Seattle startup SkyKick and the Comcast-owned broadcasting giant Sky are both upbeat about an important ruling from a top European court in their nearly four-year trademark dispute.
The Court of Justice of the European Union ruled that a trademark can’t be nullified just because it is vague or unclear, a boon for Sky. But, in a potential win for SkyKick, the court also found that filing for a trademark for a product or service that is never intended to be used could constitute a “bad faith” action.
SkyKick says it is “pleased” with the ruling that came out Wednesday, while Sky said it “welcomed” the decision. The ruling, legal experts said, is mostly a win for companies like Sky that hold a lot of broad trademarks, amid a push to upend the rules.
Here’s what the companies had to say about the ruling. First, SkyKick, which noted that the matter is far from settled with this ruling: “SkyKick is pleased with today’s European Court judgment as a whole. It is a judgement that is also of broad importance to all businesses looking to clarify the scope of European trademark registrations. We look forward to the next step of the process when the European judgement will be considered by Lord Justice Arnold in the coming months.”
And, here’s Sky’s reaction: “We welcome the judgement of the CJEU. We have always acted in accordance with our understanding of trade mark law and normal commercial practices as used by other companies seeking to protect their valuable trade marks.”
[Editor’s Note: Yes, both companies put an “e” in “judgement” in their statements, which is apparently considered an acceptable alternative spelling in the UK. No judgment, please.]
Sky sued SkyKick in 2016 for trademark infringement. SkyKick, which has an office in Amsterdam and does business in Europe, fired back, arguing in a counterclaim that Sky’s trademarks in areas like “computer software” were too broad and should be thrown out. SkyKick also argued some of the trademarks were sought in bad faith because Sky never intended to operate in those areas.
Founded by a pair of ex-Microsoft employees, SkyKick builds software for consulting companies and service providers that small-and-medium-size businesses use to create an IT strategy. Its flagship product, Migration Suites for Office 365, simplifies moving email and productivity tools over to the Microsoft-hosted Office 365.
SkyKick in May raised $40 million. At the time, the company said it planned to hire “across the board,” in Seattle and its worldwide offices in Amsterdam, Sydney, and Tokyo. The company said in May it had 150 employees around the world, and it has raised $65 million to date.
In October, the Advocate General for the Court of Justice of the European Union said trademarks for a concept as broad as computer software are against the public interest and create the potential for a “monopoly of immense breadth which cannot be justified.” However, the court didn’t go as far in its ruling.
The decision will be applauded by holders of these broad trademarks, said Mark Nichols, an associate at London law firm Harbottle Lewis. Recent judgments in other cases, Nichols said, have built momentum for upending rules to get rid of overly vague trademarks and “reduce clutter in the trademark registry.”
Thomas Kirby, a solicitor at U.K. law firm Clarke Willmott’s intellectual property division, said the decision provides clarity about what constitutes “bad faith” in terms of trademarks for products or services that may never be used. However, the court didn’t make a dent in rules about trademarking concepts that have become core parts of pretty much every business, such as financial services and computer software.
“This decision represents a missed opportunity to free up the market to new entrants by restricting the scope of the monopoly a party could obtain over computer software and other similarly broad terms,” Kirby said. “It will, however, no doubt be welcomed by the established players that already own broad monopolies as it enables them to continue enforcing those rights.”