Following the Supreme Court’s decision in SkyKick UK Ltd v Sky Ltd [2024] UKSC 36, the UKIPO has now issued a much-anticipated ‘Practice Amendment Notice’ (‘PAN 1/25’) about the implications of this decision on the Office’s approach to examining new trade mark applications for bad faith, as well as on opposition and cancellation actions.
The guidance, which comes into force with immediate effect, is important for applicants seeking to register their marks for a broad range of goods and services, as well as for opponents and cancellation applicants seeking to rely on broad lists of goods and services to enforce their registered rights. It clarifies that parties wishing to use the trade mark system should do so in good faith. Although an applicant is not required to have a “settled or developed intention” to use the mark for the goods or services, they should at the very least have an intention to establish such a business or explore its viability.
Changes to the UKIPO’s practice for examining new applications
PAN 1/25 confirms that UKIPO examiners may now routinely raise objections to applications which they believe have been filed in bad faith, marking a change from their current practice.
Specifically, examiners will now consider whether “the specification is so manifestly and self-evidently broad that a bad faith objection should be raised”. This may be, for example, where an application is filed covering a very broad list of goods/services in many classes, or where it covers the entirety of a class with “a huge range of different (and disparate)” goods/services, such as class 9. However, there may be other circumstances under which a refusal may be raised as the concept of “bad faith” is fact-specific: an application which may be good faith for one applicant may constitute bad faith for another.
In the SkyKick decision the Supreme Court found that the broad term “computer software” was applied for in bad faith. However, PAN 1/25 makes clear that, at this stage, examiners will not automatically object to broad terms such as “computer software”, “pharmaceuticals” or “clothing”, although they will consider the application as a whole and take into account a number of factors.
Guidance for applicants
Whilst there has always been a requirement for UK trade mark applicants to declare that they have a genuine intention to use the applied-for goods and/or services, the UKIPO will now take a more proactive approach when examining applications. If an objection based on bad faith is raised, the applicant will have the usual 2-month period to respond by providing “an appropriate commercial rationale” to explain why they have chosen their particular goods/services, If the examiner is unconvinced by the explanation, applicants can still request a hearing or file an appeal.
Applicants should consider the following when filing an application to try and avoid a bad faith objection:
- The context of their business
Following SkyKick, applicants must be mindful of the breadth of the goods and services covered by their application compared to the “size and nature” of their business. By way of an extreme example, an application covering all goods and services in all 45 classes is very unlikely to have been made in good faith and examiners will always raise an objection in such cases. - Class headings
Similarly, filing an application for class headings may be problematic, particularly in classes which cover a broad range of different goods or services. The example given in the PAN 1/25 is class 9, which covers goods ranging from “Recorded and downloadable media, computer software, blank digital or analogue recording and storage media” to “Fire-extinguishing apparatus”. Again, examiners will always raise an objection in such cases. - General Terms
Filing an application which includes general terms that can be very broad can be problematic if the applicant does not have an intention to use the mark for all of the sub-categories covered by that term. PAN 1/25 gives the specific examples of “computer software”, “pharmaceuticals” or “clothing”. Although examiners will not automatically object to such broad terms, objections may be possible within the wider context of the list of goods and services applied-for taking into account other factors including those listed, and such terms may also pose problems later on during any enforcement action or in oppositions or cancellation actions. - Commercial Rationale
Applicants should be mindful of their commercial rationale for the goods and services covered by their applications, and to be prepared to put it forward in the event that an objection is raised. Failure to provide a satisfactory explanation in response to an objection may support a finding of bad faith. In explaining their commercial rationale, applicants may consider the size and nature of their business, their intention to use the mark for the goods and services covered or at the very least an intention to explore the viability of such use, and their motivations for the application. Bad faith depends entirely on the facts and circumstances of a given case. An application for a house mark or company name may be more justified in covering a broader range of goods and services that could be offered by the company than a product name. A software company that designs and develops software for a diverse client base across many fields may be more justified in claiming the general term “computer software” than a telecommunications company that only offers telecommunications software to its customers. Applicants should be prepared to produce evidence that substantiates their commercial rationale, and so it is advisable for strategy papers and business plans to be kept safe.
Changes to the UKIPO's tribunal practice
Whilst PAN 1/25 primarily focuses on the UKIPO’s examination practice, it also refers to opposition and cancellation actions. It provides another potential weapon for counter-attack by those facing opposition or cancellation actions, and a level of risk for those initiating such actions. It is especially potent in cases where registrations that are too young to be vulnerable to non-use challenge are relied on.
For applicants or registrants facing opposition or cancellation actions, they should bear in mind the existence of such a weapon, which can be deployed to undermine the other party’s case and increase chances of success and/or to apply pressure in the negotiations.
For those initiating opposition and cancellation actions, they should carefully select the goods and services relied on to try and mitigate the risk of a counterclaim on bad faith grounds. This means avoiding general terms or relying on overly broad lists of goods and services where possible, and to base their case on the terms on which they would be content to defend against a potential counterclaim.
Summary
As the UKIPO, applicants, and opponents get to grips with PAN 1/25 and its impact, we can expect more bad faith objections to be raised by the UKIPO when examining new applications and bad faith counterclaims in contentious proceedings. This may be especially the case in ongoing oppositions and cancellation actions which were initiated before PAN 1/25 and broad terms in registrations have been relied on.
The risk of a finding of bad faith may in reality be reduced for existing registrations as bad faith remains a high bar, requiring conduct that ‘departed from accepted principles of ethical behaviour of honest commercial practices’ as at the filing date. This is particularly given that adopting general broad terms such as “computer software” and “pharmaceutical preparations” was an accepted and common practice. However, the risk of a bad faith finding may be increased for new applications filed following this guidance.
Nevertheless, much will depend on the specific facts and circumstances in a given case. There will still be situations where adopting general broad terms is justified and appropriate, for example a fashion company selling a wide range of attire claiming “clothing” or a pharmaceutical company that develops a variety of drugs for many conditions and ailments covering “pharmaceutical preparations”. In such cases, applicants should be prepared to explain why such terms are appropriate given the size and nature of their business and their commercial strategy.
Jacqueline Pang
Jacqueline is a Partner and Chartered Trade Mark Attorney at Mewburn Ellis. She has extensive experience in managing large portfolios, particularly advising on international filing strategies and foreign filings and prosecution. Jacqueline's work includes acting in oppositions before the UKIPO and advising on multi-jurisdictional disputes, with extensive experience in negotiating settlement agreements. She has also been involved in Nominet and UDRP proceedings relating to domain names.
Email: jacqueline.pang@mewburn.com
Jamie Emerick
Jamie is a trainee trade mark attorney and a member of the firm’s trade mark team. His interests are in contentious trade mark work, copyright and media law, having completed optional modules in these areas at university. He has previously worked as an IP assistant for a MedTech firm, assisting with contentious matters in patent law, contract law and trade secrets. He has also helped manage the firm’s IP portfolio.
Email: jamie.emerick@mewburn.com
