Are sub-brands failing your business? Two Australian trademark cases highlight the risks

What you need to know (in a nutshell)

1. The concept of “trademark use” is important in determining whether a particular sign is being used in a trademark sense under Australian law.
2. The function played by a brand name can be decisive in trademark cases, as demonstrated by two recent decisions involving beer and bikini brands.
3. The context in which a brand name is used and the overall branding strategy of a company can influence whether a brand name is perceived as a trademark or a style name.

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Is my product a brand?

Determining if a sign is being used in a trademark sense can be intricate and perplexing. This issue should not be overlooked, yet often it is.

In Australia, an essential element to prove certain things constitutes “trademark use” according to the law.

• Utilising the registered mark (when other criteria are satisfied) is an infringement.
• The use helps in registration, e.g., when seeking approval through evidence-based exceptions such as established distinctiveness or fair concurrent usage.
• The legitimate use of a trademark (to prevent an action to cancel due to non-use).
• First usage of a similar trademark to signify ownership of the same goods or services.

Notably, US academics have recently examined the issue of “failure to function” in significant detail.

Two Australian decisions have highlighted the importance of a name in beer and bikini-related cases.

The name ‘Triangl - DELPHINE’ identifies a certain bikini style, but not the brand

In Pinnacle Runway v Triangl Limited (2019), the Court ruled that using ‘DELPHINE’ on bikinis was not a violation of trademark rights because TRIANGL, rather than DELPHINE, acted as an indicator of origin. Murphy J argued this use only qualified as a ‘style name’.

Murphy J reviewed screenshots of the Triangl website, email advertisements and press releases (examples included). He thought it was unlikely people would believe DELPHINE sold TRIANGL items due to its main presence on these materials.

TRIANGL was prominently displayed on Triangl’s website during the relevant time period. It featured at the top and centre of the webpage, even when other font sizes were similar to TRIANGL (e.g DELPHINE - FIORE ROSA). This positioning made it more likely that people would perceive this as a trademark rather than simply linking “DELPHINE” with its colour (“FIORE ROSA”). Also reinforcing this notion was elements like their domain name which contained TRIANGL.

Murphy J also spoke about Triangl’s other marketing and promotional materials.

Murphy J concluded that many customers would access the DELPHINE bikinis webpages by first going to Triangl’s homepage, which prominently displayed TRIANGL. Consumers were likely to scroll through all of the bikini styles on offer (Shell Co v Esso Standard Oil [1963] 109 CLR 407).

Murphy J found Pinnacle’s argument implausible. Triangl advertised and sold