4 min read

In Hashtag Burgers Pty Ltd v In-N-Out Burgers, Inc, [2020] FCA 235 the Full Federal Court of Australia considered appeals against the In-N-Out Burgers, Inc v Hashtag Burgers Pty Ltd [2020] FCA 193 decision, which involved proceedings by In-N-Out Burgers, Inc (“INO”) against the use of DOWN-N-OUT by Hashtag Burgers Pty Ltd (“Hashtag”), in relation to (inter alia) hamburgers and restaurant services.  A summary of the primary judge’s decision was previously reported by our firm – CLICK HERE.

Background

In the primary decision, Katzman J held that use of Down-NOut infringed a registration for In-N-Out and that the Hashtag directors, Benjamin Kagan and Andrew Saliba, were jointly and severally liable for trade mark infringement, passing off and misleading and deceptive conduct in breach of s18 of the Australian Consumer Law (“ACL”) for conduct prior to 23 June 2017, being the date on which Hashtag was incorporated. 

Hashtag appealed this decision by challenging the finding of deceptive similarity.  Further, Hashtag challenged Katzman’s conclusion that Kagan and Saliba adopted the marks for the deliberate purpose of appropriating INO’s marks, branding or reputation.  Hashtag also challenged the primary judge’s findings concerning misleading or deceptive conduct and passing off.

INO filed a cross-appeal regarding the liability of Kagan and Saliba after the date on which Hashtag was incorporated.

TM Infringement by Hashtag

In support of this appeal, Hashtag alleged the following errors were made by the primary judge when assessing deceptive similarity:

  1. failing to give weight to the presence of the word BURGER in the INO trade marks;
  2. failing to assess the effect of the arrows in the composite INO trade marks;
  3. placing undue emphasis on the “N-OUT” aspect of the INO trade marks and attributing insufficient significance to the difference between “DOWN” / “D#WN” and “IN”;
  4. failing to give sufficient weight to the difference in meaning between the respective marks, and the ideas conveyed by those marks;
  5. placing significant or dispositive weight on aural similarity and setting aside material visual differences between the marks;
  6. framing the central question as one focussed on imperfect recollection; and
  7. placing apparent weight on evidence of confusion from social media posts and no weight on the absence of evidence of actual confusion.

The Full Federal Court unanimously dismissed Hashtag’s appeal in relation to trade mark infringement.  Nicolas, Yates and Burley JJ did not accept any of Hashtag’s criticisms concluding they paid insufficient regard to the rigour with which the primary judge approached her judgment. While their Honours confirmed that the “idea” or “meaning” of a mark has a role to play in determining deceptive similarity, this only forms a part of the overall analysis.

Separately, Hashtag challenged the primary judge’s conclusion that Kagan and Saliba acted dishonestly in adopting their trade marks.  

In relation to this, the Court found that her Honour erred in her findings of dishonesty but that did not vitiate the primary judge’s conclusions as to intention or deceptive similarity because:

  • a finding of dishonesty is not a necessary part of the assessment; and
  • her Honour separately found the requisite intention to cause confusion on the part of Messrs Kagan and Saliba.

Consequently, the appeal failed.

ACL and Passing Off

Hashtag also appealed the primary judge’s decision in relation to allegations of misleading or deceptive conduct arising under s18 of the ACL and the tort of passing off on the bases that:

  1. the impugned marks are not deceptively similar to the names or logos used in INO Burgers’ registered marks;
  2. the different trade dress, get-up, uniforms, décor, menus and other trade indicia adopted by the respective businesses, when combined with the parties’ different trading names, dispelled any real danger of deception occurring;
  3. the primary judge wrongly applied the measure of “imperfect recollection” when considering the response of the notional consumer.

The Full Federal Court rejected Hashtag’s first claim for the same reasons as the trade mark infringement ground outlined above.  While the Court acknowledged that the primary judge used the phrase “imperfect recollection”, their Honours were satisfied that Katzman J applied the applicable test correctly.  In this regard, Hashtag did not challenge Katzman’s finding that a not insignificant number of members of the relevant class of consumer would have been led to consider that there was an association of some kind between INO and the people behind DOWN-N-OUT.

Hashtag also submitted that in order to uphold a claim of passing off, there must be goodwill in the relevant mark (in the sense of a business with customers in the jurisdiction).  However, their Honours confirmed the longstanding principle in Australia that it is not necessary to have a place of business in Australia in order to maintain a passing off action. It is sufficient that the goods have a reputation in Australia to a sufficient degree to establish that there is a likelihood of deception among consumers, and potential consumers, and of damage to its reputation – see ConAgra Inc v McCain Foods (Aust) Pty Ltd [1992] FCA 176.

On this basis, Hashtag’s appeal was dismissed.

Cross-Appeal by INO

INO cross-appealed Katzman’s decision on the basis that Kagan and Saliba were liable as joint tortfeasors for infringing conduct which took place after Hashtag was incorporated, namely 23 June 2017.  Contrary to the primary judge’s finding, their Honours concluded that Kagan and Saliba’s conduct as individuals went beyond the threshold of performing their proper roles as directors to that of joint tortfeasers on the basis that:

  • Kagan and Saliba were the sole directors of Hashtag;
  • Kagan and Saliba made decisions as to Hashtag’s management;
  • Kagan and Saliba alone received the profits derived from Hashtag;
  • There was no significant difference between the way that Kagan and Saliba operated the business before incorporation and the way in which they operated it through the corporate vehicle after it was formed;
  • Kagan and Saliba were knowingly involved in Hashtag’s wrongdoing;

On this basis, the Full Federal Court allowed INO’s cross-appeal and ordered (i) costs for the appeal against Hashtag, and (ii) cost for the cross-appeal against Kagan and Saliba.

Related Article: Hashtag Burgers Down-N-Out – Trade Mark Infringement, Misleading Conduct and Passing Off  – April 2020

Authored by Nathan Sinclair and Sean McManis

4 min read

As IP practitioners, you have probably noticed counterfeit watches being sold at local markets, sometimes hidden from immediate view by the seller.  Over the past ~30 years, growth in online retailing (including third party retailers) has allowed counterfeiters to flourish and expand into goods such as footwear, leather goods, perfumes, jewellery and even pharmaceuticals.  A 2019 OECD Report puts the value of counterfeit and pirated goods at US$509 Billion which corresponds to approximately 3.3% of global trade.

Criminal Offences under Trade Marks Act 1995

So what can brand owners do to combat the counterfeiters in Australia?  Apart from commencing trade mark infringement proceedings, Part 14 of Australia’s Trade Marks Act 1995 also outlines a series of criminal offences in relation to registered trade marks, including:

  • Section 145 ‒ Falsifying or removing a registered trade mark;
  • Section 146 ‒ Falsely applying a registered trade mark;
  • Section 147 ‒ Manufacturing a die, etc. for use in a trade marks offence.
  • Section 147A – Drawing etc. trade mark for use in offence;
  • Section 147B – Possessing or disposing of things for use in trade mark offence
  • Section 148 ‒ Goods with false trademarks.

Each of these criminal provisions feature both summary and indictable offences with differing fault elements (intention, knowledge, recklessness or negligence) which must be proven depending on the offence.  If there is a prosecution for an offence under Part 14, Section 160 establishes the criteria to be used in determining a natural person’s state of mind and his/her responsibility for the conduct of employees and agents.

Any person may institute proceedings to commit a person for trial for an indictable offence under the Trade Marks Act 1995.  While private prosecutions for trade mark offences are possible, they are extremely rare as the costs involved are generally considered to outweigh the benefits.  In practice, criminal proceedings for offences under the Trade Marks Act would most likely be brought by the Australian Federal Police or the Department of Public Prosecutions.   Unfortunately for brand owners, such prosecutions are rarely brought in Australia (presumably on the basis that such actions are insufficiently “important”) and are typically confined to cases which primarily involve organised crime or public health and safety issues.  The penalties for such offences range from a term of imprisonment (12 months for summary offence or 5 years for indictable offence) and/or fines (60 units for summary offence or 550 units for indictable offence) or both.  On 1 July 2020, the value of one (1) penalty unit was increased to AU$222 (~US$160).  Given the enormity of the counterfeit goods market, we think that such penalties are likely to be regarded as insignificant and simply “the cost of doing (counterfeit) business”.

Miscellaneous Offences

Section 150 to 157 also establish a number of other miscellaneous offences, namely:

  • Section 150 – Aiding and abetting offences;
  • Section 151 – False representations regarding trade marks;
  • Section 152 – False entries in Register etc.;
  • Section 153 – Disobeying summons etc.;
  • Section 154 – Refusing to give evidence etc.;
  • Section 156 – Acting or holding out without being registered;
  • Section 157 – False representation about Trade Marks Office;

The penalties for such offences range from a term of imprisonment (up to 2 years) or fines (up to 150 units) depending on the particular offence.  Section 150 relates to aiding and abetting conduct including doing “an act outside Australia which, if it were done in Australia, would be an offence against this Act.  In such circumstances “the person is taken to have committed that offence and is punishable accordingly”.

Sections 151 – 157 are largely directed toward “administrative” offences such as the use of the ® symbol on or in relation to goods or services when the relevant trade mark is not currently registered in Australia.  While brand owners should be aware of how to avoid such offences (for example, by utilising the TM symbol rather than ® or by specifying the country in which the mark is actually registered), these provisions are unlikely to offer brand owners any significant assistance with the prevention of counterfeit goods being sold in Australia.

Customs Notices and ACL

Apart from the actions outlined above, brand owners should also lodge a “Notice of Objection” which allows Australian Customs to seize potentially infringing goods when being imported into Australia.  Under Australian legislation, the importer of the seized goods must make a claim for their return, otherwise they will be forfeited to the Commonwealth. This claim must include information which will assist the brand owner in contacting the importer and prevent further importations.

As China is a global manufacturing centre, it is also a significant source of counterfeit goods.  In this regard, Chinese Customs also has the power to seize infringing goods including those being either imported to or exported from China.  Brand owners should consider recording their trade marks with Chinese Customs, in an attempt to reduce the prevalence of counterfeit goods in other parts of the world.

An action could also potentially be brought against counterfeiters (by the Australian Competition and Consumer Commission) under Australia’s consumer protection law the Australian Consumer Law (ACL) which relates to conduct that is misleading and deceptive (or is likely to mislead or deceive) but again such actions would be rare.

Remedies and options are available to brand owners, however, active policing of the marketplace is required to protect brand value and minimise the trade in counterfeit goods being sold in Australia.

Authored by Nathan Sinclair and Sean McManis

2 min read

A number of New Zealand trade mark owners have recently received incorrect notifications in relation their International Registrations designating New Zealand (“IRNZ”).  The Intellectual Property Office of New Zealand (“IPONZ”) advise these incorrect notifications appear to be the result of a “system issue” concerning communications with the World Intellectual Property Organisation (WIPO) who are responsible for overseeing the International Registration system.

As a result, some IRNZ’s are currently displaying a different status on the WIPO and IPONZ databases.  For example, an IRNZ may have been accepted by IPONZ, but due to the “system issue” between IPONZ and WIPO, this mark may have (erroneously) been communicated to WIPO as a refusal.  Further, some trade mark owners have received notification from IPONZ and/or WIPO confirming their IRNZ has been formally (i.e. finally) refused, despite responding to the provisional refusal of the relevant IRNZ in good time.

IPONZ have now located the cause of this “system issue” and identified all relevant IRNZs where a notification was sent in error.  IPONZ are currently working with WIPO to reverse these transactions.  The current notifications on WIPO’s database are not expected to impact the status of the relevant IRNZs on the New Zealand Register of Trade Marks or IPONZ trade marks database.

If you or your clients are concerned about the current status of trade marks in New Zealand (including the status of any IRNZs), our firm can assist you by confirming the status of such marks or securing suitable trade mark protection in New Zealand.

Authored by Nathan Sinclair and Sean McManis

5 min read

In the Registrar’s decision of National Australia Bank Limited [2020] ATMO 41 (19 March 2020), National Australia Bank (“NAB”) have successfully relied upon the their significant reputation in Australia to overcome citations of prior rights and secure acceptance of the composite logo mark (“NAB Logo mark”) shown below.  The Registrar followed the previous decision of the Full Federal Court in Registrar of Trade Marks v Woolworths [1999] FCA 1020, which held that in certain circumstances, an applicant’s reputation may be considered as a “surrounding circumstance” when determining whether two marks should be regarded as “deceptively similar”.

NAB applied to register the NAB Logo mark for a wide range of goods and services.  The Examiner raised an objection against this mark under Section 44, on the basis that it was too similar to four earlier registrations and covered the same or similar goods and services. Each of the earlier cited registrations were comprised of the plain words “THE BRIDGE” and covered goods and services that are the same or similar to those covered by the NAB Logo mark (although, while not noted in the decision, the only same goods or services concerned philosophical education and certain personal services).  After several failed attempts to persuade the Examiner to reconsider this objection (on the basis of written submissions), NAB filed a request for this matter to be heard by the Registrar.

When assessing whether the NAB Logo mark is substantially identical with or deceptively similar to each of THE BRIDGE marks, the Registrar applied the traditional test for the comparison of marks as outlined in Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd.  The Registrar also took guidance from the comments of Jacobson J in Millennium & Copthorne International Limited v Kingsgate Hotel Group Pty Ltd with respect to the various historical principles outlined in past authorities as follows:

Without seeking to reformulate the various statements of principle stated in the Full Court authorities, it is sufficient for present purposes to identify the critical elements which seem to me to inform the issue of deceptive similarity in the present case. There are nine elements.

First, the judgement of likelihood of deception is a practical one. It requires an assessment of the effect of the challenged mark on the minds of potential customers.

Second, the question of deceptive similarity is not to be decided by a side-by-side comparison. It is to be determined by a comparison of the impression based on recollection of the opponent’s mark that persons of ordinary intelligence and memory would have, and the impression that those persons would get from the opposed trade mark.

Third, allowance must be made for imperfect recollection.

Fourth, the effect of the spoken description must be considered.

Fifth, it is necessary to show a real tangible danger of deception or confusion.

Sixth, a trade mark is likely to ‘cause confusion’ if the result of its use will be that a number of persons are ‘caused to wonder’ whether the two products come from the same source.

Seventh, all surrounding circumstances must be taken into consideration. The circumstances include those in which the marks will be used, and in which the goods or services will be bought and sold, as well as the character of the probable acquirers of the goods and services.

Eighth, the question of whether there is a likelihood of confusion is not to be answered by reference to the manner in which a party has used the mark, but by reference to what an applicant can do. That is to say, the use to which it can properly put the mark if registration is obtained.

Ninth, if a registered trade mark includes words which can be regarded as an ‘essential feature’ of the mark, another mark that incorporates those words may cause a tangible danger of deception or confusion by reason of consumers retaining an imperfect recollection of those words. However, care must be taken to not too readily characterise words in a composite trade mark as an ‘essential feature’ because to do so may effectively convert a composite mark into something different.

Reference was also made to comments by French J in the Woolworths decision (see above), where it was held:

reference to the familiarity of the name ‘Woolworths’ in Australia was appropriate. Where an element of a trade mark has a degree of notoriety or familiarity of which judicial notice can be taken, as is the present case, it would be artificial to separate out the physical features of the mark from the viewer’s perception of them. For in the end the question of resemblance is about how the mark is perceived. In the instant case the visual impact of the name ‘Woolworths’ cannot be assessed without a recognition of its notorious familiarity to consumers.

The Hearing Officer concurred with NAB’s assertion that the NAB Logo is as well-known as “WOOLWORTHS” and there was nothing before the Hearing Officer which obviously distinguishes that case (Woolworths) from the present matter.  On this basis, the Registrar held that the NAB Logo mark was not substantially identical or deceptively similar to the earlier THE BRIDGE marks and accepted it for potential registration.

The decision is short on detail and while not stated specifically, it seems that NAB’s mark was accepted as well-known simply on the basis of general knowledge, rather than evidence. As NAB is a well-known bank, the extent to which that reputation is relevant in respect of the cases of the direct conflict with services covered by the prior registrations, namely ‘Courses, lectures and seminars on philosophical subjects’ and ‘Personal care services (non-medical nursing assistance); Providing non-medical assisted living services for personal purposes’ is debatable. However, the Hearing Officer seems to have accepted it as sufficient, irrespective of the nature of the services.

When examining a trade mark for potentially conflicting rights under Section 44, Australian examiners do not consider the “reputation” of the respective marks involved in their initial assessment.  However, where one particular element of a trade mark has a high degree of notoriety or familiarity to Australian consumers, the owner’s reputation in that element may be considered as a “surrounding circumstance” when determining whether or not two marks are “deceptively similar”.  While the degree of notoriety or familiarity required by a trade mark is not entirely clear, and examiners will typically need this to be proved, it is reasonable to conclude that the owner must have made lengthy and widespread use of the relevant mark in Australia, such that most Australian consumers are familiar with the mark and its owner.

Authored by Nathan Sinclair and Sean McManis

5 min read

In the case of In-N-Out Burgers, Inc v Hashtag Burgers Pty Ltd, in considering whether use of Down-N-Out infringed a registration for In-N-Out, and amounted to misleading conduct and passing off, the Federal Court considered questions of:

– whether the alleged infringer’s intentions are relevant to assessing whether two trade marks are deceptively similar

– whether, despite the fact that a business has no permanent business operations in Australia, it may nevertheless have sufficient reputation to establish misleading and deceptive conduct in breach of Australian Consumer Law and passing off

Short answers are below, while information about the case and reasons for the decision can be found in the subsequent report:

– Intention will not always be relevant but in circumstances where, as in the present case, the party adopts a name with the intention of benefiting from an association, it will be relevant

– Use outside Australia, in combination with some local use, can be sufficient, particularly where there is evidence of a strong overseas reputation and the name is distinctive

In-N-Out Burgers, Inc v Hashtag Burgers Pty Ltd [2020] FCA 193 (26 February 2020)

In-N-Out Burgers, Inc (“INOB”) is an American company that has, for many years, operated a chain of burger restaurants in the United States. The business was founded in 1948 and the company was incorporated on 1 March 1963. It is a family owned private company, which operates a chain of restaurants in California, Arizona, Oregon, Nevada, Texas and Utah. As at May 2016, there were over 300 In-N-Out restaurants in the United States. They include restaurants in locations such as Fisherman’s Wharf in San Francisco, Sunset Boulevard in Hollywood and South Sepulveda Boulevard in Westchester, Los Angeles, which is within a mile of LAX airport.

As well as owning registrations for a IN-N-OUT BURGER logo, depicted below as registered in black and white and as used in colour, INOB also owns a registration for the word mark IN-N-OUT BURGER, along with ANIMAL STYLE and PROTEIN STYLE.

INOB established its website around June 1999 and an online store was established in May 2004, allowing promotional merchandise to be purchased around the world, including from Australia. In 2013 there were 37,631 visitors to the website from Australia. In 2014 there were 50,108, in 2015 61,988 and in 2016 there were 78,098 visitors.

Over the years 2012 to 2017, INOB hosted one pop-up event each year in Australia and in 2018 it hosted two. At the 2017 event, 400 burgers and 420 T-shirts were sold, prior to that sales were below 300 burgers.

Prior to incorporation of Hashtag Burgers Pty Ltd (“HB”) on 23 June 2017, the directors conducted their own pop-up event in June 2015 using the logo depicted below:

In May 2016, they had the following logos designed:

They then advertised an event to be held on 7 June 2016 with a media release titled “Sydney’s Answer to In-N-Out Burgers has finally arrived” in which they referred to “the cheekily named Down-N-Out” and advertised “secret menu hacks such as Animal Style and Protein Style”

When it opened, the pop-up used the first Down-N-Out logo shown above, and outside the premises the following sign was displayed:

Following this, the business received a letter of demand from INOB, in response to which there were denials concerning use of Animal Style and Protein Style. It also denied that use of Down-N-Out infringed any registrations claiming that the business had received legal advice and asserting that:

This expression has its own separate and distinct meaning in the English language which is unlikely to conflict with the meaning of “In-N-Out”. Further, the word Down also relates to “Down Under” which relates to the fact that we are an Australian business.

It was, however, indicated that use of the Arrow designs would cease.

Subsequently, there was use of the following designs:

The inclusion of the word BURGERS in the registered word mark was acknowledged by the parties as not significant. Further, in determining the infringement issue Justice Katzmann did not attribute any significance to the use of the hashtag in D#WN-N-OUT, noting that any verbal references would still be to Down N’ Out.

HB argued sufficient differences based on:

  • Differing ideas and impressions between DOWN N’ OUT and IN-N-OUT with “down and out” referring typically to a person who has fallen on hard times
  • That use of the word DOWN was also a deliberate allusion to Australia, which is colloquially referred to “the land down under”
  • Visual and phonetic differences
  • Differences in essential features, claiming that the essential feature of the registered mark is IN-N-OUT not just N-OUT.
  • The absence of any evidence of actual confusion.

Justice Katzmann recognised authority indicating that the first part of a trade mark is often the most important for the purposes of distinction. However, she also referenced cases where similarities in suffixes have been sufficient.

She found that:

  • N-OUT is a distinctive and significant feature and an essential ingredient of all the [INOB] trade marks
  • notwithstanding differences in meanings, imperfect recollection is sufficient to give rise to a likelihood of confusion, noting also that the word “down” can be used in a directional sense, like “in”, and that this was the more likely context of recollection

As regards the evidence presented, she noted:

  • Social media posts raising questions concerning whether these is some association with INOB. While not decisive, and noting that their meaning and intent was debatable, they were of some probative value
  • The intentions of HB and the failure of the directors to give evidence in the proceedings

On the issue of intention, Justice Katzmann quoted authoritative precedent, which states:

The rule that if a mark or get-up for goods is adopted for the purpose of appropriating part of the trade or reputation of a rival, it should be presumed to be fitted for the purpose and therefore likely to deceive or confuse, no doubt, is as just in principle as it is wholesome in tendency. In a question how possible or prospective buyers will be impressed by a given picture, word or appearance, the instinct and judgment of traders is not to be lightly rejected, and when a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he has done is in fact likely to deceive.

In relation to this, she made the points:

  • Cases where intention is relevant ae not restricted to cases of “deliberate” dishonesty;
  • An imitation of another person’s product does not necessarily signify an intention to deceive;
  • The selection of the name was not coincidental, with HB’s own media release referring to the adoption of the name as “cheeky”;
  • There was no evidence of use in association with get up or imagery consistent with the claimed meaning of “down and out”;
  • There were initial advertising references to Animal Style and Protein Style products;
  • Initial logo designs incorporating arrows indicated an intention to reflect similarity;
  • No steps were taken to dispel any potential for confusion;
  • No evidence was presented to indicate that N-Out or N Out had been used in the brand names of anyone other than INOB, before HB decided to use it in DOWN-N-OUT;
  • HB failed to comply properly and fully with their discovery obligations

Consequently, there was a finding of infringement and a likelihood of confusion.

Australian Consumer Law and Passing Off

While reputation is not a factor in determining infringement of a trade mark registration, it is relevant in misleading conduct (Australian Consumer Law) and passing off cases.

Notwithstanding no established business in Australia, Justice Katzmann found sufficient reputation in Australia arising from:

  • International trade and notoriety in the United States, resulting in spill over reputation in Australia
  • Media references, and the success of pop-up events conducted in Australia

Having found relevant reputation in Australia, Justice Katzmann found a likelihood of HB’s conduct misleading or deceiving consumers, for reasons similar to those mentioned in respect of the infringement action.

In relation to changes made to get up used, it was noted this that there was a failure on the part of HB to address the “potential hangover effect” arising from the previous activities using designs similar to those of INOB.

Personal liability

Australian Consumer Law legislation includes fairly broad provisions for recovering damages against persons “involved in” contraventions. Consequently, the directors were liable for breaches of the Act even subsequent incorporation of HB.

However, in respect of trademark infringement and passing off, it was necessary to establish that the directors were joint tortfeasors. Notwithstanding the close involvement of the directors of the business with the activities of HB, there was insufficient evidence that the company was merely an instrument for the perpetration of infringement so that the directors could hide behind the corporate veil. Consequently, there was no finding of personal liability for actions amounting to infringement or passing off that occurred after the incorporation of the company.

Conclusion

There can be a fine line between inspiration and association. In trying to be clever and ‘cheeky’, HB crossed the line in this case.

Authored by Sean McManis

3 min read

MS Marketing Inc. v EZ Imports Pty Ltd [2019] ATMO 159 (8 November 2019)

The Issue

Competing companies separately engaged the services of the same Chinese contract manufacturer to produce a range of electric wheelchairs, mobility scooters and associated parts and accessories.

EZ Imports Pty Ltd (“EZ”) sought to register a trade mark in Australia which was successfully opposed by MS Marketing, Inc (“MS”) on the basis of their superior claim to ownership of the relevant mark.

The Law

In Australia, rights in a trade mark can be established either by use or by registration.  Australia’s Trade Marks Act 1995 supplements the common law where first use of a trade mark establishes a qualified right to continue that use. The right of use and to registration is limited to the specific trade mark or a substantially identical trade mark in relation to the same kind of thing as the goods for which first use can be established.

The Facts

MS engaged a graphic designer in November 2013 who designed the EZ LITE CRUISER Logo mark (as shown below). MS used that trade mark for the relevant goods in Australia from at least December 2013.  Under the terms of its agreement with the graphic designer, copyright in this logo was transferred to MS in November 2013.

The Trade Mark
Opponent’s Trade Mark

In August 2017, EZ filed an application by which it sought to register the EZ MOBI CRUISER Logo (as shown above). This was opposed by MS.  EZ claimed that it was not aware of MS or its use of the EZ LITE CRUISER Logo mark in Australia.  Further, EZ claimed that both companies sourced their wheelchairs from the same manufacturer in China and that MS only sought to register a trade mark in Australia after EZ obtained the Australian distributorship of such goods.

MS supplied a copy of their distribution agreement with the Chinese contract manufacturer (dated June 2016) which stated (inter alia) that “EZ LITE CRUISER and other such trademarks” are owned by MS.  Further, this agreement explicitly stated “that each of the marks used by MS is the exclusive property of MS” and “does not grant licence, right or permission” for the Chinese contract manufacturer “to use them without obtaining MS prior written permission”.  MS did not provide such permission to either EZ or the Chinese contract manufacturer.

The Decision

The Hearings Officer found the marks shown above to be substantially identical as they shared the same “dominant cognitive cues” and “essential elements”.  The Hearings Officer found the only discernible difference between these marks were the terms “Lite” and “MOBI”, which suggested specific qualities that are generally desirable for the relevant goods, namely, that they are “Lite” (i.e. lightweight) and “Mobi(le)”.

MS were able to demonstrate that their use of the EZ LITE CRUISER Logo mark in Australia commenced well before EZ filed (or started using) the EZ MOBI CRUISER Logo mark and that their use of the EZ LITE CRUISER Logo mark in Australia was in relation to the “same kind of thing” as EZ’s goods, namely electric wheelchairs, mobility scooters and associated parts and accessories.

As a result, MS was able to demonstrate that it possessed a superior claim to ownership and the Hearings Officer refused to register the EZ MOBI CRUISER Logo mark.

The Point

A person supplying goods in Australia from a foreign manufacturer can legitimately claim ownership of a trade mark in Australia but they first need to show that they control the quality of the goods being sold and control use of the trade mark.

Beyond that ownership of a trade mark will generally be determined by ascertaining  the person who was first in time to either (i) use that mark (or a mark that is substantially identical) in Australia in relation to specific goods and/or services, or the “same kind of thing” or (ii) file an application for the trade mark covering the relevant goods and/or services.

Authored by Nathan Sinclair and Sean McManis

Congratulations to Allira Hudson-GofersDuncan Longstaff and Michael Deacon, Shelston IP’s newly appointed Principals. Congratulations also goes to Nathan SinclairSerena White, and Danielle Spath for their promotions. This is well deserved recognition for their hard work and dedication shown towards their IP practice  and clients each day.

Allira Hudson-Gofers
Principal
BE(Mechatronic) (Hons 1), MBiomedEng, MIP, BA(Technology)Allira specialises in the provision of commercially relevant advice regarding patents and registered designs. Her expertise includes medical devices and diagnostic technologies; robotics; building and construction; sustainable technologies; and manufacturing processes.

Duncan Longstaff
Principal
LLM(IP) LLB(Hons1st) BSc(Biol)With over a decade of experience and higher degree training specialising in IP topics, Duncan’s IP litigation practice focuses on patent disputes involving pharmaceuticals, biotechnology, medical devices, mining and information technology.

Michael Deacon
Principal
BA LLB (Hons) GradCert TMLPMichael is a Lawyer and Registered Trade Mark Attorney with a focus on IP commercialisation. He has broad experience providing legal advice and drafting agreements across various commercial transaction types and assisting with brand protection, enforcement and strategy.

Nathan Sinclair
Senior Associate
BSc (Hons) (Chem) MIP (UTS)Nathan manages all aspects of Australian and overseas trade mark filings and prosecutions, filing strategies and trade mark portfolio management.

Serena White, DPhil
Senior Associate
MChem (Hons) (Oxon), DPhil (Oxon)Serena is a European qualified patent attorney, a UK and trans-Tasman patent attorney. She has
a strong technical background in organic chemistry.

Danielle Spath
Associate
GradCert TMLPDanielle maintains client trade mark portfolios and deals with the registration and protection of trade marks in Australia and overseas.

Securing protection for your intellectual property in the South Pacific can often be both challenging and time-consuming.  If registration is available (which is not always the case), the registration process varies from country to country and often involves a labyrinth of filing requirements, elderly legislation and “island time”, where an outwardly straightforward process may take several months (even years) to complete.

However, the Intellectual Property Office of Papua New Guinea (“IPOPNG”) has recently unveiled a series of improvements to their www.ipopng.gov.pg website, a move which will assist brand owners interested in protecting their rights in Papua New Guinea (“PNG”).

The IPOPNG website now provides access to a searchable electronic database of PNG trade marks which is hosted by the World Intellectual Property Organisation (WIPO).  Trade mark owners can now conduct direct availability searches prior to filing to help identify potentially conflicting registrations.  It is unclear how often the IPOPNG database will be updated, but there is currently a delay of ~3 months for new trade marks being published online, which suggests that some care should be taken when reviewing search results.

Those who currently own trade marks in PNG can also check on the status and scope of existing registrations.  The updated website also allows users to download forms and schedules of official fees.

While the changes will not impact upon some of the frustrations experienced by trade mark owners managing portfolio protection in PNG, such as typically long delays in the issuing of certificates of registration, they are certainly a step in the right direction.

PNG’s population exceeds 8 million (almost twice that of New Zealand), and it is potentially a significant market for brand owners.  Consequently, it would be prudent for brand owners trading goods or services there to consider seeking protection.

Shelston IP deals directly with IPOPNG and certain other South Pacific intellectual property offices when registering trade marks.  Further, with a network of trusted and experienced associates in the South Pacific, Shelston IP is able to assist you in protecting your trade marks throughout the South Pacific region.

If you require further information, please let us know.

Authored by Nathan Sinclair and Sean McManis