InIP: What's happening in intellectual property - April 2023

Your regular wrap-up of some of the world's leading and intriguing IP stories 6 min read

High Court says yes to instant BOTOX alternative

By Rob Vienet

The High Court of Australia recently ruled in favour of Self Care in the dispute concerning Allergan's injectable pharmaceutical products (BOTOX) and Self Care's anti-wrinkle products (INHIBOX and PROTOX).

We previously reported on the Federal Court's decision and the Full Federal Court's decision. In its unanimous judgment, the High Court ruled as follows.

• Self Care did not infringe BOTOX under section 120(1) of the Trade Marks Act 1995 (Cth) (the Act) by its use of the phrase 'instant Botox® alternative'. That was because Self Care did not use that phrase as a trade mark.
• Self Care did not infringe BOTOX under s 120(1) of the Act by its use of PROTOX. That was because PROTOX was not deceptively similar to BOTOX, assuming fair and normal use of the marks in a notional context in relation to anti-wrinkle creams.
• Self Care was not liable under the Australian Consumer Law (the ACL). That was because use of the phrase 'instant Botox® alternative' did not contain a representation that the wrinkle-reducing effects of INHIBOX products would last for the same duration as the wrinkle-reducing effects of BOTOX products.

In reaching these findings, the High Court stated the following significant principles.

• First, in assessing whether a sign has been used as a trade mark, the relevant question is whether it was used to indicate a connection in the course of trade between the alleged infringer's goods (eg INHIBOX) and the alleged infringer (eg Self Care). It is wrong to ask whether the sign was used to indicate a connection in the course of trade between the alleged infringer's goods (eg INHIBOX) and those of the registered owner (eg Allergan).
• Secondly, in assessing deceptive similarity under s120(1) of the Act, reputation of the registered mark should not be taken into account.
• Thirdly, in assessing deceptive similarity under s120(1) of the Act, it is necessary to consider the actual circumstances in which the alleged infringer has used the allegedly infringing mark.
• Fourthly, in assessing whether or not the use of particular words is misleading or deceptive under the ACL, it is necessary to consider their effect in light of the immediate context (eg the surrounding words on the packaging) as well as the broader context (eg the class of consumers to whom those words are directed).

You can read the High Court's decision, Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8, here.

The Full Federal Court hands down a class-y trade marks decision

By Jacob Flynn

A recent Full Federal Court decision will have consequences for the interpretation of goods and services in all areas of trade mark practice.

Trade marks are registered for given goods and/or services. In 1957 the World Intellectual Property Organization developed an international system called the Nice Classification, which sorts goods and services into 45 numbered classes – eg vehicles are in class 12, chocolate is in class 30 and telecommunications services are in class 38. The Nice Classification has been adopted in Australia, and its class numbers are commonly used both by trade mark attorneys and IP Australia to perform trade mark searches.

The Federal Court has previously confirmed that the Nice Classification can be referred to when interpreting the scope of goods and services. For example, the court has referred to the Nice Classification in determining that 'fish' in class 29 includes crayfish, mussels, oysters and shellfish for human consumption. It has adopted a similar approach when construing 'thermoplastic polymers (for packaging)' in class 16 and 'cosmetics' in class 3.

However, in Energy Beverages LLC v Cantarella Bros Pty Ltd [2023] FCAFC 44, the Full Federal Court recently cast doubt on that approach. Its decision emphasises that the Nice Classification is primarily a matter of convenience in administration – it is not decisive as to the scope of a registration. This shift in approach laid the groundwork for the court's finding that 'non-alcoholic beverages' in class 32 includes coffee beverages – notwithstanding that coffee beverages are classified separately under class 30.

An application for special leave to appeal to the High Court has been filed. However, unless and until that court endorses a different approach, it is important to focus primarily on the description of goods and services listed in a trade mark registration, without that description being coloured by class numbers.

Case of deja brew in bewildering packaging dispute 

By Ryan Balkin

Recent developments have highlighted the challenges of defending a distinctive get-up in a saturated market. On 8 February 2023, Justice Stewart dismissed Brick Lane Brewing Co Pty Ltd's claims of misleading and deceptive conduct and misleading and false representations under the Australian Consumer Law (the ACL) against Torquay Beverage Co Pty Ltd, regarding similarities between their respective alcoholic beverages.

As part of its Sidewinder range, Brick Lane released Hazy Pale via a social media campaign on 21 July 2021 and it was available for sale on 3 August 2021. On 26 July 2021 Torquay released Better Beer via an ASX Announcement, and it was available for sale in late October 2021. Brick Lane and Torquay also respectively launched XPA Deluxe, for sale in early December 2021; and Better Beer Ginger Beer, launching on 18 April 2022.

Image 1 shows both lines have similar get-ups: off-white 355ml cans, and stripped designs of similar block colours with corresponding off-white cardboard cases when sold.

Each company sought to register its marks: Torquay filed 13 August 2021, Brick Lane on 1 November 2021.

Departing from 'thirsty folk want beer, no explanation' (Montgomery v Thompson [1891] AC 217, 225), His Honour commented that these products occupy different segments of the market, but 'together they might be considered as part of a "health-conscious" segment' (Brick Lane Brewing Co Pty Ltd v Torquay Beverage Co Pty Ltd [2023] FCA 66 [94).

ACL breaches require established reputation of the brand's get-up for the relevant consumers to be misled or confused by alternative products. The relevant date for alleged conduct and, subsequently, reputation is when 'public-facing activities using that get-up commenced.' (Brick Lane Brewing Co Pty Ltd v Torquay Beverage Co Pty Ltd [2023] FCA 66 [48]).  

Justice Stewart held that five days was not enough time for Brick Lane to establish the relevant reputation with consumers of their Sidewinder get-up compared with Torquay's Better Beer range. Although four months separated launches of Brick Lane's XLD Deluxe and Torquay's Better Beer Ginger Beer, His Honour found that both brand's reputations had developed concurrently in the market, becoming distinctive .

As well as finding the relevant date of alleged offending conduct is when a product or its marketing is available to the public, he found that reputation of brand get-up can be established through earlier associated products. Further, in a saturated market, similar get-ups of like goods may not be misleading if there are sufficient differences – in this case, clear and prominent names.

Although Brick Lane did not appeal to vary paying costs, it can still appeal the decision. Additionally, the outcomes of the respective trade mark oppositions are still pending. Both Brick Lane and Torquay have expanded their ranges, with the launch of Brick Lane's non-alcoholic Lime and Passionfruit XPA, and Torquay's relabelling their original Better Beer to Better Beer Middy and introducing Zero Alc, mid-strength and non-alcoholic beer. This may inspire Brick Lane to bring similar actions relating to those products. Watch this space!

Business owners and marketing executives, be sure to apply for registration of key branding. Trade mark infringement proceedings are cleaner and easier than proving reputation to support passing off proceedings. Not surprisingly, a reputation takes time to develop. Five days is not long enough to develop an actionable reputation. Four months may be.

Copycat crunch: Aldi faces legal action over snack similarities

By Ioana Sabau

Supermarket chain Aldi is facing legal action by Hampden Holdings over alleged copyright breaches relating to the food brand, Little Bellies.

Every Bite Counts manufactures and sells Little Bellies products using trade marks and copyrighted artworks under licence from Hampden Holdings, the owner of the intellectual property. Hampden Holdings alleges that Aldi's Mamia Organic Baby Puffs products have infringed its copyright in the artworks on the packaging of Little Bellies, with the Aldi products reproducing a substantial part of the artworks.

As far as we can ascertain, this is the first case against Aldi Australia alleging copyright infringement regarding its products. Previous cases in Australia for similar 'copying' focused on trade mark infringement and misleading or deceptive conduct, not copyright infringement. For example, in Moroccanoil Israel Ltd v Aldi Foods Pty Ltd [2017] FCA 823, Aldi successfully defended a trade mark infringement claim. The Federal Court found in favour of Aldi that although there were 'similarities in the get-up', these were 'immaterial' to a trade mark infringement claim.

In the United Kingdom, Aldi was found to have infringed supermarket chain Marks & Spencer's designs in a light-up gin bottle, in Marks and Spencer PLC v Aldi Stores Limited [2023] EWHC 178. This followed a separate copyright infringement claim that settled, in which Marks & Spencer alleged that Aldi had infringed its copyright in artworks on Marks & Spencer's 'Colin the Caterpillar' cake.

Time will tell whether Australian courts will likewise find that Aldi Australia has infringed copyright.

UK courts grapple with Bitcoin technology

By Sophie Clapin and Stefan Ladd 

Two recent decisions involving legal claims brought by Dr Craig Wright (or his company, Tulip Trading Ltd) have shed light on UK courts' treatment of various technical aspects of Bitcoin from the perspective of both copyright law and fiduciary duties. Readers may be familiar with Dr Wright, an Australian computer scientist who has controversially claimed to be the creator of Bitcoin, and to have written the original Bitcoin code and have authored the Bitcoin 'White Paper' (describing the Bitcoin system), under the pseudonym 'Satoshi Nakamoto'.

In Wright & Ors v BTC & Ors [2023] EWHC 222 (Ch), the English High Court was asked to consider whether copyright subsists in the 'Bitcoin File Format' used in the Bitcoin system. For context, the Bitcoin File Format describes the structure of each block in the Bitcoin blockchain (such as the data fields and their sequencing). The court ultimately determined that copyright did not subsist in the Bitcoin File Format, as 'no relevant "work" [had] been identified containing content which defines the structure of the Bitcoin File Format'. The court observed that while the law of copyright 'will continue to face challenges with new digital technologies', it did not see 'any prospect of the law as currently stated … allowing copyright protection of subject-matter which is not expressed or fixed anywhere'.

In Tulip Trading Ltd v van der Laan [2023] EWCA Civ 83, Tulip Trading claimed that it owned Bitcoin worth around US$4 billion, but had lost access to that Bitcoin due to a hack. It argued that the defendants (open-source software developers who developed the 'Bitcoin Core' and 'Bitcoin Cash ABC' software) owed it a fiduciary duty to enable it to re-access its Bitcoin. Accordingly, Tulip Trading sought a declaration that it owned the Bitcoin in question, as well as orders requiring the defendants to take reasonable steps to ensure that it had access to the Bitcoin (or, alternatively, for equitable compensation or damages). The England and Wales Court of Appeal held that the case raised a serious issue to be tried. According to the court, there was a plausible argument that Bitcoin developers could owe fiduciary duties to the owners of Bitcoin property. These might include:

• a duty to not introduce features for their own advantage that compromise owners' security;
• a duty to introduce code to fix bugs; and
• even a duty to take active steps to introduce code, so that an individual owner's Bitcoin can be transferred to safety, or to grant access to a hacked Bitcoin wallet.

The court noted in this regard that Bitcoin owners are in a position where they cannot avoid placing their property into the care of developers. However, the question of whether there are, in fact, such duties is one that should be decided once the facts are adequately established, at trial.

Interested readers should stay tuned for updates in this space, as both UK courts and others around the world continue to grapple with the complexities of Bitcoin technology, and how it fits into existing legal frameworks.

UK court rules again on FRAND licences 

By Sarah Muller and Tommy Chen

The English High Court has determined what constitutes fair, reasonable, and non-discriminatory (FRAND) terms in relation to a licence for standard essential patents (SEP). The decision is the second time the court has determined substantive terms of a FRAND licence, including royalty rates, on a global basis.

The case concerned the terms on which Lenovo Group Limited (and its related bodies) (Lenovo) should be granted a licence to patents owned by InterDigital Technology Corporation (and related bodies) (InterDigital), which had been declared essential to the European Telecommunications Standard Institute's 3G, 4G and 5G Standards.

The court considered whether offers made by the parties were FRAND, and if not, what constituted FRAND terms. Lenovo had proposed a lump-sum licensing rate of US$80 million (plus or minus 15%), while Interdigital proposed US$337 million. The court rejected both options, finding that neither offer was FRAND. Rather, it held that Lenovo must pay US$138.7 million, reflecting US$0.175 per device sold between 2007 and 2023.

While Interdigital was successful, the licence fee granted was significantly less than the amount it sought and was closer to Lenovo's proposed rate – Lenovo has stated it considers the judgment a 'major win'. It was given the option to elect to pay the licence fee or be subject to an injunction in the UK, and opted to enter into the licence.

In a parallel development, the European Commission's proposed new regulations for SEPs were released on 26 April 2023. The proposed regulations refer to a new register of SEPs applicable to a standard, and include procedures for essentiality checks and FRAND determinations. The regulations would be implemented by a new 'competence centre' operating under the European Union Intellectual Property Office.

UK set to accede to the CPTPP, but no alignment with Australia on 12-month grace period

By Bryanna Workman

The terms governing the United Kingdom's (UK) accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) have been substantively finalised and, as part of the negotiations, the UK has secured an exemption from the obligation to provide a 12-month grace period for patent applications.

On 1 February 2021, the UK formally requested accession to the CPTPP, a free trade agreement which includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. On 31 March 2023, the UK Government announced that negotiations concerning the UK's accession had substantially concluded. However, the announcement confirmed that the UK will not be required to make any changes to its domestic law regarding grace periods until other international conventions to which the UK is party, including the European Patent Convention (EPC), have been amended to allow a grace period. The UK undertook to promote international harmonisation on the issue, and to report annually to other CPTPP members on progress.

The Intellectual Property chapter of the CPTPP includes an obligation for CPTPP members, when assessing novelty or inventiveness, to disregard public disclosures of information made by the patent applicant, or a person that obtained the information directly or indirectly from the patent applicant, in the 12 months prior to the filing date of the patent application. In contrast, the EPC and UK law applies a strict 'absolute novelty' test, meaning that a patent applicant's own disclosures can constitute prior art.

It was hoped that the UK's accession to the CPTPP would align it with Australia's patent practice in the near future. However, the exemption means that there will be no change in UK patent practice in respect of prior art, and patent applicants cannot rely on a 12-month grace period when filing UK patent applications.

The CPTPP will enter into force for the UK after an Accession Protocol has been finalised and each CPTPP member has completed its domestic ratification procedures to approve the accession.

Coca-Cola's trade mark removed from Register of Trade Marks for non-use in Australia

By Saye Kaeo Saylan

The Australian Trade Marks Office (the ATMO) recently removed Coca-Cola Company's trade mark from the Register of Trade Marks (the Register) because it was not being used in Australia.

A trade mark can be applied to be removed from the Register when it has not been used in Australia by the registered owner for a continuous period of three years (ending one month before the application is filed) (the relevant period).

Garth Stanley applied for Coca-Cola's trade mark image of a smiling and winking lemon (the trade mark) (pictured below) to be removed for non-use in the class of non-alcoholic beverages. The trade mark is displayed on Coca-Cola's product Hubert's Lemonade.

After assessing evidence provided by Coca-Cola (which had the onus of rebutting the application), the ATMO decided that the trade mark was not used in Australia during the relevant period. Coca-Cola's evidence demonstrated that the Hubert's Lemonade product displaying the trade mark was promoted in the US and Canada, but it was not clear that this advertising was targeted at Australian customers. Additionally, Coca-Cola was unable to provide invoices showing that Hubert's Lemonade was imported or sold during the relevant period in Australia. Coca-Cola tried to argue that Hubert's Lemonade was offered for sale by a convenience store in New South Wales; however, the evidence was undated or related to sales after the relevant period.

If reasonable to do so, the ATMO can exercise its discretion not to remove a trade mark despite a ground for removal being established. Coca-Cola had the onus of satisfying the ATMO that the discretion should be exercised in its favour. Relying on factors taken into consideration in previous cases, Coca-Cola argued that it has not abandoned the trade mark because it intends to sell Hubert's Lemonade directly to Australia in the future. The ATMO decided that Coca-Cola's ongoing interest in the trade mark was not sufficient to justify the exercise of its discretion.

Registered owners of trade marks seeking to rebut non-use applications should ensure that their evidence is specific to use in Australia. If a ground for removal is established, rebutters should identify, in as much detail as possible, the circumstances that might persuade the ATMO to exercise its discretion not to remove a trade mark.

Image source: https://search.ipaustralia.gov.au/trademarks/search/view/1513392