Sky’s the Limit

By Brian Whitehead, Partner

Lord Justice Arnold has handed down a further judgment in the long-running trade mark dispute between the TV broadcaster and telephony/broadband service provider Sky and the cloud management software provider SkyKick. The dispute, which has been ongoing since 2016, had already resulted in three High Court judgments and a judgment of the CJEU following a reference on points of law. By way of recap, the CJEU held that i) a lack of clarity and precision in terms used to designate the goods and services for which a trade mark is registered is not a ground on which the mark can be invalidated; and ii) whilst a lack of intention to use a mark in respect of particular goods and services may constitute bad faith, the consequence is that the mark is invalid only in respect of those particular goods and services i.e. the bad faith does not render the entire mark invalid. Applying that ruling, Arnold LJ held that Sky’s marks were partly invalid for reasons of bad faith, but were nonetheless infringed by SkyKick.

In this latest judgment, Arnold LJ considered, amongst other things, whether an injunction should be granted, and costs. With regard to the injunction, the starting point is that the normal consequence of a finding of infringement of a trade mark is an injunction prohibiting further infringement. Arnold LJ acknowledged that, strictly speaking, an injunction is a discretionary remedy, and can be refused where the rights owner has been guilty of illegal or unconscionable conduct. Additionally, a judge can award damages in lieu of an injunction in appropriate circumstances. SkyKick relied on both arguments, and Arnold LJ provides a detailed review of the law pertaining to injunctions in trade mark law. Ultimately, he rejected the notion that Sky’s bad faith in applying to protect an overly wide series of goods and services should mean that no injunction is granted. To do otherwise would have allowed the bad faith to “infect” the other parts of the mark, contrary to the CJEU’s ruling. Nor did the judge consider that an injunction would be disproportionate, such that damages should be awarded in lieu. Accordingly, the judge granted an injunction restraining further acts of infringement.

On costs, the judge held that Sky was the overall winner. Nevertheless, SkyKick was the successful party on a number of discrete issues, and he decided that not only should Sky be deprived of its costs on those issues, it should be required to pay SkyKick’s costs of those issues. Given the difficulty in apportioning costs to specific issues, the judge decided simply to order each party to bear its own costs. The overall exercise has been an expensive one for both parties, as Sky and SkyKick’s costs were in excess of £1.5 and £1.9 million respectively. In that regard, it appears that both parties may have adopted a “no stone left unturned” approach – for example, each party instructed two Leading Counsel. No doubt the parties had their reasons for doing that, but we would point out that trade mark litigation in England and Wales does not necessarily have to cost a seven figure sum, and we have conducted High Court litigation at a cost which is an order of magnitude lower than the costs in this action.

This judgment is not the end of the dispute, however, as the judge granted SkyKick permission to appeal against the findings of infringement and Sky permission to appeal against the finding of partial bad faith. It remains to be seen whether the Court of Appeal will take a different view on either issue. The injunction is stayed pending the determination of the appeal, as is the inquiry as to damages/account.

Our previous article, “A “Sky” of Relief for EU Trade Mark Proprietors” takes a look at the earlier judgement handed down in January.