In Crazy Ron’s Communications Pty Limited v Mobileworld Communications Pty Limited [2004] FCAFC 196, the Full Court overturned the primary judge’s decision and ruled that the use of trade marks^[1] by Crazy Ron’s Communications Pty Limited (‘appellant’) did not infringe the registered trade marks of Mobileworld Communications Pty Limited (‘respondent’) and ordered trade mark 803950 “” to be cancelled on grounds that the registration contravened s 62(a) of the Trade Marks Act 1995 (Cth) (“TMA”) at the point of application. 

Background

In 1991, Mr. John Ilhan started Mobile World Communications Pty Ltd (ACN 050 242 558) to sell mobile telephones and accessories. He started the first store in Brunswick, Victoria in 1994. In the same year, he changed its name to Mobile World Wholesalers Pty Ltd. 

In 1993, it started trading as “Crazy John’s” and by January 1994, Mobile World Communications Pty Ltd (ACN 050 242 558) transferred the business and its assets to a new entity bearing the same name Mobile World Communications Pty Ltd (ACN 063 108 547). Additional stores were opened from April 1994 in Victoria and by October 1995, two additional stores were opened in the Gold Coast. 

In 1995, Mobile World Communications Pty Ltd (ACN 063 108 547) applied for registration of the first trade mark no. 656212 “” (“the 1995 mark”) in Class 38 in respect of including telecommunications services. 

On the 22 May 1996, the 1995 mark was assigned to Crazy John Pty Ltd (ACN 070 157 452). Mobile World Communications Pty Ltd (ACN 063 108 547) carried on with the use of the 1995 mark till 30 June 1996. On 1 July 1996, Mobile World Communications Pty Ltd (ACN 063 108 547) sold the business to Mobileworld Communications (Aust) Pty Ltd (ACN 073 366 757) (“MW Aust”). On the same day, MW Aust was granted a licence to use the 1995 mark by Crazy John Pty Ltd with Mobile World Wholesalers Pty Ltd (ACN 050 242 558) also selling the operating business to MW Aust.

On 17 August 1999, MW Aust applied for trade mark registration no. 803950 “” (“the 1999 mark”) for “CRAZY JOHN’S” in stylised script in Classes 35 and 38 through its solicitor, Mr. Darrer. On 12 November 1999, Mr. Darrer informed IP Australia that the applicant should have been Crazy John Pty Ltd and there was an administrative error made at the time of the application. The application was subsequently amended reflect Crazy John Pty Ltd as the applicant. 

On 2 December 1999, MW Aust entered an asset purchase agreement with Mobileworld Operating Pty Ltd (ACN 090 451 433) and Mobileworld Communications Ltd (ACN 090 451 415). A Deed of Assignment was executed between Crazy John Pty Ltd and Mobileworld Communications Ltd (ACN 090 451 415), making the latter the subsequent owner of both “the 1995 mark” and “the 1999 mark”.

Appellants

In late 1996, Mr. Bakir and Ms Doueihi started a retail store in the Gold Coast and traded under “Crazy Ron’s Mobile Places”, selling mobile telephones and accessories. The store was located 2 shops away from Crazy John’s. Following a split between Mr. Bakir and Ms Doueihi in July 2000, Mr. Bakir continued trading under Crazy Ron. In Nov 2001, Mr. Bakir sold the Crazy Ron’s stores to BHL and maintained his position as employee of the business. In August 2003, HBL acquired a chain of stores in Sydney and Melbourne. HBL subsequently extended the Crazy Ron’s brand to the Melbourne and Sydney stores.

After a failed attempt by respondents to get Mr. Bakir to cease trading under ‘Crazy Ron’s’ in 1996, the respondents initiated proceedings against the appellants in August 2003 seeking restraining order against the use of Crazy Ron’s or Crazy Ron on grounds that the use of appellants’ mark had infringed the registered trade marks 656212 “” and 803950 “” under s 120 of the TMA. The respondents also pressed misleading and deceptive as well as passing off conduct. One of the appellants filed a cross claim to have the 1999 mark invalidated under s 88 of the TMA on grounds that the applicant was not the owner of the mark (s 58) and lack of intention to use/authorize mark(s 59). 

Proceedings at first instance

The primary judge dismissed the cross claim and held that the mark “CRAZY RON” was deceptively similar to registered trade marks 656212 “” and 803950 “” and found infringement. Orders were made to restrain the use of “Crazy Ron”, “Crazy Ron’s”including “www.crazyrons.com.au” except in Southeast Queensland where the appellants have acquired a reputation through extensive promotions and advertising.

Appeal at Full Court

On grounds that the primary judge had erred in his finding that “CRAZY RON” was deceptively similar to 656212 and that the amendments for application 803950 contravened s 62(a) of the TMA, the appellants brought the appeal before the Full Court.

The appellants contended that the primary judge had incorrectly assessed that the words CRAZY JOHN were essential features of the 656212 “” composite mark and that there were other notable features of the mark that were prominent and significant enough to be accorded weight to sufficiently distinguish itself from “CRAZY RON”. 

The appellants further contended the amendment to the application for 803950 “” was inappropriate as the Act only has provision for amendment for ‘particulars of applicant’ and not a substitute of the original applicant with a new entity without the effect of an assignment. 

The Full Court took into account the other prominent features of 656212 “” mark and held that on balance CRAZY RON was not deceptively similar to the 1995 mark. The Full Court, however held that because of the aural similarity between CRAZY RON and the 1999 mark and taking into account likelihood of careless pronunciation and speech on the part of consumers, the marks were found to be deceptively similar. The Full Court then went on to examine the grounds of contention for the cancellation of the 1999 mark. While the grounds of ss 58 and 59 could not be made out, the Full Court found the substitution of the original applicant with a new applicant does not fall within the provision of s 65(5) of the TMA. Pursuant to s 88 and s 62(a) of the TMA, their Honours concluded that the registered mark 803950 (“the 1999 mark”) should be removed from the register. Because of the invalidity of the 1999 mark, infringement claims for the use of CRAZY RON or CRAZY RON’S marks necessarily fell away.

The appeal was granted and earlier restraining orders by the primary judge were set aside. 

^[1] Crazy Ron’s, Crazy Rons, www.crazyrons.com.au

Disclaimer: The above is provided to assist in the understanding of the decision by the Federal Court of Australia (Full Court). It should not be relied upon as legal advice. Any errors or omissions are the author’s. For queries related to the article, please contact the author here.