In January 2020, the CJEU issued guidance on both points, confirming in relation to (i) that a lack of clarity/precision in a specification is not a ground for invalidity. Applying the CJEU’s guidance, the UK High Court decision concluded in relation to (ii) that Sky had applied for at least certain goods/services with a view to obtaining an exclusive right “purely as a weapon against third parties”. In other words, partial bad faith was proven so far as Sky had applied for the broad term “computer software” as part of its strategy without any commercial justification (but Sky was entitled to file for a broader scope of protection than its actual use on the marketplace reflected). This resulted in the UK High Court restricting Sky’s trade marks to a specification which reflected the company’s actual use.

The Court of Appeal decision concerns appeals filed by both parties: Skykick challenged the cutting-down of Sky’s specifications for bad faith (contending it should have been more severe); Sky challenged the finding of partial bad faith.

“Un-finding” bad faith

The Court of Appeal was “in no doubt” that Sky’s appeal should be allowed and overturned the UK High Court’s decision to restrict some of its trade marks on the grounds of bad faith.

The Court of Appeal looked at key EU/UK case law and legislation concerning bad faith, and confirmed that a lack of intention to use a mark, as a solitary factor, would not amount to bad faith.

The jurisprudence gives guidance as to the types of factors which may contribute to a finding of bad faith. For instance, in the case of Lindt (see http://dycip.com/c-52907-lindt-09), the applicant operated with a “sole objective” or “sole aim” which was inconsistent with the essential functions of a trade mark, or designed to promote unfair competition. Importantly, in SKYKICK, the Court of Appeal flagged that a lack of intention to use a mark for certain goods/services might be evidence of bad faith (where there are other “objective, relevant and consistent indicia” which allow the conclusion to be reached), but not bad faith in itself. Other mechanisms within the trade mark system enable parties to challenge conflicting rights (via opposition, invalidity on relative grounds, and non-use revocation actions).

The Court of Appeal looked at judge Arnold LJ’s core reasoning for the finding of bad faith:

1. for “some goods and services covered by the specifications”, Sky did not intend to use the trade marks at the application dates and there was no foreseeable prospect that they would ever do so (“the no prospect of use conclusion”)
2. the marks were applied for pursuant to a deliberate strategy of seeking very broad protection, regardless of whether it was commercially justified (“the broad strategy/no justification conclusion”).

In relation to (1), the Court of Appeal flagged that SkyKick had challenged Sky’s rights on the basis that they did not intend to use the SKY mark for all computer software, and there was no prospect of that. The Court of Appeal did not consider this to be a relevant or objective indicator of bad faith, noting that an absence of a plan to use a mark for all conceivable types or sub-divisions of computer software would not amount to bad faith.

In relation to point (2), the Court of Appeal held that an absence of a rationale/strategy in connection with a wide range of goods (that is, a plan under which the mark is to be used for all goods/services within a category of the registration) is not relevant to the bad faith assessment. The Court of Appeal also noted that, in connection with “computer software”, Sky had extensive use and expectations of further use, with “obvious commercial justification for applying for computer software” – namely, the company’s existing substantial business in computer software.

In short

It seems clear that broad terms such as “computer software” are not objectionable through being overly broad (if an applicant intends to use their mark in relation to just one type of software, that should be enough to show it has an intent to use for the broader term).

However, there is no clear guidance on whether an applicant like Sky is justified in covering products such as “bleach” in relation to which there is arguably no commercial justification based on their established business.