Samsung has been found liable by the High Court of England and Wales for infringement of Swatch group trade marks embedded in watch face apps and apps names created by third parties and made available on the Samsung Galaxy App store. The case is good news for brand owners and further clarifies the law on the liability of online intermediaries for trade mark infringement. 

What happened?

• Members of the Swatch group of companies (including the Tissot, Swatch, Omega and Hamilton brands) brought a trade mark infringement claim against Samsung.
• The claim was made in respect of watch face apps which had been created by third parties but which bore Swatch group trade marks and were made available on Samsung's Galaxy App (SGA) Store.
• Samsung claimed that it had not used the Swatch trade marks at all, but merely provided a mechanism for third parties to provide watch face apps.
• Samsung's active role in the review of the watch face apps, prior to their publication in the SGA Store, and its commercial publicity about the availability of changeable watch faces meant that Samsung was in fact using the Swatch trade marks in the course of trade.
• These findings were also core to the rationale on why it was that Samsung could not rely on Article 14(1) of the e-Commerce Directive, which provides a safe harbour to information society service providers which do not have actual knowledge of illegal activity on their platforms.
• The court upheld most of the claims of double identity trade mark infringement, as well as claims based on a likelihood of confusion, and unfair advantage, dilution and tarnishment, which Swatch submitted "encapsulates the real mischief in this case".

In more detail: 

30 watch face apps were made available on the SGA Store, having been created by third parties who were not employed by Samsung. These watch face apps bore Swatch group trade marks either in identically, on the watch dial face or in the app name, or to a highly similar degree.

Although Samsung had promptly taken down the watch face apps at issue once Swatch had notified Samsung of their existence, the case before the court looked at whether the existence of the watch face apps on the SGA Store, prior to their take-down, constituted trade mark infringement.

This decision turned on the facts of the case and, in particular, the facts that:

• Samsung required app developers to agree to its terms and conditions, which prevented these developers from publishing any apps without Samsung having certified them.
• Samsung obtained a share of the revenue from these app developers.
• Samsung required the app developers to give it a licence to use the app.
• Samsung undertook a technical and content review of all of the apps submitted to the SGA Store, prior to their upload.
• Samsung advertised and communicated its product's ability to change and adapt its smart watch faces as a key part of its commercial offering.
• In the SGA Store, there was no distinction between Samsung's own watch face apps and the watch face apps created by third parties.

Although Samsung attempted to argue that there was no use of the signs in relation to the relevant goods (being watches and smart watches) and that any such use was merely decorative and descriptive, these submissions were unconvincing to the court. The watch face apps did not simply produce a depiction of a watch face, like a poster showing a well-known logo on a car, it functioned as a real watch.

The court had little trouble in finding double identity trade mark infringement in some instances. Where the trade marks were not identical, it upheld infringement based on a likelihood of confusion (despite the fact that there was no evidence of actual confusion and, to the contrary, limited evidence of non-confusion). 

The court also found that there was unfair advantage to Samsung and dilution and tarnishment to the Swatch group trade marks in respect of those watch face apps which had been downloaded in significant quantities.

Samsung could not avail itself of the safe harbour provisions under Article 14(1) of the e-Commerce Directive. Its conduct was not of a technical, automatic and passive nature, and a diligent economic operator should have identified the infringement in the content reviews which it was undertaking to certify the watch face apps prior to publication.

What does the decision mean for you?

This decision is good news for brand owners because it makes clear that the owners of online stores featuring mobile applications can be liable for infringing apps available within their stores. 

Online intermediaries must re-evaluate and bolster their app content review and verification processes to ensure that employees have access to trade mark search databases and training on IP infringement. "Safe harbour" provisions will provide a haven only for intermediaries which have no knowledge of, nor control over, the information which is transmitted or stored on its systems.