Australian Country Spinners Pty Ltd v Austwide Wholesalers Pty Ltd

[2004] FCA 1102

FEDERAL COURT OF AUSTRALIA

Australian Country Spinners Pty Ltd v Austwide Wholesalers Pty Ltd
[2004] FCA 1102

Ocean Spray Cranberries Inc v Registrar of Trade Marks (2000) 47 IPR 579 distinguished

AUSTRALIAN COUNTRY SPINNERS PTY LTD v AUSTWIDE WHOLESALERS PTY LTD

V999 OF 2004

SUNDBERG J
24 AUGUST 2004
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V999 OF 2004

BETWEEN:	AUSTRALIAN COUNTRY SPINNERS PTY LTD (ACN 006 290 713) APPLICANT
AND:	AUSTWIDE WHOLESALERS PTY LTD (ACN 009 438 153) RESPONDENT

JUDGE:	SUNDBERG J
DATE OF ORDER:	24 AUGUST 2004
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.Upon the Applicant, by its counsel, giving the usual undertaking as to damages, until the trial of these proceeding or further order, the Respondent whether by itself, its directors, officers, employees or agents or howsoever otherwise be restrained from:

(a)importing, processing, balling, labelling, distributing, promoting, offering, or displaying or advertising for sale, selling or supplying any handknitting yarn products under or by reference to the word or mark “feather’ or “feathers” or any mark or packaging which is substantially identical with, or misleadingly or deceptively similar to, or which constitutes merely a colourable imitation of the word or mark “feathers”;

(b)using the word “feather” or “feathers” or word(s) which are substantially identical with or deceptively similar to the word “feathers” on or in relation to yarns and threads (and goods and/or services of the same description as yarns and threads for textile use) in the course of business conducted by the Respondent;

(c)falsely representing that the Respondent’s Product (as defined in paragraph 12 of the Statement of Claim) is of the same standard, quality or value as the Feathers Product (as defined in paragraph 6 of the Statement of Claim);

(d)falsely representing that the Respondent’s Product has the sponsorship or approval of the Applicant;

(e)falsely representing that the Respondent has the sponsorship or approval of Applicant;

(f)by any means, in the course of trade or commerce, in connection with the supply or possible supply of handknitting yarn products or in connection with the promotion by any means of the supply or use of handknitting yarn products importing, processing, balling, labelling, distributing, promoting, offering, displaying or advertising for sale, selling or supplying the Respondent’s Product under or by reference to the word or mark “feather” or “feathers” or any mark or packaging which is substantially identical or deceptively similar to, or which constitutes merely a colourable imitation of the word or mark “feathers”; and

(g)passing off or attempting to pass off the Respondent’s Product as and for the Feathers Product.

2.The Respondent, by its proper officer, make, file and serve on the Applicant within seven (7) days of this order an affidavit verifying the number of the Respondent’s Products sold, identifying each and every customer to whom the Respondent’s Product was sold (by name and address), and identifying and quantifying all printed matter referring to such goods, which bear the trade mark “feather” or “feathers” and which are in the Respondent’s possession, custody or power.

3.The Respondent deliver up to the Applicant or its duly authorized agent, within fourteen (14) days of this order, all of the Respondent’s Product, packaging, catalogues, price lists, brochures, advertising material, video cassettes and other documents or things in the possession, custody, power or control of the Respondent of which the sale or use would fall within the terms set out in paragraph 1 above to be retained by the Applicant or its said agent until further order.

4.The proceeding be adjourned to a directions hearing on a date to be fixed.

5.The costs of this application be reserved.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V999 OF 2004

BETWEEN:	AUSTRALIAN COUNTRY SPINNERS PTY LTD (ACN 006 290 713) APPLICANT
AND:	AUSTWIDE WHOLESALERS PTY LTD (ACN 009 438 153) RESPONDENT

JUDGE:	SUNDBERG J
DATE:	24 AUGUST 2004
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. The applicant seeks, amongst other things, interlocutory relief restraining the respondent from importing, processing, balling, labelling, distributing, promoting, offering, or displaying or advertising for sale, selling or supplying any handknitting yarn products under or by reference to the word or mark “feather” or “feathers” or any mark or packaging which is substantially identical with, or misleadingly or deceptively similar to, or which constitutes merely a colourable imitation of the word or mark “feathers”.

2. The applicant has satisfied me that there is a serious question to be tried as to each of the causes of action upon which it relies: trade mark infringement, misleading and deceptive conduct and passing off.

3. The applicant is the owner of the mark “Feathers” registered with effect from 2 May 2003 in relation to goods in class 23, namely “Yarns and threads, for textile use”. The respondent’s main contention is that registration of the word should not have been granted because it is not capable of distinguishing the applicant’s goods from those of other persons. See Trade Marks Act 1995 s 41(2). No cross‑claim for revocation of the registration has been made by the respondent.

4. The respondent relies on the result of Google searches and information on web sites disclosing the use by yarn manufacturers in China and Taiwan of the words “feather yarn”. On the basis of this material it submits that the applicant seeks to use an ordinary English noun “feathers” in relation to a product that is commonly called “feather yarn” throughout the industry. It was also said that far from there being a prima facie case of trade mark infringement, there is a prima facie case that the Register should be amended by either cancelling the applicant’s trade mark altogether because it is only used in relation to its feather yarn products, or placing a restriction on the mark so that it cannot be used in relation to feather yarn products.

5. As I have said, the evidence relied on relates to use of “feather yarn” by manufacturers in China and Taiwan. There is no evidence of the use of the words in Australia other than by the applicant, or in reverse order by the respondent – “YARN FEATHER”. The basis for the respondent’s contention that the Registrar of Trade Marks would not have granted registration if he or she had been aware of the use as aforesaid of the words “feather yarn” thus falls away. The respondent’s contention also fails to take into account in this connection the extensive evidence of use by the applicant of the word “Feathers” in relation to its product since mid‑2001, preceding the filing of its application for registration of the mark. See s 41(6)(a) and s 41(5)(a)(ii) of the Act.

6. The respondent also contended that the applicant’s use of the word “feather” on its balls of yarn was purely descriptive of its product and was not the use of the word as a trade mark. It relied on Ocean Spray Cranberries Inc v Registrar of Trade Marks (2000) 47 IPR 579 where it was held that the name “Cranberry Classic” in connection with soft drinks and fruit juices was purely descriptive and not capable of registration. Wilcox J said:

   “I return to what I regard as the proper tests. Can it be said that ‘Cranberry Classic’ are words that other cranberry drink manufacturers might wish to use in the future ‘for the sake of the signification which they ordinarily possess’? Can it be said that ‘Cranberry Classic’ is a ‘pure description’ of the applicant’s goods? I have concluded these questions must both be answered in the affirmative. If I am right in thinking that the word ‘classic’ is intended only to convey the notion of excellence, the words ‘Cranberry Classic’ mean no more than ‘quality cranberry’. Other cranberry fruit drink traders might well wish to use the laudatory word ‘classic’ in conjunction with identification of the juice used in their product. Put another way, the words describe the nature of the juice, with a commonplace laudation.”

7. That case is distinguishable for two reasons. First, the product in Ocean Spray was a cranberry drink, and it was held that the words did no more than describe the nature of the drink, with a commonplace laudation. Here, the applicant’s product is not bird plumage, but a type of yarn for which it had acquired a reputation in Australia in the years preceding the filing date of its application. Secondly, the words “feather yarn” used by manufacturers overseas, assuming that use to be relevant, are not the words used by the respondent. It does not on its products use the words “KNITTING FEATHER YARN” but the words “KNITTING YARN FEATHER”.

8. The applicant has also shown a serious question as to its misleading conduct and passing off claims, independently of its trade mark case in association with these causes of action. There is extensive evidence of the reputation the applicant has acquired by use of the word “Feather” in connection with its products. I am satisfied, to the level required for present purposes, that the respondent, a rival trader, has sought to derive a benefit from that reputation by using “FEATHER” on its own comparable product. I repeat that the use the respondent makes of the word is not in accordance with the overseas use on which it relies (feather yarn), but in the rather unnatural collocation “KNITTING YARN FEATHER”.

9. In relation to the balance of convenience and discretionary considerations the respondent complained of the applicant’s delay in seeking interlocutory relief. The delay is not such as to lead me to deny relief. The applicant made quite reasonable attempts, over a six week period, to avoid the need for litigation by seeking undertakings from the respondent. These attempts were unsuccessful, and the present application was then made. There has been no undue or unexplained delay.

10. The respondent contended that there was no urgency justifying the application for interlocutory relief. Special emphasis was placed on the fact that in his affidavit, filed about 45 minutes before the hearing commenced, the respondent’s solicitor stated that three days earlier he had been “advised” by the respondent’s General Manager, Mr Fresson, to undertake “to refrain from selling product with the word ‘Feather’ or ‘Feathers’ in the label until this matter is finalised”. I regard the submission that this demonstrated that the application was unnecessary as quite disingenuous.

11. The respondent noted that the applicant had provided scant detail of the damage it claimed to have suffered. It is true that the claim lacks particularity. However I do not regard that as a reason for denying relief. It is a characteristic of cases of this nature that it is difficult to quantify an applicant’s loss with particularity. I am satisfied that the applicant is likely to have suffered loss as a result of the respondent’s activities. In this connection it is to be noted that the respondent’s product, sold by use of the word “FEATHER”, retails for $1.99 per ball, whereas the applicant’s product sells at $3.95.

12. The balance of convenience favours the grant of relief, even though at a late stage the respondent stated that it had temporarily changed its label to “Fancy Knitting Yarn” as a “pragmatic approach to avoid expensive interlocutory litigation”. It is apparent from this that the grant of the interlocutory relief sought will not prevent the respondent from continuing to carry on its business.

13. I will make the orders in paragraphs 1, 2, 3, 6 and 7 of the draft minutes filed by the applicant.

I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg.

Associate:

Dated:             24 August 2004

Counsel for the Applicant:	E Strong SC and I Horak
Solicitor for the Applicant:	City Pacific Law Firm Pty Ltd
Solicitor for the Respondent:	M Paterson
Date of Hearing:	23 August 2004
Date of Judgment:	24 August 2004