SkyKick UK Ltd and another v Sky Ltd and others

A trade mark application may be made in bad faith where its specification includes goods or services for which the applicant had no genuine intention to use the mark and the application was intended to secure an exclusive right for purposes outside the functions of a trade mark. The inference must arise from objective, relevant and consistent indicia, assessed overall, and may be answered by a plausible commercial rationale.

Bad faith may affect distinct subcategories within a broad term. Invalidity is then limited to the affected goods or services. Ambiguous specifications are confined to the core of their possible meaning. United Kingdom courts retain EU trade mark jurisdiction in proceedings instituted before the end of the Brexit transition period.

Sky alleged that SkyKick’s email-migration and cloud-backup products infringed five SKY trade marks. SkyKick counterclaimed that the registrations were invalid because their specifications lacked clarity and precision and because Sky had applied in bad faith without intending to use the marks across their breadth.

Arnold J rejected the clarity challenge but found partial bad faith, restricted the specifications and found limited infringement: [2018] EWHC 155 (Ch), [2020] EWHC 990 (Ch) and [2020] EWHC 1735 (Ch). The Court of Appeal restored the specifications, holding that bad faith had not been established and that the later procedure was unfair: [2021] EWCA Civ 1121.

The Supreme Court considered the meaning and proof of bad faith, partial invalidity within broad specifications, procedural fairness, infringement by the two SkyKick services, and the post-Brexit jurisdiction of United Kingdom courts over pending EU trade mark proceedings.

1. Appeal allowed in part. Lord Kitchin, with whom Lord Reed, Lord Lloyd-Jones, Lord Hamblen and Lord Burrows agreed, held that Arnold J was entitled to find that the SKY marks had been applied for partly in bad faith and to restrict their specifications. The Court of Appeal had adopted an unduly narrow understanding of bad faith and had no sufficient basis for reversing the judge.

2. Bad faith is assessed at the application date through an overall evaluation of all relevant circumstances. It exists where the applicant intended either to undermine third parties contrary to honest practices or to obtain an exclusive right for purposes outside the functions of a trade mark. The challenger bears the initial burden. Objective circumstances capable of rebutting the presumption of good faith require the proprietor to provide a plausible explanation of the application’s objectives and commercial logic.

3. A lack of present use or a developed business plan does not itself establish bad faith. An applicant may have conditional intentions and may seek reasonable protection for future expansion. Nevertheless, the size and nature of the specification, compared with the applicant’s actual or reasonably contemplated business, may support an inference of abuse. A broad term such as “computer software” may be partly affected where it contains distinct subcategories for which there was no intention to use. Invalidity is confined to the goods or services affected.

4. The procedure before Arnold J was fair. Sky knew the substance and basis of the bad-faith case and had an opportunity to propose narrower specifications. The judge could draw an intermediate boundary after rejecting the formulations advanced by both sides.

5. Ambiguous specifications must be confined to the substance or core of their possible meanings. Cloud Migration was not an “electronic mail service”; it migrated email accounts between infrastructures. Infringement on that basis was not established. Cloud Backup, however, supplied services the same as or very similar to computer services for accessing and retrieving documents. The concurrent finding of infringement in that respect disclosed no error of principle and was upheld.

6. Articles 122–135 of Regulation (EU) 2017/1001 continue to have direct effect for proceedings pending before a designated United Kingdom EU trade mark court at IP completion day. By article 67(1)(b) of the Withdrawal Agreement and section 7A of the European Union (Withdrawal) Act 2018, those courts and domestic appellate courts retain the relevant EU-wide jurisdiction until the proceedings conclude.

1. United Kingdom Supreme Court: By [2024] UKSC 36, unanimously allowed SkyKick’s appeal in part, restored Arnold J’s partial-invalidity determination, rejected procedural unfairness, upheld infringement by Cloud Backup but not Cloud Migration, and confirmed continuing jurisdiction over the EU trade marks.
2. Court of Appeal: By [2021] EWCA Civ 1121, allowed Sky’s appeal on bad faith and procedural fairness, restored the Selected Goods and Services to their full width, and consequently dismissed SkyKick’s infringement appeal. It dismissed Sky’s passing-off appeal.
3. High Court: Arnold J delivered the principal trial judgment at [2018] EWHC 155 (Ch), refused reconsideration at [2018] EWHC 943 (Ch), applied the CJEU’s answers and restricted the specifications at [2020] EWHC 990 (Ch), and made the final orders at [2020] EWHC 1735 (Ch).