Possible dangers with broad trade mark specifications

A brand owner often files its trade mark for a broad range of goods and services in order to assist it in preventing third parties from using its mark (or a similar one) for the relevant goods and services. Often the brand owner will have no intention to use the mark for all of the goods and services protected by the trade mark.

Filing for such broad specifications can cause difficulties and possibly expose the registered trade mark to an invalidity attack (which, if successful, would result in the whole or part of a trade mark specification being removed from the register).

A recent case involving Sky v SkyKick highlights the dangers in filing trade marks with broad specifications. It illustrates that filing an EU trade mark covering the UK is presently a far better way to protect the brand owner from such an invalidity attack as the UK Court and Trade Mark Registry are far more likely to invalidate a UK trade mark if the brand owner has no intention to use the mark for certain goods or services covered by the registration.

The UK Court has referred several questions to the Court of Justice of the European Union ("CJEU") to seek clarity on the implications of filing trade marks for broad terms and for goods and services for which the brand owner does not intend to offer or supply under the relevant mark.

The case in detail 

In this case, Sky claimed that SkyKick had infringed various UK and Community trade mark registrations comprising the word Sky ('the Trade Marks') by using the sign 'SkyKick' and variants thereof and therefore had committed passing off. SkyKick denied infringement and passing off and counterclaimed for a declaration that the Trade Marks were wholly or partly invalid. This argument was advanced on the grounds that the specifications of goods and services lacked clarity and precision and that the applications were made in bad faith as Sky did not have an intention to use the Trade Marks for all of the goods and services claimed.

This case is of particular interest following the IP translator case which held that goods and services for which protection of a trade mark is sought, should be identified by the applicant with "sufficient clarity and precision". The CJEU held that the use of class headings may be clear in some cases but not in others. Brand owners were therefore given an opportunity following the case to review their trade mark registrations and specify with more precision what goods and services they wished to protect under the general class headings. This led to some brand owners amending their trade mark specifications.

Mr Justice Arnold considered the evidence in this case and held that if the Trade Marks were valid, SkyKick had infringed them. Therefore, the key issue in the case was the validity of the Trade Marks.

In this regard, the Judge made the following points:

Unclear and imprecise terms

• Whilst the IP Translator case held that trade marks which contained imprecise terms should not be allowed to proceed to registration, it did not make clear whether the trade mark registration could be declared invalid on that ground after registration. There was also some earlier case law which supported the view that the trade mark cannot be invalidated on this ground.
• The terms used in the class headings vary between relatively precise ones (such as 'cash registers' in class 9) and much more all-encompassing ones (such as 'telecommunications' or 'telecommunications services' in class 38). The Judge considered that the term 'computer software' was too broad and was "unjustified and contrary to the public interest because it confer[ed] on the proprietor a monopoly of immense breadth which cannot be justified by any legitimate commercial interest of the proprietor". However, the Judge did accept that this may not mean that the term is imprecise and unclear. That said, he thought the term was no less clear than 'machines', which had been indicated in various policies as being imprecise.
• Various questions were therefore referred to the CJEU, namely:
  • (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?

Bad Faith

• SkyKick accepted that Sky did intend to use the Trade Marks for some goods and services but not for all. Consequently, they put forward two arguments: first, that this bad faith led to the whole registration being invalidated, or, in the alternative, that the registration in relation to the goods and services in which there was no intention to use the mark should be invalidated. The EU case law seems to support the conclusion that a trade mark should be invalidated in relation to all the goods and services in the application where there is an element of bad faith in the application; whereas the approach in the UK is more supportive of a partial invalidation.
• The CJEU has had relatively little opportunity to consider what constitutes filing a trade mark application in bad faith, and has not had occasion directly to address the question of whether it is bad faith to apply to register a trade mark without a genuine intention to use the trade mark in relation to the specified goods and/or services. However, there is now a considerable body of case law on bad faith from the General Court in appeals from the Boards of Appeal of OHIM/EUIPO. The Judge commented that, "[a]lthough the General Court has not yet squarely addressed the question of whether it is bad faith to apply to register a trade mark without a genuine intention to use the trade mark in relation to the goods and/or services specified in the registration it has shed some light on the question in a number of cases."
• After reviewing the cases at the EU level, the Judge held that the reasoning in the cases does recognise that, in certain circumstances, registering a trade mark with no intention of using it can constitute bad faith. However, it was clear from the cases he referred to that the CJEU is not likely to find bad faith except in extreme circumstances. In particular, in Psytech International Ltd v Office for Harmonisation in the Internal Market [2011] ECR II-165, the General Court held that there was no basis "to find that there is bad faith in view of the size of the list of goods and services in the application for registration..." However, there were comments in some of the other cases which indicated that bad faith may be found in some circumstances. For example, one case held that account should be taken of the "applicant's commercial logic for filing its application..." and this suggested that if there is no commercial logic then the trade mark may have been filed in bad faith.
• In contrast, there is a considerable body of UK case law on bad faith which has focussed on the intention to use the mark. For example, in DEMON ALE Trade Mark [2000] RPC 345, the applicant applied to register the trade mark for beer, but admitted that he did not intend to use it. Geoffrey Hobbs QC sitting as the Appointed Person upheld the Hearing Officer’s conclusion that the application had been made in bad faith since the applicant’s section 32(3) declaration was false.
• Considering the evidence, the Judge found that Sky did not have an intention to use the Trade Marks for certain goods and services at the time it filed the application.
• In light of these findings, the Judge referred these questions to the CJEU:
  • (1) 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?
  • (2) If the answer to question (1) 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?
  • (3) Is section 32(3) of the 1994 Act compatible with the Directive and its predecessors?

It will be several months before we hear from the CJEU with their preliminary ruling on these questions. However, in the meantime, brand owners should be reviewing any EU and UK trade marks they hold which contain very broad specifications and thinking about implementing protective measures, pre-emptively, to ensure continued protection in the event that the preliminary ruling means that existing trade marks with broad specifications are vulnerable to invalidation where there was not an intention on the part of the applicant at the time the application was made, to use the trade mark across the whole specification of relevant goods/services.

Quite clearly, businesses need to be careful when filing trade marks for very broad specifications when they have no intention to use the mark for many of the goods and services covered. That said, there are many advantages from an enforcement angle to doing this and so businesses should consider a few defensive steps such as filing EU trade marks and perhaps filing multiple applications where the goods and services for which the mark is not intended to be used are in a separate application to the core goods and services. The answers to these referred questions may also have an impact on those businesses that re-file their trade marks every five years in order to avoid the risk of their rights being cancelled for non-use.

If you would like to discuss this issue further please contact one of our IP team specialists.