Swatch court makes protecting sub-brands tougher

In Swatch Group (US) Inc v Movado Corp (01 Civ 0286 (RLC)), the US District Court for the Southern District of New York has held that the defendant's use of the trademark VENTURE for watches does not infringe the plaintiff's VENTURA mark for watches. The court relied heavily on the fact that the two marks are subsidiary marks and therefore are not relied upon as heavily by consumers as the parties' more prominently featured house marks.

Swatch's VENTURA watch is offered as a line within the company's HAMILTON brand watch. While the HAMILTON mark is prominently featured on the watch, the VENTURA mark appears only on a sticker on the watch's box above the bar code. Similarly, Movado's VENTURE watch is offered as a line within its ESQ division. Movado uses the VENTURE mark in its advertising in a point size that is much smaller than that of the ESQ mark, and does not use the VENTURE mark anywhere on the watch or on its packaging.

Based on this evidence, the court concluded:

"The prominent use of the house marks HAMILTON and ESQ on the parties' watches and in all of their advertisements goes far to eliminate the possibility of confusion in this case. This factor, if not dispositive, weighs most heavily in Movado's favour."

The court also relied on Swatch's willingness to coexist with a third-party VENTURA mark. By entering a coexistence agreement that allows Swatch to use VENTURA in Switzerland in return for allowing a Swiss company to use VENTURA in the United States, Swatch transformed an otherwise strong mark into one that the court deemed "only moderately strong". On this basis, the court found that the strength of the mark factor "weighs only slightly in [Swatch's] favour".

The combination of the weakening of Swatch's mark through permitted coexistence and the real-world circumstances under which consumers encounter the respective watches and their advertisements allowed the court to hold on Movado's motion for summary judgment that there is no likelihood of confusion and hence no infringement of Swatch's VENTURA mark.

Karin Segall, Darby & Darby, New York