Radiologist’s choice of trade mark not so insightful

Trade marks – opposition – substantially identical – reputation – use of similar marks in different States – infringement – defences – good faith use of own name – revocation – inherent adaptability to distinguish.

Insight Radiology Pty Ltd v Insight Clinical Imaging Pty Ltd [2016] FCA 1406

The parties (respectively Insight Radiology and Insight Clinical) both conduct medical imaging businesses, with Insight Radiology operating in NSW since 2004 (and in Tasmania since 2012) and Insight Clinical operating in Western Australia since 2008.

Since 2008, Insight Clinical has used the marks INSIGHT, INSIGHT CLINICAL IMAGING and the device mark on the left below in relation to its business.  Since March 2012, Insight Radiology has used the mark INSIGHT RADIOLOGY and the device mark shown on the right:

Insight Clinical also owns registered marks for INSIGHT CLINICAL IMAGING and the device above, each with a priority date of 12 October 2012.

On 7 December 2011, Insight Radiology’s director sought to register (in his own name) the INSIGHT RADIOLOGY device mark above (subsequently with a disclaimer as to any entitlement to use the words INSIGHT RADIOLOGY in Western Australia).  Insight Clinical opposed the registration on the basis that the mark was substantially identical to its own device mark, and various grounds including ownership (s 58 of the Trade Marks Act 1995 (Cth)), prior reputation (s 60) and use contrary to law under s 42(b), specifically by reason of the mark giving rise to a misrepresentation of association between the parties in contravention of the Australian Consumer Law.  The Registrar refused registration on the basis of the s 58 ground.  Insight Radiology appealed.  At the same time, Insight Clinical initiated proceedings against Insight Radiology for trade mark infringement, passing off and contravention of the Australian Consumer Law.  Insight Clinical’s claims centred upon Insight Radiology’s conduct from March 2012.

On the appeal from the Registrar’s decision, the commonality of the parties’ services and Insight Clinical’s claim as to ownership of the Clinical Insight device mark before the relevant filing date were not in issue.  The primary dispute was whether the Insight Radiology device was identical, or substantially identical, to the Clinical Insight device: see Carnival Cruise Lines Inc v Sitmar Cruises Limited (1994) 120 ALR 495.  On that front, Justice Davies found in favour of Insight Radiology.  Even if little weight were given to the difference in the elements CLINICAL IMAGING and RADIOLOGY, there otherwise are clear visual differences between the marks and not a “total impression of resemblance”.

Insight Clinical also sought to challenge the Insight Radiology mark on the basis that the ownership requirement under s 27(1) had not been met.  In this regard, her Honour rejected much of Insight Radiology’s evidence as to why the registration was in its director’s name and his purported intentions at the time, and concluded that the requirement under s 27(1) had not been met at the time of filing.  Nevertheless, a subsequent assignment of the mark in favour of Insight Radiology (which occurred after Insight Clinical sent a letter of demand, but still within the opposition period) was sufficient to rectify the situation.  That conclusion meant that Insight Clinical’s opposition on the grounds in s 58 and 59 was not made out.

Insight Clinical succeeded, however, in its opposition under s 60 (and, for reasons addressed below, s 42(b)).  Insight Radiology accepted that its device mark was deceptively similar to the Insight Clinical device in the requisite sense, and that Insight Clinical’s device enjoyed a reputation in Perth that pre-dated December 2011.  The question for determination was whether that reputation extended throughout Australia, and whether Insight Radiology’s endorsement disclaiming rights in Western Australia was sufficient to defeat the s 60 ground.  As to the first question, her Honour accepted Insight Clinical’s evidence as to the extension of its marketing efforts beyond Western Australia (for example, at national conferences and the maintenance of a website) and the fact of consumer awareness elsewhere in Australia (for example, in the form of interstate referrals and Google analytics data relating to the website).  Further, the evidence demonstrated that even if radiology service providers operate in a localised area, they operate in a national industry.  Accordingly, even if Insight Radiology disclaimed any right to use its mark in Western Australia, the potential for deception or confusion remained.  Insight Radiology’s appeal was dismissed.

As to Insight Clinical’s trade mark claim, Insight Radiology conceded deceptive similarity and commonality of services, but relied upon defences available under s 122, including good faith use of its own name (s 122(a)).  It was not successful in that regard.  The “own name” defence was not available as at March 2012 because Insight Radiology had been called AKR Radiology Consultants Pty Ltd until 17 June 2013 and, although Insight Radiology and its director had registered “Insight Radiology” as a business name since at least July 2011, no evidence of actual trading under that business name was adduced.  Further, Insight Radiology changed its name only after receiving a letter of demand from Insight Clinical and, in the absence of cogent evidence from Insight Radiology to explain the reason and timing of the change of name, the element of good faith was not made out.

Insight Radiology’s defence under s 122(1)(fa) (use of marks for which it would obtain registration were it to apply for them) fell away because, for the reasons canvassed elsewhere, Insight Radiology would not be able to obtain registration for the INSIGHT RADIOLOGY marks.  Insight Radiology’s only potential remaining pathway to registration – honest concurrent use under s 44 – was not supported by evidence from Insight Radiology and, indeed, the evidence suggested that if reasonable diligence had been exercised on behalf of Insight Radiology then Insight Clinical’s presence in the radiology services market, and the marks it was using, would have come to Insight Radiology’s attention.   Further, the lack of proper searches by Insight Radiology prior to adopting its marks, the conceded deceptive similarity of those marks to those of Insight Clinical, instances of actual confusion and a lack of prejudice to Insight Radiology in adopting alternative marks once it actually was aware of Insight Clinical’s rights were discretionary factors that militated against registration under s 44(3) in any event.

The other defence sought to be relied upon by Insight Radiology under s 122(1)(e) (exercise of a right to use a mark given under the TM Act) was unavailable because no registration had yet been granted to Insight Radiology for its marks.

Insight Radiology also sought revocation of the INSIGHT CLINICAL IMAGING word and device marks based on a number of grounds, none of which were successful.  Among other things, Insight Radiology sought to argue that Insight Clinical’s marks lacked an inherent adaptability to distinguish within the meaning of s 41.  Plainly “clinical imaging” is descriptive of radiology services, so the issue was whether the “INSIGHT” (or “inSight”) element was sufficient to impart an inherent capability to distinguish.  Her Honour held that it did, noting that the “word is connotative of the understanding and expertise of the clinicians, not denotative of the radiology services as such”.  The remainder of Insight Radiology’s other grounds for attack failed, largely as a result of her Honour’s finding that Insight Radiology’s use of its marks was, at the relevant times, unlawful.

Insight Clinical’s claims for passing off and contravention of the Australian Consumer Law also prevailed, with the main issue again being whether Insight Clinical enjoyed a reputation among consumers in the States in which Insight Radiology operated.  Insight Clinical also made out a joint tortfeasance claim against Insight Radiology’s sole director (and 50% shareholder), who was instrumental in choosing the Insight Radiology name, logo and branding style, and authorising the company’s adoption of its marks and new name at a time when he was on notice that doing so might infringe Insight Clinical’s rights.