Trade Mark News & Information

Trademark Lawyers Australia – Federal Court – Chemist Warehouse

Verrocchi v Direct Chemist Outlet Pty Ltd [2015] FCA 234 (17 March 2015)

Unsuccessful application by Verrocchi and Gance seeking to restrain use by Direct Chemist Outlet of an allegedly similar get-up for their stores, catalogues and website.

The Applicants established the Chemist Warehouse business and from 2002 to January 2014, there were over 250 retail pharmacies across Australia which were controlled by the Applicants or licensed by them to use this name and associated get up.

The Respondent’s Direct Chemist Outlet business commenced in May 2006 with its first retail pharmacy store in Werribee, Victoria and from around that time to April 2014, there were 24 stores in Victoria, Queensland and New South Wales.

Essentially the dispute involved the use of the colours yellow, blue and red in combination with a red logo with white text and descriptive discount slogans on the external get up of the stores.            

Middleton J noted there was a lack of uniformity in the get up of the Applicant’s stores and promotional material. The use of colour, font and layout differed materially between them. The one constant was the Chemist Warehouse logo rendered in vibrant red with white lettering. It was this logo which communicated the Applicants’ brand to consumers. There was no distinctive consistency of appearance in the respective party’s catalogues and their websites were quite different. Indeed, the Applicants’ website varied substantially over time.

His Honour acknowledged that colour, where used as a key branding element, is not to be regarded as a trivial or insignificant component of a brand concept. However, some colours are known to have a functional element. Yellow is chosen for its high visibility and can be used for the value proposition of cheapness or heavily discounted goods or services. There was evidence of other retail chemist stores which had predominant use of yellow on their storefronts.

Middleton J reached the view that the Respondent undoubtedly copied many of the ideas and concepts of the Applicants, but did not do so with an intention to mislead or deceive consumers, or to pass off their stores as being associated with the Applicants. They did not adopt those elements uniformly and sufficiently distinguished their stores from those of the Applicants.

The Applicants failed because there was insufficient uniformity in their visual branding. There was no sufficiently common identity in the design and layout to give rise to an unusual or distinctive store get up (or catalogue or website design) associated with the Applicants. The Respondent had done enough to distinguish the trade indicia of their stores, catalogues and website such that consumers would not be likely to be misled or deceived. The Respondent used its Direct Chemist Outlet logo and its stores had a cleaner appearance and typically included lifestyle photo elements in their exterior get up, whereas the Applicants’ stores were consistently loud and cluttered with slogan bearing banners. His Honour considered that relevant consumers are more concerned with the identity of a store by reference to its logo than by any other feature of the get up.

The Respondent also used the slogan ‘Who is Australia’s Cheapest Chemist’ in the manner shown below:

Who is Australia's cheapest chemist logo

The Applicants used the slogan ‘Is this Australia’s Cheapest Chemist?” and registered this as a trade mark in August 2007 as shown below:

Is this Australia's Cheapest Chemist logo

However, Middleton J found this trade mark registration was not valid and upheld the Respondent’s cross claim on this issue. It lacked inherent adaptation to distinguish and the Applicant’s use of this slogan prior to the filing date was insufficient to support registration. Its significance was often diluted by the dominant Chemist Warehouse logo and other slogans of a similar nature which appeared nearby on stores, catalogues and the website.

Given this finding it was unnecessary for his Honour to consider trade mark infringement, but he did express the view that the Respondent was not using its slogan as a trade mark and hence infringement did not arise in any event ( even if the Applicant’s registration was valid). Consumers would not see this slogan as a reliable badge of trade origin on its own.