Australian Trade Marks Law Blog

Mars craters

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Sat, 27 Jun 2009 20:48:29 +1100

In Mars Australia Pty Ltd v Sweet Rewards Pty Ltd [2009] FCA 606 the applicant Mars Australia Pty Ltd (Mars) has manufactured, distributed, marketed and sold a bite-size confectionary called Maltesers in Australia since 1989. The respondent (Sweet Rewards) has imported, distributed and sold a chocolate covered confectionary product known as “Malt Balls” since about the middle of 2005, principally through Target (in orange jars) but also through and Kmart, Coles, Franklins, Priceline, BI-LO, IGA, Dimmeys and a number of other discount stores (in red jars). The word Maltesers does not appear on the Malt Balls packaging. They are delicious, make you fat and rot your teeth. If you are a film critic, you can hold them in your hand until slightly molten then hurl them at the movie screen. Or not. Anyway, the red jars and the Mars packaging looked like this:

Mars made four claims about the two kinds of jars and labelling used by Sweet Rewards, namely that:

1. their distribution is unlawful because, the jars wrongly suggest a connection between Malt Balls and the Maltesers product which is non-existent;

2. the Malt Ball jars misleadingly represent to consumers that their contents are the same as Maltesers;

3. the use on the jars of a label with floating chocolate balls, some of which are sliced through showing a yellow filling, misleadingly represent to consumers that their contents are the same as Maltesers;

4. the jars infringe two registered trade marks owned by Mars.

Mars’ failed on all allegations and its application was dismissed with costs. Baker & McKenzie acted for Mars. Mallesons instructed Bruce Caine SC and Warwick Rothnie of IP Wars blog for the respondents.

Trade Practices Act claim – misleading and deceptive conduct

The Hon Justice Perram held that “the orange jar does not remotely resemble the Maltesers packaging or use all of the essential features of the Maltesers get-up. I do not think that the ordinary consumer of chocolate confectioneries could possibly mistake the orange jar for Maltesers. In my opinion, this claim by Mars is wholly unmeritorious”.

The Court also found against Mars in relation to the red jar, on four main grounds:

the word “Maltesers” or any other aspect of that word’s visual features or presentation is nowhere to be found on the red jar so there was no significant “source of confusion” causing the products to “misleadingly resemble” each other. As Perram J., put it : “it is highly unlikely that any ordinary consumer of chocolate confectionary could mistake something which is not called a Malteser for a Malteser. In that sense, Mars is a victim of its own success.”;
the word “Delfi” with a skier motif next to it is emblazoned on the label of the red jar in print half the size of the words “Malt Balls” was “a significant feature which finds no counterpart in the Maltesers get-up”;
the red of the Maltesers products is quite different to the red of the red jar.
while there was some limited similarity between the red jar and the Maltesers products in that “both are festooned with floating chocolate balls, this condition is not sufficient to overcome the effect of the words “Malt Balls”, the Delfi mark or the different red colouring”.

The first passing off claim – representations about source and origin

The Court noted that “where a party intends to misappropriate another’s goodwill the demonstration of that intention may well make it easier to draw an inference that the impugned conduct was misleading” then found as a question of fact that Sweet Rewards had not deliberately misappropriated the goodwill associated with the Maltesers products.

The second passing off claim – product equivalence representation

The decision continues: “Mars also argued that the red and orange jars conveyed representations that the Malt Balls they contained were made from the same ingredients, made from the same recipe or provided the same taste experience as Maltesers when eaten”. His Honour called this the “product equivalence representation.”

The Court held that “the get-up of the respective products was not deceptively similar” but said that “the red and orange jars [were] deceptively similar to the Maltesers get-up then I would be prepared to conclude that the [so called] product equivalence representation was made”.

Really? I mean, what His Honour says about get-up is uncontroversial but the idea of “product equivalence” seems, to this writer, to cover any get-up that descriptively or functionally represents chocolate coated honeycomb, which would be plainly wrong.

The third passing off claim – whether every Malt Ball represents that it is a Malteser

Mars contended that the get-up depicting floating brown balls with some cut-through to reveal a yellow centre necessarily connotes that the malt ball depicted is a Malteser.

The Court held that “most important aspect of the Maltesers get-up is the word Maltesers and the associated brand flag”. It also held that the words “Malt Balls” were a dead giveaway too, “extinguish(ing) entirely whatever limited capacity for confusion the floating balls might have otherwise had.”

The trade mark claims

Mars owned two relevant registered trade marks and agitated two issues:

1. whether Sweet Rewards’ use of the Malt Balls label was ‘use’ in a trade mark sense; and

2. whether the use by Sweet Rewards of that label, assuming it to be trade mark use, was deceptively similar to Mars’ trade marks.

1. Use

Mars had to demonstrate that Sweet Rewards’ use of the red jar label was use as a trade mark . This requires either that Mars show that the label was intended to be used to distinguish goods or services in the requisite sense or that it did in fact do so (see s 17 of the Trade Marks Act).

The Court held that there was trade mark use by Sweet Rewards but that it was only the Delfi mark, not the Maltesers mark.

2. Deceptive Similarity

On this element, the Court engaged in a straightforward application of the principles in Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd (2004) 61 IPR 212 [2004] FCAFC 196 which established a number of principles in considering whether a mark so nearly resembles another mark that it is likely to cause confusion or deception:

it is to be judged by an impression by persons of ordinary intelligence based on their recollection or imperfect recollection of an applicant’s mark;

the ‘idea of the mark’ is to be taken into account;

aural impression is taken into account;

risk of deception is taken into account and whether an ordinary person entertains a reasonable doubt;

where an essential feature or features of a particular registered trade mark are incorporated into another mark, that may well infringe the registered trade mark;

generally, reputation is irrelevant to the question of infringement except if a particular word or words has come to signify exclusively the goods of the proprietor of a mark (the mark including those words) then the use of that or those words by another would be an infringement; and

a mark is notoriously so ubiquitous and of such long standing that consumers generally must be taken to be familiar with it and its use in relation to particular goods or services is a relevant consideration.

The Court concluded that the trade mark used by Sweet Rewards was the Delfi mark so that Mars’ claim tripped over at the first hurdle. The Court went on to find that “even if the trade mark use by Sweet Rewards were as Mars alleges (and it wasn’t), consumers are so familiar with Maltesers that they could not possibly be confused by the Malt Balls packaging – more formally, there is no likelihood of imperfect recollection by them of the Maltesers mark leading to confusion.” His Honour observed that “Maltesers” does not sound like “Malt Balls” found against Mars and awarded costs to Sweet Rewards.

Ruling on Evidence

Objection was taken by the respondents on Mars’ evidence of certain discussions a witness had with various retailers about the distribution of the Delfi products, the purpose which was to show that the reputation of the Delfi range was limited.

The Court held that the evidence was hearsay and declined to receive it pursuant to s 64(2) of the Evidence Act 1995 (Cth) as no notice had been given pursuant to s 67. The Court declined exercise its power to relieve Mars from the notice requirements pursuant to s 67(4) as the affidavit did not provide the particulars contemplated in the notice and was prepared five months in advance of the hearing.

The Court pointed out that the problem would have been fixed with a short affidavit from each person. But as the Court observed much earlier in the judgment [at paragraph 23]: “No reputation need be established in any feature of the respondent’s product in order to show that the applicant’s goodwill is being misappropriated or that consumers are, thereby, being misled. The making of an allegation by an applicant that a respondent’s product has a particular get-up, beyond and above it having particular features, serves no purpose.” In other words, the dud evidence was unnecessary. And inadmissible.

Nick Weston

Beware of cybersquatting on Facebook

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Tue, 16 Jun 2009 19:17:36 +1100

Facebook has announced that it will begin offering personalised username URLs to its users. On a first-come, first-served basis commencing 13 June, 2009 Facebook users are able to register personalised domain names such as www.facebook.com/yourname for their Facebook pages. Previously, a user’s Facebook URL was comprised of randomly assigned numbers.

Nicholas Weston, the law firm behind the Australian Trade Marks Law Blog comments that offering such services is a new potential opportunity for trade marks infringers and cyber-squatters. These procedures may be abused by reserving your – or your client's - trade marks as their username and thereby hold themselves out as being affiliated with the genuine trade mark owner. For example, any particular user might register www.facebook.com/yourtrademark.

In anticipating that some of its users will want to set up URLs that include the trade marks of others, Facebook created an online form for trade marks owners to pre-emptively block people from including their registered trade marks in Facebook usernames but, apparently satisfied with that grand effort, closed this process within three days of its commencement.

Facebook still has an automated IP infringement form for those who wish to report that someone’s username infringes their trade marks rights. The complaint form is available at http://www.facebook.com/copyright.php?noncopyright_notice=1. For those who like to complain early and complain often, there is no cost to complain about trade mark rights being infringed using the online form.

Nick Weston

Qantas wins first prize for grammar

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Mon, 15 Jun 2009 15:36:29 +1100

In a recent decision by a Delegate of the Registrar of Trade Marks (Opposition by Virgin Blue Airlines Pty Ltd to registration of trade mark application No. 980223) Virgin has been unsuccessful in its attempt to stop Qantas from registering as a trade mark the slogan ‘ALL DAY, EVERY DAY, LOW FARES’.

At a Hearing in Canberra on 19 January 2009 before Delegate, Bianca Irgand, Virgin Blue Airlines Pty Ltd (Virgin) pursued three grounds of opposition under the Trade Marks Act 1995 (the Act).

For ease of reference, the relevant trade marks are:

‘ALL DAY, EVERY DAY, LOW FARES’ (the Qantas mark)

‘EVERY DAY LOW FARES’ (the Virgin mark)

Ownership – Section 58: Virgin argued that they were the rightful owners of the Qantas trade mark since they were prior users of the “substantially identical” Virgin trade mark. However, the deliberate use of punctuation and addition of words ‘ALL DAY’ in the Qantas trade mark were the focus of the Delegate in finding that the Section 58 ground had not been made out. The extra words combined with the importantly placed commas “served to create a strong impression of a three part slogan in the mind of the consumer”. With no form of punctuation in the Virgin trade mark and the particularly descriptive use demonstrated by Virgin the Delegate fell short of finding that the mark carried no inherent distinctiveness.

Reputation – Section 60: To succeed under Section 60 (pre-October 2007 amendment version) Virgin needed to point to a trade mark that was either “substantially identical” or “deceptively similar” that had acquired a reputation in Australia such that use of the Qantas trade mark would lead to deception or confusion.

On the basis of the “descriptive nature” of ‘EVERY DAY LOW FARES’ the Delegate found that the Virgin and Qantas trade marks were not deceptively similar. Regardless the Delegate went on to consider both the “use” and “reputation” requirements under Section 60, which is useful given the chances of another decision maker coming to a different finding on the question of deceptive similarity, as well as the fact that deceptive similarity is no longer a requirement under Section 60 of the Act. In particular, the Delegate was not satisfied that the Opponent’s “demonstrated” use of the expression ‘EVERY DAY LOW FARES’ was “use” as a trade mark nor that the Opponent had shown a reputation in the trade mark. More evidence, for example documentation supporting Virgin’s claim that ‘EVERY DAY LOW FARES’ was in fact a “specifically designed” trade mark may have convinced the Delegate otherwise.

Contrary to Law – Section 42(b): Further to the Delegate’s finding that the Qantas mark was not likely to deceive or cause confusion under Section 60 of the Act, she held that use of the opposed mark would similarly not offend Sections 52 and 53 of the Trade Practices Act 1974 (Cth) since proof of deception or confusion was even less onerous (the relevant supporting case law was cited).

Given the competitive nature of the no frills domestic airfares market, first captured by Virgin, this battle is unlikely to end here.

Lea Lewin

Recognising the Indications of Geography

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Thu, 28 May 2009 17:28:35 +1100

A recent decision by Justice Bennett concerning the use of the word ‘Bavaria’ in relation to beer has provided some interesting insights into the extent of protection provided for geographical indications under our trade mark legislation. The applicant, Bavaria NV, is a family-owned company incorporated in the Netherlands that makes beer, among other beverages. It had unsuccessfully sought registration of its trade mark for beer and appealed to the Federal Court when its application was denied as the result of an opposition hearing. The trade mark included the word ‘Bavaria’ which was displayed prominently within a device mark and which also contained other words, ‘Holland Beer’.

The successful opponent of the original application for registration was the Bavarian Brewery Association which represents the interests of well over 200 Bavarian breweries, some of which have been in business for centuries. Its opposition to registration was based on numerous grounds as is the custom in trade mark practice but it is the discussion about geographical indications and the application of Section 61 of the Trade Marks Act 1995 (Cth) which is the focus of this posting.

Section 61 provides that the registration of a trade mark may be opposed on the ground that the trade mark contains or consists of a sign that is a geographical indication for goods. Section 6 defines a geographical indication as a ‘sign recognised [in another country] as a sign indicating that the goods originated in that country, region or locality and have a quality, reputation or other characteristic attributable to their geographical origin.’

The expression ‘Bayerisches Bier’ which translates to Bavarian Beer is registered as a protected geographical indication (PGI) under the relevant EC regulations. As such it is recognised as the name of a region used to describe an agricultural product or foodstuff originating in that region and which possesses a specific, quality, reputation or other characteristic attributable to that geographical origin. The registration for a PGI can be contrasted with registration for Protected Designation of Origin (PDO) which requires that the goods have a quality or characteristic which is essentially or exclusively due to a particular geographical environment with its inherent natural and human factors.

There were two key points in the judgment that affect the application of Section 61. The first surrounds the use of the word ‘recognised’ in the definition of a geographical indication. Bennet J held that long term use is not enough in itself to constitute recognition and that the recognition would have to be formalised in some way in the relevant country by, for example, registration under some system of registration for geographical indication. Consequently, the expression ‘Bayerisches Bier’ is a geographical indication because it is registered pursuant to the EC regulations as a PGI and those regulations only permit registration when the necessary connection between the name of the region and the specific characteristic of the goods attributable to that geographical region has been demonstrated. Long term use short of formal recognition would not be sufficient although the judgment leaves open the possibility that recognition might flow from a court decision.

This view has particular significance for those countries that do not have systems of registration of geographical indications. In particular, one of the reasons often put forward for protecting geographical indications in international fora is that it allows developing countries to gain protection for the names of their agricultural products. The catch is that it seems they will have to have in place a system of registration of their geographical indications. In turn, this requires devotion of scare resources to the creation of a registration system when those same countries may well have other, more pressing priorities. But because they have not devoted as many resources to the issue.

The second key point of the decision is that it is not enough to demonstrate that the sign is substantially identical with or deceptively similar to the geographical indication in question. Those words which appear in other sections of the legislation such as Section 120 and Section 44 do not appear in Section 61. In other words, the sign in question and the geographical indication must be identical. Bennett J pointed out that ‘Bavarian Beer’ is not the same as Bavaria, even when that word appears on a beer bottle. For that reason alone, Section 61 did not apply.

The end result is that Section 61 may not have as many teeth in it as some may have thought. No doubt the EC will be quick to point out the ‘deficiencies’ in our legislation in the near future.

Mark Davison

Annual Nicholas Weston "Tattooed Brands" Global Survey 2009 Results

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Mon, 11 May 2009 14:19:04 +1100

The first annual Nicholas Weston "Tattooed Brands" Global Survey was conducted during May 2009 with 20 tattoo businesses in the suburbs of Melbourne, Australia surveyed using a telephone interview questionnaire. Conducted by Australian law firm and trade marks attorneys Nicholas Weston, the survey asked tattooists whether they had ever tattooed a registered trade marked brand or logo onto someone's body and if so, which ones are popular, what age groups get them and whether the recipient was drunk or affected by drugs at the time.

Surveys are typically conducted as an important tool to find out what is vital to the community, and where to prioritise spending or effort. In this case, the survey is motivated by an inordinate interest in the self-mutilation of others combined with a gratuitous exercise in self-promotion, sorry, law firm marketing. Nicholas Weston is pleased to share its findings in the annual survey with the global community.

The highlights from the 2009 Survey are summarised below.

Top Twenty Trade Marks Tattooed onto People (Ranked from Most Popular to Least Popular):

1. Harley Davidson

2. Nike

3. AFL (Australian Rules) club logos

4. Vegemite

5. VB

6. Disney characters (various)

7. Holden

8. Ford

9. Fox/Alpinestars (motorcross)

10. Triple J (radio)

11. Louis Vuitton

12. Chanel

13. Playboy

14. Coca-Cola

15. Jack Daniels

16. Jim Beam

17. Mountain Dew

18. Qantas

19. Triumph (motorcycles)

20. Gibson/ Fender

Summary of 2009 Survey Results

Of those receiving a tattoo, only around 2 – 5% receive a brand tattoo, and predominantly in the 18 – 25 age group. In every case, the brand tattoo was requested by the recipient rather than suggested by the tattooist. Tattooists also said that brand tattoos were obtained on impulse in some cases and as a carefully considered choice in others. Opinion among tattooists was divided on whether the choice of brand- tattoo reflected its culturally iconic status or the recipient's faith in the brand. One tattooist opined that "it is a humour thing." One tattooee received payment to have toilet rolls of a certain brand inked onto his backside but otherwise the overwhelming majority were not paid to become human billboards. All of those surveyed denied that any recipients of a brand tattoo were visibly drunk or affected by drugs at the time.

A copy of the questionnaire is located here. The next annual survey will be conducted in May 2013 and the results should be available in October 2026. We have already started drinking heavily in anticipation.

So what?

Most well known brands and logos are registered trade marks. Use of a registered trade mark as a tattoo is generally not “use as a trade mark” by using the sign in the course of trade for the purposes of s 120 of the Trade Marks Act 1995 (Cth).

However, for those of you keen on things Biblical, the pagan custom of tattooing symbols on human flesh is verboten by G_d: "Ye shall not make any cuttings in your flesh for the dead, nor print any marks upon you: I am the LORD": Leviticus 19:28. Brand worshippers and trade marks idolaters may be answering to a higher authority in due course (and they will be easy for Him to spot).

About Nicholas Weston

Founded in 2005, Nicholas Weston is ranked two years running (2008 and 2009) by Managing Intellectual Property Magazine’s World Survey for 'Trade Mark Prosecution' and 'Trade Mark Contentious'. The firm claims practical implementation of thought leadership. Nicholas Weston serves the creative and technology sectors and sectors being transformed by technology.

For more information contact:

Nicholas Weston Lawyers & Trade Marks Attorneys

Ground Floor, 156 Collins Street, Melbourne Vic 3000 Australia

T: (+ 61) 1300 132 551

mail@nicholasweston.com

www.nicholasweston.com

Things just got UGGlier

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Tue, 21 Apr 2009 08:49:41 +1100

In Deckers Outdoor Corporation Inc. v Farley (No 2) [2009] FCA 256, Deckers Outdoor Corporation, responsible for the well known sheepskin boots sold under the ‘UGG’ brand, has been successful in its application for summary judgement for trade mark infringement of its composite trade mark No. 785466. The Court has postponed making an order with respect to compensatory damages until further supporting evidence is presented.

As to its claims for declaratory and injunctive relief for copyright infringement, passing off and trade practices breaches Deckers was unsuccessful. Deckers has become renowned for aggressive enforcement of its intellectual property rights. In view of this positive finding of trade mark infringement, only time will tell whether it continues to pursue these other causes of action, particularly a damages claim for flagrant copyright infringement under Section 115(2) of the Copyright Act 1968 (Cth).

Background

Deckers Outdoor Corporation Inc. (Deckers) and its predecessors have designed, manufactured and sold footwear under the UGG brand in Australia and overseas for over twenty years. In 2003 Deckers became aware that counterfeit UGG products were being manufactured in Melbourne after search orders for a factory in Moorabbin were granted in their favour. Upon discovering the counterfeit products Deckers entered into a settlement agreement with Vladamir Vaysman, Victoria Vaysman and Hepbourne Pty Ltd and these parties also consented to orders restraining them from dealing with footwear bearing the words “UGG” or “UGG AUSTRALIA” or a “sun device” logo. However, the first settlement agreement was breached and a second settlement agreement entered into whereby those same parties, or any entity controlled by them, could not use the word “UGG” to describe or offer for sale any sheepskin products whatsoever.

Late in 2007 Deckers again discovered counterfeit “UGG” footwear being promoted and sold, in this instance on the internet. Deckers filed another claim. Search orders were granted and following an examination of documents seized under those orders, Deckers amended its Statement of Claim to include 22 respondents. Many of these claims have now been settled with only 6 respondents remaining: Hepbourne Pty Ltd, Vladamir Vaysman, Josef Vaysman, Polina Vaysman, Victoria Vaysman and Samba Enterprises Pty Ltd (the Respondents). The present decision relates to an application for summary judgement against the Respondents under Section 31A of the Federal Court of Australia Act 1976 (Cth) in respect of the following claims: declaratory and injunctive relief for trademark and copyright infringement, passing off and breaches of Sections 52 and 53 of the Trade Practices Act 1974 (Cth) as well as state legislation. This case note will focus largely on the trade marks aspect of the claim.

Deckers is the owner of composite trade mark No. 785466 registered since February 1999 and comprising the letters “UGG” below which appears the word “australia” below which appears a “sun device” logo (the Trade mark). This Trade mark, as well as other related marks owned by Deckers, has attracted considerable media coverage and attention and a comprehensive fact sheet on the registrability of the words “UGG” and “UGH” published by IP Australia can be accessed HERE. Deckers allege that the Respondents have infringed the Trade mark by using a mark which is substantially identical or deceptively similar to the Trade mark in connection with the footwear in respect of which the Trade mark is registered.

The Decision

To start the Court outlined that Section 31A of the Federal Court of Australia Act 1976 (Cth) empowers a court to give judgement in favour of an applicant if it is satisfied that the respondent “has no reasonable prospect of successfully defending the proceeding”.

In support of its claim of trade mark infringement Deckers relied on evidence from respondents who had been involved in the marketing of footwear manufactured at the Moorabbin factory, footwear ceased from the Moorabbin factory and advertising and markeing material. In light of this evidence, the Court found that the Respondents were manufacturing, packaging and distributing boots which had on their heels the “UGG australia” label and on their soles the embossed letters “UGG” in association with the “sun device” logo. The case then turned on the similarities between the registered Trade mark and the “counterfeit” products.

The Respondents all argued that the three elements of the Trade mark (the word “UGG”, the word ‘australia” and the “sun device” logo) did not all appear together on the boots or packaging and therefore argued that the marks in question were not deceptively similar. The Court found that this issue could only be determined having regarding “to the circumstances in which the goods were bought and sold and the characteristics of the persons who might be expected to be purchasers of the footwear”. The Court held that the impression created, and “intended to be created” (for example by use of the ® symbol next to the letters “UGG”) made it plain that it was an attempt by the Respondents to suggest that the boots were made by Deckers. The Court was left with no doubt with respect to the “likelihood of confusion and deception as to the provenance of the boots”.

The Court then considered the Respondents submission that there was a reasonable prospect that the Trade mark should be cancelled under Section 88 of the Trade Marks Act 1995 (Cth). This raised the same issue that was dealt with by the Trial Judge in E & J Gallo Winery v Lion Nathan Australia Pty Limited [2009] FCAFC 27 and discussed HERE by the Australian Trade Marks Law Blog, namely retrospective operation of orders made by a court under the Trade Marks Act. Along the same reasoning, the Court held that a successful cross claim under Section 88 would have no bearing on whether or not they had infringed the Trade mark during the relevant period since any order could only be “prospective in nature”.

Accordingly, Deckers was entitled to summary judgment on its claim that the Respondents had infringed the Trade mark in 2005, 2006 and 2007. As to Deckers claim for a declaration to pay compensatory damages, the Court held that the evidence put forward was not specifically directed to damage flowing from the trade mark infringement and that such evidence would need to be adduced and a claim for compensatory damages made.

Other Findings

Copyright Claim: Deckers claim for summary judgment with respect to copyright infringement of numerous literary and artistic works was rejected. The Court’s decision was based on the following issues raised by the Respondents:

- a dispute as to ownership of some of the copyright works;

- the question of whether the words “UGG australia” could attract copyright protection; and

- the potential for a successful defence under Section 77 of the Copyright Act 1968 (Cth)

Substantial Reputation: With regard to their application for declaratory and injunctive relief for passing off and trade practices breaches, Deckers pleaded that it had a substantial reputation both in Australia and overseas. However, no supporting evidence was presented and Deckers sought to rely on deliberate copying by the Respondents as evidence of their reputation. The Court found that without direct evidence, perhaps “expert evidence” it could not conclude that “the Respondents have no reasonable prospect of defending this aspect of Deckers” claim.

Lea Lewin

Lion Nathan legs it with Barefoot

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Tue, 31 Mar 2009 08:34:41 +1100

In E & J Gallo Winery v Lion Nathan Australia Pty Limited [2009] FCAFC 27 the Full Federal Court has affirmed a first-instance decision to remove E & J Gallo’s ‘BAREFOOT’ trade mark from the Register for non use, thus confirming that Lion Nathan has the right to market its 'BAREFOOT RANDLER' beer product. Whilst confirming the first instance decision to remove the 'BAREFOOT' trade mark, the Appeal Court overturned the Trial Judge's finding that beer and wine are not ‘goods of the same description’ and held that Lion Nathan was infringing the ‘BAREFOOT’ trade mark during the 6 month period which it remained on the Register and Lion Nathan had sold its ‘BAREFOOT RADLER’ beer.

So although ultimately losing their trade mark, the Appeal may have proven worthwhile for E & J Gallo. This will be clearer when the question of remedies for the period Lion Nathan was infringing Gallo's trade mark is resolved. On the other hand, the finding that wine and beer are 'goods of the same description' has opened the door for Lion Nathan to bring its own infringement action.

Background

E & J Gallo Winery (Gallo) is a large wine-producing company incorporated in the United States whom in 2005 acquired the share capital in a company trading under the name ‘Barefoot Cellars’. As part of that deal they acquired the Australian ‘BAREFOOT’ trade mark for wine in Class 33. Although ‘BAREFOOT’ was very successful in the United States, only a very limited quantity of the wine had been sold by Beach Avenue Wholesalers Pty Ltd (BAW) in the Australian market during the period from 7 May 2004 to 8 May 2007 (the non-use period). Importantly, there was no evidence that Gallo, or its predecessor, knew about these sales.

In 2006 Lion Nathan Australia Pty Limited (Lion Nathan) began to develop a new full strength, carbon-neutral beer with lemon and lime twist which they coined ‘BAREFOOT RADLER’. Upon learning of Gallo’s ‘BAREFOOT’ trade mark they commissioned some investigations into the use of that mark. Lion Nathan’s investigations revealed no use and filed an action for removal in the Australian Trade Marks Office in May 2007. They proceeded to launch their beer product in January 2008.

The beer launch proved too much to, er, bear, and Gallo initiated proceedings in the Federal Court against Lion Nathan for trade mark infringement. Lion Nathan then brought itsremoval action to the Federal Court by way of a cross-claim. Both actions were heard together in April 2008. The decision was reported by the Australian Trade Marks Law Blog here. In that case, Flick J found in favour of Lion Nathan in both its defence to infringement and its counter-claim to have Gallo’s ‘BAREFOOT’ trade mark removed from the Register for non use.

In July 2008 Gallo appealed with respect to Flick J’s decision on (i) non use of the ‘BAREFOOT’ trade mark and (ii) whether the good in question, beer and wine, were ‘goods of the same description’. Lion Nathan’s cross-appeal concerned the date upon which the removal order should commence arguing that the date should be 8 May 2007 rather than 27 June 2008 (the date of the decision).

The Appeal Decision

The decision was broken up into two questions:

Was there use of the ‘BAREFOOT’ trade mark during the non use period for the purposes of Section 92(4)(b) of the Act?

The Court acknowledged that there was no direct authority on the issue of ‘whether, when a registered trade mark is used in Australia on, or in physical or other relation to the goods, which are offered for sale and sold here but manufactured overseas by an owner or authorised user of the mark who applied the mark to them, the use of the mark constitutes a use by the owner, even though that person may not know that the goods are being offered for sale or sold in Australia but rather sold them to a foreign distributor for resale without any limitation on where they might be resold’.

Along the same lines as the Trial Judge the Court rejected Gallo’s submissions and found that ‘use’ is not made out merely because goods to which a trade mark has been affixed by the owner, or an authorised user, are traded in the ordinary course of trade in Australia. Rather, the ‘owner must have engaged in conduct of some type which the owner might reasonably contemplate would result in dealings with its goods marked with its mark in Australia while the goods were in the course of trade’.

The Full Court went further in its analysis to find that in order for the statutory scheme of the Act to be a cohesive one, the use to which Section 92 of the Act is directed ‘is use of the same character which would warrant registration of the trade mark in the first place. That is conduct, by or on behalf of the owner, associated with a witting or deliberate use of the trade mark in Australia.’ There was no course of trade as between Gallo and BAW or any other party in Australia.

Finding that the ‘BAREFOOT’ mark should be removed the Court then considered the cross appeal. The Full Court noted that Section 101(2) of the Act is clear because it is ‘an order directing someone to do something’. Accordingly, the act of the Registrar removing a trade mark from the Register can only be done after the order is made. An investigation into whether such an order can be made retrospectively was held to be a ‘false issue’. Infringement of a trade mark during the time that it remains on the Register is therefore possible.

Are beer and wine ‘goods of the same description’?

Rather than look at the question of whether beer and wine are ‘goods of the same description’ in isolation the Full Court found it was relevant to note the purpose or object of Section 120(2) as protecting the statutory monopoly a registered owner has to use their mark. In this context they found this requires a ‘consideration of what members of the consuming public might perceive as a result of the use of the alleged infringing mark on the goods in question and whether they might be led to believe they were goods of the registered owner’. When looked at through this prism, it is clear how late on a Saturday evening one might think that beer and wine are ‘goods of the same description’. The Full Court overturned Flick J’s finding on this issue.

The question of deceptive similarity between ‘BAREFOOT’ and ‘BAREFOOT RADLER’ was decided in the affirmative leading to the conclusion that Lion Nathan had infringed the ‘BAREFOOT’ mark from the time it launched its product in January 2008 until the date of the Federal Court decision.

So What?

By affirming Flick J’s decision on the issue of non-use, trade mark owners, particularly foreign ones, need to be conscious that Australian trade marks may be vulnerable if the owner does not put their products into the Australian market either directly or through an authorised user.

Also, the vibe of the recent major non-use cases is that trade marks clearance searches MUST include related classes and potential uses, even if the goods or services at issue face little risk of technological convergence with others. In the Pioneer decision (a convergence case) discussed by the Australian Trade Marks Law Blog here, Bennet, J., chose to exercise her discretion in allowing Pioneer to retain its trade mark in circumstances where some argue there had not been use in the broad category of ‘computer peripheral’ goods for a period of three years. In the Bing! software case (another convergence case) discussed by the Australian Trade Marks Law Blog here, a partial non-use application might have led to a different result. The vibe, and our recommendation , is to search widely when selecting a mark.

Lea Lewin

Novel domain name decision clarifies tests for consolidation of multiple complainants

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Mon, 23 Mar 2009 23:35:57 +1100

In National Dial A Word Registry Pty Ltd and others v. 1300 Directory Pty Ltd (WIPO Case No. DAU2008-0021) an Administrative Panel Decision of the WIPO Arbitration and Mediation Center handed down on 6 March, 2009, the Complaint was submitted by nine complainants against one respondent. The complainants (whom were commonly represented by one law firm) each operate businesses that deal in ‘smartnumbers’: or, in other words, freephone or local rate phone numbers. These are numbers auctioned by the Australian Communications and Media Authority that are numerically alliterative (e.g. 1800 222 222) or those that translate to a "phoneword" when the suffix digits are selectively mapped to the letters on an alphanumeric keypad (e.g. 13 2287, which translates to 13 CATS).

The Respondent, it was alleged, operates a business that had registered sixty-six disputed domain names comprising the Complainants’ phonewords with the addition of the suffix ".com.au".

The Complaint raised a novel procedural issue for which the auDRP contains no express provision: whether a single complaint may be filed against a single respondent by multiple complainants or, in other words "consolidation of multiple complainants" as distinguished from similar issues like consolidation of multiple domain names, consolidation of multiple respondents and consolidation of multiple complainants and respondents.

Panelist, Professor Andrew Christie enumerated ten principles to help guide determination of this issue, as follows:

Just kidding. I am not going to list them. Prolonged exposure may cause brain damage. Thrillseekers may read them HERE.

The Panel ordered that the Complaint be dismissed, subject to the right of (any or all of) the Complainants to file, in their individual capacity, should they wish to do so, a complaint against the Respondent in relation to any of the domain names (in respect of which such individual Complainant asserts applicable rights under the Policy) that are the subject of the Complaint.

Nick Weston

Pioneering Decision on Non-use

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Mon, 09 Mar 2009 20:48:18 +1100

Pioneer KK, the makers of quite well known audio, audio-visual and home entertainment products have had a big win in an application against them for non-use of their trade mark on a range of goods. In Pioneer Computers Australia Pty Limited v Pioneer KK [2009] FCA 135 (23 February, 2009), the battle lines were drawn between the applicant for removal, Pioneer Computers (‘the new guys’), which used the sign Pioneer on its computer products and Pioneer KK (‘the old guys’), the company that sells the home entertainment products under the Pioneer brand that most of us are probably familiar with.

The problem here was that the old guy’s original registration in Class 9 for Pioneer was quite broad. It included ‘computers, computer peripheral devices, computer keyboards; computer memories; printer for use with computers… computer software’ as well as the home entertainment equipment for which the old guys are known. The new guys started up in late 1996 and had been selling computers and computer products since then with the knowledge of the old guys but the old guys, it seems, have had enough and wish to enforce their strict statutory rights. While they retain registration in respect of computers, they can require the new guys to cease using selling Pioneer computers by relying on s120(1) of the Trade Marks Act 1995 (Cth). Effectively, the provision is a strict liability provision and the old guys would not have to prove confusion and the new guys would have no defence even if there was proof of a lack of confusion. The other infringement provisions in s120(2) and (3) are more conditional and offer opportunities for consideration of the likelihood of confusion. They apply where the defendant’s use is on goods for which the trade mark owner does not have registration.

The intriguing part of the decision is that the old guys did not use their trade mark for computers during the non-use period and they have absolutely no intention of making or selling computers. Yet Bennett J exercised her discretion to allow the old guys to keep their registration which means the new guys need to stop using Pioneer on their computers.

A few things about the law of non-use generally

The decision makes a few observations about the Australian law of non-use generally and draws some interesting conclusions about the application of those principles to ‘new’ technology or, more relevantly, the convergence of technologies. A few basic points about Australian non-use law can be made. First, the Court has a general discretion under s 101(3) to retain the registration even if there has been non-use. It need only decide that it is reasonable to do so and there does not have to be any special circumstances. Section 101(4) provides that one discretionary factor is whether the trade mark has been used on similar goods. In this context, that means the issue is whether it has been used on goods of the same description.

Convergence issues

These points become of particular significance in the context of technological convergence. Much of the evidence was directed to the proposition that computer technology and home entertainment technology had converged to the point where ‘the public would not draw a distinction’ between computers sold by the new guys and audio-visual equipment sold by the old guys. The basic proposition being put was that things that play music are now computers and computers play music, among other things. Throw in the existing strong reputation of the old guys and the combination of brand extension and technology convergence meant that Bennett J thought it was not in the public interest to remove the old guys’ registration for computers. As a consolation prize to the applicants, she did say that her discretion would only be exercised upon the old guys giving an undertaking not to sue in respect of past use and giving the new guys a reasonable time to wind up the sales of its Pioneer computers. The end result though is that the new guys need to leave the field and that no-one in Australia will ever sell a Pioneer computer because the old guys do not want to, the new guys can not and, after this decision, anyone else who thinks about it would be plain silly.

As an aside, the old guys had a very aptly named marketing expert called Mr Blanket which is entirely appropriate for an expert advocating for retention of registration over a broad range of goods even when there has been no use and is no intention to use the trade mark in respect of a number of those goods.

Consequences

Now I don’t want to be a wet blanket here but there are a few issues to consider. The first is that while there was a fair bit of discussion about s101(4), the relevance of use of the trade mark on goods of the same description, there was, I think, an unnecessary convergence of this issue with another issue. There was no express finding that what the old guys sold were goods of the same description as computers. There was a finding that ‘the public would not draw a distinction between the removal goods and the goods sold by the old guys’ because of technology convergence and the old guys’ reputation. It would be disappointing if likelihood of confusion became the test of goods of the same description. If it did, that would take a lot of the fun out of distinguishing between ss 44 and 60 of the legislation.

Second, the convergence argument is a bit of a worry. Its limits were not fully explored. For example, just about everything that involves electricity these days uses digital technology. While the same manufacturer may well sell all sorts of digital products and computers, I’m not completely convinced that the public is unable to distinguish between them. Just because a computer can perform basically all functions those digital items can does not mean that they are one and the same thing and certainly not goods of the same description. Try this analogy. I’m a parent. I cook, I clean and I drive offspring to and fro. Does this mean that a chef, a cleaner and a limousine driver are the same as parents in the eyes of the public? After all, they do the same thing.

Third, Bennett J considered that there would be no detriment to the public from requiring the old guys to give that undertaking not to sue in respect of past use or future use for a reasonable time. Now, if there was no detriment to the public from the past use and there would be no detriment to the public from future use for a reasonable period of time and the old guys are never going to make a computer called Pioneer, why are they being given a lay down misere cause of action under s120(1)? Why should they not be required to win their action under s120(2) or s120(3) and run the gauntlet of evidence about whether the public really is unable to distinguish between the different products on offer.

Mark Davison

Battle of the b(r)and - get a well drafted band agreement or a drum machine

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Sat, 21 Feb 2009 12:37:04 +1100

The curious afterlife of old bands, some of whom survive their original membership, is a little publicised niche of the IP world. Legal disputes about who owns the rights to the names of some of the world's most lauded rock bands are not uncommon. The oddest is probably Blood Sweat and Tears, which shows up with scattered members from the past but also "with Chuck Negron" who acquired rights to the group but had nothing to do with it originally. Instead he was with Three Dog Night, which tours without him.

Last year, the five members of the Angels who shot to fame in Australia in the late 1970's re-united after one such dispute. Part of the Australian citizenship test is to recite the rejoinder to the Angels' hit "Am I Ever Gonna See Your Face Again?" In another barney that ended up in court, the founding members of Australia's 'Little River Band' are unable to trade under that name because they sold it to a guitarist in the 80’s who ended up with all the shares in the company that owned the rights to the name. When they tried to tour as the ‘Original Little River Band’ a couple of years ago, he sued them and won. Now they trade as 'Birtles, Shorrock, Goble of the original Little River Band'. To someone who did not like their sound in the first place, now they sound like a law firm.

In a recent dispute over the name HERMAN'S HERMITS, Frimp Ltd v Jan Barry Whitwam [2009] ATMO 5 (19 January 2009) Jan Whitwam (the Applicant), who was not in the original 1963 line-up but was from 1964 a drummer in the famous 60's British act, applied in Australia to register the trade mark HERMAN'S HERMITS in class 16 for "Printed matter, posters, photographs, stickers" and in class 41 for "Entertainment services; live performances by a musical group including performances of recorded music by a musical group." The applicant also owns the trade mark in the United Kingdom in class 41 and for the European Community in classes 16 and 41.

The Opponent, Frimp Limited was formed in 1964 by five members of the band (including the Applicant) to act as employer of the individual band members, to enter into contracts, and to receive royalties and other payments related to performances and recordings of the band.

However, it was held in a Trade Marks Office decision, that there was no evidence the Opponent was formed to own the trade mark rights, nor that it does so. It was further held that the 1964 line-up who were also all of the directors and shareholders of the Opponent (bar one) – even though they had been in dispute – had agreed that the band name should continue to be used by which ever one or more of the 1964 line-up wished to perform as HERMAN'S HERMITS and that the Applicant (stated the Hearing Officer): "is the last remaining band member of those who formed the Opponent. He is playing in the band that bears the name HERMAN'S HERMITS and plays the songs associated with the band. The applicant has done so, along with a diminishing number of members of the original band, continuously since 1964".

In other words, the Applicant used the name pursuant to an agreement. I will spare you all the details. You can read them for yourself HERE. Clearly, an ill-conceived IP agreement is as damaging as none at all. According to Nicholas Weston, the law firm behind the Australian Trade Marks Law Blog, if a band chooses to have no band agreement (and failing to put one in place is also a choice) their recommendation is to purchase a drum machine. So, what is the difference between a drummer and a drum machine? A drum machine can keep a steady beat, you only have to punch the information into the drum machine once, it won't steal your girlfriend and cannot register a trade mark.

Nick Weston

Elvis sighted at Australian Trade Marks Office

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Wed, 11 Feb 2009 00:00:00 +1100

In the recently published decision Elvis Presley Enterprises Inc v Elvis Jelcic [2008] ATMO 103, a Delegate of the Australian Trade Marks Office has allowed the trade mark ‘ElvisFINANCE’ covering financial services in Class 36 to proceed to registration despite opposition from Elvis Presley Enterprises.

Jelcic established his mortgage brokerage, ElvisFINANCE, in 2004 and claims to have spent substantial costs since that time setting up the business. On the other hand, as far as we are aware, Elvis Presley Enterprises has never offered home loans or any type of financial services, although The King was known among his entourage for automotive finance.

The main ground of opposition sought to be established by the Opponent was under section 43 of the Trade Marks Act 1995 which requires that because of some “connotation ...the trade mark…has,…or would be likely to deceive or cause confusion”. The main gist of the Opponent’s argument was that commercial use of such a famous person as Elvis Presley would be regarded as an endorsement and would deceive or cause confusion on this basis. The Delegate accepted that use of the word ‘Elvis’ may cause come people to think of the singer.

However, the Delegate quoted Kenny J in an earlier Federal Court case as saying “the question is whether, because of this connotation, the respondent’s mark is likely to deceive or cause confusion”. On the evidence the Delegate did not find such a connection between Elvis Presley and mortgage lending and home loans. The Delegate said that it would require something more such as embellishing the mark with a guitar to cause a likelihood of deception or confusion.

The Delegate also noted that opposition under the ground that use of the trade mark would be contrary to law (section 42 Trade Marks Act 1995) had not been established because he did not consider that the Applicant’s behaviour had contravened any laws regarding misleading and deceptive conduct.

When first contacted by solicitors for Elvis Presley Enterprises Jelcic’s reaction was “…I thought, it’s my natural name, so why should I change it?” Why, indeed.

According to CNN, Elvis (that's Presley, not Jelcic) topped the Forbes magazine's list of Top-Earning Dead Celebrities, hauling in (US)$52million last year" so he is good for a loan. However, I imagine that this is not a list anyone on it cares to be on, and even had The King not made the 1977 career move, he would now be 74, retired and an unlikely mortgage broker, so the decision is not unreasonable.

Nokia monitoring borders but Court hangs up

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Sat, 24 Jan 2009 15:43:30 +1100

In the recent Federal Court case of Nokia Corporation v Liu [2009] FCA 20 (21 January 2009) the applicant (Nokia) sought damages in a situation where infringing goods had been seized by Customs and never reached the marketplace. They got ten bucks.

Nokia also sought to avoid the operation of Order 62 Rule 36A of the Federal Court Rules which under certain circumstances including when a party is awarded judgement for less than $100,000 in damages requires an award of costs to be reduced by one third. They failed. Corrs Chambers Westgarth acted for Nokia. The respondent failed to appear.

Background

In February 2008, pursuant to Section 133(2) of the Trade Marks Act 1995, a delegate of the Chief Executive Officer of Customs seized goods bearing marks that infringed various trade marks owned by Nokia (the Nokia trade marks). On 4 June 2008 the Court made orders by consent which amongst other things included an order that the respondent pay the applicant damages for infringement of the Nokia trade marks. Proceedings for the assessment of such damages were fixed for 11 December 2008.

The decision - damages

Counsel for the applicant made submissions to the effect that the loss and damage suffered by Nokia was in the region of $50,00 to $100,00 as a result of the respondent having been engaged in the importation and sale of counterfeit Nokia mobile phones.

Justice Jessup did not accept the applicant’s arguments, not simply because they had not provided any evidence of Nokia’s business including the money lost when a sale is missed, but because the mobile phones seized by customs officials never found their way to the respondent. More specifically, the Consent Orders made on 4 June 2008 include findings against the respondent for importation of the counterfeit goods but include no findings that there had been infringement of the Nokia trade marks. As such, the damages that may be claimed are limited to those arising from the unlawful conduct constituted by the importation. Since the goods were seized by customs officials, Nokia never lost any sales nor could their reputation have been tarnished.

Nominal damages in the sum of $10 were awarded.

The decision - costs

The applicant sought an order avoiding the operation of Order 62 Rule 36A of the Federal Court Rules (the rule) which provides for an award of costs to be reduced by one-third if either:

- a party is awarded judgement for less than $100,000 on a claim for a money sum or damages; or

- the court declares that a proceeding could be more suitably have been brought in another court or tribunal.

Justice Jessup rejected the Applicant’s submission that the rule is not appropriate in intellectual property cases and pointed to various cases that discussed the appropriateness of commencing copyright cases in the Federal Court. Clearly, it is not just a moot point.

In the case where an award of damages is less than $100,000 the court retains a discretion to order that costs not be reduced in accordance with the rule and it was this discretion that Nokia was attempting to invoke. Justice Jessup noted that a large part of the remedies sought by the applicant were not economic: namely injunctions, declarations and delivery up, all of which were secured by consent almost immediately. Justice Jessup noted that these “non-money aspects” of Nokia’s claim were the more substantial ones. Moreover, he did not find the case to involve a degree of complexity or to relate to a complicated set of facts. Such findings did not support a request that operation of the rule be avoided.

Nokia was obviously pleased that its Notice of Objection successfully assisted Customs in detecting the counterfeit goods and detection should assist in deterring others importing like goods. However, $10 is unlikely to cover insurance against theft and loss for the average mobile handset.

Lea Lewin

No shape mark injunction in fight between two armless chairs

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Sun, 18 Jan 2009 14:29:56 +1100

In Sebel Furniture Limited v Acoustic & Felts Pty Limited [2009] FCA 6 (12 January 2009), the applicant (Sebel) is the Registered Owner of Trade Mark No 1054076 in respect of a shape kind of sign or shape device (Sebel’s trade mark). Sebel’s trade mark is registered in Class 20 in respect of plastic, moulded chairs without arms, also known as 'sidechairs'. The trade mark was registered with effect from 6 May 2005 and is subject to an endorsement that sub-section 41(5) of the Trade Marks Act 1995 (Cth) was applied meaning that when it was applied for, it was not sufficiently inherently distinctive to achieve registration on that basis alone, but that registration was granted because it was or would become distinctive through use. Sebel’s trade mark chair, known as the 'Postura', is widely used in educational institutions.

The respondent (Reed Furniture) recently commenced to import into Australia and to supply to the same educational market which, for many years, has been supplied with Sebel’s Postura, a moulded plastic chair known as the 'Titan'.

Sebel sought various injunctions based on allegations that the Titan chair infringed Sebel’s trade mark by using the shape in respect of which Sebel’s trade mark is registered and that Reed Furniture had engaged in passing off and in misleading and deceptive conduct within the meaning of s 52 of the Trade Practices Act 1974 (Cth) (TPA) by promoting, offering to supply and supplying the Titan chair. Sebel also sought an order to restrain Reed Furniture from making each of the following representations in trade or commerce in Australia in relation to chairs:

(a) No chair in Australian classrooms has been manufactured to a European Standard.

(b) The Titan chair is the only one-piece polypropylene chair that has attained EN1729 Part 1 and Part 2 Certification.

(d) the Titan chair is the first one-piece chair that conforms to EN1729 Parts 1 and 2 in the United Kingdom.

Held

Trade Mark Infringement

Sebel failed to prove, even to a prima facie level, that Reed Furniture had used a shape as a trade mark in relation to goods of the relevant class by reason of its promotion and sale of the Titan chair. However, because it was an interlocutory application, the court assumed (without deciding) that even if Sebel’s activities did constitute the use of a shape as a trade mark in relation to goods, it failed to establish that it has a prima facie case or a serious question to be tried that the shape so used by Reed Furniture is deceptively similar to Sebel’s trade mark.

The court stated that this conclusion is reinforced when regard is had to the fact that the chairs are likely to be purchased in bulk by reasonably well-informed purchasing officers who would not be confused. It also held that a one-off example of what may have been actual confusion on the part of a potential purchaser does not, of itself, establish deceptive similarity.

Passing Off

Sebel’s passing off claims did not prove fruitful either. Despite having evidence that Sebel is the source or the origin of the Postura chair, the court held that Sebel failed to establish a prima facie case in passing off.

The court took the following matters into consideration as a whole in determining passing off:

(a) Appearance and shape of the product – The court held (i) that Reed Furniture did not use as a trade mark the shape of the Titan chair, to promote, supply and sell Titan chairs; and (ii) even if Reed Furniture had used the shape as a trade mark, Sebel failed to establish that the shape used by Reed Furniture is deceptively similar to that used by Sebel.

(b) Distinguishing markings – The court held that there are clear distinguishing markings (embossing) on the Titan chair and the Postura chair such that consumers are easily able to distinguish between the origins of the two products.

(c) Level of knowledge of potential purchasers – The court held that Sebel failed to establish even a prima facie case that the promotion, supply and sale of the Titan chair has led or is likely to lead a substantial number of persons in Australia to believe that the Titan chair is associated with Sebel.

(d) The market into which the products are to be sold – The court held that because of the form or method of introducing the Titan chair into the market, namely that (i) the brochure of Reed Furniture used to promote the Titan chair is in electronic form on the Reed Furniture website and (ii) the paper form of the brochure is only distributed by Reed Furniture representatives, consumers from the market is not likely to be led to believe that the Titan chair is associated with Sebel.

Trade Practices Act (TPA)

Sebel made two TPA claims in this proceeding. The first TPA claim was that Reed Furniture had engaged in misleading and deceptive conduct pursuant to Section 52 of the Trade Practices Act. Sebel failed to establish this claim even on a prima facie basis. The Court cited the same difficulties it had with finding for Sebel on the basis of common law passing off.

The second TPA claim made by Sebel concerned an alleged misrepresentation in Reed Furniture’s brochure promoting the Titan chair. In the brochure, Reed Furniture had represented that the Titan chair is the first one-piece chair in Australia that conforms to the UK standard EN1729 Parts 1 & 2. The court held that because the brochure represented to the effect that the Titan chair is presently the only chair in Australia that meets the UK standard, the use of present tense in the representation implies that the Titan chair is in the present time, the only chair in Australia which conforms to the UK standard EN1729 and that Sebel had made out its second TPA claim on a prima facie basis.

Remedies

The court held that on the balance of convenience and justice, the granting of an interlocutory injunction prohibiting Reed Furniture to continue to represent that the Titan chair is the first chair in Australia that conforms to the UK standard will not cause significant financial hardship to Reed Furniture, therefore, interlocutory injunction pertaining to Sebel’s second TPA claim is granted.

The court ordered Sebel to pay Reed Furniture’s costs because it had failed to make out most of its claims at this stage of the proceeding.

Where to from here

A hearing of the substantive case is to be listed for March or April this year. According to Nicholas Weston, the law firm behind the Australian Trade Marks Law Blog, the case is a good survey of the law on shape mark protection.

Sebel’s case needs to focus on use by both parties of the concocted, non-functional elements of Sebel’s trade mark if it hopes to do better than it did in this round.

Singapore Treaty takes effect March 2009

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Sun, 11 Jan 2009 13:36:22 +1100

Australia has become the 10^th State to ratify the Singapore Treaty on the Law of Trade Marks (the Singapore Treaty), allowing the Treaty to come into force on 16 March 2009. The treaty establishes common standards for procedural aspects of trade mark registration and licensing between the contracting States.

According to the Federal Minister for Innovation, Industry, Science and Research, Senator The Hon. Kim Carr, signing on “offers a positive example for Australia’s trading partners, thereby increasing the capacity of regionally based trade”.

The Treaty is also intended to encourage national trade mark offices to take advantage of modern communication technologies. Most significantly, for the first time in any international instrument dealing with trade mark law, non-traditional marks are explicitely recognised.

Background

On 27 October 1994 the Trademark Law Treaty (TLT) was adopted by World Intellectual Property Organisation (WIPO) member States as part of an international effort to harmonise the administrative procedures of intellectual property offices around the world.

However, over time, technological advancements such as electronic filings and changes in the scope of trade mark protection have led to the need to update the TLT. Given these developments, it became necessary to review and update the TLT, resulting in the Singapore Treaty being formally adopted on 27 March 2006. This international treaty is the first treaty in Singapore’s history to bear the country’s name, as hosts of the final round of related negotiations. The Singapore Treaty does not supersede the TLT. WIPO’s aim was to make several technical and substantive changes to the TLT, whilst retaining the key provisions such as use of the Nice System for International Classification.

Singapore was the first country to finalise the ratification process in March 2007 followed by Switzerland, Bulgaria, Romania, Denmark, Latvia, Moldova and Kyrgyzstan and USA. The United Kingdom has signed but not ratified the Singapore Treaty. For the Treaty to take effect, ratification or accession by 10 member states and intergovernmental organisations is required, highlighting the significance of Australia's contribution as the 10th party to sign on.

Content of the Singapore Treaty

The Singapore Treaty covers the following key points:

Formation of an Assembly (Article 23): An Assembly of Contracting Parties has been created with the power to deal with matters concerning the development of the Treaty including amending the Regulations. By way of contrast, the TLT does not include an Assembly because of a lack of consensus over the rights of intergovernmental organisations at the time it was adopted.

Electronic Communications (Article 8): Contracting Parties can choose how they receive communications and whether they accept correspondence, including trade mark applications, by electronic means only, in paper only, or by either means. By comparison, the TLT provides that members have to allow paper filing of correspondence.

Expanded Scope of Trade Marks (Article 2): The Singapore Treaty provides for the wider range of signs that are gaining popularity and acceptance around the world. The TLT only covers visible signs but the Singapore Treaty refers to all signs that can be registered as marks in a given Contracting State, thus explicitly recognising that trade marks are no longer limited to two-dimensional labels on products. The treaty expressly mentions hologram marks, motion marks, colour marks, and non-visible signs such as sound and taste marks. According to Nicholas Weston, the law firm behind the Australian Trade Marks Law Blog, experienced trade marks practitioners know how to represent unconventional trade marks in an application and says that under the treaty, contracting parties will be able to define relevant standards.

Licences (Article 17): Maximum administrative standards a trade marks office can require for recording, amendment and cancellation of licence interests are included. Non-recordal of a licence shall not affect the validity of the registration of the mark which is the subject of the licence. Recordal may not be required as a condition for the use of a mark by a licencee to be deemed to constitute use by the holder in proceedings a relating to the acquisition and enforcement of marks.

Relief Measures in case of failure to Comply with Time Limits (Article 14): In some instances, Contracting Parties must provide relief measures where a deadline is missed.

Impact

The Trade Marks Act (Cth) 1995 is consistent with the Singapore Treaty and no changes to the Australian Trade Marks Register are anticipated. As such, any benefits to Australia that stem from the Treaty will be to Australian exporters as a result of a more consistent, user friendly application process and potentially lower application costs due to reduced requirements for supporting documentation. Moreover, participation in the Assembly will allow Australia to influence future direction of the Treaty.

WIPO summary of the Singapore Treaty is available HERE.

Lea Lewin

Happy New Year 2009

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Wed, 31 Dec 2008 14:11:08 +1100

May your costs be managed, may your revenue streams flow, may your problems be smoothly resolved. Best wishes in 2009 from all at Nicholas Weston. Also from our food experts, Midge and Beanie.

Parallel Importers welcome in Australia

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Tue, 23 Dec 2008 23:07:21 +1100

In Polo/Lauren Company L.P. v Ziliani Holdings Pty Ltd [2008] FCAFC 195 (18 December 2008) the Full Federal Court has dismissed an appeal by Polo/Lauren Company L.P. (Polo/Lauren) seeking to prevent the parallel importation of goods embroidered with their signature polo player logo.

Parallel importation occurs where genuine goods are sourced from overseas markets at a lower price than the authorised product for sale in Australia without the authority of the local licensee. This activity has continued to increase. The limitations against parallel importation imposed by the Trade Marks Act 1995 (Cth) means that brand owners have had to rely on other intellectual property rights to protect their brands. However, this decision confirms that successful claims based on copyright are similarly now limited, and that restricting trade of genuine products by local brand owners is becoming increasingly difficult.

Background

Ziliani Holdings Pty Ltd (“Ziliani”) is a clothing retailer in Sydney whom imported into Australia, from various trade fairs in the United States, genuine Polo Ralph Lauren garments bearing the well-known polo player logo. Whilst the garments were authentic, they were sold without the consent of the relevant Australian subsidiary, Polo/Lauren. Unsurprising, Polo/Lauren took action to restrain such action. In view of Section 123 of the Trade Marks Act 1995, which provides that the importation into Australia of genuine goods bearing a trade mark legitimately affixed overseas is not an infringement of the local trade mark, Polo/Lauren’s claim was based on the copyright in the polo player logo. Specifically, breach of Sections 37 and 38 of the Copyright Act 1968 which provide that it is an infringement of copyright to import a copyright work for sale without the permission of the copyright owner (secondary infringement).

However, Section 44C of the Copyright Act 1968 provides a defence to such infringement in cases where the copyright is a "label" which is incorporated into the surface of an article. Ziliani successfully relied on this defence on the basis that the polo player logo embroidered onto the goods was actually a “label” which is exempt from protection since it is a “non-infringing accessory”.

Additionally, it was held by Justice Rares that the embroidered logo was a “corresponding design” within the provisions of the Copyright Act 1968 which deny copyright protection to industrial designs. In reaching his decision the Trial Judge found a visual “shape and configuration” in the logo by reason of the alteration, including changes to the texture and shape, in the fabric created by its embroidering.

In the current appeal, the Full Federal Court considered both of the above copyright issues. Of particular relevance to trade mark law, the Court considered whether the Trial Judge had erred by effectively assimilating the notion of a “label” with the notion of a trade mark.

Label v Trade Mark

Section 44C of the Copyright Act 1968 provides that:

“the copyright in a work a copy of which is, or is on, or embodied in, a non-infringing accessory to an article is not infringed by importing the accessory with the article”.

The word “accessory” is defined in Section 10 of the Copyright Act 1968 and includes amongst other things “a label affixed to, displayed on, incorporated into the surface of, or accompanying, the article” or “a label affixed to, displayed on, incorporated into the surface of, or accompanying, the packaging or container in which the article is packaged or contained”.

Accordingly, importation of an article bearing a “label” does not infringe copyright in that “label”.

The Full Court concurred with the Trial Judge in finding that a label within the definition of “accessory” can be, or may contain, a trade mark. In the present case, the trade mark is physically manifested and incorporated into the article and is therefore being used to identify the article with its source, stating: “its purpose is to label the goods; it is a label”.

In fact, the Full Court pointed out that the "label" in R & A Bailey Co Ltd v Boccaccio Pty Ltd & Ors (1986) 4 NSWLR 701 (a very influential case at the time of drafting Section 44C) was also a trade mark and that the labeling exemption exactly contemplates such “labels”, a point the Polo/Lauren submission “overlooks”.

The Full Court also noted that Section 198A of the Copyright Act 1968 which deals with non-infringement of trade marks in relation to the importation of copyright material adds support to their finding that a “label” can be or contain a trade mark.

The Full Court has confirmed that copyright law is not available to trade mark owners as an alternative means for stopping parallel importation in cases where there is copyright in a trade mark and the trade mark is physically manifested and incorporated into an identifiable article, essentially whenever a trademark appears on clothing. Brand owners will need to turn to other actions such as passing off and the Trade Practices Act 1974 (Cth) to attempt to ward off parallel importers.

Lea Lewin

Weston named Panelist for World Intellectual Property Organization

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Mon, 15 Dec 2008 17:37:26 +1100

Nick Weston, the name principal of Melbourne based powerhouse niche law firm Nicholas Weston, has been appointed to the Geneva, Switzerland-based World Intellectual Property Organization’s (WIPO) Arbitration and Mediation Center’s List of Arbitrators and Mediators and also the Center’s Domain Name Panel. WIPO is a United Nations organization. Mr Weston also serves as chairman of ASX listed biopharma, Agenix Limited [ASX:AGX; NASDAQ OTC: AGXLY] and charitable foundation Karma Currency.

Mr Weston will serve as a WIPO Domain Name Panelist to decide disputes under the “Uniform Domain Name Dispute Resolution Policy” (UDRP) and the “.au Dispute Resolution Policy” (auDRP) the mandatory arbitration procedures for deciding competing claims to domain names. As a domain name panelist, Nick Weston will review domain name disputes and decide whether a domain name registration should be transferred, cancelled or the status quo maintained.

The UDRP applies primarily to international domains such as .com, .net, .org, .info, .biz. and .mobi. In addition, 56 country code top-level domains (ccTLDs) have now appointed WIPO as service provider for their domain name disputes. Apart from UDRP cases, the Center has administered over 15,000 cases under Sunrise policies relating to registrations in the start-up phase of new domains. The auDRP is an Australian adaptation of the UDRP for com.au, net.au, asn.au, id.au, edu.au and org.au domain names.

The WIPO Arbitration and Mediation Center has resolved more than 14,000 cases under the UDRP procedures involving parties from 144 countries and some 25,000 Internet domain names. More information about the WIPO Arbitration and Mediation Center is available HERE. More statistics in relation to Australian domain name disputes are available HERE.

Weston acts for brand owners and domain name registrants. His clients include the world’s second largest provider (after You Tube) of user generated on-line content, Heavy.com . He acted for the successful plaintiffs against 24 defendants in influential arbitration case, Mond v Berger (2004) 10 VR 534; [2004] VSC 45. Current work includes a Federal Court of Australia trade marks proceeding acting for the Japan Karate Association against the Japan Karate Association of Australia. Law firm Nicholas Weston publishes the Australian Trade Marks Law Blog.

Mr Weston attended both the WIPO Advanced Workshop on Domain Name Dispute Resolution: Update on Practice and Precedents and the WIPO Arbitration Workshop in October 2008.

The WIPO Arbitration and Mediation Center's CV for Mr Weston is located HERE.

When is trade mark infringement not also misleading and deceptive conduct? Bing!

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Fri, 05 Dec 2008 16:50:54 +1100

In Bing! Software Pty Ltd v Bing Technologies Pty Limited (No 1) [2008] FCA 1760, Justice Collier in the Federal Court in Brisbane has just handed down a judgment in a case alleging trade mark infringement and a breach of s52 of the Trade Practices Act 1974 (Cth) (TPA).

The registered owner of the trade mark ‘Bing!’ won its trade mark infringement action but was unsuccessful in its claims of breaches of the TPA and passing off which, in itself, is an interesting statement about the usefulness of registration compared to relying on passing off principles.

Bing! is registered in Class 9 for ‘Software for the legal profession and other industries and professions not limited in any way to a specific industry or commercial sector’. I think this means software for the legal profession and software for anyone else but the legal profession. The statement reminds me of the way that we can divide the world into two types of people, namely, those who divide the world into two types of people and those who don’t.

The trade mark owner’s primary business is for a Family Court document automation software package. It also has software packages for conveyancing. It calls its software ‘Bing!’

The defendant’s business involves ‘an internet protocol postal mail service’, a seeming amalgam of e-mail and snail mail. Clients of the service have letters in electronic form routed to a location close to the intended recipient of the letter. They are printed and posted there. The ‘net’ result (that’s a pun) is that hard copy arrives at the intended destination more quickly and more cheaply than if sent from the client’s location. The problem was that in order to provide the service, the defendant also needed to provide the software for the service which it also called Bing. The defendant did not target the legal profession and provided the service to the commercial sector generally.

There are a few interesting points about the case and the decision. First, the defendant claimed it was providing a postal service, not a good (software), and therefore was not using a deceptively similar trade mark for the goods in respect of which registration existed. Unfortunately, Collier J did not buy the argument. In order to provide the service, they also provided the software separately and had extensively referred to the software as Bing software.

Second, even though trade mark infringement was established, Collier J declined to award any damages. The plaintiff led no evidence of damage and relied on a claim for ‘damages at large’ or is that large damages? I think it was the former. In any event, Her Honour was unconvinced that any loss or damage had occurred as the two businesses related to very different markets.

Finally, the claims based on the TPA and passing off were rejected. The two markets of the parties were very different and any initial interest confusion caused by the two pieces of software with virtually identical names was quickly dispelled.

I will leave off with one thought. If the plaintiff has only used its software for the legal profession and since it registered its trade mark as ‘software for the legal profession and software for everybody else’, there might have been the possibility of making a non-use application in respect of ‘software for everybody else’. This is where that facetious comment earlier in this piece about dividing the world into two kinds of people might come in handy. If a partial non-use application were successful, the plaintiff would then have had to prove that the defendant had provided its software to the legal profession in order to establish use of a deceptively similar trade mark in respect of the goods for which registration existed. Alternatively, the plaintiff would have had to rely on s120(2) and claim that the defendant’s goods were of the same description as those of the plaintiff. At that point, the defence in s120(2) might have been available.

Mark Davison

Big Tobacco looking to Government to cough up for trade mark restrictions

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Wed, 03 Dec 2008 15:04:33 +1100

A recently concluded meeting of the World Health Organisation has considered guidelines for the implementation of the Framework Convention on Tobacco Control (FCTC). What’s that got to do with trade mark law in Australia? A fair bit if we are talking about trade marks for tobacco products.

The FCTC has 168 signatories, including Australia which ratified it in 2004, and it is the only treaty created under the auspices of the WHO. As its name implies, the Convention deals with a number of aspects of the control of the sale of tobacco throughout the world. The recent meeting in Durban considered recommended guidelines for the implementation of some provisions of the treaty and within those guidelines is a recommendation that members of the FCTC consider mandating plain packaging of cigarettes. See HERE. If adopted in the laws of member countries, this recommendation would involve the branding of cigarette packets being restricted to plain font and black and white statements of the name of the product eg ‘Dunhill’. No fancy font, no pretty pictures and, of course, the fancy font and pretty pictures are often registered trade marks.

There would still be those gruesome pictures of the effects of smoking. For our overseas readers, Australia has legal requirements that a variety of pictures of the outcomes of diseases caused by smoking be prominently depicted on cigarette packets. Consequently, a purchaser of cigarettes might also be buying a picture of a mouth ravaged by cancer or an aorta oozing with nicotine generated lethal sludge portrayed in full technicolor. Often, these pictures would only be viewed by the purchasers of the cigarettes for brief moments because they quickly hide the cigarettes in plastic containers made for that purpose. Their reasoning may be that what they don’t see or know won’t hurt them until it does. These actions deprive non-smokers of opportunities for schadenfreude. Fortunately, some smokers have a strong commitment to public education and when they finish with the packets, they leave them lying around in gutters, footpaths and all sorts of other public spaces where they and the gruesome pictures are clearly visible.

Anyway, back to the FCTC. The possibility of plain packaging is being considered. See HERE. If the recommendations were made law in Australia, there might be a few legal arguments to be made by big tobacco.

One might be an argument based on the Australian Constitution which requires the Federal government to pay just compensation if it acquires property. The argument is a bit suspect. If I tell you that you can’t use your trade marks, what have I acquired ie obtained that I didn’t have before? Not a lot. Nevertheless, the lack of a strong argument has never stopped the tobacco industry before and there is no reason why it should stop now.

As for arguments based on international law, they don’t look good for the tobacco industry either. There is no right under TRIPS to the exclusive use of your trade mark. There is only a right to prevent others from using the trade mark.

The Australian Trade Marks Act 1995 (Cth) does state that a registered owner of a trade mark does have an exclusive right to use the trade mark and to authorise others to use it. However, the government giveth and the government taketh away. Subject to the Constitutional argument mentioned above, the Federal government is entirely within its powers to re-arrange these rights. Anyhow, (that’s a sick joke for the baby boomers who remember Paul Hogan’s Winfield ads) expect the tobacco industry to be making a lot of noise about this issue in the near future. Unfortunately, those without a larynx due to throat cancer will be unable to match that noise.

Mark Davison

Monster Energy keeps battling

mail@nicholasweston.com (NICHOLAS WESTON - AUSTRALIA) — Sat, 22 Nov 2008 14:44:56 +1100

In Hansen Beverage Company v Bickfords (Australia) Pty Ltd [2008] FCAFC 181 (14 November 2008) the Full Federal Court has handed down a decision, in three separate judgments, that will make it easier for owners of well-known brands to establish their reputations in Australia.

The Full Court, in particular Justice Finkelstein (aka da Fink), made significant observations about the impact of indirect marketing techniques going as far as saying that these may be “better than direct marketing” for establishing reputation in cases of passing off and/or misleading and deceptive conduct under the Trade Practices Act 1974 (Cth) (TPA).

Background

Earlier this year Hansen Beverage Company (Hansen), having no registered trade marks to rely on, brought an application for declarations and consequential relief, against Bickfords (Australia) Pty Ltd (Bickfords) on the ground that it had passed off and/or contravened the TPA by selling their MONSTER ENERGY drinks in Australia.

In that case the parties agreed that the energy drinks produced by both sides were similar enough so as to mislead and deceive for the purpose of passing off and contravention of the TPA. The case then hinged on whether sufficient reputation could be established for a successful action.

Justice Middleton noted that the required reputation cannot be assumed “in a market where the product has not been sold or directly advertised”. The primary Judge approached the question of the operation of the TPA by requiring that a significant or substantial proportion of potential customers within Australia would be likely to be misled. According to the evidence, Hansen’s target market was males between the ages of 18 to 30 and Justice Middleton’s reasoning was that the required reputation must be amongst that target market. As such evidence of awareness of the Hansen product amongst male extreme sports enthusiasts would not suffice.

For a full discussion of Justice Middleton’s decision handed down on 31 March 2008 refer to The Australian Trade Marks Law Blog's earlier article HERE.

Hansen appealed the decision on the basis that it submitted the primary Judge erred in wrongly selecting the class of persons in respect of which reputation be assessed and submitted that he “should have asked simply whether there was a sufficient number of the Australian public who would be likely to be misled”.

Decision

In allowing the appeal and remitting the case for reconsideration to the primary Judge the Full Court noted that the language of the TPA does not require that a reputation exist amongst a specific class of persons before a breach can be made out, even if such a group of persons is defined by advertising objectives.

Justices Tamberlin and Siopis agreed that the appropriate question should be “whether a not insignificant number of persons in the Australian community, in fact, or by inference, have been misled, or are likely to be misled, even if those persons are mostly or exclusively extreme sports enthusiasts”. Justice Finkelstein essentially agreed but discussed the issue in terms of a “relevant market” and a “target market”. He found that in the present case “the relevant market is narrower than the target market” and if a substantial number of extreme sports enthusiasts (clearly a relevant market) were misled then the claim would be supported.

The Full Court also noted the impact of indirect advertising and acknowledged that the advertising industry had moved away from relying on direct marketing techniques as their primary source. The value of indirect advertising through sponsorship of sports was clearly recognised and the primary Judge “was entitled to infer that indirect brand advertising…can establish reputation as well as, if not better than, direct marketing”.

Brand protection through trade mark registration clearly remains extremely important for traders (arguably paramount), and in this case may have avoided lengthy proceedings. However, with the courts now expressly recognising changing marketing techniques, even without trade mark registration, legitimate brand owners are gaining respect in Australia.

Lea Lewin