In the recent case of Insight Radiology Pty Ltd v Insight Clinical Imaging Pty Ltd [2016] FCA 1406, the Australian Federal Court considered a dispute in respect of two logo marks that include the word “insight”:
The facts of the case are as follows: Both parties are in the business of providing medical imaging services. Insight Clinical Imaging Pty Ltd (“ICI”) has been operating in Western Australia since 2008 and filed a trade mark application for the “insight Clinical Imaging” logo mark depicted above (“the ICI logo mark”) in October 2012. This application was accepted in December 2012 and proceeded to registration. Insight Radiology Pty Ltd (“IR”) commenced using the “insight radiology” logo mark depicted above (“the IR logo mark”) in New South Wales in 2012. IR’s sole director, Mr Pham, filed a trade mark application for the IR logo mark in his own personal name in December 2011 and Mr Pham then assigned the application to IR (i.e. the company) in July 2013. The IR trade mark application was opposed by ICI.
In summary, ICI opposed IR’s trade mark application on various grounds as well as claiming that the use of the IR logo constituted trade mark infringement, misleading/deceptive conduct and passing off. IR cross-claimed to cancel ICI’s trade mark registration.
ICI contended as part of its opposition that Mr Pham was not the true owner of the IR logo mark because the evidence pointed to the company, IR, being the correct owner at the time of filing of the application. The evidence showed that there was never a licensing arrangement entered into between Mr Pham and IR authorising IR to use the IR logo. IR paid for the creation of the IR logo and commenced use of the IR logo and name in 2012. ICI also contended that the assignment from Mr Pham to IR was ineffective because it was made without consideration and that Mr Pham, in any event, had no rights of ownership to assign. The Court held, however, that although Mr Pham did not appear to be the correct owner at the time of filing, IR became the owner via the assignment. The Court was satisfied that the assignment was properly recorded from Mr Pham to IR as there was a document evidencing the intention to transfer the application, a clear identification of the application and, most importantly, the transfer of ownership was effected to the correct owner when the application was still pending.
Although ICI was unsuccessful in attacking the validity of IR’s trade mark application on the basis of the ownership issues, the decision was ultimately in ICI’s favour as the Court held that ICI had established a reputation for the ICI marks as at the filing date of IR’s application and, because of that reputation, the use of the IR logo by IR would likely cause deception or confusion. IR had argued that ICI’s reputation should be limited to Western Australia; however, the Court considered that ICI had established a sufficient reputation so as to successfully oppose IR’s trade mark application on this basis.
With respect to ICI’s trade mark infringement claim, the Court held that IR had infringed ICI’s logo and IR failed to establish that it was entitled to the statutory defences sought. In particular, IR unsuccessfully argued that it should have a defence to the trade mark infringement claim on the basis that it had adopted the IR trade mark in good faith without knowledge of ICI. The Court rejected IR’s submissions finding that IR was not entitled to claim that use of the IR mark was in good faith given that IR had not conducted proper and diligent searches to check whether the name “Insight Radiology” was available for use.
Finally, the Court also held that IR’s conduct constituted misleading/deceptive conduct as well as passing off.
Lesson: Prior to adopting a new trade mark, it is important to carry out reasonably comprehensive searches to check whether any other parties are already using a similar trade mark. Searches of the Trade Marks Register should be conducted as well as general searches of the internet, businesses directories etc. Then, when filing trade mark applications, it is important to ensure that the correct entity is listed as the owner to avoid any ownership challenge by third parties in the future.
