Published March 2024
Brand Collaborations: Partnerships and Placement
I have not met many watch aficionados in my time, but some watch makers and/or brands transcend the aficionado space and become recognised amongst the masses.
Omega is certainly one of the luxury brands that can be categorised in this way. But for many, the luxury watch market is not a realistic space and the price tag for many of these watches, which range from a couple of thousand to tens of thousands, are out of reach for ordinary folk…… or so we thought.
As some may have been aware, Swatch recently collaborated with Omega to introduce the Bioceramic MoonSwatch collection. The collaboration between Swatch and Omega introduced a homage to the iconic Omega Speedmaster, brought to fame when Buzz Aldrin and Neil Armstrong wore it during the 1969 Apollo 11 lunar landing. The more recent MoonSwatch collection is almost identical in appearance to the original Speedmaster, including the Omega and Speedmaster branding. Obviously, as this is a collaboration the range of watches also include the Swatch and new MoonSwatch branding. Unlike the original Speedmaster, the MoonSwatch is a quartz movement, is made from what Swatch describe as an “innovative bioceramic material” and certainly does not come with the hefty price tag.
In September 2023 to much surprise, Swatch announced yet another collaboration with a luxury watch brand. On this occasion it was a homage to Blancpain’s Fifty Fathoms dive watch. Often seen as one of the holy grail dive watches, along with the Rolex Submariner, this is luxury with a large price tag. The collaboration between Swatch and Blancpain celebrates 70 years of the iconic Fifty Fathoms dive watch. As with the MoonSwatch, the BIOCERAMIC SCUBA Fifty Fathoms collection is almost identical in appearance to the original, including the Blancpain and Fifty Fathoms branding. Unlike the MoonSwatch, this collaboration comes with an automatic mechanical watch movement. This is in line with Jean-Claude Biver’s comments from four decades ago when he stated that “there has never been a quartz Blancpain watch and there never will be”.
The Group – background
The Swatch Group is a Swiss-based company and a giant of the watch and jewellery industry, including having interests in the manufacture and sale of electronic systems used in watchmaking and other industries. According to The Financial Times, the Group’s annual revenue comes in at just under CHF8bn. The Group’s watch and jewellery brands include a number of established names such as Blancpain, Breguet, Longines, Omega, Tissot, Hamilton and of course Swatch.
Knowing what entities make up the Swatch Group, it probably comes as less of a surprise that two brands have suddenly collaborated. The surprising element is not that they joined forces to create and present these collections to the public, but the fact we have a luxury brand collaborating with essentially a high street watch brand. However, collaborations of this type are not as rare a phenomenon as one might think. We have seen various partnership and co-branding campaigns in the past, for example Balenciaga and Crocs and even more surprising Burger King and McDonald’s. As my colleague Tanya Waller wrote recently, “[s]ome of the best co-branding campaigns make sure that there is a balance between the intellectual property rights of both parties. One brand is not overpowering the other, or acting detrimentally to their co-branding partners’ brand protection. When considering co-branding, not only brand values but brand protection and the impact upon it should be considered”.
As well as the co-branding considerations and customer facing marketing campaigns, it is also worth taking a moment to think about the discussions that took place behind closed doors and the subsequent agreement that was borne out of those discussions that helped shape the permissions granted to the licensee for use of the licensor’s intellectual property rights. It goes without saying that trade marks can be one of the most important and lucrative IP rights. These rights can be used in various ways to generate a source of income, including via partnerships with other brands.
The Intellectual Property Rights
We have focused our short overview of trade mark rights here from an EU and UK perspective. Interestingly, at the time of writing this, Blancpain had no EU registrations and/or applications for their FIFTY FATHOMS trade mark, but they do appear to have an International Registration that designates a number of EU member states but certainly not all. Their BLANCPAIN trade mark is registered at EU level in Class 14 (currently the subject of non-use cancellation proceeding issued by Samsung in respect of all goods in class bar “analogue watches” [see Montres Breguet SA & ors v Samsung Electronics [2023] EWCA Civ 1478 for background information]), but they also have five International Registrations covering various classes one of which designates the EU in Class 9.
In the UK there are five “BLANCPAIN” trade marks, two of which are EU clones created following the UK’s withdrawal from the European Union. In terms of FIFTY FATHOMS protection, there is a single national registration covering Class 14.
Whilst Omega, apart from having over 1,500 active trade marks in the EU/UK alone, have a larger number of “OMEGA”, “OMEGA Device” and “SPEEDMASTER” registrations.
These collaborations with Swatch have also resulted in a couple of new trade marks, the first being “MOONSWATCH” and the other “BIOCERAMIC”, both covering Class 9 and 14.
Intergroup Trade Mark Licensing
There is no “one size fits all” approach to licensing and agreements can be tailored to fit the needs of the licensor and the licensee depending on the needs and expectations of either party. Intercompany licensing is no different and in most cases each IP rights holding company within the group is and will be a separate and independent legal entity (for example Blancpain S.A. and Omega SA). An agreement for the licensing of trade marks (or any other IP right) is important for a number of reasons not least because the agreement sets out the legal provisions for using the licensors trade mark (i.e. brand guidelines / forms and manner of use), which might otherwise be an infringement of that trade mark, but the agreement also sets out the financial considerations (i.e. royalties) and quality control/brand provisions (i.e. Blancpain watches only ever being sold with an automatic movement). Careful drafting of the agreement would also ensure that accrual of goodwill arising from the licensee’s use of the marks will be the sole and exclusive property of the licensor. There are also special considerations to take into account such as protection of the mark[s] and any third-party infringement clause. The Court of Appeal case (EWCA Civ 1478) does suggest that the Swatch group of companies work well together when IP violations surface, but that is not always the case, and a well drafted agreement helps to set out who must and/or may bring a claim against a third-party, including who takes the financial risk and/or receives the benefit of pursuing infringers.
Licensing is a widely used practice and big brands (for example The Walt Disney Company) are prolific brand licensing companies that strategically use their IP portfolio to increase brand exposure into new categories of consumer products or target markets. But there is a fine balance to be made in order to carefully control the quality and in turn consider what products will and will not dilute the brand.
Although licence agreements can be a minefield, licensing partnerships can reap huge rewards for all parties concerned if managed and executed correctly with everyone’s interests in mind. It is always advisable to contact an experienced lawyer to discuss how to make your licence agreement work best for your business and create optimal value for your business.