What you need to know
- The Full Court of the Federal Court of Australia has found that VAGISAN is deceptively similar to VAGISIL (in relation to goods in classes 3 and 5 such as soaps and pharmaceutical products), overturning the decision of the primary judge.
- In doing so, the Full Court has provided powerful guidance on the proper approach to considering descriptive elements, and the "idea" of a trade mark, for the purposes of assessing deceptive similarity.
- To the extent that the "VAGI-" element of the trade marks conveys a descriptive meaning, it is nevertheless a "striking feature" of the VAGISIL trade mark that is likely to be recalled by consumers because it calls to mind an awkward subject.
What you need to do
- Businesses should take this decision into account when weighing the risks and opportunities associated with adopting a brand that is similar to a competitor's brand, or defending their own brand from a rival.
- The case also demonstrates the importance of seeking local trade mark registrations promptly when, or ideally before, entering a new market.
Path to the Full Court
This case is a classic example of two companies who created similar brands in separate countries, and subsequently found themselves in dispute following expansion into international markets.
Combe International Ltd (Combe) is a global personal care company founded in the US in 1949. It sells products under a number of well known brands, including Just For Men (hair colouring), Seabond (dentures), and VAGISIL. Combe created VAGISIL in the 1970s in the US, and Combe's earliest Australian trade mark for VAGISIL was registered in 1976.
Dr August Wolff GmbH & Co. KG Arzneimittel (Dr Wolff) is a German pharmaceutical company founded in 1905. It primarily supplies medicinal, cosmetic and dermatological products. Dr Wolff created VAGISAN in 1998 in Germany.
As the two companies continue to expand their global reach, the similar brand names have led to trade mark disputes in, among other places, Israel, New Zealand, Singapore, the United Kingdom, the United States of America and Australia. This is primarily in the context that Combe is established in the local market with its VAGISIL brand, and Dr Wolff seeks to enter with VAGISAN.
Initially, Combe successfully opposed Dr Wolff's trade mark application for VAGISAN in the Australian Trade Marks Office. Dr Wolff appealed to the Federal Court and was successful in a hearing de novo of the opposition ([2020] FCA 39).
Combe appealed to the Full Court of the Federal Court of Australia where Justices McKerracher, Gleeson and Burley unanimously found in favour of Combe.
Ashurst acted for Combe in the Federal Court and Full Court proceedings.
Full Court decision
The main ground of opposition dealt with in the appeal was section 44 of the Trade Marks Act 1995 (Cth) – that VAGISAN is deceptively similar to VAGISIL.
It was held at first instance, and not challenged on appeal, that the goods of the VAGISAN trade mark application were the same as or similar to those of Combe's registered VAGISIL trade marks. As a result, the appeal proceeded solely on the issue of whether the marks are deceptively similar.
At first instance, Justice Stewart held that VAGISIL and VAGISAN were not deceptively similar. In reaching this decision, Justice Stewart considered that the VAGI- element of the trade marks conveyed a descriptive idea, and discounted those letters in their entirety for the purposes of assessing deceptive similarity. His Honour concluded that "the words do not have a close phonetic resemblance" and the suffixes SIL and SAN are quite distinct.
The Full Court unanimously disagreed with this approach for a number of reasons.
The Full Court observed that:
- the two marks share the first five letters and are comprised of three syllables, with the "VAGIS-" portion pronounced the same way; and
- the different suffixes "SIL" and "SAN" are both sibilant, and any aural dissimilarity arises only from the end of the word, which may be mispronounced or slurred, or less readily recalled by consumers.
On this basis, the Full Court concluded that the two marks were visually and aurally similar.
In relation to the idea of the marks, the Full Court agreed with Justice Stewart that VAG- or VAGI- may convey a reference to the vagina. However, in stark contrast to Justice Stewart, who discounted that element for that reason, the Full Court considered this was a "potent idea" in common between the marks. The shared presence of that potent idea contributed towards the finding of deceptive similarity.
The Full Court also observed that, to the extent VAGI- conveys a vaginal reference, this is something consumers are more likely to recall. This is because VAGI- represents a topic regarded with some awkwardness among consumers, and is likely to be a "striking feature" of VAGISAN for this reason. The Full Court thought it most likely that consumers would take away an imperfect recollection that there was a trade mark for "VAG, VAGI or VAGIS something", and not have a clear recollection of the final letters of VAGISIL. Consumers would be caused to wonder, when they encountered VAGISAN, whether the goods were from the same trader.
The Full Court upheld Combe's appeal, found that the section 44 ground of opposition was made out, and made orders for the refusal of Dr Wolff's application to register VAGISAN.
Lessons from the decision
The decision is a powerful reminder about the nuanced approach that is required when considering similar trade marks, especially coined terms.
Elements of a trade mark that convey a descriptive meaning are not automatically disregarded, and may in fact constitute a "striking feature" of a trade mark on the particular facts of the case.
Authors: Elizabeth Arms, Lawyer; Tim Rankin, Lawyer; Joanna Lawrence, Counsel and Stuart D'Aloisio, Partner.
