Global technology giant, Apple, has had mixed results in relation to its attempt to register the word IWATCH as a trade mark in the UK, which faced opposition from Arcadia Trading Ltd on the one hand and Swatch AG on the other.
In March 2014, Brightflash USA LLC ("Brightflash") applied to register the word 'IWATCH' as a trade mark in respect of goods, including inter alia computer software, monitoring devices, cameras, computers and wireless communication devices in Class 9, and timepieces, bracelets and accessories in Class 14 (the "Application"). The Application was accepted and proceeded to publication for all goods in Class 9; however it was refused in respect of all goods in Class 14 as it was descriptive and/or devoid of distinctive character.
In September 2014, Arcadia Trading Ltd ("Arcadia") opposed the Application in respect of Class 9 on absolute grounds that it was descriptive or devoid of distinctive character. Meanwhile, Swatch AG ("Swatch") opposed the Application on relative grounds, arguing that the registration would be contrary to s.5(2)(b) and/or s.5(3) of the Trade Marks Act 1994 (the "Act").
On 15 October 2015, Brightflash assigned the Application to Apple Inc ("Apple"). Arcadia subsequently amended its grounds of opposition, alleging that the Application had been made in bad faith.
In August 2016, the hearing officer at the UK Intellectual Property Office rejected Arcadia's allegation of bad faith, but agreed with Arcadia that IWATCH was descriptive of some of the goods in Class 9 (computer software, computers, hardware, etc.). The Application was therefore only permitted to proceed in relation to the remaining Class 9 goods (security devices, computer peripherals, accessories, etc.).
The hearing officer upheld Swatch's opposition in part, in respect of certain goods in Class 9, having found:
- a medium to high visual, aural and conceptual similarity between IWATCH and iswatch
- the goods covered by them were similar to a medium or high degree
- there was a likelihood of confusion.
Apple appealed against both decisions.
Apple v Arcadia
Apple's three grounds of appeal were that the hearing officer was wrong to:
- Hold that the Class 9 specification covered smartphones in the shape of a watch or smartwatches.
- Hold that IWATCH was descriptive of computer software.
- Reject Apple's arguments of acquired distinctiveness.
Apple referred the Court to the current (11th edition) of the NICE classification, which specifically includes 'smartwatches' in the list of goods for Class 9. The 10th edition however, which was in force at the relevant time, did not make reference to 'smartwatches'. Apple argued that the hearing officer was wrong to conclude that smartwatches fell within Class 9 under the 10th edition.
The Court concluded that it was immaterial that 'smartwatches' were not expressly included in Class 9.
Apple then complained that the hearing officer described the specification of goods applied for as "smart phones in the shape of a watch" in some instances and "smartwatches" in others. Apple argued that neither of these expressions appeared in the Class 9 specification of goods.
The Court held this argument was legally erroneous. A multipurpose product with dual functionality, such as a 'smartwatch' that is both a watch and a phone with internet functionality, could fall into more than one class (i.e. Class 9 as a computer and Class 14 as a watch).
Apple's arguments regarding the hearing officer's categorisation of the 'smartwatches' therefore failed.
2. Descriptive of computer software
Apple's argument that computer software was not so closely connected to smartwatches as to make IWATCH descriptive of computer software did not succeed either. The Court held that smartwatches depend on the computer software that they incorporate for their operation and therefore IWATCH is descriptive of computer software, specifically software incorporated in smartwatches.
3. Acquired distinctiveness
Lastly, Apple argued that a trade mark (IWATCH) could acquire distinctive character as a result of the use of different trade marks (e.g. iPhone, iPod, iTunes and iPad) which shared a common feature (the i- prefix). The hearing officer rejected this argument.
The Court held that Apple failed to establish that IWATCH had acquired distinctive character on the facts. The Court stated that the average consumer would not necessarily perceive 'IWATCH' as originating from the same source as other i- branded products, particularly given there was evidence of third party use of i-prefixed trade marks (e.g. BBC's iPlayer).
The Court provided a useful reminder that a trade mark can acquire distinctive character through the use of that trade mark either (i) as part of a larger trade mark or (ii) in conjunction with another trade mark. Recent decisions in support of this include Nestlé's attempt to register the shape of a four-finger chocolate bar, as we discussed previously.
However, this did not necessarily mean that a trade mark can acquire distinctive character as a result of the use of different trade marks with a common feature.
Apple's appeal was dismissed. Apple has indicated its intention to appeal the Court's decision.
Apple vs Swatch
Apple's two grounds of appeal were that the hearing officer erred in assessing the similarity of the marks and the similarity of the goods.
On the first point, the Court held that it was impossible to fault the hearing officer's conclusions that there is a high degree of visual similarity between the marks and a medium to high degree of aural similarity.
As regards the similarity of the goods, taking into account:
- The respective specifications of the IWATCH and the iswatch.
- The nature of the goods.
- Their intended purpose and method of use.
- Whether they are in competition with each other or complementary.
The Court held that there is only a low degree of similarity between the goods and there is no likelihood of confusion for the average consumer.
Apple's appeal on this point was allowed.
It is interesting that the door was not necessarily closed to trade mark owners, who have marks possessing common features, from relying on the use of other trade marks in a "family" of trade marks to prove or demonstrate the acquired distinctiveness of a trade mark bearing that same feature.
It is unfortunate for Apple – with whom most laymen would associate the use of "i-" in connection with certain pieces of technology – that it was unable to demonstrate acquired distinctiveness in this case. There is little authority on this, but with moves towards broadening how one can demonstrate acquired distinctiveness, i.e. by use in association with another trade mark, it may be that this area of the law will continue to develop.
However, the recent decision of the Court of Appeal in Nestlé's 3D shape case demonstrates there are still some significant hurdles for trade marks which are in fact never used without reference to another trade mark.
  EWHC 440 (Ch) and  EWHC 713 (Ch)