Transliteration of mark into another language does not warrant ownership

Australia
In Australian Medic-Care Company Ltd v Hamilton Pharmaceutical Pty Limited ([2009] FCA 1220, October 30 2009), Hamilton Pharmaceutical Pty Limited has failed in its cross-claim that Australian Medic-Care Company Ltd (AMC) had deceived it into believing that Chinese marks were literal translations of English pharmaceutical product names. 

AMC is the sole distributor in Hong Kong of Hamilton's Rubesal and Urederm products. To cater for the Chinese-speaking market, in 1988 AMC transliterated the product names into 'Tuotoning' and 'Fuyunhon', respectively. Neither of the names has a linguistic, phonetic or transliterative relationship with the English names. During negotiations with Hamilton in relation to the ownership of the marks, AMC successfully registered the trademarks AUSTRALIAN TUOTONING and AUSTRALIAN FUYUNHOM in 1999 and 2002. AMC also redesigned the packaging, embodying the Chinese character marks together with product indications and instructions for use, which was crucial for its high product sales in the Chinese-speaking markets. 

AMC brought proceedings alleging (among other things) that Hamilton had infringed its copyright by selling the repackaged product to another Australian company. Hamilton cross-claimed for AMC to transfer ownership of the marks AUSTRALIAN TUOTONING and AUSTRALIAN FUYUNHOM to itself on the basis that AMC had engaged in misleading and deceptive conduct - in breach of Section 52 of the Trade Practices Act 1974 - by representing to Hamilton that the Chinese characters were literal translations of the English product names.

The Federal Court found that AMC had not misled or deceived Hamilton in relation to the Chinese marks on the following grounds:

  • Although the distribution agreement provided that AMC could not register any signs incorporating the trademarks of Hamilton, the agreement related only to the specified English marks and did not extend to the Chinese marks.
  • The disagreements and negotiations between Hamilton and AMC in relation to the ownership of the Chinese marks effectively placed Hamilton on notice of AMC's claimed entitlement to the Chinese marks. As Hamilton failed to register the Chinese marks (initially due to the fact that they were directly descriptive), its subsequent ownership claims were effectively attempts to 'steal' the marks from AMC.
  • The Chinese language advertisements prominently displayed the FUYUNHOM mark in its Chinese-character form and AMC had repeatedly indicated to Hamilton the meaning of the Chinese names. Hamilton had also approved the removal of the name Hamilton on the new packaging, with the understanding that Hamilton would retain the right to the trade name Urederm.
  • Hamilton acquiesced and was aware that the products were promoted and known in Hong Kong through their new packaging and by the names of Tuotoning and Fuyunhon. AMC also repeatedly referred to the products using their Chinese names.
Accordingly, the court held that Hamilton's cross-claim was unsuccessful on the basis that AMC had provided clear notice that the Chinese marks were AMC's creations and were not mere literal translations of the English names. Moreover, far from being misleading and deceptive, AMC had given Hamilton notice of its claimed ownership of the Chinese marks through various correspondence. Even if Hamilton's cross-claim could be made out, the court indicated that it would be inappropriate to order the transfer of the registered Chinese marks from AMC to Hamilton due to the provenance and use of the Chinese character marks from 1989 to present. The court pointed out that AMC had contributed language skills, medical knowledge, local knowledge and marketing abilities to the creation of the Chinese marks. 

This case demonstrates that it is crucial for companies to register their marks to protect their interests. If a new mark in a different language (which is not a direct translation of the registered mark) is used to market and promote a product which already has a registered mark, the ownership of the new mark does not automatically vest in the owner of the registered mark.
 
Lisa Ritson and Wendy Ho, Blake Dawson, Sydney

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