An unsuccessful appeal before the Full Federal Court has again highlighted the risk of choosing trade marks with ordinary meanings that are descriptive of the goods or services to which they are applied.
Bendigo and Adelaide Bank Ltd has lost its statutory monopoly over the term "community bank" (Bendigo and Adelaide Bank Ltd v Community First Credit Union Ltd  FCAFC 31), with the Full Federal Court holding the words "community bank" have an ordinary meaning that is descriptive of providing financial services to a community defined by a common feature such as geography.
In the absence of sufficient evidence of prior use as a trade mark by Bendigo, its "community bank" logo and word marks were, at the relevant priority dates, found to have been incapable of distinguishing its services from those offered by others.
Despite being successfully registered some 20 years ago, both trade marks will now be cancelled unless Bendigo seeks leave to appeal in the High Court and succeeds in that appeal.
Two laying claim to being community banks
Bendigo registered as a device mark and COMMUNITY BANK as a word mark in 1999 and 2001 respectively (the Bendigo Community Marks).
In March 2013, Community First Credit Union Limited (CFCU), sought to register COMMUNITY FIRST BANK and COMMUNITY FIRST MUTUAL BANK for class 36 services including “financial services” and “personal banking services”. Bendigo successfully opposed each of those registrations. CFCU appealed that decision and in March 2017 commenced rectification proceedings seeking removal of the Bendigo Community Marks from the register. The appeal and the rectification proceeding were heard together, with Justice Markovic finding in favour of CFCU in both and ordering the cancellation of the Bendigo Community Marks.
What about terms that have more than one ordinary meaning?
In its Full Court appeal from the decision of Justice Markovic, Bendigo contended "community bank" had so many meanings that the term did not have an ordinary meaning for the purpose of the first limb of the test in Cantarella Bros Pty Ltd v Modena Trading Pty Ltd (2014) 254 CLR 337. Even if it did have an ordinary meaning, it was one that conveyed covert or skilful or metaphorical allusions to concepts or notions of a bank providing undefined or unspecified benefits to the community, and could not have an ordinary signification for the purpose of Cantarella.
The Full Court rejected Bendigo's argument. It held that the absence of an exhaustive list of common features by which to characterise a community did not "render the expression meaningless". Indeed, in the primary judgment, Justice Markovic had already held that a community may be defined by a common feature and did not place a limit on what that common feature might be.
The process of establishing the ordinary meaning of a term does not require the exclusion of words with more than one meaning in one context. To do so, the Full Court noted, would be to artificially limit the ability of section 41 of the Trade Marks Act 1995 (Cth) to prevent the appropriation of ordinary language.
Descriptive use or use as a trade mark?
Bendigo alternatively argued that Justice Markovic had erred by not finding that the Bendigo Community Marks had acquired distinctiveness by reason of their extensive use as trade marks before their priority dates.
The Full Court rejected Bendigo's arguments and instead agreed with the primary judge that:
- the words “community bank”, when seen in the way that they were used in conjunction with other Bendigo marks, would not have had the character of a trade mark, having regard to the proximity of those words which themselves provided a clear designation of origin to Bendigo Bank; and
- there was otherwise insufficient evidence of use of the COMMUNITY BANK word mark on its own so as to distinguish the relevant services being provided by Bendigo under or by reference to the sign at the priority date.
The Full Court also agreed with the primary judge that many examples relied on by Bendigo of the words "community bank" appearing in press material were descriptive and not press coverage of the relevant trade mark.
Don't risk a descriptive term
The decision illustrates the difficulties of securing and maintaining trade mark rights in a descriptive term. Indeed, even where registration has been secured and held for a long period of time there may be substantial difficulty and risk defending or enforcing a monopoly.
Devising a distinctive trade mark is the best way businesses can mitigate against costly legal disputes both in securing and defending their rights in future. If a trade mark is descriptive of the goods or services to which it will be applied then it will be difficult to not only secure registration of those rights but also to stop other traders from using that brand. Determining whether a trade mark is descriptive is no small feat and there can be a fine line between marks that are registrable because they make a covert and skilful allusion and those that are not registrable because they unfairly monopolise words that other traders should be free to use.
The case is also an important reminder to ensure that where a business considers it has a monopoly in a distinct part of a composite mark that it take steps to register that component separately and that it can show continued use of that component as a trade mark.
Please contact Clayton Utz if you would like any assistance or advice regarding the brand protection strategy of your business or are concerned that another trader may be infringing your trade mark rights.