Virgin Enterprises, a company within Branson's British company Virgin Group, launched action in the Australian Trade Mark Office after a small NSW company called Virgin International Pty Ltd registered a stylised "V" trademark (see below) which it intended to use on its condoms.
The company, owned by Santino Di Bella, imported 20,000 condoms from an Asian supplier with the intent of selling them through vending machine pubs and clubs. It also sells olive oil under the Virgin International brand and in 2006 successfully defended an attempt by Virgin Group to take action against the trademark in relation to its olive oil brand.
However, in the condom case, investigations by Virgin Group found that the condoms had not been registered with the Therapeutic Goods Administration, which needs to approve all condoms as they are classified as "medical devices".
Virgin Group was therefore able to successfully argue that the importation of the condoms was a breach of the Therapeutic Goods Act and as such that trademark could be rejected on the grounds that it was "contrary to law".
"I am satisfied that such importation was use of the Trademark and... I am satisfied on the balance of probabilities that such importation was in breach of the TG Act," hearing officer Michael Kirov said in his judgement.
Costs were awarded against Virgin International.
Intellectual property lawyer Trevor Choy says Virgin Group's strategy was highly unusual. While claims that use of a trademark is "contrary to law" are often made at the start of a legal claim, they are usually dropped when a trademark opponent decides to focus on other claims for which there is more evidence.
"Normally Virgin Group will attack on the basis that the word "Virgin" is being used. But because the Virgin International trademark is so distinctive, Virgin Group had to pick another battleground," Choy says.
Choy says had the condoms been registered with the Therapeutic Goods Administration, Virgin Group, which has more than 2,000 Virgin-related trademarks registered around the world, may not have won an argument that Virgin International's distinctive trademark was too close to its own.
"Branson would have to argue that his brand is so famous that any use of the word Virgin could infringe on his trademarks. But that is a very hard argument to make, particularly in the case of logos."
A spokesperson for Santino Di Bella said he planned to appeal the decision and argues the company did not breach the TGA Act at the condoms were not sold in Australia.
Virgin International is involved in a number of other trademark battles with Virgin Group, including a fight over the Virgin International olive oil.
"We'll keep on fighting. But it consumes a lot of time, trying to win court cases when you are trying to run a business," spokesperson Bobby Arya told SmartCompany this morning.
He said Virgin International was prepared to keep tweaking its logo in order to ensure it remains distinctive.
"If you compare the two trademarks together they are very different. You know straight away it's not Richard Branson's Virgin."
Susan Darmopil of Addisons Lawyers, which represents Virgin Group declined to comment as matters against Virgin International are on-going.
