The SkyKick Decision: The Importance of Origin Function

SkyKick UK Ltd and another (Appellants) v Sky Ltd and others (Respondents) [2024] UKSC 36 before Lord Kitchin, Lord Reed, Lord Lloyd-Jones, Lord Hamblen and Lord Burrows.  Judgment given on 13 November 2024.

SkyKick Cases: Key findings

1. In assessing bad faith, it is essential to consider whether the trade mark application was made with the intention of securing exclusive rights for purposes outside the legitimate functions of a trade mark – the most important function being a trade mark’s origin function.
2. If parts of the specification are held to have been filed for in bad faith, it does not render the whole trade mark application invalid, just the parts which were filed in bad faith.
3. A bad faith determination will be based on findings directed to all of the circumstances of the case.
4. The Supreme Court noted that the circumstances supporting a finding of bad faith in an application to register a sign as a trade mark typically include where the application was made:

a)not with the intention of engaging fairly in competition but with the intention of undermining, in a manner inconsistent with honest practices, the interests of third parties (i.e., unfairly targeting a third party) (“Category 1”); or

b) with the intention of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark, in particular the essential function of indicating             origin – and so enabling the consumer to distinguish the goods and services of one undertaking from others which have a different origin (i.e., registering for purposes other than using the mark as a bade of origin, such as         using the mark as a legal weapon)(“Category 2”).

5. In accordance with a Category 2 application, Sky had filed specifications which included goods and services in relation to which Sky had never intended to use the marks, and in relation to categories of goods and services which were so broad that Sky could not have intended to use the marks across their breadth.
6. Further, the context to Sky’s conduct provided powerful support for the contention that Sky was prepared to deploy the full armoury of its marks in infringement and opposition proceedings; notwithstanding that (at least in respect of some of the specifications) it did not intend to use those goods/services.

How should brand owners approach a trade mark filing?

1. At the time of filing, brand owners ought to have in mind the defining principles of trade mark law. Namely, a trade mark should function as a badge of origin.  A trade mark’s purpose is to attract and retain customers by the quality of its goods or services, and consumers should be enabled, without any possibility of confusion, to distinguish those goods or services from those which have a different origin.

2. The use of general terminology (or class headings for example) in the specification, rather than specific categories of goods/services, could have the unintended effect of reducing the specification’s coverage, as the Court                is not prepared to expand the meaning of the term beyond its “core meaning”. In SkyKick, “Cloud Migration” was not covered by “electronic mail services” for example.

3. Trade mark applicants should carefully consider the commercial rationale underpinning the good/services they apply for under a particular registration. Note, there is no requirement that the applicant knows it will use all of the goods/services specified at the time of filing.  If there is a real commercial prospect that certain goods/services will be used (and that can be adequately evidenced), that would undermine any bad faith allegation.

4. The majority of brand owners do not file overly broad specifications. However, for brand owners with broad specifications covering a scope of goods/services which were never intended to be used, there is no reason to panic.  The Court is prepared to modify specifications which are overly broad in scope to restrict the specification to the goods/services that are intended to be used, and a bad faith application will not as a rule render a trade mark wholly invalid.

5. However, these SkyKick decisions may result in bad faith being raised as a ground of invalidity more regularly, as there is greater clarity on this area of law. To the extent parts of a trade mark’s specification are found to have been filed in bad faith, those goods/services will not be enforceable in infringement/opposition proceedings.

This article was prepared by Senior IP Solicitor Christie Batty