Trade Marks Cases Review 2007
1. Infringement of Trade Marks
Brother Industries, Ltd v Dynamic Supplies Pty Ltd [2007] FCA 1490 (Federal Court of Australia - 26 September 2007
In this case Dynamic Industries was found to have infringed Brother's Australian trade mark and engaged in misleading and deceptive conduct in contravention of sections 52 and 53 of the Trade Practices Act 1974 and the tort of passing off when they imported products manufactured by Brother but without the BROTHER trade mark in unauthorized packaging containing this trade mark.
Background
Dynamic Supplies imported 'original equipment manufacturer' (OEM) printer drum units, manufactured by Brother Industries Ltd in Japan but without the Brother trade mark, into Australia from America in packaging that contained the 'BROTHER' trade mark. Brother Australia made several trap purchases of the alleged infringing items from Dynamic in 2004. Dynamic argued that Brother's rights to exclusively use and authorize use of the mark in relation to the goods and services only extended to prevent the sale of goods bearing the BROTHER trade mark but which were not Brother's. They also argued that Dynamic's invoice notations containing the trade marks did not constitute 'use' of the mark by Dynamic as they were merely descriptive of the products.
The Decision
Since the OEM goods bearing the trade mark accurately indicated their trade origin as from Brother, Dynamic argued that Brother was the 'user' of the trade mark and therefore there had been no infringement. This argument was rejected because Brother had sold the OEM goods and taken steps to dissociate itself as the originator of the goods and therefore, could not be said to have 'used' the false trade mark which was applied to its product by a disassociated entity without its permission. [1]
Dynamic was found to have 'used' the BROTHER trade mark as a trade mark in the course of trade because the stationery associated with importing, distributing, offering for sale and selling the OEM products would bear the counterfeit trade mark in relation to the registered goods. Dynamic's argument that invoice notations containing the trade mark used the mark only for descriptive purposes was rejected since the word "BROTHER" did not describe any characteristics of the goods. [2]
Dynamic could not establish that Brother in Japan had authorised the application of the trade mark to the OEM products because they could not provide evidence that the chain of supply of the OEM products traced back to Brother Japan or that Brother Japan expressly or impliedly consented to the application of the trade mark to the OEM goods. [3]
Implications
Foreign manufacturers are free to make and import products that do not bear their well-known trade mark and can sue for trade mark infringement if an unassociated entity uses false copies of the well-known mark in relation to the goods. Importers in Australia need to watch for unauthorised use of trade marks on such products.
2. The likelihood of deception or confusion
Pierre Fabre Dermo-Cosmetique v Senator Automation Pty Ltd [2007] FCA 1391 (Federal Court of Australia - 18 July 2007)
Pierre Fabre Dermo-Cosmetique (" Pierre") unsuccessfully opposed registration of Senator Automation (" Senator")'s "AFENE" device trade marks because the Court found that use of Senator's trade marks would be unlikely to deceive or cause confusion with Pierre's "EAU THERMALE Avène" device marks.
Background
Pierre opposed registration of Senator's stylized device trade marks containing the word "AFENE" for class 3 cosmetic goods on the grounds that they were likely to deceive or cause confusion with Pierre's stylized device marks, also registered for class 3 cosmetic goods, that contained the word "Avène", in addition to the words "EAU THERMALE".
The Decision
Use of Senator's stylized "AFENE" device trade marks was found to be unlikely to deceive or cause confusion with Pierre's "EAU THERMALE Avène" device mark. The Court took into account the visual and aural differences between the marks and the distinctive "Frenchness" of Pierre's mark which was said to be lacking in Senator's marks, one of which included Chinese characters. [4] Furthermore, all evidence of the use of Pierre's mark included the accent above the 'e' and the words 'eau thermale' and so it was suggested that Pierre did not have a reputation in the mark "Avene". [5]
Implications
Trade marks are examined in their entirety in tests of deception or confusion with other trade marks, and the inclusion of additional words and characters of non-English alphabets will be taken into account.
Merck KGaA v Generic Health Pty Ltd [2007] ATMO 1; (2007) 71 IPR 387 (Australian Trade Marks Office - 15 January 2007
In this case Merck, owner of the ZACTIN trade mark, unsuccessfully opposed Generic's SASTIN trade mark application when the Court, considering the marks as a whole, considered they were sufficiently different that deception or confusion between the marks by those dealing with pharmaceuticals was unlikely.
Background
Merck filed an opposition to Generic's trade mark application for SASTIN in relation to pharmaceutical products and distribution and import services, on the grounds that the application was deceptively similar to their mark ZACTIN, also covering pharmaceutical preparations.
The Decision
Merck had argued that they had sufficient prior reputation in ZACTIN to render use of the applicant's mark deceptive and confusing. The lack of specific evidence to establish the reputation of the mark ZACTIN meant Merck could not establish that the mark had a reputation at the priority date and could therefore not establish its opposition under s 60.
Evidence produced about the dangers of drug mix-ups through the use of confusingly similar pharmaceutical names was found to be general, not indicating the rate that confusion has occurred, and to invite importation of general health policy considerations into the principles for comparison of trade marks. [6] Counter to these arguments, since the relevant goods required prescription, it was recognized that the use of handwritten prescriptions was declining and there is tight regulation in the marketplace for prescription pharmaceuticals in Australia. [7]
The Hearing Officer found that the suffix "-TIN", occurring in both marks, was common within pharmaceutical trade marks. [8] When considered as a whole, it was found that there was no real or substantial risk that a reasonable person would confuse the goods or be caused to wonder if the goods had the same source. [9] Accordingly the opposition failed.
Starr Partners Pty Limited v Dev Prem Pty Ltd [2007] FCAFC 42; (2007) 71 IPR 459; (2007) AIPC 92-246 (Full Federal Court of Australia - 28 March 2007)
In this case on appeal to the Full Court of the Federal Court (" Full Court"), Starr Partners successfully claimed infringement of their "STARR PARTNERS" device trade mark containing a star, registered for real estate services, by Dev Prem's use of an unregistered "STAR REALTY" trade mark which also contained a star device and was used for a real estate agent business.
Background
Starr Partners, carried on a real estate business in New South Wales with a registered trade mark for a STARR PARTNERS device which included a star. They brought claims of trade mark infringement, passing off and breach of the Trade Practices Act against Dev Prem for carrying on business as a real estate agent in Brisbane under the name "Star Realty" using an unregistered trade mark containing the name and a star device.
The Decision
The Full Court allowed Starr Partners' appeal finding that the primary Judge over-emphasised the use of side-by-side comparisons at the expense of consideration of imperfect recollection in determining whether the two marks were 'deceptively similar'. [10] The Full Court held that deception or confusion was likely given the similarity between the essential features of the marks, namely the word "Starr" or "Star" and the use of a star device. [11] The additional letter 'r' in the STARR PARTNERS trade mark, lacking in the STAR REALTY trade mark, was said not to hold much weight in light of the use of the star device and the overall impression of the marks. [12] The word "Realty" was said to be descriptive of the services and unlikely to leave a lasting impression, while, similarly, the word "Partners" was also not distinctive and unlikely to be remembered, and therefore these words were inessential components of the trade marks. [13]
Implications
Words that are descriptive of the goods or services or which relate to the business structure of the entity (for example, "limited" or "partners") are unlikely to be distinguishing factors between two trade marks that are otherwise similar.
3. Competing Rights in Trade Marks
Honest Tea Inc v Teavolution Pty Ltd [2007] ATMO 10; (2007) 72 IPR 431 (Australian Trade Marks Office - 9 March 2007)
In this case, Honest Tea opposed Teavolution's application to register trade marks containing the words "HONEST TEA" for tea-based beverages in Australia. While Honest Tea Inc had been using the HONEST TEA name overseas, the opposition was unsuccessful because they could not provide sufficient evidence of an intention to trade or reputation in Australia.
Background
Teavolution applied to register word and device trade marks for HONEST TEA for tea and tea-based beverages and related services. Honest Tea Inc (" the Opponent"), a US company which had been using the mark in relation to organic iced tea around the world since 1998, opposed the application.
The Decision
Although the marks and respective goods or services were agreed to be substantially identical, the Opponent could not produce sufficient evidence to support its claim of ownership of the marks in Australia. The Opponent made no claim to any actual sales of their goods in Australia. [14] Instead, it sought to rely on samples distributed at lectures given in Australia, discussion and correspondence with potential Australian distributors, the potential for sales via the website and advertising and articles in US publications available in Australia. [15] These were found to be preliminary steps that did not clearly show any trade or offer to trade in the goods and were not sufficient to promote the operation of a trading channel that was already open in Australia. [16] No evidence was produced of statistics of Australian visitors to, or any sales by Australians through, the American website, or that anyone in Australia had read the articles in the US publications.
Implications
The Hearing Officer appears to have decided this case based on the facts and the evidence before it. If there is a trade mark ownership dispute between two parties a Court will look at who was the first party to use the mark as a trade mark in Australia. In Malibu Boats West v Catanese the Federal Court found that although there was insufficient evidence that the appellants had entered into a distributorship agreement, evidence that the distribution of advertising brochures handed out in Australia by a third party and confirmed by the sale of two boats, was sufficient to show that the appellant was ready to trade and had used the mark as a trade mark in Australia. [17]Honest Tea v Teavolution does not appear to have been appealed to the Federal Court.
4. Applications for Extensions of Time
Cat Media Pty Ltd v Apex Marketing Group LLC [2007] ATMO 13; (2007) 72 IPR 442 (Australian Trade Marks Office - 26 March 2007)
In this case, Apex was granted an extension of time to pay lapsed registration fees on their HAIR NO MORE trade mark. Cat Media's opposition to the extension, on the grounds that their later applications for the same mark would be disadvantaged, was unsuccessful.
Background
In a previous proceeding Cat Media had unsuccessfully opposed Apex's application to register the trade mark HAIR NO MORE. The Hearing Officer had found that Apex was the owner of the mark by virtue of is earlier prior use. However, following the proceeding Apex's registration later lapsed when they failed to pay the registration fee. Cat Media's applications for the same mark, which had a later priority date, proceeded to acceptance following the lapse and Apex opposed their registration and filed a request for an extension of time to pay the registration fee. Cat Media opposed the extension request on the grounds that granting the extension would disadvantage them because it would affect the likely registration of their applications.
The Decision
Apex's request for an extension of time was granted. [18] The failure to pay was said to be caused by confusion between Apex and their several legal advisors in the earlier proceeding as to who was responsible for paying the registration fee. The failure to pay was held to be an error or omission by Apex. Evidence showed Apex had continued to use the mark and thus did not establish that Apex had abandoned the mark or lost ownership by acquiescence or estoppel. [19] As Cat Media was not the owner of the mark it could not be said to be disadvantaged by the granting of the extension of time and Apex's registration of the mark. [20] A public interest in having a trade mark register that accurately reflects ownership of trade marks with a minimum expense to traders was said to be best achieved by allowing the extension of time. [21]
5. Registrability of Shape Marks
Re: International Registration Designating Australia 936483 (International Registration No. 790851) (30) - Seahorse-shaped Chocolate - in the name of Chocolaterie Guylian N.V. (2007) ATMO 30 (Australian Trade Marks Office - 31 May 2007)
Chocolaterie Guylian N.V. ( "the applicant") was unsuccessful in their arguments that their seahorse-like shape mark was capable of distinguishing their praline chocolates from the goods of other traders in attempting to register the shape mark in an international registration.
Background
Chocolaterie Guylian N.V. applied to register an international registration designating Australia for the seahorse-like shape of their praline chocolate. The examiner issued a Notice of Intention to Reject on the grounds that the mark was not capable of distinguishing the goods. The applicant requested a hearing.
The Decision
Evidence was produced that chocolates in the seahorse-like shape had been marketed in Australia since 1980, in addition to market survey evidence. While the shape was a distinct modification of the shape of a seahorse, the Hearing Officer found that other traders were already using the shape or similar shapes for their own chocolates. [22] As such, additional support was required for the shape to have the capacity to distinguish the goods of the applicant from those of others. [23] Evidence of boxes depicting the seahorse-like shaped chocolates were said not to be use of the shape as a trade mark but merely indications of the chocolates available inside the box. [24] Evidence of more recent seahorse-shaped boxes were said to be overwhelmed by the word mark "GUYLIAN" and this use was not relevant to showing prior use of the shape mark for chocolates. [25] The Hearing Officer was not persuaded by the market survey evidence that 40% of consumers recognized the chocolates as coming from the applicant, as this meant that over half of consumers did not make such connections. [26]
Implications
Like colour marks, shape marks can be difficult to register since they must have the capacity to distinguish the goods from those of other traders and other traders may legitimately wish to use the shape. In this case, the fact that other traders were already using similar shapes placed a higher burden on the applicant, who then could not produce sufficient evidence that the shape had been used as a trade mark.
6. Update on Registrability of Colour Marks
Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No.4) [2007] FCAFC 70; (2007) 159 FCR 397; (2007) 72 IPR 261; (2007) ATPR 42-161 (Full Federal Court of Australia - 21 May 2007)
Background
In the Federal Court decision Cadbury were unsuccessful in their trade mark infringement, passing off and breach of the Trade Practices Act action against Darrell Lea for use of a shade of purple in which Cadbury claimed it had "a substantial, exclusive and valuable reputation and goodwill". [27] The Federal Court found that Cadbury's use of the colour purple in marketing, advertising and promotion was inextricably bound up with the stylised name "Cadbury" and the colour had never been used in isolation as an indicium of trade. [28]
The Decision on Appeal
The appeal primarily raised the question of whether the primary judge erred in refusing to admit certain pieces of expert marketing evidence sought to be adduced by Cadbury on the grounds that the issues raised in the evidence were within the scope of the knowledge of ordinary persons. The Full Court found that the excluded evidence, if accepted, could have resulted in a different outcome to the case. [29] Accordingly the proceeding was remitted to the primary judge for further hearing. [30]
The Full Court found that although other traders had been shown to use the colour purple, it did not necessarily follow that the goods of these other traders would be distinguished by colour. [31] In addition, it was said that the principles of passing off and contraventions of the Trade Practices Act did not necessarily require Cadbury to prove any exclusive reputation in the colour purple. [32] Regarding the Trade Practices Act contravention the issue was instead whether the use of the colour was likely to mislead or deceive consumers into believing that the goods were those of Cadbury. [33]
Cadbury Schweppes Pty Ltd's application for special leave to appeal to the High Court of Australia against the Full Federal Court of Australia decision was recently dismissed.