APAA Country Report Australia. Jennifer McEwan, Saskia Jahn and Andrew Butler. 1. Legislation

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1 APAA Country Report Australia Jennifer McEwan, Saskia Jahn and Andrew Butler 1. Legislation a. There have been no significant legislative changes during the reporting year. The Intellectual Property Laws Amendment Act 2015 came into force on 25 February In respect of trade marks, the Act had little effect other than to make minor administrative changes. b. IP Australia is presently conducting a fee review to ensure the fees they are setting for patents, registered designs and trade marks are consistent, transparent and cover the costs associated with administering the intellectual property rights system in this country. It is expected that any proposed fee changes will come into effect during the 2016/2017 financial year. 2. Statistics No accurate recent data regarding the number of filings and registrations has been published by IP Australia. However, approximately 66,662 new applications were filed during the period from 1 October 2014 to 30 September Of these, approximately 10,090 were International Registrations designating Australia (IRDA). Of the 66,662 applications filed the number that had already proceeded to registration during this timeframe were 15,713 with 4,184 of these being IRDAs. 3. Cases of Note a. Cantarella Bros Pty Limited v Modena Trading Pty Limited [2014] HCA 48 (3 December 2014) (Use as a trade mark, validity) This decision clarifies test for distinctiveness of trade marks in Australia and treatment of foreign ford marks. The case concerned an ongoing dispute between the parties about the use of the registered trade marks ORO and CINQUE STELLE in relation to coffee products. ORO means gold in Italian, and CINQUE STELLE means five star. The Appeal turned on section 41 of the Trade Marks Act and whether the trade marks were inherently adapted to distinguish the goods for which they were registered. The High Court proposed a two part test requiring that the determination of whether a trade mark is inherently adapted to distinguish, firstly requires consideration of the ordinary signification of the words proposed as trade marks to any person in Australia concerned with the goods to which the trade mark is to be applied. Once the ordinary signification of a word, English or foreign, is established, an enquiry can then be made into whether the other traders might legitimately need to use the word in respect of their goods.

2 The High Court allowed the Appeal on the basis that ORO or CINQUE STELLE were not shown to convey a meaning or idea sufficiently tangible to anyone in Australia concerned with coffee goods as to be words having a direct reference to the character or the quality of the goods. b. Verrocchi v Direct Chemist Outlet Pty Ltd [2015] FCA 234 (17 March 2015) (Use as a trade mark; validity) This case involved allegations of passing-off and misleading and deceptive conduct relating to the get-up on the outside of discount pharmacy stores. Verrochi was the registered owner in relation to pharmacy services in classes 35 and 44 of the mark: The respondent used the slogan: Infringement proceedings were instituted. The judge held that the respondents were not using the slogan as a trade mark but rather that is was understandable and common for any discount chemist to wish to convey such messages of cheapness in its marketing materials. Moreover, that the trade mark registration in question was invalid for lack of distinctiveness and should be cancelled from the register. c. Coca-Cola Company v PepsiCo Inc (No 2) [2014] FCA 1287 (Use as a trade mark; Deceptive similarity) This case is noteworthy since it relates to enforcement of a shape trade mark. The Court recognized that shapes do indeed function as trade marks, even if they also serve a functional purpose. The Coca-Cola Company ( TCCC ) has sold beverages in its distinctive Classic Contour Bottle shape since It is widely accepted that this is perhaps one of the most well-known shape trade marks throughout the world. Pepsico commenced selling products in a somewhat similar bottle shape (the Carolina Bottle ) in TCCC commenced infringement proceedings.

3 Contour bottle TCCC Carolina bottle - Pepsico The Court held that it was incorrect merely to focus on the outline or silhouette of the Carolina Bottle since it was not just the outline or silhouette of the Carolina Bottle that was functioning to identify the product being offered for sale, but rather was all of the features of the Carolina Bottle including the distinctive horizontal wave lines across the lower half of the bottle. On this basis, the Carolina Bottle was not considered to be deceptively similar to any of the registrations owned by TCCC. Moreover, in the absence of any empirical evidence showing that consumers have been misled by the use of the Carolina Bottle, the Court found the use of the Carolina Bottle did not constitute passing off or misleading or deceptive conduct. d. Apple Inc. v Registrar of Trade Marks [2014] FCA 1304 (3 December 2014) (Registrability) This case was an Appeal by Apple to a decision of the Trade Marks Office the trade mark APP STORE was not registrable in respect of retail services, telecommunications services, and information technology services since the term APP STORE is a term that is likely to be needed by others to describe similar services.

4 The terms app and store were considered to be common English words and when used together carry a well understood meaning. Apple only began using the trade mark APP STORE in press releases 7 days prior to filing the trade mark application. The evidence adduced in respect of Apple s use of its APP STORE trade mark fell short of establishing that the term APP STORE, on its own, would have been recognized by members of the public as referring only to Apple as at the filing date. Apple did not file an Appeal to the Full Court but refiled applications for APP STORE in classes 35, 38 and 42, presumably hoping to establish factual distinctiveness at the new filing date. e. Hugo Boss Trade Mark Management GmbH & Co Kg v Sasalili Oxford Fia [2014] FCA 1328 (5 December 2014) (Additional damages) Exemplary damages were introduced into the Australian Trade Marks Act in April The Respondent had been manufacturing and offering a range of apparel bearing the mark BOSSIT, with the logo bearing a resemblance to Hugo Boss logo, primarily online and also in several local markets. The Court had ordered the respondents to pay the applicant for infringing the Hugo Boss trade mark. Additional damages were awarded based on evidence that the respondents continued selling the infringing products even after receiving the applicant s cease and desist letter. Additionally, it was taken into account that the respondent s products were of inferior quality, manufactured and sold through means that Hugo Boss would never have done themselves. In making the an assessment as to whether additional damages should be awarded, the Courts should have regard to factors including the flagrancy of the infringement, the need to deter similar infringements, the conduct of the infringing party that occurred after it was informed of the alleged infringement and any benefits shown to have accrued to that party. The Court considered the award of compensatory and additional damages fair and a good deterrent to entities that would seek to engage in infringing activities in the Australian marketplace. f. Ly v The Queen [2014] FCAFC 175 (17 December 2014) (Infringement) In this case, a man was sentenced to 12 months imprisonment for possession of infringing discs of movies and computer games with intent to sell and exposure for sale of goods bearing infringing trade marks. Mr Ly was sentenced in the County Court of Victoria and unsuccessfully appealed his sentence to the Full Court of the Federal Court. Australian Federal Police seized more than 61,000 discs from his premises, the majority of which appeared to be counterfeit. Mr Ly made an early guilty plea and consented to the destruction of the discs but did not give evidence to show that he was remorseful. He had two prior convictions for similar offences.

5 The Full Court emphasised that the need to deter IP infringers generally and to deter Mr Ly in particular, a repeat offender, as well as the seriousness of the offences were all important factors in justifying the prison sentence. g. Skyy Spirits LLC v Lodestar Anstalt [2015] FCA 509 (26 May 2015) (Removal for non-use; authorised user) A non-use application was filed seeking removal of Wild Turkey Bourbon s WILD GEESE trade mark registration. Wild Turkey Bourbon had not used the trade mark WILD GEESE in Australia. It had however, granted a perpetual licence of that trade mark, to an Australian wine making company, for a nominal fee of $1.00. The licensee had used the trade mark in Australia during the relevant period. The evidence showed that Wild Turkey Bourbon did not exercise any actual control over the way that the Australian wine company used the trade mark WILD GEESE, or any quality or financial control with respect to the wine in relation to which the licensee used the mark. Accordingly, the question arose whether the use by the licensee was authorised use within the meaning of section 8 of the Trade Marks Act. Fortunately for Wild Turkey Bourbon, it had a written licence agreement with the Australian wine company that included clauses that contractually imposed obligations to observe quality control measures. Notwithstanding that Wild Turkey Bourbon did not actually exercise any controls, the possibility of control given by the terms and conditions of the license was considered to suffice to qualify the licensee as an authorised user. Accordingly the Wild Turkey Bourbon s WILD GEESE registration was not removed. h. Delfi Chocolate Manufacturing SA v Mars Australia Pty Ltd [2015] FCA 1065 (1 October 2015) (Registrability; likely to deceive or cause confusion) In this case, Mars (the maker of MALTESERS) sought to prevent Delfi from registering MALTITOS as a trade mark. Mars was successful before the Trade Marks Office, in blocking Delfi s registration of on section 60 grounds (well-known trade marks) but not on section 44 (deceptive similarity) grounds. Delfi appealed to the Federal Court. Mars cross-appealed. The Court held that MALTITOS is not deceptively similar to MALTESERS. Further, that the Delfi s use of MALTITOS was unlikely to cause confusion in the market as a result of the reputation vesting in the mark MALTESERS. While his Honour accepted that MALTESERS was very well known in Australia, he did not consider the strength of this reputation to be such that Delfi s use of MALTITOS in respect of confectionery was likely to cause confusion. Indeed, his Honour considered that the strength of Mars s reputation in MALTESERS would reduce the likelihood of confusion.

6 i. Scandinavian Tobacco Group Eersel BV v Trojan Trading Company Pty Ltd [2015] FCA 1086 (9 October 2015) (Infringement; importer repackaged cigars to comply with Australian Plain Packaging laws) This case is of interest since it relates to the operation of s120 and s123 in the context of parallel importation of tobacco products which are required to be plain packaged in accordance with Australian law. STG made an application for injunctive relief claiming that Trojan had infringed various Australian trade marks. The alleged infringement concerned the importation by Trojan of tobacco products manufactured by, or with the consent of STG, in Belgium and Holland. In order to comply with Australian law, the cigars were re-packaged by Trojan bearing STG s trade marks and identifying Trojan as distributor. His Honour found that the process of re-packaging and the sale of the imported cigars to retailers involved use of STG s trade marks in the course of trade and was infringing use subject to consent under s123 or a defence to infringement under s122 of the Act. However, Trojan were able to rely on consent under s123 and so there was no infringement. His Honour looked back to the time of original packaging by STG and considered that s123 needs to be construed to conform with its purposes of protecting as non-infringing use that which does no more than draw a connection between the goods and the registered owner, and does not draw a connection between the goods and the person using the trade mark being someone other than the registered owner. Accordingly s123 was engaged, that is trade mark was considered to have been applied to the goods by, or with the consent of, the registered owner of the trade mark. This case is presently on Appeal to the Full Federal Court of Australia