Now let's be honest - clarification of Australian trade mark law on ownership and reputation

Intellectual Property Update

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In a unanimous decision of the Full Federal Court of Australia this week, Insight Clinical Imaging Pty Ltd, has for the third time, successfully opposed the registration of a competitor's trademark application.

The decision of the Full Federal Court of Australia has clarified the law on ownership of trademarks and in doing so, held that an assignment of a trademark application will no longer cure an application where the original applicant was not the true owner of the mark. This raises an important issue as to the validity of trademarks in many portfolios.

Background

Insight Clinical Imaging Pty Ltd (ICI) coined the trademark INSIGHT CLINICAL IMAGING in December 2007 and commenced use of the following mark in August 2008:

Australia trademark 2

On 12 July 2011, Mr Pham, the sole director of a competing company, AKP Radiology Consultants Pty Ltd, registered the business name 'Insight Radiology' for use by AKP Radiology Consultants Pty Ltd. Mr Pham subsequently, on 7 December 2011 filed, in his own name, a trademark application for:

Australia trademark 1

In June 2013, AKP Radiology Consultants Pty Ltd changed its name to Insight Radiology Pty Ltd (IR). On acceptance of the IR mark ICI opposed its registration. During the opposition period, Mr Pham purported to assign the IR mark to IR.

The Trademarks Office refused registration of the IR mark, finding that it was substantially identical to the ICI mark and that in light of the evidence of prior use by ICI, IR was not the owner of the IR mark. (Insight Clinical Imaging v Insight Radiology [2014] ATMO 85).

IR appealed the decision to the Federal Court of Australia. Justice Davies agreed that Mr Pham lacked the requisite intention, but held that the assignment to IR after acceptance was effective to cure the defect. However ICI ultimately succeeded in preventing registration of the IR mark on the ground that, owing to the reputation of the ICI mark, the use of the IR mark would be likely to deceive or cause confusion. Read our previous update reporting Justice Davies' judgement.

IR (which has now changed its name to Pham Global Pty Ltd) again appealed, this time to the Full Federal Court (FFC). In their Honours' decision handed on Friday, the FFC too found the IR trademark to not be registrable, this time on all grounds including both the ownership and reputation grounds. In doing so, the FFC has clarified some important issues of trademark law and practice including that:

Only a person claiming to be an owner of a trademark may apply for its registration.

If the applicant is not the owner of the mark at the time of the filing of the application, the assignment provisions of the Trademarks Act 1995 do not assist, because these provisions pre-suppose that the applicant owns the mark. The FFC stated at [40]:

"Within such a [legislative] scheme, where the rights of the registered owner extend back to the filing date of the application, it is essential that the initial applicant on the filing date be the owner of the mark. Otherwise the applicant cannot transfer ownership of the mark by an assignment in accordance with the legislative provisions on and from the filing date and can claim on becoming the registered owner an account of profits or damages for infringement when not in fact the owner."

In determining the relevant class of persons (for assessing whether a mark is likely to deceive or confuse) the nature of the goods or services on which the mark is used informs the identification.

The FFC accepted Davies J's conclusion that the evidence provided an ample basis to support the conclusion that radiological services are provided as part of a national industry. The FFC stated at [74]:

"Radiological or clinical imaging services … involve a specialist field of health service. The relevant forum is Australia but the relevant class of consumers consists of those working in a specialist national market, being radiographers, radiologists and medical practitioners, as well as patients."

Given the increased use of the Internet for communication and regular movement of people across Australia, it will be increasingly difficult, if not impossible, to limit trademarks by State.

The FFC stated at [81]:

"… the reality of modern life, with widespread use of the internet for advertising, job seeking, news gathering, entertainment, and social discourse and free and frequent movement of people across Australia for work, leisure, family and other purposes, necessarily impacts on both the acquisition of a reputation in a mark and the likelihood of the use of another mark being likely to deceive or cause confusion because of that reputation. Given current modes of communication and discourse and free and unfettered rights of travel within Australia, a substantial reputation in Western Australia in this national industry constituted a sufficient reputation in and across Australia ... IR's attempts to subdivide the nation into its component States and Territories … resonates with sentimental notions of pre or early Federation train track gauge differences."

Conclusion

This decision is a significant change to the law on ownership of trademarks. Trademark owners should review their portfolios and consider filing new applications for any marks which may not have been filed in the true owner's name, including the wrong company in a corporate group.

The decision on use across Australia, and identifying the relevant class of persons, sweeps away old law that did not reflect the modern world of travel and instant online access to information. For clients who only use marks in a particular city, this decision provides comfort that their rights will extend across the country.

ICI was represented by DLA Piper Australia.