Phone Directories Company Australia Pty Ltd v Telstra Corporation Limited  FCA 373 (11 April 2014)
Murphy J has overturned Trade Marks Office decisions and held that Telstra’s application to register the word mark YELLOW should be refused because it is totally devoid of any inherent adaptation to distinguish and deceptively similar to earlier trade mark registrations for THE YELLOW ENVELOPE, YELLOW DUCK, YELLOW ZONE and YELLOW DOOR.
However, his Honour upheld the Trade Marks Office decision and refused Yellowbook.com.au Pty Ltd’s application to register the trade mark yellowbook.com.au on the basis that it was deceptively similar to Telstra’s various prior registrations for its YELLOW PAGES word mark and composite YELLOW PAGES & Walking Fingers device mark.
Telstra had been producing telephone directories since 1906 and enjoyed a statutory monopoly on telephone communications in Australia until the early 1990s. As a result, it had a substantial market advantage over any competitors in relation to telephone directories.
In 1975, Telstra commenced use of YELLOW PAGES and yellow coloured pages for its directories and subsequently also used its Walking Fingers logo. From 1975 to 1996, it distributed approximately 231 million directories and spent some $200 million in advertising. It subsequently promoted the YELLOW PAGES brand by various campaigns including the Hello Yellow campaign in the early 1980s, a Hello Yellow operator assisted directory service from 1993 to 1997 and the Find it in Yellow campaign from February 2005 to June 2006. In 1994, Telstra established its online directories at the yellowpages.com.au website.
In 2006, Telstra decided to move to move away from YELLOW PAGES and in September 2006 relaunched its print and online directories under YELLOW as the umbrella brand and changed its website to yellow.com.au. Despite spending some $20 million to advertise this change, Telstra’s market research indicated a negligible level of unprompted consumer awareness of YELLOW directories. As a result, in 2009 Telstra abandoned YELLOW as an umbrella brand and reverted to its YELLOW PAGES brand.
On the issue of distinctiveness of the word YELLOW as a trade mark, the evidence disclosed that other parties used Yellow and yellow coloured directories before and after Telstra filed its YELLOW trade mark application on 25 Jul 2003. Indeed, Telstra conceded that, when deciding to adopt its YELLOW PAGES and Walking Fingers logo in 1975, it was picking up on an international trend. Overseas use of Yellow and directories with yellow coloured pages was relevant because it goes to what hypothetical other traders in Australia are likely to do.
Murphy J also considered cases on colour marks because it is difficult to divorce the colour yellow from the word denoting that colour. Policy considerations also were against Telstra being allowed exclusive rights to the word YELLOW.
His Honour made a detailed analysis of the manner and context in which Telstra has used the word Yellow before and after the 2003 filing date. Apart from the re-branding to YELLOW in the three year period from 2006 to 2009, his Honour considered that there was very little trade mark use of this word. Rather, the use of this word predominantly referred back to the YELLOW PAGES brand. Any significance that the word Yellow had as a trade mark was substantially diluted by its association with YELLOW PAGES and the Walking Fingers logo. As a result, Murphy J found that, as at the 2003 filing date, Telstra failed to satisfy its onus and establish that YELLOW by itself did, in fact, distinguish its designated goods and services
Murphy J went on to note that, even if he was wrong and YELLOW did have same small degree of inherent adaptation to distinguish, the manner of use of this word by Telstra after the 2003 filing date was not sufficient to satisfy him that this word had the capacity to distinguish.
Given his Honour’s finding that the word YELLOW did not qualify for registration as a trade mark, it was not strictly necessary to deal with the other grounds of opposition. Nonetheless, he did express a view on the issue of deceptive similarity and found that the word YELLOW by itself was too close to the other earlier registrations for combination word marks containing YELLOW. Indeed, his Honour commented that it is “somewhat disingenuous for Telstra to now contend that if YELLOW is permitted to be registered, it will not be deceptively similar to the earlier cited marks”, particularly given that Telstra had aggressively protected its market position by threatening action against competitors on the basis that it had exclusive rights in the word Yellow by virtue of use of its YELLOW PAGES brand.
Given his Honour’s position on YELLOW being deceptively similar to these earlier combination word marks, it was not surprising that he also found yellowbook.com.au to be deceptively similar to Telstra’s earlier registrations for YELLOW PAGES and the composite YELLOW PAGES & Walking Fingers logo. Murphy J discounted the presence of .com.au and considered YELLOWBOOK and YELLOW PAGES to be visually and aurally similar because they start with the same word followed by another word of one syllable. Although “pages” and ”book” in the respective trade marks were not distinctive, each connotes the same concept and create the impression of a directory which is described as being yellow. His Honour reached this conclusion in the context of consumers often wanting to access a directory at the same time the information is needed and will want the answer speedily. They will often access directories while involved in other activities, including while in transit and through smart phones, tablets and similar mobile devices. As such, his Honour had “little doubt that consumers will give scant consideration to small differences in branding in these circumstances”. Accordingly, there was a real risk of consumers being initially confused even if such confusion might subsequently be dispelled.
It is also worth noting that, on the issue of standard of proof, Murphy J expressed a preference for the lower civil standard of balance of probabilities to be applicable, but considered that he would also be satisfied that the relevant grounds of opposition would be established on the higher standard of having to show that a trade mark should clearly not be registered.