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ACCC moves to approve tobacco-free certification trademark

31 January 2019

#Competition & Consumer Law, #Intellectual Property

Dan Pearce

Published by Dan Pearce, Louise Almeida

ACCC moves to approve tobacco-free certification trademark

The ACCC has moved to allow an Australian-based charity to register certification trademarks that show that financial institutions’ and fund managers’ investments are tobacco-free.

The ACCC recently accepted Tobacco Free Portfolios’ application for three certification trademarks (CTM) at the initial assessment stage.

If approved, the tobacco-free CTMs will certify that funds or investment products don’t invest in companies that manufacture or produce tobacco products. They will also certify if an entity has committed to divesting from such investments. 

The ACCC said that certification requirements were sufficiently specified in the certification rules (which CTM applicants are required to submit), and that consumers wouldn’t be misled or deceived about the certification process.

Whether Tobacco Free Portfolios can use the CTMs now depends on the ACCC’s final assessment, which will take place after a submission period.

What is a certification trademark?

In this case, the ACCC is involved because Tobacco Free Portfolios Limited applied to register certification trademarks, rather than standard trademarks. Generally, trademark applications are assessed by IP Australia alone. However, CTMs are also assessed by the ACCC.

A CTM guarantees that goods or services meet a certain standard. A CTM can only be used if the owner of the CTM (or another person approved by the owner) authorises the trader to use it. Certification often relates to quality, accuracy, origin, or mode of manufacture and therefore helps provide certainty to consumers.

By contrast, a standard trademark simply shows that one trader’s goods or services are different to another trader’s goods or services. The goods or services don’t have to meet a particular standard. 

What standards apply to a certification trademark?

A CTM firstly has to meet certain standard trademark requirements. It must be distinctive and not be deceptive, confusing or include scandalous material or prohibited signs. A CTM must be able to distinguish the certified goods or services from others.

On application, IP Australia will consider the extent to which:

  • the CTM is inherently adapted to distinguish those goods or services
  • because of its use or the circumstances, the CTM has become adapted to distinguish those goods or services. Intended use is not relevant to this consideration. Applicants will need to show substantial evidence of use. 

How do you apply for a certification trademark?

The application process for registering a certification trademark is lengthy. Tobacco Free Portfolios Limited, for instance, first lodged its CTM application in May 2017.

The CTM application process involves the following steps:

  • the applicant sends a trademark application and the rules for using the CTM to IP Australia
  • an IP Australia trademark examiner reviews the application. If the application complies with the general requirements under the Trade Mark Act 1995, the deadline for accepting the application will be put on hold until the ACCC makes a decision
  • IP Australia sends the CTM application, a notification of any amendment to the application, the rules for using the CTM, and any other relevant documents to the ACCC. In Tobacco Free Portfolios’ case, this step occurred about one year after lodgement with IP Australia
  • the ACCC makes an initial assessment. To pass the initial assessment, the ACCC must find that:
    • the CTM rules won’t be detrimental to the public
    • the CTM rules comply with competition and consumer laws (including laws relating to restrictive trade practices, unconscionable conduct, unfair practices, product safety and product information requirements)
    • the attributes required of a trader to obtain approval for the CTM allow a person to assess competently whether that trader’s goods or services meet the certification requirements.

In Tobacco Free Portfolios’ case, the ACCC found that the CTMs and rules were not detrimental to the public and were unlikely to be misleading or anti-competitive. The ACCC noted that the certification requirements and process would ensure that institutions or financial products bearing the marks would meet the standard shown. The ACCC accepted that each of the CTMs including a tagline of “verified tobacco-free”, “verified tobacco-free product”, or “verified tobacco-free commitment”, would help clarify the standard met.

  • the ACCC notifies the applicant and IP Australia of the outcome of the ACCC initial assessment. Tobacco Free Portfolios’ application is currently at this stage. IP Australia will also publish the outcome in the Official Journal of Trade Marks. Within one month of advertisement, the applicant or any other person can respond in writing to the ACCC, and request the ACCC to hold a conference in relation to the initial assessment
  • the ACCC makes a final assessment. It will consider the initial assessment, the submissions in response and any other relevant matters
  • the ACCC notifies the applicant and IP Australia of the outcome of the final assessment

The ACCC’s findings in relation to Tobacco Free Portfolios’ application at the initial assessment stage shows the importance of submitting marks that precisely and accurately reflect the certification requirements.

Authors: Dan Pearce & Louise Almeida

Contacts:

Melbourne
Dan Pearce, Partner
T: +61 3 9321 9840
E: dan.pearce@holdingredlich.com

Sydney
Lyn Nicholson, General Counsel
T: +61 2 8083 0463
E: lyn.nicholson@holdingredlich.com

Brisbane
Andrew Hynd, Partner
T: +61 7 3135 0642
E: andrew.hynd@holdingredlich.com

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Dan Pearce

Published by Dan Pearce, Louise Almeida

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