Knott Investments Pty Ltd v Winnebago Industries, Inc: Use of trade mark

Wednesday 12 June 2013 @ 10.12 a.m. | IP & Media

In Knott Investments Pty Ltd v Winnebago Industries, Inc [2013] FCAFC 59 (7 June 2013) the full court of the Federal Court of Australia has delivered its decision in favour of Winnebago Industries in a long standing dispute between the US based Winnebago Industries and Australian recreational vehicles (known as RVs) manufacturer Knott Investments over the ownership and use of the "Winnebago" trade mark.

Background

US based Winnebago Industries Inc., manufactured RVs since the 1960s and had held "Winnebago" as its registered trade mark in the United States fo a considerable period of time. In 1982 Knott Investments Pty Ltd commenced the manufacture and sale of RVs in Australia under the trading name of Winnebago and used the US Winnebago trade mark.

In 1985 Winnebago Industries first became aware that Knott Investment was using the US registered "Winnebago" mark to promote the sale of RVs in Australia but it was not until 1991 that Winnebago Industries contacted Knott Investents about the matter. From that contact there followed a settlement agreement under which Knott Investment agreed not to register "Winnebago" in Australia and Winnebago Industries agreed not to sue Knott Investments in the US. As well under the settlement arrangement, Winnebago Industries reserved its rights to take action in the future against Knott Investments in Australia.

Despite the above described settlement arrangement, in 1997 Knott Investments registered the trade mark "Winnebago" in Australia. Following a long gap in 2010 Winnebago Industries decided to enter the Australian market and in so doing demanded that Knott Investments cease using their trade mark. Upon Knott Investments refusing to do so, Winnebago Industries commenced proceedings against it for "passing off" and "misleading and deceptive conduct" (see Winnebago Industries, Inc v Knott Investments Pty Ltd (No 2) [2012] FCA 785 (September 2012)).

At Trial

Important at this stage of the matter was the fact that Winnebago Industries had no registered trade mark in Australia on which to rely to support their claims against Knott Investments. The key question in the proceeding became whether Winnebago Industries had "sufficient reputation in Australia" as of 1 June 1982, the point where Knott Investments commenced carrying on the business of Winnebago Industries.

At trial Winnebago Industries contended there was no doubt the Winnebago brand had gained an extensive reputation in the US and other places it operated and submitted that many Australians who travelled to the US and other places where it operated before and after 1 June 1982 would have become aware of the Winnebago brand due to the significant reputation of the Winnebago brand. Winnebago Industries also relied on the considerable number of international publications, in which Winnebago's RVs and brand appeared and there accessiblity in Australia before and after 1 June 1982.

At trial the evidence led the court to conclude that Knott Investments "intentionally hijacked the 'Winnebago' marks in Australia in a bold attempt to pre-empt Winnebago opening its doors here". The court was satisfied that Australians were aware of the brand as at June 1982 and that the public was likely to be confused into thinking Knott Investments was related to Winnebago. Further while the court acknowledged that there had been an extraordinary delay on Winnebago's part in taking steps to protect its brand the court also concluded that Winnebago Industries had taken steps to protect its position through the settlement arrangement. The court's view at trial was that the settlement arrangement created a "standstill" effect, allowing Winnebago to enforce its rights at future point, and since the conduct complained of was continuing it was not out of time.

At trial the court ordered the cancellation of the Winnebago mark registered by Knott Investments and that Knott and its dealers be restrained from using the mark.

On Appeal

On appeal to the full court of the Federal Court the key issues remaind as the matter of "passing off and misleading or deceptive conduct" and whether at the relevant date of the allegedly wrongful conduct Winnebago had sufficient reputation in Australia to sustain the cause of action.

Further Knott Investments sought to rely on the significance of its subsequent development of a reputation in the Winnebago brand and its settlement arrangement with Winnebago as evidence of estoppel, acquiescence, laches and delay on the part of Winnebago.

Result

The full court decided that there was no error in the primary judge’s (trial court's) decision to issue an order cancelling the registration of the "Winnebago" trade mark pursuant to the Trade Marks Act 1995 (Cth) s 88(1). In his judgment Allsop CJ at [75] saying:

"Knott submitted that even if in 1997 or 2010 the registration of the trade mark was liable to deceive or cause confusion, the primary judge should not have exercised his discretion to cancel the mark because that deception and confusion had not occurred through any act or default of Knott, and that any such deception or confusion arose more from the informed and deliberate inaction of Winnebago. I would reject that submission. Knott was not entirely innocent and lacking fault in this regard.  Mr Binns commenced using the name and mark to avail himself of such reputation as Winnebago had.  At least at times in the 1990s, Knott associated itself with Winnebago.  The extraordinary delay of Winnebago undoubtedly would have contributed to the deception and confusion, but Knott and its controllers were not lacking in fault in the causation of such deception or confusion.  Further, if Knott could, because of its breach of the Settlement Agreement, arguably be restrained from exercising its legal rights or be liable in damages for clear breach of contract in applying for registration or renewal of registration, such could legitimately be taken into account in deciding whether to cancel the trade mark."

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