Rolex’s Lost Trademark Dispute to Prevent Crown Logo Trademark Registration by EUIPO

In the latest stage of its legal battle against PWT A/S, Rolex was unsuccessful in preventing the registration of a trademark featuring a crown design with the European Union Intellectual Property Office (EUIPO). The company argued that the trademark in question was too similar to its own well-known crown logo, and that it would unfairly benefit from its crown mark’s reputation. However, the EU General Court rejected these claims in a ruling on the 18th of January 2023, stating that the potential for confusion between the crown logo used on watches and the one applied for use on clothing, footwear, and headgear is unlikely, and that Rolex’s crown logo does not have a reputation that would be at risk of harm.

Background

The legal dispute began back in June 2016, when the Swiss watchmaker challenged the registration of a crown trademark by the Danish fashion group PWT A/S for use on clothing, footwear, and headgear. Rolex argued that the trademark PWT A/S had applied for, was too similar to its own crown logo, which had already been registered by the EUIPO in 2001 for use on watches, as well as the crown logo in combination with the word “Rolex”. Rolex believed that PWT A/S’s application should be denied, as it would violate Article 8(1)(b) and Article 8(5) of Regulation No. 207/2009.

The EU Trademark Regulation outlines specific reasons for denying a trademark application under Article 8, including:

• Similarity to an existing mark for identical or similar goods/services, leading to consumer confusion (Article 8(1)(b))
• Use of a mark with a reputation that would harm or unfairly benefit from the distinctiveness or reputation of a previously registered mark (Article 8(5))

After a review by EUIPO, the Board of Appeal sided with PWT A/S, stating that there was no likelihood of confusion because watches, clothing, footwear, and headgear sit under different product genres.

The Board also rejected Rolex’s claim that the reputation of its crown trademark would be damaged if PWT’s mark was approved.

Are Watches and Clothing Similar Goods?

A trademark’s reputation can be a valuable asset as it represents trust, quality, and reliability in the minds of consumers. As such, Rolex claimed that the registration of PWT’s trademark would damage the reputation of its crown trademark.

However, after review, the Board of Appeal rejected Rolex’s claim, stating that Rolex’s crown trademark did not have a significant enough reputation to be damaged by the PWT registration. The Board found that while Rolex has a significant reputation when its crown trademark is used in conjunction with its name, the crown alone did not have a similar standing. As a result, they ruled that the registration of PWT’s mark would not harm Rolex’s reputation.

The Swiss watch company immediately appealed the Board’s ruling, claiming that they had not considered the typical sources or marketing practices associated with the products when determining their similarity. Rolex also asserted that clothing and watches are comparable and hence, there is a greater chance of consumer confusion as they belong to interconnected market segments. Furthermore, Rolex argued that the prevalence of e-commerce sites has made it common for consumers to view and purchase clothing and accessories, including glasses, jewellery and watches, at the same sales points.

The General Court rejected Rolex’s argument, stating that Rolex provided no evidence to support its claim that the goods at issue are similar and are not in competition. The Court also stated that even though the goods may be sold in the same commercial establishments, such as department stores, it is not significant as the products are diverse enough to prevent consumers from automatically attributing them to the same origin. Therefore, the Court upheld the Board of Appeal’s findings and rejected Rolex’s arguments on this matter.

Failure to Prove Unfair Advantage and Reputational Damage

The Court then also addressed and affirmed the Board’s previous decision that the use of PWT’s trademark would not gain an unfair advantage of the distinctive character or reputation of Rolex’s marks. The arguments Rolex did provide, such as 1) pointing out that the Board of Appeal recognised the reputation of the crown and Rolex name trademark for wristwatches, and 2) mentioning the significant investments required to acquire such a reputation, were re‑confirmed as not enough by the Court to fulfil the requirements of Article 8(5).

The Court determined that for a trademark to be protected under Article 8(5), the holder must demonstrate that the:

• existing mark (i.e. the mark with a reputation) is registered in the relevant area;
• existing mark and the proposed mark are either identical or alike;
• existing mark has a reputation in the relevant area and for the goods and/or services the opposition is based on;
• use of the proposed mark would exploit or harm the distinctive character or reputation of the existing mark.

Conclusion

It is not uncommon in the fashion industry to market clothing along with a wide range of accessories (or vice versa) as all of these products are considered “necessary” to complete the look. However, under current law, generally only the protected version of marks is taken into account, and any hypothetical use, which may differ from the registration, is irrelevant when making the assessment. Therefore, it may be beneficial for brands to consider different classes when registering their marks. Equally, for those wishing to oppose a registration, brands may have a stronger case if they consider alternative arguments, e.g., tort of passing (in the UK) rather than being limited to the strict comparison of trademarks as filed/registered as required by the EUIPO.

This case underlines the importance of seeking professional advice when opposing a trademark registration, particularly when assessing similarity of the marks. The Court’s decision highlights once again that there are specific legal requirements that must be met in order to successfully oppose a trademark registration based on reputation and likelihood of confusion. A trademark attorney can assess the case and advise on the best ground on which to oppose, ensuring that a company’s opposition is based on solid legal grounds and that all necessary evidence is provided to support the opposition. This approach minimises the risks of reputational loss, protects investments and greatly increase the chances of success.

Author: Luisa Grillo, IP Counsel, BRANDIT