Australia: Trade Mark Enforcement - A Monster Hassle Without Trade Mark Registration!

A recent decision of the Full Federal Court highlights the benefits to be obtained from registering a trade mark prior to commencing business, and the potential expense and inconvenience in enforcing your rights without a registration.

The facts

In Hansen Beverage Company v Bickfords (Australia) Pty Ltd [2008] FCAFC 181, the appellant (Hansen) had manufactured and sold an energy drink under the brand MONSTER ENERGY since 2002. Sales were primarily in the United States, South and Central America and the Caribbean. The MONSTER ENERGY drinks had not been sold (other than via eBay) or directly promoted in Australia. Hansen had, however, engaged in "indirect advertising" and used the mark MONSTER ENERGY in the sponsorship of athletes, athletic competitions, music festivals and musicians to promote this product prior to launch in Australia. Hansen's activities were directed at raising awareness of its product among young adult males, specifically those aged 18 – 30 years.

The respondent (Bickfords) conducted trade mark searches which revealed that Hansen had no Australian registrations or applications for MONSTER or MONSTER ENERGY. Bickfords therefore proceeded to file applications to register each of MONSTER and MONSTER ENERGY as an Australian trade mark in 2005. Bickfords then commenced using the brand MONSTER ENERGY in Australia from 2006 for its own energy drink. Bickfords' MONSTER ENERGY branded drink was also targeted towards young adult males.

Hansen commenced Federal Court proceedings against Bickfords seeking injunctions and damages against Bickfords. Without a relevant trade mark registration, Hansen could only rely on claims for "passing off" and contravention of section 52 of the Trade Practices Act 1974 which prevents a corporation from engaging in conduct that is misleading or deceptive or is likely to mislead or deceive.

There was no dispute in this case that the energy drinks of Hansen and Bickfords were similar, and that such similarity could mislead and deceive. The issue in this case was whether Hansen had established sufficient reputation in the marks MONSTER ENERGY and MONSTER in Australia in relation to energy drinks to support its claims. The trial judge found that Hansen had not established the sufficient reputation within its "target market" in Australia. Hansen appealed this decision to the Full Federal Court.

The Full Federal Court did not make a decision on the issue of reputation but allowed the appeal on the basis that the trial judge had erred in requiring Hansen to establish relevant reputation specifically within its "target market" of males aged 18 – 30. The Full Court found that instead, the relevant group for assessing the reputation of Hansen's MONSTER ENERGY branded product was the broader Australian community. The Full Court has remitted this matter back to the trial judge for further hearing.

Discussion

If Hansen had registered its trade mark MONSTER ENERGY in Australia, Hansen could have relied on a claim of trade mark infringement, given the brand used by Hansen and Bickfords were identical (MONSTER ENERGY) as were the goods in relation to which each was using this brand (ie energy drinks). Instead, Hansen was required to establish that it had the relevant reputation in its MONSTER ENERGY mark and that Bickfords' use of this mark (and other similar product features) was likely to mislead or deceive. Compiling evidence of sufficient reputation is often a lengthy and expensive process and may require input from third parties and/or the collection of survey evidence. This process can be avoided if a relevant trade mark registration is held. In this case, to enforce its rights, Hansen has undergone the expense (both financial and time) of a Federal Court trial and a Full Federal Court appeal and, now, appears destined for a further hearing before the trial judge. In separate proceedings before the Trade Marks Office, Hansen also opposed the applications by Bickfords to register the marks MONSTER and MONSTER ENERGY in Australia.

While filing a trade mark application can often be seen as an unnecessary expense when launching a new brand, or an existing brand in a new country, as this case highlights, investment at this early stage can often avoid much greater expenses when attempting to enforce your rights. The registration of a trade mark also provides a degree of certainty that you will have the exclusive right to use your brand in relation to the goods or services covered by a trade mark registration. While there is obviously a need, particularly in a rapidly expanding business, to be somewhat strategic in making brand protection decisions, obtaining a trade mark registration (at least for key brands) prior to launching the brand is well worth the effort.

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.