Sunday, October 2, 2022

Trademark litigation will have major impact on trademark owners – Alison B…

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A six-year trademark dispute between Sky and SkyKick will be finally decided by the UK Supreme Court later this year – a decision that could have significant implications for trademark owners.

In the UK, trademark applications must designate not only the mark itself, but also the precise list of goods and services for which the applicant has a good faith intention to use that mark. When that application then proceeds to registration, its owner is given a monopoly right and can prevent the use and registration of confusingly similar marks in the UK.

Only when the registration reaches its fifth birthday does the proprietor actually have to prove that the mark has been used in the UK. Therefore, there is an incentive for trademark owners to apply for a broadly formulated list of goods and services, both to give them the broadest possible scope of protection and to anticipate future expansion.

The Skykick case examines in more detail the antagonism inherent when a trademark owner claims good faith intent to use a large, broadly worded list of goods and services that it may offer at some point in the future, and yet at the time of application the trademark owner has no real ones plans to do so.

What about general parent categories (e.g. “computer software”)? Can an applicant really have good faith intent to use a trademark on all types of “computer software”? If not, could filing such requests constitute an act of “bad faith” under UK trade mark law which would invalidate a trade mark registration in whole or in part?

After six years, eight judgments and a trip to the European Court of Justice, these are the questions that now lie before the UK Supreme Court. In 2016, Sky (provider of satellite and pay-TV services) filed a lawsuit alleging that SkyKick (a Seattle-based cloud management and software provider) infringed a number of its Sky trademark registrations by using the Skykick trademark have.

In particular, like many others (and as has been the practice in trademark circles in the past), Sky protected its trademarks (amongst others) for “computer software”, without limitation to the specific type of software offered by Sky. The action was brought primarily on the grounds that there was a risk that consumers would be confused between the parties’ offers and that SkyKick’s use of the Skykick trademark had taken unfair advantage of Sky’s reputation in the UK.

SkyKick denied the infringement, arguing that Sky acted in bad faith in submitting its claims so extensively. In particular, much of the controversy revolved around whether filing a request to collect every conceivable type of “computer software” could be an act of such malicious intent. The 2020 High Court decision answered in the affirmative, while last summer’s Court of Appeal disagreed, finding Sky’s registrations fully valid and infringed by SkyKick. If the Supreme Court agrees with the High Court, the implications for trade mark owners will be significant – as it would therefore cast doubt on the validity of a large number of the many UK trade mark registrations, which include without limitation ‘computer software’ and other similarly broad generic terms.

The Supreme Court will make its decision against a backdrop of an increasingly crowded trademark register and growing trademark exhaustion. A recent study of EU and US trademark registries found that more than 75 percent of the 20,000 most common words in the English language are identical to an existing EU trademark registration. The few excluded markers had generally negative connotations (such as “worst” and “kill”). The author of the study, Professor Barton Beebe, warns – somewhat fatalistically – that “all the best words have already been claimed”.

Amid the uncertainty surrounding the decision, now may be a good time for brand owners to seek expert advice on their branding strategy – not only to understand the risks this decision poses to their existing portfolio, but also to ensure that any new ones Registrations are designed appropriately.

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