Estex Clothing Manufacturers Pty Ltd v Ellis & Goldstein Ltd

[1967] HCA 51

HIGH COURT OF AUSTRALIA

Windeyer J. Barwick C.J., McTiernan, Taylor and Owen JJ.

ESTEX CLOTHING MANUFACTURERS PTY. LTD. v. ELLIS AND GOLDSTEIN LTD.

(1967) 116 CLR 254

12 December 1966

Trade Marks (Cth)

Trade Marks (Cth)—Removal from register—No use during three years—English manufacturer registered proprietor of mark—Sales of goods bearing mark to Australian retailers—Subsequent retail sales in Australia—"Use"—Use by English manufacturer in Australia—Trade Marks Act 1955-1958 (Cth), s. 23 (1) (b)*.

Decisions

WINDEYER J. delivered the following judgment: -
These are two motions, heard together, for the removal from the Register of Trade Marks of two trade marks of which the respondent is the registered proprietor. The motions are founded upon s. 23 (1) (b) of the Trade Marks Act 1955-1958 (Cth), it being alleged that two continuous periods of not less than three years had elapsed during which there was no use in good faith of the trade marks by the respondent. The same two trade marks are in question in each case. There are two motions because two different periods of alleged non-use are relied upon. One period is from 30th June 1958 to 30th June 1961; the other is from 21st September 1960 to 21st September 1963. The marks in question are as follows: -

(a) No. 97,535: The word "EASTEX"; registered in class 38 in respect of "outer clothing for women" for fourteen years from 30th December 1948; the registered proprietor being described as "Ellis &Goldstein Limited, clothing manufacturer, a British company, of 20/24 Commercial Street, London, E. 1, England". This trade mark has been renewed for a further period of fourteen years from 13th December 1962. (The certificate tendered shows the date as 13th December; this may be a misprint for 30th December.) A change of the registered proprietor's address to Brick Lane, London, was noted on 6th October 1964.
(b) No. 111,939: The word "EASTEX" in a form of italic script followed by "Range 52"; registered in class 38 in respect of "complete articles of clothing" for fourteen years from 21st October 1952; the respondent being again the registered proprietor, of the same address, and with a change of address later duly noted. This trade mark has also been renewed for a further period of fourteen years, in this case from 21st October 1966. (at p255)

2. The respondent is a public company which manufactures in England women's dresses, jersey suits and coats. It has a large business. It does not itself sell its goods by retail. Its goods are marketed by being sold to buyers for the retail trade, both in the United Kingdom and elsewhere. Since about 1948 it has, from time to time, sold goods for export to Canada, various places in the Middle East, and elsewhere including Australia. The dresses it sells bear, and have always borne, its trade mark, either "EASTEX" or "EASTEX Range 52", on labels sewn inside the garment, and, since about 1951, also on tied-on tags. These tags, of which two were attached to each garment, bear the trade mark, in one or other of its forms, prominently shown. They also include information as to shade, size, etc. of the particular garment, and a form to be filled in, and sent to London, by anyone wishing to have sent to him - more probably to her I suppose - a brochure giving information about Eastex goods. The Eastex brochures would, the tag said, be sent regularly to anyone who asked to be put on the mailing list to receive them. (Photographic illustrations of labels and tags used in the relevant period will be annexed as a schedule to some written copies of this judgment.) There can be no doubt at all that the use of the trade mark on garments and on tags in this way was for the purpose of indicating, and did and does indicate, that goods bearing the marks are the product of a particular manufacturer. (at p256)

3. At this point it is convenient to note that the mark EASTEX Range 52, which was adopted in or about the year 1952, has no relation to that year; it was intended to designate, as the letterpress on the tag shows, a range of sizes and shapes of garments designed for women of approximately 5' 2" in height. In 1962, and for a few years thereafter, some smaller garments designed for young girls bore a label "MISS EASTEX". At one stage the respondent marketed one line of its goods under the name "ELGORA". This, however, was only for a short time; and it is of no significance in this case, as evidence, which I accept, and to which I shall refer later, establishes that goods of the respondent's manufacture which were sent to retailers in Australia at any relevant time were marked "Eastex" in one form or another. (at p256)

4. The applicant is a proprietary company which was incorporated in New South Wales on 20th June 1958. It took over the business of a partnership which for some years, from about the year 1951 it seems or perhaps a little earlier, had been making and selling women's clothing under the name "Estex". This business was, I gather, started by one Nicholas Erlich, a migrant who came with his wife to Australia from Europe in December 1951. They, in partnership with others, started a clothing factory. Mr. Erlich is the managing director of the applicant. It has a large business. (at p256)

5. The applicant's use of the name "Estex" apparently did not come to the knowledge of the respondent until about June 1961 - then as the result it seems of an advertisement in a magazine. Thereupon a firm of patent attorneys retained by the respondent wrote to the applicant alleging it was infringing the respondent's mark. As the applicant did not desist the respondent commenced proceedings in the Supreme Court of New South Wales seeking an injunction to restrain it from using the name "Estex" as being substantially identical with and said to be similar to the respondent's registered trade marks and as a passing off. (at p257)

6. Shortly before the statement of claim in this suit was issued, the applicant applied for registration of the name "Estex" as a trade mark in respect of "women's suits, coats and ensembles". The Registrar of Trade Marks held, naturally enough, that the proposed mark could not be registered because of its resemblance to the two marks of the respondent. (at p257)

7. Apparently in anticipation of this, the applicant had, on 31st July 1961, commenced the first of the two motions now before me: No. 21 of 1961. On 22nd October 1963 it commenced the second of these motions: No. 28 of 1963. This explains how it is that there are two periods of non-use alleged as a ground of removal. As the infringement proceedings in the Supreme Court are still pending, being, I understand, adjourned until the present motions are determined, these motions necessarily come to this Court pursuant to s. 23 (5) of the Act rather than to the Registrar. (at p257)

8. There has been delay in bringing the case to a hearing. For some reason of which I am not aware the applicant, having filed its first motion in July 1961, then apparently did nothing more about it for some three years. Not, it seems, until 3rd June 1964 did the applicant take out a summons for directions in either motion. (at p257)

9. Directions were given by me pursuant to the summons of June 1964, with a view to the matter being ready for hearing early in 1965. But there have been further summonses and further delays. The blame for these does not by any means lie wholly on the applicant; both parties must have some responsibility. The case has at last come to trial, the first motion five years and four months after it was instituted. I make these observations because the matters in question in a motion to remove a mark under s. 23 (1) of the Act relate to a period of three years up to one month before the date of the motion. It is obviously desirable that the inquiry should be made as soon as possible after the expiry of the period. Delay can make difficult the ascertainment of the relevant facts. Records may be lost, recollections fade, and people die. Delay, too, may prejudice the satisfactory trial of other proceedings elsewhere which have had to await the decision of this Court on the motion. It is most unfortunate if the processes of this Court unduly delay or hamper such proceedings. But I suppose if the parties are not themselves prompt and pressing there is little that this Court can do about it. (at p258)

10. It is conceded, as is obvious enough I think, that the applicant is "a person aggrieved" within the meaning of s. 23 (1). The question therefore is whether it is established that there was no use in good faith by the respondent of its mark in Australia during either one, or both, of the relevant periods set out above, being in each case the three years preceding the date of the filing of the relevant notice of motion. (at p258)

11. The use which s. 23 (1) (b) postulates is (1) use of the mark in good faith; (2) use of it by the registered proprietor; (3) use of it as a trade mark in relation to goods of the class for which it is registered; (4) use of it in Australia. (at p258)

12. The central issue in the case is whether or not anything which occurred in the relevant periods amounted to a use of the mark in Australia by the respondent. If this were so it is not suggested, and could not be suggested, to have been otherwise than in good faith. (at p258)

13. I pause here to observe that the issue under s. 23 of the present Act is not the same as the issue under s. 72 of the earlier Act, the Trade Marks Act 1905-1948. Under that section if there were "no bona fide use of the mark for a consecutive period of three years" the mark might be removed "unless it was at the date of the application in bona fide use and had been so for a period of six months immediately prior to the date of the application". The latter words, as Kitto J. said in Continental Liqueurs Pty. Ltd. v. G. F. Heublein and Bro. Inc. (1960) 103 CLR 422, at p 430 , refer to "a course of conduct extending substantially over the period and still continuing at the end of it". But under the present Act, the issue is not whether the mark had been in use for a period but whether there was no use during a period. I do not think that, in this context, the word "during" means "throughout" so as to require a regular and continuous course of conduct for the whole period. If during the period the registered proprietor uses his mark in good faith that will keep the mark alive, and will rebut what I may call the statutory presumption of abandonment which s. 23 creates. (at p258)

14. It is for an applicant who seeks to have a mark removed to prove his case. The onus is on him to show an absence of use in good faith during the period. If persons who, by reason of their connexion with the relevant trade, might be expected to have seen or heard of the mark if it were used as a trade mark upon goods for which it is registered, swear that they had not seen or heard of it in use as a trade mark at any time during the relevant period, that is prima facie evidence of the fact which the applicant must prove. Slight evidence may suffice at this stage, for the applicant has the task of proving a negative and the registered proprietor is probably in a better position to prove user than is the applicant to prove non-user. But if evidence be given for the respondent to controvert the applicant's prima facie case, then when all the evidence is complete the question is still, has the applicant proved his case? I do not for a moment accept the proposition of the applicant in these present proceedings that the ultimate burden of proving its case does not rest upon it. (at p259)

15. The applicant tendered a great body of affidavits - liberty to adduce evidence by affidavit having been given originally at the instance of the applicant on a summons for directions. Affidavit evidence is common enough in cases of this sort. In this case, I think, twenty-five affidavits in all were tendered. They were made by persons who deposed to having been, for varying periods of years, actively concerned in various capacities in the retail trade in Australia in women's garments. The deponents come from all the capital cities in Australia. Each of their affidavits contained a paragraph as follows: "I am informed that the trade mark "EASTEX" is registered under the Commonwealth Trade Marks Act by Ellis &Goldstein Limited of 20/24 Commercial Street, London E.1. England in respect of complete articles of clothing and outer wear for women but I have never encountered any use of this trade mark in respect of such goods." I assume that when the deponents said they had never encountered any use of the trade mark, they meant they had never come across it, in the sense of not having heard or seen it in use upon or in connexion with women's garments in Australia. (at p259)

16. This would be a formidable body of evidence if all the statements of all the deponents were prima facie reliable. But they are not. I leave out of account that none of the affidavits complies fully with the Rules of this Court. Some affidavits do not state the place of the deponent's abode; and none states explicitly what was his or her description, that is his or her occupation, calling or profession at the time of swearing the affidavit, although in some cases, perhaps in most cases, this can perhaps be inferred from the statement of the positions he or she had theretofore occupied in the trade. Many of the affidavits contained manuscript insertions in blank spaces left in the typed script for that purpose. These are not initialled and there is in one affidavit an alteration not initialled. Some of the affidavits do not state the full name of the deponent, only his or her initials and surname. (at p260)

17. Despite these defects, and despite the fact that several of the affidavits were not filed within the time specified by the orders made on the summons for directions, and therefore could not be used without the leave of the Court, I thought it proper to allow them all to be read, except one sentence in each which I rejected. (I perhaps should say here that at least one affidavit filed by the respondent is also formally defective as not complying with the Rules of the Court.) (at p260)

18. I turn now to what is said in these affidavits which were tendered for the applicant. They were in a common form of words, differing only as to the particular deponent's experience in the trade and the period over which his knowledge extended. Paragraph 3 of each I have already quoted. Paragraph 2 of each - mutatis mutandis, that is to say adapted to the particular deponent's alleged period of knowledge - reads: "I am familiar with the trade name or mark of "ESTEX" of Estex Clothing Manufacturers Pty. Limited, 60 Wentworth Avenue, Sydney. Of my own knowledge the trade name or mark of "ESTEX" has been used in the State of New South Wales (or whatever State the deponent was speaking) for the last thirteen years. The trade name or mark "ESTEX" has during this period appeared on labels attached to garments manufactured by Estex Clothing Manufacturers Pty. Limited and in advertisements in the newspapers and trade and fashion magazines. As a result, the name "ESTEX" is in my opinion well-known to the trade and interested members of the public." The last sentence was objected to and I rejected it. The rest of the paragraph was not objected to. It seems to me, however, to be irrelevant in these proceedings, except as showing the applicant to be a person aggrieved - which was conceded. (at p260)

19. It was suggested for the applicant that the statements might also be relevant as effecting a discretion in the Court. I do not think this could be so. If the applicant fails to establish the matter which it must establish to have an order for the removal of a mark pursuant to s. 23, then the Court cannot make an order for its removal under that section. If on the other hand the applicant establishes that the mark was not used during a relevant period then it is prima facie entitled to an order that it be removed. Possibly the Court could in the exercise of a discretion decline nevertheless to make an order. I do not have to decide whether that would be so or not. I shall therefore say only that, although some of the decisions, among others Re Columbia Graphophone Co. Ltd.'s Trade Marks (1932) 49 RPC 483 , Re Morny Ltd.'s Trade Marks (1951) 68 RPC 131 , and J. Lyons &Coy. Ltd.'s Application (1959) RPC 120 , suggest that there is or may be a discretion in cases of this kind, I am not persuaded that this is so for the same reasons as Kitto J. alluded to in the case which I have already mentioned - the Continental Liqueurs Case (1960) 103 CLR 422 , his Honour's observations on this aspect appearing at p. 433. That is to say, I doubt whether the word "may" in s. 23 confers a discretion to refuse an order if non-user for the requisite period is clearly proved. The word is, I think, probably to be read according to the rule in Julius v. Lord Biship of Oxford (1880) LR 5 App Cas 214 . (at p261)

20. Moreover, par. 2 of the affidavits, which I have just quoted, seems to me to say only that the applicant has been for some time past doing what, at first sight at all events, is infringing the respondent's marks. It may of course have been doing so innocently. I shall assume, in the absence of any evidence to the contrary, that up to June 1961 it was unaware of the respondent's marks. After it had become aware of the respondent's marks it may have continued to use its mark "Estex" in the honest belief that it could establish a right to do so. But however that may be, I cannot see that evidence that the applicant has used a mark similar to the respondent's registered mark provides any evidence that the respondent had not used its mark during the relevant period. And that is the issue in this case. There is no suggestion of acquiescence by the respondent in the applicant's use of the name Estex. (at p261)

21. One conclusion, however, can be drawn from what the various deponents have said in par. 2 of their affidavits. That is that in some cases it makes one very sceptical of the value of their evidence that they have not known of the mark, for their affidavits seem to have been prepared and sworn without any scrupulous regard for accuracy. For example, to say in 1964, as many of the deponents do, that Estex had been a mark used for eleven years attached to garments manufactured by Estex Clothing Manufacturers Pty. Limited, is obviously untrue because there was no such company in existence until June 1958. It is said that the deponents were referring to the partnership, the predecessor in business of the proprietary company. That may be, but they do not say so. And whether the partnership carried on business at 60 Wentworth Avenue - the address given - or elsewhere is not clear. It appears (from par. 2 in the affidavit of Erlich of 12th October 1964) that at some stage its address was Foster Street, which however is not far from Wentworth Avenue. (at p261)

22. Other deponents go even further. Two of them say that they had known the mark Estex as the applicant's mark for thirteen years; two others for fourteen years. Fourteen years back from 1964 takes one to 1950; Mr. Erlich only arrived in Australia in December 1949; and exactly when his firm began, and when it first traded under the name Estex, do not appear, the nearest statement being that the mark Estex had been used since "at least the year 1951". (at p262)

23. There are some other surprising features in some of the affidavits. One deponent says he has been concerned in the trade for "approximately two years" yet he states that he had known the name Estex on garments manufactured by the applicant for the last eleven years. Another deponent who states he had been concerned in the trade for "approximately five years" yet professes to have known the same matter for six years. In another affidavit "10 years" acquaintance with the trade is claimed: the figure was originally "16", it is altered to "10", not initialled, yet the deponent speaks of knowing "Estex" as the applicant's mark for eleven years. On top of all that there are some other matters, in relation to the manner in which the blank spaces were filled up and so forth, to which I alluded during the hearing as they created for me misgivings in addition to the scepticism which, as this Court has on other occasions observed, is always created by mass-produced affidavit testimony of this kind. But the affidavits are not to be rejected for that reason. Probably one cannot usefully say more of such matters than was said by Lord Evershed M.R., in Re Morny Ltd.'s Trade Marks (1951) 68 RPC 131 . At p. 142 he said: "Of course, if it is shown that deponents make affidavits by swearing more or less blindly, drafts which are prepared by solicitors, then the Court may well say that no great weight or perhaps in certain cases no weight at all can be or ought to be attached to them." (at p262)

24. I would perhaps be not so troubled by all this - and would merely observe that swearing an affidavit is a serious thing, as those who pledge their oaths should know, and as those who prepare affidavits for them should remember - were it not for one quite extraordinary aspect. One affidavit is, or purports to be, sworn by a deponent named in it as "M. O'Brien". It is in the common form; it is dated 25th September 1964. In it the deponent stated that she had been actively concerned in the trade for fifteen years, being eleven years fashion buyer for Grace Bros., and that for fourteen years she had known the name "Estex" as the name of the applicant's goods; and, in the stock formula, she swore that she had never encountered the trade mark "EASTEX". Yet on 28th May 1965 she swore another affidavit, this time for the respondent. In this her name is given as "Mary A. O'Brien"; in this she describes herself as the company buyer of the suit and coat department of Grace Bros. Pty. Limited, and says that the sale of ladies' suits and coats is under her control. She says further that she knows that in 1960, 1961 and 1962 her company received from the United Kingdom shipments of ladies' suits having attached labels bearing the mark "EASTEX" or "EASTEX Range 52" or "Miss Eastex" and that these goods were displayed in the company's store for sale to the public and were in due course sold and that when sold they still had the labels attached. Exhibited to this, her second, affidavit were photostat copies of contemporary invoices from the respondent relating to the sale by it of the goods of which she thus speaks. To that extent what she says is corroborated. (at p263)

25. It would have been interesting to have heard this witness cross-examined to see how she explained her two quite contradictory affidavits, but I was told she was dead. According to the practice of the Chancery Court an affidavit could be received although the deponent had died after it was sworn; but the Court did not attach so much weight to it as it would have done if there had been an opportunity of cross-examination: Daniell's Chancery Practice, 5th ed., p. 786. (at p263)

26. As both of Miss O'Brien's affidavits were tendered and neither was objected to, I received them both. The latter I think makes the former of no weight; and it can itself be of little or no weight in the circumstances, except to the extent that it is supported by documents which accord with other evidence to which I shall come later. (at p263)

27. The only evidence for the applicant in addition to these affidavits was given by Mr. Erlich. He had made an affidavit, but Mr. Franki for the applicant very properly told me that there might perhaps be some doubt whether the man before whom it was sworn was a person qualified to administer an oath in this case. I do not know what was the doubt about this, but as the witness was in court it seemed prudent that he should enter the witness box to confirm so much of what appeared in his affidavit as was not objected to and rejected. This he did. He was also cross-examined on some matters. His evidence does not carry the matter further on any critical issue. None of the other persons whose affidavits were tendered was required to attend for cross-examination. (at p263)

28. In my opinion, this body of affidavit evidence, although, for the reasons I have given, by no means impressive or convincing, did establish a prima facie case that there had been no use by the registered proprietor of its marks in Australia during either of the two periods in question. But in the upshot this evidence became unimportant for the case really turns upon evidence given for the respondent by Mr. C. R. Harrington, who gave evidence orally. (at p264)

29. Mr. Harrington is an executive officer of the respondent company, living in England, working in London. He has been with the company for many years. Before about 1948 he was in general charge of the sales in London of its goods, including sales for export. Later he became general sales manager. He is now a senior executive, concerned with sales as well as other matters. He was well informed, impressive and careful, and I accept his evidence. (at p264)

30. I do not think it necessary here to do more than say that he satisfied me that from about 1948 onwards, and particularly in 1955 and afterwards, the respondent had from time to time sent women's garments of its manufacture to Grace Bros. Pty. Limited, Sydney, and that it had also on occasions sent such garments to other retail houses in Australia. Contemporaneous documents confirmatory of this were produced and interpreted by Mr. Harrington, who was closely cross-examined about them. (at p264)

31. The practice of several well-known leading retail stores in Australia which import goods from London is, it seems, to buy through buyers or buying agents there who place their orders for them. A directory, Stores of the World, Buyers and Buying Agents, was tendered. It shows that a London company, J. Grace Limited, 40 Duke Street, London, is buying agent for Grace Bros. Pty. Limited, Sydney: that Myer Emporium (London) Limited, Brook Street, London, buys for the Myer Emporium (Melbourne) and for Farmer &Company Limited, Sydney, and associated stores of the Myer organization in other Australian cities: that J. A. Ewing &Company (London) Limited buys for Miller, Anderson Limited of Adelaide. Some buying is also done by individuals who visit London on behalf of their Australian employers and inspect goods and place orders there. The name of a Miss Littlewood, for example, appears in this case as a buyer for more than one Australian retail house. She was known to be acting in that capacity by Harrington and others in the employment of the respondent. (at p264)

32. I now summarize those transactions, proved by Mr. Harrington and the documents produced to have occurred, which are relevant to one or other of the two periods of three years in question: Column (1) shows the date on which, according to the respondent's records, the sale was made. Column (2) shows the general nature of the goods sold: more details were proved. Column (3) shows the name appearing on the respondent's records as the person to whom the invoices were sent. Column (4) shows the actual person through whom the transaction was effected in cases where that was stated in evidence. Column (5) shows certain notations appearing on the respondent's documents relating to the destination of the goods.

---------------------------------------------------------------------------- (1) (2) (3) (4) (5)
---------------------------------------------------------------------------- 29/5/60 12 Ladies J. Grace Ltd. "Goods for

Suits London Grace Bros., Sydney"

---------------------------------------------------------------------------- 31/10/60 70 Ladies Myers Emporium Miss Littlewood -

Suits Melbourne

---------------------------------------------------------------------------- 31/10/60 10 Ladies Myers Emporium Miss Littlewood -

Suits Ltd. Chadstone, Aust.

---------------------------------------------------------------------------- 31/10/60 24 Ladies McWhirters Ltd. Miss Littlewood -

Suits Brisbane, Aust.

---------------------------------------------------------------------------- 31/10/60 24 Ladies Brownells Ltd. Miss Littlewood -

Suits Hobart, Tas.

---------------------------------------------------------------------------- 5/4/61 100 Ladies J. Grace Ltd. "Goods sent to

Suits London Grace Bros. (Pty.) Ltd., Sydney"

---------------------------------------------------------------------------- 13/7/61 1 Ladies D. T. Karafka -

Suit C/- Kartex Suits Melbourne

---------------------------------------------------------------------------- 17/7/61 9 Ladies J. Grace Ltd. "For Grace

Suits London Bros. Pty. Ltd., Sydney"

------------------------------------------------------------------------ 17/10/61 33 Ladies Myers Emporium Miss Littlewood "For Farmer

Suits (London) Ltd. &Co. Ltd.,

Sydney"

------------------------------------------------------------------------- 14/2/62 1 Ladies J. Grace Ltd. "Goods to Suit London Grace Bros. 1 Ladies Pty. Ltd., Coat Broadway Sydney" Air Parcel Post

------------------------------------------------------------------------

5/10/62 17 Ladies J. A. Ewing &Co. "Miller

Suits (London) Ltd. Mr. Vesco Anderson Ltd., Adelaide"

15 Ladies J. A. Ewing &Co. " " "

Suits (London) Ltd.

------------------------------------------------------------------------

2/11/62 8 Coats, J. A. Ewing &Co. " " "

2 Suits (London) Ltd. Mr. Vesco

2/11/62 10 Ladies J. A. Ewing &Co. " " "

Suits (London) Ltd.

------------------------------------------------------------------------

Evidence was given of some other sales for export to Australia. But as they were after September 1963 I have not listed them. (at p266)

33. All the sales I have mentioned were in fact concluded in London. The goods were ordered in London by someone there, either someone from one of the regular London buying agents or some other representative of the Australian customer. The orders were accepted by the respondent in London and payment was made in London. Delivery was in each case made by the respondent as directed - to a shipping agent, or in some other way including direct despatch by air, for onward movement to the Australian retail house to which the goods were to go. However they went, the goods left the respondent's premises addressed to an intended Australian destination. This appears from the records kept and the respondent's system of business. (at p266)

34. I am satisfied too that the goods bore, as the respondent's goods at this time always did, an "EASTEX" sewed-on label and "EASTEX" tags. There is no reason to suppose that any of the goods so sent to Australia did not arrive here. There is every reason to believe they did. There is indeed positive and unchallenged evidence by affidavit that goods ordered from the respondent in fact arrived in Australia and were during the relevant periods offered for sale and sold by Australian retail houses with, as one would expect, their "EASTEX" marks and tags still on them. (at p266)

35. Mr. Franki for the applicant really could not dispute any of this; what he says, however, is that because the sale of the goods took place in London, the property passed there to the buyer, who in some cases was the London buying agent, and that therefore there was no use of the trade mark by the respondent in Australia. The respondent, he said, had parted with its goods. It had delivered them to some stipulated place somewhere in or near London; where they went or what was done with them thereafter by the buyer who then owned them, was a matter beyond the control of the respondent, a matter with which it was no longer concerned. The respondent, he said, entered into no transaction in Australia. (at p266)

36. All this is true enough. But I think that to insist on it is to misapprehend the present case. As a proposition of law it is no doubt perfectly correct that the goods when sold and delivered in London no longer belonged to the manufacturer. But when it is said that a trade mark is used to distinguish the goods of one man from those of another, that abbreviated statement obviously does not refer to the goods of the owner of the mark in the sense of goods which he owns or possesses. After the goods have been sold by him his mark may still, using the definition of trade mark in the Act, be used in relation to those goods for the purpose of indicating a connexion in the course of trade between them and him, the registered proprietor of the mark. The manufacturer who sells goods, marked with his mark, to a warehouseman, wholesaler or retailer does not, in my view, thereupon cease to use the mark in respect of those goods. The mark is his property although the goods are not; and the mark is being used by him so long as the goods are in the course of trade and it is indicative of their origin, that is as his products. Goods remain in the course of trade so long as they are upon a market for sale. Only when they are bought for consumption do they cease to be in the course of trade. The concepts upon which the case turns are economic, commercial, business concepts concerning the marking and marketing of goods, rather than the provisions of the Sale of Goods Act concerning the passing of property. (at p267)

37. Of course, the use which s. 23 speaks of is a use in Australia by the registered proprietor, a permitted use, that is by a registered user, being for this purpose equivalent to a use by a registered proprietor, s. 77. It is obvious that unless the use be by the registered proprietor, or as his mark by some authorized user, a person who was, say, a mere infringer using the mark would keep it alive for the benefit of the registered proprietor, although the proprietor had ceased to use it. That is why s. 23 speaks of an absence of use by the registered proprietor. It is his failure to use his mark which creates the statutory abandonment of it by him. (at p267)

38. Had anyone asked the respondent, "Do you use your trade mark 'EASTEX' in Australia?", I imagine that the answer would have been "Yes: all the goods which we export to Australian retailers go with our marks on them". And although the respondent had not a large export business to Australia - tariff considerations prevented that it seems - it had at all relevant times an actual or prospective business connexion or goodwill here which could be protected by a trade mark. Mr. Franki suggested that this was not so because of some remarks in the judgments in Commissioner of Taxes (Q.) v. Ford Motor Co. of Australia Pty. Ltd. (1942) 66 CLR 261 . But the question in the present case is not as to the possibility of a severable assignment of a separate and local goodwill, but of the possibility of the English company having, by reason of its export business and the sale by retailers of its products here, such an interest or goodwill that when goods of its manufacture are sold here under that mark the mark is being used by it. I merely refer to R. J. Reuter Co. Ltd. v. Mulhens (1954) 1 Ch 50, at pp 95, 96 ; Adrema Werke Maschinenbau G.m.b.H. v. The Custodian of Enemy Property and the Administrator of German Enemy Property (1957) RPC 49 and Aktiebolaget Manus v. R. J. Fullwood &Bland Ltd. (1948) 65 RPC 329, at p 337 ; and I may add, Poiret v. Jules Poiret Ltd. and A. F. Nash (1920) 37 RPC 177, at p 187 . The position, I think, is that, adapting the words of Farwell J. in the Panhard Levassor Motor Company's Case (1901) 2 Ch 513, at p 516 , the respondent did not sell directly in Australia, but it sold indirectly, so that Australia was one of its markets. I appreciate that the question of local goodwill and so on has been considered more in relation to passing off questions than to trade marks; and I do not have to decide in this case whether the respondent's goods had acquired a reputation among Australian consumers. But if the suggestion is that the respondent had no goodwill, actual or prospective, in Australian trade, it seems to me it cannot be said that it had not. (at p268)

39. The main issue in this case is, however, simply whether there was a user by the respondent of its mark in Australia. In my opinion there was. I do not think it necessary to go through all the cases that were cited to me; Jackson &Co. v. Napper (1886) 4 RPC 45, at pp 57-59 contains much that is instructive. (at p268)

40. The applicant put some reliance on the case of Rothmans Ltd. v. W. D. &H. O. Wills (Australia) Ltd. (1955) 92 CLR 131 , decided by Fullagar J. in 1955 and on appeal to this Court W. D. &H. O. Wills (Australia) Ltd. v. Rothmans Ltd. (1956) 94 CLR 182 . But, except by way of contrast, that case seems to me to have little bearing on this case. There, cigarettes were sent from an American supplier to consumers who had ordered them directly from the United States of America. They bore a mark of which W. D. &H. O. Wills was the registered proprietor in Australia. A question arose, under s. 72 of the former Act, of whether this importation from America was a user of the mark in Australia. The sending by the American company of the cigarettes to Australia, and their receipt in Australia, were relied upon to displace the allegation of non-user. The registered proprietor of the mark, W. D. &H. O. Wills, was in no way concerned in the transaction by which the goods reached Australia, although it was, by arrangement with the United States company which sent them, entitled to receive a royalty, or percentage of amounts which the American company received from sales to Australia. (at p268)

41. The contrast between those facts and the facts of this case is quite marked. The very reasons why, in that case, it was held that there had been no user of the trade mark in Australia show why, in my view, there was such a user in this case. There the cigarettes arrived in Australia to be smoked by the buyers; they, consumers, had bought them in America by mail orders sent there. The American company which sent them was not the proprietor of the Australian trade mark, and had no interest in it. Here the garments arrived in Australia to be sold by retail in the ordinary course of business. The buyers were not consumers, they were traders. (at p269)

42. Passages in the judgment of the Full Court in the Rothmans Case (1956) 94 CLR 182 emphasize the significance of this distinction. I do not think it necessary to quote them; I simply refer to pp. 188-190, and in particular, p. 191. (at p269)

43. The other point of distinction between the two cases I have already mentioned. There the company which was the registered proprietor of the mark had no part at all in the transactions by which the goods came to Australia. It was a stranger to them, although it may have got a pecuniary benefit because they had occurred. Put the two distinctions together, and you have this. In the Rothmans Case (1956) 94 CLR 182 a person who was not the registered proprietor of the trade mark sold goods in America to consumers here. At the point of sale in America the goods ceased to be goods in trade. In the present case, a person who was the registered proprietor of the trade mark sold goods in England not to consumers, but to go into the market in Australia and there sold under the trade mark. (at p269)

44. In my opinion both these motions must be dismissed with costs. (at p269)

45. I understand that, by arrangement, the applicant advanced moneys to the respondent in connexion with the passage to Australia of the respondent's witness Harrington who came to give evidence instead of one David Cannon, who had made an affidavit, and whose attendance for cross-examination had been required but who at a late stage was said to be unable to come. The applicant is to have credit for the moneys thus advanced against its liability for costs. What amount is to be allowed for the attendance of Harrington as a witness is of course a matter for the taxing officer. The respondent was clearly entitled to have his evidence. The applicant had required, reasonably enough, that evidence of transactions in England on which the respondent relied (the general nature of this evidence was known to the respondent from Cannon's affidavit) be given orally rather than by affidavit, or if by affidavit that the deponent attend for cross-examination. No costs should be allowed in respect of the affidavit sworn by Cannon which the respondent did not tender and which it undertook not to use, Harrington being called as a witness instead. (at p270)

46. The order in respect of both motions is motion dismissed with costs. And I make the usual order as to exhibits. (at p270)

47. From this decision the applicant appealed to the High Court. (at p270)

48. R. J. A. Franki Q.C. and G. G. Masterman, for the appellant. (at p270)

49. D. A. Staff Q.C. and B. A. Beaumont, for the respondent. (at p270)

50. The arguments of counsel sufficiently appear in the judgment of the Court hereunder.

Cur. adv. vult. (at

p270)

1967, April 21.
THE COURT delivered the following written judgment: -
The respondent is a public company which manufactures in England and sells by wholesale women's dresses, jersey suits and coats. It is also registered under the provisions of the Trade Marks Act 1955-1958 (Cth) as the proprietor of two trade marks, "Eastex", in slightly different forms, in respect of garments of this character. The appellant is a company which was incorporated in New South Wales on 20th June 1958 and it also manufactures articles of women's clothing. (at p270)

2. On 31st July 1961 and again on 22nd October 1963, the appellant applied to this Court for an order that each of the trade marks be removed from the Register on the ground that in respect of each mark up to one month before the date of each application a continuous period of not less than three years had elapsed during which the trade mark was a registered trade mark and during which there was no use in good faith of the trade mark by the registered proprietor or a registered user for the time being in relation to the goods in respect of which it was registered. The applications were made pursuant to s. 23 of the Act. The learned judge of first instance having dismissed both applications these appeals are brought from the orders of dismissal. (at p270)

3. There is no doubt - and his Honour's findings to that effect are not contested - that during the periods relevant to each of the applications the respondent manufactured and sold to Australian retail traders for re-sale in Australia substantial quantities of garments with "Eastex" tags and labels sewn on or otherwise attached to the garments. Equally, there is no doubt that during those periods such garments with such tags and labels attached were displayed, offered for sale and sold in Australia by such retail traders. On this evidence his Honour was of the opinion that during the relevant periods there had been a use in Australia of the trade mark by the registered proprietor. (at p271)

4. However, counsel for the appellant contends that this view is erroneous. He points out that the sales which it is proved were made by the respondent to the several Australian retail houses were made in England, the goods, in each instance, were the subject of an f.o.b. contract and, presumably, the property in them passed upon shipment in London. That being so, it is said, there was no act of the respondent in Australia which can be said to constitute a use by it in Australia of the mark. For this proposition we were referred to the decision in Badische Anilin und Soda Fabrik v. Basle Chemical Works, Bindschedler (1898) AC 200 where it was held that a manufacturer in Switzerland who sold and delivered in that country to an English trader goods manufactured according to an invention the subject of English letters patent had not thereby infringed the rights of the holder of the patent by using or vending the patent in England. But to apply the reasoning in that case in solving the problem in the present case would be to misconceive the significance of the word "use" when it is used in relation to a trade mark. (at p271)

5. By the Act a trade mark means "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 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 "use" in s. 23 must be understood in this context. Its denotation is not limited by any concept of the physical use of a tangible object and we have no doubt that when an overseas manufacturer projects into the course of trade in this country, by means of sales to Australian retail houses, goods bearing his mark and the goods, bearing his mark, are displayed or offered for sale or sold in this country, the use of the mark is that of the manufacturer. Indeed, in this case, the respondent is the only person who has the right to use the mark and the retailer to whom the goods have been sold for re-sale does not, in any relevant sense, use it. (at p271)

6. It is conceded that there is a use of the mark in this country by an overseas proprietor where he advertises his mark in this country. Further, it is conceded that there is a use by such a manufacturer of his mark where the property in the goods sold by him by wholesale to traders in this country does not pass until their arrival into Australia. It would, in our view, be an extraordinary result if the maintenance of the Australian trade mark of an overseas manufacturer who is projecting goods of his manufacture on to the Australian market by means of sales to retail houses here can be made to depend upon whether the property in the goods the subject of such sales passes on shipment or upon or after their arrival in Australia. We agree with the learned judge of first instance that it cannot and, therefore, are of the opinion that the appeals should be dismissed. (at p272)

Orders

Appeals dismissed with costs.