Australia: Lessons from Recent Trade Mark Decisions

Last Updated: 7 March 2005

By Mike Clarke, Graduate Paralegal and Noric Dilanchian, Managing Partner

To brainstorm, select, design or register a trade mark there's a lot to be said for working at the outset with a multi-disciplinary team capable of thinking in design, marketing and legal terms.

Recent Australian trade mark law decisions lay bare the success or failure of companies to build brands and trade mark rights. The evidence is there for improved performance by brand managers, product developers, store façade designers and others whose livelihood depends on the protection of intellectual property, in particular trade marks.

1. Consider registering a colour or shape trade mark

There has been a recent burst of colour onto the Australian Trade Marks Register. Trade mark applications for such colours as BP's green and Cadbury's purple have attracted commentary and oppositions against their acceptance for registration.

In October 2004, BP won in the Federal Court of Australia against Woolworths which opposed BP's trade mark application no. 559837 to register its shade of green (Pantone 348C) for its service stations. In its objection Woolworths noted it too uses green in branding for its service stations (eg for Woolworths Petrol Plus).

In 2005, litigation continues for purple by Cadbury Schweppes (pending marks 779336, 1009024, 1029792 and 1029890). The oppositions to the application by Nestle and Darrell Lea Chocolate Shop Pty Ltd are yet to reach a hearing. In December 2004, Cadbury's "tactical counter-claim" for a range of trade practices and passing off offences against Darrel Lea was discontinued.

Trade mark registration of colours has grown. The door opened wide to the possibility with section 70 and the then new definition of "sign" in the Trade Mark Act 1995.

Now there are over 150 registered colour marks on the Australian Trade Marks Register as of February 2005. Examples are:

  • Kodak yellow (751852)

  • Eagle Boys pink (585856)

  • Australia Post mailbox red and white (773449)

  • colours on Jacques Villeneuve's helmet (701832), the WD40 can (703361) and surf lifesavers caps (780742)

Further, there are over 150 colour trade mark applications on the Australian Trade Marks Register. They include applications for Nestle's Milo green (888415) and for two telecommunications companies - Telstra's blue and orange (983458) and Orange's orange (1028765).

Shape as a trade mark registration

There has also been a multitude of shape registrations. As at February 2005, the Australian trade mark register shows whilst there are 370 shape marks registered, a further 270 are pending registration. The Academy Awards statue, Tiny Teddies biscuits and Rubix Cubes are among the shapes awaiting registration.

In foreign jurisdictions shape trade mark applications have also increased in number.

For example, in the European Union (EU) applications for the Maglite flashlight shape1 failed in November 2004; and succeeded last year for the Henkel bottle shape2 for cleansers and various other household products.

Last year in the EU there was a series of applications, oppositions and appeals involving variously Nestle, Mars and Masterfoods with each vying to register or block trade mark registration of tube-shaped marks for confectionery such as Smarties. Smarties were launched in 1937 and named Chocloate Beans, then renamed Smarties and packed in a tube one year later. (Nestle tells us that 16,000 Smarties are eaten every minute in the UK alone!)

Also, the Intellectual Property Office of New Zealand has in recent years allowed trade mark registrations for distinctive 3-dimensional shapes. They include the Dior perfume bottle, Bic pen shape, Buzzy Beer shape, Reebok sneakers and Toblerone bars. However it rejected the trapezoid shape of the Kit Kat bar, holding it was a common geometric form and its ability to distinguish the Kit Kat bar from other manufacturers' bars was not very great.

What it takes to gain a legal monopoly

A look at some recent decisions sheds light on the legal requirements in Australia for colours and shapes to be registered and gain monopoly status. In BP p.l.c v Woolworths Limited3, Justice Finkelstein of the Federal Court agreed with Woolworths that the green colour used by BP was not inherently distinctive of BP's goods and services. However, he found that based on BP's extensive evidence of use, that BP's green had acquired distinctiveness as a dominant part of BP's corporate identity.

The general rule applied in Australia to shape and colour applications is – does the shape or colour have the capacity to distinguish the product from that of other persons?4 Is it likely that others trading in similar goods or services will honestly want to use the shape in a way which would infringe the applicant's mark?5

Following that rule, a recent decision of the Trade Marks Registrar rejected an application to register an "ice-cream cone" shape. It was not capable of distinguishing the goods, as other traders would legitimately want to use the cone shape for ice-cream in the course of trade.6

The first full Federal Court decision involving a shape application was in 2002. It sheds light on what must be proved. The majority held that the invented shape of a "bug-like creature" for confectionery was inherently adapted to distinguish, and hence registrable. It said invented shapes should be treated the same as invented words.7 Justice French in the majority expressed the view that a shape may be registered if the shape is not dictated by the nature of the product or the need to achieve a particular technical result.

The lesson is that if you have a product or service where the associated colour or shape is important, and it has an inherent or acquired distinctiveness, then the mark may well be registerable. However, our advice is that registration of colours and shapes should add to other trade marks, not substitute for them. To expand the monopoly, they should be treated as providing protection additional to more traditional types of monopoly over names, logos and other devices, slogans and tag lines.

It is also a good idea for brand managers, product developers, store fit-out and façade architects and designers of all descriptions to learn the meaning of "get-up". Get-up is a term used in law to refer to the overall design, look and feel of a 2-D or 3-D work. (A red Ferrari has plenty of get-up!)

2. Avoid weak registrations

A novel trend evident from the Australian Trade Mark Register is the influx of trade mark registrations for school badges, crests and shields. In February 2005 there were over 50 applications for school brands. This is some evidence of the increasing entry by educational institutions into fields of commerce. But are such badge, crest or shield registrations worth the cost or effort?

As regards the list of products to which they relate, such registrations are either thin or comprehensive. Either end of the range can cause problems.

Applications at the thin end of the range cite simply the word "education" on its own as a service in class 418, At the comprehensive end they cite numerous goods and services eg a recent school application is in 8 classes and includes beer, kilts and the provision of kayaking training.9

The range of goods or services descriptions for a trade mark can indicate weaknesses. Selection of a single word (describing a good or service) in a single class of the Trade Marks Register can indicate that not a lot of thought has gone into an application. It's a jungle out there. It is appropriate then to act on legal advice.

Experienced trade mark lawyers and attorneys learn to "smell and hunt" for weaknesses in applications and registrations by competitors who stake their claim despite poor, little or no advice. It may be too late to correct the position if a weak registration is exposed as having little value. Monopoly is then reduced or even lost.

Another lesson useful for all applicants is that the majority of the school applications are for logo or illustration style trade marks (ie school badges, crests or shields), not word trade marks (eg ST PAULS GRAMMER SCHOOL).

Logo applications often leave gaps through which infringers and competitors race in. They often provide a lower degree of monopoly in practice. If someone were to make a copy, and then substantially alter a logo mark, the ability of the original registration holder to enforce its monopoly may become arguable or questionable.

Even less useful can be label style marks, as are often registered by wineries for their wine bottle labels. They can provide a low degree of protection in practice. For experts in law they can be a sign that brand managers and their advisers are pretending to do their job.

So what is the alternative? It involves smart thinking about brand architecture. This is an entire topic on its own. Briefly, there's a lot to be said for having a dual strategy and for giving a preference to a word mark. A dual strategy could involve filing a word mark and a separate logo mark. A word mark may in some cases provide protection that is broader. Paradoxically word registrations provide protection which is both precise and "flexible". Copyright often applies to logos and labels anyway, thus providing a separate legal ground for protection.

3. Finesse your dispute resolution correspondence

Lonely Planet, the international travel guidebook company, has a portfolio of over 20 registered marks in Australia, most of which relate to its name and logo. Its difficulty has recently been with a domain name.

The lengthy facts of an October 2004 decision10 reminds us of basic lessons for dispute resolution strategy and correspondence.

Lonely Planet failed in its domain name dispute heard though the WIPO's (World Intellectual Property Organisation) dispute resolution system.

Basically, an individual unrelated to Lonely Planet obtained the domain name, and was using the site to sell second-hand traveller's guides including Lonely Planet travel guidebooks. It seems the site was also using a logo and font very similar to the registered marks of Lonely Planet.

To make a long story short, after various "carrot and stick" correspondence the parties came to an agreement in May 2002 for the individual to use the domain name, but that he would include prominent disclaimers that the site was not related to Lonely Planet on every page, he would cease using the similar logo and he would not significantly expand his activities to place him in competition with the official site.

Although complied with briefly, Lonely Planet was surprised to find that several months later the disclaimers were apparently gone, and the individual had begun to market cheap flights and other services which also conflicted with the non-book activities of Lonely Planet. After more correspondence, in mid-2004 Lonely Planet filed a complaint with the WIPO and requested the transfer of the domain name.

Interestingly, the WIPO panellist's decision acknowledged that the individual's domain name was confusingly similar and that it was registered in bad faith.

Nonetheless, the decision went in favour of the individual. The panellist stated that Lonely Planet had not established that what amounted to a right of use, or agreement between the parties, had been revoked. This and it seems evidentiary issues permitted the individual to use the domain name for his website.

Lesson? With the benefit of hindsight, it seems Lonely Planet should have: (1) come down harder earlier; (2) finessed its early stage dispute resolution strategy; and (3) taken greater care by tightening its correspondence. now trades happily on the net with just the disclaimer that it "operates separately from and has no commercial, or formal involvement with 'LONELY PLANET' Publications."

4. Get your application right, the first time

This seemingly obvious tip is taken from a recent decision from the Registrar, highlighting the need to ensure trade mark applications are properly rendered and executed. In that decision an application for the mark SECRENT MENS BUSINESS was approved for registration. That was good news. The bad news was that the applicant only then realised that "SECRENT" was a typo, an error, it should have been SECRET. The Applicant applied to amend its mark to SECRET MEN'S BUSINESS. The Registrar refused. The Applicant appealed.

At the appeal hearing, the Registrar stated that an application for the "wrong" mark could only be amended if the amendment does not substantially affect the identity of the trade mark as represented in the original trade mark application (see section 65, Trade Marks Act 1995). In other words, the amended mark needs to be substantially identical to the original mark.

In comparing the two marks side by side, the Registrar decided that they were significantly different enough for him to refuse the amendment. Hence, to correct its position the applicant would have to file a new application thus incurring additional cost, potentially jeopardising any launch strategy and delaying the date from when a monopoly legal right might arise.

The lesson? Don't rely on "Oops" as an excuse; it only works sometimes. Get your application right, the first time.

5. Reward record keeping

Recent decisions, sections 41 and 60 of the Trade Marks Act 1995, and the examination and opposition stage of trade marks provide valuable lessons and guidance for those whose livelihood depends on brands to improve and reward record keeping practices.

From a trade mark protection perspective, records to keep permanently include corporate scrapbooks, discontinued brochures and ads, tax returns showing revenues, draft product design mock ups, photos, consultant reports and of course diary and file notes.

Commence record keeping at the earliest stage, eg at the brainstorming stage for a new product name, logo or get-up. The applicant is then prepared when the records need to be used as evidence to win early and economically in a trade mark opposition, dispute or litigation matter.

On considering these records, what does the Registrar look at? Some examples of critical flaws with evidence and records tendered in recent cases are:

  • Inconsistent use Where the use of the mark is "erratic and inconsistent" the evidence will not be helpful. An example is using different versions of a logo or a product name. This type of weakness is frequently evident.11

  • Descriptive use When there is a risk a mark might be construed as being "purely descriptive", use of the mark to describe the offering can be damning. In the 2004 decision for the TOTALLY WASHABLE application, there was evidence of descriptive use on the very product label, ie it stated it was "totally washable". Not surprisingly, the application was rejected. This error should have been corrected at the design legal sign-off stage.

  • Unsubstantiated use Claims that a mark has been used should be substantiated, this is a core reason for record keeping. In one instance, the Trade Mark Registrar dismissed a statutory declaration of the applicant as "unsupported hearsay evidence".12

6. Taking on big guys, standing by your mark

A relatively high profile decision in December 2004 involved Timothy Bull, a trade mark applicant operating in Canberra in the children's education and entertainment sector. He took on a large corporation and won.

Mr Bull's trade mark application was for the phrase TIM THE YOWIE MAN. In opposition to it, Cadbury Schweppes cited its own registered YOWIE mark used on chocolate and related merchandise. It also argued a large number of grounds for opposition, from "deceptive similarity" through to Mr Bull having allegedly "no intention to use the mark".

The decision of the Registrar in favour of Mr Bull is a reminder that regardless of size, in the end an opposition will often come down to questions of law.

Cadbury Schweppes' opposition failed in its entirety. Cadbury Schweppes also had to pay the costs of the opposition.

While rarely acknowledged, in trade mark practice "bullying" does take place, often by large, resourced, rich or irrational opponents to trade mark applications. Given this, it is sometimes cost-effective and smarter to change your position when there is a real threat. Options include replacing the application or changing its description of goods or services. The alternative is to stand by your mark, as did Tim Bull in the YOWIE case.

7. Lessons learned

The above lessons involve common sense. We regularly see instances where poor planning, decisions and execution by both applicants and their legal advisers result in:

  1. Weak registrations, in terms of the choice of applicant, the selection and rendition of the mark, the description of goods and services, or the selection of classes;

  • Lost opportunity, eg no protection over colours, shapes, scents, sounds, or other novel "signs". Too often applicants register a logo when a name or word could provide more valuable and useful armoury.

  • Unhappy outcomes from dispute situations that are mismanaged resulting in outcomes which are not cost-effective.
  • Overall, to build the strength and scope of protection there's a lot to be said for working with a multi-disciplinary team capable of thinking in design, marketing and legal terms.

    The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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