Sky Plc & Ors v Skykick UK Ltd & Anor

A national court cannot declare EU legislation invalid. It may reject an invalidity challenge if the arguments are unfounded, but a well-founded challenge on a material issue must be referred to the CJEU.

The discretion whether to make a reference before trial is distinct. Relevant considerations include whether the issue may prove irrelevant, whether the factual matrix has been established, the risk of assumed facts becoming obsolete, timing, and the need to keep the proceedings on track. Proceedings may continue in parallel with EUIPO validity proceedings where special grounds exist, assessed by reference to the risk of inconsistent decisions and the particular circumstances.

Sky plc, Sky International AG and Sky UK Ltd brought claims for passing off and infringement of EU and UK trade marks against SkyKick UK Ltd and SkyKick Inc concerning the use of SKYKICK. SkyKick challenged the breadth and validity of the SKY marks, relied on bad faith, and sought to rely on the own name defence.

SkyKick applied for a pre-trial reference to the CJEU concerning the validity of Article 1(13) of Regulation (EU) 2015/2424, which restricted the EU trade mark own name defence to natural persons. They also sought a stay because related validity proceedings had been brought before the EUIPO. The issues were whether a reference should be made before trial and whether special grounds justified continuing the national proceedings.

1. Reference to the CJEU. The application for an immediate reference was refused. The national court could reject an invalidity challenge where the arguments were unfounded, but could not itself declare EU legislation invalid. If a material invalidity argument were well founded, a reference would be mandatory.
2. The question whether a reference should be made before trial was separate from the legal conclusion the national court could reach on validity. Both sides had properly arguable cases concerning Article 1(13), so the merits did not favour an immediate reference.
3. The own name issue might prove irrelevant. SkyKick could succeed on infringement, scope or the facts concerning honest practices. Sky could also succeed without the EU-law issue being decided. The trial would determine the facts relevant to the own name defence, including the parties’ conduct and any searches undertaken.
4. A reference at that stage would require assumed or alternative facts. Although permissible, a reference after trial would provide the CJEU with a substantially firmer factual foundation. The Defendants’ financial need for early certainty and the general public importance of the validity issue did not outweigh those considerations.
5. Article 104. Article 104(1) was engaged because validity proceedings had already been commenced before the EUIPO. The court nevertheless had to decide independently whether special grounds justified parallel national proceedings. Applying the approach in Starbucks v British Sky Broadcasting Group Plc, [2012] EWCA Civ 1201, the relevant considerations included the parties’ agreement, the real risk of inconsistent decisions, the need to maintain the early-2018 trial timetable, and the presence of passing-off and UK trade mark claims.
6. Special grounds existed. The proceedings would continue and would neither be stayed nor referred at that stage.