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Trademark Lawyer – Full Federal Court – Primary Health Care Appeal

Primary Health Care Limited v Commonwealth of Australia [2017] FCAFC 174 (9 November 2017)

Unsuccessful appeal by Primary Health Care (applicant) against refusal of its applications, filed on 6 October 2009, for trademark registration of the words PRIMARY HEALTH CARE and the Logo version shown below for various class 35 Services:

Trademark Lawyers Sydney Primary Health Care

The Delegate refused registration based on the s43 ground of opposition due to these trade marks containing an inherent connotation which is likely to deceive or cause confusion.

The applicant appealed the Delegate’s decision in respect of s 43. The respondents, by notice of contention, continued to oppose registration of the trade marks based on s 41 (trade mark not distinguishing applicant’s services) and s 42 (use of trade mark contrary to law). The primary judge, Jagot J decided that the respondents established their grounds of opposition under ss 41, 42 and 43 of the Act, with the consequence that the appeal should be dismissed and the trade mark applications refused. The decision of the primary judge is reported here

The applicant sought and obtained leave to appeal to the Full Federal Court, but this appeal failed on all grounds. The applicant largely failed to specifically identify the alleged errors of the primary judge. While an appeal from a single judge is by way of rehearing, it is necessary to show there has been some legal, factual or discretionary error.

The applicant had operated its business under the name Primary Health Care since 1998 (although the logo version of the mark was not used until after filing of the trade mark applications). The applicant’s class 35 Services subject of the trade mark applications related to medical centre business management and administration, as well as various other back office and administrative support services. The primary judge reached the conclusion that the applicant is in the business of operating medical centres and provides a suite of services to health care professionals contracted to work from these medical centres, but as part of that business and not otherwise. These services are “indivisible from or integral to” the provision of clinical care by the health professionals. In reality, the applicant provides its services in a multilateral way as a bundle of services to health care professionals and patients in the overall conduct and operation of its medical centres. Significantly, it does not market or provide these services generally to other health care professionals outside of its medical centres.

The applicant sought to characterise its Services as being in a bilateral way provided only to health care professionals, but this was an artificial characterisation.

It was common ground that the applicant does not supply any clinical care or other professional health care services.

Rangiah J gave the leading judgment on the s41 and s42 grounds of opposition. However, Greenwood and Katzmann JJ disagreed with Rangiah J on the s43 ground.

The Full Court essentially found the findings of fact reached by the primary judge were open on the evidence. An appeal court should not interfere with such findings unless they are demonstrated to be wrong by incontrovertible facts or uncontested testimony, or they are glaringly improbable or contrary to compelling inferences.

Section 41

The Court confirmed that s 41 as it stood at 6 October 2009 (being before the Raising the Bar amendments which took effect from 15 April 2013) was applicable. Of course, the High Court in Modena Trading Pty Ltd v Cantarella Bros Pty Ltd [2014] HCA 48 noted that the ordinary signification of a word is crucial in assessing whether a trade mark is inherently adapted to distinguish.

Rangiah J referred to earlier cases and noted, at paragraph 225, that “prior to the amendments, a party opposing registration of a trade mark carried the onus of proving that the mark is not inherently adapted to distinguish under s 41(3) of the TMA, but if that onus was discharged, the applicant for registration bore the onus of proving that ss 41(5) or (6) applied“. His Honour then commented that “the 2012 amendments have altered the position so that the onus remains on the opponent throughout the assessment under s 41 of the TMA. Those amendments do not affect this case“.

In the present case the ordinary meaning of the words “primary health care” to the target audience (which included persons involved in the public health sector, medical professionals and patients) was “that part of the Australian health care system which provides first level health care, being the health care received as a result of the first contact between an individual and a health care system (or, in shorthand, first level or first contact health care)”. The Court did not accept the applicant’s submission that the Services are only provided to health practitioners at the medical centres and that the target audience was so limited. Although these health care practitioners pay for the applicant’s services, they are not the only persons who receive these services or are concerned with the services. Patients of the medical centres consume the services even though they do not directly pay for them. The broader target audience includes all other participants in health care who interact with any medical practitioner in the applicant’s centres. Rangiah J observed that the Cantarella case does not limit the target audience to “persons who will purchase, consume or trade in the goods”, rather “any person in Australia concerned with the goods” is to be considered.

Hence the phrase “primary health care” lacked sufficient inherent adaptation to distinguish the applicant’s class 35 Services. Katzmann and Rangiah JJ observed that “the fact that a term has acquired a secondary meaning through use or by repute is not relevant to the question of whether it is inherently adapted to distinguish an applicant’s goods or services. Inherent adaptability depends on the nature of the trade mark itself and cannot be changed by use or otherwise“.

The primary judge then went on to consider the use of the applied for marks on the assumption that the sign “primary health care” contained some degree of inherent adaptation to distinguish, but was not satisfied that this sign was capable of distinguishing the applicant’s Services under s41(5). While the word mark had been used to distinguish the operation of the applicant’s medical centres, it had not been used to distinguish the relevant class 35 Services. The applicant did not show that the primary judge’s reasoning on this issue was illogical or otherwise wrong and the Full Court was not prepared to disturb the primary judge’s finding on this aspect. Further, as Rangiah J noted “even if the appellant had been able to show that it used the word mark to market the Services to health practitioners, it did not show that a substantial number of health practitioners were aware of such use in relation to the Services“. As a result there was no error in the primary judge’s conclusion that the applicant failed to discharge its onus under s41(5).

The primary judge’s findings under s41(5) also answered the enquiry under s41(6). Assuming the sign “Primary Health Care” is not to any extent inherently adapted to distinguish, then the applicant’s pre-filing use of the word mark was insufficient to demonstrate this sign had acquired a secondary meaning in relation to the relevant class 35 Services. The applicant’s use referred to the applicant as a corporate entity which operates medical centres, but the secondary meaning acquired from such use is not in connection with the relevant class 35 Services. Again, there was no basis for the Full court to disrupt the primary judge’s conclusion under the s41(6) ground.

Section 42

The Full Court upheld the primary judge’s conclusion that use of the trade marks would be contrary to the Australian Consumer Law as conduct likely to mislead or deceive due to a false representation that the applicant provides primary health care services. However, the Full Court agreed with the applicant that there was a lack of clarity or ambiguity in the formulation of the second misrepresentation by the primary judge that the applicant is responsible for the health and medical services provided by the practitioners within the applicant’s medical centres. This was particularly attributable to the lack of clarity in the words “responsible for”. However, this error was not material in light of the finding that there was a false representation that the applicant provides primary health care services.

The applicant also argued that the primary judged erred in finding likelihood of confusion under s43 and then using this as a basis for the finding of misleading or deceptive conduct with the higher standard of proof required under s42. However, the Full Court considered the primary judge did properly consider misleading and deceptive conduct as well as mere confusion.

Section 43

Greenwood and Katzmann JJ construed s43 by reference to “denotation” being the role of the relevant sign to be inherently adapted to function as a trade mark (in the sense of being capable of distinguishing the applicant’s Services from those of others) and “connotation” being an implied or secondary meaning to that which is denoted. Hence, s43 is concerned with whether the mark subject of the application (or a sign contained in the mark) connotes something other than a connection in the course of trade between the relevant Services and the person who applied (or intended to apply) it to those Services. It is not necessary, as Rangiah J considered, to isolate a primary meaning of the relevant word or words as a pre-condition to identifying a relevant connotation.

The applicant’s trade marks were contrary to s43 because they connote the applicant is the provider of first level or first contact health care. This connotation is likely to deceive or confuse because the applicant does not provide such services to patients.

Proposed amendments

The applicant’s proposed amendments to the specification of services as well as the entry of a limitation or disclaimer directed to limiting the services to those provided to medical professionals and not to patients or other members of the public attending the medical centres were rejected. There was no reason to depart from the primary judge’s findings that such amendments lacked utility and would introduce unacceptable ambiguity. Consequently, they did not assist in making the trade marks distinctive of the Services. The applicant also tried to introduce a new condition which was not put to the primary judge, but that was also rejected.