Agapitos v Habibi
[2014] WASC 47
•25 FEBRUARY 2014
| JURISDICTION | : | SUPREME COURT OF WESTERN AUSTRALIA IN CIVIL |
| CITATION | : | AGAPITOS -v- HABIBI [2014] WASC 47 |
| CORAM | : | LE MIERE J |
| HEARD | : | 7 & 8 MAY 2013 |
| DELIVERED | : | 25 FEBRUARY 2014 |
| FILE NO/S | : | CIV 1302 of 2011 |
| BETWEEN | : SPIROS AGAPITOS |
Plaintiff
AND
TARA TAHEREH HABIBI
Defendant
(BY ORIGINAL ACTION)
TARA TAHEREH HABIBI
Plaintiff by Counterclaim
AND
SPIROS AGAPITOS
Defendant by Counterclaim
(BY COUNTERCLAIM)
Catchwords:
Claim for infringement of trade mark - Defendant has not used words as a trade mark - Defendant used sign in good faith
[2014] WASC 47
Passing off - No evidence that significant section of the community identify plaintiff with the trade mark - No consumer deception or confusion
Misleading or deceptive conduct - Conduct not misleading or deceptive or likely to mislead or deceive
Counterclaim - Application for cancellation of plaintiff's trade mark - Trade mark not inherently adapted to distinguish services - Trade mark not capable of distinguishing plaintiff's services - Registration of trade mark should be cancelled
Counterclaim - Application for cancellation of plaintiff's trade mark - Use of trade mark not likely to deceive or cause confusion
Legislation:
Fair Trading Act 1987
(WA), s 10 s 89(1), s 120, s 122
Result:
Plaintiff's claim dismissed
Defendant's counterclaim granted
Category: B
[2014] WASC 47
Representation:
Original Action
Counsel:
| Plaintiff | : | Mr A Metaxas |
| Defendant | : | Mr G A Rabe |
Solicitors:
| Plaintiff | : | Metaxas & Hager |
| Defendant | : | Stables Scott |
Counterclaim
Counsel:
| Plaintiff by Counterclaim | : | Mr G A Rabe |
| Defendant by Counterclaim : | Mr A Metaxas |
Solicitors:
| Plaintiff by Counterclaim | : | Stables Scott |
| Defendant by Counterclaim : | Metaxas & Hager |
Case(s) referred to in judgment(s):
Aldi Stores Ltd Partnership v Frito-Lay Trading Co GmbH (2001) 190 ALR 185
Austin Nichols & Co Inc v Lodestar Anstalt [2011] FCA 39
Blount v Registrar of Trademarks (1988) 83 FCR 50
BM Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd (1976) 51 ALJR
254; (1976) 12 ALR 363
British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281
Campomar Sociedad Limitada v Nike International Ltd (1999) 202 CLR 45
Chocolateri Guylian NV v Registrar of Trade Marks (2009) 180 FCR 60
Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511
EOS Australia Pty Ltd v Expo Tomei Pty Ltd (1998) 42 IPR 277
Health World Ltd v Shin-Sun Australia Pty Ltd [2010] HCA 13; (2010) 240
CLR 590
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Hornsby Building Information Centre Pty Ltd v Sydney Building Information
Centre Ltd (1978) 140 CLR 216
Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991)
30 FCR 326
Mantra Group Pty Ltd v Tailly Pty Ltd [2010] FCA 291; (2010) 267 ALR 347
Mark Foy's Ltd v Davies Coop & Co Ltd (1956) 95 CLR 190
Ocean Spray Cranberries Inc v Registrar of Trade Marks [2000] FCA 177;
(2000) 47 IPR 579
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
Registrar of Trade Marks v W & G Crows Ltd (1913) AC 624
Sports Warehouse Inc v Fry Consulting Pty Ltd [2010] FCA 664; (2010) 87 IPR
300
Tobacco Institute of Australia v Australian Federation of Consumer
Organisations Inc (1992) 38 FCR 1
Unilever Aust Ltd v Karounos [2001] FCA 1132; (2001) 113 FCR 322
Wellness Pty Ltd v Pro Bio Living Waters Pty Ltd [2004] FCA 438; (2004) 61
IPR 242
Woolworths v BP plc (No 2) [2006] FCAFC 132; (2006) 154 FCR 97
Yarra Valley Dairy Pty Ltd v Lemnos Foods Pty Ltd [2010] FCA 1367
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LE MIERE J
LE MIERE J: The plaintiff is a dentist who carries on business in Mount Hawthorn under the business name 'Dental Excellence' and is the owner of a trade mark comprised of the words 'Dental Excellence'. The defendant is a dentist who carries on business in South Perth under the business name 'South Perth Dental Excellence'.
2 The plaintiff says that the defendant has infringed his trade mark by
using as a trade mark the sign 'South Perth Dental Excellence' that is substantially identical with, or deceptively similar to, the plaintiff's trade mark. The plaintiff further claims that the defendant's conduct is misleading or deceptive conduct in breach of s 10 of the Fair Trading Act (WA) (FTA), and that the defendant has passed off her business as the plaintiff's business or as having some connection in trade with the plaintiff or his business. The plaintiff says that he has suffered loss and damage as a result of the defendant's conduct.
3 The defendant denies that by using the name 'South Perth Dental
Excellence' she has infringed the plaintiff's trade mark or engaged in conduct that amounts to passing off or misleading or deceptive conduct under FTA s 10. The defendant counterclaims for an order that the plaintiff's trade mark be cancelled on two grounds. The first is that the plaintiff's trade mark is not capable of distinguishing his services from the services of other persons. The second is that because of the circumstances applying when the counterclaim was brought, the use of the trade mark is likely to deceive or cause confusion.
The plaintiff's business
4 On 4 July 2002 the plaintiff registered the business name 'Dental
Excellence' with the Department of Commerce, Western Australia. On 24 August 2002 he commenced trading as a dentist under the business name 'Dental Excellence' from premises in Mount Hawthorn. On 21 November 2002 the plaintiff registered the business name 'Dental Excellence' with the Dental Board of Western Australia. The plaintiff has never traded under a different business name or registered any other name with the Dental Board.
5 On 14 October 2010 the plaintiff applied to register the words
'Dental Excellence' as a trade mark. The application was initially not accepted by the Trade Mark Examiner for the reason that the words 'Dental Excellence' laud a characteristic of the services claimed indicating that the plaintiff was providing superior quality dental services, and other traders who also provide excellent dental services should be able to use the words 'Dental Excellence' in connection with goods or services similar
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to the plaintiff. The plaintiff then provided to the Examiner evidence of how he had used the trade mark. The registrar was satisfied that the plaintiff's trade mark was capable of distinguishing his services from the services of other persons and accepted and registered the trade mark. The trade mark is deemed to be registered from the date of filing, 14 October 2010. The trade mark is registered for dentistry services.
6 The plaintiff gave evidence that he has a reputation within Western
Australia but not around Australia. Since commencing the business the plaintiff has actively marketed, advertised and displayed the business name 'Dental Excellence' and promoted his dental practice under that name. The plaintiff advertised in two local or suburban newspapers on a number of occasions between late 2003 and March 2005 and again in February and March 2010 and in dental and other magazines. He advertised for a year in 2003 - 2004 on an FM radio station during the Greek Hellenic Voice of WA programme. In February 2009 the plaintiff conducted a letter box drop to 9,804 homes in the Mount Hawthorn, East Leederville, North Perth and Joondanna areas. The plaintiff has displayed the business name on letterheads, business cards and brochures. He has advertised his practice under the name 'Dental Excellence' in the Yellow Pages, the White Pages and various online advertising. In 2010 the plaintiff sponsored a Floreat Athena soccer team which displayed the words 'dental excellence' on the sleeve of their jerseys. The name 'Dental Excellence' is displayed on internal and external signage on the plaintiff's business premises. The majority of the plaintiff's clients are sourced from areas in and around Mount Hawthorn. The plaintiff has not advertised in South Perth.
7 Since June 2011 Melidian Trading Pty Ltd (Melidian) has carried on
a dental practice in Sydney under the business name 'Sydney Dental Excellence'. The plaintiff claimed that Melidian had infringed his trade mark by doing so. The plaintiff and Melidian entered into a deed of settlement on 17 December 2012 by which Melidian, without any admission of liability, agreed to phase out its use of the business name over six months. The plaintiff says that he took that action to protect his trade mark. Between 14 November 2012 and 18 January 2013 the plaintiff entered into six licence agreements with persons or companies carrying on business in Victoria, Queensland, South Australia, the ACT and New South Wales under the name of 'Dental Excellence' or a name including these words by which the plaintiff licensed the person or company to use his trade mark in the specified territory.
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8 The plaintiff gave evidence of people having confused his practice
with the defendant's practice. He said that his practice has received phone calls from people who have confused him with the defendant's practice. He has received letters from specialists asking for referrals for patients who are not his patients. He has received goods from dental suppliers that are not meant for him. The plaintiff did not particularise when or how frequently any of those matters had occurred.
The defendant's business
9 The defendant operates dental practices at Woodvale, Hillarys and
Mount Lawley in addition to the South Perth business, each of which she purchased before the South Perth practice. In September 2007 she purchased the dental practice operated by Dr McNeil under the name 'McNeil's Dental Care' in South Perth. After purchasing the practice the defendant continued to trade under the name 'McNeil's Dental Care'. In 2008 and 2009 Dr McNeil asked the defendant to change the business name. In 2010 the defendant needed to renovate the practice and decided to change the signage. Prior to that time the defendant had advertised her dental practices in a display advertisement in the Yellow Pages and in the Southern Gazette newspaper. In each case the heading of the advertisement read 'Excellence in Dental Care' and gave the address, telephone number and opening hours of each of her four practices. Business cards, letters and other documents used by the defendant's South Perth practice featured a logo with the words 'Committed to Excellence' below the words 'McNeil's Dental Care'.
10 In 2010 the defendant considered changing the signage for the South
Perth practice. She was undecided whether to adopt the signage 'South Perth Dental Excellence' or 'South Perth Excellence Dental'. She discussed the matter with her niece, Dr Shaba Habibi, who is also a dental surgeon. Dr Habibi advised the defendant to go for 'South Perth Dental Excellence'.
11 In June 2010 the defendant applied to the Department of Fair
Trading to register the name 'South Perth Dental Excellence'. The department issued a certificate of registration of business name for 'South Perth Dental Excellence' on 22 June 2010. On 30 July 2010 the Dental Board of Western Australia granted approval for the defendant to use the new name for the South Perth practice. The defendant commenced trading under the name 'South Perth Dental Excellence' on 17 September 2010, that is before the filing date of the plaintiff's trade mark application. On 18 October 2010 the signage on the South Perth practice was changed
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to 'South Perth Dental Excellence'. The defendant subsequently changed the name of the practice to 'South Perth Dental Excellence' in the Yellow Pages directory and in other advertisements.
Signage
12 The words 'dental excellence' on the signage on the plaintiff's
premises appear all in lowercase. The word 'excellence' appears below the word 'dental' and is indented so that the first 'e' in 'excellence' appears below the 'e' in dental and the first 'l' in excellence appears immediately below the 'l' in 'dental'. The words appear in white on what appears to be a brown background. A symbol in yellow appears to the right of the word 'dental' and above the word 'excellence'. The style and appearance, or get up, of the signage on the defendant's premises is different from that on the plaintiff's premises. 'SOUTH PERTH DENTAL EXCELLENCE' appears all in uppercase. The words 'South Perth' are above and less prominent than the words 'Dental Excellence'. The defendant's signage features a number of graphics including the letters 'D' and 'E' within a circle. Visually, the appearance of the signage on the defendant's South Perth premises is very different from the appearance of the signage on the plaintiff's premises.
Dental practices in Australia with similar names
13 When the plaintiff filed his application for the registration of his
trade mark on 14 October 2010 (filing date) there were a number of people or companies carrying on business in Australia under the name 'Dental Excellence' or a name which includes those words. The businesses were:
Business Name Registration Date Principal Place of Business Dental Excellence 9 February 1999 Woden, ACT Dental Excellence 12 July 1999 New South Wales Dental Excellence 4 July 2002 Mount Hawthorn (plaintiff) Family Dental Excellence 26 February 2007 Mount Gravatt, Queensland Dental Excellence 14 May 2009 Adelaide Dental Excellence at the 15 December 2009 The Gap, Queensland Gap
Dental Excellence 22 June 2010 South Perth (defendant)
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Further businesses with the words 'Dental Excellence' in their name were registered after the filing date as follows:
Business Name Registration Date Principal Place of Business Achieve Dental Excellence 24 January 2011 Robina, Queensland Sydney Dental Excellence 28 June 2011 Pyrmont, New South Wales Dental Excellence 15 February 2012 South Yarra, Victoria Australasia Dental Excellence Global 8 March 2012 South Yarra, Victoria Dental Excellence 22 February 2013 Castle Hill, New South
Wales14 At the filing date there were numerous businesses registered with a
business name that included the word 'dental' and some additional word or words indicating the quality or a characteristic of the services provided. They include 'Absolute Dental Care', 'Absolute Dental', 'Advanced Dental', 'Advanced Dental Care', 'Best Dental', 'Best Dental Practice', 'Care Dental', 'Care Dental Clinic', 'Dental Intelligence', 'Dental Reflections', 'Fresh Dental', 'Fresh Dental Care', 'Gentle Dental Care', 'Gentle Care Dental', 'Gentle Dental', 'Gentle Dental Practice', 'Perfect Dental', 'Perfect Smile Dental', 'Perfect Style Dental', 'Professional Dental Care', 'Quality Dental' and 'Quality Dental Care'.
The counterclaim
15 The primary issue of contention is the validity of the plaintiff's trade
mark. If the defendant is successful on her counterclaim for the cancellation of the plaintiff's trade mark, then the plaintiff's claim for infringement of the trade mark must necessarily fail. It is convenient to start by considering the defendants' claim for cancellation of the plaintiff's trade mark.
Defendant may apply for cancellation of trade mark
16 Section 88(1) of the Trade Marks Act 1995 (Cth) (TMA) enables an aggrieved person to apply to this court for an order that the Register of Trademarks be rectified by cancelling the registration of a trade mark.
[2014] WASC 47
LE MIERE J
The TMA does not define 'aggrieved person'. In Health World Ltd v Shin-Sun Australia Pty Ltd [2010] HCA 13; (2010) 240 CLR 590 [31] a plurality of four justices observed that:
It is for these reasons that the authorities called for the word 'aggrieved' in the trade mark legislation to be 'liberally construed'.
The legislation has not defined 'aggrieved' in sections 88 and 92, and in many courts have eschewed any attempt to do so. Rather they have proceeded to deal with the particular problem before them, leaving it to later courts to deal with different problems in the light of their own peculiar circumstances. It is desirable to employ that technique in this case as well [30] - [31].
In Austin Nichols & Co Inc v Lodestar Anstalt [2011] FCA 39 Cowdroy J considered the decision of the High Court in Health World and concluded at [64] that the mere fact of being engaged in the same trade or trading in the same class of goods was regarded by the majority in Health World as sufficient to warrant a claimant being constituted a 'person aggrieved' for the purpose of standing. In Mantra Group Pty Ltd v Tailly Pty Ltd [2010] FCA 291; (2010) 267 ALR 347 [113] Reeves J accepted that being engaged in the same trade as the trade mark owner and being the subject of an action for trade mark infringement brought by the trade mark owner were each sufficient reasons to constitute the applicant an 'aggrieved person' for the purposes of TMA s 87(1).
18 In this case the plaintiff and the defendant are both engaged in the
same trade, they both provide dental services. Before and since the plaintiff has been deemed the registered owner of his trade mark, the defendant has conducted her practice in South Perth under a name which includes the words comprising the plaintiff's trade mark. The plaintiff's trade mark will or might limit the legal rights of the defendant. Those circumstances are sufficient to make the defendant an aggrieved person for the purposes of TMA s 88.
Grounds for cancellation of trade mark
19 TMA s 88(1) enables an aggrieved person to apply to a court for an
order that the register be rectified by cancelling the registration of a trade mark. The grounds include any of the grounds on which the registration of the trade mark could have been opposed (s 88(2)(a)) and the ground that because of the circumstances applying at the time when the application for rectification is filed, the use of the trade mark is likely to deceive or cause confusion (s 88(2)(c)). The grounds on which the
[2014] WASC 47
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registration of the trade mark could have been opposed are found in pt 4
div 3 of the TMA and include s 41 which is relied upon by the plaintiff.20 The key part of s 41 is s 41(2) which provides that an application for
the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant's goods or services in respect of which the trade mark is sought to be registered from the goods or services of other persons (emphasis added). Sections 41(3) to (6) set out the steps for determining whether a trade mark is capable of distinguishing the goods or services in respect of which the trade mark is sought to be registered (designated goods or services) from the goods or services of other persons. Section 41(3) directs the Registrar of Trade Marks to first assess the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons.
21 The Act does not expressly set out the kinds of trade marks that
would not be considered distinctive. However, a note to s 41 provides that trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:
(a) the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or (b) the time of production of goods or of the rendering of services.
22 Although contained in the TMA when enacted, the notes to the TMA
do not prescribe rules of law. The Readers Guide at the commencement of the TMA explains the functions of the notes. Those functions include that they may draw the reader's attention to information that may help them to understand the contents or legal consequences of certain provisions or how to comply with them. Notwithstanding that the note does not have legislative force, I accept, as did Wilcox J in Ocean Spray Cranberries Inc v Registrar of Trade Marks [2000] FCA 177; (2000) 47 IPR 579 [30] that the note fairly reflects the trend of relevant judicial authority.
23 If the registrar concludes that the trade mark is inherently adapted to
distinguish the designated goods or services from the goods or services of other persons and capable, on that basis alone, of so distinguishing the designated goods or services, then the registrar will decide that the trade mark is capable of distinguishing the designated goods or services from
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the goods or services of other persons: Blount v Registrar of Trademarks
(1988) 83 FCR 50, 57 (Branson J).24 If the registrar is unable to decide whether a trade mark is capable of
distinguishing the designated goods or services from the goods or services of other persons taking into account only the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons, then the registrar must decide the matter in accordance with s 41(5) or s 41(6): s 41(4).
25 If the registrar considers that the trade mark has some inherent
capacity to distinguish the designated goods or services from the goods or services of other persons, then the question is considered in accordance with s 41(5). For such a trade mark, the registrar decides whether or not the trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons by considering, because of the combined effect of:
(i) the extent to which the trade mark is inherently adapted to distinguish the designated goods or services; (ii) the use, or intended use, of the trade mark by the applicant; and (iii) any other circumstances; whether the trade mark does or will distinguish the designated goods or
services as being those of the applicant.26 If the registrar considers that the trade mark has no inherent capacity
to distinguish, then whether it is capable of distinguishing the designated goods or services from the goods or services of other persons is determined in accordance with s 41(6). Section 41(6) provides that if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date, it does distinguish the designated goods or services as being those of the applicant then the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons. In any other case, the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons. In that case, the application for the registration of the trade mark must be rejected.
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Trade marks comprised of descriptive words
27 The defendant contends that the plaintiff's trade mark is not capable
of distinguishing the plaintiff's services from the services of other persons because the words 'Dental Excellence' are descriptive words to describe the services provided and their quality and are not distinctive of the services of the plaintiff. The descriptive nature of words does not necessarily preclude their registration as a trade mark. Descriptive words will only be refused for registration where they are not distinctive of the goods or services to which they relate.
28 The note to TMA s 41 to which I have already referred suggests that
there is a tension between inherently distinctive signs and descriptive signs. Signs that are inherently distinctive are used to mark some goods and services as different from other goods and services. In contrast, signs that are descriptive describe the goods or services themselves or some characteristic or quality of the goods or services themselves. The more apt a word is to describe the goods, the less inherently apt it is to distinguish them as the goods of a particular manufacturer: Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511, 512 (Kitto J).
In Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326, 335 – 336, Lockhart J whilst accepting that the mere fact that a word is descriptive does not necessarily prevent it being distinctive of somebody's goods, elaborated upon the difficulty of establishing that descriptive words are distinctive of a plaintiff's goods or services:
If a word is prima facie descriptive the difficulty of establishing that it is distinctive of the plaintiff's goods is considerably increased. Also, if the plaintiff has not used the word simply for the purpose of distinguishing his own goods from those of others but primarily for the purpose of describing the particular kind of article to which he has applied it and only secondarily, if at all, for the purpose of distinguishing his own goods, it will be more difficult for him to establish that it is distinctive of them.
A word may be so totally descriptive of the goods concerned as to be unregisterable, for example, ELECTRICS for electrical apparatus … In less extreme cases the question is one of degree. There must be a sufficient degree of distinctiveness to counterbalance the descriptive character of the word … A word which is prima facie descriptive may become distinctive in connection with particular goods and yet retain its descriptive meaning … But the word must, in order to become distinctive, have a new and secondary meaning different from its primary descriptive one and thus ceased to be purely descriptive …
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Distinctive means distinctive in the sense that the mark distinguishes the registered proprietor's goods from others of the same type in that market, though it does not mean that the goods must specifically identify the plaintiff as the source of those goods. Often the identity of the supplier will be unknown, but what is important is that a significant number of consumers in the relevant market identify the plaintiff's goods as coming from one trade source … (335 - 336) (citations omitted)
30 Under TMA s 41(3) and 41(5) it is essential that a sign has at least
some inherent capacity to distinguish. However, some signs may have been 'so totally descriptive of the goods concerned as to be unregisterable': Johnson & Johnson (336). In British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281, Jacob J referred to the difference between use and distinctiveness:
There is an unspoken and illogical assumption that 'use equals distinctiveness'. The illogicality can be seen from an example: no matter how much a manufacturer made use of the word 'Soap' as a purported trade mark for soap the word would not be distinctive of his goods. He could use fancy lettering as much as he liked, whatever he did would not turn the word into a trade mark (302).
31 Similarly in Unilever Aust Ltd v Karounos [2001] FCA 1132; (2001) 113 FCR 322 Hill J considered the trade marks 'Real Fish-N-chips' and 'REAL' registered in respect of various goods and services. Hill J said:
Mr Karounos relied on the decision of the High Court in Mark Foy's Ltd v Davies Coop & Co Ltd (1956) 95 CLR 190 (the Tub Happy case) for the proposition that it is erroneous to assume that words such as 'real' possess a meaning and then to proceed to inquire what the meaning is. Words, it is submitted, are not always used to convey a meaning but may be purely emotive. So much of Mr Karounos' submissions may be accepted. However, in my opinion, they do not avail the respondents where the mark concerned is as ordinary a part of the English language as the word 'real'. The Tub Happy case concerned the issue of whether the coined phrase 'Tub Happy' used in connection with clothes was validly registered as a trade mark. In that case, Williams J said (at 201) that 'any reference that the words "Tub Happy" have to the character or quality of articles of clothing is very remote'.
In contrast, the word 'real' has and is only capable of having a very direct reference to the character and quality of the goods in connection with which it is used. In my opinion, the word 'real' in its ordinary usage and as used in the evidence in this case, is, in the words of Lockhart J, 'so totally descriptive of the goods concerned as to be unregistrable': the Caplets case at FCR 336. In fact, the evidence of the respondent, including documentation of RFG, supports a conclusion that the word 'real' is clearly
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intended to be used to convey an idea to consumers about the quality and
nature of the goods to which it is attached [47] - [48].
In Ocean Spray Cranberrys Inc v Registrar of Trademarks Willcox J applied the same approach to a trade mark which consisted of a descriptive word and a laudatory word - 'Cranberry Classic'.
Test to determine if trade mark inherently adapted to distinguish services
32 As I have said, TMA s 41 sets out the steps for determining whether
a trade mark is capable of distinguishing the designated goods or services from those of other persons. The first step is to assess the extent to which the trade mark is inherently adapted to distinguish the plaintiff's services from the services of other persons.
33 In Clark Equipment Co v Registrar of Trade Marks Kitto J formulated the test for determining whether a trade mark is inherently adapted to distinguish the designated goods or services from goods or services of other persons. The test has been applied on numerous occasions by the courts in determining a trade mark's inherent adaption to distinguish pursuant to TMA s 41: Yarra Valley Dairy Pty Ltd v Lemnos Foods Pty Ltd [2010] FCA 1367 [56] (Middleton J). Kitto J said that the question whether a trade mark is 'adapted to distinguish':
… is not whether the mark will be adapted to distinguish the registered owner's goods if it be registered and other persons consequently find themselves precluded from using it. The question is whether the mark, considered quite apart from the effects of registration, is such that by its use the applicant is likely to attain his object of thereby distinguishing his goods from the goods of others (513).
Kitto J referred with approval to the criterion described by Lord Parker of Waddington in Registrar of Trade Marks v W & G Crows Ltd (1913) AC 624 at 635, where Lord Parker said:
The applicant's chance of success in this respect [ie in distinguishing his goods by means of the mark, apart from the effects of registration] must, I think, largely depend upon whether other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connection with their own goods … the question whether a mark is adapted to distinguish [is to] be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess - will think of the word and want to use it in connection with
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similar goods in any manner which would infringe a registered trade mark
granted in respect of it (513 - 514).
Kitto J described another person's improper motive to be a desire to get for themselves a benefit from the trade mark owner's reputation (at 517).
34 In answering the question posed by TMA s 41(3), the court is thus
required to consider whether other traders are likely, in the ordinary course of their businesses and without improper motive, to want to use the same mark, or some mark closely resembling it, upon or in connection with his or her own services: Sports Warehouse Inc v Fry Consulting Pty Ltd [2010] FCA 664; (2010) 87 IPR 300 [78] (Kenny J).
Plaintiff's contentions
35 Counsel for the plaintiff, Mr Metaxas, submits that the trade mark
'Dental Excellence' is distinctive and not merely descriptive of the services provided by the plaintiff. Mr Metaxas submitted that the words 'Dental Excellence' would not be used in normal language. Mr Metaxas said:
'Dental Excellence' is a concoction. It is artificial. It is not part of our common heritage in terms of language … this is a case where words that were not normally used - or would not normally be used in speech have been put together to devise a name.
36 Mr Metaxas referred to Wellness Pty Ltd v Pro Bio Living Waters Pty Ltd [2004] FCA 438; (2004) 61 IPR 242. In that case the applicant was the owner of the registered trade mark 'LIVING WATER'. The respondents distributed bottled water under the name 'Pro-Bio Living Waters'. The applicant alleged infringement of the trade mark. Bennett J held that Pro-Bio was used to denote the company that is the origin of the range of waters marketed and distinguished under the name 'Living Waters' and Living Waters is thereby used as a separate trade mark. One question was whether Living Waters was used as a trade mark or was merely descriptive of the respondent's products. Bennett J held that the words 'Living Waters' represent a coined phrase which cannot be said to have no direct reference to the character or quality of the water, but that that did not preclude the words from being used as a trade mark. Bennett J said, paraphrasing Williams J in Mark Foy's Ltd v Davies Coop & Co Ltd (1956) 95 CLR 190, 201, that to say that water is living is in the ordinary use of English meaningless. The words contain at most a 'covert and skilful allusion' to the quality of the water. The words convey only a 'vague association of ideas'. They do not have an inherent capacity to describe the water.
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'Dental Excellence' is not inherently distinctive
37 In my view the trade mark 'Dental Excellence' is not inherently
adapted to distinguish the services of the plaintiff from the services of other persons. The trade mark consists of two words, each of which separately has a meaning in ordinary English usage. The Macquarie Dictionary defines 'dental' to mean of or relating to the teeth or of or relating to dentistry. 'Excellence' means the fact or state of excelling, superiority, eminence. Mr Metaxas submitted that if an objective observer was asked: 'What would you think a business called Dental Excellence might do?' he or she might answer: 'Well, perhaps they sell toothpaste, toothbrushes, floss and other products related to good dental hygiene'. I do not agree. An ordinary member of the community is likely to think that a person offering dental excellence was offering dental services, or dentistry, of a superior quality.
38 In Wellness Pty Ltd v Pro Bio Living Waters Pty Ltd Bennett J said that the words 'living water' convey only a vague association of ideas and do not have an inherent capacity to describe the water. Mr Metaxas says that that similarly the words 'dental excellence' do not have an inherent capacity to describe dental services. I do not agree. The words 'dental' is only capable of describing the services provided. The word 'excellence' is only capable of referring to the quality of the services in connection with which it is used. The words 'dental excellence' in their ordinary usage convey to a consumer the quality and nature of the services to which they are attached.
39 The test formulated by Kitto J in Clarke Equipment to determine whether a trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons is whether other traders or service providers are likely, in the ordinary course of their business and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connection with their own goods or services. In my view, other service providers are likely, without any improper motive, to desire to use the words 'dental excellence' in connection with their own services. An honest dentist may want to use the word 'excellence' on or in connection with 'dental' to indicate, or at least claim, that they provide dental services of a superior quality. 'Dental Excellence' may not be words which are commonly used by somebody outside the calling of dentistry but that is not the point. The point is that a dentist may well want to use the words 'dental excellence' to identify the services they provide and the quality of those services. The name 'dental excellence' at the date of filing had a sensible meaning that
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was descriptive of the plaintiff's designated services. The name was apt to
describe the provision of dental services of superior quality.40 The inherent adaptability of the trade mark 'Dental Excellence' to
distinguish the designated services of the plaintiff from those of other traders may be tested by considering the likelihood of other traders wishing legitimately to use those words in relation to their own services. That is essentially the hypothetical question which I have addressed, and I have concluded that other traders are likely, in the ordinary course of their business and without improper motive, to want to use the trade mark or something closely resembling it, upon or in connection with their own services.
41 The question may cease to be hypothetical where, as here, there is
evidence that at the date of filing other traders legitimately, that is without a desire to get for themselves a benefit from the plaintiff's reputation, not only wished to use those words in relation to their own services, but had done so. The defendant purchased the dental practice 'McNeil's Dental Care' in South Perth in September 2007. In 2010 when she was renovating the practice the defendant decided to change the signage. At the time the defendant advertised 'McNeil's Dental Care' in the Yellow Pages directory and the Southern Gazette as well as on business cards and stationery. Each advertisement of 'McNeil's Dental Care' featured a combination of the words 'Excellence in Dental Care' or 'Committed to Excellence'. The defendant decided to adopt a new name which was a combination of the suburb name, South Perth, and the words Excellence and Dental in some form of combination. The defendant gave evidence that she did not know of the plaintiff's dental practice - 'Dental Excellence' - at any time until she received a letter from the plaintiff's solicitors in February 2011. Counsel for the plaintiff accepted that the defendant's evidence to that effect should be accepted. It follows that the defendant, without any improper motive, desired to use the words 'Dental Excellence' in connection with her own services and had done so before the plaintiff filed his application for registration of his trade mark.
42 There is evidence that a number of other businesses in Australia used
the name 'Dental Excellence' or a name incorporating those words at the time of filing. Wriglin Pty Ltd commenced using the name 'Dental Excellence' in the ACT in February 1999. Calavassy Holdings Pty Ltd commenced using the name 'Dental Excellence' in Castle Hill, New South Wales in July 1999. John Gooley commenced using the name 'Family Dental Excellence' in Upper Mount Gravatt, Queensland in February 2007. Dental Excellence (SA) Pty Ltd commenced using the name
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'Dental Excellence' in Adelaide in May 2009. Dental Corporation Pty Ltd commenced using the name 'Dental Excellence at the Gap' in the Gap, Queensland in December 2009. After the date of filing, Walena Sarandoglou commenced using the name 'Achieve Dental Excellence' in Robina, Queensland in January 2011 and Melidian Trading Pty Ltd commenced using the name 'Sydney Dental Excellence' in Pyrmont, New South Wales in June 2011. Melidian Trading Pty Ltd, without any admission of liability, agreed to phase out its use of the business name 'Sydney Dental Excellence'. Each of the other persons or companies I have referred to in this paragraph have, at some time in or after November 2012, that is after these proceedings were commenced, entered into a licence agreement permitting the person or company to use the plaintiff's trade mark in a specified territory. The other people or companies carrying on business under the name 'Dental Excellence' or a name including the words 'Dental Excellence' to which I have referred earlier in these reasons have, and are, carrying on that business without any licence from or agreement with the plaintiff.
43 Notwithstanding that some of the people or companies who carry on
business under the name 'Dental Excellence' or a name including those words, have entered into a settlement deed or licence agreement with the plaintiff, I infer that all of the people or companies who carry on or who have carried on business under the name 'Dental Excellence' or a name including those words used that business name honestly, that is without a desire to get for themselves a benefit from the plaintiff's reputation. The plaintiff does not have, and never has had, a relevant reputation in Queensland, New South Wales, the ACT, Victoria or South Australia. The plaintiff did not practice dentistry in those States or Territory. The plaintiff gave evidence that some of his patients now live in other States and continue to consult him but that does not, of course, mean that the plaintiff, or his dental practice, has at any time had any reputation in any State or Territory other than Western Australia. In cross-examination the plaintiff said that he entered into the settlement or licence agreements with the people and companies referred to, to protect his trade mark, not because he had a reputation that he was seeking to protect. As the plaintiff, and his dental practice, did not have a reputation in Pyrmont, the Gap, Adelaide, the ACT, Upper Mount Gravatt, Robina or Castle Hill I infer that the people and companies that used the name 'Dental Excellence' or a name incorporating those words did not do so with a desire to get for themselves a benefit from the plaintiff's reputation. The inference is irresistible in relation to the people and companies who started using the relevant business name before the plaintiff registered the
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business name 'Dental Excellence' in July 2002 or commenced trading
under that name in August 2002.44 For the reasons I have stated I find that the trade mark 'Dental
Excellence' is not to any extent inherently adapted to distinguish the plaintiff's services from the services of other persons. Accordingly, whether the plaintiff's trade mark is capable of distinguishing his services from the services of other persons must be decided by applying TMA s 41(6).
Application of TMA s 41(6)
TMA s 41(6) provides:
(6)
If the Registrar finds that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply:
(a) if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant – the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons; (b) in any other case – the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.
46 The onus of proof is on the defendant to establish grounds of
cancellation, including the allegation that the plaintiff's trade mark does not distinguish the designated services as being those of the plaintiff because of the extent to which the plaintiff had used the trade mark before the filing date: Yarra Valley Dairy Pty Ltd v Lemnos Foods [32], [40] - [41]. However, it is not necessary to resort to the onus of proof. Evidence relevant to TMA s 41(6) is before the court and I am able to reach a conclusion in relation to that matter without resort to the onus of proof.
47 TMA s 41(6) is concerned with whether, because of the extent to
which the applicant has used the trade mark before the filing date, it does distinguish the designated goods or services as those of the applicant. The plaintiff has led evidence of his use of the name 'dental excellence' in his business and the promotion of his business under that name. However,
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TMA s 41(6) is not concerned with the mere use of the trade mark. Use and promotion of a name do not, by themselves, give rise to relevant distinctiveness. I have referred earlier in these reasons to the words of Jacob J in British Sugar where his Honour referred to the difference between use and distinctiveness. Later in the same decision his Honour remarked:
… the question of factual distinctive character is one of degree. The proviso really means 'has the mark acquired a sufficiently distinctive character that the mark has really become a trade mark'. In the case of common or apt descriptive or laudatory words compelling evidence is needed to establish this. And in particular mere evidence of extensive use is unlikely to be enough on its own. Of course the power of advertising may be able to turn almost anything (save a pure description) into a trade mark, but it must be shown in a case of this sort that the mark has really become accepted by a substantial majority of persons as a trade mark - is or is almost a household word (original emphasis).
These statements are referred to with approval by Wilcox J in Ocean Spray at [24]; Lindgren J in Aldi Stores Ltd Partnership v Frito-Lay Trading Co GmbH (2001) 190 ALR 185 at [73] and Sundberg J in Chocolateri Guylian NV v Registrar of Trade Marks (2009) 180 FCR 60 [87] and by the Full Federal Court in Woolworths v BP plc (No 2) [2006] FCAFC 132; (2006) 154 FCR 97 [117]. In Yarra v Lemnos Middleton J stressed that the mere use of a descriptive term will not in and of itself make the term distinctive. His Honour explained:
It is also important not to equate use with distinctiveness. The mere use of PERSIAN FETTA by Yarra Valley does not, of itself, establish that those words distinguish Yarra Valley’s cheese from the cheeses of other persons.
Evidence of distinctiveness
48 Where TMA s 44(6) applies, that is where the trade mark is not
inherently adaptive to distinguish at all, it is a question of fact whether the trade mark does in fact distinguish the goods and services. Section 41(6) expressly limits the use to use of the trade mark before the filing date. The plaintiff adduced evidence of use of the trade mark on signage on his business premises and on business stationary and of advertising and promotion of his business under the business name 'Dental Excellence'. As I have said the promotion included marketing or advertising in newspapers and on the radio, magazines, online advertising, on internet websites and the use of letterheads, business cards and brochures displaying the business name.
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49 The plaintiff led evidence from three persons who have been his
patients for a number of years. Two of them, Mr Fazio and Ms Della Rocca, gave evidence that in early 2012 they drove past the defendant's premises in South Perth and on seeing the words 'Dental Excellence' on the signage on the premises thought that it was the plaintiff's practice. That is evidence that at that time those persons associated the name 'Dental Excellence' with the plaintiff's business. Those events occurred after the filing date. Nevertheless, the evidence may provide a basis to infer that Mr Fazio and Ms Della Rocca associated the words 'Dental Excellence' with the plaintiff at the filing date.
50 Mr Fazio and Ms Della Rocca had each been a patient of the plaintiff
before and after the filing date. It may be inferred that each of them associated the name 'Dental Excellence' with the plaintiff's services at least in part because of the use by the plaintiff of his trade mark before the filing date. However, that falls a long way short of establishing that the plaintiff's trade mark distinguished his services from the services of other persons at the filing date. In 2012 Mr Fazio and Ms Della Rocca had been patients of the plaintiff for eight years and 10 years respectively. Their association of the name 'Dental Excellence' with the plaintiff's services is necessarily based on their own knowledge and perceptions and reflects their situation as long-term patients of the plaintiff. I accord their evidence little weight. They are merely two consumers, both of whom were very familiar with the plaintiff's services. It is not open to infer that they are representative of a wider body of consumers.
51 The plaintiff also called evidence from Mr Colbert, who has been a
patient of the plaintiff since 2008. In July 2011 when trying to locate the telephone number for the plaintiff's practice Mr Colbert googled the words 'Dental Excellence' and on calling the number displayed by the first search result found that he had contacted the defendant's practice. Mr Colbert then made another google search, this time including the words 'Mount Hawthorn' as well as 'Dental Excellence' and located the plaintiff's telephone number. That is not evidence that the trade mark 'Dental Excellence' distinguishes the designated services as being those of the plaintiff. It appears that whilst Mr Colbert was initially confused when the google search displayed the defendant's website, after telephoning the defendant's business he realised it was a different business and then located the plaintiff's business.
52 The plaintiff also called evidence from Ms Featherstone, a dental
nurse, who applied for employment at the plaintiff's practice in answer to an advertisement. Ms Featherstone had previously called in at the
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defendant's premises and believed that the plaintiff's Dental Excellence practice was the same as the South Perth Dental Excellence practice because they both traded under the same business name. That is evidence that the trade mark 'Dental Excellence' does not distinguish the services provided under that name as being those of the plaintiff. To the contrary, Ms Featherstone thought that the trade mark distinguished the services as those of the defendant.
53 The plaintiff's evidence establishes that he has used the words
'Dental Excellence' as the name of his dental practice since 2002. The evidence also establishes that the plaintiff has marketed, advertised and promoted his practice under that name. Furthermore, there is evidence that the plaintiff's practice has grown over the years. However, this is evidence of use, not distinctiveness. The evidence of use of the trade mark 'Dental Excellence' by the plaintiff in marketing and promoting his business is not so extensive as to give rise to an inference that the trade mark became distinctive of the services provided by him. I give little weight to the 'consumer' evidence of Mr Fazio and Ms Della Rocca for the reasons I have given. The evidence of Ms Featherstone is evidence that the trade mark or name 'Dental Excellence' does not in fact distinguish the designated goods and services as being those of the plaintiff.
54 The slight evidence of distinctiveness adduced by the plaintiff is
overcome by the evidence of other businesses trading under the name 'Dental Excellence' or a name including those words. The name 'Dental Excellence' had been used by three businesses, other than that of the plaintiff or the defendant, before the filing date. Two of those had commenced before the plaintiff commenced using the name. In addition, businesses under the names 'Dental Excellence at the Gap' and 'Family Dental Excellence' had been registered before the filing date. Furthermore, the defendant had commenced trading under the name 'Dental Excellence' before the filing date. Furthermore, before using the business name 'South Perth Dental Excellence' the defendant had advertised in the Yellow Pages and elsewhere under the heading 'Excellence in Dental Care'.
55 The evidence of the defendant is also evidence that at, and before,
the filing date the words 'Dental Excellence' did not as a matter of fact distinguish the designated services as being those of the plaintiff. The defendant qualified as a dentist in 1994. She operates four dental surgeries, the first of which she acquired in 1999, and all of which are situated in different locations in the Perth metropolitan area. She did not
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know of the plaintiff's dental practice or its name at any time before she
received a letter from the plaintiff's solicitors after the filing date.56 I conclude that the trade mark 'Dental Excellence' did not, before the
filing date, distinguish the designated services as those of the plaintiff because of the extent to which he had used the trade mark before the filing date. The words 'Dental Excellence' are capable of application to the services of any dentist for the sake of their ordinary signification. The name 'Dental Excellence' and variations of it had been used by a number of businesses throughout Australia. Some of them commenced to use the name before the plaintiff. I infer that the name 'Dental Excellence' has been so used by traders for the sake of their ordinary signification of the services provided and the quality of those services. The plaintiff's use of the words 'Dental Excellence' has not changed or altered the words' meaning so that they only denote the plaintiff as the source of services to which the words are applied. The plaintiff's use of the words has been consistent with the use of the words by other businesses as denoting a particular type and quality of service.
Trade mark must be cancelled
57 The requirements of TMA s 41(6)(a) are not met. Therefore, in
accordance with TMA s 41(6)(b) the trade mark is taken not to be capable of distinguishing the designated services from the services of other persons. Therefore, in accordance with TMA s 41(2) the registration of the trade mark must be rejected. For those reasons the court may, under TMA s 88(1) cancel the registration of the trade mark.
58 TMA s 88(1) does not itself give to the court a true discretion to
order, or not to order, rectification of the register where a ground of rectification specified in s 88(2) is established. The word 'may' is used in the subsection in the facultative sense and not so as to create a true discretion: EOS Australia Pty Ltd v Expo Tomei Pty Ltd (1998) 42 IPR 277, 287 (Branson J). Therefore, as the defendant has established a ground on which the registration of the plaintiff's trade mark could have been opposed, that is that the trade mark is not capable of distinguishing the plaintiff's goods or services in respect of which the trade mark was registered from the goods or services of other persons, the defendant is entitled to an order that the register be rectified by cancellation of the registration of the trade mark.
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Application of TMA s 41(5)
59 TMA s 41(5) does not arise for consideration because I have found
that the trade mark is not to any extent inherently adapted to distinguish the designated services from the services of other persons. However, I will make some brief observations as to the application of s 41(5).
Section 41(5) provides as follows:
If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services:
(a) the Registrar is to consider whether, because of the combined effect of the following: (i) the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;
(ii) the use, or intended use, of the trade mark by the applicant;
(iii) any other circumstances;
the trade mark does or will distinguish the designated goods or
services as being those of the applicant; and
(b) if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services – the trade mark is taken to be capable of distinguishing the applicant's goods or services from the goods or services of other persons; and (c) if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services – the trade mark is taken not to be capable of distinguishing the applicant's goods or services from the goods or services of other persons.
61 TMA s 41(5) requires a balancing exercise. If a mark is inherently
adapted only to a small degree it will require greater evidence of the fact that it has been (or will be) used in such a way as to distinguish the relevant goods: Yarra v Lemnos at [251] (Middleton J). In this case there is evidence of the use of the trade mark at or before the filing date but not of intended use. Accordingly, the question is whether because of the combined effect of the extent to which the trade mark is inherently adapted to distinguish the designated services, the use of the trade mark
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by the plaintiff and any other circumstances, the trade mark at the time of
filing distinguishes the designated services as being those of the plaintiff.62 The first matter to be considered is the extent to which the trade
mark is inherently adapted to distinguish the designated services. For the reasons I have given, if the trade mark is to some extent inherently adapted to distinguish the designated services from the services of other persons, it is so only to a small degree. The second matter to be considered is the use of the trade mark by the plaintiff. At the date of filing the plaintiff had traded under the name 'Dental Excellence' for about eight years. During that time he had advertised and promoted the business under the name 'Dental Excellence' but the advertising and promotion was not so extensive as to give rise to an inference that the words 'Dental Excellence' distinguished the designated services as those of the plaintiff. The third matter to be considered is any other circumstances. Relevant circumstances include that at the date of filing other people or companies traded under the name 'Dental Excellence' or a name including those words and some had commenced to do so before the plaintiff commenced using the name. Weighing up those matters I find that the trade mark does not distinguish the designated services from the services of other persons.
63 Even if, contrary to my findings, TMA s 41(5) applies, the trade
mark is taken not to be capable of distinguishing the plaintiff's services from the goods or services of other persons: TMA s 41(5)(c). It follows that the defendant is entitled to an order that the register be rectified by cancellation of the registration of the trade mark.
Rectification because trade mark likely to deceive or cause confusion
64 The defendant also applies for cancellation of the plaintiff's trade
mark on the ground that because of the circumstances applying at the time when the application for rectification was filed, the use of the trade mark was likely to deceive or cause confusion. It is unnecessary to consider this ground because I have decided that the trade mark should be cancelled on the ground that the trade mark is not capable of distinguishing the plaintiff's services in respect of which the trade mark is registered from the services of other persons and hence must be rejected by reason of TMA s 41(2). Nevertheless, I will briefly address this ground of the defendant's counterclaim.
65 Section 88(2)(c) provides that an application for rectification of the
register may be made on the ground that because of the circumstances applying at the time when the application for rectification is filed, the use of the trade mark is likely to deceive or cause confusion. Section 89(1)
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confers a discretion on the court not to grant rectification where the application is made on the ground that because of the circumstances applying at the time when the application for rectification is filed, the use of the trade mark is likely to deceive or cause confusion, if the owner of the trade mark satisfies the court that the ground relied on by the applicant has not arisen through any act or fault of the registered owner.
66 The defendant has not made out a case for rectification on the ground
specified in TMA s 88(2)(c) for the following reasons. First, the use of the trade mark is not likely to deceive or cause confusion. The trade mark is descriptive of the services being provided rather than a badge of origin. It is likely to be understood by consumers or patients as such and hence not to cause them to be confused as to the provider of the services or an association between the provider of the services and the plaintiff.
67 Secondly, I would not grant rectification on the ground specified in
TMA s 88(2)(c) in the exercise of my discretion under s 89 because if, because of the circumstances applying at the time of the application for rectification as filed, the use of the trade mark is likely to deceive or cause confusion, that has not arisen through any act or fault of the plaintiff. The plaintiff has continuously used and promoted his services by the use of the trade mark and has done nothing to cause any confusion.
Infringement
68 I have found that the register should be rectified by cancelling the
registration of the plaintiff's trade mark. Accordingly, it is strictly not necessary to decide whether or not the defendant infringed the plaintiff's trade mark. However, I will briefly set out my conclusions in relation to the question of infringement by the defendant. TMA s 120 provides that a person infringes a trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered. I am not satisfied that the defendant has used the words 'dental excellence' as a trade mark. She has used them as a descriptive phrase to describe the nature and quality of the services she provides.
69 The defendant also relies on the defence under TMA s 122 which
provides that a person does not infringe a registered trade mark when the person uses a sign in good faith to indicate, amongst other things, the kind, quality, quantity, intended purpose or some other characteristic of services. The defendant used the sign 'South Perth Dental Excellence' in good faith to indicate the kind and quality of the services she provides and the location from which she provides them. The defendant did not know
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of the existence of the plaintiff's trade mark or that the plaintiff traded under the name 'Dental Excellence'. Therefore the defendant relevantly used the sign in good faith. Furthermore the sign used by the defendant indicates the geographical origin or location of the services (South Perth), the kind of services (dental services), and their quality (excellence).
Passing off
70 The plaintiff claims in the alternative that the defendant has passed
off her business as the plaintiff's. The plaintiff says that his trade mark and business name 'Dental Excellence' when used in relation to dental services has come to signify to the public in either Western Australia or Australia the plaintiff's business, such that persons seeking dental services under or by reference to the business name or trade mark or any brand name closely similar to them, expect and intend to acquire such services from the plaintiff and not from any other person. The plaintiff pleads that the conduct of the defendant in using the name 'South Perth Dental Excellence' was calculated to injure the goodwill of the plaintiff by the misappropriation of his widely known and recognised reputation in dental services and his business and has caused damage to his business. I understand that the plaintiff uses 'calculated' in the sense of 'likely to' rather than 'intended to'.
71 The action for passing off protects the right of property that exists in
the goodwill of a business. Therefore, the use of a distinctive business name by another business is actionable in passing off: BM Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd (1976) 51 ALJR 254; (1976) 12 ALR 363, 369. To be distinctive, a descriptive name must have come to acquire a secondary meaning, which is indicative of a particular source. In BM Auto Sales Gibbs J said:
… a name composed of descriptive words may become distinctive of the business of a particular person, and if a plaintiff shows that the name in fact distinguishes his business and that the use of the name by the defendant is calculated to deceive persons into supposing that the business carried on by the defendant is that of the plaintiff, and is likely to cause damage to the plaintiff's business, he will be entitled to relief (257 - 258).
72 I am not satisfied that the plaintiff has established that consumers in
Australia or Western Australia identify the words 'Dental Excellence' with the plaintiff's services or business. Where, as here, the plaintiff's trade mark and business name consists of words which are descriptive and laudatory of the services provided, compelling evidence is required to establish that they have acquired a secondary meaning which is indicative
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of the plaintiff's services and business. The evidence of Mr Fazio and Ms Della Rocca is evidence that they associate the words 'Dental Excellence' with the plaintiff's business. However, they have been patients of the plaintiff for seven to eight years and 10 years respectively. Their evidence is necessarily based only on their own knowledge and perceptions. Their evidence is of an idiosyncratic nature and reflects their situation as long term patients of the plaintiff. Their evidence does not establish that any significant section of the community identify the words 'Dental Excellence' with the plaintiff's business or services. The evidence of the defendant and of Ms Featherstone is evidence that the words 'Dental Excellence' have not become distinctive of the business of the plaintiff. The fact that the plaintiff has used the sign in and to promote his business does not lead to any inference that a significant section of the public identify the words with the plaintiff's services or business. The evidence that the name 'Dental Excellence' or a name including those words has been used by a number of businesses in Australia tends to show that the name has not come to acquire a secondary meaning which is indicative of services provided by the plaintiff.
73 In order to succeed in an action for passing off the plaintiff must also
establish that there has been a relevant misrepresentation by the defendant resulting in consumer deception or confusion. The plaintiff must show that the actual or imminent damage to his goodwill is a result of the defendant's misrepresentation leading to consumer deception or confusion as to the relationship between the services of the defendant and those of the plaintiff. The crucial question is whether the defendant's conduct has resulted, or is likely to result, in confusion or deception and therefore damage to the plaintiff's goodwill. In my view the evidence does not make out that element of the tort. For those reasons the passing off claim fails.
Misleading conduct
74 The plaintiff claims that the conduct of the defendant is misleading
and deceptive in breach of FTA s 10. The plaintiff says that the conduct of the defendant in using the name 'South Perth Dental Excellence' constitutes conduct and representations that:
(a) the business of the plaintiff is the same as the defendant; or (b)
alternatively, the business of the plaintiff is associated or affiliated with the business of the defendant; or
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(c) alternatively, the business of the defendant is carried on with the sponsorship or approval of the plaintiff. 75 Whether particular conduct is misleading or deceptive is a question
of fact to be determined in the context of the evidence as to alleged conduct and to the relevant surrounding facts and circumstances. To prove that conduct is misleading or deceptive it is not enough to establish that the conduct complained of was confusing or caused people to wonder whether two products or services may have come from the same source. The court must decide objectively whether the conduct is misleading or deceptive or likely to mislead or deceive and evidence that members of the public have actually been misled is not conclusive: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, 198 - 199 (Gibbs CJ). People who are misled by a misconception of their own will not have been misled by the relevant conduct: Tobacco Institute of Australia v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1, 49 (Hill J).
76 I have already referred to the evidence of two of the plaintiff's
patients, Mr Fazio and Ms Della Rocca, that when they saw the signage on the defendant's business premises they thought that the plaintiff had opened a practice in South Perth. Ms Featherstone, a dental nurse applying for a job with the plaintiff, thought that the plaintiff's practice was part of the defendant's practice because of the signage. Mr Colbert, another patient of the plaintiff, googled the words Dental Excellence to find the telephone number of the plaintiff's practice and initially obtained the telephone number for the defendant's practice. The plaintiff gave evidence that his practice had received parcels that were intended for the defendant's business and had received enquiries from specialists thinking that he was the treating dentist for a patient of the defendant's practice. That is all evidence which tends to show that the use by the plaintiff and the defendant of their respective trading names has caused confusion amongst people dealing with them.
77 Evidence that persons were misled, or of confusion, is admissible but
not conclusive to prove the nature of the impugned conduct. In Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 Sydney Building Information Centre Ltd sued Hornsby Building Information Centre Pty Ltd alleging that the use of the name 'Hornsby Building Information Centre' without any disclaimer of connection with the Sydney Building Information Centre was misleading or deceptive. Stephen J held that the conduct of using the name Hornsby Building Information Centre was not misleading or
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deceptive notwithstanding that the Sydney Centre led evidence from persons who were led to believe by the Hornsby Centre's use of a name so similar to the name of the Sydney Centre that the Hornsby Centre was a branch of, or otherwise associated with, the Sydney Centre. Stephen J explained:
The Sydney Centre tendered some evidence that persons had been misled in this way and for present purposes I will assume that this has occurred. But to determine whether there has been any contravention of s 52(1) it is necessary to inquire why this misconception has arisen in the minds of others. This necessarily leads one to examine the name of the Sydney Centre. The name which it adopted as its own consists of three descriptive words, prefixed by a word of locality, the whole of which it uses as its trade and corporate name. Having done so it cannot, as it acknowledges, claim any monopoly in the descriptive words; yet it does in fact seek to impose conditions upon another's use of those words, the condition being that an explanatory disclaimer should accompany that use.
…
The use by the Sydney Centre of the three descriptive words was no doubt convenient. It thereby acquired a name which at the same time very clearly described its activities.
…
There is a price to be paid for the advantages flowing from the possession of an eloquently descriptive trade name. Because it is descriptive it is equally applicable to any business of a like kind, its very descriptiveness ensures that it is not distinctive of any particular business and hence its application to other like businesses will not ordinarily mislead the public.
…
As his Lordship said, the possibility of blunders by members of the public will always be present when names consist of descriptive words - 'So long as descriptive words are used by two traders as part of their respective trade names, it is possible that some members of the public will be confused whatever the differentiating words may be'. The risk of confusion must be accepted, to do otherwise is to give to one who appropriates to himself descriptive words an unfair monopoly in those words and might even deter others from pursuing the occupation which the words describe.
…
Given that a name is no more than merely descriptive of a particular type of business, its use by others who carry on that same type of business does not deceive or mislead as to the nature of the business described. Thus both the Hornsby and the Sydney Centres are building information centres
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and no one is being deceived as to the nature of the service which is available there. Any deception which does arise stems not so much from the Hornsby Centre's use of the descriptive words as from the fact that the Sydney Centre initially chose descriptive words as its title and for many years thereafter was the only centre in Sydney which answered the description which those words provide. In consequence members of the public have come to associate its particular business with that type of activity. Evidence of confusion in the minds of members of the public is not evidence that the use of the Hornsby Centre's name is itself misleading or deceptive but rather that its intrusion into the field originally occupied exclusively by the Sydney Centre has, naturally enough, caused a degree of confusion in the public mind. This is not, however, anything at which s 52(1) is directed (228 - 230).
78 In Campomar Sociedad Limitada v Nike International Ltd (1999) 202 CLR 45 the Court observed that in Hornsby Building Information Centre Stephen J, having referred to evidence that persons had been misled in the way in which the respondent complained, went on, in order to determine whether there had been contravention by the appellant of Trade Practices Act s 52(1), 'to enquire why this misconception has arisen in the minds of others'. The Court said that that in cases such as that before them:
… an issue arises … as to the presence of a sufficient nexus between the
conduct … and those misconceptions or deceptions [98].
79 The Court went on to say that in determining whether the impugned
conduct has caused an erroneous assumption, the court must assess the reactions or likely reactions of ordinary or reasonable members of the class to whom the conduct was addressed and might disregard any extreme or fanciful reactions.
80 In this case the evidence does not establish that the name 'Dental
Excellence' on its own has acquired distinctiveness and a secondary meaning in the minds of the public. The conduct of the defendant in trading under the name 'South Perth Dental Excellence' and using signage with that name is not conduct which misleads or deceives or is likely to mislead or deceive ordinary reasonable members of the public to believe that her practice is part of the plaintiff's practice or endorsed or sponsored by him. The plaintiff has not established that the defendant has engaged in misleading or deceptive conduct.
Conclusion
81 The plaintiff's claim must be dismissed. The defendant has
established a ground on which the registration of the plaintiff's trade mark
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could have been opposed. The register should be rectified by cancelling
the registration of the plaintiff's trade mark.
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