An insight into the work of our client, Beston Global Food Company, who have developed sophisticated anti-counterfeit and traceability technology helping to protect the integrity of premium Australian food products overseas, ensuring that consumers are receiving authentic, non-counterfeit products.
Qantas uses a variety of “kangaroo” trade marks as part of its business, including the “kangaroo tail fin” logo below which it registered in Australia in 1996 for advertising, marketing and merchandising services and financial, investment and banking services associated with the use and promotion of credit cards and charge cards (Registration No. 711454):
In a recent Federal Court case, Qantas has unsuccessfully opposed an application by Mr Luke Edwards to register the following “kangaroo t-shirt” logo as a trade mark:
Mr Edwards operates an online retail store selling a range of goods including clothing and apparel. In 2010, Mr Edwards applied to register his “kangaroo t-shirt” logo above as a trade mark, for use in relation to clothing; footwear; headwear; shirts; T-shirts. At the time, Mr Edwards’s online store offered t-shirts branded with his “kangaroo t-shirt” logo.
Qantas formally opposed the registration of the “kangaroo t-shirt” logo on a number of grounds but the Delegate of the Registrar of Trade Marks found in favour of Mr Edwards.
Qantas appealed the decision to the Federal Court, claiming that the “kangaroo t-shirt” trade mark was deceptively similar in appearance to Qantas’s existing Trade Mark Registration No. 711454 for the “kangaroo tail fin” logo. In addition, Qantas claimed that the goods/services covered by the two marks were closely related, ie that Mr Edwards’s clothing; footwear; headwear; shirts; T-shirts were closely related to Qantas’s advertising, marketing and merchandising services.
Qantas also claimed that it had a strong reputation in Australia in relation to various registered and unregistered “kangaroo” trade marks it had used for many years and, because of this reputation, Mr Edwards’s use of his “kangaroo t-shirt” trade mark would be likely to deceive or confuse consumers. Qantas argued that consumers would simply see Mr Edwards’s “kangaroo t-shirt” logo on clothing as an extension of the Qantas brand.
The Federal Court dismissed both grounds of opposition and found in favour of Mr Edwards.
The Court held that Qantas and Mr Edwards’s trade marks were not deceptively similar in appearance, as each of the marks has a separate, distinctive element apart from a kangaroo. The Court also held that the goods/services covered by the two marks were not closely related. The Court noted that Qantas’s advertising, marketing and merchandising services were no more or less related to Mr Edward’s clothing; footwear; headwear; shirts; T-shirts than ‘any other goods or services that can be advertised, marketed or merchandised’ and that there was, therefore, no close relationship between the two.
In assessing Qantas’s reputation in its various “kangaroo” trade marks, the Court found that two of these “kangaroo” marks ‘would have been recognised by a substantial number of ordinary members of the public as marks denoting [Qantas’s] airline services’. However, the Court determined that there was no likelihood that consumers would be deceived or confused on seeing Mr Edwards’s “kangaroo t-shirt” trade mark used for clothing; footwear; headwear; shirts; T-shirts given the differences between the marks.
Qantas has now filed a new application for the “kangaroo” logo below covering a wide range of goods/services in 15 classes including various items of clothing (No. 1703712). Mr Edwards has opposed this application and it will be interesting to see the outcome of these proceedings.
This case highlights the importance of considering the different types of marks which are important to your business. In addition to registering brand names as trade marks, logos and other types of trade marks are also registrable and may be just as valuable.
China presents some unique difficulties for foreign trade mark owners. The subtle differences between the IP systems applicable in many western countries and Chinese law have caused much consternation and frustration.
China practises a “first-to-file” trade mark system. This means that the person who first applies for registration of a trade mark in China will prevail over a person who is first to use the same trade mark in China regardless of the fame or reputation of that mark outside of China.
This “first-to-file” system has created, and continues to create, distress for those who are unaware of the Chinese system. This is especially the case for companies located in a country which practises a “first-to-use” trade mark system, where, as the name suggests, the first person who actually uses a trade mark would be the owner of the trade mark. For example, when a company has invested significant time and energy to arrange for the sale of a certain branded product in China, they may then discover that someone has already registered that brand as a trade mark in China. The “first-to-file” system means that instead of being the owner of that brand in China, the company may face a potential infringement issue.
The trade mark system in China does have a provision to prevent “famous” trade marks from being “grabbed” by unrelated parties, such as trade mark squatters. However, recent cases show that it is very difficult to establish sufficient “fame” to an examiner. It is a subjective assessment and the bar seems to be very high.
Three recent decisions involving Facebook, iPhone and Weixin illustrate these points and the challenges faced by trade mark owners in China:
iPhone: A third party filed for “iphone” in relation to “leather goods”. This would cover accessories such as tablet covers. In this case, the court considered that iPhone was not well known in China before the filing date, thus the registration stands. In other words, Apple cannot use “iPhone” to sell leather goods in China.
Weixin (“Wechat”): Weixin is an instant messaging service developed by Tencent (a major Chinese company) and enjoys active users of 650 million per month. A third party filed for “Weixin” in relation to “communication services” and Tencent opposed registration. At first court instance, the Court decided that public interest trumps the interest of the Applicant. On appeal, the High Court chose a different reason, ruled that “Weixin” was descriptive in that “Wei” means “small” or “little”, and “Xin” means “letter”, “message” or “communication”. Thus, the third party’s application was rejected. While not spelt out, it can be construed that Tencent now owns the mark through sufficiently wide use.
Facebook: A third party filed for “face book” in relation to “fruit juice beverages”. While the use of Facebook is banned in China, the court considered that Facebook had sufficient prior reputation in China to be considered “famous”, thus the first filed “face book” in relation to “fruit juice beverages” by the third party was rejected.
It is not easy for us to reconcile these decisions. There does not appear to be a consistent application of legal principles that would lead to a predictable outcome. As said above, we must remember that China is not a common law country and thus earlier court decisions, while being able to assist one in understanding laws and regulations in China, would not set precedence that is always required to be followed by subsequent courts.
It is our strong recommendation to always file as soon as possible and to seek strategic legal advice for trade mark planning in China. Under a “first-to-file” system, it is necessary to get in early. If someone has already registered your mark, it is most important to discuss your options with a legal advisor to assess risk and consider available strategies.
Madderns has a specialised Chinese team to provide strategic legal advice to clients for trade mark planning in China. Most team members speak fluent Chinese and travel to China regularly to keep up with the latest developments.
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