DC Comics v Cheqout Pty Ltd is the second recent consideration of the bad faith ground by Australia’s Federal Court. This time the claim to bad faith was made out.

The case involved an opposition by DC Comics against the mark SUPERMAN WORKOUT in relation to various fitness servicesin class 41. The Hearing Officer rejected the opposition, and DC Comics appealed.

Section 60 – the reputation ground

Bennett J rejected DC Comics’ opposition based on its reputation in the SUPERMAN mark under s60. Bennett J considered that the fair and notional use of SUPERMAN WORKOUT by Cheqout for the class 41 “without reference to any of the well known indicia associated with the DC Comics superhero” would not be likely to cause confusion. Bennett J went as far as saying that SUPERMAN was descriptive within the opposed mark.

Section 62A – the bad faith ground

However, Bennett J upheld the appeal in respect of the bad faith ground under s62A.

Key to the outcome was the applicant’s use of the logo above “soon after the application” was filed on 2 June 2009. That design closely resembles DC Comics’ insignia, and it was relevant too that Cheqout made use of colours “traditionally used in conjunction with the Superman character”. 

Bennett J inferred that the SUPERMAN WORKOUT mark was as at the filing date intended to be used “in combination with the BG Shield Device in order to strengthen the allusion to Superman” and that this was “designed to gain a benefit by appropriating Superman indicia and the reputation of the DC Comics superhero, so as to further the viewer’s association between the Trade Mark and the Superman word mark”. This conduct fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons, and the application was therefore rejected as having been filed in bad faith.

Bennett J stopped short of expressly stating that this appropriation gave rise to a likelihood of confusion.

Comment

In focusing on the conduct of the applicant, rather than on a likelihood of confusion among consumers, the decision simply reflects the fact that bad faith is an absolute ground for rejection, rather than a relative ground.

Having said that, Bennett J’s decision also echoes the language of “unfair advantage” in Europe’s anti-dilution provisions (namely articles 8(5) and 9(1)(c) of Regulation 207/2009). The vagaries of these provisions were criticised as providing a “pointless monopoly” by Lord Justice Jacob in the L’Oreal v Bellure litigation, on the basis that they are “high in moral content” rather than on economic content.

It is only a matter of time before further consideration is given as to where the line is to be drawn between legitimate business practices and conduct falling on the wrong side of the line. 

This article was originally published in the INTA Bulletin on 1 July 2013. The decisions mentioned are available at www.austlii.edu.au and www.bailii.org