Colorado Group Limited v Strandbags Group Pty Ltd [2007] FCAFC 184 involved the concurrent use of the trade mark âColoradoâ by different retailers, Colorado Group and its predecessor in title (together âCGâ) and Strandbags and its predecessor in title (together âStrandbagsâ).
CG obtained trade mark registration for âColoradoâ from 2001 for goods including bags, wallets, purses and backpacks. Both CG and Strandbags had used âColoradoâ before 2001.
CG brought trade mark infringement proceedings against Strandbags for its sale of Colorado-brand handbags, wallets, purses and backpacks. Strandbags counterclaimed, alleging CGâs registration was not valid in relation to those goods.
The trial judge had found that CGâs registration was valid for backpacks only and Strandbagsâ handbags, wallets and purses would not infringe that registration.
The Full Court found that âColoradoâ did not distinguish the relevant goods under section 41, so it was not a valid registration for those goods. The Full Courtâs decision reversed the trial judgeâs somewhat controversial finding that âColoradoâ was inherently adapted to distinguish the relevant goods and was registrable under section 41(3).
The Full Court also found that, if âColoradoâ was registrable:
* CG was the first user of Colorado for backpacks and was entitled to register âColoradoâ for backpacks.
* Backpacks are not the same kind of goods as handbags, wallets and purses. Given Strandbags first used âColoradoâ for handbags, wallets and purses, CGâs first use for backpacks did not entitle CG to claim ownership and register âColoradoâ for handbags, wallets and purses.
* The registration was not obtained by a false suggestion.
Allsop J considered that Strandbagsâ handbags would prima facie infringe a valid registration for backpacks, because handbags were of the same description as backpacks. Interestingly, the trial judge had formed the opposite view, finding that handbags were not goods of the same description as backpacks. However, Allsop J considered that Strandbags could take advantage of the prior use defence to infringement under section 124, because it had used âColoradoâ on handbags prior to the date of CGâs registration or CGâs first use of âColoradoâ on handbags.
The Full Court agreed with the trial judge that there was no actionable passing off or breach of the Trade Practices Act by Strandbags.
âColoradoâ is not inherently adapted to distinguish the goods At trial, Finkelstein J recognised that âColoradoâ was a geographical location, and that âColoradoâ conjured up notions of trekking, ruggedness, fashion, Rocky Mountains and so on. However, in a decision that surprised many commentators, His Honour found that âColoradoâ was inherently adapted to distinguish bags, wallets, purses and backpacks under section 41(3) because those notions did not describe the bags, wallets, purses and backpacks themselves.
The Full Court disagreed and found that âColoradoâ was not inherently adapted to distinguish bags, wallets, purses and backpacks because an honest trader may wish to make use of âColoradoâ given the notions âColoradoâ conveys for those types of goods.
If a mark is only to some extent inherently adapted to distinguish, registration may be obtained if it is found that the applicantâs use of the mark does or will distinguish the goods (section 41(5)). The Full Court found that it could not be said that CGâs use of âColoradoâ as at 2001 does or will distinguish the goods as being CGâs goods and no otherâs, particularly because Strandbags was also using âColoradoâ by that time.
This outcome demonstrates the difficulty of obtaining registration under section 41(5) (or s41(6)) if there is another trader concurrently using the same mark.
Ownership
If a trade mark has been used prior to the date of application for registration (as âColoradoâ had been in this case), in Australia it is the first user of the mark for certain goods who is entitled to register the mark in respect of those goods and goods of the same kind.
CG asserted that it first used âColoradoâ from 1982, when the mark was embroidered on backpacks. However the evidence was somewhat unclear about whether âColoradoâ was first used alone or together with a mountain logo. If âColoradoâ was used along with the mountain logo, CG may not be entitled to claim ownership of âColoradoâ alone. If CG could not claim to be the owner of âColoradoâ alone, its registration would be invalid in light of later use by Strandbags.
CG relied on the evidence of a store employee, who recalled that in 1982 and 1983 CG was selling a style of backpack which had the word âColoradoâ but no logo embroidered on it.
Strandbags bore the onus of proving that CG did not use âColoradoâ alone on backpacks. Allsop and Kenny JJ found Strandbags did not discharge the onus, as it was not clear that CG was not the first user of the mark âColoradoâ alone on backpacks. This result illustrates the difficult evidentiary burden faced by a party disputing anotherâs claim to ownership of a mark by first use.
In addition to backpacks, CGâs registration covered bags, purses and wallets.
However, Strandbags used âColoradoâ for handbags, purses and wallets before CG (but after 1982). Therefore, CGâs registration would not validly cover handbags, purses and wallets unless they were goods âof the same kindâ as backpacks. The trial judge and Allsop and Kenny JJ all agreed that backpacks were not the same kind of goods as handbags, wallets and purses. (The Court was divided as to whether handbags were the same kind of goods as wallets and purses.)
Kenny J noted that a policy reason for assessing narrowly which goods are goods of the same kind is that âif the acquisition of a mark by a prior user were to extend to a broad ill-defined set of goods, this would have the capacity to undermine the efficiency of the registration systemâ (at [19]).
False suggestion
Strandbags also alleged that CGâs registration was accepted because of a false suggestion made to the Trade Marks Office about the extent of Strandbagsâ use of âColoradoâ, namely, a statement conveyed the impression that nothing of relevance happened after 1990 or 1991 in relation to the activities of traders other than CG.
In actual fact, Strandbags continued to use âColoradoâ after 1991.
False suggestion is an unusual ground of revocation and it was not accepted in this case, primarily because the statement to the Trade Marks Office merely conveyed an impression – it was not a clear statement and it was not intended to be a false suggestion.
Infringement
Because the Full Court found that CGâs registration for âColoradoâ was not valid for the relevant goods, it was not necessary to consider whether Strandbags had infringed the registration. However Allsop J went on to consider infringement in any event. For Strandbagsâ handbags, purses and wallets to infringe CGâs registration for backpacks, those goods had to be âof the same descriptionâ as backpacks, or the service of supplying those goods had to be âclosely relatedâ to backpacks (s 120(2)).
The trial judge had found that neither handbags, nor purses and wallets were goods âof the same descriptionâ as backpacks. Allsop J disagreed, finding that handbags and backpacks were goods âof the same descriptionâ, (despite having found they were not goods âof the same kindâ for ownership purposes.) Allsop J did agree with the trial judge that wallets and purses were not goods âof the same descriptionâ as backpacks. Allsop J concluded Strandbagsâ backpacks and handbags would prima facie infringe.
Prior use defence to infringement
Allsop J then considered whether Strandbags could take advantage of the prior use defence to infringement under section 124, which would be available if Strandbags had continuously used âColoradoâ before the earlier of CGâs 2001 registration or CGâs first use of âColoradoâ.
For Strandbags to take advantage of section 124, Allsop J interpreted the section as requiring Strandbags to have been using âColoradoâ before CG on the goods of the same description as those for which registration was obtained (ie on handbags) before CG had used âColoradoâ on those same goods (ie handbags). That is, even if CG used âColoradoâ on the goods specified in the registration (backpacks) before Strandbags used âColoradoâ on handbags, Strandbags could still take advantage of section 124.
In this case, Strandbags used âColoradoâ on handbags before CG did and this was before 2001, so Strandbags had a defence to infringement under section 124.