The recent Federal Court of Appeal decision in Geox S.P.A. v. De Luca considered whether modifications to the appearance of a trademark went beyond the scope of the registration. The Court also highlighted important factors for brand owners to consider when licensing and refreshing a corporate logo.
The Use of Variants
The Registrar of Trademarks may cancel a trademark registration if it has not been used in the preceding three years. In 2017, Geox asked the Registrar to cancel Giuseppe De Luca’s trademark registration for:
Following the usual procedure, the Registrar required Mr. De Luca to submit an affidavit proving his ANFIBIO & Design mark had been used in association with shoes and boots during the preceding three years.
Mr. De Luca asserted that during the relevant time the mark had been used in the following updated form under license by Chaussures De Luca, a company that he had founded and previously owned:
In response, Geox argued that the mark used by Mr. De Luca’s licensee, Chaussures De Luca, was not registered trademark and, in any event did not constitute use by or for the benefit of Mr. De Luca himself.
When considering the use of variations of a trademark, the test is whether the differences between the registered mark and the variation are “so unimportant that an unaware purchaser would be likely to infer that both, in spite of their differences, identify goods having the same origin”. In this case, because the dominant features of the mark—the penguin design and the word ANFIBIO—were retained in the updated logo, and the mark remained recognizable, the Registrar held that the use of the updated logo constituted use of the registered mark.
With respect to licensing, subsection 50(1) of the Trademarks Act provides that use of a mark by a licensee is deemed to have the same effect as use by the owner, provided that the owner has direct or indirect control over the character or quality of the goods or services under the license.
In this case, Mr. De Luca’s licence agreement specified that the goods sold in association with the mark must continue to be made with the same quality as at the time the agreement was formed. The license agreement also contained a clause permitting Mr. De Luca to terminate the license agreement if the licensee did not ensure such quality. The licensee paid royalties throughout, and Mr. De Luca never complained. On those facts, the Registrar was satisfied that Mr. De Luca had established use during the relevant time period in association with boots. The Registrar was not satisfied that the mark had been used in association with shoes and the registration was narrowed accordingly.
The Registrar’s decision was affirmed on appeal to the Federal Court, and again by the Federal Court of Appeal.
A trademark license does not need to be written to be valid. The Federal Court noted that one way a trademark owner can demonstrate the requisite control under subsection 50(1) is to have a written license agreement which expressly imposes a quality standard. The quality control clause in Mr. De Luca’s license agreement was integral in establishing his control over the quality of the goods produced by the licensee in association with the trademark.
Given the Federal Court of Appeal’s approval, this case is a timely reminder of three important lessons:
- It provides an example of the degree to which a registered trademark can safely be modified;
- It implicitly recommends that trademark owners seek protection for updates to their trademarks so that they can avoid the time, expense and uncertainty associated with court challenges; and
- It reminds trademark owners of the importance of having a written licence agreement to demonstrate the requisite control over the character and quality of the goods and/or services provided by their licensees.