Sky v SkyKick - no CJEU reference re removal of own name defence to EUTMs

Is Article 1(13) of Regulation 2015/2424 contrary to fundamental rights?  This is a question that SkyKick recently sought to refer to the Court of Justice of the European Union (CJEU) in Sky v SkyKick [2017] EWHC 1769.  We will not find out the answer for a while (possibly ever) because Birss J denied the defendants' desired pre-trial reference.

SkyKick offers a range of cloud based services including data backup, and cloud management software facilities.  SkyKick is a US company.  They carried out US searches in November 2011 and applied to register SKYKICK in the US in 2012.  In 2016 they filed and international trade mark (IR) designating the EU and other territories.  Sky brought its claim shortly after this filing in May 2016. 

Why does the own name defence matter?

The own name defence remains for UK trade marks until the new Directive is implemented (the deadline for national implementations is 14 January 2019).  However, Article 1(13) removes the own name defence for corporate defendants (it remains for natural persons) from article 12 of the European Trade Mark Regulation (i.e. Regulation (EC) No 207/2009).  SkyKick wanted to rely on the defence against Sky.

SkyKick alleged that Article 1(13) was contrary to:

• Article 16 of the EU Charter (Freedom to conduct business);
• Article 17 of the EU Charter (Right to property);
• Article 20 of the EU Charter (Equality before the law); and
• Article 21 of the EU Charter (Non-discrimination).

SkyKick also relied on:

• Article 51 of the EU Charter (the field of application);
• Article 52 of the EU Charter (scope and interpretation of the rights and principles); and
• Article 17 of TRIPS.

In summary, SkyKick alleged that the change to the law interferes with the freedom to conduct business and right to property which companies had under the existing law.  In particular, they alleged that there has been no proper assessment of the impact of the change in law, it is discriminatory as against natural persons, and there is no good reason for it.

Sky pointed out that the defence was originally only intended to apply to natural persons but was construed as covering legal entities as well by the CJEU in the Anheuser-Busch v Buddejovickybudvar (C-245/02 [2004] ECR-I-10989).  In other words, all that has happened is that the EU legislature has made an express alteration to the law so as to return it to the original intention.

Having considered these arguments, Birss J declined to make a reference at this time.

They think it's all over?

Birss J was clear that it was open to him to refuse a reference if he considers that SkyKick's arguments are unfounded (see IATA v European Low Fares C-344/04 [2006] ECR 1403).  In other words, whilst the question of validity of an EU law is not a matter for a national court to decide the application itself can be rejected if the national court considers that there are no grounds for saying that an EU law is invalid.

While it is open to a court to refer questions on the validity of EU law when considering the kind of legal conclusion the national court is entitled to reach (see R (Telephonica 02 Europe PLC) v Secretary of State for Business Enterprise and Regulatory Reform [2007] EWHC 3018 (Admin)), the timing is important. 

In other words, the main question Birss J considered in this application was whether a reference should be made in the middle of proceedings.  He considered the following principles:

1. references should not be made of matters which are of purely academic interest (Meilick and Bacardi Martini v Newcastle United);
2. the CJEU prefers for the relevant factual matrix to have been determined before a reference is made.

Although he considered that both sides have a properly arguable case on the merits he noted that:

1. SkyKick may win the action without a reference to the own name defence (their key argument was that there was no infringement by the goods and services that SkyKick offers);
2. Sky may win the action without the question of law being decided as the own name defence will have to be considered in any event in the context of the UK trade mark;
3. this means that the trial will consider the honest practices of the Defendants in detail and make findings of fact which will help with the question regarding the necessity of a reference.  These findings of fact will make it easier for the CJEU to make a decision;
4. although the Defendants' required the reference to be as soon as possible in order to achieve business certainty for their startup the Defendants had also made a request for a stay which was inconsistent with their purported desire for immediate certainty.

The own name defence question may become relevant if SkyKick wins in relation to the UK mark but loses in relation to the EU mark but it could just as easily be an unnecessary reference.  The best way for SkyKick to get a speedy resolution was to keep the trial timetable on track for early 2018.  

Stay?

Although there are parallel proceedings to invalidate Sky's marks at the EU IPO, the parties and the judge agreed that there were special grounds for continuing with the proceedings. This was because:

1. the parties agree (although this is not determinative);
2. there was a real risk of inconsistent decisions;
3. the need to keep the early 2018 trial on track;
4. the High Court claim also concerned passing off and UK trade mark infringement.