The Decision of the European Court or Justice preliminary ruling on 29 January 2020 in respect of Sky and Others (ECJ Case C 371/18, Sky and Others), gives useful guidance on applying for an EU trademark and the importance for applicants to be precise and specific in identifying the goods and services to which the mark relates. It clarifies the circumstances in which the ground of bad faith can be invoked against registrations for goods and services which the applicant has not any intention to use, according to Article 59(1)(b) EUTMR.
EUTM are classified within the 45 Nice Classifications: classes 1 – 34 relating to goods; and classes 35 – 45 relating to services. Within those classes are specific sub-class terms. For example class 12 is “Vehicles; apparatus for locomotion by land, air or water”. Delving into class 12 gives a further 294 specific class 12 related goods, from “yachts”, to “mudguards”, to “pet strollers”, to “cigar lighters for automobiles”.
It was the case that registering a mark over a whole class rather than specifying the specific sub-classes could have adverse implications on the enforceability of that mark. The Sky and Others case clarified and changed this position.
The four main questions put to the court in the Sky and Others case were:
- Whether a trade mark can be declared invalid, wholly or in part, on the grounds that the specification of goods and services lacks clarity and precision;
- If the answer to the first question is yes, whether terms such as “computer software” are considered to lack clarity and precision;
- Whether a trade mark can be declared invalid on grounds of bad faith if the applicant does not have any intention to use the mark in relation to the specified goods and services;
- If the answer to the third question is yes, whether it is possible to conclude that the trade mark was only partly filed in bad faith as regards the goods for which there was no intention to use the mark.
1. Whether a trade mark can be declared invalid, wholly or in part, on the grounds that the specification of goods and services lacks clarity and precision;
“a European Union trade mark or a national trade mark cannot be declared wholly or partially invalid on the ground that the terms used to designate the goods and services in respect of which that trade mark was registered lack clarity and precision.”
EU First Directive 89/104 and Regulation No 40/94 provide an exhaustive list of the absolute grounds for invalidity among which there is no such ground as lack of clarity and precision of the specification of the goods and services. Furthermore, the lack of clarity and precision of the terms used to designate goods and services does not fall within the scope of one of the absolute grounds set in Article 7 of the Regulation or Article 3 of the Directive and in particular it cannot be considered contrary to public policy.
3. Whether a trade mark can be declared invalid on grounds of bad faith if the applicant does not have any intention to use the mark in relation to the specified goods and services;
the Court confirmed that the application for a trade mark without any intention to use it in relation to the goods and services applied for could constitute bad faith if a number of conditions are fulfilled.
the trade mark applicant is not required to indicate or even to know precisely, on the date of filing of his mark, the use he will make of it, and that bad faith, therefore, cannot be presumed on the basis of the mere finding that, at the time of filing the application, the applicant had no economic activity corresponding to the goods and services referred to in that application. However, the registration of a trade mark by an applicant without any intention to use it in relation to the goods and services covered by that registration may constitute bad faith, where it is apparent from relevant and consistent indicia that the proprietor of a trade mark has filed it not with the aim of engaging fairly in competition but with the intention of undermining the interests of third parties, or with the intention of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark, in particular the essential function of indicating origin.
In considering the question of bad faith the court will consider the circumstances as at the time of the application in question, including the commercial logic underlying the filing of the application for registration and chronology of events leading to that filing. The consequence of a finding of bad faith is to invalidate the trademark therefore the starting point is that there was no bad faith and it is for the person claiming bad faith to prove its case.
4. If the answer to the third question is yes, whether it is possible to conclude that the trade mark was only partly filed in bad faith as regards the goods for which there was no intention to use the mark.
The Court held that when the absence of the intention to use a trade mark in accordance with its essential function concerns only certain goods or services covered by the registration, the invalidity of that trade mark covers those goods or services only.
These answers should reassure EUTM owners, that they will not have their EUTM declared invalid for registrations which include broad terms solely on the basis of the fact that those broad terms may lack clarity and precision, and that whilst owners can face invalidity actions where the application has no intention to use the mark for the services under which registered, in the instance were an EUTM has been registered for some services that it is used for and some that it is not, it can face invalidity action in respect of those services that it does not use only.
The ECJ summed up with advice that applicants are careful to register their marks only for those services that they intend to use the mark for, failing which applicants may face invalidity actions and challenges to their marks, which if successful would result in the applicant bearing the cost of the proceedings.
Key Takeaways for TM owners and would-be TM owners:
Those looking to register and retain EUTMs should take note of the ECJ’s guidance given in the Sky and Others case.
Although the ECJ has confirmed that an EUTM being registered over an entire class is not grounds in itself for declaring its registration mark invalid, applying for a mark and not being precise to what the owner intends to use the mark for, or applying in more classes than required or being overly vague can have adverse consequences on an EUTM owner’s ability to enforce and can result in unwanted oppositions and challenges.
Being as specific as possible when registering a Trademark both in the goods and services that you register it for and the jurisdiction you use ensures that the Trademark fulfills the essential functions of a Trademark and be possible for owners to effectively enforce against infringers and rely upon for protection.
Specifying sub-classes and being precise as possible for what the mark is to be used for can also help to avoid oppositions and in instances where there are pre-existing marks for similar goods or services, it can allow for parties to agree terms to co-exist by restricting and excluding certain types of goods or services within a class.
Further, by specifying the exact goods or services for which a mark applies will help to notify third parties of the existence of a registered Trademark within a specific area or industry which again, will assist with reducing the amount of opposition proceedings and improving the chance of successfully enforcing the EUTM against infringers.