Since the launch of the Apple Watch in 2015, Apple and Swatch, a well-known Swedish watch manufacturer, have been involved in a number of trade mark disputes in their now overlapping product markets.

These disputes have concerned the marks ‘I-WATCH’ and ‘I-SWATCH’, ‘TICK DIFFERENT’ and ‘THINK DIFFERENT’ and, more recently, the mark ‘ONE MORE THING’.

In 2015, Swatch filed an application to protect the word mark ‘ONE MORE THING’ in a number of jurisdictions around the world.

Apple opposed this application based on bad faith. Apple argued that the mark would be associated to Steve Jobs’ frequent use of this phrase when launching Apple products. Use that is dated back to 1998. Apple also noted that Tim Cook, CEO of Apple, had revived the phrase in 2015, around the time of the filing, when launching the Apple watch.

The case

Apple submitted various extracts from internet forums in which users called the Swatch filings an ‘epic troll move’ by the Swedish watch-maker, as part of the parties’ wider ongoing dispute. Swatch, on the other hand, remained relatively quiet, opting to mention very little about the purpose of the filings in question.

The Hearing Officer rejected the argument based on Section 5(4)(a) of the Trade Mark Act (i.e. unregistered rights), as the phrase was never used as an indication of the origin of Apple’s products or services. However, the Court upheld Apple’s opposition under Section 3(6) of the Trade Marks Act (i.e. bad faith) based on the following consideration:

“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”.

However, this objection was overturned on appeal by the High Court.

The High Court judgement stated that ‘bad faith’ requires some consideration of the state of mind of the applicant and their intentions in respect of the application.

Particularly, the Court indicated that whilst it was easy to understand (based on the evidence provided by Apple and on the lack of alternative references offered by Swatch) that the applications were intended to upset Apple, no ‘parodic’ use was necessarily intended by Swatch and, in any event, ‘parodic’ use would not necessarily amount to bad faith.

Lastly, the Court found that the first instance decision was based on the assumption that the mark would be used as an Apple’s parody rather than on evidence and that Apple did not provide sufficient examples of the kind of parody that may undermine Apple’s business.

Takeaways

The present decision provides welcomed guidelines on the concept of bad faith, which continues to raise a number of questions of practical importance for brands.

While the interpretation of bad faith in connection with parody provides an innovative perspective, this case confirms, once again, the importance of providing compelling evidence of actual use of prior marks to identify the commercial origin of goods or services as well as an indication of potential or actual damages that use of the mark by a third party may cause.

Last but not least, brands should consider as part of their trade mark strategy that wordings, phrases and slogans known to the public and associated with a company should be adequately protected, providing that use is foreseen in a not-too-distant future.