Apple Inc v Swatch AG

On an appeal from the Registrar of Trade Marks, the appellate court should respect primary factual findings and multifactorial evaluations. It may intervene where a material error of principle has affected the result.

In comparing goods for trade mark purposes, the court must assess the goods specified in the applications and registrations. It should consider their nature, intended purpose, method of use, competition and complementarity. An incidental function shared by one possible product within a broad specification does not make all goods having that specification similar. Where that error materially affects the likelihood-of-confusion assessment, the appeal should be allowed.

Apple appealed from the decision of the Registrar’s Hearing Officer, Mr Allan James, dated 27 June 2016 and amended on 26 August 2016. The decision upheld Swatch AG’s opposition in part under section 5(2)(b) of the Trade Marks Act, based principally on Swatch’s international registration 962366 for horological and chronometric instruments.

The opposition concerned Apple’s application to register IWATCH for goods in class 9. The Hearing Officer treated smart watches as falling within several of Apple’s specified categories and found a high or medium degree of similarity between those goods and Swatch’s watches. Apple challenged the assessment of similarity of goods and similarity of marks. The appeal proceeded only on the basis of the 366 mark; there was no appeal from the dismissal of the section 5(3) ground.

1. Appeal allowed. The Hearing Officer’s decision was set aside insofar as it was based on the 366 mark. The appeal was determined on the evidence and reasoning described in the judgment.

2. The appellate approach was governed by the principles summarised in TT Education Ltd v Pie Corbett Consultancy Ltd (O/017/17), as approved in Apple v Arcadia [2017] EWHC 440 (Ch). Primary findings and multifactorial assessments attract respect, but the court may intervene for a distinct and material error of principle. Mere disagreement or doubt is insufficient, although an appellate court may allow an appeal after anxious consideration if it concludes that the decision was wrong.

3. The Hearing Officer was entitled, on the evidence, to treat smart watches as encompassed by terms such as computers, computer hardware and wireless communication devices. The difficulty lay in treating the incidental ability of a possible device within those categories to tell the time as creating substantial similarity with watches for the whole category.

4. Applying Canon, Case C-39/97, the court considered the nature of the goods, their intended purpose, method of use, competition and complementarity. The proper comparison was between the goods as specified, rather than between watches and a hypothetical smart watch possessing multiple additional functions. The appropriate conclusion was a low degree of similarity for goods for which the Hearing Officer had found a high or medium degree.

5. The visual and aural similarity findings were not open to criticism. Conceptual similarity arose principally from the common use of “watch”, but that term was descriptive or non-distinctive in the relevant context. The Hearing Officer’s conclusion on conceptual similarity was therefore not displaced.

6. The Hearing Officer’s likelihood-of-confusion conclusion depended importantly on the erroneous assessment of similarity of goods. Reassessing the matter, the court concluded that the 366 mark did not establish a basis for refusing registration. The 259 mark did not affect the overall conclusion because the Hearing Officer’s reasoning in relation to it could not be faulted.

• High Court (Chancery Division): appeal from the Registrar’s decision O/307/16 allowed.
• Registrar of Trade Marks: opposition upheld in part, with registration permitted for specified class 9 goods.