Australian Trade Marks Law Blog : Australian Trademarks Lawyer & Attorneys : Nicholas Weston Law Firm : Copyrights, Intellectual Property

Background 

Earlier this year Hansen Beverage Company (Hansen), having no registered trade marks to rely on, brought an application for declarations and consequential relief, against Bickfords (Australia) Pty Ltd (Bickfords) on the ground that it had passed off and/or contravened the TPA by selling their MONSTER ENERGY drinks in Australia.

In that case the parties agreed that the energy drinks produced by both sides were similar enough so as to mislead and deceive for the purpose of passing off and contravention of the TPA. The case then hinged on whether sufficient reputation could be established for a successful action.

Justice Middleton noted that the required reputation cannot be assumed “in a market where the product has not been sold or directly advertised”. The primary Judge approached the question of the operation of the TPA by requiring that a significant or substantial proportion of potential customers within Australia would be likely to be misled. According to the evidence, Hansen’s target market was males between the ages of 18 to 30 and Justice Middleton’s reasoning was that the required reputation must be amongst that target market. As such evidence of awareness of the Hansen product amongst male extreme sports enthusiasts would not suffice.

For a full discussion of Justice Middleton’s decision handed down on 31 March 2008 refer to The Australian Trade Marks Law Blog's earlier article HERE.

Hansen appealed the decision on the basis that it submitted the primary Judge erred in wrongly selecting the class of persons in respect of which reputation be assessed and submitted that he “should have asked simply whether there was a sufficient number of the Australian public who would be likely to be misled”.

Decision

In allowing the appeal and remitting the case for reconsideration to the primary Judge the Full Court noted that the language of the TPA does not require that a reputation exist amongst a specific class of persons before a breach can be made out, even if such a group of persons is defined by advertising objectives. 

Justices Tamberlin and Siopis agreed that the appropriate question should be “whether a not insignificant number of persons in the Australian community, in fact, or by inference, have been misled, or are likely to be misled, even if those persons are mostly or exclusively extreme sports enthusiasts”. Justice Finkelstein essentially agreed but discussed the issue in terms of a “relevant market” and a “target market”. He found that in the present case “the relevant market is narrower than the target market” and if a substantial number of extreme sports enthusiasts (clearly a relevant market) were misled then the claim would be supported.

 The Full Court also noted the impact of indirect advertising and acknowledged that the advertising industry had moved away from relying on direct marketing techniques as their primary source. The value of indirect advertising through sponsorship of sports was clearly recognised and the primary Judge “was entitled to infer that indirect brand advertising…can establish reputation as well as, if not better than, direct marketing”.

Brand protection through trade mark registration clearly remains extremely important for traders (arguably paramount), and in this case may have avoided lengthy proceedings. However, with the courts now expressly recognising changing marketing techniques, even without trade mark registration, legitimate brand owners are gaining respect in Australia.

 Lea Lewin