09 January 2016
by Cara Waters
Musashi v A-Sashi: Nestle wins trademark battle against Aussie small business
The court found A-Sashi had infringed Musashi's trademark.
Small business owner James Christian has been forced to stop trading after losing a courtroom battle against Nestle over the use of the word "A-Sashi".
Christian started an online vitamin business in 2013 known as A-Sashi Vitamins for which he registered a business name, domain name and used logos incorporating the word A-Sashi.
But Nestle, as the owner of a range of trademarks for dietary supplements incorporating the word Musashi, sued Christian for trademark infringement.
Nestle argued Christian intentionally fashioned the A-Sashi name and logos so that they would be deceptively similar to the Musashi trademarks.
Christian said he was unaware of the Musashi trademarks and came up with the name A-Sashi himself "from looking at Asahi beer and wanting to have a Japanese feel about the brand".
It's important to get proper advice so your searches are not limited to exact matches.
Christian engaged a vitamin manufacturer in Florida to do his first production run for A-Sashi vitamins and started selling the products online but found his supply was abruptly cut once Nestle became aware of the A-Sashi products.
"I tried to place an order fo $220,000 and they wouldn't take the order," Christian says.
A-Sashi's products were reported to the Therapeutic Goods Administration and Nestle commenced legal proceedings against Christian.
The case went all the way to the Federal Court of Australia in November with the Full Court awarding Nestle a general injunction preventing Christian from using a mark that is substantially identical or deceptively similar to Nestle's Musashi trademarks.
The court clarified that a mark can still be used as a trademark even when it is not physically applied to the goods themselves, but is instead used on a website or Facebook page that is used to promote the goods.
The case also indicates that when a globally accessible website is targeted or directed at customers in Australia, the use will be found to be in Australia and infringing the trademark.
Courts will look to factors such as whether there is a reference on the website to shipping to Australia or paying in Australian dollars.
The Full Court found the primary judge erred by not awarding a general injunction and should have focused not only on the infringing conduct in issue but also consider the risk of the trademark infringer engaging in the infringing conduct in the future.
In awarding a general injunction the Full Court took into account that Christian was "belligerent, even defiant, in his attitude throughout the appeal, and he was disrespectful of both his opponents and the court conduct in the proceeding".
Christian says the court case has had a devastating affect on both him and his business.
"I was travelling along fine until Nestle got in my life and now I'm on a Centrelink payment and unemployed," he says. "My business is completely shut down."
Christian says he has lost the $200,000 he invested in A-Sashi and now owes costs to Nestle.
"The court case has taken three years out of my life," he says.
Christian represented himself in court and says he will now seek special leave to appeal to the High Court.
Cate Nagy, partner at law firm King & Wood Mallesons, says the case highlights the importance of undertaking trademark searches and potentially searches of the ASIC register for company names as well to trying to identify any third party use of a name in Australia.
"It's important to get proper advice so your searches are not limited to exact matches," she says. "You want to capture names that are similar but not identical."
Nagy says the Full Court's decision highlights the scope of remedies available.
"The Full Court ordered the cancellation of A-Sashi's business name and domain name and found these were effectively tools of deception and could only serve as a temptation to [Christian] to infringe Nestle's rights in the future," she says.
A spokesperson for Musashi declined to comment.