No shade, but the evidence was slim | Eminem suffers first loss in trade mark saga

An Australian small business has struck the first blow in a multi-stage trade mark dispute with the artist Eminem.

Sydney-based business Swim Shady, known for its beach shades, bags, towels and swim shorts, successfully restricted trade mark registrations for SHADY and SHADY LIMITED owned by Marshall B. Mathers III, professionally known as Eminem or by his alter ego Slim Shady.

In another win for local labels after the recent victory of designer “Katie Perry”, the Registrar’s Delegate was not persuaded that Mathers’ registered marks had been used by the registered owner during the relevant three-year window. Unless the decision is appealed, the registrations will be removed for goods including bags, clothing, footwear and umbrellas.

The main downfall was a lack of evidence proving that Mathers, the registered owner, authorised use of the marks by his record company, Interscope Records. Interscope was identified throughout the evidence in connection with the SHADY trade marks, but the details of any control by Mathers were not clear.

The Delegate also did not accept that variations on SHADY counted as use of the registered marks, considering marks such as SLIM SHADY, I’M THE REAL SLIM SHADY and THE DEATH OF SLIM SHADY to be too different. And while there was evidence of merchandise sales in Australia, the records did not specify the exact products sold, which would have made it difficult to decide what products should remain registered even without the issues relating to control.

If there had been some firm evidence that the record company’s use was controlled by Mathers, even by a “common sense arrangement”, the registration – at least for SHADY – may have been saved for t-shirts, jumpers, jackets and caps.

A registration for SLIM SHADY may have also had a better chance of withstanding removal, because that mark featured in some of the evidence. Although Mathers has since applied to register SLIM SHADY, that application is now blocked by SWIM SHADY, and probably won’t progress until the opposition to SWIM SHADY is resolved.

What’s next?

If appealed to the Federal Court, Mathers would have a fresh opportunity to file evidence joining the dots between himself as an individual and his record company, and put forward further records precisely identifying the products sold during the December 2021 – 2024 period.

Otherwise, part two of the contest will see the Trade Marks Office decide whether SWIM SHADY can be registered as a trade mark once Mathers’ registrations are removed for the overlapping products.

Although the path will be clear as far as the trade mark register is concerned, the Aussie brand will still need to overcome the other opposition grounds based on Mathers’ reputation in SLIM SHADY and the assertion that SWIM SHADY was filed in bad faith.

In the meantime, we are watching a similar battle play out in the United States, with Mathers filing a petition to cancel the already-registered SWIM SHADY mark.

Key takeaways for brand owners 

Overseas brand owners are often surprised by Australia’s stringent technical requirements regarding authorisation of use. Courts, and the Trade Marks Office, will look behind bare declaratory statements and require actual proof that use of a mark was authorised by the registered owner.

This might take the form of financial control (such as might be exercised by a parent company over a wholly owned subsidiary) or quality control (such as might be exercised pursuant to a licence agreement setting out a quality control regime together with evidence about the actual exercise of that control).

This case should remind local and overseas brand owners alike to:

1. shore up licensing arrangements so that use by a trading entity, if different to the registered owner, can still legally accrue to the registered owner 
2. obtain registrations for the exact marks used, because use of other marks will not preserve a registration unless the marks are “substantially identical” or there is some other persuasive reason not to remove the registration, and 
3. keep meticulous sales records, even for smaller markets.

How we can help 

The Trade Marks team at Spruson & Ferguson regularly advises brand owners on protecting their trade mark registrations by opposing removal proceedings.

We represent clients through all stages of these proceedings, including gathering the relevant evidence and advocating for our clients at hearings. We also work closely with our clients to prepare brand protection strategies, ensuring that important marks are registered and adequate licensing and control arrangements are in place to help insulate valuable registrations from the type of attack seen in this case.