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Focus: Intellectual Property – September 2002

How does your brand shape up?

In brief: A recent decision by the Full Federal Court to allow the registration of a three-dimensional, bug-shaped confectionery item has significant implications for existing and future shape trade mark applications in Australia. Patents & Trade Marks Attorneys Partner Colin Oberin and Lawyer Ben Arnall review Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks and examine the important consequences of the decision for brand owners who wish to protect the unique shape of their goods against imitators.

Registering shapes

The Trade Marks Act specifically lists shapes, colours, sounds and scents as 'signs' that may be registered, in addition to traditional signs such as names, headings, labels, devices, tickets and numerals (and combinations of these).

Despite this, the Trade Marks Office (TMO) has taken a very stringent view as to whether a product shape is registrable as a trade mark. Only around 10% of shape trade mark applications have been accepted – a much lower percentage than applies to word marks.

In order to be accepted for registration, a three-dimensional shape mark must pass the same test as any other trade mark sought to be registered – it must be capable of distinguishing the applicant's goods or services from those dealt with or provided by other persons. This requirement may be satisfied by either showing that the mark is inherently (that is, by its very nature) capable of distinguishing the goods or services, or, alternatively, by demonstrating that the mark does or will distinguish the applicant's goods because of the extent of its use.

The TMO has accepted many shape trade marks for registration on the basis that the marks in question have satisfied the registrability requirements by virtue of considerable use in the market place.

However, shape marks have been difficult to register based only on inherent distinctiveness. This position should change in light of the Full Federal Court's decision in Kenman Kandy on 28 August this year.

Kenman Kandy's millennium bug confectionery

The picture below shows the trade mark which Kenman Kandy Australia Pty Ltd (Kenman) applied to register in January 1999.

The 'Millennium Bug'

 

The 'Millennium Bug': the stylised six-legged creature that caused all the argument.

 

 

By filing the application, Kenman sought to obtain trade mark registration for the three-dimensional shape of its fruit-flavoured 'millennium bug' confectionery (the bug shape).

In support of its application for registration, Kenman relied solely on the contention that the bug shape was inherently adapted to distinguish its confectionery from those of other manufacturers. Kenman filed no evidence of the extent to which the bug shape had already been used in Australia.

Despite making findings that the bug shape was an 'invented' and 'stylised six-legged creature' that 'strikes the eye as distinguishable from other shapes', a delegate of the Registrar of Trade Marks ultimately rejected the registrability of Kenman's shape trade mark. On appeal, Justice Wilcox upheld the delegate's decision.

What did the Full Federal Court say?

By a majority of 2:1, the Full Federal Court upheld Kenman's appeal and ordered that the bug shape trade mark be registered.

The two judges who formed the majority agreed that the introduction of new trade marks legislation in 1996 was not accompanied by an intention to make a radical change in trade mark law. They also agreed that shape marks may be the configuration of part or the whole of the goods themselves, but that a shape dictated by the nature of the goods or by a particular technical result to be obtained, could not function as a trade mark. This last consideration was emphasised by the Court, even though it was not directly applicable to the bug shape because it had no functional significance. In doing so, the Court reaffirmed the long-standing principle that trade marks should not be used to create monopolies in respect of functional features or innovations.

The majority judges further accepted that the registrability of shape marks was to be determined by reference to the same criteria applied to other types of trade marks, and therefore the central question was whether the bug shape was inherently adapted to distinguish Kenman's goods. Those judges considered the issue in the following terms: were other confectionery manufacturers likely, in the ordinary course of their businesses and without any improper motive, to desire to use the bug shape or some mark nearly resembling it, upon or in connection with their own goods?

Justice Stone took the view that, while the bug shape was suggestive of insect life, it was not the shape of any specific insect or bug. In upholding Kenman's appeal, Her Honour concluded:

'Registration of the bug shape as a trade mark would not give the appellant a monopoly over all bug or insect shapes – only this particular shape and any substantially identical or deceptively similar shape'.

Justice French reached a similar conclusion, deciding that the bug shape's distinctive symmetrical disposition of legs and eyes enjoyed the benefit of the presumption of registrability mandated by the 1995 Act, while also adding that closer adversarial scrutiny of the bug shape may occur at the opposition stage.

Significantly, Justice French also confirmed that the trade mark applicant enjoyed the benefit of the presumption of registrability set out in the Act.

Implications of the decision

In the absence of a successful appeal to the High Court of Australia, the Kenman decision should lead to a significant relaxing of the TMO's approach to the registrability of non-functional shape trade marks. Hitherto, the TMO has said that the presumption of the registrability did not apply to considerations of whether a mark was inherently adapted to distinguish goods, and therefore has placed a higher barrier in the face of applications for shape trade marks when compared with word marks.

Although each shape mark will still need to be considered on its merits – and, quite clearly, shapes that are dictated by function will not be regarded as inherently adapted to distinguish – the majority judgments in Kenman Kandy should signal an increase in the number of successful applications for three-dimensional shape trade marks in Australia.

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