Federal Court resolves "legitimate uncertainty" in uncontested trade mark appeals

By Tim Webb, Brett Doyle and Justin Kardi
03 Feb 2022
When an appeal from a decision of the Registrar of Trade Marks is settled by the parties, the Court may still need to deliver a judgment if the appeal is not merely withdrawn. In allowing the appeal, the Court may need to decide a range of issues, including whether the mark under appeal meets the statutory threshold of distinctiveness.

The a2 Milk Company Limited (a2MC) has secured registration of the trade marks a2 Milk and TRUE A2 after the Federal Court delivered judgment allowing a2MC's appeals from successful oppositions before IP Australia, and ordered that a2MC's trade marks proceed to registration (The a2 Milk Company Limited v LD&D Australia Pty Ltd [2021] FCA 1515).

The Court's judgment came about in circumstances where the opponent to registration, a2MC's competitor LD&D Australia Pty Ltd (Lion), no longer wished to pursue its oppositions after reaching a settlement with a2MC. The parties sought orders by consent to finalise the proceedings, including an order that the trade marks proceed to registration. Because of the public interest relevant to the issue of distinctiveness, the Court was not in a position to make such orders based solely on the agreement between the parties.

Agreement between parties insufficient

Had Lion dropped its oppositions to registration before the Registrar of Trade Marks, the way forward would have been clear. Because a2MC's applications had been accepted on examination, in the absence of those oppositions, the marks would have proceeded to registration.

However, the Registrar of Trade Marks found that both a2 Milk and TRUE A2 were not capable of distinguishing a2MC's goods from those of other traders, and this engaged the public interest considerations.

The guidance offered by case law was limited, with only two cases giving rise to a similar set of circumstances. In both of those cases, the public interest concerns were addressed by a letter from the Deputy Registrar of Trade Marks that indicated the Registrar did not oppose the decisions being set aside. A letter on the same terms was sought by a2MC, but was not provided. Instead, the Deputy Registrar issued a letter noting the public interest concerns arising from section 41 of the Trade Marks Act 1995 (Cth), observing that the issue was "now a matter for the court", and stating the Registrar was unable to indicate that she had no objection to the decisions being set aside.

"Legitimate uncertainty" on the way forward

The Court accepted that the position adopted by the Registrar gave rise to "legitimate uncertainty" about the way forward. In particular, it was unclear what would happen if the Court did not make an order requiring the marks to proceed to registration. Justice Bromwich noted that the Deputy Registrar's letter left open a view that Lion's abandoned section 41 opposition "might still somehow have some work to do on public interest grounds, or at least in some other way impede the progress towards registration".

In the interests of certainty and finality, his Honour acceded to a2MC's request that the Court hear the matter, even in the absence of an opponent. All trade marks under application must meet the section 41 distinctiveness threshold and so the Court had to determine, in light of the evidence, if that threshold had been reached.

Trade marks inherently adapted to distinguish

While considering the substantial body of additional evidence put before the Court by a2MC, Bromwich J also gave the "usual degree of weight" to the two Registrar's decisions that gave rise to the appeals. In light of the Deputy Registrar's letter, his Honour noted that the extant findings of those delegates were apparently maintained and should not necessarily be discarded just because of the new evidence that had been filed in the appeals.

After considering that evidence and the Registrar's decisions, the Court found that the meaning of 'a2' or 'A2' did not amount to a description of a2MC's products, but instead made "an allusive reference to them and their qualities". His Honour went on to note that a "use of A2 by another trader to do more than identify that their product contains the A2 bovine beta-casein protein would not be properly motivated and is no reason to deny the applicant registration".

The Court held that both marks were sufficiently inherently adapted to distinguish a2MC's goods from the goods of other traders and should proceed to registration. Justice Bromwich also noted that the evidence of use by a2MC, both before and after the earlier of the two priority dates, clearly established the marks would operate to distinguish a2MC's goods as being those of a2MC. This included visual evidence that showed a2 or A2 presents in the market "in the manner of a brand, not just a product description", and detailed lexicology evidence about the use of a2 or A2 in the community that showed "overwhelming association with the applicant's products".

Clayton Utz acted for a2MC in these proceedings.

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