From Cadbury’s purple to Tiffany & Co’s robin egg blue, distinctive colours have become synonymous with the brands they represent. Branding – in particular colour – is a powerful form of consumer recognition and brand distinction. Thus, the legal protection of colours has on a number of occasions become a hot-headed issue as companies aggressively try to protect their brand identity from competitors. The issue of whether you can trademark a colour arose again recently when British Petroleum (BP) tried to trademark a shade of green.
When can you trade mark a colour?
Trademarking of colours has traditionally been a shady area, with resistance from authorities to recognise them as the legal property of a brand. To use a colour as a trade mark, the colour must be specifically identifiable with a company’s goods or services and distinguishable from others. Just as authorities won’t grant a monopoly on words or expressions which are likely to be needed to describe goods and services, they are unwilling to do the same for colours. IP Australia, the body who regulate trademarks, has stated that a single colour “will generally be regarded as being devoid of inherent adaption to distinguish.” Thus, it requires continual use (as a trademark), colour recognition by consumers, and distinct parameters of use for colour trademarks to be granted. We’ve outlined some examples of where the trademark of colours has been successful, and where it has failed.
BP Green with Envy:
IP Australia rejected BP’s application in July this year to trademark a shade of green known as Pantone shade 348C. BP faced resistance from Woolworths who hold a trademark for a similar colour for their well-known apple-shaped logo. IP Australia said that if the colour was used alone it would fail to be distinguishable and was not indelibly linked in the average petrol consumer’s mind to BP. Just think, would you recognise BP’s shade of green if it wasn’t accompanied by their brand name or logo? The finding concludes 12 years since BP original filed for the colour trademark in Australia. However, BP has successfully obtained colour trademarks for the same shade of green in the United Kingdom and Europe.
Other Trademarked colours:
In Australia and abroad, there have been companies which have successfully trademarked their colours. Here are a few examples:
Fada bananas, the supplier of ecologically-grown bananas, successfully trademarked their distinctive red wax tip. The ecologically grown bananas were held to be recognisable to consumers and easily distinguished from traditional bananas. Whilst this isn’t an example of colour per se, it reflects how the distinct use of colour can be trademarked.
Louboutin successfully trademarked their famous red soled high heels in the USA after a long uphill battle with reluctant courts. The exception to the trademark is for other shoes which are monochromatically red and wish to include a red sole.
Cadbury successfully trademarked their distinct purple shade, Pantone 2685C, in the UK in 2012. The British colour trademark emerged as Cadbury were embroiled in an Australian litigation against competitor Darrell Lea. The five year litigation ended in 2008 when the Federal Court held that Darrell Lea had not breached the Trade Practices Act or engaged in misleading or deceptive conduct by using purple. The Court noted that a “cause to wonder” is not adequate to amount to misleading or deceptive conduct, and the name Darrell Lea on a purple chocolate wrapper could not confuse a consumer to thinking it was a Cadbury product. The colour purple was never used in isolation without some branding or script, allowing other competitors, such as Darrell Lea and Nestlé for Violet Crumble bars, to use other shades of purple. In Australia, Cadbury was not able to trademark the colour purple in general, however it was able to protect the specific shade it has used on its packaging since 1914.
Telstra was unable to trademark the word “YELLOW” for their online telephone directories, as competitors or other traders would use the word honestly and commonly for similar phone directory products. The Federal Court of Australia emphasised that they would not grant monopolies lightly, and in the circumstances of Telstra it was not appropriate.
Caterpillar Inc, known for their tractors and other agricultural equipment, were able to trademark “Caterpillar yellow.” The difference here was the distinct colour not closely associated with the agricultural machine industry, and the bright yellow shade was accompanied with the brand name Caterpillar. Of course, the trademark only limits other machinery companies from using the same or a similar shade, not an overall ban on the use of yellow.
Other trademarked colours include Barbie pink, UPS brown and Tiffany blue. The trademarking of colours limits the protection to competitors in the same industry and therefore the companies discussed do not hold the boundless exclusive rights to the use of the colour. An application to legally trademark a colour will be an uphill battle for any brand with high evidentiary burdens and an overall reluctance to monopolise the use of colours. It’s important to remember that each case will turn on its own facts and factors such as the combination of distinct colours will more likely be successful. Therefore it is always favourable to take a vigilant approach when branding or rebranding as competitors will seek to protect their brand identity. Choose colours which are not closely associated with competitors or with the product itself, or use a distinct combination of colours. The failure to think about competitors and trademarks may result in expensive and time-consuming litigation, regardless of whom the Court holds as the winner.
For any questions you may have in relation to brands and trade marks, please feel free to give our team a call: 02 8221 0933.
140 defamatory characters posted in the Twitter-sphere could cost tens of thousands of dollars in damages, the New South Wales District Court has held. The case reignites the complexities of defamation law in a world where everyone is a publisher and information is disseminated across the globe at the click of a button.
In the recently handed down court decision of Mickle v Farley, 20 year old Andrew Farley was sued by Ms Christine Mickle, a highly-regarded music teacher who taught at the same school. Mr Farley believed Ms Mickle was responsible for his father (the previous head teacher of music) leaving the school, and posted multiple allegations on both Twitter and Facebook. The comments were false, as his father had left the school in 2008 “in order to attend to personal issues.” The suggestion that she was responsible for the harm or ill-health of the father caused distress to Ms Mickle, who subsequently took a year of sick leave.
The case itself is unremarkable in regards to the current state of defamation law in Australia except that it’s the first Twitter judgement. Judge Elkaim awarded $85,000 in compensatory damages. He commented:
“when defamatory publications are made on social media it is common knowledge that they spread. They are spread easily by the simple manipulation of mobile phones and computers. Their evil lies in the grapevine effect that stems from the use of this type of communication.”
Judge Elkaim additionally awarded $20,000 for aggravated damages for Mr Farley’s uncooperative behaviour. The case shows the accountability of social media users for their actions, even when Mr Farley only had a mere 60 Twitter followers and 50 Facebook friends.
The Social Media Legal Landscape in Australia:
Whilst Andrew Farley’s case was the first Twitter judgement in Australia, it’s not the first to hit the courts. In 2012 music reviewer Joshua Meggitt sued Marieke Hardy and Twitter, but settled out of court. This otherwise unremarkable case demonstrated the law responding to technological change.
Companies too must, of course, be careful as there is a history of liability for the failure to remove posts on their Facebook pages written by others. This is important, as the control and responsibility of the page rests on the company – even for content which it did not produce. Even Google couldn’t escape publisher liability when the search engine failed to remove defamatory search results after several requests from a Mr Trkulja, who was defamed and Google found to be liable in late 2012.
Defamation Law in Australia and Beyond:
As defamation law us is usually more concerned about where content is downloaded, rather than uploaded, the internet has made the law more complex. As content can be viewed or downloaded anywhere, amateur and professional writers can now be exposed to defamation laws across the globe. In Australia, a person can sue for defamation in the state or territory where his reputation is established, even when the content was published overseas. This pick-and-choose system provides advantages for people who believe they’ve been defamed. By bringing an action in countries with stricter freedom of speech laws increase the chances the material will be held defamatory, whilst it’s lower in countries which strongly promote free speech. In reality, most potentially defamatory comments never eventuate into law suits because of the cost and time to do so, and many won’t be across multiple jurisdictions.
Defamation has always been a topical issue, but as the law and evolves to meeting the challenges of the social media age, it has become more relevant to everyday people. There is a misconception that social media is treated differently from traditional forms of media. In reality, this isn’t entirely true, and whilst people may let their guard down with what they say on their Facebook page, it can have unintended ramifications. Judge Elkaim’s words should be a warning to those with a propensity for hot-headed tweeting, or perhaps even a careless fib. For the young Andrew Farley, he found himself owing more than $100,000 plus significant legal costs in circumstances where he was unlikely to have considered this a likely outcome at the time of his tweeting.
With the FIFA World Cup fast approaching, the issue of ambush marketing is again at the forefront of discussion. Forming a key concern for event organisers, partners, sponsors and fans, ambush marketing is an attempt by a third party to create a direct or indirect association with a sport event or its participants without their permission. Major sports events, including the upcoming FIFA World Cup, present excellent opportunities for international brand exposure, so it comes as no surprise that entities engage in ambush marketing in an attempt to reap the associated commercial benefits of such coverage.
The last decade has seen a broad range of ambush marketing techniques come into play around major sporting events, with non-official sponsors striving to have their brands in the limelight. Colourful examples include the 2006 FIFA World Cup which left official sponsor, Budweiser outraged after the mass provision of bright orange lederhosen by Bavarian Brewery to fans attending games, or the more recent targeting of professional athletes by Beats Electronics at the London Olympics, where the recognisable oversized Beats headphones were given to athletes for free and as a result appeared extensively in Olympic television coverage.
The popularity of ambush marketing lies in its cost effectiveness. A successful ambush marketing campaign after all, will leverage a popular major event by suggesting an association with it, thereby achieving its intended marketing objectives – be it to attain exposure, increase brand profile or gain credibility through an implied relationship with the targeted event – and do so for a fraction of the cost of actually sponsoring or being otherwise aligned with the targeted event.
New legislative steps: Major Sporting Events (Indicia and Images) Protection Bill 2014 (Cth)
Recognising the commercial concerns over ambush marketing practices, Australian legislators introduced the Major Sporting Events (Indicia and Images) Protection Bill 2014 (Cth) earlier this year. The Bill, enacted on 27 May 2014, embodies the Australian Government’s desire to provide statutory protection to the organisers and sponsors of major Australian-Pacific sporting events. It will commence on 1 July 2014.
The Act is consistent with previous legislative moves prior to the Sydney 2000 Olympic Games and again at the Melbourne 2006 Commonwealth Games in that it is event specific. It offers protection for three upcoming major sporting events: the Asian Football Confederation (AFC) Asian Cup 2015, the International Cricket Council (ICC) Cricket World Cup 2015; and the Gold Coast 2018 Commonwealth Games. However, unlike previous Commonwealth attempts, the explanatory memorandum of the Bill indicates that there is potential for the scope to be widened to account for future major events.
Under the legislation, use of “protected indicia or images” of a major sporting event for “commercial purposes” is prohibited for non-authorised bodies and persons.
The Act indicates the Commonwealth support for “staging of the events to showcase Australia as a host of world class major sporting events and build trade, tourism and event legacy opportunities” (Major Sporting Events (Indicia And Images) Protection Bill 2014: Outline). Recognising the importance of commercial rights protection as being integral to the success of major sporting events, the Act is an attempt to more thoroughly protect the commercial interests of sponsors, upholding their rights and preventing other entities from unfairly cashing in on associations with major events. The Act also requires the online publication of a Register of authorised entities for each major event by the event-holders, which provides added transparency and openness to the procedure.
Key features of the Act include:
- Each listed event having a list of agreed words and phrases.
- The Act will exempt the use of certain indicia and images for each event where the use is for the purpose of the provision of information, or the purpose of criticism or review.
- The Act provides a range of potential remedies including injunctions, damages, corrective advertisement and the seizure of goods.
- It will be based on existing provisions within the Trade Marks Act 1995 (Sections 131-144) that relate to the importation of goods infringing Australian trade marks to avoid confusion for business, consumers and those administering the measures.
- The measures in the Act will protect the existing contractual agreements between the relevant for State and Territories and the authorising bodies.
- It is proposed that the Act will not include any criminal offence provisions as these can be dealt with through existing legislation such as the Trade Marks Act 1995 and the Copyright Act 1968.
While this Act formally recognises and seeks to curb ambush marketing surrounding major events, it must be noted that this sort of practice always potentially been subject to existing Australian laws. Ambush marketing has had (and continues to have) the potential to fall within the scope of the legal action of passing off (which can arise where a trader’s reputation has been detrimentally affected by a misrepresented association with another trader or brand) and/or breach Section 18 of the Australian Consumer Law (which centres upon consumer protection), as misleading or deceptive conduct and generally under the Trade Marks Act 1995.
Ambush Marketing and the FIFA 2014 World Cup
Later this month, the FIFA 2014 World Cup will take place across twelve host cities in Brazil. With 32 countries participating, there is no doubt that the World Cup forms one of the biggest global sporting events on the calendar, expected to be broadcasted to billions of viewers worldwide. Naturally a sporting event of this scale is extremely attractive to a wide range of businesses as a platform to promote their brand. However, sponsorship is a pricey option and at this level, is simply out of reach of many promoters. Thus, marketing strategies (including various ambush marketing tactics) have come into play for those companies wishing to profit from the popularity and pervasiveness of the World Cup. As established above, this is no new trend.
FIFA are correct in their assertion that the “World Cup” brand is an integral part of their financial success but equally, this should not give the FIFA brand complete control over all football / soccer related activities in 2014. Thus, a market balance needs to be created which recognises the extent of the FIFA brand without limiting the rights of others involved. Naturally this involves a respect for the official FIFA trade marks – which there are many, ranging from “2014 FIFA World Cup Brazil” and “Copa 2014” to “Mundial de Futebol Brasil 2014,” ensuring that they are not used for marketing purposes without the consent of FIFA.
The Major Sporting Events (Indicia and Images) Protection Bill 2014 (Cth) makes no reference to the FIFA 2014 World Cup, instead choosing to offer protections for major events in the Australia-Pacific region. Thus, this will offer no specific protections for FIFA in an Australian context. However, there are existing protections in Australian law which protect FIFA’s commercial rights.
Consumer protection laws
Pursuant to the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010 (Cth), which replaces the Trade Practices Act 1974 (Cth) as well as certain provisions of State and Territory fair trading legislation, any marketing activity that falsely or deceptively suggests or implies an association, sponsorship or affiliation between a brand and an event may constitute misleading or deceptive conduct (section 18) and/or contain false or misleading representations (section 29).
The distinction must however be made between a marketing activity that indirectly implies an affiliation with an event, which may only lead to confusion and may not give rise to a cause of action under the Australian Consumer Law, and a marketing activity that makes direct and misleading claims of association with an event, which may result in deception or a misrepresentation under the Australian Consumer Law.
Additionally, ambush marketing may be actionable under the common law action of passing off if it causes damage to the reputation or goodwill of an official sponsor or supplier to an event or wrongful appropriation in the sense of causing potential customers to associate the product or business of an official sponsor or supplier with that of the marketed brand, where no such connection exists.
Intellectual property laws
Ambush marketing may infringe the intellectual property rights of an official sponsor or supplier to an event, such as the unauthorised use of logos, names, symbols or imagery as part of the overall marketing campaign. For instance, copyright infringement may arise if the marketing activity substantially reproduces original components of the branding of an official sponsor or supplier or of the event itself, for instance its logo, tagline or theme song.
Trade mark infringement may also arise where a marketing activity contains a sign that is substantially identical or deceptively similar to the registered mark of an official sponsor or supplier or of the event itself, if the sign is used as a trade mark to indicate the origin of goods or services that fall within or are similar to the classes of goods or services in which the trade mark of the official sponsor or supplier or of the event itself is registered.
Ambush marketing has always been a risky practice, but as specific legislation is introduced to curb its popularity, it is becoming even more risky. While exposure, risk and controversy can sometimes be inherent aspects of a brand’s marketing strategy, the new legal intervention in Australia is likely to cause marketers to rethink their existing approaches to this form of marketing to overcome these new legal challenges. With controversial ambush marketing strategies historically an entertaining feature of major sporting events, we eagerly anticipate what strategies will emerge later this month.
Firm principal Stephen von Muenster recently attended Mumbrella’s CommsCon on 20 March 2014. He presented a question and answer session on ‘Managing Risk: How to keep your brand on the right side of the law.’
During this session, Stephen was asked questions relating to a number of legal areas. Below are some key take outs from the session.
I run a small PR agency. When I help a client get great publicity in the newspapers, I sometimes scan in the clippings and put them on our website, and also send them a copy. I’ve heard I could get into trouble for this. What should I do?
• Copyright protection automatic and applies to editorial works if there is a reproduction of a substantial or important part of an original work
• No copyright in linking to the article; no copyright in simply the headline of the article
• For reproduction in full, including on the Internet, get a licence from Copyright Agency Limited (CAL) for the use as this is a collecting society that manages a number of publishers’ interests
We look after a client’s Facebook page. Sometimes the public say some pretty offensive things in the comment thread about the brand, or other people. If it’s libellous are we liable?
• Under Defamation Acts (2006) defamation can occur where one person publishes content [words, sound, video, images] that damages reputation of another identifiable person
• Liability for defamatory publication can extend to a brand where the brand is able to exercise control over a publication, there is knowledge of the publication and there is a failure to prevent or remove the publication by a third party, eg on a brands blog or Facebook page etc
• Have clearly stated community guidelines and netiquette outlawing personal attacks, vilification and defamation. Such comments would also be a breach of Facebook’s Rights & Responsibilities
• Actively moderate or review blog postings / comments and remove those that breach community guidelines or rules of social media site – do not rely on users to tell you
• Remember the case of Federal Court decision in Seafolly Pty Ltd v Madden highlights social media legal media risks in the areas discussed above, including:
o Misleading & deceptive conduct
o Injurious falsehood
o Copyright infringement
I help run the social media community for several of our clients. Are there any implications of the changes to the privacy laws in how I share any information we gather?
• You need a compliant collection statement at the point you collect personal information
• All direct marketing via ANY channel (including banners and social) that uses personal information needs to comply with APP 7 (direct marketing)
• Direct marketing can be via any channel including:
o Email – eg using personal information provided by customer in the course of signing up for a loyalty program
o Online advertising – including targeted advertising when browsing
o Social advertising – eg facbook user ID’s, displaying an ad on social media to an individual using personal information (including data collected by cookies dropped as a result of the individuals site visits)
I’m about to change agencies. I’ve got a great relationship with a couple of clients, and I think I can persuade them to come across. I also happen to know that the contract is up soon. Are there any risks in getting involved in bringing them in?
• Comes down to your contract
• Usually we see non-competes and non-solicits
• Non compete means you cannot work for a competitive business but these are difficult to enforce against employees who need to earn a living in their chosen profession – unreasonable restraining
• More enforceable if can be proven are the non-solicits of clients of the former agency or employees of the former agency
• Also need to consider confidential information and IP issues that arise in employment contracts
I’m tired of training up staff, then just as they are becoming useful they get poached for more money and move to a rival. Is there anything I can do to stop them from working somewhere else?
• Pay them more money
• Bonus incentives tied to loyalty and staged payments
• Enforce non-solicits if applicable
I’ve had a great business idea. But I did some of the work on it during my lunchbreaks. If I go out on my own can my employer claim they own the idea?
• Need to check your employment contract to see if there is anything said as to what is “during the course of employment”. It may cover lunchbreaks particularly if you are using company assets eg computers, resources etc to develop your idea.
• Need to consider if the ‘idea’ is IP – if it is something protected by copyright and it is in the course of employment then agency will own the IP
• If it is an idea only it may be protected by employment contract and the common law obligations of confidence that an employee has to his or her employee
• Best to come up with your ideas at home out of work duty hours and only tell your employer of your idea if you agree with them up front that you own it at this stage
A relationship with a client ended badly. They haven’t paid their bills for the last three months, claiming they got no results. They had unrealistic expectations. They owe us about $20k. Should I sue?
• Depends on the circumstances of course. There may be legitimate dispute here.
• If they never raised any concerns prior and now conveniently, after the relationship ends and you have issued final bills, they say they did not get what they paid for, they may find it hard to defend.
• Statutory demand is a possibility
• Always get legal advice
We are always happy to answer your questions. Please contact us on (02) 8221 0933 or via firstname.lastname@example.org if you have any further queries.
A meaty dispute recently arose between a small hamburger shop and fast food giant Hungry Jacks. The take-away shop, in Wamberal on the Central Coast of NSW, has been serving the ‘Wambie Whopper’ for 20 years. It was reported that Hungry Jacks wrote to the owners, requesting that they stop using ‘whopper’ in their shop name.
When news of the letter broke on Facebook, Hungry Jacks was grilled on social media, with fans of the burger rallying to support the shop. Long-time Wambie Whoppers customer Matt Burke mustard huge support via Facebook by setting up the page ‘Save the Wambie Whopper’. The page received over 29,000 ‘likes’. A petition on change.org received over 5,000 signatures and Hungry Jacks’ own social media accounts were inundated with comments and criticisms.
Hungry Jacks found itself in quite a pickle, and following the backlash, the company withdrew its request.
The sauce of Hungry Jacks’ claim was likely based on trade mark and trade practices law. The word mark ‘Whopper’ was registered in December 1997 by the Burger King Corporation. However, if the term ‘Wambie Whopper’ was in use before the date of registration, the shop may have had a defense to any claim of trade mark infringement under the Trade Marks Act. The owners of Wambie Whoppers could have even considered taking action against Hungry Jacks under section 129 of the Trade Marks Act on the basis that Hungry Jacks had no grounds for making the threat.
It is also unlikely that Hungry Jacks would have been able to successfully argue that use of ‘Wambie Whopper’ is misleading and deceptive under the Australian Consumer Law. Lettuce be honest, it seems highly improbable that a reasonable consumer would consider that an association or connection exists between Hungry Jacks and Wambie Whoppers.
From a PR perspective, it seems to us that Hungry Jacks flipped out unnecessarily, to the detriment of its brand and reputation. As corporate conglomerate Unileaver found out earlier this year when it issued a legal letter to popular gelato bar Gelato Messina, strictly enforcing legal rights is not always the best course of action to take.
Copyright Agency Limited (CAL) is a copyright collecting society which collects and distributes copyright licence fees and royalties for text and images. CAL represents a number of publishers including Fairfax Media.
It has come to our attention that CAL has been sending letters of demand to some PR agencies and brands alleging copyright infringement in respect of editorial content being reproduced on brand websites and requesting back payment of copyright licence fees.
Copyright protection automatically attaches to content that is ‘original’ and subsists in material form, including literary and artistic works. Text and images comprising editorial content would be works in which copyright subsists. Copyright affords the owner the exclusive rights to copy, publish, perform, broadcast, adapt, sell, license, import, communicate to the public and reproduce in material form (including on the internet) copyright protected creations.
The reproduction or copying of content in which copyright subsists constitutes an infringement of that copyright. An infringement of copyright will be deemed to have occurred where a substantial or important part of an original work is copied. The reproduction of editorial content on a brand or agency’s website would constitute infringement of the owner’s (usually the publisher’s) copyright.
In order to avoid infringing copyright, brands and agencies should refrain from reproducing editorial content on their websites without permission from the publisher or a licence from a collecting society such as CAL. As an alternative, brands and agencies may consider linking to online versions of the relevant editorial content as linking in such a way is unlikely to constitute copyright infringement.
This is general guidance only in respect of this issue. Should you have any specific concerns regarding your use of any editorial content, you should contact us.
In a noble move to enrich Australia’s cultural and historical legacy, boutique brewer Thunder Road Brewing is looking to revive many of Australia’s heritage beer brands, including Brisbane Bitter, Cairns Draught and Ballarat Bitter. However, their plans have gone slightly a-rye, as Carlton United Breweries (CUB) currently holds trade mark rights in the historic labels. Before the pints can be pulled, Thunder Road Brewery must have approximately 60 trade marks removed from the trade mark register. The company is seeking to have CUB’s trade marks revoked on the basis that they are no longer used by the brewing giant, a point vigorously contested by CUB.
And so the parties have hopped off to court. The bitter dispute was heard by a delegate of the Registrar of trade marks at IP Australia in Melbourne during April this year.
Under the Trade Mark Act 1995 (Cth), a trade mark may be removed from the register where there has been no use, or no use in good faith, of the trade mark for 3 years (an application cannot be made until after 5 years have passed from the original filing date). Any person can apply to have a trade mark removed from the register, provided they are willing to pay the application fees involved, thought to be approximately $13,000 in this instance. The opponent then bears the thirsty task of either demonstrating the necessary use or satisfying IP Australia that circumstances had prevented use, but that registration should continue.
This trade mark war may be likened to a bar room brawl. During the hearing, CUB argued that they had not abandoned the trade marks, pointing to the release of commercial batches of the heritage beers from time to time, which were sold in pubs and through outlets such as Woolworths and Dan Murphy’s. Thunder Road suggested that these releases were not genuine use of the marks, but merely a sham to retain the trade marks.
Ultimately the decision rests with IP Australia, which has a broad discretion and will consider each mark on a case by case basis. In addition to actual use, the delegate will look at factors such as residual reputation in the market. Even if Thunder Road legitimately gains use of the trade marks, consumers may still associate some or all of the labels with CUB. If the use of the labels by Thunder Road suggests an association or connection between Thunder Road and CUB where no such connection exists, there may be an infringement of the Australian Consumer Law (ACL) (now at schedule 2 of the Competition and Consumer Act 2010 (Cth)) and passing off under common law.
IP Australia’s decision is likely to be handed down in approximately 3 months time. For stubby trade mark holders, this case is a timely reminder that you should:
- sit back, crack open a cold one and take a good look at your trade mark portfolio;
- ensure that you are using your trade marks. Remember, such use must be use ‘as a trade mark’ to distinguish your goods or services from those of other traders; and
- have another beer.
Sydney’s favourite gelato shop, Gelato Messina, recently found itself in a sticky and not-so-sweet trade mark dispute. Last week Gelato Messina created the ‘Gaytime’ flavour as a tribute to both the Sydney Gay and Lesbian Mardi Gras and everybody’s favourite childhood ice-cream (in case you were hungry wondering, the flavour consisted of layers of caramel and milk gelato with chocolate coated biscuit bits).
But alas, this ice-cream made Unilever scream, presumably because Unilever did not like Gelato Messina’s use of their ‘Gaytime’ trade mark.
Gelato Messina was shown the cold shoulder and told in no uncertain terms to cease and desist from using the ‘Gaytime’ name. No doubt hoping all their troubles would just melt away, Gelato Messina promptly changed the sweet treat’s name to ‘the flavour formerly known as Gaytime’.
The situation, however, remained frosty. Unilever demanded that Gelato Messina change the name again, setting a 5pm deadline. Harnessing the power of social media, Gelato Messina appealed to its loyal fans on Facebook to rename the ice-cream.
Just in a lick of time, a gelato fan came up with the final name, which aptly sums up this trade mark dispute – UNILEAVE US ALONE.
Brands with a registered trade mark are entitled to protect their rights, and if Gelato Messina had not changed their flavour’s name, they may have found themselves involved in legal proceedings. However, from a PR perspective, brands may wish to take a more chilled approach to trade mark infringement. Asserting strict legal rights might not always be the best course of action to take.
Author’s note: some gelato sampling research was conducted during the writing of this blog post.
In the recent case of Seafolly Pty Ltd v Madden  FCA 1346 (29 November 2012), the Federal Court found Leah Madden, principal designer of Australian swimwear label White Sands, liable for misleading and deceptive conduct and false representations under sections 52 and 53(a) of the Trade Practices Act 1974 (now sections 18 and 29 of the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010) for making statements on Facebook and in emails suggesting that Seafolly had ripped off her designs.
After seeing a photo of Seafolly swimwear in a magazine, which she initially believed was her own creation, Ms Madden posted various comments on her personal Facebook page and the White Sands Facebook page implying that Seafolly had copied her swimwear designs, such as:
- “Seriously, almost an entire line-line ripoff of my Shipwrecked collection.”
- “Ripping off is always going to happen, but sending in a dummy ‘buyer’ to get photos is super sneaky!”
Ms Madden also posted to her personal Facebook page an album comparing eight photos of her garments alongside photos of Seafolly swimwear under the heading “The most sincere form of flattery?” Ms Madden then emailed a number of fashion and news publications replicating the Facebook album followed by the comment “Is it just us, or has Seafolly taken a little to [sic] much ‘inspiration’ from White Sands?”
Once Seafolly became aware of Ms Madden’s claims as a result of the media interest and issued press releases denying her claims, Ms Madden took some of her Facebook posts down but continued to post comments on the White Sands Facebook page, such as “White Sands Australia says: “bullies be gone and take your bully tactics with you! We tiny little fledgling designers will not be taken advantage of!”
Seafolly sued Ms Madden on the following grounds:
- misleading and deceptive conduct and false representations;
- injurious falsehood; and
- copyright infringement.
Ms Madden cross-claimed against Seafolly, for alleging in its press releases that her statements had been made with the malicious intent of damaging Seafolly, on the following grounds:
- defamation; and
- misleading and deceptive conduct.
Misleading and deceptive conduct / false representations
In light of the evidence that the Seafolly swimwear generally predated those of White Sands, the Federal Court determined that:
- Seafolly did not copy the White Sands swimwear;
- the Seafolly swimwear were original designs created by employees of Seafolly without reference to the White Sands swimwear; and
- Seafolly did not use underhanded means to obtain photos of the White Sands swimwear and did not create the Seafolly swimwear using such photos.
The Federal Court rejected Ms Madden’s argument that her allegations were merely expressions of opinion and not statements of fact as, when read in context, her language conveyed that copying had in fact occurred. Even if her allegations could be understood as opinions, the Federal Court considered that she had been reckless in forming them. Ms Madden should have adopted a cautious approach as her allegations were made against a competitor and could potentially harm Seafolly’s reputation.
The Federal Court also rejected Ms Madden’s argument that her conduct was not ‘in trade or commerce’ as she had sought to influence the attitudes of customers and potential customers of Seafolly, a trade competitor, rather than merely provide commentary on industry matters.
The Federal Court accordingly found that Ms Madden had engaged in misleading and deceptive conduct and that she had made false representations as to the particular ‘style and model’ of the Seafolly swimwear. Ms Madden’s cross-claim for misleading and deceptive conduct failed as Seafolly’s allegations in its press releases that Ms Madden had sought to maliciously injure Seafolly were found to be true and not apt to mislead.
While Seafolly could establish the first three elements of the tort – a false statement of or concerning Seafolly’s goods or business, publication of that statement by Ms Madden to a third person, and malice on the part of Ms Madden – Seafolly could not establish the final element of proof of actual damage suffered as a result of the statement. Seafolly’s claim for injurious falsehood consequently failed as Seafolly did not provide adequate pecuniary, as opposed to reputational, loss suffered by it as a consequence of Ms Madden’s allegations.
Seafolly were unable to sue for defamation as it is a company with ten or more employees. The Federal Court noted that this case illustrates the difficulty confronted by such companies when their commercial reputations are called into question.
Seafolly also failed in its claim for copyright infringement as the owner of copyright in the Seafolly swimwear photos at time of publication by Ms Madden was the photographer, not Seafolly. Although the photographer subsequently assigned copyright in the photos to Seafolly and the right to sue for past infringements, Seafolly did not adduce any evidence to demonstrate that the photographer, as opposed to Seafolly, had suffered any damage as a result of the publication of the photos.
While the Federal Court found that Seafolly conveyed defamatory imputations of Ms Madden by asserting in its press releases that she had acted in a malicious way in order to harm Seafolly’s commercial interests, the Federal Court upheld Seafolly’s defences of:
- justification, on the basis that Seafolly’s statements were substantially true given Ms Madden had acted maliciously with reckless indifference; and
- qualified privilege, on the basis that Seafolly’s response was commensurate with the serious allegations made against it by Ms Madden.
As a result Ms Madden’s cross-claim for defamation failed.
The Federal Court ordered that Ms Madden:
- Seafolly limited damages of $25,000 (for reputational damage only, as Seafolly could not establish any economic loss as there was no downturn in Seafolly’s sales and profitability); and
- Seafolly’s costs; and
- be restrained from:
- reproducing or authorising the reproduction of the Seafolly photos without Seafolly’s consent; and
- making, or aiding, abetting, counseling or procuring the making of, similar statements, representations or claims to third parties.
Regarding the award of limited damages only, the Federal Court noted that the Facebook postings were accessible to a relatively small number of ‘friends’ for less than two days, however the email to the media outlets had the potential to be widely published. Despite this, the email did not actually generate significant publicity in the mainstream press.
This case serves as a warning to those who publicly shame brands on social media. It is important for brands to:
- not be reckless in their commentary on industry matters and ensure they ascertain, or take reasonable steps to ascertain, the truth of such commentary before posting it to social media;
- proceed with caution where such commentary relates to, or has the potential to harm, the trade or reputation of a competitor;
- monitor their social media pages for posts that are potentially misleading or defamatory or may infringe copyright;
- determine whether to treat, tolerate or take down these posts as soon as reasonably possible;
- upload house rules to their social media pages clearly defining the standards of behaviour that users of the page must abide by;
- implement company policy stipulating that their employees must not post anything to their personal social media pages that appear to be made ‘on behalf of’ the brand unless expressly authorised by the company; and
- if in doubt, seek legal advice early before the issue escalates.
They were short, stout and furry-toed, and their bones were discovered on the Indonesian island of Flores in 2003. Their full name is Homo floresiensis, or Flores Man, but you might know them better as hobbits.
However, with the new film ‘The Hobbit’ now hitting cinemas, a recent incident in New Zealand has provided a warning to all those who refer to this extinct species as ‘hobbits’.
Dr Brett Alloway, of Victoria University, organized a free public lecture about Homo floresiensis alongside the two archaeologists who discovered the species, Professor Mike Morwood and Thomas Sutikna. The lecture, titled ‘The Other Hobbit’, was scheduled to coincide with the release of the movie ‘The Hobbit’.
Dr Alloway sought permission to use the lecture title from the Saul Zaentz Company/Middle-Earth Enterprises, which owns certain rights in The Hobbit. A law firm acting for the company banned Dr Alloway from calling his lecture ‘The Other Hobbit’, noting that ‘it is not possible for our client to allow generic use of the trade mark ‘Hobbit.’
A disappointed Dr Alloway changed the name of his lecture to the less catchy ‘A newly discovered species of Little People – unraveling the legend behind Homo floresiensis.’
Although Dr Alloway did not choose to fight the Saul Zaentz Company, it is arguable that Dr Alloway’s lecture title was not a breach of trade mark law. Under both Australian and New Zealand trade mark legislation (see section 120 of the Trade Marks Act 1995 (Cth) and section 89 of the Trade Marks Act 2002 (New Zealand)), to infringe a registered mark, a person must use the sign (in this case the word ‘hobbit’) as a trade mark. Dr Alloway may have been able to argue that his use of the word ‘hobbit’ was merely descriptive, and that the lecture title was therefore not infringing the Saul Zaentz Company’s trade mark. The more descriptive the registered trade mark, the more likely a defence of this kind may be available.
It appears that the Saul Zaentz Company is actively enforcing its trade mark to prevent the word ‘hobbit’ from becoming generic. Genericide is the process by which a trade mark which was originally distinctive becomes the colloquial or generic description for, or synonymous with, a particular category of goods and services. If a trade mark becomes known as the generic name for goods or services, it will cease to be recognized as a trade mark. Many well-known trade marks have passed into common language, such as Thermos and Escalator.
To maintain the distinctiveness of a trade mark, brands should:
- ensure ownership and registration notices are used where appropriate (E.G. ™ or ®);
- develop a style manual which sets out how the trade mark should be used;
- develop a detailed strategy for use of the mark and a proactive approach to enforcing such use;
- maintain control over all third party licences and provide detailed obligations regarding use of the mark under licence; and
- monitor and act against all unauthorized use.
It may be difficult for the Saul Zaentz Company to protect its rights in the word ‘hobbit’ in the long term, as the word ‘hobbit’ is already part of our English speaking vocabulary, being defined in the Oxford English Dictionary as ‘a member of an imaginary race similar to humans, of small size and with hairy feet, in stories by J. R. R. Tolkien’, and is frequently used in the written press and in scientific literature to describe Homo floresiensis.