Streamline - December, 2011

Trade Marks

Government response to labelling law proposals a first step in plugging health claims loophole?

In the latest development in the ongoing food labelling law reforms, the Forum on Food Regulation (made up of the Australian and New Zealand Ministers responsible for the regulation of food and beverages) recently issued a response to a raft of recommendations made earlier this year by an expert panel in its report Labelling Logic - Review of Food Labelling Law and Policy. The panel's report included a recommendation that applications for trade names and trade marks be scrutinised by the relevant agencies to identify and reject words and devices that have the effect of inferring health implications that are otherwise prohibited under the Food Standards Code. 

This recommendation was driven by a recognition that some traders have sought to exploit a legal "loophole" of sorts, by obtaining trade mark registrations for health-related terms that might otherwise fall foul of the Food Standard Code's prohibition on certain health-related claims (which include a prohibition on the use of the word "health" in, or in conjunction with, the name of a food product).  A search of the Trade Marks Register today in the key food-related classes reveals 406 matches for the word "health" alone.  There are mechanisms for opposing or challenging such registrations under the Trade Marks Act, for example on the basis that their registration is likely to deceive or cause confusion, or is contrary to law, but these grounds of challenge are infrequently invoked.  In 2009, the New South Wales Food Authority failed in its attempt to challenge the registration of the mark HEART ACTIVE by National Foods Milk Limited on these grounds.

The Forum indicated its "in principle" support of the panel's recommendation on trade marks and health claims, but did not go as far as to agree that the agencies responsible for maintaining the trade mark and business name registers should be primarily responsible for vetting and approving applications for names and marks including or implying health claims.  Rather, the Forum indicated that it would request the Food Regulation Standing Committee to investigate and report on the scope of trade mark law and the provisions of the Food Standards Code. For an overview of the Forum's response to other recommendations of the panel, please see our recent alert.

Federal Court clarifies deceptive similarity test under section 44 of the Trade Marks Act

The Federal Court has provided a useful illustration of the role of context and practical marketplace factors in assessing deceptive similarity between trade marks, in clarifying the principles applicable under section 44 of the Trade Marks Act.

NV Sumatra applied to register the trade marks LUCKY DRAW and LUCKY DREAM for cigarettes and other tobacco-related products.  British American Tobacco (BAT), which owns the trade marks LUCKY STRIKE and LUCKIES opposed the applications.  The Registrar refused registration on the basis of deceptive similarity to the BAT marks.  The Federal Court upheld the Registrar's decision, in doing so emphasising that LUCKY STRIKE and LUCKY DRAW were routinely referred to as "Luckies" by both customers and sales staff.  As cigarettes are sold only over the counter, and consumers must request their chosen brand, the aural similarity between the marks was a key factor. NV Sumatra sought leave to appeal to the Full Federal Court, arguing that reputational aspects of the BAT marks were irrelevant to an analysis of deceptive similarity. Leave to appeal was refused and the court confirmed that all the surrounding circumstances (including the manner in which the relevant goods are sold in the marketplace and the ordinary way in which the trade marks of both parties would be used) must considered together in determining deceptive similarity.

A win for the Flying Kangaroo

Qantas has, since 1944, used numerous versions of a hopping kangaroo logo painted on its aircrafts, with the first logo of a winged kangaroo adopted in or around 1947.  As a result of its use of the Kangaroo logo on its aircrafts, Qantas has been unofficially labelled the "Flying Kangaroo". The FLYING KANGAROO name has been extensively used by Qantas, consumers and third parties to refer to Qantas. The use is so widely spread and entrenched in people's minds that in a recent Trade Marks Office decision,Qantas was able to establish that it had acquired a significant reputation in the name FLYING KANGAROO and a close connection to the wine industry, such that the registration of the mark FLYING KANGAROO by a third party in respect of wines would be likely to mislead and confuse.  Whilst Qantas was unable to show it had used the FLYING KANGAROO as a trade mark, Qantas was nevertheless successful in opposing the registration of the mark FLYING KANGAROO filed by Danniel Amadio on the basis that use of such trade mark would be contrary to law as it would be misleading and deceptive.

Consumer Law
 

Federal Court rules on keyword advertising and Google "Sponsored Links"

The Federal Court of Australia has ruled that "Sponsored Results" which display business or product names of an advertiser's competitor in the headline did not constitute misleading or deceptive conduct by Google. This case, brought by the ACCC, considered a number of scenarios where advertisers purchased keywords that incorporated the trading names of other entities, such as competitors.  The primary example involved the purchase of the name "Kloster Ford" by the Trading Post. When the term "Kloster Ford" was searched by a user, the search results provided a link to the Trading Post's website under the headline "Kloster Ford", even though Kloster Ford has no relationship with Trading Post. The Court rejected the ACCC's allegations against Google and concluded that the use of the words "Sponsored Results" was likely to convey that the links were paid for by advertisers and that the colouring technique employed by Google clearly distinguished the sponsored results from the "organic" search results.  Furthermore, the Court decided that even if Google had been involved in misleading or deceptive conduct, it was entitled as a publisher to rely on the defence available to those publishing advertisements in the normal course of business unless they know or have cause to suspect that the publication of a specific advertisement would breach the Trade Practices Act 1974 (Cth).

Importantly for advertisers, the Court concluded that the use of a trading name in sponsored search results by an advertiser may amount to misleading and deceptive conduct where there is no association between the advertiser and the trading name used.  To view the recent case summary, please see our Client Alert.

Copyright

EMI loses Kookaburra copyright appeal

The High Court has rejected EMI's appeal of the 2010 Federal Court ruling that Men at Work's hit song "Down Under" had copied a substantial part of "Kookaburra sits in the old gum tree". In February 2010, the Federal Court ruled that the flute riff in Down Under reproduced two of Kookaburra's four musical bars.  EMI was ordered to pay Larrikin Music (which holds the copyright in Kookaburra) 5% of royalties earned from Down Under since 2002 and from future earnings. The High Court was not persuaded by EMI's arguments that the Federal Court had incorrectly focused on the flute riff (rather than Down Under as a whole), and that the copied bars were intended to be a "tribute to the iconicity of Kookaburra".  EMI also challenged the Federal Court's reliance on expert evidence to detect similarity between the flute riff and Kookaburra.  However, the High Court agreed with Larrikin that, even if there was not "a ready aural perception" of "Kookaburra" in "Down Under", the use of expert assistance to identify the similarity was legitimate and accepted by both parties at trial.

The decision, which represents the end of the road for EMI, lends further support to the role of experts in copyright cases.