Choosing brands and trade marks has always been an important
selection, and the decision in Yarra Valley Dairy Pty Ltd v
Lemnos Foods Pty Ltd  FCA 1367 highlights the importance
for Australian businesses in choosing differentiating and
distinctive trade marks that are able to distinguish their goods
and services from their competitors.
Yarra Valley had been using its registered trade mark
"PERSIAN FETTA". It claimed that Lemnos Foods was
infringing its trade mark by using an identical mark, in breach of
section 120 of the Trade Marks Act 1995 (Cth).
Yarra Valley also sought relief for misleading and deceptive
conduct (in breach of section 52 of the Trade Practices Act
1974 (Cth)) and for damage to its goodwill (passing off).
Lemnos counter-claimed that Yarra Valley's registration of
the PERSIAN FETTA should be cancelled, because registration could
have been successfully opposed, and the application was tainted by
Too common a term
The Federal Court of Australia held that PERSIAN FETTA was not
capable of distinguishing the registered goods ("dairy
products including cheese") as those of Yarra Valley. The
Court held that "fetta" is a common term and
"Persia/Persian" are geographical terms (albeit there
being no country currently called Persia) and accordingly
"there is a likelihood of other traders legitimately wishing
to use in Australia the phrase PERSIAN FETTA in relation to cheese
products in the appropriate circumstance".
According to the Court, it was the name YARRA VALLEY and Yarra
Valley's logo, which included the words PERSIAN FETTA, (and not
the actual words PERSIAN FETTA) that distinguished its products
from those of competitors.
Justice Middleton made the point that extensive use of a mark
does not alone establish distinctiveness; instead, distinctiveness
is proven if the trade mark distinguishes the goods or services of
one trader from those of another. This assessment cannot be reached
in isolation from a consideration of the mark itself.
He referred to the classic test for determining distinctiveness
expressed by Justice Kitto in the Michigan case: "the question
whether a mark is adapted to distinguish [is to] be tested by
reference to the likelihood that other persons, trading in goods of
the relevant kind and being actuated only by proper motives
– will think of the word and want to use it in connection
with similar goods in any manner which would infringe a registered
trade mark granted in respect of it" (Clark Equipment Co v
Registrar of Trade Marks (1964) 111 CLR 511 at 514).
On the issue of damage to goodwill and misleading and deceptive
conduct, Justice Middleton stated the classic trinity of elements
needed to establish passing off:
that the "get-up" is recognised by the public as
that there has been misrepresentation by the other party;
that the applicant has suffered or is likely to suffer
Here the Court held that the action for passing off and
misleading and deceptive conduct could not succeed because there
was an "insufficient likelihood that consumers would have been
misled by the packaging of Lemnos".
As a licensor or a licensee, here are some tips you should consider when negotiating your next licence agreement.
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