The CJEU gave its highly awaited judgment today in Sky v SkyKick (case C-371/18 Sky v SkyKick).

The decision is largely positive for trade mark owners, as the CJEU has rejected many aspects of the AG’s Opinion which threatened to disrupt the status quo for trade mark practices. If the AG’s Opinion had been followed by the CJEU, then it would have left huge numbers of trade marks on the register, vulnerable to at least partial invalidation.

A summary of the CJEU’s main findings are set out below.

Lack of clarity and precision of trade mark specifications

In response to the High Court’s reference relating to the clarity and precision with which goods and services are described within a trade mark specification, the CJEU has held that EU and national trade marks cannot be declared invalid (either wholly or partially) on the ground that terms used lack clarity or precision.

This will come as a relief to trade mark owners with registrations for goods and services such as ‘Computer software’, ‘Financial services’ and ‘Telecommunication services’, all of which had been thrown into doubt by the AG’s Opinion on the basis that they were broad and potentially imprecise terms.

Trade mark applications made with no intention to use 

The High Court also referred questions to the CJEU on bad faith and, in particular, whether it can constitute bad faith to apply to register a trade mark without any intention to use it in relation to each of the specified goods or services.

On this question, the CJEU held that an applicant for a trade mark will only have acted in bad faith in this respect if their application was made with “the intention either of undermining, in a manner inconsistent with honest practices, the interests of third parties, or 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.”

The CJEU has therefore set the threshold reasonably high for a finding of bad faith. It will not be enough, for example, to merely show that the applicant had no economic activity corresponding to the goods and services at the time they applied for the mark and no ability to pinpoint the precise date when their use would start.

Instead, there will need to be “objective, relevant and consistent indicia” tending to show dishonesty and an attempt either to undermine a third party’s use of a trade mark or to obtain a trade mark for some purpose outside of the usual functions of a trade mark. The CJEU does not directly address the question of ‘ever-greening’, where applications are made purely to shore up a position at the end of the five year grace period, but it does appear that such conduct could fall foul of the CJEU’s ‘dishonest practices’ test in certain circumstances.

Where an applicant is found to have acted in bad faith in respect of only some of the goods/services applied for, then the trade mark will only be partially invalidated, not wholly invalidated.

Summary

The AG’s Opinion suggested that it might be time to address the balance in the EU trade mark system. He pointedly asked “whether we have arrived at a point in trade mark law that grants the trade mark proprietor a position of absolute monopoly in the face of which one can no longer defend himself in infringement proceedings — in spite of the fact that the mark has not been used, and is not likely to be used, for many of the goods and services in respect of which it was registered.”

The CJEU has largely answered the AG’s hypothetical question in the negative. Trade marks covering ‘computer software’ and other broad terms shall not be vulnerable to invalidation. And the bar for a finding of bad faith when a trade mark is applied will remain high. Importantly, there is no risk of total invalidation even if a finding of bad faith is reached.

Trade mark owners can be relieved that the CJEU has not embraced the  approach which was suggested by the AG. However, equally, from the perspective of defending a claim, it remains a frustration that a trade mark under 5 years old which covers goods with broad definitions will not be able to be invalidated.