Australia: Coffee Machine manufacturer goes ATOMIC
On 10 January 2019, the Federal Court issued its decision in Notaras v Barcelona Pty Limited  FCA 4. The decision reminds us to be careful when drafting specifications to ensure a breadth of protection and to be vigilant in monitoring the Register.
In 1964, Notaras imported and sold the iconic ATOMIC coffee machines in Australia. Subsequently, she became the exclusive distributor and acquired the moulds in the late 1980s, becoming the manufacturer for the Australian market. She owns the following trade marks covering, broadly, coffee machines in class 21:
In 2005, Barcelona Pty Ltd (Barcelona) opened its café/restaurant in Western Australia, under the mark “ATOMIC” and filed an application to register ATOMIC covering coffee cups, coffee, retailing/wholesaling of coffee and café-related services in classes 21, 30, 35, 40 and 43.
Notaras opposed registration before the Trade Marks Office but failed to establish that:
- owing to her earlier use of ATOMIC, Barcelona is not the common law owner of the mark for ground coffee;
- her earlier registrations for ATOMIC should preclude registration; and/or
- she enjoyed a reputation in ATOMIC and therefore use of Barcelona’s mark would be likely to deceive or cause confusion.
Notaras appealed to the Federal Court before Nicholson J who found against her.
Regarding ownership, Notaras established historic use of the word ATOMIC as a trade mark for ground coffee in about mid-1960s, but she appeared to cease selling by about 1972.
Given the period of non-use, the Court concluded that Notaras abandoned the mark ATOMIC. Her failure to select another supplier and the co-existence of a registration for ATOMIC owned by Suntory for coffee since 2005, weighed against Notaras’ assertion that she intended to resume sales. Accordingly, the Court concluded that she was not the common law owner of the mark for ground coffee and Barcelona was open to apply to register for those goods.
For Notaras’ earlier ATOMIC registrations, the ground of opposition turned on whether the goods covered by her registrations are similar to the goods/services covered by Barcelona’s application. The Court concluded that although there are overlapping trade channels, coffee, coffee cups, retailing/wholesaling of such goods and café services are not similar or closely related to coffee machines.
The Court indicated that even if that conclusion was incorrect, Barcelona would be an honest concurrent user noting that the registration was restricted to Western Australia where its café is located. The fact that Barcelona was inspired by the machine’s branding was not enough to suggest its mark was adopted dishonestly.
Finally, Notaras established prior reputation in the mark ATOMIC, but the Court held that the use of the mark is not likely to deceive or cause confusion noting that Notaras’ coffee machines have a higher retail price (AUD575), sales in Western Australia were limited and there were no instances of confusion.
The outcome may have been different if Notaras’ registrations covered a broader range of goods/services as this would have required greater consideration whether there had been honest concurrent use. Further, the case highlights the importance of maintaining exclusivity on the Register.