distinctiveness

Shades of green

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

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.

image002.jpg

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.

It does not appear that Frucor has appealed.

Frucor Beverages Limited v The Coca-Cola Company [2018] FCA 993

  1. Presumably, the same reasoning would apply under s41(3) in the “new” version.  ?
  2. 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].  ?
  3. 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.  ?

Shades of green Read More »

Primary Health Care

1 Comment / Because I felt like it / / / , , , , ,

The Full Court has dismissed Primary Healthcare’s appeal from the decision rejecting its attempt to register “Primary Health Care” for medical services.

The judgment is 438 paragraphs long; Greenwood J providing 77 paragraphs on aspects of s 41 (old form), Katzmann J providing 80 paragraphs and the balance being the leading judgment of Rangiah J.

While Greenwood J and Katzmann J agreed generally with Rangiah J on s 41 (old form), it appears there are some nuances to consider! Katzmann J disagreed with Rangiah J about the application of s 43.

Primary Health Care Limited v Commonwealth of Australia [2017] FCAFC 174

Primary Health Care Read More »

Accor gets its trade marks back

1 Comment / Internet, Trade marks / / / , , , , ,

Accor has trade mark registrations for “Cairns Harbour Lights” and “Harbour Lights”, which it used to promote accommodation at the Harbour Lights complex in, you guessed it, Cairns. It sued Liv Pty Ltd which was renting out apartments owned in the complex by others.

Amongst other things, the trial judge had held that “Cairns Harbour Lights” should be expunged from the Register and the registrations for “Harbour Lights” should be amended to remove some of the services including “accommodation rental services” and “rental of accommodation”. Liv, however was found to infringe through the use of:

(a) “Harbour Lights Cairns”; and

(b) “cairnsharbourlights.com.au”; and

(c) “harbourlightscairns.com.au”; and

(d) “harbourlightscairns.com”.

The Full Court has now allowed Accor’s appeal, revoking the trial judge’s orders to expunge “Cairns Harbour Lights” and remove some of the services for which “Harbour Lights” is registered.

At 360+ paragraphs, more detailed consideration will have to wait.

One interesting aspect is that the Full Court confirmed that Liv’s use of “keywords” (really metatags) in the source code of its website was trade mark use and so infringing:

323 The title used in the source data is “Cairns Luxury Accommodation – Waterfront Apartments – Harbour Lights – Cairns Queensland”. The primary judge finds that the use of the words “Harbour Lights” in that title appears to be merely a description of the waterfront apartments referred to in the title: PJ at [434]. As to the use of the keyword “Harbour Lights” (as described by the primary judge at [430] and quoted above), the primary judge regarded that use as also a reference to the apartments as those words appeared in the context of surrounding words such as “Cairns apartments”, “waterfront, luxury apartment” and “harbourside”. Thus, the words were not used as a badge of origin: PJ at [434].

324 The other words used in the source data as recited at [430] by the primary judge are these:

  “content: = Harbour Lights Apartments in Cairns offer luxury private waterfront apartment accommodation for holiday letting and short-term rental”.

325 As to those words, the primary judge finds that the use of the words “Harbour Lights Apartments” in that phrase was, effectively, use as a business name for a business which offers “accommodation for letting and short?term rental” thus operating as a badge of origin to distinguish Liv’s services from others: PJ at [435]. Such use is use of a mark substantially identical with and deceptively similar to each of the registered trade marks in suit. It is use in relation to each of the Class 36 and Class 43 services other than “commercial real estate agency services”, “agency services for the leasing of real estate properties” and “hotel services”: PJ at [436]. (emphasis supplied)

Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd
[2017] FCAFC 56 )Greenwood, Besanko and Katzmann JJ)

Accor gets its trade marks back Read More »

Chemist Warehouse dismissed

1 Comment / Trade marks / / / , , , , ,

While we are on the subject of misleading or deceptive conduct, the Full Court has dismissed “Chemist Warehouse”‘s appeal from Middleton J’s dismissal of its claim that stores like these:

Another view
Another view
Direct Chemist Outlet
Direct Chemist Outlet

misrepresented an association of some sort with stores looking something like this:

Some Chemist Warehouse storefronts
Some Chemist Warehouse storefronts

image022

 

 

 

 

 

 

 

There were some 19 grounds of appeal which the Full Court worked their way through in detail. The central problem for Chemist Warehouse was that Full Court said there was no error in Middleton J’s finding that the predominantly yellow colouring of the exterior of the Chemist Warehouse outlets was not distinctive – the distinctive feature was the “Chemist Warehouse” logo:

no error has been shown in his Honour’s findings that the primary colour palette used by Chemist Warehouse was not distinctive. First, there was considerable variability in the nature of the Chemist Warehouse get-up. The primary judge distinguished other authorities where secondary branding had been accepted on the basis of a consistent presentation of colours in a particular juxtaposition. Second, the colours had a functional aspect. Colour can be used for its practical or functional utility, for example, high visibility for a road sign. In the present case his Honour appears to have accepted that the colour yellow was used to take advantage of the attributes of visibility and its association with discount value; but such a function could apply to any type of discount goods, not just pharmacy goods. The use of yellow to create the so-called “yellow box” was also to draw the attention of potential consumers on the street; it cannot be said that the use of the colour yellow in that way denoted trade origin. His Honour accepted the functionality of yellow (see at [9], [10], [12], [14] and [100]). He also accepted that the yellow, blue and red combination served a functional purpose (see at [240]). No error is demonstrated in any of these findings.

Fourth, the dominant and distinctive “Chemist Warehouse” logo was the only consistent branding element across the appellants’ stores prior to May 2006 ….

The fact that other stores, like JB Hi-Fi and Ted’s Camera’s used a predominantly yellow background to attract attention was also not irrelevant to whether its use on pharmacies was distinctive.

Moreover, even if the get-up had been distinctive, there would have been no misrepresentation:

in any event, even if a colour-based reputation could have been shown, that would not have answered the question of whether there had been misleading or deceptive conduct or a misrepresentation.  The respondents had a different get-up with different distinguishing features.  Indeed the primary judge had distinguished the respondents’ stores by not only the “Direct Chemist Outlet” trade mark but also the different distinctive logo, cleaner appearance and lifestyle photographs.  None of these were part of the appellants’ pleaded get-up.  The respondents’ schedules two and three to its closing submissions, by reference to the primary evidence before his Honour consisting of the relevant photos, well summarise the variability in get-up used at the DCO stores and the Chemist Warehouse stores, and relevant differences.

The Full Court pointed out that proof DCO had copied elements of its get-up from Chemist Warehouse was not sufficient to invoke the principle from Australian Woollen Mills that someone who sets out to deceive will be presumed to have succeeded. For that principle to apply, it was necessary to show not just copying but also a subjective intention to mislead or deceive – to appropriate part of the trade or reputation of the competitor.

Finally (for the purposes of this note), the Full Court accepted Middleton J’s view that the appropriate time to assess whether DCO’s conduct was misleading or deceptive was when DCO first commenced use of its present get-up. Chemist Warehouse argued, in the alternative, that Middleton J should have made the assessment for each individual DCO store at the time it opened – the so-called geographical approach. Middleton J pointed to a number of problems with this approach. One problem was that there were some areas where the Chemist Warehouse store opened after the DCO store – who would be making the misrepresentation then. Further:

… if the Applicants and Respondents were concurrently trading and building independent reputations in separate areas, it may have been the case that it was not the Respondents’ conduct that was misleading or deceptive at that later time.

For example, the Lalor DCO store opened in 2014, well after 26 May 2006. Both parties had advanced their own reputations by that time. What is the Court to conclude is the position of the competing parties in that particular area and at that particular time? It is to be recalled that since 26 May 2006 both businesses involved in this proceeding have increased their respective exposure to the relevant consumers by opening many new stores. There has been co-existence in the market place for approximately eight years prior to litigation commencing. Further, stores have opened in numerous locations, and Chemist Warehouse stores have opened in close proximity to existing DCO stores (as in the case of the Warrnambool store, for example).

In any event, his Honour considered that the DCO get-up sufficiently distinguished its stores from Chemist Warehouse stores that no misrepresentation was likely to arise.

The Full Court considered Middleton J’s analysis was “unremarkable” and no error was identified.

Verrocchi v Direct Chemist Outlet Pty Ltd [2016] FCAFC 104

Chemist Warehouse dismissed Read More »

The word yellow is descriptive of online directories

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

Telstra has lost its appeal in the “Yellow” case.

The Full Court upheld the trial judge’s conclusion that the word “yellow” lacked any capacity to distinguish print or online directories under (the old version of) s 41. However, the Full Court accepted that the word “yellow” had become sufficiently distinctive of Telstra by reason of use and promotion after the date of the application that it would have been registrable if it had had some inherent capacity to distinguish.

Following the High Court’s ruling in “Oro/Cinque Stelle“, the Full Court agreed with the trial judge that the word “yellow” signifies the colour yellow and the evidence showed that the colour yellow signified print and online directories. Consequently, the word itself was descriptive. At [117], in considering the ordinary signification of the word, the Full Court said:

We would say at the outset that it was appropriate for Telstra to proceed on the basis that capacity to distinguish could not be decided by reference to inherent adaption alone even if the Court accepted all of its arguments. The word yellow describes a colour and, even without evidence, it would be appropriate to infer that at least some other traders might wish to use that colour. Furthermore, there was at the very least evidence in this case of not infrequent use of the colour yellow in connection with print and online directories.

The Full Court then considered that the evidence of use by other traders in print and online directories confirmed that consumers did in fact consider the word “yellow” descriptive of such directories. Like the trial judge, the Full Court took into account the usage of traders overseas as well as within Australia, although it may have been to support the good faith of the local traders’ use.

Survey and acquired distinctiveness – s 41(5)

If the word “yellow” had had some capacity to distinguish print and online directories, the Full Court would have allowed Telstra’s appeal that it had become sufficiently distinctive under s 41(5) by use after application. A 2008 survey (not the 2007 survey relied on by the primary judge) showed that after several years of use including millions of dollars of expenditure on advertising, at least 12% of the survey respondents identified (associated?) the word “yellow” with Telstra’s directory unprompted. A further 4%, making 16% in total, had similar unprompted association.

The Full Court distinguished British Sugar and held that would be sufficient. (The report does not disclose the terms of the question that elicited those responses.) Arguably, makes a nice contrast to the Oro/Cinque Stelle case.

What about .com.au

In dismissing a second, cross-appeal in which yellowbook.com.au was found to be deceptively similar to Telstra’s Yellow Pages trade mark, the Full Court treated the domain name “accoutrement” .com.au as largely insignificant for the purposes of the deceptive similarity analysis.

The interesting point here is that the Full Court considered this may not always be the case. It was appropriate to disregard the element here in the context where the services were online directories and consumers were shown largely to disregard such elements.

The question of onus

The Full Court also seems to have resolved the ongoing disputes about the onus of proof. The Full Court held that the opponent has the onus of proving that a proposed trade mark has no inherent capacity to distinguish. It further held that that onus was on the balance of probabilities, not the practically certain standard which some courts at first instance have applied.

Telstra Corporation Limited v Phone Directories Company Australia Pty Ltd [2015] FCAFC 156 (Besanko, Jagot and Edelman JJ)

The word yellow is descriptive of online directories Read More »

Zima is a registrable trade mark

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

Mastronardi applied to register ZIMA as a trade mark in class 31 for tomatoes. The Registrar refused the application on the grounds that it was not inherently adapted to distinguish. Gordon J has now upheld Mastronardi’s appeal and directed the trade mark be registered.

Unknown

ZIMA sofar as anyone knows is an invented word; it has no meaning at all. Apparently, however, it is only ever used in relation to one “variety” of tomato. The Registrar refused the application on the basis that:

“the word ZIMA appears to be a reference to a single kind of tomato plant and its fruit” and that the trade mark “lacks any inherent adaptation to distinguish the Applicant’s tomatoes as it appears to be an appropriate description of the goods in respect of which it is to be used”.

As the trade mark had not been used in Australia before the date of the application to register it, therefore, it failed.

The question fell to be determined under the old form of s 41 (although it should be the same under the (it is hoped, more clearly expressed) new form. Thus, a sign is registrable as a trade mark if it is “inherently adapted to distinguish”. Both Mastronardi and the Registrar accepted on the appeal that, even under the old form of s 41, a sign is presumed to be inherently adapted to distinguish unless the Registrar (or the Court) is (positively) satisfied it is not.

A sign would not be inherently adapted to distinguish if other traders in such products would legitimately wish to use it to refer to those products even if they were not the applicant’s products. The issue turns on:

the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess – will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.[1]

Consequently, Gordon J explained there were two questions that needed to be addressed:

(1) how would ZIMA be understood as at 25 July 2011[2] by ordinary Australians seeing it for the first time used in respect of tomatoes; and

(2) how likely is it that other persons, trading in tomatoes and being actuated only by proper motives, will think of the word ZIMA and want to use it in connexion with tomatoes in any manner which would infringe a registered trade mark granted in respect of it?

As it was an wholly invented word, with no meaning, the answer to the first question was easy: it wouldn’t convey any meaning.

The Registrar argued on the second question that ZIMA was in fact, and was treated by other traders, as the name of a particular variety of tomato. The expert evidence before the Court, however, disclosed that “variety” in the context of tomatoes was a very rubbery (no pun intended?) term and, while there were a few varieties of tomato registered under the Plant Breeder’s Rights Act, thousands were not.

More directly, Mastronardi’s evidence was that it did not source its ZIMA brand tomatoes from just one variety. In Australia, there are apparently 50 different cultivars of orange grape tomatoes; Mastronardi used only six of these and only two were supplied to it exclusively. Moreover, when it launched its product in Australia, it had been very careful in its usages referring to its ZIMATM golden grape tomatoes or sweet orange grape tomatoes or golden snacking tomatoes.

So, it followed that other tomato suppliers had a range of terms they could use to describe their own sweet orange/golden grape tomatoes and, therefore, ZIMA was inherently distinctive.

Her Honour’s decision highlights the importance of careful use of trade marks, particularly if there is a risk the trade mark may become the commonly accepted term for a variety or type: the trade mark should be used as an adjective and not as a noun (or verb). This is a problem that practices in the pharmaceutical industry have had to grow up to develop – a different name for the active ingredient to the “brand” name[3] – but, as this case shows, of potentially much wider application.

It is also interesting that her Honour has directed that the trade mark be registered rather than accepted and advertised.[4]

Mastronardi Produce Ltd v Registrar of Trade Marks [2014] FCA 1021

  1. Kitto J in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 at 514.  ?
  2. The date of Mastronardi’s application to register its trade mark in Australia.  ?
  3. See also s. 25.  ?
  4. Which in some cases carries the risk of opposition.  ?

Zima is a registrable trade mark Read More »

Q1?

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

Mr Spagnuolo has been granted “special” leave to appeal to the Full Court from Reeves J’s dismissal of his opposition to Mantra registering Q1 for a range of accommodation, travel and holiday services.

Some background

Q1 is another one of those “iconic” high rise apartment buildings on the Gold Coast. Its 78 levels boast 526 residential apartments, a retail shopping plaza and a resort / conference complex.

In addition to operating the resort/conference part of the building under Q1 RESORT & SPA, Mantra also has arrangements for renting out 193 of the privately owned apartments.

Mr Spagnuolo owns two of the apartments himself and has arrangements to rent out a number of others’ apartments. He operates his rental business under the name Q1 Holidays Gold Coast and also holds the domain name q1holidaysgoldcoast.com.au.

Mantra’s predecessor applied to register 3 trade marks, Nos 1228706, 1228707 and 1228708 for a range of services in classes 36, 39, 35 and 43. (Not sure why they were in three different applications. has there been a change of practice about these things?)

The Registrar’s delegate had upheld Mr Spagnuolo’s opposition, but Reeves J overturned that decision on appeal.

Why?

While a party may appeal to the Court from the Registrar’s decision in an opposition proceedings as a matter of right, there is no automatic right of appeal from the Court’s decision at first instance. Leave is required: s 195(2).  It is fairly unusual for unsuccessful opponents to the registration of a trade mark to get leave to appeal to the Full Court.

One key factor in why Logan J granted leave was the legal point Mr Spagnuolo wants to run: he argues that Q1 is not inherently adapted to distinguish Mantra’s services as other people wanting to rent out their properties in the Q1 building will legitimately want to use Q1 too. That is, Mr Spagnuolo wishes to contend that Q1 is not inherently adapted to distinguish under s 41 because the Q1 building is not owned by one person. As a result of the disparate ownership of the properties comprising the Q1 building, therefore, Q1 may be the name of “a locality”.

According to Logan J and the parties, this question has not been the subject of judicial decision.

Another consideration was that there were conflicting decisions in the Office and at first instance, with the Registrar’s delegate allowing the opposition and Reeves J rejecting it.

After some rumblings about the potential for litigants with deep pockets to oppress those “not as well financially provided”, Logan J also pointed out that the parties had filed extensive evidence in the court proceedings, the benefit of which would be lost if Mr Spagnuolo was not permitted to appeal and was left to start revocation proceedings anew.

Finally, Logan J granted Mr Spagnuolo an extension of time in which to file his application for leave to appeal. Under the “old” Rules, an applicant for leave had 21 days to file the application. Under the new rules (in force since August 2011), however, applications for leave must be filed within 14 days. That wasn’t an obstacle in this case as Mr Spagnuolo’s advisers filed only 1 week late so there wasn’t really any special prejudice Mantra could point to.

Finally, Logan J granted a stay on Reeves J’s direction that the trade marks proceed to registration:

… Mantra IP has only briefly enjoyed the benefits of the judgment. Before then, its applications stood rejected. It was not greatly pressed, on its behalf, that there was any particular commercial harm that it would suffer beyond the obvious one of its position being unclear until there was a final judgment. It seems to me there would be much potential for mischief in the marketplace in the event that there were not a stay.

Spagnuolo v Mantra IP Pty Ltd [2012] FCA 1038

Q1? Read More »

Registering a trade mark in bad faith

1 Comment / Trade marks / / / , , , , , , ,

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.

Sports Warehouse successfully opposed Fry registering:

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:

  1. 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.
  2. 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.
  3. 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]:

  1. 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

Registering a trade mark in bad faith Read More »

Plant breeder’s rights in the EU

Leave a Comment / PBR / / / , , , , ,

The European Court of Justice has dismissed Ralf Schräder’s appeal from the rejection of its registration for plant breeder’s rights in plectranthus ornatus.

It would seem after detailed genetic testing, including travel to South Africa, the EU regulatory authorities have determined the variety the subject of the application is not distinct from a common South African plant.

IPKat has a good overview, with links to earlier stages in the dispute, here.

Case C?38/09 P Ralf Schräder v Community Plant Variety Office

Plant breeder’s rights in the EU Read More »