Best Trade Mark Cases 2017
Welcome to Shelston IP's round up of key trade mark cases in Australia and New Zealand for 2017
It was a little quiet on the trade mark scene in New Zealand in 2017 but there was plenty happening in Australia including some important Full Federal Court cases. See below for a quick snapshot of each case followed by a more detailed discussion.
Bauer Consumer Media Limited v Evergreen Television Pty Ltd  FCA 507
First Use Ownership Non-Use
The owner of a trade mark in Australia is generally the first person to use the trade mark in Australia in the course of trade for the relevant goods or services. If there has been no prior use, the first person to apply to register a trade mark will usually be the owner of the trade mark. This decision provides further clarity regarding ownership and authorship of trade marks and when first use is considered to have commenced. See page 4
GAIN Capital UK Limited v Citigroup Inc (No 4)  FCA 519
Confusion Reputation Similarity
A trade mark will generally be refused registration in Australia if there is a real, tangible danger that its use will confuse or deceive consumers because another similar trade mark already has a reputation in Australia. This decision provides an indication of the factors to be taken into account when assessing the similarity of trade marks, reputation and the likelihood of confusion. See page 6
Clipsal Australia Pty Ltd v Clipso Electrical Pty Ltd (No 3)  FCA 60
Market Defences Cancellation Bad faith TM no defence to ACL Personal liability
In this case, the Court considered the circumstances when a trade mark should be cancelled, examining the reasons for adoption of the trade mark. Having found that the mark was adopted in bad faith, the Court cancelled the trade mark and found in favour of the other party in relation to breach of the Australian Consumer Law and passing off. Importantly, personal liability was imposed on the company's sole director due to his close personal involvement with the running of the company. See page 8
Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd (No 3)  FCA 865
Deceptive similarity word/device marks Infringement ACL/Passing off Relevant class of consumer
This decision further highlights the difficulties that logo trade mark holders have in enforcing their trade mark against potentially infringing word marks. The case confirms that although registering a mark that contains a combination of features may protect the mark, it will not necessarily protect the
individual features separately. See page 11
Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd  FCAFC 56
Infringement Metatags Prior use elements not substantially affecting the identity of the mark
This case concerned use of a competitor's trade marks in various ways including on a website and in website metatags, email addresses, domain names, third party website listings, flyers and other marketing. The case provides some useful examples of logos which were not identical with the registered marks but whose additional elements were found not to substantially affect the identity
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of the trade mark. Therefore the logos constituted prior use of the relevant trade marks to support the infringement claims. Rather surprisingly in view of prior relevant decisions, the Full Federal Court has now ruled that use of a competitor's trade mark in a website's metatags can constitute trade mark infringement. This ruling is an important development. See page 14
Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd  FCAFC 83
Correct owner Validity Assignment Substantial Identity Reputation Deception or confusion
This Full Federal Court decision highlights the importance of ensuring that a trade mark application is filed in the name of the owner of the trade mark. It confirms that an application filed in the incorrect name is invalid and cannot be rectified by subsequently transferring ownership of the mark to the correct owner. This decision also provides guidance on the test for determining whether two marks are substantially identical and on how the reputation of a trade mark and the relevant class of consumers are to be assessed in determining the likelihood of deception or confusion arising from use of another mark. See page 17
Samuel Smith & Son Pty Ltd v Pernod Ricard Winemakers Pty Ltd  FCA 1515
Use as a trade mark Deceptive similarity Reputation Trade mark infringement
This late 2016 case provides guidance on the relevance of reputation in assessing the impression of a trade mark conveyed to consumers when determining deceptive similarity of a trade mark. The decision confirms that evidence of reputation might be relevant if it establishes that the mark, or an important element of it, is notoriously so ubiquitous and of such long standing that consumers must be taken to be familiar with it. The case also demonstrates that a sign may be used as a trade mark even if its use was intended to be purely descriptive, if the sign is unique or unconventional. See page 23
Moroccanoil Israel Ltd v Aldi Foods Pty Ltd  FCA 823
Infringement Deceptive Similarity Misleading Conduct Revocation Non-Use
This case provides useful guidance on the different factors that are taken into account when comparing trade marks for the purposes of assessing trade mark infringement and when comparing product branding and packaging for the purposes of assessing passing off and contraventions of the Australian Consumer Law. The decision also demonstrates that "natural" marketing claims for products that do not wholly or substantially contain natural ingredients and claims of performance benefits which cannot be properly substantiated are likely to contravene the Australian Consumer Law. See page 26
New Zealand Snapshots
Crocodile International Pte Limited v Lacoste  NZSC 14
Revocation Non-Use Discretion
The New Zealand Supreme Court has overturned the previous decision of the New Zealand Court of Appeal, revoking a trade mark registration for non-use where the trade mark owner had only used a mark that is conceptually similar to the registered trade mark. This decision has reversed the earlier decision which seemed to set the bar too low when it comes to relying on use of a similar trade mark to defend an application to revoke another trade mark for non-use. The Court also confirmed that there is no discretion to allow a trade mark to remain registered if it has not been used in a manner which satisfies the use requirements of the Trade Marks Act 2002 (NZ), despite such discretion being applied in the past. See page 30
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Bauing Discovers Downunder
Bauer Consumer Media Limited v Evergreen Television Pty Ltd  FCA 507
Evergreen Television Pty Ltd (Evergreen) is a producer of television programs. Bauer Consumer Media Limited and Bauer Media Pty Ltd (together Bauer) also produce television programs.
The Trade Mark
Evergreen applied to register DISCOVER DOWNUNDER (application number 1324177) in class 41 for "Production of television programs".
Background and Issues
Between 2000 and 2009, Warren Parrt was an employee of ACP Magazines Pty Ltd (ACP), a company which was later acquired by Bauer and is a part of the Nine Entertainment Co. group (Channel 9).
Warren's father, Colin Parrt, is the sole director of Evergreen. Evergreen asserted that both the trade mark and a television series relating to the trade mark were conceptualised in the late 1980's by Colin Parrt, but the idea did not gain traction until the early 2000's.
In 2004, at the request of Evergreen, Warren Parrt pitched the television series concept to ACP under the name "Caravan Australia". ACP declined the concept and Colin Parrt took his idea to rival network Channel Ten Pty Ltd (Channel 10). ACP expressed interest in attending the meeting with Channel 10 and Colin Parrt, alleging their attendance was predicated on the basis that ACP would own all rights to the series, including the title.
Following the meeting, email exchanges took place between Colin Parrt and Channel 10 discussing probable names for the show, eventually deciding on "Discover Downunder". Evergreen entered into a licence agreement with Channel 10 in 2005 to air the Discover Downunder show and provided this agreement as evidence of Evergreen's first use of the trade mark.
When the show first aired on 14 April 2005, Warren Parrt was credited as the series creator, resulting in some confusion for ACP and causing ACP to realise that it had no written agreement in place with Evergreen. Evergreen entered into a new licence agreement with Channel 9 to air the series from 2007 until early 2009. In early 2009, Warren Parrt was made redundant by ACP and Evergreen was fired by Channel 9 as the producer of the show.
Evergreen filed the trade mark application on 9 October 2009. Bauer opposed registration of the trade mark on the basis of section 58 of the Trade Marks Act 1995.
Under section 58, an application may be opposed on the basis that the applicant is not the owner of the trade mark (that is, someone else is the true owner). In Australian practice, the owner of a trade mark is generally the first person to author and use the trade mark. The core issue of this case was whether Bauer was able to establish that it had used Discover Downunder as a trade mark prior to Evergreen entering into the licence agreement with Channel 10 in 2005, which Evergreen relied on as evidence of its first use of the mark. Bauer argued that ACP used the trade mark during the promotion and production of the television series as early as 2004.
Decision by the Trade Marks Registrar
At first instance and based on the evidence provided, the Hearing Officer decided that, on balance, ACP was the least eligible candidate for authorship and therefore ownership of the trade mark. The likely author of the trade mark was either Evergreen or Evergreen and Channel 10 jointly in view of the 2004 email exchange.
The Hearing Officer noted that Bauer had failed to establish any earlier use, particularly in the form of written contracts, and instead relied heavily upon declaratory evidence by an employee, Keith Falconer. The Hearing Officer was not persuaded
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by the evidence put forward by Bauer, noting that there were a number of inconsistencies within the declaration.
As a result, the opposition was dismissed.
Bauer appealed to the Federal Court on the section 58 ownership issue. In addition, Bauer sought an order for removal of the trade mark under sections 92(4)(a) and (b) of the Act, on the basis that Evergreen had no intention in good faith to use the trade mark as at the application date and/or that Evergreen subsequently did not make genuine use of the trade mark for a consecutive period of 3 years. This application was made primarily with the intention of placing the onus of establishing genuine use of the trade mark on Evergreen.
The lengthy decision effectively boiled down to Justice Perry's view that Bauer was again unable provide any substantive evidence of use of the trade mark since before Evergreen's agreement with Channel 10. Consequently, Bauer failed in its appeal.
Justice Perry noted that in the matter of ownership of the trade mark, little weight could be placed on the declaratory evidence provided by Keith Falconer and the credibility of his statements without supporting evidence, especially given the period of time that had passed since the trade mark was developed and the effect that would have on any person's ability to accurately recall events. Given that Colin Parrt and Warren Parrt were able to provide substantive documentary evidence consistent with their position, Perry J considered that their recall of events was generally more reliable.
As a result, Perry J dismissed Bauer's appeal and upheld the Hearing Officer's original decision to dismiss Bauer's opposition to registration of the trade mark by Evergreen.
Given Justice Perry's views on ownership of the trade mark and acceptance of Evergreen's evidence regarding its prior use and intention to continue using the trade mark, Bauer's application for removal of the trade mark from the register was also dismissed.
This decision reiterates the importance of applying for registration of a trade mark as soon as practicable after its conception and keeping good records of the development and first use of the trade mark to confirm ownership if necessary. Doing so will limit the risk of a third party obtaining superior rights through first use of the trade mark or seeking to claim ownership by filing a trade mark application before you do.
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No Citi monopoly for Citigroup
GAIN Capital UK Limited v Citigroup Inc (No 4)  FCA 519
GAIN Capital UK Limited (Gain) is involved in the financial services sector, particularly in relation to derivatives and foreign exchange contracts. Citigroup, Inc (Citigroup) is, of course, part of the well-known multinational financial services group bearing that name.
The Trade Marks
Gain initially filed the following Australian trade mark applications:
Australian trade mark application number 1393370 in class 36 for "Financial services; providing general financial services advice for derivative and foreign exchange contracts" (the CITYINDEX Mark); and
Australian trade mark application number 1393371 in class 36 for "Financial services; providing general financial services advice for derivative and foreign exchange contracts" (the IFX Mark).
Background and Issues
Citigroup is the owner of a large number of Australian trade mark applications and registrations, the majority of which include the word "Citi" as a predominant feature (the Citi Marks). Citigroup has been registering Citi Marks since as early as 1998 and has been operating in the financial services sector in Australia since the 1960's.
Gain was established in the UK in 1983 under the parent company, City Index Limited. Gain commenced trading in Australia as CITY INDEX in early 2007, offering international foreign exchange services.
Citigroup opposed registration of the CITYINDEX Mark and the IFX Mark by Gain. Citigroup asserted that: (a) it had been using its Citi Marks since at least before 2007 in relation to products and financial services broadly, including foreign exchange services; and (b) because of the long standing reputation of the Citi Marks in the Australian market and the similarity between the Citi Marks and each of the CITYINDEX Mark and the IFX Mark, Gain should not be permitted to register the CITYINDEX Mark or the IFX Mark.
The Hearing Officer at IP Australia found that Citigroup had established a significant reputation in its earlier Citi Marks in Australia in relation to services similar to those covered by the CITYINDEX Mark and the IFX Mark. The Hearing Officer took the view that given the prior reputation in the Citi Marks and their similarity to the CITYINDEX Mark and IFX Mark, there was a real, tangible danger of consumers being deceived or confused into believing that the services provided under the marks originate from the same source. Accordingly, Citigroup was successful in its opposition and registration of the CITYINDEX Mark and the IFX Mark was refused.
Gain appealed to the Federal Court against the Hearing Officer's decision. The crucial question to be answered was whether there was a real, tangible danger of deception or confusion arising from the use and registration of the CITYINDEX Mark and the IFX Mark. In answering this question, the Court reiterated that it must not simply compare the marks side-by-side but must take into account all
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surrounding circumstances. These circumstances include not only visual and aural similarities between the marks, but the similarity of the services for which the trade marks are used.
To further distinguish its applications from the earlier Citi Marks, Gain sought to remove the potential overlap between its services and those provided by Citigroup by replacing the broad claim for "financial services" with the following more limited range of services: "Financial services, being trading services for retail, over the counter derivatives provided through a user online software program or provided electronically or via other communicative means" (the Amended Services).
When comparing the CITYINDEX Mark and the Citi Marks, Markov J noted that while "citi" and "city" are phonetically identical, the "city" element of the CITYINDEX Mark is simply a normal English word and is not in itself an essential feature of the mark. The word "index" however is unique to the CITYINDEX mark and does not appear in any of the Citi Marks. This assisted to distinguish the marks.
In the case of the IFX Mark, Citigroup relied upon its prior registrations of CITIFX and CITI INSTANTFX. Markov J found that unlike the CITYINDEX mark, the IFX Mark contains a dominant feature that "strikes the eye" and "fixes itself in the recollection", namely the IFX element. Again, this assisted to distinguish the IFX Mark from CITIFX and CITI INSTANTFX. The inclusion of the tagline "A City Index Company" in the IFX Mark also meant there were no aural similarities between the marks. In any case, Markov J was not satisfied that Citigroup had a significant reputation in its CITIFX or CITY INSTANTFX marks specifically and found that the services provided by Citigroup under those particular marks did not extend to the Amended Services offered by Gain.
Importantly, while it was accepted that Citigroup had a significant reputation in the word "Citi" alone, Markov J considered that a refusal to register the CITYINDEX Mark and IFX Mark on the basis of the Citi Marks would effectively grant Citigroup a monopoly over use of the common word "city" (as a prefix or suffix in combination with other words) for financial services.
Considering all of the above, Markov J concluded that there was no real, tangible danger of confusion arising from the registration and use of the CITYINDEX Mark and the IFX Mark by Gain for the Amended Services. As a result, the trade marks were allowed to progress to registration for the Amended Services.
A number of factors will be taken into account when determining if there is a real, tangible danger that the registration and use of a trade mark will confuse or deceive consumers because of the reputation of another trade mark. Even if there is a strong reputation associated with the earlier mark, there may not be a real risk of confusion if the earlier mark has not been used or acquired a substantial reputation specifically in connection with the goods or services covered by the applied for mark, or if the dominant and distinctive features of the applied for mark are not shared by the earlier mark.
The decision also suggests that the Court is understandably reluctant to reach a conclusion that will effectively grant a company a monopoly over the use of a generic word.
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Clipso and Kader Clipped by Clipsal
Clipsal Australia Pty Ltd v Clipso Electrical Pty Ltd (No 3)  FCA 60
Clipsal Australia Pty Ltd (Clipsal) is a large and well-known company selling electrical conduit fittings and other electrical products including switches under the brand name Clipsal since the 1920s. It was the overwhelmingly dominant supplier in the market. Mr Abdul Kader established Clipso Electrical Pty Ltd (Clipso) in 2008 and marketed various electrical products including switches under the name Clipso.
The Trade Marks
Clipsal was the holder of various trade marks for CLIPSAL but relied on a registration effective from March 1989 for all goods in class 9. Clipso obtained a registration for CLIPSO for a wide range of goods in class 9. Clipsal also held a shape trade mark registration for its "dolly switch" in class 9 for electrical wiring accessories incorporating certain types of switches as follows:
Background and Issues
Not surprisingly, Clipsal objected to Clipso's use of CLIPSO. Clipsal sought orders that the CLIPSO trade mark be cancelled on the grounds of substantial identity or deceptive similarity, bad faith and Clipsal's prior reputation in the Clipsal name. Clipsal also argued that Clipso and its director, Mr Kader, had engaged in misleading and deceptive
conduct in breach of the Australian Consumer Law (ACL) and passing off (seeking to trade on Clipsal's reputation and pass off its own goods as those of Clipsal). Finally, Clipsal argued that Clipso was infringing Clipsal's shape trade mark for the dolly switch.
Clipsal succeeded on most grounds but not for infringement of the dolly switch shape trade mark. While Clipso's dolly switch was very similar to the switch covered by Clipsal's shape trade mark, the Court held that Clipso had not used its switch as a trade mark given the extensive Clipso labelling applied to the packaging containing the Clipso switch.
Mr Kader's evidence
Mr Kader asserted that in adopting CLIPSO, he had very little awareness of CLIPSAL although he knew of the mark. His Honour rejected Mr Kader's assertions on the basis that Mr Kader had been importing electrical accessories since 2005 and must have been well aware of CLIPSAL given Clipsal's dominant position in the market. Accordingly, the judge found that Clipso deliberately adopted a very similar mark to CLIPSAL for the purpose of taking advantage of Clipsal's reputation in the market.
What is the relevant market?
The judge sought to identify the relevant market for the goods to decide whether: CLIPSO was deceptively similar to CLIPSAL for the purposes of section 44; whether use of CLIPSO would be likely to deceive or cause confusion for the purposes of section 60; whether use of CLIPSO was misleading or deceptive within the meaning of the ACL; and whether use of CLIPSO would confuse consumers for the purposes of the passing off action. It was the position of the ordinary, reasonable consumer in the relevant market which was to be considered.
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Clipso argued that the market was limited to specialist electrical contractors and wholesalers, all of whom would be very familiar with the Clipsal brand and would therefore not be deceived or confused into thinking that the Clipso brand was related. Clipso made this argument on the basis that most of the relevant products can only be installed by a qualified electrician.
Justice Perram spent some time considering the potential segments of the market. Evidence from Clipsal of its targeted marketing to end consumers (not just tradespersons) was important. Ultimately, for the primary CLIPSAL/CLIPSO element of the case, his Honour found that the market consisted of electrical contractors and wholesalers (making up the vast majority of the market) together with a much smaller (but not de minimis) number of direct end consumer purchasers and end consumers who directed or influenced their electrical contractors in relation to which products to use.
Trade mark infringement
In comparing CLIPSAL and CLIPSO, his Honour held that the marks were not substantially identical but easily concluded that they were deceptively similar given the visual, and even more significant aural, similarities. Thus use of CLIPSO infringed CLIPSAL and this conclusion applied to at least the end consumer segment of the market and possibly all segments. CLIPSAL was not considered to be so well-known as to negate any deception of those in the trade. However, Clipso had a defence to the infringement claim under section 122(1)(e). This section provides that use of a registered trade mark is a defence to an infringement claim. Of course, the defence only survives if the registration continues and falls away if the registration is cancelled. Clipso also sought to rely on the "use of own name" defence but this failed due to the lack of good faith by Clipso. Perram J granted injunctions against future infringement by Clipso.
Cancellation of the CLIPSO mark
An aggrieved party may seek cancellation of a trade mark on any of the grounds which could be used for an opposition to the trade mark at the time of application. In this case, Clipsal sought cancellation
of CLIPSO on various grounds including section 44 (substantially identical/deceptive similarity), section 60 (trade mark similar to a prior mark with a reputation) and section 62A (bad faith). Clipsal succeeded on all three grounds and registration of CLIPSO was cancelled.
Given the end consumer segments of the relevant markets and the similarity of the marks, Perram J had little difficulty in finding in favour of Clipsal under sections 44 and 60, rejecting Clipso's arguments that CLIPSAL was so well known as to remove any possibility of deception. Included in his Honour's reasoning was evidence from a linguistics expert that CLIPSO could be considered a hypocoristic or slang shortening of CLIPSAL (in the same way that "arvo" is a hypocoristic for the word afternoon).
Given his Honour's earlier findings in relation to the credibility of Mr Kader and Clipso's reasons for adopting CLIPSO, his Honour also found that the mark had been applied for in bad faith, in the hope of misleading consumers. Clipso's conduct was not in accordance with acceptable commercial standards.
Breach of ACL and passing off
Perram J found that Clipso's use of CLIPSO was a breach of the ACL and constituted passing off in respect of that segment of the market which comprised end consumers. However, there was no breach of the ACL or passing off in respect of the market segment comprising contractors and wholesalers. This segment was well aware of CLIPSAL and would not be mislead or confused by CLIPSO and would only be "caused to wonder" about a connection between Clipso and Clipsal.
It is important to note that liability for breach of the ACL and passing off attached to all conduct of Clipso since it first began using CLIPSO in 2008. In contrast, liability for the trade mark infringement claim in respect of CLIPSAL could only commence once the order for cancellation of CLIPSO was made by Perram J in 2017 (CLIPSO providing an infringement defence before that time pursuant to section 122(1)(e)).
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Personal liability of Mr Kader
In this case, Mr Kader was also sued personally by Clipsal for trade mark infringement and for passing off as a joint tortfeaser with Clipso, and for breach of the ACL as a person involved in the contravention of the ACL by Clipso. His Honour held that Mr Kader was personally liable given his close personal involvement with Clipso as the sole director and responsible for the establishment and day to day operation of Clipso.
This case is important in its analysis of the relevant market. Clipso would have been in a much better position had the market only consisted of specialist electrical contractors and wholesalers as these persons would perhaps have not been deceived or confused by the similarity of the CLIPSO mark. While CLIPSO provided a defence to trade mark infringement until it was cancelled, having that registration provided no defence to the ACL and passing off issues. Finally, for small companies where only a single director is involved, there is a real risk that engaging in questionable conduct will result in personal liability, removing the usual protection from personal liability offered by incorporation.
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Shape Shopfitters not in shape
Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd (No 3)  FCA 865
Shape Shopfitters Pty Ltd (SS) is the registered trade mark owner. Shape Australia Pty Ltd (Shape Australia) is the alleged infringer of the trade mark. This Federal Court judgment (Mortimer J) relates to claims made by SS that Shape Australia had engaged in the tort of passing off, misleading and deceptive conduct and had infringed its registered trade mark by using a deceptively similar trade mark in connection with the same services.
The Trade Marks
SS is the owner of Australian trade mark registration number 1731525 for the following logo:
(the Registered Mark). The Registered Mark was registered on 30 October 2015 in class 37 relating to, amongst other things, "shopfitting, construction and advisory services relating to constructions". Shape Australia had promoted its services under and by reference to the word `SHAPE' (the Word Mark) and to the following two marks:
(the Circle Mark)
(the Transparent Mark)
We will refer to the Word Mark, the Circle Mark and the Transparent Mark together as the Shape Australia Marks.
Background and Issues
On 2 July 2012, as part of a "re-branding" into a specialist shopfitting company, SS changed its name from Billings Long Constructions Pty Ltd to Shape Shopfitters Pty Ltd.
Shape Australia, a much bigger enterprise than SS, was incorporated a decade before SS and originally had three corporate names involving the acronym "ISIS". In 2015, a new corporate identity, "SHAPE Australia", was chosen by Shape Australia without knowledge of the existence of SS.
SS contended that as "SHAPE" was the essential eye-catching and memorable feature of the Registered Mark, by using this feature in the Shape Australia Marks, the hypothetical person of ordinary intelligence would wonder whether SS is a smaller specialist part or subsidiary of the Shape Australia group. SS therefore claimed that Shape Australia's conduct in using the Shape Australia Marks constituted trade mark infringement, passing off and contraventions of sections 18 and 29 of the Australian Consumer Law (ACL).
Shape Australia relied on the Full Court's decision in Crazy Ron's Communications Pty Ltd Mobileworld Communications Pty Ltd  FCAFC 196; 209 ALR 1; 61 IPR 212, submitting that the word SHAPE was not the only essential feature of the Registered Mark given that the Registered Mark is a device and not a word mark and is comprised of a number of elements all of which have to be taken into account in applying the established tests for the causes of action.
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Contraventions of the ACL
Justice Mortimer initially had to identify to whom the impugned conduct or representation was directed and agreed with SS that this requires a broad construction of the relevant market. SS correctly classified the relevant market as including participants in the commercial construction industry who were affected by or exposed to Shape Australia's conduct in the promotion, provision and sale of commercial services. This included buyers and clients, third party trade subcontractors and providers of other services such as design and architectural services. Her Honour held that there was no reason in principle to confine the class to "consumers" or "purchases" as submitted by Shape Australia as the point of s 18 is to prohibit conduct which misleads or deceives, or is likely to do so and provides protection to all people dealing with Shape Australia.
The broader construction of the relevant class of persons was important to SS' case in demonstrating overlap between the business activities of the parties which provides the occasion or opportunity for the relevant deception amongst that class. While SS could only provide limited evidence of overlapping customers between the two parties, it could establish an overlap between subcontractors who had worked for both parties.
Despite this market overlap, Mortimer J held that there was no real, practical risk that the relevant class would be misled or deceived. Her Honour held that the businesses were simply too different and operated in different areas, with SS being far more specialised and more geographically contained. Although SS submitted evidence demonstrating subcontractors who had sent invoices and other communications erroneously to Shape Australia, the Judge held that this simply demonstrates confusion. Here, her Honour drew a distinction between confusion and deception. Although there was clear evidence of actual confusion, SS failed to establish that the subcontractors were deceived into believing that SS formed part of or was linked in any way to Shape Australia.
Additionally, Justice Mortimer also considered evidence as to the nature of each party's clients. Clients were engaged by Shape Australia and SS over long periods of time, and often repetitively. In particular, a majority of SS' work was obtained through personal contracts and existing business relationships. Additionally, her Honour accepted Shape Australia's evidence demonstrating that there were a number of other entities using the word `SHAPE' in their corporate names. Therefore, clients would be both familiar with Shape Australia or SS and as industry specialists, would appreciate that many unrelated "SHAPE" entities co-exist.
SS therefore did not discharge its burden of proving a contravention of s18 or s29 (which was dependent on the success of the s18 claim).
In assessing the elements of the tort, namely reputation, misrepresentation and damage, Justice Mortimer held that Shape Australia's conduct did not threaten or damage or otherwise adversely affect the reputation and goodwill of SS. However, her Honour confirmed that the absence of proof of actual damage does not preclude the claim in passing off from succeeding. Nonetheless, the passing off allegations failed for want of the necessary misrepresentation.
Trade Mark Infringement
Mortimer J dealt with the trade mark infringement aspect of this case relatively quickly. Although she stated that a claim for trade mark infringement can be successful even though a claim under the ACL and passing off is not made out, her Honour held that SS had failed to establish that the Shape Australia Marks are deceptively similar to the Registered Mark.
Shape Australia submitted that the difference in colour between the Registered Marks and the Shape Australia Marks could preclude a finding of infringement. However, due to the imperfect recollection of the marks to the reasonable person of ordinary intelligence, Mortimer J was not required to express an opinion on Shape Australia's submission regarding the difference in colour.
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Ultimately, her Honour considered that the reasonable person of ordinary intelligence and memory recalling SS' mark would recall the word "SHAPE" in capital letters in conjunction with the word "shopfitters" due to the alliterative effect between the two words. She also considered the bottle cap border of the Registered Mark as a distinctive feature and likely to be recalled. These features do not appear in the Circle Mark or Transparent Mark notwithstanding the use of capitalized letters in the word "SHAPE", the central placement of the word inside a circle and the circle itself. Additionally, the Word Mark used the capitalized word "SHAPE" in conjunction with other words and did not include the word `shopfitters'.
Accordingly, a reasonable industry participant of ordinary intelligence and memory would not be caused to wonder whether Shape Australia's services and business come from the same source as SS.
In the decision, Mortimer J also considered that as the word `SHAPE' is used in the ordinary course of the English language, SS should not be entitled to an outcome that would provide SS with a statutory monopoly over the word.
This case reinforces the decision in Crazy Ron's and many other cases, demonstrating that registering logo marks will protect the mark as whole but will not necessarily protect the individual features separately, particularly ordinary English words. Accordingly, since it is difficult to establish misleading and deceptive conduct and passing off claims, as demonstrated by Justice Mortimer's reasoning, the case highlights the importance of seeking registration of both logo and word trade marks (as applicable) when establishing a new business or rebranding an old business.
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Lights out for Liv
Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd  FCAFC 56
Accor Australia & New Zealand Hospitality Pty Ltd (Accor) was appointed by Cairns Harbour Lights Pty Ltd (CHL) to be the exclusive provider of onsite letting services for the Cairns Harbour Lights complex built by CHL. Accor initiated action against Liv Pty Ltd (Liv) alleging trade mark infringement and misleading and deceptive conduct by Liv in the course of undertaking a letting service in respect of the Cairns Harbour Lights complex. The judgment of the full Federal Court (Greenwood, Besanko and Katzmann JJ) relates to an appeal by Accor from the first instance Federal Court decision of Rangiah J. Rangiah J found substantially in favour of Liv in relation to the various trade mark infringement and misleading and deceptive conduct claims. Liv crossappealed to the Full Federal Court in relation to the trade mark infringement findings of Rangiah J.
The Trade Marks
CHL was the owner of the trade marks HARBOUR LIGHTS and CAIRNS HARBOUR LIGHTS, applied for in January and April 2009 respectively. The trade marks were registered in classes 36 and 43 and covered "agency services for the leasing of property, accommodation, letting agency services and similar". Accor was CHL's exclusive licensee in respect of those trade marks.
Background and Issues
Initially, Accor used the name Sebel Harbour Lights to operate the letting business in respect of the Cairns Harbour Lights complex but from early 2009 it used the name Cairns Harbour Lights. CHL registered the domain names harbourlights.com. au and cairnsharbourlights.com in January 2004. These domains were linked to CHL's website but that website only related to apartment sales not apartment leasing or rental. Importantly, Accor also used the following logos in printed advertisements published in 2005:
Elise Bradnam bought an apartment in Cairns Harbour Lights complex in 2005. She operated a business called Harbour Lights Property Management and Sales under which she managed the leasing of various apartments in the Cairns Harbour Lights complex including her own. She registered the domain names cairnsharbourlights. com.au, harbourlightscairns.com.au and harbourlightscairns.com with those domain names pointing to her website which became operational on 31 October 2006. In September 2009, Ms Bradnam sold her leasing management business to Liv. Liv traded under the business name Cairns Luxury Apartments. As part of the sale, Liv acquired harbourlightscairns.com from Ms Bradnam. Ms Bradnam retained cairnshabourlights.com.au and harbourlightscairns.com.au but both these domains pointed to Liv's website.
In operating its apartment letting services business, Liv used the Cairns Harbour Lights and Harbour Lights names in various ways including on the Liv websites and in the domain names, Google advertisements, email addresses, invoices, booking confirmations, flyers, signs, listings on third party accommodation websites and in the metatags for the cairnsluxuryapartments.com.au website (also operated by Liv).
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Decision of the Federal Court (single judge)
At first instance, Rangiah J held that CHL's Cairns Harbour Lights trade mark registration was nondistinctive and therefore invalid. The HARBOUR LIGHTS registration was found to be distinctive. However, due to prior use by Ms Bradnam/Liv, the registration was valid for only certain services. As a result of these conclusions, Accor's trade mark infringement claims were dismissed. Rangiah J found various instances of misleading and deceptive conduct by Liv relating to the use of the Cairns Harbour Lights and Harbour Lights names. Both parties appealed the unfavourable aspects of the verdict.
The decision of the Full Federal Court
The Full Federal Court disagreed with Rangiah J in respect of the CAIRNS HARBOUR LIGHTS trade mark and found it to be sufficiently distinctive to be registrable. The Full Court also disagreed with Justice Rangiah's decision that the HARBOUR LIGHTS trade mark was partially invalid, finding that CHL could rely on its prior use of the trade mark in the 2005 published advertisements to support the registration in all classes. While Rangiah J had held that the 2005 advertisements did not amount to use of the HARBOUR LIGHTS trade mark, the Full Court found that the additional elements in the 2005 advertisements did not substantially affect the identity of the trade mark and thus constituted use of the trade mark which was prior to the use by Ms Bradnam/Liv. Accordingly, Liv was found to have infringed both trade marks by its conduct.
Most importantly, the Full Court agreed with Rangiah J that one of Liv's uses of Harbour Lights, being use in the metatags for its cairnsluxuryapartments.com.au website, was use as a trade mark and therefore infringed CHL's HARBOUR LIGHTS trade mark. This finding is the most significant element of the case and is worth further elaboration. All websites contain source code which sits behind the websites and determines the content, structure and layout of the website. It is common to insert into the source code so called metatags which are not visible on
the website but which can be viewed by a user who knows how to find the source code. It is not difficult to find the source code for a website but few users bother to access it. Metatags are generally used to enhance search engine rankings for the website with a view to delivering users searching for the particular term to the website. In this case, there were two relevant sections of text in the source code for Liv's website as follows:
"Cairns Luxury Accommodation Waterfront Accommodation Harbour Lights Cairns Queensland"; and
"Content: equals Harbour Lights Apartments in Cairns offer luxury private waterfront apartment accommodation for holiday letting and short term rental".
At first instance, Rangiah J found the reference to Harbour Lights in the first bullet above to be entirely descriptive and therefore there was no trade mark infringement. However, he found that "Harbour Lights Apartments" was use as a business name constituting a badge of origin and therefore trade mark use.
The Full Court agreed with these conclusions. This result is surprising for two reasons as follows:
The earlier case of Complete Technology Integrations Pty Ltd v Green Energy Management Solutions Pty Ltd  FCA 1319 found that metatags are invisible to the ordinary internet user, and once at the relevant website, the user will be aware that the website is operated by the relevant person. Accordingly, use in a metatag of a registered trade mark is not use which indicates the origin of the services and so metatag use is not use as a trade mark. As the Accor decision is a Full Federal Court decision it effectively overturns this reasoning. Note also that the New Zealand Court of Appeal in Tasman Insulation NZ Ltd v Knauf Insulation Ltd  NZCA 602 found that website source code and embedded metatags could not infringe a registered trade mark. In that case the relevant trade mark was BATTS. The appearance of BATTS amongst an extensive source code made the reference "random and essentially meaningless".
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In the case of VEDA Advantage Ltd v Malouf Group Enterprises Pty Ltd  FCA 255, Justice Katzmann (surprisingly also part of the Full Federal Court in the Accor decision) held that purchase of Google AdWords consisting of trade marks of competitors did not constitute trade mark infringement. This conclusion was reached on the basis that the Google AdWords are not visible to the public and therefore cannot be use as a trade mark. It is perhaps surprising that Justice Katzmann was comfortable to reach this conclusion in relation to Google AdWords but was a party to a Full Court Decision reaching an opposite conclusion in the case of metatags in the source code for a website. Perhaps the difference lies in the fact that the source code is visible to end users if they bothered to look for it. In practice, no one does.
While perplexing in view of the VEDA Advantage case relating to Goods AdWords, the Full Federal Court has now ruled clearly that use of a competitor's trade mark in a metatag is trade mark infringement where that use is as a badge of origin and not merely descriptive. As a result, any use of a competitor's trade mark, whether in the source code (metatags) or in the text of the website itself must be undertaken very carefully. It may also be unwise to rely on the single judge decision in the VEDA Advantage case above in relation to use of Google AdWords, particularly given that this same judge was part of the Full Federal Court in the Accor decision. While VEDA Advantage represents the current state of the law in relation to Google AdWords, a future Full Federal Court may over-rule it, applying the reasoning from the Accor decision on metatags.
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An Insight into trade mark ownership
Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd  FCAFC 83
Insight Clinical Imaging Pty Ltd (ICI) is the registered trade mark owner. Pham Global Pty Ltd (Pham Global), formerly named Insight Radiology Pty Ltd (IR), is the alleged infringer of the trade marks. As at the date of the proceedings, IR/Pham Global was also the named applicant for a trade mark application opposed by ICI. The opposed application was initially filed in the name of Alan Pham (Mr Pham), who is the sole director of Pham Global but was subsequently assigned to IR/ Pham Global.
This Full Federal Court judgment (Greenwood, Jagot and Beach JJ) relates to an appeal by IR/ Pham Global against the primary judge's decision to uphold ICI's opposition and the subsequent refusal to register IR/Pham Global's trade mark and finding that IR/Pham Global had infringed ICI's trade marks and engaged in misleading and deceptive conduct and passing off.
For simplicity and to minimise confusion with ICI (the other party), we use "Pham Global" below to refer to Pham Global or IR, regardless of which company name applied to the entity at the relevant time.
The Trade Marks
ICI is the owner of Australian trade mark registration numbers 1517780 for "InSight Clinical Imaging" (the ICI Word Mark) and 1517779 for the following logo:
(the ICI Composite Mark).
The ICI Word Mark and ICI Composite Mark are both registered in class 44 for "radiology services" and have a priority date of 10 October 2012.
As at the date of the proceedings, Pham Global was the applicant for Australian trade mark application number 1463912 for the following logo:
(the IR Mark).
The application for registration of the IR Mark (the IR Mark Application) was filed on 7 December 2011 in class 44 for "radiology services".
Background and Issues
ICI has been using the ICI Composite Mark, the ICI Word Mark and "INSIGHT" in connection with providing radiology services in Western Australia since 2008.
Pham Global has been providing radiology and medical imaging services in New South Wales since 2004 and in Tasmania since 2012. Pham Global first used the IR Mark for such services in March 2012.
The IR Mark Application was initially filed by and in the name of Mr Pham. The application included a voluntary endorsement that registration did not confer any exclusive right to use the words INSIGHT RADIOLOGY in Western Australia.
ICI opposed the IR Mark Application on various grounds including on the grounds that Mr Pham was not the owner of the IR Mark (section 58 of the Act) and that use of the IR Mark would be likely to deceive or cause confusion because of the reputation already associated with the ICI Word Mark and ICI Composite Mark in Australia before the priority date of the IR Mark Application (section 60 of the Act).
Under common law, trade mark ownership arises from either: (a) authorship and first use of the mark; or (b) authorship, filing an application for
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registration of the mark and a genuine intention to use the mark. Section 27(1) of the Act further provides that a person is entitled to apply for registration of a trade mark only if the person claims to be the owner of the trade mark and the person: (a) is using or intends to use the trade mark; (b) has authorised or intends to authorise another person to use the trade mark; or (c) intends to assign the trade mark to a body corporate that is about to be constituted.
The section 58 ground of opposition could be established if: (a) Mr Pham was not the owner of the IR Mark because he did not satisfy the common law requirements for ownership or the requirements of section 27(1); and/or (b) ICI was the true owner of the IR Mark because ICI was the first user of a mark substantially identical to the IR Mark for radiology services.
Neither Mr Pham nor Pham Global used the IR Mark before filing the IR Mark Application. Only Pham Global used the IR Mark after the IR Mark Application was filed.
Mr Pham assigned the IR Mark to Pham Global during the opposition proceedings, after ICI had notified Mr Pham that ICI was relying on section 58 as a ground of opposition.
The Registrar of Trade Marks decided the opposition in favour of ICI and refused to register the IR Mark, primarily on the basis that Pham Global was not the owner of the IR Mark because ICI had prior use of a substantially identical mark, being the ICI Composite Mark.
Pham Global appealed the Registrar's decision in the opposition to the Federal Court.
ICI commenced proceedings against Pham Global in the Federal Court for infringement of the ICI Word Mark and ICI Composite Mark, contravention of sections 18 and 29(1)(g) of the Australian Consumer Law (ACL) and passing off. Pham Global cross-claimed by seeking cancellation of the ICI Word Mark and ICI Composite Mark on the basis that those marks should not have been registered at all or at least without an endorsement limiting their use to outside of New South Wales and Tasmania.
Pham Global's appeal from the opposition decision and ICI's infringement case were heard together given the overlap in issues. Some of the key issues for the Court were:
1.Ownership of the IR Mark whether Mr Pham was the owner of the IR Mark and therefore entitled to file the IR Mark Application and, if not, whether the assignment of the IR Mark to IR cured any defect arising from the fact that the IR Mark Application was not filed by the owner of the IR Mark;
2.Substantial identity whether the IR Mark was substantially identical to the ICI Composite Mark for the purposes of the section 58 ground of opposition and trade mark infringement; and
3.Reputation whether ICI had a sufficient reputation in its ICI Word Mark and ICI Composite Mark in Australia to support its section 60 ground of opposition and its ACL and passing off claims.
Decision of the Federal Court (single judge)
At first instance, Davies J dismissed Pham Global's appeal against the Registrar's decision to refuse registration of the IR Mark and also dismissed Pham Global's cross-claim for cancellation of the ICI Word Mark and ICI Composite Mark. Justice Davies also held that use of the IR Mark infringed the ICI Word Mark and ICI Composite Mark, constituted conduct likely to mislead or deceive in contravention of the ACL and amounted to Pham Global passing off its services as those of or associated with ICI.
Justice Davies agreed that ICI had established its ground of opposition under section 60, but held that ICI should not have succeeded with its section 58 ground.
In considering the section 58 ground of opposition, Davies J held that Mr Pham was not the owner of the IR Mark at the time of filing the IR Mark Application because Mr Pham was not the author of the IR Mark and did not have the intention to use the IR Mark in his personal capacity as at the application date. To the contrary, the evidence supported the view that Pham Global was the correct owner of the IR Mark. This is because the evidence showed that Pham Global was the author and first user of the IR Mark, that the intention was always for Pham Global to be the user of the IR Mark and that Mr Pham did not take any steps in his personal capacity to licence or control the use of the IR Mark by Pham Global.
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However, even though Mr Pham was not the owner of the IR Mark at the time of filing the IR Mark Application, Davies J held that the subsequent assignment of the IR Mark from Mr Pham to Pham Global cured any defect in ownership and entitlement to file the IR Mark Application. In support of this position, Davies J relied on the reasoning in Mobileworld Communications Pty Ltd v Q & Q Global Enterprise  FCA 1404; (2003) 61 IPR 98 at  (Mobileworld), Crazy Ron's Communications Pty Limited v Mobileworld Communications Pty Limited  FCAFC 196; (2004) 209 ALR 1 at  (Crazy Ron's), and Global Brand Marketing Inc v YD Pty Limited  FCA 605; (2008) 76 IPR 161 at   (Global Brand), which all proceeded on the basis that the requirement for the applicant to own the mark may be satisfied at any time while the application for the trade mark is pending.
Justice Davies did not consider that the IR Mark was substantially identical to the ICI Composite Mark, which would be necessary if ICI wished to establish that it was the owner of the IR Mark for the purposes of the section 58 ground of opposition. However, Davies J did consider that use of the IR Mark infringed the ICI Composite Mark and ICI Word Mark, on the basis that the IR Mark was at least deceptively similar to those marks.
The decision of the Full Federal Court
Ownership of the IR Mark
ICI submitted that Mr Pham was not the owner of the IR Mark at the time of filing the IR Mark Application, that the requirement of ownership had to be satisfied when the IR Mark Application was filed and that failure to satisfy that requirement could not be rectified by a subsequent assignment.
In dealing with this issue, the Full Court further considered the reasoning in Mobileworld, Crazy Ron's and Global Brand relied upon by the primary judge, the common law and established general principle regarding trade mark ownership and the overall legislative framework pertaining to trade mark ownership and assignments under the Act.
The Full Court was quick to dismiss the relevant reasoning in Crazy Ron's as not only plainly wrong but also as obiter dicta by which the Court was not bound. Mobileworld and Global Brand primarily relied on the definition of "applicant" in s6(1) of the Act being "the person in whose name the application is for the time being proceeding" and the use of the present tense in section 58, which states that "the registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark", to support the conclusion that the issue of ownership for the purposes of section 58 was to be determined as at the time the opposition is decided. However, the Full Court considered that this interpretation was inconsistent with common law and general principle regarding trade mark ownership and the entitlement to file an application for trade mark registration as well as the regime provided by the Act when considered more broadly and in the context of such established principle.
In particular, the Full Court noted:
under common law, rights to a trade mark are established by first use for the relevant goods or services. Where there is no prior use of the mark, ownership is established by "the combined effect of authorship of the mark, the intention to use it upon or in connection with the goods [or services] and the applying for registration" - Shell Co of Australia Ltd v Rohm and Haas Co  HCA 27; (1948) 78 CLR 601 per Dixon J at 627;
the Act permits an applicant to obtain ownership of an unused trade mark only if section 27(1) is satisfied of relevance, this requires the applicant to claim to be the owner of the trade mark and to intend to use (or authorise use of) the trade mark;
the term "owner" as used in section 58 is derived from the common law notion of ownership;
the Trade Marks Act 1905 and the Act both provided for "registration of ownership not ownership by registration" - PB Foods v Malanda Dairyfoods Ltd  FCA 1602; (1999) 47 IPR 47 per Carr J at 78 80;
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there is substantial authority confirming that trade mark rights and intention to use are determined as at the date of the trade mark application. In particular, in respect of "applications for registration, the rights of the parties are to be determined as at the date of the application" (Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 per Kitto J at 595);
section 106(1) was introduced into the Act to expressly provide for assignment of a trade mark before registration, stating "a registered trade mark, or a trade mark whose registration is being sought, may be assigned or transmitted in accordance with this section";
the definition of "applicant" as being "the person in whose name the application is for the time being proceeding" was introduced into the Act at the same time as section 106(1) and should be read in that context; and
it is clear from section 106(1) that it is the trade mark itself, not the application, that is permitted to be assigned this presupposes that the assignor owns the trade mark in order for it to be effectively assigned.
Taking all of the above into account, the Full Court summarised the position regarding ownership and assignment of trade marks as follows:
The legislative scheme operates in the context of established principle that the alternative sources of ownership of a trade mark are authorship and use before filing an application for registration or the combination of authorship, filing of an application for registration and an intention to use or authorise use... Only a person claiming to be an owner may apply for registration. That claim may be justified at the time the application is made based on either alternative source of ownership. But if the claim is not justified at that time, ss 58 and/or 59 are available grounds of opposition. Moreover, if the applicant is not the owner of the mark at the time of the filing of the application, the assignment provisions... do not assist because they authorise the assignment of the mark and thus pre-suppose, consistent with established principle, that the applicant owns the mark.
As a result, the Full Court confirmed that the requirement for trade mark ownership must be satisfied as at the date of the trade mark application and the rights of the parties for the purposes of the section 58 ground of opposition must also be determined as at the date of the trade mark application.
In this instance, Mr Pham did not own, and for the purpose of section 27(1) could not claim to be the owner of, the IR Mark at the time of filing the IR Mark Application, because the evidence showed that Mr Pham had not authored or used the IR Mark and had no intention to use or authorise the use of the IR Mark at the time of filing the application. The intention was always for Pham Global to use the IR Mark.
Given that the requirement for ownership was not satisfied as at the application date, the IR Mark Application was invalid as it did not satisfy the requirements of section 27(1) and any subsequent assignment of the IR Mark to Pham Global could not cure that deficiency. In short, the Full Court determined that "Mr Pham could not assign that which he did not own".
As a result, the Full Court held that Mr Pham was not the owner of the IR Mark as at the application date and that ICI had therefore established the section 58 ground of opposition.
The Full Court then examined whether use of the IR Mark infringed ICI's marks. It considered established principle regarding the test for substantial identity, noting that this requires a side by side comparison of the marks taking into account their similarities and differences and the significance of those similarities and differences having regard to the essential features of the marks and the total impression of resemblance or similarity arising from the comparison.
ICI argued that the primary judge erred by focussing too closely on visual differences between the marks which were immaterial once the essential features of the marks (also referred to as "dominant cognitive cues") were properly taken into account.
The Full Court noted that the assessment of substantial identity is a question of degree about which opinions may differ, so an error by the
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primary judge would need to be identified to justify a re-evaluation of the marks by the Full Court. In this instance, the Full Court held that the primary judge incorrectly carried out the process of evaluation by failing to properly account for the essential elements of the marks, requiring a new evaluation by the Full Court.
The Full Court identified the word "Insight" and the circular device as the essential elements of the marks. The word "Insight" in both marks is identical and the circular device is positioned to the left of the word "Insight" in both marks. While there are other different words used in the marks, those words are merely descriptive of the services offered. According to the Full Court, the differences between the marks are slight and there is a total impression of resemblance having regard to the fact that the dominant cognitive cues in both marks is a circular shaped device evoking an eye to the left of the word "Insight".
As a result, the Full Court disagreed with the primary judge, taking the view that the IR Mark is substantially identical to the ICI Composite Mark and that the section 58 ground of opposition was established on the basis of ICI's prior use of the ICI Composite Mark. The first instance decision that use of the IR Mark infringed the ICI Composite Mark was reaffirmed by the Full Court, but on the basis that the IR Mark is actually substantially identical to the ICI Composite Mark rather than just deceptively similar. This important decision appears to lower the bar on substantial identity.
To establish a ground of opposition under section 60 it is necessary to show that: (a) another trade mark had acquired a reputation in Australia for the relevant services before the priority date of the applied for mark; and (b) because of that reputation, use of the applied for mark would be likely to deceive or cause confusion.
Pham Global conceded that the ICI Composite Mark had acquired a reputation in Perth before the priority date of the IR Mark Application, meaning the first limb of section 60 was satisfied. However, Pham Global disputed that use of the IR Mark would be likely to deceive or cause confusion as a result of the reputation of the ICI Composite Mark. In particular, Pham Global argued that the reputation
of the ICI Composite Mark was limited to Western Australia; that there was no likelihood of deception or confusion arising from use of the IR Mark outside of Western Australia; and noted that the IR Mark Application included a voluntary endorsement that registration did not confer any exclusive right to use the words INSIGHT RADIOLOGY in Western Australia.
In determining reputation and the likelihood of deception or confusion, the Full Court considered the nature of the market for radiology services in Australia and evidence of how the ICI Composite Mark was used and exposed to others within that market. The Full Court noted that: (a) radiology service providers operate within a national industry, even if carrying on business in a localised area; (b) teleradiology services commonly involve images being taken in one location being transmitted via the internet to a radiologist for assessment in another location; (c) there was evidence that radiologists and/or medical practitioners in Victoria and Sydney were aware of ICI providing its services under its mark because ICI had used teleradiology services before December 2011 that involved ICI sending its images to Victoria for radiologists to analyse and report in circumstances where the head office of the company employing those radiologists was based on Sydney; (d) there was evidence that ICI received referrals of patients from various interstate medical practitioners; (e) there was evidence that ICI recruited for professional staff on a national basis; (f) Google analytics indicated that around 20% of visitors to the ICI website before December 2011 were from outside Western Australia; and (g) the relevant class of consumers for radiology services is a specialised one, comprising radiologists, medical practitioners and patients.
Considering the specialised nature of the market for radiology services, the Full Court considered that ICI's reputation in Western Australia was itself sufficient to give rise to a likelihood that use of the IR Mark would be likely to deceive or cause confusion amongst a sufficiently substantial number of the relevant class of consumers (radiologists, medical practitioners and patients).
In any case, the Full Court held that Pham Global's reliance on the argument that ICI's reputation in its marks did not extend beyond Western Australia did not assist Pham Global's case taking onto account
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the reality of modern life, including the ease of interstate communication via the internet and the frequent movement of people across Australia for work, leisure or other purposes. According to the Court, this aspect of modern life "necessarily impacts on both the acquisition of a reputation in a mark and the likelihood of the use of another mark being likely to deceive or confuse because of that reputation".
Considering the above, the Full Court agreed with the primary judge that use of the IR Mark would be likely to deceive or cause confusion because of the reputation already existing in connection with the ICI Composite Mark and that the attempt by Pham Global to disclaim rights to the words INSIGHT RADIOLOGY in Western Australia did nothing to alleviate that risk of deception or confusion or provide a valid defence to the section 60 ground of opposition.
For the same reasons, use of the IR Mark by Pham Global was considered to contravene the ACL and constitute passing off.
This decision reaffirms general principles regarding the test for substantial identity, assessment of reputation and the relevant class of consumers for the purposes determining ACL claims and the likelihood of deception or confusion in the market, but importantly notes that aspects of modern life, such as the freedom and ease of communication and travel, should be taken into account when considering the exposure of brands to consumers within Australia.
Of most significance, this decision confirms that a trade mark application and subsequent registration will be invalid if the trade mark application is filed in the incorrect name. A subsequent assignment of the trade mark to the "correct" owner will not cure this deficiency. As a result, trade mark owners must be careful to ensure that trade mark applications are filed in the name of the person or company that is entitled to claim ownership of the mark under common law or s27(1) of the Act. Registered trade mark owners should also consider reviewing their trade mark applications and registrations to ensure that they were filed in the correct name and are not susceptible to challenge for invalidity on this ground.
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The "the" sometimes is the main thing
Samuel Smith & Son Pty Ltd v Pernod Ricard Winemakers Pty Ltd  FCA 1515
Samuel Smith & Son Pty Ltd (Yalumba) trades under the name Yalumba and operates a winemaking business that dates back to 1849. Pernod Ricard Winemakers Pty Ltd (Pernod Ricard) trades under the name Jacobs Creek and is also a winemaker.
The Trade Mark
Yalumba is the registered owner of the Australian trade mark comprising the words THE SIGNATURE (the Yalumba Mark) covering "wines, especially still table wines" in class 33. Pernod Ricard began producing, supplying and selling wine products with labels and associated promotional material bearing the words in issue, BAROSSA SIGNATURE. Pernod Ricard had never attempted to register these words as a trade mark.
Background and Issues
The registration of the Yalumba Mark was effective from 2 September 1999 although the words THE SIGNATURE had been used on Yalumba labels for 20 years prior to registration. Since around 2000, Yalumba has produced about 60,000 bottles of wine each year bearing the Yalumba Mark.
Since 2000, Pernod Ricard has produced a sub range of red wines referred to as its Reserve Range which are sold and promoted through its house brand, Jacobs Creek. The words BAROSSA SIGNATURE were chosen to be used for the new sub range of Barossa shiraz wines. Pernod Ricard was advised by its legal team that due to the existence of the Yalumba Mark, Pernod Ricard should avoid using the word `signature' in isolation and use the words BAROSSA SIGNATURE as a single phrase. As a phrase, the words arguably served a descriptive purpose in the sense that the new products would be identifiable as quintessential Barossa red wines from the Jacob Creek's renowned signature range.
The new products were released for sale in September 2015. Yalumba asserted that the words BAROSSA SIGNATURE are deceptively similar to THE SIGNATURE and therefore by producing, supplying, selling and promoting the new products, Pernod Ricard infringed Yalumba's registered mark.
The issues before Justice Charlesworth were:
1.whether BAROSSA SIGNATURE had been used as a trade mark within the meaning of s 17 of the Trade Marks Act 1995 (Cth);
2.whether the words BAROSSA SIGNATURE are deceptively similar to THE SIGNATURE; and
3.if the first and second questions are answered in the affirmative, whether Pernod Ricard used BAROSSA SIGNATURE in good faith, thereby avoiding trade mark infringement.
Use as a Trade Mark
Pernod Ricard accepted that it had used BAROSSA SIGNATURE as a sign in relation to the same class of goods covered by the Yalumba Mark. However, Pernod Ricard contended that this use of a sign did not constitute use as a trade mark to distinguish its goods or service from those of another trader, so as to evoke infringement under section 120. Instead, Pernod Ricard submitted that as the words BAROSSA SIGNATURE are descriptive, the only features on the label of the new products that consumers would consider a `badge of origin' would be the words JACOB'S CREEK and RESERVE.
Her Honour held that the fact that both the words BAROSSA and SIGNATURE are descriptive is relevant to, but by no means determinative of, use as a trade mark. Whilst both words are common words in the English language, they are not commonly used in that order. Commonly, when used in a phrase such as "signature dish", the adjective precedes the noun. Therefore, whilst
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the words themselves are ordinarily descriptive, the unconventional combination of BAROSSA SIGNATURE is not. The words therefore do perform a distinguishing function.
Pernod Ricard further submitted that although BAROSSA SIGNATURE was meant to distinguish wines within the Jacob's Creek house brand, it would not be understood by consumers as a sign distinguishing the relevant goods from those of other traders. However, Justice Charlesworth rejected this on the basis that as consumers in the trade context do not employ significant cognitive effort in making wine purchases, and as BAROSSA SIGNATURE is clearly displayed in the centre of the wine labels, consumers are unlikely to perceive the words BAROSSA SIGNATURE as a sign distinguishing the wines within the sub-range but not as a sign distinguishing the wine from those of other traders.
Her Honour therefore ruled that BAROSSA SIGNATURE had been used as a trade mark as defined in section 17 of the Act. Her Honour then considered whether this trade mark use infringed the Yalumba Mark.
Yalumba contended that there is a risk that Pernod Ricard's use of SIGNATURE for its new products would cause consumers to wonder whether Pernod Ricard's wines originate from the same source as Yalumba's wines, given the reputation of THE SIGNATURE as a Yalumba house brand and that SIGNATURE is a distinctive element of the Yalumba Mark.
The Judge determined that in assessing deceptive similarity, consideration is usually had to the effect or impression that is produced in the minds of consumers of ordinary intelligence and memory by the normal use of the mark. However, drawing on the Henschke case, Charlesworth J considered that in assessing a consumer's imperfect recollection of the mark, evidence of reputation could be relevant if it established that the mark, or an important element of it, is so notoriously ubiquitous and of such long standing that consumers generally must be taken to be familiar with it and its use in relation to particular goods and services.
However, her Honour held that the evidence was insufficient to establish that the Yalumba Mark, or an important element of it, was so notoriously ubiquitous and of such long standing that the relevant consumer would be taken to be familiar with it and its use in relation to wine. Reputation was therefore not relevant in considering the issue of deceptive similarity which solely rested on the impression conveyed by the marks.
In considering the impression conveyed by THE SIGNATURE, Justice Charlesworth placed important significance on the use of the word THE as it attaches definitive significance to the noun that follows. This has two important consequences; it causes the word SIGNATURE to convey its ordinary meaning as a noun and also assists in creating a subtle impression that the signature referred to is of some particular importance. Her Honour held that this is the essential and memorable element of the Yalumba Mark.
In comparison, the impression conveyed by BAROSSA SIGNATURE rests on the unconventional combination of those words, which suggest that they are being used as a trade mark. The Judge explained that when words are used in invented combinations it decreases the likelihood of confusion and, in this case, further removed BAROSSA SIGNATURE from the idea or impression conveyed by the Yalumba Mark. Therefore, even though a distinctive part of the Yalumba Mark was adopted in BAROSSA SIGNATURE, that distinctive part was not used in such a way as to make BAROSSA SIGNATURE deceptively similar to the Yalumba Mark.
Good faith use defence
Justice Charlesworth proceeded to determine whether Pernod Ricard could rely on good faith use of the mark under section 122(1)(b)(i) had deceptively similarity been established. Pernod Ricard contended that its intention was to use the sign solely for the purpose of indicating the characteristic of its wines being quintessential or typical of wines produced from the Barossa region. Even though her Honour accepted that BAROSSA SIGNATURE did indicate the relevant characteristics, her Honour was not convinced that Pernod Ricard's intention was confined this
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narrowly and did not extend to distinguishing its goods from those of other traders, having regard to Pernod Ricard's evidence relating to legal risk. Ultimately, had BAROSSA SIGNATURE been deceptively similar to the Yalumba Mark, Pernod Ricard could not rely on this defence to infringement.
This decision provides an example of how signs that are merely descriptive or indicative of particular characteristics can be conveyed as a `badge of origin' if they include an unconventional combination of words constituting grammatical nonsense. Furthermore, in determining the issue of deceptive similarity, it is important to note that it is the distinctive element of the trade mark that will form the necessary impression in the mind of the consumer. This necessary impression can be influenced by the reputation of a trade mark so long as the distinctive element of the mark is notoriously so ubiquitous and of such long standing that consumers must be taken to be familiar with it and its use in relation to the relevant goods or services. The most interesting conclusion on the facts of this case is that sometimes "THE" can be the most distinctive (and distinguishing) element of a trade mark.
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Aldi's copycat argan oil permissible but unnatural
Moroccanoil Israel Ltd v Aldi Foods Pty Ltd  FCA 823
Moroccanoil Israel Ltd (MIL) is a producer and supplier of hair care, skin care and other products. Aldi Foods Pty Ltd (Aldi) is the well known German originating supermarket operator.
The Trade Marks
MIL owns the following trade marks, registered from 24 January 2008 and 4 August 2010 respectively in class 3 for various goods relating to hair care products, skin care products and fragrances:
(the Registered Marks)
In 2011, MIL applied to register the word mark MOROCCANOIL in class 3 for various hair care products. Aldi successfully opposed the registration on the ground that it was not inherently adapted to distinguish MIL's products from those of others.
Aldi was producing and selling a range of hair care products, brushes and appliances bearing the words ARGAN OIL OF MOROCCO up until January 2016, when it rebranded as MOROCCAN ARGAN OIL. Aldi had never attempted to register those words as an Australian trade mark.
Background and Issues
Argan oil is extracted from the nut of the native Moroccan argan tree. MIL manufactures and distributes a range of `Moroccanoil' products with argan oil as their main ingredient. These Moroccanoil products were launched in Australia in 2009 and have achieved considerable commercial success.
Aldi's evidence disclosed that it aims to create its own "Aldi version" of competitor products that are considered to be "on trend". In developing its own version, regard is had to the packaging of competitor products to ensure that the Aldi house brand packaging is consistent with the trend. Aldi also adapts "cues" such as colour, wording associated with the competitor's product, product descriptions and claims of benefits. This is to ensure that Aldi's version is consistent with its "main pitch to customers", that its products look like other products but are not exactly like them (ie. "Like Brands. Only cheaper").
Aldi identified that in 2011 health and beauty products containing argan oil were on trend and at least some of MIL's products were known to Aldi at the time. Aldi's intention was to replicate MIL's benchmark product but in a way that would distinguish the Aldi version. Aldi's product packaging generally comprised differing versions of the following:
(the Aldi Product)
MIL submitted that because the phrase MOROCCAN ARGAN OIL as used on the Aldi Product was deceptively similar to the Registered Marks, the manufacturing, offering for sale and sale of the Aldi Product infringed its Registered Marks, contravened the Australian Consumer Law (ACL) and constituted passing off.
In response, Aldi cross claimed for revocation of MIL's Registered Marks on the basis that the marks are not sufficiently distinctive and therefore should not have been registered in the first place, and additionally that the Registered Marks were not being used in relation to some of the goods for which they were registered.
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To establish its claims, MIL sought to rely on tendency evidence under s 97 of the Evidence Act 1995 to prove that Aldi has a tendency to copy elements of the get-up of other brands and, because of this tendency, it is more likely that Aldi deliberately copied elements of MIL's trade marks and the get up of MIL's products to appropriate the reputation of MIL's products. However, this evidence was not admissible as the Court found that Aldi was not given reasonable notice of MIL's intention to rely on the evidence and the evidence lacked significant probative value.
Trade Mark Infringement
Justice Katzmann was satisfied that considering the appearance, place, size and prominence of the phrase MOROCCAN ARGAN OIL on the Aldi Product, Aldi was using MOROCCAN ARGAN OIL as a trade mark and not as a mere description of the Aldi Product, as alleged by Aldi. Aldi contended that its use of MOROCCAN ARGAN OIL was analogous to the use of `Spanish olive oil' to describe a product and its nativity. However, her Honour did not accept this analogy as Spanish olive oil only consists of olive oil whereas Aldi's products consist of additional ingredients other than simply argan oil. She also referred to the well-established principle that a sign might still be used as a trade mark even if it may be understood to be descriptive and even if another trade mark is used on the same packaging or advertisement.
However, Katzmann J did not consider MOROCCAN ARGAN OIL to be deceptively similar to the Registered Marks.
As the Registered Marks are composite marks, each mark as a whole had to be compared to the phrase MOROCCAN ARGAN OIL as used on the Aldi Product. Although the Registered Marks were filed in colour, they were not registered with any limitations to colour and therefore are to be taken as registered for all colours. Whilst comparisons of colour and other broader get-up are relevant to actions under the ACL and passing off, these features are not necessarily considered when comparing trade marks for the purposes of assessing trade mark infringement. Her Honour took the view that the essential features of the
Registered Marks to be compared to Aldi's branding in this instance were the large letter `M' and the word `Moroccanoil'. Neither of these features was adopted in Aldi's branding. Justice Katzmann believed that the hypothetical consumer would therefore not mistake the phrase MOROCCAN ARGAN OIL as used on the Aldi Product for the Registered Marks or wonder whether the products originated from the same source.
In reaching this conclusion, the Judge also considered evidence submitted by MIL from various witnesses of alleged "confusion" between MIL products and the Aldi Product. However, this evidence was not given any weight and failed to answer whether the phrase MOROCCAN ARGAN OIL itself was likely to confuse.
Aldi's cross claim
Her Honour did not accept Aldi's argument that registration of the Registered Marks should be revoked because the Registered Marks failed to distinguish MIL's goods from the goods of other traders. She conceded that whilst the single word `Moroccanoil' is coined, when the joined word `Moroccanoil' is spoken it has the same aural impact as the two separate words which describe oil from Morocco. However, Katzmann J did not accept that at the relevant time `Moroccan oil' had any ordinary meaning in Australia. The Judge also concluded that the wealth of evidence showing extensive prior use of the Registered Marks by MIL supported the view that the Registered Marks were capable of distinguishing MIL's goods and adapted to qualify for registration as at the application dates for registration the Registered Marks.
By MIL's own admission, it had not used the Registered Marks anywhere in the world in respect of certain goods covered by the registrations and had no intention to do so in the future. MIL submitted that skin care products had been on sale overseas since 2012 and that facial products, fragrances and toiletries are in the MIL product development calendar.
Considering MIL's admission, her Honour concluded that the later of the Registered Marks should remain on the Register for all goods other than shaving preparations, shaving creams, soaps, after shaving creams and lotions as MIL had, for all intents and purposes, abandoned the mark for
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these goods. Justice Katzmann also held that the earlier of the Registered Marks should be removed from the Register for all goods other than the hair care goods as evidence suggested that this mark had only ever been used and intended to be used in relation to hair care products.
ACL and Passing Off
MIL alleged that the get-up of the various Aldi Products is misleading or deceptive by falsely representing that the products are, or are related to, MIL's products. Her Honour explained that establishing this representation largely depends on MIL's reputation at the time of the impugned conduct by Aldi because the relevant consumers could not be misled or deceived if they were not aware of the MIL products at that time. Justice Katzmann was satisfied that at the relevant time, MIL had a substantial, valuable and exclusive reputation and goodwill in the Registered Marks, the MOROCCANOIL sign and the get up of its products. It was further accepted that Aldi intended to appropriate this reputation by copying important features of MIL's get-up.
However, Katzmann J explained that "the mere fact that one trader copies aspects of the get-up of another... does not mean that the rival trader's conduct is misleading or deceptive or likely to mislead or deceive". The result depends on whether Aldi has "sufficiently distinguished its products and made it clear that they are not the goods of the manufacturer whose design or get-up is copied". Accordingly, despite the similarities between the products, her Honour noted substantial differences including, amongst others: (1) that the Aldi products display the house brand PROTANE NATURALS or VISAGE signs; (2) the absence of a large orange `M' on the Aldi products; and (3) that MORROCANOIL was always displayed vertically on MIL products, whereas "Moroccan argan oil" is horizontal on Aldi products.
Therefore, looking at "the whole of the Aldi get-up, and not just the part of it in which the resemblances are to be found, the get-up does not deceive". Whilst the get-up of the products was similar, Justice Katzmann held that the Aldi Products look cheaper and the house branding marked them out as a different product to the MIL products. The Court was therefore not satisfied that the get-up
of the Aldi Products constituted a representation that the Aldi Products are, or are related to, MIL's products.
As MIL relied on the same conduct to establish passing off, the passing off claim was therefore also dismissed.
Further ACL claims
MIL further alleged that Aldi's use of the word NATURALS, to sell and promote the products, falsely represents that Aldi's Products contain only or substantially natural ingredients. MIL alleged that by making these representations, Aldi had engaged in misleading and deceptive conduct in contravention of s18(1) of the ACL and had made false or misleading representations about the standard, quality and composition of the Aldi Products in contravention of s29(1)(a) of the ACL.
Little weight was given to evidence led by scientists in considering this issue. Her Honour explained that it was necessary to determine what the word `naturals' means to the ordinary or reasonable member of the relevant class of consumers in the context in which the word is used. Accordingly, the ordinary or reasonable consumer shopping for hair care products would consider that products with the word `naturals' on their packaging were made, either wholly or substantially from natural ingredients. However, apart from water, the Aldi Products were in fact made substantially from synthetic products. Justice Katzmann therefore held that Aldi had contravened sections 18(1) and section 29(1)(a) of the ACL as it was misleading for Aldi to represent that particular products are natural.
MIL also alleged that Aldi's prominent use of the words `argan oil' as part of the branding of its products falsely represented that the addition of argan oil as an ingredient gave the products a benefit that they did not have. Aldi failed to provide any evidence demonstrating that it had performed any meaningful due diligence on the quantifiable benefits of argan oil as an ingredient in hair care products or the amount required as a percentage of its products in order for those benefits to be enjoyed by the consumer. In light of this, the Judge held that Aldi was indifferent to the truth and used `argan oil' for emotive effect and marketing purposes. Her Honour held that in Aldi's oil treatment, shampoo and conditioner, the amount of
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argan oil used in the manufacturing process was so small that it could not make a material contribution to the performance of the products. As a result, Justice Katzmann held that the prominent use of `argan oil' by Aldi as part of the branding of its products also contravened section 18 of the ACL.
MIL also appealed the decision of the Registrar to uphold Aldi's opposition against MIL's registration of the word mark MOROCCANOIL. Katzmann J held that Aldi had failed to discharge its onus of establishing that MOROCCANOIL was not capable of distinguishing the relevant hair care products. No evidence was submitted to suggest that the single word `Moroccanoil' has an ordinary meaning to the Australia consumer. Furthermore, whilst `Moroccan oil' could be descriptive of oil originating from Morocco, it is not necessarily descriptive of hair care products nor does it connote a relationship with hair care products.
Her Honour also accepted that prior to MIL launching its products, it is unlikely to have occurred to an honest competitor to use MOROCCANOIL in relation to hair care products. Finally, Justice Katzmann also accepted that a significant number of consumers, purchasers and traders in the Australian hair care market identify MOROCCANOIL as originating from one trade source. Accordingly, MOROCCANOIL was distinctive of MIL's goods and the word mark qualified for registration. Even if the mark had not been inherently adapted to distinguish, the Court held that it would still be registrable because it had become distinctive of MIL's products before the filing date due to the extent that MIL had used the mark for its hair care products.
While MIL was successful in its subsidiary claims concerning Aldi's representations of "naturals", it was not successful in its primary goal of preventing Aldi from introducing into the market "like brands. Only cheaper". This case confirms, as for various other similar cases against Aldi, that if there are sufficient differences between the overall get-up of products, misleading and deceptive conduct, passing off or trade mark infringement may not be established even if there was an explicit intention
to copy. This case provides a reminder of the difficulty in succeeding in a product get-up case and confirms that the overall product branding, packaging and the alleged infringer's conduct must be considered as a whole. However, what may qualify as a sufficient difference between products and branding in any given case will depend on the particular circumstances. So brand users should still avoid making "other versions" of products already on the market to limit the risk of trade mark infringement, passing off and breaching the ACL.
Aldi promptly appealed the decision, so it appears that at least the ACL claims pertaining to Aldi's use of `naturals' and `argan oil' will be subject to further consideration.
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Lack of use costs Lacoste
Crocodile International Pte Limited v Lacoste  NZSC 14
Lacoste is the registered trade mark owner. Crocodile International Pte Limited (Crocodile International) applied to revoke the trade mark registration on the basis of non-use. This New Zealand Supreme Court judgment relates to an appeal by Crocodile International from the earlier New Zealand Court of Appeal judgment that upheld the High Court judgment to allow registration of the Lacoste mark despite the original decision by the Assistant Commissioner of Trade Marks to revoke the trade mark registration for non-use.
The Trade Mark
The trade mark in issue was New Zealand trade mark number 70068 for the following logo:
(the Crocodile Mark).
Background and Issues
Under section 66(1)(a) of the Trade Marks Act 2002 (NZ), a registered trade mark may be revoked if it has not been genuinely used as a trade mark in the course of trade for its relevant goods or services for a continuous period of 3 years.
Section 7 of the Act confirms that use of a trade mark includes use "in a form differing in elements that do not alter the distinctive character of the trade mark in the form in which it was registered". This has generally allowed trade mark owners to make minor variations to their trade marks in commercial use over time without fear of their corresponding trade mark registrations being revoked for non-use.
Crocodile International applied to revoke registration of the Crocodile Mark on the grounds of non-use by Lacoste.
Lacoste admitted that it had never used the Crocodile Mark, but argued that its use of the marks below amounted to use of the Crocodile Mark "in a form differing in elements that do not alter the distinctive character of the trade mark in the form in which it was registered" pursuant to section 7, thereby entitling it to maintain the registration of the Crocodile Mark:
(the Used Lacoste Marks).
The Assistant Commissioner, who only considered the first of the above Used Lacoste Marks, held that its use did not constitute use of the Crocodile Mark as contemplated by section 7.
However, the High Court, considering the two device Used Lacoste Marks, overturned the initial decision and held that use of the device Used Lacoste Marks constituted use of the Crocodile Mark within the meaning of section 7.
The Court of Appeal acknowledged that there were differences between the Crocodile Mark and the Used Lacoste Marks, including: (i) the crocodile is facing in opposite directions; (ii) the Crocodile Mark and the Used Lacoste Marks use different fonts; (iii) the placement of the words "crocodile" and "Lacoste" are different relative to the crocodile image; and (iv) the two device Used Lacoste Marks do not contain the word "crocodile" one has the word "Lacoste" while the other has no word at all. However, the Court of Appeal held that "in terms of the overall impression these differences are insignificant and do not alter the distinctive character" of the Crocodile Mark "which is dominated by the image of the crocodile. The crocodile is the central idea and message."
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According to the Court of Appeal, the images of the crocodiles used in the Crocodile Mark and Used Lacoste Marks are similar and share the same key features including that the crocodile used in all marks has its mouth ajar, body arched, is drawn side-on, has jaws open slightly and has its scales, eyes, claw and teeth visible. The use of the stylised word "crocodile" in the Crocodile Mark only served to reinforce the dominant element of the Crocodile Mark and added little or nothing to the distinctiveness of the Crocodile Mark.
As a result, the Court of Appeal held that Lacoste had used the Crocodile Mark within the meaning of section 7 by virtue of its use of the Used Lacoste Marks.
Rather than focussing on a broad concept of the "central idea and message" of the Crocodile Mark, the Supreme Court focussed more on the different visual elements of the Crocodile Mark when considering its distinctive character. According to the Supreme Court, the distinctive character of the Crocodile Mark comprised two essential elements: (1) the stylised word "crocodile"; and (2) the crocodile image. The question then was whether any of the Used Lacoste Marks were essentially the Crocodile Mark but in a form differing in elements that did not alter the distinctive character of the Crocodile Mark.
Having noted that the distinctive character of the Crocodile Mark comprised two essential elements, the Court held that "the fact that one of the essential visual elements is missing [from each of the Used Lacoste Marks]... would in itself likely mean that the use of the Lacoste [Marks] is in a form differing in elements which mean that the distinctive character of the [Crocodile Mark] is altered". As a result, use of the Used Lacoste Marks could not be considered use of the Crocodile Mark within the meaning of section 7. Interestingly, the Court suggested that the distinctive character of a trade mark is more likely to be retained where elements are added to the mark rather than removed, given that the altered mark would still incorporate the original mark in its total form. However, this will very much depend on the circumstances of each particular case.
New Zealand courts and the Assistant Commissioner have in many cases exercised a discretion to retain a trade mark registration even if there has been no use of the mark in its registered form, primarily on the basis that section 66(1)(a) of the Act provides that a registered trade mark "may" be revoked on the basis of non-use. Significantly, the Supreme Court held that there is no discretion to allow a trade mark to remain registered if the mark has not been used either in its registered form or in the manner contemplated by section 7 during the relevant 3 year period.
Given that Lacoste had not used the Crocodile Mark within the meaning of section 7 and that the Court did not have any discretion to allow registration in the absence of such use, the registration of the Crocodile Mark was revoked.
This decision makes it clear that trade mark owners should ensure that they continue to use their trade marks in the form in which they are registered if they wish to avoid their registered trade marks becoming vulnerable to revocation for non-use. At the very least, the essential elements of the registered trade marks should be retained. New trade mark applications should be filed to ensure ongoing protection if trade mark owners decide to vary or refresh their branding.
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That completes our lengthy review of the key trade mark cases in Australia and New Zealand for 2017. There were no High Court trade mark cases in Australia for 2017 and only a few Full Federal Court decisions. Activity in New Zealand was subdued in 2017 but the long-running Lacoste litigation is now finalised. In Australia, the important Harbour Lights case has confused rather than clarified the position in relation to metatags with the conclusion being
that use of a competitor's trade marks in metatags can be trade mark infringement where they are used as a trade mark. It will be interesting to see if any further Google AdWords cases now come up for the Court's consideration seeking to apply the Harbour Lights decision and overturn previous decisions finding no trade mark infringement by use of Google AdWords.
Senior Associate and Trade Marks Attorney Shelston IP Lawyers
T +61 2 9777 2450 E MichaelDeacon@ShelstonIP.com
Lawyer and Trade Marks Attorney Shelston IP Lawyers
T +61 2 9777 2450 E NatashaFaigenbaum@ShelstonIP.com
Principal and Trade Marks Attorney Shelston IP Lawyers
T +61 2 9777 2450 E ChrisBevitt@ShelstonIP.com
Trade Marks Attorney Shelston IP Lawyers
T +61 2 9777 2450 E AmberMcKenna-Hill@ShelstonIP.com
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