Shape trademark cannot be used to extend patent rights

In Mayne Industries Pty Ltd v Advanced Engineering Group Pty Ltd ([2008] FCA 27, January 23 2008), the Federal Court has highlighted the risks that trademark owners face when a registered shape trademark is based on the subject matter of an expired patent.

Mayne Industries Pty Ltd was the registered owner of a shape trademark consisting of a rod bent into an S shape. The appearance of the S loop trademark was the product itself, which was used by Mayne as a 'fence dropper' (ie, an article designed to be inserted into a fence to maintain a constant distance between horizontal fence wires). Mayne exploited the fence dropper under an Australian patent which expired in 1984.

Advanced Engineering Group Pty Ltd imported and sold in Australia a fence dropper called the 'ezy-lock', which contained a S loop shape. Mayne claimed that Advanced Engineering's fence dropper infringed the S loop trademark.

In its cross-claim, Advanced Engineering relied on Section 25 of the Trademarks Act 1995 (Cth), which states that a registered owner does not have exclusive rights to use, or otherwise authorize other persons to use, a trademark in relation to the article of the same description (Section 25(2)). Advanced Engineering argued that the S loop trademark consisted of a sign that described or was the name of an article that was formerly exploited under a patent which expired at least two years ago (Section 25(1)). Advanced Engineering claimed that the S loop trademark was the only commonly known way to describe the article which was the subject of the expired patent. As a result, it argued that pursuant to Section 87 of the act, the court should exercise its discretion to rectify the register and cancel the registration.

The court held that Advanced Engineering's fence dropper contained a S loop that was substantially identical to Mayne's trademark. However, infringement under Section 120(1) of the act could not be made out, as the functional features of the S loop trademark make it clear that Advanced Engineering's use of the shape was not use as a trademark.

In forming this view as to the functionality of the S loop trademark, the court was influenced by the fact that the shape was essential to the very subject of the expired patent and, as a result, was bound to be considered largely functional. As the S loop trademark adopted the same S loop shape which was used in the fence dropper that was developed and patented in 1969, the shape of the S loop was fundamental to the working application of the fence dropper.

In response to Advanced Engineering's cross-claim, the court held that a shape sign is capable of describing an article. In this instance, the court stated that the shape was the only commonly known way of describing the article at issue. Therefore, the requirements set out in Section 25(2) of the act were satisfied and Mayne was deprived of any exclusive rights to use or authorize others to use the S loop trademark.

Consequently, the court exercised the discretion conferred by Section 87(1) of the act and cancelled the registration of Mayne's trademark on the grounds that the act of registering the S loop trademark was an attempt by Mayne to extend the term of exclusivity lost when the patent expired.

This decision emphasizes the fact that the Trademarks Act is not a means of providing enduring exclusive rights to protect an article formerly exploited under a patent where the sign is, in substance, the only commonly known way of describing the article.

Stephen Stern and Katerina Makris, Corrs Chambers Westgarth, Melbourne