What is a trademark?

 

WHAT IS A TRADEMARK?

A trademark is defined in S17 of the Trade Marks Act 1995 (Cth) (TMA) as ‘a sign,  used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by another person‘.

To satisfy the definition of a trademark legally, each of the elements in the definition above must be established for a mark to qualify as a trade mark.

A ‘sign‘ under  S6 TMA is defined very broadly and inclusively rather than exhaustively.  It includes the following or any combination of the following;  a word,  name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent.

NON-CONVENTIONAL TRADEMARKS

There is a trademark in the United Kingdom for beer smelling darts, the colour lilac has been registered in relation to Milka chocolate by Lindt. Philmac has a trademark for the single colour terracotta as applied to the connecting inserts of polypipe fittings Philmac Pty Ltd v The Registrar of Trade Marks [2002] FCA 1551.

In the 2010 case of Mars Australia Pty Ltd (formerly Effem Foods Pty Ltd) v Societe des Produits Nestle SA [2010] FCA 639 the Court granted a colour trademark for ‘Whiskas Purple’ a colour “made up from scratch” by the European marketing division, being described as a mixture of cyan 40% and magenta 100%.

Red Bull’s colour trademark  is under attack after the European Court of Justice’s decision in the Heidelberger Bauchemie Gmbh case, which cast doubt upon the registrability of colour marks which fail to properly delineate the contours of the colours  within a graphical representation of a trademark.

In Australia, BP was unsuccessful in claiming a trade mark over the colour green(See BP Plc v Woolworths Ltd). After a long battle with Darrell Lea, Cadbury Schweppes acquired trade mark rights over five shades of the colour dark purple in relation to chocolate.

Other brands have acquired rights for colour marks. Telstra has registered a trademark over its yellow pages phone books, whilst the Australian Postal Corporation has a trade mark for the colour yellow for mail delivery. Kraft Foods Limited has secured a colour trademark over the colour silver for cream cheese. There are currently over 200 colour marks registered on the trade marks database.

Recently Austrian shoe company, Think Schuhwerk, applied to register “shoes with laces with red tips on the ends of shoelaces” as a Community Trade Mark (CTM), but their application was rejected  because the impression created by shoelaces with red tips does not differ greatly from the normal patterns of lace shoes. Additionally the Board of Appeal found that the company had not submitted evidence to suggest that the colour of parts of a shoe lace as perceived by relevant consumers as an indication of the brand or origin of the shoes.

A trademark can become a valuable intangible commercial asset particularly given the increasingly important role trademarks have assumed in advertising and marketing.
Traditionally trademarks served to identify the source or origin of goods,  but in today’s world of mass advertising,  they play a role beyond this,  evoking compelling imagery as a means of eliciting consumer preference  for one brand over another.

Through advertising consumers are educated  to associate a certain image, quality or reputation with goods or services bearing a particular trademark.   In today’s market the shape of a manufacturers’ goods or packaging,  the use of colour, pheromones, and other advanced marketing techniques are being used to capture the senses of consumers and can end up becoming an integral part of a brand.

Whilst three dimensional shape marks have been permitted in some countries,  for example, the shape of a Coca Cola bottle, such non-conventional trade marks are more difficult to attain in practice.

Shape marks and other non-conventional trademarks have been expressly provided for since 1995 in the TMA .   However even prior to the 1995 amendments explicitly recognising the registration of shape marks, three dimensional trade marks and other non-traditional  trademark rights had been granted by Courts. For instance a trademark over the colour bands occupying the external surface of multicoloured party pharmaceutical pellets was granted in Smith Kline and French Laboratories Ltd. v Sterling Winthrop by the House of Lords.

Although a shape mark can be registered,  it cannot be the product itself, and must be embodied in or applied to an article or part of an article, otherwise registration of a mark might confer a permanent monopoly on the use of goods of a particular type of character.  A shape used to achieve a purely functional result cannot operate as a trademark according to Australian case law see Koninklijke Philips Electronics NV v Remington Products Australia (shape of Philips’ triple headed rotary shaver) & Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks (shape of ‘insect like’ candy). In Chocolatiere Guylian N.V. v Registrar of Trademarks the Belgian Chocolate maker Guylian was unsuccessful in obtaining trademark registration over its seashell shaped chocolate.

Coca-Cola has enforced its rights over its iconic contour glass bottle in Australia in the case against a Cola flavoured bottle shaped confectionary maker in Coca Cola Company v All-Fect Distributors Ltd (2000) AIPC 91-534

Coca-Cola won a long battle in the Japanese IP Court to acquire 3D trademark rights over its contour bottle and has also obtained three community trademarks (CTMs) from the Office for Harmonization in the Internal Market (European Union) OHIM in relation to its bottles. Coca-Coca has also recently filed an action in the Federal Court of Australia for trademark infringement, passing off and breaches of ss52 & 53 of the Trade Practices Act 1974 (Cth) against Pepsico and Schweppes in relation to their use of Coca-Colas contour bottle.

GOOD FAITH

One of the elements of the definition of a trade mark in S17 TMA is the requirement that a trade mark be used or proposed to be used in good faith.  This means genuine commercial use (see Imperial Group Ltd v Philip Morris & Co).  In the Philip Morris, case upon being alerted to the fact that the name ‘Merit’ was unregistrable for cigarettes, the word ‘Nerit’ was registered by Philip Morris with no commercial intention to use the mark.  This practice, called ‘ghostmarking’, is impermissible and led to mark being declared invalid.

Filing trademark applications to prevent a competitor or business using them or  warehousing trade marks to sell them back to legitimate owners would also fall into the category of a lack of good faith.

As stated in the above definition in S17, trade marks must be distinctive. A trade mark, by definition, must also be dealt with or provided in the course of trade.    This is part of the essential nature of a trade mark;  a connection in the course of trade, meaning a connection between the goods and the person with the entitlement to use the mark.

A trade mark can be owned by a retailer, distributor, importer or designer of a product, however in each case, the ‘owner’ must  exercise some control over the product,  otherwise the trade connection or origin may not be proven. (See Montana Tyres Rims & Tubes Pty Ltd v Transport Tyre Sales).

In Intellectual Property law there is a degree of overlap between the statutory regimes which protect intangible property. Therefore it is prudent to consider any potential interaction of trademark protection with other forms of protection such as copyright and design protection, bearing in mind the different types of rights the respective regimes are intended to protect, and any benefits or restrictions attached to a particular form of protection. Where a logo has been registered as a trademark it is likely that copyright might also subsist in elements of the logo.

THE DIFFERENCE BETWEEN TRADEMARKS, DOMAIN NAMES AND BUSINESS/COMPANY NAMES

Trademarks must be distinguished from business names, company names and domain names which serve a different function and, most importantly, do not confer a proprietary interest upon the owner. The Corporations Act 2001 (Cth) mandates that company names be registered with the Australian Securities and Investments Commission, whilst the purpose of business names legislation in each state, such as the Business Names Act 1962 (Vic), is to ensure that consumers are able to identify the owners of a business name.

It is a popular misconception that registration of a business name or company name confers upon the owner a right to prevent other persons using that name as a trade mark.  However this is not the case unless the owner of the name can prove they have acquired a sufficient reputation in the relevant name such that it has acquired the status of a trademark.  Domain names are merely user friendly alphanumeric internet addresses.

Typically, words selected for use in a domain name will consist of the trading name of a business, or a trademark a business uses in relation to their goods or services. Whilst domain names perform a similar identifying function, they differ markedly in their legal character from trademarks.  Like business and company names they are merely a form of contractual licence or permission to use a particular name as distinct from registered property.

Where a domain name which is identical or confusingly similar to a trademark has been registered in bad faith, the trademark owner may bring a complaint seeking the transfer or cancellation of the domain name under administrative dispute resolution procedures which have been set down by the International Corporation for Assigned Names and Numbers (ICANN).   The Uniform Dispute Resolution Policy (UDRP)  applies to disputes over domain names in the top level .com domain name space,  whilst disputes arising in the Australian country code top level domain are resolved under the auDRP dispute resolution policy.

COMMON LAW OR UNREGISTERED TRADEMARKS

It isn’t mandatory to register a trademark to acquire trademark rights in Australia and other countries which recognise ‘common law’ trade marks.  However  there are considerable benefits to be enjoyed from acquiring a registered trademark. Protection for some unregistered trade marks can be achieved by bringing an action for the  tort of passing off and/or under the Consumer and Competition Act 2010 (Cth) for misleading and deceptive conduct and corresponding State legislation eg Fair Trading Act 1999 (Vic)).

However it is both time consuming and expensive to bring an action for passing off and/or misleading and deceptive conduct in the courts.  It is much easier to enforce a registered trademark which confers perpetual protection upon the owner.  Trade marks are personal property,  which means they can be transferred, assigned, licensed, mortgaged or bequeathed; s21 TMA.   Having a registered trade mark enables a business to sell the goodwill of the business separately without having to sell their entire business.   A trademark can be valued  and included on the balance sheet of a business to reflect its value.

Any assignments of a trademark are recorded on the official Trademark register.  Registration gives the trademark owner the exclusive right to use the trademark in relation to the goods and/or services upon which it is registered under s20(1)(a), including the authority to authorise others to use it and obtain relief in respect of infringement.

WHAT KINDS OF TRADEMARKS CAN BE REGISTERED? – DISTINCTIVENESS

A trademark which is too generic or descriptive of your goods and services will prove difficult to register as the law is loathe to allow trademarks to be registered which other traders are likely to want to use to promote and advertise their goods and/or services.

A trademark will only be able to be registered if it is distinctive, namely if it is capable of distinguishing the goods or services upon which it is used from the goods or services of othersS41(2) TMA.

Trademarks usually fall into a range of categories along a spectrum of distinctiveness, from most distinctive to least distinctive, namely arbitrary, fanciful, suggestive, descriptive and generic.

An arbitrary trademark is one whose meaning bears no relation to the goods and/or services being sold eg Apple for Computers.  Trademarks which fall into the first three categories will generally be regarded as inherently distinctive, whereas those which fall into the last two categories will generally be characterised as lacking the requisite distinctiveness to function as a trademark, unless they have acquired a sufficient degree of secondary meaning in the eyes of consumers.

The question is whether the mark has the capacity to distinguish the applicant’s goods or services or has acquired a distinctive character through use.

To qualify for registration a trade mark must be capable of being represented graphically; S40.  Regulation 4.3 of the  Trademark Regulations 1995 (Cth) sets out the rules regarding the representation of trademarks.  See also the Trade Marks Manual Of Practice and Procedure (Part 21, [2] – [4]), the official guide to practice in relation to the examination of trade marks published by IP Australia.

Section 39(1) of the Act proscribes the registration of certain signs; r4.15(f) (see alsos18).  For example the use of the word patentcopyrightOlympia, trademarks containing certain symbols such as the copyright symbol, whilst  representations of a flag, arms, emblems or seal of the Commonwealth, State, or Territory are prohibited. An application for a trademark may be rejected if it is deemed to be scandalous S42(a) or otherwise contrary to law underS42(b), eg a breach of copyright or in contravention of s52 or s53 TPA.

Apart from marks which affront religious sensibilities,  in practice it is rare for a mark to be refused or contested on the grounds that it is scandalous and transgresses S42(b). Marks considered crude, rude or in bad taste such as Look Good + Feel Good = Root Good,  are considered in the context of the marketplace, in this instance deemed to fall short of scandalous, being “a summary of the product’s operation…..evocative of either mathematical precision or, perhaps, of some possible language of our cave dwelling ancestors“).  Whilst FCUK and CNUT have been accepted for registration, obvious phonetic equivalents of english words such as kunt (“kuntclothing.com”) will fall afoul ofS42, being “against the universe of discourse in Australia“.  In the latter decision the Trademarks Examiner rejected the applicants’  submissions the word kunt was a well known trademark used by a European electrical manufacturer,  a Dutch surname, which also meant “can do“, and  an acronym for ‘Kakadu Unspoilt Northern Territory‘.

A trademark is also capable of being rejected if it is substantially identical or deceptively similar to a registered or pending trademark in respect of similar goods or closely related services, ss44(1)&(2). The Examiner may also reject an application for a trademark if because of some connotation within the trademark it would be likely to deceive or cause confusion under s43.

There are also other trade marks which may be difficult to register such as geographic names or indicators and common surnames. This is partly because they are deemed to be lacking the necessary degree of distinctiveness, and are also opposed under s61 dealing with false geographical indicators, as defined in s6.

However, trademarks should always be evaluated on a case by case basis. A geographic indicator consists of the name of the place of the origin of goods and has particular application to agricultural products such as meat, wine or cheese. This is based on the rationale that they are said to have distinctive qualities referable to the place of production, which may range from local influences or conditions such as climate and soil, or may relate to specific cultural production techniques employed by producers  in a particular location.  Champagne and Roquefort are two well known examples see also the Australian Wine and Brandy Corporation Act 1980 (Cth) and s15 of the Act which defines ‘originate’ in relation to wine as the wine having been manufactured within a territory or country or alternatively made from grapes grown in that region or locality. Even small obscure places such as Strathspey, famous for a particular industry, in this case the whiskey industry, have been removed from the Register.

TRADEMARK PORTFOLIOS

An IP Auditor evaluating the trademarks owned by a business won’t focus narrowly upon registration certificates for trademarks and pending applications, recognising that this is just a starting point. A business often uses a wide range of names, phrases, slogans and logos as part of their business which have acquired trademark status and represent valuable intellectual property. Most famous brands have a family of trademarks associated with their products.  The critical task in IP valuation is to ascertain which marks are used to build the goodwill of the enterprise. The personnel responsible for marketing an enterprise in the product/service cycle such as those in sales and advertising are often in a position to provide valuable insights into the language and trademark usage procedures employed by an organisation.

Any inconsistencies revealed in the use of trademarks can compromise the protection of a trademark, so it is good practice to conduct periodic reviews to determine how names, phrases and logos are being used by an enterprise.

TRADEMARK MONITORING AND BRAND MANAGEMENT

In today’s technological world almost anything can be duplicated and widely disseminated with the touch of a mouse click.  Many businesses decide to use special trademark watch services to monitor and prevent the misuse of their brand by unauthorised third parties which can damage or erode their brand equity.  A business should have some kind of trademark watch service best adapted to their needs to alert them to any unauthorised uses of their trademark/s.  Once discovered, it is up to the business to decide upon the most appropriate strategy to protect their rights and prevent damaging uses before they affect their market share.

TRADEMARK OPPOSITION PROCEEDINGS

After a trademark has been registered, a person who wishes to oppose can do so once it has been advertised in the Official Journal of Trademarks. To oppose the registration of a trademark a person may file a notice of opposition on several grounds.  Some of these grounds are that the owner is not the true owner of the trademark (s58), that the applicant has no good faith intention to use the trademark (s59), or that use of the mark would be likely to cause confusion or deception because of the existence of another trademark with an earlier priority date which has acquired a reputation in respect of the goods and/or services (s60).

TRADEMARK INFRINGEMENT

A registered trademark is infringed if a person uses ‘as a trademark‘ (ie indicating a connection in the course of trade between goods and the person who applies a mark to the goods) a sign which is substantially identical or deceptively similar to the trademark for the goods or services in respect of which the trademark is registered under s120(1).

The plaintiff needs to show use of the trademark upon or in physical relation to the goods or services; ss7(4) & (5). Infringement can occur when a trademark is used as a trademark in respect of:

(i) goods of the same description as that of registered goods
(ii) closely related services to registered goods, services of that same description as registered services or
(iii) goods closely related to registered services.

Whether goods or services can be characterised legally as ‘of the same description‘ as the goods of services in respect of the which the trademark is registered is a question of fact and impression to be determined by a court. A court looks beyond the inherent nature of the goods or their uses and function, considering factors such as the normal trade channels through which commodities are traded.

In the final analysis, infringing use must be use which is likely to cause deception or confusion in the minds of the ordinary consumer in the target market for the relevant goods and/or services. There are also several specific uses which will be excluded from trademark infringement set out in ss122(1)(a)-(g) & 124 of the Act.

WELL-KNOWN OR FAMOUS TRADEMARKS

Special protection is extended to well known trademarks pursuant to s120(3). If a mark has become so famous or well known that it serves a function beyond the traditional function of trademark in identifying the source or origin of goods it will be afforded additional protection. In this situation, where a trademark is substantially identical or deceptively similar to a well known trademark, even if used in respect of unrelated goods and/or services it still may constitute infringement under s120(3).

This form of infringement known in the US as dilution is likely to be found if use of the trademark is likely to be interpreted as indicating some connection between the unrelated goods or services and the registered owner of the well known trademark, and for that reason the trademark owner’s interests would be adversely affected. There is no need to prove any risk or likelihood of confusion or deception, and the law is effectively protecting the commercial value of the mark by precluding uses which are thought to tarnish it.

REMEDIES FOR TRADEMARK INFRINGEMENT

In addition to the traditional remedies for intellectual property infringement, a trademark owner may also request the Australians Customs Service to seize imported goods if they infringe a registered trademark; ss131-144. A special procedure is set out in the Act to deal with the rights of objectors.

CRIMINAL LIABILITY

The Act renders it an offence to intentionally or recklessly falsify or unlawfully remove a registered trademark from goods and/or services; s145(1).  Falsifying a trademark includes defacing it, erasing it, altering it or obliterating it s145(2).  Making a device either with knowledge or reckless as to the fact that it will contravene ss145 or 146 of the Act is also an offence, as is either drawing a registered trademark or programming a computer to produce it under s147.

Dealing in goods with knowledge or reckless indifference as to whether they have falsified marks applied to or removed from them is also an offence under s148. A person will expose themselves to criminal liability if they represent that a trademark is registered in respect of goods and/or services unless they either know or have reasonable grounds to believe otherwise; s151

Disclaimer:  This site is intended to operate purely as an informational  resource, a general overview of intellectual property and other related legal issues arising online.   It isn’t a substitute for professional legal advice from a lawyer certified to provide legal advice in your jurisdiction.  Neither is it intended to create an attorney-client  relationship.   The law varies in each jurisdiction and we do not warrant the accuracy, completeness or usefulness of any material you read here

Disclaimer:  This site is intended to operate purely as an informational  resource, a general overview of intellectual property and other related legal issues arising online.   It isn’t a substitute for professional legal advice from a lawyer certified to provide legal advice in your jurisdiction.  Neither is it intended to create an attorney-client  relationship.   The law varies in each jurisdiction and we do not warrant the accuracy, completeness or usefulness of any material you read here.

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