News & Insights

Chinese telecommunications company Huawei Technologies Co Ltd has applied for registration of a swathe of Australian trade marks that represent misspellings of its name.

Variations included Huawii, Wuawe and Huawy, and followed an early batch of misspellings registered last year.  There are nine misspellings in total.

In English, pronunciation of its name is not intuitive.  In an online environment, correct spelling of domain names, Twitter handles, etc matters.

If a malefactor was to register a domain or social media account utilising a phonetic equivalent of Huawei’s name, they would receive traffic and have the potential to cause malfeasance.  As such, Huawei has a commercial need to protect itself against misspellings of its name.

From a trade mark perspective, such an initiative is misconceived.

In Australia, it is a requirement that an applicant for trade mark registration either has used or has an intention to use the trade mark.  With a trade mark that is going through the registration process, a third party can oppose registration of the trade mark under section 59 of the Trade Marks Act 1995 on the basis that the applicant does not intend to use, authorise the use of or assign the trade mark in Australia.

If the trade mark has already been registered then its removal can be sought either:

• under section 92(4)(a) through IP Australia, on the basis that the application had no intention to use, authorise the use of or assign the trade mark in good faith; or
• under section 88 through the courts, on the basis that the trade mark should not have been registered because it could have been opposed under section 59.

In many cases, it is difficult to prove that a trade mark applicant does not intend to use a trade mark.

Australia does not require a trade mark to have been used before its registration can be granted, and sometimes there can be considerable delays in launching a new brand.

However, where the applications are all variations of an established trade mark, as in Huawei’s case, it would be straightforward for IP Australia or a court to infer that there is no intention to actually use the misspellings.

UK “Merit” case

Back in the early 1980s, Phillip Morris & Co had a line of cigarettes branded “Merit”.

However Phillip Morris was unable to register “Merit” as a trade mark in the UK because it was insufficiently distinctive.

Phillip Morris then struck upon the idea to register the trade mark “Nerit”, on the basis that if anybody else used the brand “Merit”, then it could bring infringement proceedings because “Merit” would be similar to its registration for “Nerit”.

Phillip Morris even went so far as selling approximately 1 million cigarettes under the “Nerit” brand.

The UK Court of Appeal determined that they had no real intention to use “Nerit” as a legitimate trade mark in the normal course of trade.  The position in Australia is generally thought to be the same.

So are misspellings pointless?

Does this mean that registering misspellings is pointless?

Yes and no.  Legally it is pointless.  Any person threatened with infringement proceedings would seek to have the trade mark registration removed, eliminating the threat posed by it.

In any case, under the Trade Marks Act 1995 infringement proceedings can be brought against somebody using a substantially identical or deceptively similar trade mark to the one registered.  Many variations registered by Huawei would be deceptively similar to “Huawei”.

Where these misspelled trade marks become useful is when utilising IP protection policies maintained by major online businesses such as eBay with its Verified Rights Owner program (VeRO), which relies on registration of the trade mark in question to have listings taken down.

Trade mark shortlists

So what happens if you are shortlisting a number of trade marks?  The reality is that usually all but one of the shortlisted trade marks will never be used.

Usually the best approach is to keep that shortlist confidential and proceed straight to registration of your chosen option once it has passed appropriate clearance searches.

But sometimes stakeholder consultation means that secrecy is not an option and registration needs to be sought for the shortlist.  For example in 1995 the Australian Football League sought to register “STARS”, “STINGRAYS” and “SURF” alongside the eventual name of “SUNS” for what was to become the Gold Coast Football Club.

At the time that registration of the shortlisted trade marks is sought, there is no intention to use any one of them.

The courts have previously stated that in the case of speculative applications, the necessary intention to use is missing.  Even though the shortlist will eventually be whittled down to a single trade mark, this will not cure the problem that existed at lodgement.

In 2017, the Full Court of the Federal Court in Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd determined that the assessment of intention needs to be made at the time that the application was lodged, not at the time that the opposition is considered.  This means that a trade mark that was originally part of a shortlist will remain vulnerable to opposition or removal action.

The prudent approach, in circumstances where a shortlist of trade marks was originally applied for, is to seek fresh registration of the chosen trade mark once a decision has been made on which mark to use.

Macpherson Kelley can assist with trade mark availability searches and applications locally and overseas and can also provide advice and assistance if your intellectual property rights have been infringed. If you have any questions, please contact our Intellectual Property team.

This article was written by Nils Versemann, Senior Associate – Commercial.