What is the difference between product certification and the provision of certification services? Halal Certification Authority Pty Ltd (HCA) found out in the Full Federal Court case of Halal Certification Authority Pty Limited v Flujo Sanguineo Holdings Pty Limited ([2023] FCAFC 175).
Background
HCA, which assesses and certifies halal products, self-filed an application for registration of the mark below (‘the annulus design’):
It did not seek registration as a certification mark, but sought and obtained registration in relation to:
- Class 42: “Scientific and technical services; issuing halal certification to businesses and individuals for goods and services if religious and technical requirements are met”; and
- Class 45: “Personal and social services rendered by others to meet the needs of individuals”.
It licensed various businesses to use its registered trade mark in relation to goods that it verified as halal, and ultimately ended up in a dispute with Flujo Sanguineo Holdings Pty Limited (FSH), which sold products bearing the annulus design without the authority of HCA.
Primary judgment
At first instance, the primary judge found as follows, among other things:
- FSH had not used the annulus design as a trade mark. This was a consequence of its small size on packaging (see the image below, the mark is at the bottom on the side of the packet) and its descriptiveness.
- The registration for the annulus design should be cancelled because it was not sufficiently distinctive to be registered, and its use misrepresented HCA as an officially sanctioned “authority”.
In light of the finding that there was no use as a trade mark, use in relation to relevant goods or services did not need to be considered.
The matter was appealed to the Full Federal Court.
Full Federal Court decision
Use as a trade mark
Notwithstanding the size of the annulus design on the packaging, it performed the dual functions of both (i) describing the goods as halal, and (ii) indicating (as a trade mark) a connection with the Halal Certification Authority Australia.
Use in relation to registered services
There was no use in relation to the registered services. The only use was in relation to the goods on which the annulus design appeared.
Goods closely related to the registered services
Infringement can occur when there is use in relation to goods closely related to services covered by a registration. Therefore, it was necessary to consider whether the goods concerned were closely related to the registered services.
HCA argued that the goods were closely related to their certification services because they were goods that they had certified as halal. However, defining goods as ‘closely related’ simply because they were certified by HCA was inconsistent with the concepts applied to determine objectively whether goods and services are closely related.
The goods in the present case were “sweeteners”, which the court found to be unrelated to halal certification services. The court suggested that meat products might be considered closely related.
‘Use in good faith’ defence
FSH had products produced by toll manufacturers, which had entered into agreements with HCA concerning use of the annulus design. FSH believed that the authorisation obtained by the toll manufacturers extended to permitting its use of the annulus design on its retail products. At certain times, there were gaps in the approvals obtained by the toll manufacturers and FSH did not have a direct agreement.
In light of the previous agreements between the toll manufacturers and HCA concerning use of the annulus design, FSH believed that its ongoing application of the annulus design to the subject goods was an authorised use.
The court held that, up until the time that HCA issued a letter demanding that FSH discontinue use of the annulus design, it would have been entitled to rely on the defence that there was good-faith use of the trade mark in a descriptive sense. This was in light of FSH’s assumptions about use being approved and because the goods being sold had previously been approved by HCA as halal.
Cancellation of the annulus design registration
The Full Federal Court agreed that the annulus design registration should be cancelled on the following grounds:
- The trade mark was misleading – although HCA had an official role in the certification of halal products, that official status was closely prescribed and applied only to red meat and meat The evidence established that HCA used the annulus design in relation to a wide range of goods beyond red meat and meat products. Use for the halal certification of non-meat products was likely to deceive or cause confusion. This was because it was likely to cause consumers to wonder whether the annulus design designated the approval of an authoritative body authorised by the government to certify non-meat products as halal.
- The trade mark was not capable of distinguishing – the English words and Arabic characters (the Arabic characters mean ‘halal’) in the annulus design would be understood in the relevant market as describing the goods to which the trade mark was applied, and in relation to which the services were provided. Annulus designs are in common use and the representation was insufficient to render the mark, as a whole, capable of distinguishing the subject services.
Takeaways
Obtaining registration as a certification mark requires the preparation of appropriate rules and government approval. Seeking registration in respect of certification services may not protect against use on the goods to which the trade mark may be applied.
The case is also interesting in that it demonstrates how a sign can be used simultaneously as a description and as a trade mark.
This article first appeared in WTR Daily, part of World Trademark Review, in (December 2023). For further information, please go to www.worldtrademarkreview.com.