Spruson & Ferguson Trade Marks E-news. February 2008.

Mayne Industries Pty Ltd v Advanced Engineering Group Pty Ltd [2008] FCA 27 (23 January 2008), the first case to consider the operation of section 25 under the Trade Marks Act 1995 (Cth), is a cautionary tale for patent owners seeking to extend protection of their intellectual property by trade marking the shape of their invention. Public policy considerations were influential when the Federal Court recently cancelled a registered trade mark in these circumstances.

In this case the applicant (Mayne) was the owner of a registered trade mark (dating from May 2001) for a three dimensional “S” shape for “fence droppers” (used to space the wire strands in stock fencing).

Mayne alleged that Advanced Engineering had infringed its registered trade mark by importing fence droppers which embodied the S shape into Australia, offering them for sale and promoting them in advertising brochures. Advanced Engineering cross claimed seeking cancellation of Mayne’s registration on the grounds that it contained a sign that described a fence dropper formerly protected by a patent owned by Mayne, contrary to section 25 of the Trade Marks Act 1995 (Cth).

Under s25 the registered trade mark owner loses the exclusive right to use or authorise anyone else to use the trade mark in respect of goods and services covered by the registration where:

	the trade mark consists of or contains a sign that describes or is the name of an article or substance formerly exploited under a patent (or a service formerly provided as a patented process); and
	more than two years have passed since the expiry of the patent; and
	the trade mark is the only commonly known way to describe or identify the article, substance or service.

If s25 were established, Mayne would lose the exclusive rights to the trade mark 2 years after the patent expired (on 8 October 1984), some years before the trade mark was registered and would have no statutory rights to allege infringement.

Justice Greenwood found that the shape of the S loop adopted in Mayne’s fence dropper was primarily dictated by its function. Moreover, during the 16 years of the patent term and continuing in the post patent period the “commonly known” way of describing Mayne’s dropper had become the “S” shape of the loop. Consequently, the depiction of an “S Shape” dropper in Advanced Engineering’s advertising brochure and its importation and sale of a dropper containing an S loop did not constitute use as a trade mark and, as a result, did not infringe Mayne’s registered trade mark.

Justice Greenwood’s decision was influenced by the policy underlying the statutory monopoly given to inventors under patent law. The “social compact” underlying patent legislation is the encouragement of innovation and invention by the grant of a monopoly for a set term following which others are free to manufacture and develop the invention. According to his Honour, trade marks legislation is not a means by which inventors can secure further exclusive rights (through infringement proceedings) for the shape of a functional manner of new manufacture formerly the subject of a patent.

Mayne’s conduct was also relevant in the decision to cancel the registration. Again policy considerations influenced his Honour in concluding that Mayne had deliberately set out to:

“…strategically put itself in the same position, through registration of a three-dimensional shape for a functional “S” shaped loop for embodiment in fence droppers, as it would have been in, had the expired patent remained on foot, with the added advantage that exclusive rights of use and the right to obtain relief for infringement thus obtained, would be renewable every 10 years…”.

This case illustrates that trade mark registration will not assist the owners of expired or expiring patents to extend their rights where the sign in question, in this case a three dimensional shape for a farming implement, has become the commonly known way of describing that particular article.

For further information please contact Hilary May Black at hilary.mayblack@sprusons.com.au