Australia: Is It A Dunlop Dunlop Or A Goodyear Dunlop? — The Curious Case Of Ownership Of The Dunlop Marks For Aircraft Tyres

Last Updated: 20 August 2018
Article by Nicholas Butera and Nick Holmes

In an interesting and long-anticipated decision, the Federal Court has ordered the partial cancellation of registrations for the trade marks DUNLOP and (DUNLOP/FLYING D Marks) on the basis that, through its failure to properly control the use of the marks, the trade mark owner allowed its foreign supplier (and owner of the DUNLOP/FLYING D Marks in other jurisdictions) to develop an independent reputation in those marks in the Australian marketplace to such an extent that the marks came to signify the foreign supplier and not the trade mark owner.

Background

As the case involved a complex fact scenario covering over 120 years of use of the DUNLOP mark in Australia, it is not possible to go into the facts in any great detail in this article. 

A short summary of the relevant facts is set out below:

  • Dunlop Aircraft Tyres Limited and its predecessors (DATL) manufactured aircraft tyres under the name DUNLOP in the United Kingdom since at least 1910 and under the logo  in the UK since the mid-1950s.  It is the owner of those marks in the United Kingdom.
  • Goodyear Australia and its predecessors in title (Goodyear AU) were the registered proprietor of the marks DUNLOP (registered since 1910) and  (since 1965) in Australia (Dunlop Registrations) in relation to, amongst other goods and services, aircraft tyres.  The Goodyear Tire & Rubber Company (Goodyear US) wholly acquired Goodyear AU in 2006, and the Dunlop Registrations were assigned to it.  Goodyear US then licensed the use of the Dunlop Registrations back to Goodyear AU.
  • Prior to 1987, Goodyear AU manufactured aircraft tyres under the DUNLOP/FLYING D Marks in Australia.  However, it was unable to manufacture all types of aircraft tyres so, from around 1925 to 2015, it imported and sold in Australia aircraft tyres manufactured by DATL bearing the DUNLOP/FLYING D Marks.  At no stage did Goodyear AU exercise any quality or other control over the tyres made by DATL.  Further, from 1987 to 2015, the only aircraft tyres sold in Australia by Goodyear AU bearing the DUNLOP/FLYING D Marks were sourced from DATL.
  • In 2009, DATL sought to register the DUNLOP/FLYING D Marks in Australia in its own name in relation to aircraft tyres, but these registrations were successfully opposed by Goodyear AU and Goodyear US (the Goodyear Parties) on ownership and lack of honesty of use grounds (Opposition Decision).

 In 2015, DATL ceased its arrangements with Goodyear AU and commenced selling aircraft tyres under the DUNLOP/FLYING D Marks in Australia through a different distributor. 

  • The Goodyear Parties commenced proceedings against DATL in the Federal Court (Nicholas J) on the grounds of trade mark infringement and misleading and deceptive conduct.  In response, DATL sought revocation of the Dunlop Registrations in relation to aircraft tyres and related goods and services on the grounds of non-use and cancellation of the Dunlop Registrations on the grounds that their continued registration/use by the Goodyear Parties would cause consumer confusion.  DATL also appealed the Opposition Decision.

Revocation for Non-Use

The Court held that the Dunlop Registrations should not be revoked in relation to 'aircraft tyres', as Goodyear AU's sale of DUNLOP/FLYING D branded aircraft tyres sourced from DATL was trade mark use for the purposes of the Act, even though neither Goodyear AU nor Goodyear US exercised any control over how DATL used the marks on those tyres. 

In coming to this conclusion, the Court made the following observations:

  1. In assessing whether a trade mark has been used under the control of a the trade mark owner, it is necessary to consider both:
    1. Whether the use was authorised; and
    2. Whether the use by the authorised party was trade mark use. 
  2. In terms of authorised use, while there needs to be 'actual control', this can include appropriate financial and managerial control.  As Goodyear AU was a wholly owned subsidiary of Goodyear US, and Goodyear US knew of and approved the use by Goodyear AU of the Dunlop Registered Marks in connection with tyres manufactured by DATL to DATL's standards, this was sufficient for 'authorised use' to be established, even though DATL was not subject to quality control by Goodyear US.
  3. In terms of 'trade mark use', as the DUNLOP/FLYING D Marks were used to signify that the aircraft tyres were made 'by or under the aegis of the registered owner of those marks or its authorised licensee', this was sufficient to establish that Goodyear US (through Goodyear AU) had used the marks the subject of the Dunlop Registrations, even though there was no relevant trade mark connexion between the aircraft tyres themselves and Goodyear US.

Cancellation Action

The Court held that the Dunlop Registrations should be cancelled in relation to aircraft tyre related goods and services on the basis that the continued maintenance of the Dunlop Registrations would cause consumer confusion, as the relevant market associated the DUNLOP/FLYING D Marks with DATL and not the Goodyear Parties.

In coming to this conclusion, the Court held that:

  1. the presumption of conclusive registration no longer applied to the Dunlop Registrations because the DUNLOP/FLYING D marks did not distinguish the Goodyear Parties' activities from those of DATL in relation to aircraft tyre related goods and services;
  2. the continued maintenance of the Dunlop Registrations for aircraft tyre related goods and services was likely to cause consumer confusion as the aircraft tyres market already associated the use of the DUNLOP/FLYING D Marks on aircraft tyre related goods and services with DATL (not the Goodyear Parties) and, more importantly, if the Goodyear Parties commenced using the DUNLOP/FLYING D Marks on their own aircraft tyres and related goods and services, consumers would assume that those goods and services are associated with DATL;
  3. the discretion to retain the Dunlop Registrations on the Register for aircraft tyre related goods and services should not be exercised as the Goodyear Parties were at 'fault' for the confusion as they failed to exercise any control over DATL's use of the DUNLOP/FLYING D marks in Australia and because, if the Dunlop Registrations were maintained, consumers would assume that Goodyear US controlled the entity who manufactured the DUNLOP/FLYING D branded aircraft tyres when this was not the case.

Importantly, the Court ruled that, while an order for cancellation could only operate prospectively (i.e. from the date of the Court order), the Goodyear Parties could not continue their 'primary' infringement action against DATL because, once the Dunlop Registrations were cancelled, Goodyear US was no longer the 'owner' of the Dunlop Registrations for the purposes of section 20(2) of the Trade Marks Act, and therefore no longer had standing to continue the action.

Appeal of the Opposition Decision

While the Court disagreed with the Delegate's finding that DATL's use of the DUNLOP/FLYING D Marks was not honest, the Court upheld the Delegate's decision to refuse DATL's applications on ownership grounds, on the basis that ownership overrides acceptance on the basis of honest concurrent use.

In coming to this conclusion, the Court observed that:

  1. DATL's use of the DUNLOP/FLYING D Marks was honest, as it had not used those marks contrary to any agreement between the parties or to 'misappropriate' or diminish Goodyear US's goodwill or rights in the Dunlop Registrations, and the marks had come to signify that the aircraft tyres were made by DATL — section 44(3)(a) (honest concurrent use) would therefore have applied; however
  2. Goodyear US was the owner of the DUNLOP/FLYING D Marks in relation to 'aircraft tyres' at the time of DATL's applications, as mere non-use of a mark was not sufficient, without more, to constitute abandonment of ownership, particularly in circumstances where steps had been taken to maintain the registrations and the maintenance of the Dunlop Registrations would have likely been maintained to serve as a deterrent to DATL obtaining registration in its own right — section 58 (refusal on ownership grounds) therefore applied over and above acceptance on the grounds of honest concurrent use.

Infringement/Misleading and Deceptive Conduct

The Goodyear Parties were unsuccessful in their claims for trade mark infringement and misleading and deceptive conduct.

The Court considered that, while aircraft tyre related goods and services were similar to other tyre related goods and services, there would be no consumer confusion, as consumers already associated the DUNLOP/FLYING D Marks with DATL in relation to aircraft tyre related goods and services

The Court also held that consumers would not be misled or deceived were DATL to offer aircraft tyre related goods and services under the DUNLOP/FLYING D marks independently of the Goodyear Parties, as this idea was based on the 'unreasonable assumption' that consumers in the specialised and sophisticated aircraft tyre industry would not appreciate that a supplier could legally appoint a different distributor in Australia.

Key Points

While the case relies on a somewhat unique factual scenario, it provides a number of key messages for trade mark owners and their advisors:

  1. The importance of licensing and brand protection — The case highlights that even the most distinctive registered trade mark may become vulnerable to cancellation if the trade mark owner allows it to be used in such a way as it comes to signify the goods/services of third parties.  Trade mark owners should therefore take appropriate brand protection steps, such as appropriate licensing arrangements with suppliers (including clear recognition of the trade mark owner on the supplied goods) and enforcement, in order to protect their trade mark rights.

    This aspect of brand protection is likely to become increasingly important with the advent of global ecommerce sites and fast and reliable international shipping, as local trade mark owners may find that their rights are being usurped by foreign trade mark owners taking advantage of those means to establish a reputation in their own right in Australia.
  2. Control is more than just 'quality control' — While a trade mark owner must engage in 'actual control' of the use of its mark, this can be satisfied by means other than quality control — in particular, where a trade mark owner exercises financial and managerial control over a trade mark user, it will be sufficient if the trade mark owner 'knew of and approved' the intended use of the trade mark by that user (even if that use is not otherwise subject to quality control by the trade mark owner).
  3. Cancellation as a sword and a shield— This case confirms that counterclaiming for cancellation of a trade mark is an effective strategy when facing an infringement action — if the counterclaim is successful, then, based on the decision in this case, the trade mark owner may be prevented from obtaining relief in respect of the alleged infringing conduct as it will no longer have standing to maintain its infringement action.

The decision has been appealed to the Full Federal Court.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Pointon Partners
Thynne & Macartney
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Pointon Partners
Thynne & Macartney
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions