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The vexed question of “use as a trade mark”

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stacked-booksToday on IPcopy we have a guest post from Carmen Champion, an IP barrister in Sydney, on the subject of “use as a trade mark”.

In a couple of recent cases in Australia, dealing with businesses as disparate as home elevators and halal butcheries, the courts have considered (or in one case, ignored!) that question central to trade make disputes: was the mark in question “used as a trade mark”?

What’s the current state of the law? In 2000 the full court of the Federal Court of Australia reaffirmed that the crucial question in a claim for trade mark infringement is whether the manner of use of the mark by the respondent is use as a trade mark. The High Court in E. & J. Gallo Winery v Lion Nathan Australia Pty Limited [2010] HCA 15 said:

41. The concept of “use” of a trade mark which informs ss 92(4)(b), 100(1)(c) and 100(3)(a) of the Trade Marks Act must be understood in the context of s 17, which describes a trade mark as a sign used, or intended to be used, to “distinguish” the goods of one person from the goods of others.

42 Whilst that definition contains no express reference to the requirement, to be found in s 6(1) of the Trade Marks Act 1955 (Cth)[14], that a trade mark indicate “a connexion in the course of trade”[15] between the goods and the owner, the requirement that a trade mark “distinguish” goods encompasses the orthodox understanding that one function of a trade mark is to indicate the origin of “goods to which the mark is applied”[16]. Distinguishing goods of a registered owner from the goods of others and indicating a connection in the course of trade between the goods and the registered owner are essential characteristics of a trade mark[17]. There is nothing in the relevant Explanatory Memorandum[18] to suggest that s 17 was to effect any change in the orthodox understanding of the function or essential characteristics of a trade mark.

In Coca-Cola Co v All-Fect Distributors Ltd [19] a Full Court of the Federal Court of Australia said:

“Use ‘as a trade mark’ is use of the mark as a ‘ badge of origin ‘ in the sense that it indicates a connection in the course of trade between goods and the person who applies the mark to the goods … That is the concept embodied in the definition of ‘trade mark’ in s 17 – a sign used to distinguish goods dealt with in the course of trade by a person from goods so dealt with by someone else.”

That statement should be approved.”

This an issue fraught with difficulties where the mark is descriptive, and has been exacerbated by the wide-spread use of the internet for search and general marketing purposes.

In Lift Shop Pty Ltd v Easy Living Home Elevators Pty Ltd [2014] FCAFC 75, the applicant has a registration for “LIFTSHOP” with some pretty innocuous embellishments. The respondent had, in its endeavour to maximise search engine optimisation, caused to be drafted a title for its website including the top five keywords selected from its competitors’ website addresses – with the result that when a search was done what appeared was “EasyLiving Lifts/Home Elevators/Lift Shop –Lift Shop.” The court at first instance found that there was no trade mark use.

The judge found that the term “lift shop”was being used descriptively by third parties, and that in this industry the term has an understood generic connotation. The appellant contended that the judge was wrong in taking that fact, especially that other parties were using the term in the titles of their websites, into consideration when determining the trade mark use issue. The full court rejected that contention referring to Gummow J’s observations in the Johnson & Johnson case to the effect that infringing use may be considered in light of a usage common to the relevant trade:
[44] . In making its determination of whether the use by the respondent was a trade mark use, the court considered the nature and purpose of the use, which the court found was simply to tell the public that it is selling lifts: [46].

Halal Certification Authority Pty Limited v Scadilone Pty Limited [2014] FCA 614 was concerned with the alleged infringement of a registered trade mark consisting of a form of Halal certification for, inter alia, issuing halal certifications to business. Such certification means that that the meat offered has been slaughtered in accordance with the relevant Islamic rites. The mark was not registered as a certification mark but as an ordinary trade mark. Both respondents (butchers) had displayed this certificate on their premises. They had no authorisation to do so.

The infringement issue was simply dealt with by the court by reference to s.120(c) of the Trade Marks Act, the court finding that the mark had been used in relation to kebabs and that they are goods closely related to the registered services. The judgement contains no discussion of the pivotal issue in a trade mark infringement case, was the use by the respondent a trade mark use!

Since the content of the trade mark was really only indicative of compliance with certain rites it is rather difficult to see how it could have been acting as a badge of origin when used by the respondents: see Koninklijke at 48 IPR 257 at 263 – 264 where the distinction was demonstrated by reference to the Edward Young case (picture of a bullock cart laden with large a large barrel). In the Halal case, the applicant was awarded $91,015 against the first respondent as damages for trade mark infringement.
Carmen Champion, Barrister at Law –  27 August 2014

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