Effectiveness of Trade Mark Registration

The effectiveness of trade mark registration to protect the reputation/authenticity of a brand is the topic of this paper and will be referenced to case law and statutes in Australia and New Zealand. This paper will delve into the areas of   trade mark infringement, passing off and misleading or deceptive conduct; the intended outcome is to illustrate the effectiveness of the courts and/or the relevant statutes in respect of the protection of trade marks.

Sections 18 and 29  of CCA inadvertently provides certain protections for unregistered trade marks. These protections directly protect the consumer; however, they can also indirectly provide protections for the owners of unregistered trade marks. Unregistered and registered trade marks can be protected under Section 18 and 29 of this Act, this part of the act focuses on misleading or deceptive conduct, Registered and unregistered trade marks are also protected under the law of tort (passing off)

In addition to the above, the holder of a trade mark can enact proceedings under, the Trade Marks Act 1995 (Cth). It must be noted; the Trade Marks Act 1995 (Cth) protects against the unauthorised use of a trade mark, (infringement) whereas Section 18 and 29 of Schedule 2 and the tort law of passing off protect against misrepresentation.

The relevant and comparable statute in New Zealand for misleading and deceptive conduct is       Section 17, the act is different from Australia as this section illustrates the grounds for not registering a trade mark; (i.e. there is no presumption of registrability) Section 17 (1) (a)  states that a trade mark may not be registered if it is likely to deceive or cause confusion. There is no presumption of registrability as there is under Section 33 and 41(repealed 2012) of Trade Marks Act 1995 (Cth).

 

Sexwax Incorporated v Zoggs International Limited

A case related to Section 17 (1) (a) of the Trade Marks Act 2002 NZ was Sexwax Incorporated v Zoggs International Limited. The respondent (Zoggs) applied in December 2009 for the Zoggs mark to be registered, this application was rejected under 17 (1) (a) as it was likely to deceive or cause confusion. The respondent appeal to the High Court was successful as the court found it was unlikely the Zoggs mark would be confused with the Mr Zogs SEX WAX mark.

This was a curious decision as my understanding of the case gave the distinct impression that the Zoggs mark would have caused confusion due to its deceptive similarity.

The High Court direction entitling ZOGGS to register its mark was overturned, the court ruled; confusion would extend to the Zoggs products sold in surf shops but also other Zoggs products in other retail outlets. it was further ruled that if ZOGG wished to seek re-registration for a mark it will assessed by a specialist tribunal in light of the outcome of this case.

The registration of a trade mark gives the registrant (holder/owner) of the trade mark certain rights, these rights include the use of the trade mark, ability to authorise others to use the trade mark and the right to enact proceedings should the mark be infringed under s 120 (1), (2) and (3) of the act. Infringement of a mark has taken place if a person or company uses a   trade mark that is deceptively similar of substantially identical to a mark already in use that relates to goods and services in which a mark is registered.

The registration of a trade mark is the ultimate end goal when trying to protect the reputation and authenticity of a brand. The rights conferred on the owners of registered trade marks attaches a value to the trade mark. The mark can be sold, licensed, and transferred all for the benefit of the owner. Additionally, registrant rights include the ability to enact proceedings against unauthorised use of the mark.

 

Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd

In Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd, Cadbury on appeal from a single judge of the Federal Court, had its appeal upheld, the basis of the case was the use of the colour purple by Darrell Lea Chocolate Shops in its branding, stores, advertising, signage etc, one of the allegations were;

[para 14]

Darrell Lea “utilised consistently and regularly a colour purple bearing

a striking and obvious likeness to the colour Cadbury Purple….Each of those representations is false or alternatively misleading or deceptive”.

Under the Trade Practices Act 1974 (Cth) S 52 (superseded) and under the common law tort of passing off, distinguishing marks or signs including colour can be associated with a business ; in this instance the colour purple used by Darrel Lea could be classified as misleading or deceptive conduct. The equivalent legislation today  is Section 18 of Schedule 2 of The Competition and Consumer Act 2010 (Cth) Cadbury had claimed an exclusive association of the colour purple in respect of the marketing and promotion of its products. Although not registered, this case shows that an unregistered trade mark (including a colour) can effectively be protected under The Competition and Consumer Act 2010 (Cth) and under common law tort. Tamberlin J stated;  The main issue is whether the ordinary consumer in Australia is likely to be misled and hence mistakenly associate one company’s products with that of another.

The court is this case did not consider reputation in a particular mark to be the overriding factor in deciding in favour of the appellant. Rather it was the misleading and deceptive conduct which was caught under S 52 (superseded)

 

Clipsal Australia Pty Ltd v Clipso Electrical Pty Ltd (No 3

The applicant; Clipsal Australia Pty Ltd had sought action against Clipso Electrical Pty Ltd (No 3) for infringement under Trade Marks Act 1995 (Cth), misleading and deceptive conduct under Competition and Consumer Act 2010 (Cth) and the tort of passing off.

These proceedings against Clipso by Clipsal were enacted under S 120 (1) and (2)

Perram J, found the respondent had breached S 18 as the word CLIPSO was too close to CLIPSAL and ordinary consumers are likely to perceive a connection to the applicants, Perram J found the respondents had also breached Sub-sections 29(I), (g) and (h) which deals with the false representation of goods, it was concluded the respondent had breached Sub-sections 29(I), (g) and (h) in the same way S 18 had been breached.

The applicant eventually relied on three areas of the Trade Marks Act 1995 (Cth), s44, s60 and s62A. In summary these related directly to deceptive similarity, reputation in respect of the same goods and that the CLIPSO mark application was made in bad faith. It was found in favour of the applicants in that the respondents had breached s 44 and s62A, that is, under s44  deceptive similarity and/or misleading conduct and under 62A the application was made in bad faith. Perram J was of the opinion the respondent was fully aware of the CLIPSAL mark and had intended to trade off its reputation; he made no finding in respect of s60. Finally, it must be noted that it was found that the two marks were not substantially identical however aurally and in name there was deceptive similarity.

Another aspect previously referred to; presumption of registrability is evident in this case. Section 33 of Trade Marks Act 1995 (Cth) was referred to in Intellectual Property Laws Amendment Bill 2011 at page 146 to clarify the presumption of registrability under the act.

Clipso Electrical had their trade mark registered on 27 October 2008. The priority date of the CLIPSAL trade mark was 13 March 1989.

On this occasion the mark was successfully defended against infringement by Clipso Electrical, however, the regularity in opposing registrations and hearings may be minimised (notwithstanding the legal costs) if we were to do away with the presumption of registrability and adopt a similar registration process as New Zealand. The Trade Marks Act 2002 NZ,  states that a trade mark may not be registered if it is likely to deceive or cause confusion. i.e. There is no presumption of registrability.

It seems that under the NZ statute there may be a greater chance of longer term protection of a registered trade mark due to the apparent greater diligence placed upon the registration process initially. It seems this system can be relied on by companies that hold registered marks, therefore the competing mark is unlikely to be registered if it is determined the competing mark is likely to deceive or cause confusion.

 

TiVo Inc v Vivo International Corporation Pty Ltd

In the case of TiVo Inc v Vivo International Corporation Pty Ltd ,  the presumption of registrability is again challenged. The “Vivo” trade mark was accepted for registration on 24 April 2009, TiVo Inc opposed the registration and applied for the Vivo mark to be removed from the register or its registration cancelled Under s 88 of the Trade Marks Act 1995 (Cth) (“the Act”), as the registration should have been opposed under s 44, s 60, s 92 of the act. The TiVo trade mark had been registered on 18 July 2000, nearly nine years earlier. It was held by Dodds-Streeton J that the Vivo trade mark should be cancelled and removed from the register pursuant to s 88 (2) (a) and (c). as S 24 and 25 did not apply. The mark registered by Vivo International Corporation Pty Ltd had the effect of misleading and being deceptive although the case was won based on the act rather than tort law due to the opponent filing suit based on the Trade Marks Act 1995 (Cth) and not ACL.

Dodds-Streeton J states

(at [534]):

“The evidence does not establish that Mr Grassia held an honest belief that the adoption of “Vivo” would not infringe TiVo’s rights”

The most effective way to protect the reputation of a brand (in addition to registration) is to ensure that the trade mark is distinctive rather than descriptive, further, the trade mark should not be deceptively similar or substantially identical to any other mark.

The most effective trade marks are those that do not describe the goods being sold or the industry they are in, e.g. Apple, Google, Toyota, BMW etc.

Descriptive  trade marks can be expensive to obtain and to protect. The more descriptive a trade mark is; the more often you will consult your lawyer or take action to defend the trade mark. This is tiresome and expensive.

The registration of a trade mark is a most effective way to protect the reputation and authenticity of a brand. Registration under s 20 of the act will confer certain rights on the registrant, namely, the exclusive use the trade mark, a value can therefore be attached to the trade mark as it becomes a tangible item. The mark can be sold, licensed, and transferred all for the benefit of the owner, further the owner of a registered trade mark has a right to take action against the infringement of the mark under s 120 (1), (2) and (3) of the act.

Due to protections available to non-registered trade marks in the form of Sections 18 and 29 of CCA and in tort law for passing off, it can be argued that non-registration of a trade mark will still enable the mark to be protected, these protections directly protect the consumer, however they also indirectly provide protections for the owners of unregistered trade marks.

It can be further argued however, that proving reputation for a small firm can be difficult under the CCA and tort law provisions, therefore the registration of a trade mark should be seriously considered.

The owner of a registered trade mark can enact proceedings in three areas; Section 18 and 29 of Schedule 2, of The Competition and Consumer Act 2010 (Cth), Trade Marks Act 1995 (Cth) and under common law tort of passing off, additionally a registered trade mark can be deemed a tangible asset; hence valuable. This is the ideal scenario for the effective protection of the reputation and authenticity of a brand.

 

© 2020 Alliance TMA Pty Limited