The Bern Commercial Court recently had to decide whether use of the sign 'Mega' on watches resulted in a likelihood of confusion with respect to trademarks owned by watch manufacturer Omega.
Watch manufacturer Omega AG owns several trademarks for its brand, including the word mark OMEGA. At a watch and jewellery show in March 2009 Franck Muller, another Swiss watch manufacturer, presented some new models from its Aeternitas collection bearing the name 'Mega'. The watches bore the word 'Mega' in red letters in the centre of the dial, just underneath the words 'Franck Muller' or 'Franck Muller Geneva', both written in black letters of approximately the same size as was used for 'Mega'.
In July 2009 Omega filed an action to prevent Franck Muller from using the sign 'Mega' in Switzerland when offering or advertising watches, as well as with respect to any other use connected to the trade in watches.
In its 2011 decision, the court dismissed Omega's action based on the following arguments.
First, the court dealt with the question of whether 'Mega' belonged to the public domain. 'Mega' is a designation that derives from the Greek language and means "big". It is a well-known and commonly used word in Switzerland. Therefore, the sign lacked distinctiveness. According to the guidelines of the Swiss Federal Institute of Intellectual Property, quality indications such as 'master', 'super', 'top' or 'mega' belong to the public domain. Thus, the court concluded that neither party could have registered the sign 'Mega' for watches. A likelihood of confusion under Article 3 of the Trademark Act, as well as a likelihood of dilution under Article 15 of the act, cannot be based solely on a sign that belongs to the public domain. Therefore, this conclusion was already sufficient in order to reject Omega's action. However, the court also commented on some other arguments raised by Omega.
Omega argued that Franck Muller had used the sign 'Mega' not in a descriptive manner, but with the intention to distinguish its goods in the sense of Article 1 of the act, and therefore in a commercial manner. This argument was based on the fact that 'Mega' appeared in the centre of the dial in red letters, catching the attention of the customer. Franck Muller countered that the meaning of the word 'Mega' is purely functional and that the purpose of using it was to allude to a specialised type of clockwork named 'grande complication'. In other words, 'Mega' was primarily used to distinguish some of the watches of the Aeternitas collection from other watches of the same collection, and thus its purpose was purely functional.
Consequently, the court analysed the actual use of the sign 'Mega' on the Franck Muller watches. The court found that the terms 'Franck Muller' or 'Franck Muller Geneva' and the word 'Mega' were the same size, were put on the same vertical axis and were positioned close to each other. According to the court, all the words together gave the impression of unity. The court further stated that the average consumer would, with no effort, conclude that the word 'Mega' in this context referred to the qualities or special characteristics of the respective Franck Muller watch model. Thus, 'Mega' was used in a descriptive manner.
The court also examined the likelihood of confusion. First, the court made clear that the signs 'Mega' and 'Omega' could not be directly compared. Instead, 'Omega' must be compared to the combination of either 'Mega' and 'Franck Muller', or 'Mega' and 'Franck Muller Geneva'. Thereby, the court found that there was no likelihood of confusion. The court even denied the existence of a likelihood of confusion between 'Omega' and 'Mega' as such, because of the visual, oral and conceptual differences between the two words. The conceptual differences refer to the fact that the word 'Omega' usually does not ring a bell to consumers, since they are not familiar with the Greek alphabet. However, the word 'Mega' is known and means something to everyone. According to the court, the only likelihood of confusion that may be determined lay in the syllable 'mega', but this word has no distinctiveness and belongs to the public domain.
The court then responded to another aspect. According to the Trademark Act, the likelihood of confusion may result only from trademarks designating the same or similar goods or services. Although the goods in question were watches in the upper price segment, the court denied the similarity of the goods based on the following arguments:
- The prices of the watches were quite far apart – the minimum price for a Franck Muller Mega watch was around Sfr1.2 million, while the most expensive Omega watch cost Sfr325,000.
- The technology used for the Franck Muller watches was much more complex than that used for the Omega watches.
- The two manufacturers used different distribution channels – while Omega watches can be bought in numerous stores around the world, Franck Muller watches were made to order or sold on special occasions only.
- The clientele was different, since the customers of Franck Muller were usually watch enthusiasts, whereas Omega's clientele were merely those with the necessary means.
Therefore, the court denied the similarity of the goods, and consequently the likelihood of confusion between the OMEGA trademarks and the sign in question.
For further information on this topic please contact Silvana Schweri or Roger Staub at Froriep Renggli by telephone (+41 44 386 6000), fax (+41 44 383 6050) or email ([email protected] or [email protected]).