capable of being confused with the trade mark

Jessup J has ruled that Idameneo’s use of:

Idameneo's trade mark

does not infringe Symbion’s registered trade mark for:

Symbion's trade mark

(As registered, the trade mark is not coloured; it was generally used in the colours depicted. See s 70(3).)

However, Idameneo’s use of its trade mark did breach its contractual obligations.


On the trade mark infringement front, you might have been thinking like me, “Who would have thought?” It turns out, however, that what enabled Idameneo to escape was the nature of the services: medical imaging services. Although the customer, you or I needing an x-ray, pays the bill and has the service practised on us, the relevant public were the doctors (and the odd dentist) who referred the patient to the service. This constituted a specialist market within Lord Diplock’s definition :

My Lords, where goods are of a kind which are not normally sold to the general public for consumption or domestic use but are sold in a specialised market consisting of persons engaged in a particular trade, evidence of persons accustomed to dealing in that market as to the likelihood of deception or confusion is essential. A judge, though he must use his common sense in assessing the credibility and probative value of that evidence, is not entitled to supplement any deficiency in evidence of this kind by giving effect to his own subjective view as to whether or not he himself would be likely to be deceived or confused.

By law, the doctor (and presumably the dentist) could not make a referral without providing the patient with the name and address of the service provider: i.e., they had to know who was going to provide the service.

It is rather a messy deal how Symbion came to license its trade mark to the corporate group of which Idameneo was a member. Under the terms of the licence, however, the licensee agreed (for itself and the other members of the corporate group which included Idameneo) by cl. 5.5:

Use of Similar Marks

Except as permitted by this deed, the [respondent] must not, and must ensure that each Licensee does not, use:

(a)       any Trade Mark; or

(b)     any Mark similar to or capable of being confused with any of the Trade Marks or which contain the words SYMBION or FAULDING,

as a trade mark, business name, domain name or otherwise anywhere in the world.

(emphasis supplied)

Jessup J was not prepared to treat the obligation as being 2 separate obligations: not to use similar trade marks or ones capable of being confused …. Rather, his Honour considered that the notion of ‘similar’ had to take colour from its context.

On the other hand, his Honour rejected Idameneo’s argument that the contractual obligation was no different to the test provided by s 10 for deceptive similarity for trade mark infringement:

36. …. The respect in which the test stated by the contractual provision conspicuously differs from that under s 10 is that it is concerned with similarity which is capable of causing confusion, whereas the section is concerned with resemblance which is likely to deceive or to cause confusion.  Here I think that the applicant has the better of the argument.  It is as clear as may be that the parties to the licence agreement were conscious of the circumstance that many of the marks referred therein were registered under the Trade Marks Act; and it may be inferred that they had an active appreciation of the requirements of s 10.  I have no reason to doubt that their choice of different language by which to express the prohibition in cl 5.5(b) was a conscious one.  I consider that for the court to conflate, as it were, the terms of that prohibition into those of s 10 of the Trade Marks Act would be to neutralise that choice, and would go against the parties’ intentions.

In [37], Jessup J went on to note that the contractual prohibition was part of the consideration Symbion had extracted in return for granting the licence and must be thought to have some intended value.

Applying the usual rules of visual comparison and imperfect recollection, the lower threshold established by capable of confusion compared to likely to deceive or cause confusion meant the contract had been breached.

Jessup J did accept that the setting in which the competing marks were used should be taken into account in deciding whether or not cl. 5.5 was breached. The facts that Idameneo used its mark for medical diagnotic imaging while Symbion used its mark for the wholesale distribution of pharmaceuticals, however, did not save Idameneo:

47 But I do not accept the respondent’s factual submission that the circumstances in which the respondent’s mark is used are so distinct from the business activities of the applicant as to leave no realistic scope for confusion by reason of similarity.  Both marks are used in the allied health sector: indeed, before 2008, the applicant’s mark was used by the respondent and its subsidiaries (then not part of the Primary group) in both the pharmaceutical and the imaging parts of that sector.  I think I am entitled to regard it as notorious that there is a degree of contact, at both the professional and the consumer levels, as between these parts, such as would make it quite unsurprising if the same people – to some extent at least – had occasion to encounter both the respondent’s mark and the applicant’s mark from time to time.  And there is some evidence that the respondent’s mark is used in settings, such as the premises of hospitals, where those who have regular business dealings with the applicant – pharmacists and the staff of hospital pharmacy departments, for example – might be expected to be found. …. (emphasis supplied)

Idameneo argued that cl. 5.5 should be read down so as not to apply to its use of its trade mark because it had been using its trade mark before Symbion’s trade mark had been developed and it was in use when the licence was negotiated. Thus, it argued it was unreasonable to read cl. 5.5 as applying to its continued use of the trade mark. Jessup J rejected this argument, noting the strictness of the test for implying terms into a comprehensive, professionally drafted written agreement. Moreover, Idameneo’s business appears to have been something of a sideline or relatively remote activity within the corporate group as a whole. Jessup J pointed out at [42]:

there is no evidence that the applicant … knew of the existence of the respondent’s mark in the period August-October 2008.

Thus, the conditions for implication of a term could not be made out.

Symbion Pharmacy Services Pty Ltd v Idameneo (No 789) Limited [2011] FCA 389

DGTEK v Digiteck I

Lander J has upheld the Registrar’s decision to allow Bitech to register DIGITEK for

“TV installation accessories including external TV antennas, none of the foregoing being set-top boxes” in class 9

in the face of Hills’ prior registration for DGTEC, DGTEK and DGTECH in respect of

“Digital and electronic products including televisions, video players, DVD players, CD players, decoders and cameras” also in class 9.

While the competing marks were deceptively similar, they were not in respect of the same goods or goods of the same description. At [110]:

…. The goods are fundamentally different. The brown goods which comprise the Hills products are goods which are digital and electronic and provide the display to the consumer visually or audibly. Bitek’s goods are as they have said; goods which allow the brown goods to function. They provide support of varying types to the brown goods.

At [114]:

It is right as Hills contend that the goods are interdependent and they rely on each other for their functionality. However, that does not take the matter far. Whilst the goods cannot operate on their own, they are not interchangeable. They are not “commonly used as alternatives or substitutes” for each other:… They each have their uses which are quite separate and distinct even though when they are put together they assist to perform the end function: ….

His Honour also rejected argument that the goods passed through the same trade channels, distinguishing the Gallo Full Court’s finding that beer and wine were similar goods because:

[126] …. the clear impression I have is that goods of the kind under the Hills’ mark are marketed at the retail level and by direct advertising to consumers. TV installation accessories are mainly sold to professional installers at the wholesale level. A retail store may have for sale some accessories but only as a side line.
[127] Where a retail store does have TV accessories for sale it does not display them in the same manner as brown goods. Brown goods are used as the bait for consumers. Consumers want to see the product which will at least from the consumers’ point of view deliver the visual image or audible sound. TV installation accessories do not have the attraction from a sales point of view that brown goods have.
Lander J agreed with Kenny J’ ruling in McCormick that the s 60 ground of opposition could defeat an application independently of the operation of s 44(3).
However, his Honour rejected Hills’ opposition on the basis of the old form of s 60: although Hills proved it had more than $20 million of sales under its DGTECH mark of set top boxes, there was simply no proof that it had a reputation in the mark, the sales might well have resulted from the fact that Hills had a marketable product (apparently it was the only set top box in the market at the time). His Honour noted Kenny J had recognised in McCormick that it was often common to infer reputation from sales and advertising figures. It was not appropriate, however, to do so in this case:
[195] The evidence by itself does not prove any reputation at all. It may tend to prove that the goods sold under the mark are very marketable goods. In this case the goods being marketed under the DGTEC mark were set-top boxes which having regard to changes in the industry were marketable to persons who wanted to upgrade their analogue equipment.
[196] I do not think the bald evidence supports a finding of a reputation in the mark.
[197] In my opinion, the Hills’ mark had not acquired a reputation in Australia of the kind that is contemplated in s 60. The mark had only been used on set-top boxes prior to the priority date and although Hills, and previously the company, had sold in excess of $20 million worth of set-top boxes, there is no evidence that the mark under which the set-top boxes had been sold had a reputation of the kind contemplated in this section.
[198] For that reason alone, I would have dismissed Hills’ objection under s 60.

Striclty obiter

Even if Hills had established a reputation, Bitek’s mark would not have been like to deceive or cause confusion as a result of that reputation, so the old form of s 60 still would not have applied.

[208] Assuming, contrary to my opinion, that the Hills’ mark had acquired a reputation, it had only acquired, at the priority date, a reputation in respect of set-top boxes. Hills did not contend for any other reputation. If that was the case, the use of the Bitek mark in respect of its goods was not likely to deceive or cause confusion because the goods were unrelated to a set-top box. Bitek’s goods specifically excluded set-top boxes. A consumer wishing to acquire a TV installation accessory or external antenna bearing the Bitek brand would not in my opinion be likely to be confused or deceived as to the origin or provenance of those products because of Hills’ mark’s reputation in set-top boxes. For that further reason, Hills could not rely upon s 60 to defeat Bitek’s application for registration.

In case it became necessary on appeal, Lander J would have rejected Bitek’s attempt to rely on s 44(3) honest concurrent user or “other circumstances”.

Bitech failed on “honest concurrent user”  and “other circumstances” because the use occurred after the priority date.

Under “other circumstances”, Bitek sought to rely on the inconvenience it would suffer through loss of the goodwill it had built up. If it had been permissible to take use after the priority date into account under “other circumstances”, Lander J would still have rejected this:

[187] However, I would not have exercised my discretion in favour of Bitek under s 44(3)(b) even if events after the priority date were relevant for two reasons. First, because Bitek had not used the mark prior to the priority date. It did not make any sales under the brand. Secondly, its case was that its goods are not sold by reference to its mark. As Hills contended, Bitek’s case was that the consumers of its goods are unlikely to be concerned with brands because brands are unimportant with TV installation accessories.

[188] If that is so, then it seems to me that little goodwill could have attached to the brand or the mark since it has been used and in those circumstances where there is a finding under s 44(1), there would be insufficient evidence to support the exercise of discretion in favour of the applicant for registration. If Bitek is right that its consumers do not depend upon brand or mark, then little would be lost to Bitek in arranging for a mark which is not deceptively similar to the Hills’ mark.

Hills Industries Limited v Bitek Pty Ltd [2011] FCA 94

ps The decision also addresses removal for non-use and infringement issues which, in view of the length of this post, will need to be the subject of a later post.

The value of descriptive ‘trade marks’?

Lea Lewin looks at why Virgin lost its opposition (in the Office) to Qantas‘ attempt to register

ALL DAY, EVERY DAY, LOW FARES

in the face of Virgin’s ‘trade mark’ for:

EVERY DAY LOW FARES

Unfortunately, Virgin’s ‘trade mark’ doesn’t exactly leap off its website (or the evidence it filed).

Given Qantas is on the verge of registration (and apparently using its ‘mark’ through Jetstar), I can see why Virgin would want one too. Duets looks at some reasons from a US perspective and some other things to think about.

But, surely the real question here, is how can any trade mark system allow anyone to register either (purely descriptive) ‘mark’?