C A Henschke & Co v Rosemount Estates Pty Ltd [2000] FCA 1539
INTELLECTUAL PROPERTY – trade mark – appeal from a decision of a primary judge – whether the primary judge erred in finding that the respondent’s proposed conduct in selling Hill of Gold wine did not constitute an infringement under s 120(1) of the Trade Marks Act 1995 (Cth) of the appellants’ registered mark, Hill of Grace – whether the primary judge erred in holding that the reputation of a trade mark (or the goods to which it is affixed) is not to be taken into account in deciding whether it has been infringed under s 120(1) – whether the primary judge otherwise erred in finding that the respondent’s Hill of Gold sign was not deceptively similar to the appellants’ Hill of Grace mark – primary judge dismissed the appellants’ claim under s 92 for removal of the Hill of Gold mark from the Register on the ground of non-use – whether the primary judge erred in finding, consequent upon his earlier conclusions, that the appellants were not “persons aggrieved” for the purposes of s 92(1) and therefore lacked standing to make such a claim – primary judge dismissed the respondent’s claim under s 92 for removal of the Hill of Grace mark from the Register on the ground of non-use – whether the primary judge erred in finding that the persons using the mark were “authorised users” of the mark within the meaning of s 8 – whether the primary judge had, in any event, exercised his discretion under s 101(3) not to order the removal of the mark from the Register even though the grounds for its removal had been established and, if so, whether he erred in so doing
TRADE PRACTICES – whether the primary judge erred in finding that the respondent’s proposed conduct in selling Hill of Gold wine was not, for the purposes of s 52 or s 53(a), (c) or (d) of the Trade Practices Act 1974 (Cth), likely to cause consumers to mistake the respondent’s wine for the appellants’ wine or to mislead consumers into believing that there was some other relevant association between them
EVIDENCE – expert opinion evidence of wine writers and critics, retailers, restaurateurs and academics adduced at trial by both parties as to (i) the extent to which members of the relevant section of the wine-consuming public were aware of the appellants’ Hill of Grace wine and how they regarded it and (ii) the likelihood that the sale by the respondent of wine under the Hill of Gold sign would confuse, mislead or deceive the relevant group of consumers – whether the primary judge erred in ruling that much of the evidence given by the non-academic witnesses, and the evidence given by the academic witnesses as to (i), was either inadmissible or to be accorded little weight – whether the primary judge erred in his assessment of the evidence of the academic witnesses…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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In the case of C A Henschke & Co v Rosemount Estates Pty Ltd, the appellants, C A Henschke & Co, sought relief against Rosemount Estates Pty Ltd, alleging that Rosemount's intended use of the "Hill of Gold" trademark threatened to infringe upon the appellants' "Hill of Grace" trademark, contravene sections 52 and 53 of the Trade Practices Act 1974 (Cth), and amount to passing off. The appellants also sought the removal of the "Hill of Gold" trademark from the register due to non-use. Conversely, Rosemount filed a cross-claim seeking the removal of the "Hill of Grace" trademark from the register on the same grounds. The trial judge dismissed both the application and the cross-claim, leading to the current appeal by the appellants and cross-appeal by Rosemount.
The legal issues before the court revolved around whether Rosemount's use of the "Hill of Gold" trademark would infringe upon the appellants' "Hill of Grace" trademark, contravene the Trade Practices Act, and amount to passing off. Additionally, the court had to determine the validity of the appellants' claim for the removal of the "Hill of Gold" trademark from the register and the merit of Rosemount's cross-claim for the removal of the "Hill of Grace" trademark. The court also considered the admissibility and weight of expert evidence on the matter of reputation and the likelihood of consumer confusion.
The court carefully examined the evidence presented by both parties, including expert opinions and survey data. The primary judge assessed the opinions of wine industry experts and found that while the "Hill of Grace" wine had a strong reputation, the evidence did not sufficiently support the claim that consumers would be misled or confused by the "Hill of Gold" trademark. The court found no error in the trial judge's treatment of the expert evidence and survey data. It concluded that the appellants' claims were not substantiated by the evidence provided, and the trial judge's findings on the likelihood of consumer confusion and the reputation of the "Hill of Grace" trademark were reasonable.
Accordingly, the appeal by the appellants and the cross-appeal by Rosemount were dismissed. The appellants were ordered to pay the respondent's costs of the appeal, and the cross-appellant was ordered to pay the cross-respondents' costs of the cross-appeal. The decision upheld the trial judge's rulings on the trademark dispute and the admissibility of evidence in the case.
Orders
Orders of the court
1. The appeal be dismissed.
2. The appellants pay the respondent’s costs of the appeal.
3. The cross‑appeal be dismissed.
4. The cross‑appellant pay the cross‑respondents’ costs of the cross‑appeal.
Background
Background to the litigation
In proceedings in the Court, the appellants claimed that Rosemount (which at that stage had not commenced to sell Hill of Gold wine) threatened to infringe the Hill of Grace trade mark and to engage in conduct which would both contravene s 52 and s 53 of the Trade Practices Act 1974 (Cth) and amount to passing off. The appellants also sought an order for the removal of the Hill of Gold trade mark from the register on the ground of non‑use. Rosemount, by cross‑claim, sought an order for removal of the Hill of Grace trade mark on the same ground. By orders made on 21 December 1999, a judge of the Court dismissed, in each case with costs, both the application and the cross‑claim. The appellants appeal from the order dismissing the application and seek, in substitution, declarations that Rosemount’s proposed use of the mark “Hill of Gold” will constitute conduct contravening s 52 and s 53 of the Trade Practices Act and an infringement of the Hill of Grace mark; an injunction; and an order for the removal of the Hill of Gold mark from the register. Rosemount, by cross‑appeal, appeals from the order dismissing its cross‑claim and seeks, instead, an order for the removal from the register of the Hill of Grace trade mark. Rosemount also seeks (as it sought unsuccessfully from the primary judge) an order that the appellants pay, on an indemnity basis, the costs incurred by Rosemount in relation to its preparation of evidence responding to certain expert evidence tendered by the appellants which, ultimately, the primary judge rejected or accorded little weight.ADDITIONAL FACTUAL BACKGROUND(a) A “crowded” market; “topographical” names The evidence before the primary judge established that there were over 1000 wine producers in Australia who sold wine under more than 16,000 brands. The use of words describing topographical features, as part of a brand name, was common. There were many “Hills”: for example, Ashton Hills, Chalk Hill, Montgomery’s Hill, Penfolds Koonunga Hill, Red Hill Estate and Vasse Felix Forest Hill Riesling. There were also many “mountains” or “mounts”: for instance, Bald Mountain, Henschke’s Mount Edelstone, McWilliams Mount Pleasant, Mount Avoca Vineyard and Plantaganet Mount Barker. Similarly, there were several “Ridges”. Among all those names, “Hill of …” was a rarity. Apart from Hill of Grace and Hill of Gold there were only four such names: Hill of Grapes, Hill of Hope, Hill of Roses and Hill of Content. Of those, all except Hill of Hope were marks registered by the Henschke family (a term which, like “the Henschkes”, we use to describe the widow and descendants of Cyril Henschke), the registration of which had inadvertently been allowed to lapse. Another company applied in 1997 to register the name “Hill of Content”; the Henschkes have lodged a notice of opposition to that application. The Henschkes also own the Hill of Hope mark: they acquired that mark from Mr Michael Hope who, for a short period after 1996, made wine from grapes grown in a vineyard which he called Hill of Hope in the Hunter Valley and sold it under the name “Hill of Hope”. The evidence apparently did not disclose that any wine had ever actually been made or sold under a “Hill of …” name other than Hill of Grace, Hill of Gold and Hill of Hope.(b) Circumstances surrounding Rosemount’s introduction of Hill of Gold wine
Evidence
Evidence Before The Court
Because of the critical part played, in argument before us, by the expert or opinion evidence, the primary judge’s rulings on it and his Honour’s findings on matters relating to reputation and to the likelihood that consumers would be deceived, misled or confused, it is convenient to deal with those matters before turning to the specific arguments concerning the appellants’ claims of trade mark infringement and contravention of the Trade Practices Act.TREATMENT OF EVIDENCE AS TO Reputation AND LIKELIHOOD OF CONFUSION ETC (a) The non-academic witnesses We have mentioned that the appellants read, at trial, affidavits of writers and commentators about wine, restaurateurs and retailers. We have mentioned also that Rosemount’s objections to all that evidence were reserved to be dealt with by the primary judge in his reasons for judgment. The objections included lack of proved expertise to found opinions expressed; that reputation was irrelevant to the question of trade mark infringement; that evidence as to likelihood of deception or confusion was in any event inadmissible; and that the character of the evidence in any event required its exclusion under s 135 of the Evidence Act 1995 (Cth). Rosemount, nevertheless, took the precaution of reading a number of affidavits in response to those read by the appellants. There was an arrangement between the parties that only one of these witnesses, on each side, would be cross‑examined, neither party taking any point based on Browne v Dunn (1893) 6 R 67. The existence of that arrangement reduces the force of the submissions on behalf of the appellants before us to the effect that weight should be given to certain of the opinions expressed because the witnesses had not been cross‑examined. The witnesses for the appellants were Mr James Halliday, Group Winemaker – Regional Wineries of Southcorp Wines and a well known wine writer, judge and consultant; Mr Giuseppe Polese, whose family owns and manages Beppis Restaurant and Mezzaluna Restaurant, both in Sydney; Mr Max Allen, a wine writer, judge and consultant; Mr Walter Bourke, the director of Walter’s Wine Bar, Southgate and Walter’s Wine Bar, Brisbane, who has extensive experience as a chef, restaurateur and wine collector; Mr Peter Forrestal, another well known wine writer and judge; and Mr David Matters, who has long experience as a retailer of wine and, at the time of the trial, owned and ran Best Cellars in Sydney. Mr Forrestal was cross‑examined, and the primary judge derived, as will appear, some assistance from his evidence. All of the witnesses had extensive experience in the wine industry and several of them, at least, substantial experience in dealing with retail purchasers and consumers of wine. Each gave evidence that Hill of Grace has a wide reputation as a wine of consistently outstanding quality. The following evidence of Mr Allen is reasonably typical:“… I consider that Hill of Grace wine is unarguably the most revered Australian Shiraz after Penfold’s Grange. The wine has been particularly highly regarded in the last 10 years or so, with the 1986 and 1990 vintages being some of the best red wine to ever to [sic] come out of Australia. The name Hill of Grace is so well known that most wine consumers will have heard of Hill of Grace wine and know it to be a wine of exceptional quality even if they have never actually tasted or seen the wine. It could be said that Hill of Grace’s reputation precedes it.”Each witness also expressed the opinion that wine consumers would be misled or confused by Rosemount’s use of the Hill of Gold name into believing that, at least, there was some association between Hill of Grace and Hill of Gold; some expressed the opinion that such consumers might be misled or confused particularly by wine lists which included Hill of Gold or, more especially, both Hill of Grace and Hill of Gold.
Decision
Reasons for decision
RYAN, BRANSON AND LEHANE JJ
His Honour proceeded to deal with the question whether uninvolved consumers were likely to think that there might be an association between Hill of Grace and Hill of Gold. He regarded the Hutton survey, on this topic, as at best equivocal. He found Professor Lockshin’s evidence unconvincing: if it were accepted that consumer decision‑making was a complex “black box”, no acceptable reason had been given for the making of the particular association asserted. This was so despite any reputation that Hill of Grace might have (Professor Lockshin’s views about that being summed up in his observation that “If you would say ‘Hill of’, [consumers] would say ‘Grace’ ”). His Honour preferred Dr Hall’s evidence, despite his lack of specific expertise in wine marketing, as to the complexity of consumer decision‑making:“While I do not for present purposes rely upon Dr Hall’s opinion as to how a consumer would read the Rosemount Hill of Gold label, his reservations on the critical process of linkage – of association – suggested by Professor Lockshin are reservations I share. With the greatest of respect, for my own part I consider the Professor’s reasoning in this to be conjectural and, moreover, to be contrived in the sense of describing a possibility not a likelihood. A possibility will always be there. There is no accounting for the courses of the human imagination. But I am not concerned with bare possibilities.”(e) Submissions; conclusion The appellants’ attack on the primary judge’s reasoning leading to his findings on reputation and the likelihood that consumers would be misled was based principally on two propositions. One was that he erred in discounting as heavily as he did the opinions expressed by eminent wine writers, restaurateurs, and retailers. The other was that his Honour erred in preferring the evidence of Dr Hall, who admittedly had no expertise in wine marketing, to that of Professor Lockshin, who had substantial expertise and long experience in that specific subject. (There was a conceptually distinct attack on his Honour’s understanding of the significance of the mark “Hill of Grace”, which we shall consider separately below). However, there is no doubt that his Honour was right in describing the former category of evidence substantially as mere assertion, both as to reputation and as to the possibility that consumers would see an association. (See Quick v Stoland Pty Ltd (1998) 87 FCR 371, especially at 374, 375 per Branson J; S Odgers, Uniform Evidence Law, 4th ed 2000 at 177‑183). Mr Forrestal’s evidence apart, to the extent that particular justifications were suggested (for example, the way in which wines are described in wine lists) they were not made good. As for his Honour’s treatment of the evidence of Professor Lockshin and Dr Hall, little more need be said. A reading of the evidence given by both – including cross‑examination – makes it quite clear why his Honour took the view that he did. The value of expert evidence depends very largely on the cogency of the reasoning on which it is based. An opinion is not necessarily to be accepted simply because it is offered by someone who has expertise and experience in the particular field. In our view, no error is demonstrated in the way in which his Honour treated the expert evidence. Nor – despite a submission to the contrary – was there any error in the way in which his Honour dealt with the Hutton survey or with any of the other evidence, for example the newspaper extracts, led on the question of reputation.
