Omega SA v Omega Engineering Incorporated

A co-existence agreement between businesses using similar marks is construed as a contract, by its language and commercial context. Where the agreement defines goods without referring to trade mark classes, a class restriction should not be implied unless necessary to give the terms business efficacy. A contractual undertaking not to object to use or registration for specified goods may therefore extend beyond the class in which those goods were registered or originally classified. The fact that classification may change, and the agreement’s purpose of preventing confusion, may support that construction. A decision concerning the relevance of class numbers to ambiguity in a trade mark application does not necessarily govern construction of a differently framed commercial agreement.

Omega SA appealed from Arnold J’s order of 25 June 2010. The judge had dismissed Omega SA’s appeal from the Registrar of Trade Marks and granted Omega Engineering Incorporated summary judgment for breach of the parties’ 1984 co-existence agreement.

The agreement allocated commercial fields between the parties and required Omega SA not to object to Omega Engineering’s use or registration of OMEGA for defined scientific or industrial goods. The central issue was whether those goods were confined to trade mark class 9, so that the undertaking did not prevent opposition to an application covering goods in class 14.

The Court of Appeal, in a judgment delivered by Lord Justice Mummery and agreed to by Lady Justice Black and Sir John Chadwick, dismissed both appeals.

1. The 1984 Agreement was a co-existence agreement intended to demarcate the parties’ respective commercial fields and reduce confusion between goods marketed under similar marks. Its effect was therefore determined by construing the contractual language in its factual and commercial context, including the agreement’s object and subject matter. The dispute was principally one of contract construction, rather than a trade mark classification issue (paras [29]-[30]).
2. Clauses [3] and [5] did not expressly refer to class 9 or class 14. It was not necessary for business efficacy, and therefore was not justified, to imply references to those classes into the agreement. The definition of the specified goods was not confined by the classification in which they happened to fall for registration purposes (paras [32]-[35]).
3. The court considered Altecnic Ltd’s Trade Mark [2001] EWCA Civ 1928; [2002] RPC 34, in which class numbers selected in a trade mark application could assist in resolving ambiguity in the specification. That decision did not determine the construction of this agreement. The court doubted its assistance in construing clause [5], which operated in the distinct context of contractual demarcation and applied to use as well as registration (paras [31]-[33]).
4. The definition of the specified goods served both the particular purpose of identifying goods to be removed from an existing registration and the wider, free-standing purpose of allocating future commercial use. The latter purpose would be undermined if the undertaking changed whenever trade mark classification changed. Omega SA therefore breached clause [5] by opposing Omega Engineering’s application for the goods covered by the agreement.
5. Arnold J was right to grant summary judgment and to dismiss the appeal from the Registrar. His construction reflected the language and context of the agreement, and no further elaboration of the reasons was necessary (paras [35]-[36]).

• Court of Appeal (Civil Division): On 27 May 2011, both appeals were dismissed. Arnold J’s construction of the 1984 Agreement, summary judgment, and dismissal of the appeal from the Registrar were upheld.
• High Court of Justice, Chancery Division (Intellectual Property): On 25 June 2010, Arnold J dismissed Omega SA’s appeal from the Registrar and granted Omega Engineering summary judgment for breach of contract.
• Registrar of Trade Marks: On 12 November 2009, Omega SA’s opposition to Omega Engineering’s trade mark application failed.