ACCC ends the party for SCHOOLIES trade mark owner
24 November 2005School may be out for thousands of school leavers currently flocking to Queensland to celebrate schoolies week, but the Australian Competition and Consumer Commission (ACCC) has ended the party for Break Free Holidays, the registered owner of the SCHOOLIES trade mark in six classes since 1992.
Misleading or deceptive conduct by Break Free Holidays
The Federal Court held in 2000 in Sports Break Travel v P & O Holidays that the word SCHOOLIES was entirely descriptive of the travel and accommodation services provided by Break Free Holidays at the time its applications were filed. The registrations were held to be invalid and ordered to be removed from the Register (although the registrations remain registered).
Subsequently, a number of third parties had received threatening letters for using the word SCHOOLIES as a general descriptive word in their advertising and promotional material for schoolies week. The ACCC investigated and concluded that Break Free Holidays had potentially engaged in misleading or deceptive conduct under the Trade Practices Act by:
- asserting that the third parties’ use was infringement of its SCHOOLIES trade mark registrations, irrespective of the context in which SCHOOLIES is used
- threatening to commence legal proceedings for trade mark infringement if the use did not stop, and
- asserting that the third parties could not continue to use the word SCHOOLIES without its authorisation.
Undertakings by Break Free Holidays
Break Free Holidays acknowledged the ACCC’s concerns and has given court enforceable undertakings that for five years it will obtain legal advice and clearance before:
- using the symbols ® or ™ in conjunction with the word SCHOOLIES
- asserting to third parties that it is the registered owner of the SCHOOLIES mark or that the third party has infringed its registrations
- threatening to commence legal proceedings against third parties for trade mark infringement, or
- asserting that third parties requires its authorisation to continue to use the word SCHOOLIES.
Break Free Holidays must also report annually to the ACCC on its approaches to third parties about their use of the word SCHOOLIES and implement a trade practices compliance program.
Groundless threats of legal proceedings
No court action was taken by the threatened third parties against Break Free Holidays for groundless threats of legal proceedings under the Trade Marks Act.
If such an action had been successfully taken, the third parties could have obtained a declaration from the court that Break Free Holidays had no grounds to make the threats, an injunction restraining continued threats or an award for damages sustained because of Break Free Holiday’s conduct.
Lessons for trade mark owners
Graeme Samuel, the ACCC chairman commented that:
Businesses should be very mindful of the limits of their intellectual property rights. It is important to ensure that overzealousness doesn’t drift into the misleading and deceptive category of representations.
The case is a potent reminder that trade mark owners should seek legal advice on whether they have justified grounds before sending a letter of demand which threatens legal proceedings for trade mark infringement. The consequences for inappropriately seeking to enforce trade mark rights can be as severe as ACCC disciplinary action or an action for groundless threats of legal proceedings under the Trade Marks Act.
This article was written by Lisa Ritchie, Solicitor and Trade Mark Attorney.
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