Caterpillar Loader Hire (Holdings) Pty Ltd v Caterpillar Tractor Co

[1983] FCA 143

Re: CATERPILLAR LOADER HIRE (HOLDINGS) PTY. LTD. (trading as Willoughby's
Caterpillar Loader Hire Service); MILJAN ANTON WILLOUGHBY and BARBARA JEAN
WILLOUGHBY
And: CATERPILLAR TRACTOR CO. (1983) 77 FLR 139
No. G26 of 1982
Trade Marks and Trade Names

COURT

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Franki(1), Lockhart(2) and Neaves(3) JJ.

CATCHWORDS

Trade Mark - service mark - action for infringement - "Caterpillar" registered for both goods and services - whether use of mark for services likely to deceive or cause confusion - whether "Caterpillar" used in good faith to describe character or quality of services.

Trade Marks Act 1955, ss.58(1), 62(1), 64(1)(b).

Trade Marks and Trade Names - Service mark - Alleged infringement - Use of registered trade mark "Caterpillar" as part of business name - Whether likely to deceive or cause confusion - Whether descriptive of character or quality of services - Trade Marks Act 1955 (Cth), ss 58(1), 62(1), 64(1)(b).

HEADNOTE

The appellants carried on business under the business name "Willoughby's Caterpillar Loader Hire Service" which was registered under the Business Names Act 1963 (SA). The business consisted of the hiring out of front-end loaders, but only those of the respondent's manufacture. Meanwhile the respondent registered the name "Caterpillar" as a trade mark in respect of, inter alia, rental and leasing services in connection with earthmoving machinery and equipment. The respondent sought an injunction restraining the appellants from using the word "Caterpillar" in their business name. The appellants admitted that the business name was used by them as a trade mark but claimed the word "Caterpillar" merely signified that the type of loaders it had available for hire were all manufactured by the respondent, and this was unlikely " to deceive or cause confusion" in terms of s 62(1) of the Trade Marks Act 1955 as extended by s 6(3). The appellants argued, alternatively, that the name was used in good faith as "a description of the character or quality" of the loaders which it had available for hire and therefore were entitled to the protection of s 64 (1)(b). The respondents were successful in obtaining an injunction in the Supreme Court of South Australia, and from that decision the appellants appealed to the Federal Court.

Held: (1) The use of the word "Caterpillar" by the appellants has the effect of conveying to persons dealing with them that the services provided have a connection with the respondent. Use of the word in the appellant's business name is therefore likely to deceive or cause confusion, and the name is therefore "deceptively similar" to the respondent's trade mark within the meaning of s 62(1) of the Trade Marks Act 1955 as extended by s 6(3).

Saville Perfumery Ltd v June Perfect Ltd (1941) 58 RPC 147, applied.

Mark Foys Ltd v Davies Coop and Co Ltd (1956) 95 CLR 190 at 205 per Williams J, referred to.

Irving's Yeast-Vite Ltd v Horsenail (1934) 51 RPC 110, distinguished.

(2) The use of the word "Caterpillar" in the appellant's business name may indicate that vehicles of the respondent's manufacture are being hired but that is not a description of the quality or the character of the services being provided. The word "Caterpillar" is not, itself, descriptive of any class of goods.

Eastman Photographic Materials Co Ltd v Comptroller-General of Patents (1989) AC 571; F H Faulding and Co Ltd v Imperial Chemical Industries of Australia and New Zealand Ltd (1965) 112 CLR 537; J B Stone and Co Ltd v Steelace Manufacturing Co Ltd (1929) 46 RPC 406; Eclipse Sleep Products Inc v Registrar of Trade Marks (1957) 99 CLR 300; Thomson v B Seppelt & Sons Ltd (1925) 37 CLR 305, referred to.

HEARING

Adelaide, 1983, April 6, 7; July 19. #DATE 19:7:1983

APPEAL

Appeal from a decision of the Supreme Court of South Australia which granted an injunction restraining the appellants from infringing the respondent's trade mark.

J W Perry QC and McNamara Boundy, for the appellants.

H C Williams QC and W A Ross, for the respondent.

Cur adv vult

Solicitors for the appellant: McNamara Boundy.

Solicitors for the respondent: Ross, McCarthy & Nosworthy.

FPC

ORDER

1. Each of the defendants being the defendant Caterpillar Loader Hire (Holdings) Pty. Ltd. by itself, its directors, servants and agents and Miljan Anton Willoughby and Barbara Jean Willoughby be restrained from infringing the trade mark "Caterpillar" registered in the plaintiff's name under the Trade Marks Act 1955 in Part A of the Register of Trade Marks as No. 327469 in relation inter alia to rental and leasing services in respect of machinery and equipment being services included in Class 36 and the trade mark 'Caterpillar' registered in the plaintiff's name under the Trade Marks Act 1955 in Part A of the Register of Trade Marks as No. 327470 in relation inter alia to rental and leasing services in respect of machinery and equipment including the hire of bulldozers and other earth moving machines (being services included in Class 37).

2. Order 1 is stayed for fourteen (14) days and the matter is remitted to the Supreme Court of South Australia for the hearing of any application which the appellants may wish to make for a further stay of that order for a reasonable period.

3. Orders 1, 2, 3, 4, 6, and 8 of the orders made by the trial Judge are vacated.

4. Otherwise the appeal is dismissed.

5. The appellants pay the respondent's costs of the appeal.

Orders accordingly

JUDGE1

I have had the benefit of reading the separate draft judgments prepared by Lockhart and Neaves JJ. in which the facts of the case are set out. I will not set out the facts again. Lockhart J. and Neaves J. have dealt with the background to the amendments to the Trade Marks Act 1955 ("the Act") by No. 130 of 1978 when the Act was extended to cover services. I approach this case by bearing in mind that the Act only gives protection, so far as infringement is concerned, where the mark alleged to infringe is used in relation to goods or services "in respect of which the trade mark is registered". (Ss.58(1) and 62(1)).

Before the learned trial Judge the respondent sought relief in respect of its registrations numbered A327470 and A327469. Both were registrations of service marks in Part A of the Register. Number A327470 was in Class 37 (Construction and Repair Services) and it was in respect of:
"Rental and leasing services in this class in respect of machinery and equipment including the hire of bulldozers and other earthmoving machines, construction and repair services, including maintenance and repair of earth moving and other machinery, maintenance work, care and repair of goods, engineering construction being services included in Class No. 37 . . . ".
Number A327469 was in Class 36 (Insurance & Financial Services) and it was in respect of:
"Rental and leasing services in this class in respect of machinery and equipment, financing, financial services, financial securities, financial transactions, insurance, insurance agents, insurance brokers, insurers, investment, investment trusts, hire purchase, financing of hire purchase, agents and brokers for agricultural credit, agents and brokers for credit from farming development, financing of credits for wholesale dealers, arranging for time payment for goods, capital investment, arranging credit, credit recovery agents, advice and enquiries regarding credit, depositing of securities and of stocks and shares, farming surveys, financial guarantees, monetary transactions and associated insurance and financial services, being services included in Class No. 36 . . . ".

I consider that it is only relevant to consider the position with regard to these registrations and not to complicate the matter by looking at the position in relation to the respondent's registration of a trade mark for "Caterpillar" for goods in respect of machinery which had existed for many years. That mark, No. A10,993, was in respect of "Machinery; Agricultural and horticultural machinery, and parts of such machinery included in Class No. 7".

Section 23 of the Act, dealing with the removal of a trade mark on the ground of non-use, does provide that use in relation to "goods that are closely related to those services" may be relevant where the application is to expunge a mark registered in respect of services. Section 33 provides that a mark which is substantially identical with, or deceptively similar to, a trade mark shall not be registered in respect of services if it is already registered in respect of "goods that are closely related to those services". Section 36(1A) provides that the Registrar may require the association of trade marks where one is registered in respect of any services, and it is substantially identical with another trade mark registered in respect of "goods that are closely related to those services". Section 37 provides that associated marks can only be assigned or transmitted as a whole and s.38 deals with use of associated trade marks. In my opinion, ss.23, 33, 36 and 37 have the essential purpose of protecting the public. Although those sections may be favourable to the registered proprietor they do not extend his rights in relation to infringement of his trade mark.

Lockhart J. and Neaves J. have dealt with the different views taken by the members of the Federal Court in Angoves Pty. Ltd. v. Johnson (1982) 43 A.L.R. 349 and, if it were necessary, I would accept the view that the majority of the Court expressed a preference for the concept that s.58(1) only covered the use of the identical mark. For some reason, not clear to me, in contradistinction to s.58(1), s.62(1) uses the word "mark" and not "trade mark". It refers to a mark being deceptively similar to the registered trade mark in respect of, in this case services, for which the mark is registered. The words "deceptively similar" are to be interpreted in accordance with s.6(3) which provides:
"For the purposes of this Act, a trade mark shall be deemed to be deceptively similar to another trade mark if it so nearly resembles that other trade mark as to be likely to deceive or cause confusion".
I mention that the definition of "trade mark" in s.6 is different to that of "mark" in that section.

The first question is whether the use of the name "Caterpillar Loader Hire Service" for the type of business carried on by the first appellant is a use which falls within s.58(1) or s.62(1) of the Act. The use must be use as a trade mark. The main argument advanced by the appellants was that the use of the word "Caterpillar" by them was not a use to indicate the origin of the services and therefore not use in a trade mark sense but was a use to indicate the origin of the machines. I reject this argument. In my opinion, apart from any question of the effect of s.64(1)(b), that name must be liable at least to cause confusion within the meaning of s.62(1) as extended by s.6(3). The next question is whether the addition of the word "Willoughby's" removes the likelihood of deception or confusion. In my opinion it does not. It was common ground that the name "Willoughby's Caterpillar Loader Hire Service" was used by the first appellant as a trade mark. No evidence of deception or confusion was before the learned trial Judge but, when considered in relation to the registration of "Caterpillar" for the services for which the respondent has registration, in my opinion that mark is likely to deceive. Although the mark in question is "Willoughby's Caterpillar Loader Hire Service" so that the word "Willoughby's" is part of the mark, I consider that the principle applied in Saville Perfumery Ld. v. June Perfect Ld. (1941) 58 R.P.C. 147 is applicable. In that case Viscount Maugham at p.174, with whom Lord Russell of Killowen and Lord Romer agreed, said:
"Now as the Master of the Rolls pointed out, it is true that on a careful reading of the printed matter used in connection with the shampoo powder and the lipstick it appears that the origin of the goods to indicate which the word 'June' is used, is either the June Hair Curler Co. or June Perfect Ld. 'But', as he then pointed out, 'this circumstance, relevant though it may be upon the question of passing-off, is immaterial upon the question of infringement. In an infringement action, once it is found that the Defendant's mark is used as a trade mark, the fact that he makes it clear that the commercial origin of the goods indicated by the trade mark is some business other than that of the plaintiff, avails him nothing, since infringement consists in using the mark as a trade mark, that is, as indicating any origin.' "
See also Kerly's Law of Trade Marks and Trade Names, 10 Ed. pp.288-289.

As Williams J. said in Mark Foys Ltd. v. Davies Coop & Co. Ltd. (1956) 95 C.L.R. 190 at p.205:
"Needless to say, if the defendant uses the words of the plaintiffs' trade mark as indicating origin it is still an infringement not withstanding that the defendant always adds his own name."

It would be logical to conclude that there was some association between the services the first appellant provided and the services for which the respondent had registration. It might be thought that the first appellant was a registered user of the respondent's service mark or that it held a franchise from, or was a subsidiary or an authorised agent of, the respondent.

It is not irrelevant to bear in mind that there could be a registration for a trade mark in relation to services without there being any registration of the same word in relation to goods or without there being any goods known by the same name.

This then takes me to the question of the effect of s.64(1)(b). This section is applicable if the acts alleged to constitute an infringement are the use "in good faith" of a description of the character or quality of (the defendant's) . . . services". It seems clear that s.64(1)(b) only applies where descriptive words are used descriptively in relation to the goods the subject of the relevant registration. The same principle must apply to service marks.

Section 24, dealing with registration in Part A provides, inter alia, that a trade mark is registerable if it contains or consists of a word "not having direct reference to the character or quality of the goods or services in respect of which registration is sought . . . ". The words in s.64(1)(b) differ somewhat and instead of the words "direct reference to" one finds the words "a description of". This may be a matter of some consequence. (Picot Ltd. v. Goya Ltd. (1967) R.P.C. 573 at p.578). I am disinclined to give a broad construction to s.64(1)(b). The corresponding section, 53A, of the Trade Marks Act 1905 was considered in Mark Foy's Ltd. v. Davies Coop & Co. Ltd., supra. Williams J. at p.202 said that it:
". . . protects the use by any person of any bona fide description of the character or quality of his goods. But that means a description and not a mere suggestion in fanciful language. It does not protect an attempt by the defendants to usurp a metaphorical phrase like 'Tub Happy' however magnetic the force of its public appeal may be."

His Honour also cited the following passage from J.B. Stone & Co. Ltd. v. Steelace Manufacturing Co. Ltd. (1929) 46 R.P.C. 406 at p.417 where Lawrence L.J. said:
"In my opinion the object of s.44 (of the English Trade Marks Act 1905 which corresponds to s.53A of the Commonwealth Act) was to safeguard traders in cases where the registered trade mark consisted of more or less descriptive words forming part of the ordinary English language, without the use of which other traders would find some difficulty in describing certain qualities of their goods; but was never intended and does not operate to enable a trader to make use of a rival trader's registered trade mark consisting of a fancy word having no reference to the character and quality of the goods in order more readily to sell his own goods."
Dixon C.J. at p.195 agreed with the judgment of Williams J.

The section was also considered by McTiernan J. in F.H. Faulding & Co. Ltd. v. Imperial Chemical Industries &c. Ltd. (1965) 112 C.L.R. 537. At p.543 his Honour said in relation to s.64(1)(b):
"What this provision protects is the use of a mark that is genuinely descriptive of the character or quality of goods in connexion with which it is used, where the use is purely for the purposes of description."
At p.544 his Honour said:
"This evidence satisfies me that in describing its cream as a Barrier Cream the defendant was using the word BARRIER as a reference to the character or quality of its cream and that the word BARRIER can be regarded as a correct description of the creams. However, I think that the defendant is not entitled to the protection of s.64(1)(b) for the reason, as I hold, the word BARRIER in its setting on the defendant's package is not used purely for the purpose of description."
(Emphasis added in each passage.)

An appeal from this judgment was dismissed but upon different grounds. I consider that the judgments in the appeal did not qualify the views of McTiernan J. which I have set out.

Eclipse Sleep Products Inc. v. The Registrar of Trade Marks (1957) 99 C.L.R. 300 was a case concerning an application to register a mark in respect of mattresses. Broadly, the mark consisted of a device which depicted a spring enclosing the words "springwall mattress". In a joint judgment at pp.322-323 Dixon C.J., Williams and Kitto JJ. said:
"Section 53A of the Trade Marks Act, however, the meaning of which was discussed to some extent in Mark Foy's Ltd. v. Davies Coop & Co. Ltd. (1956) 95 C.L.R. 190, provides that no registration under the Act shall interfere with the use by any person of any bona fide description of the character or quality of his goods. The object of this section is not to afford a guide as to whether a word is adapted to distinguish the goods of the proprietor of the trade mark from those of other persons. It is intended only to protect traders in the bona fide use of a word which has been registered and must be treated as adapted to distinguish such goods."
and a little later said:
"Section 53A would however protect the bona fide use by other traders of the words 'SPRING' and 'WALL' in order to describe the character or quality of their goods, assuming the compound word to be an essential feature of the applicant's mark. Accordingly there does not appear to be any sound reason for requiring the applicant to disclaim any right to the exclusive use of the words 'SPRING' and 'WALL' as a condition of granting the application. But, as s.53A applies only to verbal descriptions, not to require the applicant to disclaim any right to the exclusive use of the device of the border might well result in the applicant's acquiring the exclusive right to use upon mattresses containing border stabilizer springs a device indicating that they do contain such springs."

The extent of s.53A in the Trade Marks Act 1905 was also considered by Higgins J. in Thomson v. B. Seppelt & Sons Ltd. (1925) 37 C.L.R. 305, a case where it was sought to register "Great Western" for wines. Higgins J. at p.315 said that in his opinion the words "Great Western" were not a description of the character or quality of the applicant's wines.

Some consideration was also given to s.62(1) in Angoves Pty. Ltd. v. Johnson, supra. In my opinion the use of the word "Caterpillar" by the first appellant in the mark "Willoughby's Caterpillar Loader Hire Service" does not describe the "quality" of the services nor indeed their "character". The word may, as is submitted by the appellants, indicate that Caterpillar vehicles are being hired but I do not consider that that is a description of the character of the services. If there was a particular type of loader which some people might describe as "Caterpillar" because of its construction, we might have to consider whether that type of loader could be properly described as a caterpillar loader regardless of who was the manufacturer. In any event the loaders being hired by the first appellant were not of a construction appropriate to be described as "Caterpillar". "Caterpillar" is a word which is not descriptive in any relevant sense. Because of the conclusion I have reached it is unnecessary to consider whether the appellants' use of the name was bona fide. I mention that I have examined the judgments in Caterpillar Tractor Co. v. Caterpillar Loading Pty. Ltd. (1981) 28 S.A.S.R. 307 and in the appeal to this Court, 38 A.L.R. 394.

I would dismiss the appeal with costs. The respondent indicated that the only injunction which it was concerned to retain was that in order 1(a) made by the trial Judge.

The orders are set out in the judgment of Lockhart J. It will be seen that order 1(a) was made by the learned trial Judge not only in respect of the defendants and each of them but also in respect of the directors, servants and agents or any of them. The order is not in the form that the defendants and each of them by the directors, servants and agents or any of them be restrained. The effect of the order 1(a) would therefore be to restrain not only the acts of the defendants by their directors, servants and agents but also the independent acts of the directors, servants and agents. The order in its present form would appear to extend to persons, whether parties or not, for example, to present and future servants and agents. In my opinion, although our attention was not directed to this question, I do not think the Court can endorse the order in its present form.

I propose that order 1(a) of the learned trial Judge be affirmed in an altered form so that the opening four lines read: "Each of the defendants being the defendant Caterpillar Loader Hire(Holdings) Pty. Ltd. by itself, its directors, servants and agents and Miljan Anton Willoughby and Barbara Jean Willoughby be restrained."

I would vacate orders 1(b), 2, 3, 4, 6 and 8. I would stay order 1(a) for fourteen days and remit the matter to the Supreme Court of South Australia to hear any application which the appellants may wish to make for a further stay of that order for a reasonable period to enable it to be complied with in a practical manner.

I propose the following orders:

1. Each of the defendants being the defendant Caterpillar Loader Hire(Holdings) Pty. Ltd. by itself, its directors, servants and agents and Miljan Anton Willoughby and Barbara Jean Willoughby be restrained from infringing the trade mark "Caterpillar" registered in the plaintiff's name under the Trade Marks Act 1955 in Part A of the Register of Trade Marks as No. 327469 in relation inter alia to rental and leasing services in respect of machinery and equipment (being services included in Class 36) and the trade mark "Caterpillar" registered in the plaintiff's name under the Trade Marks Act 1955 in Part A of the Register of Trade Marks as No. 327470 in relation inter alia to rental and leasing services in respect of machinery and equipment including the hire of bulldozers and other earth moving machines (being services included in Class 37).

2. Order 1 is stayed for fourteen (14) days and the matter is remitted to the Supreme Court of South Australia for the hearing of any application which the appellants may wish to make for a further stay of that order for a reasonable period.

3. Orders 1, 2, 3, 4, 6, and 8 of the orders made by the trial Judge are vacated.

4. Otherwise the appeal is dismissed.

5. The appellants pay the respondent's costs of the appeal.

JUDGE2

This appeal is from a judgment given in favour of the respondent, Caterpillar Tractor Co., upon the trial of an action brought in the Supreme Court of South Australia for the infringement of two trade marks for services each consisting of the word "Caterpillar". The trade marks are registered in the name of the respondent, a company incorporated in the U.S.A., under the Trade Marks Act 1955 ("the Act") in Part A of the Register of Trade Marks. Trade mark No. 327469 is registered in relation to various services, including rental and leasing services in respect of machinery and equipment. These services were treated by the Registrar of Trade Marks as falling within class 36, namely "insurance and financial services".

Trade mark No. 327470 is also registered in relation to various services including rental and leasing services in respect of machinery and equipment including the hire of bulldozers and other earth moving machines. These services were treated by the Registrar as falling within class 37, namely "construction and repair services".

The validity of the registration of the trade marks has not been challenged.

The respondent applied for registration of the two trade marks on 1 February 1979 and registration was granted on 23 June 1980. The registration subsists for seven years from 1 February 1979. 1 February 1979 was the date on which the Trade Marks Amendment Act 1978 (No. 130 of 1978: "the Amendment Act") came into operation and introduced into the Act for the first time the registration of trade marks in relation to "services".

The two trade marks were registered as associated trade marks pursuant to s.36. The Schedule to the Register records the associated marks as including the trade mark "Caterpillar" registered in 1911 in respect of machinery of which the registered proprietor is the respondent.

The facts material to the appeal may be briefly stated. For many years the respondent's Australian subsidiary, Caterpillar of Australia Limited, has distributed throughout Australia a wide range of earth moving and other equipment manufactured by the respondent in the U.S.A. including a range of loaders, some with wheels and other with tracks, bearing the trade mark "Caterpillar".

On 17 July 1980 Cavill Power Products Pty. Limited ("Cavill"), a company incorporated in South Australia, was registered as the registered user of both service marks. Since October 1972 Cavill has been the sole dealer in South Australia and Western New South Wales in "Caterpillar" equipment manufactured in the U.S.A. by the respondent and exported to Australia. The equipment sold by Cavill under the name "Caterpillar" consists of earth moving and construction equipment including loaders, some with wheels and others with tracks. Cavill is the sole dealer authorised by the respondent to service "Caterpillar" machinery and equipment in South Australia.

Since about April 1973 Cavill has hired out "Caterpillar" fork lift trucks to the public, but it does not hire out "Caterpillar" loaders except in a limited number of cases either where one of its customers wishes to purchase a loader but one is not immediately available or where a loader is being repaired or serviced by Cavill for a customer and in either case the customer wishes to use a loader in the meantime.

In 1959 Miljan Anton Willoughby and his wife Barbara Jean Willoughby, the second and third appellants, commenced business in partnership as sand and metal contractors under the name "M.A. & B.J. Willoughby". They acquired and used two trucks for the purpose of carrying on the business. In about 1973 they purchased a second hand "Caterpillar" front-end loader manufactured by the respondent. They hired out the machine with Mr Willoughby as its operator at hourly rates. About twelve months later they bought a second "Caterpillar" front-end loader from Cavill. By then they had disposed of the trucks and thereafter confined their activities to hiring out front-end loaders.

In August 1974 Mr and Mrs Willoughby applied for and were granted registration under the Business Names Act 1963 (S.A.) ("the Business Names Act") of the business name "Caterpillar Loader Hire Service" in respect of the business described as "hire of front-end loaders" to commence on 1 September 1974. They continued to use that business name until October 1976.

In February 1976 the patent attorney acting for the respondent wrote to Mr and Mrs Willoughby complaining of their use of the word "Caterpillar" as part of their business name "Caterpillar Loader Hire Service". Correspondence then ensued between the patent attorney and the solicitors for the respondent on the one hand and the solicitors for Mr and Mrs Willoughby on the other hand. Mr and Mrs Willoughby placed an advertisement in the Adelaide Advertiser published on 15 June 1976 stating that their business was not connected with Caterpillar Tractor Co. of the U.S.A.

On 2 November 1976 Mr and Mrs Willoughby gave notice under the Business Names Act that on 27 October 1976 they had ceased to use the business name "Caterpillar Loader Hire Service". On the same day Mr and Mrs Willoughby caused the first appellant to be incorporated. Upon its incorporation the first appellant took over the business previously carried on by Mr and Mrs Willoughby under the name "Caterpillar Loader Hire Service". In late November 1976 the first appellant was granted registration under the Business Names Act of the business name "Willoughby's Caterpillar Loader Hire Service". Mr and Mrs Willoughby are the only shareholders and directors of the first appellant.

Since its incorporation the first appellant has carried on the business of hiring front-end loaders under the name "Willoughby's Caterpillar Loader Hire Service". The business has continued to be the hiring out at hourly rates of front-end loaders manufactured by the respondent with operators to work them.

In November 1976 the first appellant owned two "Caterpillar" front-end loaders. It acquired three more and by the date of trial (August 1982) it owned five of them. Each machine bears the name "Caterpillar". It owns three vans which are used by operators to provide a "back-up service" for the loaders let out on hire. Until June 1977 the words "Caterpillar Loader Hire" were painted on both sides of each van in large black lettering and beneath those words but in less bold lettering the word "Service" appeared in script design.

The first appellant also used letterheads, invoices and statements on the top of which there were two configurations depicting front-end loaders, and the words "Caterpillar Loader Hire Service". The words "Caterpillar Loader Hire" stood out more prominently than the word "Service". The first appellant arranged for the insertion in the White and Yellow Pages of the Adelaide Telephone Directory of entries under the name "Caterpillar Loader Hire Service". The entry in the Yellow Pages was in the form of an advertisement displaying the words "Caterpillar Loader Hire" in contrast to the word "Service". In June 1977 the word "Willoughby's" was superimposed, in script design, above the words "Caterpillar Loader Hire" on the signwriting on the vans and on the first appellant's stationery.

In about June 1977 Mr Willoughby took steps to change the entries in the telephone directory. Altered entries first appeared in October 1978. The entry in the Yellow Pages appeared as "Willoughby's Caterpillar Loader Hire Service" with prominence still being given to the words "Caterpillar Loader Hire". The shirts and overalls worn by operators of the machines had embroidered on them a monogram bearing the name "Willoughby's Caterpillar Hire Service". There has been no change in the style of the monogram.

In December 1980 the respondent commenced these proceedings in the Supreme Court of South Australia to restrain the appellants from infringing the two registered trade marks "Caterpillar". The learned trial Judge (Walters J.) gave judgment in favour of the respondent and granted injunctions restraining the appellants from infringing the two marks. His Honour granted certain other relief to which I shall refer later. The appellants appealed to this Court from his Honour's judgment.

Before turning to the arguments advanced before us I shall say something about service marks and their place in the Act. This is the first case to my knowledge where service marks have come under the scrutiny of the courts of this country. Some reference to the history of service marks and the purpose they serve is called for as it assists in both understanding and resolving the questions which arise in this case.

Until the Amendment Act Australian Trade Marks Acts limited their recognition of trade marks to marks used or proposed to be used in relation to goods. This limitation still applies in the United Kingdom notwithstanding the recommendation of the Mathys Committee which was established to examine British trade mark law and practice. In its report in 1974 (CMND 5601) the Committee said (para. 70):-
"(i) That provision should be made in the Trade Marks Act for the registration of marks used or proposed to be used for distinguishing services offered in the course of trade or business.

(ii) That the provisions relating to marks for goods in the Trade Marks Act should apply so far as is feasible to marks for services.

(iii) That the prohibition of registration of identical and nearly resembling marks for services should apply in the case of closely related services.

(iv) That there should be provision for the refusal of marks for services which conflict with the same or nearly resembling marks already registered for closely related goods and vice versa."

Extension of the registration of trade marks to include marks used in relation to services has been effected in the trade marks legislation of many countries. The U.S.A. was the first to legislate in this respect by the Lanham Trade Mark Act 1946. By 1970, 43 countries including the U.S.A., Canada, France, Italy, Sweden, USSR, the Phillipines, Taiwan and Korea had amended their trade marks laws to provide statutory protection for service marks.

The twentieth century has witnessed the growth and increasing importance of commercial and industrial services. This has been reflected in the demand by organizations representing industry, trade, commerce and the professions for the extension of trade marks legislation to include the registration of marks used to distinguish services. The services involved are extensive and include insurance, finance, advertising, the construction and repair industry, communications, transport, education, entertainment, hiring and leasing.

Various circumstances combined to delay the introduction of legislation to provide for service marks until the enactment in 1978 of the Amendment Act. Those circumstances were the comparatively recent expression of the need to extend the protection of the Act to service marks, the tendency of Australian trade marks legislation to follow the United Kingdom legislation, the absence of any extension by the United Kingdom Parliament of protection to service marks and the long held view in this country, since dispelled or at least seriously doubted, that the Commonwealth had no power to legislate for registration of service marks based on the judgment of the High Court in Attorney-General for the State of New South Wales v. The Brewery Employees Union of N.S.W. ("Union Label Case") (1908) 6 C.L.R. 469.

Prior to the Amendment Act coming into operation on 1 February 1979 the protection of service marks was left largely to passing off actions, business names and companies legislation, the registration under the Act of trade marks for goods used in the course of supplying a service (for example, the proprietor of a hotel chain registering goods marks in respect of packaged foods, towels and linen, stationery and souvenirs) and the consumer protection provisions of the Trade Practices Act 1974 ("the Trade Practices Act"), in particular ss. 52, 53 and 55A.

The way in which the Act was amended to extend its protection to services was broadly to apply the provisions relating to goods marks so far as feasible to service marks. This has also been the practice in other countries where service marks are registered, notably the U.S.A. and Canada. The principal machinery adopted by the Amendment Act to achieve this purpose was to extend the definition of a "trade mark" in sub-s. 6(1) of the Act to include a mark used in relation to services. Thus the definition of "trade mark" now reads:-
"'trade mark' means -
(a) except in relation to Part XI, a mark used or proposed to be used in relation to goods or services for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the goods or services and a person who has the right, either as proprietor or as registered user, to use the mark, whether with or without an indication of the identity of that person; and

(b) in relation to Part XI, a mark registrable, or registered, in Part C of the Register;"

In this way the provisions as to registration, associated trade marks, infringement, assignment, registered users, certification and defensive marks apply equally to marks used in relation to goods or services.

The Act defines neither "services" nor "goods". In the absence of a statutory definition of "services" in the Act it will fall to the courts to give meaning to the word. Some guidance may be obtained from the Mathys Committee's recommendation (para. 67) that any definition of "services" in the Trade Marks Act 1938 (U.K.) should be broad enough to include the following types of services:-
"(i) consultancy and advisory services which involve no goods;

(ii) similar services which involve goods and can be provided either with or without the promotion, or sale, of goods; and

(iii) services which necessarily involve the use, or sale, of goods."

The definition of "services" in the Trade Practices Act 1974 (sub-s. 4(1)) may also be a useful guide. The breadth of the notion of services is illustrated by the eight classes of services which have been adopted by the Trade Marks Regulations - Statutory Rules 1979 No. 11. That classification corresponds to the classification of "services" used under the Nice Agreement of 1957, as subsequently revised, to which Australia has acceded.

Although service marks are in their infancy in Australia they may give rise to problems of confusion between service marks themselves, and between goods marks on the one hand and service marks on the other, of greater difficulty and subtlety than has previously been experienced in the case of goods marks alone. It is obvious that there is likely to be confusion if substantially the same or deceptively similar trade marks are used by different proprietors, one for goods and the other for services, where the goods and services are closely related. Examples that present practical difficulties are the sale of goods such as data processing equipment and the sale of programs for their operation; the sale of curtains and furnishing materials on the one hand, and the sewing of curtains on the other, as interior decorators often sell curtains and perform the service of sewing; the sale of clothes on the one hand and tailoring on the other because the service of custom tailoring is frequently provided in addition to the sale of ready-made clothes; and the sale of educational material on the one hand and educational services (language courses, home study programs) on the other.

In addition to similarity between goods and services there may be confusion between trade marks used by different proprietors for similar services: for example the business of a real estate agent of selling flats on the one hand and the business of managing flats and bodies corporate on the other.

Confusion is more likely to arise where services protected by service marks necessarily involve the use or sale of goods or where services (for example, consultancy services) involve goods but can be provided either with or without the sale or promotion of goods. Parliament recognised this potentiality for confusion between marks for goods and services where they are closely related to each other by amending various sections of the Act including s. 23 as to non-use of trade marks, s.33 as to prior registration of conflicting marks and s.36 relating to registration of associated trade marks.

The potentiality for confusion between trade marks lies behind the legislative purpose of refusing registration to marks the use of which would be likely to deceive or cause confusion (para. 28(a)). This was the case with marks for goods and now extends to marks for services whether as between themselves or as between marks for goods and services.

Until the "association" provisions of the Trade Marks Act 1905 (U.K.) were introduced one person could not register two marks substantially the same: In the Matter of John Player & Sons' Application for a Trade Mark (1901) 18 R.P.C. 65. The Act does not deny registration to confusingly similar trade marks owned by the one person, but by the "association" provisions (ss. 36 - 39) the Act seeks to ensure that such marks remain in the same ownership. By sub-s. 36(1) the Registrar may at any time require that two trade marks be entered in the Register as "associated trade marks" where the words are substantially identical or so nearly resemble each other as to be likely to deceive or cause confusion and some of the goods or services for which one mark is registered, or is the subject of an application for registration, are of the same description as, or are closely related to goods or services covered by the other mark. In addition the Act deems certain marks to be, and to be registered as, associated trade marks. By s.39 where several marks are registered as a series in the one registration those marks are deemed to be, and to be registered as, associated trade marks.

Part D of the Register is intended to protect marks that have been used for certain goods or services to such an extent that their unauthorised use for different goods or services would be likely to mislead the public. These marks are not adequately protected by registration in Part A or Part B because of the provisions of the Act (s. 23) relating to non-use.

Defensive registration of well known trade marks is procured by s.93 and a trade mark so registered cannot be removed from the Register for non-use (sub-s. 93(2)). Registration in Part D can be achieved only where the same mark is already registered in Part A. By sub-s. 93(4) where a trade mark is registered as a defensive trade mark, it and the mark as otherwise registered in the name of the same person are deemed to be, and to be registered as, associated trade marks.

By s.37 associated trade marks are assignable or transmissible only as a whole and not separately but, subject to the Act, they are for all other purposes deemed to have been registered as separate trade marks. The "association" provisions of the Act are thus intended to prevent deceptively similar trade marks from falling into separate ownership.

Speaking generally, the closer the relationship between particular goods and services the greater is the potentiality for confusion between trade marks for those goods and services. This possibility of confusion is heightened when the trade marks for goods or services are household names such as the word "Caterpillar" is in this case. However, not every use of a mark which is identical or substantially identical with, or deceptively similar to, a registered trade mark infringes the proprietary right which the proprietor of the mark possesses.

Sub-section 58(1) of the Act states that the registered proprietor of a trade mark has the right to the exclusive use of the trade mark in relation to the goods or services in respect of which the trade mark is registered. Sub-section 62(1) provides that a registered trade mark is infringed by a person who, not being the registered proprietor or registered user by way of permitted use, uses a mark which is substantially identical with or deceptively similar to the trade mark in the course of trade, in relation to goods or services in respect of which the trade mark is registered.

It is well established by high authority that it is implied both in sub-ss. 58(1) and 62(1) that the use which is there referred to is limited to the use of a mark as a trade mark. It is sufficient to mention the decisions of the House of Lords in Irving's Yeast-Vite Limited v. Horsenail (1934) 51 R.P.C. 110 and of the High Court in Mark Foy's Limited v. Davies Coop & Co. Limited (1956) 95 C.L.R. 190 and The Shell Co. of Australia Limited v. Esso Standard Oil (Australia) Limited (1963) 109 C.L.R. 407.

In the Yeast-Vite Case, the plaintiffs were the proprietors of the registered trade mark "Yeast Vite" and it was held that this mark was not infringed by the defendant selling in his shop a preparation labelled "Yeast Tablets a substitute for 'Yeast-Vite'" which was not the plaintiff's preparation. It was held by the House of Lords that the use of the expression "YeastVite" on the defendant's preparation was to indicate the plaintiff's preparation and to distinguish the defendant's preparation from it. It was not a use of the expression as a trade mark, that is as indicating the origin of goods in the plaintiff.

The principle that a trade mark is not infringed unless the offending mark is used as a trade mark still stands today, but it must be viewed in the light of the protection which the Act now affords to services. This consideration lies at the heart of the present case.

Once the same trade mark is registered for both goods and services in the name of one proprietor questions of infringement enter a grey area, especially where those goods and services are closely related. This case provides an excellent example. It is easy to say that "Willoughby's Caterpillar Loader Hire Service" means that "Willoughby" conducts the service of hiring out Caterpillar loaders and that, viewed this way, there is no necessary association between the respondent and the hiring service conducted by "Willoughby". But once the Act extends its protection to the same mark in the same ownership for goods and closely related services, as it does here, it is more difficult for the appellants to say that their use of the phrase "Willoughby's Caterpillar Loader Hire Service", which is admittedly use as a trade mark for services and which includes the very mark to which the protection of the Act extends, is otherwise than the use of the word "Caterpillar" as a trade mark.

The appellants conceded that the appellant company used the words "Willoughby's Caterpillar Loader Hire Service" as a trade mark distinctive of the service provided, but asserted that this reference to the word "Caterpillar" in the name is solely to Caterpillar goods and in particular to Caterpillar loaders. It was submitted that the reference to "Caterpillar" does not indicate that the respondent is connected or associated with the hiring services. It is as if the appellant company said -
"This is Willoughby's Hire Service, we hire Caterpillar Loaders".

This was the primary submission of the appellants. When someone sees the words "Willoughby's Caterpillar Loader Hire Service" appearing on the first appellant's vans, stationery and in the Adelaide telephone directory and elsewhere it is strongly arguable that it would convey to him that "Willoughby" conducts a hire service of Caterpillar loaders and that the reference to "Caterpillar" does not suggest that the respondent is the origin of or connected with the hiring service.

Notwithstanding the force of the appellants' submission I have come to the conclusion that the use of the mark "Caterpillar" in the context of "Willoughby's Caterpillar Loader Hire Service" is a use denoting that such services originate from the respondent or that the respondent has some connection with them. The appellant company is saying that the trade source or origin of its hiring services is linked or associated with the respondent. The phrase "Willoughby's Caterpillar Loader Hire Service" carries in my opinion the implication of use of the mark "Caterpillar" as indicating both that the goods being hired are Caterpillar loaders and that the hiring services have some link or association with the respondent. This is the essential question on which the appeal turns.

The submission of the appellants, if accepted, would lead to the conclusion that registered service marks would be of little, if any, practical benefit to their proprietors where the services protected by the marks necessarily involve the use or sale of goods to which the services are closely related and the goods are protected by the same or a substantially identical mark.

I reject this first submission of the appellants.

Some time was devoted in argument to the question whether any infringement of the appellants arose from s.58 or s.62 of the Act. The scope of the equivalent sections in the Trade Marks Act 1905 (ss. 50 and 53) was considered by the High Court in Mark Foy's Limited v. Davies Coop & Co. Limited (supra). Dixon C.J. and Williams J. held that s.53 was an appendage to s.50, its function being to widen the definition of "infringement" so as to include cases where the mark used was not the registered trade mark itself but one substantially identical with it or so nearly resembling it as to be likely to deceive. Kitto J. expressed no opinion on that question.

In Angoves Pty. Limited v. Johnson (1982) 43 A.L.R. 349, a decision of a Full Court of this Court (Franki, Deane and Fitzgerald JJ.), different views were expressed on this question. Franki J. said in effect (at pp. 351-2) that s.58 may be infringed by the use of the actual mark itself even if accompanied by other words. Fitzgerald J. said (at p. 371) that sub-s. 58(1) "is confined to the use of the exact registered mark, without addition or alteration." Deane J. did not expressly decide this question, but his remarks suggest that he favoured the view of Fitzgerald J.

I do not find it necessary to consider this question because, once the primary submission of the appellants is answered against them, in my opinion the respondent's trade marks, on the facts of this case, have been infringed whether under sub-s. 58(1) or sub-s. 62(1). If Franki J's view in Angoves Case is applied, plainly the respondent's trade marks have been infringed under sub-s. 58(1). If Fitzgerald J's view is applied then sub-s. 58(1) has not been infringed and it is then necessary to turn to sub-s. 62(1). It seems plain that if that latter sub-section applies the appellant company's mark "Willoughby's Caterpillar Loader Hire Service" is substantially identical with or deceptively similar to the registered trade marks of the respondent, given that the primary submission of the appellants is rejected. In other words, once it is accepted that the mark "Willoughby's Caterpillar Loader Hire Service" denotes the origin of the services as being linked with the respondent, the conclusion is plain that the appellant company's mark is substantially identical with or deceptively similar to the registered service marks of the respondent. Counsel for the appellants did not really contend to the contrary.

Counsel for the appellants conducted the appeal on the footing that if the primary submission was rejected the appeal then turned on whether para. 64(1)(b) applied to prevent any infringement of the respondent's marks. That paragraph provides:-
"64.(1) Notwithstanding anything contained in this Act, the following acts do not constitute an infringement of a trade mark:

. . . .

(b) the use in good faith by a person of a description of the character or quality of his goods or services."

Paragraph 64(1)(b) proceeds on the assumption that the monopoly conferred upon the registered proprietor of a trade mark does not prevent other people from using in good faith a word which describes the character or quality of their goods or services.

Lord Herschell said in Eastman Photographic Materials Company Limited v. Comptroller-General of Patents, Designs and Trade Marks (1898) A.C. 571 (at p.580):-
". . . it would obviously have been out of the question to permit a person by registering a trade-mark in respect of a particular class of goods to obtain a monopoly of the use of a word having reference to the character or quality of those goods. The vocabulary of the English language is common property: it belongs alike to all; and no one ought to be permitted to prevent the other members of the community from using for purposes of description a word which has reference to the character or quality of goods."

This passage was cited with approval by McTiernan J. in F.H. Faulding & Co. Limited v. Imperial Chemical Industries of Australia and New Zealand Limited (1965) 112 C.L.R. 537. His Honour said (at p. 543) that, although the observations of Lord Herschell were made with respect to a provision corresponding to para. 24(1)(d) of the present Australian Act, they were nevertheless "apposite to the policy inspiring a provision of the nature of s.64(1)(b)". His Honour went on to say -
"What this provision protects is the use of a mark that is genuinely descriptive of the character or quality of goods in connexion with which it is used, where the use is purely for the purposes of description. 'The object of this section (s.53A) is not to afford a guide as to whether a word is adapted to distinguish the goods of the proprietor of the trade mark from those of other persons. It is intended only to protect traders in the bona fide use of a word which has been registered and must be treated as adapted to distinguish such goods': Eclipse Sleep Products Inc. v. The Registrar of Trade Marks (1957) 99 C.L.R. 300. at p.323.
The reference to s.53A was to that section as it appeared in the Trade Marks Act 1905.

The question whether a word describes the character or quality of a person's goods or services has been considered by courts in various cases. One obtains little guidance as to the meaning of the words "character" or "quality" where used in reference to goods or services, but the circumstances in which those words have been considered give some guidance to their application in the present case. I will mention some of them, but it must be remembered that they are cases concerned with the registration of marks. The word "ribbon", in relation to a dentifrice, was held to refer to a character or quality of dental cream in that it described the manner in which the dental cream would come out of the tube and lie on the brush, in the shape of a ribbon: In the Matter of an Application by Colgate & Co. for the Registration of a Trade Mark (1913) 30 R.P.C. 262. The noun "charm" in respect of hosiery, being wearing apparel, was held to have the same significance as the adjective "charming" and to describe in a laudatory sense the character or quality of the goods: In the Matter of a Trade Mark of Keystone Knitting Mills Ltd. (1928) 45 R.P.C. 421. The noun "perfection" was held to have the same meaning as the adjective "perfect" and as such to describe the character or quality of any goods: In the Matter of an Application by Joseph Crosfield & Sons Ltd. to Register a Trade Mark ("Perfection") (1909) 26 R.P.C. 837.

In this case I cannot see how the use by the appellant company of the word "Caterpillar" in the larger phrase "Willoughby's Caterpillar Loader Hire Service" is a description of the character or quality of the hiring services offered by it. In my opinion it says nothing whatever as to the character or quality of those services.

It is therefore unnecessary to express any view as to whether the use by the appellant company of the word "Caterpillar" in the phrase "Willoughby's Caterpillar Loader Hire Service" was a use in good faith or not.

The Orders made by the trial Judge included the following:-

1. That the defendants and each of them and the directors servants and agents of any of them be restrained and an injunction is hereby granted restraining them and every of them

(a) from infringing the trade mark "Caterpillar" registered in the plaintiff's name under the Trade Marks Act 1955 in Part A of the Register of Trade Marks as No. 327469 in relation inter alia to rental and leasing services in respect of machinery and equipment (being services included in Class 36) and the trade mark "Caterpillar" registered in the plaintiff's name under the Trade Marks Act 1955 in Part A of the Register of Trade Marks as No. 327470 in relation inter alia to rental and leasing services in respect of machinery and equipment including the hire of bulldozers and other earth moving machines (being services included in Class 37);

(b) from carrying on business under the business name of "Willoughby's Caterpillar Loader Hire Service", or under any name including the word "Caterpillar" calculated to induce the belief that the business of the defendants is connected or associated or has any link with the plaintiff's business relating to the rental leasing and hiring out of machinery and equipment including earthmoving machines.

2. That on or before the 30th day of November 1982 the defendants do remove or obliterate or cause to be removed or obliterated the word "Caterpillar"

(a) from the motor vehicles used by the defendants in the conduct of the business hitherto carried on by them under the name "Willoughby's Caterpillar Loader Hire Service";

(b) from all letterheads invoices statements stationery and other papers or documents hitherto used by the defendants in the conduct of the said business to the extent to which the said word "Caterpillar" is incorporated in the business name "Willoughby's Caterpillar Loader Hire Service" or in any other business name of the defendants.

3. That on or before the 30th day of November 1982 the defendants do take such steps as may be necessary to remove the word "Caterpillar" from the entry and advertisement respectively appearing in the "White Pages" and the "Yellow Pages" of the Adelaide Telephone Directory and in the Home and Business Directory published by Springfields & Associates for 1982-1983 to the extent to which the said word "Caterpillar" is incorporated in the business name "Willoughby's Caterpillar Loader Hire Service" or in any other business name of the defendants.

4. That on or before 30th day of November 1980 the defendants do take such steps as may be necessary to obtain the necessary consents of the Commissioner for Corporate Affairs to the change of the corporate name of the defendant company and to the change of registration of the business name "Willoughby's Caterpillar Loader Hire Service" in order to remove the word "Caterpillar" from each of such corporate name and business name.

5. That the plaintiff be at liberty to apply in Chambers on two days' notice to the defendants for the purpose of enforcing the injunction and orders hereinbefore appearing.

6. That the defendants or any of them may be at liberty to apply in Chambers on two days' notice to the plaintiff for a stay of proceedings upon this judgment and order."

We were informed by counsel for all parties that orders 2, 3 and 4 were stayed by the trial Judge upon the application of the appellants pending the determination of this appeal.

In my opinion the respondent's rights are sufficiently protected if relief is confined to Order 1(a). Counsel for the respondent informed us that the respondent was content with this course.

I would dismiss the appeal with costs. I agree in the Orders proposed by Franki J.

JUDGE3

Prior to the amendments made to the Trade Marks Act 1955 by the Trade Marks Amendment Act 1978, the expression "trade mark" was relevantly defined to mean a mark used or proposed to be used in relation to goods for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the goods and a person who had the right, either as proprietor or as registered user, to use the mark, whether with or without an indication of the identity of that person (sub-section 6(1)). The purpose of the Trade Marks Amendment Act 1978 was to broaden the business and commercial activities in relation to which trade marks might qualify for statutory protection. That Act extended the scope of protection provided by the then existing legislation by permitting the registration of marks used or proposed to be used in the course of trade to identify and distinguish the services supplied by a particular business. The general approach was to apply the provisions of the trade marks legislation to marks used or proposed to be used for distinguishing services offered in the course of trade or business and to achieve this result by replacing the words "goods" by the words "goods or services" wherever appropriate throughout the Act. There is no definition of the word "services" but some guidance as to the scope of that expression may be found in the Report of the Committee to Examine British Trade Mark Law and Practice (the Mathys Committee) made in 1974 (Cmnd. 5601). According to that report (para. 67) the services concerned may be divided broadly into three categories:-

"(i) consultancy and advisory services which involve no goods;

(ii) similar services which involve goods and can be provided either with or without the promotion, or sale, of goods;

(iii) services which necessarily involve the use, or sale, of goods."

The Mathys Committee recognised that there could be conflict in the use of the same mark by different businesses, one for goods and the other for services.
Paragraph 68 of the report reads:-
"The grouping of services in the International Classification of Goods and Services brings together under separate classes the services which are likely to be regarded in trade or business as closely related and so there is an indication of the areas where the use of the same mark by different businesses for services might lead to conflict. There is no such indication of where the use of the same mark by different businesses, one for services and the other for goods, might lead to conflict. We have no doubt, however, that in many cases conflict would arise and that marks used to distinguish one should not be registered by a different business to distinguish the other where deception or confusion would be likely to result. We therefore believe that the principles of section 12(1) of the Trade Marks Act 1938 prohibiting the registration of identical and resembling trade marks, as also the principles of section 12(2) as regards concurrent user, and of section 12(3) as regards the position of co-pending applications, should be applicable in cases of conflict between marks for services and for closely related goods. We also think that the principles as regards the association of marks under section 23 should apply."

Similar considerations may be taken to have influenced the Commonwealth Parliament in the amendments made by the Trade Marks Amendment Act 1978 to sections 23, 33 and 36 of the Trade Marks Act 1955. Section 23 contains provisions relating to the non-use of a trade mark, section 33 to substantially identical or deceptively similar trade marks and section 36 to associated trade marks.

The amendments made by the Act of 1978 were proclaimed to come into operation on 1 February 1979. On that date amendments to the Trade Marks Regulations also came into operation. Those amendments included the specification, as prescribed classes of services for the purposes of sub-section 31(1) of the Act, of the services described in the Fourth Schedule to the Regulations as classes 35 to 42 inclusive. The classes so specified reflect the provisions of the International Classification of Goods and Services issued under the Nice Agreement Concerning the International Classification of Goods and Services for the Purpose of the Registration of Marks of 15 June 1957, as revised at Stockholm on 14 July 1967 and at Geneva on 13 May 1977. Of those classes of services, classes 36 and 37 are of relevance to these proceedings. Class 36 is "Insurance and financial services" and Class 37 "Construction and repair services".

On 1 February 1979 the respondent made two applications under the amended provisions for registration in Part A of the Register of Trade Marks as the proprietor of the word "Caterpillar" in respect of services claimed to fall within classes 36 and 37 respectively. Registration was granted on 23 June 1980. The first of the marks is numbered A327469. The certificate of registration certifies that it is registered "in respect of Rental and leasing services in this class in respect of machinery and equipment, financing, financial services, financial securities, financial transactions, insurance, insurance agents, insurance brokers, insurers, investment, investment trusts, hire purchase, financing of hire purchase, agents and brokers for agricultural credit, agents and brokers for credit from farming development, financing of credits for wholesale dealers, arranging for time payment for goods, capital investment, arranging credit, credit recovery agents, advice and enquiries regarding credit, depositing of securities and of stocks and shares, farming surveys, financial guarantees, monetary transactions and associated insurance and financial services, being services included in Class No. 36". The second of the marks is numbered A327470 and is registered "in respect of Rental and leasing services in this class in respect of machinery and equipment including the hire of bulldozers and other earthmoving machines, construction and repair services, including maintenance and repair of earth moving and other machinery, maintenance work, care and repair of goods, engineering construction being services included in Class No. 37". The registration of both marks is for a period of seven years from 1 February 1979.

So far as relevant, sub-section 36(1A) of the Trades Marks Act 1955 provides for the association of trade marks where a trade mark which is the subject of an application for registration in respect of services is substantially identical with another trade mark which is registered in the name of the same proprietor in respect of goods that are closely related to those services or so nearly resembles such a trade mark as to be likely to deceive or cause confusion if used by a person other than the proprietor. The Registrar of Trade Marks required that each of the trade marks applied for by the respondent in respect of services be entered in the Register as an associated trade mark with trade marks A10993, A224505, A226464 and A318731.

Trade mark numbered A10993 is registered in the name of the respondent in Part A of the Register of Trade Marks "in respect of machinery; agricultural and horticultural machinery, and parts of such machinery, included in Class No. 7" The registration of that mark took effect from 13 April 1911 in respect of machinery and from 17 November 1911 in respect of agricultural and horticultural machinery, and parts of such machinery. Trade mark numbered A224505 is registered in the name of the respondent in Part A of the Register "in respect of vehicles and parts thereof and accessories therefor and all other goods included in Class 12". Certificates of registration in respect of the other associated marks are not before the Court but it appears that trade mark numbered A226464 is registered in respect of "Games and playthings: toys including replicas of motor vehicles, earth moving equipment and the like" within Class 12.

No question arises in these proceedings as to the validity of the registration of trade marks numbered A327469 and A327470. No argument was addressed to the Supreme Court of South Australia or to this Court concerning the extent of the services for which protection is given to the respondent by such registration but it must be said that the melange of expressions used, particularly in the certificate of registration for trade mark numbered A327469, does not facilitate clarity of understanding. The matter proceeded on the basis that the appellant company, in carrying on its business, is providing services of such a kind that the respondent has in relation to them the exclusive right to the use of the word "Caterpillar".

The appellant company was incorporated in South Australia on 2 November 1976. The individual appellants are its sole shareholders and directors. The appellant company has at all material times carried on the business of hiring out at hourly rates earthmoving equipment of a particular kind described as front end loaders, being rubber tyred tractor type vehicles of various capacities or sizes fitted with different types of buckets. The appellant company's business consists almost exclusively of hiring out those vehicles with an operator employed by the company. The evidence also establishes that a small part of the appellant company's business consists in direct contracting for the excavation and removal of sand or spoil using for this purpose the front end loaders which it owns and trucks which it hires for the purpose. The evidence further establishes that the only front end loaders which the appellant company uses in its business are front end loaders of the respondent's manufacture and which bear the respondent's trade mark "Caterpillar".

It appears that the appellant company was incorporated to take over a business of similar character then carried on by the individual appellants in partnership. That business had commenced in 1959 as a metal contracting business under the business name M.A. & B.J. Willoughby. The business changed its character so that by late 1974 its only activity consisted in hiring out front end loaders, those loaders being in fact of the respondent's manufacture. On 10 August 1974 the individual appellants applied for and were granted, registration under the Business Names Act, 1963 of the State of South Australia of the business name "Caterpillar Loader Hire Service", the nature of the business being described as "Hire of front end loaders". On 27 October 1976 the individual appellants gave notice under the Business Names Act, 1963 that on that date business ceased to be carried on in South Australia under the business name "Caterpillar Loader Hire Service".

Commencing in February 1976 correspondence passed between the patent attorneys for the respondent and the individual appellants or their solicitors concerning a complaint by the respondent that the use by the individual appellants of the business name "Caterpillar Loader Hire Service" would be likely to lead to confusion.

In April 1976 the individual appellants took steps to register under the Business Names Act, 1963 the business name "Willoughby's Earthmoving Hire Service" but business was not carried on under that name and the registration was not renewed when it lapsed in April 1979.

Following further correspondence between the solicitors for the respondent and the solicitors for the individual appellants, the latter arranged for an advertisement to be inserted in "The Advertiser" newspaper on 15 June 1976 to the effect that neither the individual appellants nor the business "Caterpillar Loader Hire Service" was in any way connected with the respondent.

I have already referred to the notice given under the Business Names Act, 1963 to the effect that business ceased to be carried on in South Australia by the individual appellants under the business name "Caterpillar Loader Hire Service" on 27 October 1976 and to the incorporation of the appellant company, Caterpillar Loader Hire (Holdings) Pty. Limited, on 2 November 1976. During November 1976 that company applied for, and was registered as the proprietor of a business name "Willoughby's Caterpillar Loader Hire Service", the nature of the business being described as "Hiring of Caterpillar Loaders". Shortly thereafter, on 14 December 1976 another company M.A. & B.J. Willoughby Pty. Limited was incorporated on the application of the individual appellants. The sole shareholders and directors of that company were the individual appellants and they each held their shares in trust for the appellant company. The company M.A. & B.J. Willoughby Pty. Limited, so far as appears from the evidence, has not carried on business.

In June, 1977, following the institution of a suit by the respondent in the Supreme Court of South Australia, a suit which did not proceed, changes were made to the letterheads, invoices and statements used by the appellant company in its business by adding the word "Willoughby's" before the words "Caterpillar Loader Hire Service" which, together with the street and postal addresses, telephone number and pictorial representations of the types of machine used in the business, had appeared on the letterheads, invoices and statements previously in use. The signwriting on the vans used in the appellant company's business was also altered by having the additional word "Willoughby's" painted on.

The appellant company continued to carry on its business of hiring front end loaders of "Caterpillar" manufacture without, so far as appears, further complaint from the respondent until almost six months after the respondent had been successful in obtaining registration of trade marks numbered A327469 and A327470 in respect of the services to which I have already referred. On 5 December 1980 the solicitors for the respondent gave notice before action to the solicitors for the appellants. Some two weeks later proceedings were commenced in the Supreme Court of South Australia seeking an injunction restraining the appellants from infringing the two trade marks referred to and for consequential relief. The respondent relied on the continued use by the appellants of the business name "Willoughby's Caterpillar Loader Hire Service" and the name "Caterpillar Loader Hire (Holdings) Pty. Limited" in the business of hiring loaders and servicing the same.

The respondent sought interlocutory relief but this was refused by the Supreme Court of South Australia and by this Court; Caterpillar Tractor Co. v. Caterpillar Loader Hire (Holdings) Pty. Ltd. and Others, (1981) 28 S.A.S.R. 307; (1981) 38 A.L.R. 394. At the trial, however, the Supreme Court granted an injunction restraining the appellants:-

(a) from infringing the trade mark "Caterpillar" registered in relation to, inter alia, rental and leasing services in respect of machinery and equipment (being services included in Class 36) and in relation to, inter alia, rental and leasing services in respect of machinery and equipment including the hire of bulldozers and other earth moving machines being services included in Class 37); and

(b) from carrying on business under the business name of "Willoughby's Caterpillar Loader Hire Service" or under any name including the word "Caterpillar" calculated to induce the belief that the business of the defendants (appellants) is connected or associated or has any link with the plaintiff's (respondent's) business relating to the rental leasing and hiring out of machinery and equipment including earthmoving machines.

The Supreme Court also made certain consequential orders.

From the decision of the Supreme Court the appellants have appealed to this Court.

It is common ground that the appellant company has used, and continues to use, the words "Willoughby's Caterpillar Loader Hire Service" as a trade mark to distinguish the services it provides from those of others in a similar line of business. The appellants concede that the word "Caterpillar" is used as an integral and important feature of the mark used by the appellant company but contend that that word in the composite expression is not used in a relevant sense to designate the origin of the services provided but is used merely to describe the origin of the front-end loaders which it uses in its business, it having no other such vehicles for hire than those manufactured by the respondent and which bear the trade mark "Caterpillar" registered by the respondent in Class 7 in respect of such earth-moving machines. It follows, so the argument runs, that there is no infringement by the appellants of the respondent's service trade marks either under section 58 or section 62 of the Act.

Sub-section 58(1) of the Trade Marks Act 1955 defines the right of property which the proprietor of a trade mark possesses by virtue of its registration in Part A or Part B of the Register. That right is defined as the right to the exclusive use of the trade mark in relation to the goods or services in respect of which the trade mark is registered. Sub-section 62(1) adds that a registered trade mark is infringed by a person who, not being the registered proprietor or a registered user using by way of permitted use, uses in the course of trade, in relation to goods or services in respect of which the trade mark is registered, a mark which is substantially identical with or deceptively similar to the registered trade mark. A mark will be treated as being deceptively similar to a registered trade mark if it so nearly resembles that trade mark as to be likely to deceive or cause confusion.

Sub-section 58(1) will entitle a plaintiff to relief against infringement of his registered trade mark in certain circumstances: see Mark Foy's Ltd. v. Davies Coop & Co. Ltd. (1956) 95 C.L.R. 190 at pp. 202, 204; The Shell Co. of Australia Ltd. v. Esso Standard Oil (Australia) Ltd. (1963) 109 C.L.R. 407 at pp. 414, 422-3. Subject to the alleged infringer bringing himself within the protection of section 64, relief will be available under sub-section 58(1) where the alleged infringer has used as a trade mark the exact words of the registered trade mark without any addition or variation. Differing views have, however, been expressed whether sub-section 58(1) applies when what the alleged infringer has done is use as a trade mark the exact words of the registered trade mark with some addition thereto: see Angoves Pty. Ltd. v. Johnson, (1981) 28 S.A.S.R. 66 at pp. 70-72; (1982) 43 A.L.R. 349 at pp. 351-2, 361-2, 367-371. On the view which I take it is unnecessary to consider further these differing views.

We have in this case to decide between two contentions. On the one side it is submitted by counsel for the respondent that the use of the term "Caterpillar" in the business name used by the appellant company as a trade mark is a use indicating to a person dealing with the appellant company that the respondent is connected in a relevant trade sense with the services provided; and on the other it is submitted by counsel for the appellants that the word "Caterpillar" would indicate to a person dealing with the company no more than that the vehicles which are hired out are vehicles of the respondent's manufacture.

In considering these contentions, it is of some importance, I think, to examine the make up of the business name which the appellant company has been using as a trade mark for the services it provides. Visually the most prominent feature of the mark is the word "Caterpillar" itself. It forms the whole of the centre line of the mark and appears in capital letters the width of each letter (with the exception of the letter "I") being the same as its height. There is to my mind, a very striking similarity between the way in which the word "Caterpillar" appears in the appellant company's mark and the way in which the respondent reproduces the word "Caterpillar" when physically applying it to the goods of its manufacture or in advertisements. In the appellant company's mark the word "Willoughby's" appears in cursive script and, although it contains the same number of letters as the word "Caterpillar", it occupies but half the space of the latter word. The words "Loader Hire" appear in capital letters and although their height is greater than that of the letters in "Caterpillar", their width is no greater. The word "Service" appears in cursive script of larger dimensions than that used for the word "Willoughby's". This format is consistently used by the appellant company on its vans, its invoices, statements and other stationery and in advertisements.

The appellants relied strongly on the decision of the House of Lords in Irving's Yeast Vite Ltd. v. Horsenail (1934) 51 R.P.C. 110 but the phrase which was the subject of discussion in that case "Yeast Tablets a substitute for 'Yeast-Vite'" was clearly not used as a trade mark. The words "Yeast Tablets" were simply descriptive of what was being sold - they did not constitute and were not claimed to constitute a mark or part of a mark distinctive of the defendant's goods and, as the House of Lords held, the expression "Yeast-Vite" was not used as in any way to designate the defendant's goods - to the contrary it was used to distinguish the defendant's goods from those of the owner of the registered trade mark.

The appellants have by their conduct indicated a clear intention that the word "Caterpillar" should have a prominent place in the name of the company providing the services, in the business name under which it trades, on its stationery and invoices, and in all advertising matter promoting that business. One may ask why the appellants should have such a fixed determination to continue to use the word "Caterpillar" in such a prominent way. To my mind it is oversimplifying the matter to say, as the appellants do, that the conduct complained of is designed solely for the purpose of bringing to the notice of those dealing with the appellant company that the vehicles which may be hired from the appellant company are of the respondent's manufacture. In my opinion the use of the word "Caterpillar" by the appellants is for the purpose, and has the effect, of conveying to persons dealing with the appellant company that the services provided have a connexion with the respondent as the registered proprietor of the trade mark.

The appellants contend that the use of the mark is no more an infringement of the respondent's rights than would be the case if the business name were "Willoughby's Loader Hire Service" and immediately under that in any statement, invoice or letterhead or in any advertisement the words appeared "Caterpillar loaders available". I am unable to agree. It seems to me there is a vast difference between this approach and what the appellant company has done. In the approach above suggested the word "Caterpillar" would clearly not be used in a trade mark sense as indicating a connexion between the services being provided and the registered proprietor of the mark "Caterpillar". The vice in the conduct of the appellant company is that the mark used indicates some such connexion as is sufficient to amount to an infringement of the service marks registered in the name of the respondent.

For these reasons I am of the opinion that infringement has taken place either under section 58 or section 62 of the Act. For this infringement the respondent is entitled to appropriate relief unless the appellants can bring themselves within the protection of section 64 of the Act.

So far as relevant for present purposes section 64 provides that, notwithstanding anything contained in the Act, the use in good faith by a person of a description of the character or quality of his services does not constitute an infringement of a trade mark.

In my opinion the appellants have not shown that the use of the word "Caterpillar" is protected by that provision. The word "Caterpillar", although it has become very well known as a particular make of earth-moving equipment, is not, in itself, descriptive of any class of goods. In this context it is an adjectival not a substantive word. One must add something to it in order to describe a particular vehicle or class of vehicle let alone the services which are provided by the use of such a vehicle. In so far as the word "Caterpillar" has come to be descriptive, it is descriptive of the particular mode of traction - vehicles which are sometimes described as crawler-track type vehicles - but this is not the kind of equipment that the appellant company uses in its business.

I would, therefore, dismiss the appeal. I agree in the orders proposed.