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Mainly intellectual property (IP) issues Down Under

Are you carrying on business in Australia by registering a trade mark here

If you need authority for the proposition that registering a trade mark, or enforcing the rights under the registration, does not necessarily mean you are carrying on business in Australia, Besanko J may help you out.

The ACCC sued Nexans SA and others alleging they were engaged in price fixing cartel.

Nexans SA is the global parent of the Nexans group. It had registered NEXANS in Australia as a trade mark. It had also licensed the trade mark to Nexans Australia, which was a member of the group, but not a direct subsidiary.

Besanko J rather sensibly stated at [282]:

…. I do not think the fact that the ultimate holding company of a large worldwide Group, insures all of the directors and officers of the companies comprising the Group means that the ultimate holding company is carrying on business within all the jurisdictions where companies in the Group are operating or is even a reasonably strong indication of that fact. The registration of trade marks in Australia by an overseas company could be an indication that the company is carrying on business in Australia, but, of course, it is only the beginning of the inquiry. The fact is that here there is a licence to Nexans Australia which (depending on the precise circumstances) may be considered to be an authorised user of the registered trade marks under s 8 of the Trade Marks Act. Nor do I think the fact that Nexans SA took action in this Court to protect its rights as owner of the registered trade marks indicates that it was carrying on business within Australia.

His Honour then explored other factors which in the end did lead to Nexans SA being held to carry on business in Australia. Ultimately, however, Besanko J did not consider it had engaged in the cartel behaviour, but another company, Prysmian, had.

Australian Competition and Consumer Commission v Prysmian Cavi E Sistemi S.R.L. (No 12) [2016] FCA 82

Logan J has ruled that documents prepared by a firm of trade mark attorneys in connection with a domain name arbitration are not covered by trade marks attorney privilege. The limits on the scope of “trade marks attorney privilege” is the main takeaway – in particular, Logan J considered that a draft statutory declaration prepared in connection with a UDRP complaint did not fall within the scope of the privilege. There is a warning about how a claim of privilege is made too.

Logan J has ruled that documents prepared by a firm of trade mark attorneys in connection with a domain name arbitration are not covered by trade marks attorney privilege. The limits on the scope of “trade marks attorney privilege” is the main takeaway – in particular, Logan J considered that a draft statutory declaration prepared in connection with a UDRP complaint did not fall within the scope of the privilege. There is a warning about how a claim of privilege is made too.

Titan is suing a Mr Cross and a Dr Harmon alleging that a website they, or one of them, operated – Beware of Titan Garages – infringed its trade mark rights and copyright.

Titan alleges that Mr Cross is a fictitious person.[1]

Titan had previously brought a complaint against Mr Cross under the UDRP unsuccessfully. Mr Cross was represented in that dispute by a firm of patent and trade mark attorneys (the attorneys) and not their associated law firm.

Titan issued a subpoena to the attorneys for production of documents which disclosed information about the identity of Mr Cross. The subpoena allowed redaction of information in the documents protected by client legal privilege (apart from name and contact details). The attorneys produced documents in answer to the privilege in redacted form. After inspection, Titan sought to access the documents in unredacted form. The attorneys objected, citing s 229.

Section 229 provides that a communication, or a record or document, made for the dominant purpose of a registered trade marks attorney providing “intellectual property advice” is privileged in the same way and to the same extent as if made by a lawyer.

The attorneys recognised that the privilege was Mr Cross’ privilege; not theirs. They had made efforts to obtain his instructions, but these were not forthcoming. Mr Cross did not appear at the hearing before Logan J either. As it was Mr Cross’ privilege to waive or not, the attorneys properly maintained the objection.

Why the claim of privilege was refused

In support of the claim, the trade mark attorneys provided an affidavit by the solicitors acting for them in connection with the subpoena. It stated that the deponent was informed the documents:

(1) were part of the trade mark attorney firm’s confidential files; and

(2) contained confidential communications with the attorneys for the purpose of them giving advice in connection with the UDRP complaint.

Logan J considered that the evidence did not rise above “mere assertion” and, in the circumstances of this case, was insufficient to discharge the onus on the person claiming the privilege to prove the privilege applied. His Honour had earlier explained at [9] that:

“the essential issue on a claim for privilege is the purpose for which the document or communication in question was made”: Hancock v Rinehart at [32]. It necessarily follows that the best, though not the only sufficient, source of evidence is the direct evidence of the person whose purpose is in question: Hancock v Rinehart at [32]. Procedural fairness questions in relation to other affected parties intrude in relation to any endeavour to prove the requisite purpose just by an inspection by the Court of the document which is the subject of the asserted privilege. That means that a court ought to be cautious about acting upon an invitation so to do, especially if that invitation is not attended by separate evidence describing the document and the circumstances of its creation….

Logan J did acknowledge that there might be other situations where the circumstances could lead to a different result. His Honour’s approach, however, highlights the risks that can be run by what might be thought to have been a fairly typical form of claim to privilege.

No doubt the attorneys were hampered in preparing the response by Mr Cross’ failure to provide instructions. One might also speculate whether his failure to provide instructions or to appear in circumstances where Titan alleged he was fictitious influenced his Honour’s approach. Titan did not take the point that the affidavit was “on information and belief”, but that is often problematic.[2] Logan J was not invited to inspect the documents and did not consider it appropriate to do so of his own motion. Presumably the point of claiming the privilege would be lost if his Honour had inspected the documents.

The scope of trade mark attorney privilege

Logan J noted that s 229 provides a privilege only in respect of communications and documents made for the dominant purpose of providing “intellectual property advice”.

Relevantly, that was defined as advice in relation to “trade marks” or (one might add) “any related matters”.

His Honour pointed out at [11] – [12] that the privilege was conferred only in respect of the advisory aspect of client legal privilege and did not extend to the litigation aspects.[3] While s 19(2) of the Code of Conduct for Patent and Trade Marks Attorneys 2013 incorporates a duty of confidentiality into the attorneys’ retainer. The terms and scope of that obligation were not co-extensive with the privilege. Consequently at [14]:

As s 229 is presently drawn, it is certainly possible to conceive of anomalous outcomes concerning the existence or otherwise of s 229 privilege with respect to such an arbitral proceeding. For example, it is not controversial that advice as to whether the rights associated with a registered trade mark confer rights in respect of an Internet domain name fall within the definition of “intellectual property advice” in s 229(3). And so, too, would advice as to whether the contents of a statutory declaration for use in an arbitral proceeding were sufficient to demonstrate that those rights did or did not extend to an Internet domain name seem to fall within the ambit of s 229 privilege – either by virtue of paragraph (b) or (e) of the s 229(3) definition. But the mere drafting of that statutory declaration by a registered trade mark attorney would not attract s 229 privilege. Likewise, advice as to what submission ought to be made to demonstrate that the asserted trade mark right did or did not extend to cover a domain name would seem to fall within the scope of the privilege, whereas the mere drafting of such a submission for use in an arbitral proceeding would not. However this may be, the present claim must be determined solely by reference to the scope of the privilege as presently enunciated by Parliament. (emphasis supplied)

If with respect his Honour’s approach is right, there would appear to be potentially quite drastic consequences for the normal practice of attorney firms, and for that matter patent attorneys,[4] in drafting statutory declarations and preparing submissions in contested hearings before the Office such as opposition proceedings.

Of course, given the view Logan J took about the adequacy of the claim to privilege, his Honour’s view on the scope of the privilege is “only” obiter dicta.

And, it must be said, the circumstances were rather unusual given Mr Cross’ failure to provide instructions or defend his claim.

Further, his Honour was not considering the potential application of the privilege to proceedings in the Office. And it might be possible to argue that such proceedings are not what is normally within the scope of litigation privilege rather than “advisory” privilege. Both privilege provisions for trade mark attorneys and patent attorneys draw a clear line between “intellectual property advice” and “court proceedings”. But “arbitrations” under the UDRP are not court cases either, officially being styled administrative proceedings without prejudice to the parties’ rights to litigate in court.

It may be arguable that, given the traditional role of patent attorneys and trade marks attorneys in preparing such documents before the Office (at least), it can be argued that they fall within the scope of the “any related matters” part of the definition of “intellectual property advice”. That may be seen as straining the concept of “advice” too far in the dichotomy Logan J acted under.

On a positive note, Logan J accepted that documents prepared by persons who were not registered trade marks attorneys could benefit from the privilege if prepared under the supervision of a registered trade marks attorney.

Titan Enterprises (Qld) Pty Ltd v Cross [2016] FCA 1241


  1. at [4].  ?
  2. For example, Ansell Healthcare Products LLC v Reckitt Benckiser (Australia) Pty Ltd (No 2)
    [2016] FCA 765 at [32] – [35].  ?
  3. Contrast s 118 and s 119 of the Evidence Act 1995.  ?
  4. Patents Act 1990 s 200  ?

Dot Feedback

I was the panelist in an interesting UDRP dispute, debeers.feedback, which raises a couple of points worth being aware of.

If you’re not aware of it, .feedback is one of those new Top Level Domains that ICANN approved earlier this year. It is supposed to be a forum where people wishing to provide feedback (Duh!) can make their point. At the time of its approval, it was apparently rather controversial.

In this particular case, a number of what appeared to be otherwise genuine “feedback” posts only appeared on the website after Debeers sent a letter of demand, even though they were dated much earlier. The registrant did not seek to explain that.

The first point I wanted to draw your attention to is that, unbeknownst to the Complainant or me, the posts in question seem to have been cut and pasted from Yelp. If you have to deal with one of these domain names, a Google search will be in order.

Marty Schwimmer, the original trademark blog, suggests another argument: that “feedback” is semantically different to “.sucks” (and similar criticism outlets) and, Marty argues, implies an official outlet or connection.

Selected links,from last week

Here is a selection of links to IP-related matters I found interesting this week:

Patents

Trade marks

Copyright

Remedies

Not categorised

I hope you find some interesting. If you did or have a question, leave a comment or send me an email

Chemist Warehouse dismissed

While we are on the subject of misleading or deceptive conduct, the Full Court has dismissed “Chemist Warehouse”‘s appeal from Middleton J’s dismissal of its claim that stores like these:

Another view
Another view
Direct Chemist Outlet
Direct Chemist Outlet

misrepresented an association of some sort with stores looking something like this:

Some Chemist Warehouse storefronts
Some Chemist Warehouse storefronts

image022

 

 

 

 

 

 

 

There were some 19 grounds of appeal which the Full Court worked their way through in detail. The central problem for Chemist Warehouse was that Full Court said there was no error in Middleton J’s finding that the predominantly yellow colouring of the exterior of the Chemist Warehouse outlets was not distinctive – the distinctive feature was the “Chemist Warehouse” logo:

no error has been shown in his Honour’s findings that the primary colour palette used by Chemist Warehouse was not distinctive. First, there was considerable variability in the nature of the Chemist Warehouse get-up. The primary judge distinguished other authorities where secondary branding had been accepted on the basis of a consistent presentation of colours in a particular juxtaposition. Second, the colours had a functional aspect. Colour can be used for its practical or functional utility, for example, high visibility for a road sign. In the present case his Honour appears to have accepted that the colour yellow was used to take advantage of the attributes of visibility and its association with discount value; but such a function could apply to any type of discount goods, not just pharmacy goods. The use of yellow to create the so-called “yellow box” was also to draw the attention of potential consumers on the street; it cannot be said that the use of the colour yellow in that way denoted trade origin. His Honour accepted the functionality of yellow (see at [9], [10], [12], [14] and [100]). He also accepted that the yellow, blue and red combination served a functional purpose (see at [240]). No error is demonstrated in any of these findings.

Fourth, the dominant and distinctive “Chemist Warehouse” logo was the only consistent branding element across the appellants’ stores prior to May 2006 ….

The fact that other stores, like JB Hi-Fi and Ted’s Camera’s used a predominantly yellow background to attract attention was also not irrelevant to whether its use on pharmacies was distinctive.

Moreover, even if the get-up had been distinctive, there would have been no misrepresentation:

in any event, even if a colour-based reputation could have been shown, that would not have answered the question of whether there had been misleading or deceptive conduct or a misrepresentation.  The respondents had a different get-up with different distinguishing features.  Indeed the primary judge had distinguished the respondents’ stores by not only the “Direct Chemist Outlet” trade mark but also the different distinctive logo, cleaner appearance and lifestyle photographs.  None of these were part of the appellants’ pleaded get-up.  The respondents’ schedules two and three to its closing submissions, by reference to the primary evidence before his Honour consisting of the relevant photos, well summarise the variability in get-up used at the DCO stores and the Chemist Warehouse stores, and relevant differences.

The Full Court pointed out that proof DCO had copied elements of its get-up from Chemist Warehouse was not sufficient to invoke the principle from Australian Woollen Mills that someone who sets out to deceive will be presumed to have succeeded. For that principle to apply, it was necessary to show not just copying but also a subjective intention to mislead or deceive – to appropriate part of the trade or reputation of the competitor.

Finally (for the purposes of this note), the Full Court accepted Middleton J’s view that the appropriate time to assess whether DCO’s conduct was misleading or deceptive was when DCO first commenced use of its present get-up. Chemist Warehouse argued, in the alternative, that Middleton J should have made the assessment for each individual DCO store at the time it opened – the so-called geographical approach. Middleton J pointed to a number of problems with this approach. One problem was that there were some areas where the Chemist Warehouse store opened after the DCO store – who would be making the misrepresentation then. Further:

… if the Applicants and Respondents were concurrently trading and building independent reputations in separate areas, it may have been the case that it was not the Respondents’ conduct that was misleading or deceptive at that later time.

For example, the Lalor DCO store opened in 2014, well after 26 May 2006. Both parties had advanced their own reputations by that time. What is the Court to conclude is the position of the competing parties in that particular area and at that particular time? It is to be recalled that since 26 May 2006 both businesses involved in this proceeding have increased their respective exposure to the relevant consumers by opening many new stores. There has been co-existence in the market place for approximately eight years prior to litigation commencing. Further, stores have opened in numerous locations, and Chemist Warehouse stores have opened in close proximity to existing DCO stores (as in the case of the Warrnambool store, for example).

In any event, his Honour considered that the DCO get-up sufficiently distinguished its stores from Chemist Warehouse stores that no misrepresentation was likely to arise.

The Full Court considered Middleton J’s analysis was “unremarkable” and no error was identified.

Verrocchi v Direct Chemist Outlet Pty Ltd [2016] FCAFC 104

Pacific (f)ale

Moshinsky J has rejected Stone & Wood’s attempt to block Thunder Road Pacific Ale and, instead, ruled that Stone & Wood made unjustified threats of trade mark infringement.[1]

In 2010, Stone & Wood renamed its Draught Ale product as Stone & Wood Pacific Ale. Stone & Wood has 3 other main products in its line up of beers, but the Pacific Ale makes up some 80 – 85% of its sales. These sales were mainly in the Northern Rivers area of NSW, south eastern Queensland, Sydney and Melbourne.

Pacific Ale was a name Stone & Wood coined for its product. At the time, Stone & Wood was based in Byron Bay and ‘Pacific’ was chosen partly to reflect Byron Bay’s location on the Pacific ocean and partly for its ‘calming, cooling emotional response’.

The second respondent, Elixir,[2] also started up in 2010, in Brunswick, Melbourne Victoria, which some people might consider far from the Pacific. One of its lines of beers is its Thunder Road range. In 2015, it added a Thunder Road Pacific Ale to that range.

misleading or deceptive conduct / passing off

This is what individual bottles of the competing products looked like:

image002

image004

The Thunder Road logo is on the label around the neck. This is what a six pack of each looked like:

image006 image008

Stone & Wood contended that Elixir’s use of Pacific Ale and/or the ‘similar’ green and orange colour scheme misrespresented that the Thunder Road product was Stone & Wood’s or in some way associated with it in contravention of s 18 or s 29 of the ACL or a passing off.

The essential problem with this type of claim is that whether or not there is a real possibility of misrepresentation falls to be determined in all the circumstances. What would the ordinary consumer of the relevant products think in all the circumstances. Moshinsky J’s reasoning is much more detailed than I am going to attempt here, but notwithstanding the large and prominent display of Pacific Ale on Elixir’s product:

  • the dominant element on Stone & Wood’s packaging and get-up was its name: Stone & Wood;
  • there was no use of Stone & Wood on the Thunder Road product;
  • the words Pacific Ale on the Elixir product was very closely associated with Thunder Road, itself a well-known brand amongst the discerning hipsters and others in the market for craft beers;
  • although Pacific Ale was not a technical ‘style’ recognised at beer shows, it had become by the time Elixir introduced its product, descriptive for many consumers of a beer made from Galaxy hops, a particular Australian variety which gave the beer a fruity or tropical flavour – this was reinforced by the reasons why Stone & Wood had adopted the name in the first place;
  • the colour schemes and get-up are, shall we say, pretty different.

Moshinsky J accepted that Elixir knew full well that Stone & Wood had a Pacific Ale product when it decided to launch its own Pacific Ale and was trying “to some extent” to take advantage of consumers’ recognition of the term Pale Ale. That was not the same thing, however, as trying to take advantage of the name Stone & Wood or trick people into thinking the Thunder Road product was the Stone & Wood product which was what Stone & Wood needed to show.

Stone & Wood also deployed expert evidence from the marketing expert, Professor Lockshin.[3] Prof. Lockshin argued that marketing theory posited consumers might have come to identify Stone & Wood’s product just by the sub-brand Pacific Ale. Moshinksy J was not prepared, however, to overlook the significance of the prominent use of Stone & Wood on Stone & Wood’s products and the other differences between the products in the absence of testing which showed how consumers actually reacted.

In an attempt to repeat Bodum’s rather surprising success against Euroline, Stone & Wood pointed to a blackboard in a bar which simply listed PACIFIC ALE as one of the beers on tap; the beer of course being Thunder Road, not Stone & Wood. Moshinky J was not prepared to infer that patrons ordering the beer from that listing were necessarily trying to order Stone & Wood Pacific Ale as opposed to a pacific ale. Also, Elixir should hardly be liable for the actions of an independent bar owner.

Trade Mark infringement

Stone & Wood has a trade mark, No. 1395188, registered in class 32 for beer:[4]

image012

The problem Stone & Wood confronted with its infringement case is that Pacific Ale is such a subsidiary feature of the trade mark. Moshinsky J was not prepared to find that the words Pacific Ale in that configuration were likely to be an essential feature of the mark. His Honour considered that the Crazy Ron case required him to assess the essentiality of a feature in the context of the trade mark as a whole. It would have been wrong to focus on part of the mark in isolation only.

Groundless threats

Section 129 provides someone threatened with an action for trade mark infringement to bring proceedings for unjustified threats. A declaration that the threat was unjustified can be obtained, injunctions against repetition and, if damage be suffered, damages.

The Trade Marks Act is rather curious in that it is a defence to such an action if the trade mark owner starts proceedings for infringement “with due diligence”, even if the infringement allegation ultimately fails.[5] Moshinsky J denied Stone & Wood’s reliance on this defence in this case.

Stone & Wood had sent a letter of demand which included allegations of trade mark infringement as well as misleading or deceptive conduct, and threatened proceedings. When the correspondence did not lead to a resolution of the dispute, it started proceedings against Elixir, but only for misleading or deceptive conduct / passing off. It did not bring proceedings for trade mark infringement. It only brought the infringement proceedings by way of amendment after Elixir cross-claimed for unjustified threats.

In that respect, Moshinsky J distinguished Stone & Wood’s position from the trade mark owner in the Montana case. There, Wilcox J had rejected reliance on the ‘with due diligence’ defence, but the Full Court overturned that on appeal. In Montana, TTS did bring the infringement proceedings by way of cross-claim. However, it did not start the proceedings with a misleading or deceptive conduct claim. Montana started the earlier proceedings with its claim against unjustified threats and TTS brought the cross-claim at the first available opportunity.

The matter will continue to ascertain whether Stone & Wood will have to pay any damages.

It is tempting to wonder whether Stone & Wood would have had more success if it had promoted Pacific Ale more prominently and independently of its name, Stone & Wood. Perhaps, but these types of sign are slippery and it doesn’t take much for them to slide into descriptiveness. CAPLETS, for example, was a coined word, but not infringed.

If you have a comment or a question, please feel free to post it in the comments section. Or, if you would prefer, email me.

Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd [2016] FCA 820


  1. His Honour’s reasons run for some 95 pages or 245 paragraphs, so I am not going to try and convey all the nuances which were explored before his Honour in a blog post such as this.  ?
  2. The operation is sufficiently crafty, or un-boutiquey, that the first respondent is the holder of the group’s intellectual property rights.  ?
  3. If his name sounds familiar, that is because he was unsuccessfully deployed by Henschke in the Hill of Grace case.  ?
  4. It also has a pending application for PACIFIC ALE, but that has been opposed by, you guessed it, Thunder Road.  ?
  5. Dowsett J has recently pointed out that the patents legislation used to have this defence, but it was repealed a long, long time ago.  ?

Selected links from last (couple of) weeks

Here is a selection of links to IP-related matters I found interesting this past week (or two):

Patents

Trade marks

Copyright

Not categorised

I hope you find some interesting. If you did or have a question, leave a comment or send me an email

Selected links from last week

Here is a selection of links to IP-related matters I found interesting last week:

Patents

Trade marks

  • Is the US Olympic Committee’s [#TwitterBan Fair or Foul?](https://t.co/kmG0Avith) compare
    Telstra ‘Go to Rio’ campaign cleared by Federal Court, AOC case dismissed

Copyright

Remedies

  • Want An Enforceable Online Contract? Don’t Use A Footer Link Called “Reference”–Zajac v. Walker (USA)

Designs

Not categorised

Future of the profession

I hope you find some interesting. If you did or have a question, leave a comment or send me an email

Selected links from last week

Here is a selection of links to IP-related matters I found interesting this week:

Patents

Trade marks

Copyright

Not categorised

I hope you find some interesting. If you did or have a question, leave a comment or send me an email

Selected links from around the web

A selection of (mostly) IP-related links I found interesting last week:

Patents

US Federal Circuit Finds § 101 Patent Eligible Subject Matterin BASCOM

Patenting From China: how Chinese innovators are using the parent system

Copyright

USA: Apple’s New Music Royalty Proposal Would Make Streaming Costlier for Free Services Like Spotify

Vimeo’s Second Circuit DMCA Safe Harbor Win Over Capitol Records

Trade Mark

English High Court summarily dismisses Seretide combination color mark

Internet

USA: “Modified Clickwrap” Upheld In Court–Moule v. UPS

Trade – TPP

TPP at risk from ‘Hatch(ed)’ accusations that Australia’s data exclusivity steals US patents

Living in the future

A Technical Glitch or what might Facebook Live do to the world (as we know it)

The obsolete associate – Law21 or more AI in Big Law

Feel free to leave a comment or email me