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

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

Sportsbet's RESCUE trade marks saved from revocation

By Ye Rin Yoo

Over June and July 2023, the Australian Trade Marks Office issued decisions in favour of Sportsbet, not to revoke the acceptance or registration of its trade marks for QUADDIE RESCUE, EXOTIC RESCUE, FIRST4 RESCUE, QUINELLA RESCUE and TOTE RESCUE, all for goods and services in Classes 9 and 41.

Sportsbet's trade marks had been the subject of Notices of Intention to Revoke Acceptance/Registration on the ground that a distinctiveness objection (section 41(4) of the Trade Marks Act 1995 (Cth) (the Act)) should have been raised during examination, as:

• QUADDIE is a common abbreviation of 'quadrella' (a type of bet);
• EXOTIC, FIRST4, QUINELLA and TOTE all refer to types of bets; and
• RESCUE means 'save'.

The Registrar has the power to revoke the acceptance/registration of trade marks (ss 38, 84A of the Act) if two limbs are satisfied:

• the trade mark should not have been accepted/registered when taking into account all of the circumstances that existed at that time; and
• it is reasonable to revoke acceptance/registration.

In Sportsbet's case, the Registrar accepted that the individual words (QUADDIE, EXOTIC, FIRST4, QUINELLA and TOTE) had meaning, but was not satisfied that the marks as a whole (those words combined with RESCUE) conveyed any meaning. They found the marks indicated the goods and services would 'save' a 'bet'; however, it wasn't clear what this actually meant. Even when taking into account the meanings of the individual words, the Registrar wasn't satisfied that the marks conveyed anything more than a 'skilful and covert allusion' such that a distinctiveness objection should have been raised during examination. They did not find the first limb to be satisfied and, hence, it wasn't necessary to further consider the second limb. Therefore, all four of Sportbet's trade marks were not revoked.

A revocation action is initiated by the Office; a third party can request revocation, but the Registrar is not obliged to consider and act on that request (if a third party wants to challenge the registration of a trade mark, it should file an opposition). It is rare for the Office to initiate a revocation action. If initiated, it is typically difficult for the applicant/owner to persuade the Office to withdraw that action with submissions alone, and so it becomes necessary to request a hearing. If revoked, the trade mark is returned to examination, so that the applicant/owner would need to incur the time and any costs to have it accepted/registered once again.

These decisions are interesting because they concern the rarely used revocation action, and show that – as Sportsbet did – it is possible to defend a trade mark in such an action.

Battle of the Sevens

By Stefan Ladd and Rob Vienet

In case you missed it, the Federal Court recently handed down its decision in an important trade mark dispute between two heavyweights – Channel Seven and 7-Eleven – in a case we are dubbing the 'Battle of the Sevens'!

It concerned Channel Seven's Australian trade mark registration for '7NOW'. 7-Eleven was seeking to have that registration removed in relation to certain goods and services, such as computer software and retail and wholesale services. 7-Eleven claimed that Channel Seven had not used the 7NOW mark in respect of those goods and services.

Interestingly, whether Channel Seven had used the mark turned on how it had used the associated domain name 7now.com.au within the alleged non-use period. For example, for part of that period, that domain simply redirected users to 7plus.com.au, which the court did not consider to amount to use of '7NOW'. It indicated that, in those circumstances, reasonable members of the public would have concluded that 7NOW was no longer in use.

While, eventually, 7now.com.au would lead users to a 7NOW website, the court remained unconvinced that the way in which the 7NOW mark was used on that website amounted to trade mark use in respect of each of the relevant goods and services at issue.

The case is an important reminder to businesses of the importance of actually using material trade marks in relation to the relevant goods and services for which they are registered, as well as of the dangers of relying on the mere use of an associated domain name.

Seven Network has filed leave to appeal, and a hearing of the Full Federal Court has been listed for 22 November 2023, so watch this space!

Lowering the bar for 'prompt and diligent' extensions of time in trade mark oppositions and non-use actions

By Ye Rin Yoo

From 31 July 2023, the Australian Trade Marks Office has broadened its interpretation of the 'prompt and diligent' ground for an extension of time for filing evidence in trade mark oppositions and non-use actions. (See the Official Notice and the Trade Marks Manual of Practice and Procedure.)

The Trade Marks Regulations 1995 (Cth) allow two grounds for an extension of time for filing evidence:

• the party has made all 'reasonable efforts' to comply with all relevant filing requirements and, despite acting 'promptly and diligently' at all times, is unable to file the evidence by the deadline; and
• there are 'exceptional circumstances'.

Those grounds were introduced by the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No. 1) (Cth), and sought to narrow the circumstances for an extension of time for filing evidence, to streamline oppositions and non-use actions. However, they perhaps 'raised the bar' too high, as they required a 'standard of perfection', and an extension of time for filing evidence became very difficult to obtain.

This change seeks to make it easier to obtain on the first ground, and also to align trade mark practice with that for patents. It broadens the interpretation of 'promptly and diligently' so that other circumstances don't preclude acting in that way. Examples the Official Notice lists are:

• mere slips;
• errors in recording follow-up dates;
• missing pages;
• unsigned declarations;
• technical errors encountered when submitting evidence; and
• other genuine errors that have caused failure to file when they're in the context of a reasonable plan for the preparation of evidence, otherwise executed promptly and diligently.

However, this still wouldn't include significant periods of unexplained delays.

Although the change seeks to remove the previous 'standard of perfection' that had to be met to show a party was acting 'promptly and diligently' at all times, it's still recommended parties treat the deadline as final, avoid delays in the opposition or non-use action, apply for any extension of time as early as possible and before the deadline, and keep a detailed plan and chronology that could explain the circumstances causing the delay if an extension is required.

It will be interesting to see the implications of this change, including:

• what other circumstances will now be acceptable for an extension of time on this ground;
• whether it will lower the evidentiary burden on the party to establish the ground;
• whether it will increase the number of objections raised to the granting of an extension of time;
• how it will otherwise affect the timing of oppositions and non-use actions; and
• how it will work with the provision that gives the Registrar discretion to consider evidence filed out of time, as they are not bound by the rules of evidence.

'Motorola to Hytera, do you copy?'

By Paul Mersiades

Justice Perram of the Federal Court recently published a 2,315 paragraph liability judgment (Motorola Solutions, Inc. v Hytera Communications Corporation Ltd (Liability) [2022] FCA 1585) regarding allegations by Motorola Solutions Inc (Motorola) that Hytera Communications Corporation Ltd and Hytera Communications (Australia) Pty Ltd (together, Hytera) infringed its patents and copyright in relation to digital mobile radios (DMRs). Motorola and Hytera are the two largest worldwide manufacturers of DMRs, which are widely used in public and private industries including construction, transport and hospitality.

Motorola has brought proceedings against Hytera in several countries, including the United States, China and Germany. In July 2017, it sued Hytera in Australia on three of its patents relating to its Time Division Multiple Access technology, which allows frequency channels within radio spectrum to be divided to allow the use of the same channel by multiple users. In December 2018, Perram J gave Motorola leave to add a substantial copyright infringement case, by which Motorola argued that Hytera infringed the copyright in 11 of the computer programs in its DMR firmware. Those computer programs were in the form of source code, which Motorola alleged Hytera had copied, compiled into object code, and installed on Hytera's DMRs.

Justice Perram found largely in favour of Hytera in respect of the patent infringement allegations. The court found that the claimed method in the first patent was obvious and that all of its asserted claims were invalid; that the claims of the second patent had not been infringed by Hytera; and that Hytera had only infringed the third patent prior to November 2019, at which time Hytera reprogrammed its devices to remove the infringement. However, his Honour held Hytera liable for infringement of the copyright in 6 of the 11 computer programs in suit, both:

• under section 37 of the Copyright Act 1968 (Cth), on the basis that Hytera imported the DMRs into Australia and knew, or ought reasonably to have known, that the making of the DMRs would have constituted copyright infringement had they been made in Australia; and
• under section 36(1), on the basis that Hytera communicated the firmware in Australia by making it available for download on its website.

The judge found that three Motorola employees downloaded thousands of confidential files comprising the source code before coming across to Hytera to help develop its DMR products. Justice Perram described this conduct as 'substantial industrial theft', 'morally reprehensible' and 'calculated theft', but since it occurred in China and did not constitute infringement under Australian law, it was not relevant to determining whether Motorola should be entitled to additional damages. His Honour found that Hytera's infringements were flagrant and indicated that additional damages would be available (should Motorola elect damages rather than an account of profits at the hearing on quantum).

Hytera has appealed Justice Perram's decision to the Full Court of the Federal Court, and Motorola has cross-appealed, meaning that the Australian chapter in this worldwide dispute is long from over.

X-celsior…!...? Trade mark implications of the X rebrand

By Nick Li

Twitter rebranded to 'X' following an 11th-hour tweet from Elon Musk announcing the change. Onwards and upwards indeed – but what are the trade mark implications of such a rushed rebrand?

To date, there is little evidence to suggest that X has any intention of incorporating trade mark registration as part of its brand protection strategy.

This is perhaps unsurprising given the difficulties in proving distinctiveness in a single letter of the alphabet. No Australian trade mark application has yet been made by any company within the X group – at least that's how it appears from trade mark searches. It is possible that X is seeking to accrue evidence to support a claim of widespread reputation and goodwill in the trade mark before facing down the trade marks examiner.

In any case, even if X (the company) can establish that X (the stylised trade mark) has extensive goodwill and reputation through use – it will still need to overcome many potential existing registrations for stylised X marks, many of which are held by companies who are not shy in starting opposition proceedings.

A search of Australian registered trade marks and pending applications comprising just 'X' alone or in a stylised form yields 366 results. All but one are in stylised form (impressively, Michelin has owned the trade mark for just the letter 'x' in respect of pneumatic tyres in class 12 since 1972). 

Many of the existing registered trade marks are likely to pose an obstruction to the registration of Elon's X trade mark. Microsoft owns stylised 'X' trade marks in respect of its Excel program and XBOX gaming consoles. The Commonwealth Government owns a stylised 'X' trade mark with respect to software development.

Finally, SecureT Solutions Pty Ltd filed to register the very same X trade mark on 4 August (in respect of a wide range of services in class 35) – that application is currently accepted pending publication. It is unknown whether that application is made on behalf of the X group – the address for service and the services the subject of the application suggest the application is more likely to be a troll more than a genuine application.

Elon Musk's choice to rebrand Twitter to X shows a flagrant disregard for the IP risks and consequences in choosing such a non-distinctive brand – and that may very well be the point – a display of bravado by a super corporation (an IP 'beating of the chest' so to speak).

Here's to hoping it ends up better for X than for the protagonist in Henry Longfellow's Excelsior.

There are of course many factors besides IP protection that go into selecting a new brand. We would generally advise against a hard launch of a rebrand without first conducting due diligence searches and putting in place a rudimentary strategy to protect the brand.