Symbion undone by Full Court’s “ordinary person” approach to comparison of trade marks

Symbion undone by Full Court’s “ordinary person” approach to comparison of trade marks

Symbion undone by Full Court’s “ordinary person” approach to comparison of trade marks

The Full Court of the Federal Court of Australia has overturned the trial Judge’s decision in Symbion Pharmacy Services Pty Ltd v Idameneo (No 789),1 finding that an ordinary person would not form an impression that a trade mark used by radiology provider Idameneo 789 was, or was like, either of the “Symbion marks” used by pharmaceutical distributor Symbion Pharmaceutical Services Pty Ltd (SPS).2

The decision at first instance and appeal

In April 2011, Justice Jessup ruled that while Idameneo 789 had not infringed Symbion’s trade mark, it had breached a clause in the licence agreement with SPS restraining it from using a mark that was similar to or capable of being confused with the Symbion marks.

Although the Full Federal Court allowed Idameneo 789’s appeal at the outset on the question of whether the Idameneo 789 Mark was sufficiently like the Symbion marks alone, the Court nevertheless considered the parties’ other arguments with respect to the construction and interpretation of the contractual restraint clause in the context of the breach of contract claim brought by SPS.

Neither party appealed the trial Judge’s finding that Idameneo had not infringed the Symbion Trade Mark.

Construction and application of the restraint clause

In relation to the restraint clause, which prohibited Idameneo from using any mark “similar to or capable of being confused with” the Symbion marks, the Court held that the trial Judge had erred in conflating that phrase into one composite expression. Rather, the Court concluded that the natural and ordinary meaning of the language should be given, such that the phrase should be read as prohibiting use of two different categories of marks – those that are “similar to”, and those that are “capable of being confused with”, the Symbion marks – as argued by SPS at the trial. In reaching this conclusion, the Court was influenced by the context of the transaction, including the language used in the licence agreement and the surrounding circumstances (including the specialised market in which the parties’ respective services were provided), which indicated that the parties intended the restraint to extend beyond the concepts of “substantially identical” and “deceptive similarity” in the Trade Marks Act.

Reaching this conclusion, the Court then applied the different tests set out in the restraint clause and concluded that neither had been satisfied. Even though the Court appeared somewhat critical of the trial Judge’s approach, it followed a similar approach when comparing the marks to determine whether the Idameneo 789 mark was similar to or capable of being confused with the Symbion marks. It concluded that the tests used in cases of statutory infringement actions for the ordinary reasonable person were apposite for this purpose. In relation to the “capable of being confused with” test, the Court found that it was not open to the trial Judge to find that the Idameneo 789 mark was capable of being confused with the Symbion marks in the absence of evidence from persons in the specialised market in which the parties traded, as Idameneo argued at the trial.

Drafting implications: clear language and express intentions are vital

This decision indicates the Full Court’s willingness to give a contract its natural and ordinary meaning, in its particular context, to give effect to parties’ intention. This approach is particularly important where a party seeks to constrain another’s use of trade marks which extends beyond the statutory monopoly granted and a trade mark owner’s rights at common law to protect its reputation and goodwill. To avoid doubt, parties should ensure that contracts express their intention in clear language and, if necessary, expressly indicate their intention that a restraint provision extends beyond the scope of the Trade Marks Act or common law passing off.

Endnotes

  1. [2011] FCA 389.
  2. [2011] FCAFC 164.