CASE SUMMARY

FACTS

Opposer Swatch AG (“Swatch”) introduced its SWATCH-brand watches in the United States in the 1980s.  M.Z. Berger & Co., Inc. (“Berger”) manufactured, imported into the United States, and sold watches and clocks under many different brand names for more than sixty years.  In 2007, Berger filed an intent-to-use application to register the mark IWATCH for watches, clocks, and thirty additional subsidiary goods.

Swatch opposed Berger’s IWATCH application based on a likelihood of confusion with its registered SWATCH marks for watches, and on Berger’s alleged lack of a bona fide intent to use the IWATCH mark in commerce at the time it filed its application, thus rendering the application void under Section 1(b) of the Trademark Act.

In an attempt to prove that it did have the requisite bona fide intent to use the IWATCH mark at the time its application was filed, Berger relied on (1) a trademark search in Class 14 that was conducted by a nonattorney employee who handled the prosecution of the matter; (2) an internal company e-mail relating to discussions with the examining attorney that “essentially echoes the wording of a response to an Office Action”; and (3) internal e-mails forwarding sample mock-ups and product renderings featuring stylized versions of the IWATCH mark, and one clock and two watches bearing the IWATCH mark.

According to Berger’s deposition testimony, the pictures and images were created to submit to the examining attorney as “samples of advertisements or promotional materials of both watches and clocks,” and were not created for any promotional or other purpose.  Berger also submitted conflicting deposition testimony from a company employee and its owner/chief executive officer regarding its bona fide intent to use the mark.

ANALYSIS

Following briefing and an oral hearing, the TTAB rejected Swatch’s likelihood-of-confusion claim, finding that the marks SWATCH and IWATCH differed significantly under the first du Pont factor. The TTAB determined that inclusion of the generic word “watch” into both parties’ marks was an insufficient basis for finding likelihood of confusion.  The mere fact that the parties’ marks share a common generic root does not automatically render them similar.  Thus, despite finding the SWATCH mark to be famous, the TTAB held that the “i” and “s” addition to the generic term “watch” caused the marks to differ sufficiently in sound, meaning, appearance, and overall commercial impression.

As to its second claim, Swatch bore the burden of demonstrating by a preponderance of the evidence that Berger lacked a bona fide intent to use the IWATCH mark on the identified goods at the time it filed its application.  This may be done, the TTAB noted, by proving that the applicant lacks any documentary evidence to support its intent-to-use allegation at the time its application was filed.

The TTAB concluded that Berger had offered insufficient documentation to demonstrate that it had a good-faith intent to use the IWATCH mark in commerce at the time its application was filed. The evidence of record—the trademark search, and the internal e-mails about potential specimens of use for clocks and watches and the trademark application—was found to relate only to the application for the IWATCH trademark, and failed to demonstrate that Berger had made any effort to develop and market IWATCH-branded products to potential buyers.

While the TTAB held that the creation of mock-ups and renderings can be used by trademark applicants to evidence the product-development process, the “samples of promotional materials” that Berger tried to rely on had only been submitted to the examining attorney, and were not actually used in commerce.  This lack of evidence was underscored by the Berger nonattorney employee’s testimony that Berger never had a bona fide intent to use the IWATCH mark on the subsidiary goods and that she had included them in the application “to leave all doors open.”

Finally, the TTAB recognized that a trademark clearance search may in some situations be probative evidence of a bona fide intent to use a mark.  However, it concluded that a review of the evidence as a whole demonstrated that Berger’s intent at the time it filed its application was “merely to reserve a right in a mark” in case it made a future decision to begin developing products. The evidence was thus insufficient to prove that Berger had a good-faith intention to use the IWATCH mark in commerce at the time it filed its application, and the TTAB sustained the opposition on that ground.

On November 26, 2013, Berger appealed the TTAB’s decision to the Federal Circuit.  The parties have yet to submit briefs in the appeal.

CONCLUSION

Despite its tenuous likelihood-of-confusion claim as between the marks SWATCH and IWATCH for watches and clocks, Swatch was nonetheless able to successfully oppose Berger’s application.  In doing so, it added to the TTAB’s growing list of cases finding an application void for a lack of a demonstrable bona fide intent to use a mark in commerce.  Applicants must be prepared to produce adequate documentation of their prefiling intent to use the applied-for mark for all goods and/or services identified in their trademark application.Those seeking coverage for a wide range of goods and services are particularly susceptible to challenge under Section 1(b).