A trade mark registration gives its owner valuable rights, but those rights can become difficult to enforce when the mark no longer identifies the registered owner’s goods or services.
This issue was central to Dunlop Aircraft Tyres Limited v The Goodyear Tire & Rubber Company [2018] FCA 1014, where the Federal Court of Australia considered a dispute over the DUNLOP name and the well-known Flying D device used on aircraft tyres.
The dispute arose because Goodyear owned the relevant Australian trade mark registrations, while Dunlop Aircraft Tyres Limited (DATL), a separate UK business, had manufactured the aircraft tyres sold under those marks for many years.
In a judgment delivered on 6 July 2018, Nicholas J ordered the rectification of Goodyear’s Australian registrations to exclude aircraft tyres and related goods and services. The Court also dismissed Goodyear’s trade mark infringement, misleading conduct and passing off claims.
However, DATL’s own attempts to register the DUNLOP and Flying D marks in Australia were unsuccessful.
The decision illustrates an important distinction between owning a registered trade mark, using it in the course of trade and maintaining the commercial connection necessary for the mark to perform its essential function of identifying origin.
Background of the dispute
The DUNLOP name has a long history in the tyre industry, dating back to the late nineteenth century.
The Australian business associated with the DUNLOP brand was established in the 1890s. The DUNLOP word mark was first registered in Australia in 1910, and subsequent registrations covered various tyres, related products and services.
For much of the twentieth century, Australian companies operating under the DUNLOP name manufactured and sold aircraft tyres locally. However, aircraft tyre manufacturing in Australia ceased around 1987.
Following that closure, the Australian business continued importing and distributing aircraft tyres manufactured in the United Kingdom by DATL and its predecessors.
In 2006, The Goodyear Tire & Rubber Company (Goodyear US) acquired the relevant Australian trade mark registrations as part of its acquisition of Ansell’s interest in the South Pacific Tyres business. Its Australian subsidiary, Goodyear & Dunlop Tyres (Aust) Pty Ltd (Goodyear Australia), continued distributing DUNLOP-branded aircraft tyres.
DATL, meanwhile, remained the manufacturer of those tyres in the United Kingdom. It also owned relevant UK trade mark registrations for the DUNLOP and Flying D marks.
The commercial relationship began to deteriorate when DATL sought to supply Australian customers directly or through alternative distributors.
In January 2009, DATL applied to register the DUNLOP word mark and Flying D device in Australia for aircraft tyres and tubes in Class 12 and aircraft tyre re-treading services in Class 37.
Goodyear opposed both applications, relying on its existing Australian registrations. The Trade Marks Office upheld the opposition in February 2015.
By this time, DATL had also begun distributing its aircraft tyres in Australia through Aero Parts Australia Pty Ltd. Goodyear subsequently commenced infringement proceedings against DATL and Aero Parts.
Main issues before the court
The proceedings raised several connected questions concerning the ownership, use and enforceability of the DUNLOP trade marks.
Goodyear argued that DATL and Aero Parts had infringed its registered marks by importing, selling and providing services in relation to DUNLOP-branded aircraft tyres in Australia.
It also claimed that the use of those marks was misleading or deceptive under the Australian Consumer Law and constituted passing off.
DATL challenged Goodyear’s registrations on two principal grounds.
First, it argued that the relevant marks should be removed for non-use because Goodyear had not used them in Australia during the statutory non-use period.
Secondly, DATL sought rectification under section 88 of the Trade Marks Act 1995 (Cth), arguing that the marks had ceased to indicate a sufficient commercial connection with Goodyear and that their continued registration for aircraft tyres and related services was likely to deceive or cause confusion.
The Court also had to determine whether DATL was entitled to obtain its own Australian registrations despite Goodyear’s earlier rights.
Trade Mark Use and the role of an Authorised User
One of the central questions was whether Goodyear could rely on the activities of its Australian subsidiary to establish use of the registered marks.
Under section 92(4)(b) of the Trade Marks Act, a registration may be challenged where the mark has not been used in Australia during the relevant statutory period.
Section 7(3) provides that authorised use of a trade mark is taken to be use by its registered owner. Section 8 requires such use to occur under the owner’s control.
Goodyear US had entered into a written licence agreement with Goodyear Australia in January 2012. The agreement permitted the subsidiary to use the registered marks in connection with the manufacture, marketing and sale of products and services.
DATL argued that Goodyear Australia could not rely on the licence because the aircraft tyres it sold were manufactured by DATL according to DATL’s own manufacturing and quality standards.
The Court accepted that Goodyear did not exercise quality control over the manufacturing process. Nevertheless, that did not resolve the question of authorised use.
Nicholas J found that Goodyear US exercised financial and managerial control over Goodyear Australia’s business. Goodyear US also knew of and approved the subsidiary’s continued importation and sale of DATL-manufactured tyres.
The Court was therefore satisfied that Goodyear Australia’s use occurred under the control of Goodyear US.
Importantly, the Court also found that importing and selling aircraft tyres bearing the DUNLOP and Flying D marks constituted trade mark use.
Although Goodyear Australia had not manufactured the tyres or applied the marks itself, those marks continued to function as badges of origin on the goods being sold.
Accordingly, Goodyear was able to establish relevant authorised use in relation to aircraft tyres during the non-use period.
A different position for aircraft tyre re-treading services
The Court reached a different conclusion concerning aircraft tyre re-treading services.
Goodyear Australia had previously provided re-treading services in Australia but ceased those operations in 2009. Thereafter, it arranged for aircraft tyres to be re-treaded by another Goodyear subsidiary in Thailand.
Although the re-treaded tyres continued to bear the original DUNLOP and Flying D markings, Goodyear Thailand applied its own GOODYEAR mark to identify the business responsible for the re-treading work.
Nicholas J held that the original DUNLOP markings identified the source of the tyres when they were manufactured. They did not indicate that the subsequent re-treading services had been performed by Goodyear under the DUNLOP brand.
The distinction was significant because the same mark may serve different functions depending on the goods or services involved.
Goodyear also relied on a combined GOODYEAR/DUNLOP logo appearing on invoices and delivery documents.
The Court considered that the addition of the GOODYEAR name substantially affected the identity of the separately registered DUNLOP and Flying D marks. Use of that composite logo was therefore insufficient to establish use of the individual marks for the purposes of resisting removal for non-use.
The non-use grounds were consequently established in relation to re-treading services and various other registered marks incorporating the DUNLOP name.
Why had the Australian registrations become deceptive?
The most significant aspect of the judgment concerned the application of section 88(2)(c) of the Trade Marks Act.
That provision permits rectification of the Register where, because of circumstances existing when the rectification application is filed, use of a registered trade mark is likely to deceive or cause confusion.
DATL argued that the DUNLOP and Flying D marks had ceased to identify aircraft tyres originating from Goodyear.
The evidence showed that DATL had been the sole manufacturer of DUNLOP-branded aircraft tyres for approximately thirty years. Australian customers purchasing those tyres were generally aware that they were manufactured by DATL or its predecessors in the United Kingdom.
This was particularly important because aircraft tyres are sold in a highly specialised market involving airlines, aviation maintenance providers and other professional purchasers.
The Court accepted that these purchasers associated the DUNLOP and Flying D marks on aircraft tyres with the UK manufacturing business.
Nicholas J then considered what would happen if Goodyear itself manufactured aircraft tyres and sold them under those marks.
The Court found that a substantial number of purchasers would probably believe that such tyres came from the same source as the DATL-manufactured tyres they had previously purchased, or at least wonder whether the same business was responsible for their manufacture or quality.
This created a real danger of deception or confusion.
The Court emphasised that the relevant assessment was not limited to how Goodyear was actually using the marks. It also required consideration of their normal and fair use across the goods and services covered by the registrations.
Although Goodyear did not intend to manufacture DUNLOP-branded aircraft tyres itself, its registrations were broad enough to permit that use.
The difficulty was that the DUNLOP name, in the aircraft tyre market, had come to identify goods manufactured by DATL rather than goods originating from or controlled by Goodyear.
Goodyear’s lack of quality control over DATL’s manufacturing activities was particularly important.
While the financial and managerial relationship between Goodyear US and its Australian subsidiary was sufficient to establish authorised use, it did not establish a sufficient connection between Goodyear and the manufacture or quality of DATL’s aircraft tyres.
The Court concluded that the registrations had lost their ability to distinguish the relevant goods and services of Goodyear from those of DATL.
Rectification of the Register
Having found that the relevant marks were likely to deceive or cause confusion, the Court considered whether the registrations should be amended.
Goodyear argued that its longstanding involvement in the Australian tyre market, its reputation and its commercial relationship with DATL justified retaining the registrations.
Nicholas J was not persuaded.
The Court found that the problem had arisen because Goodyear had allowed DATL to remain responsible for the manufacture and quality of the aircraft tyres without exercising relevant control over that process.
The registrations had consequently ceased to reflect the actual commercial source associated with those goods.
The Court also considered the public interest in maintaining an accurate Trade Marks Register.
Registration should identify marks that perform their statutory function of distinguishing the goods or services of one trader from those of others.
The Court therefore ordered rectification under section 88(1), removing aircraft tyres and relevant associated goods and services from the scope of Goodyear’s registrations.
The registrations were not cancelled in their entirety. Goodyear retained protection for the goods and services that remained within their amended specifications.
Although the Court had also found grounds for removal based on non-use in relation to certain marks and services, it considered separate removal orders under section 101 unnecessary in light of the rectification orders.
DATL’s Attempt to Register the DUNLOP Marks
An unusual feature of the dispute was that DATL succeeded in obtaining rectification of Goodyear’s registrations but failed to secure registration of its own marks.
Goodyear had opposed DATL’s applications under sections 44 and 58 of the Trade Marks Act.
Section 44 concerns conflicts with earlier registered or pending trade marks. However, section 44(3) permits acceptance in certain circumstances, including where there has been honest concurrent use or other circumstances making registration appropriate.
The Court accepted that DATL’s use of the DUNLOP and Flying D marks on aircraft tyres in Australia had been honest.
DATL was not attempting to pass off another manufacturer’s products as its own. It was supplying tyres that it had manufactured under marks long associated with its aircraft tyre business.
Nicholas J considered that the circumstances justified applying section 44(3)(a) to DATL’s application for aircraft tyres.
For re-treading services, the Court considered section 44(3)(b) applicable because of the particular circumstances and the public interest in having the marks identify services associated with the manufacturer of DUNLOP aircraft tyres.
However, this did not overcome the separate objection under section 58, which concerns whether the applicant is the owner of the trade mark.
DATL argued that Goodyear had effectively abandoned its rights in the relevant marks.
The Court rejected that argument.
There was insufficient evidence that Goodyear had intended to abandon ownership of the registrations. The fact that its registrations were liable to rectification did not establish that it had abandoned the marks.
Consequently, DATL’s appeal against the refusal of its applications was dismissed. Goodyear’s cross-appeal was also dismissed.
The outcome demonstrates that establishing honest concurrent use or showing that another trader’s registration should be narrowed does not necessarily establish entitlement to register the same mark.
Trade Mark Infringement Claims
Goodyear alleged infringement under sections 120(1) and 120(2) of the Trade Marks Act.
Section 120(1) concerns use of a substantially identical or deceptively similar sign in relation to the goods or services covered by a registration.
The rectification orders proved decisive.
Once the relevant aircraft tyres and related goods and services were excluded from Goodyear’s registrations, the Court found that the infringement claims under section 120(1) could not succeed.
Nicholas J also considered the effect of rectification on alleged infringements that occurred before the orders were made.
The Court held that rectification under section 88(1) did not operate retrospectively. Nevertheless, a trade mark owner could not obtain infringement relief based on registration rights that had been cancelled or removed by the time judgment was given.
Goodyear also relied on section 120(2), which can extend protection to similar goods and services or closely related goods and services.
The Court accepted that aircraft tyres and aircraft tyre re-treading services were closely related.
However, section 120(2) allows a defendant to avoid infringement where the relevant use is not likely to deceive or cause confusion.
Given the specialised market and purchasers’ understanding that DATL manufactured the tyres, the Court found that DATL’s use of the marks was not likely to cause such confusion.
The infringement claims therefore failed.
Misleading Conduct and Passing Off
Goodyear also claimed that DATL and Aero Parts had engaged in misleading or deceptive conduct under sections 18 and 29(1)(g) of the Australian Consumer Law.
Its argument was that the use of the DUNLOP and Flying D marks by DATL and Aero Parts suggested an ongoing commercial association with Goodyear.
Goodyear relied partly on evidence that it had historically been the principal Australian distributor of DUNLOP-branded aircraft tyres.
However, the Court distinguished between a reputation as a distributor and a reputation as the manufacturer or commercial source of the goods.
Australian aviation purchasers understood that Goodyear Australia had sourced its DUNLOP-branded aircraft tyres from the UK manufacturing business.
Nicholas J considered that those purchasers would also understand that a manufacturer could change its distribution arrangements or appoint another Australian distributor.
The fact that Aero Parts supplied the same genuine DUNLOP-branded tyres did not suggest that Aero Parts or DATL was commercially associated with Goodyear.
The Court therefore rejected the Australian Consumer Law claims.
The passing off claim was based on substantially the same allegations and failed for the same reasons.
Outcome of the Proceedings
The Federal Court ordered Goodyear’s relevant Australian trade mark registrations to be rectified by excluding aircraft tyres and associated goods and services from their specifications.
Goodyear’s infringement claims were dismissed, as were its claims under the Australian Consumer Law and passing off.
DATL’s separate appeal seeking registration of the DUNLOP and Flying D marks was also dismissed, together with Goodyear’s cross-appeal.
Although neither party obtained every form of relief it sought, the rectification orders substantially limited Goodyear’s ability to rely on its existing registrations against DATL’s Australian aircraft tyre business.
Commercial Significance
The decision provides important guidance for trade mark owners, manufacturers, distributors and businesses operating through licensing arrangements.
First, it demonstrates that trade mark ownership and trade mark use are related but separate questions. A business may establish authorised use sufficient to resist removal for non-use, while still facing challenges to its registration if the mark no longer identifies goods or services originating from, or sufficiently connected with, that business.
Secondly, the case highlights the importance of maintaining appropriate control over goods sold under licensed marks. The Court accepted Goodyear’s control over its subsidiary for authorised-use purposes, but found that Goodyear had no relevant control over DATL’s manufacturing and quality standards. That distinction was central to the rectification findings.
Thirdly, a longstanding registration does not necessarily protect every category of goods or services indefinitely. The Court can examine whether normal and fair use of the mark across its registered specification would create a real danger of deception or confusion.
Fourthly, businesses should distinguish between the trade mark use associated with a product and the separate services provided in relation to it. In this case, the original DUNLOP markings identified the manufacturer of aircraft tyres, but they did not establish use of those marks for re-treading services performed under the GOODYEAR brand.
Fifthly, distributors should recognise that an established position in a market does not necessarily give them exclusive rights over the manufacturer’s brand. A distributor may develop substantial commercial goodwill through its own activities without acquiring the reputation or rights associated with the manufacturer’s trade marks.
Finally, the decision highlights why commercial arrangements involving trade marks should clearly address ownership, permitted use, quality control, distribution rights and the consequences of terminating the relationship.
The central lesson is that trade mark protection depends on more than what appears on the Register. The way a mark is used, the commercial connection it represents and the understanding of relevant purchasers can all affect the continuing scope and enforceability of registered rights.
For businesses managing brands across different jurisdictions, particularly where manufacturing and distribution are carried out by separate entities, maintaining that connection is essential to protecting the long-term value of their trade marks.
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