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UNITARY PATENT

In 2012 Member States and the European Parliament agreed on the "patent package" - a legislative initiative consisting of two...

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Swatch Loses Swatchball Match

The European Court decision in Revolvo/Volvo, should be compared with another recent dispute that involved a consideration of Article 8(5) CTMR.

In this case, the mark at issue was Swatchball. Panavision Europe, the well-known producers of optical, lighting and photographic equipment, had filed a CTM application for this mark in respect of a variety of goods and services in Classes 9, 35, 41 and 42, including computer software, that related to their area of commercial interest. For reasons that are pretty obvious, Panavision excluded goods and services that related to timekeeping (as well as computer game software and programs).

Unsurprisingly, Panavision’s CTM application was opposed under Article 8(5) CTMR by the Swiss watch manufacturer, Swatch AG, based on their numerous, earlier EU trade mark registrations for the trade mark Swatch in Class 14, together with their reputation in that famous trade mark.

More surprisingly, both OHIM’s Opposition Division and the Second Board of Appeal rejected the opposition. Understandably, Swatch appealed to the (European) General Court.

In what ought to be seen as a pretty astonishing decision but unfortunately, after many years of reading European Court trade mark rulings, is not, the General Court agreed with the Board of Appeal and rejected Swatch’s opposition.

In reaching this decision, the Court first summed up the view of the Board of Appeal as follows:

“…the Board of Appeal acknowledged that the earlier marks have a reputation in the French, German and Spanish markets with respect to goods in Class 14. Secondly, the Board of Appeal held that, in view of the fact that the goods and services at issue are so different, the mark applied for is unlikely to bring the earlier marks to the mind of the relevant public and that it is improbable that that public would think of one of those goods when confronted with the other mark. Thirdly, the Board of Appeal found that the applicant had failed to prove that use of the mark applied for in relation to the goods and services covered by it could cause a dilution of the earlier marks through the dispersion of their identity and their hold upon the public mind or take unfair advantage of the reputation or distinctive character of the earlier marks.”

They then further reasoned as follows:

•     The signs at issue are similar to an average degree.

•     The earlier marks have a particularly strong reputation.

•     There should be a risk that the earlier mark with a reputation will be adversely affected by the risk of one of the types of injury referred to as a result of the relevant public establishing a link between the marks at issue.

•     The following factors weigh against a finding that such a link exists: (i) the differing nature of the goods and services covered by the marks at issue, given that they have different distribution channels, that they are neither interchangeable nor in competition with each other, that they serve very different purposes and that they do not belong to adjacent market segments, all of which results in a very limited degree of closeness between those goods and between those services; and (ii) the existence of two separate relevant publics.

•     Far from being addressed to the average consumer, the goods and services marketed by Panavision Europe target a specialist public, whereas the goods covered by the earlier marks target the general public.

•     While it is indeed possible that the specialist public for the goods and services covered by the mark applied for may also be aware of the earlier marks, it can nevertheless be concluded that the Board of Appeal did not err in its assessment in finding that the relevant public will not establish a link between the marks at issue, since it is highly unlikely that that public will encounter the goods covered by those marks in the same shops or think of the goods covered by one mark when presented with the goods covered by the other mark.

•     Notwithstanding the undeniable reputation of the earlier marks and the fact that there is some similarity between the marks at issue, the absence of similarity between the goods and services in question and the differences between their relevant publics (with the mark applied for having a specialised public that pays a higher degree of attention and focuses on the characteristics of the goods and services at issue, which have nothing in common with the goods covered by the earlier marks) are such that they are liable to exclude the existence of any link between the marks at issue.

•     That conclusion cannot be called into question by the applicant’s argument that the relevant public is liable to establish a link between the marks at issue because software and other equipment used for film editing may include a timekeeping mechanism. That argument is inoperative inasmuch as the application for registration at issue explicitly excluded goods and services relating to timekeeping.

Where to begin with an analysis of such a decision? Well, let’s start with the finding that the two signs (Swatch and Swatchball) are similar to an average degree. Surely this is wrong? Swatch is an unusual English dictionary word (meaning a collection (of usually coloured) samples, for example of paint or make-up), the original definition of which has rather been overtaken (even in the UK) by its newly acquired meaning as the house mark of a highly successful Swiss watch manufacturer. So, amongst the majority of English speakers in the EU (at least) the trade mark Swatchball must be seen as a combination of the well-known trade mark Swatch and the English word “ball”. Is it seriously suggested that the trade marks Rolexball and Rolex would only be seen as having an average degree of similarity? Of course not. It is therefore strongly submitted that, on the same basis, the trade marks Swatchball and Swatch are similar to a (very) high degree.

Next, let us consider the “link”, between the two marks at issue, that has been made so crucial by European Court judgements in Article 8(5) (reputation) disputes. According to that case law (see Intel Corporation v CPM UK; C-252/07) establishing such a “link” requires only that the later mark brings the earlier mark to mind. It should therefore follow that showing a link ought to be easier than establishing a likelihood of confusion. And yet, in many European Court (and OHIM) decisions, it is becoming increasingly plain that, if the later goods or services are rather different to those of the earlier rights holder, it has become extremely difficult to convince the tribunal that the necessary “link” exists. This practice seems to the writer to have moved significantly away from the original intention of the legislators which was to allow the owners of trade marks with a reputation to prevent the third party registration and use of conflicting marks in relation to dissimilar goods or services without the need to register the mark with a reputation in all 45 Classes (and to update that protection regularly). Certainly, if the Swatchball decision is upheld by the Court of Justice after the inevitable further appeal, the only sensible advice to a company such as Swatch, if they are determined to maintain a clean register, will be to seek to protect their trade mark for all goods and services and to re-file (a very slightly updated form of the mark) in all 45 Classes every 3 to 4 years. This would represent a very lucrative business for Swatch’s EU representative(s), but ought to be completely unnecessary if the intentions of those who drafted the CTM Regulation were acknowledged and followed.

Two further points occur to the writer. First, it is apparent that some well-known marks are treated more equally than others. Could one imagine, for example, that if Panavision had applied to register the trade mark Red Bullball, the various tribunals would have reached similar decisions? Certainly, the CTM opposition decision where the Austrian energy drinks company successfully opposed the trade mark Larune Sex Bull in relation to pharmaceuticals in Class 5 (Red Bull v Pascal Paicheur; Opposition No. B2207705), suggests a very different approach.

Second, Panavision appears to use its trade mark Swatchball, through its subsidiary, Lee Filters, in relation to downloadable software that facilitates the choice of an appropriate coloured filter by lighting designers. See the website http://leefilters.blogspot.co.uk. It will be seen at that website that the stylisation of the trade mark Swatchball bears a striking resemblance, in the writer’s opinion, to the stylisation of the trade mark Swatch. Further, the nature of the Swatchball product appears to be a ball of colours from which one can choose a colour (in other words a “swatchball”, according to the original dictionary definition of the word “swatch”). So, if the European Court confirms the General Court’s decision, which unfortunately is quite feasible, it might be open to Swatch to seek to invalidate Panavision’s resultant CTM on the ground that it is non-distinctive in relation to the goods and services claimed.