The Full Court has refused Meat & Livestock Australia leave to appeal from Beach J’s rulings to grant Branhaven’s[1] patent for the use of genetic information in the selective breeding of cattle. MLA did not seek leave to appeal the ruling that the claims to uses of the genetic information were patentable subject matter.
Image by VIVIANE MONCONDUIT from Pixabay
In its amended form as allowed by Beach J, claim 1 reads:
A method for identifying a trait of a bovine subject from a nucleic acid sample of the bovine subject, comprising identifying in the nucleic acid sample an occurrence of at least three single nucleotide polymorphisms (SNPs) wherein each of the at least three SNPs are significantly associated with the trait, with the degree of statistical significance being p?0.05, and wherein the at least three SNPs occur in more than one gene; and wherein
[and wherein] (a) at least one of the SNPs corresponds to position 300 of any one of SEQ ID NOS: 19473 to 21982, or
(b) the SNP is about 500,000 or less nucleotides from position 300 of any one of SEQ ID NOS: 19473 to 21982 and is in linkage disequilibrium with the SNP at position 300 with an r2 value of ?0.7.
(The [ ] indicates deletions and the italics insertions from the original claim.)
In his Honour’s first ruling, Beach J held that claim 13[2] was invalid as a claim to genetic information, but otherwise rejected MLA’s attacks based on manner of manufacture, novelty and inventive step. His Honour, however, found that the claims lacked clarity. So Branhaven came back with the amended form.
In his Honour’s second ruling, MLA argued there was no power to amend and, in any event, the proposed amendments were not fairly based. In the result, his Honour rejected MLA’s attacks and directed the patent in amended form proceed to grant. MLA sought leave to appeal.
If an appeal is made to the Federal Court against a decision or direction of the Commissioner in relation to a patent application, the Federal Court may, on the application of the applicant for the patent, by order direct the amendment of the patent request or the complete specification in the manner specified in the order.[3]
At [91] and [93], the Full Court considered the plain meaning of this provision was to confer on the Court power to deal with amendments of patent applications under appeal.
The Full Court considered MLA’s argument that Beach J had decided the appeal in his Honour’s first decision and so was functus officio “untenable”.
Within 14 days of the date of these orders, each of the parties file and serve proposed minutes of orders and short submissions (limited to three pages) to give effect to these reasons, including on the question of any steps necessary to deal with any application to amend the claims of patent application no. 2010202253 and on the question of costs.
The Full Court accepted that this order did not dispose of the appeal and so Beach J still had jurisdiction over the patent application in its amended form. At [87]:
The order made by his Honour at the time did not dispose of the appeal but was instead a procedural order requiring the parties to file and serve proposed minutes of order and short submissions to give effect to his Honour’s reasons including in relation to any application to amend the claims of the patent application. There is no substance to the applicant’s submission that either the publication of his Honour’s first set of reasons or the making of that order brought the proceeding to an end.
and [90]:
However, as his Honour correctly observed, the publication of his first set of reasons did not dispose of the appeal since no order to that effect was made. Nor could the publication of his Honour’s first set of reasons amount to an order disposing of the appeal. His Honour made it clear in his reasons that he would refrain from making any such order until any question in relation to amendment had been dealt with.
The Full Court turned then to the substantive argument about whether Beach J erred in allowing the amendments.
Were the amendments permissible?
As already noted, his Honour had found in his first reasons that the relevant claims lacked clarity. The main issue here was that claim 1 did not explicitly state the requirement of “linkage disequilibrium” (LD) for the relevant single nucleotide polymorphisms (SNPs) or what degree of LD was required: see [348] – [362] reproduced at [69] of the Full Court’s reasons.
As the elements were not disclosed in the claim, MLA argued the amendments were impermissible as they introduced new matter into the claims. Beach J, however, allowed the amendments on the grounds that they were limiting amendments and had been in substance disclosed in the specification.
The Full Court essentially accepted this conclusion on the facts. It did note that, generally, a claim which defined an invention more narrowly than the disclosure in the specification would be fairly based, but there may be some situations where that was not the case. The overriding question was whether the claim described an invention different to the disclosure in the specification. At [104] – [105]:
All other things being equal, a claim that defines an invention in terms that are narrower than a more general description in the body of the specification would support is not likely to travel beyond what is more generally described. But there may be some situations in which what is more specifically defined results in a claim that travels beyond what is described in the specification: AstraZeneca at 244 and [285]-286 where reference is made to Sir Robin Jacob’s judgment in Dr Reddy’s Laboratories (UK) Ltd v Eli Lilly and Co Ltd [2010] RPC 9 at [26] and [28]. In these situations a claim may be invalid if the invention more specifically defined is an invention that is different from the invention described in the specification as opposed to some narrower embodiment of the latter.
In circumstances where it can be concluded that there is an implicit disclosure of the relevant feature, it is unnecessary to inquire into whether the feature is truly limiting. But even in the absence of an implicit disclosure, a claim does not necessarily lack fair basis because it includes a matter of detail that is not described in the specification so long as it defines an invention that is not different from the invention described in the specification. The proper characterisation of the invention described in the specification is critical when determining whether the claim is to an invention different from that described in the body of the specification. Each case will depend on its own facts and on the proper characterisation of the invention described in the body of the specification. (emphasis supplied)
If the feature added to the claim was implicitly disclosed in the specification, therefore, the claim could be amended. But, amendment might be permissible even if not implicitly disclosed.
At [110] – [115], the Full Court focused on Beach J’s unchallenged findings including, in particular, that the skilled addressee “would understand that the specification requires that there be high or strong LD between the limb (a) SNP and the limb (b) SNP”, but not necessarily a very high or perfect LD. The proposed amendments gave effect to that understanding by reference to more precise rather than some less precise criteria.
The Full Court accepted MLA’s criticism that the specification (before amendment) made no mention at all of r2 values. Beach J accepted expert evidence, however, that the r2 values were broadly equivalent to LD values that might fairly be regarded as high or strong. As a result, its inclusion was permissible. Noting that high LD or strong LD were “less precise criterion” than the expressed r2 vaues, at [114], the Full Court explained:
…. To hold that it is not open to use the r2 statistic or the 0.7 value for the purpose of ascertaining whether there is a high or strong degree of LD between the limb (a) SNP and the limb (b) SNP would involve, in our view, the very kind of over meticulous verbal analysis that should be eschewed when determining whether a proposed amended claim satisfies the requirements of s 102(1) of the Act. This is particularly so in circumstances where the amendment is propounded for the purpose of clarifying an ambiguity that would otherwise prevent the patent application proceeding to grant. In the present case we do not think the use of the r2 statistic in limb (b) results in a claim that defines an invention different from that which is more generally disclosed in the body of the specification as filed. (emphasis supplied)
As a result, the Full Court came to “the very clear conclusion” that MLA had not made out a clear prima facie case of error where the likely result would be allowing an invalid patent to proceed to grant. Accordingly, leave to appeal was refused.
Since this is a pre-Raising the Bar patent, the old “practically certain” test applies to the opposition. That raises the question whether things would turn out differently in a revocation proceeding on the balance of probabilities. After 949 paragraphs for the first decision and 470 paragraphs for the second, perhaps the “very clear conclusion” language might help discourage that course?
Cargill Inc. and Branhave were joint applicants but in the course of the hearings before Beach J, Cargill assigned its interest to SelecTraits Genomics LLC. ?
Claim 13. An isolated polynucleotide identified according to the method of claim 8. ?
Sch. 3 item 6. Prior to the introduction of this amendment, the appeal to the Court was limited to the form of the specification before the Commissioner in the decision under appeal. If an application to amend was made after the Commissioner’s decision, the application could only be dealt with by the Commissioner: see e.g. Airsense Technology Limited v Vision Systems Limited [2007] FCA 828 ?
While some of us have been sweltering on the beach or disporting in the northern snows, Beach J has granted Branhaven’s application to amend its patent application for compositions and methods of inferring bovine traits following Meat & Livestock Australia’s opposition.
You will recall that Beach J had earlier rejected MLA’s attack based on manner of manufacture, novelty and inventive step. However, his Honour upheld the challenges based on lack of clarity and, to an extent, utility.
Branhaven applied to amend under s 105(1A) of the Patents Act 1990.
MLA opposed; in broad terms arguing that Branhaven was too late, there was no power to amend at this stage; the amendments were not permissible in any event and, as a matter of discretion, should not be allowed even if the Court did have power.
Prior to the Raising the Bar Amendments, the Court had power under s 60(4) to hear an appeal from the Commissioner’s decision in an opposition. The Court was restricted, however, to dealing with the application in the form the subject of the opposition before the Commissioner. If the opposition was successful but on grounds that could be cured, any application to amend had to be remitted to the Commissioner.[1] Two of the amendments introduced by Raising the Bar were s 105(1A) and s 112A. Section 105(1A) provides:
If an appeal is made to the Federal Court against a decision or direction of the Commissioner in relation to a patent application, the Federal Court may, on the application of the applicant for the patent, by order direct the amendment of the patent request or the complete specification in the manner specified in the order.
MLA argued that, after such a hotly contested ‘appeal’ and detailed reasons, Beach J was in effect functus officio. Amongst other things, MLA’s application was not made during the appeal and the Court therefore had no power to deal with the amendment application.
Beach J has rejected all these attacks. In the course of doing so, his Honour recognised it would not be appropriate to remit the matter to the Commissioner (even if there were power). His Honour also found that s 105(1A), like s 105(1) but unlike the Commissioner’s powers under s 60, was discretionary. His Honour’s reasons also explored the types of considerations that might affect the exercise of that discretion in the context of an application instead of a granted patent.
At this stage, it is not known if MLA will seek to appeal.
Last week’s post looked at the substantive reasons for the rejection of Frucor’s attempt to register a shade of green as a trade mark for energy drinks. There were also a couple of points about grounds of opposition and amendment of applications on appeal worth noting.
You will remember that Frucor’s application included a green swatch, copied from its New Zealand trade mark application, which was for a different colour than the colour identified by the written description under reg. 4.3(7), Pantone 367c.
What’s a ground of rejection (for opposition purposes)
In addition to the grounds of opposition provided by sections 58 to 62A, as you will know s 57 provides that an application may be opposed on any of the grounds on which the application could have been rejected during examination.
Coca-Cola argued that the inconsistency between the graphic representation of the mark and the written description was itself a ground of rejection.
The basis for this argument was that s 33 required the Registrar to reject an application where the application had not been made in accordance with the Act. It argued the Registrar should have rejected the application because the inconsistency meant that Frucor’s application had not been made in accordance with the Regulations as required by s 27(2)(a).
Yates J rejected this argument at [136]ff. The grounds of rejection contemplated by s 57 were, relevantly, those provided by s 39 – s 44. (They even appear under a heading “Grounds for rejecting an application”.)
The power to amend
Frucor had not sought to amend its application to substitute a swatch of the correct colour before the Registrar during the examination process. It did apply to amend, however, during the appeal to the Federal Court.
Yates J, citing the approach taken by Heerey J under the Patents Act in Genetics Institute,[1] held that the Court had power to consider the amendment application under s 197even though there had not been an application to amend before the Registrar. At [195], his Honour explained:[2]
…. I do not see how an appeal to this Court from a decision of the Registrar in opposition to registration proceedings under the Trade Marks Act differs materially from an appeal to this Court from a decision of the Commissioner in opposition to grant proceedings under the Patents Act. Whilst I acknowledge that, in the present case, an application under s 63 of the Trade Marks Act was not before the Registrar, the registrability of the mark the subject of the application was in contest. In the proceedings below, the Registrar had the power to permit the application to be amended subject to the constraints placed upon the exercise of that power by the Act. Given the nature of the “appeal” to this Court, the Court’s power to quell the controversy as to the registrability of the mark—the subject matter of the appeal—cannot be more limited than the Registrar’s power. Further, it cannot matter that the Registrar was not asked to exercise the power of amendment, just as it cannot matter that an opponent might seek to raise additional or new grounds of opposition, or that the parties might seek to adduce different evidence to the evidence that was before the Registrar or raise new or different arguments. The opposition proceeds afresh before the Court on the subject matter that was before the Registrar and is adjudicated upon accordingly.
This practical approach is, with respect, to be welcomed in the interests of efficiency and, if followed, would obviate the need to introduce into the Trade Marks Act a counterpart to s 105(1A) of the Patents Act which, in turn, arose because Courts applying NEB had ruled a Court hearing an appeal from an opposition before the Commissioner had no power to deal with an amendment application.
Even though the power existed, Yates J at [206] denied Frucor’s application to amend. The substitution of “a markedly different green-coloured swatch” for the existing swatch would substantially affect the identity of the trade mark and so was prohibited by s 65(2).
Frucor also made a very late application to the Court to amend the application on the basis of s 65A.
The very late stage of the application and the lack of any utility (as the application would fail the distinctiveness requirement in any event) were fatal.
In contrast to his Honour’s practical approach to allowing consideration of an amendment under s 65 through s 197, however, Yates J considered allowing a party to bring an application under s 65A for the first time in the Court would subvert the statutory process for the consideration of such amendments by the Registrar prescribed by s 65A. Section 65A contemplated publication of the amendment application in the Official Journal and opposition proceedings before the Registrar.
In further contrast to Yates J’s views about s 65A, it may be noted that Courts dealing with amendment applications under s 105(1A) have directed the amendment applicant to publish the application in the Official Journal so that the Commissioner and any potential opponents may intervene.[3] The difference is of course that the Patents Act through s105(1A) expressly tells the Court to deal with the request to amend because of the inefficiencies and delays which had resulted.
As previously noted, it does not appear that Frucor has appealed.
Frucor’s attempt to register the colour green as the predominant colour applied to its “V” energy drinks has failed. The colour being applied for was not properly defined and, consequently, had not been used as a trade mark. Yet again, consumer survey results did not help.
Frucor’s application included a green swatch, copied from its New Zealand trade mark application and, in accordance with reg. 4.3(7) a written description:
The mark consists of the colour green (Pantone 376c), as shown in the representation attached to the application, applied as the predominant colour to the goods, their packaging or labels.
The fundamental problem was that the green colour of the swatch was not Pantone 376c.
What’s the trade mark
Frucor argued that the written description should be given priority over the coloured swatch as a matter of construction of the trade mark application.
Its argument was that any trader looking at the Register would realise the colour swatch was inherently unreliable due to the potential for corruption through scanning, printing etc. Consequently, anyone looking at the Register would recognise that Pantone 376c was the subject colour.
Yates J considered this analysis was informed by Frucor’s subjective intention. The matter needed to be determined objectively. Reg. 4.3 required the application to set out a representation of the mark and, in that context, r. 4.3(7) required a description of the mark “as represented”. It was the representation which was primary. At [122], his Honour concluded:
…. A person inspecting the Register is entitled to act on the assumption that the trade mark applicant’s own depiction of colour in the representation accompanying the application is accurate.
Once the person inspecting the Register appreciated there was an inconsistency between the graphic representation and the description, there was no way to resolve the disconformity.
“V” green had not acquired distinctiveness
As the application was for a single colour mark, this meant that Frucor could not possibly demonstrate its trade mark had acquired distinctiveness under s 41(6)(a), the old (or pre-Raising the Bar version).[1] At [145], his Honour explained:
As the Full Court explained in Woolworths/BP at [79], it is important to appreciate that it is the use of the mark applied for, as a trade mark, that determines what can be registered. In that connection, the Full Court emphasised that the mark that is the subject of the application for registration must conform to the mark that was, for the purposes of s 41(6), used before the filing date. Because, in the present case, the mark is defined ambiguously—its features are uncertain and cannot be determined objectively—it is not possible for Frucor to establish the factual condition of s 41(6)(a) by reference to its own particular use of “V” Green. It follows that, for that reason alone, registration should be refused in the present case.
Yates J would have rejected the application even if one assumed there was no ambiguity and the colour claimed was Pantone 376c.
Yates J accepted that Frucor’s use of “V” green was substantial, consistent and conspicuous. At [163], his Honour had “no doubt that … those familiar with Frucor’s “V” energy drinks would have associated “V” Green as the colour of Frucor’s core energy drink product.” (emphasis supplied)
Yates J held, however, that this extensive use and recognition was not use as a trade mark.[2] First, at [164] the “consistent presence” and “dominating display” of the “V” logo was what consumers would recognise as performing the function of the badge of origin for the goods.
Accepting that there could be more than one trade mark for a product, the second consideration was the role colour played in the soft drink market including energy drinks, soft drinks, sports drinks, fruit juices and bottled water.
Packaging and labels in this field are often brightly coloured. Soft drink producers used colour to denote a range of things: sometimes product flavour, more generally some “varietal characteristic”. Frucor itself had different varieties of “V” which were presented in different liveries (scroll down): red for berry flavoured, silver for sugarfree, black and also a yellow in addition to “V” green which was reserved for the “hero” of the range. So at [166]:
…. Although Frucor’s use of “V” Green was pervasive and no doubt fundamental to its whole marketing strategy, it was, nonetheless, reminiscent of its core product. In this way, Frucor’s use of “V” Green was essentially descriptive, not distinctive in the trade mark sense. It denoted the core product in the “V” energy drink range. I am not persuaded that, somehow, consumers would understand that colour in relation to the core product was being used differently to colour in relation to other varieties within the “V” energy drink range, or any differently from how colour was and is used descriptively across the range of non-alcoholic beverages sold through trade channels such as supermarkets and convenience stores.
So at [167], even though more than one trade mark could be used on any given product, the “V” green colour did not function as a trade mark.
What the market survey didn’t prove
Frucor’s evidence from a market research consultant based on two surveys did not help. His evidence showed, for example, that some 77% of the survey respondents identified Pantone 376c with a brand of energy drink and and 85% of those identified the drink as Frucor’s “V” energy drink. As a result, the expert concluded that Pantone 376c was part of Frucor’s “brand identity”, having properties that went well beyond decorative or functional attributes so that it distinguished Frucor’s products from other traders’.
The main problem was that evidence the public associated, or even identified, a particular colour with a “brand” by itself is not enough to establish that the colour is functioning as a trade mark. At [171], his Honour explained:
… evidence of an association (or, I would add, identification) of a sign, including a colour, with a particular product does not mean, without more, that the sign is functioning or has functioned as a trade mark in relation to that product. One needs to have an understanding of how the sign was used, in the proper context and setting, before that conclusion can be drawn. Moreover, the conclusion is not purely a factual one.
The last sentence in that extract points out that whether something is used as a trade mark is a legal conclusion.
If you are going to advance someone to give evidence that a colour has been used as a trade mark – as Frucor’s market survey expert purported to do, you will also need to demonstrate that the witness properly understands the legal concept. More practically, if you are trying to convert your colour into a trade mark, you need to educate your public that it is being used as your trade mark. At it’s most rudimentary level (and bearing in mind the range of other issues), can you tell your customers to “look for” you product by reference to its colour?[3]
Market survey blues
Approaching the matter in this way enabled Yates J to avoid having to deal with the numerous criticisms about the survey methodology raised by Coca-Cola. A couple of points, however, do emerge.
At [168], Yates J was sceptical that the sample used in the surveys was representative. Frucor’s expert had not bailed up survey respondents randomly in the street or at the shopping centre. Rather, as is quite common in marketing, they were drawn from a panel of people who had signed up to participate in surveys.
That criticism is all the more compelling given the second point. Yates J was not at all comfortable accepting Coca-Cola’s criticisms of Frucor’s survey methodology in the absence of support from Coca-Cola’s own expert evidence.
Presumably, the same reasoning would apply under s41(3) in the “new” version. ?
At [148], Yates J recalled that this required “an understanding, from an objective viewpoint, of the purpose and nature of the use, considered in the context of the relevant trade” citing Woolworths/BP at [77]. ?
See for example the evidence in Philmac about its khaki and then terracotta plastic pipe fittings leading to the conclusion at [40]. For more recent US practice see here. ?
Because, if you do, the Full Court has definitively ruled that the error cannot be rectified and any resulting registration will be irredeemably invalid.
This is the first of at least two rulings departing from the trial judge’s reasons which the Full Court made in the course of dismissing Pham Global’s appeal from the decision to revoke its trade mark registrations and find it infringed Insight Clinical Imaging’s trade marks. So Pham Global still lost, but with ramifications for us all.
Some background
Since 2008, Insight Clinical Imaging has been using the name INSIGHT and its composite mark for its radiology services largely in Perth, WA.[1]
Mr Pham is a radiologist and the sole director of the company through which a radiology business is conducted in NSW. Originally, the company was called AKP Radiology Consultants Pty Ltd. In December 2011, however, Mr Pham applied to register the Insight Radiology mark as a trade mark for radiology services.
Insight Clinical’s trade mark is below on the left. On the right below is the trade mark applied for by Mr Pham.
In March 2012, AKP Radiology Services first started using the Insight Radiology mark for its business.[2]
On 6 June 2013, Insight Clinical lodged its opposition to Mr Pham’s application.
On 17 June 2013, Mr Pham’s company changed its name from AKP Radiology Services to Insight Radiology Pty Ltd.[3] Then, on 1 July 2013, Mr Pham sought to assign the trade mark application to his company.
Insight Clinical Imaging’s opposition was successful before the Office and Mr Pham’s company appealed unsuccessfully. In accordance with the trial judge’s orders, Mr Pham’s company then changed its name to Pham Global Pty Ltd and sought leave to appeal.
While leave was granted, the appeal was dismissed.
Who is the applicant
The trial judge found that the Insight Radiology mark was designed for, and used by, Mr Pham’s company. It even paid the designer.
Mr Pham, however, maintained that it had not been a mistake that the application was made in his name rather than the company’s. There was no evidence that Mr Pham ever actually licensed his company to use the trade mark. Moreover, Mr Pham’s explanation for why he decided to assign the application to his company – “I just did it” – was not accepted. He explicitly rejected the proposition that he made the assignment in response to Insight Clinical’s opposition to registration of the trade mark or that it was a result of a mistake.
Accordingly, her Honour held that Mr Pham was not the owner of the application when it was made, his company was. In line with the decisions in Mobileworld and Crazy Ron’s, however, her Honour found that the assignment of the application to the company before the trade mark was actually registered rectified the error.
On appeal, the Full Court noted that Mobileworld and Crazy Ron’s were both obiter on this point.
The Full Court then noted that longstanding precedent required that grounds of opposition were assessed at the date the application was filed. That meant that, where the ground of opposition was under s 58 that the applicant was not the owner of the trade mark,[4] the applicant when the application was filed had to be the owner of the trade mark. At [32], the Full Court said:
Once it is understood that the legislative scheme operates in the context of established principle that the alternative sources of ownership of a trade mark are authorship and use before filing an application for registration or the combination of authorship, filing of an application for registration and an intention to use or authorise use, the relationship between s 27 and ss 58 and 59 of the 1995 Act becomes apparent. The grounds of opposition in ss 58 and 59 reflect the requirements of s 27. Only a person claiming to be an owner may apply for registration. That claim may be justified at the time the application is made based on either alternative source of ownership. But if the claim is not justified at that time, ss 58 and/or 59 are available grounds of opposition. Moreover, if the applicant is not the owner of the mark at the time of the filing of the application, the assignment provisions in ss 106 – 111 do not assist because they authorise the assignment of the mark and thus pre-suppose, consistent with established principle, that the applicant owns the mark.
Well, it’s a nice simple rule; should be pretty straightforward to apply in practice shouldn’t it? Of course, it does mean that the law for trade marks is way out of step with the law for patents and registered designs, sections 22A and 138(3)(4).[5]
When time permits, I shall try to do a post on the new law of substantial identity.
It did not apply to register its trade mark until October 2012. ?
On 17 June 2013, Mr Pham caused AKP Radiology Consultants to change its name to Insight Radiology Pty Ltd. As a consequence of the first instance decision, however, the name of the company was changed again – to Pham Global Pty Ltd. ?
Mr Pham’s company also made a further application to register the words INSIGHT RADIOLOGY alone. Insight Clinical has also opposed it, but it appears to be stayed pending the outcome of the court case. (There was also an earlier application in 2008, TM Application No 1236945 for INSIGHT IMAGING / INSIGHT RADIOLOGY. This application was made by a Daniel Moses and a Jason Wenderoth, but lapsed after acceptance without ever becoming registered.) ?
The same principle applies under s 59, which was also in play. ?
Dodds-Streeton J has handed down what appears to be the first detailed judicial consideration in Australia of what constitutes making an application for a trade mark in bad faith contrary to s 62A.
Sports Warehouse Inc. and Fry both sell tennis products online using trade marks based on TENNIS WAREHOUSE.
Sports Warehouse started first, in 1984 in California although in time its business expanded and in 1994 it went on line. Eventually, its sales expanded internationally including to Australia.
Fry had successfully opposed Sports Warehouse registering TENNIS WAREHOUSE.
However, Dodds-Streeton J has now upheld Fry’s appeal.
The grounds of opposition included that the trade mark lacked capacity to distinguish, that it was confusingly similar to Sports Warehouse’s trade mark and also that the application was made in bad faith.
The s 62A ground was based on the fact that, before Fry adopted its trade mark, its principal, Mr Fry had done a Google search and come across Sports Warehouse’s website. He also used some photographs from Sports Warehouse’s website for his own site. However, he said that before he adopted the name his wife had done a trade mark search to confirm it was not an “international” trade mark. Further, he acknowledged at [21]:
there was potential that some people would confuse the websites (at least at the point of the domain name) and acknowledged that he chose the name partly for that reason, but denied that he hoped to use Sports Warehouse’s reputation in order to boost early sales. He also denied that he believed the name TENNIS WAREHOUSE would cause customers aware of Sports Warehouse’s website to think that the Fry Consulting website was an arm or affiliate of Sports Warehouse.
Dodds-Streeton J noted that, when introduced in 2006, the EM had included a number of examples of bad faith:
a person who monitors new property developments; registers the name of the new property development as a trade mark for a number of services; and then threatens the property developer with trade mark infringement unless they licence or buy the trade mark;
a pattern of registering trade marks that are deliberate misspellings of other registered trade marks; and
business people who identify a trade mark overseas which has no market penetration in Australia, and then register that trade mark with no intention to use it in the Australian market and for the express purpose of selling the mark to the overseas owner.
(The last example may be contrasted to the “sharp”, but previously legitimate, practice of registering such a mark and operating a business in Australia – see [20] here.)
The concept in s 62A, however, was not limited to those examples. Her Honour drew substantial guidance from a number of English cases (and consideration of those decisions in the Office) on s 3(6) of the Trade Marks Act 1994 (UK) which adopted a “combined test” involving both subjective and objective elements:
dishonesty requires knowledge by the defendant that what he was doing would be regarded as dishonest by honest people, although he should not escape a finding of dishonesty because he sets his own standards of honesty and does not regard as dishonest what he knows would offend the normally accepted standards of honest conduct.
and
The words “bad faith” suggest a mental state. Clearly when considering the question of whether an application to register is made in bad faith all the circumstances will be relevant. However the court must decide whether the knowledge of the applicant was such that his decision to apply for registration would be regarded as in bad faith by persons adopting proper standards.
Accordingly, her Honour considered:
Bad faith, in the context of s 62A, does not, in my opinion, require, although it includes, dishonesty or fraud. It is a wider notion, potentially applicable to diverse species of conduct.
The formulation in United Kingdom authority of bad faith as falling short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in a particular area is, in my view, an apt touchstone. An overly literal application may, however, tend to negate the relevance attributed to the applicant’s mental state in the combined test preferred in Harrison.
Further, in my view, mere negligence, incompetence or a lack of prudence to reasonable and experienced standards would not, in themselves, suffice, as the concept of bad faith imports conduct which, irrespective of the form it takes, is of an unscrupulous, underhand or unconscientious character.
Dodds-Streeton J rejected the proposition that it was enough that Fry knew of Sports Warehouse’s trade mark and usage.
While her Honour regarded Fry’s conduct as exploitative, the factor which saved it in the end was an exchange of correspondence between the parties. After Sports Warehouse learnt of Fry’s use and demanded it stop on the basis of its international trade mark, Mr Fry had challenged it to provide proof of the international trade mark. Sports Warehouse said it would do so the next day but, her Honour found, never did so. At [174]:
In circumstances where:
(a) Mr Fry unequivocally indicated his willingness to cease using TENNIS WAREHOUSE if Sports Warehouse provided evidence of its entitlement, and sought a prompt response, so that if necessary he could change the name prior to significant business development and expenditure on advertising;
(b) Mr Fry did not acknowledge Sports Warehouse’s ownership or rights in Australia and Kenny J did not find that Mr Fry did not believe his assertions about the implications of a business name search, although they were misconceived;
(c) Sports Warehouse, despite undertaking to do so, did not provide any documentation or evidence of its entitlement or rights to the “TENNIS WAREHOUSE” mark, the subsequent application to register which in Australia was unsuccessful. It failed to make any further contact or objection until Fry Consulting again initiated contact two years later; and
(d) During that period, in the absence of any further objection or contact from Sports Warehouse, Mr Fry proceeded to develop his business using the words “TENNIS WAREHOUSE”, to which he added the word “AUSTRALIA”, and subsequently commissioned Mr Hughes to design a tennis ball logo, resulting in a composite mark,
it was difficult to accept that Fry’s conduct fell short of what would be acceptable commercial behaviour (especially, one might add, where Fry did not lodge its application until 2 years after Sports Warehouse said it would provide its proofs the next day).
Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) [2012] FCA 81
Back in February, the Prime Ministers of Australia and New Zealand issued a statement about harmonising IP laws (and procedures) between their countries.
Today, the Minister for Innovation, Industry and Science and the New Zealand Commerce Minister issued a further statement “revealing” that:
there will be a single application process for seeking patents in both countries from 2013; and
a single examination of the application for both countries will be introduced from 2014.
The two countries’ patent laws will continue to be different but, when these steps are introduced, there will be an integrated application and examination process to get a patent in both countries.
According to the Australian Minister:
The savings in professional costs alone could be as high as $2,000 to $5,000 per invention — money that should and will stay in the pocket of the innovator.
Not entirely clear from the information released officially how things have progressed since February. Press Release here; Fact Sheet there (pdf).
Tim Golder, a partner at AAR, and Sandi Montalto have published an article with their take on the Federal Court’s recent decision directing that Mars’ trade mark application for the colour ‘Whiskas Purple’ proceed to registration.
Bennett J has dismissed the Bavarian Beer (trade) association’s opposition to the Dutch company, Bavaria NV’s application to register the Bavarian Beer trade mark.
(The application is in black and white)
Her Honour found:
182 In summary:
The trade mark is inherently adapted to distinguish Bavaria NV’s goods from those of other traders and does so distinguish.
If the trade mark were only inherently adapted to distinguish Bavaria NV’s goods to some extent, there would be insufficient evidence to find it capable of distinguishing Bavaria NV’s goods pursuant to s 41(5) of the Act.
If the trade mark were not inherently adapted to distinguish Bavaria NV’s goods to any extent, there would be insufficient evidence to find it capable of distinguishing Bavaria NV’s goods pursuant to s 41(6) of the Act.
I am not satisfied that the trade mark connotes that Bavaria NV’s product comes from Bavaria or that it has certain characteristics attributable to a Bavarian origin. I am not satisfied that the use of the trade mark would be likely to deceive or cause confusion or that it would be contrary to law.
GENUINE BAVARIAN BEER and BAYERISCHES BEER are geographical indications for the purposes of ss 6 and 61 of the Act. Neither of these geographical indications equate with “Bavaria”. Section 61 does not refer to a sign that is substantially the same as or deceptively similar to a geographical indication. The trade mark does not contain a sign that is a geographical indication for the purposes of the Act.
Even if the trade mark did contain a sign that is a geographical indication for the purposes of the Act, Bavaria NV would succeed in raising the defence under s 61(2)(c) of the Act.
There is no discretion under s 55 of the Act to refuse to register a trade mark if none of the grounds of opposition are made out.
Professor Davison looks at the implications for (non-wine) GIs here.
I’ll just add that the Bavarians had argued s 55 of the Trade Marks Act conferred a discretion to block an application independently of the grounds of opposition. Hence the last bullet point above.
Of course, the last time I went to Europe, the Netherlands did seem to be quite some distance from Bavaria. I’m not sure what the status of the war (between the 2 sides) in Germany is.
Bennett J’s decision in Bavaria NV v Bayerischer Brauerbund eV [2009] FCA 428
