Superman defeats villain in trademark battle

Australia

In DC Comics v Cheqout Pty Ltd ([2013] FCA 478, May 23 2013), in a battle of right and wrong, the applicant has failed to convince the court that its conduct met the requisite standards of truth, justice and the Australian way.

The Federal Court upheld an appeal from a decision of the registrar of trademarks, finding that Cheqout Pty Limited should not be granted registration of the trademark SUPERMAN in respect of “conducting exercise classes; fitness and exercise clinics, clubs and salons; health club services (exercise)”.

The decision turns more on the activities and intentions of the trademark applicant, than any restrictions on general use or monopolisation of the word 'superman'.

The decision did not find that use of the word 'superman' alone by Cheqout would cause confusion. In relation to that issue, Justice Bennett stated:

"When [Cheqout's] trademark is used without reference to any of the well-known indicia associated with the DC Comics superhero and as contained in the registered trademark or other trademarks registered by DC Comics, there is no likelihood that use of [Cheqout's] trademark would be likely to deceive or cause confusion by reference to the SUPERMAN word mark, or the subject matter of DC Comics’ registered trademarks. The public would not be caused to wonder whether 'superman workout' came from the same source as the Superman character or DC Comics."

She had earlier noted that DC Comics’ registered trademarks “consist of the word 'superman' together with a device or figure of the superhero or simply the 'S' shield device, but not of the word alone”.

The problem that arose for Cheqout was its use of SUPERMAN in conjunction with a 'BG' shield device similar to the 'S' shield device used by DC Comics in conjunction with its Superman character. Depictions can be seen below:

   

Section 62A of the Trademarks Act enables an application to be opposed when “the application was made in bad faith”.

Justice Bennett found that Section 62A did not require DC Comics to establish that use of the trademark applied for would result in deception or confusion. She found that it has a broader scope and disentitles a party to registration where the conduct of the applicant falls short of the standards of acceptable commercial behaviour expected of a business.

Soon after its application for registration of SUPERMAN, Cheqout began using the word 'superman' together with the 'BG' shield device shown above. It also used the colours red, white and blue, which have traditionally been used in conjunction with the Superman character. It only stopped using the 'BG' shield device after it received a cease and desist letter sent on behalf of DC Comics. 

Justice Bennett found that:

in making the application to register the trademark, [Cheqout] intended to use it in combination with the 'BG' shield device in order to strengthen the allusion to Superman. The inference can also be drawn that this use was designed to gain a benefit by appropriating Superman indicia and the reputation of the DC Comics superhero, so as to further the viewer’s association between the trademark and the SUPERMAN word mark.”

As a consequence of this intention to take advantage of the reputation of DC Comics’ Superman character, she found that “Cheqout’s conduct fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons”.

In Superman parlance, it might be said that Cheqout’s failure to ‘do good’ resulted in its application failing faster than a speeding bullet. Cheqout failed to leap the Section 62A requirement in a single bound.

Sean McManis, Shelston IP, Sydney

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