One more thing to watch out for with bad faith
Swatch AG v Apple Inc

Apple Inc and Swatch AG both make watches, of course, but another thing they have in common is a long running trademark dispute with each other. They have clashed over trademarks like I-SWATCH and I-WATCH, Swatch’s TICK DIFFERENT trade mark and Apple’s THINK DIFFERENT slogan, and ones that have been in the news recently: Swatch’s ONE MORE THING and SWATCH ONE MORE THING.

Apple’s founder Steve Jobs used the phrase ‘…but there’s one more thing…’ as a cue at the end of many key note speeches to reveal major product launches during 1998-2011.  This was revived in 2015 by Apple’s current CEO, Tim Cook. The phrase was itself borrowed from Columbo, a TV show popular in the US and UK in the 70s and 80s; its eponymous main character, a detective, used it as a cliff-hanger.

In 2015, Swatch applied to register ONE MORE THING and SWATCH ONE MORE THING as trade marks in several countries. In the UK, Apple opposed the applications claiming passing off and bad faith on the part of Swatch.  Apple had not registered ONE MORE THING as a trade mark itself: a decision that made their case more difficult to the extent that they then had to rely on passing off. Apple’s passing off claim failed because there was insufficient evidence that a commonly used phrase like “one more thing” had become associated with Apple’s products in the minds of UK consumers. The evidence only showed that a small number of people, mainly Apple fans, would have known that the phrase described a particular moment at an Apple launch event.  It was unlikely that these people would be deceived by Swatch’s use of the phrase as a trade mark.  Apple did however succeed in its bad faith claim, in essence that Swatch meant to adopt a trolling type attitude and parody its phrase. The hearing officer concluded that Swatch filed for registration of these trade marks to annoy Apple, noting that they were already at loggerheads regarding several other marks, and with a possible intention to parody the phrase. This amounted to an abuse of the trade-mark system and therefore bad faith.

Swatch then appealed directly to the High Court, and succeeded.

The court found that the hearing officer’s decision was speculative rather than based on any convincing evidence. Apple had no evidence that Swatch intended to parody the phrase or had made a practice of parodic advertising against anyone. Apple couldn’t show any examples of any possible parodic treatment of ONE MORE THING that would undermine its business. The marks themselves were not parodic or offensive, and Swatch’s failure to provide any explanation of how they intended to use the marks was not of itself enough to be bad faith. Furthermore, the suggested parodic use would have been associated with Apple only by a small number of people according to the hearing officer’s own findings.

Bad faith is a serious allegation and can be challenging to prove. While there is no legal definition of bad faith the allegations need to be objective and economically identifiable. In the context of trade marks, usually it requires some kind of commercial dishonesty or undermining the interests of others. There is a presumption that applicants file in good faith, therefore an applicant’s intentions when it applies for a trade mark are important. The cases decided so far have typically involved applicants who have sought to block someone/anyone from using a trade mark, or misused the trade mark registration system to obtain broader or longer lasting monopoly right at odds with the commercial reality. Some recent examples include the Koton case (CJEU, 2019) – deliberate registration of another’s sign for the same goods; the Skykick case (CJEU referral from the High Court, 2020)- overly broad filing with no genuine intention to use and to obtain exclusive rights beyond the purpose of trade mark registration; and the Monopoly case (EU General Court, 2021)-on repeat filings of identical trade marks for identical goods or services in order to circumvent the proof of use requirement (“evergreening”).

This case is unusual, and not only by virtue of being a High Court appeal from the UK Registry, because it is the first time parody has been claimed as the basis of a bad faith case.  The judge emphasized that filing for a trade mark that is likely to annoy a competitor is not of itself parodic; inoffensive parodying of a competitor’s signs/slogans in use or even a proven intention to poke fun at another is not an inherently dishonest business practice, however annoying, and does not of itself constitute bad faith. Of course, there could also be issues of freedom of expression with preventing parody, although that issue was mentioned only very briefly in the decision.

What the case does not say is that parody can never be bad faith. Inappropriate parodying of another’s marks such that it negatively impacts their business interests could well amount to bad faith, but it is clear that there must be cogent, consistent and relevant evidence to back up the claim.

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