The Full Court of the Federal Court of Australia recently delivered a significant judgment concerning competing claims to the ownership of the trade mark ANCHORAGE within the Australian financial services sector. This case, involving Anchorage Capital Partners Pty Ltd (Anchorage Australia) and Anchorage Capital Group LLC (Anchorage US), provides crucial insights into establishing trademark ownership, defenses against infringement, and the complexities of intellectual property rights in business.
Anchorage Capital Partners Pty Ltd, an Australian entity incorporated in August 2007, operated a funds management business under a financial services license. Their activities centered around raising capital to revitalize and subsequently divest from underperforming businesses. By May 2011, Anchorage Australia had secured trademark registrations for ANCHORAGE, ANCHORAGE CAPITAL, and ANCHORAGE CAPITAL PARTNERS. These registered marks, categorized under class 36, encompassed a spectrum of financial services specifically aimed at “special situations and mismanaged or underperforming companies to help improve their financial performance.”
Anchorage Capital Group LLC, a US-based firm with a history of using ANCHORAGE-related names, established an Australian subsidiary, ACPA Pty Ltd (ACPA), in 2011 to extend its financial service offerings into Australia. ACPA commenced operations in Sydney in June 2011, prominently displaying signage indicating “ACPA a subsidiary of Anchorage Capital Group LLC.” In June 2013, Anchorage Australia, upon relocating to the same office building, requested ACPA to remove its signage, triggering a legal battle for trademark infringement. ACPA responded with a cross-claim seeking the cancellation of Anchorage Australia’s registered marks.
In the initial hearing, the primary judge ruled against Anchorage Australia, determining they were not the rightful owners of the ANCHORAGE and ANCHORAGE CAPITAL trademarks. The court reasoned that Anchorage US had prior use of these, or substantially identical marks, in Australia as early as January 2007, predating Anchorage Australia’s first use. Consequently, the registrations for ANCHORAGE and ANCHORAGE CAPITAL were ordered for cancellation, while the ANCHORAGE CAPITAL PARTNERS mark was initially allowed to remain.
Anchorage Australia appealed this decision, contesting the cancellation of any of its registered marks and asserting trademark infringement by the respondents. Conversely, the respondents argued for the cancellation of the ANCHORAGE CAPITAL PARTNERS registration as well. The appeal court then addressed several key issues to determine the validity of the primary judge’s findings.
Key Legal Issues in the Anchorage Capital Partners Trademark Dispute
The appeal brought forth critical questions concerning trademark law, particularly regarding ownership and infringement.
Establishing Trademark Ownership: First Use in Australia
The Court reaffirmed the principle that establishing trademark ownership hinges on demonstrating the first use of the trade mark, or a substantially identical mark, in Australia. This use must be in relation to the goods or services for which the trademark is registered, or “goods or services of the same kind.” Importantly, the Court clarified that “first use” does not necessitate actual transactions within Australia at the relevant time. An “offer to trade” or a demonstrable “existing intention” to supply the goods or services is sufficient to establish prior use and thus, ownership.
The Court emphasized that a name or sign can serve multiple purposes, and trademark use is established if one aspect of its use is to distinguish a trader’s goods or services from others, indicating origin. A mark can function as a trademark even while performing other roles. The determination of trademark use is always context-dependent.
Anchorage US primarily relied on a slide presentation from a pitch made in Australia to establish its prior use and ownership. This presentation contained a disclaimer stating it was “for information and/or discussion purposes only and do not constitute an offer to sell or a solicitation of an offer to purchase an interest in any current or future Anchorage fund.”
Anchorage Australia argued this disclaimer negated any offer to trade services in Australia and further contended that Anchorage US lacked the necessary financial services license to operate in Australia at the time of the presentation. However, the Court, after examining regulatory requirements, concluded that Anchorage US could have provided financial services in Australia by obtaining a license or operating under an exemption (which it later did in 2009).
Despite the disclaimer, the Court determined the presentation aimed to engage in financial services, contingent on an agreement. The prominent use of ANCHORAGE CAPITAL GROUP and ANCHORAGE FUNDS in the slides was deemed trademark use because it aimed to create market interest and signal Anchorage US’s readiness to offer services in the Australian market. The fact that Anchorage US was not actively conducting business in Australia at the time of initial trademark use was deemed irrelevant.
Furthermore, the Court found that “ANCHORAGE FUNDS” was substantially identical to ANCHORAGE, and “ANCHORAGE CAPITAL GROUP” was substantially identical to ANCHORAGE CAPITAL. The additions of “FUNDS” and “GROUP” were considered not to significantly alter the trademarks’ identities. Similarly, “ANCHORAGE CAPITAL” was found substantially identical to ANCHORAGE CAPITAL PARTNERS, leading the court to conclude that the ANCHORAGE CAPITAL PARTNERS registration should also be cancelled.
The Court also addressed the “turnaround provision” in the service descriptions of the registrations, which specified services “targeted towards special situations in mismanaged or underperforming companies to help improve their financial performance.” Looking beyond the US company’s presentation wording, the Court found that Anchorage US’s debt or equity investments in such companies constituted financial services of the same kind as those covered by the registered marks.
Discretion in Trademark Removal
The Court affirmed the existence of discretion in deciding whether to remove a mark from the Register. However, it found no error in the primary judge’s decision not to exercise such discretion in favor of Anchorage Australia.
Anchorage Australia argued that its established use of ANCHORAGE meant any other business’s use of the mark for similar services would likely mislead or deceive consumers. They also contended that the absence of actual misleading use should have swayed the discretion in their favor, regardless of the ownership issue.
The Court rejected these arguments, emphasizing the “public interest in ensuring that no registration of a trade mark continues if it is found to be invalid” as paramount in this case. It also noted that cancelling the registrations would allow both Anchorage Australia and Anchorage US to use their names and marks, provided they do so without misleading or deceptive conduct or engaging in passing off.
Trademark Infringement and Defenses
While not strictly necessary given the trademark cancellations, the Court offered its views on whether ACPA and Anchorage US had infringed Anchorage Australia’s previous registrations.
Regarding the “own name” defense for businesses using their own name in good faith, the Court acknowledged that the respondents’ good faith was not contested. It suggested that using ANCHORAGE CAPITAL GROUP would likely be protected by this defense, given the first respondent’s name is Anchorage Capital Group. LLC. However, this defense would not extend to using abbreviations like ANCHORAGE and ANCHORAGE CAPITAL.
Another defense concerns situations where the defendant would be entitled to obtain registration if they applied. This raised a novel question: the date for assessing this “entitlement.” The Court determined this assessment should be made at the time of the alleged infringing conduct, not at the time of action or hearing.
This temporal aspect is crucial. Even if a party could later become entitled to registration through honest concurrent use, this defense would not apply if they were not entitled to registration at the time of the initial infringement.
Conclusion: Key Takeaways for Trademark Law and Anchorage Capital Partners
This Federal Court decision provides critical clarifications for Australian trademark law, particularly concerning Anchorage Capital Partners and similar businesses navigating brand protection and potential infringement.
- First Use is Paramount: Establishing prior use in Australia, even without active trading, is crucial for trademark ownership. Demonstrating a clear intention and capability to offer services is sufficient.
- Context Matters in Trademark Use: The determination of trademark use is highly context-dependent. Presentations and marketing materials, even with disclaimers, can constitute trademark use if they aim to promote services and indicate market availability.
- Limitations of “Own Name” Defence: The “own name” defense is narrowly construed and may not extend to abbreviated versions of business names.
- Temporal Aspect of Entitlement Defence: The “entitlement to registration” defense is assessed at the time of the alleged infringement, not later, impacting businesses relying on potential future rights.
For Anchorage Capital Partners and other entities in the financial services sector and beyond, this case underscores the importance of early trademark registration, thorough due diligence regarding prior use, and a nuanced understanding of trademark law’s complexities in Australia. The decision serves as a valuable precedent for navigating trademark disputes and ensuring robust brand protection strategies.
This analysis is based on an article that first appeared in World Trademark Review, February 2018.
