Trade marks

Additional damages are procedural …

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In June, Perram J awarded the Halal Certification Authority $10 nominal damages and $91,005.00 by way of additional damages for trade mark infringement pursuant to s 126(2).

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.[1] 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) [2014] FCA 840

  1. See the discussion in Facton v Rifai [2012] FCAFC 9 at [33] – [37] (Lander and Gordon JJ) and Vaysman v Deckers Outdoor Corporation [2014] FCAFC 60 at [23] – [31] (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.  ?

Additional damages are procedural … Read More »

More contempts

Leave a Comment / Enforcement, Trade marks / / / , , , , ,

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.

They didn’t.

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 [2014] FCA 637

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Carving up an uncertified halal butcher

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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.

TM 1005647
TM 1005647

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.

Quality Kebabs was a different case, however. Having reviewed the factors set out in s 126(2),[1] Perram J held this was an appropriate case for an award of additional damages:

…. 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.[2]

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.

Halal Certification Authority Pty Limited v Scadilone Pty Limited [2014] FCA 614

Lid dip: James McDougall

  1. S 126(2) is in similar, but not identical, terms to s 115(4) of the Copyright Act 1968.  ?
  2. … 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.  ?

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Intellectual Property Laws Amendment Bill 2014

Leave a Comment / Designs, IP generally, Patents, PBR, Trade marks / / / , , , , , , , , ,

After the consultation, the Intellectual Property Laws Amendment Bill 2014 has been introduced.

  • 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.

    Schedule 1 introduces provisions to implement the “interim waiver” agreed in the Doha Declaration 2001; Schedule 2 implements the TRIPS Protocol regime agreed in 2003 (or, I think, 2005).

    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.[1]

  • 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;[2]
    • 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.

Intellectual Property Laws Amendment Bill 2014

Explanatory memorandum

  1. 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.  ?
  2. The substance of the two countries’ respective patent laws is not being harmonised (yet).  ?

Intellectual Property Laws Amendment Bill 2014 Read More »

An oro stamp and cinque stelle (or maybe not)

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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.

From the transcript, it appears that neither side disputes the basic test to be applied:

[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).

  1. Cantarella Bros Pty Limited  v Modena Trading Pty Limited (S202/2013)

Transcript of special leave application here.

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Trade mark excellence

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“Dental Excellence” vs “south perth dental excellence”

A rare case of IP in a court other than the federal courts. Guess who didn’t win?

Dr Agapitos has operated a dental surgery under the name Dental Excellence from Mt Hawthorn in Perth since 2002. In (or from) 2010, he secured registration, TM No. 1388792, for Dental Excellence in respect of “dentistry” in class 44. The provisions of s 41(5) were applied.

Dr Habibi had 3 dental practices in various parts of Perth. Then in 2007, she bought from Dr McNeil his dental practice in South Perth, McNeil’s Dental Care, which promoted its services with the slogan (or tag or strap line) ‘Excellence in Dental Care’. In 2010, when Dr Habibi was updating the signage at the South Perth practice, she changed the name to South Perth Dental Excellence. It was accepted on both sides that Dr Habibi did not know of Dr Agapitos’ practice when she settled on her name. (According to Google Maps, they are about 12.5km apart or somewhere between 13 and 20 minutes drive.)

Dr Agapitos took umbrage and sued for infringement of his trade mark. Dr Habibi counter-claimed for revocation on the basis that “Dental Excellence” wasn’t capable of distinguishing “dentristy”.

Le Miere J applied the standard test from Clark Equipment Co v Registrar of Trade Marks:

The applicant’s chance of success in this respect (i.e. in distinguishing his goods by means of the mark, apart from the effects of registration) must, I think, largely depend upon whether other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connexion with their own goods.

to find that Dental Excellence lacked any capacity to distinguish. So at [39] his Honour said:

other service providers are likely, without any improper motive, to desire to use the words ‘dental excellence’ in connection with their own services. An honest dentist may want to use the word ‘excellence’ on or in connection with ‘dental’ to indicate, or at least claim, that they provide dental services of a superior quality. ‘Dental Excellence’ may not be words which are commonly used by somebody outside the calling of dentistry but that is not the point. The point is that a dentist may well want to use the words ‘dental excellence’ to identify the services they provide and the quality of those services. The name ‘dental excellence’ at the date of filing had a sensible meaning that was descriptive of the plaintiff’s designated services. The name was apt to describe the provision of dental services of superior quality.

What is more, there was evidence that other dentists did in fact use the phrase in relation to their businesses.

Dr Agapitos could not save his registration on the basis of acquired distinctiveness under s 41(6). He put on the usual types of evidence of advertising and promotion. There was also evidence from 3 customers and a dental nurse who had gone to Dr Habibi’s practice by mistake. There was also some evidence of “licensing” of practices in other states, albeit the licences were created some two years after the trade mark was applied for. Jacobs J’s warning from British Sugar about use not equalling reputation was applied: in this case, the evidence of use, by what appears to have been a suburban dental practice, was too slight to overcome the evidence of other users.

Le Miere J finished off by (perhaps surprisingly[1]) finding that Dr Habibi did not use “dental excellence” as a trade mark and so s 120 was not infringed. In any event, she had adopted her sign in good faith and so qualified for the defence under s 122(1)(b).

The CJEU on the revocation of a trade mark on the basis that it no longer distinguishes the relevant goods or services (genericide) – Kornspitz. Of course, they do things differently in America: Living Proof is apparently distinctive, but Perfect Hair Day is not.[2]

Agapitos v Habibi [2014] WASC 47 (Le Miere J)

  1. Compare cheezy twists in Aldi v Frito-Lay.  ?
  2. Well, we do have Sheer Relief and, of course, Tub Happy.  ?

Trade mark excellence Read More »

Nappyland, Nappy Land and napplyland.com.au

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Flick J has provided a timely reminder that a registered trade mark does not always trump common law rights in passing off or under the Australian Consumer Law, in finding that Nappy Land and nappyland.com.au passed off Nappyland’s rights in NSW.

Mr Ngo and Mr Ho (through his company Powerware) started off in business together in 1997 as Nappy Land in New South Wales. Mr Ho also incorporated National Australian Nappies in 1997.  Mr Ngo and Mr Ho fell out in 1999 and Mr Ngo seems to have bought out Mr Ho’s share in Nappy Land when Mr Ngo and his wife became the owners of the business name in NSW. They appear to have carried on the business in NSW through his company CI JI Family. At some point, CI JI Family started using the following (unregistered) trade mark:

get_tmi_image-1.pl

By late 2000, Mr Ho through National Australian Nappies had registered Nappy Land as a business name in Victoria and appears to have been trading throughout Australia except NSW. From February 2002, National Australian Nappies secured registration of TM 902900

get_tmi_image.pl

It seems like Mr Ngo and Mr Ho had very different views about who bought what when their partnership came to an end. Be that as it may, there doesn’t appear to have been any real dispute that Mr Ngo and CI JI Family were operating throughout the period in NSW as effectively Nappyland or that National Australian Nappies was operating outside NSW as Nappy Land.

At some point, it appears in or about 2013, however, National Australian Nappies, started attempting to enter the market in NSW. CI JI Family and Mr Ngo sued seeking interlocutory relief, but secured a speedy trial instead.

National Australian Nappies and Mr Ho sought to rely on their registered trade mark to fend off the action on the basis that s 20 of the Trade Marks Act confers on the owner the exclusive right to use the trade mark as a trade mark in Australia for the relevant goods/services. (Section 122(1)(e) also provides a defence to trade mark infringement.) However, s 238 s 230 (of course; thanks: Tim Golder) provides:

Passing off actions

             (1)  Except as provided in subsection (2), this Act does not affect the law relating to passing off.

             (2)  In an action for passing off arising out of the use by the defendant of a registered trade mark:

                     (a)  of which he or she is the registered owner or an authorised user; and

                     (b)  that is substantially identical with, or deceptively similar to, the trade mark of the plaintiff;

damages may not be awarded against the defendant if the defendant satisfies the court:

                     (c)  that, at the time when the defendant began to use the trade mark, he or she was unaware, and had no reasonable means of finding out, that the trade mark of the plaintiff was in use; and

                     (d)  that, when the defendant became aware of the existence and nature of the plaintiff’s trade mark, he or she immediately ceased to use the trade mark in relation to the goods or services in relation to which it was used by the plaintiff.

The fact of the trade mark registration therefore provided no protection against either the passing off or ACL claim. Despite aspects of the evidence being less than satisfactory, Flick J held there was sufficient evidence that the public in NSW was being misled or deceived and so s 18 of the Australian Consumer Law was contravened and there was a passing off.

His Honour went on to award damages of $25,000 as an exercise in “judicial estimation” rather than impermissible “imagination” with further orders to be decided at a later hearing. Presumably, unless bought out, CI JI Family will seek injunctions to stop further use in NSW of Nappy Land unless some form of disclaimer can be arrived out which prevents the misrepresentation. We shall have to wait and see.

CI JI Family Pty Limited v National Australian Nappies (NAN) Pty Limited [2014] FCA 79

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3 stripes v 4 stripes: the remedies

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4 stripes 3 stripes now the remedies

Following the decision a couple of months back that 3 of 12 Pacific Brands’s shoes had infringed adidas’ 3-stripes trade mark, Robertson J has now:

  1. made a declaration that Pacific Brands infringed;
  2. granted an injunction permanently restraining Pacific Brands from making or selling etc. 2 of the 3 shoes found to infringe;[1]
  3. awarded $20,000 damages; and
  4. ordered Pacific Brands to pay 30% of adidas’ costs.

The amount of damages was resolved between the parties. There are a couple of points of interest in the terms of the injunction and the costs order.

First, in relation to the injunction, adidas had sought an injunction which restrained Pacific Brands both in relation to the specific shoes found to infringe and also “from otherwise infringing” the 3-stripes trade mark. Robertson J refused this wider injunction. The practical reality of 9 styles either abandoned or found not to infringe served a telling warning against the injunction sought:

because, as these proceedings have shown, such an order would lack sufficient clarity and definition and the Court should not make an order in relation to conduct where a person would not readily know whether or not its proposed conduct breached the order. What is the appropriate relief must depend on the facts and on the underlying dispute and I do not derive much assistance from the form of relief granted in trade mark cases which concerned primarily words because infringements by words are generally clearer than by designs.[2]

His Honour also refused to include one of the 3 infringing styles in the order because the shoe had been taken off the market 7 years earlier and there was no sufficient risk of its reintroduction. While the other 2 infringing shoes had been taken off the market in 2009, an injunction was warranted. First, no unconditional undertaking had been given in relation to them. Secondly, while a broad undertaking had been given, his Honour considered the sale of these 2 styles after that undertaking was in place breached it. His Honour also considered that the evidence that Pacific Brands’ Global Trading division – the “division” which had sold the shoes – had been closed down was not “sufficiently cogent” to persuade him that there was no sufficient further risk of infringement.

Thirdly, the terms of the injunction extend also to authorising, directing or procuring other to make or sell the infringing shoes.

On the costs question, Robertson J considered the “old” rules which included an automatic one third reduction to the costs where less than $100,000 was recovered were applicable as the action started before the new, 2011, rules came into force. However, his Honour exercised his discretion not to apply that rule. The Federal Court was an appropriate forum to have brought the action in and damages were not the primary relief being sought. The costs were reduced, however, to reflect the degree of adidas’ success, particularly bearing in mind it had pursued 12 styles of shoe as part of an overall strategy to obtain broad injunctive relief. The little weight accorded to the survey having regard to the substantial amount of evidence it involved, in the face of Pacific Brands’ objections, was also a factor in the reduction of costs.

Adidas AG v Pacific Brands Footwear Pty Ltd (No 4) [2013] FCA 1335

  1. The terms of the injunction were:  ?

    The respondent, whether by its servants, agents or otherwise, be permanently restrained from:

    (a) manufacturing, procuring the manufacture of, importing, purchasing, selling, offering to sell, supplying, offering to supply or distributing footwear in the form depicted in any of Exhibits K or L in these proceedings, being the footwear depicted in Annexures B and C to these Orders;
    (b) authorising, directing or procuring any other company or person to engage in any of the conduct restrained by sub-paragraph (a).

  2. This may be contrasted with the typical injunction in a patent case that thou shalt not infringe the patent; leaving the infringer to run the gauntlet.  ?

3 stripes v 4 stripes: the remedies Read More »

auDA reviews whoIS policy

1 Comment / Domain names, Trade marks / / / , , , , ,

auDA, the body which administers the domain name system in the .au (i.e. Australia) space (OK, ccTLD) has embarked on a review (pdf) of its WhoIS policy.

There are 2 main issues:

  1. Should there be any changes to auDA’s WHOIS Policy covering the collection, disclosure and use of WHOIS data for .au domain names?
  2. Should access to .au domain name data (other than via WHOIS) be opened up?

Apparently, there was a workshop in October 2013 where these issues were canvassed (and you can view a video online – it does go for 1 hour and 25 minutes).

I think if you are a trade mark owner, or act for trade mark owners, you would be well-advised to be making submissions to at least retain the basic information you need to identify the registrant if you want to challenge the registration as conflicting with your trade mark.

I am also not sure why the WhoIS information does not include the date the current registrant became the registrant.

auDA has called for submissions to be made by 31 January 2014.

Link to the Issues Paper (pdf again)

auDA reviews whoIS policy Read More »