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Robert Burrell[∗] and Michael Handler[†]
Much has been written about the general justifications for providing legal protection for trade marks — for example, it has been said that trade marks help to reduce consumer search costs,[1] that they protect against the misappropriation of other traders' labour and investment,[2] and that they may provide traders with incentives to invest in the development of new marks.[3] However, it is important not to conflate these justifications with the reasons for having registered trade mark systems. To the extent that this issue has been considered, the principal justification for registration that has been put forward is that trade mark registers act as an important source of public information.[4] More specifically, trade mark registers provide information as to the signs that are protected in a given commercial sphere and as to matters such as initial ownership of trade marks and subsequent assignments thereof. Consequently, in order for a trade mark register to perform its function effectively, it is essential that it reflect as accurately as possible the marks that enjoy legal protection and that those consulting the register are able to rely on the information it conveys.
Few countries, however, require registration as a precondition of trade mark protection. Unregistered trade marks are instead protected through a variety of mechanisms: through specific legislative provision;[5] by general unfair competition or consumer protection laws;[6] or through common law actions such as the tort of passing off. Surprisingly, it is rarely, if ever, noted that maintaining protection for unregistered marks has the potential to undermine significantly the effectiveness of the registered trade mark system. Most obviously, protection for unregistered marks means that a trader who consults the register with a view to determining whether it is safe to use a particular sign will not be able to rely on a finding that no confusingly similar sign has been registered — it will still be necessary to conduct expensive and time-consuming searches in order to determine which other signs may enjoy legal protection. In addition, registered trade mark systems almost invariably provide a facility for cancelling a registered trade mark on the basis that it conflicts with an earlier unregistered mark. This means that a would-be purchaser, mortgagee or franchisee who consults the register in order to check that a mark has been validly registered cannot know whether the registration is vulnerable to a challenge by the proprietor of an earlier, unregistered mark.[7]
There is no easy solution to the problem of having to reconcile the fact of legal protection for unregistered marks with the day-to-day operation of the registered trade mark system. The problem of reconciliation arises most acutely in proceedings before trade mark registries, that is, when applications for registration of trade marks are examined by registries or when oppositions to the registration of accepted applications are brought before registries by third parties. On the one hand, if registries were simply to ignore unregistered trade marks in examination and opposition proceedings this would undercut the information function of the register. More marks would survive to registration, but their use in the marketplace would be vulnerable to challenge in later court proceedings. As Judge Learned Hand of the US Circuit Court of Appeals recognised, '[i]t would plainly be a fatuity to decree the registration of a mark whose use another could at once prevent'.[8] Those relying on the accuracy of the register would suffer as a result and, ultimately, it must be remembered that if the quality of the information communicated by a trade mark register dips below a certain point, the existence of a registration system becomes difficult to justify.[9] On the other hand, attempting to account for unregistered marks in examination and opposition proceedings creates at least three potential problems. First, the registry will get drawn into deciding issues in areas of law in which its staff is likely to have little expertise. Secondly, registry procedure is likely to be ill-suited to resolving conflicts involving an unregistered mark. Thirdly, affording prior conflicting unregistered marks similar weight to that afforded to prior registered trade marks might lessen one of the incentives to register a trade mark — it can be argued that traders would be more likely to register if they could be certain that by so doing they would get greater protection in registry proceedings as against an application for a later, confusingly similar, mark.
Given the inevitably problematic relationship between registered and unregistered marks in registry proceedings, it might be expected that the current legislative provisions governing the relationship between the two forms of protection would have been subjected to careful scrutiny. Unfortunately, in Australia this has not occurred. Rather, the provisions of the Trade Marks Act 1995 (Cth) ('the TMA') that deal with the interrelationship between the two forms of protection suggest that insufficient attention was paid to this issue during the drafting of the legislation.[10] The position has been made worse by the fact that the Trade Marks Office and the Federal Court are failing to articulate a principled position that might do more to create a coherent scheme out of the (admittedly imperfect) statutory provisions. Further, while the relationship between trade marks and other signs such as business and company names has recently received some attention in reviews conducted by the Advisory Council on Intellectual Property ('ACIP'),[11]
the recommendations arising from these reviews only touch upon the broader problems with the TMA and its interpretation by the Office and the Federal Court. It is these problems that we wish to analyse in this article, focusing on how unregistered marks have been dealt with in examination and opposition proceedings, as well as the limitations of the protection afforded to registered owners in actions brought by owners of unregistered marks. We will then turn to consider what can be done about these problems, both within and outside the present legislative framework, in order to safeguard the integrity of the information function of the register and, by extension, the operation of the registered trade mark system as a whole.
When thinking about the relationship between registered and unregistered trade marks, the first issue that needs to be addressed is how unregistered trade marks will be dealt with at the stage at which an application for registration of a trade mark is examined by the Trade Marks Office. In particular, the question that arises is what an examiner should do if he or she has grounds for believing that the mark for which the application for registration is being made conflicts with some earlier unregistered mark or sign that is likely to enjoy legal protection. Perhaps the first indication that this issue has not received the attention that it deserves in Australia is that unlike, for example, the position in the United Kingdom[12] and a number of other countries[13] there is no express reference to the law of passing off or other forms of protection for unregistered marks in those sections of the TMA that set out the grounds for rejecting an application.[14] There are, however, two grounds in the TMA for rejecting an application that are relevant when considering how unregistered marks impact upon decisions as to registrability.
The first ground for rejecting an application to register a mark that needs to be considered in this context is found in s 42(b). That section provides that an application to register a mark must be rejected if 'its use would be contrary to law'. This provision most obviously catches those cases where there is specific legislation in place prohibiting or regulating the use of the applied-for sign (such as legislation dealing with Olympic insignia[15] or geographical indications for wine[16]). The wording of this provision is, however, also broad enough to catch marks the use of which would contravene s 52 of the Trade Practices Act 1974 (Cth) ('the TPA')[17] and/or would amount to passing off.
The second ground is contained in s 43 of the TMA, which provides:
An application for the registration of a trade mark in respect of particular goods or services must be rejected if, because of some connotation that the trade mark or a sign contained in the trade mark has, the use of the trade mark in relation to those goods or services would be likely to deceive or cause confusion.
As will be explored in more detail later in this article, s 43 presents a number of difficulties of interpretation, but on its broadest reading would allow registration to be refused on the basis that the mark applied for would cause confusion with an earlier unregistered sign that had acquired a reputation in Australia.
There are, therefore, provisions that might allow the Trade Marks Office, if it were so minded, to reject an application on the basis of a conflict between the mark applied for and an earlier unregistered mark that had acquired a reputation in Australia. It seems, however, that Office practice is not to take account of unregistered marks during the examination stage. This can be seen from the Trade Marks Office Manual of Practice and Procedure, which contains clear statements to this effect.[18]
It is also evident in Office decisions that demonstrate that even where the applicant has attempted to appropriate a mark that enjoys a significant international reputation, such as PLAYGIRL, LE MANS or BILLABONG, it has been left to the proprietor of that mark to challenge the application in opposition proceedings.[19] As we stressed in the Introduction, there are sound reasons for the adoption of such an approach.[20] However, it is worth noting that the justification provided by the Office focuses solely on the issue of bureaucratic convenience, it being said in the Trade Marks Manual (in relation to s 42(b)) that '[a]s the function of this office is administrative, rather than judicial, this section is only applied in what is clearly a breach of another Act'.[21] There is little to suggest that the other policy considerations identified in the Introduction have been afforded appropriate attention.
The explanation given in the Trade Marks Manual as to why it would be inappropriate for the Office to take account of unregistered marks at the examination stage is also largely indistinguishable from the argument that was rejected by the Federal Court in Advantage Rent-A-Car Inc v Advantage Car Rental Pty Ltd.[22] The background to that case was that, in the context of opposition proceedings, the Office had taken the view that it could not be required to determine an issue of law other than in the field of registered trade marks[23] and that it would only make determinations under s 42(b) where there was a clear finding (and preferably a court decision) that it could apply.[24] Madgwick J made it clear that by adopting such an approach the Office was failing in its duty under the TMA and that a court could not condone 'reticence on the part of an administrative decision-maker to express an opinion on a matter of law'.[25] Equally importantly, the Advantage decision seems to suggest that the Office is obliged to apply the same test at every stage of proceedings.[26]
It is therefore difficult to reconcile the approach set out in the Trade Marks Manual in relation to the examination of marks with the Advantage decision. At best it can be said that Madgwick J was not required to consider expressly the question of the appropriate standard to be applied during the examination phase, such that the Office is entitled to maintain its existing approach, despite the fact that Advantage is generally antithetical to current Office practice. As will be seen, this is not the only example of the Office displaying a rugged determination to place the narrowest possible construction on the Advantage decision.
If the Office's practice of leaving the consideration of unregistered marks to the opposition stage is difficult to square with judicial authority, there are also sections of the TMA that can be taken to suggest that such an approach is illegitimate. In particular, s 33(3)(b) requires that the Registrar reject an application for registration if satisfied that there are grounds for so doing. This obligation can hardly be said to have been met if some issues are not being considered at all. Nor can the 'presumption of registrability' said to be reflected in s 33(1)[27] justify the adoption of the Office's current approach. The presumption ensures that if an issue is in doubt it is decided in the applicant's favour — it does not mean that grounds for rejecting an application can be ignored entirely. On the other hand, it might be noted that the Office's insistence that issues relating to unregistered marks be resolved during opposition proceedings is consistent with the way in which the TMA treats the issue of 'ownership'[28] during the application phase. Although s 58 provides that an application can be opposed on the ground that the applicant is not the owner of the mark, no equivalent power is given to the Office in the examination phase. Rather, under s 27(1)(a) the applicant merely has to 'claim' to be the owner of the mark.[29] There is little justification for denying the Office the power to police questions of ownership during the examination phase whilst arguably requiring it to consider whether an application conflicts with an unregistered mark that has acquired a reputation. If anything, given that ownership is largely a threshold issue, while the scope of any acquired reputation is a matter of degree, it might be argued that it would have made more sense for the opposite approach to have been adopted in the TMA.
Further consideration is given in the Conclusion to the question of how unregistered marks ought to be treated during the examination phase. The next section deals with the much more serious problems that arise in opposition proceedings.
It was noted in Part II that challenges to the registrability of a mark under ss 42(b) (use contrary to law) and 43 (deceptive or confusing connotation) of the TMA are, in practice, left to opposition proceedings. In addition to considering how the Office deals with oppositions brought under these grounds, it is also necessary to consider how these sections relate to two other grounds of opposition, namely, those contained in ss 58 (applicant not the owner of the mark) and 60 (conflict with a mark that has acquired a reputation in Australia). A number of issues arise from the operation of these provisions, but probably the most important of these concerns the relationship between ss 42(b) and 60 and it is this issue that will be addressed first.
Section 60 of the TMA[30] provides:
The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:
(a) another trade mark had, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and
(b) because of the reputation of that other trade mark, the use of the first-mentioned trade mark would be likely to deceive or cause confusion.
It is important to stress that this ground of opposition applies whenever another mark has 'acquired a reputation in Australia' — there is no requirement that such a mark be registered. This section thus provides a clear and unambiguous method by which the owner of an earlier unregistered mark can challenge a later application. The difficult issue is how this provision interacts with s 42(b).
Thus far the relationship between ss 42(b) and 60 has only been considered in one Federal Court decision, which left this issue almost entirely open.[31] However, in a number of opposition decisions, the Office has taken the view that the scope of s 60 is such that there is no need to give separate consideration to s 42(b) in opposition proceedings. For example, in Ownit Homes Pty Ltd v Ownit Conveyancing Pty Ltd the Hearing Officer said:
I do not find that the existence of a low-level possibility of confusion … would justify a finding that the s 60 ground is established. Therefore, the related test under s 42, that use of the trade mark would be contrary to law, is also not established.[32]
At first sight the Ownit Homes approach is attractive: it helps simplify opposition proceedings by rolling the somewhat obscurely worded s 42(b) into a section that provides a more structured test. Unfortunately, however, by prioritising s 60 the Office has increased the likelihood that the result arrived at in opposition proceedings will differ from the outcome that would be arrived at in court proceedings, if, for example, the opponent (being the owner of an earlier unregistered mark) were to sue the applicant (being the user of a later registered mark) for passing off and/or contravention of the TPA. This has the potential to undermine the information function of the Register significantly.[33]
The overarching problem with the Ownit Homes approach is that s 60 of the TMA has something of an unusual place within the trade mark system. The test established by s 60 is sui generis, that is, it does not mirror the tests that are used to determine whether the use of an unregistered mark would constitute passing off or contravene the TPA.[34] Admittedly, s 60 directs the tribunal's attention to factors that are similar to those used when establishing whether the use of an unregistered mark would constitute passing off or contravene the TPA (for example, the extent of reputation in Australia and the likelihood of deception arising amongst consumers). Nevertheless, differences in the way the tests are ordered and framed could well point to different outcomes in borderline cases, even if the scope of s 60 were broadly coterminous with the rights afforded to the owners of unregistered marks by virtue of the actions for passing off and contravention of the TPA. The potential problem is, however, made worse by the fact that there is a strong case to be made that in some situations s 60 is narrower than the rights established by these causes of action. This in turn suggests that if the quality of the information communicated by the Register is to be preserved, s 42(b) needs to be given a greater prominence in opposition proceedings and ought not to be treated as subordinate to s 60.
In order to understand the above points, it is important to note that the Office insists in the Trade Marks Manual that for a mark to be caught by s 42(b), its use 'should breach some piece of legislation, as opposed to being in breach of common law rights'.[35] In other words, the Office has sought to exclude passing off from the scope of s 42(b), thus allowing it to confine its attention in opposition proceedings to s 52 of the TPA. This is important for the argument that s 60 of the TMA subsumes the operation of s 42(b) because the Office has consistently maintained that it is clear from case law that the standard of 'misleading or deceptive' conduct under s 52 of the TPA is higher than that set by s 60 of the TMA, which instead refers to conduct that 'would be likely to deceive or cause confusion'.[36] More specifically, this conclusion has been supported by reference to Gibbs CJ's comment in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd that, for the purposes of the TPA, 'it is not enough to establish that the conduct complained of was confusing or caused people to wonder whether two products may have come from the same source.'[37] In contrast, for the purposes of s 60 it is firmly established that it is enough that consumers are given cause to speculate as to whether the goods of the plaintiff/opponent and those of the defendant/applicant are from the same source.[38] It is on this basis that the Office has considered that s 42(b) of the TMA can be rolled into s 60: it is thought that if the use of an applicant's mark would not be likely to deceive or cause confusion and that the mark would thus survive an opposition under s 60, then such a mark will invariably also clear the s 42(b) hurdle.
The Office's approach to the relationship between ss 42(b) and 60 can, however, be criticised on a number of grounds. For a start, its interpretation of s 42(b) as only requiring attention to be paid to potential breaches of legislation is strained. The wording of this section is clearly broad enough to cover 'any law … statutory or otherwise'.[39] Parliament could readily have restricted the scope of s 42(b) by employing the wording 'contrary to any enactment' if that had been what was intended. Further, it is difficult to think of any reason of principle why the form or source of a right should make any difference for its treatment for the purposes of this section. About all that can be said in favour of the Office's interpretation is that it is just about reconcilable with the narrowest possible construction of the Advantage decision, since all of the examples developed by Madgwick J in that case concerned the operation of other statutory provisions.[40]
Once it is appreciated that passing off ought to be considered for the purposes of s 42(b), it can be seen that any attempt to fold s 42(b) into s 60 on the basis that the latter provision provides the broader protection is difficult to sustain. It must be recognised that to try to compare the boundaries of s 60 with the outer limits of the tort of passing off is fraught with difficulty, since neither is an entirely fixed or settled legal mechanism. For example, although it could plausibly be maintained that s 60 only applies where there is likely to be confusion as to the origin of the goods or services in question, or at least the existence of some form of sponsorship or endorsement by the owner of the earlier mark,[41] while passing off has expanded to the point where it comes close to providing protection against dilution, the state of the case law is such that it would not be possible to make this claim with any real confidence.[42] Nevertheless, it is clear that the current exclusion from liability under the TPA for acts that merely cause wonderment as to source (of which so much has been made in this context) has no direct parallel in passing off. On the contrary, in passing off cases courts have taken a flexible approach to the type of reaction that needs to be triggered amongst consumers, particularly in situations where the defendant's conduct is such as to raise doubts as to the origin of the goods or services in question.[43] This alone should cause us to be extremely wary of the argument that s 42(b) of the TMA can be rolled into s 60. Still more importantly, however, there are some respects in which it can be said with a reasonable degree of certainty that the tort of passing off affords broader protection than s 60.
First, it will be remembered that s 60(a) states that 'the registration of a trade mark in respect of particular goods or services' may be opposed on the ground that 'another mark had, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, acquired a reputation in Australia'.[44] The effect of the italicised words has received surprisingly little attention in discussions of the scope of s 60. The Office in interpreting s 60(a) has effectively treated these words as being redundant, accepting that an opponent simply needs to demonstrate an earlier reputation in Australia in a mark.[45] However, s 60(a) can perhaps also be read to require the opponent to establish a reputation in its mark in relation to 'those goods or services' in respect of which registration is sought by the applicant.[46] This would greatly limit the operation of s 60, because it would require the opponent to have used its mark in relation to the same goods or services as those the subject of the application for registration. If this limited interpretation of s 60 is correct, there is no question that the tort of passing off, which contains no requirement of a 'common field of activity',[47] provides the broader protection for owners of unregistered marks.
Even if the above interpretation is rejected by the courts, and s 60 is treated as applying in cases where the opponent has established a reputation in relation to any goods or services, this would still not cover the full range of cases caught by the action for passing off. One reason for this is because s 60 requires that the opponent must have a reputation in a trade mark, whereas this is not a necessary element of the passing off action. Take, for example, a case like Twentieth Century Fox Film Corporation v The South Australian Brewery Co Ltd,[48] in which the producers of 'The Simpsons' were able to get an injunction to prevent a brewery from engaging in passing off by marketing a product as 'Duff Beer'. Had the brewery applied to register DUFF in relation to beer, it is unlikely that the producers of 'The Simpsons' would have been able to bring a successful opposition under s 60: it would have been extremely difficult for them to have argued successfully that they enjoyed any reputation at all in DUFF as a trade mark.[49] A rather different example involves situations of 'extended' passing off. This is a form of passing off, recognised in a number of UK decisions, where the defendant's misrepresentation need only be calculated to injure the business or goodwill of another trader: there is no requirement that the trader must have exclusive goodwill in a particular mark.[50] Rather, provided a trader can show that it is one of a number of parties with collective goodwill in a sign that describes some quality or characteristic of the goods or services provided by those parties, it will be able to bring an action in passing off against another trader that falsely represents that its goods or services have the relevant qualities or characteristics. In the context of the TMA this would mean that if, to modify the facts of Erven Warnink BV v J Townend & Sons (Hull) Ltd,[51] a party applied to register KEELING'S OLD ENGLISH ADVOCAAT in relation to spirits not made from the traditional Dutch recipe for advocaat, then even though a maker of traditional Dutch advocaat could bring an action in passing off to restrain the sale of the product, such a party could not bring an opposition under s 60 to prevent the registration of the mark.
Yet a further problem with rolling s 42(b) into s 60 is that there may be important differences in the dates at which reputation is assessed under each section for the purpose of opposition proceedings. Section 60 specifically states that only pre-priority date reputation acquired by the opponent can be taken into account. Section 42(b), read naturally, contains no such limitation. If, for the purposes of s 42(b), reputation can be taken into account until the time of the opposition, then, given that this date could be months or even years after the priority date, this would potentially allow opponents to make out a ground of opposition under s 42(b) by relying on their enhanced post-priority date reputation in circumstances where such a ground would be unavailable under s 60. In Time Warner Entertainment Co LP v Stepsam Investments Pty Ltd Wilcox J disagreed with this interpretation of s 42(b), accepting counsel for the trade mark applicant's submission that to consider post-priority date reputation for the purposes of s 42(b) would undercut the operation of s 44 (which deals with the conflict between an applicant's mark and a prior registered mark or application in relation to similar or closely related goods and services).[52] This reasoning is somewhat difficult to understand, as even if reputation is to be assessed at the priority date for the purposes of s 42(b), the provision may still apply in a wider range of circumstances than those covered by s 44.[53] However, the real problem with the Court's interpretation is that it would potentially allow an application to proceed to registration in circumstances where the opponent could nevertheless sue in passing off or under the TPA to prevent the registered owner's use of the mark, thus significantly undermining the information function of the Register.
Finally, although this is not the place to provide a detailed exegesis of the relationship between the TPA and passing off, the argument that s 60 subsumes the operation of s 42(b) is difficult to defend even if it is accepted that it is only the TPA that is relevant for the purposes of the latter provision. This is because there is an extremely close relationship between passing off and an action under the TPA. Admittedly, the precise relationship between these two causes of action remains shrouded in uncertainty, as is perhaps best demonstrated by the fact that the authors of Shanahan manage to assert (within the space of three pages) both that s 52 of the TPA affords 'what is very close to being in effect a statutory action for passing off'[54] and that '[t]he [s 52] action will not be treated as if it were simply a statutory action for passing off'.[55] Nevertheless, the relationship between passing off and s 52 of the TPA is such that the case law has often delineated the limits of both causes of action side by side, for example in Duff Beer, where it is notable that the plaintiffs were successful in their s 52 action as well as in their claim for passing off.[56] Thus to assert that s 60 of the TMA is broader in scope than s 42(b) on the basis of comments in Parkdale as to the meaning of s 52 of the TPA, without taking into account the complex relationship between the TPA and passing off, is deeply problematic.
In summary, it can be said that the Ownit Homes approach to the relationship between ss 42(b) and 60 opens up the very real possibility that owners of earlier unregistered marks will fail to establish a relevant ground of opposition,[57] only to be able to bring a later, successful action for passing off and/or contravention of the TPA, with the quality of the information provided by the Register suffering accordingly. In particular, this possibility exists because there is a good case to be made that these causes of action are broader than the test under s 60 of the TMA. It is therefore encouraging that there are other Office decisions that assign a more significant role to s 42(b). Indeed, there are at least two recent decisions in which the opponent succeeded on the basis of s 42(b) alone, even though s 60 was also relied upon as a ground of opposition.[58] For the most part, however, even in those decisions where s 42(b) has been afforded separate treatment, the Office has tended to look for other ways of limiting its reach. In particular, the Office has seized on a comment in Advantage that it needs to be remembered that the test under s 42(b) is whether the use would be contrary to law, and not whether the use could be contrary to law.[59] This comment has been relied on to suggest that the opponent bears a higher than normal burden when seeking to establish a s 42(b) ground of opposition.[60] Although, as will be seen in the Conclusion, we have considerable sympathy for the suggestion that opponents should have to make out a clear case in order for this ground of opposition to be established, the suggestion that this result flows from the existing wording of s 42(b) is problematic[61] and, more generally, does not detract from the fact that there is a need for a fundamental reappraisal of the role of s 42(b) within the registered trade mark system.
As indicated earlier, s 43 of the TMA provides that an application must be rejected if 'because of some connotation that the trade mark or a sign contained in the trade mark has, the use of the trade mark in relation to those goods or services would be likely to deceive or cause confusion'. The wording of this section is somewhat unusual.[62] Nevertheless, it is clear that this provision prevents applicants from registering marks that, because of their 'inherent qualities',[63] would deceive consumers as to such things as the physical nature of the goods (for example, CHINA-THERM for goods made from plastic[64]) or their geographical origin (for example, PARFUMS DE PARIS for toiletries not made in Paris[65]). In this respect s 43 is closely analogous to the 'deceptiveness' ground of refusal found in other trade mark systems.[66] That s 43 is to be limited to cases of this kind, and does not provide a device to prevent the registration of marks that conflict with an earlier mark, appears to have been the intention of Parliament in enacting the provision[67] and finds strong support in the majority of Federal Court decisions to touch on this point.[68]
At times, however, the function of s 43 has been expanded to catch cases where the 'deception or confusion' arises from the possibility that members of the public will believe that the opponent has sponsored or is in some way affiliated with the applicant's goods or services.[69] In this way a line of cases and decisions has developed that has extended s 43 into areas that are closely analogous to situations in which there is a conflict between competing marks and, more importantly, into areas that are firmly within the realm of passing off and s 52 of the TPA.[70] Such an approach can be criticised on the basis that it stretches the meaning of the word 'connotation' to look beyond the inherent significations of the mark in order to take into account external factors such as the reputation enjoyed by other parties in certain signs. Still more problematically, this interpretation of s 43 creates the odd situation where a section of the TMA is being used to keep off the Register only some of the types of mark the use of which might result in passing off or contravention of the TPA (that is, those marks the use of which might misrepresent that the applicant's goods or services are sponsored by or are affiliated with the opponent). We consider that it would be preferable for the Office and the courts to protect against false claims of sponsorship or affiliation by considering the latter causes of action 'directly' under s 42(b), an approach that would accord with our earlier call for s 42(b) to be given a greater prominence in opposition proceedings.
It is also worth noting that the operation of s 43 raises another problem, which is in some respects the opposite of the problem we identified earlier as to the relationship between ss 42(b) and 60. In that situation we were concerned to show that under the Office's prevailing approach there are likely to be situations where marks might survive an opposition under s 60 and proceed to registration but whose use would constitute passing off, such that the integrity of the Register is harmed. In contrast, in the case of s 43 there appear to be situations where this provision would keep marks off the Register even though the use of those marks could not be enjoined by other traders and, indeed, could confer on the would-be registered owner a good cause of action for passing off and/or under the TPA. This gives s 43 an unusual operation: in certain situations it will mirror some aspects of the passing off action, whereas in others it will act as a disincentive to traders to register particular types of mark even though the person using such a mark might enjoy other forms of legal protection. In particular, we have in mind 'inherently deceptive' marks that would, on any interpretation of s 43, be barred from registration. At first glance, it might be assumed that such marks ought to be kept off the Register because their owners could never enforce rights in them in a passing off action (because of the equitable doctrine of unclean hands and, possibly, a related common law doctrine), a point that appears at first to be borne out in a number of UK cases.[71] However, it is overly simplistic to conclude that s 43 is coterminous with those rules that prevent plaintiffs from enforcing rights in illegal or deceptive unregistered marks. Ultimately, it must be remembered that for the purposes of s 43 the mark will be considered in the abstract, whereas for the purposes of passing off all of the surrounding circumstances will be taken into account and, on the facts, it may be clear that no deception has occurred.[72] For example, if a prima facie descriptive mark had already acquired a secondary meaning, it is likely that a passing off action could still be maintained if the mark were subsequently used on other goods in relation to which the mark might be said to be misdescriptive. The facts of Reddaway v George Banham & Co Ltd[73] bear this out: had the mark CAMEL HAIR BELTING in fact been used on belts not made of camel hair, then it is likely that the plaintiffs would still have had goodwill in their mark because it had already become exclusively associated with them, its primary signification having been displaced.[74] Alternatively, it might be the case that an 'inherently deceptive' mark will be held not to be so in passing off proceedings because of the manner in which it has been used in trade. Consider, for example, a situation in which advertisements for CHINA-THERM products indicate clearly that the goods are in fact made from plastic and the material from which the products are made is evident at the point of sale. Such marketplace factors would not only help to dispel any confusion as to the nature of the products, but would also assist in establishing goodwill, since it would be clear that CHINA-THERM was being used as a mark and not as a description of the goods.
The role of trade mark registers in providing incentives or disincentives for certain types of market behaviour has to date received very little attention.[75] It needs to be remembered that rules that exclude undesirable subject matter from registrability, which might well be appropriate in the patents and designs context (where the aim is to remove the incentive to invest in certain types of product), fit much less comfortably into the registered trade mark system (where the aim is to provide information about what signs are protected in a given commercial sphere). This is at least the case in the absence of a clear symmetry between the 'deceptiveness' exclusions from registrability and the rules that prevent plaintiffs from enforcing rights in unregistered marks. For present purposes, however, the most important thing to appreciate is that s 43 is a more complex provision than is often appreciated. Much more thought needs to be given to the precise role that s 43 ought to play and how it relates to actions for passing off and/or under the TPA.
The other ground of opposition under the TMA that potentially takes into account the interests of owners of unregistered marks is s 58. That section provides that an application to register a mark 'may be opposed on the ground that the applicant is not the owner of the trade mark'. The 'owner' of the mark in this context is the first person to use the mark (or a substantially identical mark[76]) in Australia in relation to the goods or services in question. Section 58 thus provides a further mechanism by which applicants can be prevented from trading off the reputation of an unregistered mark. Apart from some lingering doubt over what 'use' means in this context,[77] this section is normally regarded as relatively straightforward and uncontroversial. However, judged against the information function of the Register, this provision seems much more problematic. As with ss 43 and 60, the problem lies in the fact that the concept of 'proprietorship' employed in s 58 is divorced from the concepts used to determine rights in the marketplace absent registration, which has the potential to impact on the quality of the information communicated by the Register.
As an example of the above problem, it is possible to imagine a situation in which party X acquires rights in a mark through use in the marketplace, but that the mark, for the purposes of s 58, is 'owned' by party Y, who was the first user of the mark. This is because the test of 'use' for the purposes of s 58 is low and Y could well establish 'ownership' of the mark even though it could not maintain an action against X for passing off or contravention of the TPA.[78] In such a case, if X were to attempt to register the mark, Y could successfully oppose registration under s 58. The authors of Shanahan seem to suggest that it might be possible for X to achieve registration on the basis of 'honest concurrent use' under s 44(3),[79] referring to PB Foods Ltd v Malanda Dairy Foods Ltd[80] (a case decided under the Trade Marks Act 1955 (Cth)) by way of example. However, s 44(3) would most likely not assist X. This is because the provision operates as an exception to s 44(1) and (2), under which an application must be rejected if it is substantially identical with or deceptively similar to an earlier registered mark or application for registration in relation to similar or closely related goods or services. Thus s 44(3) could only apply if Y had sought to register its mark and had obtained an earlier priority date. Moreover, even if Y had done so it would seem that s 44(3) would not allow X's mark to proceed to registration (as distinct from being accepted for registration). This is because s 58 is an independent ground of opposition and is not stated to be subject to s 44(3).[81] This is significantly different from the position under s 34(1) of the Trade Marks Act 1955 (Cth) where the Registrar had an overriding discretion to accept a mark for registration on the basis that it had been used honestly and concurrently with another mark (registered or otherwise). While we acknowledge that there may well be good arguments in favour of retaining a 'floating' honest concurrent use provision,[82] it does not appear to be open to read s 44(3) in this manner and consequently considerable care is needed when dealing with cases addressing this issue decided under previous trade marks legislation.
Given the above relationship between X and Y, there would thus appear to be sound reasons for allowing X to register its mark, and we believe that the integrity of the registration system is to some extent undermined if a mark can be kept off the Register by a party that nevertheless does not have rights to use that mark itself.
A final illustration of the unsatisfactory nature of the provisions in the TMA dealing with the relationship between registered and unregistered marks is provided by s 230(2). This section states:
In an action for passing off arising out of the use by the defendant of a registered trade mark:
(a) of which he or she is the registered owner or an authorised user; and
(b) that is substantially identical with, or deceptively similar to, the trade mark of the plaintiff;
damages may not be awarded against the defendant if the defendant satisfies the court:
(c) that, at the time when the defendant began to use the trade mark, he or she was unaware, and had no reasonable means of finding out, that the trade mark of the plaintiff was in use; and
(d) that, when the defendant became aware of the existence and nature of the plaintiff's trade mark, he or she immediately ceased to use the trade mark in relation to the goods or services in relation to which it was used by the plaintiff.
This provision appears to carve out a degree of protection for a defendant in a passing off action who has relied on the process of registration in adopting and using a particular trade mark. This appears to fit comfortably alongside the information function of the Register. Unfortunately, however, s 230(2) creates a number of difficulties of interpretation. For example, a passing off action will sometimes be available in relation to a mark that is no longer 'in use',[83] thus making the application of s 230(2)(c) and (d) unclear. The most serious problem with this provision, however, is that it only refers to actions in passing off — it provides no protection for a registered owner against a claim brought under the TPA. Given the close relationship between passing off and actions for contravention of s 52 of the TPA, described in Part III(a) above, s 230(2) of the TMA is almost entirely otiose. Moreover, it seems likely that this provision only found its way into the TMA because the person responsible for drafting the legislation copied the equivalent provision in the Trade Marks Act 1955 (Cth),[84] further suggesting that the provisions of the TMA dealing with the relationship between registered and unregistered marks were not given sufficient attention during the legislative process.
Far more thought needs to be given to the provisions governing the intersection between registered and unregistered trade marks in Australia. To return to the issues canvassed in the Introduction, although there is no easy or straightforward solution to the problem of accommodating unregistered marks within the registered trade mark system, we believe that this is an issue that goes to the heart of the proper functioning of the registered trade mark system. Moreover, implicit in what has been said so far, we believe it would be possible to improve significantly on the present position. Some reform of the relevant provisions of the TMA would therefore be desirable, but above all we need to be clear about the policy considerations that are at stake, and these considerations ought to be guiding decisions of the Office and the courts even in the absence of legislative reform.
First, it needs to be acknowledged that the Office is right to treat examination proceedings as unsuitable for resolving issues relating to unregistered marks. The Office's current stance thus has much to recommend it and can perhaps even be said to derive tangential support from some of Branson J's comments in Woolworths.[85] It remains difficult, however, to reconcile the current approach with the legislative framework or judicial authority that is more directly on point, namely, the Advantage decision. In the absence of legislative reform, it is difficult to see how the present position can be much improved and consequently the Office's current approach should probably be left undisturbed as awkward, but better than any of the alternatives.[86]
In relation to opposition proceedings, even within the current legislative structure, more could be done to ensure that the grounds of opposition reflect as closely as possible the basis on which traders enjoy protection for unregistered marks in the marketplace. In practice, this would mean prioritising s 42(b) over the other grounds of opposition. This would, in turn, mean that s 60 would have to be given a much reduced role — ideally, its job should be limited to protecting 'well-known' marks,[87] although we acknowledge that there might be difficulties in interpreting the requirement of 'reputation' in s 60(a) in this manner.[88] It would also mean that consumer confusion caused by conflict between the mark applied for and earlier unregistered trade mark rights would have to be excluded from the scope of s 43, and it would entail resisting any temptation to expand the role of s 58 beyond its current, limited compass.
In relation to the examination phase, any reform should focus in large part on placing the Office's existing approach on a firmer footing, as well as overcoming some of the problems presented by the Advantage decision. An obvious possibility might be to amend ss 42(b) and 43. The former could be replaced with a ground of rejection and opposition where the applicant's mark is 'proscribed from use by express legislative provision or an order of a court'.[89] The latter could be amended to provide that an applicant's mark will be rejected or can be opposed if it is 'of such a nature as to deceive the public, for instance as to the nature, quality or geographical origin of the applicant's goods or services'.[90] Such reforms would mean that examiners would no longer be required by law to make assessments on matters outside their areas of expertise, such as the reputation of unregistered marks. If these sections are, however, to be retained in their current form, then thought should be given to introducing a new procedure at the examination stage whereby examiners could flag any concerns they might have about the mark being applied for conflicting with an earlier unregistered mark, with the mark being advertised in the Official Journal of Trade Marks accordingly.
Reform of the opposition provisions of the TMA would have to focus on rewording the legislation in order to ensure that the grounds of opposition mirror the scope of protection enjoyed by traders in the marketplace. More specifically, a new ground of opposition ought to replace s 60. For example, it has been recommended that the opportunity to oppose a registration should arise where the 'use of the trade mark by the applicant would contravene a right of the opponent, with the onus on the opponent to demonstrate its right'.[91] While we would support the adoption of such a ground of opposition, we think that given the problems we identified in Part III any new ground ought to make specific reference to passing off and legislation such as the TPA and its state and territory equivalents. We also consider that it would be desirable if the new ground of opposition made it clear that the opponent has to discharge a reasonably high burden of proof. This is necessary to ameliorate the problem that the Office will never be the ideal venue for determining the existence and scope of rights in an unregistered mark, and would help the Office avoid having to make fine judgment calls by resolving any doubt in favour of the applicant. On a rather different note, serious consideration should also be given to abandoning the concept of 'proprietorship' of trade marks altogether, given the problems we identified in Part III(b) with the operation of s 58.
A further possible reform would be to revisit the recent suggestions made by ACIP of introducing some form of consolidated register on which business and company names would appear and requiring parties to undertake trade mark searches before seeking to register business or company names.[92] However, in calling for this recommendation to be revisited, we would emphasise that such a reform might be desirable not merely because (as ACIP recognised) there is considerable confusion amongst small enterprises as to how trade mark rights are established and recorded. A more unified registration system might also be desirable because it seems that many company and business names are at present being used as unregistered trade marks. This reform must therefore be judged against its capacity to improve the functioning of the registered trade mark system and not only against the benefits that it might offer to small business.
A final important measure would be to repeal s 230(2) and introduce a defence to actions for passing off and for contraventions of the TPA or related fair trading legislation where the defendant is exploiting a registered mark. This defence ought to apply against all claims for damages, award of the plaintiff's costs (and, in the case of passing off actions, accounts of profits) up until the point of judgment, irrespective of the defendant's knowledge of the existence of the plaintiff's mark. This would provide users of the registered trade mark system with much greater security. Yet another promising possibility would be to introduce a short statutory limitation period in which owners of unregistered marks could sue proprietors of registered marks which are in active use, say, 12 months from when the defendant begins exploiting the registered mark. These measures, combined with the approach to opposition proceedings set out above, would mark a clear prioritisation of the registered trade mark system. In the absence of registration, a trader would have to meet a high standard of proof in opposition proceedings and, in the event that opposition proceedings are not brought or are unsuccessful, would be faced with only being able to obtain an injunction in passing off and/or TPA proceedings and would have to decide to bring such proceedings promptly. By extending and preserving incentives to register and by providing greater protection to those who have obtained registration against owners of unregistered marks, such a system would enhance the quality of the information communicated by the Register, on which the entire registered trade mark system ultimately hinges.
[∗] Reader, TC Beirne School of Law, University of Queensland.
[†] Senior Lecturer, Faculty of Law, University of New South Wales.
Our thanks go to Megan Jones, Kim Weatherall and the two anonymous referees for their comments and suggestions.
[1] See William Landes and Richard Posner, The Economic Structure of Intellectual Property Law (2003) ch 7; Nicholas Economides, 'The Economics of Trademarks' (1988) 78 Trademark Reporter 523, 525–6; I P L Png and David Reitman, 'Why Are Some Products Branded and Others Not?' (1995) 38 Journal of Law and Economics 207.
[2] See Anselm Kamperman Sanders, Unfair Competition Law: The Protection of Intellectual and Industrial Creativity (1997).
[3] See Vincent Chiappetta, 'Trademarks: More than Meets the Eye' [2003] University of Illinois Journal of Law, Technology and Policy 35; Megan Richardson, 'Trade Marks and Language' [2004] SydLawRw 9; (2004) 26 Sydney Law Review 193.
[4] See Lionel Bently and Robert Burrell, 'The Requirement of Trade Mark Use' (2002) 13 Australian Intellectual Property Journal 181, 183–4 and the sources cited therein; William van Caenegem, 'Striking a Balance between Protecting Commercial Reputation and Promoting Competition' (2003) 77 Australian Law Journal 598, 608. Admittedly, the role of registration is more commonly addressed in terms of the private advantages that accrue to the trade mark owner, such as the ability to secure protection prior to use or the facilitation of the enforcement of rights in the mark. The advantages conferred by registration provide an incentive for traders to register their marks, but such incentives are only desirable if the registered trade mark system ultimately confers a benefit on the public. It is the value of the register as a source of information that provides the principal public benefit of registration. For a more detailed discussion of the informational value of trade mark registers and of some of the other possible benefits (such as increased security for traders) that registration might be said to provide, see Robert Burrell, 'Trade Mark Bureaucracies' in Graeme Dinwoodie and Mark Janis (eds), Trademark Law and Theory: A Handbook of Contemporary Research (forthcoming 2008).
[5] For example, in the United States the Lanham Act makes express provision for the protection of both registered and unregistered trade marks: see 15 USC § 1125 (2000).
[6] For example, it is possible to prevent the unauthorised use of an unregistered trade mark in Australia by reference to ss 52(1) and 53 of the Trade Practices Act 1974 (Cth) or equivalent provisions of state and territory fair trading legislation: see Fair Trading Act 1992 (ACT) ss 12(1), 14(1); Fair Trading Act 1987 (NSW) ss 42(1), 44; Consumer Affairs and Fair Trading Act 1990 (NT) ss 42(1), 44; Fair Trading Act 1989 (Qld) ss 38(1), 40; Fair Trading Act 1987 (SA) ss 56(1), 58; Fair Trading Act 1990 (Tas) ss 14(1), 16; Fair Trading Act 1999 (Vic) ss 9(1), 12; Fair Trading Act 1987 (WA) ss 10(1), 12(1).
[7] There are, of course, other reasons why a mark might be vulnerable to being cancelled or removed from the register. However, conducting a search for the existence of a conflicting unregistered mark is amongst the most time-consuming and expensive enquiries that such a party would be required to undertake.
[8] Yale Electric Corporation v Robertson, 26 F 2d 972, 974 (2nd Cir, 1928).
[9] See further Burrell, above n 4.
[10] In fairness, it might be said that this reflects a long-standing failure of Anglo-Australian trade marks legislation, dating back to the Trade-Mark Registration Act 1875, 38 & 39 Vict, c 91, to come to terms with the relationship between registered and unregistered marks: see generally New South Wales Dairy Corporation v Murray Goulburn Co-operative Co Ltd [1989] FCA 124; (1989) 14 IPR 26 (in particular at 45–8, 55, 63–4 (Gummow J)); Wayne Covell, 'Moove: The "Experiment" That Went Wrong' (1992) 82 Trademark Reporter 341.
[11] See Advisory Council on Intellectual Property, Review of Enforcement of Trade Marks Issues Paper (2002) 7–14, 26 <http://www.acip.gov.au/library/Enforcement%20of%20Trade% 20Marks%20Issue%20Paper.PDF> at 21 November 2007; Advisory Council on Intellectual Property, A Review of the Relationship between Trade Marks and Business Names, Company Names and Domain Names (2006) <http://www.acip.gov.au/library/TM,%20 business,company,domain%20names-%20Final%20Report.pdf> at 21 November 2007.
[12] Section 5(4)(a) of the Trade Marks Act 1994 (UK) c 26 states:
A trade mark shall not be registered if, or to the extent that, its use in the United Kingdom is liable to be prevented … by virtue of any rule of law (in particular, the law of passing off) protecting an unregistered trade mark or other sign used in the course of trade.
[13] See, eg, Trade Marks Act 1996 (Eire) s 10(4)(a); Trade Marks Act 1998 (Singapore) s 8(7)(a); Trade Marks Act 1999 (India) s 11(3)(a).
[14] See ss 39–44 (with additional provisions in s 177 for certification trade marks, s 187 for defensive trade marks and s 189A (combined with Trade Marks Regulations 1995 (Cth) reg 4.15A) for applications received via the Madrid Protocol). See also s 31(a), which, by virtue of s 33(3), is in effect a ground on which an application may be rejected.
[15] See Olympic Insignia Protection Act 1987 (Cth) ss 24, 36; Australian Olympic Committee Inc v Courier Luggage Pty Ltd (2002) 54 IPR 419; Australian Olympic Committee Inc v ERI Bancaire Luxembourg SA (2006) 69 IPR 135.
[16] See Australian Wine and Brandy Corporation Act 1980 (Cth) ss 40C–40F; Re Application by Southcorp Wines Pty Ltd (2000) 50 IPR 655; Re Lawrence (2005) 67 IPR 455.
[17] Section 52(1) states that '[a] corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive'.
[18] IP Australia, Trade Marks Office Manual of Practice and Procedure (2007) ('Trade Marks Manual') [30.3.4], [29.3.4] <http://www.ipaustralia.gov.au/pdfs/trademarkmanual/ trade_marks_examiners_manual.htm> at 21 November 2007, discussing, respectively, ss 42(b) and 43 of the TMA and indicating that these grounds are more appropriately dealt with in opposition proceedings. This would occur by way of s 57, which states that:
The registration of a trade mark may be opposed on any of the grounds on which an application for the registration of a trade mark may be rejected under this Act, except the ground that the trade mark cannot be represented graphically.
[19] See, respectively, Playgirl Keyclub Inc v Speedlight Pty Ltd (2005) AIPC 92–071; Automobile Club de L'Ouest v Gardiakos (2005) 66 IPR 191; GSM (Trademarks) Pty Ltd v Blue Star Holdings Pty Ltd (2005) 67 IPR 194. The opponents in each of these oppositions owned a number of registered marks, but these registrations covered goods and services dissimilar to those that were the subject of the applications. Consequently, these cases illustrate the attitude of the Office in situations where it must have been apparent to the examiner that someone other than the applicant enjoyed goodwill in the sign, but where the search conducted for the purposes of s 44 failed to throw up an earlier conflicting mark.
[20] See also Registrar of Trade Marks v Woolworths Ltd [1999] FCAFC 1020; (1999) 93 FCR 365 ('Woolworths'), 389 [80] (Branson J) (noting that, at the examination stage, 'the Registrar cannot reasonably be expected to be cognisant of the reputation of registered and unregistered trade marks generally or, indeed, of the extent, for example, to which all Australians, whose circumstances and geographic locations are diverse, may be assumed to be familiar with particular words').
[21] Trade Marks Manual, above n 18, [30.3.2].
[22] [2001] FCA 683; (2001) 52 IPR 24 ('Advantage').
[23] See, eg, Amalgamated Television Services Pty Ltd v Clissold (2000) 52 IPR 207, 217 (Hearing Officer Forno). This approach had also been taken under the Trade Marks Act 1955 (Cth): see, eg, Titan Manufacturing Co Pty Ltd v Coyne (1991) 22 IPR 613, 629 (Hearing Officer Homann).
[24] See Advantage [2001] FCA 683; (2001) 52 IPR 24, 30 [23].
[25] Ibid 31 [26].
[26] This reading of Advantage is shared by others. See Freehills, Review of Enforcement of Trade Marks Issues Paper by the Advisory Council on Intellectual Property (ACIP): Submissions on Behalf of Freehills/Freehills Carter Smith Beadle (2002) 15–17 <http://www.acip.gov.au/submissions/freehills.pdf> at 21 November 2007 (arguing, for example, that '[t]o draw a distinction between the respective roles of an examiner and hearing officer is false. Both roles are administrative in character').
[27] Although s 33(1) does not specifically refer to a 'presumption of registrability', it was said in the Second Reading speech of the Trade Marks Bill 1995 (Cth) that such a presumption was to be reflected in the Act: Commonwealth, Parliamentary Debates, House of Representatives, 27 September 1995, 1909–11 (Michael Lee, Minister for Communications and the Arts). Section 33(1) has since been interpreted in this manner by the Full Court of the Federal Court: Woolworths [1999] FCAFC 1020; (1999) 93 FCR 365, 372–3 [24] (French J) (referring to Recommendation 4A of Working Party to Review the Trade Marks Legislation, Recommended Changes to the Australian Trade Marks Legislation (1992) ('Working Party Report')), 387 [67] (Branson J); Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks [2002] FCAFC 273; (2002) 122 FCR 494, 511 [50] (French J).
[28] That is, whether the applicant is the first person to use the mark in Australia in relation to the goods or services in question. This issue is discussed in more detail in Part III(b) below.
[29] As a matter of practice, the applicant's claim to ownership will not be investigated by the Office unless the claim is manifestly defective: see Trade Marks Manual, above n 18, [3.1.3].
[30] As amended by the Trade Marks Amendment Act 2006 (Cth), with effect from 23 October 2006. The effect of the amendments does not impact on our discussion.
[31] Health World Ltd v Shin-Sun Australia Pty Ltd [2005] FCA 5; (2005) 64 IPR 495, 505 [45], where Cooper J held that the two sections could be considered together 'in this case as it has been conducted'.
[32] [2005] ATMO 47 ('Ownit Homes'), [36] (Hearing Officer Williams). Similarly, see NEC Corporation v Audioxtra International Pty Ltd (2003) 58 IPR 480, 491 [53] (Hearing Officer Skivington); Alto Group Pty Ltd v Sekaku Electron Industry Co Ltd (2004) 61 IPR 151, 158 [37] (Hearing Officer Murray); ACP Masthead Nominees Pty Ltd v Bourne Properties Pty Ltd (2004) 64 IPR 134, 138 [24] (Hearing Officer Thompson); Cadbury Schweppes Pty Ltd v Effem Foods Pty Ltd (2005) 66 IPR 387, 397 [42] (Hearing Officer Williams); Hasbro Inc v Imagination Holdings Pty Ltd (2005) 66 IPR 636 ('Hasbro'), 649 [78] (Hearing Officer Thompson); Pierre Fabre Dermo-Cosmetique v Senator Automation Pty Ltd (2006) 70 IPR 368, 372 [30] (Hearing Officer McDonagh); Rodale Inc v Gardmail Pty Ltd [2006] ATMO 84, [12] (Hearing Officer Williams); Australian Pensioners Insurance Agency Pty Ltd v Brennan & Woodberry [2007] ATMO 26; (2007) 73 IPR 361 (Hearing Officer Nancarrow); Coloplast A/S v Ezy Products Pty Ltd [2007] ATMO 60, [33]-[34] (Hearing Officer Dunn).
[33] Much the same problem was noted in relation to s 28(a) of the Trade Marks Act 1955 (Cth), which covered similar territory to s 60 of the TMA: see Richard Leahy, 'Competing Trade Marks and Priority to Registration under the Trade Marks Act 1955' (1995) 6 Australian Intellectual Property Journal 160, 176.
[34] Nor does it mirror the test for infringement of a registered mark set out in s 120(1)–(3) of the TMA: see generally Michael Handler, 'Trade Mark Dilution in Australia?' (2007) 29 European Intellectual Property Review 307.
[35] Trade Marks Manual, above n 18, [30.3.2]. It is important to acknowledge that Office decisions are not entirely consistent in adopting this position (see, eg, Mastercard International Inc v Ettridge (Unreported, Australian Trade Marks Office, Hearing Officer Purvis-Smith, 21 October 2002); United Parcel Service of America Inc v United Air Lines Inc (2006) 69 IPR 663, 669 [30] (Hearing Officer Windsor)), but it is nevertheless fair to treat this as the Office's preferred approach. One of the striking things thrown up by a review of opposition decisions in this area is how seldom opponents have sought to rely on passing off in the context of s 42(b), presumably because their legal representatives have been guided by this statement in the Trade Marks Manual.
[36] See Alto Group Pty Ltd v Sekaku Electron Industry Co Ltd (2004) 61 IPR 151, 158 [36] (Hearing Officer Murray); Cat Media Pty Ltd v Apex Marketing Group LLC (2004) 63 IPR 207, 214 [27] (Hearing Officer Skivington); ACP Masthead Nominees Pty Ltd v Bourne Properties Pty Ltd (2004) 64 IPR 134, 136 [9] (Hearing Officer Thompson); Hasbro (2005) 66 IPR 636, 649 [78] (Hearing Officer Thompson); Rodale Inc v Gardmail Pty Ltd [2006] ATMO 84, [12] (Hearing Officer Williams); Coloplast A/S v Ezy Products Pty Ltd [2007] ATMO 60, [33] (Hearing Officer Dunn).
[37] [1982] HCA 44; (1982) 149 CLR 191 ('Parkdale'), 198. See also at 210 (Mason J).
[38] See, eg, Pfizer Products Inc v Karam [2006] FCA 1663; (2006) 70 IPR 599 ('Pfizer'), 610-11 [46]–[47] (Gyles J). While this has become the orthodox view of the relationship between the concepts of 'deception or confusion' under the TMA and 'misleading or deceptive conduct' under the TPA, and was reaffirmed by the High Court in Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12; (2000) 202 CLR 45, 87 [106], it has been the subject of judicial and academic criticism: see, eg, Taco Co of Australia Inc v Taco Bell Pty Ltd [1982] FCA 136; (1982) 42 ALR 177, 201 (Deane and Fitzgerald JJ); Bridge Stockbrokers Ltd v Bridges (1984) 4 FCR 460, 473–4 (Lockhart J); Scotch Whisky Association v De Witt [2007] FCA 1649 ('Scotch Whisky'), [83] (Sundberg J); Colin Lockhart, The Law of Misleading or Deceptive Conduct (2nd ed, 2003) 63–4, 160; Jill McKeough, Andrew Stewart and Philip Griffith, Intellectual Property in Australia (3rd ed, 2004) 479–82.
[39] Mark Davison, Kate Johnston and Patricia Kennedy, Shanahan's Australian Law of Trade Marks & Passing Off (3rd ed, 2003) ('Shanahan') 173.
[40] Advantage [2001] FCA 683; (2001) 52 IPR 24, 31 [26].
[41] See, eg, Pfizer [2006] FCA 1663; (2006) 70 IPR 599, 609 [38] (Gyles J) and the Office decisions: NBA Properties Inc v Gaunt (1998) 44 IPR 225; Seven Network (Operations) Ltd v All Saints Holding Co Ltd [2003] ATMO 4; Jireh International Pty Ltd v Vladimirovich (2006) 70 IPR 359.
[42] In particular, it should be noted that UK and other Commonwealth decisions over the last decade or so have continued to exhibit division on the extent to which passing off recognises 'dilution' as a head of damage: see Taittinger SA v Allbev Ltd [1994] 4 All ER 75, 87–8 (Peter Gibson LJ), 91 (Mann LJ), 95 (Sir Thomas Bingham MR); Pontiac Marina Private Ltd v CDL Hotels International Ltd [1998] FSR 839, 871 (Singapore Court of Appeal); British Telecommunications Plc v One in a Million Ltd [1998] EWCA Civ 1272; [1998] 4 All ER 476, 496-7 (Aldous LJ); Harrods Ltd v Harrodian School Ltd [1996] EWCA Civ 1315; [1996] RPC 697, 715–16 (Millett LJ); see further Hazel Carty, 'Dilution and Passing Off: A Cause for Concern' (1996) 112 Law Quarterly Review 632. Adding to the uncertainty in Australia is the fact that, on the one hand, Australian courts have led the expansion of the passing off action in cases such as Hogan v Koala Dundee Pty Ltd [1988] FCA 333; (1988) 20 FCR 314 and Pacific Dunlop Ltd v Hogan [1989] FCA 185; (1989) 23 FCR 553, but, on the other hand, have also insisted that damage through mere 'association' is restricted to character merchandising cases: Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd [1999] FCA 461; (1999) 44 IPR 281, 374–6 (Goldberg J).
[43] See Ewing v Buttercup Margarine Co Ltd [1917] 2 Ch 1; British Legion v British Legion Club (Street) Ltd (1931) 48 RPC 555; see further Christopher Wadlow, The Law of Passing-Off: Unfair Competition by Misrepresentation (3rd ed, 2004) 431–3.
[44] Emphasis added.
[45] See, eg, GSM (Trademarks) Pty Ltd v Blue Star Holdings Pty Ltd (2005) 67 IPR 194, 198 [18] (Hearing Officer Skivington) ('Section 60 does not require the relevant goods or services to be the same or closely related'). See also General Motors Corporation v Nicholls [2003] ATMO 59; (2003) 61 IPR 370, 373 [10] (Hearing Officer Skivington); Finaxa Societe Anonyme v Arnedo (2003) 61 IPR 141, 149 [41] (Hearing Officer Murray); Royal Doulton (UK) Ltd v Ghosen (2004) AIPC 92–000, 37818–19 [21] (Hearing Officer McDonagh).
[46] Admittedly, s 60(a) is punctuated in a way that supports the Office's approach (see Amalgamated Television Services v Pickard (1999) 48 IPR 133, 140 (Hearing Officer Thompson)), but otherwise the provision is poorly drafted and the alternative interpretation considered here, which has the merit of attempting to give some meaning to the italicised words, is at least open.
[47] See Henderson v Radio Corp Pty Ltd [1960] SR (NSW) 576.
[48] (1996) 66 FCR 451 ('Duff Beer').
[49] See also Durkan v Twentieth Century Fox Film Corporation (2000) 47 IPR 651 (producers of the film 'Braveheart' unsuccessful under s 60 because of lack of evidence of any use of the term as a trade mark); Metro-Goldwyn-Mayer Studios Inc v Higgs [2007] ATMO 44, [16] (Hearing Officer Lyons) (no evidence that the title of a television series 'thirtysomething' had been used as a trade mark).
[50] See, eg, Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] AC 731; Taittinger SA v Allbev Ltd [1994] 4 All ER 75; Chocosuisse Union des Fabricants Suisses de Chocolat v Cadbury Ltd [1999] RPC 826.
[52] [2003] FCA 1502; (2003) 134 FCR 51, 60–1 [46]–[47].
[53] For example, it is possible to conceive of a situation where a mark is accepted for registration on the basis of 'honest concurrent use' under s 44(3) but where an opposition can be successfully made out under s 42(b), given that honest concurrent use cannot be used to avoid a finding of misleading or deceptive conduct under s 52 of the TPA: Peter Isaacson Publications Pty Ltd v Nationwide News Pty Ltd [1984] FCA 336; (1984) 6 FCR 289, 300 (Beaumont J).
[54] Shanahan, above n 39, 609.
[55] Ibid 611.
[56] See also The Kettle Chip Co Pty Ltd v Apand Pty Ltd [1993] FCA 546; (1993) 46 FCR 152; Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157; (2002) 55 IPR 354; Telstra Corporation Ltd v Royal & Sun Alliance Insurance Australia Ltd (2003) 57 IPR 453 and the judgment of Brennan J in Parkdale [1982] HCA 44; (1982) 149 CLR 191.
[57] It might be argued that in each of the examples mentioned in this Part registration could still be successfully opposed under s 43. However, as will be shown in Part III(b) below, the scope of s 43 is uncertain, such that it would be difficult to make this claim with any degree of certainty.
[58] Marco Polo Foods Pty Ltd v Benino Fine Foods (Aust) Pty Ltd (2005) 67 IPR 179; Osgaig Pty Ltd v Shigemitsu Industry Pty Ltd (2006) AIPC 92–214. See also Automobile Club de L'Ouest v Gardiakos (2005) 66 IPR 191.
[59] [2001] FCA 683; (2001) 52 IPR 24, 32 [28] (Madgwick J).
[60] See, eg, Tommy Hilfiger Licensing Inc v Tan (2002) 60 IPR 137; Time Warner Entertainment Co LP v Just Spectacles Pty Ltd (2003) AIPC 91–916; GAP (ITM) Inc v General Pants Co Pty Ltd (2004) 60 IPR 486; Greenpeace Australia Pacific Ltd v Taylor (2004) 62 IPR 617; McDonalds Corporation v Lubowski [2004] ATMO 56; Nylex Corporation Pty Ltd v Pencray Pty Ltd (2006) 69 IPR 369.
[61] Once it is appreciated that the TMA requires the opponent to establish that the use of the mark 'would be contrary to law' on the balance of probabilities it can be seen that it is far less clear that this provision sets up a higher than normal burden on the opponent. It can also be seen that the alternative canvassed by the Office, namely that use of the mark could be contrary to law on the balance of probabilities, would set up far too low a threshold. In reply, it might be objected that the standard of proof in opposition proceedings has not yet been fixed by the Federal Court: compare, on the one hand, Lomas v Winton Shire Council (2003) AIPC 91–839, 35169 [17], 35172 [36] (Cooper, Kiefel and Emmett JJ); Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd [2003] FCA 901; (2003) 132 FCR 326, 330 [18]–[22] (Bennett J); Austereo Pty Ltd v DMG Radio (Australia) Pty Ltd [2004] FCA 968; (2004) 61 IPR 257, 258 [4] (Finn J) and Kowa Co Ltd v NV Organon [2005] FCA 1282; (2005) 66 IPR 131, 152–3 [137]–[141] (Lander J) (suggesting that the test is whether the applicant's mark should clearly not be registered) with, on the other hand, Clinique Laboratories Inc v Luxury Skin Care Brands Pty Ltd [2003] FCA 1517; (2003) 61 IPR 130, 132–3 [10]–[12] (Gyles J); BP plc v Woolworths Ltd [2004] FCA 1362; (2004) 62 IPR 545, 549 [8] (Finkelstein J) and Pfizer [2006] FCA 1663; (2006) 70 IPR 599, 606–7 [21]–[26] (Gyles J) (critical of this higher standard of proof). However, even if it were to be accepted that the higher standard of proof that the mark should 'clearly not be registered' were to be applied, the point remains that the alternative formulation, namely that the s 42(b) ground of opposition would apply if it were clear that the use could be contrary to law, would still provide too low a hurdle. More generally, the difficulty with the Office's approach is that the standard of proof in opposition proceedings is not to be found in any (other) ground of opposition, but rather is governed by s 55(1) of the TMA, as interpreted by the courts.
[62] In particular, as regards the reference to 'a sign contained in the trade mark'; cf the definition of a 'trade mark' in s 17:
A trade mark is a sign 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.
[63] Woolworths [1999] FCAFC 1020; (1999) 93 FCR 365, 389 [79] (Branson J).
[64] Cf China-Therm Trade Mark [1980] FSR 21. See also Shanahan, above n 39, 177–8.
[65] Cf Madgecourt's Application [2000] ETMR 825. See also Shanahan, above n 39, 178–80; Scotch Whisky [2007] FCA 1649, [59] (Sundberg J).
[66] See, eg, Trade Marks Act 1994 (UK) c 26, s 3(3)(b); Trade Marks Act 1996 (Eire) s 8(3)(b); Trade Marks Act 1998 (Singapore); s 7(4)(b) Trade Marks Act 1999 (India) s 9(2)(a).
[67] Explanatory Memorandum, Trade Marks Bill 1995 (Cth) 10 (stating that an application would be refused under cl 43 of the Bill if, 'because of some signification inherent to it', its use would be likely to deceive or cause confusion). See also Janice Luck, 'Distinctiveness, Deceptive and Confusing Marks under the Trade Marks Act 1995' (1996) 7 Australian Intellectual Property Journal 97, 100.
[68] Woolworths [1999] FCAFC 1020; (1999) 93 FCR 365, 389 [79] (Branson J); TGI Friday's Australia Pty Ltd v TGI Friday's Inc [2000] FCA 720; (2000) 100 FCR 358, 365 [43] (Wilcox, Kiefel and Emmett JJ); Winton Shire Council v Lomas [2002] FCA 288; (2002) 119 FCR 416, 421 [19] (Spender J); Mobileworld Communications Pty Ltd v Q & Q Global Enterprise Pty Ltd [2003] FCA 1404; (2003) 61 IPR 98, 117 [96] (Allsop J).
[69] See McCorquodale v Masterson [2004] FCA 1247; (2004) 63 IPR 582. See also Scotch Whisky [2007] FCA 1649, [13], where Sundberg J considered that ‘[t]here is a degree of overlap between ss 43 and 60’, and the Office decisions: Down to Earth (Victoria) Co-operative Society Ltd v Schmidt [1998] ATMO 10; (1998) 41 IPR 632; Amalgamated Television Services v Pickard (1999) 48 IPR 133; RS Components Ltd v Holophane Corp (1999) 46 IPR 451; Durkan v Twentieth Century Fox Film Corporation (2000) 47 IPR 651; Twentieth Century Fox Film Corp v Die Hard (2001) 52 IPR 455; Polo Sport Clothing America v Hill (2003) 57 IPR 288; Hasbro (2005) 66 IPR 636; Marc Chagall Committee v Elite Wine & Spirits [2007] ATMO 29; Turner Entertainment Co v Yo-Merry Todd [2007] ATMO 33; (2007) 73 IPR 396. It might also be observed that under s 42(2)(b) of the never-commenced Trade Marks Act 1994 (Cth) an application for registration of a mark was to be rejected if the use of the mark in relation to the goods and services the subject of the application 'would be likely to deceive or cause confusion regarding … any connection or relationship that they may have with any particular person.' This might be said to provide some support for the expanded interpretation of 'connotation' in s 43 of the TMA. Attempting to draw any conclusions from this and similar observations is, however, extremely difficult — changes in wording between the 1994 and 1995 Acts can either be deemed to be largely incidental (such that parliamentary intention can be gleaned from the earlier Act: see generally Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd [2000] FCA 876; (2000) 100 FCR 90, 103 [15] (Burchett J)) or treated as evidence of Parliament's desire to achieve a different outcome in 1995 than under the superseded legislation.
[70] See also s 53(c) of the TPA, which states:
A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services ... represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have.
[71] See Wadlow, above n 43, 753–6 and the cases cited therein.
[72] Ibid 756. Cf Scotch Whisky [2007] FCA 1649, [60]–[62] (Sundberg J).
[74] See Wadlow, above n 43, 756.
[75] But note, in the context of European law, the discussion that has occurred over the prohibition of marks that are contrary to public policy or morality which has the effect (as does s 42(a) of the TMA) of leaving such marks freely available for public use, the implication being that such a system offers no disincentive against the use of such marks. This has led to calls for reform so that such marks can be registered defensively by an independent body to prevent their commercial use: see Jeremy Phillips and Ilanah Simon, 'No Marks for Hitler: A Radical Reappraisal of Trade Mark Use and Political Sensitivity' (2004) 26 European Intellectual Property Review 327; cf Caspar van Woensel, 'Führer Wines at Your Local Store: Legal Means against Commercial Exploitation of Intolerable Portrayals' (2005) 27 European Intellectual Property Review 37.
[76] Carnival Cruise Lines Inc v Sitmar Cruises Ltd [1994] FCA 936; (1994) 31 IPR 375, 390–1 (Gummow J).
[77] In particular, there are some uncertainties about the extent to which 'use' can be established where there are no dealings in the goods or services that are the subject of the application: see Moorgate Tobacco Co Ltd v Philip Morris Ltd [No 2] [1984] HCA 73; (1984) 156 CLR 414, 432–4 (Deane J); Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261; (2001) 107 FCR 166; Lomas v Winton Shire Council (2003) AIPC 91–839; Shahin Enterprises Pty Ltd v Exxonmobil Oil Corporation (2005) AIPC 92–132.
[78] As to the test of use under s 58, see Bently and Burrell, above n 4, 183–4 and the sources cited therein; Robert Burrell, 'The Requirement of Trade Mark Use: Recent Developments in Australia' (2005) 16 Australian Intellectual Property Journal 231, 238–9 and the sources cited therein.
[79] Shanahan, above n 39, 56 (with the proviso that X must have adopted the mark in ignorance of its prior use by Y).
[80] [1999] FCA 1602; (1999) 47 IPR 47.
[81] Strong support for this reasoning is contained in McCormick & Co Inc v McCormick [2000] FCA 1335; (2000) 51 IPR 102, 131–3 [93]–[96], where Kenny J held that s 44(3) does not operate as an 'exception' to s 60.
[82] See Shanahan, above n 39, 249–50; IP Australia, Trade Marks Legislation Review, Paper 3 (2004) 12 <http://www.ipaustralia.gov.au/pdfs/general/recommendations3.pdf> at 21 November 2007.
[83] See Ballarat Products Ltd v Farmers Smallgoods Co Pty Ltd [1957] VicRp 12; [1957] VR 104; Ad-Lib Club Ltd v Granville [1972] RPC 673; Sutherland v V2 Music Ltd [2002] EWHC 14; [2002] EMLR 28.
[84] Trade Marks Act 1955 (Cth) s 68. For judicial consideration of s 68 and its limitations, see New South Wales Dairy Corporation v Murray Goulburn Co-operative Co Ltd [1989] FCA 124; (1989) 14 IPR 26, 48 (Gummow J).
[85] Woolworths [1999] FCAFC 1020; (1999) 93 FCR 365, 389 [80].
[86] Similarly, see Institute of Patents and Trade Mark Attorneys, Submission to ACIP Review of Enforcement of Trade Marks Issues Paper (2002) 7 <http://www.acip.gov.au/submissions/ Ipta.pdf> at 21 November 2007:
As a matter of practice the suggestion that examiners continue to apply the more restricted approach at examination has some attraction. There is, however, something unsatisfactory about the ambiguity of having a restricted approach at examination and a wider approach at opposition. However, if that 'two-faced' approach works in practice then it may be a fairly sensible solution to a complex problem.
[87] Such an interpretation would not be inconsistent with the legislative history: see Trade Marks Manual, above n 18, [46.5.5].
[88] On the current interpretation of 'reputation' in s 60, see McCormick & Co Inc v McCormick [2000] FCA 1335; (2000) 51 IPR 102, 127 [81] (Kenny J) (reputation refers to the 'recognition of [the mark] by the public generally'); Toddler Kindy Gymbaroo Pty Ltd v Gymboree Pty Ltd [2000] FCA 618; (2000) 100 FCR 166, 175–7 [26]–[31], 194 [94] (Moore J) (evidence of localised use and promotion of the mark held to be sufficient to establish reputation under s 60, even absent any evidence of consumer recognition).
[89] Cf Working Party Report, above n 27, 45 (Recommendation 6A(1)). In relation to 'express legislative provisions' it might make most sense to adopt an approach similar to that used at present in relation to s 39, which prevents certain prescribed signs from being registered. Regulation 4.15 and sch 2 of the Trade Mark Regulations 1995 (Cth) set out a list of signs that are currently prescribed for the purposes of s 39(2). If this approach were applied to a new ground of rejection it would be possible in some cases to identify the precise signs for which registration would be refused because of express legislative proscription (eg, the word 'Olympic' or the Olympic rings, cf Olympic Insignia Protection Act 1987 (Cth) ss 19, 24). In other cases, however, only the general legislative prohibition could be listed (eg, where the application contains a 'captured image' of a Commonwealth reserve, cf Environment Protection and Biodiversity Conservation Regulations 2000 (Cth) reg 12.38(1)). In any event, we believe that the specific legislative provisions that examiners would be required to consider under an amended test ought to be set out in the Trade Mark Regulations.
[90] Cf Trade Marks Act 1994 (UK) c 26, s 3(3)(b). See also Working Party Report, above n 27, 45 (Recommendation 6A(3)).
[91] Working Party Report, above n 27, 47 (Recommendation 8A(3)).
[92] See ACIP, A Review of the Relationship between Trade Marks and Business Names, Company Names and Domain Names, above n 11, 2–5 (in particular, Recommendations 1–6).
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