Bad faith, intent of parodic use and trade marks - Swatch successfully appeals 'ONE MORE THING' opposition by Apple

From I-Watch to I-Swatch, ‘Think different’ to ‘Tick Different’, Apple and Swatch have previously clashed over their trade mark applications. This time, Swatch’s international application for ‘ONE MORE THING’ came to appear in the England and Wales High Court (EWHC), where Swatch was able to successfully appeal a so-called "bad faith" opposition filed by Apple.

This case was unusual in many ways - it didn’t proceed on the ‘conventional’ basis of a bad faith opposition (AKA, submitting that the application had been made by Swatch to ‘block’ Apple from using the mark). Instead, it considered whether intent of parodic use of the mark by Swatch could be found, and if so, whether it would be sufficient to amount to bad faith.

Let’s see what happened.

*gets up* That's new...
Credit: me :)

Background

Swatch submitted international registrations (including a designation in the UK) for the signs: ‘SWATCH ONE MORE THING’ and ‘ONE MORE THING’ for goods in classes 9 and 14, including watches and consumer electronic products.

The phrase had notably been used by Steve Jobs in Apple promotional launches since 1998 when, at the end of his speeches, he would turn to leave the stage before coming back with the words “…but there’s one more thing”, typically to introduce a new product. The phrase was later revived by Tim Cook in 2015 with the introduction of the Apple Watch (shortly after which Swatch had filed their ONE MORE THING applications). The phrase was also noted to be a reference to fictional TV show Columbo.

In response to the applications, Apple submitted objections to the trade mark within the UK on the basis of section 5(4)(a) TMA 1994 - claiming that Apple could rely on passing off to oppose the mark, on the goodwill that Apple had in connection with the phrase. This was rejected on the basis that it was not sufficient for it to be a distinguishing sign that would indicate the trade origin of Apple’s goods or services, such that the public would not be deceived by use of the phrase for the purposes of passing off, even though Apple’s usage of the phrase may make it recognisable to a small number of people.

A bad faith opposition was also submitted under s3(6) TMA 1994 (at a broad level). To this end, the Hearing Officer had noted that whilst it was well-established that an trade mark application made, not for the purpose of using it, but to prevent others from using it, would be considered to be made in bad faith, such an argument of ‘blocking’ had not been pleaded by Apple. Rather, Apple had only pleaded purposes to do with the intended use of the mark, not the intended use of the registration, as such a ‘blocking’ objection would. To this end, the Hearing Officer could only look at those pleaded purposes: that Swatch “…sought to hijack that mark for its own benefit, either to parody Apple, divert trade from Apple or make use of the reputation subsisting in that mark…”

The diversion of trade and use of reputation pleas were rejected as being inconsistent with his findings in relation to the s5(4)(a) ground. However, regarding parody, it was found that the applications were filed in retaliation “with some form of objective of upsetting or cocking a snook at Apple” [read: ‘openly show contempt or a lack of respect for something or someone'], such that the Hearing Officer found that the application intended to poke fun at Apple in a manner akin to parody. It was further found by the Hearing Officer that such parodic use would fall short of acceptable commercial behaviour, and went far beyond that necessary to engage in legitimate parody, To this end, it was found that Swatch’s attempt to secure an exclusive right to engage in this form, to the (presumed) extent of excluding Apple’s commercial use, was objectionable, and therefore allowed for the bad faith opposition to succeed.

On appeal, Swatch submitted three points: first, that the bad faith plea depended on Apple owning enforced rights by way of goodwill [this was rejected, and so will not be addressed]; second, that the Hearing Officer had inadequate evidence as to the intention of Swatch to conclude that there was intention of parodic use; and finally, that intention of parodic use was not in any event sufficient to amount to bad faith.

The EWHC Decision

Addressing the second and third points of appeal, the Deputy Judge agreed that the timing of the applications would support a conclusion that the applications “were at least to some extent designed to ‘upset’ or ‘cock a snook’ at Apple”. However, the Deputy Judge did not think this was enough to find a prima facie case of intention to parody Apple. This was concluded on the basis that the evidence presented (online comments) were merely speculative, had no knowledge nor could provide further insight into Swatch’s intentions - the fact that Swatch did not provide explanation of their intentions did not prove anything in and of itself either. It was further determined there was no evidence that Swatch had made a practice of parodic advertising in the past, and it was not clear how such parodic use would be effective, when only a small number of people would associate the phrase with Apple.

To this end, it could only be concluded that Swatch must have regarded the application as useful in some way in its broader dispute with Apple, and that there was no support for the Hearing Officer’s earlier explanation that Swatch intended to use the trade mark to undermine Apple by parodic use, and that it was wrong to hold that Swatch intended to use the mark in a manner akin to parody.

*goes back to sleep*
Credit: me :)

Moreover, Swatch’s ‘motivation to annoy Apple’ could not be sufficient to amount to bad faith, on the basis that annoyance of a business was not capable of objective analysis, as suggested by the CJEU’s reference in SkyKick to “undermining the interests of third parties”, which the Deputy Judge at present concluded as suggesting something economically identifiable.

The Deputy Judge also considered whether a proven intention to poke fun at Apple in a manner akin to parody would be sufficient to amount to bad faith, ultimately concluding in the negative. To this end, he found that it was not inherently dishonest business practice to use a sign that would bring another trader to mind in an amusing but inoffensive way. Whether the boundary was crossed would depend on the nature of the humour, the intensity of the use, and its consequent impact on the business interests of the recipient.

Here, the Deputy Judge found that the mark here was not in itself offensive, and the prospect that it might be put to parodic use was not enough to found the bad faith opposition ground. The fact that no example of how the mark could be put to use in a way that would undermine Apple’s business was said to further illustrate this point.

Comment

Bad faith was always that difficult area of trade mark law (prior to the SkyKick judgment) - however, this judgment does help shape another facet of it, and one that hasn’t been considered before (as far as this Kat is aware). One might also think, when mentioning parody in relation to trade marks, that freedom of expression may arise, even in this context - however, whilst acknowledged minimally, for the main part it was avoided.

The main takeaway - stick to the conventional grounds in bad faith oppositions (or so it would seem).