Sky v. Skykick, or on the meaning of “computer software”

By Valentina Mazza, Annamaria Algieri and Andrea Michelangeli

On 16 October 2019, the Advocate General Tanchev issued his opinion in relation to one of the most interesting trademark disputes of the recent years, waiting for a preliminary ruling judgement before the CJEU.

The dispute involves Sky plc, Sky International AG and Sky UK Limited (“Sky”), active in the satellite and digital television broadcast service, against Skykick UK Limited and Skykick Inc (“Skykick”), which supply cloud migration information technology services.

According to the results of the main proceedings held before the High Court of Justice of the UK, Sky sued Skykick for having allegedly infringed its EU trademarks consisting in the word “SKY” through the use of the sign “Skykick” and its variants. Skykick defended its position by denying the trademark infringement alleged by Sky and by counterclaiming that Sky’s trademarks were invalidly registered, on the two grounds that (i) the specifications of goods and services lack clarity and precision and (ii) the relevant trademark applications were consequently made in bad faith.

Now, the requirement of clarity and precision for a trademark to be validly registrable stems from the CJEU judgement of 19 June 2012, Chartered Institute of Patent Attorney v Registrar of Trade Marks (also known as “IP Translator” case), Case C-307/10, which established that an applicant must specify the goods and services in respect of which the trademark registration is sought “with sufficient clarity and precision to enable the competent authorities and third parties to determine on the basis of that term alone the extent of the protection conferred by the trademark”. If the applicant fails to do so, the competent authority should refuse the registration application without the specification being amended to make it sufficiently clear and precise.

On this, the referring court raised for the CJEU judgement the issue whether the term “computer software”, used by Sky for its trademarks in the case at stake, is sufficiently clear and precise according to the IP Translator judgement’s criteria.

Advocate General Tanchev has taken a clear position in relation to this matter: according to his findings, while in one sense the term “computer software” is compliant with the clarity requirement given it comprises computer code, “it undoubtedly lacks the precision requirement since it covers goods that are too variable in their function and field of use to be compatible with the function of a trademark”.

To reach his remarks, the Advocate General followed the footsteps of the IP Translator case, where the CJEU ruled in 2012 that ‘some of the general indications in the class headings of the Nice Classification … are not such as to meet [the requirement of being sufficiently clear and precise] where they are too general and cover goods or services which are too variable to be compatible with the trade mark’s function as an indication of origin’. According to Advocate General Tanchev, that is precisely the situation faced in the present case.

Further, he agrees with the referring court that the registration of a trade mark for “computer software” is too broad for the same reasons given in the CJEU judgement of 1995, Mercury Communications Ltd v Mercury Interactive Ltd, Case FSR 850, where it was held that “the registration of a trade mark for “computer software” would cover any set of recorded digital instruction used to control any type of computer. It would cover not just the plaintiff’s type of products …”. In this way, the registration of such trademark creates a monopoly in the mark, given it is used “on an enormous and enormously diffuse range of products”.

On this, the Advocate General noted that, although this case was decided in 1995, it still maintains its contemporary character, being instead even more contemporary in the current digital era, agreeing with the observations of Skykick that in modern society a practically limitless array of ‘smart’ goods incorporate, or are supplied with, computer software.

For all these reasons, Advocate General concludes that, in his view, registration of a trademark for “computer software” is unjustified and “contrary to the public interest” because it confers on the owner a monopoly of immense breadth which cannot be justified by any legitimate commercial interest of the proprietor.

Also, the Advocate General showed his favor to Skykick’s counterclaim concerning the registration in bad faith of Sky’s trademarks at stake. In fact, in his view, where the applicant was found by the referring court to have a deliberate intention to acquire rights it had no intention to use, potentially to prevent third parties from using the registered trademark for the sale of those goods and services, then there is bad faith. In those circumstances, continues Advocate General Tanchev, the applicant is improperly seeking a monopoly to exclude potential competitors from using those signs: this behavior could amount to an abuse of the trademark system.

The possible impacts on the EU legal system in case the CJEU should deliver a judgement in line with the Advocate General opinion at hand are impressive.

As the opinion of the Advocate General highlighted, further steps forward are being made in the direction of considering too broad and generic some terms used by trademark applicants, as seen in the IP Translator case and in the Mercury Communications case decided in 2012 and 1995. In light of this, and similarly to the case at hand, the same approach may in the future be followed for other terms which are able to recall a large scope when it comes to the identification of the specific products and services involved in the trademark application (the terms “publication” or “consulting services” may be considered as examples of this concept).

In addition, the judgement of the CJEU could give important guidelines for the future on another issue raised with this dispute by the High Court of Justice of the UK, namely whether the ground for invalidity related to the lack of clarity and precision of the goods and services involved may be relied also upon trademarks that are already registered.

Although the case has not been decided yet and few months still have to get by in order for the preliminary ruling of the CJEU to come out, the opinions of the Advocate Generals still play an important role for the direction of the decisions of the CJEU, so stay tuned not to miss a sure standpoint for the future of trademarks in the digital age!

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