Brightflash USA LLC v China Trade Services Pty Ltd [2020] ATMO 121 (the iWatchiT case)

On 14 July 2020, the Australian Trade Marks Office handed down its decision regarding opposition of the Trade Mark belonging to our client, China Trade Services Pty Ltd. The name iWatchiT is to be used as the name of a smart watch currently in development by China Trade Services.

The Opponent, Brightflash USA LLC, is a corporate vehicle used by Apple, Inc for the purposes of pursuing registration of the Trade Mark IWATCH internationally. Apple has to date branded its smart watches as “Apple Watch” as opposed to “iWatch”, largely due to the existence of prior “iWatch” Trade Marks by other companies in other jurisdictions.

Brightflash contended that the iWatchiT Trade Mark was deceptively similar to its Trade Mark application for IWATCH, which it had been attempting to secure registration of since 2013.

Brightflash was finally granted registration of the IWATCH Trade Mark in April 2020, but limited to use with respect to GPS devices, not smart watches. It is still however pursuing registration of the IWATCH Trade Mark for a much broader range of goods including computer software, hardware, peripherals and communication devices as part of a separate divisional Trade Mark application, which is currently still pending.

This raised the “unusual issue” of whether the goods being compared should cover all the goods originally in the IWATCH application (including those now transferred to the divisional application), or the more limited range of goods now covered by their registered Trade Mark (ie. GPS devices).

The decision was handed down in favour of China Trade Services and the Opponent’s sole ground under section 44 of the Trade Marks Act 1995 was dismissed.

The decision provides a useful analysis of:

How divisional applications in the course of an application can impact s44 grounds of opposition;
Comparison of marks where the common term is purely descriptive
The key statements by Hearing Officer Nicholas Smith are summarised below:

Section 44

Can a later filed divisional application be considered for section 44?

Answer: Yes!

The basis for Brightflash’s opposition was that the iWatchiT Trade Mark was deceptively similar to its earlier application no. 1886228 for IWATCH (the Parent Application). The evidence and submissions of both parties were prepared and filed on this basis.

However, while the matter was still waiting to be decided, Brightflash filed a divisional application based on the Parent Application. Effectively, this deleted the majority of the goods covered in this application and transferred them to a new application (no. 2064711) (the Divisional Application). The purpose of this was to extend the timeframe for acceptance of the IWATCH mark for those broader range of goods (and is in fact the third time this tactic has been employed on this application).

This raised the somewhat unique question: should the goods compared include all the goods which were originally in the Parent Application, or the more limited range of goods now remaining in the Parent Application?

Hearing Officer Smith determined that despite the Divisional Application not being particularised in the Statement of Grounds and Particulars (since it didn’t then exist), the particularisation of the Parent Application was sufficient to allow the goods now covered in that application to also be considered.

It is not however clear whether the same decision would have been made if the divisional application had been filed at an earlier stage (eg. before the filing of evidence or filing of written submissions). That perhaps is an issue for determination at a later time.

Are Smart Watches Similar Goods to Computers?

Answer: Yes!

The Hearing Officer found that smart watches are essentially wearable computers and that therefore smart watches and computers are similar goods.

The same however, does not appear to apply to ordinary watches which would not be considered to be similar goods to computers.

Is deceptively similar to IWATCH?

Answer: No!

Two competing interpretations of the iWatchiT mark were advanced by Brightflash and China Trade Services.

We argued that the suffix “iT” in fact represents the word “it” (as in “I watch it”). We further submitted that the term “iwatch” is a purely descriptive term to describe smart watches and should therefore be discounted in comparing the marks. This finding has been supported in various overseas decisions (including by the UK High Court and the New Zealand Trade Marks Office) which have specifically considered the registrability of the “IWATCH” Trade Mark.

Brightflash argued that the suffix “iT” would be perceived as the abbreviation “IT” (short for information technology).

Hearing Officer Smith considered both possibly interpretations of the mark, but ultimately found that on either interpretation, the marks were not deceptively similar.

Interpretation 1: If the mark is perceived as “I watch it”, the mark conveys clearly separate conceptual meaning to IWATCH. In other words, it conveys that the user is watching something specific as opposed to watching anything.

The Trade Marks were also considered to be different aurally. In particular, the suffix “it” was considered to be a memorable and clear addition to the mark despite appearing at the end of the mark rather than the beginning.

Interpretation 2: If the mark is perceived as “iWatch IT”, then the term iWatch is more likely to be viewed as a descriptive reference to smart watches by the consuming public. Therefore, any confusion which may arise would be due to the descriptive connotations of that mark and not from any deceptive similarity of the marks.

Therefore, even if the additional term “it” was also perceived to be descriptive, adding that term to iWatch was a sufficient point of visual and aural difference to distinguish the marks, accounting for the descriptive elements of the marks.