Australia: Are tougher days coming for approval of agribusiness certification trademarks in Australia?

Last Updated: 5 December 2018
Article by Georgina Hey and Amanda Caldwell

On 22 November 2018 the Australian Competition and Consumer Commission (ACCC) issued its initial assessment of the rules governing use of four certification trade marks in the name of OxoPak Pty Ltd, indicating its intention to deny approval for the certification rules, and therefore the trade marks will be denied.

The ACCC is required to assess and approve the rules governing use of a certification trade mark in Australia, before a certification trade mark can be accepted for registration by IP Australia. This includes an assessment of whether the rules would be to the detriment of the public, and whether the rules are likely to be misleading or deceptive pursuant to the Competition and Consumer Act 2010 and the Australian Consumer Law.

What is unusual about this case is that the ACCC's assessment includes both an assessment of the certification rules on their own merit, as well as an assessment of the rules in light of the trade marks applied for and the impression the trade marks will convey to consumers. While this approach is slightly beyond what might usually be expected, it does align with the ACCC's currently stated areas of concern around environmental, food safety and health claims generally.

The ACCC review

The trade marks considered by the ACCC are application Nos. 1852559, 1852561, 1852562 and 1852563 (shown below), covering various plastics materials and products in Class 16:

In its assessment of the certification rules, the ACCC considered how OxoPak's certification scheme was intended to operate, and what quality or characteristic of the goods it was intended to certify. The ACCC then considered the trade marks themselves, and the impression or meaning the certification trade marks would convey to consumers.

When the ACCC considered the certification rules in the context of the trade marks applied for, they found that:

  • The Certification Rules submitted by OxoPak indicate the trade marks are intended to certify that plastics products bearing the trade marks are oxo-biodegradable, according to relevant standards.
  • However, the trade marks contain word and logo elements including "Food Fresh Food Safe", "Marine Life Safe", "Land Zero Waste", as well as images of food, marine life and trees. These elements convey an impression to consumers that the certified products "are good for the environment, marine life and food safety", or that they meet environmental and food safety standards. These are not attributes which are assessed under, or certified by, OxoPak's certification scheme.
  • Further, there was conflicting information regarding the impact of oxo-biodegradable plastics on the environment and marine life, and whether they could be referred to as "safe".
  • As the impression created by the trade marks could convey to consumers an impression which is inconsistent with what the trade marks are actually intended to certify, consumers are likely to be misled as to what is being certified, and therefore the certification trade marks and the rules are likely to be of detriment to the public.

In addition, the ACCC also considered whether the certification rules complied with the requirements set out in the Trade Marks Act 1995. The ACCC found several issues with the certification rules which did not meet the requirements for certification trade marks, and which were not satisfactorily addressed by OxoPak, including that the rules contain criteria subject to change at OxoPak's discretion, were not sufficiently clear and robust, and that they relied on requirements and standards not part of the rules themselves. As such, the ACCC found the rules could be of detriment to the public, and that the rules may not meet the principles relating to unfair practices, product safety and production information set out in the Australian Consumer Law.

Takeaway

This decision comes at a time when the ACCC has stated it has an increasing focus on ensuring truth in environmental claims, therefore, perhaps the decision is not surprising. Certification trade mark owners should be aware of current ACCC issues when preparing their rules to ensure they are likely to meet with current ACCC concerns. At present, these issues include environmental, food safety and health claims generally, all of which are relevant to anyone in the agri-business space.

What is clear from this decision is that the owner of a certification trade mark should be careful not to include in the trade mark itself material which will convey to consumers an impression or idea inconsistent with, or beyond the scope of, the intended purpose of the certification trade mark.

The ACCC's assessment of the rules is now open to further submissions and/or a request for a formal conference from OxoPak or other interested parties, with the final due date yet to be fixed but likely in January 2019.

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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Georgina Hey
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