7 min read

In the recent decision of PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd [2021] FCAFC 128 (29 July 2021), the Full Federal Court confirmed that a trade mark owner who merely authorises use of its trade mark cannot be subject to liability for direct for trade mark infringement pursuant to s120(1) of the Trade Marks Act.

In the first instance decision, found here, PDP failed in its claims against Grasshopper for trade mark infringement, misleading and deceptive conduct under the Australian Consumer Law and for passing off. Both parties failed in their attempt to cancel the other parties’ trade marks but succeeded in having them restricted.

Background

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

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

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

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

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

Grasshopper owns a registration dating from 2005 for the trade mark:

(“Wicked Tail Mark”) in class 30 for dipping sauces and related products. The WICKED Tail Mark was modified in 2014 to:

(“New Wicked Mark”) for which Grasshopper applied for registration in 2015 with the original branding phased out by early 2016. Grasshopper extended its product range to include waffle dippers in 2018.

Both the Wicked Sister and Wicked products are sold through Coles supermarkets.

PDP sells flavoured rice puddings, custard, tiramisu and panna cotta under the Wicked Sister Marks, made from fresh ingredients and found in the refrigerated section of the dairy aisle of supermarkets.

On the other hand, Grasshopper’s “Wicked” dipping sauces and waffle dippers are shelf stable products which do not require refrigeration, although the dipping sauces are sometimes placed with frozen berries in the refrigerated section of the fresh food section of the supermarket.

Appeal

The Full Court considered grounds of appeal relating to infringement, the parties’ respective removal claims and the ACL and passing off.

Infringement

Whether the Party Authorising use of the Trade Mark is liable for Infringement

Grasshopper authorised use of the Wicked Trade Marks to other companies but was not found to be liable for direct infringement under s120(1). The Full Court confirmed the primary judge’s finding.

The Court noted that under the wording of s120(1) it is the act of “the person” that attracts a finding of infringement. The language does not suggest use by one person will constitute an infringement by another person. Not every reference to the use of a trade mark in the Trade Marks Act is intended to import the definition of “authorised use” by an “authorised user” under s7(3).

An alleged infringer, who has not engaged in a primary act of infringement within s120, may nonetheless be found to infringe as a joint tortfeasor (referring to Hashtag Burgers Pty Ltd v In-N-Out Burgers, Inc [2020] FCAFC 235). However, PDP did not allege joint tortfeasorship in this case.

Deceptive Similarity

PDP contended that the primary judge made a number of errors in her reasoning in finding that the New Wicked Mark and Wicked Sister Marks were not deceptively similar.

Most were dismissed; however, their Honours acknowledged that the essential comparison in an infringement suit remains one between the marks involved and that it was not appropriate for the primary judge to descend into fine detail about the actual uses of the Wicked Sister Marks. Despite this, the Court noted that trade circumstances is a relevant consideration and were not prepared to overturn the primary judge’s findings in relation to deceptive similarity or infringement.

PDP’s removal claim

At trial, in response to PDP’s challenge to the registration of Grasshopper’s “Wicked Tail Mark” for non-use, the primary judge found use only in respect of “dips, including chocolate dips”, but exercised discretion to maintain the registration for all listed goods with the exception of “savoury dips”.

PDP contended that the primary judge erred in finding that there had been use of the Wicked Tail Mark in relation to “dips, including chocolate dips” and in the exercise of discretion.

Grasshopper transitioned from use of the Wicked Tail Mark to the New Wicked Mark between 2014 and 2016. Apart from finding use of the Wicked Tail Mark in respect of “dips, including chocolate dips”, her Honour also found that Grasshopper had established an intention to use the Wicked Tail Mark in the future in relation to chocolate rocky road, fruit flavoured toppings and sauces as well as the balance of categories of goods.

On appeal, Grasshopper acknowledged that the primary judge erred in referring to a future intention to use the “Wicked Tail Mark”, and that this should have been a reference to the “New Wicked Mark”. However, the Court found that the primary judge did intend to refer to the Wicked Tail Mark in her assessment of the facts and stated, “within the welter of overlapping issues advanced by the parties, her Honour made an error”. The Court re-exercised the discretion and ordered that all goods except for “dips, including chocolate dips but excluding savoury dips” be removed from the registration for the Wicked Tail Mark.

Grasshopper’s removal claims

Grasshopper applied for removal of the Wicked Sister Marks under the s92(4)(a) ground of lack of intention to use and no use as at the filing date. The primary judge found that Grasshopper had established grounds for removal of the marks for bakery products, confectionery, ice cream confections, dipping sauces and various yoghurt products, but exercised discretion not to remove the marks for the remaining goods. However, the registration for “dessert sauces” should be replaced with “custard”.

PDP contended that the primary judge erred in finding that PDP Capital had no intention as at the filing date to use the Wicked Sister marks on the remaining goods, placing insufficient weight on PDP’s 2018 Strategic Plan.

The Court agreed with the primary judge’s finding that the 2018 Strategic Plan spoke only in general terms about future plans that amounted to no more than raising a speculative possibility of an intention to expand into different product areas.

PDP argued that use on “tiramisu”, which was sufficient to maintain a claim for “cakes”, should also have been sufficient to establish use in relation to “bakery products”. The Court noted that this proposition was not put to the trial judge and reminded that an appeal is not a forum for a party to retry a case. This aside, the Court said that it does not follow from a finding that “tiramisu” falls within the category of a “cake” that it also falls within the category of a “bakery product”. Similarly, PDP failed to establish that use in relation to “profiteroles” was use for “bakery products” given, in particular, that PDP itself referred to these products as “chilled desserts”.

PDP also contended that “dessert sauces” were not relevantly different to “dipping sauces”. Again, while this contention was not asserted at trial, their Honours said that use of a trade mark on “custard”, which was found to be sufficient to establish use for a claim of “dessert sauces” is not sufficient to establish a claim for use on “dipping sauces”.

Accordingly, PDP’s appeal in relation to Grasshopper’s removal claims were dismissed.

ACL and passing off

The primary judge rejected PDP’s claims that Grasshopper’s conduct in selling its dipping sauces and waffle dippers under the New Wicked Mark was misleading and deceptive in contravention of ss18 and 29 of the Australian Consumer Law, or amounted to passing off. This was due to her findings that the Wicked Marks and Wicked Sister Marks were not sufficiently similar and that PDP did not have an established reputation in the Wicked Sister Marks as at 2014 when use of the New Wicked Mark commenced.

PDP were critical of the primary judge’s treatment of their evidence going to reputation and for taking into account the reputation of Grasshopper to find that there was no real likelihood of confusion or deception. The Full Court was not satisfied that PDP had established any errors made by the primary judge in her assessment of the issues and the appeals were dismissed.

Takeaway

The case reaffirms that there is no statutory liability for infringement by authorisation, with the result that an IP holding company that merely authorises use of a mark cannot be subject to liability for direct infringement. However, it may be liable as a joint tortfeasor.

Authored by Kathy Mytton and Sean McManis

3 min read

It is quite common for country leaders to be given catchy nicknames by the press. Some stick better than others.

In the US, there are examples such as JFK, LBJ, and Tricky Dicky. In the UK, examples include Winnie, The Iron Lady, and most recently BoJo. In Australia, the current prime minister is known as ScoMo, and some of the nicknames given to previous prime ministers include Pig Iron Bob, Honest John and the Mad Monk.

In a recent decision by the New Zealand Trade Marks Office, an issue arose as to the protectability of a former prime minister’s nickname, namely ‘Aunty Helen’.

James Craig Benson applied for registration of the trade mark AUNTY HELEN, after seeing a television interview where he claimed that the former Prime Minister Helen Clark said that she had no intention to use or register ‘Aunty Helen’ as a trade mark. He says that as he liked the sound and feel of the name, he then decided that it presented a valuable business opportunity for him.

The opposition concerned registration of AUNTY HELEN in respect of: (i) clothing; (ii) clothing retail services; and (iii) publishing services

The opposition grounds were:

  • Use likely to deceive or cause confusion: s17(1)(a)
  • Application made in bad faith: s17(2)

Likely to deceive or cause confusion

Much of the argument on whether there was a likelihood of deception or confusion concerned the issue of what is protectable under the Act.

Mr Benson claimed that as Ms Clark had not used, and did not intend to use, AUNTY HELEN as a trade mark, then she should have no basis for preventing registration. However, the Assistant Commissioner of Trade Marks explained that the policy behind section 17(1)(a) is to prevent public confusion, and its scope is not limited to confusion between trade marks.

Before it became more generally used, Helen Clark had been referred to as ‘Aunty Helen’ by Pacific Island and Maori communities. This is because “Aunty” is commonly used as an affectionate reference to an adult female member of those communities. The evidence established, and Mr Benson acknowledged, that Ms Clark was widely known by the nickname ‘Aunty Helen’ in New Zealand.

While Ms Clark was no longer prime minister, and recognition of the name was not as strong as it had been, the Assistant Commissioner of Trade Marks found requisite reputation in the name AUNTY HELEN, such that there was a likelihood of an assumption of approval or endorsement. In this regard, he stated:

The average consumer has a degree of commercial realism regarding the role well-known people play in marketing and advertising. When an internationally famous actor such as George Clooney is seen sipping coffee in a television commercial, the well-known Cook Nigella Lawson is seen praising a New Zealand brand of chocolate, or an All-Black or other New Zealand personality is seen in an advertisement, a viewer is likely to understand that their presence is an endorsement and commercial in nature

The onus rests with the trade mark owner to establish that there is not a likelihood of confusion, and Mr Benson was unable to do this. Consequently, this ground of opposition was successful.

Bad Faith

The ground of opposition on the basis of bad faith was also successful. In this regard, it was noted that Mr Benson had previously applied for registration of JACINDARELLA (a nickname for the current prime minister, Jacinda Ardern) but withdrew that when he encountered an objection to registration. He claimed that he was not aware of the potential association before encountering the objection.

It was also noted that the original application for AUNTY HELEN (restricted before the opposition was heard) included services related to politics.

On the basis that:

  • Mr Benson’s previous filing and withdrawal of the JACINDARELLA application indicated he had an awareness of the potential for confusion to arise from the use of a prime minister’s nickname; and
  • The fact that the application originally sought registration in relation to services relating to politics

it was found that the making of the application fell short of the standards to be expected of a reasonable and experienced business person.

Conclusion

The case highlights the breadth of matters that can be considered in determining whether there is a likelihood of deception or confusion. It also raises interesting questions as to the extent to which media-generated nicknames might be protectable.

In this case as in others, those seeking to walk a fine line involving ‘sharp’ business practices, can easily find themselves on the wrong side of that line.

Authored by Sean McManis

5 min read

Bendigo and Adelaide Bank Limited v Community First Credit Union Limited [2021] FCAFC 31

The Full Federal Court has upheld the primary judge’s decision that Bendigo and Adelaide Bank Limited could no longer hold its monopoly of more than 20 years over the words “community bank”. 

The decision emphasises the difficulties in enforcing and monopolising descriptive marks, even after they are registered.  It also provides useful discussion on “ordinary signification” in the assessment of whether marks are inherently adapted to distinguish and use as a trade mark for the purpose of showing factual distinctiveness.

Background

Bendigo and Adelaide Bank Limited (“Bendigo”) owned Registration No. 784796 for the mark:

dated 8 February 1999 and Registration No. 887023 for the plain script mark “COMMUNITY BANK” dated 24 August 2001 (collectively “the Bendigo Community marks”).

Bendigo also owned Registration No. 746687

dated 21 October 1997 (“Bendigo Composite mark”).

All of Bendigo’s registrations covered various banking and financial services in Class 36.

On 1 March 2013 Community First Credit Union Limited (“Community First”) applied to register two marks which included “community” and “bank” under Application No.1541620 COMMUNITY FIRST BANK and 1541594 COMMUNITY FIRST MUTUAL BANK (the “CFCU Marks”) covering Class 36 services, including financial services and personal banking services.

Bendigo successfully opposed both of Community First’s applications under s 44 of the Trade Marks Act 1995 (Cth) on the basis of Bendigo’s earlier registration for COMMUNITY BANK. 

Community First then appealed the opposition decision and sought rectification of Bendigo’s registrations for the Bendigo Community marks under s 88(2)(a) on the basis that they could have been opposed under s 41 because they were not sufficiently distinctive at the priority dates.

Primary decision

In summary, the primary judge held that:

  1. the Bendigo Community marks were not to any extent inherently adapted to distinguish the services for the purpose of s 41(3) and that the extent of use was not sufficient to show that the marks were distinctive in fact as at the priority dates for the purpose of s 41(6) and the registrations should therefore be rectified on the basis of s 41; and
  2. Bendigo’s opposition to Community First’s applications should be set aside as none of the opposition grounds under ss 42(b), 44, 58A, 59 and 60 were met and the CFCU marks should proceed to registration.

Appeal decision

Bendigo appealed the primary judge’s decision to rectify the Bendigo Community marks under the s 41 ground and sought leave to appeal the opposition decision, but was unsuccessful.   The main points from the Full Court’s decision are discussed below.

  1. Section 41(3) – Inherently adapted to distinguish

Bendigo argued that the primary judge erred in finding the Bendigo Community marks not to any extent inherently adapted to distinguish. 

On the issue of inherent distinctiveness, the primary judge had found the ordinary signification of the term “community bank” to be “a provider of banking services or financial institution that serves a particular community, whether defined by geography, workplace, trade or other feature” and directly descriptive of the services. [1] 

Bendigo argued that “community bank” had a number of possible meanings in the context of the services and, as such, would have no one ordinary meaning or signification.  The appeal judges said that there is no basis for limiting section 41 to prevent only appropriation of words and phrases with one singular meaning.  Justices Middleton and Burley noted “the existence of more than one possible meaning does not mean that a term is not capable of ordinary signification”. [2]

Bendigo also argued that the ordinary meaning of “community bank” was not the one found by the primary judge, but a reference to its unique franchise model, where local businesses operated local branches of the “Bendigo bank” under franchise.  However, the appeal judges agreed with the primary judge that “Community Bank” was used for its ordinary signification “that is, to convey the meaning of providing banking services to a particular community”. [3]  Justices Middleton and Burley held that “notwithstanding the originality of the model, or any originality in use of the term to refer to the model, the term was used in a way that was consistent with its natural English meaning (or at least the natural English meaning of the individual words “community” and “bank”)”. [4]

  1. Section 41(6) – factual distinctiveness

Bendigo also argued that the primary judge erred in finding that use of the Bendigo Community marks was not sufficient to establish distinctiveness under s 41(6). 

The question to be addressed was summarised by Justices Burley and Middleton as “whether, objectively, the term “community bank” was used to distinguish the services”.  Their Honours also noted that the uses must be as a trade mark.  [5]

In most cases, the words “community bank” were used in the signage and promotional materials in close association with the B logo and the words “Bendigo Bank” in the format:

or with the B logo or other Bendigo bank indicia.  The primary judge had considered that these uses emphasised “Bendigo Bank” and the B logo as the brand and diluted any brand significance in the words “Community Bank”. 

While the primary judge had recognised that there can be double trade mark use, she had found it “unlikely, if not impossible” that an ordinary consumer viewing the “Community Bank” mark in isolation of the B logo, the “Bendigo Bank” mark or other Bendigo indicia would associate the services with Bendigo. [6] 

The appeal judges agreed and found that the primary judge had made no error.  Justices Middleton and Burley found that the words “community bank” were not used as a brand.  Rather, it was the Bendigo branding that was used to distinguish the services and indicate the connection with Bendigo. [7]

There had been some use of “Community Bank” alone, or at a distance from Bendigo’s other marks and indicia.  However, the appeal judges agreed with the primary judge that this use was very limited and did not show use of “Community Bank” in a trade mark sense sufficient to establish distinctiveness or use in relation to the relevant services.

  1. Opposition

In relation to the opposition proceedings, Bendigo sought leave to appeal the primary judge’s decision in relation to ss 60, 42(b) and 44. 

The appeal judges upheld the primary judge’s decision on the basis that Bendigo did not have sufficient reputation in “Community Bank” to succeed in opposition under ss 60 and 42(b) and that opposition under s 44 could not succeed because Bendigo’s registrations for the Bendigo Community marks were to be cancelled.

Takeaways

Even when descriptive marks are registered, there may be difficulties maintaining and enforcing exclusive rights.  

Owners of descriptive, or somewhat descriptive, trade marks should ensure that they are used in a manner which clearly indicates that they are a trade mark rather than a description, and separate from other more distinctive marks.

Trade mark owners are advised that registrations for marks which have no descriptive significance are more readily protectable, and generally grant the strongest enforceable rights.


[1] Bendigo and Adelaide Bank Limited v Community First Credit Union Limited [2021] FCAFC 31, pgh 21.

[2] ibid, pgh 107.

[3] ibid, pgh 87.

[4] ibid, pgh 98.

[5] ibid, pgh 151.

[6] ibid, pgh 155.

[7] ibid, pgh 159.

Authored by Michelle Howe and Sean McManis

6 min read

A dispute between two Victorian live music venues concerning use of trade marks including “CORNER” and “CORNER HOTEL” has seen infringement allegations dismissed by the Federal Court of Australia.  The court found that the respondents various JAZZ CORNER marks were not deceptively similar to any of the Applicant’s CORNER trade mark registrations.

While O’Bryan J accepted that the word “JAZZ” has a descriptive meaning when used in relation to live music performances, his Honour held that adding this term to the word CORNER (or words CORNER HOTEL) left an impression that was distinct from the impression created by each of the Applicant’s CORNER marks.  This decision emphasises the importance of any impression left by uncommon (or unusual) elements of a trade mark, particularly where the shared elements are considered to be descriptive.

Background

Since at least 1995, Swancom Pty Ltd (“Swancom”) have been operating a hotel venue offering live music and hospitality services in Richmond, Victoria.  Swancom also own Australian trade mark registrations for CORNER HOTEL, CORNER, THE CORNER and CORNER PRESENTS for various entertainment and hospitality services in classes 41 and 42.

Swancom commenced trade mark infringement proceedings against five respondents, namely Jazz Corner Hotel Pty Ltd (“JCH”), Bird’s Basement Pty Ltd (“BB”), Saint Thomas Pty Ltd “(ST”), Ubertas Operations Pty Ltd (“UO”) and Mr Albert Dadon.  Mr Dadon is the sole director of JCH, BB and ST, each of which operate businesses from a building in William Street, Melbourne, namely a hotel business called The Jazz Corner Hotel, a jazz music venue called Bird’s Basement and a café business called The Jazz Corner Café.

UO own Australian trade mark registrations (used by JCH with UO’s authority) for the word mark JAZZ CORNER and the composite mark shown below for various hotel, night club, food and beverage services in class 43.

ST obtained trade mark registrations for the word mark JAZZ CORNER and the composite mark shown below for various food and beverage related services in class 43.

Swancom alleged that the respondent’s use of JAZZ CORNER OF MELBOURNE, JAZZ CORNER OF THE WORLD, JAZZ CORNER HOTEL and JAZZ CORNER CAFÉ (the “JAZZ CORNER marks”) in relation to live music services and related ticket booking services infringed its CORNER registrations.  Further, as sole director of JCH, BB and ST, Swancom alleged that Mr Dadon was a joint tortfeasor in the alleged infringements and sought cancellation of the various Jazz Corner registrations outlined above.

The respondents denied the alleged infringement and sought partial cancellation of Swancom’s registrations. Partial cancellation was sought because the infringement claims were not relevant to all services covered by the registrations.

Validity of CORNER marks

The respondents’ argued that Swancom’s CORNER registrations lacked sufficient distinctiveness when used in relation to the registered services.  O’Bryan J took judicial notice of the fact that Australian hotels are often located on street corners and usually provide entertainment services to patrons.  Further, the evidence disclosed the word “corner” was used descriptively to refer to the geographical location of hotels and in business names for hotels since the 19th century.

On this basis, his Honour concluded that the phrase “CORNER HOTEL” was not distinctive in relation to ordinary hotel services (such as alcoholic drinks served on the premises, prepared meals and, to a lesser extent, accommodation).  However, O’Bryan J held that the words CORNER HOTEL were capable of functioning as a trade mark for services which relate to staging of professional live music performances, particularly given the extent to which Swancom and its predecessors has used that phrase as a trade mark.

As a result, Swancom’s CORNER HOTEL registration was valid as it only covered services which related to staging professional live music performances.  For similar reasons, his Honour held that Swancom’s CORNER and THE CORNER marks were also capable of distinguishing services related to the staging of professional live music performances.  Swancom’s CORNER PRESENTS mark was also considered to be capable of distinguishing the relevant Class 41 services.

However, as Swancom’s CORNER and THE CORNER registrations cover a broader range of services in Class 41, O’Bryan J invited both parties to make submissions about whether these registrations ought to be amended/limited to preserve the freedom of other hotels, cafes, bars and restaurants to use the word “corner” in their trading name.

Infringement of Swancom’s trademark registrations

The question of whether the respondents’ use of the JAZZ CORNER marks infringed Swancom’s CORNER registrations effectively turned on two factors, namely:

  1. Did the respondents’ use the JAZZ CORNER marks as a trade mark in relation to services relating to staging of live music performances; and
  2. Are the respondent’s JAZZ CORNER mark deceptively similar to Swancom’s CORNER registrations?

Use as a trade mark

Based on the evidence, his Honour held that JCH, BB and ST operate separate businesses, namely, The Jazz Corner Hotel, Bird’s Basement and The Jazz Corner Café (respectively).  O’Bryan J held that only BB provided services for which the Swancom marks are registered, namely, professional live music performances.

However, his Honour noted that BB’s jazz club was located in the same building as the JCH and ST businesses which shared common ownership and offered accommodation and café services under the JAZZ CORNER marks.  Further, each of these businesses were found to engage in substantial cross-promotion of each other’s business.

Based on the manner and context of its use, his Honour concluded that ordinary members of the public would perceive The Jazz Corner Hotel as a provider of live music performances in the basement jazz club known as Bird’s Basement.  As such, O’Bryan J held that JCH had used JAZZ CORNER HOTEL as a trade mark in relation to live music services.

While O’Bryan J acknowledged that JAZZ CORNER OF MELBOURNE could potentially be used in a descriptive or laudatory manner, his Honour held that JCH and BB had used JAZZ CORNER OF MELBOURNE as a trade mark in relation to all of the businesses conducted from the William Street premises, namely, the hotel, café and jazz club.

While O’Bryan J held that BB cross-promoted the Jazz Corner Hotel, the evidence showed that BB did not use the JAZZ CORNER HOTEL marks as a badge of origin in relation to live music services.  In the same manner, while ST was found to have cross-promoted live music performances at Bird’s Basement jazz club, the evidence showed that ST did not use JAZZ CORNER CAFÉ as a badge of origin in relation to live music services.

The JAZZ CORNER OF THE WORLD marks were used in a more limited manner and predominantly in connection with Bird’s Basement jazz club.  On this basis, his Honour concluded that the respondents had used the phrase “Jazz Corner of the World” in a descriptive manner rather than as a trade mark.

Are the Jazz Corner marks deceptively similar to Swancom’s CORNER marks?

In view of the above, O’Bryan J was only required to consider whether the JAZZ CORNER HOTEL and JAZZ CORNER OF MELBOURNE marks were deceptively similar to any of Swancom’s CORNER registrations. 

His Honour considered the addition of “jazz” to the word “corner” (or the words “corner hotel”) gives the composite phrase a distinct sound and meaning.  In his Honour’s view, attention is immediately drawn to the word “jazz” and the words “corner” or “corner hotel” assume a secondary role in the phrase.  Further, his Honour expressed the view that the addition of “jazz” is likely to create an impression or idea in the mind of an ordinary member of the public that is distinct from the impression or idea created by Swancom’s CORNER marks.

On this basis, O’Bryan concluded that the JAZZ CORNER HOTEL and JAZZ CORNER OF MELBOURNE marks were not deceptively similar to any of Swancom’s CORNER registrations.  As a result, Swancom’s infringement claims against the respondents’ were dismissed.

Potential Defences to Infringement

While not strictly necessary, O’Bryan J went on to consider the respondents’ potential defences to infringement.  In summary, his Honour held that the respondents’ could not rely on the following defences to infringement:

  • Section 122(1)(b) – that the respondents had used the JAZZ CORNER marks in good faith to indicate some characteristic or quality of the services;
  • Section 122(1)(fa) – that due to the extent of use of the terms “JAZZ CORNER OF MELBOURNE” and “JAZZ CORNER OF THE WORLD”,  the respondents’ would be entitled to obtain registration of those marks in Australia;
  • Section 122(1)(e) – that the respondents’ use of the registered JAZZ CORNER marks was merely the exercise of rights granted to them under the Trade Marks Act. This was because the respondents had only registered their mark for Class 43 services, not the Class 41 services covered by the infringement claim;

His Honour also concluded that Mr Dadon could not be a joint tortfeasor because all relevant decisions and actions were done in his capacity as a director.  The evidence did not establish that Mr Dadon had such involvement in or responsibility for the manner and extent of that cross-promotion that he ought to be regarded as a joint tortfeasor.

Swancom have now filed an appeal in relation to this matter.

Authored by Nathan Sinclair and Sean McManis

Welcome to Shelston IP’s round up of Australian and New Zealand trade mark cases for 2020.

While there were plenty of cases in 2020, we have selected a few which we think are interesting and provide an indication of the types of issues dealt with by the Courts and Trade Marks Office throughout the year.

Please click here for a quick snapshot of each case followed by a more detailed discussion of the main issues that arose in each case.

Read our full report

Authored by Sean McManis and Michael Deacon

7 min read

Urban Alley Brewery Pty Ltd v La Sirène Pty Ltd [2020] FCAFC 186 (4 November 2020)

The Full Federal Court has upheld the primary judge’s decision to cancel Urban Alley Brewery Pty Ltd’s (Urban Alley) registration for “Urban Ale”.   The decision considers the issue of distinctiveness and highlights important lessons regarding the enforcement of trade marks which have descriptive significance, within the trade and relevant market.

Primary Decision

Urban Alley owned Registration No. 1775261 for the trade mark Urban Ale covering “beer” in Class 32 and dated 14 June 2016. Urban Alley sued La Sirène Pty Ltd (La Sirène) for use of the trade mark:

(URBAN PALE label) on its beer product, launched in October 2016.  Urban Alley also sought cancellation of La Sirène’s registration for the URBAN PALE label.

La Sirène filed  a cross claim for cancellation of Urban Alley’s Urban Ale registration under s88(1)(a) of the Trade Marks Act 1995 on the basis that:

  • Urban Ale is not capable of distinguishing beer products (s 41(1)); and
  • Urban Ale was deceptively similar to an earlier third party mark Urban Brewing Company, registered under Registration No. 1760362 and covering beer (s 44(1)).  [1]

In the primary decision Justice O’Bryan cancelled the Urban Ale mark on both grounds, finding that:

  • Urban Ale was not capable of distinguishing beers because the ordinary signification of the combination “urban” and “ale” was of a craft beer brewed in an inner-city location; and
  • Urban Ale was deceptively similar to the earlier Urban Brewing Company mark. 

While there was no infringement because the Urban Ale registration was cancelled, the primary judge went on to consider whether La Sirène’s use of its URBAN PALE logo would have infringed the Urban Ale registration, and if so, whether it had defences to infringement that:

  • La Sirène used URBAN PALE in good faith to indicate the kind, quality or other characteristics of the products (s 122(1)(b)(i); and
  • La Sirène was exercising its rights to use the mark as registered  (s 122(1)(e)) as it had obtained a registration for the URBAN PALE label in use during the litigation.

The primary judge found that URBAN PALE was used as a product name and not as a trade mark, and therefore did not infringe the Urban Ale registration. 

On upholding the first defence, La Sirène was found to have used URBAN PALE as a description to  indicate the nature and style of the product as a craft beer brewed in an urban location. 

In relation to the second defence, La Sirène had used its URBAN PALE label as registered under its Registration No. 1961656 and so had a defence under s 122(1)(e).  [2]

The primary judge also found that Urban Alley had not made out grounds for cancellation of La Sirène’s registration for the URBAN PALE label. 

Appeal Decision

Urban Alley appealed, challenging the primary judge’s findings.

  1. Capable of distinguishing

On the first ground of appeal, that the primary judge erred in finding Urban Ale not capable of distinguishing, the judges noted that the primary judge’s finding might ordinarily seem surprising.  However, their honours noted that the decision was based on contextual facts and usage of the word “urban” in the brewery trade.  They referred to the primary judge’s findings that:

  •  it was well understood that many brewers are located in urban areas and, when used in relation to beer, “urban” “conveyed the meaning that the beer was brewed in a city location as opposed to a country location”[3];
  • “‘urban’ had come to signify craft beer made in an inner city location” and could also be laudatory indicating that the beer is “fashinonable”, “trendy” or “cool” [4] ;
  • there was evidence that journalists had used “urban” to refer to beer producers and breweries had used “urban” as part of their product names;
  • ordinary consumers would understand “urban” as referring to a craft beer produced in an innner city location; and
  • “urban ale”, in its ordinary signification, would therefore indicate craft beer produced in an urban location.

The judges found no appealable error in the primary judge’s finding and agreed that Urban Ale was not capable of distinguishing. [5]

  1. Deceptive similarity

The appeal judges found no error in the primary judge’s finding that “Urban Ale” was deceptively similar to the “Urban Brewing Company” mark. 

On appeal, Urban Alley argued that the primary judge’s comments that the marks meant different things – with Urban Ale referring to beer and Urban Brewing Company referring to a maker of beer – meant that the judge ought to have found the marks not deceptively similar.  However, the appeal judges noted that these comments were made in the side by side comparison of marks for assessing whether the marks were substantially identical.  The judges noted that “ the test of deceptive similarity is fundamentally different. It is not a studied comparison. Rather, it is a comparison between one mark and the impression of another mark carried away and hypothetically recalled, paying due regard to the fact that recollection is not always perfect”.  [6]  The appeal judges agreed with the primary judge’s finding that, while Urban Ale and Urban Brewing Company had different meanings in a side by side comparison, there is a close association between the two marks making them deceptively similar.

Urban Alley also argued that substantial weight should be given to the other elements “ale” and “brewing company” in the marks and that those elements had “no relevant trade mark resemblance”.  [7]  However, their honours noted that the marks must be considered as a whole:

It is impermissible to dissect each mark to emphasise its disparate elements and then compare the disparate elements of each in order to reach a conclusion on deceptive resemblance. To start with, this would leave out entirely the impact of the common element “urban”. It would also ignore the synergy between the word “urban” and the other word(s) in each mark. This synergy contributes to the impression gained of each mark, which is carried forward into the relevant comparison between the two.”.  [8]

Given that “ale” and “brewing company” would be clearly associated in meaning, and were both combined with the element “urban”, the appeal judges agreed that the marks were deceptively similar. 

While the appeal judges upheld the primary judge’s decision to cancel the Urban Ale mark, and the case on infringement could not therefore succeed, the judges went on to consider the other grounds of appeal.    

  1. Use of URBAN PALE as a trade mark

On the question of whether La Sirène used URBAN PALE as a trade mark, the appeal judges agreed with the primary judge’s finding that URBAN PALE was used as “a product name that is descriptive of the nature and style of the beer product”.   [9]  They agreed that consumers would understand URBAN PALE as referring to a craft beer brewed in an inner city location (“urban”) in a pale ale style (“pale”) and would not see URBAN PALE as a trade mark for distinguishing the beer products from those of other traders.  

They noted that URBAN PALE was the most prominent element on La Sirene’s label and that  ordinarily this would be persuasive in finding trade mark use.  However, because URBAN PALE would be seen as a product description, trade mark use could not be found.  The judges referred to the primary judge’s words “I do not consider that prominence converts the essentially descriptive name into a mark indicating the source of origin”.  [10]

Urban Alley’s appeal was dismissed on all grounds.  [11]

Takeaways

This decision is a reminder of the limitations of adopting and registering marks with descriptive significance.  Competitors may easily avoid infringement where they can argue that they are using their trade mark descriptively.  Further, a registration for a descriptive mark will be vulnerable to cancellation on the basis that it lacks distinctiveness.  Trade mark owners are advised that the strongest rights to be obtained are in registrations for marks which have no descriptive significance in relation to the goods or services.

The case also indicates that giving prominence to a mark in labelling will not convert descriptive words into trade marks.  Further, registering a label with prominent, but descriptive, elements will not give exclusive rights to the descriptive elements.


[1] In the primary decision La Sirène had also sought cancellation of the Urban Ale registration on the basis that Urban Alley was not the owner of the Urban Ale mark due to the earlier registration for Urban Brewing Company (s 58).  This was dismissed on the basis that the marks were not substantially identical and the primary judge’s decision on this point was not appealed.

[2] La Sirène had also raised a defence under s 222(1)(e) on the basis of its registration for “Farmhouse Style Urban Pale by La Serene” covering beers. However, the primary judge did not consider it necessary to consider that defence, given that La Sirène could already rely on its registration for the URBAN PALE logo for the defence under s 222(1)(e).

[3] Urban Alley Brewery Pty Ltd v La Sirène Pty Ltd [2020] FCAFC 186 (4 November 2020), paragraph 59.

[4] Ibid, paragraph 60.

[5] Urban Alley had argued that the primary judge had suggested that “Urban Ale” was allusive and metaphorical when finding that it indicates beer made in an urban location which is “cool” or “trendy” and therefore could not be directly descriptive.  This was dismissed, with the judges saying “urban” has a clear and direct meaning.  They also tried to argue that the mark did not indicate a characteristic of the beers and therefore did not fall within the Note after s 41 [5]because it did not indicate a “characteristic” of the beers in terms of flavour or style.  This argument was unsuccessful, with the judges finding that Urban Ale could indicate  other “characteristics” such as beers produced in an inner city location.

[6] Ibid, paragraph 99.

[7] Ibid, paragraphs 105 and 106.

[8] Ibid, paragraph 106.

[9] Ibid, paragraph 119.

[10] Ibid, paragraph 119.

[11] The judges did not need to consider Urban Alley’s challenge of the primary judge’s decision that La Sirène could rely on the defence that it used URBAN PALE to indicate the kind, quality or other characteristics of the beer products (s 122(1)(b)(i).  This was because they had already upheld the primary judge’s decision that Urban Ale functions descriptively and is not inherently adapted to distinguish and the issues were essentially the same in relation to URBAN PALE.

Urban Alley had also challenged the primary judge’s finding that La Sirène would have a defence under s 122(1)(e), as it used the URBAN PALE label as registered, and the primary judge’s refusal to cancel La Sirène’s registration for the URBAN PALE label.  These grounds of appeal were dismissed.  Firstly, it was unnecessary and too remote to consider any defence under s 122(1)(e), given there was no infringement.  Secondly, Urban Alley’s registration for Urban Ale, which would have blocked the application for the URBAN PALE logo, had been removed from the Register.

Authored by Michelle Howe and Sean McManis

4 min read

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

Background

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

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

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

TM Infringement by Hashtag

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

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

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

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

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

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

Consequently, the appeal failed.

ACL and Passing Off

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

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

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

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

On this basis, Hashtag’s appeal was dismissed.

Cross-Appeal by INO

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

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

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

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

Authored by Nathan Sinclair and Sean McManis

3 min read

The New Zealand Court of Appeal has issued a decision that upholds decisions by the Trade Marks Office and High Court, finding that concurrent use of the trade marks ACTAZIN and ActiPhen is likely to cause confusion.

In Australia, a Trade Marks Office decision found that the marks are not deceptively similar.

Is this just a case of differing views or does it tell us something more about differences between assessments in the two countries?

The New Zealand Decisions

Both the ACTAZIN and ActiPhen trade marks were used, or intended to be used, in relation to nutraceuticals containing kiwifruit. The botanical name for kiwifruit is Actinidia, which is relevant to the parties’ decisions to use trade marks containing the prefix ACT-.

In the case of ActiPhen, the applicant, Pharmazen, indicated that the suffix “Phen” is a reference to phenolic compounds, being phytonutrients that are naturally occurring in plants.

The decision of the Assistant Commissioner of the Trade Marks Office was based on a view that the marks are visually similar and have a substantial degree of similarity in their likely pronunciation.

The High Court found that the marks look similar and are “phonetically extremely similar”.

The Court of Appeal was persuaded to uphold the decision of the High Court on the basis that:

  • both marks are invented words and so do not convey dissimilar ideas;
  • they are of a similar length (seven vs eight letters), have three syllables, share the first syllable “ACT” and conclude with the letter “N”, resulting in significant visual similarity;
  • there was no persuasive evidence to indicate that “ACT” is a recognised abbreviation of Actinidia, or is otherwise descriptive, generic or a common part of trade marks for the specified goods;
  • while there was no independent or expert evidence as to pronunciation, and accepting that the marks in question may generate a variety of pronunciations, the Court found “a substantial degree of similarity”;
  • the first part of the trade marks was considered the most important for the purposes of comparison – this principle is derived from the decision in Re London Lubricants (1920) Ltd’s Application (1925) 42 RPC 264 at 279.

Interestingly, while all three decisions expressed the view that there is a substantial degree of phonetic similarity between the trade marks, they all differed slightly on the most likely pronunciations of the marks:

  • The Assistant Commissioner considered the most likely pronunciations to be “Act-a-Zin” and “Ac-te-Fen”;
  • The judge of the High Court considered the most likely pronunciations to be “Act-i-zin” and “Act-i-fen”;
  • The Court of Appeal thought that ActiPhen would most likely be pronounced “Act–teh-fayrn”, and that both ACTAZIN and ActiPhen would be pronounced with a falling inflection and primary emphasis on the first syllable “Act”.

The case was unusual in that the owner of the ACTAZIN trade mark was only using its mark for export. This led to argument being presented on behalf of Pharmazen that there can be no likelihood of confusion if the products will not be competing in the New Zealand market. However, the Court of Appeal confirmed that the assessment required under section 25 involves consideration of notional use.

In passing, it is worth noting that use for the purposes of export protects a registered mark against cancellation for non-use.

The Australian Decision

While only at the level of the Trade Marks Office, in Australia the opposition to registration of ActiPhen was unsuccessful because the Registrar’s delegate found that:

  • while the trade marks “share the same three letter prefix ACT- and the last letter ‘N’, there exist such differences in spelling that there is a clear picture of dissimilarity between the trade marks”;
  • the trade marks contain very different aural and visual structures within the trade mark being “-iPhe-“ in comparison to “-azi-“ which are very different in look and sound”;
  • the trade marks are likely to be pronounced in a number of different ways by the general monolingual Australian consumer particularly when the suffixes of the trade marks are so different. I do not believe that ActiPhen would be pronounced in so similar a fashion as ACTAZIN by a significant number of consumers. The differences in spelling between the trade marks is simply too great”.

The sharp “eye” or “ee” sound at the end of Acti in ActiPhen was noted, as was the fact that the representation of the mark makes it clear how the word would be broken for the purposes of pronunciation. The difference in the central syllable and the importance of the “zee” sound was noted in ACTAZIN.

Comments

The Court of Appeal in New Zealand was referred to the Australian Office decision; however, this was not considered persuasive. Separate from jurisdictional differences, the Court noted that there is a difference in the onus between Australia and New Zealand. In Australia, the opponent bears the onus of establishing that there is a likelihood of deception or confusion, while in New Zealand the onus rests with the applicant to demonstrate that there is no likelihood of deception or confusion.

Significantly also, the New Zealand accent can give rise to differences in aural similarity. The New Zealand accent tends to clip vowels so that, for example, “e” tends to become like “i”, so “sheep” can sound like “ship”, and “i” tends to become like “u” so “fish” sounds like “fush”.

Allowing for accents is difficult since accents vary across a population. However, while accent differences do not usually make a significant difference, the present case demonstrates that they can. The difference in the New Zealand accent helps explain the different view taken on phonetic similarities between the trade marks.

The present case can be seen as demonstrating that while the principles to be applied in an assessment of similarities between trade marks are generally consistent between Australia and New Zealand, differences in decisions are possible due to:

  • The difference in onus which, in Australia, requires the opponent to establish a likelihood of confusion, while in New Zealand the applicant needs to demonstrate that there is no likelihood of confusion;
  • Differences in the pronunciation of words;
  • The simple fact that comparing trade marks often involves no clear dividing line between names that are, or are not, too similar. Consequently, it is quite possible for different decision-makers, faced with the same facts, to make different findings.

The New Zealand decision also demonstrates that if a party wishes to argue a ground, such as dissimilarities in pronunciation, evidence supporting such claims is likely to strengthen their arguments.

Authored by Sean McManis

5 min read

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

The full decision can be found here.

Background

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

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

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

V Green mark

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

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

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

Energy Beverages claimed that Pantone 376c looks like:

Pantone 376c

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

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

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

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

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

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

Issues for determination

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

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

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

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

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

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

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

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

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

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

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

Takeaway

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

Authored by Kathy Mytton and Sean McManis

4 min read

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

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

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

Background

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

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

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

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

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

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

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

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

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

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

Key Issue

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

Trade Mark Infringement

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

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

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

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

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

Remedies

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

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

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

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

Lesson

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

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

Authored by Kathy Mytton and Sean McManis