Bad Faith in Trade Mark Filings: The UK Supreme Court’s Skykick Decision & Its Impact on Filing Strategies

It is natural for businesses to want to maximise protection of their trade marks. But how far is too far?

On 13 November 2024, the UK Supreme Court released a highly-anticipated judgment (Skykick UK Ltd and another v Sky Ltd and others [2024] UKSC 36) with wide-ranging impact on trade mark filing strategy, especially registering, without any intention of using them, (i) trade marks in respect of an extremely broad range of goods and services, (ii) trade marks similar to the trade mark which the applicant actually intends to use, and (iii) the same (or very similar) trade marks in respect of the same (or very similar) goods and services to avoid the consequences of non-use (also known as “evergreening”).

Registering trade marks with extremely broad specifications 

When applying for a trade mark, the applicant must specify the goods and services for which protection is sought. The trade mark would then be protected, upon registration, in respect of all the specified goods and services.

An applicant may use this to its advantage by applying for a very broad range of goods and services to prevent similar signs from being used by other businesses (whether or not these businesses are competitors). This was the case in Skykick v Sky, where the respondents (Sky, a media and telecommunications conglomerate) had trade mark registrations in respect of an extremely broad range of specifications, including goods and services for which Sky had no reasonable commercial rationale for seeking registration (such as “bleaching preparations” and “whips”), and specifications so broad that Sky could not have intended to use its trade marks across the full breadth of the category (such as “computer programmes”).

Registering similar trade marks 

Another way a trade mark applicant may seek to widen the protection of its trade mark portfolio is to register similar trade marks without any intention to use them. One example of this strategy being employed was the subject of a decision by the English Court of Appeal in Lidl Great Britain Limited and another v Tesco Stores Limited and another [2024] EWCA Civ 262. In this case, the claimants (Lidl, a supermarket chain) had several registrations of a logo (a yellow circle with red outline and blue background) (referred to in the judgment as the “Wordless Mark”). This logo differed from their usual logo – their usual logo contained the stylised text “LIDL” within the yellow circle. However, the Claimants had never used the Wordless Mark in that form.

The advantage of the Wordless Mark was that if it were found to be valid, Lidl would be able to enforce it against any businesses using a similar sign, regardless of whether that sign contained anything resembling the “LIDL” in their usual logo.

A similar strategy was also employed by the trade mark proprietors in Ferrero SpA’s Trade Marks [2004] RPC 29. In that case, the proprietors had filed more than 60 trade marks including the word “KINDER” although it had only in fact used 6 such trade marks from 1967 to 1998. In effect, the proprietors were attempting to secure a monopoly over the word “KINDER” even though they had not registered “KINDER” on its own as a trade mark, presumably because they recognized it would not be registrable.

Evergreening 

Registered trade marks may be revoked if they have not been put to genuine use for an uninterrupted period of 5 years, and there are no proper reasons for such non-use. Further, if a registered trade mark has been used in respect of some of its specifications but not others, it is susceptible to revocation in respect of the goods and services for which it has not been used. But all trade marks have an initial grace period of 5 years from the date of completion of registration process, during which they cannot be revoked for non-use.

Thus, to avoid non-use revocation and to take advantage of the initial 5-year grace period, some trade mark proprietors have taken to making fresh applications for the same (or very similar) trade marks in respect of very similar goods and services. This would effectively evergreen the trade marks in a way which made them immune to revocation for non-use. For example, a trade mark proprietor with a trade mark registered in 2019 which it has not used since then would have difficulty enforcing it in 2025 as the trade mark may be revoked for non-use. To overcome this, the proprietor may seek to evergreen the registration by making a fresh application – if the evergreened mark was registered in 2023, the proprietor would be able to enforce it in 2025 as it would still be within the 5-year initial grace period.

Lidl was found in Lidl v Tesco to have used such a strategy to “evergreen” its protection over the Wordless Mark, by filing several fresh trade mark applications for the Wordless Mark which at least partially duplicated the goods and services that had been previously covered.

Skykick v Sky 

In Skykick v Sky, the UK Supreme Court considered the issue of whether extremely wide registrations by the respondents (Sky) had been made in bad faith and were therefore to be invalidated, and laid down the following principles which, in essence, confirmed the approach taken by the Court of Appeal in Lidl v Tesco:

1.  A party seeking to invalidate registered trade marks on the basis that they had been applied for in bad faith may rely on objective facts available to it to displace the presumption that the trade mark applicant had acted in good faith.
2. If the presumption is displaced, it would then be for the proprietor of the trade mark to explain the objectives and commercial logic of the registration. If there was no realistic prospect of the proprietor ever using the mark in respect of certain goods and services, that would appear to be an abuse of the trade mark system and an act of bad faith which would invalidate the trade mark.

The Supreme Court also emphasized that the essential function of a trade mark is to guarantee the identity of the origin of the goods or services in relation to which it is used. Bad faith would be made out if a trade mark applicant sought to obtain an exclusive right for purposes other than those falling within the essential function.

Applying the principles above, the Supreme Court agreed with the High Court that Sky’s extremely wide range of specifications, and its willingness to deploy the full range of specifications against traders whose activities were not likely to cause confusion, displaced the presumption that Sky had acted in good faith, and that Sky was unable to provide evidence to justify its filing strategy. The Supreme Court accordingly upheld the High Court’s order declaring Sky’s marks invalid in respect of certain specifications.

Impact on trade mark filing strategy 

Skykick v Sky represents a confirmation from the UK’s highest court on the approach to be taken for bad-faith invalidation cases. It is likely to be highly persuasive if the issue is litigated in the Singapore courts. The upshot of this is that trade marks which appear to have been registered as part of the strategies mentioned above may be invalidated for bad faith unless it can be shown that there was a legitimate commercial purpose for the registrations which was consistent with the essential function of trade marks.

Thus, if there is any concern at all on the part of trade mark applicants that they may be perceived to be employing one or more of the strategies set out above, they should contemporaneously record in writing the objectives and commercial logic of their registrations (which should be consistent with the essential function of trade marks). Such documents can then be produced in litigation if the need arises.

For more information, please contact Basil Lee at basil.lee@helmsmanlaw.com.