INFRINGEMENT O’CLOCK: Samsung found liable for watch-face app trade mark infringement

In a recent ruling of the High Court of England and Wales, multi-national tech giant Samsung was found to have infringed a number of registered trade marks owned by the Swatch group of watch-making companies (makers of world-renowned brands such as Omega and Tissot).

The case – the full citation of which is set out at the end of this article – provides a useful insight into the Court’s interpretation of the rights of a trade mark owner in the context of apps featuring infringing trade marks and on the defences available to app store operators. The result is that app store operators can be liable for trade mark infringement in relation to apps which are created by third parties and sold through the store.

The relevant law is Article 9 of the EU Trade Mark Regulation (2017/1001(EU)) (the “EU Regulations”), which the Court confirmed is materially the same as the equivalent provisions in the UK’s Trade Marks Act 1994.

Background

A registered trade mark gives its owner the right to the exclusive use of the mark in connection with the goods for which it is registered. The Swatch group of companies, collectively, owned 23 trade marks which were registered for various goods, including (amongst others): watches; smart watches; computers worn on the wrist; electronic apparatus incorporating a time display; and smartphones in the shape of a watch.

Samsung, makers of various different smartwatches, made available for owners of its smartwatches a number of watch face applications (the “apps”) which were downloadable from its Samsung Galaxy App store (the “app store”). Swatch claimed that the apps displayed signs which were either identical or similar to the signs comprising its registered trade marks (and in relation to goods which were either identical or similar to the goods for which its trade marks were registered). On that basis, Swatch said, the apps infringed its registered trade marks. 

30 of these apps – downloaded by users of Samsung’s smartwatches approximately 160,000 times in the UK and EU – formed the basis of Swatch’s claim. The apps were developed not by Samsung, but by third party app developers who either sold or made available for free their apps on the app store.  Samsung claimed that it had not itself infringed Swatch’s trade marks and that it was not aware of circumstances which could give rise to it having any obligation to take steps to prevent the infringements, relying on the fact that it operated a notice and take-down procedure. On the other hand, Swatch claimed that Samsung was “intimately” involved in the process by which the apps were made available and therefore liable for the infringement.

The law

Samsung was accused of breaching the EU Regulations on three separate grounds:

1. That the signs on the apps were identical with the corresponding trade mark and used in relation to identical goods to those for which the trade mark was registered (Article 9(2)(a)); and
2. That the signs on the apps were identical or similar to the corresponding trade mark and were used in relation to identical or similar goods to those for which the trade mark was registered, and that there was a likelihood of confusion on the part of the public (Article 9(2)(b)); and
3. That the signs on the apps were identical or similar to the corresponding trade marks irrespective of whether the goods for which the trade mark was registered were identical or similar, that its marks have a reputation in the EU and that Samsung had taken unfair advantage of that reputation or Samsung’s use of the identical or similar marks was detrimental to, the distinctive character of that reputation (Article 9(2)(c)).

Outcome

The Court held that Samsung had in fact infringed a number of Swatch’s registered trade marks. Each infringement had to be assessed on its own facts, which varied, but the Court’s analysis focussed on the following three areas: 

Identity and similarity of goods: watch face apps, the Court held, were not identical goods to the goods for which some of Swatch’s trade marks were registered, namely “computers worn on the wrist”, “electronic apparatus incorporating a time display”, “smartwatches” or “smartphones in the shape of a watch”, which are all physical goods. However, the Court held that the apps were similar goods to smartwatches, based on complementarity because the use of a smartwatch (or smartphone) was essential to the use of the apps. 

Use in relation to goods: Samsung claimed that it hadn’t used the marks at all but had simply provided a platform to third party app developers. The Court found that Samsung had marketed its smartwatches as “truly watch like” by reference to the variety of apps in its store and that it had made a commercial choice only to design a limited number of apps, encouraging third party app developers to design them instead. Samsung therefore had a clear commercial interest in the apps in its online store. Once an app had been downloaded to a smartwatch or smartphone, the sign was clearly intended to denote the purported origin of the watch face on the app. Therefore, such signs were being used in relation to smartwatches. The court noted that the apps were actually intended to function as a watch and contrasted the apps by way of an analogy to a poster of a Ferrari. 

Notice and take-down features: Samsung attempted to use the “hosting defence” in Article 14 of the e-Commerce Directive 2000 which appears in the UK’s Electronic Commerce (EC Directive) Regulations 2002 (i.e. that it did not have actual knowledge of the illegal activity or that, upon becoming aware of such illegality, acted “expeditiously” to remove the information), on the basis that the apps were developed by a third party and that it operated a notice and take-down procedure on the app store.  It said that users of its smartwatches will be particularly familiar with app stores and so will understand that the majority of apps in the app store will originate from third parties. The Court disagreed and was satisfied that Samsung’s content review process would have resulted in it becoming aware of the app’s name and appearance and that it should have acted to stop the infringements at that point, even though there was no general monitoring obligation. This is what is required of a diligent economic operator. 

Conclusion

This case, whilst highly fact-dependent in common with many trade mark cases, demonstrates that watch face apps can be the subject of trade mark infringement for trade marks registered for watches and other similar goods. Due to the way an app is designed to interact with a smartwatch and the fact that the apps were intended to function as timepieces, the apps here were considered to be sufficiently similar to smartwatches for Samsung to have infringed the Swatch trade marks. The decision on Samsung’s liability as the operator of the app store is also a reminder that website operators need to balance the need to check the content appearing on their platforms with the benefits provided by the hosting defence and that they should be careful when actively promoting the products of third parties on their platforms. 

Full case reference: Montres Breguet SA and others v Samsung Electronics Co Ltd and another [2022] EWHC 1127 (Ch).