When are Signs Too Similar to Trade Marks?

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Table of Contents

• Requirements of Deceptive Similarity
• Use as a Trade Mark
• Key Takeaways

Businesses often go head to head when one claims that the other’s name or logo is too similar. Not all trade marks are deliberately similar — certain industries seem to attract common colour schemes, shapes or words. But the Trade Marks Act 1995 (the Act) frowns upon trade marks that may mislead consumers. This is considered trade mark infringement.

Under the Act, an individual infringes a registered trade mark if they use a sign that is:

• substantially identical or similar to the registered trade mark; and
• used in the same category of goods and services as the registered trade mark.

The Act requires that the business uses the trade mark in a way that is likely to deceive or confuse a consumer, or is ‘deceptively similar’. We unpack the court’s approach to determining whether a registered mark has been infringed.

Requirements of Deceptive Similarity

Intention

In Coca-Cola Company v All-Fect Distributors Ltd [1999] FCA 1721 (Coca-Cola), Coca-Cola initiated trade mark infringement proceedings against the confectionery company, Efruti. Coca-Cola claimed that Efruti infringed their registered trade mark Coca-Cola bottle by selling cola-flavoured sweets of the same shape.

Efruti did not intend to deceive consumers and even packaged their confectionary in tubs clearly marked with their own logo. Most retailers who sold Efruti’s cola-bottle sweet, however, sold them in generic tubs.

The number of similarities the sweet bore to Coca-Cola’s bottle meant that consumers were likely to be misled or deceived into believing the sweet was a Coca-Cola product.

The Court paid particular attention to the overlap between the customer bases of the two products, namely:

• both were sold at convenience stores, supermarkets and milk bars; and
• the sweet was especially popular with teenage girls, as was Coca-Cola.

The overlap in audiences increased the likelihood of confusing and deceiving consumers. Although Efruti had not intended to mislead consumers by riding on Coca-Cola’s coattails, the unintentional impression created meant that they had infringed the registered trade mark.

Resemblance

Deceptive similarity requires a strong resemblance between the allegedly infringing sign and the registered trade mark. This involves a comparative visual assessment of the two signs for their similarities and differences.

In Coca-Cola, there were a number of grounds to distinguish the Cola flavoured sweet and the Coca-Cola bottle. The sweet, for example, was embossed with the word ‘Cola’ rather than Coca-Cola.

Nonetheless, the Court viewed the overall visual impression that the sweet would create was more important than individual differentiating factors. As a result, the Court decided that Efruti’s use of Coca-Cola’s unique bottle shape, including the bottle’s distinctive fluting, created enough of a resemblance to constitute a deceptive similarity.

Use as a Trade Mark

Importantly, a business does not need to use an infringing sign in a manner that causes consumers to believe that the product sold is a product of the registered trade mark owner.

In Coca-Cola, Efruti’s legal counsel raised this as a defence. They claimed that the relevant question was whether or not, just by looking at the sign, consumers would be lead to believe that the confectionary was a Coca-Cola product.

The Court said that the issue was whether consumers were being enticed to purchase the confectionery because it was using a well-known, registered trade mark. The key finding was that if a business appropriates the goodwill associated with a trade mark, then the sign will have been used as a trade mark.

Key Takeaways

A business does not need to deceive customers intentionally by using a similar trade mark. There must only be a likelihood of the mark misleading a consumer. The visual impression the trade mark creates in a consumer’s mind is also more important than whether the marks resemble one another exactly. Finally, these two elements are only relevant if the sign is used as a trade mark.

If you have any questions about whether your trade mark is too similar to another brand, get in touch with our specialist trade mark lawyers on 1300 544 755.

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Vee Naidoo contributed to this article. Vee is a final year law student at the Australian National University. She is interested in intellectual property), commercial leasing and competition law, particularly as it intersects with the Arts. Vee draws on her experience as an editor, author, journalist and salesperson to provide clients with practical and accessible advice.