Zombie mark has no bite

Zombie marks may not be as ‘alive’ as previously thought. Partner Michael Owens and Associate Celeste Bennett point out how a 2017 trade mark decision may prevent a zombie trade mark apocalypse.

Zombie marks aren’t the bites from monsters you see in the likes of Resident Evil and The Walking Dead. In the legal world, these zombies refer to trade marks. They’re sitting and waiting for approval by the time you file an application of your own (though they’re later removed). Zombie trade marks prevent entrepreneurs from properly starting their businesses. A decision handed down by the Australian Trade Marks Office (ATMO), however, shows there’s hope to end this vicious cycle.

So what is a zombie mark? It’s a trade mark application, just ‘sitting’ on the Australian register, waiting for approval or a registered trade mark not being used. This is done by businesses wanting to lessen the chances of competitor’s trade marking goods and services. It’s a dirty trick, though it’s not illegal. The mark is often removed from the register before the outcome of your application is finalised.

The case of 1872 Holdings vs Havana Club Holdinqs has given a new precedent on how to handle zombie marks in registration disputes. In 2014, Havana Club Holding SA applied to trade mark an alcoholic beverage range called Havana Club: Essence of Cuba. 1872 Holdings opposed the attempt because:

1. The beverage range would mislead consumers, in turn violating Australian Consumer Law. 1872 Holdings produces a similar range, previously trade marked, called The Spirit of Cuba Ubre, El Espiritu de Cuba, and El Espiritu De Cuba Ubre;
2. 1872 Holdings’ earlier application for Matusalem El Espiritu de Cuba (the zombie mark) prevented the registration of Havana’s trade mark Although this zombie was on the trade mark register at the time of filing, it was subsequently refused registration;
3. 1872 Holdings argued that the use of the trade mark would be misleading because the goods and services didn’t originally come from Cuba.

This last point wasn’t even considered by the Hearings Officer because 1872 Holdings didn’t raise it in their Statement of Grounds and Particulars. Furthermore, because the company didn’t establish a reputation around their trade marks in Australia in the first place, the grounds for ‘misleading conduct’ were dismissed.

1872 Holdings’ zombie trade mark was dismissed before the case reached a conclusion, a vital point stated by the Hearings Officer. For Havana Holdings’ application to be rejected, Matusalem El Espiritu de Cuba would still need to have ‘pending approval’ status.

Zombie marks have bite but there’s a way to fight them. For the person filing a trade mark application, it’s a waiting game for the already ‘pending’ application to be rejected or for the registered mark to be removed through opposition proceedings. 1872 Holdings was relying on their zombie mark to help their case but unfortunately it was rejected before the conclusion of the hearing. Their key piece of evidence was gone, and Havana Holdings could go on to trade mark their product without much hassle.

Authored by:
Michael Owens, Partner
Celeste Bennett, Associate