The Full Federal Court has confirmed that Telstra's "YELLOW" word mark is not able to be registered as a trade mark. Subject to any potential appeal to the High Court, the Full Court's decision brings to an end a 12 year battle by Telstra and Sensis to protect the word as a trade mark, which it applied to register in July 2003. The case involving "YELLOW" came before the Court because of two oppositions, filed by Emmanuel Khoury (the managing director of Yellowbook.com.au Pty Ltd) and Phone Directories Companies Australia Pty Ltd respectively, both of which publish competing classified directories. While Telstra had some degree of success in the appeal, with the Full Court overturning the trial judge's decision in respect of s 44 and upholding Telstra's appeal in respect of s41(5), ultimately the Full Court upheld the trial judge's conclusion that the word "YELLOW" lacked any inherent capacity to distinguish print or online directories under s41(3). In the same decision, the Full Court also rejected a separate appeal by Yellowbook against the trial judge's refusal of its application to register "yellowbook.com.au" in respect of online business directories.
Inherent distinctiveness: section 41(3)
Telstra's appeal ultimately failed because the Full Court upheld the trial judge’s conclusion that the word “yellow” lacked any capacity to distinguish print or online directories under s 41(3). The Full Court agreed with the trial judge that the word yellow described a colour, with the evidence showing that the use of the colour yellow signified print and online directories to the consumers of those services. Therefore, the word YELLOW itself was properly considered to be descriptive. Telstra raised a number of arguments why the trial judge was wrong to conclude that the word YELLOW was not capable of distinguishing Telstra's online and print directories. However, the Full Court ultimately agreed with the trial judge that:
- the word yellow signified print and online directories to consumers; and
- other traders might legitimately want to use YELLOW as a trade mark.
As with the trial judge, the Full Court accepted that use of the colour and word yellow overseas supported that conclusion that other traders would want to legitimately use the mark. Finally, the Full Court also confirmed that the relevant onus of proof for an opponent to registration under s41(3) is the balance of probabilities, not that the trade mark should clearly not be registered (as has been held in some Federal Court decisions).
Acquired distinctiveness: section 41(5)
Because of the Court's finding under s41(3), it was not necessary to consider the s41(5) ground of appeal, but the Court did so for completeness. The Court concluded that, if the word “yellow” did have some inherent capacity to distinguish print and online directories, it would have allowed Telstra's appeal that the primary judge had made an error in assessing s41(5). In particular, the Court held that the primary judge failed to take into account important evidence relevant to whether YELLOW had become sufficiently distinctive by Telstra's use after the date of the trade mark application. The evidence in question was a 2008 report about consumer perceptions of the YELLOW brand, and the opinion of Sensis' Executive General Manager – Strategic Marketing that, among other things, the YELLOW campaign was very successful based on levels of consumer recognition of the YELLOW trade mark. Therefore, if the appeals had turned on the s41(5) issue alone, the Court would have ordered a re-trial.
Deceptive similarity: section 44
The final aspect of Telstra's appeal related to four marks which pre-dated Telstra's application for comparable classes of goods and services, and which the primary Judge upheld as barriers to registration under section 44. The primary judge held that each of THE YELLOW ENVELOPE, YELLOW DUCK, YELLOW ZONE and YELLOW DOOR were deceptively similar to the YELLOW mark. While he accepted deceptive similarity was a matter for the Court, he took into account Telstra's history of protecting its YELLOW PAGES trade marks in coming to his decision. In particular, his Honour relied on the inconsistency between Telstra's section 44 arguments and the position it adopted in various contexts that words or phrases other than YELLOW, such as YELLOW PAGES, HELLO YELLOW and FIND IT IN YELLOW, involved used of the YELLOW trade mark. The Full Court held that Telstra's stance in respect of other words and phrases was completely irrelevant to the question before the primary judge, and that none of the four earlier marks was deceptive similar to YELLOW. According, the Full Court upheld Telstra's appeal on the s 44 ground of opposition.