Colorado Group Limited v Strandbags Group Pty Ltd [2007] FCAFC 184 involved the concurrent use of the trade mark “Colorado” by different retailers, Colorado Group and its predecessor in title (together “CG”) and Strandbags and its predecessor in title (together “Strandbags”).
CG obtained trade mark registration for “Colorado” from 2001 for goods including bags, wallets, purses and backpacks. Both CG and Strandbags had used “Colorado” before 2001.
CG brought trade mark infringement proceedings against Strandbags for its sale of Colorado-brand handbags, wallets, purses and backpacks. Strandbags counterclaimed, alleging CG’s registration was not valid in relation to those goods.
The trial judge had found that CG’s registration was valid for backpacks only and Strandbags’ handbags, wallets and purses would not infringe that registration.
The Full Court found that “Colorado” did not distinguish the relevant goods under section 41, so it was not a valid registration for those goods. The Full Court’s decision reversed the trial judge’s somewhat controversial finding that “Colorado” was inherently adapted to distinguish the relevant goods and was registrable under section 41(3).
The Full Court also found that, if “Colorado” was registrable:
* CG was the first user of Colorado for backpacks and was entitled to register “Colorado” for backpacks.
* Backpacks are not the same kind of goods as handbags, wallets and purses. Given Strandbags first used “Colorado” for handbags, wallets and purses, CG’s first use for backpacks did not entitle CG to claim ownership and register “Colorado” for handbags, wallets and purses.
* The registration was not obtained by a false suggestion.
Allsop J considered that Strandbags’ 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 “Colorado” on handbags prior to the date of CG’s registration or CG’s first use of “Colorado” 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.
“Colorado” is not inherently adapted to distinguish the goods At trial, Finkelstein J recognised that “Colorado” was a geographical location, and that “Colorado” conjured up notions of trekking, ruggedness, fashion, Rocky Mountains and so on. However, in a decision that surprised many commentators, His Honour found that “Colorado” 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 “Colorado” was not inherently adapted to distinguish bags, wallets, purses and backpacks because an honest trader may wish to make use of “Colorado” given the notions “Colorado” 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 applicant’s use of the mark does or will distinguish the goods (section 41(5)). The Full Court found that it could not be said that CG’s use of “Colorado” as at 2001 does or will distinguish the goods as being CG’s goods and no other’s, particularly because Strandbags was also using “Colorado” 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 “Colorado” 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 “Colorado” from 1982, when the mark was embroidered on backpacks. However the evidence was somewhat unclear about whether “Colorado” was first used alone or together with a mountain logo. If “Colorado” was used along with the mountain logo, CG may not be entitled to claim ownership of “Colorado” alone. If CG could not claim to be the owner of “Colorado” 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 “Colorado” but no logo embroidered on it.
Strandbags bore the onus of proving that CG did not use “Colorado” 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 “Colorado” alone on backpacks. This result illustrates the difficult evidentiary burden faced by a party disputing another’s claim to ownership of a mark by first use.
In addition to backpacks, CG’s registration covered bags, purses and wallets.
However, Strandbags used “Colorado” for handbags, purses and wallets before CG (but after 1982). Therefore, CG’s registration would not validly cover handbags, purses and wallets unless they were goods “of the same kind” 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 “if 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 system” (at [19]).
False suggestion
Strandbags also alleged that CG’s registration was accepted because of a false suggestion made to the Trade Marks Office about the extent of Strandbags’ use of “Colorado”, 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 “Colorado” 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 CG’s registration for “Colorado” 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 Strandbags’ handbags, purses and wallets to infringe CG’s registration for backpacks, those goods had to be “of the same description” as backpacks, or the service of supplying those goods had to be “closely related” to backpacks (s 120(2)).
The trial judge had found that neither handbags, nor purses and wallets were goods “of the same description” as backpacks. Allsop J disagreed, finding that handbags and backpacks were goods “of the same description”, (despite having found they were not goods “of the same kind” for ownership purposes.) Allsop J did agree with the trial judge that wallets and purses were not goods “of the same description” as backpacks. Allsop J concluded Strandbags’ 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 “Colorado” before the earlier of CG’s 2001 registration or CG’s first use of “Colorado”.
For Strandbags to take advantage of section 124, Allsop J interpreted the section as requiring Strandbags to have been using “Colorado” before CG on the goods of the same description as those for which registration was obtained (ie on handbags) before CG had used “Colorado” on those same goods (ie handbags). That is, even if CG used “Colorado” on the goods specified in the registration (backpacks) before Strandbags used “Colorado” on handbags, Strandbags could still take advantage of section 124.
In this case, Strandbags used “Colorado” on handbags before CG did and this was before 2001, so Strandbags had a defence to infringement under section 124.