Introduction
Trademark Infringement
Misleading or Deceptive Conduct or Passing Off

Opposing Applications for Trademark Parodies
Lessons for Parodists

Cultural Concerns
Comment



Introduction

In a world of modern commerce, mass media and globalization, trademarks have become far more than just an indicator of product source. The world's citizens do not speak the same language, but we all have access to a common language of almost universally recognized symbols. The golden arches, the swoosh and the curvaceous silhouette of a bottle are only the start of a long list, each effectively summarizing a broad sweep of information, including quality, cachet and status, and the branding message that the brand owner has sent to the market. Even within a local market, well-known brands carry a range of meanings.

In short, trademarks are a shorthand expression of culture and meaning. This means that it is much easier and more effective to refer to a 'McJob' than to detail menial and low-paid employment, or to use a picture of a Barbie doll rather than discuss unrealistic body image expectations. For this reason, trademarks are an attractive target for parodies.

In a number of countries where freedom of speech is protected, parody may operate as a defence to trademark infringement. However, under Australian law, there is no constitutional guarantee of freedom of speech. Therefore, Australian courts have approached the question of parody only incidentally as part of the application of black-letter trademark law. Ironically, however, the relatively stringent requirements of Australian trademark law (and in particular, the requirement for 'use as a trademark', the lack of direct dilution protection and the emphasis on likelihood of confusion) mean that parodies are in fact quite well protected under Australian law.

Trademark Infringement

Section 120 of the Trademarks Act 1995 sets out the elements of trademark infringement, namely:

  • use of a substantially identical or deceptively similar mark;
  • use as a trademark; and
  • use for identical goods or services to those for which the original mark is registered,(1) goods of the same description or closely related services to those for which the original mark is registered,(2) or for well-known marks for unrelated goods or services, if this would be likely to be taken as indicating a connection between the unrelated goods or services and the owner of the trademark and thereby adversely affect the owner's interests.(3)

Australian trademark law does not include a dilution action, but does provide broader protection for well-known marks (which will usually be involved in parodies) under Section 120(3) as discussed below. The principal elements of infringement as they typically play out in the parody context are discussed below.

Use as a trademark
Trademark infringement will occur under Section 120 only where the offending mark has been 'used as a trademark' - that is, as a badge of origin to indicate a connection in the course of trade between goods or services and their source.(4) This is a question of fact.

It can be difficult to establish that a parody involves 'use as a trademark'. Any successful parody will involve a distancing of the parodied mark from the source of the parody or the goods or services parodied, which means that the parody will often not appear as the source of the branded goods or services in any case, or indeed of any goods or services at all. Furthermore, parodies will often appear in a 'decorative' context (eg, on the front of a t-shirt or in a book), and Australian law recognizes some 'decorative' uses of marks as non-source identifying and therefore non-infringing.(5)

However, the fact that a use of a trademark is parodic or satirical will not by itself avoid a finding that the parodied mark has been 'used as a trademark'. 'Nominative' or descriptive use of a mark to refer to the original trademark owner rather than the parodist or satirist will generally not be regarded as 'use as a trademark'.

Substantial identity or deceptive similarity
Parodies often involve amendments to trademarks which may avoid substantial identity of trademarks. In that case the question then becomes whether the parodied mark can be said to be deceptively similar to the original. This is also a question of fact and depends on the extent of the variations made to the original mark and their likely impression on the consumer.

A particular problem in comparing parodied marks to the original is that Australian courts regard fame as a double-edged sword. It has been held that the greater the reputation of a mark, the higher the likelihood that relatively slight amendments will distinguish the parody from the well-known original mark:(6)

"in assessing the nature of a consumer's imperfect recollection of a mark, the fact that the mark, or perhaps an important element of it, is notoriously so ubiquitous and of such long standing that consumers generally must be taken to be familiar with it and with its use in relation to particular goods or services is a relevant consideration."(7)

In the parody context and analogous cases regarding deceptive similarity in the opposition context, the following marks were held not to be deceptively similar:

  • TENFOLDS GRUNGE and PENFOLDS GRANGE;(8)
  • DOGUE and VOGUE;(9) and
  • DICKHEADS and REDHEADS.(10)

On the other hand, REVISE was found to be deceptively similar to LEVI'S,(11) DJ IDOL to AUSTRALIAN IDOL(12) and HERBAGRA to VIAGRA.(13) Various marks, including THE WIZARD OF OZ HEMP CO & LOGO, THE WIZARD OF OZ PET FOOD & LOGO and THE WIZARD OF OZ CARD CO & LOGO, were found to be deceptively similar to THE WIZARD OF OZ (for goods and services including clothing, pet food and print goods), but oppositions were unsuccessful for some other goods and services as discussed below.(14)

Similarity of goods and services
The final question is whether the goods or services on which the parody or satire is used (typically clothing or print goods in the parody context) are sufficiently similar to those for which the original mark has been registered, or whether the original mark is well known and therefore protectable for goods and services unrelated to those for which it has been registered. The extent to which a parody or satire will be actionable is likely to diminish significantly the further the allegedly infringing use lies from the core goods or services for which the original brand has been used. For example, in Turner Entertainment Company v Yo-Merri Todd(15) the opposition to various applications for marks including THE WIZARD OF OZ failed in relation to certain goods and services, including veterinary preparations, leather goods, alcoholic beverages and coach tours, for want of a logical connection with Turner's WIZARD OF OZ property. However, oppositions succeeded in relation to more closely related goods (see above).

Further, where goods or services are only similar or closely related (rather than identical) to those for which a mark has been registered, (a parodist may escape trademark infringement if the manner in which the parodist actually used the mark is unlikely to give rise to confusion under a rider to Section 120(2) of the Trademarks Act.

Australian trademark law does not have a general 'fair use' defence. Specific defences to trademark infringement are set down in Sections 122 and 123 of the Trademarks Act. These typically protect a competing economic need to use a mark (eg, to refer to genuine goods, in relation to comparative advertising, to describe the compatibility of goods or on the basis of the alleged infringer's own independent rights in the mark through legitimate use). The defences do not cover use of a mark for parody or satire (although the Copyright Act 1968 does include a parody defence for copyright infringement), and it is highly unlikely that these defences would apply in the context of a parody if the other elements of infringement as set out above had been made out. These defences have not been applied in the parody context in Australia to date.

Misleading or Deceptive Conduct or Passing Off

Trademarks are also protected in Australia under the Trade Practices Act 1974 and the equivalent provisions of the State Fair Trading Acts, which prohibit misleading or deceptive conduct or false representations in trade or commerce, as well as under the tort of passing off. The Trade Practices Act and passing off actions are both based in likelihood of confusion, which may give rise to difficulties in the context of parodies. Nonetheless, the fact that a use of a mark is parodic is not sufficient to avoid breach of the Trade Practices Act. However, it has repeatedly been held that even where the alleged infringement involves a parody, the only question is whether the elements of the cause of action have been made out.(16)

Crocodile Dundee concerned the use of a figure in 'Crocodile Dundee'-type attire engaged in a humorous reenactment of the film's famous "That's not a knife" scene to advertise Pacific Dunlop's shoe products. The Full Federal Court rejected Pacific Dunlop's claim of parody as an excuse for representations which were held on the evidence to be likely to mislead or deceive. The court also noted(17) that the question of whether the allegedly infringing advertisement amounted to a parody was irrelevant, and that the only question was whether the elements of the causes of action claimed had been established. In any case, it appears that the court regarded the advertisement concerned as a parasitic copy rather than a successful parody.

Key questions
The key questions in the parody context are as follows.

Likely to mislead or deceive
The main question is whether the parody is likely to mislead or deceive consumers. This may not be simple to establish in the case of a 'successful' parody, which by its nature distinguishes the parody from the original mark. Australian courts tend to regard fame as a double-edged sword where the offending mark differs in some way from the original (which a parody will usually do).(18)

Cheeky but non-confusing references to trademarks have historically not been found likely to mislead or deceive. Examples include use of the brand 'Tabasco' for a company designing stands for exhibitions and shows(19) and the use of BIG MAC in an advertisement for a large bottle of McWilliams' wine.(20)

However, in the 'rip-off' context of unauthorized character or identity merchandising, a likelihood of confusion can be relatively easily demonstrated under Australian law. For example, in Hogan v Koala Dundee(21) the court held that a shop copying various indicia of Paul Hogan's Mick "Crocodile" Dundee character in its advertisement had engaged in misleading or deceptive conduct.

Whether the parody is in trade or commerce
This requirement is broadly defined. It will be readily established where the parody is featured on something being sold or in the form of an advertisement.

Likelihood of damage for passing off
Liability for passing off is activated upon proof of likelihood of damage to goodwill.(22) This requires something more than mere dilution of the target mark's reputation. Brand criticism or loss of cachet resulting from the parody is unlikely to be sufficient. More likely to be found infringing are 'character merchandising'-type parodies, which deprive the mark's owner of a licensing opportunity and therefore can be considered as a form of damage to goodwill with direct financial consequences.

Opposing Applications for Trademark Parodies

Trademark owners frequently appear to prefer to address applications for parodic marks through opposition proceedings before the Trademarks Office, rather than court proceedings. A number of grounds for opposition under the Trademarks Act may apply to parodic uses of marks. However, while parodic uses are not specifically protected, it may be difficult to make out grounds for opposition where the application is for a parody of a mark, for the reasons set out below.

Section 60
Section 60 allows an opposition on the basis of the trademark owner's prior reputation in Australia (whether the owner has registered the mark in Australia or, in extreme cases, whether the mark has been directly used in Australia), and a resulting likelihood of confusion. In almost all cases of parody the original mark will have a sufficient reputation for Section 60 (or there would be no attraction for the parodist). However, the question of likelihood of confusion will depend on the facts. In Roche Products Limited v Hylebut Pty Limited (Roche Products)(23) an application for the mark VALIUM for clothes was held likely to mislead or deceive, particularly because the parody included Roche's identical mark VALIUM and therefore might not be recognized as a parody. The famous MCDONALD'S mark has had a mixed history under this ground. No likelihood of deception was found between MCVEG and McDonald's other MC/MAC brands in Sandy Gaye Cowley v McDonald's Corporation,(24) but a likelihood of confusion has been found on the basis of the later growth of McDonald's reputation and diversification of product lines in other cases, including between MCCHINA and McDonalds''other MC/MAC brands in McDonald's Corporation v Sheli Lubowski.(25)

Section 42
Section 42 allows opposition where use of the mark of the subject of the application would be contrary to law (typically, the Trade Practices Act or the tort of passing off). However, it may be difficult to demonstrate the necessary likelihood of confusion to activate the Trade Practices Act.(26)

Section 43
Section 43 allows opposition on the basis that because of a connotation possessed by the mark, its use would be likely to deceive or cause confusion. Technically, this ground is available only where the misleading connotation is inherent in the mark (rather than based on the context of its use).(27)

However, in several cases involving the copying of television show and film titles for use for other goods and services the Trademarks Office has effectively allowed evidence of a mark's fame through use to establish the existence of an inherent connotation.(28)

Having said that, the Section 43 ground has not been upheld in a number of relatively similar cases, including Time Warner Entertainment Company LP v Just Spectacles Pty Ltd,(29) Subafilms Ltd v Tenancy Management Pty Ltd(30) and Time Warner Entertainment Company LP v Cosmopolitan Enterprises Pty Limited.(31)

While Section 43 may be an available opposition ground in parody-type cases for well-known marks, the obvious difficulty is that a parody will in most cases make some amendments to the original mark, and where that is the case it may be difficult to argue that any connotation possessed by the mark is likely to mislead or deceive, even where a connotation can be established. None of the above cases involved a clear parody.

Section 58
Section 58 allows opposition on the basis that the parodist is not the owner of the mark. However, if the parody involves any amendments at all to the original mark or covers different goods or services from those for which the original mark has been used or registered, this ground is unlikely to be available. It typically is not pressed in Australian opposition proceedings involving parody-type uses of marks.

Lessons for Parodists

As parody is not a defence in and of itself to an action for trademark infringement, misleading or deceptive conduct under the Trade Practices Act or the tort of passing off, the scope of permitted parodies has received relatively little judicial attention.

In Crocodile Dundee the Full Federal Court was clearly of the view that an advertisement amounting to unauthorized character merchandising of Paul Hogan's Mick "Crocodile" Dundee movie character to sell shoes was not a successful parody, but rather a "parasitic copy".(32) In any case the court also noted that the question of whether the advertisement was a successful parody was irrelevant to Hogan's claim. In FremantleMedia and 19 TV Limited v Solowave Pty Limited(33) an alleged attempt to parody the 'Australian Idol' mark as DJ IDOL was regarded as unsuccessful due to the similarity of the marks. The opposition succeeded. In Roche Products an opposition to an application for the VALIUM mark with a device of a 'relaxed figure' for clothes was held likely to mislead or deceive, despite being recognized as a parody by the hearings officer of the Trademarks Office, in part because the parody included Roche's identical mark VALIUM and might not be recognized as a parody by some consumers. In other words, parodies which are ineffective as parodies are more likely to be actionable in Australia.

Since the primary question will be whether a cause of action has been made out, the limits of permissible parody can be summarized as follows. A parody must not involve a 'match' to the original mark and the goods and services for which the original mark has been registered or used - that is, it must not be both substantially identical or deceptively similar to the original mark and be used in relation to identical goods or services or closely related goods or similar services (or unrelated services, in the case of a well-known mark). Alternatively, the trademark must not be used as a trademark, even if there is a 'match' on the mark or the goods and services involved. Finally, in the case of liability under the Trade Practices Act or tort of passing off, the parody must not be likely to mislead or deceive consumers into thinking that the parody is in some way associated or affiliated with the original trademark or its owner.

Cultural Concerns

Parodies appear to have been relatively frequently litigated in US and European courts and rather infrequently addressed in Australian legal proceedings. The emphasis on 'larrikinism' or an irreverent sense of humour in Australian culture, together with a distrust of authority or celebrity known as 'tall poppy syndrome', may favour a permissive approach to parodic uses of marks, and this may in turn explain the relative dearth of Australian case law on the subject. Public relations considerations are all the more important where the trademark owner is a large and/or overseas-based company (and the likely target marks for parodies will usually fit in at least one of these categories), which may give rise to claims of 'cultural imperialism' or bullying and a tendency to favour the 'underdog' parodist. The media has shown a tendency to be suspicious of trademark rights holders, particularly in the context of several relatively high-profile disputes, such as Anisha's GOLDEN ARCH case (which involved use of a large yellow A sign for a restaurant) and the DOGUE case above.(34) In such cases the media may give a sympathetic ear to targets of legal action. For example, the ABC article "Brand Name Bullies"(35) provided favourable accounts of the parody marks in the DOGUE and Anisha's cases and claims:

"It's that need to 'police' your trademark or lose it that sees larger companies chase the smaller minnows around the shallows, sometimes doing little more than incurring large legal costs and perhaps warning off other potential infringers."

The prevailing climate may act as a brake on litigious impulses and give some comfort to would-be parodists.

Comment

US and European trademark law includes specific defences to actions for trademark infringement for parodies. Australian law does not. In fact, Australian courts have frequently refused to consider the question of parody in any detail at all, dismissing the question as irrelevant and focusing on the elements of the underlying causes of action. However, the decided cases demonstrate that the requirement of use as a trademark and the dependence of Australian trademark actions on a likelihood of confusion have both frequently operated to permit parodies of trademarks and have done so without the often esoteric value judgments required by the parody defences in force overseas.

For further information on this topic please contact Lauren Eade at Gilbert & Tobin by telephone (+61 2 9263 4000), fax (+61 2 9263 4111) or email ([email protected]).

Endnotes

(1) Section 120(1).

(2) Section 120(2).

(3) Section 120(3).

(4) See Shell Co (Aust) Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407.

(5) See Top Heavy v Kilin (1996) 34 IPR 282 (where use of the expression CHILL OUT on the front of a t-shirt was held not to amount to trademark use).

(6) See CA Henschke & Co v Rosemount Estates Pty Ltd (2000) 52 IPR 42.

(7) (2000) 52 IPR 42 at 66.

(8) Southcorp Ltd v Morris McKeeman [2006] ATMO 48.

(9) Advance Magazine Publishers v Bushby [2004] ATMO 19.

(10) Intermatch v Dick Smith Investments [2003] ATM0 18.

(11) Levi Strauss v Wingate Marketing (1993) 116 ALR 298.

(12) FreemantleMedia and 19 TV Limited v Solowave Pty Limited [2008] ATMO 87.

(13) Pfizer v Karam (2006) 237 ALR 787.

(14) Turner Entertainment Company v Yo-Merri Todd [2007] ATMO 33.

(15) [2007] ATMO 33.

(16) See McIlenny v Blue Yonder Holdings Pty Ltd (1997) 149 ALR 496 and Pacific Dunlop v Hogan (Crocodile Dundee) (1989) 14 IPR 398.

(17) (1989) 14 IPR 398 at 408.

(18) See Mars Australia Pty Ltd v Sweet Rewards [2009] FCA 606 (MALT BALLS packaged in similar packaging to MALTESERS).

(19) McIlenny.

(20) McWilliam's Wines Pty Limited v McDonald's System of Australia Pty Limited [1980] FCA 159.

(21) (1988) 83 ALR 187.

(22) Reckitt and Coleman v Borden [1990] 1 All ER 873.

(23) [2007] ATMO 74 (VALIUM for clothes held likely to mislead or deceive, particularly because parody included Roche's identical mark VALIUM and might not be recognized as a parody).

(24) [1997] ATMO 65.

(25) [2004] ATMO 56.

(26) [2002] ATMO 33 (SLOUCH HAT logo for various goods, including software, held unlikely to give rise to confusion in the face of opponent's RED HAT operating system and therefore not contrary to law).

(27) See Big Country Developments Pty Ltd v TGI Friday's Inc (2000) 48 IPR 513 at 521 (concerning the TGI FRIDAY'S mark).

(28) See Twentieth Century Fox v Durkan (2000) 47 IPR 651 (BRAVEHEART THE MUSICAL found to have a misleading connotation of connection with the BRAVEHEART film) and Amalgamated Television Services Pty Ltd v Pickard (2000) 48 IPR 133 (SUMMER BAY for china goods and clothing found to have a misleading connotation of connection with the opponent's television show HOME AND AWAY, which is set in the fictional Summer Bay).

(29) [2003] ATMO 43 (MATRIX EYEWEAR held not to possess a misleading connotation with the film The Matrix, in view of alternative meanings of 'matrix').

(30) [2006] ATMO 11 (YELLOW SUBMARINE for temporary accommodation and related services found to have a connotation regarding the Beatles song, but found unlikely to deceive or confuse).

(31) [2001] ATMO 83 (VERONICA'S CLOSET for clothing, including underwear, found not to have a misleading connotation given the lack of notoriety of the opponent's television show).

(32) See, for example, Crocodile Dundee at 430.

(33) [2008] ATMO 87.

(34) Advance Magazine Publishers v Bushby.

(35) See www.abc.net.au/catapult/indepth/s1807538.htm.

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