Monday, August 28, 2017

“Made in…?”: Country of Origin Labelling Reforms in Australia

Recent changes to the Australian Country of Origin Food Labelling Information Standard 2016 (“CoOL”) was no doubt influenced by the notorious frozen berry scare in in Australia 2015, which allegedly linked a hepatitis A outbreak to imported frozen berries. This generated public interest in transparency in origin of food labelling. The changes will have a significant effect on businesses that market unpackaged goods, bringing these goods into parity with packaged foods. This means that along with the removal of mandatory minimum font sizes, CoOL information displayed in association with unpackaged food must be legible, prominent, distinctive, and in English. The changes also require signage displayed in association with unpackaged food to be in close proximity to the relevant product.

Additionally, the ACCC has also now provided a guide for businesses that make country of origin claims. The old system only required product labels to state if the product is made from imported and local ingredients. This created a loophole, by which businesses could imply that the products are mostly of Australian origin, even though most of the ingredients are foreign. By way of one extreme example, a can of mushrooms could be labeled as made from local and imported ingredients, even though only the water they are preserved in is sourced from Australia. The mushrooms themselves could be imported from another country.

Under the new Country of Origin Food Labelling Standard, country of origin claims can be made using one of four different categories. More or less in order of the strongest to weakest connection to a country, these are: “Grown in”, “Product of”, “Made in”, and “Packed in”. 

However, there are valid concerns coming from producers both small and large scale about the compliance costs of detailed labelling, especially on unpackaged foods. Also of note are producers of products that are affected by seasonality and availability of ingredients, such as butter. The availability of butter in Australia is not consistent, and there are times of the year when producers need to purchase some of their ingredients overseas. The concern is not so much the cost but the impossibility of changing labels and packaging every time they need to source their ingredients from somewhere else.

Another complaint is that highly processed foods and drinks are exempt from the new laws. The Government notes that this exemption was made because research shows that consumers did not necessarily care too much about the country of origin of highly processed food and drinks, such as biscuits, softdrinks, alcohol, snacks, confectionary etc, so they made these “non-priority” products exempt from the laws. (Which seems intuitively remarkable, that a consumer would not care of lemonade was made in China or Australia.)

Sunday, August 27, 2017

Like a Boss: Crossfit Inc v Bossfit Pty Ltd [2017] ATMO 74 (24 July 2017)

CrossFit, an entirely too vigorous regime of exercise as far as we are concerned, is an international fitness business with many adherents across the world and in Australia. As the evidence in this matter noted,

“[The Opponent] licences the CrossFit mark to affiliates throughout the world, and there are now approximately 12,836 gyms providing specialised services under the CrossFit mark throughout the world, and 601 of those gyms are based in Australia. There are approximately 116,381 certified CrossFit trainers throughout the world, and 5,869 of those trainers are based in Australia.”

When health club and fitness training services provider Bossfit Pty Ltd (the Applicant) filed a trade mark registration application for the name “BossFit” under Class 41 services, the application was opposed by Crossfit Inc (the Opponent) using the typical “scattergun” grounds for opposition, including ss 42, 44, 58, 60, and 62A ofthe Trade Marks Act 1990. The Opponent provided evidence of a number of its registered “Crossfit” trade marks, all of which are covered under health and fitness-related goods and services.

The interesting aspect of this case is to do with one of the grounds – s44. When assessing the issue of whether the Applicant and the Opponent’s trade marks are substantially identical, the hearing officer noted that the Applicant’s trade mark begins with the word “Boss” while the Opponent’s prefix is the word “Cross.”

The Applicant had a good explanation for the use of the word “BOSS”, as set out in a declaration which intermingled evidence with opinion and legal submissions (we note the rules of evidence do not apply in this forum):

‘BossFit’ as a brand was conceived and launched as an invented word in September 2012 by or on behalf of the Applicant to promote health and fitness, initially to the local Brisbane community.

The BossFit brand was inspired by a love of extreme sports, functional fitness, popular Facebook page Boss Hunting ... and popular phrase ‘Like a Boss’, a catchphrase often used in memes that feature a person completing an action with authority and finesse.

The two core design concepts of the BossFit brand are ‘bossness’ and physical fitness. ...:

The dominant or essential element within the overall impression of the CROSSFIT Marks is the word prefix ‘CROSS’. The dominant or essential element within the overall impression of the BossFit Mark is the word prefix ‘Boss’. ...

The words ‘Boss’ and ‘Cross’ have completely different natural meanings and convey completely different concepts and the two words ‘Boss’ and ‘CROSS’ are not substantially identical or deceptively similar either visually or orally.

The BossFit Mark and the CROSSFIT Marks contain the same word suffix, namely, the word ‘FIT’. There are hundreds of trade marks registered in class 41 and associated classes with the word suffix ‘FIT’. ...

The Applicant believes that the ‘FIT’ word suffix element could not itself be distinctive of the CROSSFIT Marks.

The Applicant believes that the whole words ‘BossFit’ and ‘CROSSFIT’ naturally convey completely different concepts and meanings, that they are phonetically different and that they are not substantially identical or deceptively similar either visually or orally.

The hearing officer accepted this. The comparison then moved onto determining whether there is deceptive similarity.

While discussing the issue of deceptive similarity, the Opponent submitted in a comparison of the two trade marks, the natural and normal pronunciation should be considered, including “the possibility that a word may be slurred” (not just a peculiarity for Australian accents – the concept has a pedigree dating back to the 1925 case of London Lubricants (1920) Ltd's Appn 42 RPC 264 ). The Opponent submitted that the only difference between the two trade marks are the letters “CR” at the beginning, which have been replaced by the letter “B”—the substantial part of both trade marks is “OSSFIT.”

The Opponent further argued that phonetically, there is a high degree of similarity between the two trade marks and that deception or confusion is highly likely, given the possibility of imperfect recollection, that a person may be caused to wonder whether BossFit’s services has any relation to the Crossfit trade mark.

The Applicant’s counter argument, delivered through a written submission, is that the dominant or essential elements in the trade marks are the word prefixes, CROSS and BOSS, which have completely different natural meanings and convey different concepts and therefore would not lead to deception or confusion.

The Applicant also advanced the argument that the similar element in both trade marks, FIT, could not by itself be distinctive of the trade marks due as evidenced by the hundreds of trade marks registered in class 41 that bear the same word suffix. The hearing officer agreed with the Applicant’s argument. “The respective trade marks are concatenations of two words, the second of which is ‘FIT’. This element lacks distinctiveness in respect of the relevant services. “  The Applicant’s trade mark has been ordered to proceed to registration.  This must be correct: te Opponent is not entitled to assert exclusivity over the suffix “FIT” through the back door.

Relying upon suffixes to advance an opposition is always tricky. In Merial v Virbac [2012]  ATMO  83 (25 September 2012), in a comparison between “Fiproline” and “Frontline”., while both marks began with the letter "f", and ended with the suffix "-line", they were found not to be deceptively similar. On the other hand, in Pfizer Products Inc v Karam(2006) FCA 166, in a comparison between “VIAGRA” and “HERBAGRA”, the court at [38] and [54] agreed with Pfizer’s submissions:

In my opinion, a substantial number of members of the public would identify herbal medicines used to aid health, vitality and sexuality marketed under the name ‘HERBAGRA’ to be a herbal version of VIAGRA, whether or not from the same source, or connected with VIAGRA because of the pervasive reputation of VIAGRA.:

The argument for Pfizer is that the use of the suffix ‘-AGRA’ will cause the requisite confusion as to whether:

(a) the HERBAGRA product is out of the same stable as VIAGRA;

 (b) the active ingredient in the HERBAGRA product is that in VIAGRA or is from the same family of ingredients;

 (c) the HERBAGRA product is equivalent to VIAGRA in terms of its effects or achieves similar or related effects.

 It seems the suffix must be especially notorious to be the proper foundation for such an argument.

Limitations on the Prior Use Defence: Cabcharge Australia Limited v E2 Interactive [2017] ATMO 76 (28 July 2017)

On 30 August 2011, e2Interactive Inc. (the Applicant) filed a trade mark registration application for the following logo (the Trade Mark), covering a wide variety of products and services under classes 9, 35, 36, 38, 40, and 41, but mostly in relation to cards, communication, entertainment, and marketing/advertising. The application was initially rejected after examination revealed possible grounds for rejection under s 44, but the Applicant was able to provide evidence of prior use and the Trade Mark was advertised for possible registration. The Applicant engaged in the very Australian practice of drafting a trade mark application with a very wide specification. The Applicant’s trade mark included material for which it did not have evidence of use, but further, to which it seems unlikely to have ever wanted to applied the trade mark.

This opposition had been a long time coming. The proceedings commenced prior to the introduction of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 and accordingly, those amendments did not apply to this matter.

The application was opposed by Cabcharge Australia Limited (the Opponent.) Adopting the classic “scattergun” approach to drafting notices of opposition, the Opponent initially relied upon most of the grounds of opposition available under the Act, but later advised that it would focus only upon the ss 42(b), 44, 60, and 62(b) grounds.

As part of its evidence, the Opponent drew the hearing officer’s attention to pending trade mark No. 1390374 (“FASTCARD”) and  the recently registered trade mark1416896, for “CABCHARGE FASTCARD.” Both trade marks cover goods and services in relation to various printed matter, electronic funds transfer, and taxi services that utilise electronic funds transfer.

The usual point of difference between s44 and s60 of the Act came into play. Under s 44 of the Act, the respective marks must be considered as being in “notional use” in relation to all of the goods or services covered by the application(s) or registration(s) under comparison, whether or not such use has actually taken place. Under s 60, however, it is the actual past use enjoyed by the mark(s) relied on by an opponent which matters and not any abstract concept of notional use. In furtherance of this, the Opponent also provided evidence of extensive marketing and advertising using its “FASTCARD” trade mark, as well as proof of substantial revenue from the period of 2010 to 2013. But the revenue attributed to just the case of the mark “FASTCARD” was not separated out from other revenue. The Hearing Officer noted this. This led to the failure of the s60 ground. (The 42(b) and 62(b) grounds similarly failed.)

The outcome then hinged on s 44, and deceptive similarity. Upon noting that an average consumer has a general awareness of traders’ tendency to update their branding over time (unfortunately, with this very interesting concept confined only to a single line within a single paragraph), the Hearing Officer found deceptive similarity between the Applicant and the Opponent’s trade marks:

“In my opinion the word ‘Fastcard’ is a memorable, essential and distinguishing feature of the Trade Mark and also of both the Opponent’s trade marks. It is likely that deception or confusion could occur through contextual confusion whereby the word ‘Fastcard’, the common and memorable element in each of the respective trade marks, may induce traders and the public to believe that the trade marks emanate from the same trade source.”

With deceptive similarity established, the next issue was prior use as a defence. The Applicant submitted proof of individual agreements and presentations with nineteen partners for their cards or technology that bear the trade mark. The earliest of these was a presentation entitled “InComm Executive Overview” and “InComm Overview” which were made to two retailers in May 2010, which contain images of the prepaid cards bearing their trade mark. Other evidence included copies of email between the Applicant and other Australian retailers dated August 2010, and contain attached images of prepaid cards, some of which bear the applied-for trade mark.  Other evidence included a copy of a full page advertisement which appeared in the Xbox 360 Magazine and the GameInformer Magazine in December 2010. The advertisement contained images of seven prepaid cards, some of which also evidenced use of the trade. But despite the strong evidence showing prior use within the context of prepaid cards that bear the Trade Mark as early as 22 September 2010, the Hearing Officer clarified that it only satisfiedprior use in relation to a narrow specification of the goods and services claimed, namely Class 9 and Class 36.

At best, the Applicant had fourteen months of use in Australia prior to the relevant date, only some of which was concurrent with the Opponent. With no sales figures or advertising spend evidence to support the short period of concurrent use, the Hearing Officer considered the prior use defence only partially established. As such, the Applicant’s Trade Mark proceeded to registration with protection for only limited goods and services.

The order relating to the costs of the application was that each party was to bear its own costs. This is because of the following: “83.On 10 July 2017 I informed the Applicant’s representative that it was my intention to refuse to register the Trade Mark unless the specification was refined in classes 9 and 36 in accordance with the evidence of prior use and that the remaining conflicting goods and services were deleted. On 27 July 2017 the Applicant agreed to these amendments.” The suggestion is that if, perhaps, the Applicant had done this much earlier in the piece to the opposition hearing might have been avoided.