The Court of Appeal of England and Wales has upheld the judgment of Mr Justice Arnold in a dispute between US company, Omega Engineering Inc (Omega USA), and Swiss watchmaker, Omega SA (Omega Swiss), over the application by Omega USA for a UK trade mark for OMEGA and the construction of a co-existence agreement.
In Omega SA v Omega Engineering Inc  EWCA Civ 645 (27 May 2011), the Court of Appeal of England and Wales has upheld the judgment of Mr Justice Arnold in a dispute between US company, Omega Engineering Inc (Omega USA), and Swiss watchmaker, Omega SA (Omega Swiss), over the application by Omega USA for a UK trade mark for OMEGA and the construction of a co-existence agreement.
Omega Swiss has been known as OMEGA since 1903. Omega USA was founded in 1962 and manufactures scientific instruments for the measurement and control of temperature, humidity and pressure. Given the scope for confusion between the two businesses, the parties entered into a co-existence agreement in 1984, whereby Omega Swiss undertook not to object to the use or registration by Omega USA of trade marks consisting of or comprising the word OMEGA in respect of “excluded goods” defined as:
… Instruments and apparatus intended for a scientific or industrial application in measuring, signalling, checking, displaying or recording heat or temperature (including such having provision to record heat or temperature over a period of time and/or to display the time of day).
In May 2007, Omega USA applied to register OMEGA as a UK trade mark in Class 14 covering the excluded goods. Omega Swiss objected to the application. Both the hearing officer and Arnold J concluded that Omega Swiss was bound by its contractual undertaking not to oppose Omega USA’s application. Arnold J granted summary judgment to Omega USA in respect of its breach of contract claim against Omega Swiss. Omega Swiss appealed to the Court of Appeal.
POSITION TAKEN BY OMEGA SWISS
Omega Swiss argued that the definition of the excluded goods applied only to goods in Class 9, such that the clause did not prohibit Omega Swiss from objecting to an application by Omega USA for a trade mark in Class 14. Although the definition did not mention any particular class, Omega Swiss argued that excluded goods were defined as goods belonging to Class 9 as the definition had been formed by reference to a preexisting trade mark for OMEGA in Class 9 when the agreement was entered into in 1984.
Further, Omega Swiss said, the agreement was concerned primarily with issues of registration of trade marks rather than with the use of trade marks in trade as shown by the fact that the agreement was concerned with the wording of specifications of trade marks already registered. Therefore, the obligation depended on the class of goods concerned. In addition, there was nothing in the agreement relating to Omega Swiss’ Class 14 registrations.
Omega Swiss also argued that the trade mark class number was relevant to the scope of the obligation, which should be construed as depending on the class in which Omega USA sought to register the mark.
Mummery LJ said this was a case of contract aimed at demarcating the respective fields of goods concurrently marketed by the parties using similar marks, rather than a trade mark case involving the classification of goods in a registration or use context. He dismissed Omega Swiss’ arguments concerning trade mark law and the role of the classification of goods. The appeal turned only on giving effect to the intentions of the parties as expressed in the agreement.
The two critical points were that: 1) the agreement did not refer expressly to Class 9 or Class 14; and 2) it was not necessary for the purposes of business efficacy of the terms, and therefore not justified, to imply references to those classes into the agreement.
Arnold J had therefore been correct to find that Omega Swiss was in breach of contract. The agreement dealt with the use of the name in the market by the parties in the course of trade and not with the classification of goods for the purposes of registration of marks. Omega Swiss’ undertaking could not be construed as depending upon the particular class of goods in which it sought to register excluded goods. Further, Arnold J had been right to find that trade mark classifications can and do change so that if excluded goods were moved subsequently from Class 9 to another class, the restriction on Omega Swiss would no longer apply. This would mean that the confusion the agreement sought to avoid would no longer be prevented and the intentions of the parties would not be achieved.