27 Aug 2010

Is your trade mark distinctive or just descriptive?

by Brett Doyle, Mary Still

Decision of Registrar of Trade Marks - Opposition to Registration of ExoticLimo (Stylised) of 29 July 2010.

Exotic Limo Pty Ltd applied to register ExoticLimo (stylised) for car hire and chauffeuring services:  


Theo Dimokranitis runs his own car hire business, Exoticar. He objected to registration on two bases:

  • first, because of conflict with the reputation in his business which operated under the trade mark exoticar - an objection under section 60 of the Trade Marks Act; and
  • secondly, because of conflict with his prior registered trade mark registration for exoticar | euro | luxury | hire - an objection under section 44 of the Trade Marks Act:


Both parties filed evidence demonstrating limited trading activities and reputation. There was some evidence of consumer confusion.

A delegate of the Registrar of Trade Marks dismissed both these objections to registration.

Section 44 objection: "substantially identical with, or deceptively similar to"

The two trade mark were not deceptively similar. They were more than the simple words EXOTICAR and EXOTIC LIMO. Though they shared the word EXOTIC, which was combined with the further respective elements CAR and LIMO, the EXOTIC component alone would not be the means that the average Australian would recognise and recall the EXOTICAR mark. Overall the differences between the marks were such that there was no real tangible danger of confusion between them.

It is unclear whether the Delegate regarded this as a borderline case where recourse to the "idea" of the mark can be of assistance (such as Sports Café Ltd v Registrar of Trade Marks [1998] FCA 1614 and Cooper Engineering v Sigmund Pumps (1952) 86 CLR 536). Nonetheless, she did not consider the "idea" of the marks so similar as to warrant a finding of deceptive similarity.

Section 60 objection: "likely to deceive or cause confusion"

Section 60 required the deception or confusion between the marks to be causally linked to the reputation of Mr Dimokranitis, but the marks themselves did not need to be objectively deceptively similar. This ground of opposition also failed.

At the date that the EXOTIC LIMO application was lodged, there was only a limited use of the EXOTICAR mark. This did not establish a sufficient reputation in the mind of the public, merely that there was a growing reputation. The one instance of confusion to which the Delegate gave weight resulted not from the prior reputation of EXOTICAR but because of the similarity between the two marks.

Both sides conceded that LIMO and CAR were not distinctive elements. Additionally, the Delegate found that EXOTIC was not "unusual and distinctive" in relation to car and limousine hire services. She then quoted the famous passage from Hornsby Building Information Centre Pty Limited v Sydney Building Information Centre Limited (1978) 140 CLR 216, in which Justice Stephens states that there is a price to be paid for adopting descriptive or non-distinctive words as trade marks. That price is that other traders can legitimately adopt similar marks. In such cases, "the risk of confusion must be accepted".

The distinctive trade mark

This decision is a timely reminder of the importance of a distinctive trade mark.

Although the opponent Mr Dimokranitis had an invented word for his trade mark, it still incorporated a word that other traders in the fancy car hire business would legitimately want to use - "exotic". As a result, he could not limit Exotic Limo's use of the word.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.