18 October 2016

Swatch Thwarts iWatch

In 2014 Swatch opposed the UK trade mark application for iWATCH covering “Computer software; security devices; monitors and monitoring devices; cameras; computers; computer hardware; computer peripherals; wireless communication devices; radios; audio and video devices; global positioning system devices; accessories, parts, components, and cases for all of the foregoing goods” in class 9. Swatch based their opposition on prior trade mark registrations for SWATCH and ISWATCH in classes 9 and 14.

Swatch argued that the description of goods in the iWATCH application covered smart watches and goods connected with smart watches, and that these goods were similar to the goods covered by its earlier registrations. Given the similarity of the marks, there was a likelihood of confusion. Swatch also argued that its UK registration for SWATCH had a reputation in the United Kingdom for “horological and chronometric apparatus” and that the use of the application would cause detriment to the reputation and distinctive character of its mark. In particular, there would be a transfer of the high values and strong reputation associated with the SWATCH mark (precision, accuracy, reliability) onto Apple’s mark.

Apple denied all grounds of opposition and relied in particular upon its use and reputation of 23 marks with the prefix ‘i’. As a result, Apple argued that the relevant public would associate the mark iWATCH with Apple, and that there would be no confusion with Swatch’s marks. Apple also argued that the consumer base for smart watches and traditional watches was different with the traditional watch being seen as a design piece and a smart watch a piece of wearable technology.

The Hearing Officer found that the class 9 specification of the iWATCH application covered smart watches and that there is a high degree of similarity between watches in class 14 and smart watches in class 9. He also found the marks themselves to be visually and phonetically similar. Apple argued that there were important conceptual differences between the marks, as consumers would recognise the ‘SWATCH’ in ISWATCH as designating Swatch’s products, whereas consumers would see the ‘i’ prefix as designating an Apple product. The Hearing Officer disagreed. Following the EU General Court’s decision in Ravensburger AG v OHIM, he concluded that the reputation/distinctive character of the earlier mark was not a consideration for the purposes of assessing the similarity of the marks, but would be assessed only in relation to likelihood of confusion. Overall, the Hearing Officer concluded that there was no strong conceptual distinction between the marks and that they were similar.

Turning to the question of likelihood of confusion, Apple again relied on the perceived conceptual differences between the marks and argued that the trade mark meaning of SWATCH would help to avoid confusion with IWATCH. The Hearing Officer considered this argument wrong in law. He pointed out that various decisions of the Court of Justice of the European Union (CJEU) confirmed that the greater the distinctive character of the earlier mark, the higher the likelihood of confusion. Therefore, to argue that an earlier mark was so distinctive there would be less likelihood of confusion went directly against the decisions of the CJEU.

Overall in relation to the goods covered by the application deemed similar to the goods covered by Swatch’s registrations, the Hearing Officer found there to be a likelihood of confusion and the iWATCH application was rejected for these goods. This decision shows the difficulty global brands can have when it comes to launching a new product around the world because trade marks are territorial, which means that a trade mark must be available for registration in every country of interest. Not being able to obtain the iWATCH trade mark around the world would have been a major factor in Apple's decision to change the name of its smart watch to the Apple Watch.

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