What is passing off?  Revlon’s Mitchum Clinical deodorant v Unilever's Rexona and Dove deodorants

To put simply, passing off is where there is a misrepresentation that a business’ goods or services are those of another business.  Under an action for passing off, protection is given to those who have developed goodwill or reputation.  For a claim of passing off to be successful, the claimant has to prove that a misrepresentation has been made by another in the course of trade to actual or prospective customer that injures and causes damage the claimant's business, goodwill or reputation.  The misrepresentation can be one that relates to the likeness of a product or the trade name of a service provider.

On 19 August 2014, Gleeson J of the Federal Court of Australia (FCA) handed down the latest judgement in this area of law - Unilever Australia Ltd v Revlon Australia Pty Ltd (No 2) [2014] FCA 875.  You can read the full judgment on the FCA’s website. 

The parties involved, being Unilever and Revlon, are competitors in the supply of deodorant products.  Unilever's deodorants are branded Rexona and Dove, where as Revlon's deodorant is branded Mitchum Clinical.  The initial action was by Unilever, who claimed that Revlon breached the Australian Consumer Law in terms of the representations Revlon made in advertising and on the packaging of Revlon’s deodorant.  In response to Unilever’s claim, Revlon counter-claimed that Unilever breached the Australian Consumer Law in the same way, and in addition, engaged in passing off.  Revlon wanted to obtain an injunction so as to restrain Unilever from selling or marketing Rexona clinical protection products in Revlon’s new packaging.

In his judgement, Gleeson J explained why Revlon was unsuccessful in restraining Unilever in the use of the particular packaging.  In essence, it was determined that it would be unlikely that a reasonable consumer would confuse the packaging of the two competing brands.  It other words, Revlon failed to demonstrate that Revlon’s packaging had become so distinctive that in the minds of the potential customer that Revlon had acquired trade reputation associated with it.

This is an interesting case to read, with important lessons to be learnt.  In matters relating to consumer protection, for lawyers acting for SMEs and large corporations alike, it is worth remembering that, in addition to proving deception or that confusion has been caused, actual proof of damage is required to succeed in an action for passing off.  

This post first appeared on CPD Interactive's "Legal Natter's Blog".

Inaugural blog post to answer frequently asked SME questions

At Legal Know-How, we work with many small and medium enterprises (SMEs) and we get asked a lot of legal and business questions. From time to time, we will answer a frequently asked SME question via this blog. You can filter our blog post by choosing "SME Q&A series" to quickly locate and read the relevant posts.

IP rights

In the past fortnight alone, we have been asked on 3 separate occasions on matters relating to intellectual property rights. Intellectual Property, or "IP", is a term that describes the application of the mind or one's intellect to create or develop something new or original. IP Australia is the Australian Government agency that administers IP rights and legislation relating to trade marks, patents, designs and plant breeder's rights. Copyright and circuit layout rights are also IP rights but they are considered "automatic rights", in that they do not need to be registered. 

Why is IP important to SMEs?

Why is IP so important? IP Australia summarised the reason very well in just 1 sentence - "IP is an important asset in today's knowledge economy and should be strategically managed." IP certainly is important to large corporations, but it is equally important to SMEs.

Copyright, trade marks and patents are probably the 3 most asked about categories of IP rights, and below is an outline on each.

Copyright
From the time an original idea is documented, it is automatically protected by copyright in Australia. This means that the copyright owner does not need to specifically apply for copyright protection. It is important to remember that copyright protects the original expression of an idea, as opposed to and distinct from the original idea itself.  

While not strictly necessary, it is wise to mark any original work with the copyright symbol ©. This could help deter others from infringing on the copyright owner's copyright. It is also wise to keep a contemporaneous and comprehensive record of the creative process. This could help prove that the copyright owner indeed is the copyright owner.

The Australian Copyright Council has a "find an answer" page that contains user-friendly information sheets about copyright. This can be a handy resource for SMEs.

Trade marks

IP Australia provides a concise definition of trade mark - "A trade mark is a way of identifying a unique product or service and it can be your most valuable marketing tool. Sometimes called a brand, your trade mark is your identity - the way you show your customers who you are." Some common categories of trade marks include a word (such as "Coca Cola"), a logo (such as QANTAS' "flying kangaroo") and a phrase (such as Nike's "just do it").

People often associate or identify a quality or a reputation with goods and services bearing a particular trade mark. A trade mark can be very valuable to a SME, and the more successful the SME, the more valuable its trade mark becomes.

Registration is not a prerequisite to use a trade mark but there are certainly benefits of registering a trade mark. A key benefit is that the registered trade mark holder has the exclusive right to use the trade mark as specified in the registration.  

Registration fees for trade marks vary and the current fees can be accessed here. The registration process can take around 8 months to complete. Once registered, the trade mark can bear to symbol ®. An unregistered trade mark or one that is being registered can bear the symbol ™.

Patent

IP Australia defines patent as "a right granted for a device, substance, method or process that you have invented that is new when compared with what is already known. A patent is legally enforceable. It gives you the exclusive right to commercially exploit your invention for the life of the patent."

The invention claimed in a standard patent has to be totally new, it cannot be an obvious thing for someone in the same industry to do (this is called satisfying the "inventive step") and it has to be able to be made or used in that industry.  

Of the 2 types of patents available, standard patents has an application process which is quite involved and also quite time consuming. For example, the examination stage alone can take from six months to several years. A registered patent does give the patent owner long-term protection and control over the invention. As an example, pharmaceutical companies often patent their inventions relating to pharmaceutical substances.

The other type of patent is an innovation patent. It is for the protection of inventions that do not satisfy the "inventive step" for standard patents. Innovation patents have to satisfy the "innovative step" instead, which means the subject matter must be different and improved from what is known before.

IP Australia states that an innovation patent is usually granted within a month of filing the complete application, so it is a relatively quick (and less expensive) way to obtain protection for a new device, substance, method or process. However, IP Australia also warns that, while there is no mandatory examination before an innovation patent is granted, it is only legally enforceable if it has been examined and certified. Accordingly, it is advisable to request that an innovation patent be examined.

Again, registration fees for patents vary and the current fees can be accessed here. 

A word of warning - do not disclose an invention or innovation before filing a patent application. If the invention or innovation has to be discussed (such as with a sponsor or an investor), only do so with a confidentiality agreement. "Going public" without a non-disclosure arrangement in place can risk a patent application being rejected.

We can help you understand your IP rights and, importantly, we can quickly provide you with a confidentiality agreement to protect your interest - just contact us for assistance.