What is the test for determining "bad faith" in section 3(6) of the Trade Marks Act 1994?
In SkyKick UK Ltd and another v Sky Ltd and others [2024] UKSC 36, the UK Supreme Court delivered one of the most important trade mark judgments in a generation, finally settling "What is the test for determining bad faith in section 3(6) of the Trade Marks Act 1994?" This single question has reshaped how brand owners across the world, including in India, must think about drafting trade mark specifications.
Background of the Case
Sky, the well-known broadcaster and telecoms provider, sued SkyKick, a cloud migration and backup service, for infringing five registered SKY trade marks covering an extraordinarily wide range of goods and services, from bleaching preparations to computer software to insurance. SkyKick counterclaimed that Sky's marks were registered in bad faith because Sky never intended to use them for most of the goods and services listed, and had simply filed for everything under the sun to create a wide legal weapon.
The dispute travelled from the High Court to the CJEU (on a reference), to the Court of Appeal, and finally to the UK Supreme Court. The Court of Appeal had sided almost entirely with Sky, holding that a lack of intention to use a mark for certain goods or services was, on its own, very difficult to establish as bad faith. SkyKick, along with the Comptroller-General of Patents, Designs and Trade Marks (who intervened), argued that this made section 3(6) of the Trade Marks Act 1994 almost toothless against "over-broad" filing strategies.
The Legal Question Before the Court
The Supreme Court was asked to resolve two connected issues:
What is the test for determining "bad faith" in section 3(6) of the Trade Marks Act 1994?
If bad faith is found, what is the correct approach to determining the specification of goods and services that the trade mark proprietor should be permitted to retain?
What the Supreme Court Held: The Bad Faith Test
Lord Kitchin, delivering the leading judgment (with which Lord Reed, Lord Lloyd-Jones, Lord Hamblen and Lord Burrows agreed), explained that bad faith is an autonomous concept of law with no fixed statutory definition. It must be assessed as of the date the application for registration was filed, having regard to all the objective circumstances of the case.
At its core, the objection is made out where the applicant filed the application:
not with the aim of engaging fairly in competition, but with the intention of undermining, in a manner inconsistent with honest practices, 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 its essential function of indicating origin.
"The registration of a mark by the applicant without any intention to use it in relation to the goods and services covered by the registration may constitute bad faith where there is no rationale for the application in light of the aims of the trade mark system." — Lord Kitchin, summarising the CJEU's Sky ruling
Two Established Categories of Bad Faith
Drawing on Lindt, Koton, Hasbro and other CJEU authorities, the Court confirmed bad faith cases generally fall into two, non-exhaustive categories:
Category (i): the application was made with the intention of undermining the interests of a specific third party, for example by appropriating a competitor's mark or breaching an agreement.
Category (ii): the application was made to obtain an exclusive right for purposes outside the functions of a trade mark, without necessarily targeting any specific third party, such as filing for goods or services the applicant never had any genuine intention to trade in.
Filing for Goods You Never Intend to Sell: Now a Real Risk
The most commercially significant part of the judgment concerns applicants who register marks across extremely wide specifications without any real business behind most of the listed goods and services. The Court of Appeal had suggested this alone could almost never amount to bad faith. The Supreme Court firmly disagreed.
Lord Kitchin held that while an applicant does not need a settled or fully developed intention to use a mark at the filing date, and enjoys a five-year grace period before non-use becomes relevant, an applicant who has no genuine intention to explore a business under the mark, yet still intends to enforce the registration aggressively across the full breadth of goods and services, may be found to have acted in bad faith. The size and width of the specification, measured against the size and nature of the applicant's actual business, is a legitimate factor for a tribunal to weigh.
The judgment gives a memorable illustration: an applicant who applies to register a mark across all 45 international classes of goods and services would, absent a credible explanation, be a strong candidate for a finding of bad faith, since this would amount to artificially creating the conditions for obtaining a registration with unduly wide protection.
Broad Terms and General Categories Do Not Get a Free Pass
The Court also rejected the idea that using a broad umbrella term like "computer software" should shield an applicant from a bad faith finding, even where the applicant genuinely intended to use the mark for only a narrow sub-category within that broad term. If a broad description sweeps in distinct sub-categories of goods or services the applicant never intended to use the mark for, the application can be found to have been made partly in bad faith as regards those sub-categories.
Burden of Proof and Procedural Fairness
The good faith of an applicant is presumed until the party alleging bad faith produces objective, relevant and consistent indicia capable of rebutting that presumption. Once that threshold is crossed, the burden effectively shifts: the applicant is best placed to explain its commercial rationale and objectives, and a failure to provide a satisfactory explanation can reinforce, rather than dispel, an inference of bad faith. The Court also stressed that fairness requires each side to have proper notice of the case against it and a genuine opportunity to answer it, particularly given how serious an allegation of bad faith is.
Outcome of the Appeal
Applying these principles, the Supreme Court restored the trial judge's original finding that Sky had acted in bad faith in respect of goods and services, including certain computer software and other categories, for which it had no genuine commercial intention, and upheld the corresponding narrowing of Sky's trade mark specifications. On infringement, the Court held that SkyKick's Cloud Backup service infringed the SKY marks in relation to the surviving specification, but that its Cloud Migration service did not.
Why This Judgment Matters for Indian Law Students and Lawyers
Although this is a UK Supreme Court decision, its reasoning on bad faith under section 3(6) of the Trade Marks Act 1994 (UK) mirrors the structure of section 11(10) and the bad faith objections available under the Indian Trade Marks Act, 1999, and is regularly cited before the Indian courts and the Trade Marks Registry in opposition and rectification proceedings. Understanding how a Supreme Court unpacks an undefined statutory term like "bad faith", through categories, burden of proof, and objective indicia, is exactly the kind of structured legal reasoning that separates a competent trade mark practitioner from an exceptional one.
For law students and young lawyers building a career in intellectual property, cases like SkyKick v Sky are not just exam material; they are the actual tools of trade mark prosecution, opposition, and litigation practice, whether you eventually work with a law firm, an in-house IP team, or as an independent trade mark attorney.
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Read the Full Judgment
You can download and read the full text of the UK Supreme Court's judgment in SkyKick UK Ltd and another v Sky Ltd and others [2024] UKSC 36 below.
Frequently Asked Questions (FAQs)
What is the test for bad faith under section 3(6) of the Trade Marks Act 1994?
Bad faith is made out where an applicant filed a trade mark application not with the aim of engaging fairly in competition, but either to undermine the interests of a third party in a manner inconsistent with honest practices, or to obtain an exclusive right for purposes outside the essential functions of a trade mark, assessed objectively as of the filing date.
Can filing a trade mark for goods you never intend to sell amount to bad faith?
Yes. The Supreme Court held that registering a mark across an unduly wide specification, with no genuine intention to use it for most of the listed goods or services, and intending to enforce it aggressively regardless, can constitute bad faith, particularly where the width of the specification bears no relation to the size of the applicant's actual business.
Does using a broad category like 'computer software' protect an applicant from a bad faith finding?
No. If a broad term covers distinct sub-categories of goods or services the applicant never genuinely intended to use the mark for, the application can be found to have been made partly in bad faith with respect to those sub-categories, even though the term itself was permissible in principle.
Who has the burden of proving bad faith in a trade mark case?
The party alleging bad faith bears the initial burden, and the applicant's good faith is presumed. However, once objective, relevant and consistent indicia are shown that could rebut that presumption, the applicant must provide a plausible commercial explanation for the application, and a failure to do so can strengthen the inference of bad faith.
What was the final outcome of SkyKick v Sky [2024] UKSC 36?
The Supreme Court allowed SkyKick's appeal on bad faith, restoring the trial judge's finding that Sky's marks were registered in bad faith for certain goods and services and narrowing Sky's specifications accordingly. On infringement, SkyKick's Cloud Backup service was found to infringe the surviving SKY marks, while its Cloud Migration service was not.
Keywords: bad faith trade mark, section 3(6) Trade Marks Act 1994, SkyKick v Sky, UKSC 2024, trade mark bad faith test, trade mark specification, trade mark opposition India, IPR certificate course, Into Legal World, trademark patent copyright prosecution course
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