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Focus: Seeing red over yellow

5 May 2014

In brief: The difficulty of registering a colour mark or word mark denoting a colour (that include issues of market place recognition) was highlighted by a recent set of appeals revolving around the use of the word 'Yellow' in a tussle between various business directory goods and service providers. Partner Sarah Matheson (view CV) and Lawyer Tracy Lu report on a decision that provides some useful clarification on this complex issue.

How does it affect you?

  • This decision concerns oppositions against trade mark registrations on the grounds of lack of distinctiveness, deceptive similarity and no intention to use.
  • In particular, it considered whether colour marks and word marks which denote colour are inherently adapted to distinguish goods or services.
  • It also considered what 'actual use' evidence is required to establish that a mark, particularly a mark which forms part of a larger composite mark, is or will distinguish goods or services.

Case background

The case – Phone Directories Company Australia Pty Ltd v Telstra Corporation Limited [2014] FCA 373 – concerned two appeals from decisions of delegates of the Registrar of Trade Marks.

The first appeal related to oppositions by Yellowbook.com.au Pty Ltd (Yellowbook) and Phone Directories Company Australia Pty Ltd against Telstra's application for the registration of the word 'Yellow' in respect of goods and services including print and online telephone directories and related goods and services (Yellow appeal).

The second appeal related to Telstra's opposition against Yellowbook's application for the registration of 'yellowbook.com.au' in respect of an online business directory (Yellowbook appeal).

Legislative background

The decision considered three grounds of opposition, under sections 41, 44 and 59 of the Trade Marks Act 1995 (Cth).

Section 41 deals with the rejection of an application for a registration of a mark on the grounds that it is not capable of distinguishing the applicant's goods or services. The form of s41 considered in this decision is different from the form in which it currently stands following the Raising the Bar amendments, however, some of the key concepts remain the same.

First, a mark is examined as to whether it is 'inherently adapted' to distinguish the relevant goods or services. Then, if it is found that the mark is not 'inherently adapted' to distinguish, the question will turn to whether as at the lodgment date, the mark had in fact acquired distinctiveness by reason of its actual use. Or, if it is found that the mark is to some extent but insufficiently 'inherently adapted' to distinguish, the question will turn to whether the combined effects of the extent to which it is inherently adapted to distinguish, the (actual) use or intended use of the mark and any other circumstances means that the mark is or will distinguish the relevant goods or services.

Sections 44 deals with the rejection of an application for a registration of a mark if it is substantially identical with, or deceptively similar to, a trade mark registered or applied for by another person in respect of similar goods or closely related services.

Section 59 deals with when a registration may be opposed where the applicant does not intend to use or authorise the use of the mark in Australia.

The Yellow appeal

In the first appeal, Justice Murphy rejected Telstra's application for the 'Yellow' mark, on the following bases.

1. The word 'Yellow' was not inherently adapted to distinguish Telstra's designated goods and services (under formerly s41(3) of the Trade Marks Act 1995, now s41(3)(a)).

  • In referring to commentary and other decisions dealing with colour marks (which have stated that colour marks are not generally inherently adapted to distinguish), his Honour opined that it is difficult to draw a distinction between a word denoting a colour and a colour when dealing with the issue of a trade mark's inherent capacity to distinguish.
  • 'Yellow' was descriptive and it was likely that other traders, acting without improper motive, were likely to use 'Yellow' as a mark in a way that is likely to infringe. In particular, the evidence showed that prior to the lodgment date, the colour and word yellow were commonly used in Australia and overseas in respect of print and online business directories. Evidence of the practice of overseas traders is relevant to determining whether other traders in Australia, acting without an improper motive, were likely to want to use the mark or a similar mark.

2. Where the enquiry proceeds to whether there was 'actual use' (following a determination that the mark is not, or is insufficiently, inherently adapted to distinguish), the onus shifts to the applicant of the trade mark to satisfy the Registrar or the court that the registration should be granted.

3. 'Yellow' did not in fact distinguish the designated goods and services as at the lodgment date (under formerly s41(6), now s41(3)(b)).

  • Any pre-lodgment date use, which constituted use of 'Yellow' as part of other marks (eg 'Yellow Pages' or 'Hello Yellow') rather than 'Yellow' alone, was not use as a mark, since it was just a shorthand reference to the more well-known 'Yellow Pages' marks or directories.
  • Some of the evidence taken into consideration to reach this finding includes that the stated marketing objectives of some of the campaigns relied upon by Telstra were to promote 'Yellow Pages' rather than 'Yellow', that the campaigns directed internet traffic to the Yellow Pages website, and that consumer recognition surveys conducted at the time only recorded recognition of 'Yellow Pages' directories and not 'Yellow' directories.
  • Even if it is accepted such pre-lodgment date use was use as a mark, such use was 'light' and of insufficient duration. Importantly, Telstra adduced little or no cogent evidence as to consumer recognition of 'Yellow' alone and separate from the other 'Yellow Pages' marks as a trade mark (ie the origin of the relevant goods or services) prior to the lodgment date.

4. Even if 'Yellow' was inherently adapted to distinguish to some extent, it nevertheless does not and will not distinguish the designated goods and services having regard to the combined effect of the extent to which it is inherently adapted to distinguish, the use or intended use of the mark and any other circumstances (under formerly s41(5), now s41(4)).

  • Similarly, for reasons including the above, the extent to which 'Yellow' was inherently adapted to distinguish was minor and its use, pre-lodgment date, was either not use as a mark or if it was use as a mark, such use had been insufficient.
  • Evidence of post-lodgment date use also failed to establish that 'Yellow' had subsequently become distinctive on its own, which would have allowed an inference that as at the lodgment date the mark at least had a capacity to distinguish. In particular, a post-lodgment date consumer survey showed negligible consumer recognition of the 'Yellow' mark unless prompted by reference, among other things, to 'Yellow Pages'.

5. Under s44, 'Yellow' is deceptively similar to earlier registered marks The Yellow Envelope, Yellow Duck, Yellow Zone etc.

  • In each case 'Yellow', rather than the other word, is the essential feature of the mark.
  • This approach is also consistent with the approach taken by Telstra in the Yellowbook appeal referred to below and also Telstra's stance in the marketplace in restricting other traders from using 'Yellow' on the basis of its 'Yellow Pages' marks.

While it made no difference to the overall result, Justice Murphy was satisfied that there was sufficient evidence of Telstra's intention to use 'Yellow' as at the date it applied to register 'Yellow' as a trade mark. In this regard, his Honour accepted as sufficient, Telstra's post-lodgement date use of the mark , combined with other evidence, including Telstra's actions in broadening the scope of its trade mark coverage (eg in opposing other registrations containing 'Yellow').

The Yellowbook appeal

In the second appeal, Justice Murphy rejected Yellowbook's application for the 'yellowbook.com.au' mark, on the basis that it is deceptively similar, under s44, to Telstra's 'Yellow Pages' marks and in particular:

  • Contrary to Yellowbook's proposition, the addition of '.com.au' as a suffix to a word mark does not mean the mark is to be considered differently. The '.com.au' component of the mark is given little significance in determining whether the mark is likely to deceive or cause confusion.
  • The distinctive and important feature of both 'yellowbook.com.au' and 'Yellow Pages' was 'Yellow'.
  • Furthermore, 'pages' and 'book' connote the same concept.

Conclusion

In a decision clearly written with the prospect of an appeal in mind, this case provides useful guidance by reason of its detailed consideration of the issues outlined above.

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