Swatch successfully argued that iWatch was too similar to trademarks it had already registered in the UK, namely iSwatch -- a digital number released in 2013. Apple contested this on the basis it was known for the "i" prefix because of all its other iThings, so using the name iWatch was unlikely to cause confusion among consumers. The IPO thought otherwise, denying Apple the trademark. That's true for smartwatches, anyway, with the company still allowed to use it for software, computer peripherals and components, as well as other things it wouldn't really make sense to call iWatch.
Like patents, trademarks are a messy business, as Apple knows all too well. The company had to pay $60 million to secure the iPad trademark in China after a local firm laid claim to the name and briefly had tablets pulled from shelves. Apple famously battled with a Brazilian company over the iPhone trademark in the region, too, though that's just another entry on a very long list of examples. In another iWatch dispute, a company that owns the trademark across Europe sued Apple last year, claiming that although it wasn't stamped on any product, Apple was using the term behind the scenes to promote its smartwatch in searches and ads.