Bad blood often exists between trade rivals, but is it an acceptable business practice for them to poke fun at one another? The High Court tackled that issue in the context of a trade mark dispute between tech giant Apple and Swiss watch manufacturer Swatch.

Swatch applied to register trade marks incorporating the phrase ‘One More Thing’. The application was opposed by Apple on the basis that the phrase was widely associated with its founder, Steve Jobs, who used it as a somewhat theatrical flourish when announcing new product launches. His successor, Tim Cook, had revived the phrase when the Apple Watch was launched in 2015.

Swatch’s application was rejected by a hearing officer appointed by the Registrar of Trade Marks. Amongst other things, he found it arguable that the application had been made to raise the stakes with Apple by poking fun at the company in a manner akin to parody. He ruled that such a motive amounted to bad faith within the particular meaning given to that term by the Trade Marks Act 1994.

Ruling on Swatch’s challenge to that outcome, the Court accepted that a non-trivial number of people would be aware of Apple’s tradition of using the phrase in product launches. Apple had, however, fallen short of establishing that the common English phrase was sufficiently distinctive of its products to merit protection.

The Court had no difficulty with the hearing officer’s finding that there was strong support for Apple’s argument that Swatch had filed its application as a retaliatory measure with some form of objective of upsetting or cocking a snook at its rival, with whom it was engaged in a broader intellectual property dispute.

Swatch probably wished to stimulate a response of some kind from Apple and must have known that its competitor would be annoyed by the application. In upholding Swatch’s appeal, however, the Court ruled that it did not follow from that conclusion that Swatch was intent on using the trade marks, if granted, to poke fun at its competitor in a manner akin to parody.

The Court noted that, in any event, the concepts of ‘poking fun’ or ‘parody’ cover a multitude of possibilities, ranging from gentle and affectionate teasing to full-frontal attacks. It was not an inherently dishonest business practice to use a trade mark that brings another trader to the mind of some consumers in an amusing but inoffensive way.

The point at which parodic or humorous use of a trade mark would transgress the boundaries of honest business practice was fact sensitive and depended on the nature of the humour, the intensity of its use and its impact on the business interests of the competitor concerned. On the evidence, it was not legitimate for the hearing officer to conclude that Swatch’s intentions had stepped over the line between the appropriate and inappropriate use of a trade mark.