Two recent UK cases could impact brands when they are considering filing trade mark applications and want to avoid accusations of bad faith, delegates at the recent Luxury Law Summit heard.
 
AA Thornton partner Sarah Darby briefed delegates on the impact of the cases during a roundtable entitled Fake News: Using IP to Effectively Combat Online Celebrity Endorsement Scams and Luxury Fashion Good Counterfeits.
 
Sky recently claimed that SkyKick – a provider of cloud migration services – had infringed Sky’s trade mark registrations for its various SKY marks that covered ‘computer software’, amongst a long list of other goods and services. SkyKick then counterclaimed against Sky, saying that its registrations were invalid because they lacked clarity and precision and were made in bad faith.

Bad faith

Focussing only on the bad faith aspect of this case, Darby explained it was alleged that Sky did not intend to use the mark ‘Sky’ in relation to all of the goods and services it had filed for – among which were whips, bleaching preparations and bulletproof vests – and had also used very broad terms, including computer software, and Sky did not intend to use its mark across the breadth of the category of the broad terms.
 
While the judge found SkyKick had infringed Sky’s rights, the judge agreed that Sky’s application for computer software and some other broad terms were made in bad faith and proceeded to cut the selected goods and services that were relied upon by Sky down to areas where Sky operated. 
 
That was potentially worrying for brand owners, because it questioned the legitimacy of including broad descriptions in trade mark applications, said Darby.
 
“It opened the door to the idea that perhaps there were some invalidity attacks coming around the corner based on bad faith which could result in their rights being cut down,” she said. “There was also a suggestion that in order to defend those claims it might force brand owners to disclose a lot of commercial information.”

Appeal

However, on appeal, the judge said that there is no requirement for trade mark owners to present a commercial justification for using a mark in relation to every single good that might fall within one broad description. In other words, it isn’t necessary to use, or intend to use, a mark on every type of computer software to legitimately claim computer software in a trade mark application. 
 
The judge also re-iterated that a lack of intention to use a mark at the time of filing the application is not bad faith per se, although it may be a factor in the assessment. It was also made clear by the judge that as an application can be filed partly in bad faith and partly in good faith: each relevant category of goods or services must be considered and assessed separately.  

Succeeding in an invalidity action based on bad faith remains a high bar

Darby explained that this case indicates that succeeding in an invalidity action based on bad faith remains a high bar and requires consistent, objective indicia of bad faith behaviour.
 
A lack of intention to use the mark is not sufficient to meet that requirement without other factors being present.  Also, this case shows that the risk to trade mark proprietors if an application is found to have been partially filed in bad faith remains limited only to the particular goods and services found to have been filed in bad faith and does not put the entire registration in jeopardy. 
 
This case so far confirms that the obvious benefit of seeking wide and extensive trade mark protection will continue to outweigh any potential risk of an invalidity action based on bad faith, Darby told delegates at the summit, which took place at The British Museum on 22 September.

Hasbro case

Another recent case involving Hasbro, however, underscored a potential area where bad faith would apply, Darby warned. When the Monopoly-maker filed a new trademark application in 2010, it included a number of goods and services that were already included in earlier applications registered in 1998, 2009 and 2010. 
 
The later-filed registration was then subject to a bad faith invalidity action by Kreativni Dogadaji d.o.o on the basis this registration was a repeat filing of the earlier registration, and was filed with the purpose of circumventing the obligation to prove use of the older registrations.  
 
When Hasbro put forward reasons to justify its repeat filing, it admitted that avoiding the need to file evidence of use was a benefit of the repeat filing.
 
Despite all the other commercial justifications put forward by Hasbro for the re-filing, the court found this admission of the benefit of circumventing the need to prove use was tantamount to an abuse of the law. This resulted in a partial invalidity claim being successful against Hasbro, Darby said. 
 
Again, the impact of a finding of bad faith was limited and the invalidity only related to goods that were present in both the earlier registrations and the later filed registration. 

Limited risk

This case confirms that the risk to trade mark proprietors of making repeat filings with the purpose of circumventing the non-use period appears limited to only the repeated goods and services, and the inconvenience of dealing with a bad faith invalidity action. 
 
Akin to the strategy of broad filing discussed in Skykick, the obvious benefits to this type of re-filing strategy appears to outweigh the risk associated with a bad faith invalidity action. 
 
Darby concluded that following these cases, brand owners may need to give further thought to their typical filing strategies and consider whether any potential risk associated with them is outweighed by the potential benefit. 
 
Sarah Darby is a partner and registered trade mark attorney at AA Thornton. Click here for more information about AA Thornton.