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Senses and sensibility – trademark case smashes Sydney SME - Andy McCourt

Is your company name also a registered trademark? It should be if you want total protection, particularly when litigious US-backed lawyers go on the prowl.

A recent case in point is when former Telstra subsidiary Sensis – 70% owned by US private equity concern Platinum Equity since 2014 with Telstra retaining a 30% non-controlling stake – took action against Sydney based direct mail solutions SME Senses Direct for trademark infringement.

Although different in spelling, logo and market activity, Sensis won, costing Senses Direct owner Mark Mina up to $1.4 million - probably more when costs are calculated. Sensis senses logos

Some might remember Mark Mina from AP Mail, which he sold to now defunct print company Geon and, following its collapse, bought it back again and changed the name to Senses Direct Mail and Fulfilment Pty Ltd in 2013. He applied for a trademark in 2016, to which Sensis lodged an objection. Mina could see no connection or look between the two (can you? See photo) and would not change the name and, after negotiations broke down, Sensis took action for infringement and won.

Now it may seem like a frivolous David-vs-Goliath battle but large trademark owners who sue invariably win because they hire teams of lawyers who are specialists in the murky area of IP. Witness the actions taken by US brand house Decker Outdoor, who bought the trademark right to ‘Ugg boots’ and prevents anyone in Australia who makes them from calling them ‘ugg boots’ if they export them. A small Sydney manufacturer sold twelve pairs online into the USA and was sued by Decker for US$450,000. As quintessentially Australian as Ugg boots are, you can’t call them that in the USA unless you are Decker, who now get theirs made in China.

Unfair? Probably. Illegal? Obviously not. High dudgeon and outrage is not enough to beat IP and trademark lawyers who do little else but seek damages for infringements of their clients’ trademarks. Remember the real David had a lethal secret weapon to slay Goliath – a slingshot expertly aimed at a weak spot.

The ‘Senses’ in Senses Direct Mail and Fulfilment Pty Ltd refers to the human senses of sight, sound, touch, taste and smell; it even says so on their website: http://sensesdirect.com.au/ . They are not in directories or search of any kind; they mostly do direct mail. Their name is spelled differently, and their logo graphics are totally different, None of this mattered to the judge who ruled in favour of Sensis.

 

Many more businesses use 'senses'

IMG 20190618 113312

(above) Just one example of the common word 'senses' in use by a small business

Which is curious since, a quick ASIC search turns up no fewer than 83 registered businesses using the word ‘Senses’ in their business name. There are even 27 using the closer ‘Sensus’ as part of their name. There’s even a few using ‘Sensis’ or ‘Sensi’ and a US advertising agency called Sensis.

Some words are so much part of our language that they become ‘genericised’ even if trademarked. Heroin was originally a trademark of Bayer and Videotape an Ampex trademark. Common sense (!) would tend to suggest that the word ‘senses’ applies to things possessed by all human beings, just like arms, legs and ears and thoughts. The context of use needs to be considered but the words alone can not be trademarked anymore than the word ‘carrot’ can secure royalties from any farmer calling them that rather than ‘orange tuber-like edible organic matter.’

In the Sensis issue, the judge ruled: “The applicant [Sensis] has alleged that the SENSES marks are deceptively similar to the SENSIS marks within the meaning of s 10 of the Trade Marks Act 1995 (Cth) (“the Act”) and, by using the SENSES marks in relation to services in respect of which the SENSIS marks are registered, the respondent has infringed the SENSIS marks under s 120(1) of the Act.”

Speaking with www.mybusiness.com.au, Mina said: “My name is Senses Direct Mail and Fulfillment Services. When you ring this phone, you get answered as Senses Direct. We’ve got nothing to do with Sensis, S-E-N-S-I-S; we don’t do anything [regarding] directories or White Pages or Yellow Pages, that’s all they do. We have nothing to do with their services or products. We’re not in their market space.”

Mark Mina’s explanation makes perfect sense to the average SME business owner but trademark infringement cases do not rely on common sense alone, anymore than the 1654 play published by George Chapman when a line was uttered: “Ere he shall lose an eye for such a trifle... For doing deeds of nature! I'm ashamed. The law is such an ass.” The expression ‘the law is an ass’ has been used hundreds of times since then, notably in Dickens’ Oliver Twist, to illustrate unfathomable legal rulings and injustices.

Whether this applies in the case of Sensis-vs Senses Direct Mail & Fulfillment may be determined on appeal but the tragic current situation is that the defendant company has been forced to shed staff as its business has been severely impacted and Mark Mina has to find a large sum of money to settle and pay lawyers.

It all seems a bit senseless, but that’s the way it is. The best thing when registering a business is to also check the trademark register and make any changes at the beginning, and then register your business as a trademark. A business or company name alone does not accord trademark protections.

And it’s probably best to stay out of legal stoushes with large coorporates over names unless you have bottomless pockets.