17 Jun The Importance of Choosing a Distinctive Brand
As Trade Marks Attorneys far and wide will attest, trade marks which have no descriptive significance are not only easier to register, they also provide the strongest enforceable rights for brand owners.
It is always best to choose a distinctive brand for a business. Owners of trade marks which are not inherently distinctive face the additional challenge of ensuring their trade mark is used in a manner which clearly acts as an indicator of origin – rather than merely a description – of the relevant goods or services.
A recent decision of the Full Court of the Federal Court of Australia serves as a reminder that even when descriptive marks are registered, maintaining registration and enforcing exclusivity may prove difficult.
Despite being the registered owner of a trade mark for the words ‘community bank’ for twenty years, Bendigo and Adelaide Bank Ltd (Bendigo) lost its exclusive rights in the name earlier this year.
In Bendigo and Adelaide Bank Ltd v Community First Credit Union Ltd  FCAFC 31 the Full Court rejected Bendigo’s appeal and application for leave to appeal from Community First Credit Union Ltd v Bendigo and Adelaide Bank Ltd  FCA 1553. As a result, after enjoying exclusivity and using its trade mark registration to obtain injunctive relief to prevent other banks using the ‘community bank’ words in their name or marketing materials, Bendigo can no longer claim exclusive rights in that name.
This matter commenced when Community First Credit Union Ltd (CFCU) made an application seeking cancellation of Bendigo’s registered trade marks under s88(2)(a) of the Trade Marks Act 1995 (Cth) (the Act). This section of the Act allows for post-registration cancellation of a mark on any of the grounds on which the application for registration could have been opposed.
Reasons for Decision
In its decision, the Federal Court confirmed the findings of the primary judge, and ordered Bendigo’s mark removed from the Trade Marks Register, thereby allowing CFCU to register their own mark which included the ‘community bank’ words. In making its decision, the Full Court rejected Bendigo’s arguments, agreeing with the primary judge that:
- the words ‘community bank’ did not meet the threshold of being a trade mark (that is, acting as an ‘indicator of origin’), given the proximity of use of the words to Bendigo’s core brand; and
- there was insufficient evidence showing the COMMUNITY BANK word mark was used alone to distinguish the relevant services being provided by Bendigo as at the priority date of that mark.
The Full Court also agreed with the primary judge that much of the evidence of use of the words “community bank” provided by Bendigo showed only descriptive use of the mark. That is, the mark was not being appropriately used as a trade mark to indicate the origin of Bendigo’s services.
If securing exclusive rights in a name is strategically important, the best thing to do is adopt a distinctive brand. Prospective applicants can learn more about testing a trade mark’s distinctiveness here.
If a business adopts a brand that lacks distinctiveness, it will be crucial to use the brand in such a way the descriptive words take on a significance beyond their ordinary meaning. As Bendigo learned, failure to do so can lead to removal of a trade mark from the Register.