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Key case considers important trademark issues

27 June 2019

#Dispute Resolution & Litigation

Key case considers important trademark issues

Trademarks are an important feature of many modern businesses, establishing a business’s presence in a market by assisting it to be recognisable to consumers in that market. 

The Trade Marks Act 1995 (Cth) (the Act) enables a person or business to protect, by way of registration, a sign that is used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person. 

A sign can include a letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent. 

Section 120 of the Act provides that a person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.

A key feature of registration of a trade mark under the Act is that a business’s interests in and rights to that trade mark are automatically protected by reason of that registration. This can bring considerable commercial advantage when one seeks to enforce its rights in a mark, as the elements needed to be proved under the Act are significantly less onerous than those in the actions of passing off (in tort) or misleading and deceptive conduct under the Australian Consumer Law. For example, one of the oft touted benefits to registration is that when enforcing your rights to a mark, there is no need to establish a reputation in the mark (unlike an action for passing off). This is a significant advantage for businesses that may not have built up a significant reputation in their market, but who nevertheless have real value in their mark.

In recent times, however, a mark’s reputation has crept into the concept of ‘deceptively similar’, potentially threatening the perceived benefits of trademark registration.

Holding Redlich has recently successfully defended a claim brought in the Federal Court of Australia (and run through to an application for special leave to the High Court) against Australian Meat Group Pty Ltd (AMG) by JBS Australia Pty Ltd (JBS) for breach of trademark pursuant to s 120(1) of the Act, in which the role of reputation in considering whether a mark is ‘deceptively similar’ was a central question.

JBS is the owner of two trademarks – a ‘device mark’ depicting the three letters (“AMH”) within a stylised map of Australia, and a ‘word mark’ comprising the letters “AMH”. JBS sued on these two trademarks, claiming that marks used by AMG infringed their trademarks because they were substantially identical with, or deceptively similar to, both the AMH word mark and AMH device mark.

The primary judge found in favour of JBS. The finding largely arose from an analysis of the varying settings within which the products of the companies were sold, and questioning whether they were deceptively similar in nature. In doing so, the primary judge noted the reputation he found to exist in each of the AMH marks, and highlighted that the AMH marks had either a strong reputation at all functional levels, or at least a reputation of some degree, that could realistically lead to confusion in the mind of a consumer as to whether the meat products of AMG were those of AMH.

AMG appealed the primary decision. On appeal, a number of grounds were raised by AMG in relation to the decision of the primary judge. Principal amongst these was whether the primary judge had erroneously relied upon the reputation identified in the JBS trademarks in finding that there had been a trade mark infringement under the Act.

The Full Federal Court, comprising of Allsop CJ, Beskano and Yates JJ, unanimously allowed the appeal. In doing so, their Honours specifically noted that the primary judge’s view of the strong brand reputation in AMH had a significant impact upon his conclusion concerning deceptive similarity [1] and held that the primary judge did indeed err in relying upon this reputation in making the determination [2].

In looking to previous decisions, the Full Court held that the principle in Registrar of Trade Marks v Woolworths [1999] FCA 1020; 93 FCR 365 was not a proposition that reputation will be generally relevant to an assessment of deceptive similarity under s 120(1) of the Trade Marks Act 1995 (Cth) [3]. Rather, it was deemed to be a “proposition that deceptive similarity from imperfect recollection might be countered by showing the well-known nature of the registered mark and the lessened likelihood of imperfect recollection” [4]. Consequently, their Honours chose to apply Henschke & Co v Rosemount Estates Pty Ltd [2000] FCA 1539; 52 IPR 42 in determining that reputation is not relevant when determining a trademark infringement [5].

Ultimately, the Full Court went on to determine that each of the marks were not deceptively similar. This reasoning was based upon an exploration of the components of the acronyms used in each mark, the visual components of the marks, their geometric features, and the context of the transactions within which the marks were to be used.

JBS sought special leave to appeal to the High Court, such leave being refused by their Honours Justices Keane and Bell. 

This decision serves to clarify the role of reputation in determining claims under s 120 of the Act, and the distinct operation of claims under the Act as opposed to the common law action of passing off. It may inform the best approach to take when contemplating bringing a claim to protect your trademark, and reinforces the role of registration in that respect.

[1] [2018] FCAFC 207 at [29].
[2] [2018] FCAFC 207 at [22].
[3] [2018] FCAFC 207 at [41].
[4] Ibid.
[5] [2018] FCAFC 207 at [42].

Authors: Howard Rapke & Nicola McGrady

Howard Rapke, Managing Partner, Melbourne
T: +61 3 9321 9752

Greg Wrobel, Partner
T: +61 2 8083 0411

Toby Boys, Partner
T: +71 7 3135 0649

The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.

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