HomeInsightsHigh Court overturns Hearing Officer’s decision on “parody” and “bad faith” in connection with Apple’s opposition to Swatch’s ONE MORE THING trade mark application

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Swatch AG applied to register SWATCH ONE MORE THING and ONE MORE THING as International Registrations designating the UK in Classes 9 and 24 for a wide range of goods including watches and consumer electronic products.

Apple Inc opposed the applications under s 5(4)(a) and s 3(6) of the Trade Marks Act 1994. The s 5(4)(a) objection contended that the use of the mark could be prevented by Apple under the law of passing off by reason of the goodwill that Apple had acquired in connection with the phrase ONE MORE THING. The s 3(6) objection contended that the application was made in bad faith given Swatch’s knowledge of Apple’s reputation in the phrase, the circumstances in which the marks were applied for and Swatch’s likely intentions in relation to use of the marks.

The phrase “one more thing” has been used at launches of Apple products since 1998. Apple’s well-known Chairman and founder, Steve Jobs, would reach what would seem to be the end of his keynote address at an industry event chosen for an important announcement, turn as if to leave the stage, and then turn back with the words, “but there’s one more thing…”, a playful reference to the TV detective Columbo. In 1998 the first “one more thing” was the return of Apple to profitability. In later years, the “one more thing” phrase would often be the announcement of a new product. The tradition lapsed on Steve Jobs’ death in 2011, but was revived by his successor, Tim Cook, in 2015 for the launch of the Apple Watch.

At the time of Swatch’s applications, it was engaged in a long-running trade mark dispute with Apple about the marks I-WATCH and I-SWATCH. Apple alleged that the “bad blood” generated by the dispute had led Swatch to make two sets of trade mark applications in a number of jurisdictions for the ONE MORE THING marks and for the mark TICK DIFFERENT (Apple used the slogan THINK DIFFERENT). Apple interpreted these applications as an aggressive or retaliatory tactic by Swatch.

Swatch provided no evidence about the purpose behind filing the applications. Instead, it listed occasions in the past when it had used signs incorporating the word “More”. It also pointed out the Columbo usage of “one more thing” and hinted that it was intending a “tie-up” with Colombo in the same way it had done with products in the past (e.g. James Bond), but without actually stating any real intention in this regard.

The Hearing Officer’s decision

The Hearing Officer rejected the opposition under s 5(4)(a), finding that there was not a sufficient number of people who were aware of Apple’s usage of ONE MORE THING to turn a common phrase into a distinguishing sign that indicated the trade origin of Apple’s goods or services. He also found that the public would not be deceived by Swatch’s use of the phrase.

However, he upheld Apple’s opposition under s 3(6). He rejected Apple’s arguments that Swatch’s purpose in applying for the marks was to block Apple from using them and that it had no intention to use the marks itself. He also rejected Apple’s argument that Swatch’s purpose was to divert trade from Apple or make use of the reputation subsisting in the marks, as he found that there was no intention to deceive the public or to ride on Apple’s coat-tails. However, he allowed the opposition on the basis that Swatch’s purpose was to use the mark “to parody Apple”, finding that the applications, together with the application for TICK DIFFERENT, “strongly supports” a finding that the applications had been filed “in a retaliatory measure with some form of objective of upsetting or cocking a snook at Apple”. He said that it followed that there was a prima facie case to support the argument that Swatch “intended to raise the stakes with Apple by poking fun at it in a manner akin to parody”. In the Hearing Officer’s view, this amounted to bad faith under s 3(6).

Swatch appealed the Hearing Officer’s decision on parody and s 3(6).

Decision

Mr Purvis QC, sitting as a Deputy Judge of the High Court, noted that a s 3(6) case involves a consideration of the state of mind of the applicant and its intentions with respect to the application mark. It also requires an assessment of those intentions against certain norms, in particular: (i) what would be considered honest and fair behaviour by a business; and (ii) the proper purpose of obtaining trade mark protection (i.e. to protect a mark used to distinguish goods and services from those of other traders).

Mr Purvis agreed with the Hearing Officer that the applications by Swatch were designed to “upset” or “cock a snook at” Apple. However, he disagreed that it necessarily followed from this that ‘parodic’ use was intended.

Further, he did not consider that a prima facie case of intention to parody Apple had otherwise been established. All that could really be said on the evidence was that Swatch must have regarded the applications as useful in some way in its broader dispute with Apple. It probably wanted to stimulate a response from Apple and it must have known that Apple would be annoyed. Although there was no statement of intention by Swatch in the evidence, it had made a formal statement of intent to use when it filed the applications. In any event, whether or not Swatch had thought about exactly what it would do with the marks, this did not amount to bad faith of itself.

There was therefore no real evidence supporting the complex explanation that Swatch intended to use the trade mark to undermine Apple by parodic use.

Further, Mr Purvis said that he did not think that a desire to annoy Apple was sufficient to amount to bad faith. He noted that in Case C-371/18 Sky v SkyKick EU:C:2020:45, the CJEU said that bad faith applied where the applicant had the intention of “undermining, in a manner inconsistent with honest practices, the interests of third parties”, which suggested something economically identifiable.

The judge found that “poking fun” and “parody” covered a multitude of possibilities from gentle and affectionate teasing to full-frontal attacks. He did not consider that it was an inherently dishonest business practice to use a sign which brought another trader to the mind of some consumers in an amusing but inoffensive way. Such an activity would not necessarily undermine the interests of the third party in any material way. The point at which parodic or humorous activity of that kind would transgress the boundaries of honest business practices must depend on the nature of the humour, the intensity of its use and its consequent impact on the business interests of the recipient, he said. Where (as here) the mark itself was not offensive, it was hard to see how the mere prospect that it might be put to some parodic use that overstepped the line provided a ground for refusal under s3(6) because: (i) the making of the application was equally consistent with the proprietor acting in good faith; and (ii) the court would essentially be engaging in speculation.

Mr Purvis decided that the Hearing Officer had no clear idea in mind as to the kind of parody that Swatch might engage in using this mark. This was not surprising, since there was no evidence on the point at all. However, without a clear idea, it was not legitimate to conclude that Swatch’s intentions had crossed the line between appropriate and inappropriate use of a trade mark.

Accordingly, Mr Purvis concluded that the Hearing Officer was wrong to uphold the opposition under s3(6) and allowed the appeal. (Swatch AG v Apple Inc [2021] EWHC 719 (Ch) (29 March 2021) — to read the judgment in full, click here).