In Apple Inc. v Metropage Pty Ltd  ATMO 106, Apple Inc has successfully opposed an application to register IBAD as a trade mark in Australia.
On 13 October 2011, Metropage Pty Ltd filed to register its IBAD trade mark in Australia in relation to electronic display terminals and kiosks. The mark IBAD was said to derive from an acronym for ‘Interactive Business Advertising Display’.
In May 2012, Apple filed an opposition to the registration of the IBAD trade mark arguing that the mark was visually and aurally similar to Apple’s iPad trade mark and would cause confusion among consumers. Under section 60 of the Trade Marks Act 1995, a trade mark can be opposed on the basis that another mark has gained a reputation and because of that reputation, the use of the applied-for mark would cause confusion.
Metropage did not dispute that Apple’s iPad trade mark had gained a substantial reputation in Australia. However, it argued that its IBAD mark would not cause confusion because it would be used on goods that were different to Apple’s iPad devices. Metropage also argued that the widespread reputation and notoriety of iPad mark actually counted against Apple as it would be unlikely that consumer would confuse ‘IBAD’ with ‘iPad’.
The Delegate’s decision
Ultimately, the Trade Marks Office found in favour of Apple and refused the registration of the IBAD trade mark.
The Delegate found that Apple had indeed established a strong reputation in its iPad mark and that the Metropage’s use of IBAD would result in confusion. The Delegate noted that Metropage’s evidence of use of its IBAD mark was in connection with a touchscreen device which carried the mark in the for ‘iBAD’.
- Be extremely cautious when adopting a trade mark that is very similar to another mark which has a significant reputation, particularly if they are used with similar or associated goods and services.
- The idea that a trade mark could become so well known to the point that it actually reduces the likelihood of confusion, while a popular argument, is of limited utility.
A recent judgment in the Federal Court of Australia (Adidas AG v Pacific Brands Footwear Pty Ltd (No 4)  FCA 1335) offers an interesting insight into the importance of protecting distinctive product designs as trade marks.
Since the 1950s, Adidas has sold their distinctive ‘three stripe’ design shoes in Australia. Adidas registered this three stripe design as a trade mark in Australia as early as 1957.
Between 2006 and 2010 Pacific Brands Footwear imported a range of shoes containing a four stripe design. Like the Adidas stripes, Pacific Brands’ shoes had their stripes applied to the side of the shoe. Adidas sued Pacific Brands for trade mark infringement.
Pacific Brands rejected the trade mark infringement claim, arguing that its four stripe design was not being used as a trade mark – i.e. not as an element of branding – but rather was just a pattern on their shoes with no ulterior marketing purpose. Pacific Brands Footwear also asserted that even if its four stripe designs were being used as a trade mark, they were not deceptively similar to the Adidas three stripe design.
Adidas maintained that the location of the stripes – on the side of Pacific Brands’ shoes – indicated that they were being used as a trade mark. Examples of how other brands placed their trade marks on the side of their shoes (such as the Nike ‘swoosh’ and the New Balance ‘NB’) were used to support this argument.
Adidas also argued that Pacific Brands’ used of the four stripe design was a deliberate strategy to ‘sail too close to the wind’ and therefore its conduct should be deemed to be infringing.
What was decided?
Ultimately, the Federal Court ruled partially in Adidas’ favour.
It was held that the distinctiveness of the Adidas three stripe design stemmed from not just the stripes themselves but their juxtaposition to the contrasting colour of the shoe to which they were applied. This distinction was important as it meant that the Pacific Brands shoes which had a four stripe design in a contrasting colour to that of the remainder of the shoe was held to be infringing whereas those where there was no contrast were held to not infringe.
While the Court held that Adidas had failed to lead any evidence of Pacific Brands’ intention to ‘sail too close to the wind’, it observed, in any event, that an intention to ‘sail close to the wind’ was not the same as an intention to infringe. So, even if Adidas could have shown such an intention it would not have assisted its case.
- Where an element of design is or becomes part of your brand, it should be registered as a trade mark.
- The fact that competing products might look similar does not automatically mean that there has been an intention to infringe. A trade mark owner will still need to prove, through evidence, that there was an intention to infringe. Further, an intention to ‘sail close to the wind’ is not the same as an intention to infringe or confuse consumers.
A recent decision under the .au Dispute Resolution Policy (auDRP) serves as a timely reminder that even though they are ‘administrative proceedings’, domain name disputes are won and lost on evidence.
In Mark Kingsley Williams v BBhinds Pty Ltd (WIPO Case No DAU2013-0010), the Complainant, a UK trade mark attorney, alleged that the Respondent, an Australian company, had registered a domain name that was identical to the Complainant’s trade mark in bad faith.
This was rejected by the Respondent who asserted that it had never heard of the Complainant, provided evidence of its own good faith preparations to use the domain name in connection with its long-established business and attacked the Complainant’s lack of evidence.
Under the auDRP, a Complainant must prove three things:
- that it has a right or legitimate interest in a trade mark that is identical or confusingly similar to the disputed domain name,
- that the Respondent does not have a right or legitimate interest in the disputed domain name, and
- that the Respondent registered or is using the domain name in bad faith.
All three elements must be proven in order for a Complainant to be successful.
In the present case, the Panel found that the Complainant failed to prove any of the grounds (reported by leading domain name news site, Domain Name Wire, as a ‘rare trifecta loss’) largely due to inadequate evidence.
Interestingly, in addressing the first element under the auDRP, the Complainant asserted that it had an Australian trade mark registration but failed to provide evidence of the registration. As the Complainant bore the burden of proof, the Panel held that because of the lack of sufficient evidence, it failed to establish the first element required under the auDRP.
The Complainant also failed to establish the second element required to be proven, again because of a lack of evidence.
On the third element (the crucial ‘bad faith’ element), the little evidence the Complainant filed actually worked to its detriment. In emails annexed as evidence, the Complainant asserted a trade mark registration date that was later than the date the disputed domain name was registered. Accordingly, it was impossible, on the Complainant’s own evidence, for the domain name to have been registered by the Respondent in bad faith.
- Disputes (whether in Court or before administrative panels) are won and lost on evidence. A case is only as strong as the evidence that is available to support it.
- Domain name disputes are not trade mark disputes. UDRP and auDRP proceedings are a very specific type of dispute and it pays to get representation from someone with specific expertise (the unsuccessful Complainant in this case was himself a trade mark attorney).
Markwell acted for the successful Respondent in this auDRP proceeding.
It is a common misconception that as the owner of a business name registration, you get some legal right to the name. To be crystal clear – you don’t.
When it comes to brand protection, business names are close to worthless.
What’s in a name?
Under the Business Names Registration Act 2011, a person who trades under a name that is not his or her own name must register that name as a business name.
So, if your name is John Smith and you trade under the name ‘John Smith’ you don’t need to register. If, however, you trade under the name ‘John Smith, Plumber’ or ‘Smith Plumbers’ or ‘Smith and Son’ or anything other than ‘John Smith’, you must register the business name.
The purpose of business name registration
The point of the business name registration system is to protect consumers.
It provides a register where people can identify who they are actually dealing with. It allows people to find out that ‘Smith and Son’ is a business operated by John Smith, the sole trader, or Smith Pty Ltd, the company, or Mr and Mrs Smith, the partnership.
Business name registration is not designed to protect a trader’s goodwill in his or her name. It’s designed to prevent businesses ‘hiding’ behind a different name.
So given the purpose of business name registration – consumer protection not trader protection – it is easy to understand why a business name doesn’t give you any actual rights.
Get the rights you need
The only way to get actual enforceable proprietary rights over a name is to register it as a trade mark.
A registered trade mark will give you the exclusive right to use it in relation to the specific goods and services set out in the registration.
With a registered trade mark, you can stop your competitors using the same or a similar name. With a business name, you can’t.
And once you have a registered trade mark, no one can tell you that you’re not allowed to use it. Despite a business name registration, you can still be accused of misleading conduct or trade mark infringement.
More than a name
The other limitation of business names is that you can only register a ‘name’.
That may sound obvious, but a business’ goodwill is often based on more than just its name. It may sell goods or services using unique brand names, product names, logos or artwork. It may use catchphrases, slogans and taglines that are memorable and have gained a reputation.
All those things can be protected by trade mark registration. Trade mark protection can also extend to sounds, jingles, aspects of packaging, shapes and even colours and smells.
So, think of your business name registration as a name tag that does no more than let people know who you are.
But if you want to have the exclusive use of your name and the ability to protect it and stop others from using it, then what you need is a registered trade mark.
The decision of the Full Federal Court in Knott Investments Pty Ltd v Winnebago Industries Inc  FCAFC 59 serves as a warning to brand owners not to delay when faced with infringing or misleading conduct.
Winnebago has been making and selling its mobile homes or RVs since 1959. Initially, Winnebago RVs were only sold in the USA but they eventually spread to other countries, but not Australia.
In the early 1960s, the Binns became aware of the Winnebago brand during a visit to the USA. In 1978, they started manufacturing and selling their own RVs in Australia using the Winnebago name and an identical Winnebago logo. The Binns eventually incorporated Knott Investments and this company continued to manufacture and sell the Binns’ Winnebago RVs.
In 1985, the US Winnebago company discovered that Knott was using its name and trade mark in Australia. Surprisingly, it did nothing until 1992 when the parties entered into a settlement agreement which was somewhat curious in form.
Knot continued manufacturing and selling RVs under the Winnebago name and logo and the Winnebago company allowed it to do so until 2010 (which coincided with when the Winnebago company decided to enter the Australian market) when it sued Knott for misleading and deceptive conduct and passing off.
The Winnebago company was successful at first instance.
In the Federal Court, Foster J held that even though the Winnebago company was not selling in Australia, it had sufficient ‘spillover reputation’ such that consumers were likely to be misled or deceived. While recognising that there had been an extraordinary delay by the Winnebago company in taking action, this did not necessarily preclude it from relief as it had sought to protect its position through the settlement agreement and Knott had taken a calculated risk to continue manufacturing and selling its Winnebago branded RVs.
The Court ordered that Knott and its dealers be permanently restrained from using the Winnebago marks and that they cancel all business names, domain names and corporate names that contained the Winnebago marks.
Knott appealed to Full Federal Court decision on a number of grounds. Most of these were largely unsuccessful however Knott was partially successful on one important point.
Knott argued that the Winnebago company should not have been able to bring proceedings after an 18 year delay as it was unjust. The Full Court disagreed, holding that the terms of the settlement agreement made clear that the Winnebago company wasn’t conceding its rights and Mr Binns knew that he remained at risk of being sued.
Importantly, however, the Full Court decided that Foster J’s order that Knott and its dealers be restrained from using the Winnebago marks was unjust. This was because Knott had itself developed its own reputation in the Winnebago marks and the Winnebago company had allowed this to happen by not taking action even though it knew what was going on.
The Full Court varied the order at first instance so that Knott and its dealers were only restrained from using the Winnebago marks if they used them without a disclaimer disassociating them from the Winnebago company. In other words, so long as Knott and its dealers disclaimed any association with the Winnebago company, they could continue to use the Winnebago marks.
- We say it a lot, but it’s worth saying again – if you detect infringement, take prompt action. Failing to do so can erode your rights.
- Regularly review your plans for overseas markets. Just because you’re not doing business in a country today doesn’t mean you shouldn’t be looking to protect your brand today.
A Melbourne fitness company has found that just like in the movies, Superman always wins in the end. Cheqout Pty Ltd’s attempt to register ‘Superman Workout’ found early success in the Trade Marks Office but was overturned on appeal.
In 2009, Cheqout applied to register ‘Superman Workout’ as a trade mark in connection with fitness and exercise classes and health club services.
DC Comics, which owned a number of registered marks comprising the word Superman accompanied by a figure of the superhero or the ‘S shield device’, opposed Cheqout’s application (interestingly, DC Comics did not have a registration for the plain word SUPERMAN).
The Hearing Officer held that there would be no confusion as the word ‘Superman’ was descriptive and also as DC Comics hadn’t registered or used its marks in relation to fitness services and dismissed the opposition.
DC Comics appealed to the Federal Court.
The Federal Court decision
In the appeal, the Court considered whether the use of the Superman Workout trade mark would be likely to cause confusion. Justice Bennett determined that it would not.
Her Honour agreed with the Hearing Officer that use of Superman Workout on its own would not cause confusion or deception as the word Superman was descriptive, referring to dictionary definitions and the German philosopher Nietzsche’s use of the term to describe the ideal human being of the future.
However, Justice Bennett did find that Cheqout’s trade mark application was filed in bad faith under section 62A of the Trade Marks Act. The finding of bad faith was based on evidence that Cheqout had used its mark in combination with a shield device that was very similar to DC Comics’ ‘S shield device’ and with a red, white and blue colour scheme that was similar to the colour scheme used by DC Comics for its Superman character and trade marks.
The Court noted that the bad faith ground of opposition did not require DC Comics to establish that confusion or deception was likely to arise but simply that Cheqout’s conduct was below the standards of acceptable commercial behaviour observed by reasonable people. Justice Bennett held that DC Comic’s had succeeded on this point and refused Cheqout’s application.
- Even superheroes need a trade mark lawyer
- There have only been a handful of cases on the bad faith ground of opposition. The Superman decision is important as it establishes that the manner in which a trade mark is used can be an indicator of an applicant’s intention in filing a trade mark.
- Businesses thinking of using marks that are similar to well known marks, even in relation to unrelated goods and services, must tread carefully. If the purpose is to allude to the well known mark, it’s best to stay clear.