The Court of Justice of the European Union (CJEU) has handed down a significant ruling on a trademark dispute following a referral from the High Court of Justice of England & Wales.

The ruling, which follows a trademark dispute between media giant Sky and Seattle-based cloud management software firm SkyKick, stated that trademarks cannot be ruled invalid simply because they lack clarity or precision.

It also ruled that marks can however be invalidated on grounds of bad faith when there is clear evidence that they were not intended to be used other than to stifle competition.

Mishcon De Reya advised Sky on the dispute, with IP partner David Rose leading the team. For Skykick, Fieldfisher was the key adviser, led by IP partner John Linneker.

The decision has been hotly anticipated by the trade mark industry as a clarification on the court's position, but the implications of the decision have divided opinion amongst IP experts.

"It is anything but a clear cut win for Sky," said Iain Connor, an IP partner at Pinsent Masons.

"They will certainly be pleased that their specifications have not been found to be in bad faith because of lack of clarity or precision. But they will be concerned that their specifications could be invalidated in part – either due to non-use, or due to a court finding that the only reason that they had registered the marks with these broad specifications was in order to exclude people from the market."

Joel Smith, partner and head of IP at Herbert Smith Freehills however said that the decision was "a clear win for Sky, and a very favourable decision for all brand owners."

"In the trademark space, it is one of the crucial landmark decisions. It's not a radical decision but it clarified the court's position. Even when the U.K. leaves the EU it will still continue to have an impact," he added.

The dispute originated after Sky claimed a trademark infringement over Skykick's name, but SkyKick counterclaimed claiming that Sky had registered the trade mark in "bad faith" and that the mark covered goods and services that lacked clarity and precision.

There has been growing anticipation of a change in direction by the courts following an opinion from the Advocate General, Evgeni Tanchev, in October that trademarking broad and imprecise terms such as "computer software" was unjustified.

"The Advocate General's opinion was quite left field but the CJEU hasn't really gone down that road at all," said Richard May, associate director at Osborne Clarke.

A spokesperson for Skykick said: "SkyKick is pleased with today's European Court judgment as a whole. It is a judgement that is also of broad importance to all businesses looking to clarify the scope of European trademark registrations.

"We look forward to the next step of the process when the European judgement will be considered by Lord Justice Arnold in the coming months."

A Sky Spokesperson said: "We welcome the judgement of the CJEU. We have always acted in accordance with our understanding of trade mark law and normal commercial practices as used by other companies seeking to protect their valuable trade marks."