Swatch AG (Swatch SA) v Apple Inc.

Apple Inc. applied to register its IWATCH trade mark in classes 9 and 14. Swatch AG, proprietor of the trade mark registration no. 1986/04168 in class 14 under the representation SWATCH, opposed these applications. Swatch contended that the IWATCH and SWATCH marks are confusingly similar and that the IWATCH mark, in respect of the classes of goods for which registration was sought, was likely to deceive or cause confusion. The opposition was initially brought before the Registrar of Trade Marks who transferred the proceedings to the high court in terms of s 59(2) of the Trade Marks Act. Fabricius J heard the matter and dismissed the opposition with costs, finding that the trade marks were not confusingly similar. Swatch appealed to the Supreme Court of Appeal with leave.

• Whether the trade marks IWATCH and SWATCH are confusingly or deceptively similar
• Whether Apple's application for registration of the IWATCH mark should be refused under ss 10(12), 10(14) and 10(17) of the Trade Marks Act 194 of 1993
• Whether visual, aural and conceptual comparison of the marks demonstrates sufficient similarity to cause confusion or deception
• The relevance of a family of i-prefixed trade marks in determining likelihood of confusion
• The significance of identical or similar goods in determining likelihood of confusion between marks

The appeal was dismissed with costs.

In determining whether trade marks are confusingly or deceptively similar under ss 10(12), 10(14) and 10(17) of the Trade Marks Act 194 of 1993, the court must conduct a visual, aural and conceptual comparison of the marks from the perspective of the average consumer in the relevant market. Where both marks incorporate a common descriptive word (such as 'WATCH' for watches), and one proprietor has endorsed its registration admitting no exclusive right to that descriptive word, that common element cannot be accorded significant weight in the comparison. The distinctive elements of the marks (the prefixes) become paramount. Differentiation in prefixes, combined with aural and visual differences in the overall marks, and the discerning nature of the target consumers, can be sufficient to find that marks are not confusingly or deceptively similar, even where the goods in question are identical or highly similar.

The court noted controversy regarding whether an applicant's family of marks (in this case, Apple's i-prefix family including iPod, iPhone, iPad, iTunes, iCloud) may be used to dispel likelihood of confusion with an opponent's earlier registered mark. While a family of marks may assist an opponent in resisting registration of a later mark that appears to be part of the opponent's family, it is less clear whether an applicant can rely on its own family of marks defensively. The court expressly stated there was no need to resolve this controversy in this case as the conclusion of no likelihood of confusion was robust without regard to the family of marks evidence. The court also noted, but attached no weight to, Apple's contention that 'swatch' is an ordinary English word meaning a small sample of fabric, observing that average consumers would be unlikely to associate a watch with fabric samples.

This case provides important guidance on the application of the Plascon-Evans test for comparing trade marks in South African law. It clarifies that: (1) common descriptive words in trade marks should not be accorded significant weight in determining confusing similarity; (2) prefixes can provide sufficient differentiation even where marks share common elements; (3) the nature of the target consumer (discerning, fashion-conscious) is relevant to assessing likelihood of confusion; (4) endorsements on trade mark registrations admitting no exclusive rights to descriptive words limit the scope of protection for those elements. The case demonstrates the court's approach to balancing trade mark protection with the principle that common descriptors should not be monopolized. It also touches on the controversial issue of whether an applicant's family of marks may be used defensively to dispel confusion, though this was not definitively resolved.