capacity to distinguish

Urban (f)ale

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The Full Court has dismissed Urban Alley’s appeal from O’Bryan J’s rulings that URBAN ALE was invalidly registered as a trade mark and La Sirène’s use of URBAN PALE did not infringe URBAN ALE. The decision may provide some helpful clarification of the test of substantial identity and, perhaps, urges caution against his Honour’s conclusion that URBAN PAEL was not used as a trade mark.

Urban Alley had registered URBAN ALE for beer. La Sirène started selling a Farmhouse Style Urban Pale [beer] by La Sirène under this trade mark:

Not capable of distinguishing

The Full Court upheld O’Bryan J’s conclusion that URBAN ALE lacked any capacity to distinguish as essentially descriptive or laudatory. As Urban Alley had not used the term before it registered its trade mark, it was not registrable under s 41.

This was really just the result flowing from the facts arising on the evidence. So a successful appeal was always a steep hurdle.

Practice tip: if you are going to adopt something as a trade mark, it will be unhelpful to refer to it in marketing materials in terms like:

The signature Urban Ale sits somewhere between a classic Australian golden ale and a Belgian blonde, with pleasant tropical notes but a crisp, clean finish.  This is a premium beer for the people and is described as a ‘celebration of our great city, a tribute to the laneway culture and a blend of the old and the new’

and

Name: Once Bitter
Style: Urban Ale (Somewhere between an Aussie Golden Ale and Belgian Blonde)
ABV: 4-5%

One could be mistaken for thinking the trade mark was “Once Bitter”!

Deceptively similar to prior conflicting registration

Likewise, Urban Alley was unable to overturn O’Bryan J’s conclusion that URBAN ALE was deceptively similar to a prior registration for URBAN BREWING COMPANY and so invalid under s 44.

On this part of the case, Urban Alley argued O’Bryan J’s reasons for concluding the two marks were not substantially identical were inconsistent with his Honour’s conclusion that they were deceptively similar and so the latter conclusion was wrong.

In relation to substantial identity, O’Bryan J held that the inclusion of BREWING COMPANY in the prior mark conveyed a different meaning to ALE.

The Full Court rejected Urban Alley’s attack at [98] – [99]:

A side-by-side comparison of two marks is a studied comparison. It highlights the differences between the marks just as much as it shows their sameness, in order to reach a conclusion as to whether the two marks are, in fact, substantially identical. The primary judge’s observation must be understood as having been made in that light.


The test of deceptive similarity is fundamentally different. It is not a studied comparison. Rather, it is a comparison between one mark and the impression of another mark carried away and hypothetically recalled, paying due regard to the fact that recollection is not always perfect.

Thus, when considered from the perspective of deceptive similarity and imperfect recollection the differences which were apparent from a side by side comparison lost much of their significance. In that assessment, Urban Alley’s challenge overlooked the significance of URBAN being the first word of both marks and the close association in meaning of “brewing company” and “ale”. At [106], the Full Court explained:

The appellant also submitted that there is “no relevant trade mark resemblance” between the words “ale” and “brewing company”. This submission requires careful consideration. As the appellant’s submission recorded immediately above recognises, each compared mark must be considered as a whole. It is impermissible to dissect each mark to emphasise its disparate elements and then compare the disparate elements of each in order to reach a conclusion on deceptive resemblance. To start with, this would leave out entirely the impact of the common element “urban”. It would also ignore the synergy between the word “urban” and the other word(s) in each mark. This synergy contributes to the impression gained of each mark, which is carried forward into the relevant comparison between the two. This last-mentioned consideration brings into play the primary judge’s finding that there was a clear association in meaning between “brewing company” and “ale”. Given that clear association, coupled with use of the common element “urban”, it is understandable that the primary judge reached the conclusion he did on the question of deceptive similarity.

It might be thought that the strong emphasis on the narrow scope of the substantial identity test, requiring a studied side by side comparison, is a very welcome brake on the ruling in Pham Global.

No infringement

Having ruled that Urban Alley’s trade mark was invalidly registered on two alternative grounds, their Honours pointed out that Urban Alley’s appeal against the finding that La Sirène did not infringe must fail. So, it was strictly unnecessary to consider whether La Sirène’s use of “Urban Pale” would have been an infringement.

Speaking obiter dicta, the Full Court emphasised that O’Bryan J’s finding that La Sirène did not use URBAN PALE as a trade mark, despite its prominence, turned very heavily on the “overwhelmingly descriptive” nature of the expression. At [119], their Honours said:

Thus, it is entirely possible—indeed likely—that, absent the finding of the Word Mark’s lack of inherent adaptation to distinguish because of the ordinary signification of the word “urban”, the primary judge would have come to a different conclusion on trade mark use in relation to the respondent’s use of the name “Urban Pale” on the depicted label.  This is particularly so when regard is had to the prominence and location of the name “Urban Pale”.  Such use would normally be regarded as persuasively suggesting trade mark use, a consideration which his Honour seems to have recognised in the next paragraph of his reasons, where he said:

205         It is apparent that the labelling of the La Sirène Urban Pale product features the words “Urban Pale” in large lettering and an emboldened font.  It is the most prominent name on the labelling.  However … I do not consider that that prominence converts the essentially descriptive name into a trade mark indicating the source of origin of the product.

Even so, it will be necessary to treat the finding that Urban Pale was not used as a trade mark very carefully and confined to its particular facts. On this part of the case, the Full Court concluded at [120]:

Be that as it may be, our resolution of Grounds 1, 2 and 3 of the appeal adversely to the appellant necessarily means that Ground 5 of the appeal should be dismissed, as we have said.

Urban Alley Brewery Pty Ltd v La Sirène Pty Ltd [2020] FCAFC 186 (Middleton, Yates and Lee JJ)

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My Angel is a …*

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Rares J has ordered that Centrefold Entertainment’s trade mark registration for CENTREFOLD, No 1695466, be expunged from the Register on the grounds that it is not capable of distinguishing “Entertainment’s” services.

Both Entertainment and Metro are in the business of providing “promo models” and adult entertainment services.[1] Metro promoted its services under the sign “Centrefold Strippers”. Having secured its registration for CENTREFOLD, Entertainment sued Metro for infringement. Things did not turn out how it hoped!

Entertainment argued that CENTREFOLD was a “covert and skilful allusion to its services, not descriptive of them.” It argued that the ordinary meaning of the word was of a person or the particular pages in particular types of magazine.

Rares J rejected this argument on the grounds that the word registered was a “noun” and not an adjective. However, Entertainment used the word in an adjectival sense as part of the composite mark “Centrefold Entertainment”. Hmmm.

Perhaps more compellingly, his Honour pointed out at [93] that there were at least three businesses in the adult entertainment field using names which included CENTREFOLD: Centrefold Lounge, Centrefold Strippers (i.e., Metro) and Centrefold Entertainment itself.

Also, the evidence showed that models who had achieved the status of being Centrefolds, promoted themselves as such and could often command a premium for their services.

In these circumstances, the word was not metaphorical or allusive. At [101], his Honour explained:

“Centrefold” is an ordinary English word that is apt to describe the kinds, qualities and characteristics of performers, models and others, as persons who appear, or have appeared or are prepared to appear, nude or scantily clad before strangers and in pages of magazines. Any supplier of adult entertainment services of the kind comprised in the designated services, without improper motive, might desire to use the word “centrefold” to describe that supplier’s services. That is because of the ordinary signification of the word: Cantarella 254 CLR at 358 [58].[2]

Next, his Honour held that Entertainment’s use of “Centrefold” was not sufficiently substantial to warrant registration under (the “new” version of) s 41(4).

Bear in mind that the trade mark was registered from 22 May 2015.

It appears to have been common ground that Entertainment had not used “Centrefold” alone before it applied to register its trade mark.

Secondly, until about March 2014 (i.e. just over a year before the filing date of the trade mark), the principal of Entertainment had been running two businesses, “XXX Princess” and “Centrefold Entertainment”. XXX Princess was the business promoting the adult entertainment services – by reference to XXX Princess. As part of a deliberate strategy, Centrefold Entertainment’s website and Facebook page did not explicitly promote adult entertainment services. It was only from March 2014 that Entertainment’s website explicitly promoted adult entertainment services by reference to its composite mark (see below). In that period (March 2014 to May 2015), the evidence showed Entertainment had only 2,000 customers. Rares J ruled at [107]:

It is unlikely that the limited use of “centrefold” in Entertainment’s dealings with perhaps, at maximum, the 2,000 individuals who made the bookings (but none of whom, on the evidence, ever received a tax invoice), would have brought its name to their attention, or that of others who may have telephoned the business, as a brand or trade mark rather than, if at all, as a mere reference to a business name. This limited usage would not have brought into the public consciousness the use of “centrefold” as a brand or trade mark in association with the designated services of Entertainment.

The evidence also showed that neither Entertainment nor Metro spent much (if anything) by way of Google AdWords on “centrefold”, focusing their expenditure instead on “strippers” and “waitresses”. There was also evidence a mere 0.39% of hits on Metro’s “Centrefold Strippers” website came via “centrefold”.[3]

Now that all seems uncontroversial. There are some potentially problematic issues.

First, here is one of Entertainment’s Facebook posts from 6 May 2013:

It appears that that was essentially the form of Entertainment’s page from at least early 2012.

One might think that was use of the composite mark as a trade mark for adult entertainment services, albeit not use of the trade mark as registered alone. It seems that the phone number appearing in the ads was a common phone number for XXX Princess and Entertainment and, as already noted, Entertainment’s case seems to have been that the performers were actually arranged by “XXX Princess”. That said, I am rather mystified what Entertainment’s page was doing.

Secondly, there was some evidence of a period late in 2012 where the principal of Entertainment answered the telephone to those calling in to book a performer “Centrefold Entertainment”. It appeared likely that, if the caller was surprised they had not reached XXX Princess, that some business patter was deployed to dispel any confusion. His Honour unsurprisingly, with respect, characterised that use in effect as de minimis.

Thirdly, Entertainment’s evidence was that from September 2012, invoices to all customers were sent out under the composite mark. There was a glitch in the system, however, so it appears no-one received them. Somehow, the performers and Entertainment got paid.

There was also evidence from at least one of the performers that she sent (at least) one invoice for her services into Entertainment by reference to the composite mark. Rares J, however, discounted this as evidence of use on the basis that which entity they were billing was hardly of any moment to the performers and they were rather confused about which company or website they were providing their services through.

The passing off and ACL claims by each party against the other failed on a straightforward application of the Hornsby Building Information Centre case.

By reference to the use of the word “may” in s 126, Rares J considered that the power to grant an injunction was discretionary. If his Honour had not found the trade mark invalid, Rares J would have refused an injunction on the basis of “lack of clean hands”. In promoting its services on the web, Entertainment used photographs of scantily clad young ladies. 90% of the photographs, however, were not of any of its models. They were photographs found on the Internet, including from sources such as “Sports Illustrated”. The Court would not condone such deceptive practices through the coercive power of an injunction.

Metro Business Centre Pty Ltd v Centrefold Entertainment Pty Ltd [2017] FCA 1249

  • with apologies to Seth Justman and the J Geils Band.
  1. Apparently, a “promo model” is someone who provides his or her services to promote a business by, for example, handing out advertising or business cards in a public venue, or acting as an adornment at an event, such as appearing in a manufacturer’s clothing or livery at a trade or motor show. They do not appear naked, or partially naked and get paid $20 – $30 per hour. An adult entertainer (or, often, a “stripper”) would perform naked or partially naked and could earn 10 to 20 times that for a 20 – 30 minute show.  ?
  2. Entertainment’s case was no doubt “assisted” by its principal’s evidence to the effect that he had never heard the term being used to describe “centrefolds”!  ?
  3. The Google Analytics report showed almost 830,000 hits on the website for the relevant period.  ?

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Apple can’t register APP STORE as a trade mark in Australia

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Yates J has rejected Apple’s attempt to register APP STORE in Australia as a trade mark for retail store services featuring computer software provided via the internet or for use on handheld mobile devices and the like.

Apple applied to register APP STORE in Australia on 18 July 2008 for retail store services featuring computer software […] in class 35 and related services in classes 38 and 42, TM App No 1252301. The application claimed Convention priority from 7 March 2008. Apple’s “App Store” launched in Australia on 11 July 2008 – that is, one week before the application was filed – with the release of the iPhone 3G. The Registrar rejected the application on the grounds that the trade mark lacked any inherent capacity to distinguish and, there having been no use prior to 11 July 2008, it was not factually distinctive of Apple as at the claimed Convention priority date.

Yates J, as noted, has rejected Apple’s “appeal” on the basis that APP STORE is not capable of distinguishing the services specified in the application.[1] As one would expect, his Honour’s decision provides an excellent tutorial on how one should approach questions arising under s 41 including, apart perhaps from questions of onus, the new form.

The relevant date

Yates J held that capacity to distinguish fell to be assessed at the filing date of the application not, as the Registrar contended based essentially on s 72, on the priority date applicable as a Convention application. This was potentially significant as there had been no use of the trade mark at the priority date, but there had been at least one week’s use at the filing date.

Capacity to distinguish

Yates J began by pointing out that whether something has inherent capacity to distinguish depends on the occasion and circumstance. It turns on both the nature of the particular mark itself and also the nature of the particular goods or services specified in the application.[2]

To overcome the Registrar’s rejection, Apple relied on evidence from a linguistics expert, analysis of internet usage on Google Trends and in the Internet Archive and a Newspoll online survey

Apple’s primary argument was that the expression “app store” could not be fully understood by simply combining the meanings of its component parts “app” and “store”. At [88]:

…. In other words, the combination “app store” does not have a “compositional” meaning. According to him, “the compound APP STORE can only be fully?understood non?compositionally”. ….

The argument here was that, while the term “app” had been used as “clipped” form of application since 1985, that usage was restricted to specialised computer circles. In addition, the word “store” meant a physical place where one went to buy goods or services: Apple’s App Store introduced a new meaning: an online, virtual “place” where one did not so much buy things as a “licence” to use software. That is, in more traditional terms, the expression is at best “allusive” rather than directly descriptive.

On the evidence, however, Yates J found that both “app” and “store” had relevantly well-understood descriptive meanings in the relevant sense for the general public at the filing date. There was evidence at [121] – [123] that before the filing date “app” had been used in 83 articles in publications such as PC World, Technology Review, Rolling Stone and Atlantic Monthly to refer to software applications running on PCs in the Windows environment. At [181], his Honour found:

well before 2008, the word “app” had a well-established and well-understood meaning as a shorthand expression for computer software that is application, as opposed to operating, software. I do not accept that, at the filing date, this use of the word was restricted to computer experts. I am satisfied that it was the received meaning for many interested users of computer software and certainly for those involved in the trade of supplying computer programs, including by retail.

and at [190]:

I am not persuaded that the word “store”, as used in APP STORE, ushered in a new meaning of that word. On the evidence, I am satisfied that, at the time that Apple applied for the APP STORE mark, the word “store” had a well-established and well-understood meaning among traders and the general public that was not confined to the traditional notion of a physical store, but extended, as well, to an online store for the provision of goods or services.

His Honour gave as examples Amazon.com’s launch of its e-Books store in 2000, its software download store launched in 2001 and Apple’s own iTunes Music Store launched in 2003.

Consequently, his Honour concluded that members of the public seeking to acquire application software at the filing date would have understood APP STORE to be no more than a description of a trade channel. It had no inherent capacity to distinguish:

I am satisfied on the balance of probabilities that, at the filing date, members of the public seeking to acquire application software would have understood APP STORE as no more than an expression to describe a trade channel – a store – by or through which application software could be acquired. The fact that the “acquisition” would have involved the acquisition of rights by way of licence does not, in my view, bear upon the matter.

Even if Apple was the first to use the combined expression, which Yates J does not seem to have been convinced it was, “the words in combination bore no more than their ordinary signification when applied to the designated services in Class 35.”

While his Honour drew on the Full Federal Court’s ruling in Oro / Cinque Stelle overturned by yesterday’s ruling in the High Court, these factual findings of what the terms and combined expression would mean to members of the public, unless somehow overturned, would appear to be fatal to any appeal.

Acquired distinctiveness (secondary meaning)

Yates J considered the evidence on acquired distinctiveness “opaque”. There was no real evidence about how the press releases issued with the launch of the store were used or of any other advertising or promotional steps undertaken. His Honour was prepared to accept that people had done internet searches in the week following launch of the term “app store” and “perhpas many persons” had come to associate the App Store service with Apple, but that was not enough.

The Newspoll survey

The Newspoll survey was drawn from an online pool of people who were willing to participate in market surveys for reward. It disclosed that some 65% of participants associated the term “App Store” with a particular company or brand[3] and at least 88% of those nominated Apple as the company or brand. There were at least 2 main problems with this survey. First, it was conducted in 2011 – 3 years after the relevant date – “well after the relevant period” at [223]. Secondly at [224] – [231], applying cases like Woolworths v BP and Chocolaterie Guylian, it was not enough to demonstrate that the expression APP STORE was associated with Apple; it was necessary to show the nature of that association was to identify the trade source of the product – i.e., as a badge of origin.

The ‘pro-active’ role of the Registrar

Apple criticised the active role the Registrar took in this case: going to the lengths of filing her own expert evidence in answer to Apple’s expert and relying on affidavits provided by solicitors acting for Microsoft. Such an active role is indeed unusual in such appeals. Yates J, however, did not accept that the Registrar’s role could fairly be described as “partisan”. His Honour pointed out that the Registrar is entitled to appear as a party and what role she should take when doing say would depend on the circumstances of particular cases:

In the present appeal, a large body of evidence, including expert evidence, was adduced by Apple. The Registrar was not bound to accept either the completeness or the correctness of that evidence. If, as here, there was a genuine alternative case available on the facts or evidence which materially qualified the case brought by Apple, then that alternative case could only be advanced by evidence adduced by the Registrar in the appeal, including by way of expert evidence, bearing in mind the nature of the proceeding as a hearing de novo. I do not think that the Registrar should be criticised for advancing a case for the Court’s consideration. To deny the Registrar that opportunity would be to deny the Court the opportunity to make findings on an appropriately-informed basis. This is not to encourage the Registrar, as a party to such an appeal, to make the case before the Court more factually complex or extensive than it need reasonably be or to take other than appropriately measured steps in the conduct of the litigation. Quite clearly, appropriate judgment must be exercised in considering what evidence is truly necessary, and what forensic decisions should be taken, to fulfil the Registrar’s role, which must be to take reasonable steps under the Act to protect the public interest in respect of the registration of trade marks in Australia. I do not think that the Registrar has over-stepped the mark in this case. ….

Apple Inc. v Registrar of Trade Marks [2014] FCA 1304

  1. This too was decided under the “old” form of s 41 not the new form introduced by the [Raising the Bar Act][rtb].  ?
  2. Although not referred to specifically by his Honour, this is well illustrated by “North Pole” in respect of “bananas” in contrast to, say, “Whopper” in respect of hamburgers.  ?
  3. There was considerable variation among age groups: 90% of those aged 18 to 34, 81% of those aged 35 to 49 and 60% of those aged 50 to 64.  ?

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