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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Swatch AG v Apple Inc [2021] EWHC 719 (Ch) (29 March 2021) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2021/719.html Cite as: [2021] EWHC 719 (Ch) |
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BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
ON APPEAL FROM THE REGISTRAR OF TRADE MARKS
Fetter Lane London, EC4A 1NL |
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B e f o r e :
Sitting as a Deputy Judge of the High Court
____________________
 SWATCH AG | Appellant |
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APPLE INC |
Respondent |
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Charlotte May QC and Jaani Riordan (instructed by Locke Lord LLP) for the Respondent
Hearing date: 12 March 2021
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Crown Copyright ©
Iain Purvis QC, sitting as a Deputy Judge of the High Court:
INTRODUCTION
agreed between the parties for the purpose of settlement. A further stay for the same purpose was sought from me on the eve of the date fixed for this Appeal, at which time I was told that the matter was near to settlement. Given the history of the matter, and the previous lack of success of settlement discussions, I granted an adjournment of 48 hours (to the end of the 3-day window fixed for the Appeal) to enable the parties to finalise their settlement. No settlement was reached in time (nor has yet been reached) and the Appeal therefore went ahead.
THE TRADE MARK APPLICATIONS AND THE GROUNDS OF OPPOSITION
Swatch'). They are numbered 1281231 and 1281232 and are for the following signs, respectively:
ONE MORE THING
Swatch's knowledge of Apple's reputation in the phrase, the circumstances in which the marks were applied for and Swatch's likely intentions in relation to use of the marks.
APPLE'S USE OF THE PHRASE 'ONE MORE THING'
SWATCH AND ITS CONFLICT WITH APPLE
Swatch is a well-known manufacturer of watches based in Switzerland. For many years it has had a reputation in the UK for bright and distinctively designed plastic watches, sold in particular through its own retail outlets on the High Street.
Swatch and Apple about the marks 'I-WATCH' and 'I-SWATCH'. I know little about this dispute save that it already existed at the time of the Applications in suit. However Apple alleged that the 'bad blood' generated by that dispute was connected with the making of two different sets of trade mark applications by Swatch in a number of jurisdictions worldwide. These are for the marks which are the subject of the Applications in suit and for the mark TICK DIFFERENT (Apple used the slogan THINK DIFFERENT) applied for around the same time. Apple interpreted these Swatch applications as an aggressive or retaliatory tactic on Swatch's part. It pointed to the fact that Swatch had applied for two phrases associated with Apple at roughly the same time, and the fact that ONE MORE THING applications were filed shortly after Tim Cook revived the 'ONE MORE THING' moment at an Apple launch in 2015.
THE EVIDENCE
Swatch's trade mark applications for ONE MORE THING and TICK DIFFERENT. A lot of reliance was placed on these comments before the Hearing Officer and before me as representing the unsolicited opinions of industry observers.
'
The text of the article sums up the situation quite nicely. It says as follows:
'Swiss watchmaker
It has also filed for a trademark for 'Tick Different', a pun on Apple's iconic Think Different campaign used from 1997 to 2002.
Steve Jobs would often appear to be ending a press conference before uttering 'there's just one more thing' and unveiling a major new product to the masses. Of course, Jobs didn't invent the expression, but it's most heavily associated with him.
Since his passing in 2011, Apple has avoided using the phrase, with the notable exception of the Apple Watch, the most significant new product launch for the company in recent memory.
There's no telling what
Either way, Apple likely isn't too happy about either of the trademarks, but considering neither of those expressions are often used by the company anymore, it's probably no big harm.'
Swatch's approach in the evidence was to avoid saying anything about the purpose behind filing the Applications, nor even commenting on its state of knowledge of the signs relied on by Apple. Instead it listed certain occasions in the past in which it had used signs incorporating the word 'More'. It also pointed out the Columbo usage of the phrase ONE MORE THING and gave evidence of product ranges it had brought out in the past based on fictional characters (eg James Bond). However, it never actually stated that it had any real intention of making a Columbo 'tie-up'.
CONCLUSIONS OF THE HEARING OFFICER
Section 5(4)(a)
Swatch in relation to the goods within the scope of the Application. At worst, he thought, some people who were aware of Apple's usage might be caused to 'wonder' whether Swatch's use of the phrase had some connection with Apple, but this was not enough for the purposes of passing off.
agree with the Hearing Officer that the evidence in this case fell far short of that. Whilst the Hearing Officer was no doubt right to hold that a non-trivial number of people would be aware of the fact that Apple had a tradition of using the phrase in their product launches, this does not make the phrase indicative of the origin of Apple's products or services. So far as I am aware, the phrase has never been used by Apple as an indicator of origin, but only in a way which is essentially descriptive of a particular moment at a launch event.
Section 3(6)
Swatch's intentions actually were and therefore was reduced to speculation. Its primary case at the hearing before the Hearing Officer was in fact the same as the first suggestion of the author of that article: 'maybe it just wants to keep Apple from using the phrase'. Or, as Apple's counsel put it at the hearing in the Registry:
'my primary case is that this is a blocking application in retaliation for the wider dispute between the parties…to block Apple from using that mark or continuing to use that mark in relation to its own products. That is quintessential bad faith. It is also consistent with there being no bona fide intention to use the mark as a badge of trade origin'.
'the most probable explanation on all the evidence before the Registrar'.
Swatch's motivation and intention was found in paragraph 9 of their Notices, as follows:
'In full knowledge of Apple's reputation in the ONE MORE THING mark, the Applicant has sought to hijack that mark for its own benefit, either to parody Apple, divert trade from Apple or make use of the reputation subsisting in that mark. The Applicant's conduct therefore evidently falls short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area being examined'
Swatch had no intention to use the marks, and that the applications were blocking applications. He also refused permission to amend to introduce the 'blocking' objection. Neither of these decisions are appealed by Apple.
Again, that finding was not challenged before me.
'I use the word 'parody' there to encompass the kind of trolling behaviour, the malicious bad faith use of the mark in that sense.'
Swatch at the hearing below, to this was as follows:
'I would also say that in its ordinary meaning it is a great stretch to construe the word 'parody' as encompassing trolling…A parody would normally, typically, be a bit of a humorous reference, some kind of send-up perhaps, but not the kind of malicious behaviour…that one would consider to be associated with the term 'trolling'.
Swatch, but that 'trolling' Apple and running a parodic marketing campaign had been suggested. Having noted Mr Conway's argument that these articles were not a reliable source on which to base a decision (some were said to be 'Apple biased' publications, and others had an IP rather than technology focus), the Hearing Officer said that he did not rely 'too heavily' on them but:
'they at least give some credence to the suggestion that
'All of this strongly supports that the applications were filed in a retaliatory measure with some form of objective of upsetting or cocking a snook at Apple. I therefore accept that a prima facie case exists to support that
Swatch had failed to give evidence about its actual intentions and therefore done nothing to displace the prima facie case which he had held to exist. On the second point he said this:
'I consider that the filing of applications to support and justify a potential parodying form of use (which could not only poke fun at but may also denigrate, the subject of such parody)
THE APPEAL
Swatch when it made the Applications in suit, in particular his finding as to the intention of parodic use. In particular, Mr Moss for Swatch relied on the principle explained by Geoffrey Hobbs QC sitting as the Appointed Person in IAN ADAM trade mark [2011] RPC 21 at 35 that the Hearing Officer, whilst entitled to draw inferences from the proven facts, ought not to allow the assessment 'to degenerate into an exercise in speculation.' He also relied on the third proposition of principle explained in relation to s3(6) by Arnold J in Red Bull GmbH v Sun Mark Limited [2012] EWHC 1929 (Ch) at [133] (to which I return below) that bad faith was a serious allegation which must be distinctly proved, that an applicant was presumed to have acted in good faith unless the contrary was proved, and that it is 'not enough to prove facts which are also consistent with good faith.'
against that background does not mean that Apple had thereby taken on an extra and unnecessary burden.
against an extremely imprecise legal test. On both those questions an Appellate Court should be unwilling to depart from the decision of an experienced Hearing Officer unless that decision was based on a clear error of principle or was plainly wrong. Nonetheless, it is worth remarking at the outset that this is quite an unusual case:
(i) So far as the facts are concerned, it will be recalled that the Hearing Officer had not proceeded on the basis of the explanation of
(ii) So far as the law is concerned, there is to my knowledge (and that of Counsel who appeared before me) no previous reported case of a trade mark application being refused under s3(6) on the basis that the proprietor intended to use the mark for purposes of parody of another trader. Plainly the s3(6) objection is not limited to any particular categories of bad faith or dishonest conduct, but a category which has not previously been considered by the Courts requires careful consideration as a matter of principle.
THE LAW
against certain norms, in particular (i) what would be considered honest and fair behaviour by a business and (ii) the proper purpose of obtaining trade mark protection (that is to say to protect a mark used to distinguish goods and services from those of other traders).
74 The Court has held that in addition to the fact that, 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, regard must be had, for the purposes of interpreting that concept, to the specific context of trade mark law, which is that of the course of trade. In that regard, the EU rules on trade marks are aimed, in particular, at contributing to the system of undistorted competition in the European Union, in which each undertaking must, in order to attract and retain customers by the quality of its goods or services, be able to have registered as trade marks signs which enable the consumer, without any possibility of confusion, to distinguish those goods or services from others which have a different origin (judgment of 12 September 2019, Koton Magazacilik Tekstil Sanayi ve Ticaret v EUIPO, C-104/18 P, EU:C:2019:724, paragraph 45 and the case-law cited).
75 Consequently, the absolute ground for invalidity referred to in Article 51(1)(b) of Regulation No 40/94 and Article 3(2)(d) of First Directive 89/104 applies where it is apparent from relevant and consistent indicia that the proprietor of a trade mark has filed the application for registration of that mark 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 the essential function of indicating origin recalled in the previous paragraph of the present judgment (judgment of 12 September 2019, Koton Magazacilik Tekstil Sanayi ve Ticaret v EUIPO, C-104/18 P, EU:C:2019:724, paragraph 46).
131. First, the relevant date for assessing whether an application to register a trade mark was made in bad faith is the application date: see Case C-529/07 Chocoladenfabriken Lindt & Sprüngli
132. Secondly, although the relevant date is the application date, later evidence is relevant if it casts light backwards on the position as at the application date: see Hotel Cipriani Srl v Cipriani (Grosvenor Street) Ltd [2009] EWHC 3032 (Ch), [2009] RPC 9 at [167] and cf. Case C-259/02 La Mer Technology Inc v Laboratoires Goemar SA [2004] ECR I-1159 at [31] and Case C-192/03 Alcon Inc v OHIM [2004] ECR I-8993 at [41].
133. Thirdly, a person is presumed to have acted in good faith unless the contrary is proved. An allegation of bad faith is a serious allegation which must be distinctly proved. The standard of proof is on the balance of probabilities but cogent evidence is required due to the seriousness of the allegation. It is not enough to prove facts which are also consistent with good faith: see BRUTT Trade Marks [2007] RPC 19 at [29], von Rossum v Heinrich Mack Nachf. GmbH & Co KG (Case R 336/207–2, OHIM Second Board of Appeal, 13 November 2007) at [22] and Funke Kunststoffe GmbH v Astral Property Pty Ltd (Case R 1621/2006-4, OHIM Fourth Board of Appeal, 21 December 2009) at [22].
134. Fourthly, bad faith includes not only dishonesty, but also "some dealings which fall short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area being examined": see Gromax Plasticulture Ltd v Don & Low Nonwovens Ltd [1999] RPC 367 at 379 and DAAWAT Trade Mark (Case C000659037/1, OHIM Cancellation Division, 28 June 2004) at [8].
135. Fifthly, section 3(6) of the 1994 Act, Article 3(2)(d) of the Directive and Article 52(1)(b) of the Regulation are intended to prevent abuse of the trade mark system: see Melly's Trade Mark Application [2008] RPC 20 at [51] and CHOOSI Trade Mark (Case R 633/2007-2, OHIM Second Board of Appeal, 29 February 2008) at [21]. As the case law makes clear, there are two main classes of abuse. The first concerns abuse vis-à-vis the relevant office, for example where the applicant knowingly supplies untrue or misleading information in support of his application; and the second concerns abuse vis-à-vis third parties: see Cipriani at [185].
136. Sixthly, in order to determine whether the applicant acted in bad faith, the tribunal must make an overall assessment, taking into account all the factors relevant to the particular case: see Lindt v Hauswirth at [37].
137. Seventhly, the tribunal must first ascertain what the defendant knew about the matters in question and then decide whether, in the light of that knowledge, the defendant's conduct is dishonest (or otherwise falls short of the standards of acceptable commercial behaviour) judged by ordinary standards of honest people. The applicant's own standards of honesty (or acceptable commercial behaviour) are irrelevant to the enquiry: see AJIT WEEKLY Trade Mark [2006] RPC 25 at [35]-[41], GERSON Trade Mark (Case R 916/2004-1, OHIM First Board of Appeal, 4 June 2009) at [53] and Campbell v Hughes [2011] RPC 21 at [36].
138. Eighthly, consideration must be given to the applicant's intention. As the CJEU stated in Lindt v Hauswirth :
"41. … in order to determine whether there was bad faith, consideration must also be given to the applicant's intention at the time when he files the application for registration.
42. It must be observed in that regard that, as the Advocate General states in point 58 of her Opinion, the applicant's intention at the relevant time is a subjective factor which must be determined by reference to the objective circumstances of the particular case.
43. Accordingly, the intention to prevent a third party from marketing a product may, in certain circumstances, be an element of bad faith on the part of the applicant.
44. That is in particular the case when it becomes apparent, subsequently, that the applicant applied for registration of a sign as a Community trade mark without intending to use it, his sole objective being to prevent a third party from entering the market.
45. In such a case, the mark does not fulfil its essential function, namely that of ensuring that the consumer or end-user can identify the origin of the product or service concerned by allowing him to distinguish that product or service from those of different origin, without any confusion"
ANALYSIS
Swatch, starting with his reasoning in [59] of his Decision which I have quoted in [29] above. I will repeat it here for convenience:
'All of this strongly supports that the applications were filed in a retaliatory measure with some form of objective of upsetting or cocking a snook at Apple. I therefore accept that a prima facie case exists to support that
Swatch themselves in its evidence, that the Applications were at least to some extent designed to 'upset' or 'cock a snook' at Apple.
Swatch's own goods, would no doubt have done the same.
agree with the reasoning of the Hearing Officer that a prima facie case of intention to parody Apple followed from the fact that the Applications were intended to upset Apple. Nor do I consider that a prima facie case of intention to parody Apple was otherwise established by the evidence in the case. The following points are material:
(i) Heavy reliance was placed by Apple on the various online comments by third parties in connection with
(ii) The Hearing Officer was entitled to be unimpressed by the failure of
(iii) There was no evidence that
(iv) It is not clear how the suggested parodic use of the mark would be effective when, on the Hearing Officer's findings, it was only associated with Apple by only a small number of people.
Swatch must have regarded these Applications as useful in some way in its broader dispute with Apple. They probably wanted to stimulate a response of some kind from Apple and they must have known that Apple would be annoyed. But the mere making of the Applications and their prosecution to grant would probably achieve both of these aims, as would the ordinary use of the marks in relation to the goods applied for. It may be said that the absence of any statement of intention by Swatch in the evidence makes that a more doubtful proposition, but, as Mr Moss pointed out on behalf of Swatch, they had made a formal statement of intent to use at the relevant date, namely when they made the Applications.
Swatch had not, at the date of the Applications, given much thought to exactly what they would do with these marks. This of itself would not amount to bad faith, as pointed out by the CJEU in Sky v SkyKick C-371/18, EU:C:2020:45 at [76]:
'the applicant for a trade mark is not required to indicate or even to know precisely, on the date on which his or her application for registration of a mark is filed or of the examination of that application, the use he or she will make of the mark applied for and he or she has a period of 5 years for beginning actual use consistent with the essential function of that trade mark (see, to that effect, judgment of 12 September 2019, Deutsches Patent- und Markenamt C-541/18, EU:C:2019:725, paragraph 22).'
Swatch intended to use the trade mark to undermine Apple by parodic use.
Swatch intended to make use of the mark to poke fun at Apple in a manner akin to parody.
Swatch were motivated by a desire to annoy Apple could be sufficient to amount to bad faith. I do not think it can. Annoyance of a business is not a concept which is capable of objective analysis. The CJEU's reference to 'undermining the interests of third parties' suggests something which is economically identifiable. And in any event, Apple's case was not pleaded on anything like this basis.
'filed the application for registration of that mark 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'
(i) The Hearing Officer first refers to the applications being to support a 'potential parodying form of use (which could not only poke fun at but may also denigrate the subject of such parody)'. I have some difficulty with this passage for two reasons.
a. The words 'potential' 'could' and 'may' in this passage suggest speculation and immediately run into difficulties with the propositions in [133] of Red Bull (see [40] above).
b. An intent to 'denigrate' is not one which was pleaded (although perhaps it was inherent in Mr Riordan's characterisation at the Hearing, which used the word 'malicious'). More importantly, the Hearing Officer had not found such an intention in his findings of fact in [60] of his Decision. It will be recalled that [60] simply found an intention of 'poking fun'. If the Hearing Officer had considered that the evidence went beyond this and established an intention by
(ii) He then makes the point that using a mark as part of a parody of another trader is difficult to reconcile with the use of the marks in accordance with their essential function, of indicating the commercial source of the goods. But,
(iii) Having noted that the right to publish parodies was an important aspect of free speech, the Hearing Officer points out that it is not 'necessary' to obtain exclusive rights to a sign in order to engage in parody. This seems to me to be addressing the point the wrong way around. Mr Conway's argument was not that his clients had a 'defence' of parody or free speech (to which the Hearing Officer's point on necessity might have provided an answer). Rather it was that parody was not an inherently dishonest business practice.
(iv) The Hearing Officer concludes that
It is the applicant's attempt to secure an exclusive right to engage in this form of commercial parody (even, presumably, to the extent of excluding Apple's commercial use) which is objectionable.
I find this conclusion hard to follow and somewhat inconsistent with the rest of the Decision. The exclusive right granted by a registered trade mark only extends to trade mark use. Yet the Hearing Officer's earlier concern about the application (see (ii) above) was founded on the assumption that commercial parody was not trade mark use. The reference to excluding Apple's commercial use (presumably non-parodic) does not make much sense here either, and if anything appears to be the very 'blocking' allegation which the Hearing Officer had already held to be not open to Apple on the pleadings.
Swatch might engage in using this mark. This is not surprising in itself, since there was no evidence on the point at all. However, without a clear idea, it was not legitimate to conclude that Swatch's intentions had stepped over the line between the appropriate and inappropriate use of a trade mark. I should add that at the hearing before me I asked Apple to consider over the lunchtime adjournment if they could provide some examples of the kind of parody which they would be concerned Swatch might engage in using the mark ONE MORE THING. It ultimately declined to do so, saying in essence that so far as they were concerned any use of the mark by an unauthorised third party would be offensive and damaging. Whilst Apple was perfectly entitled to take this approach, it does to my mind illustrate the problems with the Hearing Officer's Decision. The Decision is founded on an intention to use a mark in a particular way which is said to be unfair and would materially undermine Apple's business when no example or illustration of the use in question was provided.
CONCLUSION