Federal Court fleshes out its reasons for rejecting Telstra’s claims in “yellow” litigation

A recent decision highlights the difficulties in succeeding in misleading and deceptive conduct or passing off claims, especially where the respondent is able to point to the use of its own trade marks and other differentiation strategies.

Justice Murphy has issued ‘Supplementary Reasons for Judgment’ in Telstra Corporation Limited v Phone Directories Company Pty Ltd (No 2) [2014] FCA 741]. These provide examples of the website and mobile app directories in issue and “flesh out” the earlier reasons of 30 May 2014 for rejecting Telstra’s claims of misleading or deceptive conduct and passing off in relation to the use of the colour yellow on the PDC Respondents’ website and mobile app directories.

Telstra did not provide any evidence to show that mobile users selected the respondents’ mobile app or websites because of the colour yellow. The court found that any choices to use the respondents’ online directory using search engines such as Google were made before users could become aware of any use of the colour yellow on the website.

As a result of the respondents having used yellow in their print directories and marketing materials for ten years prior to Telstra raising any objection, Murphy J considered that consumers would be likely to see the use of yellow as part of the respondents’ branding rather than conveying any association with Telstra.

Interestingly, Murphy J emphasised Telstra’s inconsistent use of the colour yellow on its website over the years. For example, there were distinct periods of time when Telstra’s website featured other colours, such as blue and white or predominantly blue at the same times that the respondents’ website featured yellow. This made it likely that users of the respondents’ mobile app directory would place less significance on the use of yellow as signifying any association with Telstra. In the court’s view, mobile app users would be more concerned with functionality than branding.

The PDC Respondents had done enough to differentiate their website and mobile app directories from Telstra’s services. The key points of differentiation were:

  • the respondents’ prominent use of their own “Local Directories” branding, compared with Telstra’s branding, in which the use of the colour yellow was always in conjunction with the well known Yellow Pages Walking Fingers Trade Mark;
  • references on the respondents’ website to their printed PDC directories as being “simple, compact and easy to use”, in contrast to Telstra’s larger and “more cumbersome” White Pages/Yellow Pages print directories; and
  • the respondents’ directory having a more local focus (which survey evidence indicated was important to users), compared with Telstra’s national coverage.