Swatch AG v Apple Inc [2021] EWHC 719 (Ch)

This case has a history: the long running trade mark dispute between Swatch and Apple about the marks ‘I-WATCH’ and ‘I-SWATCH’. I will go back to that in a moment. The dispute in question concerned trade mark applications designating the following signs, covering a wide range of goods including watches and consumer electronic products:

SWATCH ONE MORE THING
ONE MORE THING

[Full disclosure: the author of this post was an undergraduate contemporary in the eighties with Iain Purvis QC, the presiding judge in this matter. I have chosen not mischievously to publish this report on 1 April.]

“One more thing” became something of a meme since The well-known Chairman and founder of Apple, Steve Jobs, would reach what would seem to be the end of his keynote address at an industry event chosen for an important announcement, turn as if to leave the stage, and then turn back with the words ‘but there’s one more thing’. In 1998 the first ‘one more thing’ was the return of Apple to profitability. In later years, the ‘one more thing’ would often be a new Apple product. The tradition appears to have lapsed on Steve Jobs’ death in 2011 but was revived by his successor Tim Cook in 2015 for the launch of the Apple Watch.

This somewhat theatrical use of the phrase in this way was probably originally borrowed from, and intended as a playful reference to, the fictional TV detective Columbo, popular in the 1970s and 1980s on US and UK television. His modus operandi in each episode was to reveal the devastating piece of evidence from which he had solved the crime by walking away from the criminal he was questioning and then turning back with the words ‘there’s just one more thing…’.

Apparently 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, as a 2015 website points out out, “Jobs didn’t invent the expression, but it’s most heavily associated with him” (THENEXTWEB.com). Since Jobs’ death in 2011 the Swiss watchmaker has acquired a European trade mark for ‘One More Thing’. The website sets out the deep history of the dispute between the two companies:

… 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.

There’s no telling what Swatch will use the trademark for. Maybe it just wants [to] keep Apple from using the phrase. Or maybe it plans to troll the company with a future ad campaign, given the Apple Watch is often seen as a threat to the Swatch’s watch market (even if it probably won’t kill it off).
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.’

The Hearing Officer below rejected one of the objections raised by Apple. Whilst he accepted that a non-trivial number of people in the United Kingdom would have been aware of Apple’s usage of the phrase ONE MORE THING in the context set out above, he did not consider that this was sufficient to turn what is a common phrase in English usage into a ‘distinguishing sign’ (one which would be taken as indicating the trade origin of Apple’s goods or services). The presiding judge could find no fault with the Hearing Officer’s findings on this issue of distinctiveness. The phrase had 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.”

But the Hearing Officer did accept Apple’s broader argument of bad faith in Swatch’s manoeuvre. The Swiss company, Apple contended, was making 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.”

This is known in IP circles as a ‘dog in the manger’ attitude that ‘I have no real use for this mark myself, but I want to stop other people from using it’ and it is likely to be considered to be made in bad faith. Unfortunately for Apple, this ‘dog in the manger’ or ‘blocking’ case was not actually pleaded in its Notices of Opposition. The only allegation that was left to consider on appeal was that Swatch had intended to use the mark ‘to parody Apple’, a word which encompasses a kind of trolling behaviour, “the malicious bad faith use of the mark in that sense.” The Hearing Officer found that there could be no coincidence that the ONE MORE THING marks were applied for with TICK DIFFERENT at a point in time when the parties were ‘already at loggerheads’ and concluded that Swatch had filed their applications “in a retaliatory measure with some form of objective of upsetting or cocking a snook at Apple.”

He therefore accepted that a prima facie case existed to support that Swatch intended to raise the stakes with Apple by poking fun at it in a manner akin to parody and that the subject applications were filed as part of such an objective.

Using the trade mark registration system to obtain exclusive rights to such signs goes far beyond what is necessary to engage in legitimate parody. 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.

On appeal, Mr Purvis QC observed that there was no previous reported case of a trade mark application being refused under Section 3(6) of the Trademarks Act 1994 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 ‘bad faith’ objection to the registration of trade marks has defied any straightforward definition, either by the UK Courts or by the CJEU. It is clear however that it involves a consideration of the state of mind of the applicant and in particular their intentions with respect to the application.

The presiding judge did not 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 did he consider that a prima facie case of intention to parody Apple had been otherwise established by the evidence in the case. The fact that Swatch had not, at the date of the Applications, given much thought to exactly what they would do with these marks. This of itself did not amount to bad faith. Nor did the judge find that the fact that Swatch were motivated by a desire to annoy Apple could be sufficient to amount to bad faith. “Annoyance of a business is not a concept which is capable of objective analysis.”

Poking fun’ and ‘parody’ cover a multitude of possibilities from gentle and affectionate teasing to full-frontal attacks. I do not consider that it is an inherently dishonest business practice to use a sign which brings another trader to the mind of some consumers in an amusing but inoffensive way. Such an activity would not necessarily undermine the interests of the third party in any material way. The point at which parodic or humorous activity of that kind would transgress the boundaries of honest business practices must depend on the nature of the humour, the intensity of its use and its consequent impact on the business interests of the recipient. [para 52]

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. Apple themselves were not able to provide some examples of the kind of parody which they would be concerned Swatch might engage in using the mark ONE MORE THING. Whilst Apple was perfectly entitled to take this approach, in Mr Purvis QC’s view this did illustrate the problems with the Hearing Officer’s Decision. The Decision was founded on an intention to use a mark in a particular way which was said to be unfair and would materially undermine Apple’s business when no example or illustration of the use in question was provided.
The presiding judge therefore concluded that the Hearing Officer was wrong to uphold the Opposition under s3(6). He upheld Swatch’s appeal.

The post “One more thing”: Apple and Swatch at each other’s throats appeared first on UK Human Rights Blog.