Debts R?us.com is a business that is in the market of collecting debts. The company has recently invented new on-line services that revolutionise the way they do business.

 

They registered the business name “Debts R’us.com”, their trademark name and other pertinent IP items such as a business method patent to protect themselves and their invention.

Debts R?us.com launches a major advertising campaign under the slogan “Your debts R’ours”.

AAA Debts Collecting is an existing rival competitor and launches a counter campaign offering exactly the same services as Debts R?us.com under the slogan “Our debts R’yours”.

Advise Debts R’us.com of their options under the law …………….

Introduction

A trademark is a word or a symbol or a phrase that is used to identify a particular producer or seller of a commodity and differentiate them from products of other competitor. Trademarks protection extends beyond the mere words or phrases as it includes characteristics of products such as its packaging and color. Trademarks make it possible for consumers to identify with products of a particular manufacturer. Debts R’ company has begun its business in debt collection with a slogan “Your debts R’ours.” The business is already registered as a trademark name and other intellectual property, hence the invention and business is protected. At the same time, another competitor has introduced similar services with the slogan “Our debts R’yours.” This is a case of imitation or mimicking of business slogan.

Misleading or Deceptive conduct

This is a principle of Australian law. It is found under section 18 of the Australian law. The principle bars firms in trade or business from conducts of misleading and deceiving. A range of remedies can be imposed in case of evidence of deceiving behavior. Behaviors that may be misleading include; silence, not acting in accordance to the way one should act in business or imitating a registered business slogan or name in a manner that can deceive the consumers about the originality of the services or products. Fines of up to A$1.1 million can be charged on the parties involved.

The rights under intellectual property such as trademarks, patents and blueprints are elementary in marketing and brand name strategy (Green, 2011). There are various laws and forms of regulation that are significant in this field; for instance, the consumer security stipulations of the Trade practices Act 1974 (Cth). The body given the mandate or responsibility for scrutinizing regularly allegations made in promotions, and marketing products in Australia is the Australian Competition and Consumer Commission (ACCC). This body acts as a regulator in the legislation as it imposes heavy penalties for any violations made by business persons. For instance, a penalty of up to A$ 1million can be imposed on infringement of the consumer protection stipulations of the Trade Practices Act. As illustrated in the case Zetco pty Ltd V Austworld Commodities pty Ltd (No2) (2011)  concerning a patent infringement, the plaintiff Zetco is a holder of a patent for a plumbing valve, applied in instant gas and hot water arrangement. The defendant, Austworld also supplies various plumbing inventions in Australia which include the plumbing valves that Zetco alleges to have been infringed. Proceedings were brought against Austworld by Zetco claiming infringement of the patent, flouting of sections 52 & 53 of the Trade practices Act 1974(Cth). The defendant denied all responsibility and made counter-claims for an order withdrawing for invalidity of Zetco’s patent. Zetco’s claims were not established as to the infringement of Trade practices Act and passing. Similarly, Austworld did no manage to ascertain the patent invalidity. Nevertheless, Austworld was guilty of infringing different allegations on the patent. It was held by the court that the allegations of invalidity were not inappropriately followed and that substantiation of copying was insufficient as to award supplementary damages. However, intentional copying may be valid to a ruling as to whether extra damages could be awarded (Smith, 2011).

From the Debts R’ business point of view, section 115(4) of the copyright Act 1968 (Cth) may be used if the AAA debts firm is proved beyond doubt that there are additional elements of  infringement conduct warrant to extra damages. Debts R’ must prove the existence of resemblance between their service slogans, a rose from copying. If the firm is to prove copying of some sort then relevant evidence must be produced. Nonetheless, guidance are provided as to how section 122(1A) can be construed. It suggests that incase a defense of invalidity is hopelessly followed and the breaching conduct persists in spite of awareness of asserted patent breach, then a claim may be put forward for extra damages. Consequently if a party alleged of breaching a patent opts to persist, the claimed breach of conduct, the party must satisfy that there are safe foundations for asserting invalidity of the patent and be ready for the potential extra damages being awarded against him or her, if the breach is proved at a trial.

According to Hoffman (2001), if one has a product or service to market, it is very necessary to protect the right of the marks. Nevertheless, the businessman must be conscious of some boundaries as to such protections, so as to easily adapt the strategies in the marketing to suit more protection that is available. Often than not, a slogan is not part of product packaging but only appears in the market promotion. The United States patent and trademark office stipulates that a slogan must be identified with the services so as to make it easier for consumers to easily notice the product or service. It is worth noting that, a slogan must rise to the rank of being protectable according to the federal registration guidelines. Basing on common law principles and unjust rivalry, the slogan can be protected if it is the subject of registration by the federal government.

Contrary, Hoffman, (2001) asserts that the US copyright office guidelines do not pursue registration of copyrights where short phrases have been used. This is because the brevity is cut into by the marketing factor in the legal obligations. The business in question Debts R’ firm may be considered to be too brief as to guarantee registration. However, the number of wording has not considerably been established as to qualify for fair use. As illustrated in Cook V. Robbins et el., (2000) the petitioner, Wade Cook made claims against a motivational presenter Anthony Robbins and his firm on copyright breach, claiming that the respondents applied two of Cook’s phrases in Robbins work. These phrases in question were “Meter drop” and “rolling stock” as they were applied by cook, and then later applied by Robbins in his work. In deciding the case, the court made a reference to the common rule that protection by copyright law is only on expressions by the author, while it does not protect facts and ideas within a work. As per the copyright office regulation, the federal copyright law stipulates non-existence of short phrases. These may be names, short phrases and titles that are not prone to copyright fortification. Hence claims of infringement can not be registered, if there is fringe of the slogan by another company. Nevertheless, the court made a ruling in favor of Cooks as it was established that Cook’s terms in passing the meaning of “meter drop” and “rolling stock” were very innovative and exceptional. They were therefore protected by the copyright law in Cook’s book. The court also found that the two books were competing in the same market place for commercial purpose and therefore the defendant was liable to pay for the damages.

From the business in question, it will depend on the ability of Debts R’ firm to prove that their slogan “your debts R’ ours” is very unique as to warrant protection from the copyright laws. If the firm can prove originality of the slogan and its importance to the business then it can make claims against AAA debts firm commensurate to the imitation of their slogan. Nonetheless, the business has a registered trade mark name which gives it an upper front in making claims for the damages. Hence, AAA debts firm can be sued for infringement. It has the implications that failure to license materials, a business runs the risk of depending on the exemptions, as many cases have been dismissed in the same light.

The law of unfair competition

This law was enforced to cover various objectives: first, the law tries to find how to safeguard the intellectual, economic and innovative investments by entrepreneurs in differentiating themselves and their goods. Similarly, the law preserves the goodwill established between entrepreneurs and their customers. In addition, the law is there to prevent competitors from imitating and appropriating the goodwill of the business. Still, the law supports transparency and stability by supporting consumers to depend on goodwill of business and their image in making an evaluation on the quality of the rival services. Lastly, the law promotes rivalry by giving businesses a motivation to provide better products in a similar field. By use of trademarks, trade names, service marks and trade dress, a business is able to distinguish from its competitors (Verbauwhede, 2002). However, there are some business competitors who try to mimic the trade dress of other businesses which acts in a manner to mislead customers. In so doing, they give a course for action for the breach. The law of unfair competition bars competitors from misleading and confusing customers through use of trade dress that are difficult to tell apart. So long as the firms are providing the same services or products, the competitors are not allowed to use trademarks and trade dress that nearly resembles that of another business. Any proof of confusing element can lead to allegations in the court of law for infringement of the breach. This applies in common law doctrines. As mentioned earlier, through registration, the claims for infringement can be greatly strengthened. The breaching can be brought in the federal court under the Lanham trademark Act (15 U.S.C.A & 1051 et seq). Protection usually goes to the first firm to register the trademark or service mark. While some courts have continually dismissed such cases concerning likelihood of confusion, some have ruled in favor of it. For instance, the court found and acknowledged that the word ‘Marks’ may not evade trade dress breach in most cases. It was held that the prominent use of the well familiar EXCEDERIN and TYLENOL word marks, present on the trade dress of rivals packaging did pronounce the possibility of confusion in Bristol-Myers Squibb co. v McNeil-P.P.C., Inc.( Commerce Clearing House, 2000))

It is therefore possible for the firm Debt R’ to put claims on AAA debts firm for confusion in the trade dress for the firms’ slogan. The firm already has substantial prove to give to the court, showing that the trade dress they are using is registered as a slogan for the firm, under the Trade Practice Act in relation to unfair competition. Prove may be presented before the court about how confusing the competitors slogan “Our debts R’yours”

Intent to copy

Any evidence that a defendant picks on a mark with the intention of replicating the petitioner’s mark may, on its own, substantiate a conclusion of a possibility to confuse. In Beer Nuts, Inc. V Clover Club Foods Co. the court ruled that anyone who adopts a symbol similar to another established already in the place of marketing acts so at his or her own risk due to the assumption that he or she can fulfill his or her purpose, that is the public will be mislead.

Possible remedies for Debts R’ firm

Since the firm has a registered trademark, then it can file claims for trade dress breach declared under section 32(1) of the Lanham Act (15 U.S.C. Section 1114(1)) as for the case of United States. The remedies for breach of trade dress are similar for those in contravening the trademark policies. Therefore injunctions or resurgence of damages in the form of profits accrued by the defendant or the real damages suffered by the plaintiff will be awarded (Advertising Compliance service, (2007).

Conclusion

From the above case law analysis, it is worth reiterating that trademarks are important in business operation. As a matter of fact, registering a trademark is very essential as it protects an entrepreneur’s invention from a possible unfair competition. It is the jurisdiction of the business people to cautiously use trademarks without breaching the current laws and regulation in order to ensure ethical running of businesses and to avert unnecessary costs of litigations. Besides, businesses must find unique trademarks for their products to distinguish themselves from competitors’ products.

 

 

 

 

 

 

 

 

 

 

 

References

Advertising Compliance service, (2007), Advertising law Cases, JLCom Publishing co., LLC’s

Commerce Clearing House, (2000), State Unfair Trade Practices Law: In One Volume

Commerce Clearing House, Inc...

Ivan Hoffman, 2001, Protecting Slogans

Lien Verbauwhede, (2002), IP Ownership: Avoiding Disputes, World Intellectual Property

Accessed on 04/10/2011 <http://www.wipo.int/sme/en/documents/wipo_magazine/11_2002.pdf >

Melanie Smith, 2011, Awards of additional damages for patent infringement, Free Hills,

Melbourne

Oyen Wiggs Green, (2011) World Trademark Review, Global Business

Publishing Ltd

 

 

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