Overturning a trade mark opposition decision - Part 1 - IWATCH, descriptive goods and acquired distinctiveness

You wait ages for a High Court appeal
against a hearing officer's decision and then two come along at once.  

Two recent decisions show the various ways in which it is possible to win on appeal and the likelihood of such an appeal being successful.

IWATCH - Apple Inc v Arcadia Trading Limited

Arcadia opposed Apple's application for IWATCH on the basis that it was (1) made in bad faith because it was filed in the name of Brightflash USA LLC and later assigned to Apple, and (2) descriptive or devoid of distinctive character in relation to Class 9 (computers, software, electronics etc).

The hearing officer decided that the application had not been made in bad faith but that IWATCH was descriptive of some of the Class 9 goods (computer software, computers, monitors, hardware etc).  The application was therefore only permitted to proceed in relation to goods such as security devices, cameras, computer peripherals etc.

Apple appealed the decision on the grounds that:

1. the hearing officer was wrong to hold that the Class 9 specification covered smartphones in the shape of a watch or smart watches;
2. the hearing officer was wrong to hold that the trade mark was descriptive for computer software; and
3. the hearing officer was wrong to reject Apple's case of acquired distinctiveness.

A watch or a computer?

What is a smart watch?

This question was at the centre of the hearing officer's decision.  He concluded that smart watches have a dual functionality - "they are a watch and a phone that has internet functionality".

Smartwatches were included in the 11th edition of the Nice Agreement but not the 10th - the version in force when the trade mark application was made.  Therefore it was permissible at that time to classify the smartwatch in more than one class (i.e. 9 - computers and 14 - watches).

As a result Apple's first ground of appeal failed.

How is IWATCH descriptive of a watch and phone with internet functionality?  

It was all in the i of the beholder.  The hearing officer was persuaded that the prefix "I" would be viewed by the average consumer as meaning "Internet".  Although Apple commonly used the "I" prefix for its goods, it did not have exclusive use of this prefix (e.g. BBC's iPlayer) and therefore, in his view, IWATCH described smart watches which may access the Internet have some form of interactive functionality or some form of monitoring functionality e.g. health checking.

Arnold J noted that smartwatches depend on computer software to operate.  Therefore, the hearing officer was correct to conclude that the trade mark was descriptive of computer software.

What about acquired distinctiveness?

Although Apple commonly used the "I" prefix, the hearing officer considered that whilst Apple's other "I" marks reduce the period of time it took for IWATCH to acquire a distinctive character, use of iPod etc cannot amount to use of IWATCH.  He also noted that Apple's use of the "I" prefix was always as a lowercase "i" followed by a capital letter whereas IWATCH included no such restriction on use.

Not even coffee could save the day

Although a literal interpretation of section 3(1) Trade Marks Act 1994 and Article 3(3) Trade Marks Directive would lead to the conclusion that a trade mark cannot acquire distinctive character as a result of use of different trade marks, EU directives are meant to be interpreted with regard to the context and objectives of the legislation.  While it "does not necessarily follow that a trade mark which lacks inherent distinctive character can acquire distinctive character as a result of the use of different trade marks with a common feature (such as Apple's "I" family of marks), the MACCOFFEE case had opened the door to this approach in an opposition context.

The MACCOFFEE mark was declared invalid by the Cancellation Division (whose decision was upheld by the General Court) on the basis that it took unfair advantage of McDonald's mark.  The General Court noted that McDonald's had to provide evidence of actual use of a sufficient number of trade marks to constitute a family.  Arnold J noted that although the General Court talked about the prefix of Mc- having acquired its own distinctive character, that prefix was not descriptive of the goods or services.

Although this argument might have been successful had there been a more detailed review of the authorities and/or more evidence, Arnold J did not consider that he had enough material before him to overturn the hearing officer's decision.  Therefore whilst the door was shut on the IWATCH trade mark application, the possibility of common features from a family of marks being used to overturn a distinctiveness application remains open.

By Rosie Burbidge