SOLAHART and SOLARHUT: are you confused?

Buying into clean energy solutions is confusing enough from a technology and regulatory point of view but with choices from SOLAR PROSPECT, SOLAR FRONTIER, SOLARPLUS, [email protected], eSOLAR, SOLAR RESERVE, FIRST SOLAR, SKYLINE SOLAR, BIG SKY SOLAR, SKYPOWER, JA SOLAR, BP SOLAR and TRINA SOLAR etc where do you start and who does what?!

In this context, it is hardly surprising that a trade mark dispute has reached the Federal Court. In Solahart Industries Pty Ltd and Rheem Australia Pty Ltd v Solar Shop Pty Ltd and Solar Hut Pty Ltd [2011] FCA 700, Solahart, the well-known suppliers of solar hot water systems, successfully sued Solar Hut for trade mark infringement. Solar Hut supply photovoltaic solar cells (solar panels) that generate electricity for any purpose for home use.

Solahart owns three trade marks that contain the word “SOLAHART”. Solar Hut used the mark “SOLARHUT” in its television, radio and newspaper advertising, during telephone sales by staff, on its website and as part of its domain name. While Solahart alleged that Solar Hut infringed its three trade marks through both ss 120(1) and 120(2) of the Trade Marks Act 1995 (Cth) as well as engaged in passing off and breached s 52 of the then Trade Practices Act, Solahart only won on the basis of s 120(2)(a): the infringing mark was used as a “sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods of the same description as that of the goods in respect of which the trade mark is registered”.

First, Solahart convinced the judge that solar hot water systems were “goods of the same description” as photovoltaic solar cells (solar panels) which generate electricity for any purpose for home use. While several factors guide the decision including the nature and origin of the goods, the uses made of the goods and the trade channels through which the goods are bought or sold, the significant factor in the mind of the judge was the degree to which the goods are substitutable. As similar motives may lie behind a decision to purchase a solar powered hot water system and a solar powered electrical generator, the class of consumers who would purchase the goods sufficiently overlap to mean they are goods of the same description.

This case continues a recent trend of applying “goods of the same description” broadly either relying on substitution, consumer perception or convergence. For trade mark lawyers, it is getting harder and harder to make this judgment and the concerns of the initial opponents of this TRIPS introduced change to Australian trade mark law are being realised.

Second, the judge decided that SOLAHART and SOLARHUT were deceptively similar. The judge admitted that “HART and HUT are plainly different from a visual perspective” but said that “this is a case where the aural impression makes a decisive difference”. He focused on the phonetic similarity of the two word marks, and did not expressly consider past authority which suggests that the importance of the phonetic similarity depends on the way that consumers purchase goods. It is generally accepted that phonetic similarity is important where the transaction is conducted “over the counter” when goods or services in question are

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ordered orally. Attention should be given to phonetics where the goods or services are generally purchased by customers asking for them by name but this doesn’t appear to fit with these type of expensive goods..

Third, Solar Hut sought to amend their defence during the hearing to include the defence in s 120(2): “However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion”. Perhaps crucially to Solar Hut’s case, this application was refused and the judge did not consider the defence. But if Solar Hut was able to argue that it rarely used the trade mark aurally and that most advertising was visual, surely it would have had a good case that the way they actually used the trade mark was not likely to deceive or cause confusion. The judge admitted that they are plainly different from a visual perspective!

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