From the Register to the dictionary: The treatment of generic trade marks in Australia

28 April 2015

Consumers are familiar with the phenomenon of famous brands being elevated to shorthand substitutes for branded products or services. Marks like TEXTA, BANDAID and TUPPERWARE are widely used as stand-ins for their clunky dictionary counterparts (“marker pen”, “adhesive bandage”, “food storage container”). Typically, this phenomenon is a mark of a high performing brand. However, if a brand’s ascendancy continues unabated, its trade mark significance can be eclipsed by its acquired signification as the name of the product of service. In such cases, a trade mark registration for the generic mark can be cancelled and the owner’s exclusive right to use and control use of that mark revoked.

In the United States, the owners of registered trade marks DRY ICE, LINOLEUM, TRAMPOLINE and HEROIN lost their statutory monopolies to “genericide”. These and other such marks were distinctive at the time of filing but lost their trade mark significance over time. Australian trade mark law finds its counterpart in section 87(2)(a) of the Trade Marks Act which, read in conjunction with section 24, gives the court power to revoke the registration of a mark that has become generic.

So far, so fair. “Genericide” laws are a logical extension of a tenet of trade mark law that no one trader should be entitled to monopolise a non-distinctive sign. As Brandeis J remarked in the seminal US case on this issue (Kellogg Co. v. National Biscuit Co., 305 U.S. 111 (1938)), “[s]haring in the goodwill of an article unprotected by patent or trade-mark is the exercise of a right possessed by all - and in the free exercise of which the consuming public is deeply interested.”

With this background, it seems curious that DICTAPHONE, LI-LO, STYROFOAM, LAUNDROMAT, CELLOPHANE, WINDCHEATER, and COMPACTUS are registered in Australia in relation to the very goods or services which the marks have come to signify. The Australian Trade Marks Office has even taken the proactive measure of including within its Manual of Practice and Procedure a non-exhaustive list of terms which, by reason of their status as registered marks, cannot be included in trade mark specifications. Thus a trade mark applicant whose application claims protection for “pants, tops and windcheaters” will be required to substitute another term (the TMO’s proposal is “close-fitting garment for wind protection”).

It has been suggested that the enduring statutory monopoly afforded to generic marks is a consequence of the dearth of test cases on section 87(2)(a) rather than some quirk of Australian law. However, a comparative analysis of the US and Australian tests reveals a significant distinguishing feature between the respective “genericide” laws which better explains why marks that would fail the test in the US are likely to continue to be afforded protection in Australia.

The US test for genericide is consumer focussed: it asks what the primary significance of the registered mark is to the relevant public. The Australian test is industry-focussed: it asks whether the mark is “generally accepted within the relevant trade” as a sign describing or denoting the name of the good or service. As members of a particular trade can be presumed to be enmeshed in the market in which they operate and to possess a command of the industry-specific lexicon, it is clear that the Australian test for genericide imports a higher threshold than its US counterpart. The likely result is the preservation of monopolies in terms which are regarded by all bar industry players as the name of the relevant good or service.

The value of a continuing monopoly in a mark which fails the US genericide test but passes the Australian one may only emerge in marginal cases. It is difficult to envisage a situation where a person infringes a registration for a mark which consumers have come to understand as generic. One would expect a court to lean towards a finding that there had been no “trade mark use” in the relevant sense or that the section 122(1)(b) “descriptive use” defence applied. The former finding was reached in Sanitarium Health Food Company v Irrewarra Sourdough [2012] FCA 592, where Jagot J concluded that the defendant had not used GRANOLA as a means of indicating a trade connection between it and its cereal product.

The current wording of s 87(2)(a) undercuts an important objective of the trade mark registration system, which is to strike a balance between the interests of traders and consumers. By adopting the perspective of the skilled trader rather than the ordinary consumer, section 87(2)(a) becomes so difficult to satisfy that it seems self-defeating. That is not to say that section 87(2)(a) should be amended to replace the term “relevant trade” with “relevant public”, but reform should be considered. To that end, one might query the utility of the trader/consumer dichotomy. There is no reason why the views of consumers and traders alike should not be relevant to an inquiry into the continuing capacity of a trade mark to distinguish a trader’s goods or services from those of another.

The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.

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