Introduction
The UK Supreme Court’s recent judgment in SkyKick UK Ltd v Sky Ltd has significant ramifications for trade mark filing and enforcement strategies. This ruling reinforces the principle that brand owners must demonstrate a genuine commercial rationale for their trademarks, curbing the longstanding practice of overly broad filings.
Case background
The dispute originated in 2016 when Sky Ltd initiated trademark infringement proceedings against SkyKick, to prevent it from using the "SkyKick" brand to provide cloud migration and backup services. Sky relied on its broad "Sky" trademark registrations which covered a vast range of goods and services, many of which bore no direct connection to its core business. SkyKick challenged the validity of these marks, arguing that Sky’s registrations were made in bad faith because it had no genuine intention to use the marks for all the goods and services covered by the registrations.
The High Court initially ruled in SkyKick’s favour, finding that Sky’s trademarks were partially invalid due to bad faith, but also finding that SkyKick had infringed Sky's trademark rights. However, in 2021, the Court of Appeal partially overturned this decision, rejecting the High Court's ruling on bad faith and limiting the scope of bad faith findings. The Supreme Court has now reinstated the High Court’s position, delivering a landmark ruling on the interpretation and application of bad faith under UK trademark law.
Bad faith applications: what are they?
A trademark registration can be invalidated (in whole or in part) where the application was made in bad faith because at the time the applicant did not have a genuine intention to use the mark for some or all of the specified goods and services. There is no statutory definition of "bad faith". The courts typically assess bad faith by considering whether the applicant had an objective commercial justification for the breadth of its filing at the time of registration. If a trademark owner cannot provide sufficient evidence of intent to use the mark genuinely, the application or registration may be deemed wholly or partially invalid.
The Supreme Court ruling
1. Bad faith in trademark filings
The Supreme Court reaffirmed that bad faith arises when a trademark applicant seeks registration without a bona fide intention to use the mark for specified goods and services. The Court did not go as far as stating that broad or vague terms such as "computer software" will inevitably invalidate a trademark. It will be important to consider the applicant's intention at the time of registration. In this case, Sky’s expansive trademark portfolio included items such as bleaching preparations and whips unrelated to its business activities, indicating an improper purpose.
2. Evidential burden on rights holders
The ruling places a heightened evidential burden on rightsholders to justify the scope of their trademark applications. Applicants must now demonstrate that their filings align with actual or intended commercial use, rather than serving as a defensive strategy to block competitors.
3. Impact on existing registrations
Brand owners with broad scope trademark registrations may now face greater scrutiny. The decision provides a strong basis for challenging registrations that appear to have been secured without legitimate intent, potentially leading to the trademarks being wholly or partially invalidated.
Implications for rights holders and businesses
Trademark filing strategies must be refined
This decision underscores the necessity for brand owners to adopt a more precise approach to the scope of protection sought in their trademark applications and avoid overreaching. Companies should carefully assess whether their filings genuinely reflect their commercial activities and future business plans to avoid a potential invalidity action based on bad faith, including a counterclaim in infringement actions. Where broad applications are filed, consideration should be given to contemporaneously recording the reasons for this, to support the underlying intentions in the event of a later challenge.
Careful consideration of enforcement strategies
The ruling empowers third parties to challenge trademarks that are perceived as anti-competitive or speculative. Businesses facing enforcement action may have a stronger defence if they can demonstrate that a trademark was sought in bad faith. Prior to enforcing a trademark and alleging infringement, companies should ensure there is a reasonable explanation and justification for its scope and that it has been used for the goods and services relied on.
Trademark portfolio audits recommended
Given the potential vulnerability of broad registrations, businesses should proactively review their trademark portfolios to ensure compliance with the principles set out in this case. Strategic amendments, including narrowing specifications in pending applications (or prior to taking enforcement action), may mitigate risks of potential invalidation for bad faith.
Conclusion
The SkyKick decision is a watershed moment in UK trademark law, reinforcing the principle that intellectual property rights must be grounded in legitimate commercial use. The ruling serves as a cautionary precedent for businesses seeking expansive trademark protection unrelated to their business activities and highlights the importance of giving proper consideration to filing and enforcement strategies.
It remains to be seen how the decision will be applied in future cases. For stakeholders navigating the evolving trademark landscape, it clearly signals a shift towards greater accountability and precision in filings. Companies should seek legal guidance to assess their current portfolios and adapt their filing strategies appropriately. For companies launching new brands, the decision will provide greater confidence in relation to registered trademarks that are not evidently in use.
If your have any further questions or require assistance, please feel free to get in touch with our intellectual property team.
This article was co-authored by Gabriella Rasiah.
