Key points

• Karen Walker Limited (Karen Walker), an internationally recognised fashion label based in New Zealand is the owner of the ‘RUNAWAY’ word mark in Class 25. Karen Walker successfully opposed Premonition Designs Pty Ltd and Mamta Group Pty Ltd’s (Runaway the Label’s) RUNAWAY THE LABEL logo mark. Runaway the Label was unable to show honesty of the honest concurrent use it sought to establish, in overcoming Karen Walker’s RUNAWAY registration.
• The case serves as an important reminder of the importance of taking positive steps to ensure a new brand is clear to register and use as a trade mark prior to any actual use or launch in Australia. A failure to do this may result in an inability to rely on the honest, concurrent use means of overcoming a prior similar mark, if cited as an obstacle.

Background

The case concerned an opposition by Karen Walker to Australian Trade Mark Application No. 2155513 Runaway the Label in the name of Premonition Designs Pty Ltd (Premonition Designs) and MAMTA GROUP PTY LTD (Mamta). The Runaway the Label mark was filed on 12 February 2021 in Classes 25 and 35 for, broadly, clothing and online retail services.

Karen Walker is the owner of two RUNAWAY word marks registered in, broadly speaking, clothing, footwear and fashion accessories in Class 25 as well as fragrances in Class 3.¹ It also owns two registered Australian device marks referred to as ‘The Runaway Girl’ in Classes 3, 9, 14 and 25:²

Karen Walker’s Runaway collection was first released to Australia in 2003.

Runaway the Label, designers and retailers of clothing based in Sydney, began using the Runaway the Label Mark in respect of the Class 25 goods in or around March 2013, and for in respect of the goods and services in or around April 14 (via an online store at Runaway The Label).

On 14 April 2015, the Applicants filed Australian Trade Mark Application No. 1687122 for ‘clothes’ in Class 25, which was not accepted. In an Adverse Report issued against this application, Karen Walker’s word mark RUNAWAY in Class 25 was cited as a barrier to registration.

Delegate’s findings

Karen Walker opposed the RUNAWAY THE LABEL marks. In reviewing the prior mark ground of opposition put forward by Karen Walker, the Delegate accepted that the Runaway the Label mark was deceptively similar to Karen Walker’s RUNAWAY word mark in Class 25, on the basis that ‘the label’ is a descriptive phrase and so RUNAWAY was the dominant element of the mark.

The Applicants submitted they did not know about the Karen Walker Marks or the Runaway Girl device and explained why the trade mark was adopted. The Delegate found that the explanation was not implausible but despite that, Runaway the Label had not shown ‘honest concurrent use’ of Runaway the Label given that they could not establish the requisite ‘honesty’. In particular, Runaway the Label did not adduce evidence:

• of sufficient searches or otherwise take sufficient steps to ascertain their ability to adopt and use the Runaway the Label mark;
• of professional advice or the exercise of reasonable precaution in the adoption of the brand; and
• explaining its conduct after it became aware of the Karen Walker mark in the adverse examination report.

Other relevant factors were a significant likelihood of confusion and the fact that RUNAWAY was not so common that it would be obviously attractive to other traders.

Key takeaways

• Having an explanation for the honest adoption of the trade mark and claiming not to be aware of a prior trade mark will not be sufficient to make out the relevant ‘honesty’ when attempting to establish honest concurrent use, even if no finding is made that the later user’s conduct is ‘improper’ or ‘surreptitious’.
• Positive steps are required to show that the requirements of honest concurrent use have been met. Businesses should conduct clearance searches, seek professional advice, and/or keep records of precautions taken at the time of adoption and launch of a mark.

Next steps

For those involved in brand creation, this is a timely reminder that pre-adoption searches may be critical to the fate of your trade mark.

Please contact the Trade Marks Team at Dentons for further information.

1. See Australian Trade Mark Nos. 1177410 (Priority date 17 May 2007) and 1615117 (Priority date 02 Dec 2013)
2. See Australian Trade Mark Nos. 1212918 (Priority date 30 Nov 2007) and 1640783 (Priority date 02 Dec 2013). Because the Delegate found that Karen Walker’s class 3 goods (perfumes, fragrances and toiletries) were not ‘closely related’ to clothing filed under the Runaway the Label mark, deceptive similarity was only considered in relation to Karen Walker’s RUNAWAY word mark filed in Class 25 (Australian Trade Mark No. 1177410).