19 December 2019

If ever there was an example in Australian IP case law that highlights the power of the rights of first-use in a trade mark dispute, it must surely be the cautionary tale of Harry Potter.

According to an article Harry Potter and the Order of the Federal Court by Catherine Lee for Clayton Utz, a court decision by Australia’s Federal Court in 2004, described by the media as a David versus Goliath test case, illustrated that proven first use of a trade mark remains the strongest criterion in a disputed ownership of a trade mark.

Long before the first publication of the now famous Harry Potter books by JK Rowling in 1997, the owners of an Australian company involved in clothing stores, Mr Farah and Ms Jennifer, made up the name 'harry potter' for a line of women's clothing, because they thought it 'would have wide appeal as an Australian masculine name,’ wrote Ms Lee.

Every year since 1994, their stores had sold hundreds of thousands of units of 'harry potter' clothing and by the year ended 30 June 1998 had achieved sales exceeding $9,000,000. Although the 'harry potter' mark had only been used on women's clothing, Mr Farah and Ms Jennifer stated that it was their intention to use it on men's and children’s clothing also.

On 26 February 1998, one of their companies, Stepsam Investments Pty Ltd, applied to IP Australia to register the trade mark 'harry potter' in respect of clothing.

In the meantime, as everyone knows, a publishing phenomenon took place, with the meteoric rise to fame of the Harry Potter books of JK Rowling. Time Warner acquired from Ms Rowling the right to make films based on her books. At the date of Stepsam's trade mark application, however, only some 2,000 copies of the first of the Harry Potter books had been sent for sale in Australia, and the book had not yet made any impression in Australia.

In due course, Time Warner opposed Stepsam’s application to register the mark 'harry potter'. The Registrar of Trade Marks dismissed the opposition and permitted the application to proceed to registration. Time Warner appealed the Registrar’s decision, seeking orders for it to be set aside and for the application for registration to be refused. Early in the hearing of its appeal, however, Time Warner modified its position. It was no longer totally opposed to Stepsam's application for registration, but contended that registration of the trade mark should be limited to adults' clothing. Stepsam rejected this limitation and argued that it was entitled to have the mark registered in relation to all types of clothing,’ Ms Lee explained.

One of the defenders of the case was one of the original founders of the company Clair Jennifer.

Clair founded her original children's clothing brand, Wombat, at the age of 19 and built up a distinctive brand with dozens of retail stores across Australia. Right from the beginning she took an active approach to protecting, defending and commercially exploiting her IP.

The strategy: leave no stone unturned

Clair's IP portfolio incorporates her Wombat brand, her harry potter label, her designs (although these are not officially registered with IP Australia) and her innovative business systems.

 'My strategic approach to IP includes management of my design process', Clair says. 'All of Wombat's clothing range is designed and developed in house and the range is then contracted to various manufacturers, under tight secrecy agreements. By managing Wombat's IP in this way, Wombat maintains control over design, but dispels with the expense of maintaining a manufacturing house'.

The label ‘harry potter’ is now owned by Pretty Girl Fashions Group Pty Ltd and retains registration and IP rights until its renewal in 2028. The Wombat clothing label is registered to owners W. Lane Pty Ltd until May 2025.