Australia Post fails to demonstrate ‎infringement of 'iconic' mark

Australia

The decision of the Full Federal Court in Australian Postal Corporation v Digital Post Australia ([2013] FCAFC 153) demonstrates the difficulty of establishing trademark infringement where the words making up an iconic mark are descriptive. In addition, it highlights the close scrutiny applied by the Federal Court to expert and survey evidence.

Australian Postal Corporation (Australia Post) has a statutory monopoly over mail delivery services within Australia and competes with commercial organisations for services including parcel delivery and electronic messaging. Australia Post is the registered owner of three AUSTRALIA POST trademarks in respect of, among other things, mail delivery services, electronic mail delivery services, financial services, electronic mail and electronic communications services, computer-based and computer-aided communications and the transmission of information.

On March 14 2012 Digital Post Australia (DPA) announced that it would be launching a digital mail box service under the name Digital Post Australia, using the domain name 'digitalpostaustralia.com.au'. Digital mail differs from email as a sender must receive authorisation from the owner of the mailbox before mail can be sent. The service was primarily marketed as a bill payment method and as a means for financial institutions and utility providers to communicate with their customers. Australia Post launched a corresponding service called Australia Post Digital Mailbox on March 26 2012.

Australia Post brought proceedings against Digital Post for trademark infringement and for engaging in misleading and deceptive conduct contrary to the Australian Consumer Law.  

After comparing the two marks visually, aurally and considering the relevant surrounding circumstances, the primary judge found that DIGITAL POST AUSTRALIA was not deceptively similar to AUSTRALIA POST, within the meaning of Section 120(1) of the Trademarks Act 1995 (Cth). The primary judge noted that, although the name Australia Post is “entirely descriptive of its mail delivery services, it has become distinctive and iconic through extensive and prolonged use”. Consequently, “potential consumers of digital post services will perceive and pay attention to even slight changes to the mark” and would not be caused to wonder whether Digital Post's digital services came from the same source as those offered by Australia Post. The addition of the prefix 'digital' and the different order of the words 'post' and 'Australia' in Digital Post's mark were sufficient to avoid deception or confusion. For the same reasons, the domain name 'digitalpostaustralia.com.au' was not considered to be deceptively similar to AUSTRALIA POST.

Further, Digital Post's use of the mark did not breach the Australian Consumer Law.

In the event a different conclusion was reached on the question of deceptive similarity, the primary judge held that a defence would be available to Digital Post under Section 122(1) of the Trademarks Act on the basis that Digital Post used its own name in good faith and to indicate the intended purpose of its digital mail service. Digital Post was not seeking to benefit from the iconic reputation of Australia Post.

On appeal to the Full Federal Court, Australia Post challenged the primary judge's findings in respect of the Trademarks Act. Australia Post submitted that the primary judge had erred in his findings in relation to deceptive similarity on the basis that, among other things:

  1. The classification of potential consumers as technologically competent and internet savvy was too narrow. The relevant class of potential customers was the population at large.
  2. Incorrect considerations, namely the primary judge's consideration of whether the AUSTRALIA POST trademark was associated with the provision of digital mail box services, were applied when assessing deceptive similarity.
  3. The survey evidence, which showed actual customer confusion as to the origins of Digital Post's product, was incorrectly discounted by the primary judge.
  4. The evidence of an expert on branding (Dr Downes) was also incorrectly discounted. The evidence had not been contradicted and indicated a reasonable probability of customer confusion.

It was further submitted that the primary judge had made errors in law and fact in concluding that the good-faith defences had been made out.

The Full Court held that the primary judge's classification of the relevant class of consumer was too narrow. The relevant class is "at the very least a member of the general public who has access to, or could have access to, a digital mailbox". Nevertheless, the Full Court thought the same result would have been achieved regardless of the class of consumers to which the test for deceptive similarity was applied. 

The Full Court stated:

"The correct approach is to consider whether a substantial or significant number of the general public potentially interested in a digital mailbox service would have cause to wonder if Digital Post's service was associated with Australia Post."

Further, the Full Court held that it would be dangerous to rely on the expert evidence as the main focus of Dr Downes’ evidence was irrelevant with respect to trademark infringement. Dr Downes focused on elements of the Australia Post brand including its "master brand" logo, its colour scheme and the word 'Post'. However, the law requires a comparison of the marks themselves. Although Dr Downes had made some "isolated comments" regarding the arrangement of the words in DIGITAL POST AUSTRALIA, it was held that his evidence should be given no weight in determining deceptive similarity.

Due to concerns regarding the method of recruiting respondents, the survey evidence was considered to be inherently unreliable and therefore discounted. This decision reflects the Full Court's reluctance to accept survey evidence if there is any possibility that the surveys are flawed.

The Full Federal Court found that DIGITAL POST AUSTRALIA and 'digitalpostaustralia.com.au' were correctly held not to be deceptively similar to Australia Post's registered trademarks.

In light of its decision on trademark infringement, it was unnecessary for the Full Court to deal with the other issues raised in the appeal. Nevertheless, the issue of use in good faith was considered. Despite Digital Post's awareness of Australia Post’s reputation in Australia, discussions at the board level of issues concerning confusion and the fact that Digital Post obtained legal advice on the registrability of their marks, there was held to be no evidence of wilful blindness on the part of Digital Post to the potential for customer confusion. Hence, the Full Court held that there was no reason to intervene regarding the primary judge's finding that a good-faith defence would be available to Digital Post.

This case further illustrates the reluctance of the Federal Court to allow survey evidence or expert opinion to interfere with its own analysis and impression on the question of deception similarity. Although obiter, the court in this decision also accepted that knowledge of the trademark owner's reputation in Australia will not necessarily preclude a finding of good faith.

Des Ryan and Georgia Schofield, Davies Collison Cave, Melbourne

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