This article first appeared here on 1 August 2017 in the INTA Bulletin and was reprinted with permission from the International Trademark Association (INTA).
Apple Inc. has lost its appeal in the UK in the High Court (before Justice Arnold) against the decision of the UK Intellectual Property Office (UKIPO) to uphold an opposition and refuse registration of the word IWATCH as a trademark for certain goods in Class 9, including computer software, computers, and computer hardware, on the basis that it was descriptive. (Apple Inc v Arcadia Trading Ltd,  EWHC 440 (Ch) [10 March 2017]).
Apple’s predecessor in title had applied to register the trademark with respect to a number of goods in Classes 9 and 14. The application was initially refused with respect to all goods in Class 14, but accepted for all goods in Class 9. Arcadia Trading Limited had then opposed the application in Class 9 on the ground that the mark was descriptive or devoid of distinctive character. The UKIPO hearing officer had partially accepted Arcadia’s opposition in relation to computer software, computers, and computer hardware, but had rejected it in relation to certain goods, including security devices, cameras, and radios.
Apple argued that the UKIPO had been wrong to:
Rule that the refused Class 9 specification goods covered smartphones in the shape of a watch or smartwatches;
Rule that the IWATCH trademark was descriptive for computer software; and
Reject Apple’s argument of acquired distinctiveness.
The High Court rejected all three of Apple’s grounds of appeal.
In relation to the first ground of appeal, the hearing officer had concluded that smartwatches have a dual functionality: they are a watch and a phone that have Internet functionality. Consequently, they could be classified in Class 9, as well as Class 14.
The High Court held that the hearing officer had not been wrong to reach this conclusion. By the time of the 9th edition of the Nice Classification, a multipurpose product could be classified in more than one class. The High Court explained that this has continued to be the position under the 10th and 11th editions of the Nice Classification. It cited as an example a product such as a clock-radio, which could be in both Class 9 and Class 14 even though the Nice Classification excludes clocks, watches, and other chronometric instruments from Class 9. The fact that “smartwatches” were not specifically included in the list of goods in Class 9 in the 10th edition was immaterial.
In relation to the second ground of appeal, the High Court rejected Apple’s argument that computer software was not so closely connected to smartwatches as to make the trademark IWATCH descriptive of computer software. Justice Arnold considered that smartwatches depended for their operation on the computer software they incorporated and therefore the hearing officer had been correct to find the trademark descriptive of computer software.
In relation to the final ground of appeal, the High Court ruled that the UKIPO had been fully entitled to conclude that IWATCH had not acquired a distinctive character in relation to smartwatches. The hearing officer had found that both the I- prefix and the -WATCH suffix were descriptive, as was the combination of the two elements.
Apple sought to rely on its other marks in the form “iPhone,” “iPad,” “iPod,” and “iTunes,” but the High Court confirmed that this did not mean that the average consumer would perceive the trademark IWATCH, presented for example in the form “Iwatch,” as denoting goods from the same source. In addition, there was evidence of third-party use of i-prefixed trademarks, such as the “iPlayer” trademark used by the BBC (British Broadcasting Corporation).
This decision is a useful reminder that a multipurpose product can be classified in more than one class of the Nice Classification. It also illustrates how it can be difficult for trademark owners to demonstrate acquired distinctiveness to the requisite standard. One interesting issue that was raised in this case is the possibility of a trademarks acquiring distinctive character from the use of a family of marks with that which it shares a common feature (such as Apple’s “I” family of marks). However, the High Court did not feel it had sufficient argument on this point and did not feel the need to rule on this issue to determine the appeal.
Apple has applied for leave to appeal the High Court’s decision, so this may not be the final ruling in this case.
Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest. Law & Practice updates are published without comment from INTA except where it has taken an official position.
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