Correspondents for South Australia, Victoria and Western Australia

Note:  Where any of the authors were involved in a case reported below and the matter is still running, or potentially so, the other correspondents have taken the role of reporting that case.

Phone Directories Company Australia Pty Ltd v Telstra [2014] FCA 373

These were two appeals from decisions by delegates of the Registrar to allow registration by Telstra of the mark YELLOW in respect of, among other things, online and print phone directories.  Each of the applicants (respectively PDCA and Yellowbook) was unsuccessful in opposing Telstra’s application before the Registrar.  Yellowbook also appealed the delegate’s decision to allow Telstra’s opposition to Yellowbook’s own application for YELLOWBOOK for the same goods and services.  Murphy J dismissed all three appeals.

Telstra has been producing print directories with yellow pages, and calling them “Yellow Pages” since 1975.  The evidence was that this was in keeping with international trends at the time.

Telstra registered YELLOW PAGES as a composite mark in 1977 and a standalone mark in 1990.  On 25 July 2003, Telstra applied for YELLOW as a word mark (i.e. the mark in suit), but the application appears to have been quiescent for some time and was not accepted for registration until the end of 2007.

His Honour reviewed the (voluminous) evidence as to Telstra and other traders’ use of marks containing YELLOW as an element and/or the colour yellow before and after the lodgement date.  He concluded that, prior to the lodgement date, other traders in Australia and overseas commonly used the colour and word yellow in respect of print and online directories.  That conclusion was unsurprising, given that the evidence established that when Telstra adopted the colour yellow in 1975, and certainly by 1986, yellow had become the worldwide industry standard colour for business directories.

Justice Murphy held that the YELLOW mark has no inherent adaptability to distinguish Telstra’s relevant goods and services; it is descriptive of the colour commonly used for Australian and overseas directories, and properly motivated traders are likely to want to use it in a manner that would otherwise infringe the mark if registered.  Even though the mark in suit was for the word and not the colour, his Honour found it difficult to draw a distinction between a word describing a primary colour and the colour itself on the question of inherent capacity to distinguish; the word and the colour could not be “cleanly separated”.  His Honour disagreed with Telstra’s contentions that YELLOW was an arbitrary word (especially when applied to services) and that its YELLOW PAGES marks had served to protect “yellow” from becoming generic in the context of directories.   The evidence referred to above pointed to a contrary conclusion.  Further, it did not matter that other traders not did have to use the word or colour yellow to describe a business directory, it was sufficient that innocent traders might want to, and in this case there were utilitarian and economic benefits of having a directory printed on yellow paper.

The key issue then was whether Telstra could satisfy the Court that the mark in fact distinguished Telstra’s goods and services as at the lodgement date: s 41(6) of theTrade Marks Act (as at 25 July 2003).  His Honour held that it failed to do so.  Although the question was not clear cut, his Honour was not satisfied that prior to 25 July 2003 Telstra had used YELLOW as a standalone word mark.  Even if it had, that use was insufficient to give rise to a secondary meaning that would distinguish Telstra’s products by the lodgement date, and that separate use would have been diluted in the minds of consumers by Telstra’s widespread use of the YELLOW PAGES mark.

Mindful of the prospects of an appeal, Justice Murphy also addressed the s 41(5) point (should he be wrong that s 41(6) applied), namely whether as at the lodgement date YELLOW did or would distinguish, taking into account a partial inherent adaptation to distinguish, Telstra’s actual and/or intended use of the mark, and any other circumstances.  Apart from considering the matters referred to above, his Honour also considered Telstra campaign, commenced in May 2006, to “refresh” its branding by using YELLOW as its overarching mark.  The evidence indicated, however, that that campaign had had limited success in transferring consumer recognition of YELLOW PAGES as a badge of origin for Telstra’s product to YELLOW, and in 2009 Telstra reverted to YELLOW PAGES as its principal brand.

His Honour also addressed the applicants’ section 44 grounds, and concluded that YELLOW was deceptively similar to prior third party registrations present at the lodgement date, including THE YELLOW ENVELOPE, YELLOW ZONE and YELLOW DUCK.  Somewhat ironically, Telstra’s arguments to persuade the Court otherwise ran contrary to its own submissions opposing registration of Yellowbook’s YELLOWBOOK mark.  His Honour rejected PDCA’s s 59 ground, however, as he was satisfied that as at the lodgement date Telstra intended to use the YELLOW mark at some point in the future.

As at the date of writing it is unclear whether Telstra intends to appeal the decision.