Trademarks update: the implications of Sky v SkyKick

A story of David and Goliath ?

Sky face a 1.5 million costs order for pursuing another brand for IP infringement.

A recent ruling, this Summer, resulted in a High Court judge ordering "the overall winners" of an ongoing dispute over trademark rights to pay the other parties legal costs which totalled in excess of £1.5 million, that had been incurred in bringing infringement proceedings. It is advisable that businesses conduct a thorough review of their portfolio of registered trademarks. This follows advice issued by experts in brand protection. This order to pay the other parties’ costs was issued as a sanction over the company's registration of a trademark for an overly broad range of goods and services.

 

The facts of the case related to a dispute over trademark rights held by the British broadcaster and telecommunications company Sky. Sky engaged in proceedings against a US entity called SkyKick, a supplier of cloud migration software. Sky claimed five of their UK and EU trade trademarks which encompassed goods and services within a number of technology categories were being infringed. The proceedings were met with robust resistance by SkyKick who challenged the validity of Sky's trademarks. In defence, it was submitted that they had been registered in bad faith and that they covered overly broad classes of goods and services and that they should therefore be revoked. In reaching its decision, the High Court conducted a detailed review of the trademarks and found in favour of SkyKick.

 

What this judgement demonstrates is that the courts are not afraid to issue extremely high-value costs orders against parties for bringing tenuous infringement proceedings against other parties for possible infringement. It is therefore imperative that companies consider carefully whether their claim is of sufficient merit to commence such proceedings.

As many businesses will own trademark registrations covering broad categories of goods and services that pre-date this ruling, clients are advised to review their existing trademarks and to prudently manage their trademark portfolio in the future. This will minimize the risk of sanctions being issued against them should they issue infringement proceedings against other companies in the future. As should they issue proceedings, on the premise that they believe their trademark has been infringed, but come to learn that their trademark is in fact registered in an overly broad range of goods and services, they could be penalised with heavy sanctions for costs.

ACLF’s specialist IP and Brand specialists can assist with any queries you may have. Please contact us at enquiries@acitylawfirm.com