DC Comics v Cheqout Pty Ltd

Case [2013] FCA 478

FEDERAL COURT OF AUSTRALIA

DC Comics v Cheqout Pty Ltd [2013] FCA 478

Citation: DC Comics v Cheqout Pty Ltd [2013] FCA 478
Appeal from: DC Comics v Cheqout Pty Ltd [2012] ATMO 64
Parties: DC COMICS v CHEQOUT PTY LIMITED
(ACN 124 830 726) and REGISTRAR OF TRADE MARKS
File number(s): NSD 1145 of 2012
Judge: BENNETT J
Date of judgment: 22 May 2013
Catchwords: TRADE MARKS – appeal from decision of the delegate of Registrar of Trade Marks allowing registration of applicant’s mark – whether trade mark is deceptively similar to respondent’s mark – whether application to register trade mark made in bad faith
Legislation: Trade Marks Act 1995 (Cth) ss 43, 60, 62A
Cases cited:

Allergan Inc v Di Giacomo (2011) 199 FCR 126 cited
Berlei Hestia Industries Ltd v The Bali Company Inc (1973) 129 CLR 353 cited
Commissioner of Patents v Sherman (2008) 172 FCR 394 cited
Fry Consulting v Sports Warehouse Inc (No 2) (2012) 201 FCR 565 followed
Fry Consulting Pty Ltd v Sports Warehouse Inc (No 1) [2011] FCA 1417 cited

Merck & Co Inc v Sankyo Co Ltd (1992) 23 IPR 415 cited

Radio Corporation Proprietary Limited v Disney (1937) 57 CLR 448 discussed
Re Application by Pianotist Company Ltd (1906) 1A IPR 379 applied
Registrar of Trade Marks v Woolworths Limited (1999) 93 FCR 365 applied
Smith Hayden & Co Ltd’s Application (1946) 63 RPC 97 cited
Southern Cross Refrigerating Company v Toowoomba Foundry Pty Ltd (1953-1954) 91 CLR 592 applied
Sym Choon & Co Ltd v Gordon Choons Nuts Ltd (1949) 80 CLR 65 cited

Torpedoes Sportwear Pty Ltd v Thorpedo Enterprises Pty Ltd (2003) 132 FCR 326 cited
Date of hearing: 30 January 2013
Date of last submissions 30 January 2013
Place: Sydney
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 78
Counsel for the Applicant: Mr R Webb SC
Solicitor for the Applicant: Baker & McKenzie
Counsel for the First Respondent: The first respondent did not appear
Solicitor for the Second Respondent: Mr N Gouliaditis of Australian Government Solicitor

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1145 of 2012
ON APPEAL FROM THE REGISTRAR OF TRADE MARKS
BETWEEN:

DC COMICS
Applicant
AND:

CHEQOUT PTY LIMITED (ACN 124 830 726)
First Respondent

REGISTRAR OF TRADE MARKS
Second Respondent

JUDGE:

BENNETT J

DATE OF ORDER:

22 May 2013

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The appeal from the decision of the delegate of the Registrar of Trade Marks be allowed.

2.The decision of the delegate of the Registrar of Trade Marks be set aside.

3.The application to register “superman workout” be refused.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1145 of 2012
ON APPEAL FROM THE REGISTRAR OF TRADE MARKS
BETWEEN:

DC COMICS
Applicant
AND:

CHEQOUT PTY LIMITED (ACN 124 830 726)
First Respondent

REGISTRAR OF TRADE MARKS
Second…

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Details
AGLC
DC Comics v Cheqout Pty Ltd [2013] FCA 478
Case
[2013] FCA 478
Decision Date

CaseChat Overview and Summary

In this matter, DC Comics appeals against the decision of the delegate of the Registrar of Trade Marks, who allowed the registration of Cheqout's trade mark "superman workout". DC Comics contends that the trade mark is deceptively similar to its own trade marks and that the application was made in bad faith. The case concerns the potential for confusion between the marks and the scope of protection afforded to unregistered marks.

The central legal issues were whether Cheqout's trade mark was deceptively similar to DC Comics' marks and whether the application was made in bad faith. The Court had to consider the notional use of the trade mark and whether there was a real danger of confusion. It also had to examine the extent of protection afforded to unregistered marks and whether the unregistered "superman" word mark was associated with the Superman character to the exclusion of other meanings.

The Court found that the Registrar's decision should be given weight, but not presumed correct. The Court noted that the Superman character was well known and recognised, and the word "superman" was intrinsically connected to the character and the associated indicia. However, the word "superman" has entered the language to connote more than just the superhero. The Court found that while consumers may associate the word "superman" with the character, they would not necessarily associate the word with DC Comics' marks when used in conjunction with fitness services. The Court concluded that there was no real danger of confusion and that the application was not made in bad faith.

The Court allowed the appeal, set aside the Registrar's decision and refused the registration of "superman workout". The Court held that the unregistered "superman" word mark was not associated with the Superman character to the exclusion of other meanings and that the notional use of the trade mark did not give rise to a real danger of confusion. The Court also found that the application was not made in bad faith.

The Court's decision highlights the importance of considering the notional use of a trade mark and the extent of protection afforded to unregistered marks. It also emphasises the need to examine the association between a word and a character or indicia, and whether that association is exclusive. The decision provides guidance for parties seeking to register trade marks that may be deceptively similar to existing marks or that may be associated with well-known characters or indicia.

Orders

Orders of the court

1. The appeal from the decision of the delegate of the Registrar of Trade Marks be allowed.

2. The decision of the delegate of the Registrar of Trade Marks be set aside.

3. The application to register “superman workout” be refused.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

The parties have provided agreed relevant facts, which are Annexure A to these reasons (the Agreed Facts). DC Comics does not assert that “superman” is a word invented by it. It accepts that the word, in English, derives from “Ubermensch” as discussed by Friedrich Nietzsche. However, it says that the word “superman” and the expression “super man” have come to be associated with the character invented by Jerry Siegel and Joe Shuster in 1938 and well publicised since then (Superman). This is the Superman referred to in the Agreed Facts. As an aside, it seems that this character developed from an earlier and different character created by the creators of the Superman character at issue here. That character was a villain and not a hero, and appeared in a short story, The Reign of Superman, rather than a comic strip. DC Comics says that this association exists and existed at the Priority Date, whether or not the word is used in connection with the stylised form of the word and/or the Superman logo and/or the figure of Superman as depicted in the relevant DC Comics trade marks (Agreed Facts at [22]). It is sufficient for DC Comics’ purposes in regards to s 60 (and therefore s 43) to submit, as it does, that the use of its unregistered word trade mark “superman” (the Superman word mark) in association with health and fitness services is sufficient to import that association in the minds of sufficient members of Australian society, as at the Priority Date. It says that given the suitability of the “Superman” brand for the licensing of goods and services in the health and fitness sector, the use of the brand in this sector represents a proper “stretch” and “fit” of its trade mark and, accordingly. that this association would be made by consumers. The Registrar does not dispute that the consumer would see the word “superman” in the Trade Mark and associate it with Superman. However, he says, in essence, that there would be no confusion for at least the following reasons:·DC Comics concedes that while licensed use of the Superman marks covers a diverse range of products and services, DC Comics has not itself ever conducted exercise classes, operated fitness clinics or health clubs, or licensed or planned to license others to do so.·The consumer seeing Cheqout’s Trade Mark used in conjunction with the Services would perhaps think of Superman, but would reject any association with him.·For that reason, substantial numbers of the Australian public would not be caused to wonder whether the Services for which registration is being sought enjoyed DC Comics’ licence, sponsorship or approval or otherwise enjoyed some connection with DC Comics.appeal from the decision of the registrar The proceeding is brought pursuant to s 56 of the Act. The Registrar contends that his decision should be given “great weight” and that his opinion is that of an expert in regard to trade mark use, particularly with respect to questions of confusion or deception. Although referred to as an appeal in s 56, it has been accepted that in proceedings of this kind:… the Court exercises its original jurisdiction and conducts a hearing de novo. The Court is required to determine the same question that was before the Registrar – whether any ground on which the application for registration was opposed has been established – and, in answering this question, the Court must apply the same legal criteria that the Registrar was required to adopt under the Act. The Court must make its decision having regard to the evidence before it. The Registrar’s decision is not presumed correct, but the Court is entitled to have regard to the Registrar’s opinion as that of a skilled and experienced person in the field of trade mark registration … [Sports Warehouse Inc v Fry Consulting Pty Ltd (2010) 186 FCR 519 at [24] per Kenny J].

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Cheqout has indicated that it does not wish to participate in these proceedings. Accordingly, the Registrar appears under s 196 of the Act, to ensure that the Court is not left without a contradictor. The Registrar has a right to appear and be heard in an appeal from his decision, and should be allowed more latitude where a party does not appear or does not argue the case before the Court (Merck & Co Inc v Sankyo Co Ltd (1992) 23 IPR 415 at 417-418 per Lockhart J; Commissioner of Patents v Sherman (2008) 172 FCR 394 at [23] per Heerey, Kenny and Middleton JJ).The decision of the Registrar Before the Registrar, DC Comics relied on the Superman word mark in regard to the s 60 ground of opposition. It relies on the same unregistered mark in these proceedings. The Registrar concluded (at [39]), and it is not presently in dispute, that: … the Superman character would be very familiar to most people in [Australia] and that [DC Comics’] various promotional and merchandising activities … would have garnered a significant reputation in Australia for the name Superman as a trade mark for relevant merchandise and entertainment services as at the Priority Date. He noted that under s 60, it is the actual past use enjoyed by the mark on which the opponent to the registration relies that must be considered, not any abstract concept of notional use. The actual use of “Superman” in Australia The evidence indicated to the Registrar that the reputation of the Superman word mark is closely linked to the Superman character and to the indicia with which the character is associated. These indicia include the character’s strength, powers and the clothing that he wears, as well as the Superman Shield Device (the S Shield Device) (as depicted below at [70]). He observed (at [43]) that the Superman word mark has in the past ‘almost invariably been used in close association with … other indicia’ and was ‘almost invariably’ rendered in the stylised form in which it exists in the registered Superman trade mark (Agreed Facts at [22]). He noted (at [42]) that the Superman word mark is ‘intrinsically connected’ to the S Shield Device that is also the subject of trade mark registration (Agreed Facts at [23]). The Registrar also accepted that Superman is one of the most recognised superhero characters in the world and that the character has been used in promotional and merchandising activities covering a diverse range of products and services, including in Australia. However, he noted (at [65]) DC Comics’ concession that there is no evidence that DC Comics has ever itself, with respect to the Superman character, conducted exercise classes, operated fitness clinics or health clubs, or licensed or had plans to license others to do so. Notional use of the Trade Mark The question was, the Registrar said, the notional use that Cheqout might make of the trade mark if registration were obtained and whether that use would give rise to a real danger of confusion (Registrar of Trade Marks v Woolworths Limited (1999) 93 FCR 365 at [50] per French J (Woolworths); Berlei Hestia Industries Ltd v The Bali Company Inc (1973) 129 CLR 353 at 362 per Mason J).

Ratio Decidendi

Legal Principle Established

Other relevant considerations for the purposes of s 60 of the Act are set out in Torpedoes Sportwear Pty Ltd v Thorpedo Enterprises Pty Ltd (2003) 132 FCR 326 at [78]. In particular (citations omitted):·An attempt must be made to estimate the effect or impression produced on and retained by customers and potential customers.·What is to be compared with one mark is the impression based on recollection of the other mark that persons of ordinary intelligence and memory would have.·Consideration is given to the goods to which the marks are to be applied and the nature of the customer, as well as all the surrounding circumstances when the marks are used in a normal way as a trade mark.·It is important to look at the whole of the marks.·Deceptiveness must result but from similarity; a likelihood of deception is judged by the effect of the similarity in all of the circumstances.·The fact that two marks convey the same idea is not sufficient in itself to create a deceptive resemblance between them and a proprietor of the mark is not entitled to a complete monopoly of all words conveying the same idea as that mark. However, the presence of a common idea may be a determining factor because the idea is more likely to be recalled than the precise details of the mark.·Where an element of a trade mark has a degree of notoriety or familiarity, it would be artificial to separate out the physical features of the mark from the viewer’s perception of them. The question of resemblance is about how the mark is perceived.·The comparison is between marks, not uses of marks, although use is not irrelevant as a circumstance. The consideration is not only actual use but also the extent of the statutory monopoly by reference to the full extent of the goods or services in respect of which the mark is registered.CONSIDERATION It must be remembered that DC Comics’ registered trade marks consist of the word Superman together with a device or figure of the superhero or simply of the S Shield Device, but not of the word alone. DC Comics maintains that the public will be misled or confused by use of the word alone. There is no dispute, and no doubt, that Superman the superhero is well known and recognised, by look and by name, to the public at large. Indeed, the superhero and his “get-up” are so famous that they could be said to be instantly recognisable, as is, by name, Superman’s alter ego, Clark Kent. However, the word “Superman” was not invented by the applicant and it is not presently defined by reference only to the superhero. Whether or not an association of the word is with the superhero, the word superman has entered the language to connote more than the superhero. The Macquarie Dictionary provides several relevant definitions of “superman”. The first is a definition which includes the plural “supermen”:1.an ideal human being who by virtue of greater spiritual powers rises above the usual notions of good and evil; conceived by the 19th-century German philosopher Friedrich Nietzsche as the product of human evolution.2. a. a man of more than human powers.b. a man who prevails by virtue of such characteristics.