By Melinda Upton and Danielle Selig
What you need to know
On 22 May 2013, Justice Bennett refused an application in the Federal Court of Australia, by Cheqout Pty Ltd (Cheqout), to register the trade mark “superman workout”. Adopting the test relied upon by Justice Dodds-Streeton in Fry Consulting v Sports Warehouse Inc (No 2) (2012) (Fry), her Honour held that Cheqout made the application in bad faith as its “conduct fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons.”
On 2 June 2009, Cheqout lodged an application to register the trade mark “superman workout” in respect of the Class 41 services of “conducting exercise classes, fitness and exercise clinics, clubs and salons; health club services.”
Cheqout’s application consisted of the word “Superman” together with the BG Shield Device and used the red, white and blue colours traditionally used in conjunction with the DC Comics Superman character and DC Comics registered trade marks.
The case is an appeal against the decision of a delegate of the Registrar of Trade Marks to register the trade mark.
DC Comic’s grounds for opposition
DC Comics opposed the application on the following grounds:
1. the word “Superman” has come to be associated with the Superman character and its use in association with health and fitness services would be likely to deceive or cause confusion; and
2. the application to register the trade mark was made in bad faith.
Federal Court’s decision
There is limited Australian authority on the breadth of the concept of bad faith. In Fry, Justice Dodds-Streeton concluded that bad faith, in the context of s 62A of the Trade Marks Act 1955 (Cth), was conduct “of an unscrupulous, underhand or unconscientious character”.
Justice Barrett was satisfied that Cheqout’s “conduct fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons” for the following reasons:
• it was a “relevant circumstance” that in making the application Cheqout intended to use “superman workout” in combination with the BG Shield Device to “strengthen the allusion to Superman.” Justice Barrett drew the inference that Cheqout was attempting to gain a benefit by accentuating the association between the trade mark and the DC Comics superhero;
• the red, white and blue colours traditionally used in conjunction with the Superman character were used by Cheqout together with the BG Shield Device; and
• the design of the BG Shield Device closely resembled that associated with the DC Comic’s character and DC Comic’s registered trade marks.
Justice Barrett found the fitness company had made the application for the trademark in bad faith. She set aside the Registrar’s decision and refused the trade mark application.
In relation to DC Comic’s other argument, Justice Barrett found that there was “no real, tangible danger or real risk of confusion arising by the normal and fair use of the word “superman” in connection with “workout.” Justice Barrett was of the view that a word, such as “Superman,” although “originally associated with a particular trade source, may over time become descriptive of a class of goods or characterisations”. She held that without reference to any of the well-known indicia associated with the DC Comics superhero there was no likelihood that the public would “be caused to wonder whether “superman workout” came from the same source as the Superman character or DC Comics.”
Tips for trade mark owners
We are seeing an increasing amount of cases in Australia in which a local company has filed for a trade mark that is essentially owned by an overseas business. There are ways to stop activity of this sort and one of the most popular grounds is the bad faith ground of opposition introduced in Australia in 2006. It’s important to act swiftly if you are to retrieve your rights in your mark in a bad faith scenario.