Bohemia Crystal Pty Ltd v Host Corporation Pty Ltd
[2018] FCA 235
•6 March 2018
FEDERAL COURT OF AUSTRALIA
Bohemia Crystal Pty Ltd v Host Corporation Pty Ltd [2018] FCA 235
File number: NSD 495 of 2016 Judge: BURLEY J Date of judgment: 6 March 2018 Catchwords: TRADE MARKS – cross-claim for revocation of trade marks pursuant to ss 41 and 88 of the Trade Marks Act 1995 (Cth) – whether marks capable of distinguishing the relevant goods or services – trade marks not inherently adapted to distinguish – insufficient use to distinguish the designated goods from the goods of others – trade marks to be revoked
TRADE MARKS – whether trade marks “BOHEMIA” and “BOHEMIA CRYSTAL” infringed pursuant to s 120 of the Trade Marks Act 1995 (Cth) – whether marks used as a trade mark or to describe geographical origin and quality of goods – whether marks used in good faith pursuant to s 122 – infringement found in some cases
CONSUMER LAW – misleading or deceptive conduct in contravention of ss 18 and/or 29 of the Australian Consumer Law – whether various impugned uses amounted to the making of misrepresentations – held no contravention of the Australian Consumer Law
Legislation: Competition and Consumer Act 2010 (Cth) Schedule 2, ss 18, 29
Trade Marks Act 1995 (Cth) ss 7, 17, 24, 41, 87, 88, 120, 122, 126
Cases cited: Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd (No 3) [2015] FCA 1436; (2015) 331 ALR 512
Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd [2018] FCAFC 6
Anheuser-Busch, Inc v Budějovický Budvar, Národní Podnik [2002] FCA 390; (2002) 56 IPR 182
Apple Inc. v Registrar of Trade Marks [2014] FCA 1304; (2014) FCR 511
Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682; (2009) ATPR 42-290
Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640
Australian Health & Nutrition Association Limited trading as Sanitarium Health Food Company v Irrewarra Estate Pty Ltd trading as Irrewarra Sourdough [2012] FCA 592; (2012) 292 ALR 101
Baume & Coy Ltd v Moore (A H) Ltd [1958] RPC 226
Bavaria NV v Bayerischer Brauerbund eV [2009] FCA 428; (2009) 177 FCR 300
Blount Inc v Registrar of Trade Marks [1998] FCA 440; (1998) 83 FCR 50
British Sugar plc v James Robertson & Sons Ltd [1996] RPC 281
Britt Allcroft (Thomas) LLC v Miller (t/as the Thomas Shop) [2000] FCA 255; (2000) 49 IPR 7
Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 4) [2006] FCA 446; (2006) 69 IPR 23
Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd [2007] FCAFC 70; (2007) 72 IPR 261
Campomar Sociedad, Limitada v Nike International Limited [2000] HCA 12; (2000) 202 CLR 45
Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2014] HCA 48; (2014) 254 CLR 337
Clark Equipment Co v Registrar of Trade Marks [1964] HCA 55; (1964) 111 CLR 511
Coca-Cola Co v All-Fect Distributors Ltd [1999] FCA 1721; (1999) 96 FCR 107
Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd [2004] FCAFC 196; (2004) 61 IPR 212
E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2010] HCA 15; (2010) 241 CLR 144
FH Faulding & Co Ltd v Imperial Chemical Industries of Australia and New Zealand Ltd [1965] HCA 72; (1965) 112 CLR 537
Flexopack SA Plastics Industry v Flexopack Australia Pty Ltd [2016] FCA 235; (2016) 118 IPR 239
Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) [2012] FCA 81; (2012) 201 FCR 565
Health World Ltd v Shin-Sun Australia Pty Ltd [2010] HCA 13; (2010) 240 CLR 590
Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd [1978] HCA 11; (1978) 140 CLR 216
Howard Auto-Cultivators Ltd v Webb Industries Pty Ltd [1946] HCA 15; (1946) CLR 175
James Watt Constructions Pty Ltd v Circle-E Pty Ltd [1970] 3 NSWR 481
Johnson & Johnson Aust Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326
Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks [2002] FCAFC 273; (2002) 122 FCR 494
Kosciuszko Thredbo Pty Ltd v ThredboNet Marketing Pty Ltd [2014] FCAFC 87; (2014) 223 FCR 517
Mark Foy’s Ltd v Davies Coop & Co Ltd [1956] HCA 41;(1956) 95 CLR 190
Moroccanoil Israel Ltd v Aldi Foods Pty Ltd [2017] FCA 823
Nature’s Blend Pty Ltd v Nestle Australia Ltd [2010] FCA 198; (2010) 86 IPR 1
Nature’s Blend Pty Ltd v Nestle Australia Ltd [2010] FCAFC 117; (2010) 87 IPR 464
Optical 88 Ltd v Optical 88 Pty Ltd (No 2) [2010] FCA 1380; (2010) 89 IPR 457
Pepsico Australia Pty Ltd (t/as Frito-Lay Australia) v Kettle Chip Co Pty Ltd [1996] FCA 48; (1996) 135 ALR 192
Peter Bodum A/S v DKSH Australia Pty Ltd [2011] FCAFC 98; (2011) 92 IPR 222
Primary Health Care Limited v Commonwealth of Australia [2017] FCAFC 174
Registrar of Trade Marks v W & G Du Cros Ltd [1913] AC 624
S & I Publishing Pty Ltd v Australian Surf Life Saver Pty Ltd [1998] FCA 1463; (1988) 88 FCR 354
SAP Australia Pty Ltd v Sapient Australia Pty Ltd [1999] FCA 1821; (1999) 48 IPR 593
Scandinavian Tobacco Group Eersel BV v Trojan Trading Company Pty Ltd [2016] FCAFC 91; (2016) 243 FCR 152
Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd [1963] HCA 66; (1963) 109 CLR 407
State Government Insurance Corporation v Government Insurance Office of New South Wales (1991) 28 FCR 511
Taco Co of Australia Inc v Taco Bell Pty Ltd [1982] FCA 170; (1982) 42 ALR 177
Thai World Import & Export Co Ltd v Shuey Shing Pty Ltd [1989] FCA 735; (1989) 17 IPR 289
Verrocchi v Direct Chemist Outlet Pty Ltd [2015] FCA 234; (2015) 228 FCR 189
Verrocchi v Direct Chemist Outlet Pty Ltd [2016] FCAFC 104; (2016) 247 FCR 570
Woolworths Ltd 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; (2010) 191 FCR 297
Date of hearing: 3-7, 10-11 April 2017 Date of last submissions: 16 May 2017 Registry: New South Wales Division: General Division National Practice Area: Intellectual Property Sub-area: Trade Marks Category: Catchwords Number of paragraphs: 376 Counsel for the Applicant and Cross-Respondent: Mr J M Hennessy with Mr F St John Solicitor for the Applicant and Cross-Respondent: HWL Ebsworth Lawyers Counsel for the Respondents and Cross-Claimants: Ms S J Goddard with Ms S L Stewart Solicitor for the Respondents and Cross-Claimants: Wrays Lawyers ORDERS
NSD 495 of 2016 BETWEEN: BOHEMIA CRYSTAL PTY LTD
Applicant / Cross-Respondent
AND: HOST CORPORATION PTY LTD
First Respondent / First Cross-Claimant
GAVAN MICHAEL SULLIVAN
Second Respondent / Second Cross-Claimant
JUDGE:
BURLEY J
DATE OF ORDER:
6 March 2018
THE COURT ORDERS THAT:
1.Within 14 days of the date of this order, the parties endeavour to agree as to the appropriate form of orders (including as to costs) to be made reflecting the conclusions expressed in these reasons. If no agreement is reached, the parties are within 21 days of the date of this order to notify the Court as to the orders for which they each contend and supply written submissions of no more than 5 pages in length addressing their respective contentions and indicating whether they desire to be heard on the issues addressed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
1 INTRODUCTION
[1]
1.1 Summary of the issues
[1]
1.2 The parties
[5]
1.3 Summary of conclusions
[7]
1.4 The witnesses
[11]
1.4.1 BCP’s witnesses
[12]
1.4.2 Host’s witnesses
[18]
1.5 The origins of BCP’s trade marks
[27]
1.6 The filing of the Bohemia marks
[39]
1.7 The business of BCP
[42]
1.8 The Host business and the Banquet products
[48]
1.9 The impugned Host uses
[55]
1.10 The drafting of the impugned uses
[61]
1.11 The letter before action
[71]
2 THE CROSS-CLAIM – SECTION 41 TM ACT
[73]
2.1 Introduction
[73]
2.2 The submissions
[76]
2.3 The Bohemia marks
[80]
2.4 Are the Bohemia marks inherently adapted to distinguish - Subsection 41(3)?
[82]
2.4.1 The relevant law – subsection 41(3)
[82]
2.4.2 The ordinary meaning of “Bohemia” and “Bohemia Crystal”
[94]
2.4.2.1 The evidence and admissions
[94]
2.4.2.2 Analysis of the evidence
[142]
2.4.3 Conclusions in relation to subsection 41(3)
[152]
2.5 Are the Bohemia marks to any extent adapted to distinguish - subsection 41(5)?
[167]
2.6 Is there factual distinctiveness – subsection 41(6)?
[172]
2.6.1 The relevant law - subsection 41(6)
[172]
2.6.2 Review of the evidence of distinctiveness
[178]
2.6.2.1 Financial statements
[182]
2.6.2.2 Packaging uses
[186]
2.6.2.3 Catalogues, pamphlets and bags
[199]
2.6.2.4 BCP stores
[204]
2.6.2.5 Showroom
[207]
2.6.2.6 Website
[210]
2.6.2.7 Advertising stands
[213]
2.6.2.8 Print media
[214]
2.6.2.9 Trade fairs
[217]
2.6.2.10 Sponsorships
[219]
2.6.2.11 Stationery and other business materials
[220]
2.6.3 Consideration of factual distinctiveness
[224]
3 EXERCISE OF DISCRETION TO CANCEL THE BOHEMIA MARKS – s 88
[239]
3.1 The submissions
[239]
3.2 The relevant law
[241]
3.3 Consideration
[245]
4 REVOCATION PURSUANT TO s 87 OF THE TM ACT
[257]
5 TRADE MARK INFRINGEMENT
[259]
5.1 Introduction
[259]
5.2 The trade mark use issue
[267]
5.2.1 The submissions
[267]
5.2.2 The relevant law – trade mark use
[269]
5.3 Consideration
[275]
6 THE USE IN GOOD FAITH ISSUE – subsection 122(1)(b)(i) TM Act
[289]
6.1 The arguments
[289]
6.2 The relevant law
[291]
6.3 Consideration
[300]
7 THE ACL CASE
[302]
7.1 The pleaded case and submissions
[302]
7.2 The relevant law
[308]
7.3 The issues
[320]
7.4 Typical Host customers
[322]
7.5 BCP’s more recent use of the words “Bohemia” and “Bohemia Crystal”
[327]
7.6 Consideration of BCP’s business and reputation
[345]
7.7 Consideration of the impugned uses
[350]
7.8 Conclusions in relation to the alleged misrepresentations
[361]
8 CONCLUSION
[376]
BURLEY J:
1. INTRODUCTION
1.1 Summary of the issues
Glass and crystal products have for hundreds of years been manufactured in a region that up until the commencement of World War I in 1914 was known as Bohemia. In 1918 the independent republic of Czechoslovakia was created, incorporating regions that were formerly part of Austria and Hungary and including the area formerly known as Bohemia. On 1 January 1993 Czechoslovakia was divided into the separate nations of the Czech Republic and Slovakia. Glass and crystal products continue to be made in the Czech Republic, including in parts of that country known as Bohemia. These historical facts are not in dispute, and underpin a dispute concerning the validity and infringement of two trade marks owned by the applicant, Bohemia Crystal Pty Limited (BCP) for BOHEMIA and BOHEMIA CRYSTAL (collectively, the Bohemia marks). The central issue in the case is whether BCP is entitled to a statutory monopoly under the Trade Marks Act 1995 (Cth) (TM Act) over those words in respect of glass and crystal products.
BCP contends that the first respondent, Host Corporation Pty Ltd (Host), has infringed the Bohemia marks by importing, advertising and selling glassware and crystal ware (referred to below, except where the context indicates otherwise, as glassware) known as the “Banquet” products. Separately, BCP alleges that Host has engaged in misleading or deceptive conduct in breach of s 18 or subsection 29(1) of Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL) and that the second respondent, Gavan Sullivan, is liable as a result of either being involved in the alleged misleading or deceptive conduct or as a joint tortfeasor in respect of the alleged trade mark infringement. In the course of the hearing BCP indicated that it no longer presses a pleaded claim for passing off.
The parties have agreed that 5 forms of impugned conduct by Host represent the range of activities that may amount to trade mark infringement or breach of the ACL. They are described more fully in section 1.9 below and concern the contents of catalogues published by Host in October 2015 and January 2016, the packaging used for the Banquet products, aspects of the Host website and the use of a sticker on the Banquet glassware itself.
Host does not dispute that it has engaged in the impugned conduct, but denies trade mark infringement. It contends that it has not used the Bohemia marks as trade marks within the TM Act. It also relies on a defence of good faith use of a geographical term pursuant to subsection 122(1)(b)(i) of the TM Act. Host contends that the Bohemia marks are liable to be cancelled and removed from the Trade Marks Register (Register) pursuant to subsections 88(1) and 88(2)(a) of the TM Act, because each could have been opposed pursuant to s 41 of the TM Act. It contends that as at the filing dates of the marks, the names “Bohemia” and “Bohemia Crystal”, when used in relation to glassware were not capable of distinguishing BCP’s goods from those of other persons. In the alternative, Host contends that the Bohemia marks have become generic and are liable to be cancelled by operation of ss 87 and 24 of the TM Act. Host also denies that it has breached the ACL and denies any liability on the part of Mr Sullivan.
1.2 The parties
BCP was incorporated in 1975 as a wholly owned subsidiary of Skloexport Akciova Spolecnost (also known as Glassexport Co Ltd) (Skloexport), which was then the government entity responsible for the export of all glass and crystal products made in Czechoslovakia (and later the Czech Republic). Until July 1999 BCP sold glassware in Australia under trade marks licenced to it by Skloexport. In July 1999 Skloexport went into liquidation and BCP took an assignment of some of its trade marks. On 5 October 2001 BCP filed an application for the BOHEMIA CRYSTAL mark and on 2 May 2003 it filed its application for the BOHEMIA mark (these dates are referred to below as the relevant dates). Since its incorporation, BCP has distributed and sold glassware sourced from within Czechoslovakia and (since 1 January 1993) the Czech Republic via third party retailers, its websites and from its own stores.
Host is an importer and supplier of catering goods and equipment that supplies a range of goods including crockery, cutlery, glassware, kitchenware and appliances to the catering trade. It was started in 1999 by Mr Sullivan as a sole trader. In 2003 the business was transferred to Host, and Mr Sullivan became its sole director and secretary. Host conducts its business from premises in Perth and Sydney. It currently offers about 2,500 different product lines.
1.3 Summary of conclusions
I have found that the cross claim brought by Host succeeds and that the Bohemia marks are liable to be removed from the Register. More particularly, for the reasons set out in section 2 of these reasons, I have found that as at the relevant dates, neither was capable of distinguishing the goods in respect of which they were registered from the goods or services of other persons. In section 3 of these reasons I find that the Register should be rectified by cancelling the registration of each of the Bohemia marks pursuant to subsection 88(1) of the TM Act. In section 4 I note that in light of my conclusion in section 2, it has not been necessary for me to consider the merits of Host’s cross-claim for revocation pursuant to ss 87 and 24 of the TM Act.
In deference to the skilfully presented arguments of the parties, and against the prospect that my conclusion in relation to validity of the Bohemia marks is incorrect, I have considered in section 5 whether or not the impugned Host uses would have amounted to infringing trade mark use. In relation to the BOHEMIA mark, I conclude that some, but not all, of the uses would have infringed. In relation to the BOHEMIA CRYSTAL mark, I conclude that none of the impugned uses is substantially identical with or deceptively similar to that mark in accordance with subsection 120(1) of the TM Act. In section 6 I conclude that a defence under subsection 122(1)(b)(i) of the TM Act would not apply in the event that the Host uses did otherwise amount to infringements.
In section 7 I consider and reject the claim advanced by BCP for breach of the ACL.
In light of my primary findings in relation to liability it has not been necessary to consider the personal liability of Mr Sullivan or BCP’s entitlement to pecuniary or other relief.
1.4 The witnesses
The hearing was conducted over 7 days and the evidence of 15 witnesses was read, many of whom were cross-examined. I generally consider that all of the witnesses made a genuine attempt to assist the Court by giving evidence honestly and, where cross-examined, that they frankly answered questions of them. The exceptions to this general finding are identified in these reasons.
1.4.1BCP’s witnesses
Paul Hesse has since March 1990 been the managing director of BCP and has worked as an employee with BCP since 1980. Mr Hesse was employed by S. Hoffnung & Company Limited from 1965 to 1980, first as a commercial traveller selling products including glassware and giftware and later as a manager of marketing and promotions for its giftware department. He gives evidence about BCP’s history, BCP’s relationship with Skloexport, action taken by BCP to protect the BCP marks over the years, the conduct of Host, the goods sold by BCP and the channels through which they are sold. He was cross-examined.
Greg Francis has since July 2000 been employed as a retail buyer by Peter’s of Kensington in Sydney. He gives evidence about the glassware market in Australia. He was cross-examined.
Stephen Coudounaris is a solicitor employed by HWL Ebsworth Lawyers, who act for BCP. He puts into evidence various materials concerning the manner in which the words “Bohemia” and “Bohemian” have been used. He was not cross-examined.
Anthony Moore is an Associate Professor of communications and media studies and the director of the Communications and Media Studies Masters program at Monash University. He has studied the culture of Bohemia and Bohemians in Australia and gives independent expert evidence about the meaning of the word “Bohemia” and its use in Australia. Professor Moore was not cross-examined.
Shane Paterson is a solicitor employed by HWL Ebsworth Lawyers who puts into evidence a Notice to Produce and some photographs. He was not cross-examined.
David Wilkinson is a solicitor employed by HWL Ebsworth Lawyers. He puts into evidence searches that he conducted on the internet using the Wayback Machine to locate historical versions of Host’s website.
1.4.2Host’s witnesses
Gavan Sullivan is the second respondent and the sole director and secretary of Host. He is responsible for overseeing all stock imported or purchased by Host and sold in Australia and has ultimate responsibility for all promotional materials used by Host. He gives evidence about his own background, his role in the business of Host, his understanding of the meaning of the words “Bohemia” and “Bohemia Crystal” and the activities of Host in relation to the goods the subject of the proceedings. He was cross-examined.
Lucy Flint has been employed by Host since 2008 and was initially involved in its operations in the warehouse and sales. Since 2015 she has been its purchasing and marketing manager. She is responsible for stock, pricing, sourcing products, liaising with suppliers, attending trade fairs to source new stock, artwork for catalogues, approving Host’s marketing material and managing its digital marketing campaigns. She gives evidence about how she sourced the Banquet range of products in 2015, how it has been promoted and the sales activities of Host in relation to that range. She was cross-examined.
Geoffrey Edwards is an arts consultant who obtained a Diploma of Art and Design at Chisholm Institute of Technology in about 1975 and a postgraduate Diploma in Fine Art at the Royal Melbourne Institute of Technology in about 1986. From 1976 to 1999 he worked at the National Gallery of Victoria, and from 1996 to 1999 he was a senior curator. He is the author of the book “Art of Glass: Glass in the collection of the National Gallery of Victoria”. He gives independent expert evidence about the meaning and use of the terms “Bohemia” and “Bohemia Crystal” as at the relevant dates and present day. He was cross-examined.
Stephen Conley has since 1995 been an antique and 20th century furniture and small ware dealer who currently operates, together with his wife, a business that trades in Double Bay, New South Wales. He gives evidence about the meaning of the terms “Bohemia” and “Bohemia Crystal” both at the relevant dates and today. He was cross-examined.
John Cook is an antique dealer and the owner and operator of Grafton Galleries Pty Ltd, which trades from premises in Rushcutters Bay, New South Wales. Grafton Galleries has been in his family for three generations, and he started working in the business part-time during the 1970s. He has worked for it full-time since 1986 and took over the business in the mid-1990s. He gives evidence about his knowledge and experience in the field of glass, glassware, crystal and crystal ware as at the relevant dates and the present, and in particular the meaning of the terms “Bohemia” and “Bohemia Crystal”. He was cross-examined.
Bindhu Holavanahalli is a lawyer employed by Wrays Lawyers, who act for Host. She puts into evidence documentary materials about: past trade mark applications including the word “Bohemia”, examination reports in respect of the Bohemia marks, dictionary definitions of the word “Bohemia”, lists of exhibitors at various trade fairs, excerpts from travel books and online materials concerning travel in the region known as Bohemia, and historical references contained in the Australian National Library dating from 1978 to 1994 concerning the use of the word “Bohemia” in various contexts. She was not cross-examined.
Tomas Barta is a citizen of the Czech Republic and has since 2010 been the managing director of Kedaung Europe Joint Stock Company (Kedaung), a company registered in the Czech Republic. Kedaung is a part of the Kedaung Industrial Group (Kedaung Group) which is an Indonesian company. Forincorp International Ltd (Forincorp) is the member of the Kedaung Group that is responsible for sales and marketing of Kedaung Group Limited’s products in and to Australia. Mr Barta started working in the glass industry in 1995, when he worked for a company called Sklo Bohemia. In 1995 that company exclusively manufactured glass products for Skloexport. In 1996 Sklo Bohemia terminated its contract with Skloexport and entered an exclusive supply contract with Bohemia Crystalex Trading a.s. (Bohemia Crystalex). In 1997 Skloexport became the owner of Sklo Bohemia but it was subsequently repurchased by Bohemia Crystalex in 1998. From 2000 to 2002 Mr Barta worked as the assistant to the General Manager of Bohemia Crystalex. He then moved to work for a company within the Kedaung Group before taking up his current position in 2010. He gives evidence about the manufacture of the Kedaung Group’s Banquet range of products, its packaging and promotional materials, the use by other companies of the word “Bohemia” in relation to glass and crystal products, his dealings with Mr Hesse and a brief history of the Czech glass industry. He was cross-examined.
Marko Kidric is a resident of the Czech Republic and has since January 2009 been the Chairman of the board and managing director of Bohemia Jihlava a.s. (Bohemia Jihlava), a company registered in the Czech Republic. Bohemia Jihlava owns a glass decoration facility and also makes designs and moulds for glass objects, such as wine glasses or vases. From 1988 until 1998 Mr Kidric worked as a product developer for a glass company located in Slovenia. He then moved to Prague and worked for a US department store as a designer, developing crystal product lines. In 2005 he moved to work in product development for a different business in largely the same sort of role, before commencing his current position in 2009. He gives evidence about his understanding of the meaning of the word “Bohemia” and “Bohemia Crystal”, the use of those terms by his company and the difficulties that he has encountered using the word “Bohemia” in Australia as a result of the activities of BCP in relation to trade marks owned by it. He was cross-examined.
Lubor Cerva is a citizen of the Czech Republic and has since 2009 been the owner and managing director of Crystalite Bohemia, s.r.o. (Crystalite), the largest producer of glass stemware and giftware in the Czech Republic. He gives evidence about the history of Crystalite, its products, his understanding of the meaning of the word “Bohemia” and “Bohemia Crystal”, Crystalite’s trade marks and the difficulties that Crystalite has experienced in using those trade marks in Australia arising from the activities of BCP. He was cross-examined.
1.5 The origins of BCP’s trade marks
Mr Hesse gives evidence of the history of BCP’s entitlement to use various trade marks, including the Bohemia marks. Set out below are my findings in relation to that evidence, much of which is taken from agreements which Mr Hesse has put into evidence.
BCP was incorporated on 26 November 1975. From 1975 until 1999 it was a wholly owned subsidiary of Skloexport, which was then the government monopoly responsible for the export of all glass and glassware from Czechoslovakia, or the Czech Slovak Socialist Republic (CSSR), as it was then known.
In 1992 Skloexport entered into a Registered User Agreement with BCP pursuant to which Skloexport agreed that BCP was granted the exclusive right to apply 5 registered trade marks to goods made in accordance with the directions of Skloexport or in accordance with its quality standards, for a term of 5 years to be renewable automatically on a year by year basis and only for so long as BCP remained a wholly owned subsidiary of Skloexport.
The trade marks to which this agreement applied (referred to collectively below as the Skloexport marks) were:
(1)No. A172034, which is a composite mark (034 mark) that was registered from 14 February 1962 under the Trade Marks Act 1955 (Cth) (1955 Act) in class 21 for “Glass and glassware of all kinds not included in other classes being products of Bohemia, Czechoslovakia”. The registration (in the form that it appears in the Register following the passing of the TM Act) includes the following endorsement:
Registration of this trade mark shall give no right to the exclusive use of the word “Bohemia”. The preceding endorsement(s) were recorded prior to commencement of the Trade Marks Act 1995.
The form of the 034 mark is as follows:
(2)No. 228310, which is a device mark (310 mark) that was registered under the 1955 Act in class 21 for “Glass and glassware of all kinds included in this class” from 13 January 1955. The registration contains no endorsements. The form of the 310 mark is as follows:
(3)No. 319701, which is a composite mark (701 mark) that was registered from 5 July 1978 in class 21 for “Glass and glassware of all kinds included in class 21 being crystal ware produced in the Bohemian region of the Czechoslovakia” (after its name change “Czechoslovakia” was changed for “the Czech Republic”). The registration (in the form that it appears in the Register following the passing of the TM Act) includes the following endorsement:
Registration of this trade mark shall give no right to the exclusive use of the words BOHEMIA and CZECH REPUBLIC. The preceding endorsement(s) were recorded prior to commencement of the Trade Marks act 1995.
The form of the 701 mark is as follows:
(4)No. A345332, which is a composite mark (332 mark) that was registered under the 1955 Act in class 11 for “Chandeliers, being crystalware produced in the Bohemian region of the Czechoslovakia” (after its name change “Czechoslovakia” was changed for “the Czech Republic”). The registration (in the form that it appears in the Register following the passing of the TM Act) includes the following endorsement:
Registration of this trade mark shall give no right to the exclusive use of the words BOHEMIA and CZECH REPUBLIC. The preceding endorsement(s) were recorded prior to the commencement of the Trade Marks Act 1995.
The form of the 332 mark is as follows:
(5)No. 532337, which is a composite mark (337 mark) that was registered under the 1955 Act in class to 2 “Household and ornamental glassware, plain and decorated”. The registration includes no endorsement. According to the Register, the lapsing of the 337 Mark was advertised on 11 February 1993. The form of the 337 mark is as follows:
On 4 April 1995 BCP applied to register a trade mark for the words BOHEMIA CRYSTAL in respect of all goods in class 21 including crystal ware, glassware and porcelain dinnerware. On 23 February 1996 that application was the subject of an adverse report from the Australian Industrial Property Organisation relevantly on the basis that the trade mark was not capable of distinguishing the goods of BCP from the goods of other traders because “your trade mark is BOHEMIA CRYSTAL which is used to refer to crystalware from Bohemia. Other traders are likely to need to use these words to indicate their similar goods and/or services.”
BCP did not pursue this trade mark application.
Between 1997 and 1999 Skloexport was in decline. Mr Hesse explains in his evidence that its business was transferred to Bohemia Crystalex, a company incorporated in the Czech Republic.
On 2 January 1999 Bohemia Crystalex and BCP entered into an agreement entitled “Contract for Exclusive Representation” pursuant to which BCP was appointed its sole representative for Australia in respect of, amongst other things, glassware and crystal ware and all products sold by Bohemia Crystalex at present and in the future. BCP was to receive a commission for sales achieved. It was a clause of the agreement that BCP undertook not to register for itself the trade marks for Bohemia Crystalex products, and agreed to defend the rights of Bohemia Crystalex in connection with its trade marks.
On 2 January 1999 Bohemia Crystalex and BCP also entered into a Distributorship Contract.
On 30 June 1999 Skloexport went into liquidation. Thereafter, in about May 2000, Bohemia Trading Pty Ltd (Bohemia Trading) (a company controlled by Mr Hesse and of which he is a director) and Net 2001 Ltd became co-shareholders of BCP.
On 13 July 1999 Skloexport assigned each of the 034, 701 and 332 trade marks to BCP. It was a term of the assignment that they were assigned without the goodwill of the business concerned in the goods in relation to which the trade marks have been used. It is relevant to note that in the schedule to the assignment it is recorded that the goods in respect of which these three trade marks are registered are goods “being products of Bohemia, Czech Republic” or products, “produced in the Bohemian region of the Czech Republic”.
In 2008 Bohemia Crystalex went into liquidation at which point Bohemia Trading became the sole shareholder of BCP.
1.6 The filing of the Bohemia marks
On 5 October 2001 BCP applied for the registration of trade mark no. 891129 which on 26 May 2004 was registered for the words BOHEMIA CRYSTAL for goods in class 21 being “Glassware being tableware, stemware and decorative items including crystal glass figurines, glass jewellery holders and trophies”. The registration included the following endorsement:
Provisions of subsection 41(6) and paragraph 44(3)(b) applied.
On 2 May 2003 BCP applied for the registration of trade mark no. 952530 which on 19 April 2005 was registered for the word BOHEMIA for goods in class 21 being “Glass and glassware, crystal and crystal ware of all kinds not included in other classes including vases, figurines, bowls, wine glasses, goblets, drinking glasses, ornaments, giftware, decorated glass, painted glass; china, porcelain and earthenware.” The registration includes the following endorsement:
Provisions of subsection 41(6) applied. Provisions of paragraph 44(3)(b) applied.
References below to “glassware” include goods which fall within the registrations of each of the Bohemia marks.
1.7 The business of BCP
I make the following findings in relation to the business of BCP.
Mr Hesse accurately characterises it as a business concerned with the importation and distribution of glassware. It is not a producer of glassware. This distinction is of significance when one considers BCP’s uses of “BOHEMIA” and “BOHEMIA CRYSTAL” and trade marks generally, particularly in the context of the ACL claim.
BCP sells what Mr Hesse describes as “fine quality glassware” which he defines to be crystal and glass that contains lead oxide and other materials to enhance the brilliance and strength of the glass. BCP uses the term “full lead crystal” for glass containing a minimum of 24% lead oxide, and “semi-lead crystal” for glass containing 8 – 23% lead oxide. The terms “glass” and “crystal” may, according to Mr Hesse, be used interchangeably and BCP does so.
BCP operates as a “high-end” vendor that competes in the sale of product with Versace, Waterford, Wedgewood and Royal Doulton in the supply of high-quality glassware products. The evidence of Mr Hesse is that most of BCP’s products cost hundreds of dollars and are expensive compared with mass-produced glassware. Therefore, although the least expensive product available is apparently a pair of champagne flutes available for $10, the price range extends to $4,200 and the normal price of goods is, according to the evidence, much higher than $10. It is Mr Hesse’s view that the products that it sells are of fine quality. Many of the goods sold feature etching and decorations that are done by hand.
The customers of BCP may be divided into “retail customers” and “commercial customers”. Retail customers generally buy from BCP stores or online for domestic use. Presently BCP has stores in Brisbane, Canberra, Jindalee in Queensland, Uni Hill in Victoria and in Liverpool in New South Wales. BCP also supplies glassware to third party retailers such as David Jones, Myer, Prouds and Angus and Coote “from time to time”. A confidential list of BCP’s commercial customers is in evidence. It largely comprises trophy and engraving businesses (who no doubt purchase glassware from BCP so that it can be engraved and presented) but also includes a small number of restaurants, hotels, catering companies and sporting or other clubs/establishments. No evidence indicates the breakdown between the number of retail customers versus commercial customers, nor the proportion of sales made to each of them. However, the number of BCP stores and the type of products sold by BCP suggests, and I infer, that the retail customers significantly outnumber the commercial customers.
I refer further to the BCP business in the context of the ACL claim in section 7 below.
1.8 The Host business and the Banquet products
I make the following findings in relation to the Host business and the Banquet products.
Host is an importer and supplier of catering goods and equipment that supplies a range of goods including crockery, cutlery, glassware, kitchenware and appliances to the catering trade. It was started in 1999 by Mr Sullivan as a sole trader, but in 2003 the business was transferred to Host. Host conducts its business from premises in Perth and Sydney. It currently offers about 2,500 different products lines.
Since 1999 Mr Sullivan, and since 2003 Host, have been importers and distributors of goods supplied by Forincorp. In about April or May 2015 Host agreed to become the exclusive distributor in Australia of crystal products supplied by Forincorp called “Banquet Crystal by Bohemia”, which are referred to in these reasons as “Banquet products”. Since then Host has supplied Banquet products, mainly to buyers in the catering industry, and promoted those products in various ways including on its website and in its catalogues.
The Banquet products imported by Host are made and packaged in the Czech Republic for the Kedaung Group. The products are made by three major glass makers from within the Czech Republic. Mr Barta gives evidence that Kedaung Group sells its products worldwide using the same branding. The Banquet range is sold to between 30-35 different countries including in Europe, Indonesia, China and Singapore. In the case of Australia, it is sold by Forincorp, a member of the Kedaung Group.
The Banquet products were first promoted in Host’s October 2015 catalogue. That is a publication of 132 pages that includes a substantial listing of products including glassware, crockery, cutlery, barware, dining, disposables (aluminium foil, paper cups, plastic cutlery etc) and equipment. The primary source of promotion of Host’s goods is Host’s catalogues. They are available in hard copy and online via Host’s website.
Customers of Host may place orders online, by telephone or by visiting Host’s showroom in Perth. The evidence indicates that over half of Host’s sales are conducted via telephone and the balance of sales are split evenly between online sales conducted via Host’s website and sales made direct from its showroom.
I refer further to the business of Host and its typical customers in the context of the ACL claim in section 7 below.
1.9 The impugned Host uses
BCP alleges that Host has infringed each of the Bohemia marks and engaged in misleading or deceptive conduct in 5 different forms of promotion of the Banquet products. The parties agree that the impugned conduct of Host may be considered on the basis of the representative samples set out below.
The first concerns the words “Banquet Crystal by Bohemia” as they appeared at page 14 of the October – December 2015 catalogue, which is set out below (October 2015 catalogue use):
The second focusses upon the words “Czech Crystal by Bohemia…Exclusive to HOST” as they appear at page 34 of its January – April 2016 catalogue which is set out below (January 2016 catalogue use). The entry for the Banquet range in the January 2016 catalogue use was reduced in comparison to the October 2015 catalogue use to a single page spread. The references to the Leona Collection and “Banquet” have been removed from the heading which is now “Czech Crystal by Bohemia”.
The third concerns the manner in which the word “Bohemia” has been used on Host’s packaging of the Banquet products, by using the phrase “Banquet by Bohemia” (packaging use) in the context of the packaging as a whole:
Top view:
Front view:
Side view:
The fourth concerns the use of the word “Bohemia” as it has appeared on Host’s website in the context of the sale of particular glass or crystal glasses such as “Bohemia Flute”, “Bohemia Footed Beer” and “Bohemia Whiskey”. An example of this impugned use is depicted below (Website use):
Finally, BCP alleges that the use of “Crystal by Bohemia” as it appears in the context of “BANQUET Crystal by Bohemia” in the Host catalogue set out in blue boxes in the top left corner of the catalogues pictured above and separately as stickers affixed to glasses when sold, examples of which are set out below, amount to trade mark infringement (collectively, sticker use):
1.10 The drafting of the impugned uses
The process by which Host came to adopt the impugned uses is relevant to a number of issues in the proceedings. Set out below are my findings in relation to this subject.
Mr Sullivan has since October 2001 known of a region in the Czech Republic referred to as “Bohemia” and was aware that it is a source of good quality glassware. In 2002 he began to attend an international trade fair in Germany called “Ambiente” at which household wares, including glassware, are promoted by various manufacturers. He became familiar with a number of companies in the Czech Republic that sold glassware and used the name “Bohemia” in their title, examples of which include “Sklorservice trading as Bohemia Royal Crystal”, “Bohemia Crystal Handelgesellschaft”, “Crystal Bohemia AS” and Crystalite (referred to above in paragraph 26). He considers that the words “Bohemia Crystal” and “Bohemia Glass” refer to glassware that is manufactured in the region of Bohemia and which is reputed to be of high quality. The objective evidence of exhibitor lists from the Ambiente trade fair in the years from 2006 to 2008 and 2009 to 2015, which were in evidence, indicate that in those years between 4 and 10 different traders with “Bohemia” in their name participated as exhibitors, including Bohemia Crystaltex Trading a.s., Tom Bohemia Crystal s.r.o., Axum Bohemia s.r.o. and Bohemia Jihlava Co Ltd.
Host has been a customer of Forincorp since it was incorporated in 2003. For several years from 2011 onwards Mr Sullivan was invited to acquire product from Forincorp identified to Mr Sullivan as “Bohemia Crystal”, which he understood to be glassware from the Czech Republic.
In April 2015 he met a representative of Forincorp at the trade fair and Host was again offered an exclusive agency in Australia to distribute its Banquet products. After discussing it with Ms Flint, he decided to take up the offer. At the fair, Ms Flint was provided a promotional brochure (flyer). After she returned from the fair, on 30 April 2015, Mr Derrick Chan from Forincorp emailed a quotation to Ms Flint of prices for glassware within the Banquet range. The flyer included at its top a rendition of the “Banquet Crystal Bohemia” logo, an image of which is produced below (Banquet logo):
Ms Flint, as purchasing and marketing manager at Host, was responsible for the packaging to be used by Host for its products. In his written evidence Mr Sullivan gives evidence that normally a supplier will send proposed packaging artwork by email to Ms Flint for approval. He qualified that evidence in cross-examination to say that prior approval was normally sought only where Host imports goods for sale under its own brand. Where it distributes another supplier’s product under its own brand, Host rarely ever approves the artwork, and Mr Sullivan could think of no instance of it doing so. He did accept, however, that if packaging supplied by Forincorp was considered to be inappropriate, Host could, under the terms of their agreement, order its own style of packaging, although his evidence was that this would come at a considerable increase in cost and include some minimum order quantities. I accept that the content of the packaging used for the Banquet products was designed overseas by or at the request of Forincorp and was supplied to Host. I also accept that Ms Flint was the person within Host who was responsible for accepting the packaging.
Mr Sullivan was responsible for approving the content of the October 2015 and January 2016 catalogue uses. Under his ultimate supervision Host produced the October 2015 catalogue consistently with the artwork and description supplied by Forincorp. The catalogue was first drafted by Angeline Alle, the marketing officer at Host, at the instruction of Ms Flint. Ms Alle was provided by Forincorp with images of the products together with images of the packaging used by Forincorp. Mr Sullivan approved the choice of wording and in particular the words “by Bohemia” because it was consistent with the artwork for the products in the Banquet range as supplied by Forincorp.
In relation to the January 2016 catalogue use, Mr Sullivan instructed Ms Alle to change the banner headline in the October 2015 catalogue use from “Banquet Crystal by Bohemia” to “Czech Crystal by Bohemia” in order to condense the promotion from two pages to one. He considered that there was no need to replicate the word “Banquet” because it was already on the page and because he believed that the words “Czech Crystal” would emphasise the point that the product was genuine crystal from Bohemia.
The use of the preposition “by” in the impugned uses of “by Bohemia” came under scrutiny during the course of the hearing. In cross-examination Mr Sullivan said:
Right. Czech – you say “Czech crystal by Bohemia” is descriptive. Can you just explain to his Honour how you say it works as a descriptive use on this page? --- It refers to the type of product and where it comes from.
The type of product being Czech crystal? --- That’s correct.
And where it comes from – “by Bohemia”? --- Bohemia.
Well, Czech crystal indicates where it comes from, doesn’t it? It comes from the Czech Republic? --- It does, but Bohemia is more specific and renowned for glassware production.
…
You understand that the word “by” is a bit problematic, don’t you, with that explanation? --- I do.
That is, that it, as a matter of grammar, just doesn’t make sense? --- I do.
Right. Well, how do you explain that? --- It was taken by the – from the description and the packaging which was supplied to us from the producer and the vendor.
Is there any other explanation you have as to why? --- No.
- - - you would use the words “by Bohemia” to mean, on your evidence, from Bohemia? --- No. Again, that’s our normal – no.
HIS HONOUR: I think, Mr Hennessy, if you just give Mr Sullivan a chance to answer the question? --- Our normal practice is to take our descriptions from the suppliers across all suppliers. We do vary it occasionally, but our normal practice is we use their descriptions.
MR HENNESSY: Well, excepting [sic, “accepting”] that evidence, you don’t do so uncritically, do you? --- No, as I said, we - - -
That would be irresponsible, wouldn’t it? --- Sorry?
You don’t do so uncritically, do you? --- No, we don’t.
You assess it and determine whether you consider it’s appropriate to adopt it? --- We do, but our normal practice is to adopt the supplier descriptions.
And why, in this circumstance, did you consider it appropriate to adopt it when you recognise that “by Bohemia” did not make grammatical sense if it was intended to indicate where it was from? --- I didn’t recognise it at the time.
Ms Flint considered the use of the reference to “by Bohemia” in various contexts had the effect of identifying a geographical location and that she used the word “Bohemia” because it conveyed the fact that the products were from the region of Bohemia which has a reputation for producing high quality crystal. However, in cross-examination she gave the following evidence:
And you, as an English speaker, would understand, wouldn’t you, that if you wanted to indicate that this product was from Bohemia, you would say so, that is, you would say “from Bohemia”, not “by Bohemia”? --- Bohemia to me is a place in the Czech Republic, and that’s what I was intending by that title.
I’m not focusing so much on Bohemia in my question as the preposition “by”. Why did you not insert “from” rather than “by”? --- Don’t have an answer.
Ms Flint’s obvious discomfort with the choice of “by” was echoed in the oral evidence of Mr Sullivan, who, as noted in the above passage from his evidence, properly accepted that the use of “by Bohemia” was an ungrammatical usage, if indeed it was intended to denote that the product was from Bohemia.
1.11 The letter before action
On 17 December 2015 HWL Ebsworth wrote a letter before action to Host, alleging that Host had infringed the Bohemia marks and BCP’s 701 mark. It drew attention to the use by Host of advertising material on its website. Mr Sullivan in his evidence contends, and I accept, that until he received this letter he was not aware of the asserted trade marks. He states that shortly after receiving this letter he decided with Ms Flint that Host would, pending resolution of the dispute, obscure or remove all uses of the words “Banquet Crystal by Bohemia” and “Quality by Bohemia” on the packaging of products in the Banquet Range, change the references to these products as they appeared in Host’s catalogue to remove the “Banquet Crystal by Bohemia” logo and the words “Czech Crystal by Bohemia”, such as in the May 2016 catalogue, and ensure that the Host website ceased to use the word “Bohemia” in connection with the products.
Thereafter, Host has continued to maintain its preference and desire to use the word “Bohemia” in connection with its products, but has agreed that it will not do so, pending the resolution of this dispute.
2. THE CROSS-CLAIM – SECTION 41 TM ACT
2.1 Introduction
It is convenient to consider Host’s cross-claim for the invalidity of the Bohemia marks before proceeding to consider issues of trade mark infringement.
Host seeks orders that the Register be rectified by the cancellation of the Bohemia marks pursuant to subsections 88(1) and 88(2)(a) of the TM Act. Subsection 88(1) relevantly provides that, subject to subsection 88(2) and s 89 the Court may, on the application of an aggrieved person, order that the Register be rectified by cancelling the registration. BCP admits that Host is a person aggrieved. Subsection 88(2)(a) provides that an application may be made on any of the grounds on which the registration of the trade mark could have been opposed under the TM Act. Host relies on s 41 of the TM Act which raises for consideration whether a trade mark is capable of distinguishing the trade mark applicant’s goods from those of other persons. In this context it is to be noted that it is common ground that the version of s 41 of the TM Act under consideration is that which pre-dates the amendments introduced into that Act on 15 April 2013.
There is no dispute that Host bears the onus of establishing that the Register should be rectified in the manner for which it contends.
2.2 The submissions
Host contends that each of the Bohemia Marks was not distinctive as at its filing date (being the relevant dates) such that it was not capable of distinguishing BCP’s goods from those of other traders. It submits that the relevant target audience of the Bohemia marks is traders who wish to sell goods within the class for which registration of the Bohemia marks were obtained and consumers who wish to purchase them. It submits that the trade marks were at the relevant dates simply words comprising a geographical name alone (in the case of BOHEMIA) or the word together with a descriptor (in the case of BOHEMIA CRYSTAL). The word “Bohemia” functions in its ordinary signification as a geographical descriptor, and accordingly, to no extent are either of the Bohemia marks inherently adapted to distinguish the designated goods. The addition of the word “crystal” for the BOHEMIA CRYSTAL mark does not make it inherently adapted to distinguish as “crystal” is a recognised term that is apt to describe glassware from Bohemia. As a consequence, Host submits that neither mark is inherently adapted to distinguish goods within subsection 41(3). Host also submits that subsection 41(5) does not apply because to no extent are the Bohemia marks inherently adapted to distinguish the relevant goods. It submits that the Court should adopt the approach taken by the Registrar of Trade Marks and consider the question of registration pursuant to subsection 41(6). However, unlike the Registrar, on the basis of the evidence in the present case it submits that the Court ought to find that BCP is not able to establish that, because of the nature and extent of the use of the BCP marks before their filing dates, they distinguish the designated goods as being those of BCP.
BCP disputes Host’s contention that the word “Bohemia”, when applied to goods of the type in respect of which registration was sought, indicates the origin of goods in Bohemia. It submits that the target audience is confined to the “buying public”, citing Mark Foy’s Ltd v Davies Coop & Co Ltd [1956] HCA 41;(1956) 95 CLR 190 (Mark Foy’s) at 195 (Dixon CJ), and that the relevant question is: what is the ordinary meaning of the words to consumers of glassware in Australia as at the relevant dates? It submits that Host has not established that the meaning is that the product is made in a region known as Bohemia, or that it is manufactured in a style, according to a method, or having physical characteristics of glassware originating in a region known as Bohemia. BCP accepts that “Bohemia” may be used as a geographical term, but submits that this does not mean that it is the ordinary signification, as required by the authorities. Rather, the evidence adduced by Professor Moore demonstrates that the word means, to the Australian public, an artistic or unconventional lifestyle.
BCP submits that the Bohemia marks are inherently adapted to distinguish within subsection 41(3) or to some extent inherently adapted to distinguish within subsection 41(5).
Alternatively, BCP contends that the evidence of use, provided in particular by Mr Hesse, demonstrates distinctiveness in fact. It submits that the use of its marks is like the use demonstrated in Blount Inc v Registrar of Trade Marks [1998] FCA 440; (1998) 83 FCR 50 (Blount), where in a composite mark the primary feature was the word “Oregon”, and the applicant adduced considerable evidence of promotion in Australia of its goods and the trade mark since 1979. In that case the Court found that the overall effect of the evidence was that persons concerned with the goods in question associated the word “Oregon” with the range of goods of a particular supplier. BCP claims that the evidence of use it relies upon demonstrates longstanding use and high volume. BCP also relies on the evidence of Mr Francis as the only witness who gives direct evidence about the meaning of the words to consumers and whose evidence was not challenged in cross-examination.
2.3 The Bohemia marks
The registrability of a mark must be assessed by reference to the mark itself. Here, each mark is simply the words BOHEMIA and BOHEMIA CRYSTAL. BCP did not in its registration seeks to limit the mark by stylistic or device elements. As a consequence, the rights conferred by registration are that BCP is entitled to the exclusive use of those marks rendered in either a stylised form or plain form, with or without capitalisation.
Further, the registrability of a mark must be assessed by reference to the specification of the goods or services for which registration is sought. The BOHEMIA CRYSTAL mark is registered in respect of goods in class 21 being “Glassware being tableware, stemware and decorative items including crystal glass figurines, glass jewellery holders and trophies”. The BOHEMIA mark is registered in respect of goods in class 21 being “Glass and glassware, crystal and crystal ware of all kinds not included in other classes including vases, figurines, bowls, wine glasses, goblets, drinking glasses, ornaments, giftware, decorated glass, painted glass; china, porcelain and earthenware”. Except where it is otherwise apparent from the context, the goods for both of the Bohemia marks are referred to below collectively as the relevant goods.
2.4 Are the Bohemia marks inherently adapted to distinguish - Subsection 41(3)?
2.4.1The relevant law – subsection 41(3)
Section 41 of the TM Act was amended by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth), which, for the most part, commenced on 15 April 2013. It is common ground that the pre-amendment form applies in this case. At that time, s 41 read as follows:
41 Trade mark not distinguishing applicant’s goods or services
(1)For the purposes of this section, the use of a trade mark by a predecessor in title of an applicant for the registration of the trade mark is taken to be a use of the trade mark by the applicant.
(2)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 (designated goods or services) from the goods or services of other persons.
(3)In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first take into account 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.
(4)Then, if the Registrar is still unable to decide the question, the following provisions apply.
(5)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.
(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.
Note 1: 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.Note 2: Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).
The dates for considering whether or not the ground for removal of the trade mark may be made out pursuant to s 41 is the filing date of each of the registrations, being the relevant dates; Unilever Aust Ltd v Karounos [2001] FCA 1132; 113 FCR 322 at [13] and [55].
The central requirement of s 41 is articulated in subsection 41(2). A trade mark must be rejected if it is not capable of distinguishing the applicant’s goods from those of others. Subsections 41(3) – (6) provide a framework for deciding that question; Blount at 56.
Subsection 41(3) requires that in deciding whether or not a trade mark is capable of distinguishing the designated goods from the goods of other persons the Court must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods from those of other persons.
In Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2014] HCA 48; (2014) 254 CLR 337 (Cantarella) the High Court considered “inherently adapted to distinguish”. The plurality (French CJ, Hayne, Crennan and Kiefel JJ) said (footnotes omitted, emphasis in original):
[26] In considering s 26 of the 1955 Act in Clark Equipment, Kitto J explained that whether a trade mark consisting of a word is "adapted to distinguish" certain goods is to be tested [at 514]:
"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 connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it." (emphasis added)
…
[28] Cantarella relied on the emphasised passage to support the proposition that the inherent adaptability of a trade mark consisting of a word (including a foreign word) is to be tested by checking the ordinary meaning (that is, the "ordinary signification") of the word to anyone ordinarily purchasing, consuming or trading in the relevant goods, characterised by Cantarella as "the target audience".
In Cantarella the Court was concerned with whether or not the marks ORO and CINQUE STELLE were laudatory epithets that were not inherently adapted to distinguish coffee and coffee related products. They are Italian words which when translated into English mean “gold” and “five stars”. The plurality considered the history of subsection 41(3). At [30] it accepted as correct Cantarella’s submission at [28] (quoted above). It is to be noted that the submission was that the relevant meaning of the words is to be considered by anyone ordinarily purchasing, consuming or trading in the relevant goods.
Emphasis was placed in the course of submissions in the present proceedings upon the reference to the “ordinary meaning” of a word. BCP submitted that this was to be understood by reference to ordinary consumers only. However, the submission accepted by the plurality in Cantarella demonstrates that the perceptions of traders are also of significance. Indeed, the focus historically of the inquiry as to whether a mark is inherently adapted to distinguish is whether other traders 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 in connection with their goods; Registrar of Trade Marks v W & G Du Cros Ltd [1913] AC 624 at 635 – 636. As the plurality in Cantarella noted at [44], the requirement that a proposed trade mark be examined from the point of view of the possible impairment of the rights of honest traders to do that which, apart from the grant of a monopoly, would be their natural mode of conducting business, and from the wider point of view of the public, has been applied for at least a century. Where the authorities refer in this context to the importance of the meaning of a word to persons who are “concerned” with them (eg Howard Auto-Cultivators Ltd v Webb Industries Pty Ltd [1946] HCA 15; (1946) CLR 175 at 185 (Dixon J); FH Faulding & Co Ltd v Imperial Chemical Industries of Australia and New Zealand Ltd [1965] HCA 72; (1965) 112 CLR 537 (Faulding) at 557 per Kitto J), or who wish to “describe their goods” (Mark Foy’s at 201 – 202 (Williams J)), they plainly mean other traders who perceive a need or have a legitimate desire to so use the words in relation to their goods.
In Faulding, Kitto J said (in a passage endorsed by the plurality in Cantarella at [56]) at 556 – 557:
[A]t least by the year of the initial registration of the appellant's trade mark (1943) the word Barrier had caught on as a word peculiarly apt, according to its ordinary signification, for descriptive use in connexion with skin protective creams, so that any trader in such creams would be very likely indeed, in the ordinary course of business and without any improper motive, to desire to use the word in order to distinguish such creams in general from creams intended for other purposes ... What matters is that at all material times the word has had such a place in the vocabulary of persons concerned with skin protective creams that according to the principle which must be applied under the Trade Marks Acts the appellant cannot be allowed a monopoly of its use in connexion with such creams.
Naturally, the desire of traders to use a word may depend on the perception of consumers’ understanding of it. This leads to the result that consideration is to be given to both. In Cantarella the plurality concluded at [59] (emphasis added):
The principles settled by this Court (and the United Kingdom authorities found in this Court to be persuasive) require that a foreign word be examined from the point of view of the possible impairment of the rights of honest traders and from the point of view of the public. It is the "ordinary signification" of the word, in Australia, to persons who will purchase, consume or trade in the goods which permits a conclusion to be drawn as to whether the word contains a "direct reference" to the relevant goods (prima facie not registrable) or makes a "covert and skilful allusion" to the relevant goods (prima facie registrable). When the "other traders" test from Du Cros is applied to a word (other than a geographical name or a surname), the test refers to the legitimate desire of other traders to use a word which is directly descriptive in respect of the same or similar goods.
At [57] the plurality observed that directly descriptive words, like geographical names, are not prima facie suitable for registration because use of them as trade marks will rarely eclipse their ordinary meaning. It said (footnotes omitted):
In Clark Equipment, Kitto J considered for the purposes of registration in Part B the word "Michigan", which had acquired distinctiveness through 20 years of use in respect of the applicant's goods despite the fact that it was a geographical name of a State in America. After approving Lord Parker's test in Du Cros and Hamilton LJ's observation in R J Lea, his Honour explained that directly descriptive words, like geographical names, are not prima facie suitable for the grant of a monopoly because use of them as trade marks will rarely eclipse their "primary" (that is, ordinary) signification. Such a word, his Honour said, "is plainly not inherently, ie in its own nature, adapted to distinguish the applicant's goods". Traders may legitimately want to use such words in connection with their goods because of the reference they are "inherently adapted to make" to those goods. Kitto J's elaboration of the principle, derived from Lord Parker's speech in Du Cros, applies with as much force to directly descriptive words as it does to words which are, according to their ordinary signification, geographical names.
The reference to Clark Equipment Co v Registrar of Trade Marks [1964] HCA 55; (1964) 111 CLR 511 (Clark Equipment) picks up a celebrated passage from the reasoning of Kitto J at pages 514 – 516, to the following effect:
It is well settled that a geographical name, when used as a trade mark for a particular category of goods, may be saved by the nature of the goods or by some other circumstance from carrying its prima facie geographical signification, and that for that reason it may be held to be adapted to distinguish the applicant's goods. Where that is so it is because to an honest competitor the idea of using that name in relation to such goods or in such circumstances would simply not occur: see per Lord Simonds in the Yorkshire Copper Works Ltd v Registrar of Trade Marks (1954) 71 RPC 150, at p 154. This is the case, for example, where the word as applied to the relevant goods is in effect a fancy name, such as "North Pole" in connexion with bananas: A Bailey & Co Ltd v Clark, Son & Morland Ltd (the Glastonbury Case) (1938) AC 557, at p 562; (1938) 55 RPC 253, at p 257 (see also the Livron Case (1937) 54 RPC 327, at p 339), or where by reason of user or other circumstances it has come to possess, when used in respect of the relevant goods, a distinctiveness in fact which eclipses its primary signification. Compare the case of a descriptive word: Dunlop Rubber Co's Application (1942) 59 RPC 134. But the probability that some competitor, without impropriety, may want to use the name of a place on his goods must ordinarily increase in proportion to the likelihood that goods of the relevant kind will in fact emanate from that place. A descriptive word is in like case: 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. This may seem at first blush a paradox, as Lord Simonds and Lord Asquith suggested in the Yorkshire Copper Works Case (1954) 71 RPC 150, at pp 154, 156, but surely not when Lord Parker's exposition of the subject is borne in mind.
The consequence is that the name of a place or of an area, whether it be a district or a county, a state or a country, can hardly ever be adapted to distinguish one person's goods from the goods of others when used simpliciter or with no addition save a description or designation of the goods, if goods of the kind are produced at the place or in the area or if it is reasonable to suppose that such goods may in the future be produced there. In such a case, the name is plainly not inherently, ie in its own nature, adapted to distinguish the applicant's goods; there is necessarily great difficulty in proving that by reason of use or other circumstances it does in fact distinguish his goods; and even where that difficulty is overcome there remains the virtual if not complete impossibility of satisfying the Registrar or the Court that the effect of granting registration will not be to deny the word to a person who is likely to want to use it, legitimately, in connexion with his goods for the sake of the geographical reference which it is inherently adapted to make. The leading authorities on the subject include the Yorkshire Copper Works Case (1954) 71 RPC 150 (the judgment of Lord Evershed in that case when it was in the Court of Appeal (1953) 70 RPC 1 contains a valuable discussion of the topic), the Glastonbury Case (1938) AC 557; (1938) 55 RPC 253 and the Liverpool Electric Cable Co Case (1929) 46 RPC 99. These cases show, as the Registrar said in the Dan River Case (1962) RPC 157, at p 160, in a decision which was endorsed by Lloyd-Jacob J, that there is a category of words which are so adapted for descriptive purposes that no amount of acquired distinctiveness can justify their registration, and that among such words are the names of large and important industrial towns or districts, and also of smaller towns or districts if they are a seat of manufacture of the goods for which registration is sought.
Accordingly, in a case such as the present, it is necessary to consider the ordinary signification of the words “Bohemia” and “Bohemia Crystal” in the context of the “target audience”, being traders and consumers of the relevant goods, to determine whether at the relevant dates other traders might legitimately desire to use these words or something similar in connection with their goods, for the ordinary signification which they possess. To this may be added the following observation of Yates J in Apple Inc. v Registrar of Trade Marks [2014] FCA 1304; (2014) FCR 511 (Apple) at [11] which reflects well established principle (emphasis added):
What does it mean to say that a trade mark is inherently adapted to distinguish the goods or services of one person from the goods or services of another? The notion of inherent adaptation is one that concerns the intrinsic qualities of the mark itself, divorced from the effects or likely effects of registration. Where the mark consists solely of words, attention is directed to whether those words are taken from the common stock of language and, if so, the degree to which those words are, in their ordinary use, descriptive of the goods or services for which registration is sought, and would be used for that purpose by others seeking to supply or provide, without improper motive, such goods or services in the course of trade.
2.4.2The ordinary meaning of “Bohemia” and “Bohemia Crystal”
2.4.2.1The evidence and admissions
The parties adduced a significant body of evidence relating to the meaning to be ascribed to the terms “Bohemia” and “Bohemia Crystal”. Set out below is a summary of the evidence and my findings in this regard.
The agreed facts
There is no dispute between the parties that there is a region in what is now known as the Czech Republic (or, more recently “Czechia”) that was known as “Bohemia” and that glassware was produced in that region. Nor is there any dispute as to the meaning of “crystal” in the context of glass. Specifically, the parties agreed to the following facts in an Agreed Statement of Facts.
First, that “glass” is a term that includes normal glassware and fine quality glassware known as crystal (which contains lead oxide and other materials to enhance strength and malleability) and other fine quality glassware that contains a variety of additional materials, including lead, to enhance brilliance or other features of the glass. The term “crystal” refers to clear, colourless glass, but not only lead crystal. Accordingly, while there may be a tendency to use “crystal” to refer to high quality glassware, and “glass” to refer to normal quality glassware, the terms may be interchanged to refer to any sort of clear glass product.
Secondly, glass and crystal products were manufactured for several hundred years in a region known, prior to 1914, as Bohemia. It is now part of the Czech Republic.
Thirdly, from about the 16th century the generic geographic descriptive terms “Bohemian Crystal” and “Bohemian Glass” were used by various manufacturers in the region then known as Bohemia to indicate that their products had been manufactured in that region so as to distinguish them from glass coming from other parts of the world.
Fourthly, from 1925 until about the start of World War II (in 1939), the terms “Bohemian Crystal” and “Bohemian Glass” were also used to refer to a particular Art Deco style of highly decorative and colourful glassware.
An admission
In [10] and [11] of its Defence to the Cross-Claim, BCP states the following “in further answer” to the Statement of Cross-Claim as a whole:
(b) [BCP] says that prior to about 1975 [each of the Bohemia marks] was not to any extent inherently adapted to distinguish the designated goods of the cross-respondent from the goods of other persons;
The defence goes on to say that because of the extent to which BCP used those trade marks, it did as at the relevant dates distinguish the relevant goods as being those of BCP.
The Australian evidence
The parties tendered and draw attention to a number of dictionary definitions of the word “Bohemia” and “Bohemian”.
The Macquarie Dictionary, 3rd edition, 1997 provides the following:
bohemia … noun a social milieu in which a bohemian atmosphere is prevalent. …
Bohemia … noun a region in the Czech Republic in the western part; in the Middle Ages an independent kingdom, later part of the Austrian Empire (1526 – 1918); …
Bohemian … 1 a person with artistic or intellectual tendencies or pretensions who lives and acts without regard for conventional rules of behaviour…2 a gipsy – adjective 3 relating to or characteristic of bohemians [from BOHEMIA, in medieval times thought of as the original home of the gipsies]
Bohemian Forest …a low forest-covered mountain range on the boundary between the south-western part of the Czech Republic and south-eastern Germany…
For the capitalised word “Bohemian” the Macquarie Dictionary, 6th edition, 2013 provides:
Bohemian … 1. a native or inhabitant of Bohemia. 2. The Czech language – adj. 3. relating to Bohemia, its people or their language.
For the word “bohemian” the same dictionary provides:
bohemian … 1. a person with artistic or intellectual tendencies or pretensions who lives and acts without regard for conventional rules of behaviour … 2. a Romani person. – adj. 3. relating to or characteristic of bohemians. [from Bohemia, a region in central Europe, now part of the Czech Republic, in medieval times thought of as the original home of the Gypsies]…
The Oxford English Dictionary 2nd edition, 2004, provides the following:
Bohemia … 1. A kingdom of central Europe, forming part of the Austrian Empire … 2. Gipsydom … 3. The community of social “Bohemians”, or the district in which they chiefly live . …
Bohemian … 1. A native of Bohemia…2. A gipsy. … 3. A gipsy of society; …
Bohemian glass, a fine kind of glass, originally made in Bohemia, in which potash is the alkali used. …
The Australian Oxford Dictionary, 1st edition, 1999, provides:
Bohemia … a region forming the western part of the Czech Republic. Formerly a Slavonic kingdom, it fell under Austrian rule in 1526, and by the Treaty of Versailles in 1919 became a province of the newly formed Czechoslovakia. Prague was the capital of Bohemia from the 14th century.
Bohemian … 1. a native of Bohemia. 2. (also bohemian) a socially unconventional person, esp. an artist or writer. adj 1. of, relating to, or characteristic of Bohemia or its people. 2. socially unconventional. …
These definitions (which are largely repeated in the other dictionaries which were tendered) indicate that the word “Bohemia” used as a proper noun means a place or region in the place where the Czech Republic is now to be found. In context, it might alternatively refer to a place from where Bohemians (being people from a social milieu in which a bohemian atmosphere is prevalent or persons with artistic or intellectual tendencies or pretensions who live and act without regard for conventional rules of behaviour) come or a place where a bohemian atmosphere is prevalent.
In this context BCP relied heavily on the evidence of Professor Moore. It submits that his evidence demonstrates that “Bohemia” in its ordinary signification describes artists or people living an unconventional lifestyle. Professor Moore has spent much of his career as an academic devoted to studying the culture of bohemia and bohemians in Australia. He says that “Bohemian” is a term used to describe “artists, or people living an unconventional lifestyle, accentuating freedom from middle class norms and the work a day world”, and “Bohemia” is a place from where Bohemians come. He gives evidence that in the early 1800s it was referred to as a conceptual, mythical country and that the origin of “bohemian” is a reference to Romany people or gypsies, whose nomadism, non-conformity and spontaneity inspired young artists in France to use the term. In Australia the term was picked up within literary and artistic circles in the mid-1800s, where the terms had essentially the same meanings. Professor Moore gives evidence that the words have continued in use in Australia, and in 1997 he was responsible for a documentary produced on the ABC called “Bohemian Rhapsody: Rebels of Australian Culture” in which Australians who had been part of various bohemian sub-cultures over many years were interviewed. They used the words “bohemia” or “bohemian” to describe themselves and those sub-cultures.
Host relies on the evidence of several witnesses to contend that, in the context in which the Bohemia marks were used during the relevant period, such use is more likely to indicate that the word “Bohemia” is a reference to geographical origins or a type of glassware from Bohemia.
Mr Conley is an antique and 20th century furniture dealer. From about 1995 to 1998 he and his wife operated an antique (that is, over 100 years old) and 20th century furniture and small ware business in London and since 1998 he and his wife have operated a similar business in Double Bay, New South Wales. Throughout his career he has regularly attended antique fairs and markets and he has dealt in vintage and modern homewares, including glass and crystal products. Prior to 2001 he sold vintage, antique and modern items of glassware that he considers to be accurately described as “Bohemian glass”. This includes glassware produced since approximately 1857 by the company Moser a.s., based in the area known as Bohemia, whose product is referred to as “Bohemian Crystal”. As at the relevant dates he understood “Bohemia”, when used in relation to glassware, to be a reference to a region in the Czech Republic renowned for the manufacture of glassware. He also understands (and understood) that “Bohemia” is used to refer to the origin of a particular style of glassware, which has certain stylistic features including cut glass, coloured glass, etched glass and/or certain shapes and styles.
Mr Conley explains that as a dealer in glassware in London (1995-1998) and since he began his business in Sydney (1998 to date), when he has identified and labelled glassware from Bohemia for sale, he has used the words “Bohemia” or “Bohemian Crystal” or “Bohemian Glass” to describe them. He gives evidence (which was not challenged in cross-examination) that as at the relevant dates the name “Bohemia” in the glass trade conveys a sign of quality due to the reputation of that region for glass-making. He regards the reputation of the region as an important selling point for customers and, where he sells glassware that is from the region of Bohemia, he advertises its provenance to his customers. Mr Conley exhibits documents from various third party sources, including Miller’s Guide (a descriptive guide book of auction valuations and results which contains terminology relevant to the items listed in the book), where the word “Bohemia” or “Bohemian” was used to designate glassware that originated from a geographical region called Bohemia. My examination of the printouts from the guide show a sample of a number of pieces of ornate glassware described in 2001 to be “Bohemian”, which (Mr Conley’s evidence supports) is used to designate the geographical origins of the work in question. Mr Conley also exhibits a selection of printouts from the website catalogues from the auction house Christie’s, which include references to antique or elaborate glassware from Bohemia, or being of “Bohemian” origins.
It is necessary to refer again to the evidence of packaging upon which BCP relies. For the reasons set out in section 2.6.2 this evidence is of little assistance in drawing conclusions as to the reputation of BCP in the words “Bohemia” or “Bohemia Crystal”. These include the fact that the images of the packaging identified are incomplete, that they are undated and that there is no evidence as to the volumes of any of the identified products sold in that packaging. In general, I regard the 2013 and 2014 BCP catalogues to be a more reliable source of information as to the range of products available in the years leading up to Host’s publication of the October 2015 catalogue. Even so, it may be observed that within the packaging depicted, some of the products sold by BCP for at least a 3 year period from 2009 – 2011 were branded “Bohemia Royal Crystal” and originated from Bohemia Crystalex. Use of the word “Bohemia” in that context is likely to serve to dilute any potential branding usage of the name, and convey to consumers that the word “Bohemia” does not denote BCP.
Mr Hesse gives evidence that BCP has sold its wares to retail customers direct via BCP stores since the opening of the Pitt St, Sydney store in 1989. Over time it has operated 11 stores, 5 of which remain open, being in Brisbane (since 2005), Canberra (since 2012), Jindalee, Queensland (since 2014), Uni Hill, Victoria (since 2015) and Liverpool, New South Wales (since 2016). The Pitt St store closed in 1996; an Adelaide store closed in 2006; a Moorabbin, Victoria store closed in 2015; an Essendon, Victoria store closed in 2011; a Birkenhead Point, New South Wales store closed in 2012; a Gold Coast, Queensland store closed in 2010. Mr Hesse stated that the stores “were important as part of our advertising and establishment of the Bohemia as quality. They ran at losses but we were establishing them as an advertising vehicle”.
Poor quality images of the shopfronts for each of the current stores indicate that the words “Bohemia Value for Lifetime” or (in the case of the Liverpool store only) “Bohemia crystal and glass” are prominently displayed on the entrance of the stores and that some of the promotional posters use “Bohemia” and “Bohemia Crystal”. It appears that the shop displays mainly comprise glassware products on shelves placed beside their packaging. The packaging displayed cannot be discerned with any clarity. None of the premium lead crystal products in the navy packaging described in paragraphs 195-196 and 331 above are apparent from my review of the products displayed.
Three observations are apposite at this point. First, for the reasons set out above, such evidence as is available of the packaging use indicates that it does not assist BCP in establishing a secondary signification for the word “Bohemia” and does not use “Bohemia Crystal” at all. Secondly, the customers of the shops are retail customers who do not overlap to any material degree with the Host customers. Thirdly, it is apparent from the photographs that the words “Bohemia Value for Lifetime” are likely to be primarily associated with the provision by BCP of retail services in association with the range of differently branded glassware goods made available in the stores.
The website used by BCP since 2002 (which it continues to use to sell product to commercial customers) has been mentioned in section 2.6.2.6 above. The version of that website printed off in April 2015 uses the words “Bohemia Crystal” in block letters together with images of Prague and references to the Czech Republic. The words under the “About Bohemia Crystal” tab state “A trademarked Bohemia Crystal product is your guarantee of quality and craftsmanship and the factories of the Czech and Slovak Republics are recognised worldwide as leaders in the production of high quality crystal and glassware. The Bohemia brand represents affordable luxury, quality and elegance…”. The same paragraph is included in the 2014 BCP catalogue, which I discuss at paragraph 330 above. The Prague imagery, in conjunction with the historical references, serves to reinforce the geographical meaning of “Bohemia”.
Since approximately 2013, BCP has also used a separate website (crystalandglass.com.au/purchase-bohemia-crystal-products-online-today/1:1/) to sell glassware direct to retail customers. Under the “About Us” tab, the website states (emphasis original):
Crystal and Glass Distributors Pty Ltd (CGD) are proud to offer, directly to the public, the world famous and renowned brands of Bohemia Crystal, RCR and Astra at very competitive prices. CGD is part of a direct import chain which allows us to keep prices to a minimum and will be introducing new brands going forward. This close cooperation represents the glassworks and crystal producers of Europe.
These quality crystal products are from the historic and traditional factories involved in crystal making in Europe. For many centuries these factories have been proudly producing crystal and glass products that are born through the artistic involvement of the designers and creators of these luxurious products. Our products are created in the flame of life from the European Heartlands.
Before 1939 there was little importation of Czechoslovakian (now Czech and Slovak Republics) glass and crystal into the Australian Market. Immediately after the war, a Bohemia Crystal Factory at Havlickuv Brod contacted the Australian Chamber of Commerce to find an agent in Australia with knowledge of crystal and glass products and in 1946 an agent was appointed for Bohemia Crystal product in Australia. In 1948 all the individual factories throughout Czechoslovakia joined together to form one multinational organisation. This company was named Glassexport Co. Limited.
From 1949 onwards, the Australian agent visited Czechoslovakia each year to coordinate production programs and to source and improve ranges and designs with each factory to suit the needs of the Australian market.
As the new century opened, Bohemia branded product continued to expand bringing quality design and craftsmanship to the market at affordable prices for the population of Australia. The trend to continue to provide both traditional, contemporary and modern pieces to the market was further enhanced by the introduction of new technologies and brands.
The modified version of the 701 mark is included at the bottom of all of the relevant website pages. Other devices relating to the RCR and Astra products (referred to in the first paragraph of the website cited above) are also used in some instances.
The evidence of print media advertising by BCP shows significantly less promotion in the 5 years prior to 2015. Although some 180 pages are included in this aspect of Mr Hesse’s evidence, only a handful of pages exhibit advertisements that are said to post-date 2010. Of these, in most the dating is done by handwritten addition, the provenance of which is not explained and is not readily apparent. I do not accept that it is intrinsically reliable. In his affidavit, Mr Hesse refers only to BCP placing advertisements (of unknown number or frequency) in some 9 publications after 2010. Of those, advertisements placed in the Myer catalogues, Yellow Pages and Harris Scarfe advertisements ceased in 2013 and the Rolls-Royce Owners’ club magazines took place only in 2014 and 2015. There is no evidence of the form that any of the advertisements took after 2014, with the exception of the Australian Gift Guide Magazine which uses the words “Bohemia Value for lifetime” and invites buyers to contact the vendor by telephone, fax or at [email protected] or BCP is here promoting its sales and distribution activities. The drop off in advertising coincides with scaling back in amounts spent, particularly from 2012 until 2016.
The evidence of trade fairs is limited to the use of “Bohemia” in association with the modified 701 mark.
There is no evidence of sponsorship activity post 2004 other than sponsorship of Harold Park Racing Events which continued from the early 1980s until 2010 and the Wentworth Park Greyhound Races, which began in about 2008 and ceased in 2015. In any event, the sponsorship activities do not involve any description of the type of business that BCP conducts or products that it sells (although the words “Bohemia Crystal” may be regarded as descriptive and self-evident).
Mr Hesse refers in his affidavit to promotions using a showroom open to its commercial customers at BCP’s offices in Sydney. However, he has provided no photographs of the showroom (if it remains in use) since 2004.
7.6 Consideration of BCP’s business and reputation
Having regard to the whole of the evidence, including the matters to which I have referred above and section 2, I make the following findings in relation to the customers, business and reputation of BCP as at October 2015.
A distinction is to be drawn between the business of BCP as importer, seller and distributor of glassware and the products that it imports, sells and distributes.
The evidence indicates that BCP’s sales and distribution services are promoted by reference to “Bohemia Value for Lifetime” (on stores) as well as by reference to “Bohemia” (in publications) mostly, but not always, in conjunction with the modified 701 mark. Sometimes the words “Bohemia Crystal” are used (also mostly in conjunction with the modified 701 mark).
The evidence indicates that the products that BCP sells and distributes are packaged and promoted by reference to a wide variety of names. They include “Claudia”, “Fleur”, “Lara”, “Rainbow” and others. Some are in packaging that uses “Bohemia” in conjunction with the 701 mark, some “Bohemia” alone and others “Bohemia Value for Lifetime”. A customer might have the impression that the packaging of these types was somehow connected with BCP, although the lack of evidence as to sales volumes (or indeed the entirety of the packaging) means that no finding as to the likelihood of a substantial number of BCP’s customers who might form that impression can be made.
A further distinction is between BCP’s commercial and retail customers. I infer that the former represent a small subset of BCP’s customers.
7.7 Consideration of the impugned uses
I now turn to consider each of the impugned uses by Host.
The October 2015 catalogue use includes the phrase “Banquet Crystal by Bohemia”. Immediately beneath it is the Banquet logo. At the foot of each page are the words “Buy online – hostdirect.com.au”. The reader will immediately note from this, and the front of the catalogue, that the seller is Host and that Host is promoting a range of products for sale. The products promoted come from a variety of sources. Focussing on the glassware section, which covers pages 2 – 21, it may be seen that a large number of branded products are identified. The brands are generally depicted by logos within rectangular boxes in colouring different to the background colour of the page on which they appear. Brands identified as the supplier of glassware include LIBBEY, ARCOROC, DURALEX and BORMIOLI ROCCO. The logos of these brands sometimes take the appearance of composite trade marks, with stylised features. Also present in the glassware section are plain text references to these brands and promotional tag lines like “Nob Hill Tumblers by Libbey”, “Islande Tumblers by Arcoroc” and “Picardie Tumblers by Duralex – Fully Toughened”. It is apparent that Host also packages glassware, and so (for example) “Host Economy Tumblers” are promoted next to a logo featuring the word “HOST”.
The prices advertised indicate that individual glasses may be purchased for approximately $1 each if purchased in lots of 48 (for Host economy tumblers). Other brands of glasses reach a maximum price of $7 per wine glass or flute if purchased by the dozen. The “Banquet Crystal by Bohemia” glasses (which include flutes, wine glasses, beer glasses and tumblers) are advertised at $2 each if bought in quantities of 24.
The impression gained from reading the October 2015 catalogue is that it is fairly dense in detail. A typical Host customer is likely to peruse the section relating to the type of product that he or she wishes to buy, consider price and product claim comparisons and then place an order.
In my view the representation made by the impugned use in the October 2015 catalogue is that a purchaser can acquire “Banquet Crystal by Bohemia” glassware from Host. Having regard to the use of the Banquet logo, in my view the representation is that the entity that produces the product is called “Banquet Crystal by Bohemia” or “Bohemia”.
The analysis is the same whether the October 2015 catalogue use is viewed online or in hard copy.
The January 2016 catalogue adopts the same broad format as the October 2015 catalogue, although the impugned use appears on a single page 5 pages into the publication. The banner headline on the page is “Czech Crystal by Bohemia” followed by “Exclusive to HOST outstanding prices”. The Banquet logo appears below the heading. The glasses promoted sell for $2 each and are sold in boxes of 24. Otherwise my broader observations in relation to the October 2015 catalogue use apply equally here.
In my view the representation made by this use is that Czech crystal by an entity named “Bohemia” can be acquired from Host. It is likely, having regard to the use of the Banquet logo, that the Host customer would regard the producer of the glassware to be known as “Banquet Crystal by Bohemia” or “Bohemia”.
In relation to the packaging use (which those Host customers buying from the Showroom would have the opportunity to see), the analysis and images set out in section 1.9 and 5.2.2 reveal a more prominent use of “Banquet” and “Bohemia” than the words “crystal by”. On the top and sides appear the words “Quality by Bohemia” in a circle. In my view, the “Banquet” and “Bohemia” words are far more prominent than the “Quality by Bohemia” logo beneath it. I consider that it is likely that most customers who have regard to the packaging would perceive that the product is produced under the brand “Banquet Bohemia” and consider that Banquet is the brand and Bohemia the geographical source of the product. Alternatively, to the extent that the customer did see the “Quality by Bohemia” logo, the Host customer may regard the product to be branded “Bohemia”.
The sticker use involves the application of the Banquet logo as stickers to glasses sold within the packaging. Customers would see the stickers only after acquiring the product. To the extent that customers would consider the branding of the glasses after they open the box, they are likely to regard the brand as “Banquet by Bohemia” or “Bohemia”.
The website use is described in section 1.9 and reviewed in section 5. It consists of the word “Bohemia flute 240ml” and the like.
7.8 Conclusions in relation to the alleged misrepresentations
I now turn to consider each of the alleged misrepresentations and express my conclusions in relation to the ACL claim. For the following reasons I consider that none of the ACL claims are made out. Before turning to each of the impugned uses in the context of the alleged misrepresentations, I make some general findings relevant to all.
First, the evidence discloses that there is likely to be a very small overlap between the customers of Host and the customers of BCP. As I have noted above, Host’s customers are typically from the HORECA industry and Host markets its products in broad terms as utilitarian and durable. Its customers purchase product in bulk and pay a low unit price per item. In contrast BCP supplies products that are high end, likely to be much more expensive than the Host products and which are predominantly for domestic use. Whilst the two companies sell glassware, the reality is that they operate in different spheres of activity. The prospect that a customer of BCP would seek to buy glassware from Host is low.
Secondly, the evidence indicates that BCP primarily uses the word “Bohemia” in conjunction with the 701 mark (or a modified version of that mark) or “Bohemia value for lifetime” to promote its business. That business is the distribution and sale of glassware of a number of differently branded products. A subset of customers may recognise that glassware products packaged with the 701 mark are connected with BCP. A smaller subset may recognise that products bearing the phrase “Bohemia value for lifetime” are associated with BCP. The evidence does not permit a conclusion that the numbers of such customers are material or significant.
Thirdly, Bohemia is a geographical term which is particularly apt to be used in the context of glassware. To some extent BCP has added to the perception that this is so. This diminishes the prospect that people who were aware of BCP’s use of “Bohemia” would consider use by Host of the same word to convey an association with BCP.
Fourthly, I note that BCP has adduced no evidence to indicate that any consumer would consider that the representations alleged would be understood by them to arise from the impugned uses by Host. For the reasons set out, I consider that they would not.
I now turn to consider each of the impugned uses and the alleged misrepresentations that are said to arise from them.
In relation to the October 2015 catalogue use, the first representation alleged is that the business of Host is the same as that of BCP. The October 2015 catalogue use does not convey any such connection between BCP and Host. To the contrary, it serves to distinguish the source of the products sold (“Banquet crystal by Bohemia”) from the vendor of those products (Host).
The second representation alleged is that Banquet products have the sponsorship or approval of BCP. The third representation alleged is that Host has the sponsorship or approval of BCP. The fourth representation alleged is that Banquet products emanate from BCP.
The October 2015 catalogue use does not directly convey such representations. Only if the use of the word “Bohemia” as used in the Host catalogue implicitly represents to the relevant consumer that the product comes from BCP will these representations arise.
I consider that whilst the typical reasonable consumer is most likely to perceive the October 2015 catalogue use to represent that the manufacturer or producer of the glassware is an entity known as “Banquet by Bohemia” or “Bohemia”, there is no more than a remote prospect that reasonable customers are likely to consider that the goods offered in the catalogue are offered with the sponsorship or approval of BCP or are offered by Host with the approval of BCP or that the Banquet products emanate from BCP. First, I do not consider that the typical Host customer who encounters this publication would be likely to be aware of BCP. Secondly, I consider that any Host customers who are aware of BCP would understand it to be a retailer of a range of glassware products sold under a range of different brands. Thirdly, to the extent that such customers perceive that BCP has a trade connection with products that it sells, those customers are likely to do so by reference to the common use of the 701 mark or the modified 701 mark. Without the presence of that mark, in my view they are unlikely to consider that the word “Bohemia” as it appears in the impugned uses connotes a connection or association with BCP. Needless to say, no such mark appears in the October 2015 catalogue. Fourthly, such customers would also be influenced by the geographical nature of the term and the material differences between the Host and BCP products such as price, quantity and quality. Accordingly I do not consider that BCP has established that the second, third or fourth representations have been made.
I reach the same conclusion in respect of the January 2016 catalogue use.
The packaging use places less emphasis on the word “by” than the catalogue uses. That tends to diminish the likelihood that consumers would perceive the word “Bohemia” to be a brand name at all. This provides a further reason (in addition to those provided in relation to the catalogue uses) why I do not consider that the packaging conveys any express or implied misrepresentation as alleged by BCP.
The evidence indicates that the sticker use is made by stickers placed on the glassware sold in the packaging. The conclusions that I have expressed in relation to the packaging and catalogue uses also apply to the sticker use.
Finally, the website use consists of a description that fleetingly appeared on Host’s website. I consider that the combination of the fleeting use, the insignificant overlap between Host’s and BCP’s customers, the absence of the word “by” and the absence of sufficient evidence to warrant a conclusion that BCP has established any secondary signification in the word “Bohemia” in relation to glassware products to be sufficient to conclude that no breach of the ACL has occurred in the manner alleged by BCP.
In light of my conclusions set out above, I do not consider it to be necessary to address Mr Sullivan’s liability for misleading or deceptive conduct or BCP’s entitlement to relief.
8. CONCLUSION
I direct that, within 14 days of the date of this judgment, the parties endeavour to agree as to the appropriate form of orders (including as to costs) to be made reflecting the conclusions expressed in these reasons. In the event that no agreement is reached, the parties are within 21 days of the date of this judgment to notify the Court as to the orders for which they contend and supply written submissions of no more than 5 pages in length addressing their respective contentions and indicating whether they desire to be heard on the issues addressed.
I certify that the preceding three hundred and seventy-six (376) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Burley. Associate:
Dated: 6 March 2018
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