Optus suffered an embarrassing loss in the Federal Court yesterday with Justice Thawley granting Boost Mobile an injunction which will see Optus remove the “Boost” branding from their new Living Network products – but it’s the detail of the case that is most damning for Optus and should raise questions about the leadership of their Management team and CEO Kelly Bayer Rosmarin.
While the pub test alone could reasonably assume that Optus’ use of the word Boost in a product name was a bit sketchy, Trademark law is a complex beast and it wasn’t a simple task for Boost’s team of Lawyers in the Federal Court on Monday and part of Tuesday.
I sat through a whole day of submissions and presentations, including Optus making a strong case under the details of Law – most of which went right over my simple head.
Boost Mobile’s lawyers were a bit more to the point, showing examples of the use of the Boost name alongside the word Mobile, as well as areas where it was used descriptively to “boost” the speed of a product. Essentially, if I was to characterise their defence, the use of the word Boost with a capital B as a product name was where the Trademark infringement was taking place.
I’m not going to pretend to unpack the entire ruling, needless to say, the Judge found in favour of Boost Mobile and Optus has to bare the costs of that, as well as the trouble they need to go to in order to comply with the injunction and remove the name.
Leaving that aside, there was a document presented by Optus on the opening day of submissions, one that had not previously been submitted to the court for Boost lawyers or the presiding Judge to see.
The document was a Marketing Brief, which Optus classified as Confidential, so other than the Optus Lawyers, Boost Lawyers and the Judge – no one could see it – not Boost themselves, or anyone in the courtroom. However, some parts of the document were referred to in His Honour’s decision and frankly, they are damning.
A full written decision has yet to be published, but from my best shorthand speed-typing and recollection – here’s how it played out.
Justice Thawley said “I’ve taken into account Optus’ evidence of the costs of the injunction and the fact that it will suffer reputational damage.”
But here’s the kicker – he went on to say “ sympathy on that front is somewhat diluted by the fact that Optus must have been aware of the risk in choosing from the various words it says it considered to describe the services it was offering – the central trademark of one of its competitors.”
To put it simple, he said “It would be commercially naive to think that Optus did not closely consider the risks, if not even the eventuality, which is now playing out.”
How does this relate to the Managment and CEO of Optus? Well the document being referred to was dated 20 May 2022 – a full nine months before the “Mobile Boost” products were announced.
That a senior marketing manager allowed the Boost name to be used, let alone the CEO herself didn’t question the name when it was presumably brought up in a weekly or quarterly product briefing is staggering.
Boost Mobile has over 800,000 prepaid customers, and is one of the biggest threats to the big-three telcos Pre-paid subscriber base.
Everyone in the Telco industry knows about Boost, and Optus and Boost have history, not just as original network partners, but more recently as marketing protagonists in the Supercars.
Here’s the most damning thing Justice Thawley said yesterday: The evidence is that Optus did indeed consider Boost’s trademark when considering the use of the word boost.“
That marketing brief he said, “described the task in a way which indicates it was choosing names, which it would be “distinctive” and “ownable” and “associative”. The task was described in a way which might reasonably be understood as being to choose a name which was both descriptive and functioning as a badge of origin.“
The “badge of origin” comment is critical as it relates directly to the Trademark law case.
Worryingly for Optus, he also said that the Marketing Brief “showed that the word boost was chosen for reasons beyond it being purely descriptive.“
We’ll never know those reasons – as the document was deemed confidential and we won’t get to see it.
The absolute bottom line, and these are the words of the presiding Federal Court judge – “Optus knew there was an underlying issue with its plan. The marketing brief stated near the end, “we can’t call the boost products boost as this conflicts with Boost Mobile”, it’s unlikely that Optus rolled out the new features without investigating this issue closely.“
And with that, the injunction was granted.
The Singaporean owners of Optus would be looking on worryingly. The Data Breach was a huge blow to the company’s reputation and despite now being “customer positive” – that is to say, they do not have less customers now than they did before the breach according to CEO Kelly Bayer Rosmarin, the reputational damage from that event will be long-lasting.
Add to that this embarrassing loss in court and you’d have to wonder if they’re lining up CEO candidates. The loss alone might not be the issue, but the ruling and the information that shows the company knew that the Boost name would be a problem really is.
The good news for SingTel, Optus’ owners, is that there are plenty of great CEO ready candidates out there. Let me help them along with a list if the eight people I’d interview for Optus CEO if I were Chairman Paul O’Sullivan or SingTel CEO Yuen Kuan Moon.
So, there you go Optus and SingTel – best of luck with what’s next.
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