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  • Ben Gardiner 3:06 pm on 31 August 2015 Permalink | Reply
    Tags: ,   

    Two yachts, one Anchorage 

    ANCHORAGE seems like a good name for a funds management business.  Sounds safe and secure.  It also reminds me of Michelle Shocked and Northern Exposure – but that’s just showing my age.  We can also thank Anchorage for Sarah Palin.

    No doubt for these reasons, amongst others, the parties in Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd [2015] FCA 882 independently chose the name of that fine town for their unrelated funds management businesses.

    The applicant was an Australian company which had operated here since 2007, while the respondents were a US firm called Anchorage Capital Group LLC and its wholly-owned Australian subsidiary, ACPA Pty Ltd.  The respondents’ business started in the United States in 2003 and established a presence in Australia in 2011.

    On 26 May 2011, the applicant applied for registration of the marks ANCHORAGE, ANCHORAGE CAPITAL and ANCHORAGE CAPITAL PARTNERS in respect of various financial services.  Those applications proceeded to registration.

    Things became complicated when, in 2013, the applicant moved into the Suncorp building in Sydney’s CBD – the same building that the respondent subsidiary company occupied.  Although the subsidiary company traded under its own name, ACPA Pty Ltd, it described itself on signage in the lobby of the Suncorp building as “ACPA a subsidiary of Anchorage Capital Group LLC“.  After some discussion and debate between the parties, the reference to Anchorage Capital was removed after a few months.

    This, however, did not resolve matters.

    In the proceeding before Justice Perram, the applicant contended that the respondents’ use of the words ANCHORAGE CAPITAL in the building’s lobby, the use of email addresses in the form and, and other uses of ANCHORAGE, ANCHORAGE CAPITAL and ANCHORAGE CAPITAL GROUP, in relation to the provision of financial services in Australia amounted to trade mark infringment pursuant to s 120(1) of the Trade Marks Act 1995 (Cth).

    The applicant also alleged passing off and breach of the Australian Consumer Law.

    The respondents cross-claimed to have the applicant’s trade marks removed from the register on the grounds that it was not the owner of those marks at the time of its application.

    His Honour accepted that the words ANCHORAGE, ANCHORAGE CAPITAL and ANCHORAGE CAPITAL GROUP were substantially identical or deceptively similar to the applicant’s registered marks;  as were email addresses in the form  Addresses in the form, however, were not deceptively similar and nor was the phrase “ACPA Pty Ltd a subsidiary of Anchorage Capital Group LLC.”

    These findings, however, were not sufficient to make out the applicant’s case.  Whilst the marks used by the respondents were deceptively similar to the applicant’s registered marks,  those marks had not been used by the respondents as trade marks in Australia since the priority date.

    His Honour said:

    There is simply no evidence that either respondent provided any of their funds management services to anyone in Australia after the priority date.  What they have done is trade in their own names.  This is not trade mark use.

    Of course, it is both possible and common to use one’s own name as a trade mark.  There is a defence expressly provided for such use when it is in good faith.  Indeed, his Honour went on, in obiter, to say that had he concluded that the respondent parent company infringed the applicant’s marks, he would have considered that s 122(1)(a)(i) of the TMA (the own name defence) would have applied.

    His Honour’s finding, however, was that no services had actually been provided by either of the respondents by reference to ANCHORAGE or its variants since the priority date.

    His Honour had already found that the first respondent (ACPA Pty Ltd) used the names ANCHORAGE and ANCHORAGE CAPITAL after June 2011 (i.e. after the priority date).  This plainly was not use of its own name.  His Honour considered, however, that this use was to indicate the subsidiary’s connection with its parent and was not use as a trade mark.  It appears that his Honour considered that the subsidiary company was not actually providing any services to anyone in Australia.  The respondents’ contention that the subsidiary was doing nothing but providing advice to its parent was expressly rejected but his Honour noted that “the reality is that [the subsidiary] assisted [the parent] in its transactional work in AustraliaIn the course of doing so it used [ANCHORAGE, ANCHORAGE CAPITAL and ANCHORAGE CAPITAL GROUP]

    In obiter, Perram J said that if he had concluded that the respondent subsidiary company infringed the applicant’s marks, he would have considered that s 122(1)(b)(i) would have applied in relation to the use the phrase “ACPA a subsidiary of Anchorage Capital Group LLC” because that use was in good faith to indicate a characteristic of the first respondent’s services, namely, the relationship between those services and the second respondent.  That is, his Honour accepted that “being a subsidiary of another company can be correctly described as a characteristic” for the purposes of s 122(1)(b)(i) of the TMA.

    The passing off and ACL claims were dismissed.

    The cross-claim appears likely to succeed but is not finalised.  On the basis of a small amount of use of the marks ANCHORAGE and ANCHORAGE CAPITAL by the respondent parent company in Australia in 2007, his Honour accepted that the applicant was not the owner of its marks at the time it applied for registration and that the discretion to remove them from the register was enlivened.  His Honour considered himself bound by earlier Full Court authority to conclude that the power to remove was discretionary – although he preferred the view of an earlier single judge decision that it was not.  Submissions are to be filed on whether that discretion should be exercised and an decision on that issue will follow in due course.

    It appears that no party raised the issue of whether ANCHORAGE being a geographic location presented a barrier to registration in the first place.

    “…you know you’re in the largest state in the union
    When you’re anchored down in Anchorage”

  • Ben Gardiner 9:04 pm on 16 June 2015 Permalink | Reply
    Tags: Federal Court Rules, Indemnity costs   

    Indemnity costs ordered in Goose fight 

    If a formal offer under the Federal Court Rules is made by an applicant and not accepted by a respondent, and the applicant obtains judgment in terms more favourable than the terms of the offer, the applicant is entitled to an order for indemnity costs from 11am on the second business day after the offer was served on the respondent: r 25.14, Federal Court Rules 2011.

    Unlike the position at common law, there is no requirement for the applicant to show that the respondent’s rejection of the offer was unreasonable.

    A respondent can only avoid the “rebuttable presumption” of indemnity costs if it can show “exceptional circumstances“: Pty Ltd v Graphix Labels Pty Ltd [2009] FCAFC 40.

    In the recent case of Skyy Spirts LLC v Lodestar Anstalt (No 2) [2015] FCA 575, Justice Perram rejected the unsuccessful party’s contentions that the other party “had won on a narrow point of law which was the subject of conflicting Full Court authority” and that the offer “did not reflect the basis upon which they were ultimately successful” constituted exceptional circumstances.

    Indemnity costs were ordered.  The case is a good reminder of the strategic advantage of properly formulated offers of compromise that comply with the the requirements of Part 25 of the Federal Court Rules.

  • Ben Gardiner 10:07 am on 6 June 2015 Permalink | Reply
    Tags: Procedure   

    Late evidence in the ATMO 

    The Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 introduced new tougher rules for the filing of late evidence in trade marks oppositions.  The relevant provision is Regulation 5.15 which provides that an extension of time for filing may only be granted if the Registrar is satisfied that:

    (a) the party despite making all reasonable efforts and acting promptly and diligently at all times, was unable to file the evidence by the deadline; or

    (b) there are exceptional circumstances.

    The regulation explains that “exceptional circumstances” includes:

    (a) a circumstance beyond the control of a party that prevents the party from complying with a filing requirement under this Part;

    (b)  an error or omission by the Registrar or an employee that prevents a party from complying with a filing requirement under this Part;

    (c)  an order of a court or a direction by the Registrar that the opposition be stayed.

    The Explanatory Statement to the Amending Regulations explains:

    New regulation 5.15 narrows the circumstances in which the Registrar will grant an extension of time to provide evidence.

    The policy and intended operation of this regulation 5.15 is the same as for the corresponding regulation 5.9 at item 2 for the Patent Regulations above…

    In the section of the Explanatory Statement relating to Regulation 5.9 of the Patent Regulations, it is stated:

    Where a party cannot satisfy the Commissioner that an extension is justified under the test [provided by Regulation 5.9], the Commissioner will not have the power to give a short extension to allow the filing of evidence immediately available or to validate evidence filed out of time. (Emphasis added)

    This presents a major obstacle to the introduction of late evidence but there is another door that has been left slightly ajar which will be available in some circumstances.

    Regulation 21.19 (which was unchanged by the RTB amendments) provides a general discretionary power to the Registrar to inform herself by reference to any information available in the Trade Marks Office.  The Explanatory Statement to the amending regulations said that Reg 21.19 was “not intended to be used as a substitute for the repealed further evidence provisions.”

    In the recent case of Fed Square Pty Ltd v Federation IP Pty Ltd [2015] ATMO 42, however, the opponent successfully relied on Reg 21.19 for the admission of late evidence having failed to meet the requirements of Reg 5.15.

    The hearing officer noted that the “clear intention is that Regulation 21.19 should not been interpreted as a substitute for the repealed further evidence provisions”  and that “I am being asked to exercise the discretion and allow precisely the same evidence under reg 21.19 that has failed the requirements under the extension of time provisions for evidence in support“.

    The Opponent contended, however, that the effect of not permitting the additional evidence would be that it could not support several of its grounds of opposition at the substantive hearing and, unless it succeeded on s 44, would be left with no choice but to appeal to the Federal Court (which would be a de novo hearing) where it could rely on whatever grounds and evidence it then chooses.  The hearing officer appeared to accept that such an outcome would be “at odds with the broader purpose of the relevant ‘Raising the Bar’ amendments, which were to “reduce delays in the resolution of patent and trade marks applications” and to “streamline the opposition process”“.

    The hearing officer referred earlier TMO authority (here and here) in relation to the previous extension of time provisions to the effect that it is preferable for oppositions to be decided by the delegate on their merits (on all of the relevant evidence) rather than to have a party whose evidence has been excluded for lateness being left with no alternative but to appeal.

    He said that the “nature and significance” of the evidence must be considered and that if the material is of high probative value, that will be “a crucial factor in the determination of whether it should be admitted“.  In circumstances where:

    (a) the evidence was immediately available (and in fact had been filed 7 days after the due date); and

    (b) constitutes the primary basis for the oppositions including details of the Opponent’s use of, and reputation of, its marks in Australia;

    the hearing officer considered that the evidence was “of high probative value and is likely to significantly affect the outcome of the substantive opposition.”  He considered that it was not the intention of the RTB amendments to entirely shut out oppositions where there is serious issue to be heard, the evidence is of high probative value and was submitted shortly after the due date.  Accordingly, the late evidence was accepted.

    A final “cautionary note” was added to the decision.  The hearing officer pointed out that parties “should not attempt to circumvent the extension of time provisions under the misguided assumption that Regulation 21.19 will apply in every case.”  He noted that “it is not sufficient to simply show that such evidence is relevant and there is a possibility that the opposition may fail without it. To allow regulation 21.19 to be utilized in that way may render the requirements for the current extension of time provisions otiose.

    Nevertheless, the hardline that the RTB amendments appeared to have introduced seems to have been slightly softened.

    Despite its success, costs were awarded against the Opponent.

  • Ben Gardiner 12:43 pm on 1 June 2015 Permalink | Reply
    Tags: ,   

    Wild Goose chase might go all the way: Skyy Spirits LLC v Lodestar Anstalt [2015] FCA 509. 

    The ongoing battle between the owners of Wild Turkey Bourbon and Wild Geese Rare Irish Whiskey (which has been running for nearly 15 years) continues rolling on. Justice Perram delivered judgment last week in an “appeal” from an ATMO decision in which the delegate ordered removal of the marks WILD GEESE and WILD GEESE WINES from the Register for non-use.

    The facts are a little unusual and slightly complicated.

    The owners of Wild Geese Rare Irish Whiskey first registered the word mark WILD GEESE in Australia in 2000 in classes 32 and 33. Subsequently, in 2005, a small South Australian wine maker applied to register the marks WILD GEESE and WILD GEESE WINES. The wine maker (which was run – or owned – by Adelaide silk Patrick O’Sullivan QC) was immediately confronted by the earlier registration. It sought to overcome this problem by having the earlier mark removed for non-use.

    Readers will know that a trade mark can be removed from the Register if it has not been used for a continuous period of three years: s 92 TMA.

    Mr O’Sullivan soon discovered that there was already another application to remove the earlier mark from the Register – it came from the Wild Turkey interests. After some correspondence between Mr O’Sullivan and Wild Turkey, they came to an agreement: he agreed to assign his company’s interests in its marks to Wild Turkey and they, in turn, agreed to license those marks back to his company in perpetuity for $1. Wild Turkey also took an assignment of Mr O’Sullivan’s company’s application to remove the Irish Whiskey WILD GEESE mark from the Register.

    That application ultimately succeeded – but not before going the Full Court of the Federal Court: Austin, Nichols & Co Inc v Lodestar Anstalt (2012) 287 ALR 221.

    Wild Turkey then secured registration of the word marks WILD GEESE and WILD GEESE WINES and it is these marks that were licensed to Mr O’Sullivan.

    The Wild Geese interests meanwhile had started selling their whiskey in Australia and wished to use the WILD GEESE mark here. Wild Turkey, on the other hand, despite selling Wild Turkey bourbon here, did not sell anything under their registered WILD GEESE and WILD GEESE WINES marks. Once the statutory three years had passed since registration of those marks, Wild Geese made its move. It sought removal of the WILD GEESE and WILD GEESE WINES marks from the Register on the grounds of non-use. (What’s good for the goose, right?)

    But the Wild Turkey interests pointed to the continued use throughout the relevant period by Mr O’Sullivan QC. Although his sales were relatively small (around $3,000-$5,000 per year), Perram J accepted that Mr O’Sullivan’s company had used the marks during the non-use period in the relevant sense.

    But did this use constitute “authorised use” within the meaning of s 8 of the TMA?

    Section 8 provides that use will only be “authorised use” to the extent that it is “under the control of the owner of the trade mark”. This required some attention to be given to the detail of the licence agreement between Mr O’Sullivan and Wild Turkey. The agreement required Mr O’Sullivan’s company to observe certain quality control measures and, if requested, to provided several bottles of his wine to Wild Turkey to allow it to conduct its own analysis. If the wine did not meet a certain defined standard, the licence agreement could be terminated by Wild Turkey.

    The agreement also placed restrictions on Mr O’Sullivan’s company in respect of where he could sell his wine and the manner in which he could use the marks.

    Despite these provisions, Justice Perram found that, in fact, Wild Turkey exercised no actual control over Mr O’Sullivan’s company’s use of the marks – except that he would have needed Wild Turkey’s permission for any export trade. His Honour considered that the licence agreement was “not intended to deliver anything but the appearance of control to the Wild Turkey interests.”

    Wild Turkey contended that the use of the marks was nevertheless under their control within the meaning of s 8. The issue for the Court was whether something less than actual control was sufficient.

    Justice Perram reviewed the statutory history of s 8 (which came into effect with the 1995 Act and replaced a provision in the 1955 Act which referred to a “connexion in trade” between the licensee and licensor rather than “control”) and the authorities under both the 1995 and 1955 legislation. On the basis of this analysis, he concluded that s 8 unambiguously requires “actual control” and that this is consistent with the position under the 1955 Act.

    However, his Honour was confronted with the Full Court’s decision in Yau’s Entertainment Pty Ltd v Asia Television Ltd (2002) 54 IPR 1. In that case, the Full Court upheld the primary judge’s decision that actual control is not required. Although Perram J respectfully dissented from the conclusions of the primary judge and the Full Court in Yau, he considered himself bound to follow it. Accordingly, he concluded (clearly reluctantly) that “for the purpose of s 8(1) a mere theoretical possibility of contractual control is sufficient to constitute authorised use”.

    For this reason, the appeal was allowed. It is rare for the primary judge’s decision to form the basis of the appellant’s submissions on appeal but this will surely be such a case.

    An interesting final point – alluded to by Justice Perram at the end of his judgment – is where Mr O’Sullivan stands in all of this. If the marks are ultimately removed for non-use, the licence agreement is worthless. Despite using the marks since 2005, and having the protection of trade mark registration through Wild Turkey since 2007, Mr O’Sullivan’s right to continued use of the mark will be in jeopardy (if not entirely lost).

  • Ben Gardiner 7:45 am on 28 May 2015 Permalink | Reply  

    Simple ≠ generic – Apple Inc [2015] ATMO 25 

    If you have more than two people living in your house you probably have multiple Apple devices half of which use the old plug and half the new.  Well, it’s the old plug we’re interested in here – it looks like this:

    ™ 1480025

    Apple applied to register this as a trade mark in relation to electrical connectors and so forth in early 2012 (with a Convention priority date of 11 July 2011).

    The examiner raised a ground of objection under s 41(5) as it stood at the relevant time.  After five adverse reports, Apple sought a hearing. You can find the decision here.

    The hearing officer considered that the examiner had incorrectly relied, at least in part, on the view that “the more ‘simple’ a trade mark is, the more likely it is that another trader would, actuated only by proper motives, require to use that trade mark.”

    He said:

    I do not consider that this necessarily holds true and does not address the real issue which is enunciating why another trader, actuated only by proper motives, would need to use the Trade Mark. Simplicity is often the essence of a good trade mark. To drawn an analogy, the word trade mark OXO, used in relation to beef cubes or beef concentrate for cookery, is obviously an extremely simple, yet effective, trade mark – it contains oblique reference to the nature of the goods, it is a palindrome and may even be inverted or read in a reflection and yet it still reads OXO. Obviously, that trade mark is very simple but its simplicity does not prevent it acting as a very effective trade mark.

    The hearing officer considered that it is not obvious why other traders would, without improper motive, need to use the Trade Mark on their similar goods and therefore took the view that s 41(5) was the appropriate sub-section to apply.  (Note the use of the word “need” here – consistent with the majority of the High Court in Cantarella and different from earlier authority that used “want” or desire”).

    The use of the mark by the relevant date was very significant (as you can imagine) and there was survey evidence which showed that 32% of consumers identified the mark as being associated with Apple.  The hearing officer considered this to be sufficient to support registration pursuant to s 41(5).  The mark was accepted for possible registration.

  • Ben Gardiner 7:45 am on 25 May 2015 Permalink | Reply  

    What on earth is honest concurrent use? 

    One of the grounds of opposition to registration of a trade mark is provided by s 44 of the Trade Marks Act 1995.  It’s probably the most obvious one: you can’t register a mark if someone else has already registered it in respect of the same or similar goods and services.  There’s a bit of nuance to it but that’s pretty much it.  There are two exceptions however.  One is provided for applicants who have used their mark since before the other trader commenced use of the cited mark – that’s the s 44(4) exception which is usually called continuous prior use.  The second exception is provided for applicants who have used their mark concurrently with the owner of the cited mark – this is the “honest concurrent use” exception.

    Section 44(3) of the TMA provides the detail:

    (3)  If the Registrar in either case is satisfied:

                         (a)  that there has been honest concurrent use of the 2 trade marks; or

                         (b)  that, because of other circumstances, it is proper to do so;

    the Registrar may accept the application for the registration of the applicant’s trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant’s trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area.

    Honest concurrent use has not had much of a run lately.  It was pretty much killed off by Justice Kenny in McCormick & Co Inc v McCormick (2000) 51 IPR 102 when she said “s 44(3) of the Act does not provide an exception to s 60“.  From then on, as long as an opponent had sufficient reputation and confusion was likely, honest concurrent use was no use to an applicant.

    In the recent case of Apax Partners Midmarket v Apax Partners LLP [2015] ATMO 30, the opponent relied only on s 44 (and not on s 60).  Honest concurrent use was in issue.  Some “uncontroversial propositions” were set out by the hearing officer.  These included:

    1. The discretion conferred on the Registrar is a broad one;
    2. Honesty of the applicant (in a commercial sense) remains an important consideration;
    3. Whether the applicant knew of the opponent and its use of its trade mark is not determinative – the question is whether the applicant might have had a reasonable good faith expectation of pursuing registration based on its concurrent use or other circumstances;
    4. Even a high likelihood of confusion is not an automatic disqualification;
    5. The comparison of uses is relative in the sense that the weight to be attributed to the applicant’s use will vary depending on the extent of the opponent’s use.

    The applicant was successful. The hearing officer accepted that the requirements of s 44(3) were made out despite the facts that the marks used by the applicant and opponent were identical and they operated in the “same sphere”.  It appears that the opponent was unable to demonstrate significant reputation vesting in its mark and it is assumed that this is the reason the application was not opposed under s 60.

    While s 44(3) is often trumped by s 60, there are occasions where s 60 will not apply (no reputation, no likelihood of confusion) and so it must not be forgotten.

  • Ben Gardiner 4:32 pm on 21 May 2015 Permalink | Reply

    Revocation in the ATMO 

    We know that trade mark infringement proceedings commonly include a cross-claim for revocation of the relevant mark.  Attack is one of the best forms of defence.  Prescribed courts are empowered to remove a trade mark from the register by ss 86-88 and 92 of the Trade Marks Act 1995.  Aside from applications based on non-use, these provisions do not extend this power to the Registrar of Trade Marks.  Once a mark is on the register, you have to go to court to get it off, right?  Not quite.

    The Intellectual Property Laws Amendment Act 2006 introduced a new provision to the TMA, s 84A, which permits revocation by the Registrar if the mark should not have been registered in the first place and revocation is reasonable in all the circumstances.  A mark cannot be revoked under this provision, however, unless the Registrar gives the owner notice of her intention to revoke within 12 months of registering the mark.  The owner has a right to be heard.

    It appears that in nearly a decade of operation, the discretion conferred by s 84A has only been exercised once.

    In FPInnovation Pty Ltd [2012] ATMO 74, a delegate of the Registrar found that 13 registered trade marks ought not to have been registered because they carried misleading or confusion connotations and therefore “a ground under s 43 exists” (don’t get me started on s 43 – the confusion used to have to be inherent in the mark or its application to the relevant goods – apparently no longer).  The delegate’s conclusion that revocation was reasonable in all the circumstances appears to have been primarily based on findings that the applicant had deliberately chosen the misleading marks.

    In the recent case of Aleem Pty Ltd [2015] ATMO 33, the facts were that a third-party wrote to the ATMO seeking revocation of the mark REFUELLING SOLUTIONS which had proceeded through to registration unopposed in several classes including “retail and wholesale provisions of and supply of fuels” and “refuelling services.”  The examiner had considered that s 41 TMA presented an obstacle to registration and sought further evidence to support registration under s 41(5) TMA.  That evidence was provided and the mark was registered with a s 41(5) endorsement.  The third-party contended that the mark ought to have been rejected pursuant to s 41(6).  A deputy registrar agreed and wrote to the owner indicating an intention to revoke the registration.  The owner requested a hearing and successfully persuaded the hearing officer that the registration should not be revoked.

    The following principles emerge from the decision:

    1. The power to revoke under s 84A must be exercised with “great caution”;
    2. A third-party does not have a right to have a competitor’s trade mark revoked even if the registration is as a result of the registrar’s error;
    3. different delegates reviewing exactly the same material and applying the same law have a different opinion about the appropriate outcome” (wait, what?) and a “change of opinion as to the registrability of a mark did not constitute a basis for revocation of acceptance“.

    The hearing officer accepted the holder’s contention that it could not be shown that “the trade mark should not have been registered” and so she did not need to consider the second part of s 84A, i.e. that it is reasonable to revoke the registration, taking account of all the circumstances.

    The take home lesson is that s 84A TMA is a very poor alternative to an opposition proceeding.  A third-party writing to the ATMO seeking revocation of a competitor’s wrongly registered mark has no right even to have their letter considered – there is no obligation on the Registrar to consider whether to revoke the registration:s 84A(4) – and no opportunity to be heard if revocation is considered.  Further, the Registrar must be convinced that the mark should never have been registered in the first place (not just that she might have a different view) and that revocation is reasonable in all the circumstances.

    It is no wonder the discretion appears to have been exercised only once.

    • Andrew Sykes 1:01 pm on 22 May 2015 Permalink | Reply

      Hi Ben

      Hope all is well in sunny Queensland! Great article.

      In my experience the office has been very reluctant to look at 84A revocation unless there is an obvious error. So I am not that surprised by Aleem decision.

      If a registration is under 12 months old I found a good tip is to conduct a search of the register and FOI the examiners file. If you find a conflicting mark that wasn’t found by the examiner (and hence no discretion exercised) go for a 84A revocation!


      Andrew Sykes

  • Ben Gardiner 2:10 pm on 31 March 2015 Permalink | Reply

    AUSTRALIA’S CHEAPEST CHEMIST Trade Mark invalid – first FCA application of Cantarella 

    In the first application of the High Court’s decision in Cantarella Bros v Modena Trading [2014] HCA 48 (Cantarella) by the Federal Court, Justice Middleton has found that the trade mark depicted below, which was registered in respect of “Retailing, online retailing and mail ordering services; all relating to pharmacies” in class 35 and “Medical, hygienic, beauty care services all relating to pharmacies; all of the foregoing being pharmacy advisory and pharmacy dispensary services” in class 44 is invalid.

    Australia's Cheapest Chemist TMThe trade mark was registered without limitation as to colour and was therefore registered for all colours: s 70 TMA.

    The owners of the mark accepted that it was only to some extent adapted to distinguish the relevant services.  Sub-sections (5) and (6) of the former s 41 of the TMA were therefore applicable.

    On the question of inherent adaptation, Middleton J cited the question posed by Stone J in Kenman Kandy:

    [161]…the question is whether if the [appellant’s mark] were to be registered as a trade mark, other persons trading in [the same market] and ‘being actuated only by proper motives’ would think of this [mark, or a sign that is substantially identical with, or deceptively similar to, the mark] and want to use it in connection with their goods in any manner that would infringe the appellant’s trade mark.

    His Honour pointed out that Justice Stone then articulated a “subsidiary and difficult question” when the mark “has associations that deprive it of the inherent capacity to distinguish.”

    In this case, the three dominant words AUSTRALIA’S CHEAPEST CHEMIST signify geographic location, price and nature of the business, respectively.  His Honour considered that these words, considered either separately or combined, did not have the required distinctiveness.  The addition of the prefix “Is this?” did not assist.  His Honour concluded therefore that the trade mark was not at all inherently adapted to distinguish.  This conclusion sits comfortably with the High Court’s view, expressed in Cantarella, that words having a “direct reference” to the relevant goods or services are “prima facie not registrable”.

    Section 41(6) was therefore applicable and his Honour found that the mark was not distinctive in fact as at the filing date.

    The registration of the mark was therefore invalid.

    Although Cantarella was referred to by his Honour in setting out the principles relevant to the question of inherent adaptation to distinguish, he did not refer to it again in the context of application to the facts in the case.  This is unusual but is perhaps explicable on the basis that Cantarella was decided after Middleton J had reserved and, in any event, his Honour was of the view that “the proper test for assessing the inherent capacity of the registered trade mark … still remains that articulated by Kitto J in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511″ and that the High Court in Cantarella had “recently endorsed this test.”

  • Ben Gardiner 1:18 pm on 19 March 2015 Permalink | Reply  

    Section 41 and Cantarella: Are there new rules on inherent adaptation to distinguish? 

    Capacity to distinguish an applicant’s goods or services from those of other traders is a prerequisite to registration of a trade mark.  Section 41 of the Trade Marks Act (1995) (Cth) (TMA) provides the legislative framework for determining whether this criterion is met.  This provision was amended by the Intellectual Property Laws Amendment (Raising the Bar) Act (2012) (Cth) which took effect on 15 April 2013.

    The amendments, however, did not substantially affect the steps that need to be taken in determining capacity to distinguish.  The High Court’s decision in Cantarella Bros Pty Ltd v Modena Trading Pty Ltd (2014) 315 ALR 4 (Cantarella), although decided under the previous s 41 TMA, is therefore applicable under the new version.

    Section 41 (old and new) provides the following structure for determining capacity to distinguish.

    First, the extent to which the mark is “inherently adapted” to distinguish must be considered.  If a mark is sufficiently inherently capable of distinguishing the applicant’s goods or services from those of other traders, it may proceed to registration (unless other grounds of opposition are made out).

    If the mark is “to some extent, but not sufficiently” inherently adapted to distinguish, the Registrar must consider (a) the extent to which it is so adapted; (b) the use, or intended use, of the mark; and (c) “any other circumstances” before deciding whether the mark can or will distinguish the designated goods or services.

    If the mark is “not to any extent inherently adapted to distinguish”, the Registrar must consider whether the mark, as a result of use before the filing date, did at that time in fact distinguish the applicant’s goods or services.

    Cantarella appears to provide a new methodology for determining whether a mark is inherently adapted to distinguish – at least for word marks.

    The old test

    In  Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 (Clark Equipment), Kitto J explained that whether a trade mark is “inherently adapted to distinguish” is tested by reference to:

    “…the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess – will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.” (at 514).

    In setting out this test, Kitto J directly applied (and quoted in full) the following passage from Lord Parker of Waddington’s speech in Registrar of Trade Marks v W & G Du Cros Ltd [1913] AC 624 (Du Cros):

    “The applicant’s chance of success in this respect (i.e. in distinguishing his goods by means of the mark, apart from the effects of registration) must, I think, largely depend upon whether other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connexion with their own goods. It is apparent from the history of trade marks in this country that both the Legislature and the Courts have always shown a natural disinclination to allow any person to obtain by registration under the Trade Marks Acts a monopoly in what others may legitimately desire to use.” (at 634-635)

    Kitto J’s test from Clark Equipment has long been settled law in Australia on the issue of inherent adaptation to distinguish.

    The question in Cantarella

    At issue in Cantarella was whether the marks ORO and CINQUE STELLE were inherently adapted to distinguish goods and services in relation to coffee.  The words mean GOLD and FIVE STARS, respectively, in Italian.

    There was some evidence of the use of ORO (and variants) by other traders but not of CINQUE STELLE (although there was evidence of use of FIVE STAR and 5 STELLE) in relation to coffee.  It was uncontroversial that Italian is the second most widely spoken language in Australia (after English) and that more than 350,000 Australians speak Italian at home.

    The new (?) test

    The majority of the High Court held that, in determining whether a mark is inherently adapted to distinguish, consideration of the ordinary meaning of any words comprising the mark is “crucial” (compare Dixon CJ’s view, expressed in the TUB HAPPY case that searching for a meaning as a first step is a “mistake”: Mark Foy’s Ltd v Davies Coop (1956) 95 CLR 190).  This is regardless of whether the mark consists of English or foreign words.  Only after the “ordinary signification” is established can an enquiry can be made as to whether other traders “might legitimately need to use the word in respect of their goods”.  (Note the inclusion of the word “need” here – compare Kitto J’s use of “want” and Lord Parker’s use of “desire”).

    In relation to a foreign word, the majority said that if “it is understood by the target audience as having a directly descriptive meaning in relation to the relevant goods” (emphasis added) then it is prima facie not registrable.  If the foreign word contains only an “allusive reference” to the relevant goods, then it is prima facie registrable.  It is not absolutely clear that the Court intended this rule also to apply to English words but it seems that it did.  There is no indication that it intended to create a new special rule for foreign words.

    The High Court explained that, in Du Cros, Lord Parker was “not referring to the desire of traders to use words, English or foreign, which convey an allusive or metaphorical meaning.”  His Lordship was only referring to words having a direct descriptive meaning.  This is why English words carrying directly descriptive meanings such as ROHOE, BARRIER and WHOPPER were not registrable whereas words carrying only allusive references, such as TUB HAPPY, were.

    Once the “ordinary signification” is established, consideration may then be given to whether other traders might want (or need) to use the words for that ordinary signification.

    Thus, the High Court has set out a new two-part test for whether a mark is inherently adapted to distinguish – at least for word marks.  First, the ordinary meaning of the words to the target audience must be considered.  Then, if the word or words has an ordinary meaning, consideration must be given to the question of whether other traders might legitimately need to use the word, or words, in respect of their goods or services, for that ordinary meaning.

    Not so fast

    But perhaps this is reading too much into Cantarella.

    Justice Middleton recently delivered judgment in Verrocchi v Discount Chemist Outlet Pty Ltd [2015] FCA 234.  His Honour said at [103], in relation the respondent’s cross-claim seeking to have the applicant’s trade mark removed from the register pursuant to s 41 TMA:

    “The proper test for assessing the inherent capacity of the registered trade mark to distinguish the designated services for the purposes of s 41(3) still remains that articulated by Kitto J in Clark Equipment…”

    He said the “High Court in Cantarella… recently endorsed this test.”


  • Ben Gardiner 9:52 am on 3 December 2014 Permalink | Reply  

    High Court finds Oro and Cinque Stelle ARE inherently adapted to distinguish coffee 

    This morning the High Court, by majority, allowed Cantarella’s appeal. More to follow on this when I have read the decision.

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