Shoe and sole shapes can function as trademarks

In Global Brand Marketing Inc v YD Pty Ltd ([2008] FCA 605, May 7 2008), the Federal Court has confirmed previous and well-established decisions in relation to shape trademarks.
Diesel SpA is the registered owner of two Australian trademark registrations for footwear in Class 25 of the Nice Classification (the sole mark and the shape mark).

Diesel and its licensee Global Brand Marketing Inc alleged that YD Pty Limited infringed the sole and shape registrations by using various shoe and sole designs named Cube and Photon. YD cross-claimed that Diesel's sole and shape registrations were invalid, as they did not function as trademarks.
The Cube and Photon sole designs were described as having various additional features including patterns, indentations, dimples and triangles. The Photon and Cube shoe designs included various features, such as a stylized YD label, stripes, round pieces, square caps, toe panels, small dots and rubber panels. The shoes sold by both YD and Diesel were in the A$129 to A$290 range.
The key questions were therefore:
  • whether the Diesel registrations and YD's designs function as trademarks; and
  • whether YD's designs were substantially identical or deceptively similar to Diesel's registrations.
The court considered a number of previous Australian decisions in relation to whether use of a shape constitutes use as a trademark (see Coca-Cola Company v All-Fect Distributors ([1991] FCA 1721), Koninklijke Philips Electronics NV v Remington Products Pty Ltd ([2000] FCA 876) and Kenman Kandy Australia Pty Ltd v Registrar of Trademarks ([2002] FCAFC 273)). In broad terms, those cases established that if a shape is so "closely bound" that it is not distinct from the goods and has purely a functional purpose, the shape cannot function as a trademark, as other traders may legitimately wish to use that shape.
However, in the present case, the court observed that the aforementioned decisions also established that shapes can operate as trademarks where:
  • the goods are distinct from the mark itself (even though the mark may be, in effect, part of the shape);
  • the mark adds "something extra", so that the goods are distinguished from those of other traders; and
  • the shape does not have "functional significance" or involve "substantial functional elements".
The court took the view that even though this case was not as clear as the previous decisions, both Diesel's and YD's designs were not purely functional. Even though some elements of the soles and shoes (eg, gripping soles) may serve functions, it was the additional features which resulted in both Diesel's and YD's designs being found to operate as trademarks to distinguish the respective goods.
Having decided that both YD's and Diesel's designs functioned as trademarks, the court considered:
  • whether YD's designs were substantially identical or deceptively similar to Diesel's designs; and
  • if so, whether YD's designs infringed Diesel's registrations.
Taking into account all the features of the respective designs, and applying the long-standing 'side by side' and 'imperfect recollection' tests, the court took the view that:
  • there were sufficient distinguishing features between the designs;
  • the marks were neither substantially identical nor deceptively similar; and
  • the risk of confusion was low. 
In particular, the court held that:
  • the various cross-hatching, indentations and dimples meant that consumers would consider the whole of the goods;
  • the price implied that 'discerning' shoppers would carefully examine the goods; and
  • there was no evidence of actual confusion.
As the respective designs were neither substantially identical nor deceptively similar, the court concluded that YD had not infringed Diesel's registrations. Diesel's application thus failed. 
Additionally, YD's cross-claim that the Diesel designs did not function as trademarks was unsuccessful. YD's further cross-claim (ie, Diesel's registrations should be revoked because the applications were filed in the name of Global Brand as licensee, and the assignment of the registrations to Diesel was invalid as Global Brand was never the owner) also failed.
The decision is a timely reminder that although the registration of shape marks in Australia is not without difficulty, such shapes may be the subject of protection and registration, provided that they are not purely functional.
Colin Oberin and Peter Ryan, Allens Arthur Robinson, Melbourne

Unlock unlimited access to all WTR content