Last year saw important infringement cases throwing up major issues, including the use of a name as a defence to trade mark infringement, when a domain name can be used as a trade mark and what constitutes goods of the same description.
Optical 88 Ltd v Optical 88 Pty Ltd [2010/2011]
The applicant, Optical 88 Ltd (88HK), operates many optical stores, primarily in Hong Kong. 88HK began business in 1987. It owned various registered Australian marks. See table below.
88HK had no Australian stores and could show only very limited use of its trade marks in Australia. That use was limited to three of its Hong Kong stores (in a total of eight transactions) sending bonus coupons and receipts incorporating its 707 Mark to customers in Australia for the sale of third party branded products. An optical cleaning cloth bearing the Optical 88 logo was also included. All the optical products 88HK supplied were third party branded products.
The second respondent (Law) established an optical business in 1984. In February 1992 (after the 707 mark priority date), he rebadged the business, registering Optical 88 as a business name. In 1993, Law incorporated Optical 88 Pty Ltd (88Oz) using the name Optical 88 by itself and in combination with Vision Centre and VIP Card on store signage and stationery.
Law and his wife were Hong Kong expatriates. He travelled to Hong Kong on various occasions from 1984 to 1992 to attend optical conventions, reading local business and professional publications. Despite this, he said he was unaware of 88HK and chose Optical 88 for business and cultural reasons.
|88HK's key trade marks |
88HK commenced proceeding against 88Oz and its directors alleging trade mark infringement, breach of the Trade Practices Act 1974, passing off and copyright infringement. This article considers only the trade mark infringement claims.
88Oz's defence and cross claims
The respondents claimed use of Optical 88 in good faith as their own name (section 122(1)(a)(i) of the Trade Marks Act 1995), that they had prior continuous use of the Optical 88 name except in relation to the 707 mark (section 124) and that they could obtain registration of the mark (section 122(1)(fa)).
The respondents cross-claimed under section 92 to have 88HK's 707 mark and 966 mark removed for non-use.
The decision at first instance
His Honour's decision at first instance held as follows:
- 88Oz's use of Optical 88 was deceptively similar to, and therefore infringed, 88HK's relevant trade marks but defences were available;
- in assessing deceptive similarity in composite marks, word elements should not too readily be assumed to be essential or distinguishing features but in this case they were (and therefore infringement was established);
- 88Oz's defence of use of its own name in good faith succeeded even though there were additional word elements in most uses by 88Oz;
- 88Oz's use of the name was honest (despite Law's visits to Hong Kong) because Optical describes the type of business and 88 is considered to be lucky by Asian cultures, also representing spectacles – the name was not so unusual that it could only have come from Law's knowledge of 88HK;
- 88Oz had continuously used its trade marks from a date before the registration of all 88HK's marks except the 707 mark;
- 88Oz's section 122(1)(fa) defence failed because section 60 (prior reputation leading to deception or confusion) would have entitled 88HK to oppose any application by 88Oz – 88HK's evidence from a survey it conducted in six Sydney shopping centres (including the three where the 88Oz stores were located) showed that half the survey participants associated the name with 88HK (with 40% associating it with Sydney/88Oz);
- all use of the relevant trade marks was by 88Oz – the Laws were not personally liable for infringement;
- 88HK bore the onus to rebut allegations of non-use and no intention to use its marks;
- 88HK's very limited use of Optical 88 in Australia would have been sufficient but it was not use of the 707 mark – the 707 mark was registered only for goods and 88HK's limited use was for services;
- 88HK had only a vague, general intention to use the 966 mark in the future; insufficient to constitute an intention to use to support its registration;
- the 707 mark and the 966 mark must be removed from the register for non use.
The decision on appeal
Justice Yates' decision was upheld. In relation to the section 122(1)(a)(i) defence (use of own name), their Honours (Cowdroy, Middleton and Jagot) reaffirmed that adding other elements to the name does not remove the availability of the defence.
Symbion Pharmacy Services v Idameneo
Symbion Pharmacy Services Pty Limited (Symbion) was previously a subsidiary of Idameneo (No 789) Ltd (Idameneo). Symbion was involved in the pharmacy and pharmaceutical distribution business. Idameneo was involved in the provision of medical services and diagnostic imaging and pathology services.
In 2008, Primary Health group acquired Idameneo (and Symbion). Idameneo then sold Symbion to a third party. Under the sale agreement, Idameneo assigned to Symbion or confirmed that Symbion owned, certain trade marks including Symbion and the following device (the Triangle Device):
The Triangle Device was registered in respect of various goods and services including medical services, pharmacy services and diagnostic, imaging, pathology, general practitioner and hospital services.
Idameneo contractually committed to Symbion not to use any trade marks which were the same as, similar to or capable of being confused with the Symbion-owned marks (except for a short-term transitional use licence).
In 2006 and 2007, before acquiring Idameneo and divesting Symbion, Primary Health made limited use of the unregistered mark below (the Circular Device) in connection with diagnostic imaging services:
After the sale of Symbion, Idameneo began using the Circular Device for diagnostic imaging and radiology services.
Symbion claimed that Idameneo's use of the Circular Device infringed Symbion's Triangle Device and breached Idameneo's contractual obligation not to use similar trade marks. This article does not discuss the contractual issues other than to note that Judge Jessup found that Idameneo had breached the contract.
Idameneo asserted that there was no possibility of confusion because the Circular Device was used for diagnostic and radiology services while the Triangle Device was used for distribution of pharmaceutical products.
The decision at first instance
Judge Jessup held as follows:
- radiology services supplied by Idameneo using the Circular Device are within the class of services for which the Symbion Triangle Device is registered;
- these are specialised services offered to a specialised market, not to the general public. Therefore, evidence from persons in the trade as to the likelihood of deception or confusion is required: General Electric Co Limited (USA) v General Electric Co Limited ;
- Idameneo submitted evidence from its managing director, who was a general practitioner for over 35 years;
- Symbion offered no specialist evidence and did not challenge Idameneo's evidence;
- Idameneo's evidence was that diagnostic imaging services users must necessarily know and use the name of the service provider; thus the use of a logo (even if similar) would not cause deception or confusion;
- as Symbion provided no evidence and did not challenge Idameneo's evidence, Idameneo's evidence must be accepted and Symbion's infringement case dismissed.
The decision on appeal
The Court affirmed Judge Jessup's decision that in a specialist market, evidence of deception or confusion from those involved in the trade is required and the judge cannot rely on his or her own impressions or general knowledge. Their Honours (Rares, Gilmour and Dodds-Streeton) overturned the decision of Judge Jessup on the breach of contract issue, holding that Idameneo did not breach the contract.
Hills Holdings v Bitek 
Hills Holdings Ltd (Hills) held a registered series mark (no 901020) for DGTec and variants for "digital and electronic products" in class 9 registered from January 23 2002. Hills had used DGTec on set-top boxes since 2001 and on other electronic products including televisions and DVD recorders since November 2005. These electronic products were sold through various national retailers.
In July 2003, Bitek Pty Ltd (Bitek) applied to register Digitek in class 9 for "TV installation accessories including external TV antennas, none of the foregoing being set-top boxes". Bitek had used the Digitek mark since January 2004 on TV installation accessories including antennae, brackets and switch selectors and on TV-related products such as set-top boxes and remote controls. Bitek sold its installation products through specialist suppliers to the trade.
The Hills opposition to Bitek's Digitek application was unsuccessful. Hills appealed to the Federal Court against the opposition decision. In separate proceedings, Hills claimed that Bitek's use of Digitek infringed Hills' DGTec mark and breached the Trade Practices Act 1974. Bitek cross-claimed, seeking the removal of Hills' mark for non-use. This article focuses on the infringement proceedings.
Judge Lander held as follows:
- the Digitek mark was deceptively similar to the Hills DGTec mark – both marks were visually and phonetically similar and had a similar meaning;
- Bitek's use of Digitek on set-top boxes and remote controls did infringe Hills' DGTec mark;
- Bitek's use of Digitek on TV installation accessories did not infringe Hills' mark because they were not goods of the same description;
- TV installation accessories are "fundamentally different" from televisions, are sold through different channels to different types of customers and are not substitutable for televisions even though they are interdependent;
- Bitek's defence under section 122(1)(fa) – entitlement to registration of the mark – succeeded except in relation to set-top boxes and remote controls;
- Bitek partially succeeded in its removal for non-use application with Hills' trade mark being limited to the goods to which it was actually applied; use of one of the marks in a series was evidence of use of all other marks in the series;
- even if Bitek's non-use application had succeeded entirely, Bitek would still have been liable for the prior trade mark infringement (E&J Gallo Winery v Lion Nathan (Australia) Pty Ltd  applied).
Solahart Industries v Solar Shop 
Solahart Industries Pty Ltd (Solahart) manufactured, sold and installed hot water heaters since 1953. It holds various registered trade marks for Solahart in class 11.
In May 2009, Solar Hut Pty Ltd began selling solar electricity generation systems through its website solarhut.com.au. Solahart objected to Solar Hut's use of the Solar Hut name. In response, in October 2009, Solar Hut launched its Sunsavers brand sold via its sunsavers.com.au website and ceased direct promotion via the solarhut.com.au site. However, Solar Hut maintained solarhut.com.au for an additional year, directing searchers to the sunsavers.com.au website. All references to Sola Hut were removed from solarhut.com.au.
Solahart alleged that Solar Hut infringed three of Solahart's Solahart trade marks under sections 120(1) and 120(2) of the Trade Marks Act 1995 by using Solar Hut as its primary brand and website and then continuing to operate solarhut.com.au after establishing sunsavers.com.au. This article does not cover Solahart's passing off and breach of the Trade Practices Act 1974 claims.
His Honour Judge Perram held as follows:
- Solahart's section 120(1) infringement claim failed because the Solar Hut goods were not the same as the goods covered by Solahart's marks;
- Solahart's primary section 120(2) claim succeeded because the Solar Hut goods were goods of the same description as those covered by Solahart's marks. His Honour acknowledged that this is an inherently contestable issue;
- there were differences between the goods: Solahart sold solar hot water products installed by plumbers while Solar Hut's solar energy generation goods were installed by electricians;
- there were similarities between the products: use of the sun, reducing electricity usage and roof mounting;
- there was some evidence of substitutability with demand for photovoltaic products having reduced demand for solar hot water products;
- Solar Hut is not substantially identical with Solahart because Sola refers to the sun and lacks distinctiveness while Hut does not look like Hart in length or structure;
- Solar Hut is deceptively similar to Solahart – Solar and Sola have the same meaning and are visually and phonetically very similar; Hart and Hut are not visually similar but are very similar aurally;
- use of the Solar Hut name and website before the Sunsavers mark was adopted was use as a trade mark and infringed Solahart's marks with the domain name being "largely analogous to a shop front";
- continued operation of solarhut.com.au after the sunsavers.com.au launch was also use as a trade mark and therefore infringed Solahart's marks – the purpose of maintaining the website was to increase sales of Solar Hut's goods.
Clarification by the Court in 2011 infringement cases
2011 saw the Court providing important clarifications on the following key issues:
- only low level use is needed to resist a removal for non-use application, even for a foreign company with no Australian establishment – but the use must be in respect of the goods or services for which the mark is registered;
- an intention to use a mark must be more than a vague, unspecified future plan;
- a high level of personal involvement is necessary for directors of a company to be personally liable for infringement;
- the infringement defence under section 122(1)(a)(i) relating to use of own name is quite broad, extending to uses of marks incorporating the alleged infringer's name;
- for trade mark infringement claims in specialised industries, the applicant must submit evidence of the likelihood of confusion or deception from a qualified person engaged in the relevant field or the infringement case will fail;
- in considering whether goods are goods of the same description, the issue of substitutability is becoming increasingly important. Interdependent goods are not goods of the same description;
- even if a trade mark is removed for non-use, the holder still has an action for infringement occurring during the period before removal;
- using a domain name which promotes or has another connection with goods and services similar to that of the trade mark owner is likely to be trade mark infringement even if the name is not actually used on the website.
By noting these key lessons, trade mark owners can increase their prospects of successfully enforcing their rights while others can take steps to reduce the risk of infringing registered trade marks.
Chris Bevitt is a partner of Shelston IP Lawyers and heads the commercial law team. He combines a strong intellectual property focus with the knowledge and experience gained from over 20 years of practice in commercial law.
Chris is a registered trade mark attorney as well as a lawyer. He advises clients extensively on all aspects of trade mark practice including filing and prosecution, oppositions, non-use and infringement proceedings, passing off and Australian consumer law matters. His practice also covers trade mark licensing and other commercialisatoin. Chris has clients across the spectrum of industries including manufacturing, financial services, mining, biotechnology, IT, hospitality and the sporting sector.
In addition to his trade mark practice, Chris advises on a broad range of contractual and transactional matters including acquisitions and disposals of businesses and shares, company structuring, shareholders agreements, advertising and sponsorship contracts, trading terms and conditions and other commercial contracts. In the IP commercialisation area, he assists with joint ventures, licensing agreements, supply and distribution agreements and manufacturing agreements.
Plain language drafting is one of Chris’ great strengths. He has prepared a comprehensive plain language training manual and has run many training courses in using plain language.