An Australian company operating under the Winnebago name and logo for more than 25 years has been found to have engaged in passing off and misleading and deceptive conduct.
Despite an incredible delay in bringing its case to Court, the Federal Court of Australia has found in favour of a United States (US) based company Winnebago Industries Inc (Winnebago) in an action for passing off and misleading and deceptive conduct against Australian company Knott Investments Pty Ltd (Knott) and its director Bruce Binns (Binns).
Knott was found to have represented that it had legitimate trade connections with Winnebago by using Winnebago's name and trade marks in Australia from 1982. This conduct was exacerbated by Knott's 1995 advertisement stating, "You'd expect nothing less from Winnebago, the world's most respected name in luxury motorhomes".
In finding that Winnebago was entitled to an injunction restraining Knott from using the Winnebago name and logos, Justice Foster found that a substantial number of potential customers looking to rent or buy residential vehicles (RVs) in Australia were aware of the "Winnebago" name prior to Knott's use of the name. The Court held that Binns' selection of the Winnebago name demonstrated his expectation that his business would financially benefit from an association with Winnebago's reputation in Australia.
As a result the Court held that Australian consumers were likely to be deceived into thinking that Knott was associated with Winnebago and that Knott's RVs were made by Winnebago.
Background
Winnebago had traded under the Winnebago name and logos since 1959, manufacturing its now famous RVs. Knott's director, Binns encountered Winnebago RVs on a trip to the US, Canada and Mexico. He subsequently decided to market RVs under the Winnebago name from his memory of his travels.
From around 1982 onwards, Knott commenced manufacturing and selling RVs in Australia under the Winnebago name and marked with Winnebago logos. Knott's use of the Winnebago name and logos since that time has been extensive – from promotional and advertising material, to letterheads, invoices, business cards, signs and magazines.
Winnebago first became aware of Knott's use of the Winnebago name and marks in May 1985. In 1988 they sought legal advice as to whether Knott could be restrained from his conduct but formed the view that nothing could be done.
They made further attempts to prevent Knott from using the Winnebago name in 1991 which eventually resulted in the signing of a settlement agreement between Knott and Winnebago. The settlement agreement provided that Knott could not:
- use the Winnebago trade marks in any country other than Australia
- apply for registration of the Winnebago trade marks in any country
- associate itself with Winnebago or its products.
Despite this agreement, Knott registered the Winnebago trade mark in Australia effective from March 1997. Given his findings as to Winnebago's reputation in Australia prior to registration of Knott's trade mark in 1997, Justice Foster ordered that Knott's trade mark registration be cancelled. As a result, Knott will be required to rebrand their business.
Justice Foster found Binns was not credible in cross examination when he said he was not trying to trade off the goodwill and reputation of Winnebago. Rather he found that the decision to use the name and marks was motivated by an appreciation that this would benefit Knott financially. He stated that Winnebago's marks were intentionally hijacked "in a bold attempt to pre-empt Winnebago's opening its doors [in Australia]".
Delay
Knott attempted to argue that relief should be refused because of the extraordinary delay of Winnebago in bringing the action. Knott argued that Winnebago had allowed Knott to develop their business in full knowledge that they were trading under the name Winnebago.
Justice Foster accepted Winnebago's evidence that they did not wish to enter into costly litigation at a time when they had no intention of exporting their products into the Australian market. He concluded that this delay did not amount to a proper basis for refusing the relief sought.
Conclusion
The case reinforces that overseas companies will be able to prevent businesses in Australia from trading off their reputation. This is so even if the foreign company has not commenced trading in Australia, provided they can establish they have some reputation in the Australian market.
If you would like to know more about your options in that regard, please contact Middletons' Intellectual Property team.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
