Best Trade Mark Cases 2017

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IntroductionWelcome to Shelston IP’s round up of key trade mark cases in Australia and New Zealand for 2017

It was a little quiet on the trade mark scene in New

Zealand in 2017 but there was plenty happening in

Australia including some important Full Federal Court

cases. See below for a quick snapshot of each case

followed by a more detailed discussion.

Australia SnapshotsBauer Consumer Media Limited v Evergreen Television Pty Ltd [2017] FCA 507

First Use Ownership Non-Use

The owner of a trade mark in Australia is generally

the first person to use the trade mark in Australia

in the course of trade for the relevant goods or

services. If there has been no prior use, the first

person to apply to register a trade mark will usually

be the owner of the trade mark. This decision

provides further clarity regarding ownership and

authorship of trade marks and when first use is

considered to have commenced. See page 4

GAIN Capital UK Limited v Citigroup Inc (No 4) [2017] FCA 519

Confusion Reputation Similarity

A trade mark will generally be refused registration

in Australia if there is a real, tangible danger that

its use will confuse or deceive consumers because

another similar trade mark already has a reputation

in Australia. This decision provides an indication of

the factors to be taken into account when assessing

the similarity of trade marks, reputation and the

likelihood of confusion. See page 6

Clipsal Australia Pty Ltd v Clipso Electrical Pty Ltd (No 3) [2017] FCA 60

Market Defences Cancellation Bad faith TM no defence to ACL Personal liability

In this case, the Court considered the

circumstances when a trade mark should be

cancelled, examining the reasons for adoption of

the trade mark. Having found that the mark was

adopted in bad faith, the Court cancelled the trade

mark and found in favour of the other party in

relation to breach of the Australian Consumer Law

and passing off. Importantly, personal liability was

imposed on the company’s sole director due to his

close personal involvement with the running of the

company. See page 8

Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd (No 3) [2017] FCA 865

Deceptive similarity word/device marks Infringement ACL/Passing off Relevant class of consumer

This decision further highlights the difficulties that

logo trade mark holders have in enforcing their

trade mark against potentially infringing word

marks. The case confirms that although registering

a mark that contains a combination of features may

protect the mark, it will not necessarily protect the

individual features separately. See page 11

Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd [2017] FCAFC 56

Infringement Metatags Prior use – elements not substantially affecting the identity of the mark

This case concerned use of a competitor’s trade

marks in various ways including on a website and

in website metatags, email addresses, domain

names, third party website listings, flyers and

other marketing. The case provides some useful

examples of logos which were not identical with

the registered marks but whose additional elements

were found not to substantially affect the identity

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of the trade mark. Therefore the logos constituted

prior use of the relevant trade marks to support

the infringement claims. Rather surprisingly in

view of prior relevant decisions, the Full Federal

Court has now ruled that use of a competitor’s

trade mark in a website’s metatags can constitute

trade mark infringement. This ruling is an important

development. See page 14

Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83

Correct owner Validity Assignment Substantial Identity Reputation Deception or confusion

This Full Federal Court decision highlights

the importance of ensuring that a trade mark

application is filed in the name of the owner of the

trade mark. It confirms that an application filed in

the incorrect name is invalid and cannot be rectified

by subsequently transferring ownership of the mark

to the correct owner. This decision also provides

guidance on the test for determining whether two

marks are substantially identical and on how the

reputation of a trade mark and the relevant class of

consumers are to be assessed in determining the

likelihood of deception or confusion arising from

use of another mark. See page 17

Samuel Smith & Son Pty Ltd v Pernod Ricard Winemakers Pty Ltd [2016] FCA 1515

Use as a trade mark Deceptive similarity Reputation Trade mark infringement

This late 2016 case provides guidance on the

relevance of reputation in assessing the impression

of a trade mark conveyed to consumers when

determining deceptive similarity of a trade mark.

The decision confirms that evidence of reputation

might be relevant if it establishes that the mark,

or an important element of it, is notoriously

so ubiquitous and of such long standing that

consumers must be taken to be familiar with it.

The case also demonstrates that a sign may be

used as a trade mark even if its use was intended

to be purely descriptive, if the sign is unique or

unconventional. See page 23

Moroccanoil Israel Ltd v Aldi Foods Pty Ltd [2017] FCA 823

Infringement Deceptive Similarity Misleading Conduct Revocation Non-Use

This case provides useful guidance on the different

factors that are taken into account when comparing

trade marks for the purposes of assessing trade

mark infringement and when comparing product

branding and packaging for the purposes of

assessing passing off and contraventions of the

Australian Consumer Law. The decision also

demonstrates that “natural” marketing claims for

products that do not wholly or substantially contain

natural ingredients and claims of performance

benefits which cannot be properly substantiated are

likely to contravene the Australian Consumer Law.

See page 26

New Zealand SnapshotsCrocodile International Pte Limited v Lacoste [2017] NZSC 14

Revocation Non-Use Discretion

The New Zealand Supreme Court has overturned

the previous decision of the New Zealand Court

of Appeal, revoking a trade mark registration for

non-use where the trade mark owner had only used

a mark that is conceptually similar to the registered

trade mark. This decision has reversed the earlier

decision which seemed to set the bar too low when

it comes to relying on use of a similar trade mark to

defend an application to revoke another trade mark

for non-use. The Court also confirmed that there

is no discretion to allow a trade mark to remain

registered if it has not been used in a manner

which satisfies the use requirements of the Trade

Marks Act 2002 (NZ), despite such discretion being

applied in the past. See page 30

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Bauing Discovers DownunderBauer Consumer Media Limited v Evergreen Television Pty Ltd [2017] FCA 507

The Parties

Evergreen Television Pty Ltd (Evergreen) is a

producer of television programs. Bauer Consumer

Media Limited and Bauer Media Pty Ltd (together

Bauer) also produce television programs.

The Trade Mark

Evergreen applied to register DISCOVER

DOWNUNDER (application number 1324177) in

class 41 for “Production of television programs”.

Background and Issues

Between 2000 and 2009, Warren Parrôt was an

employee of ACP Magazines Pty Ltd (ACP), a

company which was later acquired by Bauer and

is a part of the Nine Entertainment Co. group

(Channel 9).

Warren’s father, Colin Parrôt, is the sole director of

Evergreen. Evergreen asserted that both the trade

mark and a television series relating to the trade

mark were conceptualised in the late 1980’s by

Colin Parrôt, but the idea did not gain traction until

the early 2000’s.

In 2004, at the request of Evergreen, Warren Parrôt

pitched the television series concept to ACP under

the name “Caravan Australia”. ACP declined the

concept and Colin Parrôt took his idea to rival

network Channel Ten Pty Ltd (Channel 10).

ACP expressed interest in attending the meeting

with Channel 10 and Colin Parrôt, alleging their

attendance was predicated on the basis that ACP

would own all rights to the series, including the title.

Following the meeting, email exchanges took place

between Colin Parrôt and Channel 10 discussing

probable names for the show, eventually deciding

on “Discover Downunder”. Evergreen entered into

a licence agreement with Channel 10 in 2005 to air

the Discover Downunder show and provided this

agreement as evidence of Evergreen’s first use of

the trade mark.

When the show first aired on 14 April 2005, Warren

Parrôt was credited as the series creator, resulting in

some confusion for ACP and causing ACP to realise

that it had no written agreement in place with

Evergreen. Evergreen entered into a new licence

agreement with Channel 9 to air the series from

2007 until early 2009. In early 2009, Warren Parrôt

was made redundant by ACP and Evergreen was

fired by Channel 9 as the producer of the show.

Evergreen filed the trade mark application on 9

October 2009. Bauer opposed registration of the

trade mark on the basis of section 58 of the Trade

Marks Act 1995.

Under section 58, an application may be opposed

on the basis that the applicant is not the owner of

the trade mark (that is, someone else is the true

owner). In Australian practice, the owner of a trade

mark is generally the first person to author and use

the trade mark. The core issue of this case was

whether Bauer was able to establish that it had

used Discover Downunder as a trade mark prior to

Evergreen entering into the licence agreement with

Channel 10 in 2005, which Evergreen relied on as

evidence of its first use of the mark. Bauer argued

that ACP used the trade mark during the promotion

and production of the television series as early as

2004.

Decision by the Trade Marks Registrar

At first instance and based on the evidence

provided, the Hearing Officer decided that, on

balance, ACP was the least eligible candidate for

authorship and therefore ownership of the trade

mark. The likely author of the trade mark was either

Evergreen or Evergreen and Channel 10 jointly in

view of the 2004 email exchange.

The Hearing Officer noted that Bauer had failed to

establish any earlier use, particularly in the form

of written contracts, and instead relied heavily

upon declaratory evidence by an employee, Keith

Falconer. The Hearing Officer was not persuaded

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by the evidence put forward by Bauer, noting that

there were a number of inconsistencies within the

declaration.

As a result, the opposition was dismissed.

The Decision

Bauer appealed to the Federal Court on the section

58 ownership issue. In addition, Bauer sought an

order for removal of the trade mark under sections

92(4)(a) and (b) of the Act, on the basis that

Evergreen had no intention in good faith to use

the trade mark as at the application date and/or

that Evergreen subsequently did not make genuine

use of the trade mark for a consecutive period of

3 years. This application was made primarily with

the intention of placing the onus of establishing

genuine use of the trade mark on Evergreen.

The lengthy decision effectively boiled down to

Justice Perry’s view that Bauer was again unable

provide any substantive evidence of use of the

trade mark since before Evergreen’s agreement

with Channel 10. Consequently, Bauer failed in its

appeal.

Justice Perry noted that in the matter of ownership

of the trade mark, little weight could be placed

on the declaratory evidence provided by Keith

Falconer and the credibility of his statements

without supporting evidence, especially given the

period of time that had passed since the trade mark

was developed and the effect that would have on

any person’s ability to accurately recall events.

Given that Colin Parrôt and Warren Parrôt were

able to provide substantive documentary evidence

consistent with their position, Perry J considered

that their recall of events was generally more

reliable.

As a result, Perry J dismissed Bauer’s appeal and

upheld the Hearing Officer’s original decision to

dismiss Bauer’s opposition to registration of the

trade mark by Evergreen.

Given Justice Perry’s views on ownership of the

trade mark and acceptance of Evergreen’s evidence

regarding its prior use and intention to continue

using the trade mark, Bauer’s application for

removal of the trade mark from the register was

also dismissed.

The Significance

This decision reiterates the importance of

applying for registration of a trade mark as soon

as practicable after its conception and keeping

good records of the development and first use of

the trade mark to confirm ownership if necessary.

Doing so will limit the risk of a third party obtaining

superior rights through first use of the trade mark

or seeking to claim ownership by filing a trade mark

application before you do.

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No Citi monopoly for Citigroup GAIN Capital UK Limited v Citigroup Inc (No 4) [2017] FCA 519

The Parties

GAIN Capital UK Limited (Gain) is involved in the

financial services sector, particularly in relation

to derivatives and foreign exchange contracts.

Citigroup, Inc (Citigroup) is, of course, part of the

well-known multinational financial services group

bearing that name.

The Trade Marks

Gain initially filed the following Australian trade

mark applications:

• Australian trade mark application number

1393370 in class 36 for “Financial services;

providing general financial services advice for

derivative and foreign exchange contracts”

(the CITYINDEX Mark); and

• Australian trade mark application number

1393371 in class 36 for “Financial services;

providing general financial services advice for

derivative and foreign exchange contracts”

(the IFX Mark).

Background and Issues

Citigroup is the owner of a large number of

Australian trade mark applications and registrations,

the majority of which include the word “Citi” as a

predominant feature (the Citi Marks). Citigroup

has been registering Citi Marks since as early

as 1998 and has been operating in the financial

services sector in Australia since the 1960’s.

Gain was established in the UK in 1983 under

the parent company, City Index Limited. Gain

commenced trading in Australia as CITY INDEX in

early 2007, offering international foreign exchange

services.

Citigroup opposed registration of the CITYINDEX

Mark and the IFX Mark by Gain. Citigroup

asserted that: (a) it had been using its Citi Marks

since at least before 2007 in relation to products

and financial services broadly, including foreign

exchange services; and (b) because of the long

standing reputation of the Citi Marks in the

Australian market and the similarity between the Citi

Marks and each of the CITYINDEX Mark and the

IFX Mark, Gain should not be permitted to register

the CITYINDEX Mark or the IFX Mark.

Previous Decision

The Hearing Officer at IP Australia found that

Citigroup had established a significant reputation

in its earlier Citi Marks in Australia in relation to

services similar to those covered by the CITYINDEX

Mark and the IFX Mark. The Hearing Officer took

the view that given the prior reputation in the Citi

Marks and their similarity to the CITYINDEX Mark

and IFX Mark, there was a real, tangible danger

of consumers being deceived or confused into

believing that the services provided under the

marks originate from the same source. Accordingly,

Citigroup was successful in its opposition and

registration of the CITYINDEX Mark and the IFX

Mark was refused.

The Decision

Gain appealed to the Federal Court against the

Hearing Officer’s decision. The crucial question to

be answered was whether there was a real, tangible

danger of deception or confusion arising from the

use and registration of the CITYINDEX Mark and

the IFX Mark. In answering this question, the Court

reiterated that it must not simply compare the

marks side-by-side but must take into account all

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surrounding circumstances. These circumstances

include not only visual and aural similarities

between the marks, but the similarity of the services

for which the trade marks are used.

To further distinguish its applications from the earlier

Citi Marks, Gain sought to remove the potential

overlap between its services and those provided by

Citigroup by replacing the broad claim for “financial

services” with the following more limited range of

services: “Financial services, being trading services

for retail, over the counter derivatives provided

through a user online software program or provided

electronically or via other communicative means”

(the Amended Services).

When comparing the CITYINDEX Mark and the

Citi Marks, Markov J noted that while “citi” and

“city” are phonetically identical, the “city” element

of the CITYINDEX Mark is simply a normal English

word and is not in itself an essential feature of the

mark. The word “index” however is unique to the

CITYINDEX mark and does not appear in any of the

Citi Marks. This assisted to distinguish the marks.

In the case of the IFX Mark, Citigroup relied upon

its prior registrations of CITIFX and CITI INSTANTFX.

Markov J found that unlike the CITYINDEX

mark, the IFX Mark contains a dominant feature

that “strikes the eye” and “fixes itself in the

recollection”, namely the IFX element. Again, this

assisted to distinguish the IFX Mark from CITIFX

and CITI INSTANTFX. The inclusion of the tagline

“A City Index Company” in the IFX Mark also

meant there were no aural similarities between the

marks. In any case, Markov J was not satisfied that

Citigroup had a significant reputation in its CITIFX

or CITY INSTANTFX marks specifically and found

that the services provided by Citigroup under those

particular marks did not extend to the Amended

Services offered by Gain.

Importantly, while it was accepted that Citigroup

had a significant reputation in the word “Citi” alone,

Markov J considered that a refusal to register the

CITYINDEX Mark and IFX Mark on the basis of

the Citi Marks would effectively grant Citigroup a

monopoly over use of the common word “city” (as

a prefix or suffix in combination with other words)

for financial services.

Considering all of the above, Markov J concluded

that there was no real, tangible danger of confusion

arising from the registration and use of the

CITYINDEX Mark and the IFX Mark by Gain for the

Amended Services. As a result, the trade marks

were allowed to progress to registration for the

Amended Services.

The Significance

A number of factors will be taken into account

when determining if there is a real, tangible danger

that the registration and use of a trade mark will

confuse or deceive consumers because of the

reputation of another trade mark. Even if there

is a strong reputation associated with the earlier

mark, there may not be a real risk of confusion if

the earlier mark has not been used or acquired a

substantial reputation specifically in connection with

the goods or services covered by the applied for

mark, or if the dominant and distinctive features

of the applied for mark are not shared by the

earlier mark.

The decision also suggests that the Court is

understandably reluctant to reach a conclusion that

will effectively grant a company a monopoly over

the use of a generic word.

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Clipso and Kader Clipped by ClipsalClipsal Australia Pty Ltd v Clipso Electrical Pty Ltd (No 3) [2017] FCA 60

The Parties

Clipsal Australia Pty Ltd (Clipsal) is a large and

well-known company selling electrical conduit

fittings and other electrical products including

switches under the brand name Clipsal since

the 1920s. It was the overwhelmingly dominant

supplier in the market. Mr Abdul Kader established

Clipso Electrical Pty Ltd (Clipso) in 2008 and

marketed various electrical products including

switches under the name Clipso.

The Trade Marks

Clipsal was the holder of various trade marks for

CLIPSAL but relied on a registration effective from

March 1989 for all goods in class 9. Clipso obtained

a registration for CLIPSO for a wide range of goods

in class 9.

Clipsal also held a shape trade mark registration

for its “dolly switch” in class 9 for electrical wiring

accessories incorporating certain types of switches

as follows:

Background and Issues

Not surprisingly, Clipsal objected to Clipso’s use

of CLIPSO. Clipsal sought orders that the CLIPSO

trade mark be cancelled on the grounds of

substantial identity or deceptive similarity, bad faith

and Clipsal’s prior reputation in the Clipsal name.

Clipsal also argued that Clipso and its director, Mr

Kader, had engaged in misleading and deceptive

conduct in breach of the Australian Consumer Law

(ACL) and passing off (seeking to trade on Clipsal’s

reputation and pass off its own goods as those

of Clipsal). Finally, Clipsal argued that Clipso was

infringing Clipsal’s shape trade mark for the dolly

switch.

The Decision

Clipsal succeeded on most grounds but not for

infringement of the dolly switch shape trade mark.

While Clipso’s dolly switch was very similar to the

switch covered by Clipsal’s shape trade mark, the

Court held that Clipso had not used its switch as

a trade mark given the extensive Clipso labelling

applied to the packaging containing the Clipso

switch.

Mr Kader’s evidence

Mr Kader asserted that in adopting CLIPSO, he

had very little awareness of CLIPSAL although

he knew of the mark. His Honour rejected Mr

Kader’s assertions on the basis that Mr Kader

had been importing electrical accessories since

2005 and must have been well aware of CLIPSAL

given Clipsal’s dominant position in the market.

Accordingly, the judge found that Clipso deliberately

adopted a very similar mark to CLIPSAL for the

purpose of taking advantage of Clipsal’s reputation

in the market.

What is the relevant market?

The judge sought to identify the relevant market

for the goods to decide whether: CLIPSO was

deceptively similar to CLIPSAL for the purposes of

section 44; whether use of CLIPSO would be likely

to deceive or cause confusion for the purposes of

section 60; whether use of CLIPSO was misleading

or deceptive within the meaning of the ACL; and

whether use of CLIPSO would confuse consumers

for the purposes of the passing off action. It was the

position of the ordinary, reasonable consumer in the

relevant market which was to be considered.

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Clipso argued that the market was limited to

specialist electrical contractors and wholesalers,

all of whom would be very familiar with the Clipsal

brand and would therefore not be deceived or

confused into thinking that the Clipso brand was

related. Clipso made this argument on the basis that

most of the relevant products can only be installed

by a qualified electrician.

Justice Perram spent some time considering the

potential segments of the market. Evidence from

Clipsal of its targeted marketing to end consumers

(not just tradespersons) was important. Ultimately,

for the primary CLIPSAL/CLIPSO element of the

case, his Honour found that the market consisted

of electrical contractors and wholesalers (making

up the vast majority of the market) together with a

much smaller (but not de minimis) number of direct

end consumer purchasers and end consumers who

directed or influenced their electrical contractors in

relation to which products to use.

Trade mark infringement

In comparing CLIPSAL and CLIPSO, his Honour

held that the marks were not substantially identical

but easily concluded that they were deceptively

similar given the visual, and even more significant

aural, similarities. Thus use of CLIPSO infringed

CLIPSAL and this conclusion applied to at least the

end consumer segment of the market and possibly

all segments. CLIPSAL was not considered to be

so well-known as to negate any deception of those

in the trade. However, Clipso had a defence to

the infringement claim under section 122(1)(e).

This section provides that use of a registered trade

mark is a defence to an infringement claim. Of

course, the defence only survives if the registration

continues and falls away if the registration is

cancelled. Clipso also sought to rely on the “use

of own name” defence but this failed due to the

lack of good faith by Clipso. Perram J granted

injunctions against future infringement by Clipso.

Cancellation of the CLIPSO mark

An aggrieved party may seek cancellation of a trade

mark on any of the grounds which could be used

for an opposition to the trade mark at the time of

application. In this case, Clipsal sought cancellation

of CLIPSO on various grounds including section

44 (substantially identical/deceptive similarity),

section 60 (trade mark similar to a prior mark with

a reputation) and section 62A (bad faith). Clipsal

succeeded on all three grounds and registration of

CLIPSO was cancelled.

Given the end consumer segments of the relevant

markets and the similarity of the marks, Perram

J had little difficulty in finding in favour of Clipsal

under sections 44 and 60, rejecting Clipso’s

arguments that CLIPSAL was so well known as

to remove any possibility of deception. Included

in his Honour’s reasoning was evidence from a

linguistics expert that CLIPSO could be considered

a hypocoristic or slang shortening of CLIPSAL (in

the same way that “arvo” is a hypocoristic for the

word afternoon).

Given his Honour’s earlier findings in relation to

the credibility of Mr Kader and Clipso’s reasons

for adopting CLIPSO, his Honour also found that

the mark had been applied for in bad faith, in the

hope of misleading consumers. Clipso’s conduct

was not in accordance with acceptable commercial

standards.

Breach of ACL and passing off

Perram J found that Clipso’s use of CLIPSO was

a breach of the ACL and constituted passing off

in respect of that segment of the market which

comprised end consumers. However, there was

no breach of the ACL or passing off in respect

of the market segment comprising contractors

and wholesalers. This segment was well aware of

CLIPSAL and would not be mislead or confused

by CLIPSO and would only be “caused to wonder”

about a connection between Clipso and Clipsal.

It is important to note that liability for breach of

the ACL and passing off attached to all conduct of

Clipso since it first began using CLIPSO in 2008.

In contrast, liability for the trade mark infringement

claim in respect of CLIPSAL could only commence

once the order for cancellation of CLIPSO was

made by Perram J in 2017 (CLIPSO providing an

infringement defence before that time pursuant to

section 122(1)(e)).

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Personal liability of Mr Kader

In this case, Mr Kader was also sued personally

by Clipsal for trade mark infringement and for

passing off as a joint tortfeaser with Clipso, and

for breach of the ACL as a person involved in the

contravention of the ACL by Clipso. His Honour

held that Mr Kader was personally liable given his

close personal involvement with Clipso as the sole

director and responsible for the establishment and

day to day operation of Clipso.

The Significance

This case is important in its analysis of the relevant

market. Clipso would have been in a much better

position had the market only consisted of specialist

electrical contractors and wholesalers as these

persons would perhaps have not been deceived

or confused by the similarity of the CLIPSO mark.

While CLIPSO provided a defence to trade mark

infringement until it was cancelled, having that

registration provided no defence to the ACL and

passing off issues. Finally, for small companies

where only a single director is involved, there is

a real risk that engaging in questionable conduct

will result in personal liability, removing the

usual protection from personal liability offered by

incorporation.

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Shape Shopfitters not in shapeShape Shopfitters Pty Ltd v Shape Australia Pty Ltd (No 3) [2017] FCA 865

The Parties

Shape Shopfitters Pty Ltd (SS) is the registered

trade mark owner. Shape Australia Pty Ltd (Shape Australia) is the alleged infringer of the trade

mark. This Federal Court judgment (Mortimer J)

relates to claims made by SS that Shape Australia

had engaged in the tort of passing off, misleading

and deceptive conduct and had infringed its

registered trade mark by using a deceptively similar

trade mark in connection with the same services.

The Trade Marks

SS is the owner of Australian trade mark registration

number 1731525 for the following logo:

(the Registered Mark).

The Registered Mark was registered on 30 October

2015 in class 37 relating to, amongst other things,

“shopfitting, construction and advisory services

relating to constructions”.

Shape Australia had promoted its services under

and by reference to the word ‘SHAPE’ (the Word Mark) and to the following two marks:

(the Circle Mark)

(the Transparent Mark)

We will refer to the Word Mark, the Circle Mark

and the Transparent Mark together as the Shape Australia Marks.

Background and Issues

On 2 July 2012, as part of a “re-branding” into a

specialist shopfitting company, SS changed its name

from Billings Long Constructions Pty Ltd to Shape

Shopfitters Pty Ltd.

Shape Australia, a much bigger enterprise than SS,

was incorporated a decade before SS and originally

had three corporate names involving the acronym

“ISIS”. In 2015, a new corporate identity, “SHAPE

Australia”, was chosen by Shape Australia without

knowledge of the existence of SS.

SS contended that as “SHAPE” was the essential

eye-catching and memorable feature of the

Registered Mark, by using this feature in the Shape

Australia Marks, the hypothetical person of ordinary

intelligence would wonder whether SS is a smaller

specialist part or subsidiary of the Shape Australia

group. SS therefore claimed that Shape Australia’s

conduct in using the Shape Australia Marks

constituted trade mark infringement, passing off and

contraventions of sections 18 and 29 of the Australian

Consumer Law (ACL).

Shape Australia relied on the Full Court’s decision in

Crazy Ron’s Communications Pty Ltd Mobileworld

Communications Pty Ltd [2004] FCAFC 196; 209 ALR

1; 61 IPR 212, submitting that the word SHAPE was

not the only essential feature of the Registered Mark

given that the Registered Mark is a device and not a

word mark and is comprised of a number of elements

all of which have to be taken into account in applying

the established tests for the causes of action.

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The Decision

Contraventions of the ACL

Justice Mortimer initially had to identify to whom

the impugned conduct or representation was

directed and agreed with SS that this requires

a broad construction of the relevant market. SS

correctly classified the relevant market as including

participants in the commercial construction

industry who were affected by or exposed to Shape

Australia’s conduct in the promotion, provision and

sale of commercial services. This included buyers

and clients, third party trade subcontractors and

providers of other services such as design and

architectural services. Her Honour held that there

was no reason in principle to confine the class

to “consumers” or “purchases” as submitted by

Shape Australia as the point of s 18 is to prohibit

conduct which misleads or deceives, or is likely to

do so and provides protection to all people dealing

with Shape Australia.

The broader construction of the relevant class of

persons was important to SS’ case in demonstrating

overlap between the business activities of the

parties which provides the occasion or opportunity

for the relevant deception amongst that class.

While SS could only provide limited evidence of

overlapping customers between the two parties, it

could establish an overlap between subcontractors

who had worked for both parties.

Despite this market overlap, Mortimer J held

that there was no real, practical risk that the

relevant class would be misled or deceived. Her

Honour held that the businesses were simply

too different and operated in different areas,

with SS being far more specialised and more

geographically contained. Although SS submitted

evidence demonstrating subcontractors who

had sent invoices and other communications

erroneously to Shape Australia, the Judge held

that this simply demonstrates confusion. Here,

her Honour drew a distinction between confusion

and deception. Although there was clear evidence

of actual confusion, SS failed to establish that the

subcontractors were deceived into believing that SS

formed part of or was linked in any way to Shape

Australia.

Additionally, Justice Mortimer also considered

evidence as to the nature of each party’s clients.

Clients were engaged by Shape Australia and SS

over long periods of time, and often repetitively.

In particular, a majority of SS’ work was obtained

through personal contracts and existing business

relationships. Additionally, her Honour accepted

Shape Australia’s evidence demonstrating that there

were a number of other entities using the word

‘SHAPE’ in their corporate names. Therefore, clients

would be both familiar with Shape Australia or SS

and as industry specialists, would appreciate that

many unrelated “SHAPE” entities co-exist.

SS therefore did not discharge its burden of

proving a contravention of s18 or s29 (which was

dependent on the success of the s18 claim).

Passing Off

In assessing the elements of the tort, namely

reputation, misrepresentation and damage, Justice

Mortimer held that Shape Australia’s conduct did

not threaten or damage or otherwise adversely

affect the reputation and goodwill of SS. However,

her Honour confirmed that the absence of proof

of actual damage does not preclude the claim

in passing off from succeeding. Nonetheless,

the passing off allegations failed for want of the

necessary misrepresentation.

Trade Mark Infringement

Mortimer J dealt with the trade mark infringement

aspect of this case relatively quickly. Although she

stated that a claim for trade mark infringement

can be successful even though a claim under the

ACL and passing off is not made out, her Honour

held that SS had failed to establish that the Shape

Australia Marks are deceptively similar to the

Registered Mark.

Shape Australia submitted that the difference in

colour between the Registered Marks and the

Shape Australia Marks could preclude a finding

of infringement. However, due to the imperfect

recollection of the marks to the reasonable person

of ordinary intelligence, Mortimer J was not

required to express an opinion on Shape Australia’s

submission regarding the difference in colour.

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Ultimately, her Honour considered that the

reasonable person of ordinary intelligence and

memory recalling SS’ mark would recall the word

“SHAPE” in capital letters in conjunction with the

word “shopfitters” due to the alliterative effect

between the two words. She also considered

the bottle cap border of the Registered Mark

as a distinctive feature and likely to be recalled.

These features do not appear in the Circle Mark

or Transparent Mark notwithstanding the use of

capitalized letters in the word “SHAPE”, the central

placement of the word inside a circle and the

circle itself. Additionally, the Word Mark used the

capitalized word “SHAPE” in conjunction with other

words and did not include the word ‘shopfitters’.

Accordingly, a reasonable industry participant

of ordinary intelligence and memory would not

be caused to wonder whether Shape Australia’s

services and business come from the same source

as SS.

In the decision, Mortimer J also considered that as

the word ‘SHAPE’ is used in the ordinary course of

the English language, SS should not be entitled to

an outcome that would provide SS with a statutory

monopoly over the word.

The Significance

This case reinforces the decision in Crazy Ron’s

and many other cases, demonstrating that

registering logo marks will protect the mark as

whole but will not necessarily protect the individual

features separately, particularly ordinary English

words. Accordingly, since it is difficult to establish

misleading and deceptive conduct and passing

off claims, as demonstrated by Justice Mortimer’s

reasoning, the case highlights the importance of

seeking registration of both logo and word trade

marks (as applicable) when establishing a new

business or rebranding an old business.

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Lights out for LivAccor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd [2017] FCAFC 56

The Parties

Accor Australia & New Zealand Hospitality Pty Ltd

(Accor) was appointed by Cairns Harbour Lights

Pty Ltd (CHL) to be the exclusive provider of

onsite letting services for the Cairns Harbour Lights

complex built by CHL. Accor initiated action against

Liv Pty Ltd (Liv) alleging trade mark infringement

and misleading and deceptive conduct by Liv in the

course of undertaking a letting service in respect of

the Cairns Harbour Lights complex. The judgment

of the full Federal Court (Greenwood, Besanko and

Katzmann JJ) relates to an appeal by Accor from

the first instance Federal Court decision of Rangiah

J. Rangiah J found substantially in favour of Liv in

relation to the various trade mark infringement and

misleading and deceptive conduct claims. Liv cross-

appealed to the Full Federal Court in relation to the

trade mark infringement findings of Rangiah J.

The Trade Marks

CHL was the owner of the trade marks HARBOUR

LIGHTS and CAIRNS HARBOUR LIGHTS, applied

for in January and April 2009 respectively. The

trade marks were registered in classes 36 and 43

and covered “agency services for the leasing of

property, accommodation, letting agency services

and similar”. Accor was CHL’s exclusive licensee in

respect of those trade marks.

Background and Issues

Initially, Accor used the name Sebel Harbour Lights

to operate the letting business in respect of the

Cairns Harbour Lights complex but from early

2009 it used the name Cairns Harbour Lights. CHL

registered the domain names harbourlights.com.

au and cairnsharbourlights.com in January 2004.

These domains were linked to CHL’s website but

that website only related to apartment sales not

apartment leasing or rental. Importantly, Accor also

used the following logos in printed advertisements

published in 2005:

Elise Bradnam bought an apartment in Cairns

Harbour Lights complex in 2005. She operated

a business called Harbour Lights Property

Management and Sales under which she managed

the leasing of various apartments in the Cairns

Harbour Lights complex including her own. She

registered the domain names cairnsharbourlights.

com.au, harbourlightscairns.com.au and

harbourlightscairns.com with those domain names

pointing to her website which became operational

on 31 October 2006. In September 2009, Ms

Bradnam sold her leasing management business

to Liv. Liv traded under the business name Cairns

Luxury Apartments. As part of the sale, Liv acquired

harbourlightscairns.com from Ms Bradnam. Ms

Bradnam retained cairnshabourlights.com.au and

harbourlightscairns.com.au but both these domains

pointed to Liv’s website.

In operating its apartment letting services business,

Liv used the Cairns Harbour Lights and Harbour

Lights names in various ways including on the

Liv websites and in the domain names, Google

advertisements, email addresses, invoices, booking

confirmations, flyers, signs, listings on third party

accommodation websites and in the metatags for

the cairnsluxuryapartments.com.au website (also

operated by Liv).

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Decision of the Federal Court (single judge)

At first instance, Rangiah J held that CHL’s Cairns

Harbour Lights trade mark registration was non-

distinctive and therefore invalid. The HARBOUR

LIGHTS registration was found to be distinctive.

However, due to prior use by Ms Bradnam/Liv, the

registration was valid for only certain services. As

a result of these conclusions, Accor’s trade mark

infringement claims were dismissed. Rangiah

J found various instances of misleading and

deceptive conduct by Liv relating to the use of the

Cairns Harbour Lights and Harbour Lights names.

Both parties appealed the unfavourable aspects of

the verdict.

The decision of the Full Federal Court

The Full Federal Court disagreed with Rangiah J in

respect of the CAIRNS HARBOUR LIGHTS trade

mark and found it to be sufficiently distinctive to

be registrable. The Full Court also disagreed with

Justice Rangiah’s decision that the HARBOUR

LIGHTS trade mark was partially invalid, finding that

CHL could rely on its prior use of the trade mark

in the 2005 published advertisements to support

the registration in all classes. While Rangiah J had

held that the 2005 advertisements did not amount

to use of the HARBOUR LIGHTS trade mark, the

Full Court found that the additional elements in the

2005 advertisements did not substantially affect the

identity of the trade mark and thus constituted use

of the trade mark which was prior to the use by Ms

Bradnam/Liv. Accordingly, Liv was found to have

infringed both trade marks by its conduct.

Most importantly, the Full Court agreed with

Rangiah J that one of Liv’s uses of Harbour

Lights, being use in the metatags for its

cairnsluxuryapartments.com.au website, was use

as a trade mark and therefore infringed CHL’s

HARBOUR LIGHTS trade mark. This finding is

the most significant element of the case and is

worth further elaboration. All websites contain

source code which sits behind the websites and

determines the content, structure and layout of

the website. It is common to insert into the source

code so called metatags which are not visible on

the website but which can be viewed by a user who

knows how to find the source code. It is not difficult

to find the source code for a website but few users

bother to access it. Metatags are generally used

to enhance search engine rankings for the website

with a view to delivering users searching for the

particular term to the website. In this case, there

were two relevant sections of text in the source

code for Liv’s website as follows:

• “Cairns Luxury Accommodation – Waterfront

Accommodation – Harbour Lights – Cairns

Queensland”; and

• “Content: equals Harbour Lights Apartments in

Cairns offer luxury private waterfront apartment

accommodation for holiday letting and short

term rental”.

At first instance, Rangiah J found the reference to

Harbour Lights in the first bullet above to be entirely

descriptive and therefore there was no trade mark

infringement. However, he found that “Harbour

Lights Apartments” was use as a business name

constituting a badge of origin and therefore trade

mark use.

The Full Court agreed with these conclusions. This

result is surprising for two reasons as follows:

• The earlier case of Complete Technology

Integrations Pty Ltd v Green Energy

Management Solutions Pty Ltd [2011] FCA

1319 found that metatags are invisible to the

ordinary internet user, and once at the relevant

website, the user will be aware that the website

is operated by the relevant person. Accordingly,

use in a metatag of a registered trade mark

is not use which indicates the origin of the

services and so metatag use is not use as a

trade mark. As the Accor decision is a Full

Federal Court decision it effectively overturns

this reasoning. Note also that the New Zealand

Court of Appeal in Tasman Insulation NZ Ltd v

Knauf Insulation Ltd [2015] NZCA 602 found

that website source code and embedded

metatags could not infringe a registered trade

mark. In that case the relevant trade mark was

BATTS. The appearance of BATTS amongst

an extensive source code made the reference

“random and essentially meaningless”.

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• In the case of VEDA Advantage Ltd v Malouf

Group Enterprises Pty Ltd [2016] FCA 255,

Justice Katzmann (surprisingly also part of the

Full Federal Court in the Accor decision) held

that purchase of Google AdWords consisting of

trade marks of competitors did not constitute

trade mark infringement. This conclusion

was reached on the basis that the Google

AdWords are not visible to the public and

therefore cannot be use as a trade mark. It is

perhaps surprising that Justice Katzmann was

comfortable to reach this conclusion in relation

to Google AdWords but was a party to a

Full Court Decision reaching an opposite

conclusion in the case of metatags in the

source code for a website. Perhaps the

difference lies in the fact that the source code

is visible to end users if they bothered to look

for it. In practice, no one does.

The Significance

While perplexing in view of the VEDA Advantage

case relating to Goods AdWords, the Full

Federal Court has now ruled clearly that use of a

competitor’s trade mark in a metatag is trade mark

infringement where that use is as a badge of origin

and not merely descriptive. As a result, any use of

a competitor’s trade mark, whether in the source

code (metatags) or in the text of the website itself

must be undertaken very carefully. It may also be

unwise to rely on the single judge decision in the

VEDA Advantage case above in relation to use of

Google AdWords, particularly given that this same

judge was part of the Full Federal Court in the

Accor decision. While VEDA Advantage represents

the current state of the law in relation to Google

AdWords, a future Full Federal Court may over-rule

it, applying the reasoning from the Accor decision

on metatags.

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An Insight into trade mark ownershipPham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83

The Parties

Insight Clinical Imaging Pty Ltd (ICI) is the

registered trade mark owner. Pham Global Pty Ltd

(Pham Global), formerly named Insight Radiology

Pty Ltd (IR), is the alleged infringer of the trade

marks. As at the date of the proceedings, IR/Pham

Global was also the named applicant for a trade

mark application opposed by ICI. The opposed

application was initially filed in the name of Alan

Pham (Mr Pham), who is the sole director of

Pham Global but was subsequently assigned to IR/

Pham Global.

This Full Federal Court judgment (Greenwood,

Jagot and Beach JJ) relates to an appeal by IR/

Pham Global against the primary judge’s decision to

uphold ICI’s opposition and the subsequent refusal

to register IR/Pham Global’s trade mark and finding

that IR/Pham Global had infringed ICI’s trade marks

and engaged in misleading and deceptive conduct

and passing off.

For simplicity and to minimise confusion with ICI

(the other party), we use “Pham Global” below

to refer to Pham Global or IR, regardless of which

company name applied to the entity at the relevant

time.

The Trade Marks

ICI is the owner of Australian trade mark registration

numbers 1517780 for “InSight Clinical Imaging”

(the ICI Word Mark) and 1517779 for the

following logo:

(the ICI Composite Mark).

The ICI Word Mark and ICI Composite Mark are

both registered in class 44 for “radiology services”

and have a priority date of 10 October 2012.

As at the date of the proceedings, Pham Global was

the applicant for Australian trade mark application

number 1463912 for the following logo:

(the IR Mark).

The application for registration of the IR Mark (the

IR Mark Application) was filed on 7 December

2011 in class 44 for “radiology services”.

Background and Issues

ICI has been using the ICI Composite Mark, the

ICI Word Mark and “INSIGHT” in connection with

providing radiology services in Western Australia

since 2008.

Pham Global has been providing radiology and

medical imaging services in New South Wales since

2004 and in Tasmania since 2012. Pham Global first

used the IR Mark for such services in March 2012.

The IR Mark Application was initially filed by and

in the name of Mr Pham. The application included

a voluntary endorsement that registration did

not confer any exclusive right to use the words

INSIGHT RADIOLOGY in Western Australia.

ICI opposed the IR Mark Application on various

grounds including on the grounds that Mr Pham

was not the owner of the IR Mark (section 58 of

the Act) and that use of the IR Mark would be

likely to deceive or cause confusion because of the

reputation already associated with the ICI Word

Mark and ICI Composite Mark in Australia before

the priority date of the IR Mark Application (section

60 of the Act).

Under common law, trade mark ownership arises

from either: (a) authorship and first use of the

mark; or (b) authorship, filing an application for

18 | Shelston IP | Best Trade Mark Cases 2017

registration of the mark and a genuine intention

to use the mark. Section 27(1) of the Act further

provides that a person is entitled to apply for

registration of a trade mark only if the person claims

to be the owner of the trade mark and the person:

(a) is using or intends to use the trade mark; (b) has

authorised or intends to authorise another person

to use the trade mark; or (c) intends to assign the

trade mark to a body corporate that is about to be

constituted.

The section 58 ground of opposition could be

established if: (a) Mr Pham was not the owner of

the IR Mark because he did not satisfy the common

law requirements for ownership or the requirements

of section 27(1); and/or (b) ICI was the true owner

of the IR Mark because ICI was the first user of

a mark substantially identical to the IR Mark for

radiology services.

Neither Mr Pham nor Pham Global used the IR

Mark before filing the IR Mark Application. Only

Pham Global used the IR Mark after the IR Mark

Application was filed.

Mr Pham assigned the IR Mark to Pham Global

during the opposition proceedings, after ICI had

notified Mr Pham that ICI was relying on section 58

as a ground of opposition.

The Registrar of Trade Marks decided the opposition

in favour of ICI and refused to register the IR Mark,

primarily on the basis that Pham Global was not

the owner of the IR Mark because ICI had prior

use of a substantially identical mark, being the ICI

Composite Mark.

Pham Global appealed the Registrar’s decision in

the opposition to the Federal Court.

ICI commenced proceedings against Pham Global

in the Federal Court for infringement of the ICI

Word Mark and ICI Composite Mark, contravention

of sections 18 and 29(1)(g) of the Australian

Consumer Law (ACL) and passing off. Pham Global

cross-claimed by seeking cancellation of the ICI

Word Mark and ICI Composite Mark on the basis

that those marks should not have been registered at

all or at least without an endorsement limiting their

use to outside of New South Wales and Tasmania.

Pham Global’s appeal from the opposition decision

and ICI’s infringement case were heard together

given the overlap in issues. Some of the key issues

for the Court were:

1. Ownership of the IR Mark – whether Mr Pham

was the owner of the IR Mark and therefore

entitled to file the IR Mark Application and, if

not, whether the assignment of the IR Mark to

IR cured any defect arising from the fact that

the IR Mark Application was not filed by the

owner of the IR Mark;

2. Substantial identity – whether the IR Mark was

substantially identical to the ICI Composite

Mark for the purposes of the section 58 ground

of opposition and trade mark infringement; and

3. Reputation – whether ICI had a sufficient

reputation in its ICI Word Mark and ICI

Composite Mark in Australia to support its

section 60 ground of opposition and its ACL

and passing off claims.

Decision of the Federal Court (single judge)

At first instance, Davies J dismissed Pham Global’s

appeal against the Registrar’s decision to refuse

registration of the IR Mark and also dismissed Pham

Global’s cross-claim for cancellation of the ICI Word

Mark and ICI Composite Mark. Justice Davies also

held that use of the IR Mark infringed the ICI Word

Mark and ICI Composite Mark, constituted conduct

likely to mislead or deceive in contravention of the

ACL and amounted to Pham Global passing off its

services as those of or associated with ICI.

Justice Davies agreed that ICI had established its

ground of opposition under section 60, but held

that ICI should not have succeeded with its section

58 ground.

In considering the section 58 ground of opposition,

Davies J held that Mr Pham was not the owner

of the IR Mark at the time of filing the IR Mark

Application because Mr Pham was not the author

of the IR Mark and did not have the intention to

use the IR Mark in his personal capacity as at the

application date. To the contrary, the evidence

supported the view that Pham Global was the

correct owner of the IR Mark. This is because the

evidence showed that Pham Global was the author

and first user of the IR Mark, that the intention was

always for Pham Global to be the user of the IR

Mark and that Mr Pham did not take any steps in

his personal capacity to licence or control the use of

the IR Mark by Pham Global.

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However, even though Mr Pham was not the owner

of the IR Mark at the time of filing the IR Mark

Application, Davies J held that the subsequent

assignment of the IR Mark from Mr Pham to

Pham Global cured any defect in ownership and

entitlement to file the IR Mark Application. In

support of this position, Davies J relied on the

reasoning in Mobileworld Communications Pty

Ltd v Q & Q Global Enterprise [2003] FCA 1404;

(2003) 61 IPR 98 at [83] (Mobileworld), Crazy

Ron’s Communications Pty Limited v Mobileworld

Communications Pty Limited [2004] FCAFC 196;

(2004) 209 ALR 1 at [128] (Crazy Ron’s), and

Global Brand Marketing Inc v YD Pty Limited

[2008] FCA 605; (2008) 76 IPR 161 at [131] – [134]

(Global Brand), which all proceeded on the

basis that the requirement for the applicant to own

the mark may be satisfied at any time while the

application for the trade mark is pending.

Justice Davies did not consider that the IR Mark

was substantially identical to the ICI Composite

Mark, which would be necessary if ICI wished

to establish that it was the owner of the IR Mark

for the purposes of the section 58 ground of

opposition. However, Davies J did consider that use

of the IR Mark infringed the ICI Composite Mark

and ICI Word Mark, on the basis that the IR Mark

was at least deceptively similar to those marks.

The decision of the Full Federal Court

Ownership of the IR Mark

ICI submitted that Mr Pham was not the owner

of the IR Mark at the time of filing the IR Mark

Application, that the requirement of ownership had

to be satisfied when the IR Mark Application was

filed and that failure to satisfy that requirement

could not be rectified by a subsequent assignment.

In dealing with this issue, the Full Court further

considered the reasoning in Mobileworld, Crazy

Ron’s and Global Brand relied upon by the primary

judge, the common law and established general

principle regarding trade mark ownership and the

overall legislative framework pertaining to trade

mark ownership and assignments under the Act.

The Full Court was quick to dismiss the relevant

reasoning in Crazy Ron’s as not only plainly wrong

but also as obiter dicta by which the Court was not

bound. Mobileworld and Global Brand primarily

relied on the definition of “applicant” in s6(1) of

the Act being “the person in whose name the

application is for the time being proceeding”

and the use of the present tense in section 58,

which states that “the registration of a trade mark

may be opposed on the ground that the applicant

is not the owner of the trade mark”, to support

the conclusion that the issue of ownership for the

purposes of section 58 was to be determined as at

the time the opposition is decided. However, the

Full Court considered that this interpretation was

inconsistent with common law and general principle

regarding trade mark ownership and the entitlement

to file an application for trade mark registration

as well as the regime provided by the Act when

considered more broadly and in the context of such

established principle.

In particular, the Full Court noted:

• under common law, rights to a trade mark

are established by first use for the relevant

goods or services. Where there is no prior use

of the mark, ownership is established by “the

combined effect of authorship of the mark, the

intention to use it upon or in connection with

the goods [or services] and the applying for

registration” - Shell Co of Australia Ltd v Rohm

and Haas Co [1948] HCA 27; (1948) 78 CLR

601 per Dixon J at 627;

• the Act permits an applicant to obtain

ownership of an unused trade mark only if

section 27(1) is satisfied – of relevance, this

requires the applicant to claim to be the owner

of the trade mark and to intend to use (or

authorise use of) the trade mark;

• the term “owner” as used in section 58 is

derived from the common law notion of

ownership;

• the Trade Marks Act 1905 and the Act both

provided for “registration of ownership not

ownership by registration” - PB Foods v

Malanda Dairyfoods Ltd [1999] FCA 1602;

(1999) 47 IPR 47 per Carr J at 78 – 80;

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• there is substantial authority confirming

that trade mark rights and intention to use

are determined as at the date of the trade

mark application. In particular, in respect of

“applications for registration, the rights of the

parties are to be determined as at the date of

the application” (Southern Cross Refrigerating

Co v Toowoomba Foundry Pty Ltd (1954) 91

CLR 592 per Kitto J at 595);

• section 106(1) was introduced into the Act

to expressly provide for assignment of a

trade mark before registration, stating – “a

registered trade mark, or a trade mark whose

registration is being sought, may be assigned

or transmitted in accordance with this section”;

• the definition of “applicant” as being “the

person in whose name the application is for the time being proceeding” was

introduced into the Act at the same time as

section 106(1) and should be read in that

context; and

• it is clear from section 106(1) that it is the trade

mark itself, not the application, that is permitted

to be assigned – this presupposes that the

assignor owns the trade mark in order for it to

be effectively assigned.

Taking all of the above into account, the Full Court

summarised the position regarding ownership and

assignment of trade marks as follows:

The legislative scheme operates in the context of

established principle that the alternative sources

of ownership of a trade mark are authorship and

use before filing an application for registration

or the combination of authorship, filing of an

application for registration and an intention to

use or authorise use... Only a person claiming

to be an owner may apply for registration. That

claim may be justified at the time the application

is made based on either alternative source of

ownership. But if the claim is not justified at that

time, ss 58 and/or 59 are available grounds of

opposition. Moreover, if the applicant is not the

owner of the mark at the time of the filing of the

application, the assignment provisions... do not

assist because they authorise the assignment of

the mark and thus pre-suppose, consistent with

established principle, that the applicant owns

the mark.

As a result, the Full Court confirmed that the

requirement for trade mark ownership must be

satisfied as at the date of the trade mark application

and the rights of the parties for the purposes of

the section 58 ground of opposition must also

be determined as at the date of the trade mark

application.

In this instance, Mr Pham did not own, and for the

purpose of section 27(1) could not claim to be the

owner of, the IR Mark at the time of filing the IR

Mark Application, because the evidence showed

that Mr Pham had not authored or used the IR Mark

and had no intention to use or authorise the use of

the IR Mark at the time of filing the application. The

intention was always for Pham Global to use the IR

Mark.

Given that the requirement for ownership was not

satisfied as at the application date, the IR Mark

Application was invalid as it did not satisfy the

requirements of section 27(1) and any subsequent

assignment of the IR Mark to Pham Global could

not cure that deficiency. In short, the Full Court

determined that “Mr Pham could not assign that

which he did not own”.

As a result, the Full Court held that Mr Pham was

not the owner of the IR Mark as at the application

date and that ICI had therefore established the

section 58 ground of opposition.

Substantial Identity

The Full Court then examined whether use of

the IR Mark infringed ICI’s marks. It considered

established principle regarding the test for

substantial identity, noting that this requires a

side by side comparison of the marks taking into

account their similarities and differences and the

significance of those similarities and differences

having regard to the essential features of the marks

and the total impression of resemblance or similarity

arising from the comparison.

ICI argued that the primary judge erred by

focussing too closely on visual differences between

the marks which were immaterial once the essential

features of the marks (also referred to as “dominant

cognitive cues”) were properly taken into account.

The Full Court noted that the assessment of

substantial identity is a question of degree about

which opinions may differ, so an error by the

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primary judge would need to be identified to

justify a re-evaluation of the marks by the Full

Court. In this instance, the Full Court held that the

primary judge incorrectly carried out the process

of evaluation by failing to properly account for the

essential elements of the marks, requiring a new

evaluation by the Full Court.

The Full Court identified the word “Insight” and

the circular device as the essential elements of

the marks. The word “Insight” in both marks is

identical and the circular device is positioned to

the left of the word “Insight” in both marks. While

there are other different words used in the marks,

those words are merely descriptive of the services

offered. According to the Full Court, the differences

between the marks are slight and there is a total

impression of resemblance having regard to the fact

that the dominant cognitive cues in both marks is a

circular shaped device evoking an eye to the left of

the word “Insight”.

As a result, the Full Court disagreed with the

primary judge, taking the view that the IR Mark is

substantially identical to the ICI Composite Mark

and that the section 58 ground of opposition was

established on the basis of ICI’s prior use of the ICI

Composite Mark. The first instance decision that

use of the IR Mark infringed the ICI Composite

Mark was reaffirmed by the Full Court, but on

the basis that the IR Mark is actually substantially

identical to the ICI Composite Mark rather than just

deceptively similar. This important decision appears

to lower the bar on substantial identity.

Reputation

To establish a ground of opposition under section

60 it is necessary to show that: (a) another trade

mark had acquired a reputation in Australia for the

relevant services before the priority date of the

applied for mark; and (b) because of that reputation,

use of the applied for mark would be likely to

deceive or cause confusion.

Pham Global conceded that the ICI Composite Mark

had acquired a reputation in Perth before the priority

date of the IR Mark Application, meaning the first

limb of section 60 was satisfied. However, Pham

Global disputed that use of the IR Mark would be

likely to deceive or cause confusion as a result

of the reputation of the ICI Composite Mark. In

particular, Pham Global argued that the reputation

of the ICI Composite Mark was limited to Western

Australia; that there was no likelihood of deception

or confusion arising from use of the IR Mark outside

of Western Australia; and noted that the IR Mark

Application included a voluntary endorsement that

registration did not confer any exclusive right to

use the words INSIGHT RADIOLOGY in Western

Australia.

In determining reputation and the likelihood of

deception or confusion, the Full Court considered

the nature of the market for radiology services in

Australia and evidence of how the ICI Composite

Mark was used and exposed to others within that

market. The Full Court noted that: (a) radiology

service providers operate within a national industry,

even if carrying on business in a localised area; (b)

teleradiology services commonly involve images

being taken in one location being transmitted

via the internet to a radiologist for assessment

in another location; (c) there was evidence that

radiologists and/or medical practitioners in Victoria

and Sydney were aware of ICI providing its services

under its mark because ICI had used teleradiology

services before December 2011 that involved ICI

sending its images to Victoria for radiologists to

analyse and report in circumstances where the

head office of the company employing those

radiologists was based on Sydney; (d) there was

evidence that ICI received referrals of patients from

various interstate medical practitioners; (e) there

was evidence that ICI recruited for professional

staff on a national basis; (f) Google analytics

indicated that around 20% of visitors to the ICI

website before December 2011 were from outside

Western Australia; and (g) the relevant class of

consumers for radiology services is a specialised

one, comprising radiologists, medical practitioners

and patients.

Considering the specialised nature of the market

for radiology services, the Full Court considered

that ICI’s reputation in Western Australia was itself

sufficient to give rise to a likelihood that use of

the IR Mark would be likely to deceive or cause

confusion amongst a sufficiently substantial number

of the relevant class of consumers (radiologists,

medical practitioners and patients).

In any case, the Full Court held that Pham Global’s

reliance on the argument that ICI’s reputation in its

marks did not extend beyond Western Australia did

not assist Pham Global’s case taking onto account

22 | Shelston IP | Best Trade Mark Cases 2017

the reality of modern life, including the ease of

interstate communication via the internet and the

frequent movement of people across Australia

for work, leisure or other purposes. According to

the Court, this aspect of modern life “necessarily

impacts on both the acquisition of a reputation in a

mark and the likelihood of the use of another mark

being likely to deceive or confuse because of that

reputation”.

Considering the above, the Full Court agreed with

the primary judge that use of the IR Mark would be

likely to deceive or cause confusion because of the

reputation already existing in connection with the

ICI Composite Mark and that the attempt by Pham

Global to disclaim rights to the words INSIGHT

RADIOLOGY in Western Australia did nothing to

alleviate that risk of deception or confusion or

provide a valid defence to the section 60 ground of

opposition.

For the same reasons, use of the IR Mark by Pham

Global was considered to contravene the ACL and

constitute passing off.

The Significance

This decision reaffirms general principles regarding

the test for substantial identity, assessment of

reputation and the relevant class of consumers

for the purposes determining ACL claims and the

likelihood of deception or confusion in the market,

but importantly notes that aspects of modern life,

such as the freedom and ease of communication

and travel, should be taken into account when

considering the exposure of brands to consumers

within Australia.

Of most significance, this decision confirms that a

trade mark application and subsequent registration

will be invalid if the trade mark application is filed

in the incorrect name. A subsequent assignment of

the trade mark to the “correct” owner will not cure

this deficiency. As a result, trade mark owners must

be careful to ensure that trade mark applications

are filed in the name of the person or company that

is entitled to claim ownership of the mark under

common law or s27(1) of the Act. Registered trade

mark owners should also consider reviewing their

trade mark applications and registrations to ensure

that they were filed in the correct name and are

not susceptible to challenge for invalidity on this

ground.

22 | Shelston IP | Best Trade Mark Cases 2017 Shelston IP | Best Trade Mark Cases 2017 | 23

The “the” sometimes is the main thingSamuel Smith & Son Pty Ltd v Pernod Ricard Winemakers Pty Ltd [2016] FCA 1515

The Parties

Samuel Smith & Son Pty Ltd (Yalumba)

trades under the name Yalumba and operates a

winemaking business that dates back to 1849.

Pernod Ricard Winemakers Pty Ltd (Pernod Ricard) trades under the name Jacobs Creek and

is also a winemaker.

The Trade Mark

Yalumba is the registered owner of the Australian

trade mark comprising the words THE SIGNATURE

(the Yalumba Mark) covering “wines, especially

still table wines” in class 33. Pernod Ricard began

producing, supplying and selling wine products

with labels and associated promotional material

bearing the words in issue, BAROSSA SIGNATURE.

Pernod Ricard had never attempted to register these

words as a trade mark.

Background and Issues

The registration of the Yalumba Mark was effective

from 2 September 1999 although the words THE

SIGNATURE had been used on Yalumba labels for

20 years prior to registration. Since around 2000,

Yalumba has produced about 60,000 bottles of

wine each year bearing the Yalumba Mark.

Since 2000, Pernod Ricard has produced a sub

range of red wines referred to as its Reserve

Range which are sold and promoted through its

house brand, Jacobs Creek. The words BAROSSA

SIGNATURE were chosen to be used for the new

sub range of Barossa shiraz wines. Pernod Ricard

was advised by its legal team that due to the

existence of the Yalumba Mark, Pernod Ricard

should avoid using the word ‘signature’ in isolation

and use the words BAROSSA SIGNATURE as a

single phrase. As a phrase, the words arguably

served a descriptive purpose in the sense that

the new products would be identifiable as

quintessential Barossa red wines from the Jacob

Creek’s renowned signature range.

The new products were released for sale in

September 2015. Yalumba asserted that the words

BAROSSA SIGNATURE are deceptively similar

to THE SIGNATURE and therefore by producing,

supplying, selling and promoting the new products,

Pernod Ricard infringed Yalumba’s registered mark.

The issues before Justice Charlesworth were:

1. whether BAROSSA SIGNATURE had been used

as a trade mark within the meaning of s 17 of

the Trade Marks Act 1995 (Cth);

2. whether the words BAROSSA SIGNATURE are

deceptively similar to THE SIGNATURE; and

3. if the first and second questions are answered

in the affirmative, whether Pernod Ricard used

BAROSSA SIGNATURE in good faith, thereby

avoiding trade mark infringement.

The Decision

Use as a Trade Mark

Pernod Ricard accepted that it had used BAROSSA

SIGNATURE as a sign in relation to the same class

of goods covered by the Yalumba Mark. However,

Pernod Ricard contended that this use of a sign did

not constitute use as a trade mark to distinguish

its goods or service from those of another trader,

so as to evoke infringement under section 120.

Instead, Pernod Ricard submitted that as the

words BAROSSA SIGNATURE are descriptive,

the only features on the label of the new products

that consumers would consider a ‘badge of

origin’ would be the words JACOB’S CREEK and

RESERVE.

Her Honour held that the fact that both the words

BAROSSA and SIGNATURE are descriptive is

relevant to, but by no means determinative of, use

as a trade mark. Whilst both words are common

words in the English language, they are not

commonly used in that order. Commonly, when

used in a phrase such as “signature dish”, the

adjective precedes the noun. Therefore, whilst

24 | Shelston IP | Best Trade Mark Cases 2017

the words themselves are ordinarily descriptive,

the unconventional combination of BAROSSA

SIGNATURE is not. The words therefore do perform

a distinguishing function.

Pernod Ricard further submitted that although

BAROSSA SIGNATURE was meant to distinguish

wines within the Jacob’s Creek house brand, it

would not be understood by consumers as a sign

distinguishing the relevant goods from those of

other traders. However, Justice Charlesworth

rejected this on the basis that as consumers in the

trade context do not employ significant cognitive

effort in making wine purchases, and as BAROSSA

SIGNATURE is clearly displayed in the centre of

the wine labels, consumers are unlikely to perceive

the words BAROSSA SIGNATURE as a sign

distinguishing the wines within the sub-range but

not as a sign distinguishing the wine from those of

other traders.

Her Honour therefore ruled that BAROSSA

SIGNATURE had been used as a trade mark as

defined in section 17 of the Act. Her Honour then

considered whether this trade mark use infringed

the Yalumba Mark.

Deceptive Similarity

Yalumba contended that there is a risk that Pernod

Ricard’s use of SIGNATURE for its new products

would cause consumers to wonder whether Pernod

Ricard’s wines originate from the same source

as Yalumba’s wines, given the reputation of THE

SIGNATURE as a Yalumba house brand and that

SIGNATURE is a distinctive element of the Yalumba

Mark.

The Judge determined that in assessing deceptive

similarity, consideration is usually had to the effect

or impression that is produced in the minds of

consumers of ordinary intelligence and memory by

the normal use of the mark. However, drawing on

the Henschke case, Charlesworth J considered that

in assessing a consumer’s imperfect recollection of

the mark, evidence of reputation could be relevant

if it established that the mark, or an important

element of it, is so notoriously 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 and services.

However, her Honour held that the evidence was

insufficient to establish that the Yalumba Mark,

or an important element of it, was so notoriously

ubiquitous and of such long standing that the

relevant consumer would be taken to be familiar

with it and its use in relation to wine. Reputation

was therefore not relevant in considering the issue

of deceptive similarity which solely rested on the

impression conveyed by the marks.

In considering the impression conveyed by THE

SIGNATURE, Justice Charlesworth placed important

significance on the use of the word THE as it

attaches definitive significance to the noun that

follows. This has two important consequences; it

causes the word SIGNATURE to convey its ordinary

meaning as a noun and also assists in creating a

subtle impression that the signature referred to is of

some particular importance. Her Honour held that

this is the essential and memorable element of the

Yalumba Mark.

In comparison, the impression conveyed by

BAROSSA SIGNATURE rests on the unconventional

combination of those words, which suggest

that they are being used as a trade mark. The

Judge explained that when words are used in

invented combinations it decreases the likelihood

of confusion and, in this case, further removed

BAROSSA SIGNATURE from the idea or impression

conveyed by the Yalumba Mark. Therefore, even

though a distinctive part of the Yalumba Mark was

adopted in BAROSSA SIGNATURE, that distinctive

part was not used in such a way as to make

BAROSSA SIGNATURE deceptively similar to the

Yalumba Mark.

Good faith use defence

Justice Charlesworth proceeded to determine

whether Pernod Ricard could rely on good faith

use of the mark under section 122(1)(b)(i) had

deceptively similarity been established. Pernod

Ricard contended that its intention was to use

the sign solely for the purpose of indicating the

characteristic of its wines being quintessential

or typical of wines produced from the Barossa

region. Even though her Honour accepted that

BAROSSA SIGNATURE did indicate the relevant

characteristics, her Honour was not convinced

that Pernod Ricard’s intention was confined this

24 | Shelston IP | Best Trade Mark Cases 2017 Shelston IP | Best Trade Mark Cases 2017 | 25

narrowly and did not extend to distinguishing

its goods from those of other traders, having

regard to Pernod Ricard’s evidence relating to

legal risk. Ultimately, had BAROSSA SIGNATURE

been deceptively similar to the Yalumba Mark,

Pernod Ricard could not rely on this defence to

infringement.

The Significance

This decision provides an example of how

signs that are merely descriptive or indicative of

particular characteristics can be conveyed as a

‘badge of origin’ if they include an unconventional

combination of words constituting grammatical

nonsense.

Furthermore, in determining the issue of deceptive

similarity, it is important to note that it is the

distinctive element of the trade mark that will

form the necessary impression in the mind of

the consumer. This necessary impression can be

influenced by the reputation of a trade mark so long

as the distinctive element of the mark is notoriously

so ubiquitous and of such long standing that

consumers must be taken to be familiar with it and

its use in relation to the relevant goods or services.

The most interesting conclusion on the facts of

this case is that sometimes “THE” can be the most

distinctive (and distinguishing) element of a trade

mark.

26 | Shelston IP | Best Trade Mark Cases 2017

Aldi’s copycat argan oil permissible but unnaturalMoroccanoil Israel Ltd v Aldi Foods Pty Ltd [2017] FCA 823

The Parties

Moroccanoil Israel Ltd (MIL) is a producer and

supplier of hair care, skin care and other products.

Aldi Foods Pty Ltd (Aldi) is the well known German

originating supermarket operator.

The Trade Marks

MIL owns the following trade marks, registered

from 24 January 2008 and 4 August 2010

respectively in class 3 for various goods relating

to hair care products, skin care products and

fragrances:

(the Registered Marks)

In 2011, MIL applied to register the word mark

MOROCCANOIL in class 3 for various hair care

products. Aldi successfully opposed the registration

on the ground that it was not inherently adapted to

distinguish MIL’s products from those of others.

Aldi was producing and selling a range of hair

care products, brushes and appliances bearing the

words ARGAN OIL OF MOROCCO up until January

2016, when it rebranded as MOROCCAN ARGAN

OIL. Aldi had never attempted to register those

words as an Australian trade mark.

Background and Issues

Argan oil is extracted from the nut of the native

Moroccan argan tree. MIL manufactures and

distributes a range of ‘Moroccanoil’ products

with argan oil as their main ingredient. These

Moroccanoil products were launched in Australia in

2009 and have achieved considerable commercial

success.

Aldi’s evidence disclosed that it aims to create its

own “Aldi version” of competitor products that

are considered to be “on trend”. In developing its

own version, regard is had to the packaging of

competitor products to ensure that the Aldi house

brand packaging is consistent with the trend.

Aldi also adapts “cues” such as colour, wording

associated with the competitor’s product, product

descriptions and claims of benefits. This is to ensure

that Aldi’s version is consistent with its “main pitch

to customers”, that its products look like other

products but are not exactly like them (ie. “Like

Brands. Only cheaper”).

Aldi identified that in 2011 health and beauty

products containing argan oil were on trend and

at least some of MIL’s products were known to

Aldi at the time. Aldi’s intention was to replicate

MIL’s benchmark product but in a way that

would distinguish the Aldi version. Aldi’s product

packaging generally comprised differing versions of

the following:

(the Aldi Product)

MIL submitted that because the phrase

MOROCCAN ARGAN OIL as used on the Aldi

Product was deceptively similar to the Registered

Marks, the manufacturing, offering for sale and sale

of the Aldi Product infringed its Registered Marks,

contravened the Australian Consumer Law (ACL)

and constituted passing off.

In response, Aldi cross claimed for revocation

of MIL’s Registered Marks on the basis that the

marks are not sufficiently distinctive and therefore

should not have been registered in the first place,

and additionally that the Registered Marks were

not being used in relation to some of the goods for

which they were registered.

26 | Shelston IP | Best Trade Mark Cases 2017 Shelston IP | Best Trade Mark Cases 2017 | 27

To establish its claims, MIL sought to rely on

tendency evidence under s 97 of the Evidence

Act 1995 to prove that Aldi has a tendency to

copy elements of the get-up of other brands and,

because of this tendency, it is more likely that Aldi

deliberately copied elements of MIL’s trade marks

and the get up of MIL’s products to appropriate

the reputation of MIL’s products. However, this

evidence was not admissible as the Court found

that Aldi was not given reasonable notice of MIL’s

intention to rely on the evidence and the evidence

lacked significant probative value.

The Decision

Trade Mark Infringement

Justice Katzmann was satisfied that considering

the appearance, place, size and prominence of

the phrase MOROCCAN ARGAN OIL on the Aldi

Product, Aldi was using MOROCCAN ARGAN OIL

as a trade mark and not as a mere description of the

Aldi Product, as alleged by Aldi. Aldi contended that

its use of MOROCCAN ARGAN OIL was analogous

to the use of ‘Spanish olive oil’ to describe a

product and its nativity. However, her Honour did

not accept this analogy as Spanish olive oil only

consists of olive oil whereas Aldi’s products consist

of additional ingredients other than simply argan oil.

She also referred to the well-established principle

that a sign might still be used as a trade mark even

if it may be understood to be descriptive and even if

another trade mark is used on the same packaging

or advertisement.

However, Katzmann J did not consider

MOROCCAN ARGAN OIL to be deceptively similar

to the Registered Marks.

As the Registered Marks are composite marks,

each mark as a whole had to be compared to

the phrase MOROCCAN ARGAN OIL as used on

the Aldi Product. Although the Registered Marks

were filed in colour, they were not registered

with any limitations to colour and therefore are

to be taken as registered for all colours. Whilst

comparisons of colour and other broader get-up

are relevant to actions under the ACL and passing

off, these features are not necessarily considered

when comparing trade marks for the purposes of

assessing trade mark infringement. Her Honour

took the view that the essential features of the

Registered Marks to be compared to Aldi’s branding

in this instance were the large letter ‘M’ and the

word ‘Moroccanoil’. Neither of these features

was adopted in Aldi’s branding. Justice Katzmann

believed that the hypothetical consumer would

therefore not mistake the phrase MOROCCAN

ARGAN OIL as used on the Aldi Product for the

Registered Marks or wonder whether the products

originated from the same source.

In reaching this conclusion, the Judge also

considered evidence submitted by MIL from

various witnesses of alleged “confusion” between

MIL products and the Aldi Product. However, this

evidence was not given any weight and failed to

answer whether the phrase MOROCCAN ARGAN

OIL itself was likely to confuse.

Aldi’s cross claim

Her Honour did not accept Aldi’s argument that

registration of the Registered Marks should be

revoked because the Registered Marks failed to

distinguish MIL’s goods from the goods of other

traders. She conceded that whilst the single word

‘Moroccanoil’ is coined, when the joined word

‘Moroccanoil’ is spoken it has the same aural

impact as the two separate words which describe

oil from Morocco. However, Katzmann J did not

accept that at the relevant time ‘Moroccan oil’ had

any ordinary meaning in Australia. The Judge also

concluded that the wealth of evidence showing

extensive prior use of the Registered Marks by MIL

supported the view that the Registered Marks were

capable of distinguishing MIL’s goods and adapted

to qualify for registration as at the application dates

for registration the Registered Marks.

By MIL’s own admission, it had not used the

Registered Marks anywhere in the world in respect

of certain goods covered by the registrations

and had no intention to do so in the future. MIL

submitted that skin care products had been on

sale overseas since 2012 and that facial products,

fragrances and toiletries are in the MIL product

development calendar.

Considering MIL’s admission, her Honour

concluded that the later of the Registered Marks

should remain on the Register for all goods other

than shaving preparations, shaving creams, soaps,

after shaving creams and lotions as MIL had, for

all intents and purposes, abandoned the mark for

28 | Shelston IP | Best Trade Mark Cases 2017

of the Aldi Products constituted a representation

that the Aldi Products are, or are related to, MIL’s

products.

As MIL relied on the same conduct to establish

passing off, the passing off claim was therefore also

dismissed.

Further ACL claims

MIL further alleged that Aldi’s use of the word

NATURALS, to sell and promote the products,

falsely represents that Aldi’s Products contain only

or substantially natural ingredients. MIL alleged

that by making these representations, Aldi had

engaged in misleading and deceptive conduct

in contravention of s18(1) of the ACL and had

made false or misleading representations about

the standard, quality and composition of the Aldi

Products in contravention of s29(1)(a) of the ACL.

Little weight was given to evidence led by scientists

in considering this issue. Her Honour explained

that it was necessary to determine what the word

‘naturals’ means to the ordinary or reasonable

member of the relevant class of consumers in the

context in which the word is used. Accordingly,

the ordinary or reasonable consumer shopping for

hair care products would consider that products

with the word ‘naturals’ on their packaging were

made, either wholly or substantially from natural

ingredients. However, apart from water, the Aldi

Products were in fact made substantially from

synthetic products. Justice Katzmann therefore

held that Aldi had contravened sections 18(1) and

section 29(1)(a) of the ACL as it was misleading for

Aldi to represent that particular products are natural.

MIL also alleged that Aldi’s prominent use of the

words ‘argan oil’ as part of the branding of its

products falsely represented that the addition of

argan oil as an ingredient gave the products a

benefit that they did not have. Aldi failed to provide

any evidence demonstrating that it had performed

any meaningful due diligence on the quantifiable

benefits of argan oil as an ingredient in hair care

products or the amount required as a percentage

of its products in order for those benefits to be

enjoyed by the consumer. In light of this, the Judge

held that Aldi was indifferent to the truth and

used ‘argan oil’ for emotive effect and marketing

purposes. Her Honour held that in Aldi’s oil

treatment, shampoo and conditioner, the amount of

these goods. Justice Katzmann also held that the

earlier of the Registered Marks should be removed

from the Register for all goods other than the hair

care goods as evidence suggested that this mark

had only ever been used and intended to be used in

relation to hair care products.

ACL and Passing Off

MIL alleged that the get-up of the various Aldi

Products is misleading or deceptive by falsely

representing that the products are, or are related

to, MIL’s products. Her Honour explained that

establishing this representation largely depends

on MIL’s reputation at the time of the impugned

conduct by Aldi because the relevant consumers

could not be misled or deceived if they were not

aware of the MIL products at that time. Justice

Katzmann was satisfied that at the relevant time,

MIL had a substantial, valuable and exclusive

reputation and goodwill in the Registered Marks,

the MOROCCANOIL sign and the get up of its

products. It was further accepted that Aldi intended

to appropriate this reputation by copying important

features of MIL’s get-up.

However, Katzmann J explained that “the mere

fact that one trader copies aspects of the get-up

of another… does not mean that the rival trader’s

conduct is misleading or deceptive or likely to

mislead or deceive”. The result depends on whether

Aldi has “sufficiently distinguished its products and

made it clear that they are not the goods of the

manufacturer whose design or get-up is copied”.

Accordingly, despite the similarities between the

products, her Honour noted substantial differences

including, amongst others: (1) that the Aldi products

display the house brand PROTANE NATURALS or

VISAGE signs; (2) the absence of a large orange ‘M’

on the Aldi products; and (3) that MORROCANOIL

was always displayed vertically on MIL products,

whereas “Moroccan argan oil” is horizontal on Aldi

products.

Therefore, looking at “the whole of the Aldi get-up,

and not just the part of it in which the resemblances

are to be found, the get-up does not deceive”.

Whilst the get-up of the products was similar,

Justice Katzmann held that the Aldi Products look

cheaper and the house branding marked them out

as a different product to the MIL products. The

Court was therefore not satisfied that the get-up

28 | Shelston IP | Best Trade Mark Cases 2017 Shelston IP | Best Trade Mark Cases 2017 | 29

argan oil used in the manufacturing process was so

small that it could not make a material contribution

to the performance of the products. As a result,

Justice Katzmann held that the prominent use of

‘argan oil’ by Aldi as part of the branding of its

products also contravened section 18 of the ACL.

The Appeal

MIL also appealed the decision of the Registrar to

uphold Aldi’s opposition against MIL’s registration

of the word mark MOROCCANOIL. Katzmann J

held that Aldi had failed to discharge its onus of

establishing that MOROCCANOIL was not capable

of distinguishing the relevant hair care products.

No evidence was submitted to suggest that the

single word ‘Moroccanoil’ has an ordinary meaning

to the Australia consumer. Furthermore, whilst

‘Moroccan oil’ could be descriptive of oil originating

from Morocco, it is not necessarily descriptive of

hair care products nor does it connote a relationship

with hair care products.

Her Honour also accepted that prior to MIL

launching its products, it is unlikely to have

occurred to an honest competitor to use

MOROCCANOIL in relation to hair care products.

Finally, Justice Katzmann also accepted that a

significant number of consumers, purchasers

and traders in the Australian hair care market

identify MOROCCANOIL as originating from one

trade source. Accordingly, MOROCCANOIL was

distinctive of MIL’s goods and the word mark

qualified for registration. Even if the mark had not

been inherently adapted to distinguish, the Court

held that it would still be registrable because it had

become distinctive of MIL’s products before the

filing date due to the extent that MIL had used the

mark for its hair care products.

The Significance

While MIL was successful in its subsidiary claims

concerning Aldi’s representations of “naturals”, it

was not successful in its primary goal of preventing

Aldi from introducing into the market “like brands.

Only cheaper”. This case confirms, as for various

other similar cases against Aldi, that if there are

sufficient differences between the overall get-up

of products, misleading and deceptive conduct,

passing off or trade mark infringement may not be

established even if there was an explicit intention

to copy. This case provides a reminder of the

difficulty in succeeding in a product get-up case

and confirms that the overall product branding,

packaging and the alleged infringer’s conduct must

be considered as a whole. However, what may

qualify as a sufficient difference between products

and branding in any given case will depend on the

particular circumstances. So brand users should

still avoid making “other versions” of products

already on the market to limit the risk of trade mark

infringement, passing off and breaching the ACL.

Aldi promptly appealed the decision, so it appears

that at least the ACL claims pertaining to Aldi’s use

of ‘naturals’ and ‘argan oil’ will be subject to further

consideration.

30 | Shelston IP | Best Trade Mark Cases 2017

Lack of use costs LacosteCrocodile International Pte Limited v Lacoste [2017] NZSC 14

The Parties

Lacoste is the registered trade mark owner.

Crocodile International Pte Limited (Crocodile International) applied to revoke the trade mark

registration on the basis of non-use. This New

Zealand Supreme Court judgment relates to an

appeal by Crocodile International from the earlier

New Zealand Court of Appeal judgment that upheld

the High Court judgment to allow registration of the

Lacoste mark despite the original decision by the

Assistant Commissioner of Trade Marks to revoke

the trade mark registration for non-use.

The Trade Mark

The trade mark in issue was New Zealand trade

mark number 70068 for the following logo:

(the Crocodile Mark).

Background and Issues

Under section 66(1)(a) of the Trade Marks Act 2002

(NZ), a registered trade mark may be revoked if it

has not been genuinely used as a trade mark in the

course of trade for its relevant goods or services for

a continuous period of 3 years.

Section 7 of the Act confirms that use of a trade

mark includes use “in a form differing in elements

that do not alter the distinctive character of the

trade mark in the form in which it was registered”.

This has generally allowed trade mark owners

to make minor variations to their trade marks in

commercial use over time without fear of their

corresponding trade mark registrations being

revoked for non-use.

Crocodile International applied to revoke registration

of the Crocodile Mark on the grounds of non-use by

Lacoste.

Lacoste admitted that it had never used the

Crocodile Mark, but argued that its use of the marks

below amounted to use of the Crocodile Mark “in

a form differing in elements that do not alter the

distinctive character of the trade mark in the form

in which it was registered” pursuant to section 7,

thereby entitling it to maintain the registration of the

Crocodile Mark:

(the Used Lacoste Marks).

Previous Decisions

The Assistant Commissioner, who only considered

the first of the above Used Lacoste Marks, held that

its use did not constitute use of the Crocodile Mark

as contemplated by section 7.

However, the High Court, considering the two

device Used Lacoste Marks, overturned the initial

decision and held that use of the device Used

Lacoste Marks constituted use of the Crocodile

Mark within the meaning of section 7.

The Court of Appeal acknowledged that there were

differences between the Crocodile Mark and the

Used Lacoste Marks, including: (i) the crocodile

is facing in opposite directions; (ii) the Crocodile

Mark and the Used Lacoste Marks use different

fonts; (iii) the placement of the words “crocodile”

and “Lacoste” are different relative to the crocodile

image; and (iv) the two device Used Lacoste

Marks do not contain the word “crocodile” – one

has the word “Lacoste” while the other has no

word at all. However, the Court of Appeal held

that “in terms of the overall impression these

differences are insignificant and do not alter the

distinctive character” of the Crocodile Mark “which

is dominated by the image of the crocodile. The

crocodile is the central idea and message.”

30 | Shelston IP | Best Trade Mark Cases 2017 Shelston IP | Best Trade Mark Cases 2017 | 31

According to the Court of Appeal, the images of

the crocodiles used in the Crocodile Mark and

Used Lacoste Marks are similar and share the same

key features – including that the crocodile used

in all marks has its mouth ajar, body arched, is

drawn side-on, has jaws open slightly and has its

scales, eyes, claw and teeth visible. The use of the

stylised word “crocodile” in the Crocodile Mark only

served to reinforce the dominant element of the

Crocodile Mark and added little or nothing to the

distinctiveness of the Crocodile Mark.

As a result, the Court of Appeal held that Lacoste

had used the Crocodile Mark within the meaning

of section 7 by virtue of its use of the Used

Lacoste Marks.

The Decision

Rather than focussing on a broad concept of the

“central idea and message” of the Crocodile Mark,

the Supreme Court focussed more on the different

visual elements of the Crocodile Mark when

considering its distinctive character. According to

the Supreme Court, the distinctive character of the

Crocodile Mark comprised two essential elements:

(1) the stylised word “crocodile”; and (2) the

crocodile image. The question then was whether

any of the Used Lacoste Marks were essentially the

Crocodile Mark but in a form differing in elements

that did not alter the distinctive character of the

Crocodile Mark.

Having noted that the distinctive character of

the Crocodile Mark comprised two essential

elements, the Court held that “the fact that one

of the essential visual elements is missing [from

each of the Used Lacoste Marks]... would in itself

likely mean that the use of the Lacoste [Marks]

is in a form differing in elements which mean

that the distinctive character of the [Crocodile

Mark] is altered”. As a result, use of the Used

Lacoste Marks could not be considered use of

the Crocodile Mark within the meaning of section

7. Interestingly, the Court suggested that the

distinctive character of a trade mark is more likely to

be retained where elements are added to the mark

rather than removed, given that the altered mark

would still incorporate the original mark in its total

form. However, this will very much depend on the

circumstances of each particular case.

New Zealand courts and the Assistant

Commissioner have in many cases exercised a

discretion to retain a trade mark registration even if

there has been no use of the mark in its registered

form, primarily on the basis that section 66(1)(a) of

the Act provides that a registered trade mark “may”

be revoked on the basis of non-use. Significantly,

the Supreme Court held that there is no discretion

to allow a trade mark to remain registered if the

mark has not been used either in its registered form

or in the manner contemplated by section 7 during

the relevant 3 year period.

Given that Lacoste had not used the Crocodile Mark

within the meaning of section 7 and that the Court

did not have any discretion to allow registration

in the absence of such use, the registration of the

Crocodile Mark was revoked.

The Significance

This decision makes it clear that trade mark owners

should ensure that they continue to use their trade

marks in the form in which they are registered if

they wish to avoid their registered trade marks

becoming vulnerable to revocation for non-use.

At the very least, the essential elements of the

registered trade marks should be retained. New

trade mark applications should be filed to ensure

ongoing protection if trade mark owners decide to

vary or refresh their branding.

32 | Shelston IP | Best Trade Mark Cases 2017

Concluding remarks

That completes our lengthy review of the key trade

mark cases in Australia and New Zealand for 2017.

There were no High Court trade mark cases in

Australia for 2017 and only a few Full Federal Court

decisions. Activity in New Zealand was subdued in

2017 but the long-running Lacoste litigation is now

finalised. In Australia, the important Harbour Lights

case has confused rather than clarified the position

in relation to metatags with the conclusion being

that use of a competitor’s trade marks in metatags

can be trade mark infringement where they are

used as a trade mark. It will be interesting to see

if any further Google AdWords cases now come

up for the Court’s consideration seeking to apply

the Harbour Lights decision and overturn previous

decisions finding no trade mark infringement by use

of Google AdWords.

Michael DeaconSenior Associate and Trade Marks Attorney

Shelston IP Lawyers

T +61 2 9777 2450

E MichaelDeacon@ShelstonIP.com

Chris BevittPrincipal and Trade Marks Attorney

Shelston IP Lawyers

T +61 2 9777 2450

E ChrisBevitt@ShelstonIP.com

Natasha FaigenbaumLawyer and Trade Marks Attorney

Shelston IP Lawyers

T +61 2 9777 2450

E NatashaFaigenbaum@ShelstonIP.com

Amber McKenna-HillTrade Marks Attorney

Shelston IP Lawyers

T +61 2 9777 2450

E AmberMcKenna-Hill@ShelstonIP.com

32 | Shelston IP | Best Trade Mark Cases 2017 Shelston IP | Best Trade Mark Cases 2017 | 33

34 | Shelston IP | Best Trade Mark Cases 2017

Notes

34 | Shelston IP | Best Trade Mark Cases 2017 Shelston IP | Best Trade Mark Cases 2017 | 35

Notes

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