Federal court rules Dick Smith’s OzEmite to stay as the entrepreneur slams the “ridiculous cost of the law”

A lengthy legal battle involving Australian entrepreneur Dick Smith and yeast-spread brand AussieMite appeared to come to an end last week, with the Federal Court ruling Smith’s OzEmite spread could stay on shelves, following Intellectual Property Australia initial ruling in favour of AussieMite in 2014.

The OzEmite trademark was registered by Dick Smith in 1999 but was not approved until 2003. Smith didn’t launch the product until 2012, claiming he wanted to get the taste right, reports Mumbrella.

Meanwhile, Roger Ramsay applied to register the AussieMite name in 2001, which Smith opposed at the time. IP Australia approved the AussieMite application in 2003.

Australian trademark law dictates the owner of a trademark owners must use it within five years of registration, or third parties may apply to remove it from the register. AussieMite sought to do this with the OzeMite trademark in 2011, having previously objected to Smith’s bid to trademark the name in 2002.

The case has been back and forth since then, with both parties putting forward public defences for their brands. On Friday, Federal Court judge Anna Katzman ordered AussieMite to pay Smith’s legal costs.

However, speaking to SmartCompany this morning, Smith says he would have never entered in the battle if he knew how much money it would cost him.

“This is an example of the ridiculous cost of the law, we’ve spent $550,000 on this case so far, and AussieMite has spent something like $400,000,” Smith says.

Profits from OzEmite go towards various Australian charities, such as the Cancer Council and the McGrath Foundation. Smith says the lengthy legal battle means less money will be sent to these charities this year.

“That’s half a million less going to charities this year. If I knew that, I would have never entered into this, I would have just changed the name to DickyMite,” he says.

Smith believes these levels of costs can “absolutely” spell the end for smaller businesses, saying something must be done to prevent cases “siphoning money from charities and industries”.

Smith was also critical of IP Australia’s handling of the case, believing both time and money had been wasted.

“I think IP Australia needs some confident people in the department, this was a major error from the IP office,” Smith says.

“It was clear to IP Australia that we registered the trademark first, and we have been using it, there’s over one million jars of OzEmite on shelves right now.”

“The right course of action is to leave both products in the marketplace and let the market decide. If you have both products there, the customer can tell the difference, but if you only have one it causes real problems.”

In response to Smith’s comments, Fatima Beattie, deputy director general at IP Australia, told SmartCompany “IP Australia administers IP rights in accordance with the relevant legislation and legal precedents set by the courts”.

“If Mr Smith or any other customer has concerns about the quality of the service they have received from us, we encourage them to raise it with us as soon as possible … we take our customer service responsibility very seriously,” Beattie said.

Ramsay has indicated AussieMite may challenge the federal court’s decision, but Smith believes this will be unsuccessful, claiming these discretion decisions were “very difficult to appeal”.

“High stakes games of poker”

John MacPhail, an intellectual property specialist at Lynch Meyer lawyers, told SmartCompany though this case was not straightforward, some further risk assessment should have been done.

“When people get in fights, it takes time and money to unravel them. AussieMite took a risk taking on Dick Smith, and now that risk has come home to roost,” MacPhail says.

“It’s not just the cost that’s high, it’s the time, resources, and sleepless nights. A better course of action would have been to just change the name.”

Referring to the amount spent by Dick Smith on the legal battle, MacPhail says it is “quite high, but probably not too far off the mark” for such cases.

“Dick Smith’s been through the various levels of the legal mill, but that much is not too far off what one should expect for these sorts of battles,” he says.

“These cases are like high stakes games of poker, and just like with poker there’s a fair bit of bluffing.”

For small businesses that may be dealing with a potential trademark dispute, MacPhail says acknowledging the risks is absolutely key.

“Do the maths and apply the risk allocation factors, you’ll find it’s rarely worthwhile getting into a fight,” he says.

“Businesses often don’t have a full appreciation of the risks and what’s involved.

“Litigation isn’t a sprint, it’s a marathon, and sometimes it’s an ultra marathon.

SmartCompany contacted AussieMite but did not receive a response prior to publication.

*This article was updated on August 15, 2016, at 2.07pm to include a response from IP Australia.