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[2021] ZASCA 11
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Swatch AG (Swatch SA) v Apple Inc (1320/2018) [2021] ZASCA 11; 2021 (3) SA 507 (SCA); 2021 BIP 9 (SCA); [2021] HIPR 158 (SCA) (29 January 2021)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
Reportable
Case no: 1320/2018
In
the matter between:
SWATCH
AG (SWATCH SA)
APPELLANT
and
APPLE
INC.
RESPONDENT
Neutral
citation:
Swatch AG (Swatch SA) v Apple Inc.
(1320/2018)
[2021] ZASCA 11
(29 January 2021)
Coram:
WALLIS, MOCUMIE and MAKGOKA JJA and GORVEN and UNTERHALTER
AJJA
Delivered
:
This judgment was handed down electronically by circulation to the
parties’ representatives by email, publication
on the Supreme
Court of Appeal website and release to SAFLII. The date and time for
hand-down is deemed to be 09h45 on 29 January
2021.
Summary:
Opposition to the registration of a trade mark in reliance upon
ss 10(12)
,
10
(14) and
10
(17 of the
Trade Marks Act 194 of 1993
–
considerations relevant to a determination of whether the marks are
confusingly or deceptively similar – Comparison
of the trade
marks SWATCH and IWATCH – The issue of inclusion in the family
of i prefixed trade marks
ORDER
On
appeal from:
The Gauteng Division of the High Court, Pretoria
(Fabricius J, sitting as the court of first instance):
The appeal is dismissed with costs.
JUDGMENT
UNTERHALTER
AJA (WALLIS, MOCUMIE and MAKGOKA JJA and GORVEN AJA concurring)
[1]
The respondent, Apple Inc. (‘Apple’) applied
to register
its IWATCH trade mark in classes 9 and 14. The appellant, Swatch AG
(Swatch SA) (‘Swatch’), opposed these
applications.
Swatch is the proprietor of the trade mark registration no.
1986/04168 in class 14, under the representation SWATCH.
Swatch’s
opposition relied upon ss 10(6), 10(12), 10(14) and 10(17) of
the Trade Marks Act 194 of 1993 (‘the Act’).
In essence,
Swatch contended that the IWATCH and SWATCH marks are confusingly
similar and thus the IWATCH mark, in respect of the
classes of goods
for which registration was sought, was likely to deceive or cause
confusion.
[2]
Swatch’s opposition was brought before the Registrar
of Trade
Marks who transferred the proceedings to the high court in terms of
s 59(2) of the Act. Fabricius J heard the matter
and dismissed
the opposition with costs. Upon an application of the
well-established considerations set out in
Plascon-Evans Paints
Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A), he found
that the trade marks IWATCH and SWATCH were not confusingly similar.
With his leave, Swatch appeals to this court.
The parties agreed that
the appeal may be disposed of without the hearing of oral argument,
and, in terms of
s19(a)
of the
Superior Courts Act 10 of 2013
, we
decided to do so.
[3]
In the high court, Swatch did not pursue its opposition
under
s 10(6).
Before us, Swatch’s opposition relied upon ss
10(12), 10(14) and 10(17) of the Act. Although these provisions have
certain
distinctive requirements, absent a finding that, upon a
proper comparison, the two marks are deceptively or confusingly
similar,
Swatch’s grounds of opposition cannot prevail.
It is to this central issue that I turn.
[4]
The considerations that are relevant in the
comparison of two marks, to determine whether they are deceptively or
confusingly similar,
are to be found in
Plascon-Evans
,
[1]
and the cases that have followed and elaborated upon that
exposition.
[2]
These considerations were common ground before us. Their full
repetition would be otiose. Among the matters that may be informative
to make a proper comparison are the following. What are the visual,
aural and conceptual similarities of the marks? The overall
impression given by the marks is salient, bearing in mind their
distinctive and dominant components. How would the marks be perceived
by the average consumer, in the relevant market, who is reasonably
well-informed and observant, taking account of the type of goods
and
how they are marketed? The consumer may not encounter the goods
bearing the marks at the same time and place, and an allowance
should
thus be made for the consumer’s imperfect recollection of the
marks. The degree of similarity of the goods should
be considered in
relation to the degree of similarity of the marks. The greater the
similarity of the goods the more it may offset
some differences in
the marks, just as greater distinctiveness of the goods may require
greater similarity of the marks in order
to justify an affirmative
finding of the likelihood of confusion.
[5]
The two marks that require comparison are these:
IWATCH
[6]
Swatch contended that there are obvious similarities.
Both trade
marks consist only of letters, they employ no logos or other
distinguishing matter, although Swatch frequently uses
its mark in
conjunction with a reproduction of the Swiss national flag. Both have
the common element of WATCH, preceded by a single-letter
prefix. That
one mark starts with an S and the other with an I does little to
provide visual differentiation. Furthermore, so it
was submitted, the
marks sound similar when spoken. Neither SWATCH nor IWATCH have any
meaning, at least when used in relation
to watches. These are the
very goods covered by Apple’s class 14 application and they are
identical to the goods covered
by Swatch’s class 14 registered
mark, that is to say, ‘horological and chromatic instruments;
watches; clocks; timepieces’.
[7]
I proceed to make a visual, aural and conceptual comparison
of the
marks. In doing so, I discard from consideration any preconceived
notions associated with two such well-known brands in
the market:
Swatch and Apple. The ubiquity and durability of the two brands might
give rise to an implicit assumption of their
distinctiveness, with
the impermissible entailment that the two marks at issue in this case
are distinctive and hence are not confusingly
similar. That is not
the exercise of comparison enjoined by the authorities to which I
have referred. The court’s obligation
is to compare the marks
themselves, and not to permit something external to the marks to
intrude upon the process of comparison.
Rather, from the vantage
point of the average consumer, in the relevant market, what does a
comparison of the marks yield as to
their similarity and differences
so as to determine the ultimate issue as to whether the marks are
deceptively or confusingly similar.
[8]
As to a visual comparison of the marks, both marks make
use of a
common element, the word ‘WATCH’, which does make for
some visual similarity. However, the use of the same
descriptive
word, of a commonplace item, serves to place greater emphasis on the
significance of the prefix in each of the marks.
It is the ‘I’
in IWATCH that is the visual differentiator of the mark. So too, the
joining of ‘S’ to ‘WATCH’,
to make up the
word ‘SWATCH’, provides a visual cue based on the word
rather than its component parts. These features
of the marks give
rise to a clear visual differentiation.
[9]
As to the aural comparison, the ‘I’ joined
to ‘WATCH’
makes up a word of two syllables pronounced, without phonetic
exactitude, as ‘eyewatch’ or ‘ayewatch’.
That
sounds very different from the monosyllabic word SWATCH, when spoken.
Something was made by Apple of the fact that swatch
is an ordinary
word in the English language meaning a small sample of fabric
intended to demonstrate the look of a larger piece.
The proposition
advanced was that consumers seeing or hearing the mark SWATCH would
associate it with the English word, an association
entirely remote
from IWATCH. I attach no weight to this consideration. I am doubtful
that the average consumer would readily call
to mind an association
between a watch and a small sample of fabric. However, even shorn of
any such association, and taking SWATCH
as an unmoored word, an aural
comparison of IWATCH and SWATCH indicates a clear difference.
[10]
As with the visual comparison, there is
some conceptual identity in that both marks reference WATCH. However,
as I have already
observed, the use of the word ‘watch’
is a descriptive word. The SWATCH mark enjoys no distinctiveness by
incorporating
a descriptive word of obvious relevance to the goods in
respect of which the mark is registered. As this court made plain in
Yuppichef;
[3]
‘
… it is not the purpose of trade marks or copyright to enable
people to secure monopolies on the commons of the English
language.’
There is good reason to avoid attaching exclusive rights to common
descriptors. And in consequence, little reason
to attach significance
to the use of the word WATCH as a point of conceptual identity.
[11]
There is a further consideration that supports the same conclusion.
Swatch is the
proprietor in South Africa of the trade mark SWATCH.
The trade mark registration is endorsed as follows: ‘Applicants
admit
that registration of this trade mark shall not debar other
persons from the bona fide descriptive use in the ordinary course of
trade of the word WATCH.’ Swatch enjoys no exclusive right to
the use of the word WATCH when, as here, Apple has sought to
secure
the registration of IWATCH, and to use this mark in the ordinary
course of its trade.
[12]
Once the use of the word WATCH in both marks is deprived of
conceptual significance,
there is little on this dimension of
judgment to conclude that there is availing conceptual similarity
between the two marks.
[13]
A visual, aural and conceptual comparison of the marks, I find, does
not yield similarities
of sufficient significance to make the marks
confusingly or deceptively similar. This conclusion is supported by
the following
consideration. Swatch has emphasised in its founding
affidavit that Swatch watches are unique in terms of their
engineering and
marketing. Examples of the advertising of Swatch
watches in South Africa are attached to the founding affidavit. That
material
is clearly directed at discerning, fashion conscious
consumers. Apple’s descriptions of its product range in the
answering
affidavit leaves little doubt that these products are
innovative offerings, also made to discerning consumers. These
consumers
are likely to be more affluent and more concerned with the
precise brand of watch they require. Consumers of this kind are less
likely to be deceived or confused by the limited similarities between
the marks.
[14]
Apple contended that the likelihood of confusion was considerably
diminished by the
fact that over the past 15 years Apple has
established a family of i-prefix trade marks. The family is made up
of the iPod, iPhone,
iPad, iTunes, and iCloud devices and services.
Apple claimed that these products and services have gained great
popularity around
the world, and in South Africa, and that a consumer
who encounters a new product from Apple with the letter ‘i’
will
recognise that the product and trade mark form part of the Apple
i-prefix family of trade marks and products.
[15]
There is some controversy attaching to this contention. A family of
marks may assist
the opponent in resisting the registration of a
later mark that might appear to be a member of the opponent’s
family of marks.
It is less clear that the family resemblance of an
applicant’s later mark, that is sought to be registered, may be
used to
dispel the likelihood of confusion with the opponent’s
earlier registered mark. There is no need to resolve this controversy
in this case. The conclusion that there is no likelihood of
confusion or deception is robust, without regard to the evidence
that
the IWATCH would form part of a family of i-prefixed trade marks.
[16]
Swatch contended that the goods covered by Apple’s class 14
application are
identical to the goods covered by Swatch’s
class 14 registered mark, and that Swatch’s class 14 goods are
similar to
many of the goods covered by Apple’s class 9 trade
mark application. Swatch invoked the proposition that the greater the
similarity of the goods covered by the marks, the lesser will be the
degree of resemblance required as between the marks to show
the
likelihood of confusion or deception. Swatch complained that the
court below had disregarded this consideration.
[17]
Even on Swatch’s best case, that is, the identity of the goods
in class 14
referencing watches and clocks, in my view, on the
analysis undertaken above, the SWATCH and IWATCH marks are
sufficiently distinctive,
given the likely consumers of the products,
that it remains unlikely that the marks will give rise to deception
or confusion.
[18]
For these reasons, the appeal cannot succeed. The following order is
made:
The
appeal is dismissed with costs.
….
________________________
DAVID
UNTERHALTER
ACTING
JUDGE OF APPEAL
Appearances
For
appellant: Paola Cirone
Instructed
by: DM Kisch Inc. Sandton;
Phatshoane Henney, Bloemfontein
For
respondent: R Michau SC
Instructed
by: Bouwers Inc. Pretoria
Hill
McHardy & Herbst ,Bloemfontein
[1]
Plascon- Evans
supra
640G – 641E
[2]
Bata v Face Fashions CC
and Another
2001
(1) SA 844
(SCA) para 9;
Cowbell
AG v ICS Holdings Ltd
2001
(3) SA 941
(SCA) para 10.
[3]
Yuppichef Holdings (Pty)
Ltd v Yuppie Gadgets Holdings (Pty) Ltd
[2016]
ZASCA 118
;
2016 BIP 269 (SCA)
para
[38]