Community First Credit Union Limited v Bendigo and Adelaide Bank Limited  FCA 1553 (20 September 2019)
Successful rectification application by Community First Credit Union (CFCU) for cancellation of registrations by Bendigo and Adelaide Bank (BAB) for its COMMUNITY BANK logo (shown below) and word marks (the Bendigo Marks) covering various financial and insurance services in class 36.
CFCU was also successful in its appeal against the Registrar’s decision refusing registration of its applications for COMMUNITY FIRST BANK and COMMUNITY FIRST MUTUAL BANK (the CFCU Marks) for various financial services in class 36.
BAB was, before the Registrar, successful in opposing registration of the CFCU Marks based on its prior registrations for the Bendigo Marks and CFCU was unable to establish honest concurrent use, other circumstances or prior continuous use. The Bendigo Marks dated from 8 February 1999 and 24 August 2001.
Banks, credit unions and building societies are approved deposit taking institutions (ADIs) and, from 2000, most larger credit unions and building societies have been authorised by the Australian Prudential Regulatory Authority (APRA) to use the term “bank”, “banker” or “banking” in relation to their banking activities. CFCU is one such ADI.
BAB had been using the term “community bank” with the approval of the regulator at the relevant times, namely the Reserve Bank of Australia (RBA), which required BAB to use the words “community bank” only in a way which showed a connection to BAB. This was under a franchise model where BAB held the requisite regulatory approval and the franchisees’ profits went to BAB. The franchisees existed to benefit BAB, rather than to benefit the local communities where BAB’s community bank branches were established.
CFCU wants, subject to ultimately obtaining APRA’s consent, to change its status from a credit union to a bank or mutual bank and, on 1 March 2013, applied to register the CFCU Marks.
Under s88(2)(a), rectification of the Register can be sought on any ground on which registration of the Bendigo Marks could have been opposed as at their relevant priority dates in 1999 and 2001.
The primary ground relied upon by CFCU for rectification was that the Bendigo Marks were not sufficiently distinctive as at their 1999 and 2001 priority dates. Markovic J agreed with CFCU that, at those times, the ordinary meaning of “community bank” was descriptive of the provision of financial services to a group of people brought together by a common feature, such as geography and other traders might, without any improper motive, wish to use those words in connection with their similar services. Consequently, the Bendigo Marks were not to any extent inherently adapted to distinguish BAB’s relevant services from the services of others under s41(3) of the Trade Marks Act as it then stood. Rather curiously, her Honour did not separately deal with the inclusion of the B Device in BAB’s logo mark as imparting any distinctiveness. Her Honour then went on to consider whether BAB’s evidence of use of the Bendigo Marks prior to their priority dates could establish the acquisition of factual distinctiveness under s41(6). There was no such evidence of use of the logo mark and her Honour did not consider the evidence relied upon by BAB showed use of the words “community bank” prior to August 2001 as a trade mark. Indeed, much of BAB’s evidence showed use of its registered composite mark below:
The presence of Bendigo branding on the vast majority of the material made it difficult to conclude that “community bank” had become distinctive on its own.
Although not necessary to decide, Markovic J also went on to consider the other grounds for rectification relied upon by CFCU.
Under s43, CFCU argued that, at the relevant priority dates, the words “community bank” connote a bank which is owned and managed locally and which serves the needs of the local community, and use by BAB of the Bendigo Marks was likely to deceive or cause confusion because BAB was not a “community bank” within the ordinary meaning of these words. However, her Honour did not think the evidence supported such a connotation.
CFCU relied on a similar reasoning to argue that, under s42(b) use of the Bendigo Marks would, at the relevant priority dates, be contrary to law, namely misleading or deceptive under s52 of the Trade Practices Act then in force because BAB was not a “community bank” as those words were understood by consumers. However, Markovic J also found that ground could not be established.
Under s44, CFCU relied on its prior registration for its COMMUNITY FIRST word mark dating from 23 October 1998. Markovic J considered that, in the context of banking and financial services, the Bendigo Marks were not deceptively similar to CFCU ‘s registered COMMUNITY FIRST mark and so that ground also failed.
CFCU also relied on s59 to argue that, at the relevant priority dates, BAB had no intention to use the Bendigo Marks. Rather, at all material times, it intended to use and did use the composite mark shown above because that complied with the requirements of the RBA at the relevant times which required BAB to use the words “community bank” only in a way which showed a connection to BAB. However, Markovic J did not think CFCU had discharged its onus of establishing a prima facie case of lack of intention so as to shift the onus on to BAB to substantiate its intention beyond the mere filing of the applications to register the Bendigo Marks.
CFCU also relied on a further ground for rectification under s88(2)(c), namely that because of circumstances applying at the time the application for rectification was filed on 14 August 2017, use of the Bendigo Marks is likely to deceive or cause confusion. CFCU contended that as at that relevant date the words “community bank” possessed their ordinary English meaning and signification, being a bank that is owned and managed locally and which serves the needs of the local community. CFCU argued that the use of the Bendigo Marks has become deceptive or confusing for the same reasons it raised in support of its contentions that the Bendigo Marks could have been opposed under s42(b) and s 43. However, once again, the evidence did not support this ground. It could not be said that the definition relied upon was the only available definition or the ordinary signification of the term “community bank”.
The power for the Court to order rectification of the Register is discretionary. As Markovic J had found that a ground for rectification had been established under s88(2)(a), namely that registration of the Bendigo Marks as at their relevant priority dates in 1999 and 2001 could have been opposed under the s41 distinctiveness ground, her Honour then needed to consider whether there was any discretionary basis for not ordering cancellation of the registrations for the Bendigo Marks. After considering the evidence and the submissions on this aspect, her Honour considered there was no sufficient reason to not order cancellation. Significantly, BAB will be able to continue using the composite mark which it had already registered from October 1997. It will also be able to use the term “community bank”, but not exclusively.
BAB’s opposition to registration of the CFCU Marks was based on grounds under ss42(b), 44, 58A and 60. Significantly it relied on use and registration of its COMMUNITY BANK word mark.
Markovic J firstly considered the s60 ground based on the Australian reputation of BAB’s COMMUNITY BANK word mark as at 1 March 2013 and found that this word mark had not, by itself, acquired the requisite reputation. In almost all cases the COMMUNITY BANK word mark appeared with the B Bendigo Mark or the Bendigo Bank mark and was rarely, if ever, used on its own.
Significantly, under the s44 ground, her Honour did not consider the CFCU Marks to be deceptively similar to BAB’s registered COMMUNITY BANK word mark. The other words in the CFCU Marks renders them both visually and aurally different to COMMUNITY BANK. Also, a degree of care would likely be taken by even less sophisticated consumers when acquiring financial and insurance services.
Markovic J also went on to consider honest concurrent use and other circumstances in case she was wrong on the deceptive similarity issue. Honest concurrent use could not be established because her Honour did not consider use by CFCU of its registered COMMUNITY FIRST mark to constitute use of either of the CFCU Marks. The addition of BANK and MUTUAL BANK substantially affected the identity of these marks. However, her Honour would have favourably exercised discretion under the ‘other circumstances’ provision given use by CFCU since 1993 of COMMUNITY FIRST and the fact that CFCU could not trade by reference to the CFCU Marks without approval from APRA.
Since the CFCU Marks were originally accepted with a s44(4) prior continuous use endorsement, BAB also relied on s58A as a ground of opposition. However, this could not be sustained because, as a threshold issue, Markovic J had found the CFCU Marks were not deceptively similar to BAB’s COMMUNITY BANK word mark and, in any event, CFCU had not succeeded under s44(4).
Under the s42(b) ground, BAB argued that use of the CFCU Marks would be contrary to s66 of the Banking Act because, as at the 1 March 2013 priority date, CFCU had not obtained APRA’s consent to use the term “bank”. However, Markovic J followed earlier authority and was satisfied that the trade mark applications were filed on an intention to use basis and CFCU would apply for APRA’s consent after having obtained registration.
BAB also argued that use of the CFCU Marks would also be misleading or deceptive and contrary to the Australian Consumer Law (ACL) in that it would suggest a misleading representation, connection, association or sponsorship in circumstances where CFCU had no reputation for operating a bank. However, again this was rejected. Markovic J noted that CFCU would not in fact use the CFCU marks until APRA had given its approval for it to do so. CFCU’s conduct would only be in breach of s 18 and/or s 29 of the ACL if it used the CFCU Marks absent that approval.
Finally, BAB relied on s59 and argued that CFCU did not have a relevant intention to use the CFCU Marks, but this ground also failed. The filing of the applications to register the CFCU Marks was prima facie evidence of CFCU’s intention to use these mark and there was sufficient evidence to support this intention.
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