MR JUSTICE ARNOLD :
Contents
Topic Paragraphs
Introduction 1
The Trade Marks 2-7
The signs complained of 8-9
The witnesses 10-22
Sky’s witnesses 10-16
SkyKick’s witnesses 17-22
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
Sky Business 67
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
Warnings about
Sky 90-93
Expansion into
the EU 94
Another warning about Sky 95-96
SkyKick’s
products 97-98
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).
4.
For reasons that will appear, I must describe the specifications of
goods and services of the Trade Marks, both as applied for and as registered,
in a little more detail:
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)
What I have said about the specification of EU112 is equally applicable
to the specification of UK604. The specification runs to 8,255 words.
5.
By way of illustration of the way which the class headings are
supplemented by increasingly detailed descriptions in the specifications of
EU112, EU992 and UK604, the class heading to Class 9 in the 9th
edition of the Nice Classification includes “apparatus for recording,
transmission or reproduction of sound or images”, while the Class 9
specification of EU112 includes the following goods (among many others):
“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)
telecommunications services (Class 38);
vi)
electronic mail services (Class 38);
vii)
internet portal services (Class 38); and
viii)
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
Sky’s 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.
SkyKick’s witnesses
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.
20.
In my assessment what these points demonstrate is that Mr Schwartz had a
poor recollection, rather than any attempt to mislead the Court. It follows
that it is necessary to treat his evidence of historical matters with caution,
but otherwise I accept it.
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
|
|
Sky+
|
April 2009 (iPhone). Since made available on Android.
|
|
Sky News
|
May 2009 (iPhone). Since made available on Android,
Blackberry and Windows phone.
|
|
Sky Sports Live Cricket Score Centre
|
June 2009 (iPhone)
|
|
Sky Sports Live Football Score Centre
|
September 2009 (iPhone)
|
|
Team Sky Cycling
|
August 2010 (iPhone).
|
|
Sky Sports News
|
August 2010 (iPhone). Since made available on Android and
Blackberry.
|
|
Sky News for iPad
|
March 2011 (iPad).
|
|
Sky Go
|
July 2011 (iPhone). Since made available on Android.
|
|
Sky Bet
|
August 2011 (iPhone). Since made available on Android.
|
|
Sky Sports TV
|
August 2011 (iPhone). Since made available on Android.
|
|
Sky Movies
|
November 2011.
|
|
Sky Sports for iPad
|
December 2011.
|
|
Sky Arts: Inspiration Everywhere
|
November 2012.
|
|
Sky Tyne and Wear
|
April 2012 (iPhone). Since made available on Android.
|
|
Sky Cloud WiFi
|
April 2012 (iPhone). Since made available on Android.
|
|
NOW TV Powered by Sky
|
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.
SkyKick and their business
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.
74.
Microsoft Partners are specialised IT providers who offer their business
customers a range of IT services and act as re-sellers of Microsoft products.
Partners are typically small- to medium-sized enterprises (“SMEs”) ranging in
size from 5-10 employees to over 100 employees. Partners must register with and
be approved by Microsoft, and each Partner is given a Microsoft Partner ID
number.
75.
Office 365 was launched by Microsoft in 2011. It provides
subscription-based access to Microsoft Office programs such as Word and Excel
and other cloud-based productivity services. The email infrastructure used in
Office 365 is quite different to that in the prior Microsoft Office platform.
Accordingly, a business wanting to change from Office to Office 365 must “migrate”
its email accounts and associated settings and configurations from one
infrastructure to another.
76.
Mr Schwartz and Mr Richman came up with the idea of developing a product
which would largely automate the migration process and selling the product to
Microsoft Partners. I shall describe this product in more detail below.
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.
81.
On 12 January 2012 Ms Graybeal sent Mr Schwartz and Mr Richman a
follow-up email asking if they would like Perkins Coie to do any international
searching or to file a US application. On 16 January 2012 Mr Schwartz replied
asking about the process and costs of both.
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.
83.
On the same day Mr Schwartz replied instructing Perkins Coie to proceed
with filing a US trade mark application and asking the costs of international
filing. Ms Graybeal replied on 22 January 2012 explaining that the costs would
depend on the number of countries and that it was possible to cover all
countries in the EU by a single filing.
84.
On 6 February 2012 Ms Graybeal sent Mr Schwartz and Mr Richman a
proposed specification of services in Class 42 beginning with “[Computer
services]” and continuing with more detailed terms. She added that, if they
offered downloadable software, Perkins Coie recommended including goods in
Class 9 beginning with “[Computer software]”. She explained:
“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.
86.
On 21 June 2012 the examiner in the United States Patent and Trademark
Office (“USPTO”) issued objections, which I am sure came as no surprise to Ms
Graybeal, to the terms “computer software” and “computer services” as being
indefinite. In the case of “computer software”, the examiner stated:
“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.”
116.
Articles 4 and 12(a) were unchanged in Regulation 207/2009. As explained
in more detail below, they were amended by Article 1(7) and (13) of Regulation
2015/2424 with effect from 23 March 2016. The amended provisions are now
contained in Articles 4 and 14 of the Regulation, which provide:
“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.”
117.
Parallel provisions to those set out in
paragraph 115 above were contained in Articles 2, 3(1)(a),(2)(d), 5(1)(b),(2),
6(1)(a), 10(1), 12(1) and 13 of Directive 89/104/EEC of 21 December 1988 to
approximate the laws of the Member States relating to trade marks, which was
replaced by European Parliament and Council Directive 2008/95/EC of 22 October
2008, which has in turn been replaced by European Parliament and Council
Directive 2015/2436/EU of 16 December 2015 (“the Directive”). Articles 3
and 14(1),(2) of Directive 2015/2436 correspond to Articles 4 and 14 of
Regulation 2017/1001.
118.
The infringement provisions originally contained in Article 9(1)(b),(c)
of Regulation 40/94 and Article 5(1)(b),(2) of Directive 89/104 are now
contained in Article 9(2)(b),(c) of the Regulation and Article 10(2)(b),(c) of the
Directive. Sub-paragraph (c) of these provisions has been amended so as to
reflect the case law of the CJEU interpreting the original provisions. Article
9(2)(c) of the Regulation now reads:
“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.
127.
It should be noted that the Nice Agreement is only an agreement as to
classification, not as to the effect of classification. Thus Article 2(1)
provides:
“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.”
128.
The UK acceded to the Nice Agreement and adopted the Nice
Classification, initially by way of amendment of Schedule IV to the 1938 Rules,
in 1964: see the account given in CAL-U-TEST Trade Mark [1967] FSR 39 at
43-45.
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.”
133.
Rule 2 of Commission Regulation 2868/95/EC of 13 December 1995
implementing Council Regulation 40/94/EC on the Community trade mark provided:
“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.
…”
134.
Regulation 2015/2424 amended Regulation 207/2009 so as to replace
Article 28 with a new Article 28, which is now Article 33 of the Regulation, in
the following terms:
“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.
…”
135.
Article 2 of Commission Regulation 2017/1431/EU of 18 May 2017 laying
down detailed rules for implementing certain provisions of Council Regulation
207/2009/EU on the European Union trade mark provides:
“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
136.
Directive 89/100 did not contain any provisions relating to the
specification of goods and services or classification, leaving such matters to
the laws of the Member States. The same was true of Directive 2008/95. Article
39(1)-(5) of the Directive corresponds to Article 33(1)-(5) of Regulation
2017/1001.
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.”
138.
Section 65 provides for rules to be made empowering the Registrar to
take steps necessary to implement any amended or substituted classification,
while section 78(1) contains a general rule-making power for the purposes of
the Act.
139.
The rules made under section 78(1) in force as at 20 October 2008 were,
and remain, the Trade Marks Rules 2008. Rule 7 of the 2008 Rules provides:
“(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.
141.
That case arose out of Communication 4/03 of the President of the Office
for Harmonisation in the Internal Market (Trade Marks and Designs) (“OHIM”, now
EUIPO) of 16 June 2003 concerning the use of class headings in lists
of goods and services for Community trade mark applications and registrations.
My understanding is that Communication 4/03 formalised a practice which had
been informally adopted by OHIM sometime before then.
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.”
144.
In IP TRANSLATOR the Chartered Institute of Patent Attorneys
(“CIPA”) applied to register the trade mark IP TRANSLATOR as a UK trade mark
using the class heading of Class 41, namely “education; providing of training;
entertainment; sporting and cultural activities”, as the specification of
services. The Registrar of Trade Marks interpreted the specification in
accordance with Communication 4/03 as covering all services in Class 41,
including translation services, and refused the application on the ground that
the trade mark was descriptive in relation to translation services. CIPA
appealed to the Appointed Person. Geoffrey Hobbs QC sitting as the Appointed
Person referred the following questions of interpretation of Directive 2008/95
to the CJEU:
“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.”
147.
As an immediate response to IP TRANSLATOR, the President of OHIM
issued Communication 2/12 of 20 June 2012 concerning the use of class headings
in lists of goods and services for Community trade mark applications and
registrations abandoning the approach adopted in Communication 4/03.
Communication 2/12 stated that OHIM considered that the intention of applicants
for trade marks applied for before that date who used the class headings would
have been to include all goods or services in the relevant alphabetical lists.
Applicants who used the class headings in applications filed after that date
would be required expressly to state whether they intended to cover all the
goods or services in the alphabetical lists.
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.
149.
The Common Communication explained the TMDN’s reasons for concluding
that these indications were not sufficiently clear or precise. In the case of
“machines” (Class 7), their reasons were as follows:
“… 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.
151.
In 2015 Regulation 207/2009 was amended to introduce new Article 28, now
Article 33 of the Regulation 2017/1001, and Article 36 of the Directive was
introduced, as set out above.
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)
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.
155.
This
contention raises two issues. The first issue is whether this ground of
invalidity may be asserted against a registered trade mark. The second issue is
whether, if the ground can be asserted, the specifications of any of the Trade
Marks are objectionable. These are important issues of European trade mark law,
for reasons that I believe will be fairly obvious from IP TRANSLATOR and
its aftermath.
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?
158.
The judgment in IP TRANSLATOR established (and Article 33(2) of
the Regulation now requires) that an applicant for a trade mark must specify
the goods and services in respect of which registration is sought with
sufficient clarity and precision to enable the competent authorities and third
parties to determine the extent of the protection conferred by the trade mark.
If the applicant fails to do so, the competent office should refuse to allow
the application to proceed to registration without the specification being
amended to make it sufficiently clear and precise. It does not necessarily
follow that, if the applicant fails to do so and the office fails to ensure
that the applicant rectifies the lack of clarity or precision during the course
of examination of the application, the trade mark can be declared invalid on
that ground after registration.
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.
160.
The position is essentially the same in relation to a national trade
mark. It is not necessary to recite the relevant provisions in the Directive.
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
174.
For the reasons given above, I propose to refer questions to the CJEU,
the precise wording of which I will hear the parties on, but the essence of
which are as follows:
(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.
176.
Before doing so, I shall attempt to put them into context by briefly
explaining the importance of these issues. The circumstances in which
registration of a trade mark may be achieved, and the scope of the coverage
thereby obtained, are key features of any trade mark system, and are critical
to the balancing of the system. There are undoubtedly advantages to permitting
registration of trade marks without requiring actual use of them, as the
European system does (unlike, for example, the US system). Two of the key
advantages are that it makes it easier for brand owners to obtain protection of
their trade marks in advance of a commercial launch and that it makes the
registration process simpler, faster and cheaper. But if registration can be
obtained too easily and/or too broadly, then the result will be mounting
barriers to entry for third parties as the supply of suitable trade marks is
diminished, increasing costs which may be passed on to consumers and an erosion
of the public domain.
177.
If the applicant applies to register a trade mark without intending to
use it in relation to the specified goods and services, there is nothing to
stop the trade mark being registered (assuming that the trade mark is otherwise
registrable). Furthermore, the only way in which the registration can be cancelled,
or restricted in scope, prior to the expiry of the five-year period required
for a non-use attack is on the basis that the application was made in bad
faith. If a trade mark can be registered without any intention to use it in
relation to all or some of the specified goods and services, and the
registration cannot be attacked or limited on bad faith grounds, then the
system will be open to abuse. Examples of such abuses can be seen in the case
law reviewed below. This problem will be particularly acute if broad specifications
of goods and services cannot be attacked on grounds of lack of clarity and
precision.
TRILLIUM
178.
The case law starts with the early decision of the OHIM First
Cancellation Division in TRILLIUM Trade Mark (Case C00005347/1, 28 March
2000). In that case the proprietor of the Community trade mark had applied to
register the trade mark in respect of “computer software; communications
software”. The applicant alleged that the proprietor had had no intention to
use the mark in relation to computer software other than telecommunications
switching software, and therefore argued that the proprietor had made the
application in bad faith to the extent that it covered other software. The
Cancellation Division rejected this argument for the following reasons:
“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.”
179.
It can be seen that the Cancellation Division left open the possibility
that applying to register a trade mark in respect of goods and services which
were “remote” from the applicant’s actual economic activity might constitute
bad faith. Apart from an extreme case such as that, however, it held there was
no requirement in the Community system, as distinct from the UK system, that
the applicant should intend to use the mark in relation to all the goods and
services applied for. Subsequent case law from higher courts casts considerable
doubt on the correctness of this statement of the law, however.
Case law of the CJEU
180.
To date, 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 goods and/or services specified in the application.
Nevertheless, its case law casts some light on that question.
181.
The first case on the subject, Lindt, remains the leading
authority. In that case Lindt had applied to register the shape of its gold
bunny chocolates as a trade mark in circumstances where competitors had
long sold similar products. The CJEU ruled that, in order to determine whether
the applicant is acting in bad faith, the national court must take into
consideration all the relevant factors specific to the particular case which
pertained at the time of filing the application for registration of the sign as
a Community trade mark, and in particular: (i) the fact that the applicant
knows or must know that a third party is using, in at least one Member State,
an identical or similar sign for an identical or similar product capable of
being confused with the sign for which registration is sought; (ii) the
applicant’s intention to prevent that third party from continuing to use such a
sign; and (iii) the degree of legal protection enjoyed by the third party’s
sign and by the sign for which registration is sought.
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 …”
183.
Two points should be noted about this reasoning. First, the purpose of
registering a trade mark is to prevent third parties from using (or
registering) that trade mark (and similar signs). If the applicant does not
intend to use the trade mark, it is immaterial whether the applicant intends to
prevent a specific third party from doing so, or third parties at large.
Secondly, the point made in [45] is equally true whenever an application is
made to register a trade mark without an intention to use it in relation to the
goods or services in question. These points would suggest that the making of
such an application should constitute bad faith.
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.
185.
Mr Schlicht was the proprietor of a Benelux registration for the word
mark REIFEN in Classes 3 and 35 and had applied to register the same word as a
Community trade mark in the same classes. He intended to market a cleaning
preparation for windows and similar surfaces, and had coined the mark from the
first three letters of the German words “Reinigung” (cleaning) and “Fenster”
(window).
186.
Mr Schlicht contested IMG’s registration of the domain name. The ADR
panel held that IMG had registered the domain name in bad faith. IMG challenged
that decision in the Austrian courts. The Oberster Gerichtshof (Austrian
Supreme Court) referred a number of questions to the CJEU. The CJEU treated the
fifth question as seeking an interpretation of the concept of bad faith within
the meaning of Article 21(b) of Regulation 874/2004. The CJEU held at [42] that
whether an applicant was acting in bad faith had to be the subject of an
overall assessment, taking into account all the factors relevant to the
particular case, applying Lindt. It went on to hold that the national
court must take into consideration seven factors which it summarised at [77] as
follows:
“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
190.
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. Inevitably, a lot of
the cases depend on their individual facts. Although 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. These appear to indicate an
evolution in the Court’s thinking on this issue.
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.”
192.
Having regard to the points made in the second paragraph quoted, the
statement in the first paragraph went further than was necessary for the
disposal of the case and therefore may be regarded in common law terms as
obiter. Moreover, it must be read in the light of the General Court’s
subsequent case law.
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.”
194.
This reasoning appears to recognise that, at least in some
circumstances, registering a trade mark with no intention of using it can
constitute bad faith.
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.
59. It should be noted that acceptance of the applicant’s
argument concerning use of the contested Community trade mark would mean that
the five-year grace period, granted to every registered Community trade mark
under Regulation No 207/2009, would be divested of all practical effect.
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.”
197.
This reasoning again appears to leave the door open to the conclusion
that, at least in some circumstances, applying to register a trade mark without
intending to use it can amount to bad faith.
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).”
202.
The General Court went on to uphold the conclusion that the applicant
had applied to register the trade mark in bad faith for reasons which it
encapsulated as follows:
“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.”
205.
This appears to be the closest the General Court has yet come to a clear
statement that applying to register a trade mark without intending to use it in
relation to the specified goods or services in and of itself constitutes bad
faith.
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.”
207.
Reasoning a contrario can be dangerous, but again this appears to
recognise that it is relevant to enquire into the commercial logic for the
application.
The UK legislative framework
208.
As noted above, the UK legislative framework implements the Directive
(except for the amendments required by 14 January 2019). The 1994 Act contains
a provision which is not mandated by the Directive and has no counterpart in
the Regulation, however. Section 32(3) provides:
“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
209.
There is a considerable body of UK case law on bad faith. Again, a lot
of the cases depend on their individual facts. By comparison with the General Court,
UK courts and tribunals have focussed more closely on the requirement of
intention to use because of the role that section 32(3) of the 1994 Act plays
in the UK trade mark system. I will review the principal cases on this question
together with one English decision concerning an EU trade mark.
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.
211.
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. He saw no reason to
doubt that section 32(3) was compatible with Community 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”.
213.
In LABORATOIRE DE LA MER Trade Marks [2002] FSR 51, a non-use
case, Jacob J said obiter at [19] that “it seems bizarre to allow a man to
register a mark when he has no intention whatever of using it. Why should one
have to wait until five years from the date of registration before anything can
be done?”.
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.
215.
In Ferrero SpA’s Trade Marks [2004] RPC 29 the proprietor
had filed 68 applications to register UK trade marks including the word KINDER,
but had only used six of them. The proprietor did not answer the applicant’s
evidence alleging that the proprietor had not intended to use the five trade
marks in suit, but rather had filed the applications to obtain broad protection
for a descriptive word. David Kitchin QC sitting as the Appointed Person (as he
was then) upheld the hearing officer’s conclusion that the proprietor had no
bona fide intention to use the trade marks and therefore the applications had
been made in bad faith. He saw no reason to doubt that section 32(3) was
compatible with Community law.
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.
217.
In Red Bull the claimant had obtained international registrations
designating the UK for the trade mark BULLIT for goods and services in Classes
32, 33 and 34. The defendant contended that the claimant had made the
applications in bad faith since it had had no intention to use the trade mark. I
found that the claimant did not have any concrete intention to use the trade
mark in relation to those goods or services at the relevant dates, but that it
did contemplate the possibility of using the mark at some future point, most
likely in relation to energy drinks, in countries which might include the UK. I
held that claimant had not acted in bad faith in so far as the applications
covered energy drinks, since a possible or contingent intention to use the mark
in the future sufficed to avoid bad faith. It was unnecessary to reach a
conclusion in relation to the other goods and services.
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.
225.
First, although there is no express requirement of an intention to use
in either the Regulation or the Directive, and a registered trade mark cannot
be revoked for non-use until five years have expired, the jurisprudence of the
CJEU and the General Court suggests that, at least in certain circumstances, it
may constitute bad faith to apply to register a trade mark without any intention
to use it in relation to the specified goods or services.
226.
Secondly, the case law indicates that it is not sufficient to
demonstrate bad faith that the applicant has applied to register the trade mark
in respect of a broad range of goods or services if the applicant has a
reasonable commercial rationale for seeking for such protection having regard
to his use or intended use of the trade mark. Nor is it sufficient to
demonstrate bad faith that the applicant only has a contingent intention to use
the trade mark in relation to certain goods or services in the future.
227.
Thirdly, although the court or tribunal must exercise caution for the
reasons given in the preceding paragraph, the case law suggests that, in an
appropriate case, it may be 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.
228.
Fourthly, provided that section 3(6) of the 1994 Act is interpreted and
applied consistently with European law, then it appears probable that section
32(3) is compatible with European 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
230.
Let it be assumed that an applicant for registration of a trade mark is
found to have made the application in bad faith in so far as the application
covers certain goods and/or services, but in good faith in so far as the
application covers other goods and/or services. Is the legal consequence of
those findings partial invalidity of the resulting registration or total
invalidity? The answer to this question does not (or at least does not
necessarily) depend on the factual basis for the finding of bad faith. Such a
finding could arise, for example, in a case where the applicant is trying to
obstruct a third party in one field, but takes the opportunity to include
within his application coverage of a different field in which the third party
is not interested.
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.
233.
Nevertheless, it appears that the EUIPO accepts the correctness of the
statement made by the General Court. The EUIPO’s Guidelines for Examination
of European Union Trade Marks, Part D Cancellation (1 October 2017
edition), states at para 3.3.5:
“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.
236.
There is also a potential distinction between EU352 and EU619 on the one
hand, and EU112 and EU992 on the other hand, in that EU352 and EU619 were filed
using just the class headings as specifications whereas EU112 and EU992 were
filed with much longer and more detailed specifications.
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.”
245.
The core of Mr Tansey’s evidence in his witness statement is contained
in the following paragraphs:
“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)
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)
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)
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)
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
258.
For the reasons given above, I propose to refer questions to the CJEU,
the precise wording of which I will hear the parties on, but the essence of
which are as follows:
(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).”
266.
It is clear from this that, as a general rule, the onus lies upon the
trade mark proprietor to establish a likelihood of confusion in at least part
of the EU. If he does so, then he will be entitled to EU-wide relief unless the
defendant demonstrates that there is no likelihood of confusion in other parts
of EU, for example, for linguistic reasons. There is no reason to think that
the allocation of the burden of proof is any different under Article 9(2)(c) of
the Regulation.
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 …
34. As with all issues in trade mark law, the answer to
disputed questions is normally provided by considering the purpose of a trade
mark which, broadly speaking, is to operate as a guarantee of origin to those
who purchase or use the product. In principle, therefore, and in the absence of
any authority cited to us which is directly in point, I would consider that the
term average consumer includes any class of consumer to whom the guarantee of
origin is directed and who would be likely to rely on it, for example in making
a decision to buy or use the goods….
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.
281.
Mr Schwartz accepted that Customers were generally less technically
skilled than Partners and that many were micro-businesses. Furthermore, for the
reasons explained in the preceding paragraph, it is not just the IT
professionals in the Customers who must be considered, but also managers. Still
further, while the individuals in the Customers would exercise some care and
attention, they would not exercise as much care and attention as the Partners,
because they would rely upon the care and attention exercised by the
Partners.
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.”
288.
The same principles are applicable when considering infringement,
although as discussed above it is necessary for that purpose to consider the actual
use of the sign complained of in the context in which it has been used.
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
291.
For convenience I shall mainly express myself in the present tense, but
in doing so I am referring to the position as at November 2014.
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].
310.
Detriment to the distinctive character of the trade mark. In Intel
the Court of Justice held as follows in relation to this type of injury:
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)
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.”
314.
The Court of Justice explained the correct approach to determining
whether unfair advantage has been taken of the distinctive character or repute
of the trade mark in that case as follows:
“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?
327.
The law. I would summarise the principles laid down by the CJEU
for determining whether the use of a sign is “in accordance with honest
practices in industrial or commercial matters” as follows.
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].
329.
Secondly, the court should “carry out an overall assessment of all the
relevant circumstances”, and in particular should assess whether the defendant
“can be regarded as unfairly competing with the proprietor of the trade mark”:
see Gerolsteiner at [26], Anheuser-Busch at [84] and Céline at
[35].
330.
Thirdly, an important factor is whether the use of the sign complained
of either gives rise to consumer deception or takes unfair advantage of, or is
detrimental to, the distinctive character or repute of the trade mark. If it
does, it is unlikely to qualify as being in accordance with honest practices:
see Gillette at [49], Anheuser-Busch at [83] and Céline
at [34].
331.
Fourthly, a mere likelihood of confusion will not disqualify the use
from being in accordance with honest practices if there is a good reason why
such a likelihood of confusion should be tolerated. Thus in Gerolsteiner,
which was a case under Article 6(1)(b) of Directive 89/104, the Court of
Justice held at [25]:
“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)
whether the defendant knew, or should have appreciated, that there was a
likelihood of confusion;
vi)
whether there has been actual confusion, and if so whether the defendant
knew this;
vii)
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)
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.
333.
I do not understand the Court of Appeal to have disapproved of the
consideration of these factors, as opposed to the conclusion to be drawn on the
facts of the particular case, in London Taxi at [95]-[96]. The list of
factors set out in Samuel Smith is essentially an expanded list of the
factors set out by Kitchin LJ (with whom Underhill LJ agreed) in Maier at
[148]:
“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)
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)
There has been no actual confusion.
vii)
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)
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.
338.
On 25 November 1980 the Commission of the European Communities published
its Proposal for a Directive and a Regulation together under the title New
trade-mark system for the Community (COM(80) 635 final). Article 5(a) of
the proposed Directive provided that the trade-mark would not entitle the
proprietor to prohibit a third party from using in the course of trade “his
surname or address … provided he does not use them as a trade-mark”. Similarly,
Article 10(a) of the proposed Regulation provided that a Community trade-mark
would not entitle the proprietor to prohibit a third party from using in the
course of trade “his own surname or address … provided he does not use them as
a trade-mark”. The commentary to the proposals did not indicate whether these
provisions were limited to natural persons or extended to legal persons.
339.
On 31 July 1984 the Commission published an Amended Proposal for a
Regulation (COM(84) 470 final)). This amended the wording of Article 5(a) so as
to replace “surname” by “name” and by substituting the proviso “provided he
uses them in accordance with honest industrial or commercial practice”. The
commentary still did not indicate whether this provision was limited to natural
persons or extended to legal persons.
340.
On 19 December 1985 the Commission published an Amended Proposal for a
Directive (COM(85) 793 final). This amended the wording of Article 10(a) so as
to replace “surname” by “own name” and by substituting the proviso “provided he
uses them in accordance with honest industrial or commercial practice”.
341.
Directive 89/104 was adopted by the Council on 21 December 1988. The
minutes of the Council meeting recorded a series of joint statements by the
Council and Commission which, since were expressed to be “without prejudice to
the interpretation of [the legal text] by the Court of Justice”. The joint
statement in relation to what had become Article 6(1)(a) stated that the
Council and Commission considered that “his own name” applied “only in respect
of natural persons”. Regulation 40/94 was adopted by the Council on 20 December
1993. The minutes of the Council again recorded a series of joint statements by
the Council and Commission, and the joint statement in relation to Article 12 stated
that the Council and Commission considered that “his own name” applied “only in
respect of natural persons”. The joint statements were subsequently published
by OHIM ([1996] OJ OHIM 606).
342.
In Anheuser-Busch, however, the CJEU held at [79]-[80] held that
the joint statement in relation to Article 6(1)(a) of Directive 89/104 had no
legal significance since there was no reference to that restriction in the text
of Article 6(1)(a). In other words, if the Commission and the Council wished
to limit the scope of Article 6(1)(a) in that way, they should have said so in
the actual legislation. Plainly the same reasoning was applicable to Article
12(a) of Regulation 40/94.
343.
Subsequently the Commission commissioned a Study on the Overall
Functioning of the European Trade Mark System from the Max Planck Institute for
Intellectual Property and Competition Law (“the MPI”) dated 15 February 2011 as
a precursor to proposing amendments to the legislation. In the Study the MPI
noted at paragraph 2.240 that the broad interpretation of Article 6(1)(a) adopted
in Anheuser-Busch was not in accordance with the joint statement. The MPI
went on:
“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.”
344.
On 27 March 2013 the Commission published a Proposal for a Regulation
amending Regulation 207/2009 (COM/2013/0161 final). In paragraph 5.3 the
Commission made the following proposal in relation to Article 12(a) of Regulation
207/2009:
“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 ...”
345.
In due course this proposal was approved by the European Parliament and
Council and found its way into Article 1(13) of Regulation 2015/2424 and then
Article 14(1)(a) of Regulation 2017/1001. Recital 21 to Regulation 2015/2424
stated, and recital 21 to Regulation 2017/1001, state:
“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 ...”
346.
Article 6(1)(a) of Directive 2008/95 was replaced by Article 14(1(a) of
Directive 2015/2436 at the same time. Recital 27 to Directive 2015/2436 is in
the same terms as recital 21 to Regulation 2017/1001 save that it refers to
trade marks rather than EU trade marks.
347.
In summary, therefore, the effect of the amendments has been to restrict
the own name defence in the Regulation and the Directive to the scope which the
Commission and the Council envisaged at the time that Directive 89/104 and
Regulation 40/94 were adopted.
348.
Relevant provisions of the Charter. The Charter of
Fundamental Rights of the European Union includes the following provisions:
“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).”
352.
In summary, therefore, once it is established that there is an
interference with, or restriction upon, a fundamental right, the court must
consider whether the measure is justified by legitimate objectives and whether
it exceeds the limits of what is necessary in order to achieve those
objectives, bearing in mind the broad discretion enjoyed by the EU legislature
in an area such as this, which entails economic and social choices. Only if the
measure is manifestly inappropriate will it be invalid.
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)
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)
Sky’s claim for passing off is dismissed.
