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Friday, 8 January 2016

Australian Federal Court Prevents Registration of the Word ‘Yellow’ As Trade Mark

The IPKat is delighted to receive this guest piece from Katfriend and Antipodean author Brett Shandler, reporting the case Telstra Corporation Limited v Phone Directories Company Australia Pty Ltd [2015] FCAFC 156.

Yellow is one of this writer’s least favourite colours. Garish, sickeningly bright, and forever tarnished by its association with both liver disease and the band Coldplay, yellow is highly, highly overrated. But, credit where credit is due, it does tend to make things stand out. For this reason, it is the colour of choice for school buses, road signs, and, for historically anomalous reasons, telephone business directories – commonly known as Yellow Pages. This phrase, as well as its accompanying ‘Walking Fingers’ logo, are registered trade marks in many countries around the world, including the UK, Canada, and Australia – though curiously not the United States. 
In Australia, the YELLOW PAGES mark is owned by Telstra, the country’s largest telecommunications company. In 2003, out of apparent concern for word economy, Telstra applied to register the word YELLOW as a trade mark in a number of classes. This was followed in 2006 by an advertising campaign to make YELLOW rather than YELLOW PAGES the overarching ‘umbrella’ brand name of its directory goods and services. In the same year, Telstra applied to register the colour yellow as a trade mark. In 2009, Telstra decided to abandon YELLOW as the principal brand name of its directory services after market research indicated low levels of awareness and recognition. 
In a recent decision, the Full Federal Court of Australia affirmed a lower, Federal Court decision to deny registration of the YELLOW word mark. It held that the mark was not inherently adapted to distinguish the designated goods or services from the goods or services of other persons, and was also deceptively similar to other, previously registered marks.

Appeal
To simplify a rather convoluted factual and procedural background, the case before the Full Court involved two simultaneous appeals. The first was Telstra’s appeal (on two separate grounds) against a Federal Court decision to deny the registration of the YELLOW word mark, which had been opposed by two companies: Yellowbook.com.au Pty Ltd and Phone Directories Company Australia Pty Ltd. The second was Yellowbook’s (ultimately unsuccessful) appeal against the Federal Court decision to refuse registration of YELLOWBOOK and www.yellowbook.com.au in light of their similarity with Telstra’s YELLOW PAGES mark. We will leave the Yellowbook appeal to one side and focus on the registrability of the YELLOW mark.

Section 41 - Inherently Adapted to Distinguish?

Under s 41 of the Trademarks Act 1995 (Cth), an application for registering the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered from the goods and services of other persons. In determining this, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons.

In assessing this question, the Full Court held the YELLOW mark to be descriptive. Descriptive terms (cf generic terms) can be inherently adapted to distinguish, but only if they can be said to have acquired a secondary meaning. Next, the court looked at the ordinary signification of the word, concluding that ‘yellow’ is descriptive of the colour widely used in respect of print and online directories, and it is likely that consumers recognise directories generally by reference to that colour. Consequently, other traders were likely, without improper motive, to want to use the word yellow to signify their goods in a way that would infringe the YELLOW mark. This meant that the word was merely descriptive rather than being inherently adapted to distinguish.

What is noteworthy about this judgment is the way it creates a link between a colour and the word describing that colour. In its appeal, Telstra argued that the primary judge impermissibly conflated the two in stating 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’. Further, while Telstra conceded that the colour was used in connection with print and online directories, it disputed the suggestion that the YELLOW mark could be said to signify these directories. In rejecting these arguments, the Full Court noted that that ‘there is clearly a link between a word describing a colour and the colour itself (citing Cadbury Ltd v Effem Foods Ltd [2007] NZCA 303) and the two ‘cannot be [cleanly] separated’. If the colour yellow (‘with or without the word’) has come to signify print and online directories, then consumers and traders may in some cases come to understand the word describing the colour to signify them as well.

Section 44 – identical trade marks?

In addition to its appeal under s 41, Telstra also appealed against the primary judge's finding under s 44 that the YELLOW mark was deceptively similar to three previously registered marks which related to comparable classes and to comparable goods and services: THE YELLOW ENVELOPE, YELLOW DUCK and YELLOW ZONE. The Full Court overturned this aspect of the decision, holding that these marks (as well as another one, YELLOW DOOR) were ‘phonetically and visually distinct’, each conveying a different idea to the YELLOW mark, which consists of a sole abstract concept.

The Full Court also rejected one of the primary judge’s reasons for his finding of deceptive similarity, that Telstra’s argument that the YELLOW mark was not deceptively similar is inconsistent with its past commercial practices and representations before the Registrar of Trade Marks. As far as the appellate court was concerned, it was ‘irrelevant to take into account Telstra’s history of protecting its YELLOW PAGES trade marks’.

Conclusion
Beyond addressing the connection between the name of a colour and the colour itself, this decision provides a clear application of the High Court of Australia’s preferred approach to determining whether a mark is inherently adapted to distinguish, as recently outlined in Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2014] HCA 48. This process involves first looking at the ordinary signification of a word, before assessing whether other traders might legitimately need to use the word in respect of their goods.

Looking at this issue from the perspective of EU law, it is worth asking whether the use of the colour denoted by a word mark could have a bearing on the mark’s registrability under s 3(1) of the Trade Marks Act 1994 / art 7(1) of the Community Trade Mark Regulations (No 207/2009). This is assuming that the mark’s distinctiveness is a live issue, and bearing in mind that the court’s consideration of this issue might depend on the particular s 3(1)/7(1) subsection it deems to be enlivened.

In Société Des Produits Nestlé SA v Cadbury UK Ltd [2014] EWHC 16 (Ch) at [40]-[45], Arnold J outlined the general principles involved in assessing distinctiveness, stressing the broad nature of this inquiry. Relevantly, ‘the distinctive character of a trade mark must be assessed by reference to the goods or services in respect of which registration is applied for, and the perception of the average, reasonably well-informed and observant consumer of those goods or services’. Moreover, ‘the perception of the relevant public is not the same for all categories of trade marks and it may therefore be more difficult to establish distinctive character in relation to some categories…than others’. Finally, ‘in assessing whether a trade mark has acquired a distinctive character the competent authority must make an overall assessment of the relevant evidence’. The general thrust of these statements leads this writer (though admittedly an Antipodean interloper) to conclude that it would be open to a UK court to adopt a similar reasoning process to the Australian court. If it can be established that the public perception of the word is influenced by the use of the colour it denotes, then this should be taken into account in assessing the word mark’s distinctiveness.

Brett Shandler recently completed his studies at Melbourne Law School and the Center for Transnational Legal Studies in London.

1 comment:

Anonymous said...

This is a succinct and informative case summary with helpful comparisons between Australian and EU law. Looking forward to your next post, Brett!

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