Australia and New Zealand have adopted different approaches to implementing the test of distinctiveness.[1]

Capable of distinguishing

There are different meanings of “capable of distinguishing” under s 5 and s 18 of NZTMA when compared with Australian legislation. A statutory definition of capable of distinguishing does not exist.

In New Zealand, a trademark is not registrable if it is non-distinctive. Lord Wilberforce in York Trademark highlighted that capable of distinguishing is based on fact and law.[2] The current practice in New Zealand under 2002 Act follows the previous act that a trademark is incapable of distinguishing if the trademark has not acquired distinctiveness through use. This is the fundamental criterion to assess whether a sign is a trademark.[3]  Capable of distinguishing differs from lack distinctiveness under s 5 and s 18(1)(a). A lack inherently distinctive trademark is capable of distinguishing if the mark is factual distinguishing. The court in AA Insuranceheld that a laudatory or descriptive word lacks distinctiveness as consumers are unable to identify the trade source under s 18.[4] 

A trademark is not registrable in Australia if it does not distinguish the applicant’s goods under s 41. A trademark is not adapted to distinguish if it is not inherently adapted to distinguish nor if it does not distinguish in fact. The difference between capable of distinguishing and inherently adapted to distinguish is not as clear as it is in New Zealand legislation. In Cantarella Bros Pty Ltd v Modena Trading Pty Ltd (AU), the court explained the distinctiveness test under s 41 – (1) whether the foreign words carry ordinary significance in respect to Australians for relevant goods; and (2) whether it is common for other traders to adopt these wordings for similar goods. [5] The court considered that the ordinary significance of the foreign words was irrelevant to the quality of goods. These words were inherently adapted to distinguish among Australians. Therefore, descriptive or laudatory words could be allowed to be registered on the basis of prima facie distinctiveness.

Distinctiveness test

Australian practice is based on the presumption of registrability. The examiner adopts a negative test – emphasising what element in the mark is non-distinctive under s 41(1).[6] Balance of probabilities is a tool to assess to what extent the mark is not inherently adapted to distinguish.[7] In Clark Equipment Co v Registrar of Trademarks, Kitto J explained that a mark is distinctive if it is an “inherent adaption to distinguish”.[8]

Two elements to assess distinctiveness are whether the mark is an inherent adaptation to distinguish at the filing date and the existence of ordinary signification.[9] The High Court in Cantarella held that the majority of Australians were likely to consider the Italian words as inherently distinctive of relevant goods, although they are descriptive in the Italian language. [10] A mark with commercial attraction can be distinctive if it can indicate the origin. The test for ordinary significance under s 41 is based on the public. In Clark, the court explained that the test considers extent of distinctiveness – whether the mark has sufficient inherent adaptation to distinguish.

Unlike in Australia, the commissioner of New Zealand assesses whether the mark is incapable of distinguishing under s 18(1)(a) and has no distinctive character under s 18(1)(b).[11] Commissioners do not adopt a negative test. In McCain v Conagra, the court of appeal held that it is factual capability to distinguish that matters, not potential capability.[12] In Fredco Trading Ltd v Miller, Venning J adopted the decision of McCain[13] on the criterion of capability of distinguishing under s 5 and s 18(1)(a). [14] The court highlighted that the meaning of “incapable of distinguishing” in s 18(1)(a) and “no distinctive character” in s 18(1)(b) are different, though it failed to provide a clear explanation of whether it could be interpreted based on potentiality and factuality.[15] In Intellectual Reserve v Robert Sintes,[16] Baragwanath J explained that it should be actual capability to distinguish according to McCain that counts.

The difference between “capable of distinguishing” and “distinctive character” depends on whether the mark is inherently distinctive at the time of filing the application. The test is based on average consumers of relevant goods and services. If the applicant intends to use the mark but has yet to use it before the application date, the assessment is based on “distinctive character” in s 18(1)(b) according to Fredco. In AA Insurance[17], Williams J explained that the assessment of s 18(1)(a) and s 18(1)(b) is identical for a mark without prior use in the marketplace. If the application attracts s 18(1)(b) objection, the applicant can overcome the objection by showing that the mark has distinctive character if evidence exists that can prove that the mark has acquired distinctiveness through use under s 18(2).

Acquired distinctiveness

In Australia, the mark is incapable of distinguishing under s 41(2) if it is not prima facie distinctive and evidence of factual distinguishing does not exist.[18] There are three types of distinctiveness of a mark: (1) prima facie distinctive, (2) not sufficiently inherently adapted (NSIA) in s 41(4)(a) and (3) not to any extent inherently adapted (NTAEIA) in s 41(3)(a).[19] NSIA and NTAEIA marks are non-inherently distinctive marks and are required to show factual distinctiveness by submitting evidence. However, a lower threshold is required for NSIA than for NTAEIA in assessing whether a mark is incapable of distinguishing. To overcome the objection, the owner must prove that the NTAEIA mark had factual capability of distinguishing the goods and services before the application date.

This is different from the time requirement for the NSIA mark. Three factors are used to assess whether an NSIA mark has acquired or will acquire distinctiveness: the extent of distinctiveness of the mark, actual and potential use of the mark, and other circumstances.[20] Evidence of use after the filing date is sufficient if it shows that an NSIA will acquire factual distinctiveness. However, under the presumption of registrability, the examiners consider whether the evidence for supporting NSIA and NTAEIA are quantitatively sufficient to prove the mark has not or will not acquire distinctiveness.

In New Zealand, a non-inherently distinctive mark can overcome a lack of distinctiveness objection if the owner can prove that the mark has acquired distinctiveness through use before the application date under s 18(2). The commissioner does not consider the extent of inherent distinctiveness of a mark. Instead, they adopt a single evidence test for a mark without inherent distinctiveness. In Fredco, the court followed the decision from Windsurfing Chiemsee Produktions v Huber[21] and held that evidence must show the mark has factually acquired distinctiveness through use among a substantial proportion of consumers.[22] It is insufficient if the evidence shows only recognition among consumers.[23]

Invalidation

In Australia, a different assessment is used for factual distinguishing and invalidation on the basis of lack distinctiveness under s 88. For a mark that is NTAEIA, the proprietor has a potentially valid defence against invalidation only if the mark has factual distinguishing through substantial use before the application date. For an NSIA mark, evidence showing a post-filing date of use is acceptable. In New Zealand, the owner can save the registration if the owner can prove that the mark has acquired distinctiveness after the registration date under s 73(2).

[1] Michael Handler, “All That Glitters Is Not Gold Part 1” [2016]UNSWLR37.

[2] York Trademark [1984]RPC231(HL)

[3] Rob Batty “Unravelling the Distinctiveness Knot in New Zealand’s Trade Marks Act” (2017) 23 NZBLQ .

[4]  above n 30

[5] [2014]HCA48

[6] Trademarks Manual of Practice and Procedure, Explanatory Memorandum, “Intellectual Property Laws Amendment (Raising the Bar) Bill 2011”.

[7] above n 15.

[8] (1964)111CLR511.

[9] above n 15.

[10] above n 15.

[11] above n 42

[12] [2002]3NZLR40(CA)at [10]

[13] above n 48

[14] (2006)11TCLR751

[15] above n 19.

[16] CIV-2007-404-2610(HC)

[17] [2012]1NZLR837

[18] above n 15.

[19] above n 15.

[20] Michael Handler “Grey Skies and Silver Linings Part 2” Australian Trademark Law (Oxford University Press, 2010).

[21] [1999]ECR1-2779.

[22]above n 23 and n 22.

[23] Effem Foods Ltd v Unilever PLC and Bluebird Foods Ltd IPO T43/03, 26 Nov 2003.