On 1 March 2020, the Vanuatu Trade Marks Office (“VTMO”) announced the introduction of a new annual maintenance fee (“the AM Fee”) for all Vanuatu trade mark registrations.

The AM Fee has currently been set at US$35 and is due on or before the “anniversary date” of the trade mark. The anniversary date is taken from the date of the receipt of the file in the Vanuatu Office (i.e. the filing date). For older Vanuatu marks, which were based on re-registrations of United Kingdom registrations, the anniversary date is calculated from the filing date of the UK mark.

The AM Fee is payable for nine (9) consecutive years before the renewal fee applies. It is not payable on renewal.

The VTMO will issue a reminder notice and invoice for the AM Fee to the agent of record, however, according to present advice, there are delays in the implementation process. As a result, issuance of reminders for the AM Fee may not commence until 2021.

There is currently no official grace period for payment of the AM Fee and no penalty fee for late payment.

The new requirement is an unexpected development that presently seems to be administratively burdensome for international owners of registrations, and we wait to see if there will be some revision once actually operational.

Shelston IP deals directly with the Vanuatu Trade Marks Office and various other South Pacific intellectual property offices with respect to trade mark rights.

If you require further information regarding the Vanuatu AM Fee or assistance with other IP rights in South Pacific jurisdictions, please let us know.

Authored by Kathy Mytton and Sean McManis

There was no sweet victory for the owners of the WICKED SISTER trade mark, used mostly for dairy desserts, in their attempt to prevent use of the WICKED trade mark for dipping sauces and related products.

The recent Federal Court case of PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd [2020] FCA 1078 (30 July 2020), heard by Markovic J, involved numerous issues relating to competing registrations, infringement and validity, but ultimately PDP was unsuccessful in its claims against Grasshopper for trade mark infringement, misleading and deceptive conduct under the Australian Consumer Law and passing off under the common law.

PDP also failed in its claim to cancel Grasshopper’s trade mark registration, although it partially succeeded in its challenge to the registration on the basis of non-use.

Grasshopper’s cross claim to cancel the Wicked Sister registrations also failed, but it partially succeeded to restrict the registrations on the basis of non-use.

Background

PDP has manufactured and sold a range of chilled dairy desserts and snacks under the Wicked Sister brand since 2008.

PDP owns registrations for WICKED SISTER in plain word and stylised forms which cover various goods in classes 29 and 30 (collectively “the Wicked Sister marks”). The earlier stylised mark

dates from 2008 and is owned by PDP Fine Foods Pty Ltd (“PDP Fine Foods”). The later stylised mark

and plain word mark WICKED SISTER both date from 2016 and are owned by PDP Capital Pty Ltd (“PDP Capital”), a related IP holding company. PDP Capital’s marks achieved registration by consent from PDP Fine Foods.

Grasshopper is an IP holding company which has authorised the use by various entities selling dipping sauces since 2002 under the WICKED brand.

Grasshopper owns a registration dating from 2005 for

(“Wicked tail mark”) in class 30. The WICKED brand was modified in 2014 to

(“new Wicked mark”) with the original branding phased out by early 2016. Grasshopper also owns a pending application for the new Wicked mark, and an accepted application for the plain word WICKED (which has, since these proceedings, been successfully opposed by PDP in proceedings before the Trade Marks Office, on the basis of a lack of distinctiveness. In that case, the Hearing Officer expressed the view that “the ordinary signification of the trade mark is a colloquial word for ‘excellent’ and when applied to the goods there is an implication of decadence”).

Grasshopper extended its product range to include waffle dippers in 2018.

The Wicked Sister and Wicked products are sold through Coles supermarkets.

The products sold under the Wicked Sister marks are flavoured rice puddings, custard, tiramisu and panna cotta, made from fresh ingredients and found in the refrigerated section of the dairy aisle.

The Wicked dipping sauces are not made from fresh ingredients and therefore do not require refrigeration, although they are still sometimes placed with frozen berries in the fresh food section of the supermarket.

Common Issues

Markovic J initially considered two main issues common to the parties’ various claims in the proceedings:

»  whether the new Wicked mark is substantially identical or deceptively similar to the Wicked Sister marks; and

»  whether the goods covered by the respective marks are the same or of the same description.

The marks were not found to be substantially identical. In making her determination that the marks were also not deceptively similar, her Honour considered a number of factors including:

  • the new Wicked mark and the Wicked Sister marks are not visually or aurally similar;
  • the adjective “wicked”, when used on its own, is an abstract concept which could describe anything. In contrast, the word “wicked”, used in conjunction with the noun “sister”, is not a strongly distinguishing feature of the Wicked Sister marks;
  • despite her Honour agreeing that the goods are fast moving consumer goods sold at a low price point, based on the evidence, the goods are found in different parts of the supermarket, consumers are able to view the products and their associated trade marks, and confusion is unlikely; and
  • the evidence of confusion advanced by PDP was ultimately given little weight as it was not evidence of an “ordinary person”, but of people who have a personal or trade affiliation with PDP.

This conclusion had significant implications for a number of the claims brought by the parties, but perhaps most significantly meaning that there could be no finding of trade mark infringement.

Her Honour then determined that dipping sauces and waffle dippers are not similar to desserts, rice pudding or any of the other goods covered by the earlier stylised Wicked Sister mark owned by PDP Fine Foods. However, dipping sauces were specifically covered by the later Wicked Sister registrations owned by PDP Capital, and waffle dippers being bakery products, were also encompassed by those registrations.

Grasshopper’s cross-claim for rectification

Grasshopper sought rectification under section 88 of the Trade Marks Act for cancellation of the registration of the Wicked Sister marks.

There was a difference in ownership between the later WICKED SISTER registrations and the first registration, which was principally for tax minimisation reasons. This conflict was resolved at the examination stage by the owner of the earlier registration providing a letter of consent to the subsequent applicant. However, interestingly, her Honour upheld Grasshopper’s claim under the section 58 ownership ground finding that PDP Capital was not the owner of the later registered Wicked Sister marks because PDP Fine Foods, which owned the earlier registered Wicked Sister mark, was also the true owner of the later marks. Despite this finding, her Honour decided not to exercise discretion to cancel the registrations because there was no risk of consumer confusion due to the “unity of purpose” between PDP Fine Foods and PDP Capital being related companies [applying the principle enunciated in the Full Federal Court case of Trident Seafoods Corporation v Trident Foods Pty Ltd [2019] HCAFC 100]. This nevertheless leaves open the possibility of a similar claim in succeeding opposition proceedings, since the discretion exercised by the Court in this case does not exist in those proceedings.

Grasshopper’s non-use applications

PDP was able to establish use of the earlier stylised Wicked Sister mark for dairy desserts, yoghurt desserts, creamed rice, rice puddings, rice tapioca and cheesecakes. PDP also sought to rely on use of flavoured rice puddings to retain “sauces for rice”, but this was not accepted and these goods were removed together with all other goods for which use could not be shown.

Regarding the challenge to the later registered Wicked Sister marks under section 92(4)(a) for lack of intention to use, her Honour found evidence of actual use for various goods including, dairy products, dairy-based desserts panna cottas; crème caramels, custard, cheesecakes, cakes, frozen yoghurts, creamed rice. She also held that use of the marks for panna cotta was sufficient to retain the broad claim for “all other desserts in this class including prepared desserts”. However, as there was no intention to use or actual use of the trade marks for bakery products, confectionery, ice cream confections, dipping sauces and yoghurt products, these goods were removed.

PDP’s claim for trade mark infringement

For trade mark infringement, PDP needed to establish the threshold issue that the new Wicked mark is substantially identical or deceptively similar to the Wicked Sister marks and that dipping sauces and waffle dippers are the same as or of the same description as the goods for which the Wicked Sister marks are registered.

As the marks were not found to be substantially identical or deceptively similar, PDP’s infringement claim failed at the first hurdle and it was therefore not necessary to consider whether Grasshopper had any defences to infringement. However, in case her Honour was wrong in relation to her conclusions to PDP’s infringement claim, she went on to consider the threshold issue – whether Grasshopper’s authorised use of the new Wicked mark is capable of constituting trade mark infringement.

While Grasshopper did not deny that it authorised use of the new Wicked trade mark to other entities within the meaning of the Trade Marks Act, it argued that it could not be subject to direct liability for infringement under section 120 because there is no statutory tort of authorisation in the Act. Her Honour agreed and indicated that the threshold issue would have been decided in Grasshopper’s favour. She did add, however, that this does not mean that no cause of action could have succeeded against Grasshopper as a joint tortfeasor, had that been pleaded.

PDP’s claim under the Australian Consumer Law (ACL)

PDP alleged that Grasshopper’s conduct breached sections 18 and 29 of the Australian Consumer Law. Grasshopper argued that (1) as a mere IP holding company it could not have made any of the alleged misrepresentations and (2) there was no real likelihood of confusion. Her honour rejected Grasshopper’s first contention which indicates that Grasshopper could have been liable under the ACL if the marks were otherwise found to be sufficiently similar and PDP had an established reputation in the Wicked Sister marks as at 2014 when use of the new WICKED trade mark commenced. However, ultimately her Honour found that there was no real likelihood of confusion and, consequently, PDP’s claim under the ACL failed.

PDP’s claim for passing off

PDP’s passing off claim followed her Honour’s findings in relation to the ACL. While Grasshopper’s conduct may amount to conduct for the purposes of establishing passing off, PDP had not established a sufficient reputation in the Wicked Sister marks as at 2014, nor that a sufficient number of consumers were likely to be deceived by Grasshopper’s use of the new Wicked mark.

PDP’s non-use application

PDP sought removal of the Wicked tail mark on the grounds of non-use under sections 92(4)(a) and 92(4)(b). As her Honour had found that Mr Valentine had an intention to use the mark, the section 92(4)(a) ground was dismissed. In relation to the section 92(4)(b) ground, Mr Valentine could establish use during the non-use period for dips including chocolate dips, but conceded that the mark had not been used for dessert toppings and sauces and confectionery products. Despite this, her Honour exercised discretion to retain the registration for all goods except savoury dips.

Takeaways

When comparing marks for the purpose of determining deceptive similarity, whether the combination has a meaning that differs from that of the word alone can impact on whether that word is determined to be an essential feature of the mark.

The case also provides a timely reminder to business owners, who wish to protect and enforce their marks, to ensure that they are filed in the name of the legal entity who will use or authorise use of the mark. Further, it confirms that there is no statutory tort of authorisation in the Trade Marks Act with the result that an IP holding company which merely authorises use of a mark cannot be subject to liability for direct infringement, although it may be liable as a joint tortfeasor.

Authored by Kathy Mytton and Sean McManis

In the recent decision of the Intellectual Property Office of New Zealand, Frucor Suntory New Zealand Limited v. Energy Beverages LLC [2020] NZIPOTM 5 (11 May 2020), Energy Beverages LLC (Energy Beverages) was unsuccessful in its application for revocation of the green colour mark (V Green mark) owned by Frucor Suntory New Zealand Limited (Frucor).

The full decision can be found here.

Background

The parties are competitors in the energy drink market. Energy Beverages produces the “MOTHER” branded energy drink and Frucor the “V” branded product.

In June 2017, Energy Beverages filed an application for non-use revocation of Frucor’s registration 795206 in class 32 for “Energy drinks; none of the aforementioned being cocoa – based beverages”.

Below is a representation of the V Green mark and endorsement that appears on the NZ Trade Marks Office database:

V Green mark

“The mark consists of the colour green (Pantone 376c), as shown in the representation attached to the application, applied as the predominant colour to the goods, their packaging or labels., Section 18(2) of the Trade Marks Act 2002 applies.”

The relevant non-use period is 21 May 2014 to 21 May 2017.

Energy Beverages filed the revocation application following a threat of infringement from Frucor arising from its use of an ink mix equivalent to Pantone 376c in its “KICKED APPLE get-up” for its MOTHER energy drink.

Energy Beverages claimed that Pantone 376c looks like:

Pantone 376c

which is different to the registered mark. It consequently claimed that Frucor had not made genuine use of the V Green mark in New Zealand during the relevant period, applied as the predominant colour to its goods, their packaging or labels.

Both parties gave evidence regarding the Pantone Colour Matching System (PCMS), which is an internationally recognised system of standardising colour tones.

Frucor established that it had submitted an original square sample cut from a roll of labels coated with PMS 376 with metallic finish with the application for registration of the V Green mark. PMS 376 is a base formula for a green colour.

Energy Beverages argued the Frucor could not have used Pantone 376c on its V cans because the “c” suffix indicates it is a colour that can only be applied to coated paper stock and not metallic substrates.

Frucor admitted that the colour swatch supplied with the application was not Pantone 376c, but only “the PMS reference which best reflects the colour of 376 when printed on a metallic substrate” such as a can or metallic foil label. This view was consistent with Energy Beverages’ own evidence – “Frucor has mixed up a colour – the “V” green – to match or mirror Pantone 376C as closely as possible”.

Frucor submitted that the difference in colour between the sample provided at filing and the representation appearing on the register was due to the degradation in colour from the copying and scanning processes undertaken during the digitisation of IPONZ IP records in 2009. Energy Beverage’s own evidence demonstrated how printed colour degrades through such repeated processes.

Issues for determination

  • What is the appropriate representation of the trade mark for the purposes of assessing use?

In the High Court decision in Levi Strauss & Co v Kimbyr Investments [1994] 1 NZLR 332, Williams J held that the written explanation of the mark defines the trade mark and not the image of the mark on the register:

the opening words of the written description state that “the mark consists of”. In the absence of any other words explicitly stating that the pictorial representation is to govern, those words are decisive”.

While noting that the colour swatch attached to the trade mark application was a considerably different shade of green to that appearing on the register, the Assistant Commissioner applied Levi Strauss and found that the relevant representation is that attached to the application for the trade mark, as specified in the written explanation. Accordingly, she did not consider that the different representation of the colour on the register was relevant to the assessment of use of the trade mark.

Although not strictly necessary for the Assistant Commissioner to reach a conclusion as to the reason for the difference between the colour chip as shown on the register and the colour as described in the application, she accepted Frucor’s explanation that the difference appears to have arisen from the process of uploading the colour swatch to the register during the digitisation process in 2009.

  • Was there genuine use of the V Green trade mark in the course of trade during the relevant period?

Having found that the written explanation of the trade mark overrides the representation provided, the issue for determination is whether the evidence of use relied upon by Frucor constitutes qualifying genuine use of “the colour green (Pantone 376c) as shown in the colour swatch attached to the application, applied to the goods, their packaging and labels”.

Energy Beverages claimed that Frucor’s evidence of use was insufficient to establish genuine use of the mark in the course of trade in New Zealand. It argued that the representation of the mark as attached to the application and the reference to “the colour green (Pantone 376c)” are inconsistent, or otherwise incapable of together describing a trade mark, or being used as such. The Assistant Commissioner rejected this argument as an attempt by Energy Beverages to challenge the validity of the mark itself (which is not permitted under s66).

The Assistant Commissioner agreed with Energy Beverages’ contention that the goods referred to in the written explanation of the trade mark are the beverages themselves (Frucor did not contend that the trade mark is applied to the liquid drink), but accepted Frucor’s submission that the use of the trade mark on cans or bottles is use “in relation to” the goods. She said this conclusion is of little significance to the revocation application, because if use of the trade mark on cans or bottles does not constitute use in relation to the goods, it will certainly constitute use in relation to packaging.

After reviewing the different categories of use, the Assistant Commissioner was satisfied that there was sufficient evidence of use of the V Green trade mark by Frucor in New Zealand during the relevant period, on V cans, can multipack shrink wrap and paperboard packaging for multipack bottles, as well as related promotional and advertising materials.

Consequently, the application for revocation failed and the V Green trade mark was permitted to remain on the register.

Takeaway

This decision is informative in clarifying how to interpret depictions of non-traditional marks that appear on the Register of Trade Marks in New Zealand, and indicates the importance of accurately describing such trade marks in the application for registration.

Authored by Kathy Mytton and Sean McManis

Caterpillar Inc. v Sayvest Pty Ltd [2020] ATMO 16 (5 February 2020)

Caterpillar Inc. (Opponent), the well-known US construction equipment manufacturer, was partially successful in its oppositions to registration of two trade marks (Trade Marks) IRONCAT (Word Mark) and IRONCAT TYRES logo shown below by Sayvest Pty Ltd (Applicant) for various tyres in class 12 and related services in classes 35 and 37 (Sayvest Goods and Services):

Composite mark

The Opponent relied principally on grounds of opposition under ss44 and 60 of the Trade Marks Act 1995 (the Act). The opposition to the Word Mark was successful under ss 44 and 60, but it failed in respect of the Composite Mark.

Section 44

Section 44 involves a comparison of the Opponent’s trade marks with the Applicant’s Trade Marks, as well as a comparison of the respective parties goods and services.

The Opponent is the registered proprietor of over 150 Australian trade marks, but relied on four registrations for the word CAT covering goods and services in classes 12, 35 and 37 (Opponent’s Marks). The Applicant conceded that a number of the goods and services of the Opponent’s Marks are similar to the Sayvest Goods and Services, and the parties agreed that the issue to be determined was whether the marks are too close.

The Opponent did not contend that CAT is substantially identical with either of the Trade Marks and the delegate determined that the marks are not substantially identical.

The delegate then considered whether the marks are deceptively similar. A trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that its use is likely to deceive or cause confusion. Confusion is a lower bar than deception. It is enough to show that consumers would be caused to wonder whether the goods or services offered by the Applicant come from the Opponent.

In considering the impression conveyed by the marks, the word marks IRONCAT and CAT marks were found to be conceptually similar as both give the impression of a cat. The word IRON was considered to be mildly descriptive in the context of heavy machinery that commonly has iron and its alloys as a major element . Thus, the element CAT was found to be the more distinctive part of the trade mark IRONCAT and the delegate found the Word Mark was deceptively similar to the Opponent’s Marks.

With respect to the Composite Mark, while the emphasis in the comparison of the marks was still on the word CAT, the idea of the Composite Mark is that of a big cat, namely a tiger. This coupled with the word IRONCAT communicated an overall different impression of a powerful creature. Further, the design features are likely to be retained by the consumer as a distinctive feature of the Composite Mark. On that basis, the delegate found that the Composite Mark was not deceptively similar to the Opponent’s Marks.

Section 60

Section 60 is concerned with whether the Applicant’s use of the Trade Marks, in respect of the Sayvest Goods and Services, is likely to cause confusion as a consequence of the Opponent’s reputation in its trade marks

The Opponent’s evidence in support almost exclusively concerned the extent of reputation it enjoyed in its trade marks.

The Applicant argued that the Opponent’s reputation was a “compounded form of reputation” which involves the use of three brand elements in close proximity – a consistent yellow get up, the CATERPILLAR house mark and the CAT mark. However, the delegate was satisfied that the Opponent’s CAT word mark had acquired a significant Australian reputation in relation to heavy vehicles and machinery and other vehicles, and that it was a small step beyond to recognise that it extends to the servicing and spare parts of those goods, including solid rubber tyres.

Adopting the same analysis for confusion as under the s 44 ground, the delegate found that use of the IRONCAT word mark would be likely to cause confusion. However, the differences between CAT and the Composite Mark, featuring a distinctive orange tiger, reduced the risk of confusion and the s60 ground failed for the Composite Mark.

Conclusion

The Word Mark was refused but the Composite Mark was permitted to proceed to registration.

While the word mark in a composite mark is commonly the key feature, the present case demonstrates that a design element can change the impression conveyed, so that the composite mark conveys a different impression from that conveyed by the word alone.

Authored by Kathy Mytton and Sean McManis

Lamont v Malishus & Ors (No.4) [2019] FCCA 3206

On 14 November 2019, Manousaridis J of the Federal Circuit Court handed down his decision in the trade mark dispute over use of the name “MALISHUS”.

The Court found infringement of MALISHUS trade mark registrations through use of that word in domain names and on Facebook pages offering for sale clothing in Australia.

Background

The applicant, Darren Lamont (“Lamont”) is a musical artist who has been performing under the name “MALISHUS” since 2005.

Lamont owns four registrations for trade marks containing or consisting of the word MALISHUS, namely:

  • no. 1127629 in class 25 for clothing, accessories, headwear and footwear;
MALISHUS KONCEPT
  • no. 1523037 in class 25 for clothing, accessories, headwear and footwear;
MALISHUS
  • 1639005 MALISHUS in class 41 for musical services; and
  • 1640398 MALISHUS in class 25 for apparel (clothing, footwear, headgear).

The respondent company, Malishus Limited, was incorporated in New Zealand in May 2013 with Robert Jurcic and Clinton Selwyn as directors. Prior to incorporation, Jurcic and Selwyn, who both lived in Victoria, operated in partnership.

Jurcic became aware of Lamont’s earliest MALISHUS trade mark in 2007 but he and Selwyn proceeded to register the domain names malishus.com and malishusbrands.com. Business name registrations for MALISHUS were obtained in August 2010 and a Facebook social media page was created in March 2011. From around July 2011, Jurcic and Selwyn operated an e-commerce website under the malishus.com domain name.

They also owned various Australian trade mark registrations and applications for marks containing MALICIOUS or MALISHUS, including a MALISHUS & Device registration in respect of sunglasses (but not clothing), as well as owning MALISHUS registrations in New Zealand, the United Kingdom and the United States.

After a failed attempt to have Lamont’s earliest MALISHUS KONCEPT mark removed from the Register for non-use in 2012, the respondents closed down the malishus.com website and, in August 2013, they transferred operations of the e-commerce site to the newly registered malishus.co.nz domain name. They also registered the domain name malishus.com.au.

Lamont claimed that one or more of the respondents infringed his MALISHUS trade marks by:

  • registering and using domain names incorporating the word MALISHUS in connection with the sale of MALISHUS branded clothing;
  • selling or offering for sale in Australia clothing to which the word MALISHUS was applied; and
  • posting advertising material on Facebook that included the word MALISHUS in connection with clothing.

Lamont also claimed that by using the word MALISHUS the respondents had engaged in misleading and deceptive conduct.

Key Issue

The respondents admitted that they had used the name MALISHUS in their domain names and business in respect to the sale of clothing, but denied that there was any use of the trade mark in Australia. They said that only sunglasses (use on which would not infringe Lamont’s registrations) were directed to the Australian market and that their clothing business was directed outside of Australia to countries where they held relevant trade mark rights.

Trade Mark Infringement

The Court found that use of the malishus.com domain name by the respondents was use of MALISHUS as a trade mark in relation to clothing in Australia. This was because the respondents intended or directed or targeted the domain name malishus.com to consumers in Australia through representations that the clothing displayed on the e-commerce site was available to Australian consumers. Online advertising included statements such as “Free Shipping Any Where” and the respondents did not make it clear that the clothing products were not available in Australia. The malishus.com domain name was substantially identical to Lamont’s MALISHUS word mark registrations in class 25, and deceptively similar to his earliest composite MALISHUS KONCEPT trade mark in that class, and so infringement was established.

His Honour also found that offers for sale of clothing to Australian consumers, made via the respondents Facebook page, also constituted infringement.

However, the mere registration of a domain name does not amount to infringement, and as there was no use of the malishus.com.au domain name, the registration of that domain name did not infringe Lamont’s registrations.

Further, the domain name malishus.co.nz was found to be directed solely to persons in New Zealand, and not Australia. Consequently, use of that domain name and use on that site did not infringe any registrations.

His Honour found that Lamont was not able to establish a sufficient reputation in MALISHUS in Australia to found a claim for misleading or deceptive conduct under the Australian Consumer Law.

Remedies

A permanent injunction was granted restraining Jurcic and Selwyn from using MALISHUS in Australia as a trade mark in relation to T-shirts or any other clothing apparel, footwear or headgear.

The domain names malishus.com and malishus.com.au and the MALISHUS business name were cancelled.

As Lamont was not able to establish that he had suffered any damage, only $10 in nominal damages were awarded for the infringement. However, in light of the respondent’s flagrant infringement and, as a deterrent, the judge ordered additional damages of $25,000 plus interest. The respondents were also required to file an affidavit in respect of any articles of infringing clothing held by them stating whether they had been destroyed or whether the offending trade mark had been removed.

Presumably due to the quantum of the award made, Lamont has applied for an extension of time for leave to appeal the decision.

Lesson

This case confirms that while the mere registration of a domain name does not amount to infringement, its use in relation to the sale of products targeting the Australian market may infringe an Australian trade mark registration, as may other uses on the website.

The internet facilitates a global marketplace, but it also exposes online businesses to trade mark infringement overseas. In order to avoid or minimise this risk, online businesses should take care to ensure that they are not targeting a wider market than intended. Appropriate steps include clearly defining the market at which the products are directed, indications of where products can and cannot be sent, and appropriate disclaimers in online advertising.

Authored by Kathy Mytton and Sean McManis

In Trident Seafoods v Trident Foods Pty Ltd, the Full Federal Court examined the issue of whether use of a registered trade mark by the parent company of the registered owner of the trade mark amounted to an authorised use sufficient to protect the registration from cancellation for non-use.

Background

Trident Foods Pty Ltd (Trident Foods) owns two Australian trade mark registrations for TRIDENT in relation to goods in class 29 including fish and fish products. The TRIDENT brand has been used in Australia in relation to a range of food products since the early 1970s, in particular Asian flavourings and ingredients

Trident Foods is a wholly owned subsidiary of Manassen Foods Australia Pty Ltd (Manassen) who uses the TRIDENT trade marks in Australia.

Trident Seafoods Corporation (Trident Seafoods) wanted to sell its TRIDENT SEAFOOD branded products in Australia. The TRIDENT registrations blocked its application and Trident Seafoods filed applications for non-use removal of the marks. In response, Trident Foods secured acceptance for a subsequent application for TRIDENT relying on the “other circumstances” provisions of s44(3)(b).

The Registrar’s delegate was not satisfied that Trident Foods had used the TRIDENT trade mark during the relevant three year non-use period, or had authorised Manassen’s use of the mark, but exercised discretion to leave the marks on the Register due to Trident Foods’ residual reputation in the trade marks and the likelihood of confusion if they were removed.

Federal Court

The primary judge agreed with the delegate in finding that Trident Foods had not used the TRIDENT trade mark for any fish or fish products. Her Honour found that Trident Foods could not rely upon any use by Manassen because Trident Foods did not control the activities of its parent company, Manassen. However, she exercised discretion in favour of leaving the TRIDENT registrations on the Register having regard to Manassen’s uses of TRIDENT for fish products up until 2007, during and after the relevant non-use period.

Trident Seafoods prevailed in its opposition to Trident’s later application. The primary judge found that Trident Foods could not rely on the “other circumstances” discretion because Manassen was the owner and user of the trade mark not Trident.

The Federal Court decision is reported here.

Appeal

The Full Court disagreed with the primary judge and found that use of the TRIDENT trade mark by Manassen was authorised by Trident Foods. This rendered the primary judge’s exercise of discretion unnecessary as it resulted in a finding that the trade mark owner had made use of the trade mark sufficient to defend the non-use action. The question is not whether one company controlled the other but whether Trident Foods had control over Manassen’s use. In this regard, it was considered sufficient that the two companies had the same directors and the evidence indicated that they operated with a unity of purpose to maximise sales and to enhance the value of the TRIDENT brand.

The opposition was also dismissed as the Court found that there were sufficient circumstances to justify acceptance under the provisions of s44(3)(b). The Court considered that the discretion to accept the application under that provision should be exercised according to the circumstances as they exist at the time of exercising the discretion rather than as at the priority date of the application. At that time, it was known that the blocking application filed by Trident Seafoods could not succeed because the earlier registrations owned by Trident Foods were not being removed from the Register.

This decision may make it easier for companies in a corporate group to establish the existence of control sufficient to maintain a trade mark registration. It remains to be seen whether the “unity of purpose” test can apply to arm’s length arrangements. In those circumstances, trade mark owners should ensure that appropriate licence agreements are in place that clearly define the ownership and control of the trade mark.

Authored by Kathy Mytton and Sean McManis

In the recent Federal Court case of Insight Radiology Pty Ltd v Insight Clinical Imaging Pty Ltd ([2016] FCA 1406), Insight Radiology was unsuccessful in its appeal against the registrar’s decision refusing registration of its application for trademark registration of the following composite mark:

Insight Clinical enjoyed a substantial victory in its claims that Insight Radiology’s conduct constituted trademark infringement, passing off and misleading or deceptive conduct under the Australian Consumer Law.

Insight Clinical has been operating a medical imaging business in Western Australia since 2008 and now has seven clinics. It has been using the word marks INSIGHT and INSIGHT CLINICAL IMAGING, as well as the following composite mark:

Despite its use since 2008, Insight Clinical waited until October 2012 to register the INSIGHT CLINICAL IMAGING word mark and above composite mark for radiology services in Class 44 of the Nice Classification.

Prior to that, in December 2011, Mr Pham, the sole director of Insight Radiology, applied to register the INSIGHT RADIOLOGY composite mark in his own name for radiology services in Class 44. At that time, Mr Pham’s company was known as AKP Radiology Pty Ltd and he traded under the name of Leeton Diagnostic Imaging. His trademark application included a voluntary endorsement to the effect that any registration would not confer exclusive rights to use of the words ‘insight radiology’ in the state of Western Australia.

Use of the INSIGHT RADIOLOGY word mark and the INSIGHT RADIOLOGY composite mark commenced in approximately March 2012 in New South Wales and then Tasmania. Mr Pham was alerted to Insight Clinical’s trademark application being accepted based on prior continuous use by IP Australia in December 2012 and, subsequently, in May 2013, he received a letter of demand from Insight Clinical’s attorneys.

Despite this, Mr Pham continued trading and, in June 2013, changed his company name from AKP Radiology Pty Ltd to Insight Radiology Pty Ltd. In July 2013, after acceptance of his application to register the INSIGHT RADIOLOGY composite mark and during the opposition period, he assigned this trademark application to Insight Radiology Pty Ltd.

The Federal Court proceedings involved two aspects. First, an appeal by Insight Radiology against the registrar’s decision. Second, an action by notice of contention brought by Insight Clinical for trademark infringement, passing off and misleading or deceptive conduct under the Australian Consumer Law.

With regard to the opposition appeal, Davies J disagreed with the delegate’s finding on the Section 58 ownership ground that the respective composite marks were substantially identical. Her Honour considered that the differences between the respective marks gave a total impression of dissimilarity (although they were found to be deceptively similar).

Further, despite arguments to the contrary by Insight Clinical and the court finding that Mr Pham did not himself have the requisite intention to use the INSIGHT RADIOLOGY composite mark at the time of filing his trademark application, the subsequent assignment to Insight Radiology Pty Ltd was held to be valid. That company became the applicant under the Trademarks Act and did have the intention to use this mark which effectively cured Mr Pham’s lack of intention.

However, Davies J upheld the Section 60 reputation ground of opposition finding that, while Insight Clinical only conducted its business in Western Australia, it received referrals from interstate practitioners and the evidence demonstrated that the parties operated in a national industry. This was sufficient to establish the required reputation in its trademarks outside Western Australia at the relevant date and, because of this reputation, it followed that use of the INSIGHT RADIOLOGY composite mark would be likely to cause deception or confusion.

Given this finding, her Honour held that Insight Radiology’s geographical endorsement on its application did not overcome the Section 60 ground of opposition.

Davies J also found that Insight Radiology succeeded on the Section 42(b) contrary to law ground of opposition on the basis that use of the INSIGHT RADIOLOGY word and composite marks was in contravention of the Australian Consumer Law and constituted passing off.

With regard to the second aspect (infringement, Australian Consumer Law and passing off), as Insight Radiology acknowledged that its trademarks were deceptively similar to the registered marks of Insight Clinical, it had to try and rely on one of the defences to infringement.

Mr Pham failed in his bid to rely on the own name defence because it was found that he did not act in good faith when he changed the company name from AKP Radiology Consultants Pty Ltd to Insight Radiology Pty Ltd in June 2013, and continued to use the INSIGHT RADIOLOGY trademarks in the face of knowledge of the later-filed marks of Insight Clinical and the receipt of the letter of demand.

While her Honour had found in favour of Insight Clinical on the Section 60 ground of opposition, she also considered whether Insight Radiology would hypothetically have been able to establish a defence to infringement based on honest concurrent use of the INSIGHT RADIOLOGY word mark and composite mark. Given the actions of Mr Pham in the face of knowledge of use of the INSIGHT CLINICAL marks, her Honour questioned the commercial honesty of use by Insight Radiology and determined that discretion would not have been exercised in its favour.

Finally, Davies J briefly considered Insight Radiology’s position under the Australian Consumer Law and passing off. Having found for Insight Clinical under the Section 60 ground of opposition, her Honour had little difficulty in finding Insight Radiology’s conduct was misleading and deceptive and also constituted passing off. This was not mitigated by the different geographical locations where the parties have been conducting business because they operate in a national industry and Insight Radiology had not distinguished its services by the branding it adopted.

Additionally, her Honour also found Mr Pham liable as a joint tortfeasor and for aiding and abetting Insight Radiology’s wrongful use of the trademarks.

This decision has a number of useful aspects for practitioners, including its exploration of how a questionable claim to ownership of a trademark application may be cured by assignment, as well as the threshold level of reputation required for the Section 60 ground of opposition. It also serves as a timely reminder of the need for honesty of adoption of a trademark, both for the purposes of obtaining registration of the mark and as a defence to trademark infringement.

This article was first published in January 2017 in the World Trademark Review.

Authored by Kathy Mytton