Community First Credit Union [2015] ATMO 108 (29 October 2015)

In March 2013, the Sydney-based credit union Community First Credit Union Limited (“the applicant”) filed Australian trade mark applications for the trade marks “Community First Mutual Bank” and “Community First Bank” in class 36, which covers financial and lending services. A credit union is a type of financial institution in Australia which does not function as a bank.

The applications originally encountered a problem with the Australian Trade Marks Office. The presence of the word “bank” in both trade mark applications automatically raises an objection under s42 (b) of the Trade Marks Act 1995 (Cth).  Certain words are restricted for use or registration under the Banking Act 1959 (Cth), and “bank” is foremost on that list of restricted words.

The objection will not be raised by the Australian Trade Marks Office if an applicant has consent from the Australian Prudential Regulation Authority (APRA). This approval is generally limited to Authorised Deposit-taking Institutions (ADI). Under section 66 and 66A of the Banking Act, read in conjunction with APRA’s 2006 Guidelines, the use of a number of terms is restricted to those institutions that are authorised by APRA to carry on banking business. These terms include the use of ‘bank’, ‘banker’, ‘banking’, ‘building society’, ‘credit union’, ‘credit society’, ‘authorised deposit-taking institution’ and ‘ADI’.

The public policy behind this is a sound one: banks operating in Australia are subject to significant regulation to preserve their financial integrity, and consumers should not be caused to think that a financial institution is a bank by reason of its branding, when in fact it is not.

This, however, has presented all sorts of problems for overseas banks wishing to protect their marks in Australia but which are not authorised by APRA to trade as banks in Australia, and also for businesses not involved in the banking sector but who wish to use the word “bank” in other ways – “CVBank”, “FoodBank”, and “ClauseBank” are all examples of trade mark applications which have not been permitted to proceed to registration.

Rather than seeking from the applicant a letter of consent issued by APRA, the examiner did not raise an objection after consulting the list of ADIs at APRA’s website and noting that the applicant was listed as an ADI. The applications were then accepted for registration.

However, the Australian Trade Marks Office, prompted by a “third party”, then wrote to the applicant proposing revocation of acceptance. This was on the grounds that the approach and practice in relation to ADIs and the “bank”-related marks is that credit unions cannot use the word “bank” within a trade mark, even if the credit union is classified as an ADI.

The outcome of a hearing on the issue before a delegate of the Trade Marks Registrar was that the applications should never have been accepted for registration.

But, importantly, APRA’s updated 2015 Guidelines gives the discretionary powers to grant consent to use the word “bank”, ”banker,” or “banking” on a case by case basis.

And in a late tactical manoeuvre, the applicant also produced a letter from APRA giving consent to the applicant’s use of the word “bank” in its trade marks.

Taking into account all of the circumstances, the Registrar’s delegate did not find any reasonable grounds to revoke acceptance.

More broadly, this decision and the new APRA guidelines are together very helpful to businesses wanting to register marks utilising the word “bank”: APRA is no longer in the position of automatically refusing consent to applications of that nature. Paragraphs 35 and 36 of the new Guidelines state:

Before applying to APRA for consent under section 66 of the Banking Act to use restricted words or expressions, applicants should consider whether such words or expressions will be used in relation to a financial business and, if so, whether the applicant is regulated as an ADI in Australia or overseas.Where it is clear that restricted words or expressions will not be used in relation to a financial business, APRA’s consent is not required. However, before ASIC can register a business or company name which includes a restricted word or expression, ASIC will require the applicant to provide a letter from APRA confirming that it is not a financial business.

With that, the word “bank” is, sensibly, now freed up for use within a trade mark by businesses wanting to use the word “bank” other than in relation to financial services.

Incidentally, the applications have been opposed by Bendigo and Adelaide Bank Limited (almost certainly the “third party” which prompted the revocation hearing), so it will be interesting to see if this is not the last time that this issue is considered by a delegate of the Trade Mark Registrar.