Colorado Group Ltd v Strandbags Group Pty Ltd [2007] FCAFC 184 – Case Summary

Author: Jasmine Burrows, Progressive Legal

Facts

This case concerns the concurrent use of the trade mark, ‘Colorado’ on certain goods including backpacks, handbags, purses, and wallets by two retail groups.  

The Appellants include several different retailers from Colorado Group Ltd (Colorado Group) and the Respondents include several different retailers from Strandbags Group Pty Ltd (Strandbags).  

Colorado Group has owned the trade mark for the word, ‘Colorado’ for goods including bags, wallets, purses, backpacks, belts, clothing, boots, shoes, slippers, and other footwear since 2001.  

The main controversy here is that both parties used the word ‘Colorado’ well prior to 2001.  

Colorado Group brought trade mark proceedings against Strandbags for its sale of handbags, wallets, purses, and backpacks with the branding ‘Colorado’. 

In response, Strandbags argued that Colorado Group’s trademark registration was not valid for those specific goods.  

The trial judge decided that Colorado Group’s trademark registration was only valid for backpacks, and Strandbags’ use of ‘Colorado’ on handbags, wallets, and purses did not infringe on Colorado Group’s registration. 

Issues

Did Strandbags’ ‘Colorado’ branding infringe Colorado Group’s trade mark?  

Was Colorado Group’s trade mark registration valid? 

Decision

The Full Court found that the trademark registration for ‘Colorado’ was not valid for certain goods, and even if it was valid for backpacks, it did not give Colorado Group the right to claim ownership or register it for handbags, wallets, and purses. 

Reasoning

Proprietorship

In Australia, the first user of a trademark for specific goods and goods of the same kind is entitled to register the mark, even if the application is made later.  

Colorado Group claimed to have used the trade mark, ‘Colorado’, on backpacks since 1982. However, there was uncertainty regarding whether ‘Colorado’ was used alone or with a logo. If it was used with a logo, Colorado Group might not be the sole owner of the word ‘Colorado,’ making their registration invalid. 

Colorado Group relied on the evidence of a store employee who recalled selling backpacks with just the word ‘Colorado’ embroidered on them in 1982 and 1983. Strandbags, who used ‘Colorado’ for handbags, purses, and wallets after 1982, tried to challenge Colorado Group’s claim of proprietorship. 

The Court found that Strandbags did not prove that Colorado Group did not use ‘Colorado’ alone on backpacks first. Thus, Colorado Group’s claim to the trademark remained valid for backpacks. However, Strandbags had used ‘Colorado’ for handbags, purses, and wallets before Colorado Group, which meant that Colorado Group’s registration did not cover these items, unless they were considered goods ‘of the same kind’ as backpacks. 

The Court agreed that backpacks and handbags were not goods of the same kind, so Colorado Group’s registration did not cover handbags. The Judges were divided on whether handbags were the same kind of goods as wallets and purses. 

The Court limits the scope of goods ‘of the same kind’ to prevent the acquisition of a mark by a prior user from extending to a broad and vague set of goods, which could undermine the efficiency of the trade mark registration system. 

Distinctiveness

The Full Court decided that the trademark ‘Colorado’ did not effectively distinguish the relevant goods (like bags, wallets, purses) under s 41 of the Trade Marks Act 1995 (The Act). Therefore, the trademark registration for those goods was not considered valid. 

This decision contradicted the Trial Judge’s earlier ruling, which was seen as controversial, stating that ‘Colorado’ was naturally distinctive enough to be registered under s 41(3) of The Act. 

The Trial Judge, Finkelstein J acknowledged that ‘Colorado’ is a geographical location and brings to mind ideas of trekking, ruggedness, fashion, and the Rocky Mountains. However, surprisingly, the judge ruled that ‘Colorado’ was inherently adapted to distinguish bags, wallets, purses, and backpacks under section 41(3) of The Act.  

The Full Court disagreed with the Trial Judge and ruled that ‘Colorado’ was not naturally distinctive for these goods. They argued that a trader might also want to use ‘Colorado’ because of the associations it creates for such items. 

In cases where a mark is only somewhat distinctive, it can still be registered if the applicant’s use of the mark effectively sets their goods apart from others (section 41(5) The Act). However, the Full Court found that in the case of ‘Colorado,’ Colorado Group’s use of the mark up to 2001 did not adequately distinguish their goods as uniquely belonging to them, especially as Strandbags was also using the same term at that time. 

False Suggestion

Strandbags claimed that Colorado Group’s trademark registration for ‘Colorado’ was accepted based on a false suggestion made to the Trade Marks Office. They alleged that a statement implied that nothing relevant occurred after 1990 or 1991 regarding other traders’ activities, including Strandbags. 

However, it was found that Strandbags did, in fact, continue to use ‘Colorado’ after 1991. Despite this, the Court did not accept the false suggestion as a valid ground for revoking Colorado Group’s registration. This was because the statement given to the Trade Marks Office only conveyed an impression and was not a clear statement intended to deceive. As a result, the false suggestion argument was rejected in this case. 

Infringement

The Full Court ruled that Colorado Group’s registration for the trademark ‘Colorado’ was not valid for the relevant goods. Therefore, they did not need to consider whether Strandbags had infringed the registration. However, Allsop J still examined the infringement issue. 

For Strandbags’ handbags, purses, and wallets to infringe Colorado Group’s registration for backpacks, those goods needed to be either ‘of the same description’ as backpacks or ‘closely related’ to backpacks (s 120(2) The Act). 

The trial judge had previously decided that handbags, purses, and wallets were not ‘of the same description’ as backpacks. However, Allsop J disagreed, stating that handbags and backpacks were ‘of the same description’ despite not being ‘of the same kind’ for proprietorship purposes. But Allsop J agreed with the Trial Judge that wallets and purses were not ‘of the same description’ as backpacks. 

Prior use defense to infringement

Allsop J interpreted s 124 of The Act to mean that for Strandbags to use this defence, they must have been using ‘Colorado’ on goods of the same description (in this case, handbags) before Colorado Group started using ‘Colorado’ on those same goods (handbags). It didn’t matter if Colorado Group used ‘Colorado’ on backpacks before Strandbags used it on handbags; the key point was the use of ‘Colorado’ on the specific goods (handbags) covered by the registration. 

In this case, Strandbags had used ‘Colorado’ on handbags before Colorado Group did, and this occurred before 2001. Therefore, Strandbags successfully invoked the defence under s124 to avoid infringement. 

Need Trade Mark Help?

Please get in touch with us today via phone or the contact form on this page.

1800 820 083