The leaves have turned brown, yellow, red and all shades in between, temperatures are falling and the rain has returned. While you might think that means autumn has come to Melbourne (and you would be right) it also means the return of our city's sporting passion - the Australian Rules football competition. Melbournians will also shortly be turning their attention to the world of soccer as Australia takes its place in the 2006 FIFA World Cup.
But enough of that. In this edition, we bring you a snapshot of what has been happening in the world of intellectual property. If you like your law to be colourful, read on...
Australia’s intellectual property registration authority, IP Australia, has recently removed a famous trade mark from the register on the basis of non-use. The trade mark “UGH-BOOT”, owned by the US company Deckers Outdoor Corporation, was removed from the register despite being protected in Australia since 1971.
“UGH-BOOTS”, sheepskin footwear designed to keep your feet warm even on the coldest of days, have been a much loved item in Australia for decades. Derivatives of the trade mark including Ugh Boots, Ugg Boots and Ug Boots have been used in Australia for years to describe soft boots with a fleecy lining.
Two individuals (the applicants) recently brought an application under section 92 Trade Marks Act 1995 (the Act) claiming that between 30 November 2000 and 30 November 2003, the trade mark “UGH-BOOT” had not been used, or had not been used in good faith, in Australia either by the registered owner of the mark or by a party authorised by the owner to use the mark. The application was opposed by Ugg Holdings Inc, a predecessor in business of Deckers Outdoor Corporation.
The delegate of the Commissioner of Trade Marks who heard the application was not convinced that the evidence submitted by Ugg Holdings Inc demonstrated that there had been any use of the mark “UGH-BOOT” in Australia during the three years identified by the applicants. The delegate noted that Ugg Holdings Inc had used certain derivatives of the mark such as “Ugg Australia” occasionally during the relevant three year period but that the trade mark as registered, including the hyphen, had not been used during this period. The delegate went on to state that “registration [of a trade mark] should not therefore be viewed as conferring rights in the generic term, or terms, from which it is derived. The uses of these generic terms by [Ugg Holdings Inc] are not, therefore, uses of its registered marks”.
In addition, the delegate made the finding that the evidence overwhelmingly suggested that the terms “Ugh Boots”, “Ugg Boots” and “Ug Boots” were used interchangeably in Australia to describe a specific style of boot and that the terms did not distinguish the particular goods in any way. While the applicants, somewhat surprisingly, had not claimed that the registered mark was a generic term and therefore incapable of use as a trade mark in Australia, the delegate was clearly of the opinion that the mark was incapable of differentiating the goods in respect of which it was registered.
Four important points should be taken from this decision to ensure that you and your clients continue to enjoy trade mark protection in Australia:
- Use your registered marks in Australia regularly and continuously. If a mark is not used for a period of three years, it is open to attack and possible removal from the register.
- Ensure that you use the exact mark that is registered in Australia.
- If you are also using derivatives or variations of the registered mark, consider applying to register those variations as trade marks in their own right to ensure that they are also afforded protection as trade marks.
- Be diligent in protecting the uniqueness of your mark so that it does not become a generic term or one of common usage.
With Australian businesses and companies becoming increasingly more proactive in protecting their intellectual property through regulated means such as the registration of trade marks and patents, a recent interlocutory decision of the Federal Court of Australia has demonstrated that the common law doctrine of “passing off” is still alive and well.
Clark Rubber is an Australian retail business that has been in operation for almost 60 years. It sells a wide range of products including foam, rubber, swimming pools and pool accessories. There are currently about 70 Clark Rubber stores operating throughout Australia run by individual franchisees. Since its inception, Clark Rubber has utilised the same colour scheme on the exterior of its stores comprising a bright yellow background with blue, red and white signage and the “Clark Rubber” name and trade mark.
Clark Rubber brought an application before the Federal Court seeking an interlocutory injunction to stop a new store called “Oasis Foam & Rubber” from opening for business as planned on the following day. Clark Rubber asserted that the owner of this new store, Mygroups Pty Ltd and its director, Jennifer Mai Li (the respondents), had painted the exterior of the new store using a colour scheme that was misleadingly, deceptively or confusingly similar to the Clark Rubber colour scheme. The colour scheme of the new store included a yellow background with blue and red lettering. The respondents intended to sell products similar to Clark Rubber including pools, foam, rubber products, latex bedding, outdoor furniture and trampolines. Clark Rubber’s concerns were also heightened by the fact that Ms Mai Li had, before establishing her own store, entered into discussions with Clark Rubber with a view to becoming a Clark Rubber franchisee.
Clark Rubber argued that its colour scheme, used consistently for approximately 60 years, had become a “very strong brand, widely recognised and highly regarded by customers in Australia”. It was concerned that a consumer who saw the new store from a distance and close up would mistake it for a Clark Rubber store. Clark Rubber argued that the respondents’ actions had contravened certain provisions of the Commonwealth and State trade practices and fair trading legislation and that it was also in contravention of the tort of passing off.
The Court granted the interlocutory injunction restraining the respondents from opening the new store until such time as they changed the colour scheme on the exterior of the store to a colour scheme which did not “misrepresent or pass off itself in relation to the Clark Rubber colour scheme”. The Court determined that there were serious questions to be tried concerning the application including whether Clark Rubber stores were well known to Australian consumers by reference to the colour scheme, whether the colour scheme had become distinctive of Clark Rubber stores and whether the respondents had sought to pass the new store off as a Clark Rubber store by utilising a similar colour scheme on the exterior of the store. However, the Court found that the balance of convenience lay in favour of granting the interlocutory injunction, particularly as the respondents had not actually commenced trading.
This decision highlights the importance of a business’ brand, in whatever form that may be, and the need to consider all potential causes of action if a business feels that its brand is subject to attack by a competitor.
The Federal Court of Australia’s controversial decision that a single colour can be registered as a trade mark will be scrutinised on appeal after the Full Federal Court of Australia recently granted leave to appeal in Woolworths Ltd v BP plc. Two of the three judges granted leave, but not without creating controversies of their own in relation to the issues of registration and deregistration of trade marks.
BP plc (“BP”) applied to register two trade marks comprising the colour green in relation to its service stations. Woolworths Ltd (“Woolworths”) successfully opposed the registration of the marks on the ground that they were not capable of distinguishing BP’s goods and services. BP appealed to the Federal Court of Australia where the primary judge allowed the appeal and directed that the marks be registered. In accordance with this order, the Registrar registered the trade marks while Woolworths’ application for leave to appeal against the primary judge’s decision was still pending.
The Full Court considered a number of matters as part of its deliberations on the question of whether leave to appeal should be granted including whether:
- the Registrar was obliged to register the marks as directed by the primary judge; and
- once the marks were registered, the Court had the power to remove those trade marks from the Register as invalid.
In relation to the first issue, Woolworths claimed that because its application for leave to appeal was on foot, the Registrar should not have proceeded to register the marks. Although it had foreshadowed making an application to stay the orders of the primary judge pending its application for leave to appeal being heard, Woolworths did not proceed with a motion to stay the order which may have prevented the actual registration of the marks. While acknowledging that the Registrar believed that she was obliged to proceed with the registration as directed by the primary judge; the Court found that she did so in error. The majority held that the obligation to register does not arise until the appeal process has been exhausted otherwise it could result in the absurd situation of denying the opportunity for leave to appeal to an unsuccessful opponent but not an unsuccessful applicant.
In determining the second issue, the Court held that it had the power to remove the registered trade marks, if they were found to be invalid, from the Register in one of two ways. First, the Court could make a mandatory order directing BP, as the registered owner of the marks, to request that the invalid marks be deregistered. The Court held that it has the power to order the owner of a registered trade mark to request the deregistration of that mark. Secondly, the Court found that it has the power to order that the Register be rectified by “correcting any error in an entry in the Register”. Thus the Court held that it can rectify any detail within the entry and indeed, the entire entry itself by way of cancellation. It should be noted that on both of these points, the dissenting judge was in strong opposition and although he acknowledged that there may be circumstances in which the Court could require the removal of a mark lawfully entered on the Register, he was of the opinion that “the exercise of such a power should be reserved for an exceptional case”.
In conclusion, the Court held that the primary judge failed to take into consideration questions raised by Woolworths in its opposition to the registrability of the mark and therefore, the judge had erred in reaching the decision that the marks were capable of registration. As such, the application for leave to appeal was granted. The following summary of the majority’s decision encapsulates the current thinking of the Court: “…if the trade marks should not have been registered, they should not remain on the Register not only in Woolworths’ interest but also in the public interest. In the circumstances, we are of the view that the application for leave should be granted…and that the Register may be rectified if the appeal is successful”.
It will be interesting to consider the judgment on the merits in due course, not just concerning the registrability of a single colour as a trade mark, but also in relation to the manner in which the Court will order that the Register be rectified if it finds that the marks are not capable of registration as trade marks within Australia.
Attempts by businesses to claim some proprietary interest in a colour are clearly becoming very fashionable in Australia with another recent case involving the colour purple. Cadbury Schweppes Pty Ltd (“Cadbury”), Australia’s largest and best known chocolate and confectionary company, brought an action against another confectionary company, Darrell Lea Chocolate Shops Pty Ltd (“Darrell Lea”), in the Federal Court of Australia alleging that Darrell Lea’s use of a particular shade of purple in relation to its products had misled or was likely to mislead consumers into thinking that its products had some connection with Cadbury or constituted an attempt by Darrell Lea to pass its products off as related in some way to Cadbury’s products.
Cadbury is particularly well known in Australia for its moulded block chocolates which have generally been wrapped in a distinctive purple wrapping. This wrapping also includes the brand name “Cadbury” in a distinctive cursive script and the well known device used by Cadbury of the “glass and a half” symbol which is a depiction of two glasses from which milk is pouring. While it has used the particular shade of purple since the 1920’s, Cadbury started to use significantly more purple in the 1990’s in relation to the promotion of its products, including on point of sale displays, advertising materials, sponsorship events and television commercials.
Darrell Lea does not produce moulded block chocolates and generally sells its products through its own stores and not in retail supermarkets and chains as is Cadbury’s practice. Darrell Lea has used a number of different colour schemes to promote its products since it commenced operations in 1927. Between 2000 and 2004, Darrell Lea used a shade of purple similar to Cadbury in relation to some of its products. It was this use of the colour purple by Darrell Lea that resulted in Cadbury bringing an action in the Federal Court.
Certain facts that came out during the trial clearly harmed Cadbury’s arguments against Darrell Lea’s use of the colour purple. For example, Cadbury had entered into a “co-existence agreement” with another well known chocolate manufacturer, Nestle, in December 2005 to enable both companies to continue to use their respective marks in Australia and New Zealand, including Nestle’s use of the colour purple in its get up for some of its well known products such as Violet Crumble. In addition, assertions by Cadbury that it was diligent in protecting its marks and get up against a range of potential infringers in the confectionary industry was not borne out by the evidence. There were also problems with a survey conducted by Cadbury on which it attempted to rely to show that consumers associated the colour purple with Cadbury’s chocolate products.
The Court, considering all of the evidence before it, was of the opinion that it was the totality of Cadbury’s branding, the colour purple, the “Cadbury” name in a distinctive script and the “glass and a half device” that created the total impact for consumers, and not any one aspect of the brand in isolation. The Court found that the colour purple was always used by Cadbury in connection with the “Cadbury” name and while the colour was an important part in product recognition by consumers, it was not the only thing to trigger that recognition. The Court was also of the opinion that Cadbury could not have an “exclusive reputation” in the colour purple given that a number of other confectionary companies, including Nestle, had used a similar colour in relation to its products for years.
In conclusion, the Court found that “Cadbury does not own the colour purple and does not have an exclusive reputation in purple in connection with chocolate. Darrell Lea is entitled to use purple, or any other colour, as long as it does not convey to the reasonable consumer the idea that it or its products have some connection with Cadbury”. The judge went on to say that in his opinion, this had not occurred and was not likely to occur.
Amendments to the Therapeutic Goods Act 1989 (“the Act”) to give effect to Australia’s obligations under the Australia-US Free Trade Agreement took effect on 1 January 2005, with further changes being made on 3 April 2006. These amendments address the issue of patent rights and the relationship between innovator drug manufacturers and generic drug manufacturers by introducing new requirements into the Therapeutic Goods Administration (“TGA”) marketing approval process.
Before the changes of 1 January 2005, a generic drug manufacturer could seek marketing approval from the TGA for a therapeutic good that was covered by a patent without the manufacturer being required to notify the patent holder. Since the changes, and in a bid to help innovator manufacturers protect their patent rights, the applicant manufacturer has been required under section 26B(1) of the Act to certify to the Secretary of the Department of Health and Ageing, either that:
- the applicant, acting in good faith, believes on reasonable grounds that it is not marketing and does not propose to market, the therapeutic good in a manner or circumstance that would infringe against the patent that has been granted in relation to the therapeutic good; or
- a patent has been granted in relation to the therapeutic good, the applicant proposes to market this therapeutic good before the end of the term of the patent and the applicant has given the patentee notice of the application for registration or listing of this therapeutic good under section 23 of the Act.
However, the 2006 changes to the Act mean that requirements for certificates under section 26B(1) of the Act only apply in cases where:
- an applicant is required to submit evidence or information to establish the safety or efficacy of the goods as part of the registration or listing process; or
- an applicant has relied to some extent on evidence or information that another person has previously submitted to the Secretary to establish the safety or efficacy of therapeutic goods that have already been listed or registered.
In all other cases, a notification to the Secretary that section 26B(1) does not apply to the application to register or list the therapeutic good is sufficient. Ironically, the 2005 changes that had the effect of bolstering the position of patent holders of therapeutic goods have been substantially weakened by the new changes.
Following reports prepared by the Federal Privacy Commissioner and a Senate Committee, the Australian government announced plans in early April 2006 to establish a “do not call” register aimed at protecting consumers from unsolicited telemarketing phone calls. Drawing upon experiences in the US and the UK, the Government is proposing to establish the register to give individuals and small businesses the right to “opt-out” from receiving telemarketing phone calls.
Australian consumers are increasingly subjected to unsolicited contact by telemarketers operating within Australia and also from overseas telemarketers retained by Australian companies. Legislation to bring the “do not call” register into effect is expected to be passed shortly with the register likely to be in use in 2007. Based on international experience, the Australian government expects approximately four million consumers to register within the first 12 months of operation.
If a consumer who has elected to be placed on the “do not call” register is contacted by a telemarketer, it is likely that the telemarketer will face penalties which may include warnings, fines, formal directions and financial penalties.
Certain bodies such as charitable organisations, research groups and companies with an existing business relationship with a consumer are likely to be exempt from the legislation. It is also proposed that the legislation will establish minimum standards for telemarketers such as permitted calling hours, information requirements and the termination of phone calls. These standards will apply to all telemarketers, including those who are permitted to telephone consumers on the register.
It will be interesting to consider certain aspects of the legislation, such as how “existing business relationships” is defined, and to monitor both the extent to which the register is utilised by Australian consumers and the enforcement mechanisms put in place to protect those consumers from telemarketing calls.
On 30 March 2006, the Intellectual Property Laws Amendment Bill 2006 (Cth) (Bill) was introduced into Parliament following recommendations made by the Intellectual Property and Competition Review Committee. If passed, the Bill will make a number of amendments to existing legislation concerning patents, trade marks and designs in Australia.
Some noteworthy changes proposed by the Bill in relation to patents in Australia include:
Providing for compulsory licences to be granted to third parties if a patent owner is found guilty of anti-competitive behaviour pursuant to the Trade Practices Act 1974 (Cth) or the equivalent state and territory legislation. The proposed amendments retain the current requirements for granting compulsory licences while adding a new “competition test” ground for obtaining such a licence. This test is designed to identify and discourage anti-competitive behaviour by patent owners.
Exemplary damages being available in certain cases of patent infringement. The Bill empowers courts to award exemplary damages (in addition to the existing remedies of damages and an account of profits) in cases where a person has infringed against a patent. In determining whether to award exemplary damages, the court will be required to consider the flagrancy of the infringement, the conduct of the infringer after being informed of the infringement and the need to deter other potential infringers.
Exempting certain “springboarding” activities associated with obtaining regulatory approval for pharmaceuticals from constituting a patent infringement. At present, a person does not infringe the rights of a patent holder during any extended term of a patent if the person exploits the product for a non-therapeutic use (such as for research). A further exemption has been included in the Bill providing that a pharmaceutical patent is not infringed during the term of the patent (either the original term or any extension) if the product is exploited solely for the purpose of gaining regulatory approval for the product in Australia.
The most notable change proposed to existing trade mark law by the Bill concerns the circumstances in which the Registrar may revoke the registration of a trade mark. Some of these circumstances include any errors (including errors of judgment) or omissions that led to the registration of the mark, Australia’s obligations under international law and any special circumstances that render it appropriate not to register the mark or to register the mark only on certain conditions. The Registrar will also be required to revoke the registration of a mark if that mark was registered without consideration being given to any opposition to the mark or any request to extend the time in which to file such an opposition.
