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.

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.

Authored by Nathan Sinclair and Sean McManis

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

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

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

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

The Issue

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

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

The Law

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

The Facts

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

The Trade Mark
Opponent’s Trade Mark

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

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

The Decision

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

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

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

The Point

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

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

Authored by Nathan Sinclair and Sean McManis

Pinnacle Runway Pty Ltd v Triangl Limited [2019] FCA 1662 (10 October 2019)

Question: When is a name that is used to distinguish, not being used to distinguish?

Answer: When it is a style name

The Case

In Federal Court proceedings Pinnacle Runway Pty Ltd (“Pinnacle”) alleged infringement of its trade mark registration for DELPHINE by Triangl Group Ltd (“Triangl”). The allegation concerned the use of that word in relation to bikinis.

The key issue and basis of the ultimate decision is neatly summarised by Justice Murphy:

Triangl admitted that, over a period of six weeks, it marketed and sold in Australia a bikini style in three different floral designs under the TRIANGL Trade Mark using the name DELPHINE, but denied using DELPHINE “as a trade mark”. It argued that it employed the TRIANGL Trade Mark to distinguish its products from those of other traders and it only used DELPHINE as a “style name” so as to assist consumers to differentiate that one of its many bikini styles from its other styles. It put on evidence to show that there is a widespread practice in the women’s fashion industry in Australia of using style names in relation to women’s fashion garments, including swimwear, and that women’s names are commonly so used. Triangl contended that consumers were used to this practice and that its use of the name DELPHINE was unlikely to be perceived by consumers as distinguishing Triangl’s goods from the goods of other traders.

The Issue 

For a trade mark registration in Australia to be infringed, the infringing use needs to be use “as a trade mark”. Consequently, determining whether a name or other sign is used “as a trade mark” is an issue of key importance in any such proceedings.

The present case concerned a fundamental clash over whether and when a name is being used as a trade mark. At the heart of this issue is the view of the Court that there will only be use as a trade mark when that use is intended to distinguish the user’s goods from those of other traders.

Further to this, the Court accepted evidence that various names are used not to distinguish one trader’s goods from those of another, but to distinguish only the different products within a range sold by a particular trader.

The Evidence

Pinnacle presented evidence from a marketing consultant and lecturer in marketing concerning brand architecture and perceptions. It claimed that sub-brands function as trade marks and referenced the typical brand architecture hierarchy of:

(a) corporate or company brand, which is the overall or head brand;

(b) family brand, which is a brand that is used in more than one product category but is not necessarily the name of the company or corporation;

(c) individual brand, which is a brand that is restricted essentially to one product category, although it may be used for several product types; and

(d) modifier, which describes a specific size, flavour, configuration or function of the product.

Triangl presented evidence from a public relations and marketing consultant with experience in the fashion industry. His evidence was that there is common use of ‘style’ names simply to distinguish the different collections sold by traders, rather than to indicate origin.

It was claimed that typically the business’ principal brand, in this case TRIANGL, performed the role of distinguishing the trader’s goods from the goods of others, not the style names used.

The Use

DELPHINE was used on Trangl’s website, with varying degrees of prominence, in contexts such as:

Triangl image 1
triangl image 2
Triangl image 3

The Decision 

The Court was persuaded by the industry evidence. In concluding that DELPHINE was not being used by Triangl as a trade mark, it took into account factors such as:

  • Evidence from Triangl that it did not intend to use the name to distinguish its goods from those of other traders but only to distinguish a particular style of bikini from those within its broader range;
  • Whenever DELHINE was used, there was generally more prominent use of TRIANGL;
  • Typically, DELPHINE was used in a similar font size as the names given to the different colours and floral patterns, which is inconsistent with use as distinguishing commercial origin;
  • DELPHINE products were generally displayed as part of a wider range of styles with various different names. For example, on the website if the consumer clicked “View All” they would see images of approximately 35 Triangl bikini styles (all having different names) and if they clicked “New Arrivals” they would see 4 new styles

As a consequence, the Court was convinced that consumers would understand that TRIANGL was the trade mark being used to identify the source of the bikinis and that DELPHINE, like other style names, was not being used as a badge of origin or as a ‘sub-brand”.

The Court emphasised that the context of use is “all important“ in assessing such issues and found that use in the present case was not use “as a trade mark”.

Additional Evidentiary Issue  – Wayback Machine

The case also included an interesting observation on the admissibility of evidence from the Wayback Machine. While this is generally considered hearsay, it has been admitted on occasions as a matter of discretion.

In the present case, Justice Murphy accepted evidence that Wayback screenshots are ordinarily produced automatically. As a consequence, in the absence of evidence to the contrary, it was accepted on the basis of being a document produced without human intervention.

Comment 

The case breaks new ground and challenges perceptions of what a trade mark is, and when a name is functioning as a trade mark.

The case creates additional uncertainty for parties seeking to enforce trade mark rights and provides a new characterisation of the defence that a name is not being used as a trade mark, when there is also use of principal or ‘house’ brand.

Whether a name is being used as a style name (or something akin to a style name) rather than being used as a trade mark, will depend upon the circumstances of each case, and it is an issue that will likely give rise to considerable debate.

The case is presently the subject of an appeal, and assuming it proceeds to a decision, the result will be closely watched.

Authored by Sean McManis

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

Background

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

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

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

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

Federal Court

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

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

The Federal Court decision is reported here.

Appeal

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

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

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

Authored by Kathy Mytton and Sean McManis

– Dispute between Dunlop and Goodyear over use and registration of DUNLOP and ‘flying D’ device mark

– Use by Goodyear Australia was under control of registered owner, Goodyear US

– Goodyear Australia’s use of marks constituted use for purposes of defending non-use action

The dispute in Dunlop Aircraft Tyres Limited v The Goodyear Tire & Rubber Company ([2018] FCA 1014, 11 July 2018) concerned the use and registration of DUNLOP and the ‘flying D’ device (depicted below) in Australia:

Background

The owner of trademark registrations for DUNLOP and ‘flying D’ device in Australia is Goodyear Tire & Rubber Company (‘Goodyear US’), which has a wholly-owned Australian subsidiary, Goodyear & Dunlop Tyres (Aust) Pty Limited (‘Goodyear Australia’). Dunlop Aircraft Tyres Limited (‘DATL’) produces and sells aircraft tyres using the DUNLOP and ‘flying D’ device trademarks in the United Kingdom. It owns registrations and sells those products in numerous countries, but is not the owner in Australia.

The matter has a long history going back to the 1890s, when the UK company Dunlop Holdings Limited (‘Dunlop Holdings’) established a tyre distribution outlet in Melbourne, Australia. In 1899 Dunlop Holdings sold its Australian tyre business to Dunlop Pneumatic Tyre Company Co of Australasia (‘Dunlop Australia’), which registered the DUNLOP trademark in 1910. In 1920 Ansell was incorporated and took over Dunlop Australia’s tyre business.

Prior to the 1930s, Ansell imported aircraft tyres bearing the DUNLOP mark from Dunlop Holdings and in the early 1930s established a manufacturing facility. It then commenced manufacturing tyres, including aircraft tyres, branded with the DUNLOP mark, and later the ‘flying D’ device. It continued to import some models of tyres from Dunlop Holdings. In 1953 Ansell started providing retreading services for aircraft and other tyres at its premises in Essendon, Victoria. In 1965 the ‘flying D’ device was registered by Ansell in Australia in respect of all rubber goods in Class 12.

In 1987 a partnership known as South Pacific Star Tyres (‘SPT’) was formed between a subsidiary of Ansell and Goodyear Tyres Pty Limited (a subsidiary of Goodyear US). Around 1987, Ansell ceased manufacturing aircraft tyres in Australia, but SPT continued to market and sell DUNLOP and ‘flying D’ device-branded aircraft tyres purchased from Dunlop Holdings and later DATL.

In 2006 Goodyear US purchased Ansell’s interest in SPT and the Australian registered marks were assigned from Ansell to Goodyear US. In February 2009, the retreading facility in Essendon was closed and Goodyear Australia began shipping tyres offshore for retreading at Goodyear Thailand.

On 1 January 2012 Goodyear US and Goodyear Australia entered in a licence agreement pursuant to which Goodyear Australia was granted a non-exclusive non-transferrable licence to use the registered trademarks on and in connection with the manufacture, marketing and sale of products and services in Australia.

Between January 2008 and March 2009, DATL communicated with Goodyear Australia seeking a licence to use DUNLOP and the ‘flying D’ device in Australia but no licence was granted.

DATL applied for registration of DUNLOP and ‘flying D’ device and was successful in securing acceptance on the basis of evidence of honest and concurrent use. An opposition to registration was upheld, principally on the basis that DATL was not the true owner of the trademark.

Federal Court decision

The issues before the Federal Court concerned:

1. whether the Australian registered trademarks should be removed from the register for non-use in respect of aircraft tyres and related goods and services;

2. whether the Australian registered trademarks should be cancelled in respect of aircraft tyres and retreading services;

3. whether DATL was entitled to register the DUNLOP and ‘flying D’ device marks, in respect of aircraft tyres and aircraft tyre retreading services; and

4. whether use of the DUNLOP and ‘flying D’ device trademarks by DATL infringed any Australian registrations.

Non-use

The non-use issue turned upon whether Goodyear Australia’s sale of DATL’s products bearing the DUNLOP and ‘flying D’ device trademarks constituted use of those trademarks by Goodyear US.

Under Australian law, use of a registered trademark by a wholly-owned subsidiary of the owner is considered an authorised use of the trademark. However, there still needs to be actual control exercised by the registered owner.

In the present case, although Goodyear US did not itself exercise quality control over the goods that were being traded by the Australian company, given the relationship between the companies and the court’s finding that Goodyear US knew of and approved of Goodyear Australia’s activities, the judge (Nicholas J) found that the use by Goodyear Australia was under the control of the registered owner, Goodyear US.

Nicholas J then needed to decide whether that was trademark use by Goodyear Australia and found that, notwithstanding the fact that all control over production of the goods was exercised by DATL, Goodyear Australia used the trademarks in its dealings with those products, which constituted use for the purposes of defending the non-use action.

In relation to the issue of whether there was use in relation to retreading services, the goods were sent to
Goodyear Thailand to be retreaded and the GOODYEAR mark was affixed to the retreaded tyres.

Notwithstanding that, Goodyear also relied upon use of artwork (depicted below) on invoices and delivery dockets issued by Goodyear Australia to its customers in relation to the sale of new tyres and its retreading services:

Nicholas J took the view that this is a composite trademark, which does not constitute use of DUNLOP or the ‘flying D’ device trademark “with additions or alterations not substantially affecting its identity”. This is because the presence of the GOODYEAR mark substantially affects the identity of the overall trademark.

Nicholas J saw no reason to exercise his discretion not to remove registrations in respect of tyres or retreading services. In this regard, he took the view that DATL was known to produce the DUNLOP and ‘flying D’ device tyres being sold in Australia and it would be misleading for an unrelated party to use those marks in relation to tyres or retreading services.

Rectification

Various grounds of potential cancellation were considered by the judge, who found that:

  • evidence did not establish a lack of intention to use the trademarks for the relevant goods and services at the time registration was applied for;
  • registrations were not obtained on the basis of fraud, false suggestion or misrepresentation; and
  • use of the trademarks in respect of aircraft tyres by the owner was likely to deceive or cause confusion.

In finding a likelihood of deception or confusion, Nicholas J took the view that, in a specialised market for aircraft tyres, consumers would be aware of the origin of the products. He noted that the products that had been sold in Australia for a number of years were the products of DATL. As a consequence, what connection there may have been in the past with Goodyear had been lost and the trademarks no longer indicated any connection with the Goodyear companies. Therefore, use of the trademarks would be likely to
deceive or cause confusion if not used in relation to the products of DATL.

Nicholas J saw no reason to exercise its discretion not to cancel the registrations in respect of aircraft tyres and aircraft tyre retreading services. He also found that, although rectification does not act retrospectively, the order cancelling registration deprives the registered owner of the standing that is an essential element of an action for infringement and so denies it an entitlement to any remedies in respect of cancelled goods or services.

Dunlop’s applications

The appeal to refusal of registration for DATL in respect of the DUNLOP and the ‘flying D’ device trademarks, considered a number of issues:

1. In relation to whether representations made to secure acceptance on the basis of honest and concurrent use were defective, Nicholas J found that, notwithstanding certain minor inaccuracies, the representations made did not amount to a material misrepresentation that resulted in the acceptance of the application.

2. There was no ground for refusal based on any prior reputation held by Goodyear.

3. There was no ground for refusal based on alleged bad-faith filing by DATL.

4. There was no basis for refusal due to deception or confusion.

5. By virtue of their first use and application, the predecessors of the Goodyear companies had established ownership of the DUNLOP and ‘flying D’ device trademarks for relevant goods and services. The trademarks had not been abandoned and so this justified refusal of the application.

Although DATL used the trademark and is now recognised as the producer of aircraft tyres sold under the DUNLOP and ‘flying D’ device trademarks in Australia, since the Goodyear companies were able to establish ownership by virtue of first use, DATL was not entitled to registration.

A claim to ownership arising from first use will remain valid unless the trademark is abandoned by the owner and in the present case, there was no evidence of abandonment of the trademarks by Goodyear US.

Infringement

Infringement can occur in Australia by unauthorised use in relation to goods or services covered by the registration, similar goods or services, or closely related goods or services.

On the issue of whether aircraft tyres and aircraft retreading services are closely related goods and services, Nicholas J found that they are because the relevant market would assume that the use of the same branding in respect of those goods and services would indicate that they were provided by the same business.

Absent rectification of the register, DATL’s use would have infringed the rights of Goodyear US, so Nicholas J considered the various defences to infringement argued before him and found as follows:

DATL is not entitled to its own registration (in light of the finding regarding ownership in respect of the trademark opposition).

Consent to use by the owner was not provided.

Use by DATL was not good-faith use of the name of DATL’s name because Dunlop differs sufficiently from the name Dunlop Aircraft Tyres.

Use of the trademarks was not use for the purposes of description.

The defence available in a claim based upon similar or closely related goods or services that “the use would not be likely to deceive or cause confusion” applied. Due to DATL’s use and connection with products being sold under the trademarks, their use of those trademarks is not likely to deceive or cause confusion.

There was no infringement of Goodyear’s rights in respect of use on any goods or services covered by the registrations because of the success of the rectification action.

Further, to the extent that there may have been any use in relation to similar or closely related goods or services, there was no infringement because there was no likelihood of deception or confusion.

Conclusion

The case demonstrates the importance of the owner of a trademark registration maintaining control over use of the trademark. It also demonstrates the significance of a claim to ownership arising from first use and no abandonment.

This article by Shelston IP Principal, Sean McManis, first appeared in World Trademark Review, July 2018.

Authored by Sean McManis

On appeal to the full court of the Federal Court, Accor Australia and New Zealand Hospitality Pty Limited has succeeded in protecting the name of a residential apartment complex as a trade mark. That mark has been protected in relation to services dealing with the sale, leasing and letting of those apartments and holiday accommodation services.

Cairns Harbour Lights (CHL) was responsible for the construction of a complex consisting of three towers of residential apartments and a retail section, located adjacent to Cairns harbour in northern Queensland. The development used the names ‘Harbour Lights’ and ‘Cairns Harbour Lights’.

The domain names ‘harbourlights.com.au’ and ‘cairnsharbourlights.com’ were licensed in January 2004 and resolved to CHL’s website, which went live in early 2004. However, the services offered on the website related only to sales of apartments, rather than leasing or letting services.

On December 21 2004 CHL entered into agreements with Mirvac (subsequently Accor) giving it exclusive rights in relation to onsite letting and caretaking services. The development was completed in 2007.

CHL obtained trademark registrations for HARBOUR LIGHTS and CAIRNS HARBOUR LIGHTS on the basis of applications filed on January 21 2009 and April 21 2009 respectively. Those registrations covered the following services in Class 36:

Agency services for the leasing of real estate properties, commercial real estate agency services, apartment letting agency, apartment rental services, rental of apartments, rental of accommodation.”

They also covered the following services in Class 43:

Accommodation letting agency services (holiday apartments), accommodation letting agency services (hotel), hotel accommodation services, accommodation reservation services, booking services for accommodation, hotel services.

Elise Bradnam purchased an apartment in 2005. She subsequently registered the domain names ‘cairnsharbourlights.com.au’, ‘harbourlightscairns.com.au’ and ‘harbourlightscairns.com’, and operated a business called Harbour Lights Property Management and Sales, which let apartments at the Harbour Lights complex. Bradnam’s website went live on October 31 2006 and she later sold the business in September 2009 to Liv Pty Ltd. Liv provided short-term letting services in competition with Accor.

At first instance, the most relevant findings of the primary judge were as follows:

  • The CAIRNS HARBOUR LIGHTS trademark registration should be cancelled on the basis of nondistinctiveness and descriptiveness; and
  • HARBOUR LIGHTS was inherently registrable, but the registration should be part cancelled due to prior use of the trademark by Bradnam in relation to certain services covered by the registration.

Accor appealed the decision.

Under Australian law, ownership of a trademark arises from either first use in Australia in relation to relevant goods or services or authorship of the mark and intention to use it upon or in connection with goods or services specified in an application for registration by the person claiming ownership.

As HARBOUR LIGHTS was in use before the date that CHL applied to register HARBOUR LIGHTS and CAIRNS HARBOUR LIGHTS, the court needed to assess and determine whether use made by the respective parties established claims of ownership and, if so, in respect of what services.

To establish a valid claim of ownership, the trademark used by the party claiming ownership must be at least substantially identical to the claimed mark and must relate to the services claimed or very similar services that might be considered the true equivalent. What services are true equivalents is to be determined “in a practical, commonsense way”.

At first instance, the primary judge found that while Accor had published certain advertisements before any use claimed by Bradnam, the marks used were not substantially identical to HARBOUR LIGHTS or CAIRNS HARBOUR LIGHTS, and so the use did not support a claim of ownership in respect of those trademarks. The primary judge also found that Bradnam had used those  trademarks in relation to leasing and letting services before CHL’s application and so was the owner for those services.

The relevant examples of use by Accor are illustrated below:

Harbour Lights trademark

The primary judge considered these in their entirety and took the view that the additional elements rendered the marks not substantially identical to HARBOUR LIGHTS.

On appeal, the full court found that the five gold stars in the first example was an addition that did not substantially affect the identity of the trademark in the words alone. It also found that the use of the words “A new star shines” in small script below the words “Harbour Lights” were not distinguishing features and likewise did not substantially affect the identity of the trademark in the words alone.

As regards the second example, the full court disagreed with the decision of the primary judge, who characterised the words “The Sebel Harbour Lights” as a single trademark. The full court found that it was not a single mark, but rather two trademarks, with “The Sebel” being the trademark of the accommodation operator. The full court stated that use of “The Sebel”:

simply tells the viewer that there is a relationship between the services badged Harbour Lights’ in the advertisement, the developer and, in some way or other, an accommodation operator described by reference to the operators trade mark The Sebel.”

As a result, Accor had a valid claim of ownership in respect of all relevant services so as to defeat Bradnam’s claim.

As regards the trademark CAIRNS HARBOUR LIGHTS, the full court disagreed with the primary judge, who had focused on the fact that the services provided were based at Cairns harbour. The full court found that the distinctive part of the trademark was “Harbour Lights”.

It also found that as ‘Cairns’ was “merely a geographical reference”, it did not substantially affect the identity of the trademark HARBOUR LIGHTS. As a consequence, it found that the marks HARBOUR LIGHTS and CAIRNS HARBOUR LIGHTS were substantially identical and that Accor’s entitlement to ownership of HARBOUR LIGHTS also entitled it to ownership of CAIRNS HARBOUR LIGHTS.

The full court then dismissed the respondent’s contention that use of subject names was not infringing because they were used in good faith to indicate the geographical origin of the services. It noted the options available to the respondent and accepted the primary judge’s findings concerning use for the purposes of infringement. It found infringement of Accor’s registrations arising from use of the words ‘Harbour Lights’ in domain names, on websites and in advertisements, email addresses and listings on third-party accommodation booking sites. It also found use of ‘Harbour Lights’ as a metatag to be infringing.

In relation to the use of domain names, the full court held that electing to use a deceptively similar trademark in a domain name for the purposes of capturing enquirers and taking them to a website that offers relevant services was use as a trademark in connection with services offered at sites to which the domain names linked the enquirer.

Certain uses were accepted as being descriptive, such as those where the names were used to describe the accommodation as “Cairns Harbour Light Apartments” rather than being used to identify the service provider.

The case provides guidance on determining trademark ownership and assessing trademark use.

This article first appeared on WTR Daily, part of World Trademark Review, in May 2017. For further information, please go to www.worldtrademarkreview.com.

Authored by Sean McManis