The recent Federal Court proceeding, Samuel Smith & Son Pty Ltd (Smith & Son) v Pernod Ricard Winemakers Pty Ltd (Pernod)1 serves as a timely reminder of the importance of registering trade marks that distinguish one’s own goods and services from that of other traders. Marks that are too descriptive not only run the risk of being cancelled, they can render one’s digital marketing strategy ineffective.
Smith & Son own the South Australian wine house Yalumba. Smith & Son alleged that Jacob Creek’s ‘Barossa Signature’ is deceptively similar to Yalumba’s trade mark ‘the Signature’, used on their premium range of red wines.
Far from a clear infringement, the dispute demands an analysis of the word ‘signature’ and whether it meets the criteria set out in section 41 of the Trade Marks Act 1995 (Cth) (Act).
Distinctive vs descriptive trade marks
Section 41 of the Act reads:
‘…[A] trade mark must be rejected if [it] is not capable of distinguishing the applicant's goods or services…from the goods or services of other persons.’
Yalumba’s ‘Signature’ is ambiguous; it can refer to the signature taste or characteristic of a region. Grange is regarded as Penfold’s ‘signature’ product. To claim ownership over ‘Signature’, depriving other winemakers from its use, may lead to a successful challenge of the mark. ‘Barossa Signature’ does not function as a badge of origin; it describes the geographical location and characteristics of the wine. A consumer is unlikely to be confused or deceived between the two products.2
The case Agapitos v Habibi3, heard before Justice Le Miere, shares similarities to the above unresolved dispute. The owner of the trade mark ‘Dental Excellence’ (Plaintiff), who ran a clinic operating under the same name, brought an infringement claim against ‘South Perth Dental Excellence’ (Defendant). Despite the obvious similarities, the Defendant successfully counter-claimed, cancelling the Plaintiff’s mark under section 88 (1) of the Act.
In his decision, Le Miere J applied the following test:
‘…to determine whether a trade mark is inherently adapted to distinguish the designated…services from the…services of other persons is whether other…service providers are likely, in the ordinary course of their business and without any improper motive…to desire to use the same mark…’.4
In other words, conduct which would amount to infringement of a registered trade mark will be defensible if the infringing party was merely using their own name in good faith.
His Honour’s findings
His Honour concluded that:
‘[a]n honest dentist may want to use the word “excellence” on or in connection with “dental” to indicate…that they provide dental services of a superior quality…’
'Dental Excellence' was not inherently adapted to distinguish the Plaintiff’s services. The Plaintiff will have no recourse against those using a similar name, causing confusion and potential damage to their reputation amongst prospective customers.
This area of law isn’t always clear. In Cantarella Bros Pty Ltd v Modena Trading Pty Ltd5, Cantarella, a coffee distributer, brought proceedings on the basis that Modena had infringed Cantarella’s registered marks ‘ORO’ and ‘CINQUE STELLE’ (meaning ‘gold’ and ‘five stars’ respectively in Italian). ‘Gold’ and ‘five stars’ are generally associated with the quality of a good or service, arguably forming a descriptive mark. It was debated that despite being in Italian, ORO and CINQUE STELLE were descriptive of quality, therefore, should be available for use by all coffee traders. Having lost before the Full Federal Court, Canteralla appealed to the High Court.
In a 4:1 decision, the High Court overturned the decision of the Full Federal Court. The High Court ruled that the translation of ORO and CINQUE STELLE from Italian to English was not determinative; rather, the ordinary signification of the words to consumers or other traders was key. In an Australian context, ORO and CINQUE STELLE were inherently adapted to distinguish one range of coffee from another; the marks were upheld as valid.
Lavan Legal comment
At the time of writing, no judgment has been handed down in Smith & Son v Pernod. However, costly Federal Court proceedings could have been avoided altogether had greater care been taking in the creation of Smith & Son’s trademark ’The Signature’. Regardless of the outcome, the ambiguous, often descriptive, term ‘Signature’ may continue to be infringed by other wine traders without ‘improper motive’.
It can be disastrous for a company to build their reputation behind a brand, only to find out their marks cannot be protected. New businesses are created every day, to stand out from the crowd companies must adapt and protect their branding across all mediums.
Trade mark applications filed by Australian entities increased by 15% from 2014 to 2015. Search engine optimisation is big business, with companies clamouring to reach the front of Google’s results page. Internet users search using descriptive terms or phrases. Companies pay top dollar to make sure these commonplace phrases relate to their business. If these commonplace, descriptive terms match your marks and branding, there is a risk of getting lost in the crowd. Not only will your company struggle to find an online presence, you will be unable to enforce your descriptive mark, upending your digital strategy.
Whether starting a new business, rebranding or reviewing your current marks, it is important to seek legal advice to prevent future disputes.
1 SAD 442 of 2015.
2 See the definition of ‘deceptively similar’ under s 10 of the Trade Marks Act 1995 (Cth).
3  WASC 47.
4  WASC 47, .
5 SAD No 442 of 2015.