Court considers distinction between use of a sign "as a trademark" and descriptive use

Australia

In Edgetec International Pty Ltd v Zippykerb (NSW) Pty Ltd ([2012] FCA 281, March 23 2012), the Federal Court of Australia has had another opportunity to consider the distinction between the use of a sign “as a trademark” and the use of a sign merely as a description of some aspect of the relevant products or services. In this case, the court held that Zippykerb (NSW) Pty Ltd had used KWIK KERB “as a trademark”, and not merely to describe its quick kerbing services. 

Edgetec International Pty Ltd owns two registrations for the trademark KWIK KERB; one in Class 7 for concrete edging machines, the other in Class 37 for construction and repair services pertaining to kerbing, edging and paving.

Zippykerb, a competitor, registered and used a number of domain names, including 'kwikkerbing.com', 'kwikkerber.com.au' and 'kwikkerber.com'. Each of these names resolved to its website at 'zippykerb.com' and, when one opened that website, the words 'Kwik Kerb' and 'Kwik Kerber' appeared numerous times in different contexts.

In certain instances, Zippykerb published so-called disclaimers, such as:

"Why we are so much cheaper than our competition >>
ZippyKerb is NOT Kwikkerb"

"Zippykerb Owners Agree: Zippykerb is far better value for money than our competitor Kwik Kerb®"

"TO BE CLEAR:

We are NOT KwikKerb™

We do not want to be associated with Kwik Kerb in any way."

The essence of Zippykerb’s defence was that its use of the words 'Kwik Kerb' and 'Kwik Kerber' did not constitute an infringement of Edgetec’s registered trademarks because:

  • the word 'Kwik' is a commonly used misspelling of the ordinary English word 'quick';
  • the words 'Kerb', 'Kerber' and 'Kerbing' are everyday English words;
  • the words are used to describe its goods and services; and
  • the manner of its use of the words on its websites was not likely to deceive or cause confusion because of the publication of the disclaimers.

In Mantra Group Pty Ltd v Tailly Pty Ltd (No 2) ((2010) 183 FCR 450), the judge had stated the principles that govern this issue and reiterated his earlier summary at Paragraph 22 of his present judgment. In particular, the judge noted that “[t]he words (of a mark) may be used to describe the goods or services concerned, but still serve as a badge of trade origin”. Further:

In assessing whether the alleged use is use as a trademark, the court is required to examine the purpose and nature of the use in its context. This includes factors such as the positioning of the sign, the type of font used, the size of the words or letters, and the colours which are used, as well as how the sign is applied to the advertising material in question.”

Drawing from those principles, the judge identified the following factors that led to his conclusion that Zippykerb had used KWIK KERB “as a trademark” and not merely to describe its quick kerbing services:

  • Zippykerb used the words in a domain name to direct traffic to its website and such use of a domain name was considered to be “analogous to using those words as a sign on the front of a shop to indicate the goods or services that are sold within…”.
  • The words 'Kwik Kerber' were used 23 times on Zippykerb’s website and, on some occasions, with the letters 'TM' following (eg, in the heading: “The Original KwikKerber™ Since October 1982”).
  • Zippykerb simply added the words 'Kwik Kerber' (or one of a few variations) after its trading name Zippykerb, and there was no attempt to use those words descriptively in relation to Zippykerb’s goods and services. For example, Zippykerb did not use them to tell potential customers that its product is a quick (or even a 'kwik') means of creating concrete kerbing.
  • It was immaterial that there were statements on the website (or inside the shop in the above analogy) stating that Zippykerb’s goods and services were not those of its competitor. Although the words 'Kwik Kerb' in the actual disclaimers themselves were not being used “as a trademark”, the publication of the disclaimers only confirmed the original trademark use of those words in the domain names and elsewhere on the website.

Julian Gyngell, Kepdowrie Chambers, Wahroonga

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