Clayton Utz Insights
21 June 2012
By Mary Still and Dean Gerakiteys.
The Granola case shows how hard it is for companies to establish their unique word marks have been infringed when they have otherwise come to have a meaning of their own.
The recent Federal Court decision in Australian Health & Nutrition Association Ltd trading as Sanitarium Health Food Company v Irrewarra Estate Pty Ltd trading as Irrewarra Sourdough  FCA 592 demonstrates the difficulty of establishing trade mark infringement when a registered trade mark is used descriptively.
In this decision, the Australian Health & Nutrition Association Ltd trading as Sanitarium Health Food Company lost a claim for trade mark infringement against Irrewarra Estate Pty Ltd trading as Irrewarra Sourdough over Irrewarra's use the word "Granola".
"Granola" has been a registered trade mark since 1921 in respect of goods in class 30 (which includes preparations made from cereals). Sanitarium is authorised to use the Granola mark, Irrewarra is not.
Irrewarra is a manufacturer and distributor of wholesaler breads and baked goods, including a cereal product which Sanitarium argued infringed the Granola mark. The cereal product in question has been sold by Irrewarra in a clear plastic bag since 2004 with a front label showing the Irrewarra trade mark above the words "All Natural Handmade Granola".
Sanitarium argued that Irrewarra's use of the Granola mark in this way contravened the Trade Marks Act 1995. Irrewarra denied both that it had used the Granola mark and that its use of the term “Granola” on its labels was as a trade mark (ie. in the sense of a word distinguishing its goods from the goods of other traders in the course of trade). It argued that its use of the word "Granola" was purely descriptive and did nothing more than describe the contents of the package.
Having considered the cereal product in question, Justice Jagot concluded that the label was not substantially identical with or deceptively similar to the Granola mark. In coming to this conclusion she noted that the word "granola", although invented, was inherently suggestive of meaning a grain product. Justice Jagot did not accept that any use of the word "granola" on a cereal product must be a trade mark use. Nor did she accept that the term granola had no meaning in Australia such that it could not be a descriptive term.
In the context of the packaging it would be clear to a consumer that the “all natural handmade granola” on the label merely referred to the contents of the Irrewarra package. This was especially the case given that the word granola did not appear in isolation on the package, but rather alongside the words “all natural handmade” which are themselves plainly descriptive of the Irrewarra product.
Accordingly, Sanitarium failed to demonstrate that Irrewarra's use of the term was intended to distinguish its goods from those of any other person in the course of trade. The word "Granola" as it appeared on the goods in question was merely as a means of describing the contents of the package and did not therefore indicate any connection between the goods and Irrewarra sufficient to be likely to deceive or cause confusion about the origins of granola. Justice Jagot was therefore satisfied that Irrewarra were not using the word "Granola" as a trade mark on any of their products.
This case demonstrates the difficulty companies face in establishing trade mark infringement in respect of unique word marks that have otherwise come to have a meaning of their own. As demonstrated above, mere use of a registered trade mark by a competitor will not necessarily constitute an actionable infringement where a registered mark could be considered to be generally descriptive. To succeed, a party must show that the infringing party's use of the mark is not merely as a means of describing its products, but rather as a means of distinguishing its goods from those of another manufacturer.
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