Businesses make significant investment in their brand names. A brand name with a good reputation is a valuable asset; distinguishing a particular business' products from the similar products of its competitors. However when a business selects a brand name, an important consideration is whether the brand name is registerable as a trademark. Registration of a trademark gives the business owning the trademark the exclusive right to use it and the right to sue for infringement if someone else uses the same or a similar mark for similar goods or services. But if a business has not registered its brand name as a trademark or the brand name does not meet the criteria for registration, that business is left to rely on the common law action of “passing off” or to bring proceedings under the Fair Trading Act 1986 (for misleading and deceptive conduct) to try and protect its brand. These were the issues considered in the recent High Court decision DB Breweries Limited v Lion Nathan Limited.
The case centered around the use of the words "Summer Ale" on competing beer products. DB had produced and marketed a seasonal product called Monteiths Summer Ale since 1998. Late last year Lion introduced a new product called Macs Sun Dance Summer Ale. In response DB sought an interim injunction restraining Lion from marketing and distributing its new beer on the basis that Lion had committed the tort of passing off or a breach of the Fair Trading Act.
DB alleged that Lion's conduct in producing Macs Sun Dance Summer Ale amounted to a misrepresentation which was calculated to mislead and was likely to lead members of the public to believe that, first Macs Sun Dance Summer Ale was supplied by or had the approval and endorsement of or affiliation with Moneteiths Summer Ale; second, there was some arrangement or connection between the parties or their products; third Macs Sun Dance Summer Ale was authorised by Monteiths; and fourth, Lion was authorised by DB to use the name "Summer Ale" in packaging Macs Sun Dance Summer Ale. DB alleged that Lion was attempting to pass off its products as DB goods. The same conduct was alleged to constitute a breach of the Fair Trading Act.
The Judge examined both the labels, bottles and packaging of both products. While both used the colour orange, a sun ray effect and the words "Limited Release" even DB's lawyer admitted that the packaging of the two products was objectively different. The Judge found that is was unarguable that Lion was representing Macs Sun Dance Summer Ale as Monteiths Summer Ale or that there was any association or relationship between the two brands.
Early on in the decision the Judge noted that DB had applied to the Intellectual Property Office to register the words "Summer Ale" as a trademark but their application had been declined on the basis that the name was too generic. The Judge said that there was no justification in policy or principle for providing DB with what would in effect be a monopolistic right, equivalent to the protection of a registered trademark, to a descriptive name.
The Judge found that any possible confusion between the products was not due to any similarity between the products packaging and labelling but rather it was due to the use of the words "Summer Ale" and were the result of DB's choice of a descriptive name - ale for consumption in summer - rather than some other more distinctive name for its products.
As a result DB's application for an interim injunction was dismissed.
This case serves to highlight that investigating whether a brand name is registerable as a trademark in the early stages of a products’ development is a worthwhile investment to protect what may become a valuable asset.
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