Startup keeps its cool with IP protected

/ Madderns / Articles

Startup keeps its cool with IP protected

As a startup, deciding where and how you spend your limited dollars is one of many early crucial business decisions. Investing in marketing and branding was a given for Thomas deMasi, CEO of Coolsan®. But he admits that initially he wasn’t so convinced about investing in the company’s intellectual property.

The Coolsan® journey began in rural New South Wales in 2005. Dr Gary Erickson and his wife Merrill were running a restaurant and were constantly frustrated at the short shelf-life of their fresh herbs and vegetables. Spoilage of fresh foods is an annoying and expensive problem for the restaurant industry supply chain. Often fresh produce doesn’t show any signs of spoilage until the end of the chain, which leaves producers, suppliers or end-users bearing the costs.

Simple food-safe solutions

Drawing on his experience as a chemist, Gary developed a prototype system to decrease spoilage by delivering low levels of hydrogen peroxide into refrigerated spaces. In 2010, Gary and Merrill took their prototype system to a food and wine show in Sydney, where they met Thomas – an experienced food retailing and marketing consultant. Thomas immediately saw the potential of Gary’s prototype system.

Three years later, Gary and Thomas had founded their company Coolsan® and turned Gary’s prototype system into a marketable product. ChillSafe® is an environmentally-activated sachet that releases a low dose of a vapour to reduce the levels of bacteria, mould and ethylene that cause food to spoil.

“When we first started up, we generated a lot of interest in our product ChillSafe®, maybe too much too soon. Without revealing its secrets, I was showing it to a lot of people and then I realised it was at risk because it wasn’t protected,” said Thomas.

Although Gary had taken out an initial patent on his original system, ChillSafe® was a new and improved version and not all of its features were protected by the initial patent.

“ChillSafe® was now a unique marketable product and I realised my initial patent wasn’t enough to protect it,” said Gary.

Turning up the heat on the competition

Gary and Thomas met with Mark O’Donnell, a Patent Attorney at Madderns in Adelaide. It was the beginning of a partnership that would help Gary and Thomas make sense of a complex process, and make informed spending decisions about their intellectual property (IP).

“Mark helped me understand the importance, need and value of a patent to protect our interests,” said Thomas.

It did not take long for Thomas to work out they had made the right move.

“I had a major international food manufacturer with factories all over the world contact me. The head of their sanitation department told me he’d seen our product and asked his partners and global suppliers if they could copy it,” said Thomas.

“Two weeks later the advice from their guys was no we can’t copy it, it’s protected.”

The international food manufacturer is now trialling ChillSafe® at one of their sites.

“Now we have something of substance when we engage with global partners. When they ask if we’re protected we can say yes,” said Thomas.

Warming up to intellectual property

Mark has guided Coolsan® through every step of the patent application procedure, including advising on which countries to pursue patent applications to get the best value for money.

“As a startup, Coolsan’s® IP is their asset. Our job is to find the most cost-effective way to protect this asset,” said Mark.

Mark has worked in the IP field for more than 25 years. He has seen the patent process from all sides and believes that a well thought out IP strategy gives his clients a massive strategic advantage. The patent application process generally starts with filing a provisional patent application in Australia, which is effectively a stake in the ground that is recognised around the world. The next step is the filing of an international Patent Cooperation Treaty (PCT) application, which gives applicants the right to file in over 150 countries. The final step is the national phase where patent applications are filed in individual countries and some regions.

Coolsan® have now filed patent applications in 6 countries as well as Europe, and have signed a MoU with a major agribusiness supplier for use of ChillSafe® in the post-harvest industry in Australia and New Zealand. They are also in negotiations with a potential global partner with outlets in over 100 countries and have master distribution agreements with companies in Australia, the United Kingdom and South Africa.

“We have a novel, unique and multi-award winning product that has attracted a global audience. That is worth protecting,” said Thomas.

“If it wasn’t for Madderns’ support we wouldn’t have been able to get through the patent process.”

Get in touch with Mark at Mark.ODonnell@madderns.com.au.

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Toll Dodging: trade mark registration may decrease the cost of challenging domain name registration

/ Lucy Deane / Articles

A recent Domain Name Decision highlights the importance, and benefit, of having a registered trade mark when seeking to challenge the registration of a .com.au domain name by a third party.

Administrative Panel Decision – Case No. DAU2016-0036

The Parties

Mr Michael Arnold of Lorimax Pty Ltd (the Complainant) sought to challenge the registration by Tolling Customer Ombudsman Pty Ltd (the Respondent) of the domain name www.tollingcustomerombudsman.com.au (the Domain Name).

The Complainant, through his company, is contractually appointed by a number of entities, who operate toll roads in Australia, to provide a free complaints and alternative dispute resolution process for customers of such toll roads experiencing issues.

The Complainant submitted that it had provided such services since 2008 from the website www.tollingombudsman.com.au.

The Respondent was registered on 2 September 2016 and registered the Domain Name on the same day.  The Domain Name resolves to a website where individuals can file a complaint, free of charge, with the toll road operator Transurban Limited.

The Complainant’s Trade Marks and the Complaint

On 12 September 2016 the Complainant filed Australian trade mark applications for the word mark “TOLLING CUSTOMER OMBUDSMAN” (No. 1795768) and for a composite trade mark featuring these words (No. 1795772) (the Complainant’s Trade Marks).

Shortly thereafter, on 19 September 2016, the Complainant filed a Complaint under the .au Dispute Resolution Policy (auDRP).

At the time the Decision was issued, the Complainant’s Trade Marks were awaiting examination and hence had neither been accepted nor rejected for registration.

To succeed in this Complaint under the auDRP, the Complainant was required to establish each of the following elements:

  1. the Domain Name was identical or confusingly similar to a name or a trade mark in which the Complainant has rights; and
  2. the Respondent had no rights or legitimate interests in respect of the Domain Name; and
  3. the Domain Name had been registered or subsequently used in bad faith by the Respondent.

The Decision

The Panelist found that the act of filing the Complainant’s Trade Marks was not, of itself, sufficient to establish rights in the subject trade marks (as required to satisfy the first element).

The Panelist then considered whether the Complainant had established common law or unregistered rights in the Complainant’s Trade Marks, noting that to do so, the Complainant would need to show that through use, the Complainant’s Trade Marks had acquired a secondary meaning and become a distinctive identifier associated with the Complainant.

The Complainant had addressed the issue of unregistered trade mark rights by stating in the Complaint:

“The Complainant has invested a significant amount of time and resources to develop and promote the Trade Marks and Services under the Trade Marks. As a result of this extensive use, the Complainant has acquired a valuable and exclusive reputation and goodwill in the Trade Marks in Australia, in relation to the Services”.

The Panelist found that this statement was not sufficient to discharge the burden of establishing common law or unregistered rights in the Complainant’s Trade Marks.

In considering the question of common law rights, the Panelist noted that where the trade mark on which a complainant is relying is descriptive in nature, it can be difficult to show that the trade mark had acquired a secondary meaning and become a distinctive identifier of the complainant. In such cases, the Panelist noted that clear evidence will be required to support an assertion of common law rights.

The Panelist provided some guidance as to what might constitute clear evidence of an established secondary meaning, in finding that the Complainant had not provided any evidence of:

  • the number of customer interactions provided by the Complainant under the Complainant’s Trade Marks; or
  • advertising used to promote the Complainant which featured the Complainant’s Trade Marks; or
  • surveys showing consumer recognition of the Complainant’s Trade Marks; or
  • Media references to the Complainant’s Trade Marks

In summary, the Panelist found that there was no evidence filed by Complainant “that would suggest that a consumer would come to associate “Tolling Customer Ombudsman” with the Complainant.

Accordingly, the Complaint was denied as the Complainant failed to establish the first element of the Complaint.

However, the Panelist did note that there may be grounds to consider a re-filed complaint in the event that the Complainant’s Trade Marks were to be registered (as has now occurred with the Complainant’s trade mark No. 1795772 “TOLLING CUSTOMER OMBUDSMAN” composite trade mark).

Discussion

This decision under the auDRP is a pertinent reminder that without a relevant trade mark registration, it may be difficult (or at least costly) to succeed in challenging third party registration of .com.au domain names featuring your trade marks/brands.

This decision further confirms that assertions of common law rights in a trade mark in complaints filed under the auDRP should be supported by the filing of relevant evidence.

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IP Australia introduces new trade mark searching system

/ Madderns / News

IP Australia has introduced a new system for searching trade marks on 10 February 2017. This new searching system, rebranded as “Australian Trade Mark Search”, replaced the previous system named “Australian Trade Marks Online Search System” (ATMOSS).

The new Australian Trade Mark Search system offers many improvements for searching trade marks by using the two different options available to users for searching ie “Quick search” and “Advanced search” (as shown below).

Australian Trade Mark Search: Quick search

Australian Trade Mark Search: Advanced search

Notable new features of the search system using the “Advanced search” option include:

  • Searching for up to four words and/or image terms at a time by adding additional search fields (click on the plus button to add additional fields). Previously, you could only search for up to two words and/or image terms.
  • Improved searching for word phrases (eg slogans). However, it is important to note that word phrase searching is very precise and may not pick up misspellings, plurals or phonetic variations.
  • Uploading an image for image comparison searching. The system will return results based on similarity.
  • Saving, retrieving and re-run your search results for up to 35 days.

To access the new Australian Trade Mark Search system, please click here https://search.ipaustralia.gov.au/trademarks/

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Trade Marks: Insight Radiology Pty Ltd v Insight Clinical Imaging Pty Ltd

/ Jacqueline Leong / Articles

In the recent case of Insight Radiology Pty Ltd v Insight Clinical Imaging Pty Ltd [2016] FCA 1406, the Australian Federal Court considered a dispute in respect of two logo marks that include the word “insight”:

The facts of the case are as follows: Both parties are in the business of providing medical imaging services. Insight Clinical Imaging Pty Ltd (“ICI”) has been operating in Western Australia since 2008 and filed a trade mark application for the “insight Clinical Imaging” logo mark depicted above (“the ICI logo mark”) in October 2012.  This application was accepted in December 2012 and proceeded to registration. Insight Radiology Pty Ltd (“IR”) commenced using the “insight radiology” logo mark depicted above (“the IR logo mark”) in New South Wales in 2012.  IR’s sole director, Mr Pham, filed a trade mark application for the IR logo mark in his own personal name in December 2011 and Mr Pham then assigned the application to IR (i.e. the company) in July 2013.  The IR trade mark application was opposed by ICI.

In summary, ICI opposed IR’s trade mark application on various grounds as well as claiming that the use of the IR logo constituted trade mark infringement, misleading/deceptive conduct and passing off. IR cross-claimed to cancel ICI’s trade mark registration.

ICI contended as part of its opposition that Mr Pham was not the true owner of the IR logo mark because the evidence pointed to the company, IR, being the correct owner at the time of filing of the application.  The evidence showed that there was never a licensing arrangement entered into between Mr Pham and IR authorising IR to use the IR logo. IR paid for the creation of the IR logo and commenced use of the IR logo and name in 2012. ICI also contended that the assignment from Mr Pham to IR was ineffective because it was made without consideration and that Mr Pham, in any event, had no rights of ownership to assign. The Court held, however, that although Mr Pham did not appear to be the correct owner at the time of filing, IR became the owner via the assignment. The Court was satisfied that the assignment was properly recorded from Mr Pham to IR as there was a document evidencing the intention to transfer the application, a clear identification of the application and, most importantly, the transfer of ownership was effected to the correct owner when the application was still pending.

Although ICI was unsuccessful in attacking the validity of IR’s trade mark application on the basis of the ownership issues, the decision was ultimately in ICI’s favour as the Court held that ICI had established a reputation for the ICI marks as at the filing date of IR’s application and, because of that reputation, the use of the IR logo by IR would likely cause deception or confusion.  IR had argued that ICI’s reputation should be limited to Western Australia; however, the Court considered that ICI had established a sufficient reputation so as to successfully oppose IR’s trade mark application on this basis.

With respect to ICI’s trade mark infringement claim, the Court held that IR had infringed ICI’s logo and IR failed to establish that it was entitled to the statutory defences sought. In particular, IR unsuccessfully argued that it should have a defence to the trade mark infringement claim on the basis that it had adopted the IR trade mark in good faith without knowledge of ICI.  The Court rejected IR’s submissions finding that IR was not entitled to claim that use of the IR mark was in good faith given that IR had not conducted proper and diligent searches to check whether the name “Insight Radiology” was available for use.

Finally, the Court also held that IR’s conduct constituted misleading/deceptive conduct as well as passing off.

Lesson: Prior to adopting a new trade mark, it is important to carry out reasonably comprehensive searches to check whether any other parties are already using a similar trade mark.  Searches of the Trade Marks Register should be conducted as well as general searches of the internet, businesses directories etc. Then, when filing trade mark applications, it is important to ensure that the correct entity is listed as the owner to avoid any ownership challenge by third parties in the future.

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