6 January, 2020
Community First Credit Union Ltd v Bendigo and Adelaide Bank Ltd [2019] FCA 1553.
What you need to know
- In this Federal Court case two large financial institutions engaged in a dispute to secure monopoly rights in relation to marks incorporating the words "Community" and "Bank".
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The decision illustrates the challenges which arise in securing monopoly rights in relation to descriptive terms such as "Community Bank" with Bendigo losing its trade mark registrations incorporating those words.
What you need to do
- The case serves as a reminder of the benefits of adopting a distinctive mark in the first instance in order to avoid expensive and time consuming legal challenges when trying to obtain monopoly rights and/or enforce such rights.
Background
Before the Australian Trade Marks Office, Bendigo successfully opposed Community First Credit Union Ltd's (CFCU) trade mark applications for the word marks COMMUNITY FIRST BANK and COMMUNITY FIRST MUTUAL BANK. CFCU appealed that decision to the Federal Court. CFCU also sought orders to cancel Bendigo and Adelaide Bank Ltd's (Bendigo) trade mark registrations for its COMMUNITY BANK word and logo marks.
Cancellation of Bendigo's registrations
The first and primary part of the Federal Court's decision related to the cancellation of Bendigo's registrations for the COMMUNITY BANK word and logo marks under section 88(2)(a) of the Trade Marks Act 1995 (Cth). Rectification of the Register can be sought on any ground on which the Bendigo marks could have been opposed.
The first ground relied upon was that the Bendigo marks were not sufficiently distinctive to qualify for registration under section 41.
Justice Markovic held that as at the priority date, COMMUNITY BANK had an ordinary signification or meaning that was directly descriptive of the provision of financial services to a community of people defined by geography (ie a bank that is owned and managed locally and which serves the needs of a local community). Further, the evidence established that other traders, not actuated by improper motive, might, and indeed did as at the priority dates, legitimately desire to use those words for their ordinary meaning. Interestingly, Justice Markovic did not address the impact of the device element in the logo mark.
Further, section 41(6) (which relates to acquisition of factual distinctiveness by means of use) was not satisfied as there was not sufficient use of COMMUNITY BANK on its own, as opposed to use of the words as part of a composite mark which includes the words "Bendigo Bank". On this basis, the marks were found to be not inherently adapted to distinguish the class 36 services.
It was also argued under sections 43 and 42(b) that the trade marks were likely to deceive or cause confusion. This argument did not succeed because it was held by Justice Markovic that there were several different available connotations of the term "Community Bank". It was also unsuccessfully contended by CFCU that the Bendigo marks were deceptively similar to the COMMUNITY FIRST mark under section 44 and an argument that Bendigo had no intention to use its marks under section 59 also did not succeed.
Exercise of discretion to remove
The exercise of the power in section 88(1) to remove a mark is discretionary and so includes within it a discretion to decline to make an order for rectification even if a basis for removal is established.
Justice Markovic held that the evidence did not disclose sufficient reason not to cancel Bendigo's marks and therefore ordered that the marks should be cancelled despite Bendigo's arguments to the contrary.
In reaching this conclusion, the following matters were discussed:
- The fact that there was no opposition to registration of Bendigo's marks was not a persuasive factor as there could be many reasons why an application was not made, including a disinclination to pursue litigation.
- While Bendigo pointed to the fact that it had grown a business with over 300 Bendigo Community Bank Branches and there had been significant investment on the part of Bendigo and its franchisees in the business, it had not demonstrated that it was by reference to use of the marks alone that it had built up that business.
- The fact that CFCU's witnesses accepted in cross-examination that Bendigo should be able to use the term "Community Bank" (descriptively) does not justify a mark that is not valid remaining on the Register.
- Finally, it could be said that Bendigo was using the Register to prevent competitors from using the term "Community Bank" in association with their services by virtue of the relatively large number of trade marks filed which incorporated the words "community" and/or "bank".
Appeal of opposition decision
The second part of the decision related to the appeal of the Trade Marks Office's decision relating to the opposition to CFCU's applications.
The main ground relied on by Bendigo was section 60 under which Bendigo was required to show that as at the priority dates of the CFCU marks, the mark COMMUNITY BANK had acquired a reputation in Australia amongst the public generally, such that use of the CFCU marks would be likely to deceive or cause confusion.
While Bendigo relied upon fairly voluminous evidence of use, Justice Markovic held that it had not been established that the COMMUNITY BANK mark had acquired a reputation in Australia prior to the priority date because in almost all cases the COMMUNITY BANK mark appeared with other Bendigo marks. Thus, it was not necessary to consider whether use of the CFCU marks would be likely to deceive or cause confusion.
Bendigo also unsuccessfully argued under section 44 that the CFCU marks were deceptively similar to the Bendigo word mark, that use of the CFCU marks was contrary to law (section 42)(b)) and that CFCU had no intention to use the marks (section 59).
For further information, please contact:
Lisa Ritson, Partner, Ashurst
Lisa.ritson@ashurst.com
