Bendigo and Adelaide Bank Limited v Community First Credit Union Limited  FCAFC 31 (11 March 2021)
Unsuccessful appeal by Bendigo and Adelaide Bank (BAB) from the judgement of Markovic J ordering cancellation of registrations for its COMMUNITY BANK logo (shown below) and word marks (the Bendigo Marks) covering various financial and insurance services in class 36.
BAB was refused leave to appeal the judgement of Markovic J setting aside the decision by the Registrar to refuse registration of trade mark applications by Community First Credit Union (CFCU) for COMMUNITY FIRST BANK and COMMUNITY FIRST MUTUAL BANK (the CFCU Marks) for various financial services in class 36. Middleton and Burley JJ found there was no merit to BAB’s arguments nor even a clear prima facie case of error in the decision of the primary judge.
Thawley J agreed with Middleton and Burley JJ, and provided some brief additional reasons.
The judgement of the primary judge is reported at
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 under s41, namely 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. 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 ss 42(b), 43, 59 and s88(2)(c), but considered those grounds could not be established.
Under the s59 ground, CFCU argued 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.
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.
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 marks and there was sufficient evidence to support this intention.
BAB’s appeal was confined to the s41 distinctiveness ground for cancelling the registrations for the Bendigo Marks.
CFCU filed a Notice of Contention seeking to uphold the primary judge’s finding that the Bendigo Marks were not distinctive on the alternative basis that the term “community bank” contains a direct reference to or indicates the kind, quality, intended purpose, or some other characteristic of the registered services.
Further, CFCU contended that the primary judge erred in finding that it had not established a prima facie case under s 59 of the TM Act for lack of intention by BAB to use the Bendigo Marks.
CFCU also contended that the primary judge ought to have determined to remove the Bendigo Marks from the Register under s 92(4), being an independent ground for removal for lack of use.
Middleton and Burley JJ noted there were three issues in the appeal. Firstly, whether “community bank” means simply a provider of financial services that services a particular community, so that it does not distinguish the relevant services from those of other traders. Secondly, whether BAB’s use of the term “community bank” meant that term had become distinctive of the relevant services even if it was not originally so. The third arose from CFCU’s notice of contention as to whether there was sufficient intention to use the Bendigo Marks within the meaning of either s 59 or s 92(4).
Their Honours found that the primary judge did not err in her conclusions under the s41 ground for rectification and hence it was unnecessary to consider the issues raised under ss59 and 92(4).
There was no inconsistency in the primary judge’s finding as to the ordinary signification of “community bank”. The existence of more than one possible meaning of the term “community bank” (attributable to how a community may be defined) did not result in that term not having the ordinary signification found by the primary judge.
Any lack of use of the term “community bank” due to the tightly regulated environment for using the word “bank” did not prevent that term having an ordinary meaning flowing from the natural English meanings of the words “community” and “bank”.
BAB also argued that the ordinary signification of the term “community bank” stemmed from its development of a community bank franchise model to establish local bank branches in rural and suburban communities. However, their Honours considered that, although BAB’s community bank franchise model was novel, at the relevant priority dates, BAB had used this term to convey the meaning of a provider of ordinary banking services to a particular local community. Hence BAB’s own use of this term was consistent with the ordinary signification found by the primary judge and insufficient to alter the natural meaning derived from the individual words.
There was also evidence of other financial institutions using “community” before and after the relevant priority dates in relation to the provision of financial services. Their Honours considered this was sufficient to support the primary judge’s findings as to ordinary signification.
BAB argued that the ordinary meaning of the term “community bank” as found by the primary judge differed from the meanings put forward by CFCU. However, their Honours noted that the existence of more than possible meaning does not mean that a term is not capable of ordinary signification. Further, notwithstanding that the primary judge’s findings did not correspond precisely with CFCU’s pleaded case, it remained open on the evidence for the primary judge to reach the conclusion that she did and there was no error.
BAB argued the primary judge erred in finding the term “community bank” was directly descriptive of the relevant services. However, their Honours agreed with CFCU that the primary judge used the expressions “directly descriptive” and “direct reference” interchangeably and there was no relevant distinction of substance when applying s41. The term “community bank” directly refers to both the recipients of the services and the nature of the provider of those services. While there may be further possible meanings of the term “community bank” that convey covert, skilful or metaphorical allusions to undefined and unspecified concepts or notions, the words carry a natural English meaning that is apt to refer to attributes of the relevant services. Their Honours were also persuaded that the term “community bank” was directly descriptive of the services, or directly referred to a quality or some other characteristic of the services as at the relevant priority dates and prima facie not suitable for registration.
Hence, their Honours did not consider the primary judge erred in finding that the Bendigo Marks were not to any extent inherently adapted to distinguish the relevant services from those of other persons within the meaning of s 41(3).
Their Honours then went on to consider the application of s41(6), namely that because of the extent to which BAB had used the Bendigo Marks as trade marks before the relevant priority dates, the Bendigo Marks did distinguish the relevant services. The primary judge recognised that use of words in conjunction with or close proximity to other brand elements may still constitute trade mark use of those words (i.e. double trade mark use). However, here the presence of other Bendigo brand indicia diluted the trade mark significance attaching to the term “community bank” alone. Again, no error by the primary judge was found. The words “community bank” were presented in a setting where those words would not have appeared to the viewer as possessing the character of a brand for the purpose of indicating a connection in the course of trade. While the evidence included instances where the term “community bank” was used independently of other Bendigo brand indicia (particular as the name of a stadium), those instances did not support trade mark use of that term in relation to the relevant services. Hence, their Honours found no error in the primary judge’s evaluation that BAB had not used the Bendigo Marks as trade marks before the relevant priority dates so as to distinguish the relevant services within the meaning of s 41(6).
Middleton and Burley JJ refused BAB’s application for leave to appeal the primary judge’s decision rejecting BAB’s opposition to registration of the CFCU Marks.
BAB contended the primary judge erred in finding that BAB did not have a reputation in the COMMUNITY BANK word mark sufficient to establish the ground of opposition under s60. However, their Honours agreed with the assessment by the primary judge that a substantial amount of evidence relied on by BAB for the purpose of s 60 was of use of the words “community bank” as either an aspect of the registered composite mark or in combination with the B Bendigo Mark or the Bendigo Bank Mark. The overall impression from the material as at CFCU’s relevant 1 March 2013 priority date was of these marks and not the COMMUNITY BANK word mark. There was no error by the primary in finding that BAB did not have a reputation in the COMMUNITY BANK word mark sufficient to establish the ground of opposition under s60.
BAB relied on the same evidence and submissions in seeking leave to appeal under the s42(b) ground that use of the CFCU Marks would also be misleading or deceptive and contrary to the Australian Consumer Law (ACL). Given the finding of the lack of sufficient reputation under s60, the s42(b) ground of appeal was without merit.
Under the s44 ground of appeal, BAB contended the primary judge erred in finding the CFCU Marks were not deceptively similar to the COMMUNITY BANK word mark registration. Given that their Honours had already found this word mark registration should be cancelled and the discretion under s44(3)(b) is exercised with regard to the circumstances as they exist at the time that the discretion is exercised rather than as at the priority date of the application for registration, it was unnecessary to further consider the s44 ground even if the primary judge had erred in finding the CFCU Marks were not deceptively similar to B&B’s COMMUNITY BANK word mark registration.
Thawley J agreed with Middleton and Burley JJ. His Honour also provided some brief additional reasons.
Under the rectification appeal, his Honour noted that many phrases are capable of different meanings, but this does not prevent them from having a usual meaning or being commonly understood by reasonable members of the public in a particular way. There was no error in the primary’s judge’s identification of the ordinary signification of the term “community bank”. It was not inherently adapted to distinguish BAB’s relevant services and s41(3) applied. There was also no error by the primary judge in finding the evidence relied upon by BAB was insufficient to satisfy factual distinctiveness under s41(6).
Under the application for leave to appeal the opposition decision, Thawley J considered there was no error by the primary judge in her assessment as to lack of sufficient reputation of BAB’s COMMUNITY BANK word mark, particularly as much of the evidence relied upon showed use of these words in conjunction with and dominated by references to Bendigo. Further, given the COMMUNITY BANK mark was not validly registered due to insufficient distinctiveness and was to be removed from the register, the discretion under s44(3)(b) to refuse registration of the CFCU Marks would not be exercised. Registration of the CFCU Marks would not result in there being similar trade marks on the register liable to cause confusion.