#7209 - Trade Marks Supplementary Textbook Reading Summaries - Intellectual Property 2 (Trade Marks)

Supplementary Textbook Readings

[16.3]

• 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)

• 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

  • But misrepresentation isn’t sufficient in itself

    • For 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)

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

        • 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

        • 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

        • 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 Basic requirements [510-511]

Reputation

• 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

  • 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

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

  • 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

• 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

  • 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)

  • 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

• 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)

  • 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 business

    • Traditionally 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

• 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

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

• Though the section once referred to a ‘corporation’ the ACL now refers to ‘person’

• [16.33] IN trade or commerce

  • 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 Ku-Ring-gai CBS)

  • 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 commerce

    • In 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

      • 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)

      • 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)

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

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

  • 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%)

  • 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)

    • 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

  • 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)

  • 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

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