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Trade Marks in Australia - 2010 Roundup

Date: 27 January 2011
Author: Rebecca Schiller
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As we welcome in 2011 we look back on another year in Australian trade mark law.  2010 saw the Trade Marks Act 1995 considered by the High Court for the first and second time, confectionary cases hit the spotlight, and a key case dealt with the issue of “use” of a trade mark.  Several large corporations also learnt that it can be possible to be "too famous".
 

TRADE MARKS OFFICE DECISIONS

Reputation

Two decisions of the Trade Marks Office walk the line between length of reputation and strength of reputation.
 
Jockey International successfully opposed registration of THROTTLE JOCKEY based on its continued use of the JOCKEY trade mark since 1947.  Jockey International successfully argued that due to its reputation in the JOCKEY trade mark, use of THROTTLE JOCKEY was likely to deceive or cause confusion.  [Jockey International, Inc. v Darren Wilkinson [2010] ATMO 22]
 
In contrast, eBay Incorporated was unsuccessful in opposing applications for various UBAY logos.  Although eBay provided extensive survey evidence supporting the reputation of its EBAY logos in the marketplace, the Registrar's Delegate accepted Ubay's argument that this reputation would assist consumers in differentiating between the marks.  [Ebay Incorporated v Ubay Pty Ltd [2009] ATMO 105]
 
This issue was further addressed by the Full Federal Court in the case of Mars Australia Pty Ltd v Sweet Rewards Pty Ltd, in which the Court held that Maltesers was so well known that consumers would not be confused by the packaging and branding for “Malt Balls”.  This case is discussed later.
 

Lack of appearance not lack of intent

The Registrar's Delegate held that a failure to participate in prosecution and opposition will not necessarily imply a lack of intent to use the relevant trade mark.  Adidas International opposed an application for REBOOK Logo by Chen Yong Mei, designated under an International Registration, on the grounds that Chen Yong Mei had no intention to use the trade mark in Australia in relation to the goods claimed.  Adidas submitted the applicant's lack of intention to use the trade mark could be inferred from:
  • Its failure to file or serve evidence or submissions in the opposition;
  • Its failure to provide an address for service (the address for service listed was WIPO);
  • Its failure to respond to letters from Adidas;
  • The history of the International Registration showing Notices of Provisional Refusal, and subsequently Notices of Refusal of Protection, had issued in relation to five designated countries, with no action taken by Chen Yong Mei.
The Registrar's Delegate considered that "the holder’s failure to act in relation to its trade mark registration in the EU does not speak for its intentions regarding its trade mark in Australia".  Therefore the case rested solely on Chen Yong Mei's failure to participate in the opposition.  The Delegate found various reasons why an applicant may not participate in opposition proceedings, such as misunderstandings or disorganisation on the part of the applicant, such that a failure to participate was insufficient to establish a prima facie case of lack of intention to use the trade mark.  [Adidas International Marketing B.V. v Chen Yong Mei [2010] ATMO 15]
  

SWEET SUCCESS OR JUST DESSERTS?

Sweets were on the menu in 2010, with the following cases concluded:
 

Kit Kat Fingers

The three-dimensional shape of a Kit Kat finger is now a registered trade mark, after the appeal of a successful opposition by Aldi Stores settled out of court.  The Registrar's decision that the shape is purely functional has not been judicially reviewed, and it remains to be seen whether Kit Kat would succeed in any attempts to enforce its exclusive rights in the shape.
 

Luscious Lips

"That’s right! All your favourites are back, so put on those flares and get ready to party! Up to 7 lolly varieties including...cool Cola Bottles, those radical Racing Cars, yummy Honey flavoured Bears, totally freeeekie Teeth, luscious Lips, partying Pineapples and outrageous Raspberries."
 
This blurb on the packaging of Allen's Retro Party Mix lolly packaging was held to be descriptive by the Federal Court, and confirmed by the Full Federal Court.  Nature's Blend's claimed infringement of its registered LUSCIOUS LIPS trade mark; however the lip-shaped confectionary was held to be branded ALLEN'S and NESTLÉ, with no use of the term "luscious lips" as a trade mark.  [Nature's Blend Pty Ltd v Nestlé Australia Ltd [2010] FCAFC 117]

 

Maltesers and Malt Balls

The Full Federal Court confirmed the Delfi Malt Balls label and packaging did not suggest a connection with Mars Australia's Maltesers product, nor infringe Mars' registered trade marks.
 
The distinguishing features of each label were held to be the trade marks "Maltesers" and "Delfi" respectively.  The red colouring was considered common to the sweets industry, with the images of the malt balls and "Malt Balls" words held to be descriptive.
 
While Mars sought to argue that consumers would associate any malt ball with Maltesers due to the reputation in the Maltesers product, the Court disagreed, saying that "consumers are so familiar with Maltesers that they could not possibly be confused by the Malt Balls packaging".   [Mars Australia Pty Ltd v Sweet Rewards Pty Ltd [2009] FCAFC 174]
 

USE AS A TRADE MARK

The Luscious Lips and Maltesers cases demonstrate the principle that rights are only enforceable if the term is used as a trade mark.  The following cases also turned on this point:
 

BSS

Alcon, owner of registered trade mark BSS, sued Bausch & Lomb for infringement of its registration.  [Alcon Inc v Bausch & Lomb (Australia) Pty Ltd [2009] FCA 1299]  Bausch & Lomb claimed the term BSS was not used as a trade mark, but was used descriptively as an acronym for "balanced salt solution".  The Court held Bausch & Lomb's use to be use as a trade mark, as:
  • The font and positioning of the terms "BSS" and "AQSIA™" suggest these are branding elements;
  • The descriptive word "sterile" is separate from the "BSS" and "AQSIA™" elements;
  • The words "balanced salt solution" appear descriptively elsewhere on the packaging and in the Product Information Leaflet, without the letters "BSS".
Bausch & Lomb counter-claimed for removal of Alcon's registration on the grounds that either the term "BSS" was descriptive when the trade mark was applied for, or that exclusive rights in the trade mark have been lost as the term has since become descriptive.  The counter-claim was unsuccessful as:
  • Use of the term "BSS" in publications was in the form "balanced salt solution (BSS)", implying that the term "BSS" on its own would not convey that meaning;
  • Alcon had always used the term as a trade mark, in conjunction with the ® symbol and its corporate name, and never in the descriptive sense.

Red

Red Bull GmbH was unsuccessful in its attempt to register its stylised word  in relation to "energy drinks".  Red Bull conceded that the Red Stylised trade mark was not inherently adapted to distinguish, and relied on two forms of evidence of use of the trade mark to prove the mark has the capacity to distinguish:
  • Evidence of use of the stylised mark "Red Bull". 

The Delegate considered that the bulk of this evidence was not evidence of use of the stylised mark , but the complete stylised mark

  • Survey evidence showing that consumers associate the stylised mark "Red" with the energy drinks of Red Bull, together with submissions that energy drinks stacked on shelves will only have partial labels showing, such that consumers will identify the products by the stylised "Red".

The Delegate accepted an association in the mind of consumers between the word "Red" and Red Bull, but could "find nothing that equates to use of the word RED in the stylized logo form (or in any other form) as a trade mark to identify the applicant’s goods".  [Re: Opposition by U.B. Natural Pty Ltd to 1156737 RED in the name of Red Bull GmbH [2010] ATMO 106]

  

AROUND THE COURTS

 

Federal Court

 

Dangers of not disclosing use by competitorsTwo cases considered the impact of use of similar marks by competitors, which use was not disclosed to the Examiner during prosecution.
 

A claim for infringement by Yarra Valley Dairy against PERSIAN MARINATED CHEESE resulted in removal of Yarra Valley's own registration for PERSIAN FETTA.  Lemnos claimed Yarra Valley's PERSIAN FETTA mark should not have been registered as it was descriptive within the dairy industry.  The parties agreed the word "fetta" was descriptive, and the Court accepted Lemnos’ evidence that the geographical reference "Persian" was not sufficiently adapted to distinguish, as the term was used by other traders to describe products from that region.  Yarra Valley was unable to prove the term had acquired distinctiveness.  [Yarra Valley Dairy Pty Ltd v Lemnos Foods Pty Ltd [2010] FCA 1367]

 
Whiskas' Purple colour application was successfully opposed, as the applicant's failure to disclose use of the colour purple by other traders had misled the Examiner into concluding the trade mark was distinctive.  On appeal, the Federal Court, considered that although the Examiner's decision was based in part on the false evidence, there was sufficient evidence of distinctiveness to allow acceptance of the trade mark.
[Mars Australia Pty Ltd (formerly Effem Foods Pty Ltd) v Société des Produits Nestlé SA [2010] FCA 639]
 

Copying may be allowable

A claim for passing off and misleading and deceptive conduct between two makers of "enhanced drinking water" reinforced the position that copying other traders' packaging does not necessarily infringe that other traders' rights.  The Court rejected the applicant's claims on the basis that each packaging contained distinctive features, and the shared features were common to the trade.  In fact, the applicant's packaging was itself copied from a third trader's product.  [Nutrientwater Pty Limited v Baco Pty Limited [2010] FCA 2]  
 

High Court

As anticipated in our 2009 round up, 2010 saw the High Court considering the current Trade Marks Act for the first time since the Act's commencement in 1996.
 

Does "use" require knowledge of the trade mark owner?

In the final episode of the Barefoot Radler case, the High Court determined that it is not necessary to prove intent of the trade mark owner to sell product in Australia to demonstrate use of a trade mark. The Barefoot wine products in question had passed through several overseas suppliers, before entering Australia and appearing for sale in a Victorian store, without the knowledge of the trade mark owner.  The Federal Court and Full Federal Court had found the trade mark owner must knowingly project goods into Australia for the use of the trade mark to be use by the trade mark owner or authorised user.
 
The High Court held the trade mark owner's knowledge or intent to be irrelevant to the question of use.  Rather, use of the trade mark simply needs to be use in the course of trade in Australia, and any use of the trade mark until such time as the goods are bought for consumption, will be trade mark use by or on behalf of the owner. 
[E. & J. Gallo Winery v Lion Nathan Australia Pty Limited [2010] HCA 15]
 

Person Aggrieved

Prior to 2006, only a "person aggrieved" could apply for removal of a trade mark registration for non-use.  This element is no longer required in non-use removal proceedings, however the High Court's decision is nonetheless useful in relation to other provisions which still require the applicant to be a "person aggrieved".
 
In the Health World case, the High Court held that "person aggrieved" should be construed liberally rather than restrictively.  The Court considered the Federal Court's conclusion that "where there are two rival traders who have lost no opportunity to attack each other's attempts to register trade marks both before the Registrar and in four sets of court proceedings which have so far been heard by 10 judges, that neither of them is aggrieved, and each is to be regarded as falling within a class of inter-meddlers, lacking any interest to be protected,” to be curious and fallacious.  The High Court held it unnecessary to prove that the existence of the registration sought to be removed will have an adverse impact on the applicant.  One test, satisfied in this case, is simply that the parties are trade rivals. [Health World Ltd v Shin-Sun Australia Pty Ltd [2010] HCA 13]
  

WHAT CAUGHT THE ATTENTION OF THE MEDIA

2010 saw things get UGG-ly for the makers of counterfeit Ugg boots.  Despite restraining orders in 2003, the counterfeiters, several individuals and a small Melbourne company, continued to make and sell Ugg-style boots, based closely on the original boots produced by Deckers Outdoor, and branded with the UGG name and similar logo.  The Federal Court decision at the end of 2009 held that, although the term “Ugg boots” had become generic and descriptive, copyright subsisted in the hand-drawn UGG logo & Sun device.  In addition, the style of the boots constituted passing off and misleading and deceptive conduct – and this after a previous finding of trade mark infringement as well.  The Court awarded compensatory damages in the amount of $3m and additional damages for reprehensible conduct of $3.5m.   But this wasn’t the end – in 2010 the Court handed down prison sentences of between 1-3 years to the individuals responsible, for their contempt of the Court’s orders by years of continued production and sale.

Rebecca Schiller, Registered Trade Mark Attorney
 
 
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