Choosing brands and trade marks has always been an important selection, and the decision in Yarra Valley Dairy Pty Ltd v Lemnos Foods Pty Ltd  FCA 1367 highlights the importance for Australian businesses in choosing differentiating and distinctive trade marks that are able to distinguish their goods and services from their competitors.
Yarra Valley had been using its registered trade mark "PERSIAN FETTA". It claimed that Lemnos Foods was infringing its trade mark by using an identical mark, in breach of section 120 of the Trade Marks Act 1995 (Cth).
Yarra Valley also sought relief for misleading and deceptive conduct (in breach of section 52 of the Trade Practices Act 1974 (Cth)) and for damage to its goodwill (passing off).
Lemnos counter-claimed that Yarra Valley's registration of the PERSIAN FETTA should be cancelled, because registration could have been successfully opposed, and the application was tainted by misrepresentation.
Too common a term
The Federal Court of Australia held that PERSIAN FETTA was not capable of distinguishing the registered goods ("dairy products including cheese") as those of Yarra Valley. The Court held that "fetta" is a common term and "Persia/Persian" are geographical terms (albeit there being no country currently called Persia) and accordingly "there is a likelihood of other traders legitimately wishing to use in Australia the phrase PERSIAN FETTA in relation to cheese products in the appropriate circumstance".
According to the Court, it was the name YARRA VALLEY and Yarra Valley's logo, which included the words PERSIAN FETTA, (and not the actual words PERSIAN FETTA) that distinguished its products from those of competitors.
Justice Middleton made the point that extensive use of a mark does not alone establish distinctiveness; instead, distinctiveness is proven if the trade mark distinguishes the goods or services of one trader from those of another. This assessment cannot be reached in isolation from a consideration of the mark itself.
He referred to the classic test for determining distinctiveness expressed by Justice Kitto in the Michigan case: "the question whether a mark is adapted to distinguish [is to] be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – will think of the word and want to use it in connection with similar goods in any manner which would infringe a registered trade mark granted in respect of it" (Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 at 514).
On the issue of damage to goodwill and misleading and deceptive conduct, Justice Middleton stated the classic trinity of elements needed to establish passing off:
- that the "get-up" is recognised by the public as distinctive;
- that there has been misrepresentation by the other party; and
- that the applicant has suffered or is likely to suffer damage.
Here the Court held that the action for passing off and misleading and deceptive conduct could not succeed because there was an "insufficient likelihood that consumers would have been misled by the packaging of Lemnos".