The recent decision of the Australian Trade Marks Office (ATMO) in Target Australia Pty Ltd v Catchoftheday.com.au Pty Ltd  ATMO 54 has demonstrated the importance of having trade mark reputation and the limitation of relying on parody as defence under Australian trade mark law.
In this blog post, we discuss how the decision reveals the vast potential of a reputation acquired by a trade mark to go well beyond the registered elements of the mark, creating an extra layer of protection and highlights the value of tactical marketing and engaging with consumers in building a brand.
We also note the useful reminder the decision provides on the dangers of using parody or derivative Trade marks given the fine line between parody and a finding of misleading and deceptive conduct!
The decision was made in opposition proceedings commenced by the owner and operator of the well-known Target stores and owner of the Trade Mark "Target" and associated bull's-eye logos (see below) ('Target') against online retailer catchoftheday.com.au Pty Ltd ("COTD") over COTD's attempt to register, as an Australian Trade Mark, logo(s) (see below) featuring in stylised text the words "Tar" and "Jay" separated by a smiling infant face and a smaller stylised font by-line "by mumgo" ("Tar-Jay Logo Application(s)"), in Class 35 in respect of children's and infant's products including clothing, footwear and headgear.
At first glance, the basis for Target's oppositions seems on face value a little hard to comprehend, especially for those not in Australia. After all, the two trade marks: "Target" and "Tar Jay" seem entirely distinct and particularly so given that latter was applied for in logo form bearing no resemblance to the bulls-eye logo used by Target. What then was the basis of Target's complaint?
To see the issue we need to look beyond the face of Target's actual registered trade marks, none of which are relevantly close enough to the Tar-Jay Logo Application(s). According to evidence presented to the ATMO Delegate, since its commencement in Australia in 1972, Target has over time, without any marketing of its own, gradually acquired an alternate reputation other than its official name – that is, Target has in the public domain been sometimes referred to by consumers in a Francophone manner as Targét: with the "t" silenced, accenting the second syllable and the "g" rendered as a "zh" (i.e. Tar-ZHAY). Such colloquial usage has over at least three decades gained prevalence as an endearing term for Target –playing on the irony of the Target stores brand of style and quality being akin to that of an expensive, up-market French boutique shop, albeit of low-cost or affordable value.
While Target has itself not used it in its marketing materials, the term was in 2008 further recognised in a range of independent media comments/publications and its addition to the urbandictionary.com which defined it as "an alternative pronunciation of the big-box store Target." Since lodging its opposition claims against COTD, Target has now commenced a marketing campaign around this term and applied for the registration of TAR-JEY (Trade mark Application 1560933).
Misleading and Deceptive Conduct, Not Trade Mark Infringement
Target's opposition was therefore not based on its own existing registered Trade Marks but on Section 42(b) of the Trade Marks Act 1995 (Cth) which provides for the rejection of a trade mark application where the trade mark applied for is contrary to law. Target claimed that COTD's trade mark was contrary to the Australian Consumer Law 2010 ('ACL') prohibition on misleading and deceptive conduct under Section 18. Target argued that the registration and use of COTD's trade mark would constitute misleading and deceptive conduct because consumers would likely be misled or deceived into believing that the goods sold by COTD under its trade mark were sold by Target, or otherwise associated with Target through the Tar-ZHAY – TAR –JAY phonetic resemblance thus relying on the colloquial reputation generated for it by the public that its Trade Mark had indirectly acquired.
In response, COTD sought to argue that Target had not itself used the Tar-Jay or Tar ZHAY trade mark and there was a lack of any actual proof misleading or deception resulting in the public apart from Target's attorneys arguing this point
The ATMO Delegate considered the provisions and case law decision on misleading and deceptive conduct and found that actual evidence of consumers being misled is not a necessary element to a section 18 claim. Also, even though Target had never itself used the Tar-ZHAY mark or similar, it had nonetheless shown a sufficient reputation connected to that pronunciation, the use of Tar-Jay by COTD was sufficient to constitute misleading and deceptive conduct under Section 18 of the ACL. Given the similarity of "Tar-Jay" and Tar-ZHAY, the relevant section of the public (taken to include the whole range of astute and the gullible) could be misled or deceived by the confusion of the origin of the goods marketed under the COTD Trade Mark.
A further interesting aspect to these opposition proceedings was COTD's argument that even if Target's claims of reputation were accepted, the Tar-Jay Logo would not be contrary to Section 18 of the ACL because consumers would discern that the Tar-Jay Logo is clearly a parody of the Target mark and reputation and not be confused, deceived or misled.
The ATMO Delegate rejected this parody defence, noting that unlike under copyright law where there is a fair dealing defence for parody, there is no such equivalent defence under the Trade Marks Act. Therefore, the parody argument would only be effective in so far as it demonstrated that the Tar-Jay Logo could with sufficient clarity be disassociated from Target and its reputation. In the words cited from the US decision in relation to parody:1 "if the defendant employs a successful parody, the customer would not be confused, but amused"
Considering the Tar-Jay Logo the ATMO Delegate found that the prominence of the words "Tar-Jay' created an association in the consumer's mind to Target and its reputation, and this association was not sufficiently countered by any of the other elements of the logo including "By Mumgo" and the image of the infant face between the words. The problem was not simply the size of the words 'by Mumgo" or any other disclaimer found on COTD's website, but simply that the logo did not at first instance reveal itself as a parody and any subsequent disclaimers would thus always come too late.
The consideration of "parody" in this decision is interesting in the broader context of parodies under Australian trade mark law which has often circumvented the direct question of parody as demonstrated by the Coca-Cola Co v All-Fect Distributing Co2 case in which Coca-Cola sought to protect its bottle-shape trade mark in response to a manufacturer of confectionary in the shape of the Coca-Cola bottles. Merkel J observed the fun and "cheeky" nature of this imitation, but found that there was no representation of connection to Coca-Cola conveyed by the confectionary bottles. This finding was ultimately overturned on appeal, but parody did not feature as a point of consideration in the appeal decision.
Following the US cases, the ATMO Delegate thus concluded that in so far as parodies can be defensible under trade mark law, they must be able to perform a rather slippery and paradoxical task of conveying a connection to the other (original) brand or trade mark, whilst simultaneously conveying a clear disassociation to that original brand or trade mark so as to dispel any notion that there is a connection between the original mark and the parodying mark. Based on this, it might be queried whether or not parodies of more generic brands might be more successful in passing this difficult test.
This decision therefore leaves us with some very interesting and important observations:
The effective use of the acquired reputation of Tar-ZHAY to utilise the Section 42(b) "contrary to law" opposition ground demonstrates the incredible potential of a Trade Mark to stretch beyond the scope of its actual designation and offer a further level of protection –even without the active input from the Trade Mark owner in creating that protection! This demonstrated possibility should serve as an example of not only the vast potential in tactical marketing and development of a Trade Mark, but also the importance of understanding and engaging with the relevant consumers of your brand.
Conversely, there is also a reminder that parodies or other derivative Trade Marks can be a dangerous marketing option even if on the face of it, the difference between the contents of the Trade Marks appears distinct. As this decision shows, it is important to ensure not only that the Trade Marks are sufficiently different, but also that there is no particularly close connotation of a competitor's reputation such as the latent meaning or secondary pronunciation of their mark. Legal advice should always be sought before launching a tactical Trade Mark or marketing campaign.
1Nike Inc v Just Did It Enterprises  USCA7 1181; 6 F 3d 1225.
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