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Trade Marks Supplementary Textbook Reading Summaries Notes

Law Notes > Intellectual Property 2 (Trade Marks) Notes

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A more recent version of these Trade Marks Supplementary Textbook Reading Summaries notes – written by University Of New South Wales students – is available here.

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Supplementary Textbook Readings Class 1 Modern scope of the common law
[16.3]

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The enactment of trademarks legislation didn't herald the end of CL development - in fact the fact that a mark had been registered didn't preclude a common law action against the owner or indeed being brought against the owner if the use of the RTM would constitute passing off (Great Tower Street Co v Langford; TMA s 230(1) - this expressly preserves the CL)

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The CL action has remained true to its identity in that the root of the cause of action is misrepresentation (Conagra Inc v McCain Foods) as a result of the underlying rationale to prevent commercial dishonesty o

But misrepresentation isn't sufficient in itselfFor example the tort doesn't encompass statements by one business about a competitor's product which, although false, doesn't imply any connection between the two businesses. This instead in the realm of the tort of injurious falsehood (Radio 2UE Sydney v Chesterton)

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But this COA has remained much more limited than passing off: o

Courts have been unwilling to forgo the need for malice to be established on the part of the defendant who has to show that the other was aware of the falsity or intended to damage the plaintiff

o

The statement has to relate to the plaintiff or plaintiff's product - which means deliberately false descriptions aren't actionable even if they damage the plaintiff by drawing away trade

o

In addition to the disregard of puffery and patently hypberbolic claims (as in Shindler Lifts v Debelak) this has ensured only in exceptional cases do at CL the courts become embroiled in judging the quality of competing claims of businesses and their G&S

The Tort of Passing of The Basic requirements [510-511]
Reputation

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The courts have taken a liberal view as to the persons who may be said to possess a protectable reputation and as to the material to which that goodwill may attach o

As to the former, any form of even vaguely commercial activity can suffice - for e.g.:Professional associations (Australian Society of Accountants v Federation of Australian Accountants) and even charities (Dr Barnardo's Homes v Barnardo Amalgamated Industries) can restrain people from claiming affiliation with them

*

*In NSW the CA went as far as accepting that a church calling itself 'Ancient Church of the East' which was associated with another church could be passing off because the latter's reputation was essentially indistinguishable from commercial goodwill (Holy Apostolic and Catholic Church of the East (Assyrian) Australia NSW Parish Association v AG (NSW); Ex rel Elisha)However apolitical party cannot bring such proceedings in similar circumstances (Kean v McGiven)

As to how the reputation can be fixed in the minds of the public, the tort isn't anchored and is wide enough to encompass slogans or visual images which radio, TV, newspaper advertising campaigns can lead to this association provided that such descriptive material has become part of the goodwill o

The test is whether the product has derived from the advertising a distinctive character which the market recognizes (Cadbury Schweppes v Pub Squash)

o

Thus treat it as two separate facets - what can possess a protectable reputation and how can that reputation arise

The CB writers note that passing off is far from being only concerned with TMs even though a lot of cases are concerned with names or devices a lot also involve the 'get up' or packaging of goods

16.7 - The Source Question

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An important point stressed by the court is that as long as the plaintiff can show that goodwill is established it doesn't matter that the plaintiff is personally known to the consumers (Sykes v John Fairfax & Sons) as lopng as the public associate the product with a particular source o

Thus a maker of 'Yorkshire Relish' was entitled to restraint another firm from marketing a similar product under the same name even though he was anonymous (Birmingham Vinegar Brewery Co v Powell)

o

But these days it would be ridiculous to hope to corner a market without advertising their identity
- one who puts their product on the market without aggressive marketing its connection to itself runs the risk that imitations will arise - this happened with the Rubik's Cube and the passing off action there failed (Politechnika Ipari Szovetkezet v Dallas Print Transfers)

16.8 - No need for individual exclusivity

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Though a plaintiff has to be identified as the source of the business, the plaintiff doesn't have to be the source and can just be one of a member of traders who share a reputation - e.g. because they are all prat of a class of producers to whom goodwill attached or they concurrently use a particular mark or name in such a way that it can't be identified with any one of them (Dominion Rent A Car v Budget Rent A Car System)

*

But while they can't sue each other, they can all take independent actions to protect their own interest (GE Trade Mark) o

This has important ramifications where the use of a mark or name to which goodwill attaches is licensed to another, or where the product in question passes through the hands of a distributor

?

Here the licensee or distributor may wish to join in any action taken to protect the goodwill, or could be the only plaintiff where the original source is a foreign entity with no local businessTraditionally such intermediaries could only sue if they could show that the public came to regard them as the source of the product (Oertli AG v Bowman) but now it seems that anyone who establishes a commercial stake in the business more than just a mere link in the distribution/retail chain an bring proceedings (Children's TV Workshop v Woolworths

Other issues also arise such as the location and duration of business activity needed to satisfy the requirements of the action, whether reputation can be claimed in descriptive material or functional elements and whether there is any relevance in the plaintiff's reputation arising out of a different field of activity to that in which the defendant is trading

Misleading and Deceptive Conduct

* Sch 2, S 18 of the ACL is a catch-all provision designed to deal with a range of unfair practices detrimental to the interests of consumers. Often it is joined with any of the other provisions. The phrase 'misleading or deceptive conduct' is wide enough to encompass all forms of commercial conduct amounting to passing off

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The section has largely supplanted tort as the dominant form of redress against misappropriation of business reputation

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Though the section once referred to a 'corporation' the ACL now refers to 'person'

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[16.33] IN trade or commerce o

The words 'trade' and 'commerce' are said not to be terms of art and are expressions of fact and terms of common knowledge. They are of the widest import and not restricted to dealigns or communications that can be described as being at arms-length in the sense that they are within open markets or between strangers or have the dominant objective of profit-making (Re KuRing-gai CBS)

o

Though this does indicate that many activities are commercial (AU Society of Accountants v Fed of AU Accountants) this doesn't mean it catches all deceptive conduct by a person carrying on trade or commerce - it has to be established that it occurred in trade or commerceIn Concrete Constructions v Nelson a representation as to the safety of a workplace made by one employee to another was held not to fall within the prohibition. The section is concerned with "conduct...with whom it has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character"This requires some fine distinctions

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IT has been held that filing a patent application isn't in trade or commerce because of the lack of trading relationship with the APO (Glueck v Stang)

*

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[16.34] Engage in conduct that is misleading or deceptive o

Engage in conduct is defined broadly to include inadvertent omissions (s 4(2))

o

Misleading and Deceptive are not defined but take their definitions from the case law - the basic meaning is if something leads to error (Weitmann v Katies) or is likely to do so (Global Sportsman v Mirror Newspapers - this means a 'real or not remote chance or possibility regardless of whether it is less or more than 50%)

o

Liability is strict (HBIC v SBIC) but proof of intention to mislead or deceive will be of considerable assistance in establishing it (Telmak Teleproducts v Coles Myer)*

*

But in the realm of passing off it is difficult to see what would not fall in the line - except for example where the goodwill isn't of a commercial nature (e.g. the Ancient Church of the East case)

Carelessness is also relevant except where a statement is made as to the future - it will only be deceptive in such a case if the marker had no RG for making it, but the onus is on them to establish such grounds (s 4 ACL)

Prescribed information providers o

Newspapers, magazines, TV and radio stations are exempt from this provision (s 160 ACL) but may still be liable for aiding and abetting (Advanced Hair Studio v TVW)

o

This exemption doesn't extend to advertisement or other promotion materials connected with the supply of G&S, incl. the provider's own services (ACCC v Ch 7 Brisbane) but these may in term become the subject of the 'publisher's defence' which is provided in respect of advertisements accepted in the course of business provided that the publisher has no reason to suspect that the publication would be in contravention of the Act

[16.36] Remedies o

Additional notes to those aboveDamages will be assessed on the same basis as in tort (Marks v GIO) and exemplary images may not be awarded (Marks v GIO)In addition to damages and injunctions a court can make non-punitive orders (s 246 ACL), adverse publicity orders (s 247), orders disqualifying people from management (s 248) and pecuniary penalties (s 224-230)

Misappropriation and establishing a reputation
[17.2] The monopoly concern - the first set of issues is about the capacity of a trader to establish a protectable reputation in descriptive terms or functional characteristics. Courts have demonstrated a strong concern about the consequences of allowing one trader to restrain another from using the same common description for its product or business or incorporating the same functional features. But great danger has been perceived in effectively conferring a monopoly over matters that ought to be available to everyone

[17.3] Descriptive terms The orthodox approach

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The orthodox approach is illustrated by considering a situation where the alleged misrepresentation consists of the description by the defendant of its product in terms similar to those of a plaintiff

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Decisions have asserted that a protectable reputation cannot be established in an ordinary, obvious or factual description unless that description has acquired a secondary meaning by becoming distinctively associated with the plaintiff's product or business

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This principle requires two questions to be asked: o

o

*

Whether the terms employed are merely descriptive in the indicated sense - they will be if they inevitably suggested by some quality of the product or business such as its purpose, method of performance, geographical location or originThis is to be contrasted with 'fancy' terms or the use of ordinary terms where their usual meaning is inapplicableBUT it is possible that an invented term can be so successfully associated with a particular type of product that, paradoxically, it acquires the status of a generic description for that product and lessens the chance of a successful suit (Linoleum v Nairn)The use of familiar terms to suggest its principal characteristics will tend to be regarded as falling on the descriptive side (McCain International v Country Fair Foods (oven chips) and Lumley Life v IOOF of VIC Friendly Society (flexibond)

The second issue is, assuming the relevant terms are indeed descriptive, may the plaintiff nevertheless claim to protect them on the basis that they have become distinctively associated wit the plaintiff's business or productThis is a question of fact - the plaintiff has to show that they've been using the terms over such a long period and in such a way that would suggest to the public not just any product or business with the requisite quality but their product of businessIf this can't be shown a plaintiff can also rely on use of descriptive terms in conjunction with a distinctive 'get-up' but the plaintiff can then only restrain those who use a deceptively similar presentation - not the use of the same terms (S&I Publishing v AU Surf Life Saver)

The example cases are: o

HBIC v SBIC (see above)

o

B M Auto Sales v Budget Rent a Car System - in this case Budget, a car hire firm, was able to establish that despite its descriptive name it had so distinctive a reputation between 1965-8 that it could restrain others from using the adjective 'budget' irt car hire services. This reputation was held to even extend to the NT, the location of the defendant's activity, where the plaintiff's activities were slight

A realistic view

*

This approach boils it all down to one question - whether the plaintiff can establish a sufficient reputation by reference to which a description may be established o

It simply suggests that the use of descriptive terms, though having its advantages, has a disadvantage in that it requires more effort than would otherwise be the case with to establish a public perception o the plaintiff as the distinctive source of the product

o

Hill J notes in Equity Access v Westpac Banking Corp that there is a continuum ranging from purely descriptive names at one end to completely invented names on the other - the fancier the easier it is to establish a distinctive reputation

[17.6] Functional characteristics

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Product simulation and the case against protection - in cases of product simulation courts are even more concerned with monopolies. o

Even though logic suggests that the principles of passing off and s 52 would imply that it should be unlawful to put a product on the market whose functional features so resemble that of the plaintiff's that consumers would infer they were the same or from the same source

o

But authorities go the other way - they insist there is no liability for mere copying of the appearance of a shape or product (Benchairs v Chair Centre) - e.g. in Interlego AC v Tyco it was held that the makers of Lego-toy building blocks were refused relief in the HKCA against the marketing of identical blocks on the basis that the only distinctive features of the plaintiff's product were functional characteristics dictated by liability

o

In Parkdale Custom Built Furniture v Puxu the defendant was responsible for a range of furniture which was virtually identical to a range manufactured by the plaintiff. The court rejected s 52 on the grounds that where a design is involved which could have been registered under the Designs Act but was not, the CL and s 52 could not afford a monopoly over use

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Counter-arguments: The no-liability for mere copying approach has created significant difficulties because it requires a distinction between functional features, which you can copy, and the 'get up' (any capricious addition to the product for the purpose of packaging/marketing J B Williams v H Bronnley) which you cannot

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Establishing deception in a product simulation case - adopting an absolute principle that copying functional aspects of a product can't be unlawful ignores that the concern is solely with deceptive copying. Even the orthodox approach will succeed for one relying on simulation of the product rather than name/labelling/advertising o

Just as with descriptive terms, the common sense suggests that a long or at least particularly visible period of use would be necessary before a distinctive reputation is acquired in the functional/noon-capricious aspects of a products appearance (F Hoffman-LaRoche v DDSA Pharmaceuticals)

o

Evidence that is strong enough on the facts will do - e.g. the Jif Lemons Case

[17.9] Disclaimers and dis

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Even if a trader has a reputation in a particular products, others can enter the market as long as they take adequate steps to distinguish their products - a number of cases exist where they have successfully done so by use of a disclaimer o

In the Apple Case clones of the plaintiff's computers were able to imported without liability because they were labelled as Wombat micro-computers (Apple v Computer Edge)

o

A number of cases also exist where competitors have been able to put look-alike products because they had done enough by way of packaging and marketing to distinguish their products (Footnote 26 - specific examples given)

o

Sony Music v Tansing - CDs/Cassettes containing live recordings obtained without the consent of artists were able to escape liability for passing off and misleading and deceptive conduct because the cover of them was stamped with the word 'unauthorized'

But there will be problems in relying in a disclaimer where because of the circumstances the nature of the product or the way which consumers acquire it make it unlikely that any notice will be taken of it o

In the Duff Beer Case the defendants were faced with a finding that the name Duff Beer would deceive people into inferring a connection with The Simpsons - the defendants argued they should be able to market it with the words 'unauthorized'Unlike in other cases, it was held that this wasn't sufficient because of the fact that The Simpsons program often makes a point of sending up other advertisers etc. and it is by no means beyond a reasonable argument that the disclaimers would reinforce rather than diminish association with the series

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