Acronym trade marks: AMH and AMG meat in Court

“The world of commerce is conditioned to the use of acronyms.”¹ An acronym is often more recognisable than the name from which it is derived (think IBM and ABC). As a result, acronyms are often registered as trade marks, in order to prevent others from using the same.  

• how the Court compares acronyms in infringement proceedings; and
• whether reputation and prior use ought to be considered by the Court in infringement proceedings.

The facts

AMH and AMG process and export Australian meat. Both share similar wholesale clients and are in direct competition with each other.

AMH took issue with (amongst others) AMG’s use of its acronym.

AMH commenced proceedings against AMG, claiming:

• trade mark infringement;
• passing off; and
• breach of Australian Consumer Law.

AMH abandoned its passing off and consumer law claims at trial. Despite this, AMH ran evidence at trial of its significant reputation (and history) in the Australian market. This evidence was material in the primary judge’s finding that use of “AMG” infringed AMH’s trade mark.

AMG appealed to the Full Court of the Federal Court of Australia.

Decision

On appeal, the Full Court overturned the primary judge’s decision.

The Full Court found that evidence as to reputation and prior use was immaterial to the question of deceptive similarity. 

Although appropriate in a passing off action, reputation ought not assist a Court to compare two similar marks, in order to assess whether those marks are deceptively similar.

The Full Court also considered the popularity of acronyms in the wholesale meat industry. Where wholesale orders are of significant value, the ordinary customer would bring with them an “inquiring mind”.³  Accordingly, customers were unlikely to confuse AMG with AMH, given the clear difference in spelling.

Further, as “AM” stood for “Australian Meat” (a commonly used acronym in that industry), “AM” was not a distinctive feature.

Accordingly, within the relevant context, “AMG” was not deceptively similar to “AMH”.

Lavan comment

An action in passing off requires an assessment as to the claimant’s goodwill and reputation. However, an action in trade mark infringement is largely concerned with a direct comparison of the competing marks, in order to assess whether there is a danger that the ordinary consumer will confuse the two.

Where acronyms are involved, a claimant may have difficulty arguing infringement. If the original name comprises descriptive words (e.g. “Australian Meat Group”), a court might be reluctant to prevent other like traders from using the corresponding acronym.

Ultimately, the result will depend on the facts. If you intend to register (as a trade mark) an acronym associated with your business, or are involved in an infringement dispute, contact Iain Freeman and Andrew Sutton to discuss.