Posts Tagged ‘Trade marks’
Well, it seems the 10th anniversary of IPwars has come and gone! Yes, the first IPwars blogpost (on the now defunct iBlog system) was back on 4 October 2004, inspired by Marty Schwimmer, Denise Howell, Evan Brown, Ernie the Attorney and others who were originally “Between Lawyers” but have since moved on to podcasting, video casting and other, bigger things.
In the meantime, my article on Trade Marks and Parallel Imports has been published in Volume 22 No. 1 of the Competition & Consumer Law Journal starting at p. 54. It is essentially an overview of the Federal Court’s case law on s 123(1) to date.
In the same issue of the CCLJ, you will also find articles by:
- David Brennan “Shifting shades of grey – International price discrimination and Australian copyright” law starting at p. 1; and
- Matthew Taylor and Arlen Duke “Refocussing the parallel import debate” starting at p. 54.
I am afraid the online versions of these papers are behind the LexisNexis paywall.
Happy anniversary! and thanks for stopping by, especially those of you who have left a comment.
Mastronardi applied to register ZIMA as a trade mark in class 31 for tomatoes. The Registrar refused the application on the grounds that it was not inherently adapted to distinguish. Gordon J has now upheld Mastronardi’s appeal and directed the trade mark be registered.
ZIMA sofar as anyone knows is an invented word; it has no meaning at all. Apparently, however, it is only ever used in relation to one “variety” of tomato. The Registrar refused the application on the basis that:
“the word ZIMA appears to be a reference to a single kind of tomato plant and its fruit” and that the trade mark “lacks any inherent adaptation to distinguish the Applicant’s tomatoes as it appears to be an appropriate description of the goods in respect of which it is to be used”.
As the trade mark had not been used in Australia before the date of the application to register it, therefore, it failed.
The question fell to be determined under the old form of s 41 (although it should be the same under the (it is hoped, more clearly expressed) new form. Thus, a sign is registrable as a trade mark if it is “inherently adapted to distinguish”. Both Mastronardi and the Registrar accepted on the appeal that, even under the old form of s 41, a sign is presumed to be inherently adapted to distinguish unless the Registrar (or the Court) is (positively) satisfied it is not.
A sign would not be inherently adapted to distinguish if other traders in such products would legitimately wish to use it to refer to those products even if they were not the applicant’s products. The issue turns on:
the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess – will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.
Consequently, Gordon J explained there were two questions that needed to be addressed:
(1) how would ZIMA be understood as at 25 July 2011 by ordinary Australians seeing it for the first time used in respect of tomatoes; and
(2) how likely is it that other persons, trading in tomatoes and being actuated only by proper motives, will think of the word ZIMA and want to use it in connexion with tomatoes in any manner which would infringe a registered trade mark granted in respect of it?
As it was an wholly invented word, with no meaning, the answer to the first question was easy: it wouldn’t convey any meaning.
The Registrar argued on the second question that ZIMA was in fact, and was treated by other traders, as the name of a particular variety of tomato. The expert evidence before the Court, however, disclosed that “variety” in the context of tomatoes was a very rubbery (no pun intended?) term and, while there were a few varieties of tomato registered under the Plant Breeder’s Rights Act, thousands were not.
More directly, Mastronardi’s evidence was that it did not source its ZIMA brand tomatoes from just one variety. In Australia, there are apparently 50 different cultivars of orange grape tomatoes; Mastronardi used only six of these and only two were supplied to it exclusively. Moreover, when it launched its product in Australia, it had been very careful in its usages referring to its ZIMATM golden grape tomatoes or sweet orange grape tomatoes or golden snacking tomatoes.
So, it followed that other tomato suppliers had a range of terms they could use to describe their own sweet orange/golden grape tomatoes and, therefore, ZIMA was inherently distinctive.
Her Honour’s decision highlights the importance of careful use of trade marks, particularly if there is a risk the trade mark may become the commonly accepted term for a variety or type: the trade mark should be used as an adjective and not as a noun (or verb). This is a problem that practices in the pharmaceutical industry have had to grow up to develop – a different name for the active ingredient to the “brand” name – but, as this case shows, of potentially much wider application.
Mastronardi Produce Ltd v Registrar of Trade Marks  FCA 1021
You probably know that the auDRP is the dispute resolution policy for the .au domain name space. You may not know that there have been about 330 decisions in its roughly 12 years of operation.
Prof Andrew Christie, with a helping hand from James Gloster, Jeffry Kadarusman and Daniel Lau, has prepared an “Overview” outlining how the decisions have treated the various issues arising under the auDRP. And he is launching the auDRP Overview at a Workshop on Wednesday 27 August at 9:15 am to 10:45. Venue the Crown Promenade.
Prof Christie is the Professor of Intellectual Property at the University of Melbourne a very experienced domain name panelist, having amongst other things written the seminal decision Telstra v Nuclear Marshmallows D2000-0003. If you find yourself with a dispute over a domain name registered in the .au domain name space, I anticipate you will find your first stop being this overview. Given the influence of UDRP decisions on auDRP decisions, although there are some important differences, you will also probably find it helpful in the context of the UDRP too. Make sure you read it.
The WIPO Overview to the UDRP version 2.0 here.
Section 126(2) was inserted in the Act by the Raising the Bar Act and commenced operation on 15 April 2013.
The conduct which attracted the award of additional damages, however, occurred between August 2012 and September 2013. So, Quality Kebabs came back to argue that the award should be reduced to (about) $35,000; arguing that the Court could only award additional damages for the period from 15 April 2013.
Noting that the right to seek damages had been in place throughout the period and viewing s 126(2) as affecting the quantum only, Perram J rejected this argument. His Honour considered the situation was more like those cases where the amendment was treated as ‘procedural’ rather than ‘substantive’ and so could apply to all the conduct.
His Honour did note, however, that Quality Kebabs made no argument that additional damages were punitive in nature and so should be treated as a penal law – which would presumably not be permitted to have retrospective effect.
Hmm …. additional damages (at least in the context of copyright) are (at least in part) intended to punish the defendant and deter others from engaging in similar conduct. So this debate may well arise again.
The reasons also have a short determination on the form the corrective advertising for contravention of the ACL should take.
Perram J was able to entertain Quality Kebabs’ application because, the corrective advertising order not having been finalised, the decision was still interlocutory and not final.
Halal Certification Authority Pty Limited v Quality Kebab Wholesalers Pty Limited (No 2)  FCA 840
- See the discussion in Facton v Rifai  FCAFC 9 at  –  (Lander and Gordon JJ) and Vaysman v Deckers Outdoor Corporation  FCAFC 60 at  –  (Besanko J). Of course, s 115(4) of the Copyright Act does have all those “extra” paragraphs, but they are probably equally applicable to the Trade Marks Act and the Patents Act too. ?
Bob Jane and his trading companies were found to be infringing the BOB JANE and JANE FLEET trade marks and had, amongst other things, injunctions ordered against them to stop, to change the various company names and transfer two domain names.
This time, Besanko J has imposed fines of $25,000 and $15,000 on Mr Jane for his contempts, $25,000 and $15,000 on Bob Jane Global Tyre Corporation (Hong Kong) Limited, $20,000 on Bob Jane Southern Motors Pty Ltd and $2,000 fines on corporate respondents for other contempts. The respondents were also ordered to pay 80% of the applicants costs on an indemnity basis.
Bob Jane Corporation Pty Ltd v ACN 149 801 141 Pty Ltd  FCA 637
Perram J has awarded $10 nominal damages for trade mark infringement against each of Scadilone, White Heaven and Quality Kebabs, but $91,015 additional damages against Quality Kebabs.
The Halal Certification Authority does just that: it certifies that food has been prepared according to the relevant Islamic (halal) requirements. It has a registered trade mark for the use of which, like other such schemes, you pay appropriate licence fees and comply with the standards set.
Quality Kebabs makes and sells at wholesale meat products. It supplied some of its products to 2 kebab houses: Scadilone and White Heaven. The employee/sales rep. also provided them with certificates bearing HCA’s trade mark. Unfortunately, Quality Kebabs was not certified by HCA and it had not paid the licence fees.
HCA had sought compensatory damages based on its lost licence fees: about $5000 for a year’s licence from each of the kebab shops and roughly $60,000 from Quality Kebabs because its conduct occurred over parts of 2 different annual licensing periods. Accepting that a lost royalty or licence fee could be appropriate, Perram J refused this.
Damages under s 126(1) are compensatory. There was no likelihood that any of the infringers would have contemplated entering into a licence at those prices so there were no “lost” licence fees. The kebab houses did want assurance that the meat was halal, but that did not necessarily mean they wanted to promote their shops, as opposed to the meat, as halal certified. Perram J found that, if Quality Kebabs had known HCA’s trade mark was registered and licence fees were payable, it would not have used the trade mark. Instead, it would have copied someone else’s certificate. Therefore, there was no basis to infer that HCA had been deprived of its licence fee.
There was also no order for damages for reputational damages. The signs were displayed in only 2 shops for limited periods. There was no evidence that anyone had seen them or even whether or not the meat was in fact halal.
Perram J considered that the additional damages contemplated by s 126(2) were intended to have a deterrent effect.
Scadilone, White Heaven and their principals escaped liability for additional damages as they were innocent infringers. They had simply put up the certificates they were given and removed them, more or less promptly, when complaint had been made.
…. If the damages were to be fixed at the level of the applicant’s wholesale licence fee this would strip Quality Kebabs of the benefit it has received of using the trade mark without having to pay for it but it would not, in my opinion, be a sufficient deterrent. It would mean that an infringer could acquire, in effect, a compulsory licence to use a trade mark subject only to paying for it. It would create a ‘use now’ and ‘pay later’ state of affairs. That situation would eliminate the capacity of the trade mark owner to control who used its trade mark.
To achieve the deterrent effect and having regard to the other factors, Perram J increased the damages by a factor of 50% over the applicable licence fees. Thus, about $60,000 for the licence fees that should have been paid for the two years in which the infringements occurred plus a further $30,000.
There was no award for damages under the ACL. Although the conduct was plainly misleading, Perram J found there was no evidence that HCA’s reputation had suffered any damage.
Lid dip: James McDougall
- S 126(2) is in similar, but not identical, terms to s 115(4) of the Copyright Act 1968. ?
- … the applicant’s fee in those years was an annual one of $27,090 and $33,580 respectively. Although Quality Kebabs only used the trade mark for the 13 month period between August 2012 and September 2013 I do not think that these fees should be subject to a pro rata reduction. Had Quality Kebabs followed the correct path of obtaining the applicant’s permission it would have had to have paid both annual fees in full. ?
Last October, Tracey J found that Shine Forever had infringed Bugatti’s registered trade mark (for BUGATTI) by selling clothing and accessories under the trade mark BUGATCHI and BUGATCHI UOMO. Now Tracey J has ordered that Shine Forever pay Bugatti $551,159.39 plus costs on an indemnity basis.
Apart from the magnitude of the amount, the decision illustrates the onus the court places on an infringer, once found to infringe, and the latitude afforded a trade mark owner confronted by a recalcitrant infringer.
In addition to an injunction to stop the infringing conduct, like most intellectual property statutes, the relief one can get for infringement of a registered trade mark includes damages or, at the trade mark owner’s option, an account of profits.
To assist Bugatti in choosing between these two options, Shine Forever was ordered to provide an affidavit deposing to how many goods it had sold bearing the infringing trade mark, the price(s) they were sold for, the costs incurred in acquiring and selling the goods and the estimated profit it made.
Shine Forever was dilatory in complying with this order and there were serious doubts about the genuineness of its compliance. For example, it was claimed in Shine Forever’s “election” affidavit that the total sales were $198,407.39 worth of goods “through the BUGATCHI UOMO branded store” while total outgoings were $157,680 so that, after adjustments, there had in effect been no profit. However, in the course of the liability proceedings, Shine Forever had filed a profit and loss statement for the first 8 months of the infringing period showing total sales of $370,440.10. This profit and loss statement had been audited and certified by Shine Forever’s external accountants.
Shine Forever did not seek to explain the disparity between these two sets of figures. In fact, it failed to turn up to the hearing for the account at all.
Bugatti pointed out that the audited figures for only 8 months of the 24 month period of infringement far exceeded the amount admitted for the whole period in the “election” affidavit. The audited figures showed sales of $46,000 per month. If it were assumed that Shine Forever continued to make sales of $46,000 per month for the whole infringing period, total sales would have been $1,129,440.10. Bugatti then applied a series of assumptions and discounts, including using the costs estimated in the “election” affidavit (not the certified profit and loss statement) to arrive at the figure $551,159.39.
Tracey J recognised that Bugatti’s approach was far from ideal, but was prepared to adopt it as the best available course given the limited and imperfect information available – information which only Shine Forever could supply and which it had manifestly failed to do:
20 This process of calculation is far from ideal. It is beset by many difficulties. These include the need to make assumptions because business records which should have been produced by Shine Forever, pursuant to Court order, were not provided. Of particular concern is that …. This concern is alleviated, to some extent, by the applicant’s willingness to make a number of allowances in Shine Forever’s favour in other aspects of the calculations. ….
21 The evidence before the Court does not enable me to determine, with precision, the actual profit which Shine Forever derived from its infringement of the applicant’s marks. It is to be borne in mind that the difficulties to which I have adverted have, in large measure, been created by the failure of Shine Forever to comply with the Court’s orders and its failure to appear and make submissions on the amount to be awarded as an account of profits. The applicant should not be prejudiced by these failures.
22 The applicant has proposed a plausible method of calculating sales revenue during the relevant period by assuming that the average monthly sales figure in the first eight months of the period continued for the next 16 and a half months. In the absence of audited figures for the latter period this approach is not unreasonable and may be regarded as the best available option. Once the sales revenue figure was established, Shine Forever bore the burden of persuading the Court, by evidence, what costs should properly be deducted in order to determine the profit which it made from selling clothing and accessories bearing the infringing marks. This, Shine Forever has manifestly failed to do. ….
His Honour then awarded Bugatti its costs on an indemnity basis because of Shine Forever’s dismal failure to comply with its obligations to the Court.
Bugatti GmbH v Shine Forever Men Pty Ltd (No 2)  FCA 171
- The two are alternatives: damages compensate the trade mark owner for the loss it has suffered as a result of the infringement; an account of profits strips the infringer of the profits it has made by reason of the infringement. ?
- Schedules 1 and 2 aim to implement the TRIPS Protocol:
According to the EM:
Under the new scheme, Australian laboratories will be able to apply to the Federal Court for a compulsory licence to manufacture generic versions of patented medicines under specific conditions, and export these medicines to developing countries. Adequate compensation for the patent holder will be negotiated, to ensure that they are not disadvantaged by the arrangements.
According to the EM, only one licence has been issued under these regimes – Canada in 2007. Apparently, Canadian generics would like to engage in further licensing, but the procedures are too complicated. Also, Least Developed Countries do not need to provide patent protection until 2016 and there is said to be a lack of awareness of the regime.
- Schedule 3 confers jurisdiction over plant breeder’s rights matters on the Federal Circuit Court (in addition to the Federal Court)
- Schedule 4:
- introduces the “single examination” model for patent applications in Australia and New Zealand;
- the single regulatory regime for patent attorneys and trade mark attorneys in both countries – the so-called trans-Tasman regulatory regime; and
- provides for a single address for service in either Australia or New Zealand to be used under the patents, trade marks, registered designs and plant breeder’s rights legislation.
- Schedule 5 is headed “Technical Amendments” which include repealing “unnecessary document retention provisions” and addressing “minor oversights in the drafting of” the Raising the Bar Act. These include:
- amending s 29A so that an international applicant under the PCT cannot require anything to be done in Australia until the application enters the national phase;
- amending s 29B so that only the prescribed period under s 38(1A) applies to Paris Convention applications;
- amending ss 41 and 43 in relation to disclosure requirements for micro-organism inventions
- amending s 43 to permit reference to the combination of prescribed documents, not just to individual prescribed documents alone
- the defence in s 119(3)(b) will be amended to bring it into line with the amended form of s 24(1)(a)
- amending s 191A so that the requirement for the Commissioner to hear both parties prescribed in s 191A(4) applies only in entitlement disputes.
- The Regulatory Impact Statement included in the EM estimates that 63 in-house legal professionals and 128 patent attorneys in external firms will need to familiarise themselves with these changes for a total start up cost to business of $13,782.60 and an ongoing annual cost of $105. These costs include allowance for savings in legal costs because it will be possible to bring proceedings for infringement of plant breeder’s rights in the Federal Circuit Court, rather than the Federal Court. Perhaps confusing costs with earnings, the Regulatory Impact Statement relies on the ABS Employee Earnings and Hours Survey to estimate the average cost of patent and trade mark attorneys as $50 per hour (junior solicitors $60 per hour, IP attorneys $74.10 per hour and barristers $92.70 per hour, after including a 50% loading for overheads). The Statement does recognise that charge out rates “for lega”for legal professionals can range from $120 per hour to $800 per hour or more, viewed on 4 December 2013 at http://www.legallawyers.com.au/legal-topics/law-firm-sydney/solicitor-prices/. These costs do not reflect the opportunity cost of labour.” You may also be interested to know that the Regulatory Impact Statement estimates the costs of an application to the Federal Court for a licence at around $21,650 for the applicant. ?
- The substance of the two countries’ respective patent laws is not being harmonised (yet). ?
The Full Federal Court found that Cantarella Bros’ trade mark registrations for ORO and CINQUE STELLE, being “gold” and “five stars” in Italian, lacked any inherent capacity to distinguish coffee in Australia.
Last Friday, 14 March, the High Court granted Cantarella special leave to appeal from that decision.
[T]he question whether a mark is adapted to distinguish [is to] be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess – will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.
Canatarella’s complaint seems to be that the Full Court found the words lacked capacity to distinguish even though it did not overturn the trial judge’s finding that the words had no meaning to the general public. That is, the question seems to be in applying that test, particularly in the context of foreign language words, must the word(s) have a descriptive meaning to the consuming public (as opposed to the traders in the goods).
Transcript of special leave application here.