Crazy Ron's Communications Pty Ltd v Mobileworld Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Crazy Ron’s Communications Pty Limited v Mobileworld Communications Pty Limited [2004] FCAFC 196

INTELLECTUAL PROPERTY – Trade Marks – deceptive similarity– whether aural use of ‘Crazy Ron’ infringed a registered composite trade mark which included the words ‘Crazy John’ – whether ‘Crazy John’ an essential feature of the registered mark

INTELLECTUAL PROPERTY – Trade Marks – registration – amendment of particulars of application –whether s 65(5) of the Trade Marks Act 1995 (Cth) authorises amendment of an application which names the wrong person as the owner

Trade Marks Act 1995 (Cth) ss 6, 7, 10, 17, 20, 27, 29, 30, 58, 59, 62, 65, 72, 88, 106, 107, 108, 109, 110, 111, 120, 125, 126, 126, 212, 214, 216, 217
Trade Marks Act 1955 (Cth) s 28
Trade Practices Act 1974 (Cth) ss 80, 87

Trade Mark Regulations 1995 (Cth)

Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407 cited
CA Henschke & Co v Rosemount Estates Pty Ltd (2000) 52 IPR 42 discussed
Jafferjee v Scarlett (1937) 57 CLR 115 cited
Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641 followed
Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 cited
Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 cited
Aristoc Ltd v Rysta Ltd [1945] AC 68 cited
Rysta Ltd’s Application (1943) 60 RPC 87 cited
Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353 cited
Berlei (UK) Ltd v Bali Brassiere Co Inc [1969] 2 All ER 813 cited
Saville Perfumery Ltd v June Perfect Ltd (1941) 58 RPC 147 discussed
de Cordova v Vick Chemical Co (1951) 68 RPC 103 cited
Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227 cited
New South Wales Dairy Corporation v Murray Goulburn Co-operative Co Ltd (1989) 86 ALR 549 cited
Aldi Stores Ltd Partnership v Frito-Lay Trading Company GmbH (2001) 190 ALR 185 cited
Aktiebolaget Hassle v Alphapharm Pty Ltd (2002) 212 CLR 411 cited
Murray Goulburn Co-operative Co Ltd v New South Wales Dairy Corporation (1990) 24 FCR 370 cited
Eagle Homes Pty Ltd v Austec Homes Pty Ltd (1997) 87 FCR 415 cited
Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 cited

Shanahan’s Australian Law of Trade Marks and Passing Off (3rd ed 2003)

CRAZY RON’S COMMUNICATIONS PTY LIMITED & ORS v MOBILEWORLD COMMUNICATIONS PTY LIMITED & ORS
V 1167 of 2003

MOORE, SACKVILLE and EMMETT JJ
SYDNEY (HEARD IN MELBOURNE)
6 AUGUST 2004


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V 1167 of 2003

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

CRAZY RON'S COMMUNICATIONS PTY LTD
FIRST APPELLANT

BHL GROUP PTY LIMITED
SECOND APPELLANT

CRAZY RON'S NETWORK PTY LIMITED
THIRD APPELLANT

CRAZY RON'S COMMUNICATIONS AUSTRALIA PTY LIMITED
FOURTH APPELLANT

Q & Q GLOBAL ENTERPRISE PTY LIMITED
FIFTH APPELLANT

C R COMMUNICATIONS PTY LIMITED
SIXTH…

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Details
Case
[2004] FCAFC 196
Decision Date

CaseChat Overview and Summary

In Crazy Ron's Communications Pty Ltd v Mobileworld Pty Ltd, the dispute centered around the registration and infringement of a trade mark. The appellants, Crazy Ron's Communications, contested the registration of a mark ("1999 Mark") applied for by Mobileworld Communications (Aust) Pty Ltd (MW Aust), which was purportedly owned by Crazy John Pty Ltd (CJP). The respondents argued that the appellants' use of the term "Crazy Ron's" was an infringement of an earlier registered mark ("1995 Mark") owned by CJP. The Full Court of the Federal Court of Australia was tasked with determining the validity of the 1999 Mark's registration and whether there was an infringement of the 1995 Mark by the appellants.

The primary legal issues revolved around whether the appellants had properly challenged the registration of the 1999 Mark under the Trade Marks Act 1995 (Cth) and if the use of "Crazy Ron's" constituted an infringement of the 1995 Mark. The Court had to consider whether the words "CRAZY JOHN" were an essential element of the 1995 Mark and whether the appellants' use of "Crazy Ron's" was likely to cause confusion among consumers. Furthermore, the Court had to determine the appropriate remedy if the 1999 Mark's registration was found to be invalid.

The Full Court found that the primary judge had erred in his assessment of the essential elements of the 1995 Mark and the validity of the 1999 Mark's registration. The Court held that the primary judge had incorrectly determined that the words "CRAZY JOHN" constituted an essential element of the 1995 Mark. Additionally, the Court found that MW Aust, not CJP, had applied for the registration of the 1999 Mark due to an administrative error. The Court concluded that the 1999 Mark's registration should be cancelled as it was not validly applied for by the true owner, CJP.

As a result, the appeal was allowed, and the registration of the 1999 Mark was cancelled. The Court set aside the primary judge's orders regarding the cross-claim and infringement and ordered that the appellants pay 70% of the respondents' costs of the proceeding at first instance, including the cross-claim. The respondents were ordered to pay the appellants' costs of the appeal.

Orders

Orders of the court

1. The appeal be allowed.

2. Order 1 made by the primary Judge on 4 December 2003 dismissing the cross claim be set aside.

3. In lieu of the order referred to in the previous paragraph, an order be made pursuant to s 88(1) of the TM Act rectifying the Register of Trade Marks by cancelling the registration of Trade Mark No 803950 in classes 35 and 38.

4. Order 1 made by the primary Judge on 23 December 2003, dealing with infringement of the Marks, be set aside.

5. Order 4 made by the primary Judge on 4 December 2003, and Order 8 made by the primary Judge on 23 December 2003, relating to costs, be set aside.

6. In lieu of the orders referred to in the previous paragraph, the appellants pay 70 per cent of the respondents’ costs of the proceeding at first instance, including the cross claim.

7. The respondents pay the appellants’ costs of the appeal.

Background

Background to the litigation

The Court in Henschke v Rosemount also considered the decision of another Full Court in Registrar of Trade Marks v Woolworths Ltd. In Registrar v Woolworths, the majority (French and Tamberlin JJ) concluded that the word ‘Woolworths’ was so well known that it was the element of the allegedly infringing mark (‘WOOLWORTHS Metro’) most likely to be recalled. The Court in Henschke v Rosemount thought that Registrar v Woolworths stood for this proposition (at 66 [52]):‘in assessing the nature of a consumer’s imperfect recollection of a mark, the fact that the mark, or perhaps an important element of it, is notoriously so ubiquitous and of such long standing that consumers generally must be taken to be familiar with it and with its use in relation to particular goods or services is a relevant consideration.’Any wider proposition was inconsistent with established authority. See, too, Aldi Stores Ltd Partnership v Frito-Lay Trading Company GmbH (2001) 190 ALR 185, at 217 [155], per Lindgren J.The Facts Determining whether the appellants infringed the 1995 Mark by the use of the expression ‘Crazy Ron’s’ raises what are essentially factual questions. The authorities, although they articulate the principles governing deceptive similarity, cannot resolve the factual issues. The threshold factual question in the present case is whether, as the respondents argued, the primary Judge erred in finding that the words ‘CRAZY JOHN’ constituted an essential element of the 1995 Mark for the purposes of undertaking the comparison implicitly required by s 120(1) of the TM Act. As the earlier discussion of the authorities shows, the concept of an ‘essential feature’ of a registered trade mark is well-established, notwithstanding that the statutory language does not explicitly incorporate such a concept. Neither party suggested that the case should be decided without reference to the ‘essential feature’ of the 1995 Mark. It is, however, worth noting that the Court’s duty is ultimately to the statutory language rather than to the complexities brought forth by many years of decisional authority: cf Aktiebolaget Hassle v Alphapharm Pty Ltd (2002) 212 CLR 411, at 446 [87], per McHugh J (dissenting); at 449 [99], per Kirby J (dissenting). While recognising that decisions in other cases cannot resolve the threshold factual question in this case, it is perhaps suggestive that decisions relying on an ‘essential feature’ of a registered mark generally appear to involve much less elaborate marks than the 1995 Mark. At all events, they have tended to involve trade marks in which the words said to constitute an essential feature of the mark occupy a much more prominent place than the words ‘CRAZY JOHN’ in the 1995 Mark. Saville and de Cordova provide examples. It is important to appreciate that the primary Judge found that the words ‘CRAZY JOHN’ formed an essential feature of the 1995 Mark on the basis of an inspection of the Mark itself. His Honour made the finding because of the prominence of the words and their reinforcement by the ‘deranged look’ of the man sitting astride the globe. His Honour placed no reliance on any particular usage or understanding of the words ‘Crazy John’ among consumers and traders in the mobile telephone market. The respondents did not suggest on the appeal that there was evidence of any such usage that should have been taken into account. Nor did they argue that the words ‘Crazy John’ were so well-known that consumers generally should be taken to have become familiar with them in relation to mobile telephones.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

As we have noted, the third challenge rested on two distinct grounds. Although we were told that both arguments were put to the primary Judge, there was some doubt as to whether the cross-claim encompassed the construction question. We granted the appellants leave to amend the cross-claim to put the matter beyond doubt. We also granted the respondents leave, to the extent necessary, to contend that even if there had been no power under the TM Act to alter the application by substituting Crazy John Pty Ltd for MW Aust as the applicant for the 1999 Mark, relief should be refused to the first appellant on discretionary grounds.the primary judgmentThe Cross-Claim The primary Judge dealt first with the cross-claim attacking the registration of the 1999 Mark. His Honour noted that the appellants’ arguments were ‘essentially based’ on the proposition that Crazy John Pty Ltd was not the owner of the 1999 Mark. However, the appellants had also argued that Crazy John Pty Ltd did not use or intend to use the 1999 Mark (s 27(1)(b)(i)); that there was no evidence that Crazy John Pty Ltd had authorised or intended to authorise MW Aust to use the 1999 Mark (s 27(1)(b)(ii)); and that there was no evidence that Crazy John Pty Ltd intended to assign the 1999 Mark (s 27(1)(b)(iii)). The primary Judge rejected these submissions. His Honour made a number of factual findings which, in his view, were inconsistent with the appellants’ submissions. The findings included the following: On 1 July 1996, the Original Proprietor sold the business carried on by it to MW Aust. On the same date, Crazy John Pty Ltd granted MW Aust a licence to use the 1995 Mark for a substantial fee (see [19] above). Crazy John Pty Ltd was the trustee of a trust, while MW Aust was the operator of the business. Thereafter, MW Aust ran the retail business and used the phrases ‘Crazy John’ and ‘Crazy John’s’ in its advertising and promotion. Since 1996, it had been the intention of those directing the affairs of the Crazy John’s group that the intellectual property assets should reside in Crazy John Pty Ltd. The assignment of the 1995 Mark to Crazy John Pty Ltd was intended to be with the goodwill attaching to the 1995 Mark. It was not intended that MW Aust, rather than Crazy John Pty Ltd, should be the owner of the 1999 Mark before the application was made. Those responsible for giving instructions to Mr Darrer to lodge the application for the 1999 Mark either did not know of or had forgotten the intention to place the intellectual property assets in Crazy John Pty Ltd. In November 1999 it was realised that Crazy John Pty Ltd should have made the application and the Trade Marks Office was informed of the ‘error’. Crazy John Pty Ltd did claim to be the owner of the Mark, as shown by the terms of the letter of 12 November 1999 to the Trade Marks Office. Although MW Aust initially claimed to be the owner, being identified as such on the application, ‘on the evidence Crazy John Pty Ltd was the owner’.

Ratio Decidendi

Legal Principle Established

On 22 May 1996 the Original Proprietor assigned the 1995 Mark to Crazy John Pty Ltd (ACN 070 157 452). On 1 July 1996 Crazy John Pty Ltd granted a licence to Mobileworld Communications (Aust) Pty Ltd (ACN 073 366 757) (‘MW Aust’) to use ‘the right, title, interest and good will’ in the 1995 Mark for a fee of $300,000 per annum. On the same day, the Original Proprietor sold the business carried on by it to MW Aust. The purpose of those transactions, which were entered into on legal advice, was to vest the ownership of the 1995 Mark in a new trading entity. From 1 July 1996 until some time in December 1999, MW Aust used the 1995 Mark in connection with the retail business of selling mobile telephones pursuant to the licence from Crazy John Pty Ltd.Registration of the 1999 Mark On 17 August 1999 an application was lodged with the Registrar of Trade Marks for registration of the mark that ultimately became the 1999 Mark. A scanning sheet was attached to the application form and reproduced the 1999 Mark, as follows: Mr Mark Darrer, a solicitor in the firm of Messrs Darrer Muir Fleiter, received instructions from MW Aust to lodge the application with the Registrar of Trade Marks and invoiced MW Aust for the work that he did in connection with the lodging of the application. The form of application consisted of a document containing a series of boxes. The name of MW Aust was inserted in the box for ‘Name of Applicant’ and the form was signed by Mr Darrer. Particulars of the application were published, as required by s 30 of the TM Act, on 9 September 1999. On 3 November 1999, Mr Darrer had some discussions with Mr Simon Morris, a partner at Corrs Chambers Westgarth in Melbourne. Mr Morris was at that time doing legal work in relation to a corporate restructure of the group of companies of which MW Aust was a member. Accordingly, it did not come as a surprise to Mr Darrer to receive a communication from Mr Morris. Mr Morris told Mr Darrer that the lodgement of the application for registration of the 1999 Mark in the name of MW Aust had been an error. There was a discussion about the restructuring of the group, in the course of which Mr Darrer made a note ‘IP in CJ Pty Ltd a trust’. He said in evidence that the note conveyed to him that the group’s intellectual property, including its trade marks, was in a trust, of which Crazy John Pty Ltd was the trustee. After his discussions with Mr Morris, Mr Darrer discussed the matter with Ms Linda Orlowski who had given instructions to Mr Darrer, Mr Darrer then spoke to Mr Les Daniel at the Trade Marks Office about notifying the Office that Crazy John Pty Ltd should have been the applicant for registration of the 1999 Mark. He told Mr Daniel that he had received instructions from Ms Orlowski that ‘she had the company wrong’ and that the applicant should have been Crazy John Pty Ltd, which was the holder of the 1995 Mark. Following these discussions, Mr Darrer prepared a letter for Ms Orlowski to send to his firm. On 9 November 1999, Ms Orlowski signed a letter from MW Aust addressed to Mr Darrer as follows:‘Re: TrademarksWe refer to your previous correspondence to us in relation to the trademark applications you have lodged on behalf of Mobileworld Communications (Aust) Pty Ltd for the marks:1. “Crazy John”2. The Crazy John Character3. The globe with the letters “MW”4. “Mobileworld Communications”5. “Mobileworld Communications (Aust)”6. “Mobileworld”In fact the owner of the above marks is another company in our group, Crazy John Pty Ltd ACN 070 157 452 can you therefore please make the appropriate amendments, or withdraw and re-lodge the applications so that the correct proprietor of Crazy John Pty Ltd is noted.Our apologies for this oversight on our behalf. It has only just come to our attention, particularly when we noticed that Crazy John Pty Ltd actually has a registered trademark for “Crazy John” and the “MW” globe and the character as a whole – number 656212.If you have any queries do not hesitate to contact me.’