In KFC THC V Ltd v. Grill’d IP Pty Ltd  ATMO 192, KFC THC V Ltd (KFC) brought an opposition against the registration of the trade mark “HFC” filed by Grill’d IP Pty Ltd (Grill’d). KFC is a global chain of fast food restaurants otherwise known as Kentucky Fried Chicken. Grill’d is an Australian chain of burger restaurants which markets its food as a healthier, fresher alternative to the major fast food chains. The trade mark “HFC,” standing for “Healthy Fried Chicken,” is used by Grill’d for the fried chicken options on its menu.
Among the grounds of opposition relied upon by KFC, it was argued that HFC is substantially identical, or deceptively similar, to “KFC.” KFC argued that when comparing Grill’d’s trade mark side by side against its own marks, a total impression of similarity emerges, and the marks look substantially identical, sound substantially identical, and are conceptually the same. KFC contended the difference in the initial letter “K” vs “H” was inconsequential because “H” and “K” are phonetically similar when pronounced as letters.
Grill’d submitted that HFC is readily distinguished from KFC because the marks are initialisms rather than acronyms and so each letter is pronounced individually, and the only common element of the marks is the use of letters ‘FC,’ which are descriptively used as an “obvious” contraction of ‘fried chicken.’ Grill’d further argued that the effect of each letter pronounced individually is that each letter is emphasised and is therefore likely to be imperfectly recalled, and the marks are conceptually different as ‘H’ is a contraction of HEALTHY, while ‘K’ is a contraction of KENTUCKY.
The Hearing Officer did not accept the view that FC is an obvious contraction of ‘fried chicken’ when used in connection with all the foods claimed for the respective marks, but nevertheless concluded that HFC was neither substantially identical nor deceptively similar to KFC.
In support of this conclusion, the Hearing Officer was persuaded by the decision of the Full Court of the Federal Court of Australia in Australian Meat Group Pty Ltd v. JBS Australia Pty Ltd  FCAFC 207. In that case, the Court observed that “the world of commerce is conditioned to the use of acronyms” and consumers are used to relying on small differences to distinguish between them without being confused or misled.
The KFC and HFC decision is a reminder that although an acronym or initialism can act as a striking and memorable brand name, the scope of the monopoly afforded by registration as a trade mark can be very narrow. Courts have explicitly recognised that “the pool of acronyms and initialisms is more limited than the reservoir of words from which they are sourced” and, in the absence of demonstrated bad faith, closer similarities than normal–even the difference of one letter only–are expected and tolerated for acronyms.1
1 Australian Meat Group Pty Ltd v JBS Australia Pty Ltd  FCAFC 207 at [81-; ATP Tour, Inc v Australian Tennis Professional Coaches Association Ltd  ATMO 99; Professional Golfers’ Association of Australia Ltd v Ladies Professional Golf Association (2004) 61 IPR 206 at ; CMA CGM v CMA Corporation Ltd  ATMO 95; 95 IPR 593 at –.