Recent Full Federal Court decision aims to reduce confusion in Australia

The kids have grown up, the retirement papers are finalized and your superannuation cheques are flowing in. What is the next logical step? A motor home tour around Australia, I hear you cry. But when it comes to choosing the right chariot, that the choice is not as clear as you might have thought. Granting never-before-seen remedies, a decision by the Full Federal Court of Australia will require you to sign a form acknowledging that your Winnebago is not actually a Winnebago. Winnebago—a name familiar to us all. For the inexperienced in all things motor home, our instinct to immediately bring this brand to mind is likely a result of popular US culture. It comes as quite a shock to learn therefore, that the Winnebago offered on Australian shores is something quite distinct from that which provided so much entertainment when watching Chevy Chase’s colourful cousins throughout the 80s and Robin Williams in the 2006 movie, “RV” or reading about Stephen King’s Doctor Sleep villainous geriatrics roaming the countryside in their tricked out RVs.

Wait on – what is this all about?

The case centred around a dispute between the US corporation, Winnebago Industries Inc. (Winnebago Industries) and Australian business, Knott Investments Pty Ltd (Knott). Knott had, without authorization, manufactured motor homes in Australia since 1978 using the Winnebago trade mark. While the US giant became aware of this production in 1985, it wasn’t until 1991 that steps were taken to cease the infringing manufacture. This led to a settlement agreement in 1992 between Winnebago Industries and Knott. Only 5 years later, Knott breached the 1992 agreement by successfully applying for registration of the Winnebago trade mark in Australia. Showing less speed then their vehicles, it wasn’t until 2010 that Winnebago Industries demanded that Knott cease using the Winnebago name and logo. A claim for passing off and misleading or deceptive conduct was subsequently brought.

The Australian Courts’ decisions

At first instance, Foster J restrained Knott from using the name and logo and cancelled its Australian trade mark pursuant to s 88 of the Trade Marks Act 1995 (Cth). Knott appealed to the Full Federal Court. On appeal, the element to be determined was whether Winnebago Industries had a sufficient reputation in Australia at the time of the offending conduct to support its claims for passing off and misleading or deceptive conduct. Ultimately, this question was decided in favour of Winnebago Industries, with the Court holding that Knott had used the Winnebago name and logo without authority since 1978 and had not been encouraged, during this time, to believe that its actions would not be “accepted or opposed”. Cowdroy J commented specifically that Winnebago Industries’ “ inaction would not lead a reasonable person to believe that [it] had forgone its rights”. The question then came down to what relief was appropriate in the circumstances. The Chief Justice acknowledged the difficulties involved in this determination, commenting that a “significant tension” arose which required a balancing exercise to take place.

New remedies for Australia?

This rocky terrain led to relief which the Court accepted would be “novel”. Nonetheless, the “unusual” circumstances demanded it. It was accepted that to completely restrain Knott from the use of the Winnebago marks would be unreasonable in light of the substantial delay by Winnebago Industries. Indeed, for 25 years Knott had built its business in Australia to the point where $560 million worth of vehicles had been sold, multiple industry awards had been achieved, and the business had established a significant network of dealers, employing 215 people. The Chief Justice therefore acknowledged that to enforce some injunctive forms of relief would go too far as to extinguish Knott’s ability to benefit from its reputation. It was necessary to consider any advantage which would benefit Winnebago Industries by allowing it to make use of Knott’s work and expenditure in Australia during the 25-year period. It was decided that the protection of the public and prevention of misleading or deceptive behaviour would became the primary goal of the orders made on 17 October 2013. See Order. The orders prevented Knott from use of the Winnebago name or logo on any document, advertisement (including on radio), web page, other written material and on the vehicle itself (despite submissions by Knott that this was inappropriate), unless that use was followed by a statement to the following effect: Further, the orders prevented selling, hiring or otherwise dealing in vehicles which displayed the Winnebago name without first requiring purchasers, hires or persons to sign a form stating that they have been informed that those vehicles were not manufactured by, or by anyone having any association with, Winnebago of the United States.

What effect has this had on the trusty Australian Winnebago vehicles, you ask?

Well, although the orders were not characterised as injunctive relief, the commercial reality of having to place such a notice on motor homes—not to mention contracting with customers over use of a trade mark—means that the orders are prohibitive.

Indeed, Knott has chosen to ensure that no further confusion is experienced, changing the name of manufacture from “Winnebago Industries” to “AVIDA” in 2013. Although the disclaimer does still appear on their website. So the next time you find yourself behind a motor home creeping up the incline of a winding road and bearing the AVIDA mark, take the time to stop, think about the journey that this trade mark has been on, and cross your fingers that an overtaking lane is not too far away. Source: Knott Investments Pty Ltd and Others v Winnebago Industries Inc. [2013] FCAFC 59 was heard in March and June of this year in the Full Federal Court before Allsop JC, Cowdroy and Jagot JJ. Orders were made on 17 October 2013. Knott has a period of 28 days from this date in which to appeal the decision to the High Court of Australia.

This article was prepared by Alyson Poole, a graduate of Norton Rose Fulbright’s Australia Intellectual property group.