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Tuesday, April 26, 2016

School's out for descriptive marks

By Mark Williams, Managing Associate

A recent decision of the Australian Trade Marks Office again confirms the difficulty of securing registration of trade marks consisting of descriptive words.

The dispute centred around an application by the University of Wollongong ('UOW') for the trade mark SYDNEY BUSINESS SCHOOL in respect of goods and services in classes 16, 35, 41 and 42. UOW, which was established in 1975, commenced use of the name SYDNEY BUSINESS SCHOOL in connection with its Faculty of Commerce in 1999. Despite being initially rejected for a lack of distinctiveness, UOW had managed to secure acceptance of its application by means of evidence of use of the mark demonstrating that the mark had become distinctive of UOW's goods and services as at the filing date of the application. In 2011, the University of Sydney ('UOS'), Australia's oldest University (established in 1850) renamed its Faculty of Economics and Business as 'The University of Sydney Business School'. UOS then opposed UOW's trade mark application.

So the battleground for a monumental reputational dispute had been set. UOS alleged that UOW's use of SYDNEY BUSINESS SCHOOL in relation to educational services could amount to misleading and deceptive conduct. Not surprisingly, UOW countered by arguing that the likelihood of confusion had only been caused by UOS's later adoption of the similar mark 'University of Sydney Business School'.

However, in a somewhat anti-climactic outcome, Hearing Officer Debrett Lyons did not consider any of the reputational-based grounds of opposition under sections 42, 43 or 60, instead upholding the opposition on the basis that the SYDNEY BUSINESS SCHOOL trade mark was not capable of distinguishing UOW's goods and services. In considering the likelihood of other traders legitimately desiring to use the words in respect of their own similar goods or services, he said 'it is difficult to avoid the conclusion that the trade mark is the apt, if not only, way to describe a school of business studies located in Sydney'.

In finding the mark to be to no extent inherently adopted to distinguish, Mr Lyons then turned his attention to the evidence of use that UOW had relied upon to demonstrate acquired distinctiveness of its mark. Unfortunately for UOW, most of the materials it relied upon demonstrated use of SYDNEY BUSINESS SCHOOL in conjunction with both the words 'University of Wollongong' and the University of Wollongong crest, as shown below:

In those circumstances, and despite evidence of significant revenue and advertising expenditure, Mr Lyons found that the use of the words SYDNEY BUSINESS SCHOOL had no role in the identification of the origin of the goods or services. Instead, they were a simple descriptive use of the words in the same way terms such as 'the Faculty of Science' are ordinarily used, albeit with a geographical descriptor added. Mr Lyons then concluded that 'a member of the public seeing the words Sydney Business School and untutored by use of that name would be unable to associate it with one particular trader'. Accordingly, Mr Lyons found that the evidence of use of the mark did not support the contention that the trade mark was in fact distinctive as at the filing date of the application, and upheld the distinctiveness ground of opposition under s41.

UOW has appealed the decision to the Federal Court, and so we may yet see the intriguing reputational stoush play out. Will keep you updated in this regard.

This decision again confirms the extreme difficulties that an Applicant can face in securing registration of a trade mark which consists of descriptive words. There is often a perceived advantage in adopting descriptive marks because they are easier to market - the more descriptive that a mark is, the less that consumers need to be educated as to the nature or purpose of the product. However, this notion is completely at odds with the concept of securing monopoly rights in a trade mark. That is, the more descriptive a mark is:

  • the less likely it is that consumers will come to recognise the mark as denoting your company as the source of the goods; and
  • the harder it will be to keep other traders from using very similar words in relation to their own similar goods or services.

The decision also highlights that, in those cases where a trader elects to adopt a trade mark which consists largely of descriptive words, it is critical that the trader is disciplined and vigilant in its manner of use of the mark. This is because, with descriptive marks, consumers need to be educated that the words are intended to denote a badge of origin, rather than act as a description. However, for highly descriptive marks, it may be the case that no amount of consumer education will be sufficient to demonstrate that the words are acting as a badge of origin, because other traders, being actuated only by proper motives, will be entitled to use the words for their commonly understood meaning, in relation to their own similar goods or services.

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