England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
INTELLECTUAL PROPERTY LIST (CHANCERY DIVISION)

		Rolls Building Fetter Lane, London, EC4A 1NL
		27 April 2018

MR JUSTICE ARNOLD :

Introduction

1. This judgment deals with a number of issues arising out of the judgment which I handed down on 6 February 2018 ("the Main Judgment").

Sky's application dated 16 April 2018

2. The trial of this action took place over the period from 16 to 23 January 2018. The parties were sent the Main Judgment in draft in order that they could notify the Court of typographical and other obvious errors on 1 February 2018. Both parties duly submitted lists of proposed corrections. The final version of the Main Judgment was handed down 6 February 2018. On 16 April 2018, without prior warning to SkyKick, Sky issued an application requesting that "the Court (i) reconsider the Conclusions in paras [174], [258] and [358] of the Judgment and the reasoning on the basis of which they were reached; and/or (ii) provide amplification of the reasons on the basis of which the Conclusions in paras [174], [258] and [358] of the Judgment were reached".
3. This application was made on the advice of counsel newly instructed on behalf of Sky following the handing down of the Main Judgment to draft grounds of appeal. He told me that he gave that advice as a result of formulating the draft grounds of appeal which form the basis of Sky's alternative application for permission to appeal. I am doubtful that this justifies the lateness of the application; but I will let that pass.
4. Limb (ii) of Sky's application is advanced on the basis that it is well established that a party should not seek to appeal to the Court of Appeal on the basis that a judge which has given insufficient reasons for the conclusions he has reached in a judgment which has been delivered without first inviting the judge to amplify his reasons. I find it remarkable, and troubling, that it can be suggested that a judgment that runs to no less than 358 paragraphs contains insufficient reasons. It is fair to say that parts of the Main Judgment are directed to issues other than those which are the focus of Sky's application; but on any view a large part of the Main Judgment deals with the issues with which Sky's application is concerned. I can see no basis for the suggestion that the Main Judgment contains insufficient reasons for the conclusions reached. I would make the obvious point that a judge cannot (or at least, should not) be criticised for not addressing arguments which were not advanced before him or for not considering authorities which were not cited to him.
5. Limb (i) of Sky's application is advanced on the basis that a judge of the High Court has the power to reconsider his judgment at any time up until the order giving effect to it has been perfected by being sealed and that the exercise of this power is not restricted to exceptional circumstances: see In re L (Children) (Preliminary Finding: Power to Reverse) [2013] UKSC 8, [2013] 1 WLR 634. The only basis on which it is suggested that I should reconsider the conclusions reached in the Main Judgment, however, is that they are wrong. In my judgment that is not a sufficient justification. The proper course in such circumstances is to seek permission to appeal.
6. For the reasons given in the two preceding paragraphs, I consider that Sky's application should be dismissed. Nevertheless, I cannot ignore the fact that Sky's new counsel has made arguments in support of the application which develop the contentions advanced by Sky at the trial and, perhaps more importantly, has cited a number of authorities which had not previously been cited. In those circumstances, I propose briefly to explain why the new arguments and new authorities have not caused me to change my mind. I shall not address every point made by counsel for Sky, but only those points which appear to me to warrant comment beyond what is contained in the Main Judgment.

Can lack of clarity and precision in the specification be asserted as a ground of invalidity?

7. Counsel for Sky made two points in relation to this issue which I propose to comment on.
8. First, he pointed out that the CJEU had held in Case C-421/04 Matratzen Concord AG v Hukla Germany SA [2006] ECR I-2303:

"19. As is clear from the seventh recital in the preamble, the Directive lists in an exhaustive manner the grounds for refusal or invalidity of registration concerning the trade mark itself.

20.       According to settled case-law, in a field which has been exhaustively harmonised at Community level, a national measure must be assessed in the light of the provisions of that harmonising measure and not of those of primary law (see, in particular, Case C-352/95 Phytheron International [1997] ECR I-1729, paragraph 17; Case C-324/99 DaimlerChrysler [2001] ECR I-9897, paragraph 32; and Case C-210/03 Swedish Match [2004] ECR I-11893, paragraph 81).

21.       Consequently, it is the Directive, and in particular Article 3 thereof, on the absolute grounds for refusal or invalidity of registration, and not Articles 28 EC and 30 EC, which must be assessed to determine whether Community law precludes the registration of a national trade mark such as that at issue in the main proceedings.

22.       Article 3 of the Directive does not include any ground for refusal to register specifically aimed at trade marks constituted by a term borrowed from the language of a Member State other than the State of registration in which it is devoid of distinctive character or descriptive of the goods or services in respect of which registration is sought."

9. He submitted that this reasoning supported the view that lack of clarity and precision in the specification of goods and services was not a ground of invalidity which could be asserted against a trade mark after registration. I accept this. Nevertheless, he did not seek to withdraw the limited concession by Sky recorded in the Main Judgment at [161].
10. Secondly, he drew attention to a series of decisions of the General Court which he submitted stood as authority for the proposition that terms in specifications of goods and services which were not sufficiently clear and precise were to be disregarded in any claim for infringement or opposition on relative grounds, namely Case T-162/08 Frag Commercio Internacional SL v Office for Harmonisation in the Internal Market [2009] ECR II-212 at [31], Case T-571/11 El Corte Inglés SA v Office for Harmonisation in the Internal Market [EU:T:2013:145] at [23]-[24], [51]-56], Case T-229/12 Advance Magazine Publishers Inc v Office for Harmonisation in the Internal Market [EU:T:2014:95] at [33]-[42], Case T-39/16 Nanu-Nana Joachim Hoepp GmbH & Co KG v European Intellectual Property Office [EU:T:2017:263] at [40]-[49] and Case T-102/17 Cantina e Oleificio Sociale di San Marzano v European Intellectual Property Office [UE:T:2018:50] at [28]-[40]. He further submitted that, if objectionable terms were disregarded, a finding of invalidity would add nothing.
11. I am not convinced that these decisions are authority for the proposition stated. Rather, they appear to me to show that, absent an attack on the validity of the trade mark, an unclear or imprecise term will be narrowly interpreted as extending only to such goods or services as it clearly covers. Certainly, I am not persuaded that they show that a term in a specification which lacks clarity and precision cannot be invalid.

Are the specifications of the Trade Marks lacking in clarity and precision?

12. Counsel for Sky made five points in relation to this issue which I propose to comment on.
13. First, he submitted that (i) breadth of a term in a specification of goods and services was not the same thing as lack of clarity and precision and (ii) the Court of Justice had held in IP TRANSLATOR in its answer to the third question that the use of broad terms was unobjectionable provided that the applicant made its intentions clear. I addressed these points in the Main Judgment at [146], [149] and [164]-[172]. I would add, in case I did not make it sufficiently clear, that the Court of Justice stated in IP TRANSLATOR at [54] that some of the general indications in the class headings of the Nice Classification are not sufficiently clear and precise to allow the competent authorities to determine the scope of protection conferred by the trade mark "where they are too general and cover goods or services which are too variable to be compatible with the trade mark's function as an indication of origin". In my judgment the better view is that "computer software" is too general and covers goods or services which are too variable to be compatible with the Trade Marks' function as indications of origin, and hence lacks clarity and precision.
14. Secondly, he pointed out that Article 33(8) of the Regulation enabled proprietors of EU trade marks applied for before 22 June 2012 and registered in respect of an entire class heading to declare that their intention had been to seek protection beyond the literal meaning of the class heading "provided that the goods or services so designated are included in the alphabetical list for that class" in the relevant edition of the Nice Classification and that "computer software" had been included in the alphabetical list for Class 9 in all relevant editions. He submitted that this showed that "computer software" conformed with the requirements of the legislation. I do not accept that this conclusion necessarily follows from the premises.
15. Thirdly, he pointed out that the CJEU had stated in IP TRANSLATOR at [55] that it was "for the competent authorities to make an assessment on a case-by-case basis, according to the goods or services for which the applicant seeks the protection conferred by a trade mark, in order to determine whether those indications meet the requirements of clarity and precision". Similarly, in Case C-420/13 Netto Marken-Discount AG & Co KG [EU:C:2014:2069] the CJEU stated at [50]:

"It is for the competent authorities to assess whether indications such as 'entertainment' and 'personal and social services intended to meet the needs of individuals', used in the application for registration submitted by Netto Marken-Discount, satisfy the necessary requirements of clarity and precision (see, by analogy, Chartered Institute of Patent Attorneys EU:C:2012:361, paragraph 55)."

16. He submitted that (i) the question whether "computer software" satisfied the requirements of clarity and precision had been considered by the TMDN and answered in the affirmative and (ii) in any event, the CJEU had made it clear that, in circumstances such as the present, it was for the national court to make the necessary assessment. I addressed these points in the Main Judgment at [171]-[173]. In case it is not sufficiently clear, I would add that I consider that further guidance is needed from the Court of Justice because it is not presently clear when the generality and variability of a term like "computer software" leads to the conclusion that it lacks clarity and precision. The conclusion of the TMDN with respect to "computer software" is entitled to respect, but it does not have the force of the law and I do not find it convincing. Why is "computer software" different from "machines"? Counsel for Sky submitted that the unifying characteristic of computer software was that it consists of code, but that does not alter the fact that it can have very different characteristics, purposes, trade channels and consumers.
17. Fourthly, he submitted that the concerns expressed by Laddie J in Mercury v Mercury were adequately addressed by the remedy of partial cancellation for non-use (as exemplified by DATASPHERE Trade Mark [2006] RPC 23) and that it would undermine the EU trade mark system to require greater specificity at the registration stage. I do not accept this. Partial cancellation for non-use is not a satisfactory remedy for an unjustifiably broad monopoly, because it is not available until five years after the date of registration, which may easily be five years after the application date, making a total of ten years. Requiring greater specificity at the registration stage does not appear to have done the US trade mark system any harm.
18. Fifthly, he pointed out that Sky relied upon a number of terms for the purposes of their infringement claim. He submitted that, even if "computer software" was lacking in clarity and precision, and the Trade Marks were invalid to that extent, it did not follow that all of the terms relied upon were invalid. I addressed this point in the Main Judgment at [162]-[163] and [173]. As I hope I made clear, I consider that it is at least arguable that all of the terms relied on (with the possible exception of "electronic mail services") are objectionable. He also submitted that SkyKick's invalidity counterclaim had extended more broadly than was required for the defence of Sky's infringement claim and that this was impermissible for the reasons given by Mann J in Adobe Systems Inc v Netcom Distributors [2012] EWHC 1087 (Ch), [2013] FSR 5. I do not accept that this is an accurate characterisation of SkyKick's counterclaim, however.

Bad faith

19. Counsel for Sky made two points in relation to this issue which I shall comment on.
20. First, he submitted that it was settled law that an examination of the grounds for refusal must be carried out in relation to each of the goods or services (or categories of goods or services) for which trade mark registration was sought, relying upon Case C-597/12 Isdin SA v Office for Harmonisation in the Internal Market [EU:C:2013:672] at [24]-[30]. Accordingly, he submitted that it was unarguable that the existence of bad faith in relation to just some goods and services in a specification should lead to invalidity of the entire trade mark. I addressed this point in the Main Judgment at [230]-[234]. I am not persuaded that Isdin demonstrates that the conclusion I reached there was incorrect. I would add that I consider it arguable (although not the better view) that bad faith is different to other grounds of objection in that the existence of bad faith in relation to any goods or services taints the entire application and any resulting registration.
21. Secondly, he submitted that the travaux préparatoires showed that the EU legislature had considered incorporating a requirement of bona fide intent to use into the trade mark legislation, and had instead decided to adopt bad faith as a ground of invalidity: see Tsoutsanis, Trade Mark Registrations in Bad Faith (OUP, 2010), in particular at §§3.09, 3.27 and 3.31. I agree that this is what happened as a matter of historical record, but I consider that it remains arguable that the bad faith objection encompasses lack of intention to use the trade mark (as well as other things).

The questions

22. Both parties made submissions with respect to the wording of the questions to be referred to the CJEU. Having considered their submissions, I have concluded that the questions should be worded as follows:

"(1) Can an EU trade mark or a national trade mark registered in a Member State be declared wholly or partially invalid on the ground that some or all of the terms in the specification of goods and services are lacking in sufficient clarity and precision to enable the competent authorities and third parties to determine on the basis of those terms alone the extent of the protection conferred by the trade mark?

(2) If the answer to question (1) is yes, is a term such as 'computer software' too general and covers goods which are too variable to be compatible with the trade mark's function as an indication of origin for that term to be sufficiently clear and precise to enable the competent authorities and third parties to determine on the basis of that term alone the extent of the protection conferred by the trade mark?

(3) Can it constitute bad faith simply to apply to register a trade mark without any intention to use it in relation to the specified goods or services?

(4) If the answer to question (3) is yes, is it possible to conclude that the applicant made the application partly in good faith and partly in bad faith if and to the extent that the applicant had an intention to use the trade mark in relation to some of the specified goods or services, but no intention to use the trade mark in relation to other specified goods or services?

(5) Is section 32(3) of the UK Trade Marks Act 1994 compatible with Parliament and Council Directive 2015/2436/EU and its predecessors?"

Schedule to the Order for Reference

23. The CJEU's Recommendations to national courts and tribunals in relation to the initiation of preliminary ruling proceedings ([2016] C439/01) states at paragraph 14 that, owing to the need for translation, the request should be "drafted simply, clearly and precisely … avoiding superfluous detail" and suggests that "about 10 pages are often sufficient". SkyKick prepared a draft Schedule to the Order for Reference which was intended to comply with this guidance. Sky criticised SkyKick's draft on various grounds, but did not prepare their own draft. I shall therefore settle the Schedule myself.

Sky's application for permission to appeal and a stay

24. Sky seek permission to appeal on the grounds set out in their draft Grounds of Appeal. I refuse permission to appeal since I am not persuaded that an appeal has a real prospect of success for the following brief reasons.
25. In relation to the claim for infringement under Article 9(2)(c) of the Regulation/Article 10(2)(c) of the Directive, Sky contend that I was wrong to consider this on the assumption that there was no likelihood of confusion. I am baffled by this: if there was a likelihood of confusion, then the claim under Article 9(2)(b) of the Regulation/Article 10(2)(b) of the Directive would succeed (if the Trade Marks are valid), and the claim under Article 9(2)(c) of the Regulation/Article 10(2)(c) of the Directive would be redundant.
26. In relation to the claim for passing off, Sky contend that I was wrong to deal with it in a single paragraph and that I should have concluded that there was a misrepresentation for the reasons given in relation to Article 9(2)(b) of the Regulation/Article 10(2)(b) of the Directive. I dealt with passing off briefly because it was (rightly) dealt with by counsel briefly. I explained at [356] why my conclusion that there was a likelihood of confusion if the Trade Marks were valid did not lead to the conclusion that there was a misrepresentation having regard to the extent of Sky's actual goodwill.
27. In relation to the counterclaim, Sky contend that I was wrong to conclude that the answers to the questions I am referring to the CJEU were not acte clair, and accordingly that there is no need for a reference. I disagree for the reasons given in the Main Judgment and the further reasons given above.
28. Sky seek a stay of the Order for Reference pending determination of an application to the Court of Appeal for permission to appeal and the appeal if permission is granted. I refuse to grant a stay. As counsel for Sky himself noted, the average time for disposal of a reference to the CJEU is about 15-16 months. Accordingly, the sooner the reference is transmitted to the CJEU the better, in order to minimise the consequential delay in the determining these proceedings. The Court of Appeal will have power to grant a stay if it grants permission to appeal and thinks fit. Even if no stay is granted, the reference can be withdrawn in the event that the Court of Appeal allows an appeal. This may be an argument in favour of expedition of any appeal if a stay is refused.

SkyKick's application for an extension of time for appealing

29. Counsel for SkyKick submitted that no appealable decision had been made which was adverse to SkyKick and therefore SkyKick did not need any extension of time for appealing, but out of an abundance of caution applied for an extension of time for appealing against my conclusion that SkyKick did not have a defence under Article 12(a) of the Regulation/Article 6(1)(a) of the Directive until after the CJEU's determination of the reference. As counsel for Sky pointed out, however, this raises the potential spectre of successive references to the CJEU, which would be very undesirable.
30. In my judgment, I have made an appealable decision which is adverse to SkyKick that it does not have a defence under Article 12(a) of the Regulation/Article 6(1)(a) of the Directive. Bearing in mind that appeals lie against orders, not judgments, in order to make the position clear, I will give effect to this conclusion by including an appropriate declaration in the Order. I decline to grant SkyKick an extension of time for appealing on this issue as requested. If SkyKick wish to appeal, they must do so now.
31. Although counsel for SkyKick did not request me to grant permission to appeal, I should make clear that I would have refused to do so. My decision was a multi-factorial assessment applying established principles, and I am not satisfied that an appeal would have a real prospect of success.
32. There was some discussion as to the procedure which SkyKick should adopt if they wish to seek permission to appeal only in the event of Sky being granted permission to appeal by the Court of Appeal. In my view SkyKick can achieve this by filing a respondent's notice seeking permission to appeal pursuant to CPR rule 52.13 if and when they are notified that the Court of Appeal has granted Sky permission to appeal.