This case centered on Pacific Brands production and sale of shoes with 4 stripes running down the side. The plaintiff, Adidas, argued that the 4 striped shoes were likely to confuse or deceive consumers into thinking Pacific Brands shoes were made by Adidas, a breach of s120 of the Trade Mark Act.
Adidas was seeking an injunction, preventing Pacific Brands from using the design, damages with interest, an account of profits and for Pacific Brands to deliver the remaining stock to them.
The two trade marks being argued were from 1957 and 2002 (Trade Marks can be registered for 10 years and renewed for perpetuity), and both concerned three stripes on the side of sport and casual shoes, Adidas' position was that any stripes on shoes were covered by the trade marks, while Pacific Brands argued that 4 stripes were clearly distinguished from 3 stripes.
The Adidas claim centered on s120(1) of the Trade Mark Act, which covers use of a trade mark with respect to the same class of goods. There was no debate as to validity of the Adidas trade mark within the definition of s17 of the trade marks act. The 3-stripe symbol has clearly been used to distinguish Adidas with respect to shoes.
Pacific Brands defence rested on two arguments, first; that the use of stripes did not amount to use as a trade mark within the act, and second; that the 4-stripes were not "deceptively similar".
The first argument ran as follows;
Pacific Brands argued that the stripes were not for use as a trademark because they were used in different ways (functional, as well as design), in response Adidas argued that the 'badge of origin' claim doesn't mean it is only for that purpose (Johnson & Johnson v Sterling Pharmaceuticals, Pepsico v Kettle Chip co.)
The second argument was that the shoes were branded with Pacific Brands own brand names, this was rebutted by citing Allsop J in Anheuser v Budejovicky.
Adidas submitted that that the test for use as a trade mark should come from Aldi Stores v Frito-Lay, where the test is whether the public would perceive it as being used to distinguish from competitors. They also raised the placement of the stripes on side of the shoes, citing Beecham Group v Colgate-Palmolive, where this was found to be a factor.
The Federal Court found that, despite Pacific Brands claims that it did not advertise and thus was not associated with the stripes, that they were still using the stripes as a trade mark.
On the second argument, both sides called experts from consumer and marketing groups. An early proposition put forward by the Defendants was that their shoes were sold for lower prices and in different places, and as such consumers would be not confused. This argument was rebutted with the assertion that many leading brands were now being stocked at K-Mart, and as such the possibility to be mislead still arose.
The final limb of the Adidas argument centered on context, and that to determine the context based on where it was sold would create an absurdity where the ruling would change if Athlete's Foot were to sell that particular item.
The Federal Court found that two of the 12 shoes involved in the case, The Stingray Shoe and the Airborne shoe did breach the Adidas trade mark. Though the court was not convinced as to intent, it did find that there was a real and tangible danger of confusion occurring.
Adidas and Pacific Brands have been given 28 days to agree on damages.
Wednesday, 18 September 2013
Tuesday, 17 September 2013
s120 Trade Marks Act
TRADE MARKS ACT 1995 - SECT 120
When is a registered trade mark infringed?
(1) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.
Note 1: For registered trade mark see section 6.
Note 2: For deceptively similar see section 10.
Note 3: In addition, the regulations may provide for the effect of a protected international trade mark: see Part 17A.
(2) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to:
(a) goods of the same description as that of goods ( registered goods ) in respect of which the trade mark is registered; or
(b) services that are closely related to registered goods; or
(c) services of the same description as that of services ( registered services ) in respect of which the trade mark is registered; or
(d) goods that are closely related to registered services.
However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion.
Note 1: For registered trade mark see section 6.
Note 2: For deceptively similar see section 10.
Note 3: In addition, the regulations may provide for the effect of a protected international trade mark: see Part 17A.
(3) A person infringes a registered trade mark if:
(a) the trade mark is well known in Australia; and
(b) the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to:
(i) goods ( unrelated goods ) that are not of the same description as that of the goods in respect of which the trade mark is registered ( registered goods ) or are not closely related to services in respect of which the trade mark is registered ( registered services ); or
(ii) services ( unrelated services ) that are not of the same description as that of the registered services or are not closely related to registered goods; and
(c) because the trade mark is well known, the sign would be likely to be taken as indicating a connection between the unrelated goods or services and the registered owner of the trade mark; and
(d) for that reason, the interests of the registered owner are likely to be adversely affected.
Note 1: For registered trade mark see section 6.
Note 2: For deceptively similar see section 10.
Note 3: For well known in Australia see subsection (4).
Note 4: In addition, the regulations may provide for the effect of a protected international trade mark: see Part 17A.
(4) In deciding, for the purposes of paragraph (3)(a), whether a trade mark is well known in Australia , one must take account of the extent to which the trade mark is known within the relevant sector of the public, whether as a result of the promotion of the trade mark or for any other reason.
Tuesday, 16 July 2013
s33 - Australian Consumer Law
A person must not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose or the quantity of any goods.
Note: A pecuniary penalty may be imposed for a contravention of this section.
s29 - Australian Consumer Law
(1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:
(a) make a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use; or
(b) make a false or misleading representation that services are of a particular standard, quality, value or grade; or
(c) make a false or misleading representation that goods are new; or
(d) make a false or misleading representation that a particular person has agreed to acquire goods or services; or
(e) make a false or misleading representation that purports to be a testimonial by any person relating to goods or services; or
(f) make a false or misleading representation concerning:
(i) a testimonial by any person; or
(ii) a representation that purports to be such a testimonial;
(g) make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; or
(h) make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation; or
(j) make a false or misleading representation concerning the availability of facilities for the repair of goods or of spare parts for goods; or
(k) make a false or misleading representation concerning the place of origin of goods; or
(m) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3-2); or
(n) make a false or misleading representation concerning a requirement to pay for a contractual right that:
(i) is wholly or partly equivalent to any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3-2); and
(ii) a person has under a law of the Commonwealth, a State or a Territory (other than an unwritten law).
Note 1: A pecuniary penalty may be imposed for a contravention of this subsection.
Note 2: For rules relating to representations as to the country of origin of goods, see Part 5-3.
(2) For the purposes of applying subsection (1) in relation to a proceeding concerning a representation of a kind referred to in subsection (1)(e) or (f), the representation is taken to be misleading unless evidence is adduced to the contrary.
(3) To avoid doubt, subsection (2) does not:
(a) have the effect that, merely because such evidence to the contrary is adduced, the representation is not misleading; or
(b) have the effect of placing on any person an onus of proving that the representation is not misleading.
s18 - Australian Consumer Law
(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
(2) Nothing in Part 3-1 (which is about unfair practices) limits by implication subsection (1).
Note: For rules relating to representations as to the country of origin of goods, see Part 5-3.
Free-Roaming Chickens
When it comes to chickens, just what does the phrase 'free to roam' mean?
That is the question that has been put before the Federal Court after an action against La Ionica and Steggles chicken farms. The two companies advertised in various forms and locations that their chickens were 'free to roam' - this claim, the ACCC argued, was misleading and deceptive (breaching s18, s29 and s33 of the Australian Consumer Law)
In cases such as this, where a company is accused of being misleading or deceptive, it is important to remember that it is not necessarily the factual truth behind these statements that determines whether or not there is a breach. What does matter is the impression that a reasonable consumer would get, taking into account the context in which the statement is made.
The central question in this case was, therefore, what would a reasonable person assume was meant by the 'free to roam'?
Turi Foods (aka La Ionica), conceded that the claim was likely to mislead or deceive consumers and that the chickens at their barns were not in fact 'free to roam' to the extent that a standard consumer would expect. They had made the claim on two posters displayed in stores and on signage on delivery trucks. Tracey J in the Federal Court ordered a fine of $100,000, a 3 year injunction on the 'free to roam' claim, a corrective notice be published in a major daily newspaper and that the organisation institute training for staff on the consumer laws.
Baiada and Bartter, who both sell chickens under the brand Steggles, decided to fight the allegations by the ACCC - leading to a trial in front of Tracey J. This trial considered the definition of 'free to roam', and visited the barns were chickens were kept - even taking the unusual step of painting a chicken to see how far it did indeed roam - to form a judgement.
The court has concluded that the conditions were such that the term 'free to roam' was misleading, and punishment will be set at a later date.
The final element of interest in this case was whether the Australian Chicken Meat Federation could make use of the 'Media Safe Harbour' defence, which prevents media from breaching the act if they make factual errors. The judge ruled that the AMCF, which made the free to roam claim on its website, had breached the act and was not entitled to the 'Media Safe Harbour' defence because they existed to promote the interests of the chicken farms.
The final element of interest in this case was whether the Australian Chicken Meat Federation could make use of the 'Media Safe Harbour' defence, which prevents media from breaching the act if they make factual errors. The judge ruled that the AMCF, which made the free to roam claim on its website, had breached the act and was not entitled to the 'Media Safe Harbour' defence because they existed to promote the interests of the chicken farms.
Monday, 15 July 2013
Organic Water?
The ACCC has today negotiated with seven different suppliers of bottled water to remove the term organic from their product labels.
The commission approached the water sellers after deeming that water could not possibly be organic:
"The word ‘organic’ in the context of food and drink refers to agricultural products which have been farmed according to certain practices. Water is not an agricultural product, and cannot benefit from such practices so it is not appropriate to use ‘organic’ to describe it."
They also found it likely that having the term organic on the product was likely to lead consumers into a false belief that organic water is somehow superior to regular water (or tap water... but that's another matter).
Although the companies argued that 'Organic' was part of a brand name - rather than a claim about quality - The ACCC disagreed.
The Deputy Chair of the ACCC, Delia Rickard, spoke of what the commission term "credence claims", essentially, words which attempt to give a product some premium status. These Credence Claims, particularly in the food and beverage industries, are a priority for the ACCC according to February's Compliance and Enforcement Policy. Recent cases have seen the commission take on Steggles' Free-To-Roam chickens and Coles' "freshly-baked" bread.
However, it is a credit to both the commission and the companies involved that - unlike Coles and Steggles - we the taxpayer were spared the expense of a long and nonsensical trial concerning the organic qualities of water.
Click here to read the ACCC Press Release
Click here to read the article from Megan Levy (Fairfax)
The commission approached the water sellers after deeming that water could not possibly be organic:
"The word ‘organic’ in the context of food and drink refers to agricultural products which have been farmed according to certain practices. Water is not an agricultural product, and cannot benefit from such practices so it is not appropriate to use ‘organic’ to describe it."
They also found it likely that having the term organic on the product was likely to lead consumers into a false belief that organic water is somehow superior to regular water (or tap water... but that's another matter).
Although the companies argued that 'Organic' was part of a brand name - rather than a claim about quality - The ACCC disagreed.
The Deputy Chair of the ACCC, Delia Rickard, spoke of what the commission term "credence claims", essentially, words which attempt to give a product some premium status. These Credence Claims, particularly in the food and beverage industries, are a priority for the ACCC according to February's Compliance and Enforcement Policy. Recent cases have seen the commission take on Steggles' Free-To-Roam chickens and Coles' "freshly-baked" bread.
However, it is a credit to both the commission and the companies involved that - unlike Coles and Steggles - we the taxpayer were spared the expense of a long and nonsensical trial concerning the organic qualities of water.
Click here to read the ACCC Press Release
Click here to read the article from Megan Levy (Fairfax)
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