When registering a trade mark in Australia over a brand name or characteristic, registering a colour can be a stumbling block, and is often unsuccessful. Could it be that the next best thing is to protect the word mark for the colour? This paper looks at the novel course of action of registering a colour word mark, and the ultimately unlikely prospect of success.

Last week the Full Federal Court handed down its decision1 in the appeal by Sensis Pty Ltd and Telstra Corporation Ltd (Telstra) regarding their application (Application) to register the word mark YELLOW (YELLOW Mark).   The Full Court dismissed the appeal, upholding the primary Judge’s findings that the colour yellow is generally used by those in the trade and recognised to signify business directories. On this basis, Telstra’s YELLOW Mark was found to be incapable of distinguishing its goods and services from those of others.

This case highlights the need for brand owners to be consistent with the use of their trade marks and the importance of consumer awareness of that mark.  We look further below at the key points from this case.

Background

Federal Court Case: Phone Directories Company Australia Pty Ltd v Telstra Corporation Limited [2014] FCA 373

In April 2014, Murphy J of the Federal Court handed down his decision, concerning two appeals from decisions of the Delegate of the Registrar of trade marks in relation to two separate trade mark applications:

  1. Telstra's YELLOW Mark which had a filing date of 25 July 2003. The Yellow Mark was in respect of goods and services including print and online telephone directories and related goods and services.  It was opposed in two separate proceedings, by Emmanuel Khorey of Yellowbook.com.au Pty Ltd (Yellowbook) and Phone Directories Company Australia Pty Ltd (PDCA).  Both oppositions failed.
  2. Yellowbook's YELLOWBOOK.COM.AU word mark application which had a filing date of 1 October 2006 (YELLOWBOOK Mark).  The YELLOWBOOK Mark was in respect of an online business directory and related goods and services.  Telstra opposed the registration of the YELLOWBOOK Mark and was successful.

Yellowbook and PDCA appealed the YELLOW Mark decision (Yellow Appeals) and Yellowbook also appealed the YELLOWBOOK Mark decision (Yellowbook Appeal).  The Yellow Appeals were dealt with together.  Murphy J’s decision considered three grounds of opposition, under sections 41, 44 and 59 of the Trade Marks Act 1995 (Cth) (TM Act).

Yellow Appeals

s41 - capacity to distinguish

Murphy J considered that Yellowbook and PDCA had established that the YELLOW Mark had no inherent adaptability to distinguish Telstra's goods and services from those of other traders, who may also wish to use it without an improper motive.2  Murphy J took into account Yellowbook and PDCA's evidence demonstrating that prior to the filing date, the colour and word yellow were commonly used in respect of print and online business directories.

Telstra then bore the onus of proving that before the filing date, the YELLOW Mark did in fact distinguish the goods and services based on the extent of its use.3 Telstra led extensive evidence of use of the word “yellow” in respect of telephone directories. However, this was insufficient to show consumer recognition of ‘Yellow’ alone as the origin of the goods or services, as it had been used in composite marks such as YELLOW PAGES, HELLO YELLOW or in conjunction with a Walking Fingers logo device.4  Murphy J found that Telstra had not discharged its onus and the application failed.

His Honour also considered that Telstra would have failed to prove registrability5 of the YELLOW Mark, as it did not distinguish the designated goods and services, highlighting in particular Telstra's attempt to rebrand its goods and services as YELLOW in 2006 and its abandonment of this strategy in 2009 with its return to the YELLOW PAGES branding.

s44 - Deceptive similarity

Whilst it was not necessary to decide the matter, Murphy J considered that Yellowbook and PDCA had made out their opposition on the basis that the YELLOW Mark was deceptively similar to earlier registered trade marks 'The Yellow Envelope', 'Yellow Duck' and 'Yellow Zone' in respect of similar goods and services, finding that in each case 'Yellow', rather than the other term, was the essential feature of the mark.6

s59 - No Intention to Use

PDCA argued that Telstra did not intend to use the YELLOW Mark at the time it filed the application, pointing to the lack of internal meetings or discussions within Telstra about the filing.  PDCA was unsuccessful on this ground, as Court found that whilst there was a delay in Telstra using the YELLOW Mark, this was more a reflection of Telstra's indecisiveness, as opposed to an absence of intention to use the mark.

The Yellowbook Appeal

Telstra succeeded in making out its opposition against the Yellowbook Appeal to Telstra's registered YELLOW PAGES mark (YELLOW PAGES Mark).  Murphy J rejected Yellowbook's argument7 that its application for the YELLOWBOOK Mark was not deceptively similar to Telstra's YELLOW PAGES Mark finding that ‘pages’ and ‘book’ denote the same concept and that the domain suffix, ‘.com.au’ had little significance in determining whether the mark was likely to deceive or cause confusion. Furthermore, and contrary to Yellowbook’s contention, the distinctive feature of the YELLOW PAGES Mark and the YELLOWBOOK.COM.AU mark was held to be the word "YELLOW".

Full Federal Court Case

Summary: The Full Court dismissed the appeal by Telstra and Sensis, upholding the trial Judge’s findings in the Yellow Appeal that Telstra’s YELLOW Mark was incapable of distinguishing its goods and services from those of others. The Full Federal Court did however criticise a few aspects of Murphy J’s judgment with respect to his findings in relation to sections 41 and 44 of the TM Act.

s41 - Capacity to distinguish

Telstra argued that Murphy J had erred in his decision in respect of section 41(3) of the TM Act in finding that the colour and word "yellow" signified print and online directories, and that other traders might want to use the word "yellow."

Telstra argued that although Murphy J set out the meaning of the word "yellow", he did not consider its ordinary signification in relation to print and online directories. Telstra further contended that he did not analyse whether use of the colour in connection with print and online directories was to signify them as directories, rather than to catch the eye.

The Full Court rejected Sensis and Telstra's criticism, highlighting the relevant passage of the judgment:

"Prior to the Lodgement Date the public saw the colour yellow as synonymous with business directories (as per Mr Lee’s evidence), and yellow was seen by other traders as the standard colour for business directories (as per the evidence of Mr Moule, Mr Harvy and “Yellow – a timeline”)".8

The Court found that Murphy J had addressed the ordinary meaning of the word yellow and its significance in relation to print and online directories. On this basis, he had not fallen into the error identified by the High Court in the landmark case Cantarella Bros Pty Limited v Modena Trading Pty Limited [2014] HCA 48 (Cantarella) (see link: Cantarella Case).  His Honour had considered the ordinary meaning to those persons who would be concerned with the relevant goods or services in Australia in this case.

The Full Court made some minor criticisms with respect to Murphy J's reasoning in relation to section 41(3), but found that overall his Honour was correct to conclude that the YELLOW Mark had no inherent adaption to distinguish the designated goods and services.

Telstra also argued in relation to s41(5) of the TM Act that the primary Judge erred in finding little or no cogent evidence that consumers saw Telstra’s directories as originating from YELLOW, as distinct from YELLOW PAGES and that evidence had been overlooked in this respect, in particular, the 2008 TNS Report (a consumer survey report) directly relevant to the YELLOW Mark’s distinctiveness.  The Full Court agreed, finding that the 2008 report was of "sufficient significance" and the primary Judge ought to have addressed it.

s44 - Deceptive similarity

The Full Court, in considering the evidence before it in relation to the prior registered marks, upheld the reasoning of the Delegates and found that there "are clear phonetic and visual differences between the marks.  Furthermore, each of the cited marks conveys a different idea to the YELLOW trade mark".10  On this basis, the Full Court found that Murphy J had erred in upholding the opposition under section 44 of the TM Act.

Conclusion

Following the landmark decision in Cantarella, the Full Court has reaffirmed the approach taken to ordinary English words. In this case the word yellow described the colour, and the Full Court's view was that (even without evidence) it would be appropriate to infer that other traders may wish to use the colour for similar goods and services. This was coupled with evidence of actual use in connection with print and online directors by other traders.

This case also highlights the difficulties with descriptive marks and the high evidentiary burden required to support an argument as to descriptiveness, the onus of proof falling to an opponent of such marks.  As to burden of proof, the Full Court also confirmed the opponent need only establish on the balance of probabilities and need not show the trade mark should clearly not be registered.  Given the propensity for brands to continue to include descriptive marks, whether words or colours, as part of their branding armory, there are likely to follow more cases dealing with these issues as trade mark owners strive for protection of the illusive and perhaps valuable colour or other "descriptive" trade mark.