Bohemia Crystal Pty Ltd v Host Corporation Pty Ltd  FCA 235 (6 March 2018)
This was a comprehensive loss for the applicant, Bohemia Crystal. Not only did it fail to establish any cause of action against Host but, in the process of attempting to do so, its trade mark registrations were invalidated. This case also highlights the high level of scrutiny by a Court in evaluating evidence of acquired distinctiveness.
The applicant alleged that Host infringed its trade mark registrations for BOHEMIA and BOHEMIA CRYSTAL and engaged in misleading and deceptive conduct under the Australian Consumer Law (ACL). Host successfully cross claimed that these trade mark registrations were invalid, so there was no infringement and the ACL claim also failed.
Historically, glass and crystal products have been manufactured in a region that, up until the beginning of the First World War in 1914 was known as Bohemia. In 1918, Czechoslovakia was formed and included the area formerly known as Bohemia. Subsequently, on 1 January 1993 Czechoslovakia was divided into the Czech Republic and Slovakia. Glass and crystal products continue to be manufactured in the Czech Republic including in parts of that country known as Bohemia.
The applicant imports and sells glassware manufactured in the Czech Republic (and formerly Czechoslovakia). It was incorporated in 1975 as a wholly owned subsidiary of Skloexport and sold glassware in Australia under trade marks licensed to it by Skloexport until that Czech entity went into liquidation in July 1999. The applicant took an assignment, without goodwill, of some of the trade marks owned by Skloexport and subsequently obtained registrations for the word marks BOHEMIA CRYSTAL and BOHEMIA dating from 5 October 2001 and 2 May 2003 respectively. These word mark registrations were achieved based on IP Australian being satisfied that these marks had been used to such an extent and become factually distinctive at those times. The applicant has, since 1975, been a vendor of high quality glassware products which are sold through its stores to retail customers and also sold directly to commercial customers.
Host imports and supplies a range of catering goods and equipment supplied by Forincorp and, in or about April or May 2015, became the exclusive Australian distributor of crystal products called ‘Banquet Crystal by Bohemia’ (Banquet Products) mainly selling to buyers in the catering industry. The Banquet Products are made and packaged in the Czech Republic for the Kedaung Group and have been sold by Host in Australia since October 2015.
The applicant alleged that Host infringed its registered trade mark rights and engaged in misleading or deceptive conduct in various ways, including use in catalogues of BANQUET CRYSTAL BY BOHEMIA and CZECH CRYSTAL BY BOHEMIA, as well as use on packaging of BANQUET BY BOHEMIA and use on Host’s website offering glassware under the names Bohemia Flute, Bohemia Footed Beer and Bohemia Whiskey. On receipt of the demand letter from the applicant’s lawyers, Host agreed to obscure or remove the reference to Bohemia pending resolution of the dispute. Host submitted that use of the word “by” was to indicate products from Bohemia even though this was grammatically incorrect, but this was the language used by the supplier of the Banquet Products and adopted by Host.
Burley J first considered Host’s cross claim seeking cancellation of the relevant BOHEMIA CRYSTAL and BOHEMIA word mark registrations. Host relied on s41 (as it stood prior to the 15 April 2013 amendments) and contended these word marks were not, at the relevant times they were filed, capable of distinguishing the applicant’s goods from those of other persons because the ordinary signification of BOHEMIA is a geographical descriptor and CRYSTAL is purely a descriptor.
His Honour naturally applied the test for “inherently adapted to distinguish” as outlined by the High Court in the 2014 Cantarella case. The ordinary signification of the words “Bohemia” and “Bohemia Crystal” is to be considered in the context of the target audience (which includes other traders and consumers of the relevant goods) and it is necessary to determine whether other traders might legitimately desire to use these words or something similar in connection with their goods, for the ordinary signification these words possess.
Burley J did not accept the applicant’s expert evidence that the ordinary signification of “Bohemia” is to describe a conceptual or mythical place of origin of artists or people living an unconventional lifestyle. The correct enquiry is to determine ordinary signification in the context of usage in relation to the relevant goods and his Honour thought it unlikely for persons who consider the word “Bohemia” in the context of glassware will be caused to think of this mythical place of origin. Rather, this word and “Bohemia Crystal” would signify to such persons a region from where glassware is manufactured or perhaps, in the case of “Bohemia Crystal”, a particular decorative style of glassware that originates from Bohemia.
The applicant contended that other traders have recourse to modern words such as “Czech Crystal” and do not need to use “Bohemia” or “Bohemia Crystal”, but Burley J noted the question is not one of need, but rather whether traders are likely, with no improper motive, to desire to use these words for the ordinary signification which they possess and found in the affirmative.
Burley J went on to conclude that neither of the BOHEMIA or BOHEMIA CRSTAL trade marks was, to any extent, inherently adapted to distinguish and then assessed the evidence to ascertain whether these marks had, through use, become factually distinctive at their filing dates and found they had not. His Honour acknowledged the obvious difficulties in producing materials that date back many years, but the applicant’s evidence had significant deficiencies. It was apparent that, prior to 1999, neither mark was used by itself in advertisements, on packaging, in stores or in showrooms, rather the word “Bohemia” tended to be used as part of other composite marks, or descriptively. His Honour also observed that much of the evidence is consistent with the applicant promoting itself as a vendor or supplier of glassware from a number of sources, including Moser and Bohemia Crystalex. It appears to be mainly the use of the composite logo mark shown below on products and in the applicant’s promotions that connects the applicant to the relevant goods.
Burley J found that Host was successful in showing that the registered BOHEMIA and BOHEMIA CRYSTAL word marks could have been successfully opposed under s41 at their respective filing dates. However, rectification under s88 involves a discretion as confirmed in the recent 2018 Full Federal Court Anchorage case, so his Honour had to consider whether there was sufficient reason to not cancel the registrations. Unfortunately for the applicant, Burley J did not consider there was reason to exercise discretion in its favour. To permit them to remain would advantage an unmeritorious registrant who has incorrectly had the benefit of a monopoly. His Honour noted the applicant may file fresh applications to register these trade marks and, if accepted, they would be subject to scrutiny under the opposition regime.
Significantly, Host contended that the applicant has made illegitimate and anticompetitive use of the Trade Marks Register and Burley J did agree there was substance to this and commented that the applicant “has a history of utilising the Register as a means to ensure that potential competitors are prevented from using the word “Bohemia” in association with goods which come from that region or in any context at all in relation to the relevant goods. That conduct is antithetical to the policy and purposes of the TM Act. It may have had a distorting effect on the contemporary understanding of the word “Bohemia”. It should not be condoned.”
Given the finding in favour of cancelling the applicant’s trade mark registrations, it was not strictly necessary for Burley J to consider infringement, but his Honour did go on to discuss this aspect in case his conclusions on invalidity are the subject of a successful challenge. As in the Anchorage case, the date of effect of the order for rectification was not discussed, but it may be inferred that the relevant registrations were wrongly registered from the outset (ab initio) and so the applicant is not entitled to any relief for any subsequent conduct. In Clipsal Australia Pty Ltd v Clipso Electrical Pty Ltd reported here Perram J, at paragraph 224, commented that “there is a debate as to whether the power to remove a mark from the register in s 88 can be utilised with retrospective effect” but it was not necessary to consider this because Clipsal Australia did not seek a retrospective removal of the CLIPSO mark from the register and infringement was considered “at the legal moment after the CLIPSO mark is removed from the register“.
Central to the infringement issue is whether Host has used “Bohemia” in a trade mark sense (as a badge of origin) and this needs to be assessed in the context in which this word appears in the alleged infringing uses pressed by the applicant. Burley J noted the “relevant question is whether or not, in the setting in which the words “Bohemia” or “Bohemia Crystal” appears, they would have appeared to consumers as possessing the character of a brand in the sense that it indicates a connection in the course of trade between the goods and a supplier. The relevant point in time for such consideration is the date of the alleged acts of infringement.”
Burley J construed Host’s use of BANQUET CRYSTAL BY BOHEMIA as a banner line in its catalogues to be trade mark use of BOHEMIA because the word “by” indicated an entity called “Bohemia” which is somehow responsible, as a source of origin, for the promoted glassware. His Honour also construed the following use on packaging as trade mark use of BOHEMIA.
His Honour noted that “it is apparent from the context that, despite the more general understanding of a geographical meaning to be attributed to the word “Bohemia”, the use of that word does not direct the reader to a geographical meaning. Rather, the word is used in a manner that suggests that the author or progenitor of the glassware promoted is connected to “Bohemia”.”
The website use of Bohemia Flute, Bohemia Footed Glass and Bohemia Whiskey was not construed by his Honour to be trade mark use. Rather, this usage is likely to be regarded by consumers as descriptive of the geographic origin or style of the glassware promoted.
Burley J then considered whether, in those instances where there was trade mark use, Host could avail itself of the defence that such use was in good faith indicating Bohemia as the place of origin of the goods or an aspect of quality of the goods. His Honour expressed the view that this defence did not apply. Although the use of “by Bohemia” in the catalogues and packaging originated from Farincorp and was adopted by Host, this manner of use was not for the purpose of honestly designating the geographic origin of the glassware. Rather, it was to designate the trade origin of these goods.
Finally, Burley J dismissed the applicant’s claim that Host’s conduct was misleading or deceptive under the ACL.
His Honour considered there is likely to be a very small overlap between the customers of the applicant and Host having regard to the differences in price, target market, the qualities of the glassware sold and the numbers and apparent type of commercial customers of the applicant. Further, the evidence did not establish that “Bohemia” and/or “Bohemia Crystal” have sufficient familiarity amongst the relevant class of persons to mean that such persons associate these names with the applicant and its business activities, particularly as “Bohemia” is a geographical term which is apt to be used in the context of glassware. Burley J also noted that a distinction needs to be drawn between the business of the applicant as an importer, seller and distributor of glassware and the products that it imports, sells and distributes. The applicant sells a range of glassware under many different brands and its customers are likely to perceive the composite Bohemia Crystal logo mark as discussed earlier and shown above as the trade connection with the products that it sells.
Against this background, Host’s conduct could not amount to a representation as to any connection or association with the applicant.