Limit reached on SkyKick
Emily Gittins outlines why a referral wasn’t required to settle this dispute. [2017] EWHC 1769 (Ch), Sky plc and Others v SkyKick UK Ltd and Another (SKYKICK), High Court, 13th July 2017 .
[2017] EWHC 1769 (Ch), Sky plc and Others v SkyKick UK Ltd and Another (SKYKICK), High Court, 13th July 2017
Key point
- SkyKick’s application for a reference to the CJEU as to whether the own name defence is contrary to EU rights was rejected
In this decision, the High Court ruled that a reference should not be made to the CJEU as to whether Article 1(13) of Regulation (EU) 2015/2424 (the Regulation) is contrary to EU rights and therefore invalid.
The Claimants (Sky) were various entities within the Sky Group that provide a range of broadcasting entertainment, digital internet telecommunications and software services. The Defendants (collectively, SkyKick) were a start-up that provides cloud-based IT migration, backup and management services to IT solution providers in partnership with Microsoft.
Context
SkyKick decided to adopt its name in November 2011. It carried out US trade mark searches in 2012, which did not identify any SKY marks, but did identify marks with a SKY prefix.
In February 2016, SkyKick filed an international trade mark application designating the EU. It also brought applications at EUIPO to invalidate Sky’s EU trade marks (EUTMs) on the basis that the word SKY was not distinctive in relation to the field of cloud computing. In addition, SkyKick brought proceedings in the Intellectual Property Enterprise Court seeking a declaration of non-infringement. In response, Sky initiated proceedings in the High Court for infringement of two of its EUTMs and one UK trade mark in relation to the use of SKYKICK. It relied on Articles 9(1)(b) and 9(1)(c) of the Regulation, and corresponding parts of the UK Trade Marks Act 1994 (TMA).
SkyKick’s defence was that it had very different businesses from Sky and operated in different fields, so was not in competition. In addition, SkyKick relied on the own-name defence, and contended that it was using its own name in accordance with honest practices in industrial or commercial matters.
Own-name defence
The own-name defence is still part of UK law, pursuant to s11(2)(a) TMA for corporate entities; however, it is due to be amended in accordance with Article 1(13) of the Regulation to apply to natural persons only. The own-name defence has already been limited to natural persons for infringement of EUTMs. SkyKick therefore applied for a reference to the CJEU to review the validity of Article 1(13) of the Regulation. They said that it was invalid, as it was an interference with the freedom to conduct business and the right to property that companies had under the existing law as it was interpreted in Anheuser-Busch v Budĕjovický Budvar. SkyKick also argued that there had been no proper impact of the change in the law to remove the own-name defence for companies, and that it was discriminatory between natural and legal persons.
Sky argued that the EU legislator originally intended that the law relating to the own-name defence to trade mark infringement would only apply to natural persons, and that the legislator has now simply decided to make an express alteration to the law to adjust it to reflect what was intended in the first place.
Outcome
The Judge thought that both parties had a properly arguable case, but that the merits of the argument of law were not strong enough either way to weigh in the balance in the exercise of the Court’s discretion to make a reference to the CJEU. In making his decision, the Judge considered that:
- SkyKick may win the action without any reference to the own-name defence, since a key part of its defence is that it does not infringe the SKY marks.
- Sky may also win the action without the question of Article 1(13) having to be decided, since SkyKick may fail to establish that the use of its name is in accordance with honest practices in industrial and commercial matters.
- If the Court decided to make a reference to the CJEU now, it would need to set out a factual basis on which the CJEU was to be invited to consider the matter, which, at this stage, could be based only on assumptions.
- SkyKick argued that it needed certainty as a start-up that is still making a loss and dependent on funding from investors. As originally formulated, SkyKick’s application involved a stay of the proceedings once the reference to the CJEU had been made. The Judge said that this was not a way of producing certainty quickly and he was therefore not convinced by any argument by SkyKick that the reference would give it much-needed certainty as soon as possible. In addition, the Judge did not think that it was justified to make a reference to the CJEU and keep the proceedings on track for trial rather than wait and see if a reference was required after trial.
Emily Gittins is an Associate in Bird & Bird’s London Intellectual Property Group