Since then, Knott Investments Pty Ltd (Knott) has appealed against the court's orders permanently restraining it from using the Winnebago name and logo in relation to motor homes on the basis that it had engaged in passing off and misleading or deceptive conduct. Although Knott was largely unsuccessful in its appeal, it was able to secure a reduction in the extent of the relief awarded to Winnebago. Knott is now entitled to continue to use the Winnebago branding, subject to certain conditions.
Estoppel, acquiescence and delay
On appeal, Knott argued that Winnebago's failure to commence litigation in relation to Knott's use between 1985 (when Winnebago first learned of Knott's use of Winnebago's branding in Australia) and 2010 was a barrier to Winnebago now securing relief. The Full Federal Court found that Winnebago's conduct and the terms of the settlement agreement entered into by the parties in 1992 were not sufficient to give rise to a reasonable belief that Winnebago had accepted Knott's use of the Winnebago branding in Australia. Although the terms of the agreement were uncertain, Knott continued to use the Winnebago branding at its own risk and without any assurance that Winnebago would not enforce its rights in the brand against Knott in the future.
However, as discussed below, the fact that Winnebago had delayed in taking any action against Knott was relevant to the Court's findings on the appropriate relief.
Knott's Australian trade mark
Knott also appealed against the primary judge's decision to cancel its registration in Australia of the 'Winnebago' logo. This element of the appeal failed. The Court found that the primary judge had been correct in finding that use of the mark was contrary to law because it amounted to passing off, given Winnebago's reputation in Australia.
Knott also failed in its argument that the primary judge's discretion should have been exercised in favour of Knott, on the basis that it was Winnebago's inaction that caused any deception or confusion in the minds of the public. The Court found that Knott had also contributed to the deception and confusion, by deliberately adopting the Winnebago name and taking certain steps to associate itself in the minds of the public with the US brand. Therefore the decision to cancel Knott's trade mark was appropriate.
Relief
The Court pointed out that, since 1978, Knott had built up a substantial business in Australia without the interference of Winnebago. Although it is likely that Knott was, to some extent, assisted by the growing reputation of Winnebago's own vehicles around the world, the Court also stated that it would be unjust to ignore the contribution made by Knott itself in building up goodwill in the Winnebago brand in Australia.
Consequently, the Court held that Knott should be entitled to continue to use the Winnebago branding, as long as relief could be fashioned that would protect the public from being deceived about any connection between Knott's vehicles and Winnebago, and protect Winnebago's own trade reputation.
The Court set aside the primary judge's order restraining Knott from selling motor homes under the Winnebago branding. Instead, it ordered that Knott be required to use a disclaimer in its advertising and on its vehicles stating that the vehicles are 'not manufactured by, or by anyone having any association with, Winnebago of the United States'. Such a disclaimer must be used clearly and prominently so as to protect members of the public from being misled. The Court did not, however, agree with Winnebago that the disclaimer must be of equal prominence to the Winnebago name itself, as that would not properly take into account the entitlement of Knott to use the name in light of its own contribution to its Australian reputation.
The Court also ordered that Knott be required to ensure that each person who bought or hired one of its vehicles signs a form stating that he or she has been notified of the disclaimer. Although recognising that such an order would be 'novel', the court found that it was appropriate in order to ensure that, to the extent possible, members of the public would not be deceived about the trade origin of Knott's vehicles.
The extent of the damages to which Winnebago is entitled, if any, will be the subject of a further hearing.
As we said in our earlier article, this case illustrates some of the difficulties for overseas companies in preventing Australian businesses from trading off their reputations if the overseas company has not taken action to carry out business in Australia itself. The significant reduction by the Full Federal Court in the relief awarded to Winnebago reinforces the practical difficulties caused by waiting a long time before taking action against an Australian infringer that has been given time to build up its own separate goodwill - and legal rights - in the overseas company's brand.
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