Recently, SWATCH the Swiss brand for luxury and high-end watches filed a suit for trademark infringement against SAMSUNG. The matter was decided in favor of SWATCH. But an important question arose before the court, which is, to what extent the app store owners or developers can be held liable for the apps developed by third parties.
- INTRODUCTION:
TISSOT, RADO, OMEGA, LONGINES, MIDO, HAMILTON, GLASHÜTE, BREGUET you name a high-end watch brand and SWATCH will most likehttps://www.ipandlegalfilings.com/services/copyright-services/e the owner of it. SWATCH which stands for Swiss Watches is a well-known brand having multiple trademarks, designs, patents, and copyrights registered in its name. In previous years, the company has filed for multiple trademark and patent infringement suits against brands like Tiffany, Bloomberg, Target and so, and has emerged victorious in all. This piece deals with SWATCH's most recent victory against SAMSUNG in a UK court.1
- FACTS OF DISPUTE:
In 2018, SAMSUNG through its Galaxy platform, launched a watch brand under the name 'GALAXY WATCH'. A feature was added in these watches where the user could install from the SAMSUNG app store a lookalike of famous watch brands. After installing that into the phone the face of the watch would look exactly the same as that of the luxurious brand.
A bolt out of the blue was felt by SWATCH after seeing Galaxy Watches. Before the brand could start making profits out of it, within a span of a month a trademark infringement suit was slapped on the brand. SWATCH at England and Wales High Court filed for infringement of trademark stating that GALAXY WATCH is identically similar to SWATCH watches. It was claimed by SWATCH that more than 30 such faces of the watch were 'identical or virtually identical' to that of SWATCH's infringing 23 trademarks belonging to the company.2
SWATCH holds a dominant position in the market for watches. The company started manufacturing in 1983 and has its turnover of worth $845 million as of FY 2021. Damages worth $100 million were claimed by SWATCH. Apart from trademark infringement, unfair trade practices and misleading customers on pretext of cheating were also alleged by SWATCH.
- FEW MARKS IN QUESTION3:
More than 30 watch face apps were in question, below represented are three such marks:
- LEGAL ISSUES IN QUESTION:
UK court had to decide on following matters:
- Whether or not there is trademark infringement of SWATCH by GALAXY WATCH?
- To what extent are the app store developers/owners liable regarding the apps developed by third parties?
- VERDICT:
The dispute in hand was decided in favor of SWATCH!
Samsung in fact was believed to be liable of trademark infringement. Here, the court very rightly pointed out on the point of likelihood of confusion. The very instance when Samsung Smartwatches adapted a face to look like Swatch's design, ground was established regarding likelihood of confusion. The replication in appearance of Swatch and subsidiary brands was possible only after directly downloading from Samsung App Store "watch face" designs which were commercialized and sold in the Samsung App Store.
General Principles discussed in the case-
- Likelihood of confusion
The exact meaning of this term has not been given under the European Union Trademark Regulation (EUTMR) but it has been substantiated many a times by the Courts. Article 9 briefly mentions the concept of 'likelihood of confusion' and 'likelihood of association'. Two circumstances have been laid down to fit the concept of 'likelihood of confusion' into four walls, they are, firstly, the moment when one product is confused with some other by the public and secondly, is when public makes out a connect in the conflicting TM and thinks that the services are same from that financially linked organization.
- Infringement under Article 9(2) of EUTMR
Article 9(2) of EUTMR provides for certain rights of proprietors in relation to goods/services. Under this if the mark in question is identical or similar to that of the mark of other party which can cause likelihood of association or likelihood of confusion then that can be prohibited by the owner of the mark. In this case, the court held that there is a direct infringement by Samsung Smartwatches of Swatch designs. Swatch has an established reputation in luxury watches business globally, thus, to use its designs even through some downloaded apps from third party developers would constitute infringement.
- Arrangement with third party app developers
Samsung Galaxy App (SGA) store allows any third party to upload an app by obtaining an account after registering with Samsung's SGA Seller Portal on providing basic details like name, address, residential nation, bank account, phone number, payment details etc. The criteria to download watch face apps was that one must have a Samsung Smartwatch. Swatch had to buy Samsung Smartwatch and phone to check the contents and level of their apps and infringement thereof.
Regarding revenue sharing with the app developers who uploads their apps on SGA, 30% of revenue raised was going to Samsung (20% in case the app developer was a "Galaxy Apps Partner"). Samsung had the right to grant licenses to buyers on SGA platform. While deciding the matter, the bench noted that even though the apps were developed by third parties, it was Samsung's sole discretion to put them on SGA or not. Also, Samsung was making out profits from it, thus, cannot shed its liability in respect of the relevant marks as they appeared on the face of the watch.
- CONCLUSION:
Despite various defenses given by Samsung, Swatch was successful in establishing infringement. Swatch not only won the trademark infringement case but has also helped in establishing modern day jurisprudence in relation to third party app developers. Bench decided that watch face apps are similar goods to smartwatches, with this level of similarity likelihood of confusion can be established.
Footnotes
1 Montres Breguet SA & Ors v Samsung Electronics Co. Ltd [2022] EWHC 1127 (Ch) (20 May 2022)
3 https://www.bailii.org/ew/cases/EWHC/Ch/2022/1127.html#app1
Co-authored by Iit Kharagpur (Intern At K&K)
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