Beach J has ruled that Maurice Blackburn did not breach any of State Street Global’s rights in the Fearless Girl statue by arranging for a replica to be displayed at the launch of a campaign to address the gender pay gap.
In 2016, State Street had commissioned Kristen Visbal to create a life-size bronze statue which became known as “Fearless Girl” in connection with a campaign to promote State Street’s Gender Diversity Index exchange traded fund, known as the “SHE fund”.
The completed statue was installed and unveiled in Bowling Green Park on Wall Street, famously appearing to confront the Charging Bull statue. This had been a wildly successful campaign with, amongst other things, over 4.6 billion Twitter impressions (?) and a “mere” 745 million Instagram impressions (?) in the first 12 weeks!
In 2019, Maurice Blackburn and a number of corporate and super fund backers negotiated an agreement with Ms Visbal for a fee of USD250,000 permitting them to display a Fearless Girl replica in Federation Square Melbourne in connection with a campaign for Equal Pay Day.
false, misleading or deceptive conduct in trade and commerce contrary to the Australian Consumer Law and passing off;
trade mark infringement; and
All the claims failed.
Beach J’s reasons for judgment run for some 1191 paragraphs over 274 pages. So, more considered analysis will have to await a later day (or days).
The central issue seems to have been the very specific nature of State Street’s rights to control further reproductions of the work and the careful way Maurice Blackburn had used Fearless Girl.
The terms State Street and the artist had negotiated included a clause granting State Street the exclusive rights:
to display and distribute two-dimensional copies, and three-dimensional Artist-sanctioned copies, of the Artwork to promote (i) gender diversity issues in corporate governance and in the financial services sector, and (ii) SSGA and the products and services it offers. …. (emphasis supplied)
and Ms Visbal also agreed that no other party could be authorised to use “the Artwork” as a logo or brand ….
Beach J held that the way Maurice Blackburn had used Fearless Girl in connection with the Equal Pay Day campaign did not fall within the scope of State Street’s exclusive rights. It also was not use as a logo or brand. Michaela Whitbourn has a nice summary.
However, it looks like there will need to be a further hearing to determine whether, and if so, how Maurice Blackburn may use and display its Fearless Girl replica in the future.
Those of you out there with long(-ish) memories, might recall that that juxtaposition caused its own ‘moral rights’ controversy. Fearless Girl was later moved in April 2018 to its current position in front of the New York Stock Exchange. ?
Establishing an Indigenous Advisory Panel – providing a formalised Indigenous voice to IP Australia.
Measures for trade mark or designs using Indigenous Knowledge – changes to processes to ensure IK owners benefit from, or have consented to, the use of their IK as the basis for rights.
New requirements to declare the source of Indigenous Knowledge used in new innovations – make it easier to determine if IK has been used in a patent or plant breeder’s right, and encourage conversations about access and benefit sharing.
Labelling to promote authentic Indigenous Products – exploring interest in labelling schemes that distinguish authentic Aboriginal or Torres Strait Islander goods.
Topic 2, relating to trade marks and designs, notes that IP Australia may currently reject an application if the application uses “IK” which is secret or sacred; the name of a group or a nation where there is no connection to that group or nation or uses a an Aboriginal or Torres Strait Islander word which should be available for other business to use.
Noting the limitations in that range, the consultation paper seeks input on a range of issues including:
(a) whether people would have concerns providing a statutory declaration etc. as evidence to support an objection to an application;
(b) whether IP Australia should ask applicants whether they have consent to use the “IK”;
(c) the introduction of a check to assess whether an application would cause cultural offence to a community or communities;
(d) whether IP Australia should assess whether the the application involves a use of “IK” in a way which falsely suggests a connection to an Indigenous person, community or nation.
Other questions relate to tools for better identifying applications which involve the use of “IK”.
Topic 3 raises questions about whether patent applicants should be required to declare the source of (1) genetic resources and/or (2) traditional knowledge included in their applications or on which an application is based.
Additional questions relate to how such requirements would be implemented, enforced and, if not complied with, penalised.
The Overview page states that consultations close on 24 May 2021.
Mr Too Aussie’s video suggests the Big Jack is a special or limited time offer. However, Hungry Jack’s did file for and has obtained registration for “Big Jack” as a trade mark, No 2050899, for hamburgers etc. in classes 29 and 30, way back in November 2019. And Ben Butler at The Guardian reports McDonalds is also seeking revocation of that registration on the grounds the application was made in bad faith.
Someone’s suing Hungry Jack’s. They reckon Aussies are confusing the Big Jack with some American burger. But the Big Jack is clearly bigger ….
Hmmm. Earlier this year, Katzman J, in another case about burgers, explained:
What is the line between inspiration and appropriation? That is the question at the heart of the dispute in the present case.
That case didn’t turn out so well for the emulators.
As you will appreciate, McDonald’s have to get TM No. 2050899 cancelled in light of s 122(1)(e). Presumably, in addition to the “bad faith” allegation, McDonald’s is also asserting s 44 and s 60.
These provisions, like s 120, raise the question whether Big Jack is substantially identical with, or deceptively similar to, Big Mac.
You might think, even on the expanded and controversial test for “substantial identity” declared in Pham Global, the side by side comparison doesn’t work out in McDonald’s favour. Mac and Jack look and sound different and, you might think, convey rather different ideas.
What about deceptive similarity tested on the basis of imperfect recollection?
There couldn’t be too many Australians, especially of the fast food consuming public, who wouldn’t appreciate that Big Jack is gunning for Big Mac. But, is there a real and appreciable risk that a significant number of them would be caused at least to wonder whether there was some association with McDonald’s?
Also, you would have to think, all those ordinary Australians would know you can only get a Big Mac in a McDonald’s outlet.
You would probably have to think they pretty much know Hungry Jack’s is a direct competitor, which makes a point of being critical of McDonald’s.
Similarly, pretty much all those ordinary Australians winding up in a Hungry Jack’s take away could hardly be under any illusions that they were in Big Mac land?
Now, at 50(iii), French J did wholly orthodoxly say:
In considering whether there is a likelihood of deception or confusion all surrounding circumstances have to be taken into consideration. These include the circumstances in which the marks will be used, the circumstances in which the goods or services will be bought and sold and the character of the probable acquirers of the goods and services.
Does being in the shop count? Or is that violating the rule that you compare only the allegedly infringing trade mark to the registered trade mark?
What about billboards and the like? No shop context, probably a Hungry Jack’s logo – maybe not.
Also, you might think that “Big Mac” gets into the Woolworths territory of a household name and there could have lots of fun re-running the fight between Woolworths and Henschke.
What do you think?
Would things be any different if we had an anti-dilution law?
Maybe, at 50c to almost $1 more, the Big Jack will turn out to be a commercial flop and Hungry Jack’s will give up. I guess we’ll have to wait and see.
Trident Seafoods has failed to get Trident Foods’ registrations for TRIDENT removed for non-use, but only because Gleeson J exercised her Honour’s discretion against removal.
Trident Foods has had TRIDENT registered for fish and fish products in class 29 since 1973, TM No. 266,625 and, since 1983, for meat, fish, poultry and various extracts, preservatives and pickles, TM No. 400,953.
Trident Seafoods was founded in the USA in 1973. It is apparently the largest seafood distributor in North America. It uses and has registrations all round the world – except for Australia and New Zealand – the trade marks “Trident Seafoods” and a stylised logo incorporating those words. It has been marketing its products in Australia since 2007 under the trade mark “Bountiful”, but its attempt to register “Trident Seafoods” has been blocked by Trident Foods’ prior registrations. It brought an action under s 92(4)(b) to remove those blocking registrations on the grounds of non-use. The non-use period was 7 January 2011 to 7 January 2014.
There is a good chance you have, or have had, some TRIDENT condiments on your shelf, but here’s the thing. Since at least 2000, Trident Foods did not itself manufacture and sell TRIDENT branded products. The products were manufactured and sold by Manassen Foods Australia. Trident Foods claimed Manassen’s use was use as an authorised user. Gleeson J, however, rejected this claim but, as noted above, decided it was appropriate to exercise the discretion under s 101(3)not to order removal.
Manassen was not an authorised user
There was no written licence agreement between Trident Foods and Manassen until 3 November 2017.
In addition to that licensing arrangement, Trident Foods relied on the corporate relationship with Manassen, the involvement in their respective businesses of two common directors and Manassen’s compliance with the Bright Food Group’s quality assurance manual.
Trident Foods is a wholly owned subsidiary of Manassen (and both are members of the same corporate group, the ultimate holding company of which is Bright “Cayman Islands”). Nonetheless, Trident Foods relied on the essentially pragmatic approach applied by the Registrar:
There is nothing unusual in a large company such as Henry Schein, Inc and/or its predecessors (that is “the Company” as defined earlier) incorporating a wholly owned subsidiary in order to hold its worldwide trade mark (or, for that matter, patent or other IP right) portfolio. It is very common practice” because, inter alia, it efficiently streamlines processes for the prosecution and renewal of properties in the portfolio and it avoids the need to record name changes, mergers or assignments around the world should the parent company restructure or change names.
Gleeson J rejected this. Based on the Henschke v Rosemount and the Lodestar v Campari cases, her Honour held at  that “control” for the purposes of authorised use required “actual control” “as a matter of substance”.
The corporate relationship between Trident Foods and Manassen did not provide that. At [100(1)]: Gleeson J explained:
The corporate relationship between Trident Foods and Manassen does not place Trident Foods in a relationship of control over Manassen; rather, the converse is the case. The commonality of directors does not, without more, permit Trident Foods to exercise control over Manassen.
Trident Foods led evidence from a Ms Swanson, one of the two directors:
We have always maintained control over Manassen from the point of view of [Trident Foods’] as we have fiduciary obligations to act in the interest of [Trident Foods]. One of the things that has been considered, at least by me, since appointment as a director of Trident, is the quality and standard of the goods being sold under [Trident Foods’] trade mark registrations. As a director of Manassen, I appreciate the high standard of the goods that are sold by this company. As such, I have never had any cause for concern regarding the damage that could occur to the TRIDENT brand owned by [Trident Foods]. If there ever was a suggestion that poor quality goods were to be sold under [Trident Foods’] TRIDENT brand, I would be empowered and authorised to prevent such an occurrence.
Ms Swanson also gave evidence that Manassen had to comply with the Bright Food Group’s vendor quality management system (the VQM Manual) which was in place to maintain quality measures over all of the Group’s brands. In addition, she participated each month in meetings of Manassen’s “Innovation Council” which decided what products Manassen would sell, including “Trident” products, and were concerned with brand valuation and impairment to ensure that the brand was performing well and to avoid devaluation.
Gleeson J considered this was inadequate to establish actual control. Trident Seafoods argued that the directors would be in breach of their fiduciary duties to Manassen if they sought to exercise quality control over its operations on behalf of Trident Foods. Thankfully, Gleeson J did not accept this in terms. Rather, it seems Ms Swanson’s evidence was insufficient because it was at the level of assertion, without demonstrating examples of control being exercised by Trident Foods. At  points (2) – (6), her Honour explained:
(2) Ms Swanson’s evidence is in the nature of assertion. It does not include any particular illustration of conduct by Trident Foods amounting to actual control of the use of the “TRIDENT” trade mark.
(3) The fact that Ms Swanson considered it unnecessary to give directions, whether by reason of the existence of the VQM Manual or otherwise, is not relevant to the question of whether Manassen had obligations to Trident Foods in relation to the use of the “TRIDENT” trade mark.
(4) Any control that Ms Swanson might personally exercise by virtue of her membership of the Innovations Council (which was asserted but not demonstrated) does not prove control by Trident Foods.
(5) The identification of Trident Foods as trade mark owner on products supplied by Manassen does not prove use of the trade mark under the control of Trident Foods.
(6) Assuming that the VQM Manual is owned by Trident Foods jointly with other corporate entities in the Bright Group, Trident Seafoods did not demonstrate that the VQM Manual conferred any relevant control on Trident Foods over Manassen.
Finally, Gleeson J was not prepared to find there had in fact been an unwritten licence agreement in place as claimed in the recitals to the 2017 document. The claim was inconsistent with the evidence of how things had actually operated.
It is not possible to tell from the judgment what the contents of the VQM Manual were. One must wonder, however, whether much would really be gained by requiring the directors of Trident Foods to have met and formally adopted the relevant parts of the VQM Manual (assuming there were any) as the quality standards that Manassen needed to comply with and, further, to meet formally as directors of Trident Foods and approve changes to any applicable quality standards or even to meet at regular intervals to consider whether Manassen was complying with quality standards they had prescribed. Unless a subsidiary can never exercise control of its parent or a related body corporate that was not a subsidiary, nonetheless, it would seem that level of formalism is required.
Her Honour’s approach may be compared to that of Nicholas J in Dunlop v Goodyear at  and . Of course, in that case the trade mark was owned by the parent, not the subsidiary; there seem to have been numerous written agreements in place and some evidence of head office (i.e., the parent) issuing instructions about the business and the use of the trade marks in the business.
As already indicated, Gleeson J went on to exercise the discretion not to remove Trident Foods’ registrations. In what is already an overly long post, that and some other points of interest will have to await consideration another day.
As you know, under s 7(3), authorised use of a trade mark by a person is taken to be use of the trade mark by the registered owner. And, under s 8 a person is an authorised user of a trade mark if that person uses the trade mark under the control of the trade mark owner. Section 8(3) and (4) provide that “control” may be “quality control” or “financial control”, although s 8(5) does provide that s 8(3) and (4) do not limit the meaning of “under the control of”. ?
You may not be surprised to read that Perram J has found that CLIPSO is deceptively similar to CLIPSAL for electrical goods in class 9. This had the consequence that Clipso’s registration for “CLIPSO” was expunged from the Register and CLIPSO itself was found to infringe prospectively. Clipsal’s trade mark registration for the shape of its ‘dolly switch’, however, was not infringed by Clipso’s products.
A significant issue in the case was whether Clipso’s principal, a Mr Kader, was to be believed about how he came up with the mark. Perram J found he was not. Perhaps the most interesting feature of the case, however, is the market by which the issues fell to be assessed.
Some background facts
Clipsal has registered CLIPSAL as a trade mark in respect of all goods in class 9. While it and its predecessors claim to have been using the mark since the 1920s, the registration it relied on in this proceeding dates from 1989. It currently markets some 14,668 electrical products under the trade mark and, in 2011, its annual sales exceeded $500 million. Clipsal had some 77% of the market; its nearest competitors having only 11% each. Clipsal also has a shape mark registered for the shape of its dolly switch:
in respect of ‘electrical wiring accessories which incorporate a rocker switch … including dimmer switches….’
Mr Kader had been importing electrical accessories since about 2005. The CLIPSO mark came into use, however, in 2008 and Clipso achieved its registration in respect of a range of class 9 goods, principally electrical switches and the like, from October 2008.
The market by which deceptive similarity assessed
Many of Clipsal’s products, and most if not all Clipso’s, are what is known in the trade as ‘Bakelite’. These are (generally) plastic products such as switches, power points and other electrical products. A significant feature of these products is that by law they can be installed only by licensed electricians. Thus, a key plank of Clipso’s defence was the nature of its goods which, it said, were essentially bought by electrical wholesalers and electrical tradies, who were not confused by the two trade marks. CLIPSAL, it was argued, was so famous that no reasonable tradie would mistake CLIPSO for it.
Perram J began by noting trade mark authority had held that an infringer’s conduct fell to be assessed in light of its effect on ordinary purchasers of the products in suit. His Honour noted that misleading or deceptive conduct under the ACL fell to be assessed by reference to the ordinary and reasonable consumer. Acknowledging that other cases may lead to different conclusions, however, in the context of this case Perram J considered that Clipso’s conduct fell to be assessed under all heads according to its impact on the ordinary and reasonable consumer.
Perram J accepted that a large part of the market for Clipsal’s products were electrical wholesalers and electrical installers. For many people having a home or office built, the issue was whether there were light switches, their positioning and number. The actual purchasing decision was left to the builder or contractor. However, Perram J found that there was a (relatively small) but not insignificant section of the general public who were interested in such matters and did take into account the trade source of the products that were being installed in their building and so specified the products they wanted their contractors to install, non-purchasing end-consumers.
A key factor in his Honour’s conclusion on this point was the extent and length of Clipsal’s marketing efforts directed to the general public, not just the trade. In addition to the usual forms of advertising, this included a software program, Cipspec, which Clipsal installed in showrooms and its consultants used to work through with customers the placement and appearance of various CLIPSAL products. At  and  of his Honour’s reasons, Perram J accepted:
However, the evidence of these witnesses (the marketing director, Mr Quinn, a store manager of an electrical wholesaler, Mr Kalimnios and the electrical wholesaler, Mr Micholos) nevertheless persuades me that the applicants’ efforts in bringing end-consumers into the process as part of its supply chain strategy are likely to have had some success. The evidence of Mr Kalimnios and Mr Micholos (referred to later in these reasons) was attacked on the basis that the firm for which they worked, P&R Electrical, was not independent of the applicants. It is not surprising that an electrical wholesaler might have a substantive commercial relationship with the market leader in electrical accessories, but I would not describe such a relationship as lacking independence. In any event, I do not think that the evidence of either man was adversely affected by this matter.
One is left in the situation then that the only evidence of the success of the strategy of seeking to increase demand at the consumer end of the market is the existence of the strategy itself. Although I am prepared to accept that some end-consumers do indeed purchase switches and sockets themselves, I do not accept that generally these are the same people who are involved in, or the targets of, Mr Quinn’s supply chain strategy. As best I can surmise, they are instead a small group of people who decide to buy Bakelite products to have an electrician install them, or possibly even a smaller group of unlawful renegades who buy Bakelite products to install themselves.
His Honour was unable to quantify how significant the involvement of such end-users in the market was, but at  considered it was not de minimis:
… one is still left with little compelling evidence that any of the end-consumers targeted by the strategy exist beyond the strategy itself and the amount spent on it. I have no particular difficulty describing the strategy as plausible. One can well see that there are likely to be some people who care very much about what the light switches and sockets installed in their homes are to be, whilst there will be others who are benignly indifferent. Amongst the first class, it requires no great mental athleticism to see that their fascinations are likely to be with the Bakelite products at the premium end of the market. Can I infer from these observations that such a class exists and in numbers which are significant? I believe that I can and I do. The widespread fascination with home renovations in some quarters is reflected in the programming that appears on popular television every week. I do not believe that Mr Quinn’s strategy of creating demand and driving it back up the supply chain is some quixotic venture which is pointless. To the contrary, I am prepared to infer that a significant portion of persons building a new house or renovating an existing dwelling do care about which Bakelite products are used.
It was not necessary that these end-users be the people who actually bought the goods in question; it was sufficient that they gave instructions for them to be purchased such as through their contractors. The size of this segment of the market was sufficient to qualify as ‘substantial’. The relevant market, therefore, was a segmented one consisting of electrical contractors, electrical wholesalers and ‘non-purchasing’ end-consumers.
One consequence of this conclusion was that Perram J considered the parts of the market consisting of electrical contractors and wholesalers was a specialised market which would require expert evidence about the conduct and purchasing habits of people in those trade channels. That was not be the case for that part of the market comprised of end-users.
For that part of the market, Perram J went on to hold that CLIPSO was deceptively similar to CLIPSAL. Perram J considered that the two words shared the same root and had very similar pronunciation – the primary stress would fall on the first syllable and the final syllable of both words would be unstressed. There was also expert evidence that some people might perceive CLIPSO as an hypocristic” for CLIPSAL.
As noted above, Clipso argued that CLIPSAL was so well-known in the trade that there would be no confusion. Perram J rejected this on several grounds. First, in the context of s 44 resort could not be had to reputation except where the mark was so well-known as to be ubiquitous and, notwithstanding its market penetration, Perram J was not prepared to find CLIPSAL fell into that exceptional category. Secondly, as his Honour had already held, the market was not limited to those in the trade but also included ordinary (non-purchasing) consumers. Thirdly, there was in any event evidence from people in the trade (well, at least one) that, while they were not necessarily confused, they were caused to wonder whether there was some connection between the two trade marks. Consequently, CLIPSO was deceptively similar to CLIPSAL even for the segments of the market comprised of those in the trade.
These findings together with Perram J’s rejection of Mr Kader’s claims about how he chose the name CLIPSO meant that the CLIPSO registration was cancelled pursuant to s 44, s 60 and s62A.
Mr Kader had claimed that he chose the name while leafing through the list of goods in class 9 in the International Classification and noticing some references to “clips”. He also claimed that he knew very little if anything about CLIPSAL when he applied to register CLIPSO. Perram J found Mr Kader was lying about this based on a number of factors including the strength of Clipsal’s position in the market, Mr Kader’s involvement in the market for at least 3 years and, amongst other things, the fact that each day his trip to work involved passing a very large CLIPSAL hoarding.
As s 122(1)(e) provides a defence to trade mark infringement when the sign used is itself a registered trade mark and is being used in respect of the goods for which it is registered, Clipso could not in fact infringe until Perram J’s orders cancelling the registration of CLIPSO were effected on the Register. Therefore, injunctions only would be available.
However, Perram J did go on to find that Clipso’s use of CLIPSO also contravened the prohibitions on misleading or deceptive conduct under the ACL and passing off, but only insofar as the public consisted of (non-purchasing) end-consumers. As Perram J considered those actually engaged in the trade would not be misled or deceived, but only caused to wonder if there was a connection, there was no contravention in respect of those segments of the market.
Use of a shape trade mark
Perram J found that Clipso’s dolly switch very closely resembled Clipsal’s dolly switch which was depicted in its registered trade mark. Nonetheless, his Honour considered Clipso did not use its dolly switch as a trade mark. Perram J accepted that there were many shapes a dolly switch could take so that Clipso’s dolly switch was not dictated by function. Nonetheless, it was not used as a trade mark. At , his Honour explained:
Be that as it may, I still do not think that the first respondent was using the switch as a trade mark. Generally speaking, Clipso products were packaged in plastic sleeves emblazoned with the Clipso logo, and then placed in a cardboard box also emblazoned with the Clipso logo. There is no doubt that the word CLIPSO was being used as a badge of origin, which rather detracts from the idea that the switch located within the packaging could also have been operating as a badge of origin.
Perram J was not prepared to find that the shape of the dolly switch itself conveyed an association with Clipsal based on the sheer volume of sales of the product. This was so even though Clipsal’s packaging often included a statement that “The shape of this dolly switch is a trade mark of [Clipsal]”.
Perram J noted that there could be subtle differences also between passing off and the ACL, but it was sufficient to proceed in this case on the basis that the same test applied for both actions notwithstanding their different bases. ?
There were also end-consumers who actually bought the products themselves, but they were considered too small a segment to qualify as ‘substantial’. ?
Apparently, this refers to the practice, particularly prevalent amongst Australians, of modifying words colloquially to suggest familiarity such as “kiddo” for “kid”. ?
Bridling at  –  against even that scope for reputation permitted by Henscke. ?
The Full Federal Court has held that the licensor must actually exercise control over the licensee for a trade mark licence to be a valid licence.
The decision is part of a long running global battle between WILD TURKEY and WILD GEESE. The WILD TURKEY interests own and use WILD TURKEY around the world for bourbon whiskey; the WILD GEESE interests use, or want to use, WILD GEESE around the world for Irish whiskey. Instead of the usual battle about who was first to file and whether or not WILD TURKEY was confusingly similar to WILD GEESE or vice versa, there was an unusual twist in this fight: WILD TURKEY tried an end run, tacking on to a registration for WILD GEESE WINES.
A Mr O’Sullivan QC (and his partners) had established a winery in South Australia under the name WILD GEESE WINES (WGW) in 2000. In due course, WGW set out to register their trade mark. However, the WILD GEESE interests had already registered their trade mark in Australia for whiskey. It was cited against the WGW application and in 2005, WGW brought an application against the WILD GEESE interests’ registration to remove it for non-use. The WILD TURKEY interests had also brought a non-use action against the WILD GEESE interests’ registration.
Mr O’Sullivan (and partners) quickly came to the realisation that they did not to become embroiled in the intergalactic war being waged between WILD TURKEY and WILD GEESE whiskey. Instead, in 2007 WGW assigned its trade mark application and the benefit of its non-use application to the WILD TURKEY interests in return for an exclusive licence to use the trade mark in Australia for wine.
The non-use applications against the WILD GEESE interests’ trade mark was successful and the (now) WILD TURKEY interests registered the WILD GEESE WINES trade mark for wine and spirits that WGW had assigned to them.
In a case of sauce for the goose potentially being sauce also for the turkey, the WILD GEESE interests then brought an application to remove the WGW trade mark for non-use. The WILD TURKEY interests sought to defend that claim on the basis that the use of the trade mark by WGW was authorised use under the Act and so constituted use in the relevant period by the WILD TURKEY interests as registered owner sufficient to defeat the non-use application.
As the removal application by the WILD GEESE interests was filed on 27 September 2010, the three year period in which the WILD TURKEY interests had to show use as a trade mark in good faith ran from 27 August 2007 to 27 August 2010.
Unfortunately for the WILD TURKEY interests, there were a few wrinkles.
WGW produced a merlot under its trade mark in 2004. Due to adverse climate conditions, it did not produce another vintage until 2011. However, wine from the 2004 vintage was for sale (and was sold) in relatively small batches during the non-use period.
Mr O’Sullivan (and his partners) realised that a valid trade mark licence required that the licensee’s use be under the licensor’s control. To that end, Mr O’Sullivan proposed quality control ‘conditions’ for inclusion in the licence:
WGW’s wines had to be of sufficient quality to qualify for an export licence from the Australian Wine and Brandy Corporation;
WGW had to supply samples of their wine to the WILD TURKEY interests if requested to do so.
Notwithstanding this, the licence arrangements did not have any practical effect on WGW’s operations and the WILD TURKEY interests never requested samples until after the WILD GEESE interests brought their non-use application.
The Registrar upheld the removal application. On appeal, Perram J considered that the Full Court’s decision in Yau Entertainment bound him to find that the possibility of control being exercised was sufficient for a valid licence and so, very reluctantly, allowed WILD TURKEY’s appeal.
The Full Court’s decision
All five judges considered that Yau Entertainment did not rule that the potential for the exercise of control by the licensor was sufficient for authorised use under the Act.
Besanko J gave the leading judgment with which Allsop CJ and Nicholas J agreed.
After a detailed review of the legislative history and the case law, Besanko J concluded at  –  that “control” for the purposes of s 8 meant actual control. At :
The meaning of “under the control of” in s 8 is informed by the principle stated by Aickin J in Pioneer, that is to say, that the trade mark must indicate a connection in the course of trade with the registered owner. The connection may be slight, such as selection or quality control or control of the user in the sense in which a parent company controls a subsidiary. It is the connection which may be slight. Aickin J was not saying the selection or quality control or financial control which may be slight. I think the principle stated by Aickin J informs the meaning of “under the control of” ….
His Honour acknowledged at  that whether there was actual control was a question of fact and degree, but “there must be control as a matter of substance.”
His Honour recognised that this conclusion was different to the conclusion reached under the Trade Marks Act 1994 by the House of Lords in Scandecor. That however was because UK law had taken a different course under the influence of EU law. Similarly, the CJEU’s decision in Ideal-Standard was directed to a very different issue: exhaustion of rights.
WILD TURKEY did not actually exercise control
Besanko J went on to find that the WILD TURKEY interests did not actually exercise control over WGW’s use of the trade mark. Bearing in mind that it was a question of fact and degree, his Honour considered the most significant factor was that the licence arrangement had no practical effect on how WGW conducted itself.
The quality control provision in the Licence Agreement is that the wine be of a sufficient standard to obtain the approval for export of the AWBC. There was no evidence of the precise content of that standard. It was not an exacting standard as the approval rate shows (at  above). The primary judge considered that the standard involved no more than a rejection of what he called truly undrinkable wine (at ). It is plain that the standard had no effect on Mr O’Sullivan’s wine making practices. He was interested in making good to high quality wine. At no time during the relevant period did [WILD TURKEY] contact Mr O’Sullivan about the wine he was making or selling or both. There was never any request by [WILD TURKEY] for samples under cl 3.1 or for the product to be supplied to the Australian Wine Research Institute under cl 3.2. [WILD TURKEY] never asked Mr O’Sullivan for any information about the use of the trade marks or Mr O’Sullivan’s wine making operations generally. There was no monitoring by [WILD TURKEY] and nothing to suggest that [WILD TURKEY] took steps to ascertain whether the terms in cl 3 were being complied with. I do not think s 8(3) was satisfied by the existence of cl 3 in the Licence Agreement.
The conditions in the licence that WGW could use the trade mark only for wine it manufactured and only on wines sold in Australia were restrictions, but they were not restrictions that went to the quality of what was produced necessary to maintain the connection in the course of trade with the (putative) licensor. At , his Honour explained:
…. These are restrictions but not ones like controls on quality or manufacturing process which might suggest a connection between the registered owner and the use of the trade marks in connection with the provision or dealing with goods in the course of trade. There is no evidence that [WILD TURKEY] monitored or informed itself as to whether WGW was only selling Australian wine in Australia. These requirements do not give rise to control. WGW was not permitted to amend or abbreviate the trade marks or use them in a scandalous fashion. These provisions seem to me to be standard provisions to be expected in a licence agreement for trade marks. There is no evidence of monitoring by [WILD TURKEY] of these provisions and they do not amount to control within s 8. Finally, the provision about standard liability insurance and [WILD TURKEY]’ ability to terminate the Licence Agreement for a material breach is not sufficient to constitute control under s 8 of the Act.
Thus, the use by WGW was not authorised use and the registrations for WILD GEESE for wines should be removed for non-use.
Some other points
Nicholas J agreed with Besanko J’s reasons. Nicholas J also pointed out that the use which would defeat a non-use application under s 92 had to be use as a trade mark in good faith. His Honour considered that the failure by the WILD TURKEY interests to exercise actual control over WGW would be a factor disqualifying that use from being use in good faith. As this line of attack was not actually argued by the WILD GEESE interests, his Honour did not decide the case on this basis. nonetheless at , his Honour said:
However, in considering whether or not the registered owner has exercised sufficient control over another person’s use of a mark so as to defeat an attack on the grounds of non-use, it is important to recognise that the boundary between “use” and “use in good faith” by the registered owner cannot be defined by a bright line. This is because the question whether there has been any use by the registered owner may itself depend on whether the control it is said to have exercised was real or genuine control as opposed to something that was merely token or colourable.
Allsop CJ agreed with both Besanko J and Nicholas J.
Katzmann J also found that authorised use required the licensor actually to exercise control over the licensee. That had plainly not happened in this case. Her Honour did accept that the WILD TURKEY interests’ request for samples in 2011 (after the non-use period and after the WILD GEESE interests had filed their non-use application) could lead to ‘a “‘retrospectant’ circumstantial inference”’ that control was actually exercised. But the inference that control had not been exercised was also open and, as the WILD TURKEY interests had not shown the inference they contended for was more probable than not, they would still lose. Her Honour pointed out that the wine show medals that the WILD TURKEY interests relied on to support the good quality of the wines did not survive scrutiny. The judges’ comments at the wine shows included:
Very disappointing class with no highlights. From this class it would appear to be unsuited to the region. No wines showed any varietal character or even just brightness of fruit and character.
Perhaps more importantly, there was no evidence that the WILD TURKEY interests had any idea that WGW’s wines had won any medals or whether the wine was of good, bad or indifferent quality.
Greenwood J also concurred in the result, but was not prepared to condemn the licensing arrangements between the WILD TURKEY interests and WGW in the strong terms used by the trial judge.
So, if you are acting for a trade mark licensor, make sure that it actually exercises control over its licensee(s). And, at least when the control relied on is quality control, make sure the control goes to the quality of the goods or services provided under the licence. The use won’t be authorised use otherwise. In that case, the licensor won’t be able to rely on it to defeat a non-use application as in this case. Even if that is not a risk, there will also be the danger that use which is not authorised use may render the trade mark deceptive and liable to cancellation.
If you have a comment or a question, please feel free to post it in the comments section. Or, if you would prefer, email me.
I am going to try an experiment. With the rise of “week in review” style blogposts and your day job probably means you don’t have all day to watch Twitter streaming by, here is a selection of links to IP-related matters I found interesting this week:
The Court of Appeal has confirmed that the court’s general power to grant injunctions can be invoked by trade mark owners to get orders against ISPs to block internet access to website that have infringing content.
The interesting point (for Australians) is that, like Australia, UK law has a specific statutory power authorising injunctions against ISPs to block access only to websites that infringe copyright. There is no corresponding provision in the Trade Marks Act 1994 (UK). Instead, section 37(1) of the Senior Courts Act 1981 (previously the Supreme Court Act 1981) provides:
The High Court may by order (whether interlocutory or final) grant an injunction … in all cases in which it appears to be just and convenient to do so.
The main question the Court of Appeal’s decision raises for us is whether an Australian court might be persuaded to make similar orders against ISPs to block access to website which infringe trade marks (or other IP). Australian courts have powers to grant injunctions corresponding to s 37 of the Superior Courts Act.
On the other hand, Parliament has also only recently introduced the specific statutory provision in the context of copyright infringement and that provision is tightly focused for policy reasons against overseas websites which have infringement as their primary focus.
And, it appears that the Court of Appeal was heavily influenced by the obligations imposed on national law by art. 11 of the EU’s Enforcement Directive to require ISPs to take steps to stop infringing activity. That specific legislated obligation does not apply here. That there may be different philosophies at play may also be seen in what appears to be the different approach in the EU to the liability of market operators for infringing conduct by stall holders.
A second point emerging from a very quick skim of the 214 paragraphs is that Kitchin and Jackson LJJ held that the ISPs should be liable for the costs of implementing and maintaining the blocks. Briggs LJ dissented on this point insofar as it required the ISPs to bear the costs of complying (apart from designing and installing the software). As Jackson LJ pithily put it in agreeing with Kitchin LJ, that is “part of the price which the ISPs must pay for the immunities which they enjoy”. This may point up another difference in the legal environment: ISPs in the EU have assumed obligations to block access to websites such as those dealing in paedophilia. In addition, the safe harbours regime for ISPs applies generally, not just for copyright infringement as in Australia.
Finally, so far, there haven’t been any orders in the site blocking cases brought under s 115A yet.
If you have a comment or a question, please feel free to post it in the comments section. Or, if you would prefer, email me.
For England and Wales, not New South Wales, Victoria, Queensland or …. ?
Australian courts have corresponding powers: for example, s 23 of the Federal Court of Australia Act 1977 provides “The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate.” There are, of course, counterpart provisions in the Federal Circuit Court Act and the State Supreme Court Acts: see Victoria and NSW. ?
The Productivity Commission has released its draft report into Intellectual Property Arrangements.
You will be startled to learn that the Productivity Commission has discovered Australia is a net importer of intellectual property. We buy more IP from the rest of the world than we sell to it. Fig. 2 in the Report indicates Australian IP earned AUD1 villion from overseas, but we paid out about AUS4.5 billion for the use of their IP. The Productivity Commission then notes that we provide surprisingly strong IP protection for a country in our position. This finding guides the Productivity Commission’s recommendations which might broadly be characterised as: take the least restrictive option in terms of IP protection (where our international obligations permit).
The Productivity Commission explained its position this way:
Intellectual property (IP) arrangements need to balance the interests of rights holders with users. IP arrangements should:
• encourage investment in IP that would not otherwise occur;
• provide the minimum incentives necessary to encourage that investment;
• resist impeding follow-on innovation, competition and access to goods and services. (emphasis supplied)
So, for example, after much gnashing of economists’ teeth about the (let’s face it, indefensible) term of copyright protection, the Productivity Commission considers that the appropriate term of protection is somewhere between 15 and 25 years. However, what it actually recommends is rather more limited:
4.1: remove the current unlimited term of protection for published works.
5.2 repeal the remaining parallel import restrictions for books.
5.3 amend the Copyright Act 1968 to replace the current fair dealing exceptions with a broad exception for fair use.
The latter two, so far, have elicited the loudest complaints here and here. Meanwhile, the US’ Register of Copyrights is celebrating the first anniversary of her Fair Use Index.
18.1 expand the safe harbours to online service providers.
The Productivity Commission reports that there are 120,000 active patents registered in Australia. 93% of these have been granted to non-residents. There are also 25,000 – 30,000 applications each year; of which about 60% ultimately proceed to grant.
According to the Productivity Commission, however, there are too many granted patents which do not contribute social value and are not “additional” – in the sense that they would not have been made if there was no patent protection.
This needs to be remedied. However, the Productivity Commission acknowledges that international agreements put constraints on our freedom of action. There are 10 recommendations for patents.
The key recommendation for standard patents is yet another go at raising the threshold of inventive step.
an invention is taken to involve an inventive step if, having regard to the prior art base, it is not obvious to a person skilled in the relevant art.
This looks very similar to what we already have. As the Productivity Commission envisages matters, however, there are important differences. First, it reverses the onus currently expressed in s 7(2). According to the Productivity Commission, the current position is the opposite of where the onus lies in the USA, Japan, the EU and the UK (amongst others). Rather than a challenger having to prove the invention is obvious, therefore, the patentee will have to prove it is not.
Secondly, the Productivity Commission sees the current requirement that there be only a scintilla of invention being raised. The Productivity Commission sees this low threshold being reflected in the limitation on “obvious to try” being something which the skilled addressee would be directly led as a matter of course. Instead, the Productivity Commission considers that the test should be at least:
whether a course of action required to arrive at the invention or solution to the problem would have been obvious for a person skilled in the art to try with a reasonable expectation of success (as applied by the Boards of Appeal of the EPO).
This change would be buttressed with appropriate comments in the Explanatory Memorandum and, additionally, the insertion of an objects clause into the Act. The latter would be intended to ensure that the Courts focused on the social objectives of the Patents Act including, in particular, the public interest.
On the more colourful fronts, the Productivity Commission also recommended repeal of the abominationinnovation patent and amendment of s 18 explicitly to exclude from patentable subject matter business methods and software.
Pointing to analysis which estimates the net present value to R & D of the extension of term for a pharmaceutical patentat at year 10 at $370 million – of which only $7.5 million would accrue to Australia because our industry is so small – while the cost to the Australian government and consumers of the same extension of term is estimated at $1.4 billion, the Productivity Commission also wants a significant tightening up of the regime for extending the term of pharmaceutical patents. The Productivity Commission also opposes any extension of the period of data protection for therapeutic goods, including biologics.
The Productivity Commission also recommends exploring raising the renewal fees payable, particularly in later year’s of a patent’s life.
The Productivity Commission considers the registered design system deficient but, as we have committed to it internationally and there is no better alternative, we are stuck with it.
However, continuing the net importer theme, Australia should not go into the Hague system “until an evidence-based case is made, informed by a cost–benefit analysis.”
I’m just going to cut and paste here: the Government should:
restore the power for the trade mark registrar to apply mandatory disclaimers to trade mark applications, consistent with the recommendation of the Advisory Council on Intellectual Property in 2004 (the only people that won’t support this are in the place that counts – IP Australia)
repeal part 17 of the Trade Marks Act 1995 (Cth) (Trade Marks Act)
amend s. 43 of the Trade Marks Act so that the presumption of registrability does not apply to the registration of marks that could be misleading or confusing
amend the schedule of fees for trade mark registrations so that higher fees apply for marks that register in multiple classes and/or entire classes of goods and services.
require the Trade Marks Office to return to its previous practice of routinely challenging trade mark applications that contain contemporary geographical references (under s. 43 of the Trade Marks Act). Challenges would not extend where endorsements require goods and services to be produced in the area nominated
in conjunction with the Australian Securities and Investments Commission, link the Australian Trade Mark On-line Search System database with the business registration portal, including to ensure a warning if a registration may infringe an existing trade mark, and to allow for searches of disclaimers and endorsements.
Also, s 123 should be fixed up so that parallel importing does not infringe.
Like the rest of us, the Productivity Commission is bemused by the Circuits Layout Act and recommends implementing “without delay” ACIP’s 2010 recommendation to enable “essentially derived variety declarations to be made in respect of any [plant] variety.”
On competition policy, s 51(3) should be repealed and the ACCC should develop guidelines on the application of our antitrust rules to IP.
Innovatively, the Productivity Commission also recommends free access to all publications funded directly by Government (Commonwealth, State or Terriroty) or through university funding.
There are also at least 17 requests for further information.
If you are inspired to make a further submission, you should get it in before 3 June 2016.
Not much discussion here whether the best way to get more technological development is through a strong IP regime or to,scrap the IP system and fully commit to free riding. ?
Despite the tentative nature of this declaration, it is the first “Main key points”. ?
You will have to read Appendix D to find out how the Productivity Commission works out which patents are socially valuable and “additional”. ?
The EPO cases the Productivity Commission referred to are T 149/93 (Retinoids/Kligman) (1995) at 5.2 and T 1877/08 (Refrigerants/EI du Pont) (2010) at 3.8.3. ?
Here, the Productivity Commission notes that the Full Federal Court rejected reference to the public interest in Grant. ?
Dr Summerfield tells you why he thinks that’s a bad idea over here and of course, the Europeans (including the UK in that) do not have all sorts of complications carrying out their nice, clean exclusion. ?
In an interesting departure from its overarching premise that patents do not really contribute much to innovation because there are other protections such as lead time and trade secrets, the Productivity Commission warns that reliance on data secrecy is sub-optimal compared to patent protection. ?
Bearing in mind they have to submit their Final Report to Government by 18 August 2016. ?
In between buying your books from Amazon and Bookdepository, some references to the larger economic issues affecting booksellers here. ?