Pinnacle Runway Pty Ltd v Triangl Limited [2019] FCA 1662

In a recent decision commenced by Pinnacle Runway against well-known swimwear brand Triangl, the Federal Court has chastised the parties involved for partaking in so called “ill-advised proceedings”. The Court also confirmed that use of a word as a style name to differentiate between product lines will not amount to use as a trade mark so as to constitute trade mark infringement.

Background

Pinnacle is the owner of a registered trade mark for the word DELPHINE and it operates the womenswear label of the same name. In 2016, Pinnacle identified that Triangl was marketing a bikini under its TRIANGL brand together with the style name DELPHINE, including on Triangl’s website and social media sites.

Pinnacle sent a letter of demand to Triangl alleging that it had infringed Pinnacle’s registered trade mark for DELPHINE. Triangl agreed to stop using DELPHINE within three weeks of Pinnacle’s letter of demand and before Pinnacle decided to issue trade mark infringement proceedings.

In response, Triangl denied having used DELPHINE as a trade mark. Rather, it contended that DELPHINE was being used as a style name to assist consumers from differentiating one of its many bikini styles from others. Triangl provided evidence that style names are commonly used to help customers distinguish between goods sold by a trader, being more convenient than a model or style number. Triangl also filed a cross-claim seeking to cancel Pinnacle’s DELPHINE mark on the basis that that Pinnacle was not the first trader to use DELPHINE (or a confusingly similar mark) as a trade mark in Australia.

Use of style names

The Court accepted that Australian consumers were accustomed to seeing style names, including women’s names, being used to differentiate between women’s fashion products of the same trader, including swimwear. Pinnacle itself used style names in relation to its DELPHINE branded products.

Given the prominent TRIANGL branding that dominated Triangl’s use of DELPHINE, the Court found that consumers were unlikely to perceive DELPHINE to be a sub-brand of Triangl, and instead were likely to perceive it as a specific style of a product.

As Pinnacle failed to establish that Triangl’s use of DELPHINE was use as a trade mark, it did not make out its case of trade mark infringement.

When haste makes waste

The Court said that even if Pinnacle succeeded in establishing its trade mark infringement claim, its “damages entitlements were not worth the powder and shot”. The period of the alleged trade mark infringement was six weeks and Triangl ceased the conduct soon after being notified. The total revenue generated by Triangl for the alleged infringing conduct was less than A$40,000.

Pinnacle was unable to establish that it had lost any sales. During the period of alleged infringement, Pinnacle did not market any swimwear under the DELPHINE brand. As Pinnacle was less than a year old, its reputation was only budding and therefore could not have been significantly harmed. In addition, the Court refused to grant any award for additional damages. The Court also found there was no admissible and probative evidence adduced to support Triangl’s cross-claim.

The Court dismissed both parties’ claims, surmising that they spent many times more in legal costs bringing and defending their claims than they would have been able to recover, and characterising the case as an “unfortunate litigation” which “involved substantial expenditure of the parties’ and Court resources”.

Key takeaways

Brand owners should:

• avoid issuing proceedings (pushing instead for commercial settlement) if the conduct complained of stops soon after a letter of demand is issued and its damages entitlement would be minimal, and
• ensure the context and setting in which a style name is used render it subordinate to the parent or sub-brand to avoid a trade mark infringement claim.