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By: Carroll & O'Dea
Sydney, Australia

Permitting a moment of reflection and looking back upon 2014, many big news items come to mind, and whilst no one event defines a whole year, some can certainly leave a prominent mark. The disappearance of Malaysia Airlines Flight MH370 just over a year ago to date,  and the destruction of flight MH17 have been two of the most shocking, mysterious, perplexing, and tragic events – all the more intensified by the eerie coincidence and the widespread speculation that followed. Amidst all this, came also the IP scandals when both the MH370 and the MH17 became the subject of Australian trade mark applications lodged within days of the disappearance of MH370 (12 March 2014 “MH370” in Class 41, lodged by Aoan International), and within 24 hours of the crash of MH17 (18 July 2014 “MH17” in Class 41, lodged by Remit Now Int’l Ltd). Whilst not the most widely circulated of the “side-news stories” in each case, these quickly became particularly notorious and base examples of the problems surrounding the use of “offensive trademarks”.

As expected, the applications resulted in a public backlash. IP Australia ultimately rejected the applications to register MH370 and MH17 as trade marks in Australia however the rejection was not based on the “offensiveness” of the marks as might have been thought given the popular public sentiment. Initially, the registration for MH370 was rejected on the offensiveness ground, but at hearing the ground of rejection relied on was failure to distinguish under Section 41 of the Trade Marks Act 1995 (Cth) (‘the Act’). The fact that “offensiveness” was not relied on underscores the interesting state of the law when it comes to dealing with offensive trade mark applications.

The potential for offensive marks to be refused for trade mark registration has been long recognised, with the first Australian Trade Marks Act of 1905 prohibiting “scandalous designs and marks the use of which would be contrary to morality”. Developments since then in the diversification of trade marks, marketing techniques and cultural standards might now make such sweeping prohibitions seem naively inept.

The current prohibition targeting offensive trade mark applications is found in Section 42 of the Trade Mark Act 1995 (Cth), which provides that:

“An application for the registration of a trade mark must be rejected if:

(a)   the trade mark contains or consists of scandalous matter or;

(b)   its use would be contrary to law”

Whilst the references to “morality” are now long gone, the core difficulty of evaluating notions of offensiveness, no matter how termed, has not. The question of what should count as scandalous and exactly how that should be tested remains.

Contrary to Law

Although the contrary to law objection normally arises in oppositions, it can be applied at the examination stage. The relevant test for Section 42(b) is not whether the trade mark could be contrary to law, but rather whether it would be contrary to law (see Advantage Rent-A-Car Inc. v Advantage Car Rental Pty Ltd (2001) 52 IPR 24). Typically, this ground has been applied in preventing the registrations of trade marks infringing on another’s copyright subsisting in an element of the trade mark as well as preventing registration of trade marks in violation of Australian Consumer Law protections against misleading and deceptive conduct (for example, an application to register “yellow submarine” as a trade mark was rejected in Subafilms Ltd v Tenancy Management Pty Ltd (2006) 68 IPR 196 because it indicated a connection between the Applicant and The Beatles, which did not actually exist).

In light of the heightened attention given to Section 18C of the Racial Discrimination Act (“RDA”), we may see the Section 42(b) ground for objection and opposition may be applied in relation to trade marks that are contrary to anti-discrimination laws with respect to racial, ethnic, gender or other protected categories.  However, given the direct nature of the discrimination typically required for a breach of anti-discrimination provisions, a trade mark rejected as ‘contrary to law’ for discrimination would also most likely be capable of rejection under Section 42 (a) for containing “scandalous matter”. In fact, the apparent gap under Section 18C of the RDA in relation to religious discrimination, as highlighted in the wake of the Charlie Hebdo terror attacks, means the prohibition of “scandalous” matter would likely be the more appropriate ground of rejection. See our recent report on this issue here.

Scandalous

There is no definition of “scandalous” in the current Act or Regulations. There is no statutory list of “scandalous” or offensive words. The interpretation of this section has therefore been left to the judicial and Trade Mark Office decisions on a case by case basis.

From early on, cases have opted to interpret “scandalous” in line with its common lexical usage.  In Peter Hanlon [2011] ATMO 45 the Registrar of Trade Marks relied on the Macquarie Dictionary definition of “scandalous” as indicating a “degree of disgrace, shock or outrage.” The Registrar also noted that in any determination of whether a trade mark is scandalous for the purposes of Section 42(a) there is a need to “clearly distinguish between words that may have a tendency to be scandalous and those that are [scandalous].”

The Webster’s New Word, Fourth Edition dictionary (one of two officially cited in IP Australia’s Trade Marks Manual, the other being the Macquarie Dictionary) defines “scandalous” as: “causing scandal; offensive to a sense of decency or shocking to the moral feeling of the community; shameful.” The reference in the definition to the “community” means that the choice to rely on ordinary usage leads also to reliance on community standards. As stated in the Trade Marks Manual, “the Registrar is obliged to decide on behalf of the ordinary person” (emphasis added), as to what is regarded as “shameful offensive or shocking.”

The community or ordinary person approach is certainly helpful in allowing for flexibility in the law as societal attitudes shift and change. However, the courts have been quick to recognise that whilst the ordinary person is flexible, they are not arbitrary. As noted in early cases like Ellis & Co’s Trade Marks (1904) 21 RPC 617 (“Quaker Case”), a mere sentimental objection to a trade mark will not suffice, but race, religion, and other persuasions may be taken into account in constructing sensibility in relation to the “ordinary person”. Accordingly, overtly religious trademarks including “Mecca” “Jesus,” and “Hallelujah” have previously been rejected as “scandalous” in relation to the “ordinary person” of the relevant faith, yet recently permitted (albeit in modified forms): “Hanging out with Jesus” 742126 (clothing, jewellery, paper and adhesive products); “Hallelujah Clothing” 1200316 (clothing); and “Hair Mecca” 1392748 (hair care products).

Likewise, a broad approach is taken towards tolerance of the “ordinary person” who, according to the Trade Mark Manual, should not be credited with either a “very thick or very thin skin”. Based on this, the approach to offensive trademarks comprising obscene and coarse language has been to evaluate the “tone” so to speak of the obscene word proposed as a trade mark. Thus, a word recognised as coarse or obscene may nonetheless be registrable if it is orthographically or phonetically modified so as to dilute the coarseness. Examples include “PHAR QUE” or “FAR KEW”. Conversely, modifications that are too minor will not suffice as for example: “F*CK” or “FUCT”. Context will similarly play a key role as for instance where the same trade mark may be accepted for adult clothing, but rejected for children’s clothing.

Although the above considerations have been of assistance in determining a broad base of “scandalous” trademarks, cases like the applications for MH370 and MH17 still pose difficulty for the “scandalous” test. The problem is a sign like MH370 or MH17 is not inherently scandalous or prone to offend, it is an alphanumerical combination used for identifying flights. The scandalous element only arises in relation to the tragic events that have come to bear upon those flight numbers. In fact, the scandalous element predominantly relates to the offensiveness that arises from someone attempting to exploit the sign for commercial gain. The ambivalence of the scandalous element here is not easy to align with the traditional approach under Section 42, and perhaps for this reason the core objection to the MH370 mark was considered under Section 41 – adaptability to distinguish goods/services under the mark. In considering this issue the Registrar noted that:

“In the present matter, given the events….at the date of filing the Trade Mark conveyed a specific meaning to ordinary Australians as the flight number of the aircraft missing since 8 March 2014. When used in relation to the Applicant’s services, the Trade Mark indicates that the subject matter of those services is the missing aircraft….it is not adapted to distinguish the Applicant’s services from similar services of other traders” (Aoan International Pty Ltd [2014] ATMO 118 (12 December 2014).

The quote thus confirms the preceding point that rather than being scandalous in the traditional sense, the application to register the Trade Mark was encroaching on a term that had acquired common usage in Australia. And whilst the common meaning was also a highly sensitive one, a consideration about sensitivity was already superfluous to the Section 41 grounds of assessing the capacity of the descriptive term to distinguish.

The problem with the use of Section 41 in such cases is that whilst it prevents the registration of the mark for most of the Classes of goods and/or services for which such a mark might be used, it may not prevent the registration across all classes. As the classic Section 41 cases have previously demonstrated, although registration in one Class may be descriptive and thereby un-registrable, (e.g. “north pole” for ice) the same might be sufficiently distinctive and registrable in another Class (e.g. “north pole” for bananas) (see Clark Equipment Co v Registrar of Trade Marks [1964] HCA 55). So if in the above proceedings MH370 was not sought for Class 41 in relation to making educational campaigns and documentaries (something for which others might legitimately wish to use the MH370 sign) but rather in relation to a less pertinent Class like Class 15 (musical instruments) or Class 21 (household or kitchen utensils) the Section 41 rejection may be harder to sustain. Then again, given that the desired Classes fall out of reach, the purpose of the Applicant seeking the scandalous mark registration is also likely subverted. Nonetheless, this still illustrates that Section 41 will not always be reliable in preventing registration of scandalous marks. Thus, whilst in most cases their registration is preventable on either the Section 41 or Section 42 grounds, trademarks that are not inherently offensive, but contextually offensive continue to challenge the stretch of the legislative provisions – something that we will no doubt see more of in an ever more commoditised and diversifying trade mark space.

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