For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Thursday, 27 December 2012

Still not the end for Omega

Perfection ...
Part of the IPKat's end-of-year catch-up programme involves getting round to writing about some cases that were too big to cram into his katty head at the time they came out, and which kept getting overtaken by later, smaller cases that didn't take quite so much thinking about.  One such case is Omega Engineering Incorporated v Omega S.A. (Omega AG) (Omega Ltd) [2012] EWHC 3440 (Ch), a 30 November decision of Mr Justice Arnold in the Chancery Division of the High Court for England and Wales between warring parties whose litigious tendencies have been monitored by the IPKat in earlier posts here, here and here.

In brief, this was an appeal by the Swiss maker of OMEGA watches against a hearing officer's dismissal of its opposition to Omega Engineering's application to register the word OMEGA as a UK trade mark for various goods. Engineering applied for summary judgment on Swiss's claim for breach of contract.

... Purrfection
The facts, some of which long-term readers may well recall, run like this: both Engineering, a US company which made scientific instruments like thermometers, and Swiss, which made watches, used the word "Omega", which was part of the their respective names. In 1984, Engineering and Swiss entered into a coexistence agreement, clause 5 of which provided that Swiss would not object to the use or registration by Engineering of trade marks using the word OMEGA for "excluded goods", which were listed in clause 3 as "instruments and apparatus intended for scientific or industrial application in measuring ... or recording heat or temperature (including such having provision to ... display the time of day)". Engineering subsequently applied to register OMEGA as a trade mark for goods in Class 9, including "period timers ... for industrial and/or scientific purposes", later amending this specification by realigning the definition of "period timers" to make it the same as that of "instruments and apparatus" in clause 3 of the 1984 agreement.

When Swiss opposed the application to register the excluded goods, the hearing officer held that Swiss could not do so: it was, after all, precluded by the 1984 agreement from objecting to that application. On appeal, Swiss argued that Engineering's amendment to the specification was impermissible for two reasons.  First, it argued that the term "period timers" referred to goods the sole function of which was timing, while the goods in reality were multi-purpose goods which measured temperature in addition to timing; this meant that the effect of the amendment was to cover goods that were not previously included.  Secondly, said Swiss, the effect of Engineering's amendment was to breach the principle established by the Court of Justice of the European Union in Case C-363/99 Koninklijke KPN Nederland NV v Benelux-Merkenbureau that the specification of goods in a trade mark application could not be restricted by reference to whether they possessed particular characteristics.

Mr Justice Arnold dismissed Swiss's appeal and granted Engineering summary judgment in part.  In his view:

Products were not disqualified from being "period timers" by virtue of the fact that they had other functions. Engineering had a product that was both a period timer and a temperature controller.  This being so, a trade mark for that product would be fit for registration in both Classes 9 and 14 of the Nice Classification. Indeed, that product could be used purely as a period timer.

Koninklijke KPN established that a trade mark could not be registered only in so far as the goods or services concerned did not possess a particular characteristic [in that case, POSTKANTOOR, meaning "post office", was the mark in question. Could it be registered as a trade mark for, e.g., the issue of postage stamps so long as they were not connected with the post office?]. Such a practice would lead to legal uncertainty as to the extent of the protection afforded by the mark, since third parties would not be aware that, for given goods or services, the protection conferred by the mark did not extend to those products having a particular characteristic; this being so, they might therefore refrain from using the signs of which the mark consisted, and which were descriptive of that characteristic, for the purpose of describing their own goods.

Koninklijke KPN had to be read in the context of the question which was posed to the Court of Justice: was it acceptable to restrict the goods or services by reference to the absence of a "specific quality"?  In this case the limitation was couched in positive terms.  Here, whether Koninklijke KPN applied to positive limitations as well as negative ones, the limitation in this case was one that related to the goods' function, not their particular characteristics.

Moving from Engineering's application to Swiss's conduct, the court had no doubt that the company had acted in breach of clause 5 of the 1984 Agreement both by opposing Engineering's application and by appealing against the hearing officer's decision.

This Kat finds it difficult to imagine how, in the absence of acute paranoia, the Swiss watchmaker should have found itself so threatened by Engineering's activities as to carry on as it has done so.  Even if Swiss had succeeded in its challenge to Engineering's registration, would the fruit of victory have been worth the cost of war?  Is some amazing business plan at stake, which requires persecution and harassment on this scale, or is this an example of litigation which has been allowed to gather its own momentum and which has become unstoppable?  Readers of Arnold J's judgment will spot that there's quite a bit of law in it -- which brings with it the risk of an appeal -- and there still remain unresolved issues which were not summarily dealt with. This all suggests that readers may expect more on this saga.

Merpel says, if Swiss gets tired of this litigation, a visit to the internet search engine of their choice will reveal that there are plenty more businesses that trade as Omega whom it may wish to sue ...

2 comments:

Anonymous said...

Am I missing something here as the Kat seems to be suggesting this is a storm in a tea cup. I must admit I am with Swiss on this one and it looks like Engineering exploited poor drafting of the agreement which allowed Engineering to register timers when surely the spirit of the agreement was to allow Enginneering to use and register OMEGA for scientific instruments only with the concession that they could in practice include a secondary timer function?

Roufousse T. Fairfly said...

There never was any confusion whatsoever for me between the brands.

The products of one are meant to attract the vainglorious, and those of the other, the nerdy pocket protector types. The trademark applications could perhaps reflect this and everyone could be happy...

I have been an occasional customer of Omega Engineering, and thus must ascribe myself to the latter. I only know Omega S.A. products from looking at men's jewellery in shop windows with ridiculous price tags.

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