The Samsung Smartwatch and Swatch: Spotlight on Trademark Infringements – Fox Williams | Hot Mobile Press

In a recent case, the High Court ruled that Samsung infringed Swatch’s trademarks by including them on digital watch faces, even though the digital watch faces were created by a third party and not Samsung.

We look at the key intellectual property issues behind the ruling and highlight key insights for other companies to consider.

facts about the case

Samsung smartwatch owners could download the digital watch faces through the Samsung Galaxy App Store. These digital watch faces could then be displayed as an interface on a Samsung smart watch. Although Samsung didn’t create the apps itself (this was left to third-party developers), it was still found to have infringed trademarks.

Reasons for Trademark Infringement

1. active behavior by Samsung – Samsung does not offer an online marketplace where developers can easily upload digital watch faces and consumers can download them.

Instead, these digital watch faces, or “apps,” were judged to be important to the design and function of the smartwatch, and not just background. Samsung had one “clear commercial interest” in which “Availability, Display and Use” of apps.

In addition, the apps have been specially created to the Samsung smartwatches and a Samsung tool could also be used to help developers create the watch face apps.

Samsung had a vetting process before adding apps to its store and it shared revenue from the apps and helped promote the apps. There was active behavior from Samsung.

2. Using Samsung – Samsung claimed that there was no infringement as it does not use Swatch’s marks in relation to smartwatches or wristwatches, but when there has been use “It was used in connection with apps or smartwatch face design”.

Samsung argued that the apps are wallpapers for smartwatches and for consumer personal use, and that Samsung makes smartwatches available as hardware and watch face download services, not third-party developer software.

The judge ruled that the use of the marks in app names would be used in relation to software, as for example an app named “Tissot Watch Face” would mean that downloading the app would display a Tissot watch face. Likewise, the digital watch face preview would show the appearance of the digital watch face after it has been downloaded. The average consumer would know the app was for a smartwatch.

Finally, the design of the digital dial seems to show the origin of the watch. Hence, there was a use by Samsung in relation to smartwatches.

3. Double Identity Breach – Samsung argued the use of the marks is descriptive of the app name or design, rather than affecting consumers’ ability to know that Swatch goods in the marks are from Swatch. This is the function of proof of origin, which was an element of the double identity infringement claim here.

The judge ruled that the digital watch face design should be seen as a trademark and an indication of provenance, and the names are similarly understood as something that would function as a watch face.

The apps themselves resided on the Samsung Store and consumers would assume there was a licensing agreement with Swatch allowing use of the marks. Therefore, this would affect the ability of consumers to know that the Swatch goods in the brands originate from Swatch.

4. Risk of confusion Injury – One of the necessary elements for this is that the goods/services for which Samsung used the marks were identical or similar to those registered by Swatch.

Samsung argued that the watchface apps are not smartwatches or wristwatches, and the judge found that the watchface apps are not identical goods “Computer on your wrist”, “electronic device with integrated time display”, “smart watches” or “Smartphones in the shape of a watch”.

Nonetheless, the Watch Face apps were found to be similar products to smartwatches in that they complemented and needed each other.

In addition, there were smartwatches “at least very similar” to clocks and the watchface apps could be similar to clocks since they functioned as clocks (you could check the time on your wrist) and were designed to look like regular clock faces.

A likelihood of confusion was also found because it would probably be assumed that a license agreement or other agreement with Swatch existed.

5. Hosting Defense – Samsung also argued with this defense used by online marketplaces like eBay. This applies when an information society service provider has stored information on its server from a third party but has no actual knowledge of it or when it becomes aware that it will act promptly to remove it. However, this defense did not hold.

The question was “whether a diligent economic operator should have recognized the illegality on the basis of facts or circumstances (actually) known to him”. Procedures for notifications and withdrawals were not enough.

Samsung had a fairly small team of reviewers with little brand recognition training. However, Samsung had an active role (see above) and reviewers (and Samsung) would have taken notice of app names and watchface looks. It was also noted that some of the apps were advertised as Editor’s Picks.

analysis

So far, online marketplaces such as eBay are not necessarily liable for infringing third-party content on their sites. However, this case concerned app stores. It was different because Samsung was involved in the generation of and had control over third-party products that were created for Samsung products and sold on the Samsung Store.

What are the key insights?

  • App store developers and other companies should consider whether they have processes in place to ensure they do not post or embed infringing content without permission.
  • Businesses should review their processes and see if further efforts need to be made to identify potential violations before selling products online. For example, there could be written instructions and training for trademark searches to be performed when there is a risk that a trademark is included.
  • Businesses should enter into agreements with content providers regarding such content that does not infringe the rights of third parties.

Contact us

If you have any questions about these issues as they relate to your own organization, please reach out to a member of the team or speak to your usual Fox Williams contact.

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