Tuesday, May 6, 2014

FC Refuses to Allow Telstra to Register YELLOW as a Trade Mark

Phone bookIn July 2003, Telstra Corporation applied to register the word ‘YELLOW' as a trade mark after owning various trade marks for the term ‘YELLOW PAGES’ and several variations, including the phrase ‘HELLO YELLOW.’ The Australian Trade Marks Registrar initially approved the registration as it pertains to goods and services related to telephone directory services, but Murphy J of the Federal Court has recently overturned this.

The delegates of the Registrar of Trade Marks initially held that Telstra has extensively traded under various trade marks that are related to the word YELLOW even before filing the application, and as such has demonstrated that the word mark has the inherent ability to distinguish Telstra’s services and goods from other traders, making it valid for registration even though the word itself was not descriptive of Telstra’s telephone directory services.

However, Murphy J overturned both decisions after finding out that the word YELLOW did not have the ability to distinguish Telstra’s goods and services from other traders’ offerings. It was deemed that other traders from the same industry in Australia and overseas also used both the word and the colour for their telephone directories, before Telstra applied for registration. It was shown that the word was being used commonly with regard to phone directories, and that there are traders who would want to use the word to describe their own goods and services. Murphy J held that the mark in question pertains to “character or quality” of telephone goods and services and cannot be used to distinguish one trader’s offerings from that of a competitor.

Telstra’s argument was that no other trader would have been able to use ‘YELLOW’ as a badge of origin because doing so would have infringed their trade mark registrations for the mark YELLOW PAGES, which they allege to mean that ‘YELLOW’ was indeed inherently capable of distinguishing their goods and services from the competitors’. His Honour rejected the argument, citing that “Telstra’s strong stance in claiming exclusive rights” to the word had the effect of discouraging other traders from using similar marks even though they were legally entitled to do so, possibly muddling actual use with adaptation to distinguish when determining the distinctiveness of the mark in question.

Murphy J upheld that even though Telstra used the word YELLOW for various telephone directory related services and goods, there was no sufficient evidence that proves that the mark has been used by itself as a means of branding their offerings, as opposed to serving as a “shorthand reference back to the well-recognised” trade marks that the company possessed, such as YELLOW PAGES and HELLO YELLOW.

Given Telstra's extent of reputation in Australia, this decision is a surprise. There is a strong argument that other traders have used the colour yellow in relation to telephone directories in order to piggyback upon Telstra's goodwill. As for overseas traders, they each face the daunting prospect of demonstrating spillover reputation into Australia in the absence of actual use. It will be interesting to see if Telstra appeal.

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