This post looks at two disputes before the Australian trade marks registrar involving motor vehicle sub-brands: the relatively recent decision in General Motors LLC v Laser Cleaning Machines Australia Pty Ltd [2022] ATMO 94 (14 June 2022) (the GMSV decision), and a decision which is almost 20 years old, General Motors Corporation v Anthony Nicholls [2003] ATMO 59 (16 October 2003) (the HSV decision).
The HSV decision involved a trade mark application for the mark “HSV ENERGY DRINK – HARD SERIOUS VITAMINS” (AU TM 902269) self-filed in respect of class 32: “ cola flavoured energy drink”. The application was opposed by the American car manufacturer General Motors Corporation. Back in 1926, General Motors has acquired the Australian marque Holden. Holden holds a special place in the hearts of Australian drivers: it was long-touted as a quintessentially Australian brand. The hearing officer in this decision recognised it as a “genuine Australian icon”.
In 1987, GMH appointed UK firm Tom Walkinshaw Racing to establish the Holden Special Vehicles (‘HSV’) business in Australia, to produced niche premium performance luxury cars, parts, accessories, and merchandise. In 2003, Holden Special Vehicles (HSV) was a company licensed by the opponent through its subsidiary Holden Ltd to modify and sell vehicles manufactured by Holden Ltd, under the trade mark “HSV”. HSV was a high performance vehicle brand adopted in 1988. Merchandise was sold under the HSV mark by way of brand extension, and included caps, t-shirts, “car coats, socks underwear, ties and sleepwear as well as clocks, watches, pocket knives, key rings, umbrellas, mobile phone covers, desk sets, and coffee mugs, coasters,… drink holders” and even a mountain bike.
The opponent relied upon section 60 of the Australian Trade Marks Act (1995) whereby the opponent has the burden of establishing that:
* the applicant’s trade mark is substantially identical with, or deceptively similar to a trade mark cited by the opponent;
* the cited trade mark enjoyed a reputation in Australia as at the priority date of the subject application; and
* as a result of the reputation of the cited trade mark, use of the applicant’s trade mark would be likely to cause deception or confusion.
Section 60 contemplates brand extension. There is no requirement that the use of the trade mark should be in respect of similar goods and services as those sold by an opponent. Indeed, there is not even a requirement that the opponent has a registered trade mark.
Energy drinks are a type of fast moving consumer good, which the trade mark registrar’s delegate noted: “The purchase of soft drinks is not generally associated with particular caution or careful thought so that customers are likely to identify the brand of drink they want by an essential feature of the trade mark rather than by a careful and detailed examination of all of its features… As Lord MacNaghten said, in Montgomery v Thompson, (1891) 8 RPC 361, ‘Thirsty folk want beer, not explanations’.“
The wording outside of the element “HSV” was found to be entirely descriptive and not adding to the distinctiveness. The applicant’s mark was determined to be deceptively similar to the opponent’s mark, and the opponent was successful in the opposition.
The delegate did note that soft drinks and motor vehicles would be an odd marriage: “So far as I am aware no automobile manufacturer has extended its range of merchandise to the soft drink industry and on the face of it, it seems an unlikely brand extension.” But balanced against that was the opponent’s application of the HSV mark against a “broad range of goods.” The delegate provided, with respect, an accurate and concise explanation as to how brand extension works:
“Trade marks are frequently promoted as lifestyle choices and traders seek to protect and strengthen their trade marks by extending the brand, often through licensing programs, from a limited range to a diverse range of items to suit the image they wish to promote. Trade marks also command considerable customer loyalty so that traders see obvious commercial advantages in using their known trade marks on altogether new product categories. A known brand brings with it recognition, confidence, and an expectation of a certain quality. It is a vehicle for creating an emotional bond with the consumer. There is also less risk and expense to the trader in attaching an existing brand name with an established reputation to a new product than there is to developing a new trade mark. Consumers will have a natural expectation of quality in a new product bearing a known trade mark.”
For the motor vehicle industry in particular, there is also the use of ancillary terms which form part of the common parlance of performance driving: “Not only is HSV the essential feature of the applicant’s trade mark, but three of the five remaining words in the trade mark are common to the language of vehicle performance and this increases the likelihood of customers assuming that there is a connection between the applicant’s trade mark and the opponent’s marks. For example expressions such as ‘fuel energy’, ‘brake hard’, ‘accelerate hard’ and ‘serious racing’ are part of the every day language used in race commentaries and discussions about high performance vehicles.”
Without doubt, that is a useful observation in so far as brand extension of motor vehicle marques. The industry’s terminology assists in the scope of protection afforded by a well-known vehicle registration.
The GMSV decision has contextual similarities to the HSV decision, though they are twenty years apart. Together they tell a story of the death in the automotive manufacturing industry in Australia. The Opponent is the same, but things have changed. Holden cars are no longer manufactured in Australia. By the end of 2020, as the GMSV decision notes, the Holden brand was to disappear from car yards and motor racing. With it, the HSV mark also disappeared. In early 2020, the Opponent had started public discussions about a transformation of the HSV brand to “GMSV” – and acronym for “General Motors Special Vehicles”. It filed a trade mark application in Australia on 19 June 2020 for “GMSV”.
In the GMSV decision, it was clear that General Motors were off their game. There had been media announcements in industry press about General Motors’ intention to fill the void left by the abandonment of the HSV brand. But trade mark applications for “GMSV” and “General Motors SV” were not filed until after the event. The Applicant had some fun at the Opponent’s expense, purporting to be baffled as to how a global company could not have filed applications prior to or at the time of the announcement of the GMSV brand.
The applicant’s director, Jason Spencer, asserts that he has never heard of the GMSV acronym, and that the brand was adopted in good faith. The hearing officer questioned that:
“…it is clear from Mr Spencer’s own evidence that he had read the News.com.au Article which indicated that GM intended to continue its focus on its Australian special vehicle business. Further, given that Mr Spencer describes himself as a ‘huge car enthusiast’ with a particular interest in muscle cars, he is more likely to have been aware of GM’s plans with regards to ‘GMSV’ than another member of the public with no particular interest in the vehicle industry.”
and
“ the evidence does not demonstrate that the Applicant had any capacity to produce motor vehicles, or any history prior to the Relevant Dates of trading in relation to motor vehicle accessories or merchandise…. ’) in relation to hand sanitisers. As such, the seemingly sudden decision by the Applicant to apply for registration of the Trade Mark for goods including motor vehicles and products that are commonly merchandised under well-known motor vehicle brands is curious to say the least.“ (The applicant’s trading history was to do with cleaning products.)
Other facts – the timing, the similarity of stylisation of the applicant’s GSMV logo with the HSV logo, the fairly disingenuous explanation that “GMSV” was an acronym for “Genuine Muscle Special Vehicles”, lead the delegate to find against the applicant:
- On balance, I consider it is more likely than not that the Applicant knew of the Opponent’s intentions regarding use of ‘GMSV’ in Australia. To conclude otherwise would be to accept that it was pure coincidence that the Applicant filed trade mark applications for ‘gmsv’, ‘GM Special Vehicles’, and the GMSV Logo very shortly after the Opponent’s plans were made known to the public. I also consider it is more likely than not that the Trade Mark and the other GM formative marks filed by the Applicant were selected due to the likely association many consumers would make with the well-known GM brand.
It is a remarkable decision for General Motors to have abandoned the Holden and HSV brands, given their inherent value in Australia. As Mercedes-Benz’s revival of Maybach shows, car brands with inherent residual goodwill are valuable. They can be revived. Holden and HSV’s story might not yet be finished.