Swatch victorious after Federal Circuit calls time on rival trademark application
The US's top appeals court has ruled for the first time that parties can challenge a trademark on the grounds that there is a lack of bona fide intent to use it, in a dispute between watch makers Berger and Swatch.
In its ruling issued on Thursday (June 4), the US Court of Appeals for the Federal Circuit affirmed a decision by the US Patent and Trademark Office (USPTO) to reject a trademark application filed by Berger after Swatch opposed it.
At the centre of the dispute was Berger’s intent to use its trademark application for the term ‘iWatch’.
The application was for watches, clocks and other related goods.
Berger filed its application in 2008 with the intention of using the mark later for commerce.
But Swatch challenged the mark on two grounds: alleging that Berger had failed to produce evidence of a bona fide intent to use the mark, and that it would cause confusion with its own ‘Swatch’ trademark.
In 2013, the USPTO’s Trademark Trial and Appeal Board (TTAB) upheld Swatch’s opposition surrounding intent-to-use.
In its ruling, the TTAB cited testimony from Berger’s chief executive Bernard Mermelstein, given during the opposition proceedings, in which he said the mark would be used only for watches, not clocks.
The TTAB challenged Berger on why the company had applied for protection covering clocks if it had not intended to use the trademark for those goods.
The attorney who prosecuted the application said it was a “standard” process that left the application open for future uses.
Although it ruled in favour of Swatch on intent-to-use, the TTAB ruled there was no likelihood of confusion between the marks. Despite this, the application was still rejected based on intent-to-use.
Berger appealed against the decision in 2013, arguing that the USPTO’s threshold to show an intent to use a mark in a commercial setting was too high.
But the federal circuit rejected this in last week’s judgment, in what was the first ruling of its kind.
In a unanimous verdict, the panel of three judges ruled that the “TTAB properly exercised its judgment in finding that Berger lacking a bona fide intent is proper statutory grounds on which to challenge a trademark application”.
“The bar for showing bona fide intent is not high. But in our view ... substantial evidence supports the TTAB’s conclusion that Berger’s intent at the time of the application was merely to reserve a right in the mark, and not a bona fide intent to use the mark in commerce,” the judges concluded.
Peter Berger, partner at law firm Levisohn Berger and unrelated to the Berger company, said he was surprised by how "poorly" the watch maker was prepared for the challenge and that was not surprised by the decision.
He added: "The case supports the general view that, if challenged, one who filed based on intent-to-use must have a bona fide intent. That is simply a matter of evidence.
"The Berger witnesses and documents supported the view that Berger failed to have evidence to support its position, so in reality there is nothing new here," he added.
Neither Berger nor Swatch had responded to a request for comment on the ruling at the time of publication.
