Trade Mark News & Information

Trademark Lawyers Australia – Federal Court – Nappy Land

CI JI Family Pty Limited v National Australian Nappies (NAN) Pty Limited [2014] FCA 79 (14 February 2014)

Successful application by CI JI Family to restrain use of Nappy Land by NAN in New South Wales based on the Australian Consumer Law and passing off.

The applicant was essentially controlled by Mr Ngo (referred to as Russell), while the respondent was effectively controlled by Mr Ho (referred to as Martin). In 1997 a company associated with Martin entered into a partnership with Russell and they jointly registered Nappy Land as a business name in New South Wales. The partnership was dissolved in 1999 due to disagreements.

Russell continued to carry on business primarily in New South Wales and the State business name registration came to be held by Russell and his wife. They used the following trade mark:

NAPPYLAND Logo

 

Martin also continued to carry on business nationally and traded under the company name National Australian Nappies. Russell did not advertise in New South Wales but approached potential customers based in that State. The respondent registered Nappy Land as a business name in Victoria in 2000 and subsequently registered this business name in Queensland and South Australia, as well as obtaining and using the domain name nappyland.com.au . The respondent also registered and used the trade mark shown below with an effective registration date of 11 February 2002. From at least mid 2013, the respondent had a place of business in Smithfield, New South Wales.

NAPPY LAND Logo

The evidence was vague, but basically came down to a number of customers of the applicant receiving price lists from the respondent in 2013.

The applicant asserted there was an oral agreement reached in June 1999 that, following dissolution of the partnership, Russell would continue to operate in New South Wales and that Martin would not trade in that State. However, the judge was not satisfied with the evidence of this and considered the applicant had not discharged the onus of proof, so could not rely on any such agreement.

On the claims for misleading or deceptive conduct under the Australian Consumer Law and passing off, the respondent attempted to rely on its trade mark registration as a defence, but this was quickly dismissed. Section 230 of the Trade Marks Act makes it clear that possession of a registered trade mark is no defence to an action for passing off and the judge referred to case law finding that that there is nothing in the Trade Marks Act which confines the general operation of the Australian Consumer Law.

Rather curiously, the respondent did not make any counter-claim for infringement of its registered trade mark.

The judge reviewed authorities on misleading or deceptive conduct and passing off. He found the applicant had done enough to establish the respondent’s conduct in sending price lists to the applicant’s customers and answering telephone enquiries was misleading or deceptive, particularly in the context of the similarity between the respective trade marks. Although it was not strictly necessary to reach any conclusion on passing off, the judge did think that cause of action would also have been successful.

The judge considered the evidence relied upon by the applicant to establish loss or damage was less than satisfactory but, despite the difficulties, he concluded that an award of damages in the amount of $25,000 is within the bounds of accepted guess work and anything over that would venture into an exercise of imagination.