Colorado Group fails on appeal - Full court messes with the Fink

In Colorado Group Limited v Strandbags Group Pty Limited [2007] FCAFC 184 , the Full Court appeal from the decision at first instance of Finkelstein J., in Colorado Group Ltd v Strandbags Group Pty Ltd (2006) 67 IPR 628, [2006] FCA 160 and Colorado Group Ltd v Strandbags Group Pty Ltd (No.2) (2006) 69 IPR 281 [2006] FCA 880 , the Court again considered two issues, being those of ‘proprietorship’ and ‘inherent distinctiveness’. By way of background, from 1982, Colorado Group first used the Colorado mark as a word mark on backpacks. From 1987, the word mark in combination with a "simple mountain motif," was applied to shoes.

By 1991, Colorado Group had developed a three peaked mountain logo for use in conjunction with the word "Colorado" but until 1997 often used the word alone on bags which appears to be a reference to handbags, shoulder bags and other fashion bags (but it was not used alone on wallets and purses). In 2001 it registered its word mark to cover, amongst other things, bags, wallets, purses, backpacks and belts. In 1991, the predecessor to Strandbags Group registered "Colorado" with an “Indian head” device as a combination mark in respect of handbags, travelgoods and belts in class 18 and in the years after applied it to an expanded range of goods, among them, backpacks, briefcases, wallets and purses.

The word "Colorado" featured in both side’s shopfront designs. An appeal was filed by Colorado Group; Strandbags cross-appealed and a notice of contention was filed by Colorado Group. Proprietorship In the first instance decisions, (conflated here) the court held that a mark’s proprietor is established in one of two ways: either by authorship of the mark (which could include the copyist of a foreign mark) and intention to use it: (eg Shell Co of Australia Ltd v Rohm & Haas Co (1949) 78 CLR 601, 627-628 ) or, alternatively, if the claimant to proprietorship has used the mark, provided no-one else has used it before.

On that basis, the court held: Strandbags Group was first user and consequently (though not by that alone), the proprietor of the "Colorado" mark in respect of handbags; Colorado Group was the proprietor of the trade mark in relation to backpacks, but was not entitled to the benefit of the registered trade mark for handbags, belts, wallets and purses; that the mark should be removed from the register for these items as these were not 'goods of the same kind' as a backpack; Colorado Group therefore succeeded on the infringement claim in relation to backpacks; Strandbags Group could use the mark for handbags and 'goods of the same kind' including wallets and purses; The use by Strandbags of the word "Colorado" on handbags, wallets and purses was not an infringement of the trade mark, taking into account s 120 of the 1995 Act; Strandbags could obtain registration of the mark "Colorado" if it were to apply for it in relation to handbags, wallets and purses and would also be entitled to take advantage of the defence in s 122(1)(f) of the 1995 Act . There was no passing off or conduct in contravention of s 52 or any other provision of the Trade Practices Act 1974 (Cth) because of the geographical nature of the word used. On appeal, the Full Court found no error in the primary judge’s conclusions, nor his approach to determining goods of the same kind.

Per Allsop J (at para 90 ): "The task is not to identify the genus into which the goods upon which the mark was used fall, but to identify the goods”. Citing (at paras 66 and 80) Finklestein J’s first instance judgment (see para 25 ): "It follows that proprietorship by first use is proprietorship in relation to the goods or classes of goods on which the mark has been used. The proprietor is entitled to have his mark registered in respect of those goods.

This entitlement is not confined to identical goods or classes of goods. Registration may also be obtained for goods or classes of goods which is or are "a thing [or things] of the same kind" (Jackson & Co v Napper (1886) 35 Ch D 160, 178) or "like articles of production" (Columbia Mill Company v Alcorn, 150 US 460, 464 (1893)) or "articles of merchandise of the same kind" (Colman v Crump, 70 NY 573, 578 (1877)) or "kindred articles" (The Collins Co v Oliver Ames & Sons Corporation, 18 F 561, 570 (1882)), if there be any difference between these expressions. See also Edwards v Dennis (1885) 30 Ch D 454." Inherent distinctiveness By s 41(2) of the Trade Marks Act 1995 (Cth) ( the 1995 Act ), an application for registration 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 or services of others.

By s 41(3) , in deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the court must determine 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. Geographical names commonly fail this test. If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is so capable of distinguishing the designated goods or services, then by s 41(5) the Registrar must consider whether the mark has, or will, become well known through use.

If the Registrar finds that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, then the Registrar is to consider pursuant to s 41(6) whether, by the extent of its use, the mark does distinguish. At first instance, the court held that although the word "Colorado" is a geographic term, its use in relation to the goods in question was arbitrary, making it inherently adapted to distinguish the goods (for s 41(3) ) and thus requiring no proof of secondary meaning (under ss. 41(5) or 41(6) ).

On appeal, the Full Court unanimously overturned this aspect of Finklestein J’s decision at first instance and held that the word "Colorado" alone is not inherently adapted to distinguish the designated goods or services of the first appellant from the goods or services of other persons. Per Allsop J., (at paras 126 and 127 ): "…the relevant question was not, as the primary judge stated, whether the word was used by the appellants in a geographical sense, but whether the word has a "signification" which it ordinarily possesses (geographic or not) which other traders may wish to use (honestly) for that signification in relation to similar goods. Thus, it was submitted that if, as his Honour found, "the word "Colorado" conjures up notions of trekking, ruggedness, fashion, Rocky Mountains and so on" (see [36] of the first judgment), other traders may wish to use the word for the signification of such attributes as well as a simple geographic signification.

… the evidence was replete with recognition by witnesses that the word was used to conjure up an image of adventure, the outdoors, ruggedness, trekking and the like by association with the Rocky Mountains and Colorado. This, it was submitted was not "arbitrary use making it inherently distinctive" as the primary judge found at [35] of his first judgment. Thus, it was submitted, proof of secondary meaning was required..." Even following an inquiry under s 41(5) and s 41(6) ), the court was unconvinced the word, even in conjunction with a device, did or would distinguish the designated goods as being the appellants.

Per Allsop J (at para 180 ): "…This is so even if one included under "any other circumstances" (for the purposes of s 41(5)(a)(iii)) the use of the word plus device, the shop signage, advertising and use on shoes and clothes." This aspect of the decision highlights that use of the name in the shopfront design was not use of the name in respect of the goods and did not advance that point. Section 9(1)(a) of the 1995 Act provides "a trade mark is taken to be applied to any goods ... if it is ...

affixed or annexed to [the goods]." It is also a cautionary reminder to be careful what you ask for that falls under the 1955 Act, which does not permit consideration of "any other circumstances". Per Gyles J: (at para 35 ): "An anomaly lies at the heart of the case. The appellants claim proprietorship in the mark "Colorado" from 1982 onwards.

However, in practice, that word could not have been registered as a trade mark during most of that period. It was virtually impossible to obtain registration of a geographical name under the Trade Marks Act 1955 (Cth) (the 1955 Act)" So the Full Court rethunk the Fink, and even corrected a slip concerning a reference to the word 'belts'. According to Inchoate , citing the 13 January 2006 Hearsay column of the Australian Financial Review, The Hon.

Justice Finkelstein was sighted at a 2005 Christmas party "sporting a T-shirt with the words “Don’t Mess With Da Fink” emblazoned across the front". This year’s Christmas party should be entertaining.. Sat Dec 2007 04:12 (1 year, 1 month ago)