Intellectual Property, Information Technology & Software

Philip Morris Ordered to Pay Australia’s Legal Costs After Failing to Challenge Plain Packaging Laws

The Permanent Court of Arbitration has recently ordered tobacco company Philip Morris to pay the Australian government’s costs, after Philip Morris failed to get the Australian government’s plain packaging legislation overturned. For the uninitiated, the makes it mandatory for tobacco companies that wish to conduct business in Australia to sell their products using only a generic drab dark packaging. The legislation requires tobacco packaging to feature large, visually-arresting health warnings which are designed to make cigarettes unappealing to smokers.

The plain packaging legislation was opposed by tobacco companies and various countries. One rationale was that the mandatory use of plain packaging make it difficult, if not impossible, for brand owners to market their products using unique marks and design elements. The law also makes it that much more difficult for tobacco companies to protect their trade marks, as the plain packaging makes it that much easier for counterfeiters to produce and profit off fake products. It was also argued that any meaningful public health effects brought by the plain packaging law will be negated if cheap counterfeit tobacco products flood the Australian market.

This arbitration was brought on slightly different grounds. When Philip Morris took the case to the Permanent Court of Arbitration, it tried to argue that a ban on trade marks will breach foreign investment provisions, citing the conditions of a 1993 trade agreement between Australia and Hong Kong to support its argument. The court was very critical of Philip Morris’ arguments, and ruled against the tobacco company.

The Permanent Court of Arbitration’s ruling against Phillip Morris marks the third failure of the tobacco industry’s battle against the Tobacco Plain Packaging Act, after its previous failures to overturn the legislation at the High Court of Australia and the World Trade Organisation (WTO.)

The final costs figure that Philip Morris has been ordered to pay consist of the court fees and expenses, including the cost of expert witnesses, travel, solicitors, and counsel, as well as interest. The actual amount is redacted from the Permanent Court of Arbitration’s new ruling. But former Australian Federal Treasurer Wayne Swan (who helped draft the plain-packaging laws and was called by Australia to give evidence during secret hearings in 2015) estimates the case cost to have been “around $50 million” in legal fees.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

Curvy Edges and a Credible Expert Witness: Apple Inc [2017] ADO 4 (16 May 2017)

On 8 March 2013, Apple, Inc (the Owner) filed a registration application under the Designs Act 2003 (Cth) (“the Act”) for an “Input mechanism for an earphone” (the Design). The Design was entered on the Register of Designs on 27 June 2013 and had a priority date of 8 September 2012.

Examination of the Design was requested on 25 July 2013. Several examples of prior art that were similar or related to the Design were then raised by the examiner. The earliest example was United States design patent number D597071 (the Earlier Design), called an “Input Mechanism” and had a publication date of 28 July 2009. The Earlier Design relates to an in-line controller used for a set of earphones, which is placed along an earphone cable and used to control various functions such as volume, starting or pausing a music player, and answering phone calls.

In Australia, a design must be found to be both “new” and “distinctive” upon comparison with the prior art base for the design as it existed before the priority date. This can include designs that were published in a document anywhere. Here, the Design was considered as “new” because it is not identical to the Earlier Design. The question then is whether the Design can be considered “distinctive” under s 16(1) of the Act.

As the Design Registrar’s delegate noted:

6.Section 16(2) of the Act states that a design ‘is ‘distinctive unless it is substantially similar in overall impression to a design that forms part of the prior art base’. Section 19 of the Act goes into more detail, by setting out the factors to be considered when assessing substantial similarity in overall impression. More weight is to be given to similarities between the Design and the prior art than to differences between them [4] I must also:

• have regard to the state of development of the prior art base for the Design[5]
• where only part of the Design is substantially similar to an example of prior art, have regard to the amount, quality and importance of that part in the context of the design as a whole,[6] and
• have regard to the freedom of the creators of the Design to innovate

Apple submitted that there is a distinction between “in-line controllers that are placed at the junction between the cable running to the device and to the two earphones” and “in-line controllers that sit along one of the ear phone cables (therefore having only two cable holes).” This was supported by a declaration from freelance tech journalist and MacWorld Australia editor Anthony Caruana. The hearing officer agreed with this distinction. (Apple also provided declarations from two other patent attorneys from their representatives’ firm.) The hearing officer noted, “11.Mr Caruana is presented as an expert witness, having been a freelance journalist and publication editor in the field of information technology for over 10 years. He has also personally owned and used a variety of earphones for mobile phones from several different sources, including from the Owner.” As it turned out, his evidence went a long way.

The evidence filed in the lead up to the hearing included an extensive search of the prior art base on Google Images as well as prior art searches on design patents in the United States of America, covering the period of 7 September 2007 to 7 September 2012. The results revealed a “very well developed prior art base” (to quote the hearing officer), with a substantial amount of variations on the overall form of an in-line earphone controller. A person familiar with in-line earphone controllers at the relevant date will have enough familiarity to note smaller differences in designs.

The art found in the search results as well as Mr Caruana’s declaration point to the following visual features common in the prior art base for the products related to the Design:

• An overall diameter close to the gauge of the cable
• A cylindrical or rectangular overall
• shape, in order to ‘look as much like the cable as possible’
• The appearance of being integrated into the cable
• Colouring similar to the cable

Mr Caruana also includes the following visual features as a way of distinguishing between designs:

• The number of buttons on the controller (related to the degree of functionality)
• The shape(s) and labelling of button(s)
• Colour
• The shape of the housing

The hearing officer noted that there are no visible buttons on the Design or the Earlier Design, but accepted that there are concealed buttons because the search results indicate that users can interact with three areas by applying pressure to points on the controller. Evidence as to “colour” was considered as irrelevant given the comparison involved line drawings.

When it comes to side-by-side comparison of the Design and the Earlier Design, the hearing officer was of the view that there are several areas of apparent similarity, but they are only to a small degree and unlikely to be noticed by the informed user. The configuration of the buttons and, to a certain degree, their shapes, are significant enough to be noticed by an informed user, but the side by side comparison shows that there are points of difference in the Design and the Earlier Design in both fact and number. The hearing officer noted in his conclusion around distinctiveness:

“30.There remains one area of similarity which carries significance: the configuration of the buttons and, to a certain degree, their shapes. While this is no doubt an important area of similarity for a user, there are points of difference significant both in fact and in number. 31.Mr Caruana’s point that overall shape of the housing is typically used by people familiar with the product to differentiate between designs in the market finds support in the review of the Design which is annexed to Schinella. This article states ‘what has changed is the inline-remote and mic, which is now roughly 25 percent larger with curvier edges.’ It is these curvy edges that stand counter to the similarity in the arrangement of the buttons. This is apparent in all representations, but is most dramatic in the perspective and end views. This curvature effects not only every edge, but transforms the end from a right-angled cylinder shape in the Earlier Design to the softer curved end of the Design. Through this, the housing appears as though it is made from two pieces instead of four.”

Ultimately, despite the number of similarities (which as per s 19(1) of the Act must be given greater weight than the differences), the hearing officer was convinced that the overall impression of the Earlier Design and the Design is that they are not substantially similar and that there are no grounds for revocation. As a result, the examination has been completed and a certificate of examination has been issued. This was a good result for Apple, assisted by a competent expert witness.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

OECD/EUIPO Report Reveals Important Details About Most Common Counterfeit Trade Routes

The European Union Intellectual Property Office (EUIPO) and the Organisation for Economic Co-operation and Development (OECD) has recently published a new report titled “Mapping the Real Routes of Trade in Fake Goods.” The report uses data collected from 10 different industries, notably ones that span a wide range of IP-intense, tradable goods such as foodstuffs, cosmetics, and B2B products such as computer chips and spare parts.

According to the report, the combined trade of fakes in these sectors alone make up more than half of the total estimated trade in fake goods. The aim of the report was to make sense of the complex routes that are commonly used in the global trade of counterfeit and pirated goods.

The report finds that trading in counterfeit and pirated goods has grown rapidly in the past few years in both scope and magnitude. Always deeply problematic for manufacturing businesses (and in the case of pharmaceuticals, aircraft parts and car parts, potentially lethal because of their inferior quality) EUIPO and the OECD now conclude that counterfeits have extremely negative consequences for economies and society. Remarkably, the report concludes that systemic counterfeiting erodes the rule of law and affects citizens’ trust in their government, which can pose a threat to political stability.

The report notes that those entities which engage in the trade of counterfeit products have developed to the point of having their own systems and protocols. Accordingly, these players use complex routes with intermediary points when shipping their infringing products. The report reveals that these intermediary points have several purposes:

A.) to facilitate falsification of documents in ways that camouflage the original point of departure;

B.) to establish distribution centres for counterfeit and pirated goods, and

C.) to repackage or re-label goods.

A key finding is that local enforcement authorities may attempt to stop the importation of counterfeit goods, but will be unable to intercept goods in transit because of extra-jurisdictional limitations on their powers.

Most Common Routes and Regions in the Counterfeit Trade

Out of the ten sectors that were analysed, nine of them have China as the largest producer of counterfeit goods. This is not news: despite Chinese authorities active efforts to assist foreign IP rights owners, the size of Chinese industry makes this very problematic. The most common locations being used as key transit points include the UAE, Saudi Arabia, and Yemen, which are used for transporting counterfeit products to Africa. Counterfeit products bound for the European Union are more likely to pass through Albania, Egypt, Morocco, and Ukraine. When it comes to fakes bound for the United States, the most common transit point is Panama.

The report states that smaller items that consist of ten or fewer items are usually transported through courier services and regular post, and that these small shipments together make up more than 43% of all counterfeit goods shipped in 2013.

The report notes that data collection is crucial when it comes to policy discussions between individual governments or discussions at a regional level. Finally, the report calls for more in-depth analysis for the development of efficient enforcement and gorvernance frameworks in the role of free trade zones in transhipments, a closer look at the detection problem posed by small shipments, and a deeper probe into the economic features of provenance economies, including the quantitative relationship between the intensities of counterfeiting and indices of free trade, quality of governance, and public sector integrity.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

The Concept of “Careful Purchasers” Strikes Again: Basler Electric Company v BOGE Elastmetall GmbH [2017] ATMO 64 (30 June 2017)

On 17 November 2014, motor and vehicle parts manufacturer BOGE Elastmetall GmbH (the Holder) applied for a trade mark in Australia, relying upon an extension of protection based upon international registration no. 1227675 (“the IRDA”). This was an image mark consisting of a stylised letter “B” (the company’s logo) inside a black rectangle. The mark’s specifications include Class 7, 9, 12, 16 goods in relation to various automotive and office supplies, as well as Class 35, 38, and 41 services relating to advertising, telecommunications, computer programs, and various training services. Here is an image of the logo:

The application was opposed on 4 May 2015 by Basler Electric Company (the Opponent), relying upon sections 42, 58, and 60 of the Trade Marks Act as grounds for opposition. (Sections 59 and 62A were also submitted as grounds for opposition, but the Opponent did not make any submissions about these.)

The Opponent submitted that three of their trade marks, unregistered in Australia but which the Opponent claimed to have been in active use in Australia prior to the IRDA’s filing date:

The s 60 ground was dismissed, as the Opponent failed to establish any evidence of actual confusion arising in Australia (or elsewhere, for that matter), between the Opponent and the Holder’s respective marks. At least in part, the evidence let the Opponent down. As the hearing officer notes:

“19.I am not satisfied that the requisite reputation has been established. The evidence in Linklater is limited to the assertions of the amount of advertising, without any supporting documentation to show how it was effected and the particular sums involved. Likewise Steinacher deposes to catalogues being produced and distributed; however, there are no details as to the number distributed, how or to whom they were distributed.”

But also, the products are not fast moving consumer goods. “20.Even if the requisite reputation had been established I am not satisfied that there would be a real tangible danger of confusion or deception. The Opponent’s goods are expensive and specialized electricity generation control products used in electricity generation and distribution. These products are entirely unrelated to the goods and services covered in the IRDA, being primarily vehicle components and associated services. 21.I consider that because of the relative expense of the products of both parties and their specialisms, they would be purchased after extensive research and due consideration and are not the kind of goods that might be purchased on impulse or in a hurry.”

This reasoning echoes other decisions around casual purchases and thoughtful purchases:

a. Linecrest Pty Ltd v Cobannah Holdings Pty Ltd as trustee for the Lollymania Trust [2013] ATMO 2 (9 January 2013), where the hearing officer noted, “The goods are of such a price and nature that not much time, care, or attention is devoted to their purchase and it is likely that the goods will be casually inspected prior to purchase and their provenance will be unquestioned. Additionally, the purchase of the goods is likely to be attended a similar press of circumstances as those distractions referred to in Re Stuart Alexander and Co (Interstate) Pty Limited and Douwe Egberts Koninklijke Tabaksfabriek-Koffiebranderijen-Theehandel NV v Blenders Pty Limited [1981] FCA 152; (1981) 53 FLR 307. Lockhart J said: “Shoppers in supermarkets are probably not anxious to prolong the agony of wheeling trolleys between rows of food products and avoiding collision with other trolleys, often to the unwelcome accompaniment of clamorous babies, and children impatient to escape from the shop or to buy everything in it except the household needs. I say nothing about attendant spouses who, if husbands, wait in varying degrees of impatience to perform their function as beasts of burden. Shoppers are probably inclined to select their goods quickly.”

b. Prefel SA v Merchant Corporation (2001) ATMO 31: “My attention must also be given to the circumstances of trade likely to surround use of those trade marks on the specified goods. It seems to me the goods, which are clothing, are for the most part unlikely to be ordered by telephone or over a counter by the spoken word. I am aware that neither set of goods is limited to high cost items. Nevertheless, I think it is likely, in most situations, the goods will be sold in a manner which affords the potential purchaser an opportunity for careful inspection and comparison with other similar goods. Under such circumstances, the visual impact of the respective marks is likely to be of considerable importance – as per Taiwan Yamani Inc v Giorgio Armani S.p.A. (1990) AIPC 90-644.”

Specialist markets are different from markets for fast-moving consumer goods. In Bausch & Lomb Inc v Registrar of Trade Marks (1980) 28 ALR 537 Lee J held that where a trade mark is used on a specialised product the enquiry should be directed to the section of the community following the particular pursuit or possessing the special vocational or technical interest. In that decision, His Honour said:

“In my view one must approach the matter not as a layman with the loose knowledge to which I have referred, but from the point of view of how the word would be accepted amongst those who in fact distinguish the lens of one manufacturer from that of another by reference to a trade name, and in this case these are in the main the specialists in the field of eye care and to a lesser extent their patients.”

In Line 6 Inc v Apple, Inc [2009] ATMO 9 (29 January 2009) at para 42, evidence failed the opponent but the hearing officer noted:

“I have no doubt that the opponent’s goods have established a reputation in Australia within the musical industry – amongst players of electric guitars in particular. While the evidence does not show particularly strong sales the marketplace in not particularly large and the participants in the musical industry are generally well informed about the products available to them to enable them to perform.”

In Maxims Caterers Limited v Magnona Pty Ltd [2009] ATMO 98 (2 December 2009) the hearting officer noted, “The production and sale of moon cakes, especially under a trade mark consisting entirely of Chinese characters, indicates a niche market. “

In L.F.P Inc v Supre Pty Ltd [2005] ATMO 31 (24 June 2005) at [30] the hearing officer said, “The opponent’s goods cater for a niche market. They are advertised for sale in the opponent’s HUSTLER magazine and via the opponent’s pornographic websites and thus exposure to the purchasing public is more limited than it would be if the goods were advertised and promoted via more conventional channels…. At [20] I consider that within the niche market where goods of this nature are bought and sold the opponent has achieved a reputation such that consumers would be likely to be deceived or confused if the applicant were to use its trade mark.”

And in Spiral Foods v Valio Pty Ltd [2000] ATMO 22 (15 March 2000), the hearing officer said, “The goods on which the trade marks have been used include wheat free soy sauce, soy sauce, teriyaki sauce, yuzu ponzu, low salt soy sauce, mirin, brown rice vinegar, plum vinegar, sesame oil, miso, sea vegetables, various teas, instant miso soup, various pickles and condiments, Japanese snack foods, rice, sesame and vegetable crackers, soy milk, rice wafers, olives, olive oil and various types of noodles. …I will simply remark that they demonstrate a generally increasing trend and, for a small company, sales are substantial within what is obviously a niche market.”

None of these decisions were cited by the hearing officer in this matter, but the decision follows the same line of reasoning. If the goods in the application are goods provided to a niche market, there will be significant difficulty in successfully opposing the application unless evidence demonstrates otherwise.

(In addition, the section 42 ground failed as the hearing officer was not convinced that the marks substantially similar. Had the Opponent proved that one of their trade marks bore a substantial similarity to the IRDA, it might have argued that they are the first one to use the mark in the country in the course of trade. But as the hearing officer found no similarities between their marks and the IRDA, it follows that the Holder is the first one to have used the mark in Australia and therefore its owner. The s58 ground failed as well, and since no submissions were made for the other grounds (s 59 and 62A), the IRDA has been allowed to proceed to protection one month from the date of the decision.)

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

Who owns Neptune’s fork?: Trident Seafoods Corporation v Trident Foods Pty Limited [2017] ATMO 39 (3 May 2017)

A trident, the indicia of the Poseidon, Greek god of the sea (or Neptune for those of a preference for Roman mythology), is one of those valuable symbols which are highly suggestive of marine or maritime goods and services, but which is not descriptive. It is valuable real estate from a marketing perspective. It is entirely unsurprising that there has been an ongoing trade mark-based argument in Australia over the word “TRIDENT” in respect of seafood.

On 18 July 2014, Trident Foods Pty Limited (the Applicant) filed an Australian trade mark application for the trade mark “TRIDENT” under classes 29 and 30 goods covering various coconut and fish-related food products and condiments. The application was subsequently opposed by Trident Seafoods Corporation (the Opponent), nominating numerous grounds of opposition, but ultimately focusing only on ss 44 and 59 during the hearing.

This was the second decision to arise from a trade mark opposition between these two parties. The previous dispute related to three non-use applications – see Trident Seafoods Corporation v Trident Foods Pty Ltd [2016] ATMO 45 (30 June 2016). In that matter, two of the Removal Opponent’s trade marks were left on the Registrar. This was as a consequence of the Registrar’s delegate exercising a discretion to do so because, amongst other things, the removal opponent had not on the evidence abandoned two of the three registrations under attack.

That partially successful removal application, we assume, invited this opposition.

Deceptive Similarity Ground

Under their s44 ground of opposition, the Opponent relied upon its registered trade mark 1555536 (the Trident Seafoods mark), which had a filing date of 7 May 2013. It consists of the following logo , and covers class 29 goods as it pertains to various seafood and fish oil products.

The hearing officer noted, “ 17.I agree with the opponent that the trade marks are deceptively similar. The essential and striking element in the Trident Seafoods mark is the word TRIDENT which is presented in large text with graphic devices namely a trident and ocean waves which only serve to emphasis the word TRIDENT in the consumers mind. The Trade Mark is the word TRIDENT solus. Thus, I am satisfied that the trade marks are deceptively similar, that they cover the same goods and goods of the same description and that the Trident Seafoods mark has an earlier priority date than the Trade Mark.”

But the Applicant argued that it had been varying the range of goods that the Trident mark is being used on, in order to re-invigorate the Trade Mark. This had been ongoing since 2000. While the Applicant had only used the TRIDENT mark in relation to fish and fish products since October 2014, there is no set time period for which use of the trade mark must be demonstrated.

The Applicant also drew the hearing officer’s attention to two earlier Australian trade mark registrations, 266625 and 400953, for substantially identical trade marks. The applicant had a long history of use of its trade mark on various edible foods ranging from Asian sauces, noodles and coconut cream to smoked oysters and tinned tuna which collectively resulted in significant sales figures across Australia each year. The Applicant also presented proof that it had spent time and money into defending their trade mark before both IP Australia and in court. That was enough for the delegate. The s44 ground of opposition failed.

The interesting aspect of the decision was that the hearing officer recognised a marketing strategy of innovation and flexibility in the market offering as a relevant consideration: “ 23.The applicant has used its Trade Mark on the relevant goods and while there may appear to be a gap in production, Mr McIntosh makes the point that since there is continuous innovation and development of new products the range of food products offered under the Trade Mark evolves to take into account changing consumer demands. I note that this is not an unusual practice in the marketplace where the tastes of the public can change and demand in products can rise and fall depending on those tastes and current cuisine fads, not to mention how the demands of manufacture may alter due to supply etc.”

That is, with respect, a very commercial and practical approach to the issue of use. The nature of “use” by a business endeavouring to sustain or increase market share, as consumers’ wants and needs change, should not be set in stone.

No Intention to Use

The Opponent also argued that the Applicant had no intention to use the Trade Mark on the relevant goods, and that the intention of the Applicant is “an ongoing intention not limited by the state of mind at the time of filing the application.” This is an interesting argument because it was supported by the Applicant’s evidence, but the delegate did not agree. This argument was tantamount to requesting the delegate to make “a lot of inferences on the basis of timing of the applicant’s re-release of its fish products after a period of inactivity.” Again, commercial flexibility prevailed.

Also, the evidence demonstrating the applicant’s lack of intention to use the Trade Mark in good faith at the time of filing was found to be “lacking”. Instead, there was ample proof that the Applicant had used the Trade Mark on the relevant goods and is using the Trade Mark on the relevant goods. While the delegate acknowledged that the Applicant’s sale of tinned fish products during a certain period was of such a small scale so as to encourage the Opponent to argue that this was not genuine commercial use, there is insufficient evidence to support such an argument. Thus, the s59 ground for opposition also failed.

With the Opponent unable to establish any of their grounds of opposition, the application has been allowed to proceed to registration, barring any appeal.

Poseidon was a cranky deity, and was also the god responsible for earthquakes. There is not anything especially earth-shattering about this decision. But it is commendable for its understanding of how businesses adapt and are responsive to the market.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

Trade marks and graphic design: the bear trap of industry themes

One consideration for graphic designers upon receipt of a brief to design a new brand identity is to mitigate the risk of confusion between a client’s brand and competitors’ brands.

There is a tension between this, and rendering a logo so that it looks like it falls into a particular category of goods and services.

But how problematic is this? Below are some logos, all from the financial services sector:

(Source: Per Mollerup, Marks of Excellence, Phaidon Books, 1997)

This series of logos starts to look like an marketing communications expression of corporate kinship: variations of a logo to denote different services or operational divisions of the same entity.

But, running from left to right by row, these logos are each owned by competitors:

a. Chase Manhattan, USA

b. Jyske Bank, Denmark

c. Bankers Trust, USA

d. Development Cooperative Bank, India

e. National West Minister Bank, UK

f. Sao Paolo Development Bank, Brazil

g. Dresdner Bank, Germany

h. Senbank, South Korea

Since 1997, things have not changed much:

a. – a logo filed by White & Partners, Australia, on 2 December 2016

b. – a logo filed by Bank of Queensland, Australia, on 10 June 2014

c. – a logo filed by American Express Marketing and Development Corp., USA, on 9 September 2010

d. – the logo of Chicago Mercantile Exchange Inc, filed 20 20 July 2012

e. – the logo filed by Loan Market Group Pty Ltd, Australia, on 14 May 2014.

(“Filed” in this instance means filed with the Australian Trade Mark Registry.)

The brand consultant’s brief might be to create a logo which looks like it would fit in with notable peers. But, in addition to being lost in the fog of competing brands, this approach also creates a real risk of confusion, particularly amongst consumers who might rely upon the logo only (an issue particular to markets or jurisdictions where Latin characters are not so familiar to consumers). Mitigating the risk of a trade mark dispute between brand owners over similar logos should be a proper consideration for a graphic designer.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

Snakes and No Ladders: Hoser v Bunnings Group Ltd & Anor [2017] FCCA 1624 (13 July 2017)

Mr Raymond Hoser describes himself as a “globally recognised reptile expert” and is a government-licensed wildlife demonstrator. Mr Hoser owns registered Australian trade marks for the term “snake man” and “Snake man”.

Mr Hoser initiated an interlocutory application with the Federal Circuit Court seeking to prevent Mr Michael Alexander from using, amongst other things, “Snake man” in the course of trade. Mr Alexander conducts business under the name “Black Snake Productions,” which also provides government-licensed wildlife demonstrations. Mr Alexander is a competitor of Mr Hoser.

The case also involves another respondent, Bunnings Group Limited, a well-known hardware retail chain. Bunnings hired Mr Hoser to conduct many live reptile shows around Victoria during the period between 2011 and 2014. However, Bunnings eventually stopped hiring Mr Hoser and engaged other wildlife demonstrators to provide reptile shows. According to Mr Hoser, Bunnings secured Mr Alexander’s services for its Ringwood store on two weekends in 2016, and heavily advertised it as “The Snake Man.” Mr Hoser said he was claiming damages of $5.3 million, but this was unsubstantiated by evidence. (Mr Hoser was self-represented.)

Mr Alexander argued that the terms were descriptive. The court agreed, noting that even if Mr Hoser was the first person in Australia to use the terms as a trade mark, he had lost exclusive rights to the trade marks if they have become generally recognised in the relevant trade as descriptive of the relevant services. The court formed the view that this had occurred. The judge noted, “In my view, on the material and arguments presently before the court, there is not a serious question to be tried in this case because the prospect of the applicant succeeding is very remote.”

Inevitably, the court cited Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd [1978] HCA 11; (1978) 140 CLR 216 at 231, which in essence says that there is a price to pay for adopting a descriptive name as a brand. The court, also inevitably, cited the section 24 of the Trade Marks Act 1995, which is concerned with generic trade marks:

This section applies if a registered trade mark consists of, or contains, a sign that, after the date of registration of the trade mark, becomes generally accepted within the relevant trade as the sign that describes or is the name of an article, substance or service.

(2) If the trade mark consists of the sign, the registered owner:

(a) does not have any exclusive rights to use, or authorise other persons to use, the trade mark in relation to:

(i) the article or substance or other goods of the same description; or

(ii) the service or other services of the same description; and

(b) is taken to have ceased to have those exclusive rights from and including the day determined by the court under subsection (4).

(3) If the trade mark contains the sign, the registered owner:

(a) does not have any exclusive rights to use, or authorise other persons to use, the sign in relation to:

(i) the article or substance or other goods of the same description; or

(ii) the service or other services of the same description; and

(b) is taken to have ceased to have those exclusive rights from the day determined by the court under subsection (4).

(4) For the purposes of subsections (2) and (3), a prescribed court may determine the day on which a sign first became generally accepted within the relevant trade as the sign that describes or is the name of the article, substance or service.

Mr Hoser obtained the trade mark (TM 1175589) for “snakeman”, without objection from the examiner at IP Australia, with a date of filing of 11 May 2007. Mr Hoser acquired a second, somewhat broader registration for “Snake man” (1214301) with a priority date of 7 December 2007, overcoming an objection from the examiner apparently with a declaration containing evidence of use. Mr Hoser applied for these marks without assistance from an IP lawyer or trade mark attorney, and as stated above, was self-represented in court. It is not IP Australia’s job to tell Mr Hoser about the limitations of his trade mark. But Mr Hoser had two trade mark registration certificates, issued by a federal government agency, which he plainly believed would protect his rights and his brand. You can’t blame Mr Hoser for misunderstanding why he thought he could stop Bunnings with an urgent interlocutory injunction.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

Fishing for Phishers: Recent UDRPs brought by the UK Commissioners for HM Revenue and Customs

Phishing, the fraudulent act of soliciting money from members of the public through emailed demands, is a scourge, in which phishers deceive especially the elderly or naive.

On 22 February 2017, the Commissioners for Her Majesty’s Revenue and Customs of London (the Complainants) filed a complaint at the WIPO Arbitration and Mediation Center over the domain name HMRCONLINEGOV.COM, which has been registered with Network Solutions, LLC under the name of Dani Gan (the Respondent) of Allambie Heights, in New South Wales, Australia. The domain was registered on 2 October 2016, but had not been used and at the time of the complaint, only redirected visitors to a web page containing references to the Complainant and other websites.

As the decision notes, “The Commissioners for HM Revenue and Customs, is a non-ministerial department of the United Kingdom Government responsible for the collection of taxes, the payment of some forms of state support and the administration of other regulatory regimes.” It operates a website located at hmrc.gov.uk

This sort of domain name policing activity by government agencies (and also financial institutions) responsible for dealing with the public’s finances is important. As noted in another, separate UDRP complaint brought by HMRC:

“Complainant is accountable for safeguarding the flow of money to the Exchequer through its collection, compliance and enforcement activities and ensures that money is available to fund the UK’s public services. Complainant also administers statutory payments within the UK, such as statutory sick pay and statutory maternity pay and it helps families and individuals with targeted financial support through the payment of tax credits. Almost every UK individual and business is a direct customer of Complainant.”

The very useful website www.udrpsearch.com indicates that HMRC has three active UDRP complaints against various individuals, was successful in another six, and terminated one. (One of those individuals noted that his or her name was the subject of identity theft, and that name was redacted from the decision.) Thee active cases are for the following domain names:

• hmrc-tax-service.com, service-hmrc-tax.com, tax-hmrc-service.com (D2017-1492)
• taxreturn-hmrc.com, taxreturnhmrc.com (D2017-1333)
• refund-tax-hm-rc.com (D2017-1312)

The outcome of these three UDRP complaints remains to be seen. But by pressing on with UDRPs against recidivist cybersquatters, such as the famous Cameron Jackson (who has been involved in fifty-five domain UDRPs as the respondent), complainants assist future complainants by collectively building a body of evidence of systemic cybersquatting.

In respect of the UDRP complaint issued in respect of Mr Gan, the Complainants tried to contact the Respondent on 12 January 2017 by way of a letter demanding the transfer of the domain name. This was met with silence. Another letter was dispatched on 19 January 2017, but this second attempt at correspondence also solicited no reply from the Respondent.

As noted in paragraph 4.6 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (“WIPO Overview, 2.0”), the failure of the Respondent to reply does not necessarily result in a default in favor of the Complainant. The onus is still on the Complainant to satisfy the three requirements outlined in paragraph 4(a) of the Uniform Domain Name Dispute Resolution Policy, namely a.) the disputed domain name is identical or confusingly similar to a trade mark or service mark to which the Complainant has rights, b.) the Respondent has no rights or legitimate interests in respect of the disputed domain name, and c.) the disputed domain name has been registered and is being used in bad faith.

Under the first requirement, the Complainant filed evidence of a trade mark registration for the HMRC name in the UK, which had a priority date of March 2008. This was a prudent action for the Complainant to have taken, and one often overlooked by government entities: a trade mark is prima facie evidence of rights in a brand, and government departments should plan for an eventuality where a trade mark certificate will help when other arguments around goodwill might be tricky. (The decision does not identify it, but the trade mark has the registration number UK00002471470.) But also in support of this argument that the first element of a UDRP complaint was fulfilled, the Complainant also provided proof that third parties in the UK and other jurisdictions commonly refer to theComplainants as, simply, “HMRC”.

With ownership of “HMRC” established, the Complaint argued that the disputed domain name is confusingly similar to “HMRC”, as the words “online” and “gov” are not enough to distinguish the domain name from the Complainant’s HMRC mark. Obviously, these sorts of ancillary, descriptive terms merely suggest that the domain name is an official and/or online presence for the Complainant’s services.The arbitrator agreed.

The Complainant was also successful in the second requirement, that the Respondent had no rights or entitlement to the domain. With the Respondent making no effort to defend himself and his continued use of the disputed domain name even after the two cease and desist letters, the Panel adopted the view that the Respondent did not have any legitimate purpose for its registration, except to commercially exploit the Complainant’s HMRC mark.

The third requirement, that the Respondent’s registration of the disputed domain name was done in bad faith, was also found in favour of the Complainants. The disputed domain name fully incorporates the Complainant’s mark and the terms “online” and “gov,” presumably as a way of confusing consumers into thinking that the disputed domain name is connected to the Complainant. This was supported by evidence that links contained on the webpage resolving from the disputed domain name pointed visitors to various business:

“…it appears that Respondent has placed, or allowed to be placed, a web page at the disputed domain name that includes click-through advertising concerning Complainant, its services, income tax filing, pensions and government insurance. As Respondent has chosen not to respond in this proceeding, the Panel can only conclude, based on the available evidence, that Respondent did not register the disputed domain name for any legitimate purpose, but actively sought to capitalize on Complainant’s HMRC mark by registering a domain name that would likely be seen as related to Complainant or Complainant’s services…. the evidence suggests that Respondent specifically targeted Complainant and its HMRC mark, and did so opportunistically and in bad faith.”

People who received email demands for payments of even small sums from a website with the address “HMRCOnlineGov.com” would be forgiven for thinking that they had outstanding tax payments. The Complainant alleged that the disputed domain name had been used for fraudulent activity through phishing scams, but the Panel was unable to determine whether there has been use of the disputed domain name for fraud due to the limited amount of evidence submitted. It ultimately did not matter in so far as this domain name dispute was concerned. The Complainant was successful in establishing the three requirements outlined in paragraph 4(a) of the UDRP. The disputed domain name HMRCONLINEGOV.COM was ordered by way of the UDRP process to be transferred to the Complainant.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

Swiss Style Claims and Commissioner of Patents v AbbVie Biotechnology Ltd [2017] FCAFC 129

On 18 August 2017, the Australian Full Federal Court has overturned a prior decision made by the Administrative Appeals Tribunal in 5 September 2016 over Re AbbvVie Biotechnology Ltd [2015] APO 45, with regard to several applications for an extension of term for Australian patents 2012261708, 2013203420 and 2013257402. Patent extensions of five years are permissible in Australia for pharmaceutical products. These patents contain claims of a type called “Swiss type claims”. As the Full Court noted, “Speaking broadly, such claims are, in form, directed to the use of a substance in the manufacture of a medicament to be administered for a specified therapeutic purpose. An invention in this form is appropriately characterised as a “method or process”, not as a “product”.”

Swiss type claims are drafted by patent attorneys in order to endeavour to accrue patent protection in certain jurisdictions for the discovery of new medical uses for known compounds. In around 80 jurisdictions, patenting methods of medical treatment is prohibited (although not so in Australia as a consequence of the 2013 High Court decision inApotex Pty Ltd v Sanofi-Aventis Australia ). Swiss style claims are intended to catch any method of making a drug of any kind where that drug includes a known compound as an active constituent. Swiss type claims hinge upon the artificial premise that the prerequisites of novelty and inventiveness follow the discovery of the compound’s activity, but in relation to the new condition. This is even though there may be nothing new in manufacturing drugs consisting of the known compound. The concept relies upon the public policy position of rewarding with a patent monopoly the outcomes of successful and helpful medical research.

Each of the original patent term extension application made by AbbVie concerns a pharmaceutical substance called “adalimumab”. This is used in the manufacture of a medicament for the treatment of ulcerative colitis, Crohn’s disease, and rheumatoid spondylitis. Adalimumab is already marketed under the name “Humira.”

The Deputy Commissioner of Patents had originally rejected the request to extend the patents. In his decision, the Deputy Commissioner said,

“…while notionally directed to a method or process of manufacturing a medicament, the claims are characterised by a therapeutic use. Consequently, on the basis of my reasons in ThromboGenics I do not find that a pharmaceutical substance, when produced by a process that involves the use of recombinant DNA technology, in substance falls within the scope of the claims. I must therefore refuse the application for an extension of term.”

The Administrative Appeals Tribunal said that AbbVie’s patents were capable of extension because they satisfied s 70(2)(b) of the Australian Patents Act 1990. This was on the basis that adalimumab is “produced by a process that involves the use of recombinant DNA technology” which meant that AbbVie was trying to patent the process and not the product.

The Full Federal Court disagreed and looked to the term “pharmaceutical substance” and how it relates only to products, not processes. The Full Court said,

“58.The first and critical matter to note about Swiss type claims is that they are not claims to pharmaceutical substances at all. They are method or process claims which, in this connection, exhibit a dual character. First, they are directed to a method or process in which a substance is used to produce a medicament. Secondly, they have an additional method or process element constituted by a specific purpose to which the medication is to be used. Thus, the scope of Swiss type claims is fundamentally different to the scope of the claims addressed by s 70(2) of the Patents Act.

59.With specific reference to the present case, adalimumab is a pharmaceutical substance produced by a process that involves recombinant DNA technology. However, the claims in suit are not directed to adalimumab produced by recombinant DNA technology. They are directed to different subject matter. First, they are directed to a method or process in which adalimumab is used to produce a medicament. Secondly, they are directed to a medicament containing adalimumab that is to be used for specific therapeutic purposes, being those identified at [16] above. These claims do not meet the requirements of s 70(2)(b). In our respectful view, the Tribunal erred in concluding otherwise.”

(There was also discussion in the decision about the inclusion of the words “per se”, an important drafting issue we do not discuss in this summary, and there are also obvious consequences for drugs produced using rDNA technology.)

What does this decision mean for Swiss type claims in Australia? It poses a dilemma of indeterminate proportions by the patent owner at the time of drafting the patent. As stated above, Swiss type claims are not necessary in Australia, but provide benefits in foreign jurisdictions. This is of assistance when extending the patent by way of the Patent Cooperation Treaty into foreign markets. But within Australia, this decision quashes the potential to extend the life of a patent incorporating Swiss type claims. We note that Swiss type claims are invalid in Europe. But, practically speaking, given the relatively small size of the Australian pharmaceutical market compared to the global market where Swiss type claims are applicable, and the relatively small financial benefit arising from an additional five years of protection in this jurisdiction, there is probably no additional incentive to avoid using Swiss type claims arising from this decision.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

Limitations on the Prior Use Defence: Cabcharge Australia Limited v E2 Interactive [2017] ATMO 76 (28 July 2017)

On 30 August 2011, e2Interactive Inc. (the Applicant) filed a trade mark registration application for the following logo (the Trade Mark), covering a wide variety of products and services under classes 9, 35, 36, 38, 40, and 41, but mostly in relation to cards, communication, entertainment, and marketing/advertising. The application was initially rejected after examination revealed possible grounds for rejection under s 44, but the Applicant was able to provide evidence of prior use and the Trade Mark was advertised for possible registration. The Applicant engaged in the very Australian practice of drafting a trade mark application with a very wide specification. The Applicant’s trade mark included material for which it did not have evidence of use, but further, to which it seems unlikely to have ever wanted to applied the trade mark.

This opposition had been a long time coming. The proceedings commenced prior to the introduction of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 and accordingly, those amendments did not apply to this matter.

The application was opposed by Cabcharge Australia Limited (the Opponent.) Adopting the classic “scattergun” approach to drafting notices of opposition, the Opponent initially relied upon most of the grounds of opposition available under the Act, but later advised that it would focus only upon the ss 42(b), 44, 60, and 62(b) grounds.

As part of its evidence, the Opponent drew the hearing officer’s attention to pending trade mark No. 1390374 (“FASTCARD”) and the recently registered trade mark1416896, for “CABCHARGE FASTCARD.” Both trade marks cover goods and services in relation to various printed matter, electronic funds transfer, and taxi services that utilise electronic funds transfer.

The usual point of difference between s44 and s60 of the Act came into play. Under s 44 of the Act, the respective marks must be considered as being in “notional use” in relation to all of the goods or services covered by the application(s) or registration(s) under comparison, whether or not such use has actually taken place. Under s 60, however, it is the actual past use enjoyed by the mark(s) relied on by an opponent which matters and not any abstract concept of notional use. In furtherance of this, the Opponent also provided evidence of extensive marketing and advertising using its “FASTCARD” trade mark, as well as proof of substantial revenue from the period of 2010 to 2013. But the revenue attributed to just the case of the mark “FASTCARD” was not separated out from other revenue. The Hearing Officer noted this. This led to the failure of the s60 ground. (The 42(b) and 62(b) grounds similarly failed.)

The outcome then hinged on s 44, and deceptive similarity. Upon noting that an average consumer has a general awareness of traders’ tendency to update their branding over time (unfortunately, with this very interesting concept confined only to a single line within a single paragraph), the Hearing Officer found deceptive similarity between the Applicant and the Opponent’s trade marks:

“In my opinion the word ‘Fastcard’ is a memorable, essential and distinguishing feature of the Trade Mark and also of both the Opponent’s trade marks. It is likely that deception or confusion could occur through contextual confusion whereby the word ‘Fastcard’, the common and memorable element in each of the respective trade marks, may induce traders and the public to believe that the trade marks emanate from the same trade source.”

With deceptive similarity established, the next issue was prior use as a defence. The Applicant submitted proof of individual agreements and presentations with nineteen partners for their cards or technology that bear the trade mark. The earliest of these was a presentation entitled “InComm Executive Overview” and “InComm Overview” which were made to two retailers in May 2010, which contain images of the prepaid cards bearing their trade mark. Other evidence included copies of email between the Applicant and other Australian retailers dated August 2010, and contain attached images of prepaid cards, some of which bear the applied-for trade mark. Other evidence included a copy of a full page advertisement which appeared in the Xbox 360 Magazine and the GameInformer Magazine in December 2010. The advertisement contained images of seven prepaid cards, some of which also evidenced use of the trade. But despite the strong evidence showing prior use within the context of prepaid cards that bear the Trade Mark as early as 22 September 2010, the Hearing Officer clarified that it only satisfiedprior use in relation to a narrow specification of the goods and services claimed, namely Class 9 and Class 36.

At best, the Applicant had fourteen months of use in Australia prior to the relevant date, only some of which was concurrent with the Opponent. With no sales figures or advertising spend evidence to support the short period of concurrent use, the Hearing Officer considered the prior use defence only partially established. As such, the Applicant’s Trade Mark proceeded to registration with protection for only limited goods and services.

The order relating to the costs of the application was that each party was to bear its own costs. This is because of the following: “83.On 10 July 2017 I informed the Applicant’s representative that it was my intention to refuse to register the Trade Mark unless the specification was refined in classes 9 and 36 in accordance with the evidence of prior use and that the remaining conflicting goods and services were deleted. On 27 July 2017 the Applicant agreed to these amendments.” The suggestion is that if, perhaps, the Applicant had done this much earlier in the piece to the opposition hearing might have been avoided.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.