Motor tyre brand overcomes a MONSTER obstacle

Rodney Jane Racing Pty Ltd v Monster Energy Company [2019] FCA 923

(21 June 2019)

Rodney Jane Racing (RJR) here succeeded in its appeal from a decision of a Delegate of the Registrar of Trade Marks so as to obtain an order that its trade mark applications for three logos including the word “Monster” in class 12 for “alloy wheels for automobiles excluding motorbikes” (the RJR Marks), should proceed to registration.

Those applications had been successfully opposed below by Monster Energy Company (MEC), the entity responsible for the energy drinks sold under the MONSTER brand in Australia since 2002.  The ground upon which MEC succeeded was that, before the priority date for the registration of the RJR marks (27 January 2015), the MEC marks had acquired a reputation in Australia and, because of that reputation, the use of the RJR marks on alloy wheels for motor vehicles would be likely to deceive or cause confusion – section 60 of the Trade Marks Act 1995 (Cth).  On appeal, MEC also asserted that use of the RJR marks would be contrary to law so that they should not be registered (section 42(b) of the Act), and raised grounds under section 58 (true owner) and section 59 (intention to use) of the Act.

Justice O’Bryan first considered the true owner and intention to use grounds raised by MEC.  In short, MEC ran the argument that the named applicant for the RJR Marks was not the true owner of the marks and did not have an intention to use the marks because another closely associated entity was in fact the true owner and intended user of the marks.  This debate entertained a significant portion of Justice O’Bryan’s decision, setting out the law on ownership (section 58), use (section 17), authorised use (section 7), and control (section 8), and then delving into the detailed facts of the case to finally determine that RJR was the author of the marks and had authorised Bob Jane Corporation’s “prior use” of the marks.  Factually, the case revolved around whether Mr Jane, who was a director of both RJR and Bob Jane Corporation, was acting in his capacity as director of the former rather than the latter in various acts relevant to determining ownership.

While the law is clear that mistakes in naming the proper applicant for a trade mark will be lethal to validity, and cannot be fixed up by assignment, the authors consider a change in the law is required to allow the proper owner to be named should the circumstances warrant, or to only limit attacks under section 58 or 59 to those who have a true interest in being named as the owner of the marks in question.  It is difficult to see how any third party is harmed by such mistakes, especially in circumstances where the misnaming is between two entities that are related.  Furthermore, such a change in the law would likely put an end to what to any lay observer would consider to be arid legal and factual debates of form over substance.

Next, Justice O’Bryan considered the opposition to registration under sections 42(b) and 60 of the Act, essentially that use of the RJR marks would be likely to deceive or cause confusion because of the reputation of MEC’s “MONSTER” marks.  Because of the features of each party’s logos, MEC conceded that the MEC and RJR marks were not visually similar and that the delegate had erred in concluding that the marks shared “striking similarities”.  MEC’s point was that there would be confusion because the notional consumer, aware of MEC’s reputation in its marks would, as at January 2015, conclude that the reference to “Monster” alone in the RJR marks meant that the RJR marks were those of MEC and another entity or Bob Jane (or Bob Jane Corporation).  That is, the consumer would conclude that MEC had contracted with the producer of wheels bearing the RJR logos in the manner of brand extension, lending the MEC “Monster” name to a different logo.

In answer, RJR contended that there was no likelihood of confusion arising from the use of the RJR marks because: MEC did not have a strong reputation in the word “Monster” alone; the reputation of the MEC marks was in relation to energy drinks and the sponsorship of extreme sports, but not in relation to the sale of automotive wheels; the word “Monster” has a descriptive meaning and there has been extensive third party use of that word as a trade mark in relation to a range of goods and services; there are striking dissimilarities between the RJR marks and the MEC marks; and the RJR marks are registered in relation to goods (alloy wheels) that are sold at a relatively high price and for which consumers make a considered purchasing decision.

As to the law, there was some debate on the correct principles to be applied under section 60 of the Act.  First, as to the objective similarity of the marks, RJR emphasised that it was the whole mark that must be considered, including the degree of similarity, whereas MEC emphasised that consumers must be taken to have an imperfect recollection of marks and will thus focus attention on the “essential features” of the mark such that it is enough if that essential feature is similar.  RJR countered that, ironically, the more well known a mark is, the less imperfect the consumer’s recollection will be so that differences between the marks will take greater importance.

Secondly, as to the similarity of the goods or services in respect of which the marks are used or will be used, MEC emphasised that the prior mark need not have established a reputation specific to the goods or services of the opposed application (which is of course strictly correct).  However, RJR observed that the difference between the goods or services, and the characteristics of the class of consumers for those things, will often be a material consideration in the application of section 60 of the Act, as they will bear upon the interest and likely attention of the relevant consumers in making a purchase and therefore the likelihood of confusion.

Lastly, there was a debate as to whether the trade mark applicant’s use prior to lodgement was relevant.  MEC submitted that it generally was not.  RJR countered that in determining whether the opponent had established a distinctive reputation in a mark, third party usage of the mark (or similar marks) can weigh heavily against that conclusion and there is no reason why the trade mark applicant’s own use and reputation in the mark cannot similarly be relevant, insofar as it diminishes the likelihood that the MEC marks had acquired a distinctive reputation in the word “Monster”.  Ultimately, that proposition was accepted by MEC.

Justice O’Bryan observed that the difference between section 60 and 42(b) of the Act (when applying section 18 or 29 of the Australian Consumer Law) was that “the enquiry under s 60 requires consideration of whether the reputation of a pre-existing mark is likely to deceive or cause confusion; the enquiry under ss 18 and 29 is not so confined and all relevant circumstances can be considered. Second, under s 60 it is sufficient to show that consumers are given “cause to wonder” as to the source of the applicant’s goods, but that is not sufficient under the ACL”.

MEC had engaged in licensing a number of companies to sell official MEC apparel and merchandise, including in relation to motorsports related products including decals, helmets, gloves and protective clothing and electronic games involving motorsports.  MEC had also licensed another to manufacture and distribute MEC branded automotive wheels in the US and Canada, but the evidence of any such wheels getting to Australia was “scant” and was, overall, considered to have no bearing on the case.

His Honour accepted that MEC’s reputation was in its stylised marks, not in the non-stylised word “Monster”, and that the strength of the reputation in MEC’s device marks reduced the likelihood of confusion from use of the RJR marks.  MEC also had a strong reputation in the words “Monster Energy” but that did not assist it.  Importantly, there was no evidence that MEC had used or licensed the use of the word “Monster” in a non-stylised font.  Any reputation in the word “Monster” was derived from the MEC device marks and would only be linked to MEC when used with the device marks.  While the use of “Monster” in relation to soft drinks might cause confusion, it would not do so for other uses, including wheels.  Furthermore, the word “Monster” was used by other traders such as Ducati “Monster” motorbikes, and “Monster” trucks.  His Honour also found that purchasers of alloy wheels make considered purchasing decisions such that any scope for confusion is diminished.

In light of the findings above, and combined with the finding that MEC was a “victim of its own success” in that consumers were very familiar with its product, marketing and, importantly, device marks, it is unsurprising that his Honour concluded that the opposition under sections 42(b) and 60 failed.

Finally, his Honour also considered the admissibility of various website pages and whether they fell within an exception to the hearsay rule by reason of being business records.  There is no invariable rule that pages of a website are not business records.  Ultimately, whether the results of an internet search can be shown to be a business record within the meaning of s 69 of the Evidence Act 1995 (Cth) depends upon the content of the webpage and what is able to be established (whether directly or by inference) about the content of the page.  As to the application of the rule to Wayback Machine webpages, his Honour found that “[n]o evidence has been adduced concerning the business of the Wayback Machine. In the absence of such evidence, and consistently with the decisions referred to earlier, I am not satisfied that the archived webpages are business records. I therefore rule them inadmissible.”  The authors point out that the admissibility of Wayback Machine pages has also been dealt with very recently in Dyno Nobel Inc v Orica Explosives Technology Pty Ltd (No 2) [2019] FCA 1552 (20 September 2019) and Pinnacle Runway Pty Ltd v Triangl Limited [2019] FCA 1662 (10 October 2019).

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