Special Current.com.au Feature by Tim Lince

As more details emerge about Apple's latest gadget, a wrist-worn smart watch, it is becoming clear its preferred name "iWatch" will not be as easily accessible in Australia as the Californian company would like.

Two trademark applications already exist for the term iWatch in Australia, according to the government’s IPAustralia website, with one granted in 2008 and another still pending from July last year.

The first of these trademarks went to Queensland-based intellectual property firm IP Wealth, which was granted a Class 9 ‘mobile phones’ application for the term ‘IWATCH’ nearly five years ago. IP Wealth refused our offer of an interview.

West Australian IT consultant, Conrad Brookes, lodged a Class 9 ‘personal computer workstation’ trademark application for the ‘iWatch’ term in July last year — when the first very speculative iWatch rumours started.

When asked to comment for this article, Brookes said, “No information whatsoever will be shared by this organisation with anyone at any time unless required by law and we respectfully decline to make any comments on any matter whatsoever.”

Brookes lists on his Linkedin that he works in IT, payroll and labour consulting and has a trove of qualifications, including degrees in telecommunications, computer science and finance.

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iCommon Practice

The news will be familiar to Apple, which recently paid $60m for the rights to use the “iPad” name in China.

Matthew Nicholls, a principal at technology law firm Nicholls Legal, said the practice of trademarking potential product names is common for people or small companies.

“This kind of things goes on all the time – trademarking a word with the letter ‘i’ in front of it and hoping Apple comes along offering a lot of money,” he said. “For some, it’s an exercise in getting in first and hoping the big company will pay you off.”

“It can happen genuinely though, with big overseas or even Australian companies demanding the trademark for terms they expect to own – it can be a bit of a David versus Goliath situation, because big corporations typically will do whatever they need to do to have a globally-consistent branding portfolio.”

Nicholls says that winning the race to trademark a term is only the first step, you must still adhere to the terms of the application or risk losing it.

“A broad rule is that you can only register a trademark if you are going to use the mark in relation to the goods and services description you state on the application,” he explained. “So if someone registers iWatch in respect of electronics good, and another company such as Apple showed they were not using it as a trademark, then they could face removal proceedings.”

“The other rule is if a trademark is used by an overseas company, they generally can’t use or register
the trademark in Australia if some other company or person is using the mark commercially in Australia already, so if someone trademarks iWatch and starts trading commercially then Apple may have been beaten to the punch.”

There is also the option of demonstrating “prior or honest concurrent use of a name”, meaning a company such as Apple could have rights to a trademark even if it isn’t registered yet. This is not the same as “first to file” countries, which is why Apple had such difficulty with the iPad trademark in China.

Nicholls added that, if people or companies are registering trademarks purely to sell them, “there are rules against trafficking trademarks, and courts typically don’t favour people who attempt it”.

Apple has confirmed the iWatch device is “beyond experimentation phase in its development”, but a release date is unknown. So important is a consistent brand message, a release date could be determined by the ease of trademarking the name around the world, Nicholls suggested.

“In terms of any potential delays if Apple were planning to launch the product, they wouldn’t spend millions of dollars on a global marketing campaign without properly securing the trademarks they need —the paperwork is straightforward — but it all comes down to the negotiation,” Nicholls said. “If someone has the trademark for iWatch and they know it’s important to Apple, they could hold off until they’re offered the price point they want, or are forced to relinquish the mark through litigation.”

Apple has a notorious fondness for protecting its image by trademarking various aspects of its branding, including the recently successful US trademark application for its store design and layout.

A clever iStrategy?

Bruce Arnold, a lecturer at the School of Law at the University of Canberra, said Apple cannot simply apply for an identical trademark.

“In terms of the law, if someone gets in first and uses it in the class stated on the trademark, then if a giant corporation wants to use it, it’s tough luck,” he said. In fact, not only will they not be able to grab the existing Australian trademark, but they will not be able to trade their product in Australia using an identical mark.”

He also suggested that the whole thing could be a clever strategy by Apple.

“One thing to bear in mind is that, with global markets and products planned years in advance, some companies often register trademarks via a nominee — someone else outside of the company will hold the trademark until the corporation is happy for it to be publicly known,” he explained.

“There are whole companies, especially in the US and the UK, dedicated to looking at new trademarks to predict the future and copy upcoming innovations. Using a nominee is part of the fight to protect new ideas.”

“Therefore, this ’iWatch’ trademark could be Apple being smart and trademarking by nominee or it could be someone’s beaten them to the punch and they will have to make an offer or settle it in other ways.”

This article was submitted to Current.com.au in accordance with our guidelines. The author was not paid for this submission.