Australia: Who Is Australia's Cheapest Chemist? A cautionary tale for all trade mark owners

HG IP&IT Alert: 20 May 2015

Registration of a trade mark grants an owner the best protection of a brand against unauthorised copying, and trade mark challenges by third parties. When used correctly, it is an important tool in shaping the way you do business and can often be used to gain an advantage over your competition. But is registration always enough? A recent case points towards the conclusion that trade mark owners are not always safe against scrutiny of their marks by the court just because the marks are registered.

In this Alert, Partner Hayden Delaney and Law Graduate Briar Francis explain the reasons for the judgement in Verrocchi v Direct Chemist Outlet1 and the impacts such a decision has on the registration and maintenance of trade marks in Australia.

Key Points

  • Even if strikingly similar, a phrase may not always be considered an infringement of a registered trade mark.
  • Importantly, the distinctiveness of any mark subject to litigation will often be questioned by the court, and registration does not exempt a mark from this scrutiny.
  • Registering a trade mark does not grant the owner a broad monopoly over use of the phrase in any context whatsoever. In every case, regardless of registration, there are criteria that must be satisfied under the Trade Marks Act 1995 (Cth) (Trade Marks Act), and marks that don't meet this criteria risk being deemed invalid by the court.


Mario Verrocchi of Chemist Warehouse sued Direct Chemist Outlet (DCO) for intellectual property and consumer law related claims pertaining to allegations that DCO had copied certain aspects of Chemist Warehouse's business.

Particularly, Verrocchi claimed that DCO had made use of a trade mark deceptively similar to the registered trade mark "Is This Australia's Cheapest Chemist?" owned jointly by Verrocchi and another man. The trade mark was filed in August 2007 as a composite mark registered without limitation to colour. What made the phrase special as registered was that the words "Is This" were in a smaller font than the rest of the text, and positioned at a 45 degree angle.

From August 2006, DCO, a company in direct competition with Chemist Warehouse, began to put the phrase "Who Is Australia's Cheapest Chemist?" on its product catalogues and prescription backings. The words and sizing was positioned in a similar way to Verrocchi's registered trade mark. From that date up until commencement of the proceedings, DCO used variations of the phrase on its promotional material. At some point, DCO attempted to register the phrase as a trade mark but this did not proceed.

Mr Verrocchi argued that DCO's phrase was deceptively similar because both slogans contained the same idea, were used in respect of the same services, and the words were positioned in the same way. Mr Verrocchi claimed that use of the infringing mark would confuse consumers and that they would question whether there was some relationship between the two parties. Mr Verrocchi argued further that both of the phrases were questions and thus not purely descriptive, and that DCO could not be acting with the motive of an innocent trader as the question "Who Is Australia's Cheapest Chemist?" is not something a properly motivated pharmacist would usually pose.


Mr Verrocchi failed in his claim on two important grounds:

  • that Mr Verrocchi's registered trade mark was not a valid trade mark under the Trade Marks Act; and
  • that DCO were not using the phrase as a trade mark.

The court did not deny that the two phrases were similar. In fact, Justice Middleton said in his judgement that DCO's phrase bore a striking resemblance to the registered trade mark. The primary problem, though, was that the registered mark itself was not distinctive enough to grant Chemist Warehouse a monopoly over use of the phrase. The words that form the phrase "Is This Australia's Cheapest Chemist?" are common and therefore it would be easy for other traders operating with innocent intentions to infringe such a trade mark. Extensive use alone was not enough to determine that the phrase was recognised by the market as Chemist Warehouse's own trade mark distinguishable from other traders, and the judge noted that Chemist Warehouse itself had acted to its own detriment by varying the mark as promoted over time.

Even if the mark had been distinctive enough to be a valid trade mark under the Trade Marks Act, the court found that DCO had not been using the phrase as a trade mark, thus had not committed any infringement. The rationale behind the decision provided by the court was similar to the finding against distinctiveness of the phrase, in that other traders in the industry would likely use similar phrasing to advertise their goods and services to consumers. Cheap prices were of paramount concern to both businesses as discount chemists, and DCO had used multiple slogans to convey the same message regarding competitive pricing. The slogans were thus descriptive of the category of pharmacies in which the two businesses operate, and not inherently distinctive.


This case highlights the importance of ensuring that your trade mark is distinctive, both at the time of application to a trade mark registry and throughout use of the mark. If the mark had been valid under the Trade Marks Act, it is extremely likely that the court would have found for the Applicants that DCO had infringed their trade mark. There is also a clear responsibility placed on the owners of trade marks to satisfy themselves of the validity of the marks that they file for registration and before they seek to enforce their rights in the registered trade mark.

Trade marks which are (on face value) non-distinctive (e.g. a phrase which is descriptive of the goods or services), but which still attain registration (e.g. because of acquired distinctiveness), are still subject to scrutiny by a Court. Registration does not mark the end of the owner's obligations and a Court always has the power to cancel a registration if a mark is found to be not adequately distinctive. There are strategies available to try to acquire and to maintain brand distinctiveness – brand owners should seek advice on these strategies prior to embarking on costly enforcement action.


1Verrocchi v Direct Chemist Outlet Pty Ltd [2015] FCA 234

© HopgoodGanim Lawyers

Award-winning law firm HopgoodGanim offers commercially-focused advice, coupled with reliable and responsive service, to clients throughout Australia and across international borders.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Practice Guides
by Mondaq Advice Centres
Relevancy Powered by MondaqAI
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions