Australian confirmed as WIPO head

Dr Francis Gurry has been confirmed as Director General of the World Intellectual Property Organization (WIPO).

Dr Gurry is now the most senior Australian in the United Nations system; the first Australian to head a United Nations specialised agency since 1992, and only the third Australian to do so

Counterfeit brands website shut down

The Australian Competition and Consumer Commission has shut down the 'Designer Brand Outlet' website.

The ACCC alleged that false, misleading and deceptive representations were made on the website and that some of the clothes supplied were counterfeit copies.

The ACCC release is here.

Australian Courts and Spanish Law

In an appeal from a Trade Mark opposition, Ryan J in Neumann v Sons of the Desert SL [2008] FCA 1183, has seemingly significantly broadened the operation of section 42 of the Trade Marks Act.

Section 42(b) provides that an application for the registration of a trade mark must be rejected if its use would be contrary to law.

On the basis of an affidavit from a Spanish lawyer, Ryan J held that:

registration of the mark in Australia by the respondent to the exclusion of the applicant would be contrary to Spanish law, which governs the relationship between the parties. I accept this evidence and therefore consider that the opposition based on s 42 of the Act must also succeed.

The decision stands for the propositions that:

a) the law in question need not be Australian law; and

b) it is sufficient that the process of seeking and obtaining registration of the trade mark is contrary to law, irrespective of whether use (as seemingly required by the Act) of that trade mark in Australian would be so.

In this case, the appeal was not contested by the respondent, however if the decision is followed, it may require an Australian Court to decide whether certain actions would be contrary to the law of another country. One might have thought that applying Australian IP law was challenging enough!

Finkelstein J throws cold water on the Registrar’s decision to stay opposition proceedings

In proceedings before Justice Finkelstein of the Federal Court, Cadbury UK Limited successfully appealed the decision of a delegate of the Registrar for Trade Marks to stay opposition proceedings to the registration of its trade marks for shades of the colour purple in relation to chocolate and related products pending resolution of a Federal Court action for passing off and breach of section 52 of the Trade Practices Act.

By way of background Darrell Lea applied to the delegate to "suspend" the opposition proceedings "until the determination of [the passing off action]." In requesting the "suspension" Darrell Lea submitted that because Cadbury’s use of the colour purple was the subject of a Federal Court proceeding, it would be inappropriate to continue with the opposition proceedings as that may result in findings of fact that are inconsistent with those made by the Federal Court. The delegate accepted Darrell Lea’s argument. She said the judge deciding the passing off action must investigate the reputation of Cadbury in the colour purple and that such an inquiry would necessitate an investigation into similar evidence that would be useful in establishing factual distinctiveness for the purposes of section 41(6). The delegate considered that findings of fact made by the Federal Court would be based on more extensive material and would be better tested than evidence before the Registrar and a suspension would avoid duplication in the decision making process, and will reduce the chance of inconsistent findings resulting from the analysis of similar evidence. The Delegate then gave the following direction:

"[T]he present oppositions be suspended until the Federal Court decision in the passing off proceeding is handed down. If there is no appeal from that decision, the present oppositions shall be lifted from suspension, and further directions given such that the opposition will continue through the evidence stages in accordance with normal practice and procedure."

In reaching his decision that the delegate’s direction to stay the opposition proceedings for an indeterminate period could not stand and should be set aside, Finkelstein J firstly had regard to the Trade Mark Regulations in particularly reg 21.15(7). Whilst the Registrar’s power to give directions with regard to the conduct of opposition proceedings was not questioned, it was his Honour’s view that “the suspension of the opposition proceedings for an indefinite period amounted to a denial of justice and a refusal by the delegate to perform her duty to hear and determine those proceedings: R v Whiteway; Ex parte Stephenson [1961] VR 168, 170; compare Thornton v Repatriation Commission (1981) 35 ALR 485.”

His Honour also considered that in reaching the decision to stay the opposition proceedings the Delegate placed too much emphasis on the judge’s or judges’ findings. Finkelstein J stated that “(t)o proceed on the basis that it is unlikely that the Registrar will depart from the court’s findings and, that there is a public interest in avoiding inconsistent fact findings, indicates to me that there is a real risk that the delegate was not going to decide for herself the issues that must be decided to dispose of the opposition proceedings”.

This decision of Justice Finkelstein is interesting and one that will have ramifications not only on proceedings before the Registrar of Trade Marks but those before the Commissioner of Patents. Fortunately his Honour was able to provide us with some guidance on the circumstances where it would be appropriate to suspend an opposition proceeding pending resolution of a court proceeding. These are said to include: “a) the degree of similarity of the issues involved, (b) the significance of the issues to the opposition proceeding, (c) whether the Registrar has more evidence than the trial judge, (d) the likelihood of the judge’s findings being challenged, and (e) whether it may be unfair (ie a breach of the rules of natural justice) to rely on the judge’s findings or the evidence on which those findings were based.”

IP Australia surveys fashion designers

IP Australia recently sent a short survey to 450 members of the fashion industry.

The results revealed a pretty good level of awareness of IP, but with room for improvement!

New High Court Chief Justice

The Australian Government recently announced the appointment of Justice Robert French (currently of the Federal Court) as Chief Justice of the High Court of Australia.

Justice French takes up the position from 1 September, becoming the 12th Chief Justice appointed to the High Court since Federation, and the first from Western Australia. The current High Court Chief Justice Murray Gleeson will retire on 29 August. This appointment represents a significant change to the High Court bench and one that will prove very interesting especially in the area of IP given his Honour's experience in this area.

EMDG scheme extended to IP expenditure

The Export Market Development Grants (EMDG) scheme is an Australian Government financial assistance program for exporters. The scheme reimburses up to 50% of expenses incurred on eligible export activities.

A number of changes were made effective 1 July 2008 (claimable from 1 July 2009). These include allowing costs of patenting products overseas (and obtaining trade marks overseas) to be eligible for support.

Mere importation is trade mark infringement

Gyles J in Gillette Company v Schiavini [2008] FCA 1053 has confirmed the longstanding view that mere importation is use as a trade mark such as to constitute an infringement of a trade mark proprietor's rights.

Limited time to initiate infringement proceedings after Customs seizure

Jemella Australia Pty Ltd v MacKinnon [2008] FCA 1022 relates to a Customs seizure and an application for an extension of time under section 137 of the Trade Marks Act. It appears that the 10 day period for instituting infringement proceedings is rigid and that if any extension is sought it must be applied for and granted within the 10-day period.

At paragraph 22 Logan J states: "There are, therefore, readily identifiable and potentially conflicting commercial purposes which are resolved by the Parliamentary value judgment that I have mentioned. The time that is specified prime facie is quite short. It seems to me that that time represents Parliament’s view of a reasonable proportionality between potentially conflicting commercial interests. In those circumstances it seems to me unlikely that Parliament envisaged that there would be any ability for there to be what one might term “slippage” in the time limit prima facie specified in s 137(1). The language of s 137(1) also tends to reinforce that particular impression gleaned from evident purposes in the statute. Sackville J was plainly of the view that the language of s 137(1) had that quality."

IP Scorecard

The Australian Department of Innovation, Industry, Science and Research has released a 6-page analysis of registrable IP rights (particularly patents and trade marks) for the period from 2002 to 2006. The Scorecard looks at Australian applications and foreign applications by Australians (particularly in the US and Europe) . It is available as a PDF here.

New requirements for Australian patent and trade mark attorneys

New regulations have come into force that change the pre-registration requirements for patent attorneys with a focus on a more skills-based approach. It will be necessary to demonstrate two years appropriate employment experience.

Registered patent and trade marks attorneys now need to undertake compulsory continuing professional development activities each year.

Putting Your Best Foot Forward

The decision of Gordon J in Edwards v Liquid Engineering 2003 Pty Ltd [2008] FCA 970 provides an illustration of the need consider more than cost in developing a dispute resolution strategy.

In 2003, Edwards had obtained registration, in his own name, of two trade marks used by his then employer (who subsequently assigned its intellectual property rights to Liquid Engineering).

Liquid Engineering’s application for removal under section 92, alleging that Edwards did not intend, and had not used the trade marks in good faith, was allowed by the delegate of the Registrar of Trade Marks. Edwards appeal that decision.

Gordon J, minded to allow the appeal “on the basis that “good faith” for the purposes of s 92(4) requires no more than genuine intent to use a mark for commercial purposes; it does not involve any element of honesty or subjective good intentions” nevertheless delayed giving judgement in the appeal to allow Liquid Engineering to bring an application before the Court under section 88 on the basis that Edwards was not the owner of the trade marks, which her Honour, having heard the evidence, apprehended was the more appropriate means of dealing with the dispute.

Ultimately, it was determined that the trade marks were held by Edwards on trust for Liquid Engineering and Gordon J directed that the register of trade marks be amended to record Liquid Engineering as the true owner. However, despite Liquid Engineering’s argument that the initial section 92 action before the Trade Marks Office was appropriate as a lower cost alternative to Court proceedings, her Honour ordered that Liquid Engineering pay Edwards costs of the appeal, stating that:

“Parties should not be encouraged to bring inapposite claims on the grounds that they are cheaper; such a strategy may, as this case shows, backfire and if that occurs, it will result in more costs being incurred than if the best claim was brought in the first place.”

Anti-counterfeiting trade agreement negotiations

Both the Australian and New Zealand governments have announced that they will join with a number of other countries (including the USA, Japan, Switzerland, Canada, Korea, Mexico and the EC) to develop an Anti-Counterfeiting Trade Agreement (ACTA) as part of an international effort to curb the trade in counterfeit goods and pirated works.

It is intended that ACTA will set a common standard for intellectual property rights enforcement in matters such as criminal enforcement, border protection measures and civil enforcement; and establish enforcement best practices and mechanisms for international cooperation.

Barefoot and Fancy Free

In E. & J. Gallo Winery v Lion Nathan Australia Pty Limited [2008] FCA 934, handed down on 20 June 2008, Flick J considered a claim by Gallo that Lion Nathan had infringed Gallo’s trade mark BAREFOOT, registered in relation to wine, by the sale of beer under the trade mark BAREFOOT RADLER.

On the question of infringement, it was held that BAREFOOT and BAREFOOT RADLER were not substantially identical but were deceptively similar. Curiously, his Honour considered that had the comparison been between the registered mark BAREFOOT and the combination of the words Barefoot Radler and a “bare foot device” as used by Lion Nathan, no such deceptive similarity would have been found. Despite the finding of deceptive similarity, Flick J held that there was no infringement because the goods in question, being wine and beer respectively, were not goods of the same description.

Flick J also held that Lion Nathan was entitled to succeed in its application for revocation of the Trade Mark on the ground of non-use. While there were sales of BAREFOOT wine in Australia during the relevant period, the use of the trade mark by reason of those sales was not attributable to Gallo. In considering whether there were in fact any sales at all in the relevant period, his Honour rejected as inadmissible, evidence purporting to establish the offer for sale of wine at some time in the past on the basis of material obtained from the “Internet Archive Wayback Machine".

Costly Consequences

Three decisions handed down on 12 June 2008 illustrate how various tactical decisions can have implications on the costs awards made in intellectual property litigation.

In ITW AFC Pty Ltd v Loi and Tran Pty Ltd (No 2) [2008] FCA 895, Finkelstein J held that costs should lie were they fell in a patent dispute where both the claim for infringement and the cross-claim for revocation were unsuccessful. In rejecting the respondents argument that the proceeding should be treated as a single case in which the patentee failed, his Honour made several comments on the undesirability of parties bringing revocation actions without merit for purely tactical reasons concluding that:

“The usual order for bringing a hopeless case is to require the losing party to pay indemnity costs. Sometimes even that might not be enough. In patent litigation the parties are often large organisations that will not sufficiently feel the pain of an indemnity costs order. In those cases (I do not suggest this one) the proper order might be to require the legal practitioner to himself bear the costs, coupled with an order that the practitioner shall not be entitled to recover those costs from his client, notwithstanding any agreement to the contrary.”

In Nutrasweet Australia Pty Ltd v Ajinomoto Co Inc (No 4) [2008] FCA 876, also decided by Finkelstein J, his Honour was not prepared to award the successful party their costs on an indemnity basis because the ground upon which they had succeeded was raised only six days before the trial.

Finally, in Futuretronics.com.au Pty Limited v Graphix Labels Pty Ltd (No 3) [2008] FCA 896, Besanko J ordered that the applicant should have its costs of the infringement of copyright and breach of implied contractual term claims on which it succeeded, but that the respondents should otherwise have their costs of the proceeding. Despite the applicant being awarded only $10 nominal damages for the infringement of copyright, his Honour also made an order that the costs payable to the applicant not be reduced pursuant to O 62 r 36A(1) on the basis that copyright litigation is appropriately commenced in the Federal Court even where the monetary claim is small.

Colorado trade mark leave to appeal refused

On Friday 23 May 2008, the High Court rejected an application for leave to appeal the decision of the Full Federal Court in Colorado Group Limited v Strandbags Group Pty Limited [2007] FCAFC 184. A review of this case appeared on page 6 of Phillips Ormonde & Fitzpatrick's March 2008 newsletter, available here.

While leave was not granted, the Court suggested that there may be some uncertainty about the correctness of the Full Court's approach to s 41(5). The applicant argued that the "other circumstances" refered to in s 41(5)(a)(iii) do not include use of the mark by other traders which would only be relevant under s 60.

The transcript is here.

WIPO nominates Australian as next Director General

Dr Francis Gurry has been nominated by WIPO's Coordination Committee to be the WIPO's next Director General. Dr Gurry is an Australian national, who studied law and commenced practice here before joining WIPO in 1985. The General Assembly needs to formally appoint him at it's next meeting in September.

The WIPO announcement is here.

Health World v Shin-Sun - deceptive similarity case review

Since 1991 Health World Limited (“Health World”), had manufactured and sold a medicine product which it called Inner Health Powder. In 2000 it commenced sale of a similar product called INNER HEALTH PLUS and in September 2001 applied to register that name as a trade mark. However, in May 2001 Shin-Sun Australian Pty Ltd (“Shin-Sun”) applied to register the trade mark “HealthPlus” and subsequently obtained registration of that mark.

Crucially, as the proceedings were commenced prior to the commencement of the Trade Marks Amendment Act 2006 (Cth), Jacobson J found that the provisions of the Trade Marks Act 1995 (Cth) applied as they stood prior to the 2006 amendments. This meant that Health World were precluded from relying on the ‘contrary to law’ ground under s 42, that there was an additional requirement under s 60 that the marks be deceptively similar, and that there was an additional requirement under s 92 that the applicant for non-use be “a person aggrieved”.

Jacobson J found that the two marks were not deceptively similar because they conveyed different ideas and concepts. He was of the opinion that HealthPlus conveyed an impression of overall or general health and that INNER HEALTH PLUS specifically concerned internal health. In addition, he found the marks to be visually different as the dominant part of the INNER HEALTH PLUS mark was the phrase “Inner Health”.

At the heart of the dispute was the question of the reputation of Heath World in INNER HEALTH PLUS. Shin-Sun contended that Health World’s reputation in the Inner Health Plus capsules was not separate and distinct from its reputation in Inner Health Powder, the product it had launched nine years before. Jacobson J accepted Shin-Sun’s submission, and was of the opinion that the entire thrust of Health World’s launch of the Inner Health Plus capsules was to take advantage of the reputation of the Inner Health Powder and the goodwill attaching to it. He therefore rejected Health World’s ground for removal of the HealthPlus mark under s 88(2)(a) and s 60, claims that Shin-Sun had passed off its pharmaceutical products as those of Health World, and claims that Shin-Sun’s conduct was misleading and deceptive under the Trade Practices Act 1975 (Cth).

Health World also sought revocation of the HealthPlus mark under sections 88(2)(a) and 59, as at the time Shin-Sun applied for registration of their mark, they did not intend to use or authorise the use of the HealthPlus mark. Health World also sought removal of the HealthPlus mark on the ground that Shin-Sun had failed to use the mark in Australia during the three year period referred to in s 92(4)(a).

These grounds were raised because of the failure of Shin-Sun and the persons who conduct the business of that company to distinguish between the separate identities of Shin-Sun and an associated company, Nature’s Hive Pty Ltd (“Nature’s Hive”). In particular, the HealthPlus products identified Nature’s Hive rather than the trade mark owner Shin-Sun as being responsible for those products. Accordingly, Jacobson J found that Shin-Sun had failed to show an intention to use the mark and that Shin-Sun had not used the mark during the relevant three year period, but rather it was Nature’s Hive that used the mark during that period and at all other times. He also found that use of the HealthPlus mark by Nature’s Hive, although having the same directors as Shin-Sun, did not amount to authorised use because Shin-Sun did not relevantly control Nature’s Hive’s use of the mark.

Health World further contended that as the HealthPlus mark was being used to identify the goods of Nature’s Hive and not those of Shin-Sun, it was likely to deceive or cause confusion under s 88(2)(c). For the reasons above, this was accepted by Jacobson J.

It followed that if Health World had standing as a person aggrieved, the grounds under sections 59, 88(2)(c) and 92(4)(a) were made out. However, Jacobson J found that Health World was not a person aggrieved because the evidence was inconsistent with any intention of Health World to use the HEALTH PLUS trade mark, other than as part of its existing INNER HEALTH PLUS mark. As he found that the HealthPlus mark was not deceptively similar to the INNER HEALTH PLUS mark, Health World was found not to be a person aggrieved. Therefore, Health World’s applications seeking that the HealthPlus trade mark be removed from the register were dismissed.

The difficulties encountered by Shin-Sun illustrate the importance of ensuring that a trade mark is registered and remains in the name of the party that will use the mark. While Health World were able to show that Shin-Sun did not use the HealthPlus mark within the three year period specified in s 92(4)(a), the HealthPlus mark was not removed because Health World failed to show that they were a person aggrieved. It is important to note that the 2006 amendments have removed the requirement in s 92 that the applicant for removal of a mark be a person aggrieved.

Click here to see the judgement.

Change of Practice - Madrid applications

It is now possible to amend the statement of goods/services for an IR through IP Australia, rather than just deleting items.

Previously, IP Australia would only delete goods (e.g. “cars and trucks” to “cars”) but would not allow an amendment (eg “motor vehicles” to “motor vehicles excluding trucks” or to “cars”). An amendment formerly had to be requested through the IB, which was very inconvenient.

This practice is now changing. Note, however, that amendment is only possible if the goods/services in question have caused a provisional refusal.

Click here to go to the IP Australia release.

Two retailers concurrent use of the same trade mark – “Colorado”

Colorado Group Limited v Strandbags Group Pty Ltd [2007] FCAFC 184 involved the concurrent use of the trade mark “Colorado” by different retailers, Colorado Group and its predecessor in title (together “CG”) and Strandbags and its predecessor in title (together “Strandbags”).

CG obtained trade mark registration for “Colorado” from 2001 for goods including bags, wallets, purses and backpacks. Both CG and Strandbags had used “Colorado” before 2001.

CG brought trade mark infringement proceedings against Strandbags for its sale of Colorado-brand handbags, wallets, purses and backpacks. Strandbags counterclaimed, alleging CG’s registration was not valid in relation to those goods.

The trial judge had found that CG’s registration was valid for backpacks only and Strandbags’ handbags, wallets and purses would not infringe that registration.

The Full Court found that “Colorado” did not distinguish the relevant goods under section 41, so it was not a valid registration for those goods. The Full Court’s decision reversed the trial judge’s somewhat controversial finding that “Colorado” was inherently adapted to distinguish the relevant goods and was registrable under section 41(3).

The Full Court also found that, if “Colorado” was registrable:
* CG was the first user of Colorado for backpacks and was entitled to register “Colorado” for backpacks.
* Backpacks are not the same kind of goods as handbags, wallets and purses. Given Strandbags first used “Colorado” for handbags, wallets and purses, CG’s first use for backpacks did not entitle CG to claim ownership and register “Colorado” for handbags, wallets and purses.
* The registration was not obtained by a false suggestion.

Allsop J considered that Strandbags’ handbags would prima facie infringe a valid registration for backpacks, because handbags were of the same description as backpacks. Interestingly, the trial judge had formed the opposite view, finding that handbags were not goods of the same description as backpacks. However, Allsop J considered that Strandbags could take advantage of the prior use defence to infringement under section 124, because it had used “Colorado” on handbags prior to the date of CG’s registration or CG’s first use of “Colorado” on handbags.

The Full Court agreed with the trial judge that there was no actionable passing off or breach of the Trade Practices Act by Strandbags.

“Colorado” is not inherently adapted to distinguish the goods At trial, Finkelstein J recognised that “Colorado” was a geographical location, and that “Colorado” conjured up notions of trekking, ruggedness, fashion, Rocky Mountains and so on. However, in a decision that surprised many commentators, His Honour found that “Colorado” was inherently adapted to distinguish bags, wallets, purses and backpacks under section 41(3) because those notions did not describe the bags, wallets, purses and backpacks themselves.

The Full Court disagreed and found that “Colorado” was not inherently adapted to distinguish bags, wallets, purses and backpacks because an honest trader may wish to make use of “Colorado” given the notions “Colorado” conveys for those types of goods.

If a mark is only to some extent inherently adapted to distinguish, registration may be obtained if it is found that the applicant’s use of the mark does or will distinguish the goods (section 41(5)). The Full Court found that it could not be said that CG’s use of “Colorado” as at 2001 does or will distinguish the goods as being CG’s goods and no other’s, particularly because Strandbags was also using “Colorado” by that time.

This outcome demonstrates the difficulty of obtaining registration under section 41(5) (or s41(6)) if there is another trader concurrently using the same mark.

Ownership

If a trade mark has been used prior to the date of application for registration (as “Colorado” had been in this case), in Australia it is the first user of the mark for certain goods who is entitled to register the mark in respect of those goods and goods of the same kind.

CG asserted that it first used “Colorado” from 1982, when the mark was embroidered on backpacks. However the evidence was somewhat unclear about whether “Colorado” was first used alone or together with a mountain logo. If “Colorado” was used along with the mountain logo, CG may not be entitled to claim ownership of “Colorado” alone. If CG could not claim to be the owner of “Colorado” alone, its registration would be invalid in light of later use by Strandbags.

CG relied on the evidence of a store employee, who recalled that in 1982 and 1983 CG was selling a style of backpack which had the word “Colorado” but no logo embroidered on it.

Strandbags bore the onus of proving that CG did not use “Colorado” alone on backpacks. Allsop and Kenny JJ found Strandbags did not discharge the onus, as it was not clear that CG was not the first user of the mark “Colorado” alone on backpacks. This result illustrates the difficult evidentiary burden faced by a party disputing another’s claim to ownership of a mark by first use.

In addition to backpacks, CG’s registration covered bags, purses and wallets.

However, Strandbags used “Colorado” for handbags, purses and wallets before CG (but after 1982). Therefore, CG’s registration would not validly cover handbags, purses and wallets unless they were goods “of the same kind” as backpacks. The trial judge and Allsop and Kenny JJ all agreed that backpacks were not the same kind of goods as handbags, wallets and purses. (The Court was divided as to whether handbags were the same kind of goods as wallets and purses.)

Kenny J noted that a policy reason for assessing narrowly which goods are goods of the same kind is that “if the acquisition of a mark by a prior user were to extend to a broad ill-defined set of goods, this would have the capacity to undermine the efficiency of the registration system” (at [19]).

False suggestion

Strandbags also alleged that CG’s registration was accepted because of a false suggestion made to the Trade Marks Office about the extent of Strandbags’ use of “Colorado”, namely, a statement conveyed the impression that nothing of relevance happened after 1990 or 1991 in relation to the activities of traders other than CG.

In actual fact, Strandbags continued to use “Colorado” after 1991.

False suggestion is an unusual ground of revocation and it was not accepted in this case, primarily because the statement to the Trade Marks Office merely conveyed an impression - it was not a clear statement and it was not intended to be a false suggestion.

Infringement

Because the Full Court found that CG’s registration for “Colorado” was not valid for the relevant goods, it was not necessary to consider whether Strandbags had infringed the registration. However Allsop J went on to consider infringement in any event. For Strandbags’ handbags, purses and wallets to infringe CG’s registration for backpacks, those goods had to be “of the same description” as backpacks, or the service of supplying those goods had to be “closely related” to backpacks (s 120(2)).

The trial judge had found that neither handbags, nor purses and wallets were goods “of the same description” as backpacks. Allsop J disagreed, finding that handbags and backpacks were goods “of the same description”, (despite having found they were not goods “of the same kind” for ownership purposes.) Allsop J did agree with the trial judge that wallets and purses were not goods “of the same description” as backpacks. Allsop J concluded Strandbags’ backpacks and handbags would prima facie infringe.

Prior use defence to infringement

Allsop J then considered whether Strandbags could take advantage of the prior use defence to infringement under section 124, which would be available if Strandbags had continuously used “Colorado” before the earlier of CG’s 2001 registration or CG’s first use of “Colorado”.

For Strandbags to take advantage of section 124, Allsop J interpreted the section as requiring Strandbags to have been using “Colorado” before CG on the goods of the same description as those for which registration was obtained (ie on handbags) before CG had used “Colorado” on those same goods (ie handbags). That is, even if CG used “Colorado” on the goods specified in the registration (backpacks) before Strandbags used “Colorado” on handbags, Strandbags could still take advantage of section 124.

In this case, Strandbags used “Colorado” on handbags before CG did and this was before 2001, so Strandbags had a defence to infringement under section 124.

Polo/Lauren Company L.P. v Ziliani Holdings Pty Ltd

The Federal Court has confirmed that the door is now shut to trade mark owners seeking to use copyright in a mark or label as a means of preventing parallel importation in the recent decision of Rares J in The Polo/Lauren Company L.P. v Ziliani Holdings Pty Ltd [2008] FCA 49.

Ziliani Holdings (Ziliani) had imported into Australia for sale a number of articles of clothing onto which the Polo/Lauren ‘polo player logo’ was embroidered. Ziliani did not have the licence or consent of Polo/Lauren to import or sell those articles in Australia. The central issue in the case was whether sales to and purchases by Ziliani in the United States of genuine articles of clothing under the Ralph Lauren brand entitled it to ‘parallel import’ those goods into Australia.

Polo/Lauren had claimed that Ziliani infringed its copyright in the ‘polo player logo’ in Australia when it appeared embroidered on a genuine article imported into Australia. However, the proceedings were dismissed with costs.

The main question was whether a symbol or trade mark comprised of an artistic work when lawfully applied or embroidered overseas to the external surface of an article of clothing, was protected by copyright under the Copyright Act 1968 (Cth) (“the Act”) such that the copyright owner in Australia could prevent importation into, or sale in, Australia. This turned on whether the ‘polo player logo’ when embroidered on an article of clothing was a “non-infringing accessory” and therefore within the scope of section 44C of the Act.

In a similar manner to section 123 of the Trade Marks Act 1995, section 44C provides that copyright in a work, a copy of which is on or embodied in a “non infringing accessory” to an article is not infringed by importing the accessory with the article. The term “non infringing accessory” is broadly defined in section 10 of the Act to be an accessory made in a Berne Convention or WTO country with the permission of the copyright owner in that country. An “accessory” is also broadly defined and relevantly includes a “label” affixed to, or incorporated into the surface of the article.

Section 44C of the Act was introduced in 1998 following the decision of Young J in the Supreme Court of New South Wales in R & A Bailey & Co Ltd v Boccaccio Pty Ltd ((1986) 4 NSWLR 701; 77 ALR 177) in which the plaintiffs, who owned copyright in a painting appearing on a label affixed to a liqueur bottle, were entitled to restrain the importation and sale of liqueur in the bottles on which the label appeared. The Copyright Law Review Committee in recommending the amendment to the Act stated that distributors of goods should not be able to control the market for their products by resorting to the subterfuge of devising a label or a package in which copyright subsists. Rares J stated that the 1998 amendments to the Act were designed to prevent such an inappropriate use of copyright.

Polo/Lauren argued that the polo player logo was not a label but rather a decorative feature of articles on which it was placed. Rares J noted that the term “label” is not defined in the Act and therefore it was likely that the ordinary English meaning was that intended by Parliament. This was held to include a brand name, trade mark and the name by which a design or fashion house, and its product, such as ‘Polo’ and ‘Ralph Lauren’ and ‘Polo Ralph Lauren’, is generally known.

The evidence accepted by Rares J had established that if a shirt had the polo player logo on it, the presence of the logo conveyed to the person looking at it that it was manufactured by an entity within the Ralph Lauren group. According to Rares J, the polo player logo ‘labels’ the garment as a product of that design or fashion house and was therefore a label within the definition of accessory.

Accordingly, it was held that the polo player logo when embroidered on an article of clothing was a “non-infringing accessory”, being a “label” for the purposes of section 44C and therefore that copyright was not infringed by the importation or sale of the article. Rares J in dismissing the proceedings, stated that the Trade Marks Act and the tort of passing off adequately protected trade mark owners of wrongful exploitation of the trade mark by another.

Additionally, Rares J held that the copyright/designs overlap provisions would apply to the ‘polo player logo’ such that it would not be an infringement of copyright to embroider the polo player logo on an article of clothing in Australia. Therefore an importer in that situation would not be liable for copyright infringement as it could not have the requisite knowledge that the article would infringe copyright if made in Australia.