[2025] EWHC 1722 (IPEC)

Section 3(6) of the 1994 Act provides that a trade mark “shall not be registered if or to the extent that the application is made in bad faith”. The Amended Defence and Counterclaim states that the specification of each of the Claimant’s Marks should be invalidated in part because their specifications include “one or more terms of such breadth that the reasonable inference is that the Claimant had no bona fide intention to use them for such a breadth of goods and services” at the relevant application dates. For the Wise Logo Mark and the TRANSFERWISE Mark, the relevant date was 17 October 2018, and for the Recent Marks it was 14 October 2021. The Counterclaim goes on to claim that one can infer that the Marks were intended to undermine the interests of third parties and in particular to be used as a legal weapon in the sense discussed in Lidl Great Britain Ltd v Tesco Stores Ltd [2022] EWCA Civ 1433, rather than to protect the functions of the Marks. On that basis the Defendants challenged the following terms: computer software and application software in Class 9, financial affairs, monetary affairs, financial services and internet accounts and banking in Class 36, and the information, consultancy etc services related to them. “Financial services” is a term in the specification of Recent Mark No. 3710268, but in the 2018 Marks, there is no reference to “financial services” solus, but instead those two words appear in phrases such as “financial services including foreign currency trading…” It was common ground that the use of the term “including” meant that the specification was not limited to services of the specific type mentioned. The bad faith allegation about the Class 9 goods was made prior to the Claimant’s amendment of the Class 9 specification of the Wise Logo Mark and was maintained after that amendment against the Claimant’s applications “as filed” as bad faith is conventionally tested as at the date of filing the application for the challenged trade mark.

After the Counterclaim had been filed, the Supreme Court handed down its decision in SkyKick UK Ltd & Anor v Sky Ltd & Ors [2024] UKSC 36. The facts of the case are well-known; its history is lengthy and convoluted and hard to summarise in any useful way. In brief, Sky Ltd sued SkyKick for trade mark infringement, relying upon five of its Sky trade marks, which were registered between them for an astonishingly wide range of goods and services in a large number of classes. For example, Sky relied upon a UK trade mark No 2500604 which had a specification of goods/services in 22 classes, and which was over 8000 words long. The extensive parts of the trade marks which were relied upon for the infringement action were narrowed down late in the trial but included in particular computer software in Class 9. SkyKick contended that each of Sky's marks should be declared partly invalid on the ground that the goods and services were not specified with sufficient clarity and precision.

Arnold J, as he then was, as the trial judge, referred various questions to the CJEU. Those questions and the answers given by the Court (Case C- 371/18, EU:C: 2020:45, [2020] RPC 4) were summarised by Lord Kitchin at paragraphs 93 to 97 of his judgment. Relevantly to this case, the CJEU ruled that a mark cannot be declared wholly or partially invalid on the ground that terms used to designate the goods and services in respect of which it was registered lack clarity and precision. That defect alone does not demonstrate bad faith. When the case was restored to the High Court, Arnold J therefore dismissed that part of SkyKick’s case.

Arnold J held that the marks had been applied for partly in bad faith, because Sky did not intend to use the marks in relation to some goods and services covered by the specifications and there was no foreseeable prospect that they would ever use the marks across the board. He accepted that Sky had a strategy of seeking very broad trade mark protection regardless of whether it was commercially justified. In addition, in relation to the UK trade mark mentioned above, Arnold J found that Sky had made a false declaration under section 32(3) of its intent to use the mark, which was inconsistent with honest practices, which strengthened his conclusion that to that extent the application was made in bad faith. He went on to recast some of the specifications, doing his best to reflect the extent to which bad faith had been proved, yet to give Sky fair protection. In particular, he narrowed down Sky’s “computer software” to specific kinds of software (see [110] of the Supreme Court judgment).

Sky appealed successfully to the Court of Appeal against the findings of partial invalidity, and SkyKick then appealed to the Supreme Court. The lengthy judgment of the Court was given by Lord Kitchin. Lord Kitchin identified two categories of bad faith applications, the second of which is where the application for registration constitutes, in respect of all or some of the goods or services for which protection is sought, an abuse of the trade mark system. To make good such an objection it is necessary to show:

“182… the applicant for the contested registration must have adopted a strategy which meant that the purpose of the rules was not met. Secondly, the applicant must have intended to obtain an advantage from the rules by artificially creating the conditions laid down for securing the registration. Of particular importance here may be whether the application was made with the intention of obtaining an exclusive right for purposes other than those falling within the functions of a trade mark.”

Lord Kitchin distilled the general principles at paragraph 240. I set out a slightly shortened version below, underlining the points most relevant to this case:

“(i)

It is an absolute ground of invalidity of an EU trade mark that the application for that registered mark was made in bad faith …

(ii)

The date for assessing whether an application to register an EU trade mark was made in bad faith is the date the application for registration was made …

(iii)

Bad faith in this context is an autonomous concept of EU law which must be given a uniform interpretation in the European Union …

(iv)

While, in accordance with its usual meaning in everyday language, the concept of bad faith presupposes the presence of a dishonest state of mind or intention, the concept must also be understood in the context of trade mark law, which involves the use of marks in the course of trade. Further, it must have regard to the objectives of the EU law of trade marks …

(v)

Consequently, the objection will be made out where the proprietor made the application for registration, not with the aim of engaging fairly in competition but either (a) with the intention of undermining, in a manner inconsistent with honest practices, the interests of third parties; or (b) 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, and in particular the essential function of indicating origin (Koton, para 46; Sky CJEU, para 75).

(vi)

The intention of the applicant is a subjective matter, but it must be capable of being established objectively by the competent administrative or judicial authorities having regard to the objective circumstances of the case (Hasbro, paras 39 and 40; Koton, para 47).

(vii)

The burden of proving that an application for a registered mark was made in bad faith lies on the party making the allegation. But where the circumstances of the case may lead to a rebuttal of the presumption of good faith, it is for the proprietor of the mark to explain and provide a plausible explanation of the objectives and commercial logic pursued by the application for registration (Hasbro, paras 42 and 43).

(viii)

Whether the applicant was acting in bad faith must be the subject of an overall assessment, taking into account all of the factors relevant to the particular case (Lindt, para 37).

(ix)

The applicant for a trade mark is not required to indicate or to know precisely when the application is filed or examined, the use that will be made of it (Sky CJEU, para 76; Deutsches Patent-und Markenamt, para 22).

(x)

Nevertheless, the registration by an applicant of a mark 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 the light of the aims referred to in Regulation 40/94 and Directive 89/104 (Sky CJEU, para 77).

(xi)

Such bad faith may, however, be established only where there are objective, relevant and consistent indicia tending to show that, when the application was filed, the applicant for registration had the intention either of undermining, in a manner inconsistent with honest practices, the interests of third parties, or of obtaining, without targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark (Sky CJEU, para 77).

(xii)

It follows that the bad faith of the applicant cannot be presumed on the basis of a mere finding that, at the time of filing the application, the applicant had no economic activity corresponding to the goods and services referred to in the application (Sky CJEU, para 78).

(xiii)

When the absence of an intention to use the mark in accordance with the essential functions of a trade mark concerns only certain goods or services referred to in the application for registration, that constitutes making the application in bad faith only in so far as it relates to those goods or services (Sky CJEU, para 81).

(xiv)

If, at the end of the day, the court concludes that, despite formal observance of the relevant rules and conditions for obtaining registration, the purpose of the rules has not been achieved, and that there was an intention to take advantage of the rules by creating artificially the conditions laid down for obtaining the registration, this may amount to an abuse sufficient to find that the application was made in bad faith (see, for example, Hasbro, para 72).

(xv)

Directive 89/104 does not preclude a provision of national law under which an applicant for registration must state that the mark is being used in relation to the goods or services in relation to which it is sought to register the mark, or that the applicant has a bona fide intention that it should be used, provided thatinfringement of such an obligation cannot constitute a ground for invalidity. It may, however, constitute evidence for the purposes of establishing possible bad faith on the part of the applicant when the application was filed (Sky CJEU, paras 86 and 87).”

It does not seem to me that anything in Lord Kitchin’s summary detracts from the pre-existing UK position, that a person is presumed to have acted in good faith unless the contrary is proved, and an allegation of bad faith is a serious allegation which must be distinctly proved, see e.g. Red Bull GMBH v Sun Mark Ltd [2013] E.T.M.R. 53. On the other hand, Skykick shows that in appropriate circumstances, the proprietor may need to provide a satisfactory explanation for the application. Lord Kitchin said:

“235.

I recognise that an inference that an application to register a trade mark was made in bad faith may be displaced by an explanation of an appropriate commercial rationale for making it. In my opinion, however, a failure to provide any satisfactory explanation may reinforce the inference and provide further support for a finding of bad faith. …

252.

I recognise that such an applicant, when given an appropriate opportunity, may provide a reasonable explanation and justification for its actions and in that way answer and dispel any inference that it made the application in bad faith. If, however, it fails to do so, it is in my view open to the tribunal to find that the application was indeed made in bad faith in respect of those goods and services.”

At paragraphs 259-263 Lord Kitchin considered the problem of the use of general terms and broad categories, the essence of the Defendants’ allegation of bad faith in the case before me:

“259.

The use by an applicant of general terms to describe the goods and services for which it seeks protection presents a further problem. It was submitted on behalf of the Comptroller-General that the Court of Appeal, at paras 113 and 116 of the judgment, appears to preclude a finding of bad faith arising from the use by the applicant of overly broad categories of goods and services (for example, software) where the applicant had an intention to use the mark in relation to some but not all of the goods and services within that broad category, and that this appears to be so even where such a term manifestly covers sub-categories of goods or services in relation to which the applicant never had any intention of using the mark and there was no realistic prospect of it ever doing so.

260.

This is the second area of concern for the Comptroller-General and again, I think that concern is justified. It would in my view be anomalous for traders who use broad terminology to describe the goods and services for which they seek protection to find themselves in a more favourable position than those who use appropriate sub-categories to describe the same goods and services, and I would reject any interpretation of the legislation that necessarily leads to that conclusion. Of course, the matter must be judged as at the time of the application. … I see no reason why a person should be permitted to apply to register a mark or retain a registration in respect of distinct categories of goods or services in relation to which it never had any intention to use the mark, simply because it chose to use a broad description of those goods and services which meant they were encompassed together with goods or services about which no complaint is made.

261.

I would mention two other matters in this context. First, there can be no doubt that an application to register a mark in respect of a broad category of goods or services may be made partly in bad faith … the essential criterion to apply for the purposes of identifying a coherent subcategory of goods or services capable of being viewed independently is their purpose and intended use.

262.

Secondly, it is now possible to dispel the concern expressed by counsel for the Comptroller-General that it is doubtful whether the introduction of restrictions on the use of broad terms in trade mark specifications will alleviate the problem of cluttering, at least without the objection of bad faith filing ‘having some teeth’. In my opinion, and for the reasons I have given, the objection does have teeth: indeed, it has essentially the same teeth whether one is concerned with an unduly broad specification which uses general terms or specific sub-categories to describe goods or services and which, in either case, includes or identifies sub-categories of goods or services in relation to which the applicant never had any intention to use the mark.”

Lastly, I should mention some of Lord Kitchin’s conclusions on the merits:

“322.

There was a further point here which I must make at this stage, namely the impact on these issues of the use by Sky of general terms such as (but by no means limited to) ‘computer software’ (as goods and as a service). An applicant does not have to have a commercial strategy to use a mark for every possible species of goods or services falling within the specification. Nor is it an objection that the applicant has applied for a wide range of goods and services using class headings or other general terms. That objection, which is one of clarity and precision, has largely gone away in the light of the decision of the CJEU in this case.

323.

Where, however, the broad description includes distinct categories or subcategories of goods or services, as ‘computer programs’ and ‘computer services’ undoubtedly do, then, for the reasons I have given, the proprietor may be found to have acted in bad faith in relation to one or more of those, and it would be manifestly unjust if it escaped that consequence simply because it had framed its specification using general terminology. …”

As Daniel Alexander KC, sitting as the Appointed Person, said in O/0534/25 CNVRGCNVRG.IO trade mark (decided after the trial of this matter, on 12 June 2025) at [40] “the judgment of the Supreme Court in SkyKick indicates that the bar has been raised as to what may reasonably be expected of applicants for trade marks.” Mr Alexander went on:

“48.

Where there is evidence from which it is proper to infer that an application for registration has been made in bad faith (on the basis that it was not applied for to protect one or more of the legitimate functions of a trade mark) an applicant can reasonably be expected to provide a sufficiently coherent explanation for the application specifically in the UK including as to its scope. An applicant may be able to justify the application (including its scope) on the basis of credible evidence as to its purposes in making it, for example by reference to the width of the underlying business, actual or reasonably contemplated, which the trade mark is intended to protect. If no adequate or sufficiently credible explanation is provided or one which justifies the UK application, there may be a proper basis for a finding of bad faith in whole or in part.”

The specifications of the Wise Logo Mark and the TRANSFERWISE Mark include terms such as computer software and financial affairs which are broad and imprecise. Those are the sorts of terms which may now be challenged at the application stage (see the UKIPO’s new PAN 1/2025) and in the case of the Wise Logo Mark, may well, depending upon the evidence, be narrowed down to particular sub-categories of software or financial affairs/services as a result of the impending non-use challenge in the Defendants’ 2024 proceedings. The computer software terms plainly fall within Lord Kitchin’s point at [323] of Skykick, and it seems to me that financial affairs, monetary affairs and financial services (not currently effectively delimited by sub-category)do too.Indeed, I am unclear as to the distinction (if any) between financial affairs and financial services. On the other hand, I do not consider that the term internet accounts and banking can be criticised in the same way.

As explained above, the inclusion of imprecise terminology cannot, without more, be said to show that the Marks were applied for in bad faith. Each application needs to be shown to have been filed as an abuse of the trade mark system. I have set out the extent of the Defendants’ pleading of bad faith above and the question is whether in the circumstances the Defendants have raised an inference which rebuts the initial presumption of good faith, such that the Claimant needs to explain and provide a plausible explanation of the objectives and commercial logic pursued by the applications. In its Reply, the Claimant had claimed that at each application date it had either already been using the marks for the goods/services registered, or had the intention of doing so, alternatively, it had the intention of using them for at least some of the goods/services. However, it did not otherwise explain its filing strategy. I was told that it had successfully resisted a request to give disclosure on the point and filed no evidence supporting the Reply by dealing with its strategy in 2018 or 2021. In addition, none of the Claimant’s witnesses was able to speak to its trade mark filing strategy.

The question of whether the Defendants have raised an inference of bad faith must be considered in the light of the surrounding circumstances, including the evidence about the nature of the Claimant’s business (and any reasonably foreseeable or natural expansion of that business) at the time the applications were made. My comments are based on the somewhat limited evidence before me and are not intended to pre-empt the proper consideration in the course of the 2024 proceedings of the Defendants’ allegation of non-use of the Wise Logo Mark. It appears that the Claimant started as a money transfer business and has expanded its business over the years to offer a range of money transfer and banking-type services, such as accounts for holding customer money and a payment card. Mr Ballarini identified a range of such services, some of which were launched prior to the 2018 trade mark applications, and others between the 2018 and 2021 application dates. The challenged terms in the Class 36 specifications are broad and imprecise, and it is plain from the specifications themselves that it would be possible to file an application for an adequate trade mark in more specific terms. The “including” sub-categories of the Class 36 specifications (if properly limited) would it seems to me reflect the range of services which the Claimant says it has offered. However, given the expansion of the scope of the Claimant’s business both before and after 2018, it does not seem to me that I can infer that there are further sub-categories of financial etc services in relation to which the Claimant never had any intention of using the mark and there was no realistic prospect of it ever doing so. With some hesitation, therefore, I conclude that the Defendants have not raised a sufficient inference that the impugned parts of the Class 36 specifications were filed in bad faith to transfer the burden of proof to the Claimant to justify its trade mark application strategy.

However, I have reached the opposite conclusion in relation to the broad terms challenged in the Class 9 specifications of the 2018 Marks. Mr Ballarini described the Claimant as a software business and said that in addition to making its own applications (by which I assume he meant that the Claimant designs software facilitating use of its services) it releases open-source code on GitHub. He said that such software was not solely relevant to finance and exhibited a list of the Claimant’s code on GitHub, dating back to 2014. No evidence was given by the Claimant as to whether such software was downloaded by third parties, and, if it was, as to the scale of such use, nor of use of the Marks in relation to it. Mr Guise gave unchallenged evidence on the figures shown on GitHub, suggesting that the Claimant’s software was not popular.

As long ago as 1995, in Mercury [1995] FSR 850,Laddie J. said that there is a strong argument that a registration of a mark simply for ‘computer software’ will normally be too wide, and that the defining characteristic of a piece of computer software is the function it performs. Whilst I appreciate that software is an essential tool of the Claimant's business and may very well be designed by or for the Claimant, it does not seem to me that this justifies the Claimant’s application to register a trade mark for software of every conceivable kind. The software which the Claimant uses and which its customers use enables it to provide its money transfer and other services, but it is clear that the design or marketing of software was not the focus of its business, still less that it was the sort of business which would have a reasonable expectation of marketing a range of software fulfilling such diverse functions as to justify an application for computer software of all kinds. If Sky, with its broad business model, could not justify such an application, it seems to me that it is clear that it would be the case for the Claimant too. I take support in that view from several of the confidential documents in evidence (FB20, FB22) which predated the change from TransferWise to Wise Payments. They referred to the Claimant’s products and did not suggest that those included software products, even though some software had by that time been uploaded to GitHub. There must have been many sub-categories of software in relation to which the Claimant never had any intention of using the Marks and there was no realistic prospect of it ever doing so.

I conclude that in relation to the computer software and application software in Class 9, the Defendants did raise an inference that those parts of the specifications were not necessary for the protection of the Claimant’s business or future business. In those circumstances the breadth of the Class 9 specifications raises a concern about the Claimant’s good faith in applying for them, and as to the veracity of its declaration of an intent to use the Marks for all such goods. The burden of proof therefore fell upon the Claimant to justify its trade mark application strategy, and it completely failed to do this. It did not explain or seek to justify its filing strategy in 2018 and gave only limited evidence of the kinds of software which it had created and released.

In the circumstances, I consider it right to amend the specifications, to restrict them to a reasonable specification for the business including a penumbra of protection or range of goods/services into which the Claimant might, as at the date of application, reasonably have been expected to or intend to expand its business.

The allegation of bad faith relates back to the date of filing and so it appears to me that I should consider how to deal with the computer software and application software without reference to the subsequent amendment of the Wise Logo Mark specification, although plainly that amendment will stand, so far as appropriate. The Defendant contended that the challenged terms should be expunged from the Class 9 specification altogether, whilst the Claimant suggested that the amendment made in 2024 would achieve an appropriate specification by qualifying the simple terms computer software and application software by the phrase all the aforementioned goods in connection with financial services, monetary services, banking services, investment services, cryptocurrency services and travel insurance services.

The specific terms in the Class 36 specifications from 2018 seem to me likely to reflect the Claimant’s own view at the relevant time of the scope of the financial services it was offering or would be likely to offer and hence of the software it might supply. There was no reference in the Class 36 specifications to investment services, cryptocurrency or insurance. Mr Ballarini explained that the Claimant had decided (he did not say when) not to deal with cryptocurrency and that an interest in travel insurance is at an exploratory stage. It is not licensed to pay interest to clients, and Mr Ballarini did not describe any investment services in terms of giving investment advice. The Claimant put forward some suggested wording as a fallback position, which I accept in large part, but which I consider should exclude the kinds of services just discussed, as giving too wide a penumbra of protection to the Claimant. It seems to me that the appropriate amendment would be “computer software and application software relating to financial services, monetary services, and banking services in connection with electronic money and currency transfer services, foreign currency exchange services, foreign currency payment processing services, financial management services, financial transfers and transactions, payment services, invoice services, managing tax services, mass payments services and payroll services” In addition, I think it right tomaintain the qualification to the Wise Logo Mark already on the Register, so as not to inadvertently widen the specification, namely all the aforementioned goods in connection with financial services, monetary services, and banking services. The Class 9 specifications as amended are: