Trade Marks and Australian Consumer Law – termination and breach of Trade Mark Licence Agreement (“TMLA”) – trade mark infringement – misleading or deceptive conduct – false representations – use of CALTEX and STARCARD
This decision by O’Callaghan J involved a dispute arising from the transitioning of Caltex branded service stations to Ampol branded service stations.
Before 1995, Chevron and Ampol were competitors in the Australian fuel market, the former operated service stations under the Caltex brand, the latter under the Ampol brand. In 1995, the two competing businesses were merged. Ampol became the principal operating company for the merged business. From the late 1990s, Ampol rebranded all but ten of the service stations in its network to the Caltex brand and the Ampol brand all but disappeared in Australia.
In 2015, Chevron divested its 50% stake in Caltex Australia Limited and Chevron Global, and Ampol entered into a Trade Mark Licence Agreement (the TMLA), which licensed Ampol to use the CALTEX trade mark and other related marks. In 2018, the parties amended the TLMA to reduce the minimum period of notice required to terminate it without cause from 12 months to six months. In July 2019, the parties amended the TMLA again, reducing the work-out period from 48 months to 30 months in the event of termination without cause. The new 30-month work out period was divided into an 18-month exclusivity period, followed by a 12-month non-exclusive period. During the exclusive period, Ampol retained the rights to exclusive use of the trade marks in Australia.
On 20 December 2019, Chevron gave notice that it was terminating the TMLA and Ampol decided to transition its business to its own Ampol brand. As a result, Ampol has the exclusive rights to use the licensed trade marks until 31 December 2021 (being the exclusivity period), and Ampol and Chevron can both use the licensed trade marks from 1 January 2022 until 31 December 2022 (being the non-exclusivity period). After that date, the relevant work-out period will end, and Chevron will be free to do as it wishes with the marks.
There were three principal matters in dispute namely:
- the use by Ampol of a red coloured canopy fascia, which had been a key element of the Caltex visual identify over the last 25 years (Ampol branding using blue as its dominant colour);
- Ampol’s continuing use of the Caltex StarCard loyalty card at re-branded Ampol service stations; and
- the use by Ampol of the Caltex registered marks in conjunction with the Ampol mark in messaging, while transitioning from Caltex to Ampol branding.
On the first issue, Justice O’Callaghan concluded that Ampol did not breach the TMLA by using the red colour fascia. His Honour determined that it makes little sense as a matter of ordinary English to construe an obligation on a licensee to remove “signage and/or [any] element bearing [or displaying]” any of the registered trade marks the subject of the TMLA as requiring Ampol to repaint the red coloured fascia some other colour, which was one way that Chevron cast the obligation.
His Honour said that to impose such an obligation would be to construe an agreement granting a licence to use registered trade marks as granting to the licensor an exclusive right, as between it and the licensee, to use Caltex Red on the fascia of the canopies, in circumstances where the licensor had no registered or unregistered claim to the colour, and where the agreement never purported to license its use. Justice O’Callaghan stated that such an outcome was at odds with commercial sense, and if such an uncommercial and unlikely outcome had been intended, it would surely have been made clear.
Justice O’Callaghan accepted that a trader may also establish a reputation in trade indicia or get-up that may include a colour scheme, which can constitute a significant component of the get-up used to attract consumer attention. The get-up, including a colour scheme, may establish a reputation distinct from any trading name. Justice O’Callaghan found that the use of the red canopy was not misleading or deceptive conduct under the Australian Consumer Law. His Honour stated that, viewed as a whole, no reasonable consumer is likely to think that there is any relevant association between the two entities, let alone that the Caltex and Ampol brands hail from the same stable. His Honour stated that one only had to look at images of two comparable sites to see as much.
The next issue involved the question as to whether Ampol’s use of the Caltex registered marks CALTEX and STARCARD in conjunction with the Ampol marks AMPOL and AMPOLCARD conveyed the representation that the Caltex marks and the Ampol marks are owned by the same entity, or by entities which are associated, affiliated or otherwise connected.
In accordance with the TMLA, and without objection, Ampol had issued over a million StarCard branded cards over the course of the last 25 years which, over the last at least 15 years, had borne the words prominently on the reverse side: “This card is accepted at Caltex and Ampol locations”.
Justice O’Callaghan observed that when a fuel card is accepted for payment in either of those two particularised cases “a consumer would understand that there is a commercial relationship or association of some kind between the owners of the respective trade marks, because if there were not such a relationship or association, the relevant fuel card would not be accepted for payment”. His Honour then stated at  “it seems to me equally obvious that a reasonable consumer of retail fuel products is unlikely even to wonder whether the two brands are owned by the same entity.” His Honour agreed with Ampol’s submission that consumers understand from everyday experience that branded methods of payment may be accepted by businesses that are unrelated to the owner of the payment method brand. As a result, his Honour found that Ampol had not engaged in misleading or deceptive conduct.
The final issue was whether Ampol’s use of the Caltex registered marks CALTEX and STARCARD in conjunction with the Ampol marks AMPOL and AMPOLCARD breached the TMLA.
Justice O’Callaghan found that Ampol’s use of the STARCARD mark at its Ampol branded service stations in a banner that says “StarCard accepted here” and in advertising which says that “StarCard will be accepted at Ampol branded sites” were uses of StarCard “in conjunction with” Ampol trade marks within the meaning of cl 14.4 of the TMLA. Justice O’Callaghan found that advertising and offering to accept a Caltex StarCard in relation to provision of services under the Ampol name for Ampol products was not a use of the marks in conjunction “for the sole purpose of educating customers” within the meaning of cl 14.4 of the TMLA, being the permitted use. It was a commercial use, not an educative one. It followed that to the extent that Ampol has used the STARCARD mark at its Ampol branded service stations in a banner that says “StarCard accepted here” and in advertising which says that “StarCard will be accepted at Ampol branded sites” it was in breach of cl 14.4. and it followed that it was not an authorised use.
Justice O’Callaghan agreed with Chevron’s submission that this meant Ampol had used the STARCARD mark “in relation to a financial service”, and had therefore infringed it under s 120(1) of the Trade Marks Act 1995 (Cth) , having used it “as a trade mark … in relation to … services in respect of which the trade mark is registered”. Despite the finding of trade mark infringement, the conduct was not misleading or deceptive.
Damages will be determined at a later date.