Apple Modifies Watch Features Post ICT Import Ban - CJEU rules on likelihood of confusion between Snack trade marks

Apple Modifies Watch Features Post ITC Import Ban

Apple is in the midst of a legal and strategic battle to maintain its presence in the US smartwatch market. As we discussed in a previous blog post back in October, the US International Trade Commission (ITC), a US federal agency that investigates and rules on matters relating to international trade, including the resolution of trade disputes and the protection of intellectual property, issued a limited exclusion order and cease and desist order against Apple stopping it from importing its own watches on the US market. This action was based on the alleged infringement of two patents held by Masimo Corporation relating to the measurement of oxygen in blood.

In response to the ITC's import ban, Apple halted sales of its Series 9 and Ultra 2 models in the United States and appealed the decision in late December. Considering that this appeal could extend the final resolution of the case by approximately one year, it was likely that Apple would have to redesign or remove the disputed feature in order to quickly restore availability of the affected models.

Recently, on 17 January, Apple announced that it would remove the blood oxygen monitoring feature from two of its flagship models, the Apple Watch Series 9 and Ultra 2, in the US market. These modified models will be available for sale on Apple's website and in Apple Stores, and although they will maintain an app icon for the blood oxygen functions, the app will be disabled

The move comes amid allegations by Masimo that Apple hired employees and stole pulse oximetry technology later implemented in Apple Watches. In its defence, Apple requested the court to suspend the ban during the appeal, arguing that it was likely to win the appeal and that maintaining the ban would harm the company, its suppliers and the public. Apple also argues that the company has included a pulse oximeter feature in smartwatches since its Series 6 Apple Watch in 2020, thereby predating Masimo’s claims of infringement. The ITC disagreed, calling Apple's arguments little more than an infringer seeking permission to continue infringing.

The resolution of this case will have an impact on the technology industry. For Apple, the situation could affect its revenue, market share and business strategy. While Apple Watch sales alone cannot match the reach of the flagship iPhone, this segment accounted for more than 10% of the company's total sales in 2023. As we have already discussed, when considering the impact on the European Union (EU), it is important to note that the ITC's decision does not directly affect the EU. However, the outcome of this case could have a ripple effect, so it remains to be seen what the long-term impact of the ITC's decision will be.

CJEU rules on likelihood of confusion between Snack trade marks

On 20 December, the General Court of the European Union issued judgment in its case T-736/22, a trade mark dispute in which it would be judged whether or not there was a likelihood of confusion between “SNACK MI” and  “CAMPOFRIO SNACK’IN” trade marks. The “CAMPOFRIO SNACK'IN” figurative trade mark consists of the word 'snack’in' in a specific font written in white over a purple background On the other hand Cerioti’s “SNACK MI” trade mark consists of the words “SNACK MI” written in pink and in which the letter A is a figurative character eating a snack.

In February 2020, Cerioti Holding SA filed an application for the EU figurative mark “SNACK MI” for goods and services relating to savoury and sweet snacks and their sale both in physical shops and online, falling within Classes 29, 30 and 35 of the Nice Agreement. In response, Campofrío Food Group, S.A., holder of the seven earlier national trade marks “CAMPOFRIO SNACK’IN” filed in Spain, Portugal, the UK, Poland and Romania, opposed the application on claiming there was a likelihood of confusion with its earlier marks. Furthermore, it claimed that its “CAMPOFRIO SNACK’IN” trade marks should be granted protection as they had gained a reputation which could be harmed by Cerioti Holding’s applied-for trade mark. Both the Opposition Division and the Board of Appeal of the EUIPO rejected Campofrío's opposition. Faced with the EUIPO's unfavourable decision, Campofrío brought the case before the Court of Justice of the European Union (CJEU), which therefore had to assess whether there was a likelihood of confusion between the two marks, and if Campfrío’s trade mark’s reputation was indeed in danger of being harmed by Cerioti’s mark.

• On the similarity between the two marks

The Court started by highlighting the fact that the central element of Campofrío’s mark was the word “SNACK”, which has very low distinctiveness when included in a mark registered for goods and services related to, well, snacks. For there to be a risk of confusion between the two marks, it is therefore necessary to demonstrate that this confusion would stem from the other elements of the marks.

As regards the visual similarity, the Court highlighted the low degree of similarity due to distinctive elements such as the size of the letters and the figurative elements related to the consumption of snacks (the letter A eating the snack). Campofrío’s mark contains the word 'campofrío' in capital letters and the word 'in' in lower case, whereas Cerioti’s contains the words 'snack' and 'mi' in capital letters and figurative elements.

Regarding phonetic similarity, the CJEU held that the similarity between the marks was average, since they both contained the word 'snack' and online differed in the presence of the words “in” and “mi”.

In relation to conceptual similarity, the Court considered that the marks were conceptually different Cerioti’s mark alluded to the idea of 'my snack' and Campofrío’s mark as a whole lacked a clear meaning.

In conclusion, the Court concluded that, although the marks shared the term 'snack', the presence of distinctive and sufficiently different elements, which visually, phonetically and conceptually distinguished the conflicting marks, made it possible to distinguish them sufficiently to avoid a likelihood of confusion between them. It therefore rejected Campofrío’s opposition.

• On Campofrío’s claim that its mark has a reputation and should benefit from enhanced protection

As regards the reputation of the “CAMPOFRIO SNACK'IN” mark, the Court rejected the arguments put forward by the appellant, considering that the evidence was insufficient to prove the reputation of the earlier mark within the meaning of Article 8(5) EUTMR.

Article 8(5) EUTMR provides that an EU trade mark must not be registered or used if it is identical or similar to an earlier trade mark which has a reputation in the European Union, and its use without due cause would take unfair advantage of the reputation of the earlier trade mark, thereby causing detriment to the latter.

The Court agreed with the Opposition Division and the Board of Appeal and rejected Campofrío’s argument that its trade mark had a reputation giving it broader protection that it does to other trade marks. It held that the evidence submitted by Campofrío to support this claim did not establish a reputation in the mind of the relevant public. In addition, it pointed out that the evidence submitted, which consisted of extracts from websites relating to advertising campaigns and their translations, lacked relevant information such as sales volumes, market studies and other key factors, and predated the period for which a reputation was actually claimed. Furthermore, evidence consisting of communications aimed at a specialised public (such as industry awards) was not enough to demonstrate reputation among the general public.