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Trade Marks

Parallel importers beware

The Federal Court recently held that Paul’s Retail did not benefit from the “parallel importation defence” to trade mark infringement in relation to a significant shipment of Lonsdale products sourced from a European supplier licensed by Lonsdale.  The case involved an unusual factual scenario:  the registered owner of the LONSDALE trade marks in Australia is the local Lonsdale entity (not the parent company who licensed the European supplier); and, the European supplier was licensed to use a number of LONSDALE marks but these did not match the marks applied to the goods in question.  The Trial Judge held that s123 of the Trade Marks Act and the Champagne Heidsieck principle will only apply where it is possible to establish that the owner of the Australian registered trade marks consented to application of the marks to the goods in question.  Here, the local Lonsdale entity had not consented to the application of the LONSDALE marks; and the European licensee did not legitimately apply the LONSDALE marks which featured on the goods.  In that sense, the goods were never “genuine”.   Paul’s Retail obtained leave to appeal the decision and the Full Federal Court heard the appeal on 28 August 2012 and reserved judgment.  Whilst the limitations on the European supplier’s licence is a potentially significant fact distinguishing this case from other parallel importation scenarios, the Trial Judge appeared willing to decide the matter in Lonsdale’s favour on the question of trade mark ownership and consent alone.  Hopefully the Full Court will provide further guidance on this aspect.  We will report further once the Full Court decision is available.

Successful opposition based on "use would be contrary to law"

A recent trade mark opposition decision, where the opponent succeeded on the ground that use of the mark applied for would be contrary to law under section 42 of the Trade Marks Act, is a useful reminder of the effectiveness of this ground in the right circumstances. The applicant had filed applications for the mark HEPBURN BATHHOUSE AND SPA, which was the name of a spa business she had attempted to lease.  The applicant failed in her attempt to obtain a lease of this business.  The Hearing Officer found that the applicant's trade marks were misleading and deceptive for a number of reasons, including as to the nature of the business operated by the applicant and its connection with the actual Hepburn Bathhouse and Spa. This conduct amounted to a breach of sections 52 and 53 of the Trade Practices Act (now sections 18 and 29 of the Australian Consumer Law) and the section 42 ground was made out

Use of a invented word trade mark not considered infringing trade mark use  

Notwithstanding the word GRANOLA being an invented word trade mark that had been registered by Sanitarium, use by a third party (Irrewarra Sourdough) of the word in the context of the phrase "ALL NATURAL HOMEMADE GRANOLA" was found by the Federal Court to be use describing the product, rather than trade mark use indicating a connection between the product and Irrewarra Sourdough.  While not essential to Irrewarra's defence to the infringement claim, evidence of GRANOLA having some descriptive significance in Australia undermined Sanitarium's contention that the word has no meaning to Australians and would not be considered to be descriptive of Irrewarra Sourdough's product.  This decision emphasises the importance of brand owners educating the public on the trade mark significance of its brands and being vigilant to uses in the market that may weaken its trade mark rights.

Intel successfully opposes "bellintell"

Intel Corporation opposed registration of the mark “bellintell” on a number of grounds including that because of the reputation of the INTEL mark, use of the mark “bellintell” for the range of claimed financial services would be likely to deceive or cause confusion.  The Hearing Officer found that the INTEL mark has an “undeniable” reputation in respect of computer processors, which extends at least as far as to information technology in general.  Therefore, the greatest degree of association would be with the Applicant’s financial services in the online environment.  As the Applicant’s financial services are to be assessed on a notional basis, they may include such services offered online.  The Hearing Officer determined that use of the mark “bellintell” in connection with financial services would cause a significant number of consumers to entertain a reasonable doubt as to whether or not Intel Corporation “had developed information technology products for use in the financial services industry and had associated its product with the Applicant in order to provide financial services”.   The Hearing Officer’s expansive view of the reputation of the INTEL mark is goods news for the owners of well known marks.

Commercial

UGC on Facebook Pages subject to Advertising Codes of Conduct  

The Advertising Standards Bureau (ASB) has recently issued determinations in response to two complaints regarding user generated content (UGC) (including both comments and photos) posted by end users on Facebook Pages administered by well known alcohol brands, VB and Smirnoff. In both cases, the ASB concluded that UGC content posted on Facebook Pages is an "Advertising or Marketing Communication" within the meaning of the AANA Code of Ethics (the AANA Code) and is therefore subject to the AANA Code in the same way as traditional forms of advertising (eg TV commercials and billboards). In each complaint, the brand owners argued that treating UGC as advertising would be “unduly onerous” and “commercially unfeasible” given the degree of control they have over the posts. However, the ASB held that Facebook is a communication tool over which the advertiser has a “reasonable degree of control".

The decisions raise many issues regarding how Facebook Pages (and potentially all social media, including Twitter) are to be moderated and to what extent. Usually, the burden is on the Page owner to moderate Facebook Policy Violations (e.g. hate speech, violent posts, bullying, pornography, racist or offensive comments). However, these decisions suggest that brand owners now have an obligation to police UGC beyond those considerations and to consider, in each case, whether UGC is compliant with the AANA Code, as well as the Australian Consumer Law which prohibits misleading and deceptive conduct. Brand owners who operate a Facebook Page should therefore consider their existing social media policies regarding moderation of UGC and consider strategies such as an automatic takedown rule or the use of an external interface moderation system. While daily monitoring (followed by prompt take down) is arguably a reasonable approach and will help to reduce a brand owner's exposure to legal action, there still remains the risk of adverse PR in the event that the post vetting process fails.

Transition to new business names register complete

On 28 May 2012, a new national business names registration system commenced in Australia.  Previously, each State and Territory operated its own business name registration system.  The new centralised regime, which is operated by the Australian Securities and Investments Commission (ASIC),  consolidates these registers and will reduce the administrative burdens and costs associated with the previous system - businesses now only need to register or renew their name once with ASIC and pay a single fee.  

All business names previously held on the State/ Territory based registers have been migrated across to the new national register.  Whilst this is automatic and business name owners do not need to do anything to ensure that the transfer process is completed,  owners should check the ASIC Register to ensure that all details have been transferred correctly.   

There are some points to note about the transfer process. First, where a business name is identical to a registered business name from another State or Territory,  ASIC may incorporate a geographical identifier to the name on the Register, but this is not part of the name and will not need to be displayed publicly. Secondly, where business owners own the same business name in multiple jurisdictions, all business names will have transitioned to the national business names register, meaning that some owners may still have multiple identical business names registered to them. To minimise the need to manage multiple business names, business name owners may elect to let duplicate business names expire or cancel duplicate business names and only renew the business name with the latest renewal date.

Competition

Was / Now pricing misleading

The Federal Court has upheld the ACCC case that "Was/Now" pricing in catalogues advertising jewellery sold at around 100 Zamel stores throughout Australia was misleading.  The owners of Zamel claimed that they were discount stores and consumers would know that the "was" price was just the offered price from which negotiation of a discounted price would begin.  The "now" price was the reduced offer price.  The Court held that many consumers would be unaware of the ability to discount and would see the "Was/Now" pricing advertised in catalogues as representing the level of savings that they will make if they buy now compared to when the "was" prices applied.  In fact, the ACCC evidence established that the "was" prices were hardly ever paid for any of the items in the 4 months before the advertising in the catalogues.  The Court held that 4 months was an appropriate period given how regular catalogue sales of the jewellery occurred.  Given that roughly a million dollars was spent on the catalogue advertising, and that Zamel stores had been prosecuted for similar conduct in the past, a significant penalty is likely to follow when the Court determines the appropriate remedies.

Winnebago wins despite delay

After what it described as "extraordinary delay on the part of Winnebago" the Federal Court recently upheld U.S. recreational vehicle manufacturer Winnebago Industries Inc.'s (Winnebago) rights in its WINNEBAGO trade mark against local manufacturer Knott Investments Pty Ltd (Knott).   This case supports the view that given sufficient reputation, particularly in this age of internet communications, foreign companies not yet active in the Australian market may still be able to  prevent unauthorised use of their brands in Australia if misleading and deceptive conduct or passing off can be established.

Copyright

ALRC calls for input on copyright law reform 

The Australian Law Reform Commission has released an Issues Paper for its inquiry into copyright and the digital economy.  The Issues Paper is intended to frame discussion and encourage early public consultation on a range of issues relating to the current and desirable uses of copyright material in today's digital economy.  Among other matters, the ALRC review will rekindle the long burning debate in Australia about the adequacy and appropriateness of the exceptions to infringement and statutory licence regimes under the existing Copyright Act, including the question whether Australian copyright law should introduce a broader US-style "fair use" exception to copyright infringement.  Submissions in response to the Issues Paper are due by 16 November 2012.