical behaviour or
honest commercial and business practices’. As a rule, it is legitimate for an
undertaking to seek registration of a mark, not only for the categories of
goods and services which it markets at the time of filing the application, but
also for other categories of goods and services which it intends to market in
the future (BIGAB, paragraph 25).
55. Furthermore, neither Regulation No 207/2009 nor the case-law provides any basis for making a finding of bad faith because of the length of the list of goods and services set out in the application for registration (… Psytech International …, paragraph 88). That argument must therefore be rejected.”
196. After referring to Lindt, the Court went on:
“58. Furthermore, in determining whether there was bad faith, it is not a matter of examining the use which has been made of a contested Community trade mark, but rather of assessing whether, at the time of filing the application for its registration, it was intended to make use of a Community trade mark.
60. Moreover, the applicant has not produced sufficient evidence to prove that Pelikan had no intention of using the contested Community trade mark; nor has the applicant demonstrated that Pelikan’s intention was to prevent a third party from entering the market.”
198.
In Case C-327/12 Simca Europe Ltd v
Office for Harmonisation
in the Internal Market [EU:T:2014:240] the applicant’s predecessor in title
Mr Wöhler had registered SIMCA as a Community trade mark in respect of goods in
Class 12. The intervener had marketed motor
vehicles
under that trade mark from
the 1930s to the late 1970s, the trade mark still had a residual reputation and
it was still protected by national registrations. Mr Wöhler had worked for the
intervener as a contractor and was aware of the history of the trade mark. Mr
Wöhler had marketed electric bicycles under the trade mark since at least
shortly after the application. The Board of Appeal held that Mr Wöhler had
applied to register the trade mark in bad faith because he had intended to
free-ride on the reputation of the trade mark, and the General Court dismissed
the applicant’s appeal. In that context the General Court stated:
“38. … as the Board of Appeal rightly stated …, it is apparent from the wording used in the judgment in Chocoladefabriken Lindt …, that the three factors set out … are only examples drawn from a number of factors which can be taken into account in order to decide whether the applicant was acting in bad faith at the time of filing the application (BIGAB …, paragraph 20).
39. It must therefore be held that, in the context of the overall analysis undertaken pursuant to Article 52(1)(b) of Regulation No 207/2009, account may also be taken of the origin of the word or the sign which forms the mark at issue and of the earlier use of that word or sign in business as a mark, in particular by competing undertakings, and of the commercial logic underlying the filing of the application for registration of that word or that sign as a Community trade mark.”
199.
In recognising that it is relevant to enquire into the applicant’s
commercial logic for filing its application, this reasoning again appears to
support the view
that applying without intent to use can amount to bad faith.
200.
In Case T‑82/14 Copernicus-Trademarks Ltd v
European Union
Intellectual Property Office [EU:T:2016:396], [2015] ETMR 36 the Fourth
Board of Appeal held that the applicant, which was represented by Mr A, had
applied to register the trade mark LUCEO in bad faith because it had applied
for the registration solely so as to be able to oppose the intervener’s
application for registration of the trade mark LUCEA LED. In support of that
conclusion it relied upon similar fact evidence concerning the filing practices
of companies represented by Mr A.
201. In its review of the law, the General Court stated:
“28. The concept of bad faith referred to in Article 52(1)(b) of Regulation No 207/2009 relates to a subjective motivation on the part of the trade mark applicant, namely a dishonest intention or other ‘sinister motive’. It involves conduct which departs from accepted principles of ethical behaviour or honest commercial and business practices (see, to that effect, … BIGAB …, paragraphs 35 to 38, and the Opinion of Advocate General Sharpston in Chocoladefabriken Lindt …, paragraph 60).
29. In order to assess whether a depositor is acting in bad faith, it is necessary inter alia to examine whether he intends to use the mark applied for. In that context, it should be noted that the essential function of a trade mark is to ensure that the consumer or end-user can identify the origin of the product or service concerned by allowing him to distinguish that product or service from those of different origin, without any confusion (… Chocoladefabriken Lindt …, paragraph 45).
30. The intention to prevent the marketing of a product
may, in certain circumstances, be an element of bad faith on the part of the
applicant. That is in particular the case when it becomes apparent,
subsequently, that the latter applied for registration of a European Union
trade mark without intending to use it, solely with a view
to preventing a
third party from entering the market (… Chocoladefabriken Lindt …, paragraphs 43
and 44, and Simca Europe …, paragraph 37).
31. The intention of the applicant at the relevant time is a subjective factor which must be assessed by taking into consideration all the relevant factors specific to the particular case which pertained at the time of filing the application for registration of a sign as a European Union trade mark. Those grounds are normally established by reference to objective criteria, including, in particular, the commercial logic underlying the filing of the application for registration (see, to that effect, … Chocoladefabriken Lindt …, paragraphs 37, 42 and 53).
32. In the context of the overall analysis undertaken pursuant to Article 52(1)(b) of Regulation No 207/2009, account may also be taken of the origin of the contested sign and its use since its creation, the commercial logic underlying the filing of the application for registration of that sign as a European Union trade mark, and the chronology of events leading up to that filing (see, to that effect, … BIGAB …, paragraphs 21 to 23).
33. Where the applicant for a declaration of invalidity seeks to rely on that ground, it is for that party to prove the circumstances which substantiate a finding that the European Union trade mark proprietor had been acting in bad faith when it filed the application for registration of that mark (judgment of 11 July 2013 in GRUPPO SALINI, T‑321/10, EU:T:2013:372, paragraph 18).”
“48. … as is apparent from the Board of Appeal’s findings, Mr A. submitted chains of applications for registration of national trade marks, which were filed every six months, alternately in Germany and in Austria, just before the expiry of the six-month period of reflection in order to claim priority for a European Union trade mark in accordance with Article 29(1) of Regulation No 207/2009. Those applications were successively cancelled due to non-payment of registration fees and were therefore not examined by the national trade mark offices.
49. Such conduct cannot be considered to be legitimate business activity, but must be considered to be contrary to the objectives of Regulation No 207/2009.
50. As the Board of Appeal correctly stated, Article 29(1) of Regulation No 207/2009 provides that the person filing an application for registration of a national trade mark enjoys a six-month period of reflection to decide whether he wants also to submit an application for registration of a European Union trade mark for that mark and for goods and services identical to those in respect of which that mark is filed or contained within the latter. For its part, Article 51(1)(a) of that regulation provides that the proprietor of a European Union trade mark is to be declared to be revoked on application to EUIPO or on the basis of a counterclaim in infringement proceedings if, within a continuous period of five years, the trade mark has not been put to genuine use in the European Union in connection with the goods or services in respect of which it is registered, and there are no proper reasons for the non-use.
51. It must be noted that the successive chain of applications for registration of national trade marks for the same sign in respect of goods and services covered by classes which are at least partially identical seeks to grant Mr A. a blocking position. When a third party files an application for registration of an identical or similar European Union trade mark, Mr A. applies for registration of a European Union trade mark, claims priority for it by relying on the last link of the chain of applications for registration of national trade marks and brings opposition proceedings on the basis of that application for a European Union trade mark. The successive chain of applications for registration of national trade marks is designed therefore to grant him a blocking position for a period exceeding the six-month period of reflection provided for by Article 29(1) of Regulation No 207/2009 and even the five-year grace period provided for by Article 51(1)(a) of that regulation.
52. Therefore, it must be noted that not only the filing strategy practiced by Mr A. is incompatible with the objectives pursued by Regulation No 207/2009, but that it is not unlike the cases of ‘abuse of law’, which are characterised by circumstances in which, first, despite formal observance of the conditions laid down by European Union rules, the purpose of those rules has not been achieved, and, secondly, there exists an intention to obtain an advantage from those rules by creating artificially the conditions laid down for obtaining it (judgments of 14 December 2000 in Emsland-Stärke, C‑110/99, EU:C:2000:695, paragraphs 52 and 53, and of 21 July 2005 in Eichsfelder Schlachtbetrieb, C‑515/03, EU:C:2005:491, paragraph 39).”
203.
It can be seen from this reasoning that the General Court considered
that conduct which was not legitimate business activity, but contrary to the
objectives of Regulation 207/2009, amounted to bad faith, because it was akin
to abuse of the law. Although there were additional factors present in that
case, this reasoning appears to support the view
that filing a trade mark
without intending to use it in relation to the specified goods and services
amounts to bad faith. I note that an appeal against the General Court’s
decision was dismissed by the CJEU by reasoned order as manifestly
inadmissible: Case C-101/17
Verus
EOOD
v
European Union Intellectual
Property Office [EU:C:2017:979].
204.
In Case T-132/16 PayPal, Inc. v
European Union Intellectual Property
Office [EU:T:2017:316], [2017] ETMR 30 the intervener had registered
VENMO
as a Community trade mark in respect of goods and services in Classes 9 and 36.
The applicant contended that the intervener had applied to registered the trade
mark in bad faith. The Cancellation Division concluded that the intervener had
acted in bad faith, but the Fifth Board of Appeal allowed the intervener’s
appeal. The General Court set aside the Board of Appeal’s decision as
containing a number of errors, one of which the General Court described as
follows:
“63. ….
the Board of Appeal accepted that the evidence did not establish the
intervener’s intention to use the VENMO
mark genuinely. In that regard, it nevertheless
stressed that, under the EU trade mark system, applicants were not under an
obligation to use the trade mark immediately after registration, but enjoyed a
five-year grace period.
64. However, while the five-year grace period enjoyed by all registered EU trade marks, laid down in Regulation No 207/2009, had not yet expired on the date of adoption of the Board of Appeal’s decision, it follows from the abovementioned case-law that the intention to prevent a third party from marketing a product may, in certain circumstances, be an element of bad faith on the part of applicant, when it becomes apparent, subsequently, that the applicant applied for registration of a sign as an EU trade mark without intending to use it (… Chocoladefabriken Lindt & Sprüngli …, paragraphs 43 and 44, and … BIGAB … , paragraph 24).
65. In that regard, the intervener conceded at the hearing that it had never used the mark at issue, neither before the filing of the application for registration of the mark applied for, nor after it.”
206.
In Case T-343/14 Cipriani v
European Union Intellectual Property
Office [EU:T:2017:458] the intervener had registered the trade mark
CIPRIANI in respect of goods and services in Classes 16, 35 and 42. The
applicant contended that the application had been made in faith. The
Cancellation Division dismissed the applicant’s application, and the Fourth
Board of Appeal and the General Court dismissed the applicant’s appeals. In its
judgment the General Court said:
“46. It is true that the applicant submits that the intervener’s predecessor in title, which operates only in the hotel sector, acted in bad faith to the extent that it filed the contested mark without intending to use it for services other than hotel services, in particular for independent restaurant services. That argument made by the applicant must however be rejected. It must be observed, as the intervener points out, that it is common ground that, at the relevant date, the intervener’s predecessor in title offered restaurant services to residents of the hotel but also to other customers. Consequently, the facts of the case do not show that, at the relevant date, the predecessor in title did not intend to use the contested mark for the restaurant services in respect of which registration was sought. Furthermore, the applicant has not produced any evidence in support of his allegation that the sole intention of the intervener’s predecessor in title was to hinder his activity in the independent restaurant sector.
47. Finally it cannot be deduced from the fact that the intervener’s predecessor in title applied for registration for the services within Class 42, but also for goods and services covered by Classes 16 and 35 respectively, that it intended to pursue an objective other than that of a commercial and foreseeable development of its activities.”
The UK legislative framework
“The application [for registration of a trade mark] shall state that the trade mark is being used, by the applicant or with his consent, in relation to those goods or services [sc. the goods or services in relation to which it is sought to register the trade mark], or that he has a bona fide intention that it should be so used.”
Case law of UK courts and tribunals
210.
Although it was not a case about intention to use, it is appropriate to
begin by quoting the statement of Lindsay J in Gromax Plasticulture Ltd v
Don & Low Nonwovens Ltd [1999] RPC 367 at 379 that bad faith “includes
dishonesty and … some dealings which fall short of the standards of acceptable
commercial behaviour observed by reasonable and experienced men in the
particular area being examined” because it has been widely quoted subsequently
in both domestic and some European case law.
212.
In Decon Laboratories Ltd v
Fred Baker Scientific Ltd [2001] RPC 17 Pumfrey J rejected a claim that the claimant had filed its Community trade
mark in bad faith in so far as the specification extended beyond certain goods,
saying at [35] that it was “improbable (but not impossible) that a decision as
to the width of a specification of goods would lack good faith”.
214.
In Knoll AG’s Trade Mark [2003] RPC 10 the defendant had
registered its international trade mark in respect of inter alia “pharmaceutical
preparations and substances” and “dietetic substances adapted for human use” in
Class 5 as well as goods and services in Classes 16 and 41. The claimant
contended that the application had been made in bad faith in so far as the
specification extended beyond pharmaceutical preparations and substances for
the treatment of obesity. The defendant’s evidence was that it intended to use
the mark in relation to other goods and services “if such a decision was
commercially viable
in the future”. Neuberger J held that the attack on the key
parts of the Class 5 specification did not have a real prospect of success,
whereas the attack on the remainder of the registration did. He said that it
might be arguable that section 32(3) was inconsistent with the Directive.
216.
In 32Red plc v
WHG (International) Ltd [2012] EWCA Civ 19, [2012] ETMR 14 the defendants alleged that the claimant 32Red had registered the
number 32 as a UK trade mark without any intention to use it and in order to
prevent the defendants from using it. The Court of Appeal upheld the judge’s
conclusion that the claimant had not acted in bad faith as it had a sufficient
intention to use 32 on the basis that the claimant regarded 32 as “part and
parcel of our identity” and it was possible that claimant would make use of 32
in the future.
218.
In Total the claimant had registered its trade mark YOUR VIEW
in
respect of
various
goods and services in Classes 9, 35 and 38. The defendant
alleged that the claimant had made the application in bad faith since it had
had no intention to use the trade mark. The claimant’s witness accepted that it
had had no positive intention to use the trade mark in relation to certain
goods and services covered by the specification, although it had not ruled out
doing so. Sales J held that the claimant had not acted in bad faith since the
specification was properly related to the area in which it proposed to use the
trade mark and allowed legitimate commercial flexibility for future adaptation
by the claimant to the market and competitive environment in that area. He said
that it might be arguable that section 32(3) is inconsistent with the
Directive.
219.
In Jaguar Land Rover Ltd v
Bombadier Recreational Products Inc [2016] EWHC 3266 (Ch), [2017] FSR 20 the claimant had registered the trade mark
DEFENDER as an EU trade mark for “land
vehicles,
motor
vehicles,
motor land
vehicles”
in Class 12. The defendant alleged that the claimant had made the
application in bad faith since it had not intended to use the trade mark for
all of the goods covered by the specification, but only in relation to “cars”.
Nugee J held, relying upon Psytech, that that could not as a matter of
law constitute bad faith, but went on to hold that, even if that was wrong, the
allegation was untenable because the claimant had in fact used the trade mark
on a wider of range of
vehicles
than “cars” and therefore it was unarguable
that it should have confined its specification to “cars” if acting in good
faith. It should be noted that the latest decision of the General Court cited
in the decision is Peeters.
220.
In HTC Corp v
One Max Ltd (O/486/17) the applicant, which had
been dormant for a long period, applied to register UK two trade marks
consisting essentially of the words ONE MAX in relation to goods and services
in Classes 9 and 42, the specification of the second of which included mobile
phones and tablet computers, after having learned that the opponent planned to
launch its HTC One Max product. Daniel Alexander QC sitting as the Appointed
Person upheld the hearing officer’s conclusion that the applicant had acted in
bad faith. There was a
very
considerable mismatch between the goods and
services in respect of which the marks had been applied for and anything which the
applicant had done or said it was proposing to do, the purported justifications
for registration of the trade marks were flimsy as regards both timing and
scope and the evidence justified the inference that the applicant had intended
to block the opponent.
221. In his decision Mr Alexander said:
“21. … it
is necessary to give an applicant for a trade mark very
considerable latitude
before treating an application as filed in bad faith on the basis that the
applicant either did not have a sufficiently specific intention at the time of
the application to use the mark in respect of all of the goods or services for
which application was made or that the applicant was staking a claim contrary
to the interests of the opponent and was intended to prevent the opponent from
using its own mark. Moreover, in many cases, specifications are drafted by
trade mark attorneys who should not have to enquire in meticulous detail about
an applicant’s precise business plans before putting forward a specification
that bears a reasonable relationship to the business the applicant is already
in or has some prospect of entering in the future.
22. … it is therefore appropriate for the relevant tribunal to consider, in particular, in any case where bad faith is alleged whether, at the date of the application, having regard to the chronology and all the circumstances, the applicant had commercial reason to register the mark at all or to register it for the goods or services applied for on the basis of an arguable claim to legitimate protection of its actual or potentially extended future business under the mark.”
222.
In Paper Stacked Ltd v
CKL Holdings NV (O/036/18) the opponent
adduced evidence which it contended showed that: (i) the sole director of the
applicant, Mr Gleissner, owned a large international network of companies
through which he had acquired a wide portfolio of trade marks; (ii) the only
evidence of use of these marks was in legal proceedings in order to oppose or
cancel third party trade marks and/or to acquire domain names; (iii) the instant
application to register the name ALEXANDER formed part of a pattern of
behaviour whereby applications were made to register trade marks consisting of
common words which were likely to come into conflict with the trade marks of
third parties; and (iv) this was part of a wider strategy to register multiple
trade marks and companies in numerous jurisdictions in order to gain commercial
benefit from blocking the use of identical or similar trade marks by third
parties and/or acquiring domain names with commercial
value.
The applicant
filed no evidence to controvert this evidence. Geoffrey Hobbs QC sitting as the
Appointed Person upheld the hearing officer’s conclusion that the application
had been made in bad faith because it was part of a blocking strategy and
because the applicant had no intention to use the trade mark in accordance with
its essential function.
223. In his decision Mr Hobbs observed:
“21. The line which separates legitimate self-interest from bad faith can only be crossed if the applicant has sought to acquire rights of control over the use of the sign graphically represented in his application for registration in an improper manner or for an improper purpose. I accept that the provisions of s.32(3) of the Act should not be interpreted and applied so as to establish a more onerous requirement for use than that which is substantively imposed and regulated by the provisions of the legislative scheme relating to revocation of trade mark registrations for non-use.
22. However, that does not detract from the proposition that a declaration made pursuant to the requirement of s.32(3) can be false by reason of the absence of any bona fide intention to use a mark, with that in fact being indicative or symptomatic of the relevant mark having been put forward for registration in relation to goods or services of the kind specified in an improper manner or for an improper purpose, such as to justify refusal of the relevant application for registration on the ground of bad faith.”
Summary of the present state of the law on lack of intent to use
224. I draw the following conclusions from this review of the case law.
229.
Neither side contended that the law on these points was acte clair,
and in my judgment they were right not to do so. As counsel for Sky
submitted,
however, it does not necessarily follow that questions should be referred to
the CJEU. That depends on whether
SkyKick’s
case is factually well-founded.
Before turning to consider the facts, however, I must first consider a
distinct, although related, issue of law.
Extent of invalidity
231.
In Case T-321/10 SA.PAR. Srl v
Office for Harmonisation in the
Internal Market [EU:T:2013:372] the applicant registered the trade mark
GRUPPO SALINI in respect of services in Classes 36, 37 and 42. The intervener
applied for a declaration of invalidity relying both upon relative grounds and
upon bad faith. The First Board of Appeal found that there was a likelihood of
confusion in relation to some services, but others. The Board of Appeal also
found, however, that the applicant had applied to register the trade mark in
bad faith. The basis for that finding was that the applicant had a substantial
shareholding in the intervener and its directors sat on the intervener’s board,
and thus the applicant must have been aware of the intervener’s use of the sign
SALINI, and that a dispute was pending between the parties. The General Court
dismissed the applicant’s appeal in relation to bad faith, and therefore held
that it was unnecessary to consider the applicant’s other grounds of appeal. In
that context the General Court stated at [48]:
“As OHIM rightly states, the existence of bad faith at the time the application for registration is filed entails of itself the nullity in its entirety of the mark at issue.”
232.
Counsel for SkyKick
relied upon this as a correct statement of the law.
Counsel for
Sky
submitted that it was in common law terms obiter since it was
not necessary for the decision and that it was in any event simply wrong. As he
pointed out, the General Court made no reference in its decision to Article
52(3) of Regulation 207/2009 (ex Article 51(3) of Regulation 40/94, now Article
59(3) of the Regulation), which expressly provides for partial invalidity on
absolute grounds. As he also pointed out, courts and tribunals in the UK have
consistently proceeded on the basis that a trade mark may be held to be partly
valid
and partly invalid as a consequence of a finding of bad faith, although
the contrary does not appear to have argued before now.
“When bad faith of the EUTM owner is established, the whole EUTM is declared invalid, even for goods and services that are unrelated to those protected by the invalidity applicant’s mark. The only exception is where the applicant has directed its invalidity application against only some of the goods and services covered by the contested EUTM, in which case a finding of bad faith will invalidate the EUTM only for the goods and services that have been contested.
For example, in its decision R 219/2009-1 (GRUPPO SALINI / SALINI), the Board of Appeal concluded that bad faith had been proven and declared the contested EUTM invalid in its entirety, that is to say, also for services (insurance, financial and monetary services in Class 36 and services related to software and hardware in Class 42) that were dissimilar to the invalidity applicant’s building, maintenance and installation services in Class 37.
The General Court confirmed the Board of Appeal’s decision and stated that a positive finding of bad faith at the time of filing the contested EUTM could only lead to the invalidity of the EUTM in its entirety (judgment of 11/07/2013, T-321/10, Gruppo Salini, EU:T:2013:372, §48).
Whereas the Court did not expand on the reasons for this
conclusion, it can be safely inferred that it took the view
that the protection
of the general interest in business and commercial matters being conducted
honestly justifies invalidating an EUTM also for goods/services that are
dissimilar to the invalidity applicant’s ones and do not even belong to an
adjacent or neighbouring market.
Therefore, it seems only logical that the invalidity, once declared, should extend to all the goods and/or services covered by the contested EUTM, even those that in a pure Article 8(1)(b) EUTMR scenario would be found to be dissimilar.”
234.
In those circumstances, although it is my view
that counsel for
Sky
is
correct and that a trade mark may be declared to be partly invalid if the
application was made partly in bad faith, I do not consider that that
conclusion can be said to be acte clair.
The facts in the present case
235.
It will be appreciated from what I have said already that there is a
potential distinction in the present case between Sky’s
four EU Trade Marks and
the UK Trade Mark. In the case of the UK Trade Mark,
Sky
plc made a declaration
of intention to use as required by section 32(3) of the 1994 Act. In the case
of the EU Trade Marks,
Sky
AG made no such declaration since none was required.
237.
Sky
accept that it was their intention, when filing EU352 and EU619
using the class headings as specifications, to cover all of the goods and
services in the relevant classes even though those applications were filed
before Communication 4/03. Furthermore,
Sky
accept that they had the same
intention when filing the other Trade Marks. Although Mr Tansey did not know, I
consider that it is obvious that the reason why
Sky
included long and detailed
lists of goods and services in the specifications for EU112, EU992 and UK604
was that, by the dates those applications were filed, the
Sky
IP Legal Team
appreciated that there was a risk that the “class headings covers all goods and
services” approach articulated in Communication 4/03 was legally impermissible.
The question had been much discussed by trade mark lawyers in the UK even
before Mr Hobbs made the reference in IP TRANSLATOR on 27 May 2010.
238.
As I have explained, SkyKick
contend that, at the dates of filing the
applications for the Trade Marks,
Sky
had no intention use them in relation to
all of the specified goods and services.
SkyKick
accept that
Sky
intended to
use the Trade Marks in relation to some of those goods and services, in
particular goods and services relating to television broadcasting, telephony
and broadband provision, but contend that
Sky
deliberately and unjustifiably
framed the specifications much more broadly.
239.
Sky
accept that, in the event, they have not made use of the Trade Marks
in relation to all of the specified goods and services.
Sky
contend, however,
that they had a reasonable commercial rationale for seeking a broad scope of
protection for the Trade Marks given that the
SKY
brand was (and remains) a key
asset of the business.
Sky
also contend that, even if they made an error of
judgment in framing the specifications more broadly than was objectively
reasonable, that cannot amount to bad faith. In this regard,
Sky
rely upon the
well-established principles that the burden of proving bad faith lies on
SkyKick,
that bad faith is a serious allegation and that it cannot inferred
from facts which are equally consistent with good faith.
240.
In seeking to resolve these factual issues, the starting point is that
Sky
have not disclosed any contemporaneous documents setting out, let alone
explaining or justifying, their filing strategy, and in particular their
reasons for seeking such broad protection, at the relevant dates.
Sky’s
evidence does not explain whether this is because the strategy was never
recorded in any document or whether it was recorded in documents which have
subsequently been lost or destroyed or whether it was recorded in documents in
respect of which
Sky
claims privilege. Whichever is the correct explanation, it
would be wrong to draw an inference adverse to
Sky
from the absence of such
documents. Nevertheless, the absence of such documents means that it is
necessary to look elsewhere for evidence as to
Sky’s
intentions.
241.
The next point is that, as explained above, no one from the Sky
IP Legal
Team gave evidence as to
Sky’s
filing strategy, and in particular their reasons
for seeking such broad protection, at the relevant dates. The only witness who
gave evidence as to
Sky’s
intentions was Mr Tansey. Mr Tansey’s evidence, however,
was that he took advice from the
Sky
IP Legal Team, with whom he had regular
(approximately quarterly) review meetings, with additional meetings on an ad
hoc basis to discuss particular cases.
242.
Mr Tansey explained that the Sky
IP Legal Team, which formed part of
Sky’s
wider Legal & Business Affairs department, was responsible for IP
legal issues across the business and interacted with different business teams
within
Sky
on a daily basis. As a result, the
Sky
IP Legal Team had a good
awareness of new products and services that were in development or being
considered for development.
243. Mr Tansey also explained that:
“… the Sky
IP Legal Team were the legal experts on IP
protection and ultimately it was their job to use their expertise when it came
to the specifics of protecting
Sky’s
brands. Accordingly, having taken on board
upstream inputs from across the business (including from me), the
Sky
IP Legal
Team took the lead, applying their expert judgment, in preparing the detailed
description of goods and services.”
244.
Mr Tansey’s evidence was that EU112 was filed at a time of “particularly
prolific expansion” for Sky
and that many of the goods and services covered by
EU992 and UK604, but not by EU112, reflected products, initiatives and plans
that he was involved in or aware of. He acknowledged, however, that:
“… I cannot marry up every single article or service in the
2008 filings (or indeed the 2006 filing) with a Sky
product or initiative from
the filing date of the trade mark in issue. As I have already explained …, that
level of detail was appropriately left to the
Sky
IP Legal Team given its
breadth of knowledge of
Sky’s
business (and therefore its needs) and their
expertise in framing trade mark specifications.”
“35. I
do not recall at any stage during the time when I was responsible for branding
(and the principal point of contact with the Sky
IP Legal Team in relation to
brand protection) any discussion about applying for trade marks with the
intention of blocking third parties from trading legitimately whether in
relation to cloud computing services or otherwise. In fact the opposite was the
case - trade mark protection was sought in order to protect
Sky
and one of our
core assets i.e. our brands.
36. I
was aware that a comprehensive list of goods and services was a feature of many
of Sky’s
trade mark applications, and that our house mark (i.e.
SKY)
in
particular encompassed a diverse range of goods and services. However, there
were sound commercial reasons for having broad trade mark coverage, especially
for our house mark, in particular to ensure that the applications covered both
actual use of the brand as at the date of filing and potential future use. Given
that (as I understood) it was not necessary to show current use as a
prerequisite to securing trade nark protection (at least not in the UK or the
EU more broadly), there was no commercial sense in foregoing protection for
prospective use of the
SKY
brand at the date of the trade mark application
37. I
would make three further points. First, as far as I am aware, and was during
the Relevant Period, it is perfectly legitimate to apply for broad trade mark
protection. Trade mark Offices (notably in the UK and EU, where there is no
requirement to show actual use of a mark at the filing date) accepted Sky’s
trade mark application for such trade mark specifications. I was aware from
discussions with Mr MacLennan during the Relevant Period that it was normal and
legitimate to include within a trade mark application most of if not all the
goods or services in a particular class. If at any stage I had learnt that
filing for trade marks with broad specifications (including all the general
items in a class) was improper I would have ensured that our practice changed
and fell into line with the appropriate rules. Second, as I recall
Sky’s
usual
practice during the Relevant Period was to apply for both general descriptions
(for example ‘entertainment services’) followed by a more granular list of
sub-categories (for example in the context of entertainment services,
video
on
demand services to the production of TV programme). Whilst this may have led to
lengthy trade mark specifications I understand that it had the benefits of
ensuring clarity for
Sky
(and indeed for third parties) as regards the scope of
protections. Again, as far as I was aware during the Relevant Period, filing
for a combination of broad and specific terms was normal, legitimate and
lawful. Third, I understand that
SkyKick
takes particular objection to
software related goods and services within
Sky’s
portfolio. However, as
explained by Neil Peers in his witness statements
Sky
has actually used the
SKY
mark on such products.”
246.
In cross-examination, however, Mr Tansey was frequently unable to say
that Sky
had had any intention to use the Trade Marks in relation to particular
goods or services covered by the specifications. Rather, he sought to put
forward ex post facto rationalisations for the inclusion of such goods
and services in the specifications. Some examples of this are as follows:
i)
Mr Tansey sought to defend registrations for environmental, renewable
energy and power generation goods and services on the grounds that Sky
had “pioneered
a
very
strong green agenda” and had sought to reduce their own carbon
footprint.
ii)
Mr Tansey sought to justify the inclusion of “bleaching preparations and
other substances for laundry use” on the ground that Team Sky
“have a high
attention towards hygiene in order to stop infections among riders and staff
[and therefore] it is not inconceivable that they might come up with some
super-duper cleaning product which we would then want to put our brand on”.
iii)
Mr Tansey suggested Sky
might have applied for protection for “animal
skins” because “chamois leather and chamois leather cream [are] commonly used
by cyclists … so it is entirely possible we would have a
Sky
branded chamois of
some description and chamois [comes] from Swiss deer, I believe.”
iv)
Mr Tansey sought to justify registration for “motor vehicles”
(which
falls within “
vehicles”)
on the ground that
Sky’s
engineers travelled in
motor
vehicles
to
visit
customers. He was unable to say that
Sky
had had any
intention to trade in motor
vehicles,
however.
v)
style='font:7.0pt "Times New Roman"'>
Mr Tansey suggested that
Sky
might have applied for registration for “carbon
monoxide detectors” and “fire extinguishers” because there had been discussions
about
Sky
providing home security, although he accepted that he did not know of
any plans relating to carbon monoxide detectors or fire extinguishers
specifically.
vi)
style='font:7.0pt "Times New Roman"'>
Mr Tansey sought to justify registration for “luggage” on the ground
that it was “not inconceivable” that Team
Sky
“would want to have their own
bags”.
vii)
style='font:7.0pt "Times New Roman"'>
Mr Tansey sought to justify registration for “Christmas decorations” on
the basis that it was “entirely plausible” that
Sky
might start to
market them because
Sky
have a Christmas marketing campaign each year. (It is
immaterial that the precise term used in the relevant Trade Marks is “decorations
for Christmas trees”.)
viii)
style='font:7.0pt "Times New Roman"'>
Mr Tansey attempted to justify inclusion of “insulation materials, in
particular, for the conservation of heat within residential and commercial
buildings” on the basis
Sky
had subsequently launched solar panels (which are
completely different goods in a different class), although he accepted that he
could not say that there was any intention to market insulation materials.
247.
Mr Tansey accepted on several occasions that he had no evidential basis
for suggesting that the rationales that he was putting forward formed any part
of Sky’s
thinking at the relevant time, and it can be seen that a number of
them are rather far-fetched. Moreover, some of Mr Tansey’s rationales related
to Team
Sky.
There are two problems with Mr Tansey’s reliance upon Team
Sky.
The first is that Team
Sky
was not launched until late 2009 or early 2010, and
therefore cannot justify applications made several years before that. The
second is that the only trading activity of Team
Sky,
if it trades at all, is
its participation in cycling races. The raison d’être of Team
Sky
is to
promote the
SKY
brand. It is simply a way of bringing the
SKY
brand to the
attention of consumers, like advertising.
248.
In relation to the second point, counsel for Sky
pointed out that it was
not until 15 January 2009 that the CJEU handed down its judgment in Case
C-495/07 Silberquelle GmbH
v
Maselli-Strickmode GmbH [2009] ECR I-137,
holding that use of a trade mark on promotional goods did not constitute
genuine use of the mark,
and submitted that prior to that the issue was an open question. I am prepared
to accept that, and hence to accept Mr Tansey’s evidence in his witness
statement that he “would have expected the
SKY
brand to be protected for
articles which could have been used in sponsorship, marketing and promotional
activities”. At least two of the examples I have given do not relate to
promotional goods, however.
249.
I would add that, in a few cases, even Mr Tansey was unable to think of
any justification for the inclusion of the item in the specification. Two
examples of this are “fuel additives … for enhancing combustion of fuels”
(Class 4) and “whips” (Class 18). The same applies to “Gladstone bags”, which
are not specifically mentioned in any of Sky’s
specifications, but would have
been covered by the Class 18 specifications under Communication 4/03.
250.
The conclusion I draw from Mr Tansey’s evidence is that, at the dates of
applying for the Trade Marks, Sky
did not intend to use the Trade Marks in
relation to all of the goods and services covered by the specifications.
Sky
were already using the Trade Marks in relation to some of the goods and
services;
Sky
had concrete plans for using the Trade Marks in relation to some
other goods and services; and
Sky
had a reasonable basis for supposing that
they might wish to use the Trade Marks in the future in relation to some
further goods. But the specifications include goods and services in respect of
which
Sky
had no reasonable commercial rationale for seeking registration. I am
forced to conclude that the reason for including such goods and services was
that
Sky
had a strategy of seeking
very
broad protection of the Trade Marks
regardless of whether it was commercially justified.
251.
It is important to note that the specifications included goods and
services in relation to which I find that Sky
had no intention to use the Trade
Marks in three different ways. First, the specifications included specific
goods in relation to which I find that
Sky
no intention to use the Trade Marks
at all. Examples of this are “bleaching preparations” (Class 3, EU992 and
UK604), “insulation materials” (Class 17, EU992 and UK604) and “whips” (Class
18, EU352, EU619, EU992 and UK604). Secondly, the specification included
categories of goods and services that were so broad that
Sky
could not, and did
not, intend to use the Trade Marks across the breadth of the category. The
paradigm example of this is “computer software” in EU112, EU992 and UK604, but
there are others such as “telecommunications/telecommunications services” in
all five trade Marks. Thirdly, the specifications were intended to cover all of
the goods and services in relevant classes. For example, the Class 9 specifications,
including the Class 9 specifications in EU352 and EU619, were intended to cover
not just any computer software, but a great deal more besides. I would add that
I suspect that some of the specifications covered whole Classes in respect of which
Sky
had no intention to use (e.g. Class 4 in EU992 and UK604), but since this
was not put to Mr Tansey I make no finding on the point.
252.
Counsel for SkyKick
submitted that it was impossible to distinguish
between the parts of the specifications that covered goods and services in
relation to which
Sky
intended to use the Trade Marks and the parts of the
specifications that covered goods and services in relation to which
Sky
had no
such intention, because
Sky
had never themselves attempted to do so. I do not
accept this. Drawing the line would be a labour-intensive task, primarily
because of the sheer length of the specifications of the later three Trade
Marks, but I am satisfied that in principle it would be possible. I do not
propose to undertake the exercise at this stage, however, since the questions
of whether it is necessary to draw the line, and if so the test to be applied
when placing the line, depend on the resolution of the legal issues discussed
above.
253.
Counsel for Sky
submitted that, even if
Sky
had not intended to use the
Trade Marks across the full width of the specifications, it could not be said
that
Sky
had thereby acted in bad faith, because
Sky
was merely acting in a
manner which has been expressly sanctioned by OHIM in Communication 4/03. As
counsel for
SkyKick
pointed out, however, all that Communication 4/03
sanctioned was the use of class headings as a means of covering all the goods
or services in a particular class. It is perfectly possible for a trader to
have a reasonable commercial rationale for applying to register a trade mark in
respect of all the goods or services in a class. Communication 4/03 said
nothing about applying to register trade marks in respect of goods or services
where there was no intention to use the trade mark.
254.
It follows from my findings above that, in the case of UK604, Sky
plc’s
declaration in accordance with section 32(3) that it intended to use the Trade
Mark in relation to the specified goods and services was, in part, false.
255.
It also follows that Sky
have used the Trade Marks (and other trade
marks they own) to oppose parts of trade mark applications by third parties
which cover goods and services in relation to which
Sky
had no intention of
using the Trade Marks.
256.
Whether Sky
made the applications for the EU Trade Marks in bad faith
within the meaning of Article 51(1)(b) of Regulation 40/94 in so far as they
did not intend to use them in relation to some of the goods and services
applied for, and if so whether the consequence is partial or total invalidity
of the EU Trade Marks, depends on the resolution of the legal issues discussed
above. In the case of UK604, there is the additional issue of the compatibility
of section 32(3) of the 1994 Act with European law.
257.
Counsel for Sky
submitted that, even if the issues of law were resolved
in
SkyKick’s
favour, it would not make a difference to the infringement case. I
do not accept this. First, if the consequence of a partial lack of intention to
use is total invalidity of the Trade Marks, then that would put an end to the
infringement case. Secondly, even if that is not the consequence, it could well
make a difference to the infringement case if terms like “computer software”
and “telecommunications services” are held to be too broad on bad faith
grounds.
Conclusion
(3) Can it constitute bad faith to apply to register a trade mark without any intention to use it in relation to the specified goods or services?
(4) 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 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?
(5) Is section 32(3) of the 1994 Act compatible with the Directive and its predecessors?
Territorial aspects of Sky’s
claim for infringement of
the EU Trade Marks
259.
Sky’s
claim form claims “injunctive relief (throughout the European
Union), damages (throughout the European Union)” for infringement of the EU
Trade Marks. Consistently with this,
Sky’s
Amended Particulars of Claim alleges
that
Sky
enjoy a considerable reputation in and to the
Sky
brand “in Europe,
including in the UK” in relation to particular goods and services and that
SkyKick
have supplied goods and services “throughout the European Union,
including the United Kingdom” under the signs complained of, and seeks an
injunction to restrain
SkyKick
from infringing the EU Trade Marks “anywhere in
the European Union”.
SkyKick’s
Amended Defence and Counterclaim admits that
Sky
have a reputation “in the UK and in the EU” for certain goods and services. The
allegation that
SkyKick’s
use of the signs has extended throughout the EU also
appears to be admitted.
260.
The written evidence served by both sides concentrates on the UK,
although Sky’s
evidence also covers Ireland, and rather more briefly, the other
countries mentioned in paragraph 68 above.
261.
Save for the fact that Sky’s
skeleton argument referred in passing to
the fact that
Sky
had operations “throughout the EU” and that
SkyKick
had
expanded into “the UK and EU”, neither side’s skeleton argument addressed the
territorial dimension to the claim for infringement of the EU Trade Marks.
During counsel for
Sky’s
opening speech, I noted that
Sky’s
claim for
infringement of the EU Trade Marks extended EU-wide, but that the evidence was
rather UK-focussed, and raised the question of whether I could simply make a
single assessment for the whole of the EU or whether I needed to take into
consideration the understanding by citizens of other Member States of the
English language. Counsel for
Sky
responded that
Sky
contended that there was
no material difference between the Member States for the purposes of the
infringement claim. Counsel for
SkyKick
did not mention the matter in his
opening speech.
262. There was no cross-examination of any witness by either side directed to this point.
263.
In Sky’s
written closing submissions,
Sky
contended that, in assessing
their infringement claims, it was not necessary to distinguish between the
position in the UK and that in other Member States because neither party had
pleaded or put forward evidence that the inherent distinctive character of
SKY
differed between Member States and
SKY’s
reputation in the EU was admitted at
least in relation to certain goods and services.
SkyKick’s
written closing
submissions said nothing about this point.
264.
In his closing speech counsel for Sky
briefly reiterated what had been
said in
Sky’s
closing submissions. In his closing speech counsel for
SkyKick
submitted for the first time that any finding of infringement, and therefore
any relief, should be confined to the UK, Ireland, Germany and Italy, and
sought to rely upon my decision in Enterprise Holdings Inc
v
Europcar UK Ltd
[2015] EWHC 300 (Ch). In that case I limited the successful claimant’s relief
to the UK for four reasons, of which counsel for
SkyKick
relied on the second.
That reason was that I took the
view
that, in a case under Article 9(1)(b) or
(c) of Regulation 207/2009 as opposed to one under Article 9(1)(a), the onus
lay upon the trade mark proprietor to establish a likelihood of confusion or
one of the kinds of injury specified in Article 9(1)(c) in each Member State.
265.
Since then, however, the CJEU has decided Case C-223/15 combit
Software GmbH v
Commit Business Solutions Ltd [EU:C:2016:719], in which it
held:
“30. In order to guarantee the uniform protection which EU trade marks are afforded throughout the entire area of the European Union, the prohibition on proceeding with acts which infringe or would infringe an EU trade mark must, as a rule, extend to the whole of that area (see, with regard to Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1), repealed and replaced by Regulation No 207/2009, the judgment of 12 April 2011, DHL Express France, C‑235/09, EU:C:2011:238, paragraphs 39 to 44).
31. However, as follows from paragraph 48 of the judgment of 12 April 2011, DHL Express France (C‑235/09, EU:C:2011:238), in a situation in which — as in the case in the main proceedings — an EU trade mark court finds that the use of the similar sign in question for goods that are identical to those for which the EU trade mark at issue is registered does not, in a given part of the European Union, create any likelihood of confusion, in particular for linguistic reasons, and therefore cannot, in that part of the Union, adversely affect the trade mark’s function of indicating origin, that court must limit the territorial scope of the aforementioned prohibition.
32. Indeed, where an EU trade mark court concludes, on the basis of information which must, as a rule, be submitted to it by the defendant, that there is no likelihood of confusion in a part of the European Union, legitimate trade arising from the use of the sign in question in that part of the European Union cannot be prohibited. As the Advocate General has observed in points 25 to 27 of his Opinion, such a prohibition would go beyond the exclusive right conferred by the EU trade mark, as that right merely permits the proprietor of that mark to protect his specific interests as such, that is to say, to ensure that the mark is able to fulfil its functions (see, to that effect, judgment of 12 April 2011, DHL Express France, C‑235/09, EU:C:2011:238, paragraphs 46 and 47).”
267.
In the present case SkyKick
have neither pleaded, nor adduced any
evidence to show, that, if there is a likelihood of confusion in part of the
EU, there are nevertheless reasons why that likelihood of confusion does not
exist elsewhere in the EU. It follows that, if
Sky
establish that there is a
likelihood of confusion in the UK and Ireland, then
Sky
are entitled to EU-wide
relief. I would add that I am doubtful whether the position would be materially
different in other Member States, because although
SKY
may have less of a
reputation (at least in countries other than Austria, Germany and Italy), the
word
SKY
will be more distinctive to non-English-speaking consumers. There is
more room, in my
view,
for a different conclusion under Article 9(2)(c), but
for reasons that will appear it is not necessary to consider
this.
Contextual assessment of Sky’s
infringement claims
268.
In determining whether there is a likelihood of confusion under Article
9(2)(b) of the Regulation/Article 10(2)(b) of the Directive and whether the use
falls within Article 9(2)(c) of the Regulation/Article 10(2)(c) of the
Directive, the court must take into account the precise context in which the
sign has been used: see Case C-533/06 O2 Holdings Ltd v
Hutchison 3G UK Ltd [2008] ECR I-4231 at [64], and Case C-252/12 Specsavers
International Healthcare Ltd
v
Asda Stores Ltd [EU:C:2013:497], [2013] ETMR 46 (“Specsavers (CJEU)”) at
[45]. As Kitchin LJ (with whom Sir John Thomas PQBD and Black LJ agreed) put it
in Specsavers International Healthcare Ltd
v
Asda Stores Ltd [2012] EWCA Civ 24, [2012] FSR 19 at [87] with reference to likelihood of confusion:
“In my judgment the general position is now clear. In assessing the likelihood of confusion arising from the use of a sign the court must first consider the matter from the perspective of the average consumer of the goods and services in question and must take into account all the circumstances of that use that are likely to operate in that average consumer’s mind in considering the sign and the impression it is likely to make on him. The sign is not to be stripped of its context.”
269. In Specsavers (CJEU) the CJEU ruled that:
“Article 9(1)(b) and (c) of Regulation No 207/2009 must be interpreted as meaning that where a Community trade mark is not registered in colour, but the proprietor has used it extensively in a particular colour or combination of colours with the result that it has become associated in the mind of a significant portion of the public with that colour or combination of colours, the colour or colours which a third party uses in order to represent a sign alleged to infringe that trade mark are relevant in the global assessment of the likelihood of confusion or unfair advantage under that provision.”
270.
In the present case EU619 is registered in monochrome, and therefore
covers use in the same shade of blue as SkyKick
use for their current logo (see
Phones 4u Ltd
v
Phone4u.co.uk Internet Ltd [2006] EWCA Civ 244, [2007] RPC 5 at
[70]), but
Sky
do not contend that the likelihood of confusion or association
is increased because they have used that logo in a particular colour.
271.
In J.W. Spear & Sons Ltd v
Zynga, Inc [2015] EWCA Civ 290,
[2015] FSR 19 counsel for the trade mark proprietor submitted, in reliance upon
Specsavers (CJEU), that “if something appears routinely and uniformly in
immediate association with the [trade] mark when used by the proprietor, it
should be taken into account as part of the relevant context. This submission
was rejected by Floyd LJ (with whom Patten and Tomlinson LJJ agreed) for
reasons which he expressed at [47] as follows:
“… The CJEU’s ruling does not go far enough for [counsel’s] purposes. The matter not discernible from the register in Specsavers was the colour in which a mark registered in black and white was used. It is true that in one sense the colour in which a mark is used can be described as ‘extraneous matter’, given that the mark is registered in black and white. But at [37] of its judgment the court speaks of colour as affecting ‘how the average consumer of the goods at issue perceives that trade mark’ and in [38] of ‘the use which has been made of it [i.e. the trade mark] in that colour or combination of colours’. By contrast [counsel’s] submission asks us to take into account matter which has been routinely and uniformly used ‘in association with the mark’. Nothing in the court’s ruling requires us to go that far. The matter on which [counsel] wishes to rely are not matters which affect the average consumer’s perception of the mark itself.”
272.
Counsel for Sky
accepted this as a correct statement of the law.
Accordingly, he did not rely, for the purposes of
Sky’s
claim for infringement
of the Trade Marks, on the fact that
Sky
have made extensive use of
SKY
formative marks, frequently consisting of
SKY
plus a descriptor (e.g.
SKY
BROADBAND), but sometimes consisting of
SKY
plus a word which was merely
allusive (e.g.
SKY
ATLANTIC,
SKY
ADSMART) and sometime consisting of
SKY
joined
to another word (e.g.
SKYSCAPE).
Nor did he advance any case based upon a
“family” of trade marks.
273.
Counsel for Sky
nevertheless submitted that the Court should take into
account the fact that consumers were well acquainted with the practice of brand
owners of using brand names together with sub-brands. Counsel for
SkyKick
did
not dispute this.
The average consumer
The law
274.
It is settled that many issues in European trade mark law fall to be assessed
from the perspective of the “average consumer” of the relevant goods or
services, who is deemed to be reasonably well-informed and reasonably observant
and circumspect. I reviewed this concept in Enterprise Holdings Inc v
Europcar Group UK Ltd [2015] EWHC 17 (Ch), [2015] FSR 22 at [130]-[138].
Since then, it has been considered by the Court of Appeal in London Taxi
Corporation Ltd
v
Frazer-Nash Research Ltd [2017] EWCA Civ 1729, [2018] FSR 7, where Floyd LJ (with whom Kitchin LJ agreed) said:
“31. I agree … that the notion of an average consumer requires
the court to consider any relevant class of consumer, and not to average them.
I believe that conclusion to be consistent with the approach taken by this
court in Interflora Inc and another v
Marks and Spencer plc …
35. In
the present case I cannot therefore see any a priori reason for
excluding the hirer of a taxi from the class of consumers whose perceptions it
is necessary to consider. The guarantee of origin which the mark provides is
directed not only at purchasers of taxis but also at members of the public,
such as hirers of taxis. The hirer is a person to whom the origin function of
the vehicle
trade mark might matter at the stage when he or she hires the taxi.
I entirely accept that the hirer is also a user of taxi services, so that any
dissatisfaction with the taxi or its performance is likely to be taken up with
the taxi driver or his company. But if, for example, the taxi were to fail for
reasons not associated with the taxi service, it would be on the manufacturer
identified by his trade mark that the hirer would, or might, wish to place the
blame. …”
The present case
275.
The average consumer for the purposes of an infringement claim must be a
consumer of the relevant goods and/or services who is both (i) familiar with
the trade mark and (ii) exposed to, and likely to rely upon, the sign. In the
present case, because SKY
is accepted to be a household name at least in
relation to television broadcasting, telephony and broadband provision, it can
be safely assumed that all the potentially relevant consumers are familiar with
it. Accordingly, attention can be focussed upon those who are exposed to, and
likely to rely upon, the sign
SkyKick.
276.
Counsel for SkyKick
submitted that the relevant class of consumers in
the present case consisted exclusively of Microsoft Partners, since they were
SkyKick’s
immediate customers. It is common ground that Partners are IT
professionals, although Mr Schwartz accepted that their size, degree of IT
sophistication, knowledge and expertise was
variable.
277.
Counsel for SkyKick
also submitted that, given that Partners were IT
professionals and that
SkyKick’s
products were specialised IT products,
Partners would exercise a high degree of care and attention. Counsel for
Sky
relied upon the fact that the products were inexpensive as militating against
this. In my
view
Partners would exercise a fairly high degree of care and
attention even though the products are inexpensive.
278.
Counsel for Sky
submitted that Customers (in the form of their IT
personnel) and End Users were also relevant classes of consumers to consider,
because they were exposed to, and would rely upon, the
SkyKick
sign.
279.
I did not understand counsel for SkyKick
to dispute that the evidence
establishes that both Customers and End Users are exposed to the
SkyKick
sign.
In the case of Customers, this can occur in
various
ways: for example, through
seeing
SkyKick’s
advertising, through being sold and using Cloud Backup where
the Partner sells it under the
SkyKick
brand name and through the contract
between
SkyKick
and the Customer. In the case of End Users, this is most likely
to occur when downloading the
SkyKick
Outlook Assistant.
280.
Counsel for SkyKick
submitted, however, that neither Customers nor End
Users would rely upon the
SkyKick
sign. In the case of Customers, I consider
that it is clear from the evidence that they would rely upon the sign. After
all, the Customer contracts directly with
SkyKick.
If a migration or backup
goes wrong in some way, then the Customer is likely to blame
SkyKick
as well as
the Partner, particularly if there is any indication that there was a bug in
SkyKick’s
software.
282.
The position is more equivocal in the case of End Users. Counsel for
SkyKick
relied strongly upon evidence from Mr Peers that End Users would not
even know that their email was being migrated because it “happens in the background”
and is “system stuff”. But End Users would be aware of it, and exposed to the
SkyKick
sign, where they downloaded the
SkyKick
Outlook Assistant. Moreover, in
such cases they would be exposed to it again when logging into the
SkyKick
Outlook Assistant. Furthermore, Mr Schwartz accepted that, in at least in some
cases, Partners would notify the End Users in advance in order to re-assure
them that the
SkyKick
Outlook Assistant was a trusted piece of software.
Accordingly, I consider that, at least in some cases, End Users would rely upon
the
SkyKick
sign.
283.
I do not understand there to be any dispute that End Users would not be
likely to exercise any particular care or attention with respect to SkyKick’s
products.
Infringement under Article 9(2)(b) of the Regulation/Article 10(2)(b) of the Directive
284.
Sky
contend that
SkyKick
have infringed each of the Trade Marks pursuant
to Article 9(2)(b) of the Regulation/Article 10(2)(b) of the Directive by
use of each of the signs complained of. For the purposes of this claim,
Sky
rely upon the registrations of the Trade Marks in respect of the goods and
services set out in paragraph 6 above. I shall assume that the Trade Marks are
validly
registered in relation to those goods and services.
The law
285.
In order to establish infringement under Article 9(2)(b) of the
Regulation/Article 10(2)(b) of the Directive, six conditions must be satisfied:
(i) there must be use of a sign by a third party within the relevant territory;
(ii) the use must be in the course of trade; (iii) it must be without the
consent of the proprietor of the trade mark; (iv) it must be of a sign which is
at least similar to the trade mark; (v)
it must be in relation to goods or
services which are at least similar to those for which the trade mark is registered;
and (
vi)
it must give rise to a likelihood of confusion on the part of the
public. In the present case, there is no issue as to conditions (i)-(
v).
Nevertheless, it is still necessary for me to consider condition (
v),
because
there is a dispute between the parties as to whether
SkyKick’s
goods and
services are identical with, or merely similar to, goods and services covered
by the Trade Marks. This is relevant to the assessment of the likelihood of
confusion.
286.
Comparison of goods and services. In considering whether goods
and services are similar to each other, all relevant factors relating to the
goods and services must be considered, including their nature, their intended
uses, their method of use and whether they are in competition with each other
or are complementary: see Case C-106/03 Canon KKK v
Metro Goldwyn Mayer Inc
[1998] ECR I-5507 at [23] in the corrected English translation.
287.
Likelihood of confusion. The manner in which the requirement of a
likelihood of confusion in Article 9(2)(b) of the Regulation and Article
10(2)(b) of the Directive, and the corresponding provisions concerning relative
grounds of objection to registration in both the Directive and the Regulation,
should be interpreted and applied has been considered by the CJEU in a large
number of decisions. The Trade Marks Registry has adopted a standard summary of
the principles established by these authorities for use in the registration
context. The current version
of this summary, which takes into account the
point made by the Court of Appeal in Maier
v
ASOS plc [2015] EWCA Civ 220, [2015] Bus LR 1063 at [76], is as follows:
“(a) the likelihood of confusion must be appreciated globally, taking account of all relevant factors;
(b) the
matter must be judged through the eyes of the average consumer of the goods or
services in question, who is deemed to be reasonably well informed and
reasonably circumspect and observant, but who rarely has the chance to make
direct comparisons between marks and must instead rely upon the imperfect
picture of them he has kept in his mind, and whose attention varies
according
to the category of goods or services in question;
(c) the
average consumer normally perceives a mark as a whole and does not proceed to
analyse its various
details;
(d) the
visual,
aural and conceptual similarities of the marks must normally be
assessed by reference to the overall impressions created by the marks bearing
in mind their distinctive and dominant components, but it is only when all
other components of a complex mark are negligible that it is permissible to
make the comparison solely on the basis of the dominant elements;
(e) nevertheless, the overall impression conveyed to the public by a composite trade mark may, in certain circumstances, be dominated by one or more of its components;
(f) and beyond the usual case, where the overall impression created by a mark depends heavily on the dominant features of the mark, it is quite possible that in a particular case an element corresponding to an earlier trade mark may retain an independent distinctive role in a composite mark, without necessarily constituting a dominant element of that mark;
(g) a
lesser degree of similarity between the goods or services may be offset by a
greater degree of similarity between the marks, and vice
versa;
(h) there is a greater likelihood of confusion where the earlier mark has a highly distinctive character, either per se or because of the use that has been made of it;
(i) mere association, in the strict sense that the later mark brings the earlier mark to mind, is not sufficient;
(j) the reputation of a mark does not give grounds for presuming a likelihood of confusion simply because of a likelihood of association in the strict sense; and
(k) if the association between the marks creates a risk that the public might believe that the respective goods or services come from the same or economically-linked undertakings, there is a likelihood of confusion.”
289.
It is important to appreciate that, when assessing whether there is a
likelihood of confusion, it is necessary to assume that the trade mark is being
used by the proprietor across the full width of (the relevant part of) the
specification of goods or services even if that is not in fact the case: see Maier
at [78], [80], [85] and [87]. (If the registration is more than five years old,
the proprietor can be forced to prove use of the trade mark; but the proprietor
cannot be required to provide proof of use if the mark is less than five years
old even if it is alleged that the registration was abusive, the proper context
for such an allegation being a counterclaim for cancellation on the ground of
bad faith: see Case T-736/15 Aldi GmbH & Co KG v
European Union
Intellectual Property Office [EU:T:2017:729] at [17]-[41].)
290.
If the only similarity between the trade mark and the sign complained of
is a common element that is descriptive or otherwise of low distinctiveness,
that points against there being a likelihood of confusion: see Whyte and
Mackay Ltd v
Origin Wine UK Ltd [2015] EWHC 1271 (Ch), [2015] FSR 33 at
[43]-[44].
Assessment
292.
The distinctive character of the Trade Marks. Sky
contend that
the Trade Marks are both inherently distinctive for the relevant goods and
services and have an enhanced distinctive character by reason of the use which
Sky
have made of them. (Counsel for
Sky
did not argue that the figurative
elements of EU352 and EU619 added materially to the distinctive character of
those Trade Marks.) As noted above,
SkyKick
do not contend that the Trade Marks
are lacking in distinctive character.
SkyKick
do contend, however, that the
Trade Marks are low in distinctive character both because
SKY
is a common
English word which is allusive for cloud-based IT goods and services and
because
SKY
formative marks are widely used by third parties.
293.
In my judgment the Trade Marks have a moderately high degree of inherent
distinctive character in relation to the goods and services in question. While
for English-speaking consumers the word SKY
has a slightly allusive character
in relation to “computer software”, “telecommunications services” and the like,
I do not consider that it is strongly allusive even where such goods and
services are cloud-based, let alone where they are not. Moreover, in my
judgment, the evidence of use of
SKY
formative marks by third parties does not
go far enough to lower the inherent distinctive character of the Trade Marks.
None of the marks consists of the word
SKY
on its own, none of them is well
known except for
SKYSCANNER
and many of them are have been used in relation to
different goods and services (or at least in a niche area) or (so far as the
evidence goes) on a small scale or for a short period of time.
294.
On the other hand, I do not consider that the Trade Marks have acquired
an enhanced distinctive character in relation to the goods and services as result
of the use that has been made of them. Although Sky
have undoubtedly supplied
computer software, with one or two possible minor exceptions, the software they
have supplied has been software related to their core activities and they have
not supplied software independently of those activities. The same is true of
the other goods and services relied on. Even in the case of email services,
Sky
have only provided these as an adjunct to
SKY
BROADBAND. Moreover, the use of
SKY
formative marks by third parties must be taken into account,
notwithstanding the points made above. I should make it clear that, in
reaching this conclusion, I have taken into account the moderately high level
of inherent distinctive character of the Trade Marks, and thus the question is
whether
Sky’s
use has increased that level of distinctive character.
295.
Comparison of goods and services. As discussed above, SkyKick
have so far marketed two products, Cloud Migration and Cloud Backup. In the
case of Cloud Migration, part of what
SkyKick
supplies consists of goods,
namely downloadable software. Otherwise, the products are services.
Sky
contend
that the goods and services supplied by
SkyKick
are identical to each of the
goods and services covered by the Trade Marks set out in paragraph 6 above.
296.
Counsel for SkyKick
argued in his closing submissions that the evidence
established that the goods and services supplied by
SkyKick
were different to
those actually marketed by
Sky.
I accept this, but it is irrelevant. The
relevant comparison is with the goods and services covered by the terms in the
specifications of the Trade Marks relied upon by
Sky.
297.
In the light of the evidence, it is clear that the goods supplied by
SkyKick
are identical to “computer software”, “computer software supplied from
the internet” and “computer software … to enable connection to databases …” in
Class 9. Mr Schwartz accepted that
SkyKick’s
products provided access to data
storage, but they provide this as a service not as a good. Thus they are
similar, but not identical, to “data storage” in Class 9. Mr Schwartz also
accepted that
SkyKick’s
products were provided over telecommunications links,
namely the internet. Whether this means that
SkyKick
provides
“telecommunications services” in Class 38 depends on how broadly that term is
interpreted.
Sky’s
case requires it to be
very
broadly interpreted, which
engages
SkyKick’s
case on clarity and precision. If it is narrowly interpreted,
it is debatable whether
SkyKick’s
products are even similar. Turning to
“electronic mail services”, there is no dispute that
SkyKick
provide an email
migration service. I consider that this is identical. As for “internet portal
services”, again there is a question of interpretation. Mr Schwartz accepted
that
SkyKick
had an internet portal, but I understood him to be referring to
their website (and not the portal in Cloud Manager). In my assessment
SkyKick
do not provide internet portal services to third parties, and it is debatable
whether they provide anything similar. Finally, it is clear that the services
provided by
SkyKick
are “computer services for accessing and retrieving
information/data
via
a … computer network”.
298.
In summary, therefore, SkyKick’s
goods and services are identical to
some, but not all, of the goods and services covered by the Trade Marks.
299.
Comparison of the Trade Marks and the sign. It is not in dispute
that the first part of the sign SkyKick
is
visually,
aurally and conceptually
identical to the Trade Marks (or the word element of the Trade Marks in the
case of EU352 and EU619), nor is it in dispute that the second part of the sign
is
visually,
aurally and conceptually completely different. In my
view
SkyKick
is a sign which the average consumer is capable of perceiving as a sub-brand of
SKY.
Whether the average consumer is likely to do so depends on an assessment
of all the relevant factors, and in particular the degree of care and attention
exercised by the average consumer.
300.
Absence of evidence of actual confusion. SkyKick
rely strongly
upon the fact that, despite searches by both sides, there is not a scintilla of
evidence of any actual confusion between
SkyKick
and
Sky.
The weight of this
factor
varies
from case to case. It is well established that it is not
necessary for a trade mark proprietor to show that there has been actual
confusion in order to succeed in a claim under Article 9(2)(b) of the
Regulation/Article 10(2)(b) of the Directive. Equally, there have been cases
where the absence of evidence of actual confusion despite side-by-side trading
on a substantial scale for a significant period has been found to negate the
existence of a likelihood of confusion.
301.
In the present case, I do not consider that the absence of evidence of
actual confusion compels the conclusion that there is no likelihood of
confusion. This is for a number of reasons. First, the scale of SkyKick’s
business in the EU since November 2014 has been relatively modest. Secondly,
only a little over three years have elapsed. Thirdly, given the nature of
SkyKick’s
products and their relationship with Partners, it is possible that
confusion amongst Customers and End Users may not have come to either
Sky’s
or
SkyKick’s
attention. Fourthly, and perhaps most importantly, there is little
overlap between
Sky’s
business customer base and
SkyKick’s
customer base. Out
of about 400,000 Partners worldwide,
Sky
currently only do business with three,
whereas
SkyKick
have done business with over 1,300 in the EU. This helps to
explain the absence of actual confusion, but does not exclude a likelihood of
confusion given that the Trade Marks have specifications that extend well
beyond
Sky’s
actual trading activities.
302.
Overall assessment. The distinctive character of the Trade Marks
and the identity of SkyKick’s
goods and services with some of those covered by
the Trade Marks are factors that support the existence of a likelihood of
confusion. The similarities between the sign and the Trade Marks are such that
the average consumer is capable of perceiving the sign as a sub-brand of
SKY,
but whether this is likely depends in particular on the degree of care and
attention exercised by the average consumer. In my judgment Partners are
unlikely to be confused given the fairly high degree of care and attention they
would exercise, but there is a likelihood of confusion in the case of Customers
and End Users given the lower degrees of care and attention they would
exercise.
303.
Conclusion. Accordingly, I conclude that, if the Trade Marks are
validly
registered in respect of the goods and services relied upon by
Sky,
then
SkyKick
have infringed them pursuant to Article 9(2)(b) of the
Regulation/Article 10(2)(b) of the Directive unless
SkyKick
can rely upon the
own name defence.
Infringement under Article 9(2)(c) of the Regulation/Article 10(2)(c) of the Directive
304.
In the alternative to their case under Article 9(2)(b) of the
Regulation/Article 10(2)(b) of the Directive, Sky
contend that
SkyKick
have
infringed each of the Trade Marks pursuant to Article 9(2)(c) of the
Regulation/Article 10(2)(c) of the Directive. For the purposes of this claim,
Sky
rely upon the registrations of the Trade Marks in respect of the following
goods and services: television services, television reception equipment,
telephony services, broadband provision, computer software, electronic mail
services and advisory services relating to computer hardware and software. I
shall consider this claim on the assumption that, contrary to the conclusion
reached above, there is no likelihood of confusion due to use of the sign
SkyKick.
The law
305.
In C-408/01 Adidas-Salomon AG v
Fitnessworld Trading
Ltd [2003] ECR I-12537 the CJEU held that it is not necessary for the trade
mark proprietor to establish a likelihood of confusion in order to succeed in a
claim under these provisions.
306.
Accordingly, in order to establish infringement under Article 9(2)(c) of
the Regulation/Article 10(2)(c) of the Directive, nine conditions must be
satisfied: (i) the trade mark must have a reputation in the relevant territory;
(ii) there must be use of a sign by a third party within the relevant
territory; (iii) the use must be in the course of trade; (iv) it must be
without the consent of the proprietor of the trade mark; (v)
it must be of a
sign which is at least similar to the trade mark; (
vi)
it must be in relation
to goods or services; (
vii)
it must give rise to a “link” between the sign and
the trade mark in the mind of the average consumer; (
viii)
it must give rise to
one of three types of injury, that is to say, (a) detriment to the distinctive
character of the trade mark, (b) detriment to the repute of the trade mark or
(c) unfair advantage being taken of the distinctive character or repute of the
trade mark; and (ix) it must be without due cause. In the present case, there
is no issue as to ingredients (ii), (iii), (iv), (
v)
or (
vi).
So far as issue
(i) is concerned,
SkyKick
accept that the Trade Marks have a reputation in the
EU, but
Sky
contend that the reputation is more extensive than
SkyKick
concede.
307.
Reputation of the trade mark. This is not a particularly onerous
requirement. As the Court of Justice explained in Case C-375/97 General
Motors Corp v
Yplon SA [1999] ECR I-5421:
“24. The public amongst which the earlier trade mark must have acquired a reputation is that concerned by that trade mark, that is to say, depending on the product or service marketed, either the public at large or a more specialised public, for example traders in a specific sector.
25. It cannot be inferred from either the letter or the spirit of Article 5(2) of the Directive that the trade mark must be known by a given percentage of the public so defined.
26. The degree of knowledge required must be considered to be reached when the earlier mark is known by a significant part of the public concerned by the products or services covered by that trade mark.
27. In examining whether this condition is fulfilled, the national court must take into consideration all the relevant facts of the case, in particular the market share held by the trade mark, the intensity, geographical extent and duration of its use, and the size of the investment made by the undertaking in promoting it.”
308. Although in the case of an EU trade mark the mark must be known by a significant part of the relevant public in a substantial part of the territory of the EU, in an appropriate case the territory of a single Member State may suffice for this purpose: see Case C-301/07 PAGO International GmbH [2009] ECR I-9429.
309.
Link. Whether the use of the sign gives rise to a link
between the sign and the trade mark in the mind of the average consumer must be
appreciated globally having regard to all the circumstances of the case: see Adidas-Salomon v
Fitnessworld at [29]-[30] and Specsavers
(CJEU) at [120]. The fact that the sign would call the trade mark to mind
for the average consumer, who is reasonably well informed and reasonably
observant and circumspect, is tantamount to the existence of such a link: see Case
C-252/07 Intel Corp Inc
v
CPM United Kingdom Ltd [2008] ECR I-8823 at
[60] and Specsavers (CJEU) at [121].
i) The more immediately and strongly the trade mark is brought to mind by the sign, the greater the likelihood that the current or future use of the sign is detrimental to the distinctive character of the mark: [67].
ii) The stronger the earlier mark’s distinctive character and reputation, the easier it will be to accept that detriment has been caused to it: [69].
iii) The existence of a link between the sign and the mark does not dispense the trade mark proprietor from having to prove actual and present injury to its mark, or a serious likelihood that such an injury will occur in the future: [71].
iv) The more “unique” the trade mark, the greater the likelihood that use of a later identical or similar mark will be detrimental to its distinctive character: [74].
v)
style='font:7.0pt "Times New Roman"'>
Detriment to the distinctive character of the trade mark is caused when
the mark’s ability to identify the goods or services for which it is registered
and used as coming from the proprietor is weakened. It follows that proof that
the use of the sign is or would be detrimental to the distinctive character of
the earlier mark requires evidence of a change in the economic behaviour of the
average consumer of the goods or services for which the mark is registered
consequent on the use of the sign, or a serious likelihood that such a change
will occur in the future: [77].
311.
In Case C-383/12 Environmental Manufacturing LLP v
Office for
Harmonisation in the Internal Market [EU:C:2013:741] the Court of Justice
re-iterated that proof that the use of the sign is, or would be, detrimental to
the distinctive character of the trade mark requires evidence of a change in
the economic behaviour of the average consumer of the goods or services for
which the mark is registered consequent on the use of the sign, or a serious
likelihood that such a change will occur in the future. In this connection, the
Court held:
“42. Admittedly, Regulation No 207/2009 and the Court’s case-law do not require evidence to be adduced of actual detriment, but also admit the serious risk of such detriment, allowing the use of logical deductions.
43. None the less, such deductions must not be the result of mere suppositions but, as the General Court itself noted at paragraph 52 of the judgment under appeal, in citing an earlier judgment of the General Court, must be founded on ‘an analysis of the probabilities and by taking account of the normal practice in the relevant commercial sector as well as all the other circumstances of the case’.”
312.
In Case T-215/03 SIGLA SA v
Office for Harmonisation in the Internal Market
[2007] ECR II-711 the General Court held at [38]:
“… the risk of dilution appears, in principle, to be lower if
the earlier mark consists of a term which, because of a meaning inherent in it,
is very
common and frequently used, irrespective of the earlier mark consisting
of the term at issue. In such a case, reuse of the term in question by the mark
applied for is less likely to result in a dilution of the earlier mark. Thus in
SPA-FINDERS, … paragraph 44, the Court found that, since the term ‘spa’
was frequently used to designate, for example, the Belgian town of Spa and the
Belgian racing circuit of Spa-Francorchamps or, in general, places for
hydrotherapy such as hammams or saunas, the risk of another mark also
containing the word element ‘Spa’ being detrimental to the distinctive
character of the mark SPA appeared to be limited.”
313.
Unfair advantage. The Court of Justice described taking unfair
advantage of the distinctive character or repute of a trade mark in Case
C-487/07 L’Oréal SA v
Bellure NV [2009] ECR I-5185 at [41] as follows:
“As regards the concept of ‘taking unfair advantage of the distinctive character or the repute of the trade mark’, also referred to as ‘parasitism’ or ‘free-riding’, that concept relates not to the detriment caused to the mark but to the advantage taken by the third party as a result of the use of the identical or similar sign. It covers, in particular, cases where, by reason of a transfer of the image of the mark or of the characteristics which it projects to the goods identified by the identical or similar sign, there is clear exploitation on the coat-tails of the mark with a reputation.”
“44. In order to determine whether the use of a sign takes unfair advantage of the distinctive character or the repute of the mark, it is necessary to undertake a global assessment, taking into account all factors relevant to the circumstances of the case, which include the strength of the mark’s reputation and the degree of distinctive character of the mark, the degree of similarity between the marks at issue and the nature and degree of proximity of the goods or services concerned. As regards the strength of the reputation and the degree of distinctive character of the mark, the Court has already held that, the stronger that mark’s distinctive character and reputation are, the easier it will be to accept that detriment has been caused to it. It is also clear from the case-law that, the more immediately and strongly the mark is brought to mind by the sign, the greater the likelihood that the current or future use of the sign is taking, or will take, unfair advantage of the distinctive character or the repute of the mark or is, or will be, detrimental to them (see, to that effect, Intel Corporation, paragraphs 67 to 69).
45. In addition, it must be stated that any such global assessment may also take into account, where necessary, the fact that there is a likelihood of dilution or tarnishment of the mark.
49. In that regard, where a third party attempts, through the use of a sign similar to a mark with a reputation, to ride on the coat-tails of that mark in order to benefit from its power of attraction, its reputation and its prestige, and to exploit, without paying any financial compensation and without being required to make efforts of his own in that regard, the marketing effort expended by the proprietor of that mark in order to create and maintain the image of that mark, the advantage resulting from such use must be considered to be an advantage that has been unfairly taken of the distinctive character or the repute of that mark.”
315.
It is clear both from the wording of Article 9(2)(c) of the
Regulation/Article 10(2)(c) of the Directive and from the case law of the Court
of Justice interpreting these provisions that this aspect of the legislation is
directed at a particular form of unfair competition. It is also clear from the
case law both of the Court of Justice and of the Court of Appeal in this
country that the defendant’s conduct is most likely to be regarded as unfair
where he intends to take advantage of the reputation and goodwill of the trade
mark. Nevertheless, in Jack Wills Ltd v
House of Fraser (Stores) Ltd
[2014] EWHC 110 (Ch), [2014] FSR 39 at [80] I concluded that there is nothing
in the case law to preclude the court from holding in an appropriate case that
the use of a sign the objective effect of which is to enable the defendant to
benefit from the reputation and goodwill of the trade mark amounts to unfair
advantage even if it is not proved that the defendant subjectively intended to
exploit that reputation and goodwill. Counsel for
SkyKick
did not challenge
that conclusion.
316.
Due cause. The CJEU held in Case C-65/12 Leidseplein Beheer BV
v
Red Bull GmbH [EU:C:2014:49], [2014] Bus LR 280 at [60] that:
“ Article 5(2) of [Directive 2008/95] must be interpreted as meaning that the proprietor of a trade mark with a reputation may be obliged, pursuant to the concept of ‘due cause’ within the meaning of that provision, to tolerate the use by a third party of a sign similar to that mark in relation to a product which is identical to that for which that mark was registered, if it is demonstrated that that sign was being used before that mark was filed and that the use of that sign in relation to the identical product is in good faith. In order to determine whether that is so, the national court must take account, in particular, of:
– how that sign has been accepted by, and what its reputation is with, the relevant public;
– the degree of proximity between the goods and services for which that sign was originally used and the product for which the mark with a reputation was registered; and
– the economic and commercial significance of the use for that product of the sign which is similar to that mark.”
Assessment
317.
Reputation. SkyKick
admit that the Trade Marks have reputation in
the UK in relation to television services, television reception equipment,
telephony services and broadband provision provided to domestic consumers.
Sky
contend, and I accept, that their reputation is not limited to domestic
consumers, but extends to business consumers.
Sky
also contend that their
reputation extends to computer software, electronic mail services and advisory
services relating to computer services relating to computer hardware and
software. I do not consider that the evidence establishes that the Trade Marks
have a reputation in relation to those goods and services, however. My reasons
are essentially the same as those I gave in relation to enhanced distinctive
character (see paragraph 294 above). I would add that
Sky
have adduced little
evidence of the kind envisaged in General Motors at [27] which is
specific to these additional goods and services. For example, there is no
evidence as to
Sky’s
market share in the fields of computer software,
electronic mail services and advisory services, but I infer that it is much
smaller than their market share in their core fields.
318.
Link. As discussed above, SKY
is a household name in relation to
television, telephony and broadband. As also discussed above, the sign
SkyKick
is partly identical and partly different to
SKY.
SkyKick’s
goods and services
are in my judgment somewhat similar to the goods and services for which
Sky
have a reputation, but not
very
similar. Taking all these factors into account,
I consider that the sign
SkyKick
would be likely to bring
SKY
to the average
consumer’s mind.
319.
Detriment to the distinctive character of the Trade Marks.
SkyKick
contend that dilution cannot occur because the
SKY
trade mark is
already thoroughly diluted by the use of
SKY
formative marks by third parties.
I do not accept this. In my
view
use of a
SKY
formative mark in relation to
television services and equipment would be likely to dilute the distinctive
character of the trade mark. But the present case is not such a case.
SkyKick’s
use in relation to goods and services which are merely somewhat similar to
those for which
Sky
have a reputation. Moreover, in the IT field,
SKY
is far
from being unique having regard to the
SKY
formative marks used by third
parties. In all the circumstances I am not persuaded that, in the absence of a
likelihood of confusion, that there is any real risk of detriment to the
distinctive character of the Trade Marks.
320.
Unfair advantage. In his written closing submissions counsel for
Sky
essentially relied upon the same factors as he relied upon for detriment to
the distinctive character of the Trade Marks as establishing unfair advantage.
In his oral submissions he also argued that
SkyKick
benefitted from being
associated with a household name. In my judgment
Sky
have not established any
case of unfair advantage. It is not suggested that
SkyKick
intend to take
advantage of the reputation of the Trade Marks, and there is no basis for
believing that there is likely to be any transfer of image from
SKY
to
SkyKick.
321.
Due cause. Having regard to my conclusions above, SkyKick
do not
need to establish due cause.
322.
Conclusion. If there is no likelihood of confusion, then Sky’s
case
under Article 9(2)(c) of the Regulation/Article 10(2)(c) of the Directive is
not made out.
Own name defence
323.
SkyKick
rely, if necessary, on the “own name” defence provided by
Article 12(a) of Regulation 207/2009 (in respect of the EU Trade Marks) and Article
6(1)(a) of Directive 2008/95 (in respect of the UK Trade Mark).
324.
So far as the EU Trade Marks are concerned, SkyKick’s
reliance upon
Article 12(a) of Regulation 207/2009 in respect of use of the signs complained
of prior to 23 March 2016 has been rendered moot, because
Sky
have abandoned
any claim to financial relief in respect of acts committed before that date. So
far as acts committed after that date are concerned, it is common ground that
neither Defendant is a natural person, and thus
SkyKick
cannot rely upon
Article 12(a) of Regulation 207/2009 as amended by Regulation 2015/2436 or
Article 14(1)(a) of the Regulation.
SkyKick
contend, however, that the
amendment of Article 12(a) of Regulation 207/2009 so as to restrict its
availability to natural persons was invalid and that the limitation of Article
14(1)(a) of the Regulation to natural persons is likewise invalid. This issue
only arises, however, if
SkyKick
would otherwise be able to rely upon this
defence. That depends on whether their use of the sign
SkyKick
is “in
accordance with honest practices in industrial and commercial matters”.
325.
So far as the UK Trade Mark is concerned, as noted above, the UK has not
yet amended section 11(2)(b) of the 1994 Act so as to comply with Article
14(1)(a) of the Directive and is not obliged to do so until 14 January 2019.
For this reason, SkyKick
do not contend that the amendment of Article 6(1)(a)
of Directive 2008/95 so as to restrict its availability to natural persons was
invalid, although their argument on invalidity is equally applicable to this
amendment. It is common ground that each of the signs complained of is the “own
name” of each of the Defendants. Accordingly, the only issue is whether their
use of the sign
SkyKick
is “in accordance with honest practices in industrial
and commercial matters”.
326.
For the avoidance of doubt, the bases upon I am considering this issue
are that (a) the Trade Marks are validly
registered, (b)
Sky
have established a
likelihood of confusion, but (c) absent a likelihood of confusion,
Sky’s
case
under Article 9(2)(c) of the Regulation/Article 10(2)(c) of the Directive is
not made out.
Is SkyKick’s
use of the sign in accordance with honest
practices?
328.
First, the requirement to act in accordance with honest practices in
industrial or commercial matters “constitutes in substance the expression of a
duty to act fairly in relation to the legitimate interests of the trade mark
proprietor”: see Case C-63/97 Bayerische Motorenwerke AG v
Deenik [1999] ECR I-905 at [61], Case C-100/02 Gerolsteiner Brunnen GmbH & Co
v
Putsch
GmbH [2004] ECR I-691 at [24], Anheuser-Busch at [82], Case
228/03 Gillette Co
v
LA-Laboratories Ltd Oy [2005] ECR I-2337 at [41]
and Case C-17/06 Céline SARL
v
Céline SA [2007] ECR I-7041 at [33].
“The mere fact that there exists a likelihood of aural confusion between a word mark registered in one Member State and an indication of geographical origin from another Member State is therefore insufficient to conclude that the use of that indication in the course of trade is not in accordance with honest practices. In a Community of 15 Member States, with great linguistic diversity, the chance that there exists some phonetic similarity between a trade mark registered in one Member State and an indication of geographical origin from another Member State is already substantial and will be even greater after the impending enlargement.”
332.
In applying these principles in a number of cases, I have found it of
assistance to consider the following list of factors which I first set out in Samuel
Smith v
Lee [2011] EWHC 1879 (Ch), [2012] FSR 7 at [118]:
i) whether the defendant knew of the existence of the trade mark, and if not whether it would have been reasonable for it to conduct a search;
ii) whether the defendant used the sign complained of in reliance on competent legal advice based on proper instructions;
iii) the nature of the use complained of, and in particular the extent to which it is used as a trade mark for the defendant’s goods or services;
iv) whether the defendant knew that the trade mark owner objected to the use of the sign complained of, or at least should have appreciated that there was a likelihood that the owner would object;
v)
style='font:7.0pt "Times New Roman"'>
whether the defendant knew, or should have appreciated, that there was a
likelihood of confusion;
vi)
style='font:7.0pt "Times New Roman"'>
whether there has been actual confusion, and if so whether the defendant
knew this;
vii)
style='font:7.0pt "Times New Roman"'>
whether the trade mark has a reputation, and if so whether the defendant
knew this and whether the defendant knew, or at least should have appreciated,
that the reputation of the trade mark would be adversely affected;
viii)
style='font:7.0pt "Times New Roman"'>
whether the defendant’s use of the sign complained of interferes with
the owner’s ability to exploit the trade mark;
ix) whether the defendant has a sufficient justification for using the sign complained of; and
x) the timing of the complaint from the trade mark owner.
“In considering whether a defendant is acting fairly in relation to the legitimate interests of the trade mark proprietor it will be relevant to consider, among other things, whether there exists a likelihood of confusion; whether the trade mark has a reputation; whether the use of the sign complained of takes advantage of or is detrimental to the distinctive character or repute of the trade mark; and whether the possibility of conflict was something which the defendant was thought to have been aware. The national court must carry out an overall assessment of all the circumstances in determine whether the defendant is competing unfairly.”
334. Assessment. Considering the Samuel Smith factors, I find that the position is as follows:
i)
SkyKick
knew that
Sky
had trade mark rights in Europe which
Sky
had
successfully enforced against Microsoft’s use of
SkyDrive
before
SkyKick
began
to target the EU in November 2014. Although
SkyKick
did not have any detailed
knowledge of those rights at that date, that was because
SkyKick
had not carried
out an international search which they had been recommended to carry out and
could have afforded even in 2012. In my
view,
given what
SkyKick
knew by
November 2014, it would have been reasonable for
SkyKick
to carry out a search
before launching in the EU. On the other hand, it would also have been
reasonable for
SkyKick
to consider the judgment of Asplin J in the
SkyDrive
case. If
SkyKick
had done so, they would have found that her reasoning was
partly, although not wholly, dependent on evidence of actual confusion.
ii)
SkyKick
did not use the sign complained of in reliance on competent
legal advice based on proper instructions.
iii)
SkyKick
use the sign as a trade mark for their goods and services.
iv)
SkyKick
did not know that
Sky
objected to the use of the sign in
November 2014, but in my
view
SkyKick
should have appreciated that there was a
likelihood that
Sky
would object.
v)
style='font:7.0pt "Times New Roman"'>
SkyKick
did not know that there was a likelihood of confusion, but in my
view
SkyKick
should have appreciated that there was a likelihood of confusion
(assuming that the Trade Marks are
valid).
vi)
style='font:7.0pt "Times New Roman"'>
There has been no actual confusion.
vii)
style='font:7.0pt "Times New Roman"'>
The Trade Mark have a reputation, and
SkyKick
knew this in outline
although not in detail.
SkyKick
neither knew, nor should have appreciated, that
the reputation of the Trade Marks would be adversely affected.
viii)
style='font:7.0pt "Times New Roman"'>
SkyKick’s
use of the sign interferes with
Sky’s
ability to exploit the Trade
Marks because it represents an obstacle to
Sky
Business’ expansion into the IT
field.
ix)
In my view
SkyKick
have no real justification for using the sign. The
first justification proffered is that
SkyKick
adopted the sign innocently and
were already using it in the USA. I do not consider that that is of much weight
given that trade marks are territorial. It is not uncommon for businesses to
have to use different trade marks in different territories because of the prior
rights of other traders, and
SkyKick
could have done so in November 2014,
albeit that it would obviously have been preferable to use the same trade mark.
The second justification proffered is that
SkyKick
are using their sign in
relation to specialised IT products and that
SkyKick
do not compete with
Sky.
I
consider that this has more weight, but I do not regard it as decisive
(assuming that the Trade Marks are
valid).
x)
Sky
complained promptly once they became aware of
SkyKick,
but this was
over two years after
SkyKick
started targeting the EU.
335.
Considering the position overall, I am not satisfied that SkyKick’s
use
of its name is in accordance with honest practices in industrial and commercial
matters because in my
view
SkyKick
have not acted fairly in relation to
Sky’s
legitimate interests (assuming that the Trade Marks are
valid).
In particular,
I consider that
Sky
are justified in being concerned that, even though there
has no actual confusion to date, confusion may yet occur in the future.
Was the amendment to Article 12(a) of Regulation 207/2009 invalid?
336.
SkyKick
contend that the amendment to Article 12(a) of Regulation
2007/2009 by Article 1(13) of Regulation 2015/2424 to restrict the own name
defence to natural persons was invalid since it was an unjustified or
disproportionate interference with EU fundamental rights. Given my conclusion
that
SkyKick
cannot rely upon this defence in any event, it is not necessary to
consider this issue. I will nevertheless do so in case I am wrong about the
honest practices point.
337.
The legislative history in more detail. I have set out the
relevant provisions above. For the purposes of considering SkyKick’s
invalidity
case, however, it is necessary to explain the legislative history in a little
more detail.
“2.254 Due to the broad interpretation by the ECJ, Article 6(1)(a) TMD and Article 12(a) CTMR at present apply to all trade names, even where they do not contain the personal name of the owner. Such a broad scope of the limitation does not seem appropriate. It creates unequal conditions for trade names and trade marks in case of conflicts, as trade names are regularly granted unrestricted protection against younger trade marks. It thereby clashes with a maxim which is well-established in the legal tradition of most or all Member States, namely that all types of distinctive signs belong to the same branch of law, and that conflicts between them should be uniformly resolved on the basis of the priority principle. Exceptions from that rule are necessary only where the use of the later sign is founded on the legitimate interest of the owner to use his own personal name in commerce in order to designate his business.
2.255 Article 6(1)(a) TMD and Article 12(a) CTMR should therefore be restricted to the use of the name of natural persons. The Study does not take a position on whether this is limited to family names or includes also forenames, and whether the right to use a name will continue when there is a succession in ownership and when there are transformations, such as from a partnership to a limited liability company.”
“Limitation of the effects of a European trade mark (Article 12)
The limitation in Article 12(1)(a) is restricted to cover the use of personal names only in accordance with the Joint Statement of the Council and the Commission ...”
“The exclusive rights conferred by an EU trade mark should not entitle the proprietor to prohibit the use of signs or indications by third parties which are used fairly and thus in accordance with honest practices in industrial and commercial matters. In order to create equal conditions for trade names and EU trade marks against the background that trade names are regularly granted unrestricted protection against later trade marks, such use should only be considered to include the use of the personal name of the third party ...”
“Article 11
Freedom of expression and information
1. Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers.
…
Article 16
Freedom to conduct a business
The freedom to conduct a business in accordance with Union law and national laws and practices is recognised.
Article 17
Right to property
1. Everyone has the right to own, use, dispose of and bequeath his or her lawfully acquired possessions. No one may be deprived of his or her possessions, except in the public interest and in the cases and under the conditions provided for by law, subject to fair compensation being paid in good time for their loss. The use of property may be regulated by law in so far as is necessary for the general interest.
2. Intellectual property shall be protected.
Article 20
Equality before the law
Everyone is equal before the law.
Article 21
Non-discrimination
1. Any discrimination based on any general ground such as sex, race, colour, ethnic or social origin, genetic features, language, religion or belief, political or any other opinion, membership of a national minority, property, birth, disability, age or sexual orientation shall be prohibited.
…
Article 51
Field of application
1. The provisions of this Charter are addressed to the institutions, bodies, offices and agencies of the Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing Union law. They shall therefore respect the rights, observe the principles and promote the application thereof in accordance with their respective powers and respecting the limits of the powers of the Union as conferred on it in the Treaties.
…
Article 52
Scope and interpretation of rights and principles
1. Any limitation on the exercise of the rights and freedoms recognised by this Charter must be provided for by law and respect the essence of those rights and freedoms. Subject to the principle of proportionality, limitations may be made only if they are necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others.
…
3. In so far as this Charter contains rights which correspond to rights guaranteed by the Convention for the Protection of Human Rights and Fundamental Freedoms, the meaning and scope of those rights shall be the same as those laid down by the said Convention. This provision shall not prevent Union law providing more extensive protection.
4. In so far as this Charter recognises fundamental rights as they result from the constitutional traditions common to the Member States, those rights shall be interpreted in harmony with those traditions.
…
7. The explanations drawn up as a way of providing guidance in the interpretation of this Charter shall be given due regard by the courts of the Union and of the Member States.”
349. The explanations to Article 17 state:
“Protection of intellectual property, one aspect of the right of property, is explicitly mentioned in paragraph 2 because of its growing importance and Community secondary legislation. Intellectual property covers not only literary and artistic property but also inter alia patent and trademark rights and associated rights. The guarantees laid down in paragraph 1 shall apply as appropriate to intellectual property.”
350.
Relevant principles. The relevant principles were summarised by
the CJEU in Case C-210/03 R (on the application of Swedish Match AB) v
Secretary of State for Health [2004] ECR I-11893 as follows:
“72. According
to the case-law of the Court, the freedom to pursue a trade or profession, like
the right to property, is one of the general principles of Community law. Those
principles are not absolute rights, however, but must be considered in relation
to their social function. Consequently, restrictions may be imposed on the
exercise of the freedom to pursue a trade or profession, as on the exercise of
the right to property, provided that the restrictions in fact correspond to
objectives of general interest and do not constitute, in relation to the aim
pursued, a disproportionate and intolerable interference, impairing the very
substance of the rights guaranteed (see, inter alia, Case 265/87 Schräder
[1989] ECR 2237, paragraph 15; Case C-280/93 Germany
v
Council
[1994] ECR I-4973, paragraph 78; Case C-293/97 Standley and Others
[1999] ECR I‑2603, paragraph 54; Joined Cases C-37/02 and C-38/02 Di
Lenardo and Dilexport [2004] ECR I-0000, paragraph 82, and Spain and
Finland
v
Parliament and Council, paragraph 52).
73. The
prohibition on the marketing of tobacco products for oral use laid down in
Article 8 of Directive 2001/37 is indeed capable of restricting the freedom of
manufacturers of such products to pursue their trade or profession, assuming
that they have envisaged such marketing in the geographical region concerned by
that prohibition. However, the operators’ right to property is not called into
question by the introduction of such a measure. No economic operator can claim
a right to property in a market share, even if he held it at a time before the
introduction of a measure affecting that market, since such a market share
constitutes only a momentary economic position exposed to the risks of changing
circumstances (Case C-280/93 Germany v
Council, paragraph 79).
Nor can an economic operator claim an acquired right or even a legitimate
expectation that an existing situation which is capable of being altered by
decisions taken by the Community institutions within the limits of their
discretionary power will be maintained (see Case 52/81 Faust
v
Commission
[1982] ECR 3745, paragraph 27).”
351.
In Case C-447/14 Pillbox 38 (UK) Ltd v
The Secretary of State for
Health [EU:C:2016:324], [2016] 4 WLR 110 the CJEU stated:
“48. It should be borne in mind at the outset that, according to the settled case-law of the Court, the principle of proportionality, which is one of the general principles of EU law, requires that acts of the EU institutions be appropriate for attaining the legitimate objectives pursued by the legislation at issue and do not exceed the limits of what is necessary in order to achieve those objectives; when there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued (see, to that effect, judgments in British American Tobacco (Investments) and Imperial Tobacco, C‑491/01, EU:C:2002:741, paragraph 122; ERG and Others, C‑379/08 and C‑380/08, EU:C:2010:127, paragraph 86; and Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 67 and 91).
49. With regard to judicial review of the conditions referred to in the previous paragraph of the present judgment, the EU legislature must be allowed broad discretion in an area such as that at issue in the main proceedings, which entails political, economic and social choices on its part, and in which it is called upon to undertake complex assessments. Consequently, the legality of a measure adopted in that area can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institutions are seeking to pursue (see, to that effect, judgment in British American Tobacco (Investments) and Imperial Tobacco, C‑491/01, EU:C:2002:741, paragraph 123).”
353.
Assessment. SkyKick
contend that the restriction of the own name
defence to natural persons is an interference with, or restriction upon, a
number of fundamental rights enjoyed by companies such as
SkyKick,
and in
particular those under Articles 11 and 16 of the Charter. Although
Sky
took
issue with this, counsel for
Sky
did not advance any cogent argument to the
contrary. In my judgment the restriction of the own name defence to natural
persons is an interference with, or restriction upon, the commercial freedom of
expression and the freedom to conduct a business of legal persons.
354.
In my judgment, however, the measure is justified by legitimate
objectives and is not manifestly inappropriate. The objective pursued by the
measure is the protection of intellectual property protected by Article 17(2),
namely trade marks. The purpose of the own name defence is to give a trader a
defence to a claim for trade mark infringement where the trader would otherwise
be infringing. It is plain that different considerations are involved in
affording a defence for the defendant’s use of their own name depending on
whether the defendant is a natural person or a legal person. A natural person will
generally be given their name by their parents at birth (although, at least in
English law, natural persons can acquire names subsequently) and the choice of
name will generally be strongly influenced by family history and other cultural
factors. By contrast, legal persons are named when they are formed and
generally have a free choice of name within the law. Family history and other
cultural factors are, if not entirely irrelevant, certainly much less relevant
when naming a legal person than when naming a natural person. It is fair to say
that this difference between the positions of natural and legal persons could
be accommodated by the requirement that the use of the sign be in accordance
with honest practices in industrial and commercial matters, but in my view
it
does not follow that the legislature’s decision that only natural persons
should be able to rely upon the own name defence is manifestly inappropriate.
It was a legitimate policy choice, which was recommended by a distinguished
academic institute as part of a detailed study of the European trade mark
system as a whole, as to the circumstances in which the defence should be
available. As counsel for
Sky
pointed out, the same solution has been adopted
by English common law in the context of passing off: see Asprey and Garrard
Ltd
v
WRA (Guns) Ltd [2001] EWCA Civ 1499, [2002] FSR 31 at [41]-[43]
(Peter Gibson LJ, with whom Chadwick and Kay LJJ agreed). Moreover, it has the
advantage of providing a bright-line rule for legal persons rather than leaving
matters to a case-by-case assessment, the difficulties of which are illustrated
by the split decision of the Court of Appeal in Maier (see Kitchin LJ at
[145]-[160], Underhill LJ at [189]-[195] and Sales LJ dissenting at
[239]-[258]).
355.
Accordingly, I reject SkyKick’s
contention that the amendment to Article
12(a) of Regulation 207/2009 by Regulation 2015/2424 was invalid.
Passing off
356.
Both counsel dealt with passing off briefly in their submissions, and I
shall follow their example. The legal principles are well known and not in
dispute, and therefore it is unnecessary to set out them. The key issue in
applying those principles to the present case is whether SkyKick’s
use of their
sign gave rise to a misrepresentation in November 2014. The relevant
considerations are
very
similar to those which fall to be taken into account
under Article 9(2)(b) of the Regulation/Article 10(2)(b) of the Directive, but
there are two important differences. First, the issue is to be approached
having regard to the actual extent of
Sky’s
use of the
SKY
trade mark by that
date, rather than upon the basis of
Sky’s
deemed use by
virtue
of the
specifications of the Trade Marks. This is a factor which militates against
there being a misrepresentation, particularly given the absence of evidence of
actual confusion. Secondly, in this context,
Sky
can rely upon their own
extensive use of
SKY
formative marks. This is a factor which supports the
existence of a misrepresentation, because it supports the proposition that consumers
may believe that
SkyDrive
is another sub-brand of
SKY.
In my judgment the issue
is finely balanced, but in the end I have concluded that the first point tips
the balance in
SkyKick’s
favour. Accordingly,
Sky’s
claim for passing off is
dismissed.
Reference to the CJEU
357.
It follows from the conclusions reached above that, if the Trade Marks
are validly
registered in respect of the goods and services set out in
paragraph 6 above, then
SkyKick
have infringed the Trade Marks pursuant to Article
9(2)(b) of the Regulation/Article 10(2)(b) of the Directive and do not have an
own name defence. Thus the outcome of the case depends on whether the Trade
Marks are
validly
registered for those goods and services. As I have explained,
the
validity
of the Trade Marks depends on a number of issues of European law
upon which the guidance of the CJEU is required. Since this Court is not a
court of last resort, I have a discretion as to whether to make a reference or
attempt to decide the issues myself. In my judgment, in the circumstances of
the present case, it is better to make a reference myself for the following
reasons. First,
SkyKick
urged me to make a reference. Secondly, although
Sky
contended that no reference was necessary to decide the case,
Sky
did not urge
me not to refer if I concluded that a reference was necessary. Thirdly, I
consider that, if I did not refer, it is highly likely that the Court of Appeal
would do so, thereby entailing further costs and delay for the parties. Lastly,
the issues are ones of general public importance, and so the CJEU should be
asked to rule upon them sooner rather than later.
Summary of principal conclusions
358. For the reasons given above, I conclude that:
i)
SkyKick’s
contention that the Trade Marks are partly invalid because the
relevant parts of the specifications of goods and services lack clarity and
precision raises issues upon which guidance from the CJEU is required;
ii)
SkyKick’s
contention that the Trade Marks are wholly or partly invalid
because the applications were made in bad faith since
Sky
did not intend to use
the Trade Marks in relation to all of the specified goods and services also
raises issues upon which guidance from the CJEU is required;
iii) I shall therefore refer questions along the lines set out in paragraphs 174 and 258 above to the CJEU;
iv)
if the Trade Marks are valid,
then there is a likelihood of confusion
within Article 9(2)(b) of the Regulation/Article 10(2)(b) of the Directive as a
result of
SkyKick’s
use of the
SkyKick
sign;
v)
style='font:7.0pt "Times New Roman"'>
if the Trade Marks are
valid,
and there is a likelihood of confusion
within Article 9(2)(b) of the Regulation/Article 10(2)(b) of the Directive,
SkyKick’s
use of the
SkyKick
sign is not in accordance with honest practices in
industrial and commercial matters and therefore
SkyKick
do not have an own name
defence; and
vi)
style='font:7.0pt "Times New Roman"'>
Sky’s claim for passing off is dismissed.