4 min read

Combe International Ltd v Dr August Wolff GmbH & Co. KG Arzneimittel [2021] FCAFC 8

Following on from our previous article, in a successful appeal by Combe International Ltd, the Full Federal Court disagreed with the primary judge’s approach to assessing deceptive similarity. As a result, it refused registration of the VAGISAN trade mark by Dr August Wolff GmbH & Co. KG Arzneimittel.

Background

Dr August Wolff GmbH & Co. KG Arzneimittel(Dr Wolff) is a German pharmaceutical company. It filed an application for VAGISAN on 27 May 2015 for the following goods:

Class 3: Soaps and cosmetics, all aforementioned goods not for the indication and application of tired legs and/or arms

Class 5: Pharmaceutical products, sanitary products for medical purposes; dietetic substances for medical purposes, all aforementioned goods not for the indication and application of tired legs and/or arms

Combe International Ltd (Combe) is a US company that markets and sells a range of personal cleansing, health and grooming products and is the owner of prior registrations for or incorporating VAGISIL. These registrations include the following goods:

Class 3: Medicated lotions and medicated creams; non-medicated products for feminine use

Class 5: Medicated products for feminine use; vaginal lubricants; medicated creams, gels, lotions

A delegate of the Registrar of Trade Marks refused registration of the VAGISAN trade mark on 29 September 2017 under s60 of the Trade Marks Act 1995 based on Combe’s prior reputation in its VAGISIL trade mark.

Federal Court Decision

The primary judge disagreed with the delegate’s decision and decided that Combe had failed to establish any ground of opposition.

On the issue of deceptive similarity (section 44), the primary judge found that the VAGISAN and VAGISIL trade marks are likely to be understood as indicating products to be used in relation to the female genital area. The primary judge took the view that the prefixes VAG and VAGI are descriptive, and that, as a consequence, the words VAGISAN and VAGISIL do not have a close phonetic resemblance. In his view neither of the words lends itself to mispronunciation, and the suffixes SIL and SAN are quite distinct.

Combe was also not able to establish that a significant or substantial number of potential customers might be confused or deceived by the VAGISAN mark such as to wonder whether there is any connection between it and VAGISIL, given Combe’s reputation (section 60) in the VAGISIL trade mark

Regarding the final opposition ground (section 59), the primary judge considered the fact that soap and cosmetic products were proposed to be introduced into Australia was sufficient intention to use the VAGISAN trade mark in respect of the designated goods.

The Federal Court decision is reported here.

Appeal to the Full Federal Court

In its Notice of Appeal, Combe claimed that the primary judge erred in his assessment of deceptive similarity between VAGISIL and VAGISAN by:

  • comparing the two words side by side;
  • engaging in a meticulous comparison of the two words, letter by letter and syllable by syllable with a clear pronunciation;
  • failing to give proper consideration to the notional consumer’s imperfect recollection of VAGISIL;
  • failing to give proper regard to the importance of the first syllable of each word and the tendency of English speakers to slur the endings of words;
  • breaking each word into component parts, assessing the descriptive and distinctive qualities of those parts and thus failing to pay proper regard to the whole of each mark;
  • failing to assess the whole of each mark as a coined term with no actual meaning; and/or
  • assessing the SAN element of VAGISAN as a distinctive and not descriptive feature, despite finding that SAN is readily understood as a reference to sanitary.
  • not giving sufficient weight to the high-volume and low-value nature of the VAGISAN Goods when making his assessment.

Section 44 – Deceptive Similarity

After consideration of the primary judge’s reasoning regarding deceptive similarity, the Full Court disagreed with the primary judge’s approach for a number of reasons.

Firstly, the VAGISAN and VAGISIL trade mark both have the same first five letters, they both have three syllables, and the VAGIS component is pronounced the same way. The only differences between the marks is the final two letters “AN” and “IL, and the only aural difference, being that between SIL and SAN, may be mispronounced or slurred.

Secondly, the idea of the mark is important in the consideration of deceptive similarity. In this case, consumers are likely to consider VAG or VAGI to be a reference to the vagina. Further, the first two syllables of both marks are likely to be remembered. While a similarity in idea may be insufficient for a finding of deceptive similarity if there is an absence of visual or aural similarity, in this case, the VAGISAN and VAGISIL marks also have visual and aural similarity.

Thirdly, the primary judge appeared to wrongly assume that the classes 3 and 5 goods of both the VAGISAN and VAGISIL trade marks were confined to goods for vaginal use, due to the descriptive nature of the prefixes VAG and VAGI. However, when assessing deceptive similarity, the notional use of the respective marks should have been considered, and the range of goods went beyond those for vaginal use.

In light of the above, the Full Court concluded that VAGISAN was deceptively similar to VAGISIL. The VAGISAN trade mark was refused.

Section 60 – Reputation

This ground of opposition was not considered, as the matter had already been decided by the Full Court’s findings on the conflict with Combe’s earlier registrations.

Takeaway and final comments

The Full Court decision provides guidance on the various factors that should be considered when assessing the deceptive similarity of trade marks. In particular, it is a reminder that marks should be considered and compared in their entirety.

In a further development, Dr Wolff has filed an application for the composite mark DR WOLFF’S VAGISAN, covering similar goods in classes 3 and 5 to its VAGISAN word mark. This application has been opposed by Combe.

Authored by Danielle Spath and Sean McManis

10 min read

Office of the Retirement Commissioner v Cash Converters Pty Ltd [2020] NZIPOTM 27 (23 December 2020)

This recent decision provides helpful guidance on the principles for partial revocation of trade mark registrations in New Zealand and the determination of a “fair description” for goods and services.

The decision also highlights important differences between the law and practice on non-use removal proceedings in Australia and New Zealand.

Background

Cash Converters Pty Ltd (“Cash Converters”) sought partial revocation of the Office of the Retirement Commissioner’s (ORC) Registration No. 637400 SORTED. It covered Class 36 services in providing advisory, consultancy and information services relating to finance, investment and financial planning for and during retirement, and providing financial information relating to retirement.

They also sought partial revocation of Registration No. 976028 SORTED, which covered broadly worded Class 36 services “financial affairs; monetary affairs; real estate affairs” and various services in providing advice, consultancy and information the areas of finance, monetary affairs, retirement, real estate, property and insurance and Class 41 educational services and services in providing educational material and information relating to insurance, financial affairs, monetary affairs, real estate affairs.  The full specifications for the registrations are at [1].  

Revocation was sought on the basis of non-use of the SORTED mark for a continuous period of three years.

Facts/evidence

ORC started using its SORTED mark in 2001, when it established its website www.sorted.com for providing information and tools, such as online calculators, to help New Zealanders prepare for, and manage, their finances during retirement. 

From at least 2013 ORC’s use of SORTED expanded to a broader range of services in providing information, advice and resources to promote “the life-long financial literacy of New Zealanders”.  With this expansion in 2013, ORC obtained the later Registration No. 976028 SORTED for the broader range of services. 

ORC’s evidence of use included use of the SORTED mark on guides, booklets, seminar and course details, on online tools and calculators and on an online forum.  [2]

Discussion

As the SORTED mark had not been used on all of the services covered by the registrations, partial revocation was in order.   

The Assistant Commissioner noted the High Court decision in Sky Network Television Ltd v Sky Fiber Inc (Sky Network) confirming how partial revocation applications should be considered:

The case law establishes that the first task is to find as a fact what goods or services there has been genuine use of the trade mark in relation to; and then to ‘arrive at a fair specification of goods having regard to the use made’.”  [3]

ORC was found to have used the SORTED mark to provide generalised information, advice and education on retirement planning and financial literacy generally.  ORC was also found to have used the mark to provide online calculator tools and an online community forum which provided users with more specific information and recommendations. 

In considering what was a “fair description” of those services provided under the mark, the Assistant Commissioner identified the principles set out by Mallon J in Sky Network:

“(a) The assessment has “nothing to do with the defendant.” Defining the goods negatively by reference to the defendants’ activities is therefore not the approach. 

(b) The proprietor has protection outside his or her specification of goods in areas where he or she can demonstrate a likelihood of deception under other provisions. “There is no pressing need, therefore, to confer on the proprietor a wider protection than his [or her] use warrants by unduly broadening the specification of goods.

(c) The width of the surviving specification “must depend largely upon questions of fact and degree.”  “Wide words can cover what are commercially quite different sorts of articles”.  If there is shown to be use of just one of those things “it would be commercially nonsense to maintain the registration for all goods caused by the wide words”. [4]

In summary, and further quoting Mallon J in Sky Network, the Assistant Commissioner noted that:

The “fair description” is one “which would be given in the context of trade mark protection” and depends on the nature of the goods, the circumstances of the trade and the breadth of use proved” and should be approached as ““objective and impartial, balancing the competing interests” and “a view from the trade”.[5]

The Assistant Commissioner recognised the important “balancing exercise” of competing interests of the owner, competitors and the public:

  1. to have the Register uncluttered with unused marks or with registrations with overly broad specifications;
  2. to prevent parties being unjustifiably exposed to infringement of registrations with overly broad specifications; and
  3. “the owner’s interest in protecting its brand” which “aligns with the public interest in consumers not being deceived or confused by use of another trade mark” and the owner’s entitlement “to commercially realistic protection, remembering the test for infringement, extends to similar goods and services”.  [6]

Findings 

The scope of the original specifications was considered to “extend well beyond the actual use that had been made of the SORTED mark”.  [7]

The Assistant Commissioner considered that a “fair description” of the services offered under the SORTED mark could be reached by considering the “functions (the way the mark has been used) and the generalised, rather than personalised, nature of the education, information and advice ORC provides”.  [8] 

ORC was not using the SORTED mark in relation to all types of information, education and advisory services in the areas of insurance, finance, money, real estate and investment.  Those services were all provided in giving advice and information focusing on retirement and personal financial literacy, and not on all aspects of insurance, finance, money and other matters.

The Assistant Commissioner found that it was appropriate to limit the specifications to reflect the focus of the use and reworded the services more narrowly and as all “relating [or related] to retirement and personal finance”.

Further, ORC’s advice was not personalised advice given to individuals.  Rather, it was generalised advice and information.  The general description “advisory services relating to…” in the original Class 36 specifications for both registrations was considered too broad.  The Assistant Commissioner considered that it would be fair to describe those services as “general advice relating to…”.

The original term “consultancy services relating to…” used in the Class 36 specifications for both registrations was removed because ORC would not be reasonably understood to be a consultancy business.  The Assistant Commissioner noted that “there is no aspect of the ORC business that technically requires the description to be used. ORC is able to have commercially realistic protection without the reference to consultancy”.  [9]

The full specifications as amended are at footnote  [10].

Earlier cases considering partial revocation

The Assistant Commissioner provided a helpful summary of earlier partial revocation cases and what was found to be a “fair description” for the goods and services.  This can be found at paragraph 71. 

These decisions show that precise descriptions are applied in partial revocation actions and that broad and unqualified descriptions are unlikely to be allowed under New Zealand practice. 

Comparison with Australian law

The decision highlights some important differences between the law on revocation/non-use removal actions in Australia and New Zealand. 

1. Discretion to remove or restrict a registration

The Assistant Commissioner noted in the decision that there is no “overriding discretion to refuse to revoke or partially revoke a registration”, which follows from the decision Crocodile International Pte Ltd v Lacoste [2017] NZSC 14 at [97].  [11]  Under New Zealand law, a trade mark owner must show use during the three year non-use period, or special circumstances that justify non-use of their mark, to successfully oppose a revocation application.

Unlike New Zealand, under Australian law the Registrar has the discretion under s 101(3) of the Trade Marks Act 1995 not to remove a registration even where there has not been use of the mark if “satisfied that it is reasonable” not to remove the registration.  Further, s 101(4) provides that in deciding under subsection (3) not to remove a registration the Registrar may take into account use of the mark on similar goods or closely related services or similar services or closely related goods. 

2. Standing to apply for removal for non use

New Zealand law requires that only an “aggrieved person” can apply for revocation of a registration.   As noted in the decision “the term “aggrieved person” is given a wide and liberal interpretation.  This will generally include trade rivals.  As well as someone who is disadvantaged in a legal or practical way.”  [12]

However, under Australian law any person can apply for removal of a registration for non-use and there is no requirement for the removal applicant to show aggrievement to have standing to apply for removal. 

3. Date of revocation

In the New Zealand decision, the Assistant Commissioner noted that “the result of revocation is that the owner’s rights cease to exist on the date the application revocation was filed, or at an earlier date if the Commissioner is satisfied the non-use ground has been made out at an earlier date.”  [13]

Under Australian law, the date of removal of a registration for non-use is the date of the Registrar’s decision and the Registrar does not have the discretion to determine an earlier date for removal.

Takeaway

There are important differences in relation to standing and discretion in revocation/non-use removal proceedings in New Zealand and Australia which trade mark owners should note.

When defending a non-use removal action in Australia, and there has been no use of the mark during the 3 year non-use period, trade mark owners should still consider whether there are grounds for convincing the Registrar to refuse removal of the registration, such as some residual reputation in the mark from earlier use or possibly overseas reputation.

In New Zealand, it is much more likely than it is in Australia that broad descriptions will be restricted to more specific and limited descriptions.


[1] Services covered by Registration No. 637400 SORTED:

Class 36:Providing advisory, consultancy and information services relating to finance, investment and financial planning for and during retirement; providing financial information relating to retirement by means of telecommunication and electronic networks including online, via a global or other communications network, the world-wide web, an intranet or the Internet

Services covered by Registration No. 976028 SORTED:

Class 36: Financial affairs; monetary affairs; real estate affairs; providing advisory, consultancy and information services relating to finance, investment and financial planning for and during retirement; advisory services relating to real estate ownership; providing financial information relating to retirement by means of telecommunication and electronic networks including online, via a global or other communications network, the world-wide web, an intranet or the Internet; consultancy services relating to insurance; information services relating to insurance; insurance advisory services; insurance information; provision of insurance information; consultation services relating to real estate; providing information, including online, about insurance, financial and monetary affairs and real estate affairs; provision of information in relation to real estate; provision of information relating to property (real estate); provision of information relating to real estate; real estate advisory; services; real estate investment advice

Class 41: Dissemination of educational material; education services; educational services; life coaching (training or education services); provision of educational information; provision of education services via an online forum; publication of educational materials; publication of educational texts; the aforementioned relating to insurance, financial affairs, monetary affairs, real estate affairs

[2] Arguing that ORC did not provide financial advisory services, Cash Converters’ evidence in support of the revocation application referred to ORC’s disclaimers on its website that its information and tools “should be treated as a guide only” and should be used before seeking professional advice.  It was also noted that ORC’s “Investor Kickstarter” guide is referred to on the website as a guide only which  “does not constitute investment advice to any person”.  The evidence also noted that ORC is not a registered financial services provider under the Financial Services Provider (Regulation and Dispute Resolution) Act 2008 (RDR Act). 

In reply, ORC filed evidence that it is not required to be registered under the RDR Act as it is not a business which provides financial services as defined under the Act.  ORC also noted that their “Investor Kickstarter” tool asks high level questions to categorise participants into one of five types of investors and that their disclaimer clarifies that the advice given through this tool is not the type of financial advice to which the Financial Advisors Act 2008 would apply. 

[3] Office of the Retirement Commissioner v Cash Converters Pty Ltd [2020] NZIPOTM 27 (23 December 2020), paragraph 39.

[4] ibid, paragraph 44.

[5] ibid, paragraph 45.

[6] ibid, paragraph 52.

[7] ibid, paragraph 110.

[8] ibid, paragraph 113.

[9] ibid, paragraph 96.

[10] Registration No. 637400

Class 36: Providing information services and general advice relating to finance, investment and financial planning for and during retirement; providing financial information and general advice relating to retirement by means of telecommunication and electronic networks including online, via a global or other communications network, the worldwide web, an intranet or the Internet

Registration 976028

Class 36: Providing information and general advice, including online, about insurance, financial and monetary affairs and real estate affairs related to retirement and personal finance; provision of financial calculation services relating to retirement and personal financial planning including budgeting, personal debt, home buying, mortgages, superannuation, investment and savings, including by way of online; calculators; providing information services and general advice relating to finance, investment and financial planning for and during retirement; providing financial information and general advice relating to retirement by means of telecommunication and electronic networks including online, via a global or other communications network, the world-wide web, an intranet or the Internet.

Class 41: Education services related to retirement and personal financial matters including financial planning and budgeting, debt, home buying, mortgages, superannuation, investment and savings; provision and dissemination of educational material and information related to retirement and personal financial matters, including by way online communication, websites, web blogs, social media, forums, publications (including texts, guides and brochures), news articles, training, courses, seminars and meetings.

[11] ibid, paragraph 12 quoting  Crocodile International Pte Ltd v Lacoste [2017] NZSC 14 at [97]

[12] ibid, paragraph 28.

[13] ibid, paragraph 11.

Authored by Michelle Howe and Sean McManis

11 min read

Axent Holdings Pty Ltd t/a Axent Global v Compusign Australia Pty Ltd [2020] FCA 1373 (25 September 2020) 

This decision of Kenny J of the Federal Court of Australia considers many issues including the Crown use defence; whether information published by the Crown (and made available to it by a patentee) can be novelty defeating; and the effect that requesting an extension of time to renew a patent outside of the renewal fee grace period has on the relevant period during which the patent is taken to have ceased before it is restored.

The Background

Axent Holdings Pty Ltd, trading as Axent Global (Axent), commenced proceedings against Compusign Australia Pty Ltd and Compusign Systems Pty Ltd (together Compusign) as well as Hi-Lux Technical Services Pty Ltd (Hi-Lux) (the respondents) for infringing Australian Patent No. 2003252764 titled “Changing Sign System” (764 Patent). The 764 Patent claimed an earliest priority date of 4 October 2002 and was granted on 26 June 2008. The respondents filed a cross claim asserting the 764 Patent was invalid. Except for any issues under ss 22A and 138, the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) (Raising the Bar Act) did not apply.

The invention related to a changing sign system for use as a variable speed limit sign (VSLS) on roadways. The VSLS could be used to display a lower hazard speed limit instead of the normal maximum safe speed when a certain condition is detected. When the hazard speed limit is displayed, a portion of the sign is varied to conspicuously indicate the change of conditions.

Independent claims 1, 17 and 20 described an electronic variable speed limit sign, which has a plurality of lights forming the central speed limit numerals and annulus rings around those numerals. The specification explains that a change of conditions is indicated by flashing some of the annulus outer rings while always retaining one ring on, to fulfil the criteria of being a speed display sign, that is, by always showing a number in a circle on a display panel. Dependent claims 2 to 16, 18 to 19 and 21 to 27 specified a number of further features, and claim 28 was an omnibus claim.

In September 2001, Mr Fontaine, the director of Axent and named inventor of the 764 Patent, met with Mr Bean, who worked for VicRoads, to view a demonstration of Axent’s variable speed limit sign with a partly flashing annulus. Mr Fontaine stated that he subsequently received tender documents which included a VicRoads specification (the September 2001 specification), which contained a requirement, for variable speed limit signs, that part of the inner diameter of the annulus should be capable of flashing on and off.

The issues

Product or method claims

A preliminary question arose as to whether the claims were product or method claims for the purposes of determining infringement. Axent pleaded that the claims were to a product. The respondents submitted that the claim integers formed part of a method of using a variable speed limit sign. Her Honour rejected Axent’s submissions that the claims were framed in terms of capabilities, yet still construed the majority of the claims as product claims limited by result. Claims 12, 14 and 16 were construed as method claims which describe the operation of the claimed sign system.

Clarity

The respondents contended that independent claims 1, 17 and 23 lacked clarity because of the use of the terms “normal speed”, “input criterion” and “change in conditions”. Her Honour considered that when the claims were read as a whole, in the context of the specification, the skilled addressee would have no real doubt about what is intended by the above features and that the claims were clear.

Direct Infringement

Axent’s case was in substance that the supply by Hi-Lux and Compusign of their respective variable speed limit signs infringed all the claims of the Patent. Axent was unable to establish that either the Hi-Lux signs or the Compusign signs included relevant features of the product claims or that Hi-lux or Compusign performed the relevant claimed method in making their signs. Thus, the product and method claims were not infringed.

As omnibus claim 28 was narrowed “with reference to the examples”, and the specification included no ‘examples’, her Honour considered that there can be no infringement or alternatively that claim 28 was invalid for lack of clarity.

Indirect Infringement

Axent also relied on s 117 of the Patents Act 1990 (Act) to allege indirect infringement initially on the sole basis that the supply of a sign is, in and of itself, a supply that attracts the operation of s 117. Axent subsequently sought to broaden their case for indirect infringement to instances where the invention was for a method, rather than a product. Axent also sought leave to elicit from the respondents’ witnesses in cross-examination evidence as to the directions given and steps taken by the respondents when supplying their signage. The respondents submitted that it would be unfair to permit Axent to seek to make out an infringement case based on s 117 that it had not opened or properly foreshadowed. Her Honour agreed and held Axent to the case on which it opened. The evidence given by the respondents’ witnesses by way of cross-examination was admitted, however, it was limited in its use so that it could not be used to form the basis of an infringement case by reference to s 117. Axent was not able to make out its case of indirect infringement against the respondents.

Crown use defence

Hi-Lux submitted that each of VicRoads, the South Australian Department of Planning, Transport and Infrastructure, and the City of Greater Geelong was an authority of a State for the purposes of s 163 of the Act which provides that exploitation of an invention by or for the services of the Commonwealth, or a State is not an infringement of any patent rights.

Her Honour considered that each of the organisations were an Authority of the state and that the exploitation of the sign was for the services of each Authority. However, this was subject to s 163(3) which required that the exploitation of the invention was necessary for the proper provision of the services within Australia. Her Honour considered it may be that exploitation was not strictly necessary in the sense contemplated by s 163(3) because alternative signage was available and widely used. However, this was not considered further, in any event, as Hi-Lux failed to satisfy her Honour that the infringement  was authorised in writing by an authority of the State.

In particular, the documents in relation to Hi-Lux’s supply of signs to VicRoads and the City of Greater Geelong left open the possibility that Hi-Lux had a choice as to the electronic speed sign supplied, leaving it free to perform the relevant contract without infringing the claims of the Patent. It was clear that Hi-Lux was under no contractual obligation to supply an infringing item.

The contract for the supply and installation of variable speed limit signs between the Commissioner of Highways and Hi-Lux included a specification which set out the requirements for the variable speed limit signs. Her Honour noted the possibility this contract may have required a product that infringed the 764 Patent and thus, the infringing acts may well have been authorised for the purposes of s 163. However, in the absence of submissions or evidence to this effect, her Honour was not satisfied that the contract with the Commissioner required Hi-Lux to supply goods that necessarily infringed the patent in suit. Accordingly, Hi-Lux’s defence under s 163 of the Act did not succeed.

Innocent infringement

Compusign argued that they were not aware and had no reason to believe that a patent existed for the invention before receiving the letter of demand from Axent. Compusign gave evidence to the effect that they had not expected a patent to exist in relation to the requirements of the roads authorities’ specifications without the specifications referring to the patent. Her Honour considered that there was nothing in the relevant roads authorities’ specifications that would put a reader on notice of the existence of a relevant patent. Axent did not address the issue of innocent infringement.

Accordingly, if it were necessary to do so, her Honour would have provisionally refused to make an award of damages or an order for an account of profits in respect of any infringement by Compusign prior to the date of the receipt of the letter of demand.

Lapse of patent

Axent did not pay the renewal fees for the 764 Patent by the due date of 6 October 2015; nor did it pay the fees by 6 April 2016, within the 6 month renewal fee grace period. Axent applied for an extension of time which was granted on 1 September 2016 and the renewal fees were then applied to the 764 Patent. The 764 Patent therefore ceased to be registered for a period for the non-payment of fees.

The respondents submitted that Axent could not assert infringement of the patent from the day after that on which the renewal fee for the 764 Patent was due, 7 October 2015, to the day on which an application to extend the time to pay the renewal fee was granted, 1 September 2016. Axent submitted the relevant period began on 5 April 2016 (that is, approximately 6 months after 7 October 2015) and concluded on 1 September 2016. The commencement of the relevant period turns on the construction of reg 13.6 of the Patents Regulations 1991 (Cth), which relevantly provides that the period in which the renewal fee must be paid is the period ending at the last moment of the anniversary, however, if the renewal fee is paid within 6 months after the end of the relevant anniversary the period is taken to be extended until the fee is paid. The respondents submitted, and her Honour accepted, that the period is only “taken to be” extended if the condition of the renewal fee being paid within the 6 month grace period is satisfied. Had Axent paid the renewal fee at any time before the end of the 6 month grace period, the 764 Patent would never have ceased as the prescribed period would have been extended by reg 13.6(2)(a) to end on the day Axent paid the fee. However, Axent did not pay the renewal fee before 5 April 2016, and in consequence reg 13.6(2)(a) had no application.

Therefore, the prescribed period for renewal ended on 7 October 2015 being the point after the last moment of the anniversary date for the Patent. It follows that the Patent ceased on that day. The Patent was restored on 1 September 2016, when the extension of time for the renewal fee application was granted.

Prior use

The respondents relied on s 119(1) by way of defence to Axent’s infringement case. In the absence of evidence that either Hi-Lux or Compusign Australia was “making” an infringing product or “using” an infringing process before the priority date, neither could satisfy the requirements for the prior use defence required by s 119(1) prior to the Raising the Bar Act changes.

Invalidity of the Patent

The respondents submitted the claims were not novel because the invention was disclosed by the September 2001 specification and as part of the installation process for the Western Ring Road Project. Axent submitted that the September 2001 specification was merely a “wish list” that provided insufficiently direct disclosure and in any event was excluded from being considered for the purposes of novelty and inventive step because of s 24(1)(b) and/or s 24(2). Relevantly, s 24(1)(b) provides that, when assessing novelty and inventive step, the person making the decision must disregard any information derived from the patentee and made publicly available without their consent. Under s 24(2), the person making the decision must disregard any information given by, or with the consent of, the patentee, to the Crown, but to no other person or organisation.

Axent argued that it had disclosed its invention to VicRoads confidentially and never consented to VicRoads on-disclosing it in the September 2001 specification. The respondents contended, and her Honour agreed, that s 24(2) did not apply because the September 2001 specification was a disclosure made by, and not to, the Crown and the language of s 24(2) did not support the “reach-through effect” that Axent had argued.

There was still the further question as to whether s 24(1)(b) operated. A central issue was whether the information was made publicly available without the consent of Axent. Whilst there was no evidence that Axent expressly gave consent, having regard to the circumstances and the evidence, her Honour was satisfied that Axent positively consented to the inclusion of the claimed invention in the September 2001 specification. Accordingly, s 24(1)(b) did not apply.

Kenny J rejected the contention that the September 2001 specification was part of the common general knowledge or that it could be combined with the common general knowledge. Accordingly, the critical question was, whether each of the claims lacked inventive step by reference to common general knowledge alone. The evidence was clear that, apart from the flashing annulus feature, the other features of the claims were obvious as at the priority date. However, there was clear evidence that the skilled worker was aware of a flashing annulus feature well before the priority date.

Her Honour considered that no problem was overcome or barrier crossed by the adoption of the flashing annulus feature and that the evidence indicated a person skilled in the art would have taken the steps leading from the prior art to the claimed invention as a matter of routine. The 764 Patent was found invalid for lack of inventive step by reference to the common general knowledge alone, and claims 1, 9, 10, 14, 15, 17, 20 and 27 were invalid for want of novelty in light of the disclosure of September 2001 specification.

The Decision

Ultimately, Axent failed in its infringement case, even if it had succeeded, Compusign succeeded in its innocent infringement defence and all respondents succeeded on the lapsed patent defence. The Crown use and prior use defences failed.

Significance

The decision clarified that the prescribed period to pay a renewal fee to prevent a patent ceasing is only taken to be extended to the date of payment, if the fee is paid within the 6 month grace period. Accordingly, when the renewal fee is paid after the 6 month grace period by relying on an extension of time, the patent is taken to have ceased from the point after the last moment of the anniversary of the patent.

Regarding the Crown Use defence, the decision indicated that written authorisation by the Crown to exploit an invention may be explicit or implied, but the authorisation must be specific such that the necessary exploitation of the invention is authorised and that alternatives are not possible.

For information made available to the Crown by a patentee and subsequently published by the Crown, the decision indicated s 24(2) did not provide a “reach-through effect” to exclude such a publication from the prior art when considering novelty and inventive step.

The decision also offers guidance on the evidence required to establish innocent infringement in the case that a defendant was not aware, and had no reason to believe, that a patent for the invention existed.

Authored by Tam Huynh and Dean Bradley

8 min read

Representations on Packaging and in Advertising – the Full Federal Court finds that Kimberley-Clark has not Engaged in Misleading Conduct by using “Flushable”.

The Australian Competition and Consumer Commission (ACCC) has lost its Full Court appeal that Kimberly-Clark Australia (KCA) had misled and deceived consumers, by representing on its website www.kleenex-cottonelle.com.au and on product packaging, that its  Kleenex Cottonelle Flushable wipes (KCFC wipes) were suitable for flushing down toilets.

The full decision can be found here.

Background

Earlier Federal Court Proceedings

In 2006 the ACCC commenced Federal Court proceedings against KCA alleging that KCA had, by its advertising and marketing of the KCFC wipes during May 2013 and May 2016:

(1)     engaged in conduct in trade or commerce which was misleading or deceptive, or likely to mislead or deceive, in contravention of s 18(1) of the Australian Consumer Law, being Sch 2 of the Competition and Consumer Act 2010 (ACL);

(2)     made false or misleading representations that its KCFC wipes had a particular quality in  contravention of s 29(1)(a) of the ACL and/or had particular performance characteristics, uses and/or benefits, in contravention of s 29(1)(g) of the ACL; and

(3)     engaged in conduct in trade or commerce that was liable to mislead the public as to the nature, characteristics, and suitability for purpose of KCFC wipes, in contravention of s 33 of the ACL.

 The ACC alleged that KCA’s packaging and website represented that the KCFC wipes:

(1)     “were suitable to be flushed down the toilet and into sewerage systems in Australia” (flushability representation);

(2)     “had similar characteristics to toilet paper when flushed”, as they would behave in a similar way to toilet paper when flushed in that they break up or disintegrate in a timeframe and manner similar to toilet paper” (characteristics representation); and

(3)    “would break up or disintegrate in a timeframe and manner similar to toilet paper” (disintegration representation).

The representations included statements on the webpages of KCA’s website www.kleenex-cottonelle.com.au , such as “Flushable Cleaning cloths” and “will break up in the sewerage or septic system like toilet paper”, use on the product packaging of words, such as “flushable” and “Cloths break down in sewerage system or septic tank” and of the logo (depicted below).

At the time there was no legislation or generally accepted industry standards governing the characteristics of what could be marketed as “flushable”, although KCA argued that the KFCF wipes met the tests for flushability under the “GD3 Guidelines for flushability”, which had been developed by manufacturers, including Kimberley-Clarke Corporation.

KCA denied making the characteristics or disintegration representations but accepted that it made the flushability representation. However, it argued that the flushability representation was not false or misleading and was within the G3 Guidelines.

While accepting that the KCFC wipes do not break down as quickly or easily as toilet paper, Gleeson J found that the characteristics and disintegration representations had not been made.  This was because in the website or packaging context in which the alleged representations appeared, they would not convey to an ordinary reasonable consumer anything about how the flushed KCFC wipes behaved, except that they might be “flushable” (although not equivalently flushable to toilet paper).

Having regard to the ACCC’s concession and the evidence, Gleeson J found that the flushability representation had been made by KCA. However, her Honour found that the flushability representation was not false, misleading or deceptive because there was insufficient evidence that harm had actually eventuated to household plumbing and the sewer network to demonstrate that the KCFC wipes were unsuitable for flushing.

While there was disagreement over the G3 Guidelines being an acceptable standard, Gleeson J found that, in the absence of this evidence of harm, they were an “appropriate framework for assessing flushability” and a “reasonable benchmark for making a flushability claim”.

The Appeal to the Full Federal Court

The ACCC unsuccessfully appealed Gleeson J’s decision to the Full Federal Court on 8 appeal grounds, all of which were dismissed. Appeal grounds 1 to 6 related to the flushability representation.

In the 1st ground of appeal,  the ACCC argued that the trial judge, Gleeson J was in error because she “approached the question of ‘harm’ as might be done in a damage claim in negligence, elevating the inquiry to proof of causation as opposed to assessing falsifiability under the consumer law”. The ACCC argued that her Honour should have considered the question of whether  there was a real risk of harm or that the KC wipes had the potential to cause harm rather than that the KC wipes contributed to or caused actual harm (including blockages) to household plumbing (including septic tanks) or to the sewerage network.

The Full Court dismissed this ground of appeal for two reasons.  First, there was no error in the primary judge’s reasons because her Honour simply responded to the case argued by the ACCC at trial on the flushability representation, which was on the basis that the actual harm had been caused, not that flushing the KC wipes posed a risk of harm. The Full Court said “No such case was run at trial. It cannot be run now”, as it was a different case.

Secondly, the Full Court found that Gleeson J had, in any event, considered and addressed the risk of harm but concluded that it was not shown to be materially greater than the risk posed by toilet paper, and that it was not erroneous to take into account, as the primary judge did, whether any harm in fact eventuated to household plumbing and the sewerage network, when assessing the level of risk posed by the KCFC wipes.

Related to this second issue, the ACCC argued in its 2nd  and 3rd  appeal grounds  that Gleeson J’s  findings that the KCFC wipes did not present a risk of harm “over and above” or “materially greater” than that posed by toilet paper and her finding that flushing the KCFC wipes down the toilet would contribute to, or cause harm, were in error because they were inconsistent with and against the weight of the evidence.

In dismissing these grounds, the Full Court found that It was not erroneous (for the trial judge) to have regard to “the paucity of evidence of harm in reaching the conclusion that the risk posed by KCFC wipes was not materially greater than the risk posed by toilet paper”.

Some of the problems identified by the primary judge in the evidence led by the ACCC were:

  • Most of the evidence was directed to how wipes in general caused blockages, but not that the KCFC wipes caused blockages. The ACCC had presented only very weak evidence of blockages in household drain lines and in the sewer (beyond the household drain line) caused by the KCFC wipes.
  • It was accepted, as a matter of logic, that the more quickly an item breaks down after flushing the less the risk of snagging or clumping in the sewerage system. The KCFC wipes were shown to break down and disperse more slowly than toilet paper but this did not support an inference that flushing KCFC wipes down the toilet led to a materially greater risk than toilet paper of causing blockages to the sewerage system, when there was a lack of evidence that KCFC wipes actually did cause blockages.
  • KCA’s change of packaging in October 2015 to indicate that it did not recommend KCFC wipes be flushed into a domestic septic tank was insufficient to support the inference (contended for by the ACCC) that the KCFC wipes contributed to or caused harm to household plumbing or the sewer network.

In the 4th ground of appeal, the ACCC argued that the trial judge erred in finding that the evidence of 26 consumer complaints in KCA’s business records (regarding how their household plumbing (including septic tanks) had been blocked by KCFC wipes) was “weak” and insufficient to support a finding that the KCFC wipes were not suitable to be flushed down toilets.

The Full Court said that the small number of consumer complaints (most of which related to  blockages in septic tanks not the sewerage systems as argued by ACCC at trial) and the absence of evidence from any consumer or plumber to verify the facts in any of the complaints  was “hardly a sound basis” for reaching the conclusion that KCA falsely representing that KCFC wipes were flushable, and “rather suggests that the KCFC wipes were suitable to be flushed into domestic drain lines”.

In the 5th ground of appeal, the ACCC argued that the trial judge erred in finding that the GD3 Guidelines were an “appropriate framework for assessing flushability”, because manufacturers, including KC had developed the guidelines themselves, “to avoid government regulation which might constrain their business”.

The Full Court dismissed this ground.  They found that the primary judge was “plainly aware that the manufacturers were developing their own guidelines” and their development had been informed by various “real world” tests.

The ACCC’s 7th and 8th grounds of the appeal concerned the characteristics and disintegration representations.

The Full Court found that the primary judge was correct to conclude that the characteristics and disintegration representations were not made and so it was not necessary to consider then whether they were false and misleading.

The Full Court noted that of the 8 representations relied upon by the ACCC, 6 did not mention toilet paper at all or compare the KCFC wipes with the characteristics or performance of toilet paper. The 5th representation, that the KCFC wipes “will break up in the sewerage or septic system like toilet paper” (appearing on a webpage of the www.kleenex-cottonelle.com.au website) was the only statement which directly compared the KCFC wipes to toilet paper. However, the Full Court agreed with the judge at first instance that this representation had to be considered in the context of the immediately following sentience; “However, do not flush an excessive amount of wipes at one time (no more than two wipes per flush)” The Full Court said that in this context (i.e. the direction not to flush any more than two wipes)the reasonable consumer would not have understood that the KCFC wipes broke up in the same way as toilet paper .

Regarding the eighth representation, the  image,  the Full Court said that he image did not, of itself, or together with the other representations read in context, convey that KCFC wipes “had similar characteristics to toilet paper when flushed” or that they “would break up or disintegrate in a timeframe and manner similar to toilet paper”.

Comment

The ACCC’s case ultimately failed because it could not prove that KCA made the false and misleading statements that the ACCC alleged.  The ACCC didn’t help its own cause by arguing at first instance (which could not be changed on appeal) that the KFCF wipes were not suitable for flushing because they caused actual harm to the sewerage system. With this argument the ACCC gave itself a higher evidentiary burden to meet than the argument that the KCFC wipes posed only a risk of harm. It is worth noting that the ACCC’s argument at first instance that the flushabiilty representation by KFA was in respect of a “future matter”, and so within section 4 of the ACL, was not successful.  If the ACCC had succeeded with this argument and section 4 found to apply, the evidentiary burden would instead have been on KCA to present evidence that it had “reasonable grounds” for making the flushability representation and so (for that reason) the representations could not be taken as misleading.

Authored by 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

10 min read

Vehicle Monitoring Systems Pty Ltd v SARB Management Group Pty Ltd [2020] FCA 408

This decision forms part of an ongoing battle between two Australian companies over patented technology for improving the efficiency by which authorities monitor and manage access to public parking.  In this decision, the Federal Court of Australia provides some helpful guidance on the approach to assessing whether or not a claimed invention involves an inventive step (i.e. is not obvious) under the current provisions of Australian patent law.

Background

Vehicle Monitoring Systems Pty Ltd (VMS) developed a Parking Overstay Detection System (the POD system), which uses in-ground sensors to detect changes in the earth’s magnetic field when a vehicle enters a parking space (or bay).  A message is sent wirelessly to a device carried by a parking officer who can then issue an infringement notice, as required.

VMS sought to collaborate with SARB Management Group Pty Ltd (SARB) to advance the POD system technology.  SARB is the designer and distributor of software popularly used with generic handheld PDAs for issuing parking infringement notices by council officers.  However, no collaboration eventuated from these discussions.  Instead, SARB developed its own vehicle detection system which was also based on the use of a sensor to detect changes in the earth’s magnetic field when a vehicle enters a parking space.

More specifically, SARB’s system incorporated a vehicle detection unit (VDU) using a magnetic sensor capable of detecting occupancy of a vehicle space by a vehicle; a storage device carrying parameters which define notifiable vehicle space occupancy events; and a processor operable to initiate a communication from the VDU to a supervisory device (such as a PDA) upon occurrence of a notifiable event (such as a parking violation), wherein the communication includes data items pertaining to the notifiable event and is communicated in a format suitable for pre-population into infringement issuing software.

SARB’s system became the subject of Australian Patent Application No. 2013213708, entitled ‘Vehicle Detection’ (SARB application).  Relevantly, VMS opposed the SARB application on the grounds that the claimed invention lacked an inventive step and that SARB was not entitled to the grant of a patent for this invention under the Patents Act 1990.

An opposition hearing was conducted before the Australian Patent Office (Vehicle Monitoring Systems Pty Ltd v SARB Management Group Pty Ltd [2017] APO 63).  The Patent Office rejected each of these grounds as advanced by VMS, determining that claims 1-24 should proceed to grant (but claims 25-28 should not be granted).

VMS appealed this decision to the Federal Court of Australia and the present decision concerns the outcome of this appeal.

Arguments

VMS submitted that claims 1-24 of the SARB application lacked an inventive step in light of the common general knowledge and five sources of prior art information, including: a published PCT application (filed by VMS); a published Australian patent, a published journal article; slides of a presentation given at an industry conference in 2005; and details of an oral presentation given at an industry conference in 2006.

Additionally, VMS submitted that SARB is not entitled to be the person to whom the patent is granted because Mr Welch of VMS, or alternatively Mr Welch and Mr Gladwin of Maribyrnong City Council conceived of all or part of the invention disclosed in the SARB application and communicated it to Mr Del Papa of SARB, and in doing so sufficiently contributed to the invention to be named as inventors.

Decision

The decision involved a comprehensive assessment of facts, technical details, claim construction, and a determination of the common general knowledge involving expert witnesses and submissions from both parties.

Claim construction

For ease of reference, claim 1 is reproduced below:

  1. vehicle detection unit (VDU) comprising:
    1. magnetic sensor able to sense variations in magnetic field and for outputting a sensor signal caused by occupancy of a vehicle space by a vehicle;
    2. storage device carrying parameters which define notifiable vehicle space occupancy events;
    3. processor (a) operable to process the sensor signal to determine occupancy status of the vehicle space, and (b) operable to compare the occupancy status of the vehicle space with the parameters in order to determine whether a notifiable event has occurred, and (c) operable to initiate a communication from the vehicle detection unit to a supervisory device upon occurrence of a notifiable event, wherein the communication includes (i) data items pertaining to the notifiable event and (ii) communicated in a format suitable for pre-population into infringement issuing software.

There were contentions over the construction of the scope of claim 1, particularly as to whether the VDU initiates a communication only upon the occurrence of a notifiable event or whether the claim includes that the VDU is operable (i.e. able) to initiate a communication at a time other than when a notifiable event has occurred.  The Court preferred the latter construction advanced by VMS as to do otherwise would inappropriately add a limitation to the claim that is not present – that is, inserting the word ‘only’ before ‘operable’.  Additionally, the Court considered that data items pertaining to the notifiable event did not include ‘all’ data items as the plain language of the claim simply refers to ‘data items’ not ‘all data items’.

Furthermore, there was consideration of the feature ‘communicated in a format suitable for pre-population into infringement issuing software.’  VMS submitted that this required the data communicated from the VDU to the supervisory device to be able to be pre-populated into the data fields in the infringement issuing software without further data processing by the supervisory device.  SARB largely accepted this construction but submitted that the language of claim 1 does not preclude additional necessary processing at the supervisory device; for example to receive and organise the data packets.  The Court agreed with VMS’s construction and SARB’s qualification.

Inventive step

In Australia, an invention is taken to involve an inventive step when compared with the prior art base unless the invention would have been obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed before the priority date of the relevant claim.  The assessment can be made against the common general knowledge separately or together with certain other pieces of prior art information.

Accordingly, when assessing whether or not a claimed invention involves an inventive step it is first necessary to establish the relevant common general knowledge of the trade.

The prior information that can be used to supplement the common general knowledge to support an assertion of lack of inventive step is provided by section 7(3) of the Patents Act 1990 as follows:

(a)  any single piece of prior art information; or

(b)  a combination of any two or more pieces of prior art information that the skilled person could, before the priority date, be reasonably expected to have combined.

Section 7(3)(a) enables any publicly available single item of prior art information to be added to the common general knowledge for the purpose of considering whether or not an invention involves an inventive step.  Section 7(3)(b) facilitates the addition of a combination of two or more (publicly available) pieces of prior art information to supplement the common general knowledge for the consideration of invention step, subject to the condition that the skilled person could be reasonably expected to have combined them.

The requirement that the prior information merely be publicly available for it to be available for the consideration of inventive step represents a significant departure from the more rigorous requirements that existed before the changes to Australian patent law introduced by the Raising the Bar Act.  Previously, no prior art information could be added to the common general knowledge unless the skilled person could, before the priority date, be reasonably expected to have ascertained, understood, and regarded it as relevant.

Despite this framework, there was some dispute between the parties as to the proper approach to be taken when seeking to combine two or more pieces of prior art information under s 7(3)(b).  The Court reviewed the submissions from each party and summarised the relevant law before stating:

‘It follows that I do not accept that it is necessary for VMS to demonstrate any more for the purpose of s 7(3)(a) than that the prior art information has been made publicly available. Once it has done so, such information is notionally supplied to the person skilled in the art within s 7(2). For combining two or more pieces of prior art information, s 7(3)(b) deems that if those pieces of information are ‘publicly available’, they are be made available to the person skilled in the art. It will be a question of fact whether or not they may be reasonably be expected to be combined.’

In the respective approaches to inventive step, there was general agreement on the common general knowledge of electrical engineers with respect to wireless sensor networks.  However, there was some disagreement over whether or not the POD system formed part of the common general knowledge and, if so, what information concerning that system was known at the time.

The Court considered that the broad working of the POD system formed part of the common general knowledge in the art but did not accept that the common general knowledge would include a detailed understanding of the mechanisms of the POD system, or experience of using the POD system. In particular the means of communication between the in-ground sensor and the various remote terminals was not considered common general knowledge nor was the manual entry problem of transcription errors when using the POD system.

VMS first relied on the combination of the PCT application with information contained in an article on the POD system entitled ‘PODS – the Next Big Thing’.  However, the article did not consider pre-population of data items into infringement issuing software, which was a crucial item of detail absent from the disclosure of the PCT application.

VMS also cited a PowerPoint presentation, by Mr Gladwin, only as a publication of the slides.  The meaning of the slides, shorn of detail provided during the presentation, was opaque and the information in them was not considered to be of any practical use in the implementation of the PCT application.

Additionally, VMS cited a presentation given by Mr Welch at a conference in November 2006.  However, VMS faced insurmountable hurdles in proving the content of the presentation was made publicly available.  The Court noted the intrinsic danger in relying on an unaided recollection of events.  Whilst it was agreed Mr Welch was doing his best to assist the Court, it was noted that memories fade and, as such, it was unlikely that he would recall what he said with any reliable accuracy.

In considering inventive step, the Court was conscious that the question is whether the combination, not each integer, is obvious.  On this basis, the Court identified four points of uncertainty for the skilled team seeking to implement a system or method as disclosed in the PCT application.  Referring to the four identified points of uncertainty, the Court considered that each point required decisions on how to proceed which would involve prototype testing and evaluation. The Court noted the following:

“In my view, whilst the number of alternative solutions is relatively limited, there is no single line of logic that leads to the invention as claimed such that it can be concluded that the combination arrived at was ‘very plain’, or obvious. In my view the qualitative evaluation weighs sufficiently in favour of SARB to arrive at this conclusion.”

Accordingly, the Court held that VMS had not discharged its onus of demonstrating, on the balance of probabilities, that the invention claimed in claim 1 lacks an inventive step in view of the prior art PCT Application.  The remaining prior art information relied on by VMS was also not successful in demonstrating that the claimed invention lacked an inventive step, as they did not touch upon the most material aspects of the claimed combination.

Entitlement

Regarding VMS’s claim that SARB lacked entitlement to the invention, there was some dispute over the content of the conversations between Mr Del Papa, Mr Gladwin and Mr Welch when proposing the collaboration between VMS and SARB.

The Court found that the message conveyed to Mr Del Papa was, at its highest, the idea that the POD system could possibly be adapted in the way suggested by Mr Welch and Mr Gladwin. In the Court’s view the invention disclosed in the specification and the subject of the claims was not that obvious, high level idea, but rather a more prosaic, practical implementation. It was the reduction of that concept to a working apparatus that is the invention. The Court considered that neither Mr Welch nor Mr Gladwin played any role in arriving at the solution and rejected that Mr Welch or Mr Gladwin should be named either as the sole inventor or as a co-inventor.

Orders

The Court found that the grounds of opposition to the grant of a patent on the SARB application, as advanced by VMS, had not been made out.  Accordingly, the appeal was dismissed and it was ordered that claims 1-24 of the SARB application proceed to grant.

Significance

This decision provides some helpful clarification that publicly available prior art information can be readily added to the common general knowledge when assessing whether or not a claimed invention possesses an inventive step, following changes made to Australian patent law under the Raising the Bar Act.  This decision also highlights the practical difficulties that can arise when relying on non-documentary publications such as presentations and lectures, particularly the difficulty in determining precisely what information was made publicly available by such events over time.

For further information, please contact Dean Bradley and Greg Whitehead.

Authored by Dean Bradley and Greg Whitehead

8 min read

In the recent decision, CSIRO v BASF Plant Science GmbH [2020] FCA 328, the Federal Court of Australia considered the allowability of amendments to patent specifications under s 102(1) of the Patents Act 1990, as amended by the ‘Raising the Bar’ Act[1]. In overturning a decision of the Commissioner of Patents, Beach J decided that BASF’s proposed amendments were impermissible because they claimed and disclosed matter that extended beyond the specification as filed. In so doing, the Court decided that the same strict test used by UK Courts should also be applied in relation to added matter in Australia.

The Background

At issue is a patent application filed by BASF Plant Sciences GmbH (BASF) entitled “Process for the production of polyunsaturated fatty acids in transgenic organisms”, which relates to genes from a species of unicellular algae that code for enzymes which can be employed for the recombinant production of polyunsaturated fatty acids (PUFAs) in plants. Specifically, the invention relates to a pathway for the synthesis of long-chain PUFAs, that involves a sequence of enzymatic reactions to convert shorter-chain PUFAs into commercially desirable long-chain PUFAs. The claims relate to isolating the genes for those enzymes in a species of unicellular algae, Ostreococcus lucimarinus, and introducing those genes into suitable oil-producing crops. Performing the invention enables the production of the valuable fatty acids in transgenic commercial crops.

CSIRO opposed BASF’s accepted application, and during the opposition proceedings BASF applied to amend its patent and introduce new dependent claims. The Australian Patent Office initially refused the proposed amendments on the basis that, as a result of the proposed amendments, the specification would not comply with the requirements of s 40(3). However, a second set of proposed amendments was submitted, which a Delegate of the Commissioner of Patents subsequently allowed. CSIRO then lodged an appeal to the Federal Court against that decision under s 104(7) of the Patents Act 1990.

The amendments

In a passage referred to by the parties as the “bridging paragraph”, the specification as filed stated that:

      “The invention, the subject of the present application, is directed to the following:

  • a CoA-dependent delta-6 desaturase having the substrate specificity of the delta-6 desaturase shown in SEQ ID NO:14 [referred to by Beach J as Feature A]and
  • the above CoA-dependent delta-6 desaturase which has a preference for conversion of alpha linolenic acid compared to linoleic acid [referred to by Beach J as Feature B].” (emphasis added)

The experts agreed that the words “the above” in the statement in the second bullet point of the bridging paragraph meant that this statement (i.e., the “conversion preference”) must be read together with the statement in the first bullet point of the bridging paragraph (i.e., the “substrate specificity”). In other words, the invention is directed to the claimed enzyme having the substrate specificity shown in amino acid “SEQ ID NO:14”, and having a certain conversion preference. The bridging paragraph is the only place in which a conversion preference is disclosed in the body of the specification of the application as filed. The invention described in each bullet point of the bridging paragraph is claimed in claims 1 and 2 respectively of the application as filed.

BASF removed the bridging paragraph and deleted corresponding claims 1 and 2 by amendment during prosecution and replaced it with a description that defines the invention as:

  • a process for the production of a substance of general formula I … wherein the process comprises the cultivation of (i) a host cell … or (ii) a transgenic non-human organism comprising … “an isolated polynucleotide comprising a nucleic acid sequence coding for a CoA-dependent delta-6 desaturase having at least 75% identity to a nucleotide sequence which codes for a polypeptide as shown in SEQ ID NO: 14” [referred to by Beach J as “Feature C”]; and
  • use of an isolated polynucleotide … (or vector, host cell, or transgenic non-human organism comprising said nucleic acid sequence) … for the production of an oil, lipid or fatty acid composition.

In light of the amendments to the bridging paragraph and the deletion of the corresponding claims, the application as accepted did not refer to Feature A, Feature B or Feature A combined with Feature B.

As Beach J noted at [130], Feature C captures a broader range of polypeptides than Feature A. That is, Feature A (substrate specificity of the Δ6-desaturase shown in SEQ ID NO:14) is a subset of Feature C (at least 75% identity to SEQ ID NO:14).

In a further round of post-acceptance amendments BASF sought to insert new dependent claims, to a process for production of, and use of, a CoA-dependent Δ6-desaturase:

a) having at least 75% identity to a nucleotide sequence which codes for a polypeptide as shown in SEQ ID NO:14 [Feature C]; and

b) that preferentially converts alpha linolenic acid compared to linoleic acid [Feature B].

The amendments also sought to introduce the following description after the consistory clause:

“According to an embodiment of the abovementioned process and use, the CoA-dependent desaturase preferentially converts alpha-linolenic acid compared to linoleic acid.” [Feature B]

CSIRO argued (at [166]) that the post acceptance amendments were not allowable as they would introduce a claim combining Feature C with Feature B, when the only disclosure of Feature B in the specification as filed was in the context of Feature A (a much narrower subset of Feature C) in the bridging paragraph.

Issues and Decision

Section 102(1) relevantly provides:

(1) An amendment of a complete specification is not allowable if, as a result of the amendment, the specification would claim or disclose matter that extends beyond that disclosed in the following documents taken together:

(a) the complete specification as filed;

(b) other prescribed documents (if any).

Beach J noted that that the Raising the Bar provisions were intended to mirror other jurisdictions, such as the UK and Europe, and that it was intended that Australian courts would have regard to the developments of case law in those jurisdictions when interpreting the Raising the Bar provisions. More specifically, he noted the intention disclosed in the explanatory memorandum to the Raising the Bar amendments that the operation ss40(2) and (3) as amended (which deal with sufficiency and support) be as close as practicable to that given to the corresponding provisions in the UK Patents Act and the European Patent Convention,

Beach J therefore commenced a review of the UK authorities and in coming to his decision, noted two “conceptual themes permeate the UK authorities”, namely “added matter” and “intermediate generalisation”.

In terms of the former, and with reference to several landmark UK decisions on added matter (including Bonzel[2]Richardson-Vicks[3], and European Central Bank[4]), it was noted that subject matter will be impermissible added matter “unless it is clearly and unambiguously disclosed in the application as filed”, having reference to what has been disclosed both explicitly and implicitly.

As to intermediate generalisations, it is useful to consider the EPO guidelines[5], which explain:

“…the content of the application as filed must not be considered to be a reservoir from which individual features pertaining to separate embodiments can be combined in order to artificially create a particular combination.

When a feature is taken from a particular embodiment and added to the claim, it has to be established that

  • the feature is not related or inextricably linked to the other features of that embodiment and
  • the overall disclosure justifies the generalising isolation of the feature and its introduction into the claim.

… it has to be ensured that the skilled person is not presented with information which is not directly and unambiguously derivable from the originally filed application, even when account is taken of matter which is implicit to a person skilled in the art using his common general knowledge”

In other words, the concept of “intermediate generalisation” requires that an amendment is not allowable if it takes a feature which is only disclosed in a particular context and seeks to introduce it into a claim deprived of that context.

Beach J found that there was “no good reason not to follow the UK authorities” to apply these analogous concepts for the purposes of construing the present form of s 102(1) of the Act.[6] In doing so, Beach J confirmed that, after Raising the Bar “the test is a strict one” in Australia, and that the concept of intermediate generalisation applies to s 102(1).

BASF argued that the relevant amendments, including the addition of new claims, were narrowing amendments. Beach J accepted this insofar as the comparison was with the accepted claims, however he noted that this did not resolve the issue of whether the amended specification would claim or disclose matter extending beyond that disclosed in the specification as filed.

BASF further argued that there was disclosure of Feature C in a particular paragraph of the specification as filed. However, Beach J decided that this paragraph could only be read in the context of the description of ‘the invention’ in the bridging paragraph. In this regard, Beach J considered that the bridging paragraph did not provide disclosure of a delta-6 desaturase with Feature B (the “conversion preference”) in the absence of Feature A (the “substrate specificity”).  As mentioned above, Justice Beach also considered that Feature A was not the same as the 75% homology requirement that BASF sought to introduce into the claims (Feature C).  This was because two enzymes can have different substrate specificities and still have 75% homology to each other at the DNA level.

Justice Beach concluded that BASF’s amendment sought to remove Feature B from the context in which it was disclosed in the application as filed (namely, in conjunction with Feature A) and introduce it into the specification and the claims deprived of that context.  The amendments generalised the originally disclosed technical information (applying Feature B in the broader context of Feature C, as opposed to Feature A), thereby introducing subject-matter extending beyond the content of the application as filed. This was an example of an impermissible intermediate generalisation.

As a result, BASF’s amendment was refused, and CSIRO’s appeal was upheld.

Commentary

In the first Federal Court decision on “added matter” under the Raising the Bar Act, Beach J has confirmed that the test in Australia for added matter is strict, and that subject matter will be impermissibly added “unless it is clearly and unambiguously disclosed in the application as filed”. Importantly, until now it has not been clear whether the prohibition on “intermediate generalisation”, a familiar concept in European patent law, would be adopted in Australia. Beach J has confirmed that an intermediate generalisation is not permissible, where a feature which is only disclosed in a particular context (e.g. a particular example) is introduced into a claim deprived of that context.

At the time of filing a patent application, it is important to provide a full disclosure of your invention as adding subject matter later will not be allowable. It is also important to ensure that your patent application discloses your invention in terms that encompass all variants of the invention that you may later wish to claim.

Such limitations should also be borne in mind if seeking to limit granted claims in pre-litigation or litigation to avoid prior art brought to the attention of the patentee.

Shelston IP is well placed to advise its clients on how to best draft a patent specification to satisfy these important requirements and on related issues in a litigation context. If readers have any questions, please do not hesitate to contact any of our Shelston IP patent attorneys or lawyers.


[1] Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) (the Raising the Bar Act)

[2] Bonzel v Intervention Ltd (No 3) [1991] RPC 553 (Bonzel)

[3] Richardson-Vicks Inc’s Patent [1995] RPC 568 (Richardson-Vicks)

[4] European Central Bank v Document Security Systems Inc [2007] EWHC 600 (European Central Bank)

[5] https://www.epo.org/law-practice/legal-texts/html/guidelines/e/h_v_3_2_1.htm

[6] Commonwealth Scientific and Industrial Research Organisation v BASF Plant Science GmbH [2020] FCA 328 at [214]

Authored by Michael Christie, PhD and Katrina Crooks

4 min read

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

6 min read

Dr August Wolff GmbH & Co. KG Arzneimittel v Combe International Ltd [2020] FCA 39 (3 February 2020)

On 3 February 2020, Dr August Wolff GmbH & Co. KG Arzneimittel (Dr Wolff) successfully appealed against a decision by the Registrar of Trade Marks, which refused registration of its VAGISAN trademark.

Background

The VAGISAN trade mark was filed by Dr Wolff on 27 May 2015 for a broad range of personal care products in classes 3 and 5.

This registration was successfully opposed by Combe International Ltd (Combe), the owner of prior VAGISIL trade mark registrations which also cover personal care products classes 3, 5 and 10.

A Delegate of the Registrar of Trade Marks refused registration of the VAGISAN trade mark on 29 September 2017 under s60 of the Trade Marks Act 1995 based on Combe’s reputation of its earlier VAGISIL trade mark.

Dr Wolff subsequently appealed this decision.

Grounds of Opposition

Section 44

The VAGISAN application covers the following goods:

Class 3: Soaps and cosmetics, all aforementioned goods not for the indication and application of tired legs and/or arms

Class 5: Pharmaceutical products, sanitary products for medical purposes; dietetic substances for medical purposes, all aforementioned goods not for the indication and application of tired legs and/or arms

(VAGISAN Goods).

The VAGISIL registrations cover the following goods:

Class 3: Medicated lotions and medicated creams; non-medicated products for feminine use

Class 5: Medicated products for feminine use; vaginal lubricants; medicated creams, gels, lotions

(VAGISIL Goods).

Dr Wolff accepted that the class 3 VAGISAN Goods are similar to the class 3 VAGISIL Goods.  However, it did not consider the class 5 VAGISAN Goods to be similar due to the “highly specialised” nature of the class 5 VAGISIL Goods.

Stewart J found that “pharmaceutical products” and “sanitary products for medical purposes” covered by the VAGISAN trade mark are similar to the class 5 VAGISIL Goods on the basis that:

(1) the goods would typically sold through the same trade channels (i.e. pharmacies, supermarkets and online);

(2) producers of pharmaceutical products might also produce medicated lotions and medicated creams; and

(3) producers of sanitary products for medical purposes might also produce medicated products for feminine use, medicated douches and various other goods.

On the issue of deceptive similarity, Stewart J found that both the VAGISAN and VAGISIL trade marks are likely to be understood as being associated with products to be used in relation to the female genital area. However, while the idea of VAG (or VAGI) is descriptive, the words VAGISAN and VAGISIL do not have a close phonetic resemblance and neither of the words lends itself to mispronunciation. Further, both words are invented words and the suffix elements SIL and SAN are quite distinct.

Stewart J also dismissed Combe’s argument that there is a greater likelihood of confusion as consumers of products for feminine use are not likely to pay attention to what they are purchasing.

The s44 ground of opposition was unsuccessful

Section 60

Section 60 requires a reputation amongst a significant or substantial number of people or potential customers in the relevant mark i.e. the potential customers of the VAGISAN goods. Although, there is not a significant distinction given the overlap in the goods provided by the VAGISAN and VAGISIL trade marks.

Combe sought to rely on evidence comprised of schedules of sales figures and consumption data for VAGISIL products, extracted from a computer database by IRi Australia. It argued that the evidence should be admissible as an exception to the rule against hearsay on the basis that it constitutes business records. Dr Wolff objected to the admissibility of the schedules, not the data contained in the schedules. However, Stewart J was satisfied that the schedules should be admitted.

Both Combe and Dr Wolff sought to tender survey evidence, although Dr Wolff’s evidence was in relation to consumer behaviour rather than Combe’s reputation. Dr Wolff objected to Combe’s survey reports on the basis that they were not business records of the survey companies or Combe itself. Stewart J was satisfied that the reports submitted form part of the records belonging to or kept by Combe in the course of, or for the purposes of a business. The survey evidence from both parties were admitted and Stewart J indicated that there is no reasons to suppose that the hearsay statements recorded in the reports are other than accurate.

There has been consistent use of the VAGISIL brand in Australia since 1986 for personal products for feminine use, which have been sold through approximately 6,400 supermarkets and pharmacies. Further, there has been significant advertising and promotional activity through various channels. Despite the relatively small market share based on the sales figures provided, Stewart J considered that reputation of the VAGISIL trade mark was established in Australia as at the priority date. However, the form of trade mark which enjoys reputation is the VAGISIL trade mark used in conjunction with a “V” Device, rather that VAGISIL on its own. It is used in this composite form:

Consequently, confusion between the trade marks is likely to be less in light of the distinctive “V” Device.

Combe was not able to establish that because of the reputation of the VAGISIL trade marks a significant or substantial number of potential customers might be confused or deceived by the VAGISAN mark such as to wonder whether there is any connection between it and VAGISIL.

Accordingly, the s60 ground of opposition was also unsuccessful

Section 59

As at May 2015, Dr Wolff had the intention to sell five VAGISAN products in Australia. Based on evidence provided on behalf of Dr Wolff, none of these products were directed for use on any part of the human body other than the female genital area. On this basis, Combe submitted that there was no intention to use the trade mark in relation to soaps and cosmetics for use on other body parts

Even though the goods were limited for use on a specific area of the body, Stewart J considered the fact that soap and cosmetic products were proposed to be introduced is sufficient intention to use the VAGISAN trade mark in respect of the designated goods.

The s59 ground of opposition was also unsuccessful

Decision

Combe failed to establish any ground of opposition and, therefore, Dr Wolff’s appeal was successful.

Combe subsequently filed an appeal to the Full Federal Court of Australia.

Takeaway

This decision is under appeal and it will be interesting to see if the first instance decision is maintained. Nevertheless, the decision provides some guidance regarding what might be admitted into evidence as business records, and the potential for difficulty establishing reputation in a word alone when it is used with other significant branding elements.

Other Opposition / Invalidity Actions

The VAGISAN trade mark has also been opposed by Combe in a number of other countries. The most recent decisions handed down were in Singapore and the United States.

Combe filed an application for declaration of invalidity with the Intellectual Property Office of Singapore based on the grounds of likelihood of confusion. Combe successfully invalidated the VAGISAN trade mark in Singapore, however, an appeal from this decision to the High Court is pending.

In the United States, the Trademark Trial and Appeal Board (TTAB) dismissed an opposition filed by Combe in the first instance. This decision was subsequently appealed to the US District Court. However, on appeal, the VAGISAN trade mark was found to be likely to cause confusion with the VAGISIL registration.

Authored by Danielle Spath and Sean McManis

4 min read

The relatively new “bad faith” (section 62A) ground of opposition can be a strong basis for action against misappropriation of a trade mark owners’ goodwill, where the more commonly used grounds of deceptive similarity with an earlier mark (section 44) and likelihood of confusion due to reputation in an earlier mark (section 60) would fail.

Recent Trade Marks Office decisions illustrate some types of exploitative conduct that can give rise to a finding of “bad faith”.

The issue

The key issue in all cases was whether Southcorp Brands Pty Ltd (SCB) met its onus of demonstrating that the applicant had acted in “bad faith” in filing its trade mark application.

Bad faith has been described in the following way:

“… mere negligence, incompetence or a lack of prudence to reasonable and experienced standards would not, in themselves, suffice, as the concept of bad faith imports conduct which, irrespective of the form it takes, is of an unscrupulous, underhand or unconscientious character

(Fry Consulting Pty Ltd v Sports Warehouse (No 2) (2012) 201 FCR 565)

The Cases

SCB’s well known Penfolds” mark

SCB is a subsidiary of Treasury Wines Estate (TWE) Limited and produces wines under various well known marks, including “Penfolds”.

SCB filed evidence of the extensive reputation and promotion of its “Penfolds” wines, which have been in existence since 1844, and are labelled with the trade mark “Penfolds” in plain script or in red cursive script.

In each opposition case below, the applicant had applied to register its mark/s in relation to wines and other alcoholic beverages.

Facts in each case

Oppositions to “Barry Ford and “Ben Ford”
(Southcorp Brands Pty Limited v Li Li Shen [2019] ATMO 42 (26 March 2019)

SCB’s “Penfolds” Label

SCB filed evidence of use of the Chinese Characters  in relation to its “Penfolds” wines sold in China. Those characters are transliterated to “Ben Fu” – the Chinese phonetic approximation of “Penfolds”.  SCB also owns Australian registrations for its  and “Ben Fu” trade marks.

The applicant had repeatedly used its mark “Barry Ford” in red cursive font (similar to SCB’s font) combined with SCB’s  mark on its wine labels.  SCB also submitted evidence that the applicant had used trade dress similar to SCB’s, such as a red capsule attached to the bottle neck, red cursive font against a white label and the use of “BIN” to indicate wine vintages.

Prior to the date of filing, the Beijing High People’s Court had issued a decision regarding an application by SCB to remove one of the applicant’s Chinese trade mark registrations for non-use.  In that decision the Court recognised that the Chinese Characters   would be seen as identifying SCB’s wines.  The applicant was therefore clearly aware of SCB and its trade mark rights and reputation at the date of filing its application.

Opposition to “MAISON RICH”
(Southcorp Brands Pty Limited v BIN-VIN (Shanghai) Trading Co. Ltd [2020] ATMO 27 (24 February 2020)

The English translation of SCB’s Chinese Character version of the “Penfolds” mark is “Rush Rich”.  SCB was the owner of the trade mark MAISON DE GRAND ESPRIT.

The applicant’s mark combined the word “MAISON” with the word “RICH” – being the second word in the English translation of SCB’s Chinese Character version of “Penfolds”.

The applicant was part of a corporate group, with shared ownership and directors, which had applied to register various marks similar to SCB’s marks in the names of different, but related, entities.  SCB had opposed numerous applications filed by entities within the group and rather than defending those oppositions, new applications had been filed for additional marks similar to SCB’s in the name of different related entities.

Entities within the group had also been the subject of judgements in the Federal Court in Australia and the Shanghai Pudong District People’s Court for infringement of SCB’s marks or engaging in unfair competition through the making of false allegations. See for example Southcorp Brands Pty Ltd v Australia Rush Rich Winery Pty Ltd [2019] FCA 720 (3 May 2019) for the finding of infringement by some of the entities within the applicant’s group.

Again, the applicant was therefore clearly aware of SCB and its trade mark rights and reputation at the date it applied for “MAISON RICH”.

Opposition to mark


(Southcorp Brands Pty Ltd v Shanghai Benka Wines Co., Ltd [2020] ATMO 9 (29 January 2020)

The applicant had sought registration of various marks identical or similar to SCB’s marks in China and Australia, and one application in China had been opposed by the Opponent well before the filing date.

It had also produced wine labelling copying SCB’s trade dress by using similar script stylisation and colour schemes.

The applicant had also used a different company name for filing the Australian application to the name it had used to file the earlier Chinese applications which had been opposed by SCB. SCB argued (successfully) that this was intended “to obscure its true identity in order to prevent detection of its activity in Australia”.

Findings

In all three cases the Hearing Officer decided that each applicant was aware of the reputation in SCB’s “Penfolds” marks at the time of filing their application.  The pattern of behaviour in each case, such as adopting similar trade dress and trade mark stylisation to that used by SCB and applying for identical or similar marks to SCB’s in Australia and China in related company names, was found indicative of a desire to exploit SCB’s trade marks and reputation and to convey an association, affiliation or endorsement by SCB that did not exist.

The Hearing Officer found that the behaviour in each case fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons and constituted “bad faith”.\

Authored by Michelle Howe and Sean McManis