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Tuesday, July 1, 2014

Yellow is for sharing

by Tracy Lu, Lawyer
Further to our post on a decision on disputes over the word mark 'yellow', the Federal Court has handed down its decision on disputes over the colour yellow. This time, Telstra was unsuccessful in proving that the respondents (which included Phone Directories Company Pty Ltd) had engaged in misleading or deceptive conduct and passing off in the way that they had used the colour yellow for their print and electronic directories.

Alleged infringing conduct
Telstra's complaint relates to the respondents' use, since 2005, of yellow covers for their print directories (known as the 'Local Directories') and of the colour yellow on their website and on their mobile app which both had electronic directories.
Such use of the colour yellow, Telstra contended, constituted misleading or deceptive conduct and passing off, as it misrepresents to consumers that:

  1. The respondents' print and electronic directories were Telstra's directories, Yellow Pages directories or local or regional versions of them.
  2. The respondents' print and electronic directories were produced by, connected, associated, sponsored, approved, licensed, endorsed and/or affiliated with Telstra or its directories.
  3. The respondents had a connection, association, affiliation, commercial and/or other arrangement with Telstra.

Telstra's reputation
While the judge accepted that Telstra established that it had acquired a secondary reputation in the colour yellow by 1996, the association in the minds of consumers between yellow and Telstra was insufficient because:

  • The use of yellow covers is generic in the industry and directory users seeing yellow covers on a directory would see it as a directory, rather than as Telstra's product. 
  • Telstra only used yellow together with the Yellow Pages and Walking Fingers trade mark and not alone.
  • Telstra's use of yellow covers was inconsistent and reduced over time between 1996 and 2012, therefore consumers concerned about trade sources would place less significance on yellow, standing alone, as the signifier of Telstra's products.

Relevant class of persons
The judge found that there were two relevant classes of persons for the purposes of assessing where there has been misleading or deceptive conduct: first, directory users in the relevant regions in which both the respondents' and Telstra's directories were published and secondly, advertisers or prospective advertisers in such directories.
In respect of directory users, the judge found that they were unlikely to be misled or deceived:

  • There was evidence that yellow pages and yellow covers were widely used internationally and that yellow was internationally recognised by 1975 as the colour of classified directories. International use of the colour for directories is relevant to the extent such use is known by Australian consumers and therefore affects the association in their minds between yellow and Telstra.
  • Directory users have little emotional involvement with directories and are likely to be more focussed on searching for information and on the functionality and features of directories rather than the branding.
  • Therefore, directory users are likely to see yellow covers on a directory as signifying only that it is a directory, rather than that it is Telstra's product.

In respect of advertisers or prospective advertisers, the judge found that they were also unlikely to be misled or deceived:

  • The respondents, when trying to persuade prospective advertisers to advertise in their directories, are likely to focus on their directories as being an alternative to Telstra's directories and on the differences and benefits as compared to Telstra's directories.
  • Advertising in directories is expensive and advertisers or prospective advertisers are likely to have closely focussed on the respondents' directories for the purposes of assessing the likely effectiveness of advertising in these directories.
  • The respondents' representatives conducted face-to-face meetings with prospective advertisers and clearly identified themselves as from 'Local Directories' (eg by use of company branded attire).

Sufficiently distinguished?
In any event, the judge held that, even if it had been found that Telstra did have a strong reputation in yellow as at 1996 and as at 2005 (the time of the alleged infringing conduct), Telstra still would not have been successful.
In adopting a primary colour such as yellow as a key part of its get-up, Telstra must accept that small differences in the get-up of other traders would be sufficient to distinguish. The respondents' products were sufficiently distinguished from those of Telstra:

  • The overall get-up was quite different. One particular example is the use of  a large rectangular photograph of a local landmark in the centre of the cover for the Local Directories as compared to the use of a stock photo on the Telstra directories.
  • There were different trade marks used on the directories – the respondents used their LD Local Directories marks and Telstra used their Yellow Pages, White Pages and Walking Fingers logo marks.
  • Telstra's Yellow Pages directories in most of the regions where the Local Directories were published were co-bound with its White Pages directories.
  • The Local Directories were typically appreciably smaller in size.

Evidence
While voluminous amounts of evidence were produced to the Court, in the end the judge found that Telstra's viva voce and survey evidence were of little utility to support its claims. Viva voce evidence showing isolated examples of actual deception did not demonstrate the likelihood of deception of a reasonable person within the relevant class. The survey evidence, to the extent that it showed there was some confusion in the minds of consumers about the origin of the respondents' directories, did not prove that the confusion was as a result of the respondents' conduct.

Conclusion
This decision illustrates the difficulty of claiming monopoly over the use of a single colour in trade indicia which has become generic to an extent in the relevant field. Yellow is now strictly for sharing.

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