Hills Industries Ltd v Bitek Pty Ltd
[2011] FCA 94
•15 February 2011
FEDERAL COURT OF AUSTRALIA
Hills Industries Limited v Bitek Pty Ltd [2011] FCA 94
Citation: Hills Industries Limited v Bitek Pty Ltd [2011] FCA 94 Parties: HILLS INDUSTRIES LIMITED (ACN 007 573 417) v BITEK PTY LTD (ACN 084 308 207)
HILLS INDUSTRIES LIMITED (ACN 007 573 417) v BITEK PTY LTD (ACN 084 308 207)
BITEK PTY LTD (ACN 084 308 207) v HILLS INDUSTRIES LIMITED (ACN 007 573 417)
File numbers: SAD 14 of 2008
SAD 39 of 2009
SAD 40 of 2009Judge: LANDER J Date of judgment: 15 February 2011 Corrigendum: 4 May 2011 Catchwords: INTELLECTUAL PROPERTY – Trade marks – registration – application for registration of mark “DIGITEK” – opposition to registration under s 44(1) – whether mark deceptively similar to opponent’s registered trade mark “DGTEC” – whether the applicant’s TV installation accessories and goods the subject of opponent’s trade mark (digital and electronic products including televisions, video players, DVD players, CD players, decoders and cameras) are “goods of the same description” within meaning of s 14(1) of Trade Marks Act 1995 (Cth).
INTELLECTUAL PROPERTY – Trade marks – appeal from Registrar of Trade Marks – standard of proof to be applied in determining grounds of opposition – whether opponent required to satisfy the Court that trade marks should clearly not be registered.
INTELLECTUAL PROPERTY – Trade marks – registration – whether honest concurrent use of trade marks established for purposes of s 44(3)(a) – whether evidence of use after the date the application for registration is made may be taken into account under s 44(3) – whether, because of “other circumstances” it is proper to allow registration of the mark under s 44(3)(b).
INTELLECTUAL PROPERTY – Trade marks – opposition – whether opponent’s marks had acquired a reputation in Australia for purposes of s 60 – nature of evidence required to show reputation considered – whether s 60 subject to s 44(3) – whether applicant’s registration would be contrary to law under s 42(b) because its use would constitute misleading and deceptive conduct under s 52 Trade Practices Act 1974 (Cth).
INTELLECTUAL PROPERTY – Trade marks – application for removal of trade mark from Register for non-use – application seeking to remove all goods in respect of which the mark is registered – evidence of use of some, but not all of the goods – whether grounds for removal under s 92(4) established – whether s 101(2) affords discretion to remove certain goods from registration notwithstanding that the application seeks removal of all of the goods – whether permissible for the Court to amend a registration to ensure that it accords with the scope of established use – exercise of discretion under s 101(3) – scope of s 101(4) – whether the opponent has established use of “similar goods” under s 101(4) - whether order for removal from the Register operates retrospectively to provide a defence to infringement.
INTELLECTUAL PROPERTY – Trade marks – infringement – whether infringement under ss 120(1), (2) and (3) – whether applicant’s trade mark was “well known” under s 120(3) – s 122(1)(fa) - whether the respondent would obtain registration of its mark if it applied for it.
TRADE PRACTICES – misleading and deceptive conduct – s 52 Trade Practices Act 1974 (Cth) – whether applicant’s sale of set-top boxes constitutes misleading and deceptive conduct.
Legislation: Trade Marks Act 1995 (Cth) ss 44, 42, 43, 58, 60, 35, 53, 55, 14, 120, 96 101, 92, 66, 66A, 100, 20, 72, 122
Trade Practices Act 1974 (Cth) ss 52, 53
Trade Marks Act 1955 (Cth) ss 22, 35
Trade Marks Amendment Act 2006 (Cth)
Trade Mark Regulations 1995 (Cth), reg 9.1, 9.3Cases cited: Pinto v Badman (1891) 8 RPC 181 cited
Blount Inc v Registrar of Trade Marks (1998) 83 FCR 50 cited
Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 referred to
Chocolaterie Guylian NV v Registrar of Trade Marks (2009) 180 FCR 60 referred to
Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 applied
Lomas v Winton Shire Council [2003] AIPC 91-839 followed
Kowa Co Ltd v NV Organon (2006) 66 IPR 131 followed
Clinique Laboratories Inc v Luxury Skincare Brands Pty Ltd (2003) 61 IPR 130 not followed
Pfizer Products Inc v Karam (2006) 237 ALR 787 not followed
Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd (2003) 132 FCR 326 followed
F Hoffmann-La Roche AG v New England Biolabs Inc (2000) 99 FCR 56 cited
McCorquodale v Masterson (2004) 63 IPR 582 cited
Austereo Pty Ltd v DMG Radio Australia Pty Ltd (2004) 209 ALR 93 cited
Health World Ltd v Shin-Sun Australia Pty Ltd (2005) 64 IPR 495 cited
BP plc v Woolworths Ltd (2006) 62 IPR 545 cited
Woolworths Ltd v BP plc (2006) 150 FCR 134 cited
E & J Gallo Winery v Lion Nathan (Australia) Pty Ltd (2009) 175 FCR 386 followed
Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 cited
Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd (2004) 61 IPR 212 cited
Re Jellinek’s Application (1946) 63 RPC 59 applied
New South Wales Dairy Corporation v Murray Goulburn Co-op Corporation (1989) 14 IPR 75 followed
Re Parkington & Co Ltd’s Application (1946) 63 RPC 171 cited
McCormick & Cov McCormick (2000) 51 IPR 102 followed
Re Simac SpA Macchine Alimentari’s Application (1987) 10 IPR 81 cited
Re Application by Coles Myer Ltd (1993) 26 IPR 577 cited
Lister v Stingray Surf Company Pty Ltd (1997) 37 IPR 306 cited
Aromas Pty Ltd v Aroma Coffee & Tea Co Pty Ltd (1997) 40 IPR 75 cited
South Cone Inc v Stockline Pty Ltd (2001) 52 IPR 575 cited
Safety Step (NZ) Ltd v Illinois Tool Works Inc [2007] ATMO 78 cited
Trepper v Miss Selfridge Ltd (1991) 23 IPR 335 cited
VB Distributors Ltd v Matsushita Electric Industrial Co Ltd (1999) 53 IPR 466 cited
Hannaford & Burton v Polaroid Corporation [1976] 2 NZLR 14 (PC) cited
Richard James Pty Ltd v Grant Oliver Investments [2005] ATMO 18 cited
Trussardi SpA v Rundles Pty Ltd (1993) 25 IPR 503 cited
Emdon Investments Pty Ltd v Shell International Petroleum Co Ltd (1988) 12 IPR 525 cited
Dinning v New Balance Athletic Shoe Inc (1992) AIPC 90-931 cited
Analyses Conseils Informations ACI v Iguassu (No.16) Pty Ltd [2001] ATMO 4 cited
PB Foods v Malanda (1999) 47 IPR 47 referred to
Red Hat Inc v Martinek (2002) 56 IPR 292 cited
Playcorp Group of Companies Pty Ltd v Peter Bodum (2010) 84 IPR 542 cited
George Weston Foods Ltd v Manildra Flour Mills Pty Ltd (1999) 47 IPR 145 cited
Pioneer Computers Australia Pty Ltd v Pioneer KK (2009) 176 FCR 300 referred to
Magnavox (Aust) Pty Ltd’s Trade Mark (1964) 34 AOJP 2075 cited
McHatten v Australian Specialised Vehicle Systems Pty Ltd (1996) 34 IPR 537 cited
Woolly Bull Enterprises Pty Ltd v Reynolds (2001) 107 FCR 166 cited
Murray Goulburn Co-op Corporation v New South Wales Dairy Corporation (1990) 17 IPR 269 cited
Mentholatum Co v Innoxa Marks Pty Ltd [2008] ATMO 61 cited
Sanyo Chemicals Industries Ltd v Nuplex Industries (Australia) Ltd [2005] ATMO 2 cited
Insfin Insurance & Finance Group Pty Ltd v Razor USA LLC [2009] ATMO cited
Elan Polo Australia Pty Ltd v Blush Lingerie Inc [2009] ATMO 29 cited
Unilever plc v Johnson Wax Ltd [1989] FSR 145 referred to
Hunter Douglas (Australia) Pty Ltd v Perma Blinds (1970) 122 CLR 49 referred to
Re Carl Zeiss Pty Ltd’s Application (1969) 122 CLR 1 cited
E & J Gallo Winery v Lion Nathan (Australia) Pty Ltd (2008) 77 IPR 69 citedDate of hearing: 22, 23 and 24 March 2010 Date of last submissions: 24 March 2010 Place: Sydney (heard in Adelaide) Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 376 Counsel for Hills Industries Limited: Mr E J C Heerey Solicitor for Hills Industries Limited: Piper Alderman Counsel for Bitek Pty Ltd: Mr B Caine SC with Ms H Rofe Solicitor for Bitek Pty Ltd: Norman Waterhouse FEDERAL COURT OF AUSTRALIA
Hills Industries Limited v Bitek Pty Ltd [2011] FCA 94
CORRIGENDUM
1.In paragraph 227, delete the word “allowed” and insert the word “dismissed” so that the paragraph reads: “The appeal should be dismissed and the trade mark application 960495 should be registered.”
I certify that the preceding paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. Associate:
Dated: 4 May 2011
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
SAD 14 of 2008
BETWEEN: HILLS INDUSTRIES LIMITED (ACN 007 573 417)
ApplicantAND: BITEK PTY LTD (ACN 084 308 207)
Respondent
JUDGE:
LANDER J
DATE OF ORDER:
15 FEBRUARY 2011
WHERE MADE:
SYDNEY (HEARD IN ADELAIDE)
THE COURT ORDERS THAT:
1.The parties bring in short minutes of order to reflect these reasons.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
SAD 39 of 2009
BETWEEN: HILLS INDUSTRIES LIMITED (ACN 007 573 417)
ApplicantAND: BITEK PTY LTD (ACN 084 308 207)
Respondent
JUDGE:
LANDER J
DATE OF ORDER:
15 FEBRUARY 2011
WHERE MADE:
SYDNEY (HEARD IN ADELAIDE)
THE COURT ORDERS THAT:
1.The parties bring in short minutes of order to reflect these reasons.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
SAD 40 of 2009
BETWEEN: BITEK PTY LTD (ACN 084 308 207)
ApplicantAND: HILLS INDUSTRIES LIMITED (ACN 007 573 417)
Respondent
JUDGE:
LANDER J
DATE OF ORDER:
15 FEBRUARY 2011
WHERE MADE:
SYDNEY (HEARD IN ADELAIDE)
THE COURT ORDERS THAT:
1.The parties bring in short minutes of order to reflect these reasons.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
SAD 14 of 2008
BETWEEN: HILLS INDUSTRIES LIMITED (ACN 007 573 417)
ApplicantAND: BITEK PTY LTD (ACN 084 308 207)
Respondent
SAD 39 of 2009
BETWEEN: HILLS INDUSTRIES LIMITED (ACN 007 573 417)
ApplicantAND: BITEK PTY LTD (ACN 084 308 207)
Respondent
SAD 40 of 2009
BETWEEN: BITEK PTY LTD (ACN 084 308 207)
ApplicantAND: HILLS INDUSTRIES LIMITED (ACN 007 573 417)
Respondent
JUDGE:
LANDER J
DATE:
15 FEBRUARY 2011
PLACE:
SYDNEY (HEARD IN ADELAIDE)
REASONS FOR JUDGMENT
INTRODUCTION
Three related matters were heard concurrently and this judgment addresses those separate proceedings, all of which were brought under the Trade Marks Act 1995 (Cth) (the Act). The applicant in SAD 14 of 2008 and SAD 39 of 2009, the respondent in SAD 40 of 2009, Hills Industries Limited (Hills) also seeks relief under ss 52 and 53 of the Trade Practices Act 1974 (Cth) (the TPA).
In the first proceeding (SAD 14 of 2008 – appeal proceeding) Hills appealed from a decision of a delegate of the Registrar of Trade Marks (the delegate) allowing registration of Bitek Pty Ltd’s (Bitek), DIGITEK mark.
In the second proceeding (SAD 40 of 2009) Bitek claims that Hills’ marks should be deregistered for non-use. That application has been referred to this Court by the Registrar of Trade Marks.
In the third proceeding (SAD 39 of 2009 – infringement proceeding) Hills alleges that Bitek has infringed its series of marks, DGTEC, DGTEK and DGTECH, and has as well contravened ss 52, 53(c) and 53(d) of the TPA.
On 21 April 2009 an order was made with the consent of both parties that the proceedings be heard concurrently and the evidence in each proceeding be evidence in the other proceedings. It was also ordered that liability be determined separately from quantum. These reasons address the question of liability.
The proceedings proceeded upon affidavits. Both parties tendered a number of affidavits in support of their case which do not need to be identified. I will refer to the particular evidence relied upon by the parties in the reasons which follow.
Counsel for Hills did not seek to cross-examine any of the deponents to the affidavits relied upon by Bitek. Bitek’s counsel cross-examined two of the deponents of affidavits relied upon by Hills, being Mr Anthony (Tony) Cormick and Mr Barry Griggs. Mr Cormick was a former director of DGTEC Pty Ltd (the company). Mr Griggs is the research and development manager of the antennas and electronics division at Hills.
The trade marks in suit are:
(a)Bitek’s pending trade mark application no. 960495 for “DIGITEK” in respect of goods in Class 9:
TV installation accessories including external TV antennas, none of the foregoing being set-top boxes.
That trade mark application was filed on 4 July 2003.
(b)Hills’ DGTEC trade mark Registration No. 901020 for the series of words “DGTEC, DGTEK and DGTECH” in respect of goods in Class 9:
Digital and electronic products including televisions, video players, DVD players, CD players, decoders and cameras.
That trade mark application was filed on 23 January 2002.
HISTORY
The company was incorporated on 31 July 2001 with two directors, Paul Cormick (until 7 October 2007) and Anthony (Tony) Cormick. On 21 November 2007 Tony Cormick placed the company into voluntary administration. On 18 December 2007 liquidators were appointed.
In November 2007 Hills acquired the business assets of the company pursuant to a Sales of Business Assets Agreement. The company sold and Hills purchased all right, title and interest in the “Assets” of the company which included the “Goodwill” of the company which was defined to include the business name “DGTEC” and all intellectual property relating to the business name and the “Business” of the company including registered and unregistered trade marks: see ss 106 and 106(3) of the Act. At the time of entry into the agreement the company owned the DGTEK Australian Trade Mark Registration no. 901020 for the series of marks DGTEC; DGTEK and DGTECH, which are the subject marks relevant to all three proceedings.
At common law a trade mark was assignable only if it went with the goodwill of the business in which the trade mark was used: Pinto v Badman (1891) 8 RPC 181 at 194. However, legislative reform has led to the enactment of s 106 of the Act which provides that a registered trade mark or a trade mark whose registration is being sought may be assigned or transmitted with or without the goodwill of the business concerned in the relevant goods and/or services.
The company was amongst the first suppliers of set-top boxes in the Australian market and its first sales of set-top boxes under the DGTEC trade mark occurred in about August 2001.
A set-top box converts a digital signal into a form which can be displayed on an existing analogue television to which it is connected. Between 2001 and November 2005 the company sold three separate set-top models; DH-2000A; DH2000B; and DG-5000i. The company sold its set-top boxes under the DGTEC mark through predominantly national retail channels such as Dick Smith, the Good Guys, Harvey Norman, Retravision and Myer.
After November 2005 the company and Hills, after it acquired the company’s assets, also sold the following products under the DGTEC trade mark, being:
(a) digital video recorders;
(b) LCD televisions;
(c) CD and MP3 players;
(d) DVD player/recorders;
(e) micro-stereo sound systems;
(f) iPod docking speakers; and(g) web-based cameras.
Bitek was promoted and incorporated by Kazik Bialecki in 1998.
Bitek has since its incorporation carried on the business of importing and selling products used in the installation of free-to-air and satellite television receivers. It carries on business in New South Wales, Victoria, the Australian Capital Territory and South Australia. It has supplied products under a variety of trade marks including the DIGITEK mark which it adopted in early 2003 to enable it to sell products to other trade suppliers with whom it was otherwise in competition. Mr Bialecki’s evidence was that DIGITEK was chosen as the mark on the basis that its prefix came from the word “digital” and its suffix was taken from “Bitek”. His evidence was that DIGITEK was chosen as a mark to suggest modern, well-designed products for use in the digital age.
Cable was the first product sold under the trade mark DIGITEK by Bitek in January 2004. Since that time Bitek has sold products under that mark, including:
Antennas, cables (speaker, coaxial, data and security), leads, TV and projector mounting brackets, switch selectors, connectors, wall plates, splitters, multi-switches, cable ties, cable clips, cable caddies, industrial tools, digital set-top boxes, video senders, video intercoms, remote controls.
In May 2007 Bitek ceased selling DIGITEK branded digital set-top boxes. In August 2009 it also stopped selling remote controls.
Bitek sells its DIGITEK range of products to professional installers who comprise 90% of its customers. Professional installers carry on the business of the installation of TV antennae and satellite equipment and accessories. The TV antennae are for receiving free-to-air TV signals whilst the satellite dishes are for receiving satellite TV signals. Professional installers usually connect or mount antennae, satellite dishes and related components by using cables, connectors and brackets. Usually professional installers do not supply the television receivers, video players and CD players.
The remainder of Bitek’s customers (10%) for its DIGITEK range of products are wholesalers who buy for the purpose of resale to professional installers. Bitek promotes its products, including the DIGITEK range of products, by using sales representatives, its website and by conducting regular trade nights for customers and by attending industry trade shows. Bitek has a number of sales representatives who visit customers and provide samples, product lists and product brochures. Bitek’s customers order products by either attending Bitek’s warehouses in the States and Territories to which I have referred or by e-mail, facsimile or over the telephone.
The DGTEC trade mark has been registered for the series of word marks “DGTEC: DGTEK: DGTECH” and has been registered as a word series type of mark with effect since 23 January 2002 in Class 9 in respect of “Digital and electronic products including televisions, video players, DVD players; CD players, decoders and cameras”.
Section 51 of the Act governs an application for registration of two or more trade marks in respect of similar goods or similar services within a single class where the trade marks resemble each other. At the relevant time, s 51 provided:
(1) A person may make a single application under subsection 27(1) for the registration of 2 or more trade marks in respect of similar goods or similar services within a single class if the trade marks resemble each other in material particulars and differ only in respect of one or more of the following matters:
(a) statements or representations as to the goods or services in relation to which the trade marks are used or are intended to be used;
(b) statements or representations as to number, price, quality or names of places;
(c) the colour of any part of the trade mark;
(d) any matter that is not inherently adapted to distinguish the goods or services and does not substantially affect the identity of the trade marks.
(2) If:
(a) the application meets all the requirements of this Act; and
(b) the Registrar is required (under section 68) to register the trade marks;
he or she must register them as a series in one registration.
Section 51(1)(d) has been repealed. Section 51(d) was repealed by the Trade Marks Amendment Act 2006 on 23 October 2006. Nothing turns on the fact it was repealed.
Hills contended that paragraphs (a), (b) and (c) of s 51(1) had no application to this series of marks because there was no difference in the goods or services to which the trade marks are to be used: (a); no difference in the number, price, quality or names of places: (b); and no difference in the colour of any part of the trade mark: (c). Therefore it contended the DGTEC trade mark registration was effected under s 51(1)(d) on the basis that the words differ only in respect of matters that are not inherently adapted to distinguish the goods and do not substantially affect the identity of the trade marks: s 51(1)(d). It contended the Registrar proceeded on the basis that the words DGTEC, DGTEK and DGTECH are substantially identical to each other.
It contended that Bitek has not challenged this aspect of the DGTEC registered trade mark and that therefore it would focus on the DGTEC and DGTEK variants rather than DGTECH which “does not take the case any higher”.
Later Hills used Bitek’s non-challenge on this ground to the DGTEC registered trade mark in its argument on the non-use application in a manner which I will explain.
It is necessary to set out the issues raised in the three separate proceedings, identify how some of those issues are common to each of the proceedings and the contentions made by the parties on those issues. In doing so, I will refer to the relevant statutory provisions as they arise.
APPEAL PROCEEDING
Bitek’s trade mark application was filed on 4 July 2003 and was accepted on 13 April 2004. At the time of acceptance, a statement of goods listed the following goods in Class 9:
Coaxial cables, data cables and accessories; TV installation accessories including external TV antennas.
On 15 November 2004 the company filed a notice of opposition to the registration of the Bitek trade mark. The company opposed the registration of the Bitek trade mark relying on its prior registered trade mark no. 901020 which was for the series of marks DGTEC, DGTEK and DGTECH in respect of the goods in Class 9:
Digital and electronic products including televisions, video players, DVD players, CD players, decoders and cameras.
A hearing in relation to that opposition took place in Canberra on 4 May 2006 before the delegate. After the hearing, Bitek amended the statement of goods to exclude set-top boxes and as a result the statement of goods in respect of which registration was sought became, as it is now:
TV installation accessories including external TV antennas, none of the foregoing being set-top boxes.
On 11 May 2006, after Bitek had amended the statement of goods, the company’s solicitors advised the delegate that it:
... would be happy with the result (the Hearing Officer) foreshadowed at the hearing where digital set-top boxes are specifically excluded from the class of goods in (Bitek’s) registration.
The assignment of DGTEC trade mark from the company to Hills was registered on 4 January 2008 and Hills was entered on the Register as the owner of the trade mark on 17 January 2008.
Hills relies on s 53 of the Act for its standing to continue the company’s opposition to the registration of the Bitek mark. Section 53 provides:
If:
(a)after a person has filed a notice of opposition, the right or interest on which the person relied to file the notice of opposition becomes vested in another person; and
(b)the other person:
(i)notifies the Registrar in writing that the right or interest is vested in him or her; and
(ii)does not withdraw the opposition;
the opposition is to proceed as if the notice of opposition had been filed in that other person’s name.
Hills claimed that it notified the Registrar that the DGTEC mark had vested in it by making its successful application to have itself registered on the assignment of that trade mark. It did not withdraw the opposition. Hills claimed that when it was entered in the Register as the owner of the trade mark the opposition proceeded “as if the notice of opposition had been filed in Hills’ name”: s 53. I am satisfied that Hills was entitled to continue the company’s opposition before the Registrar and appeal to this Court against the decision of the delegate.
Where a Registrar is faced with opposition proceedings the Registrar must proceed in accordance with s 55 of the Act which provides:
55 (1) Unless the proceedings are discontinued or dismissed, the Registrar must, at the end, decide:
(a) to refuse to register the trade mark; or
(b)to register the trade mark (with or without conditions or limitations) in respect of the goods and/or services then specified in the application;
having regard to the extent (if any) to which any ground on which the application was opposed has been established.
(2) Without limiting subsection (1), if the application was opposed on the ground specified in paragraph 62(a) (that the application, or a document filed in support of the application, was amended contrary to this Act), the Registrar may revoke the acceptance of the application and examine the application again under section 31.
On 18 January 2008 the delegate found that Bitek’s mark DIGITEK is deceptively similar to the prior registered DGTECH/DGTEK/DGTEC marks, but that the goods in Bitek’s amended statement of goods were not “similar goods” within the meaning of s 44(1)(a)(i) of the Act to the goods the subject of the company’s registered trade mark and, on that basis, dismissed the company’s opposition and allowed registration of Bitek’s DIGITEK trade mark in respect of the goods set out in the amended statement of goods.
Hills appealed against the delegate’s decision. On 16 April 2008 Hills filed an amended notice of appeal which raises the following grounds of objection:
(a)Hills’ trade mark and Bitek’s trade mark are substantially identical or deceptively similar and both are in respect of goods which are similar (s 44(1));
(b)the use of Bitek’s trade mark would be contrary to law (s 42);
(c)because of some connotation that Bitek’s trade mark has its use would be likely to deceive or cause confusion (s 43);
(d)Bitek is not the owner of the Bitek trade mark (s 58);
(e)the Bitek trade mark is similar to the Hills’ trade mark which is an earlier registered trade mark that has acquired a reputation in Australia and because of that reputation the use of the Bitek mark would be likely to deceive or cause confusion (s 60).
Bitek claims that Hills conceded in submissions made before me on 8 October 2008 that its appeal “turned entirely on s 44(1) of the Act”. However, Hills pressed its grounds of opposition under ss 44, 60 and 42(b) of the Act.
Hills’ notice of appeal raises those issues and each party addressed those issues on the appeal. It seems to me that the submission made to me was not meant to be and was not understood, at least by Bitek, to be an abandonment by Hills of its two grounds under ss 60 and 42(b) of the Act. However, the grounds of appeal in paragraphs (c) and (d) referred to in [37] were not pressed.
Section 35 of the Act provides for an appeal to this Court against a decision of the Registrar to accept an application for registration of a trade mark or to reject that application. An appeal from a decision of the Registrar of Trade Marks is heard in the original jurisdiction of the Court and is by way of rehearing: Blount Inc v Registrar of Trade Marks (1998) 83 FCR 50 per Branson J at 59. The appeal is a hearing de novo: Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 per French J at [32].
In Chocolaterie Guylian NV v Registrar of Trade Marks (2009) 180 FCR 60, Sundberg J said:
The nature of an “appeal” to the Federal Court under s 35 (and in respect of a decision in an opposition proceeding under s 56) has been discussed at length in several cases: see Blount 83 FCR at 58D-59A (Branson J); Kenman Kandy 122 FCR 494 at [21]-[22] (French J); Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 at [32]-[34] (Woolworths) (French J). In hearing an appeal pursuant to s 35, the Court exercises its original jurisdiction and conducts a hearing de novo. It is to determine on the merits the same question that was before the Registrar — namely, whether or not the trade mark should be accepted — and in doing so, it is to apply the same legal criteria that the Registrar is required to adopt under the Act.
No presumption arises in favour of the correctness of the delegate’s decision but the Court will give respect and weight to the delegate’s opinion, being an experienced and skilled person: Registrar of Trade Marks v Woolworths Ltd 93 FCR 365 per French J at [33]. In considering the appeal, the Court should have regard to the rights of the parties as at the date when the application for registration was made; in this case, 4 July 2003: Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 per Kitto J at 594.
Hills has the responsibility which it accepted to establish the grounds of opposition relied upon. Bitek argued that this Court could only uphold any ground of opposition if the Court were satisfied that the trade marks should clearly not be registered: Lomas v Winton Shire Council [2003] AIPC 91-839 per Cooper, Kiefel and Emmett JJ at [17]-[19]; and Kowa Co Ltd v NV Organon (2006) 66 IPR 131 per Lander J at [139]-[140].
Hills, on the other hand, argued that it had no higher obligation than to establish the grounds of opposition on the conventional ground of the balance of probabilities. It relied on the decision of Sundberg J at 67 in Chocolaterie Guylian NV v Registrar of Trade Marks 180 FCR 60, which followed a decision of Gyles J in Clinique Laboratories Inc v Luxury Skincare Brands Pty Ltd (2003) 61 IPR 130 and Pfizer Products Inc v Karam (2006) 237 ALR 787.
In those decisions, Gyles J (on two occasions) and Sundberg J (on the one occasion) rejected the approach taken in earlier decisions that an opponent to the registration of a trade mark should satisfy the Registrar or court that a trade mark “should clearly not be registered”.
The dispute as to the standard which is to be applied on an appeal of this kind arises out of remarks made by the Full Court in Lomas v Winton Shire Council [2003] AIPC 91-839, the first case upon which Bitek relied. In that case the Court said at [17]-[19]:
17 No submissions were addressed to the Court concerning the standard to be applied by a single judge in considering an appeal under s 56 of the Act. The presence of s 195(2) suggests that a parallel should be drawn with the scheme of appeals in opposition proceedings under the Patents Act 1990 (Cth). On that basis, on appeal under s 56, the Court should consider whether the trade mark should clearly not be registered. Only if so satisfied should the Court decide to uphold an opposition.
18 The fact that leave to appeal from the decision of a single judge is required indicates the quasi summary nature of an opposition proceeding. An unsuccessful opponent would always have the opportunity to bring an expungement proceeding if the opposition proceeding fails. In an expungement proceeding, the validity of a trade mark can be fully explored. That is a reason for concluding that there should not be a full exploration of the prospective validity of a trade mark on an appeal in an opposition proceeding.
19 Thus, it would be inappropriate for there to be a full exploration of the validity of the trade mark in two separate proceedings in the Court, first in an appeal in an opposition proceeding and then, subsequently, if the opposition proceeding failed, in an expungement proceeding. Those considerations emphasise the need for the Full Court, before refusing leave to appeal pursuant to s 195(2) of the Act, to be satisfied that a decision by a single judge upholding an opposition is undoubtedly correct.
Later the Court said at [36]:
36 The legislative scheme relating to opposition proceedings set out above indicates that an opponent has the onus of establishing the ground of opposition relied on. In the present context, that means that Winton and the Company must establish that Ms Lomas was not the owner of the Trade Mark as at the Priority date, at least on the balance of probabilities. On one view, they may be required to establish that she was clearly not the owner (see [17] above).
(Emphasis added.)In Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd (2003) 132 FCR 326, Bennett J followed the decision of Emmett J in F Hoffmann-La Roche AG v New England Biolabs Inc (2000) 99 FCR 56 and applied the reasoning of Emmett J in relation to opposition proceedings under the Patents Act to trade marks opposition proceedings which she said was consistent with the approach which was taken by the Full Court in Registrar of Trade Marks v Woolworths Ltd 93 FCR 365. Subsequently, in Clinique Laboratories Inc v Luxury Skincare Brands Pty Ltd 61 IPR 130, Gyles J indicated contrary to the decision in Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd 132 FCR 326 that he could not see how, having regard to the provisions of s 55 of the Act, it can be said that a higher standard than the conventional standard should be applied.
Thereafter different judges took different positions. Kenny J applied the higher standard in McCorquodale v Masterson (2004) 63 IPR 582; and Finn J in Austereo Pty Ltd v DMG Radio Australia Pty Ltd (2004) 209 ALR 93 and Cooper J in Health World Ltd v Shin-Sun Australia Pty Ltd (2005) 64 IPR 495 followed Bennett J in Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd 132 FCR 326 as a matter of comity.
On the other hand, Finkelstein J reached a different conclusion which he recognised might be inconsistent with the views expressed in Lomas v Winton Shire Council [2003] AIPC 91-839 and Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd 132 FCR 326: BP plc v Woolworths Ltd (2006) 62 IPR 545.
I had occasion to review those authorities in Kowa Co Ltd v NV Organon 66 IPR 131 and concluded that I should follow the decision of the Full Court in Lomas v Winton Shire Council [2003] AIPC 91-839 and a decision of the Full Court in Registrar of Trade Marks v Woolworths Ltd 93 FCR 365, and as a matter of comity follow Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd 132 FCR 326 even though I doubted the correctness of those decisions for the reasons expressed by Gyles J and Finkelstein J in the cases to which I have referred.
Following that decision, Gyles J considered the issue afresh in Pfizer Products Inc v Karam 237 ALR 787. He referred to the decisions to which I have referred and, in particular, my decision in Kowa Co Ltd v NV Organon 66 IPR 131 and said I was wrong to follow Lomas v Winton Shire Council [2003] AIPC 91-839 because the remarks in that decision were obiter and the other decision upon which I relied was not relevant to my decision.
He also referred to a further decision of the Full Court in Woolworths Ltd v BP plc (2006) 150 FCR 134 in which the Full Court addressed this issue when considering an application for leave to appeal and gave leave on the basis that the question ought to be considered by the Full Court. However, after leave was granted and the matter came before the Full Court, the issue did not need to be resolved. Justice Gyles in Pfizer Products Inc v Karam 237 ALR 787 restated his dissent from Lomas v Winton Shire Council [2003] AIPC 91-839.
In Kowa Co Ltd v NV Organon 66 IPR 131 I said that I should follow the decision in Lomas because it was a decision of the Full Court and I should follow Bennett J’s decision in Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd 132 FCR 326 as a matter of comity and because other judges of the Court had followed that decision.
That is still my opinion. It may be, as Gyles J has pointed out, that the decision in Lomas was obiter and does not strictly need to be followed but it is a decision of the Full Court in circumstances where there are competing lines of authority at first instance which have left judges of this Court divided. The conflict cannot be resolved at first instance and must be resolved in the Full Court. As I indicated in Kowa Co Ltd v NV Organon 66 IPR 131, I favour the reasoning of Gyles J in Clinique Laboratories Inc v Luxury Skincare Brands Pty Ltd 61 IPR 130 but thought because of Lomas v Winton Shire Council [2003] AIPC 91-839 and comity I should follow the other line of authority. That is still my view, notwithstanding the criticism of that approach in Pfizer Products Inc v Karam 237 ALR 787.
Section 44
Hills principally relied upon s 44(1) of the Act in its opposition to the Bitek application. Section 44(1) provides:
44 (1) Subject to subsections (3) and (4), an application for the registration of a trade mark (“applicant’s trade mark”) in respect of goods (“applicant’s goods”) must be rejected if:
(a)the applicant’s trade mark is substantially identical with, or deceptively similar to:
(i)a trade mark registered by another person in respect of similar goods or closely related services; or
(ii)a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and
(b) the priority date for the registration of the applicant’s trade mark in respect of the applicant’s goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.
Note 1: For deceptively similar see section 10.
Note 2: For similar goods see subsection 14(1).
Note 3: For priority date see section 12.Note 4:The regulations may provide that an application must also be rejected if the trade mark is substantially identical with, or deceptively similar to, a protected international trade mark or a trade mark for which there is a request to extend international registration to Australia: see Part 17A.
Section 14 of the Act defines “similar goods”:
14 (1) For the purposes of this Act, goods are similar to other goods:
(a) if they are the same as the other goods; or
(b) if they are of the same description as that of the other goods.
The registration by the company of the DGTEC trade mark registration occurred prior to the priority date for the registration of the Bitek trade mark and, as such, s 44(1)(b) was satisfied by Hills. Hills argued that the questions for decision under s 44(1) were whether the mark DIGITEK is deceptively similar to the marks DGTEC or DGTEK and whether Bitek’s application goods are “similar goods” or “of the same description” as Hills’ registered goods. As I have said at [36], the delegate answered the first question in favour of Hills and the second question in favour of Bitek and proceeded to registration.
Hills argued that the same factual issues arose under s 44(1)(a)(i) in the appeal proceeding as arise under s 120(2) of the infringement proceeding, save for any relevant difference between Bitek’s used goods which are to be considered under the infringement proceeding, and Bitek’s application goods which are to be considered under the appeal proceeding.
It was Hills’ argument that there were sufficient similarities between Bitek’s used goods and Bitek’s application goods that the same conclusion under s 120(1) of the Act should be reached under s 44(1)(a)(i); that is, that DIGITEK and DGTEK are deceptively similar and the respective goods are the same.
Deceptive Similarity
Although s 44(1) is engaged when two marks are “substantially identical with, or deceptively similar to” each other, Hills did not assert that its mark DGTEC and Bitek’s mark DIGITEK were substantially identical but relied solely upon the claim that the marks were deceptively similar to each other.
Hills submitted that DGTEC and DIGITEK were deceptively similar in terms of sound, appearance and meaning.
Hills claimed that the appropriate test was whether there is a real risk that a significant number of consumers, having an imperfect recollection of Hills’ registered trade mark DGTEC will entertain a reasonable doubt as to whether DGTEC and DIGITEK products come from the same source: Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd 91 CLR 592 per Kitto J and Registrar of Trade Marks v WoolworthsLtd 93 FCR 365 per French J; E & J Gallo Winery v Lion Nathan (Australia) Pty Ltd (2009) 175 FCR 386 at [75]. Bitek did not dispute that to be the appropriate test.
In Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd 91 CLR 592, Kitto J said at 595:
It is not necessary, in order to find that a trade mark offends against the section, to prove that there is an actual probability of deception leading to a passing-off. While a mere possibility of confusion is not enough—for there must be a real, tangible danger of its occurring—it is sufficient if the result of the user of the mark will be that a number of persons will be caused to wonder whether it might not be the case that the two products come from the same source. It is enough if the ordinary person entertains a reasonable doubt.
Bitek did not argue otherwise.
With that in mind, I turn to the evidence and the submissions made by the parties in relation to matters which Hills said would satisfy that test.
I will first address the question whether the marks are deceptively similar and then the question whether they are so in respect of similar goods.
Similarity in Sound
Hills submitted that the marks DGTEC and DIGITEK are sufficiently similar in sound to create a real risk of confusion amongst a significant number of consumers. Hills’ witnesses, including Mr Cormick gave evidence that DGTEC was pronounced “dijitek”.
Bitek refuted Hills’ evidence and disputed Hills’ submissions that DGTEC was pronounced “dijitek”. Bitek argued that the marks are aurally different and, to that extent, relied upon the evidence of Dr Burton, a reader in English at the University of Adelaide, that there are two different natural or ordinary pronunciations of the Hills’ mark neither of which accorded with Hills’ contentions, being:
(a) Dee Gee Tee Eee See; and
(b) Dee Gee Tec
Bitek argued that both of those pronunciations were different from that of the Bitek trade mark which is pronounced “dijitek”.
Bitek submitted that the pronunciation suggested by Hills does not accord with the ordinary and natural pronunciation of “DGTEC”. It asserted that the evidence of wholesale distributors such as Mr Manicastri and Mr Kaczmarczyk indicated that DGTEC is pronounced “Dee Gee Tec” not “dijitek”. Further, Bitek argued that Hills’ own customer service message, a recording of which was played in Court, pronounced DGTEC as “Dee Gee Tec”.
In its closing submissions, Hills argued the evidence in [69] was not relevant but, if relevant, little weight should be attached to such evidence. Hills submitted that in determining deceptive similarity between two marks, the task of the Court is not to engage in a side by side, meticulous comparison of DGTEC and DIGITEK: Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407 per Windeyer J at 415. Hills argued that the Court should refrain from the type of detailed phonetic comparison suggested by Bitek and on that basis asked the Court to reject Bitek’s evidence.
In the alternative, Hills submitted that Bitek’s evidence, taken at its highest, does not rule out the possibility that a significant proportion of relevant consumers would pronounce DGTEC as “dijitek” demonstrating a likelihood of confusion in the marketplace.
I do not agree with Hills’ claim that Bitek’s evidence was irrelevant because it meant that the Court would need, if it used the evidence, to engage in a “side by side” comparison of the marks. The question of how the marks might be pronounced is relevant in determining whether the requisite degree of confusion will be caused. To consider that aspect is not to compare the marks side by side.
However, that does not mean that the evidence should be given more weight than it deserves. The question is one for the Court.
In what manner would the marks be used in ordinary speech? There can be no doubt I think that Bitek’s mark is pronounced “dijitek”. Indeed, Hills did not argue otherwise. The three vowels in the “word” make that pronunciation inevitable.
It might be as Dr Burton says that the Hills’ mark might be spoken of in the two separate ways he mentioned. I think, however, because of the number of letters in the mark, that it is unlikely that the word will ordinarily be spelt as in “Dee Gee Tee Eee See”. It is more likely that it will be spoken as “Dee Gee Tec”. That is consistent with the evidence of the installers and the Hills’ customer service message. If that is the way the Hills’ mark is spoken, then it is different, but not very much so, than the spoken Bitek mark. The two pronunciations are “Dee Gee Tec” and “dijitek”. The pronunciations are quite similar. The Hills’ mark has a hard “g” and the Bitek mark a soft “g” or “j”. I think the way in which the marks are spoken will lead to confusion.
The delegate was of the same opinion. She thought that “Australians are notoriously careless in their speech and DIGITEK and DGTEC are likely to be pronounced in the same fashion”.
Similar in Appearance
Bitek asserted that the marks DGTEC and DIGITEK convey different visual impressions. The DIGITEK mark is in the form of a readily pronounceable word whereas it asserted DGTEC is “no more than a collection of alphabetic characters”.
I do not agree with Bitek’s contention in this regard. The marks are not the same, nor could they be but they are at first sight visually similar. Whilst the Hills’ mark does not have a vowel between the “D” and the “G”, at first sight that is not obvious.
I do not think that the ordinary person will view the Hills’ mark as a collection of “alphabetic characters” but will see it as a word which, because of the absence of that vowel, is pronounced in the way I have suggested.
The difference in the last letter of each mark is of no consequence at all. I think the marks are similar in appearance. In this respect I disagree with the delegate who was of the opinion that the marks did not so heavily resemble one another that confusion or deception was likely.
Similarity in Meaning
Hills argued that the marks DIGITEK and DGTEC are deceptively similar in that they share the common idea of combining the first element of each of the words DIGITAL and TECHNOLOGY. Hills submitted that an essential and distinguishing feature of DGTEC is the creation of a brand name from the first parts of the words DIGITAL and TECHNOLOGY: Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd (2004) 209 ALR 1 at [79]–[90]. It argued that because an essential feature of the DGTEC mark has been incorporated into DIGITEK mark, there is a real likelihood of confusion amongst consumers.
Bitek admitted that the name DIGITEK was created by using the first letters of DIGITAL. However, Bitek submitted, contrary to Hills’ contention, that the suffix TEK was chosen to ensure consistency with Bitek.
I think the marks have a similar meaning. Dealing first with the second element “TEC” and “TEK”, I think that consumers would see those letters as incorporating Technology especially having regard to the goods to which both marks relate.
As to the first element I think Hills’ argument should be accepted. The letters “DG” and “DIG” do convey a meaning relating to “DIGITAL”, especially when used with ‘TEC” and “TEK”. That again is reinforced because of the goods to which the marks relate. I think the two marks convey the same meaning and that is that they are associated with digital technology.
For all those reasons, I am of the opinion that the marks are deceptively similar. I agree with the conclusion reached by the delegate.
The next question is whether the marks are deceptively similar in respect of similar goods.
Similar Goods
Hills submitted that its registered Class 9 goods and Bitek’s TV installation accessories are “similar goods” for the purposes of s 44(1)(a)(i). As mentioned above, because of s 14(1)(b) of the Act, goods are similar if they are “of the same description” as the other goods. Bitek denied that its goods and Hills’ goods are “goods of the same description”.
The point of time at which this question is to be answered is at the priority date: Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd 91 CLR 592 at 595.
In determining whether particular goods are “goods of the same description”, the Court will consider a number of the factors which were identified by Romer J in Jellinek’s Application (1946) 63 RPC 59 including:
(a)the nature of the goods;
(b)the uses of the goods; and
(c)the trade channels through which the goods are bought and sold.
That decision was considered in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd 91 CLR 592, and the High Court said at 606:
The fact that examination of the nature of the applicant’s goods may, by itself, induce an observer to conclude that they are different in character from those of an opponent, and designed to serve different purposes, is by no means conclusive. Nor is the fact that the applicant’s goods are not specified by the regulations as being within the same class of goods: see In re The Australian Wine Importers Ltd and Reckitt & Colman (Australia) Ltd. v. Boden per Latham C.J. There may be many matters to be considered apart from the inherent character of the goods in respect of which the application is made and some indication of what matters are relevant to this inquiry was given by Romer J. in In re Jellinek’s Application. Romer J. thought it necessary to look beyond the nature of the goods in question and to compare not only their respective uses but also to examine the trade channels through which the commodities in question were bought and sold.
(Footnotes omitted.)The Court said further, after referring to another decision, at 606-607:
“… No single consideration is conclusive in itself, and it has further been emphasized that the classifications contained in the schedules to the Trade Marks Rules are not a decisive criterion as to whether or not two sets of goods are ‘of the same description’”: In re an Application by John Crowther & Sons (Milnsbridge) Ltd. Much the same considerations are evidence in the observation of Dixon J. (as he then was) in Reckitt & Colman (Australia) Ltd. v. Boden when he said: “What forms the same description of goods must be discovered from a consideration of the course of trade or business. One factor is the use to whch the two sets of goods are put. Another is whether they are commonly dealt with in the same course of trade or business.
(Footnotes omitted.)Hills and Bitek addressed each of those factors. Hills undertook a comparison of televisions (within Hills’ registered goods) and television antennas (within Bitek’s goods). Bitek compared its TV installation accessories with Hills’ goods which Bitek described as “brown goods” to distinguish them from Bitek’s goods.
At the priority date the only product that Hills marketed under its mark DGTEC were set-top boxes. It had not at that time extended the brand to remote controls, digital video recorders with hard drive, televisions, CD and MP3 players, DVD players, micro sound systems, iPod docking speakers and web-based cameras. By the time of the hearing before the delegate those goods were sold under the DGTEC mark.
Whilst Hills’ statement of goods for the DGTEC, DGTEK and DGTECH marks did not use the expression “set-top boxes”, it was common ground that they were included in Hills’ statement of goods as “decoders”.
As I have said, after the hearing in Canberra on 4 May 2006 Bitek amended the statement of goods to exclude set-top boxes so that its proposed statement of goods was for:
TV installation accessories including external TV antennas, none of the foregoing being set-top boxes.
At the priority date Hills sold only one product under the DGTEC mark being set-top boxes and Bitek sought registration of its mark for goods which specifically did not include set-top boxes.
It seems to me that at that date it could not be said that the goods marketed under the registered mark and the goods the subject of the Bitek application were similar goods or goods of the same description. Indeed, it could be positively said that they were not similar goods or goods of the same description.
However, Hills argued that its registered mark included goods of a wider description and that Bitek’s amended application had to be considered against the Hills’ statement of goods. The parties therefore embarked upon a notional factual inquiry where goods of the kind included in the respective statement of goods were marketed and sold. For example, Hills sought to prove that goods of the kind which it sold were sold and marketed in a particular manner. Evidence was led by Bitek as to the goods it marketed under its mark, their use and the manner in which they were marketed. Hills did not rely on evidence of the sale and marketing of its DGTEC products for the purposes of its s 44(1) case although Hills did rely on evidence of that kind to defend Bitek’s non-use claim. It relied upon general evidence of sales and marketing of like products. Hills criticised Bitek’s evidence which it said descended on occasions into actual sales and markets and failed to remain at the notional level.
There is a risk in that approach which I have attempted to avoid in that the inquiry might descend into determining the question not at the priority date but at the date of the hearing.
Nature of the Goods
Hills argued that the inherent nature of the goods registered in respect of DGTEC and those goods Bitek seeks to have registered under the name DIGITEK were comparable. Its submission was that Bitek’s TV installation accessories fall within Hills’ registered goods in that they “are all products made to interoperate with each other for the use and enjoyment of home entertainment systems”.
Bitek argued that its goods and Hills’ registered goods are of a fundamentally different nature. It asserted that TV installation accessories capture and convey signals to brown goods and act to connect such goods or physically support such goods. Alternatively, brown goods process signals into a visual and/or audible format.
It would be useful at this point to identify the TV installation accessories which comprise Bitek’s goods. Bitek relied on the evidence of three wholesale store operators.
Mr Manicastri’s evidence was that TV installation accessories include antennas, cables, brackets and mountings, connectors and cords that “are necessary to be used to allow or assist the electronic components of a TV installation to perform their function”. TV installation accessories are not electronic products. TV installation accessories are items which provide physical support to components of the installation or the items that capture a TV signal and allow it to be directed to electronic components. TV installation accessories do not process signal and do not contain circuitry or operate on electrical current.
Mr Kaczmarczyk said that TV installation accessories are items which capture and convey signal to an electronic product including antenna, satellite dish, mounting hardware, cabling, connections and amplifiers.
Mr Gigliotti said that TV installation accessories include antenna, audio and video leads, connectors, splitters and brackets.
None of those witnesses were cross-examined.
Mr Griggs, to whom I have already referred, said that a professional person in the industry would describe TV installation accessories as everything between the antenna and back of the television (does not include antenna, television or set-top box). He said a lay meaning of the expression would mean everything which is accessory to the viewing of the television: all the accessories between the antenna and the television, including the antenna itself, the television and a set-top box as well as remote controls, home theatre equipment, stands, cabinets and other things “accessory” to an installed television viewing set up. Later in his affidavit he described actual accessories:
– antenna
– cable
– amplifiers
– splitters
– power supplies
– brackets
– AV leads
– diplexers
– AV selectors
– connectors/adaptors
– remote controls– video intercoms
I do not accept Mr Griggs’ evidence in respect of what he called the lay meaning. The expression is TV installation accessories. I cannot think that anyone would think that the television itself was an accessory. I also do not accept his evidence that a professional person would not include an antenna in a TV installation accessory. Indeed, in his cross-examination he admitted that to define TV installation accessories to include all items which capture and convey the signal to the electronic product would not be to give the term a “strained meaning”.
I prefer the evidence of Bitek’s witnesses which is generally the same and the particular evidence of Mr Kaczmarczyk.
I accept Bitek’s argument. The goods are fundamentally different. The brown goods which comprise the Hills products are goods which are digital and electronic and provide the display to the consumer visually or audibly. Bitek’s goods are as they have said; goods which allow the brown goods to function. They provide support of varying types to the brown goods.
Use of Goods
Hills submitted that televisions cannot properly function to display terrestrial television broadcasts without an antenna. The two goods are therefore closely linked because “the quality and performance of the antenna has a vital impact upon the viewer’s digital television experience”.
Further, Hills argued that there is a real likelihood of confusion between DGTEC branded products and DIGITEK products due to the close proximity in which they are used. Hills annexed a diagram to its Closing Submissions which, it argued, demonstrated the use of DIGITEK and DGTEC products within a household and the likelihood of confusion which may arise therefrom.
Bitek took issue with Hills’ claim that televisions and television antennas are goods of the same description because a television cannot properly operate without an antenna. It submits that functional interdependence of goods should not be the sole determinant of whether the goods are similar goods or goods of the same description. The fact that TV installation accessories can be used in conjunction with brown goods does not mean that customers are likely to be confused.
It is right as Hills contend that the goods are interdependent and they rely on each other for their functionality. However, that does not take the matter far. Whilst the goods cannot operate on their own, they are not interchangeable. They are not “commonly used as alternatives or substitutes” for each other: New South Wales Dairy Corporation v Murray Goulburn Co-op Corporation (1989) 14 IPR 75. In that regard they are quite different classes of goods to those discussed in E & J Gallo Winery v Lion Nathan (Australia) Pty Ltd 175 FCR 386. They each have their uses which are quite separate and distinct even though when they are put together they assist to perform the end function: Re Jellinek’s Application 63 RPC 59.
Trade Channels
The evidence on this aspect became a little confused because Bitek relied upon its own actual marketing rather than use at the notional level. Bitek asserted that the method of sale of its goods differed from Hills. It submitted that its TV installation accessories are sold to trade customers (professional installers) or wholesale distributors via its factory shopfronts, website, sales representatives and by telephone, fax or email. It contended that Hills’ goods are purchased by ordinary retail customers from mainstream retail outlets such as Retravision, Myer and Harvey Norman.
Hills submitted that the evidence demonstrates that goods of a kind which Hills market and goods of the kind which Bitek markets are sold through the same or overlapping channels at both the wholesale and retail level.
Hills relied on Bitek’s Mr Gigliotti’s evidence. He said that the goods the subject of the Hills registration, including televisions, DVD players and video players were stocked and sold by wholesale distributors including Radio Parts and Easy Living Technology. Those wholesale distributors also stocked and sold Bitek’s TV installation accessories. Mr Gigliotti’s evidence was that Radio Parts and Easy Living Technology sold those products to electronic retailers such as Betta Electrical, Retravision and Home Electronics.
Mr Gigliotti also gave evidence that Bitek sold its DIGITEK branded products, including cables, leads, plugs, connectors and digital set-top boxes, to an electronics retailer, Leading Edge Super Store. This retail store also stocked and sold a range of consumer electronics including televisions, DVD players and video players.
Hills submitted that the fact retailers and wholesalers stocked, sold or distributed Bitek’s TV installation accessories as well as goods the subject of Hills’ registration such as televisions, DVD players and video players demonstrates that there has been and most likely will continue to be overlapping sales of Hills’ and Bitek’s goods. Of course in that regard Hills, contrary to its submission as to the way in which the inquiry should be conducted, was relying on actual use of the marks.
Bitek conceded that it sold its products to a retailer, Leading Edge Super Store. However, it submitted that this was the only retailer to which it supplied its goods and the supply related to a limited range of goods. It emphasised that its products were primarily sold to trade customers or wholesalers.
Hills adduced evidence that registered products of the kind the subject of the Hills’ mark were displayed and sold in close proximity to TV installation accessories in leading electronic retailers including Dick Smith, Tandy, Harvey Norman and Myer. Hills alleged that that evidence illustrated that, although predominantly distributed at the wholesale level, Bitek’s goods are likely to enter the public retail sphere alongside Hills’ registered goods. However, the evidence did not go and could not go as far as to prove that the Hills’ and Bitek’s goods were sold by the same retailer.
Bitek submitted that to the extent that television installation accessories appear in retail stores they are displayed in different ways to brown goods (the goods of the kind the subject of the Hills’ mark). TV installation accessories are commonly displayed by retailers in blister packs hanging in racks. Brown goods are likely to be displayed in working condition in order to demonstrate the features, styling and performance of the product to be seen by consumers.
Bitek argued that consumers of brown goods are concerned with brand names while consumers of TV installation accessories have regard to reliability and price over brand. It argued that consumers of TV installation accessories do not rely upon the brand. That contention is important for reasons which will appear later. Styling is important for brown goods as they are commonly visible when installed and in operation. In contrast, Bitek submitted TV installation accessories are typically out of view (in wall cabling, mounting brackets) or camouflaged (eg wall plates) when installed or in use.
Bitek submitted that there was a clear difference in price between goods of the kind under the Hills’ brand and Bitek’s TV installation accessories.
Bitek argued that the two sets of goods are promoted in different ways. Bitek does not direct its promotions to retail customers, but to trade customers. On the other hand, DGTEC branded goods are advertised by retailers in their catalogues and newspaper advertisements.
As I have mentioned earlier, the evidence on this topic at least on Bitek’s part strayed into evidence of actual sales and marketing. However, the clear impression I have is that goods of the kind under the Hills’ mark are marketed at the retail level and by direct advertising to consumers. TV installation accessories are mainly sold to professional installers at the wholesale level. A retail store may have for sale some accessories but only as a side line.
Where a retail store does have TV accessories for sale it does not display them in the same manner as brown goods. Brown goods are used as the bait for consumers. Consumers want to see the product which will at least from the consumers’ point of view deliver the visual image or audible sound. TV installation accessories do not have the attraction from a sales point of view that brown goods have.
Hills and Bitek both made submissions regarding the Full Court’s decision in E & J Gallo Winery v Lion Nathan (Australia) Pty Ltd 175 FCR 386. In that case the question was whether beer and wine were goods of the same description.
Hills argued that there were three key factors which led the Full Court to determine that beer and wine were goods of the same description: both beer and wine were sold by the same retailers; both products were distributed by the same major wholesale distributors; and both products were produced by large producers of alcoholic beverages.
Hills submitted that the same circumstances exist in this case in respect of Hills’ registered goods and Bitek’s TV installation accessories. The evidence establishes that brown goods and TV installation accessories are sold by the same mainstream electronic retailers (Tandy, Dick Smith, Harvey Norman and Myer); both brown goods and TV installation accessories are distributed by the same wholesale distributors (Radio Parts and Easy Living Technology); and brown goods of the kind sold under the DGTEC brand by Hills and TV installation accessories of the kind sold by Bitek are manufactured and sold by the same manufacturers, such as Hills. Hills submitted that such evidence “points compellingly to the conclusion” that its registered goods and Bitek’s goods are “of the same description”.
Bitek submitted that the Full Court’s finding that beer and wine were goods of the same description turned on the fact that the radler beer and wine were both “alcoholic beverages” and intended to be alternatives. Bitek argued that the facts in this case are distinguishable from E & J Gallo Winery v Lion Nathan (Australia) Pty Ltd 175 FCR 386 because its goods and Hills’ registered goods cannot be considered alternatives or substitutes. TV installation accessories perform essentially different functions to brown goods. For this reason, Bitek asserted that the conclusion reached by the Full Court is not open to me on the facts of this case.
In determining that Lion Nathan’s beer and wine were goods of the same description, the Full Court said at 407-8:
The primary judge accepted that there were a number of factors which supported the view that Lion Nathan’s beer and wine were goods at (sic) the same description. They were both alcoholic beverages and generally distributed by this (sic) same major wholesale distributors. The beer was intended to be an appealing alternative to wine and in developing the product, Lion Nathan deliberately set out to attract people who did not drink beer. Indeed it was developed with the deliberate objective of enticing consumers who previously drank wine but not beer. Producers of alcoholic beverages are no longer confined to the production of beer, as opposed to wine, and large producers of alcoholic beverages now produce a range of products and market themselves as doing so. Companies which were once brewers now market and distribute a range of products including beer, wine, spirits, cider and non-alcoholic drinks. Wine and beer are now frequently distributed by the same retailers. We agree that these matters point, and in our opinion point convincingly, to Lion Nathan’s beer and wine being goods of the same description.
In my opinion, a critical fact which moved the Full Court to describe wine and Lion Nathan’s beer as goods of the same description was that in the market in which they were sold they were interchangeable. They were both alcoholic beverages competing in the same market. Lion Nathan had introduced the radler beer for the specific purpose of appealing to the wine drinking market. As noted by the Full Court at [72], the beer had been developed “with the deliberate objective of enticing consumers who previously drank wine”. The beer was therefore intended to compete with wine and encourage wine drinkers to consume radler beer as an appealing alternative. That is not the case on this appeal. These goods are not interchangeable. TV installation accessories cannot be considered alternatives to brown goods. At most they are complementary.
The Full Court also placed weight on the fact that some large manufacturers of beer and wine produce a wide range of products including beer, wine, spirits, cider and non-alcoholic drinks. Hills argued by analogy that manufacturers of brown goods also manufacture TV installation accessories and for that reason the Court should find the goods are of the same description. However, the only evidence to support Hills’ claim is its own evidence that it produces both brown goods and TV installation accessories. Hills did not attempt to establish that other major manufacturers of brown goods also manufactured TV installation accessories. Bitek submitted that major manufacturers of brown goods do not also manufacture TV installation accessories.
The Full Court also considered the fact that both beer and wine were generally distributed by the same major wholesale distributors as supporting a finding that the goods were of the same description. In that case, there was evidence that wine and beer were distributed by national wholesalers including Australian Liquor Marketers, Independent Liquor Group and National Independent Liquor Wholesalers Association. The evidence on this appeal does not support a finding that TV installation accessories and brown goods are distributed by the same major wholesalers as is the case in respect of beer and wine. The only evidence of brown goods and TV installation accessories being distributed by the same wholesalers was by regional stores Radio Parts and Easy Living Technology.
For all of those reasons, the Full Court decision does not bear directly on the issues to be decided on this appeal.
When analysed the goods are quite different even though in the case of antennas they assist a television to operate. The Bitek goods are restricted to TV installation accessories including external TV antennas. They are not similar goods to televisions and certainly not similar goods to any of the other goods in the Hills’ goods. Nor are they goods of the same description. A television installation accessory is not an article of the same description as a television because it is quite different.
CONCLUSION
The question is whether the “TV installation accessories including external TV antennas, none of which are set-top boxes” and “Digital and Electronic products including televisions, video players, DVD players, decoders and cameras”, are similar goods or of the same description as each other.
The goods sold under the Bitek trade mark are not similar or of the same description as the goods sold under the Hills’ mark even though the goods, especially televisions and television antennas, and television installation accessories, are interdependent upon each other for their functionality.
The delegate also thought they were not. She said:
Registration 901020 is for a broad range of goods namely ‘digital and electronic products’. Although it describes ‘televisions, video players, DVD players, CD players, decoders and cameras’ as being included in the category of ‘digital and electronic products’ its registration is not limited to those specific goods. The question is whether the ‘digital and electronic products’ of registration 901020 are the same or similar to any of the goods of the applicant’s trade mark now that set top boxes have been excluded. I am not satisfied that they are.
External TV antennas are not a ‘digital or electronic product’, nor are they similar to such goods. The evidence shows the applicant is using its trade mark in relation to TV installation accessories such as cabling, connectors, adaptors and the like. These too are not ‘digital or electronic products, nor are they similar to such goods. I find none of the applicant’s goods are the same or similar to those of registration 901020. The ground of opposition under section 44 fails on this basis.
I agree with the delegate. In my opinion, the delegate was right to conclude that the Bitek mark should be registered.
I would have reached the same conclusion whether the test to be applied is that in Lomas v Winton Shire Council [2003] AIPC 91-839 or in Clinique Laboratories Inc v Luxury Skincare Brands Pty Ltd 61 IPR 130. In other words, if the obligation upon Hills was to establish its opposition no higher than on the balance of probabilities it has failed to discharge that obligation.
For those reasons, in my opinion, Hills’ appeal should be dismissed.
Because of the conclusion which I have reached in relation to s 44(1), it is not strictly necessary to consider Bitek’s reliance on s 44(3) of the Act which was relied upon by Bitek if Hills succeeded under s 44(1). However, in case I am wrong about my conclusion that the goods are not similar goods or goods of the same description and that therefore s 44(1) is a bar to registration, I should address Bitek’s fall back position under s 44(3).
Section 44(3) provides:
(3) If the Registrar in either case is satisfied:
(a) that there has been honest concurrent use of the 2 trade marks; or
(b) that, because of other circumstances, it is proper to do so;
the Registrar may accept the application for the registration of the applicant’s trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant’s trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area.
In addressing that argument the underlying assumption is that Hills has established that the marks are deceptively similar (with which I agree) and that the marks relate to similar goods or goods of the same description (with which I disagree).
Bitek argued that s 44(3) allows the Court to permit registration of a mark which would otherwise be refused under subsections (1) or (2) of s 44, which meant that s 44(3) implied a tolerance to a degree of confusion in the market place. I agree with that submission. Section 44(3) assumes that there are circumstances where it would be appropriate to permit registration of a mark notwithstanding that that mark is deceptively similar to a registered mark in respect of similar goods or goods of the same description.
Section 44(3) would permit registration of such a mark if the applicant for registration were able to satisfy the Registrar or the Court of one or other of the two matters in paragraphs (a) or (b) of s 44(3). If the applicant for registration can make out the threshold tests in either paragraph, the Registrar or the Court in the exercise of discretion may accept the registration subject to conditions. A particular condition is mentioned in s 44(3) as itself. Conditions which might be imposed would include conditions which would minimise or ameliorate the risk of deception or confusion in the market place. An appropriate condition would be a condition which preserves the integrity of the Register.
It said that Bitek’s use of the mark subsequent to the date of lodgement of the application for the mark may be taken into account as a positive factor in the exercise of the discretion. The other matters to be taken into account, it was submitted, were that there had been no actual confusion; the parties operated in different markets; and “the balance of inconvenience” lies with Bitek. In that regard, Bitek relied upon the use of the mark after 2004 which, if registration of the the mark were now denied, Bitek’s reputation in the DIGITEK mark would be destroyed.
It said regard should be had to the indication of consent earlier given by the company on 11 May 2006 that it would be satisfied if set-top boxes were excluded from the goods covered by the registration. It also said that regard ought to be had to the commercial honesty which Bitek had exhibited in adopting the DIGITEK mark by the use of the prefix and suffix to which I have already referred.
Bitek relied on both paragraphs (a) and (b) of s 44(3) to support registration in the event that the Court found Hills had established its opposition to registration under s 44(1).
Section 44(3)(a)
The discretion which is given by s 44(3)(a) will arise for consideration if the applicant can establish an honest concurrent use of its mark and the opponent’s mark.
Bitek asserted that the elements of s 44(3)(a) have been made out. It adduced evidence of six years of concurrent use and approximately $11 million worth of sales from January 2004 to the date of trial. It argued there is no evidence to suggest that Bitek’s adoption of the DIGITEK mark was other than honest.
Hills did not argue that Bitek’s use was not honest or, in particular, that the use had not been commercially honest: Re Parkington & Co Ltd’s Application (1946) 63 RPC 171 at 182. That aspect of paragraph (a) does not need to be further addressed.
However, Hills argued that s 44(3)(a) was not engaged at all because all of the evidence of concurrent use related to use after the priority date (4 July 2003). Bitek made no use at all of its DIGITEK mark before the priority date. The first sale of DIGITEK branded products was January 2004.
The evidence was as Hills asserted. There was no evidence of any use by Bitek of the DIGITEK mark in relation to any goods before the priority date.
Hills submitted that evidence of use after the priority date was not relevant because the rights of the parties to an opposition to registration are to be determined at the date of application for registration: Southern Cross RefrigeratingCo v Toowoomba Foundry Pty Ltd 91 CLR 592 at 595 per Kitto J; Registrar of Trade Marks v Woolworths Ltd 93 FCR 365 per French J at 383; McCormick & Co v McCormick (2000) 51 IPR 102 at 111. Hills also relied on the decision of a delegate of the Registrar in Re Simac SpA Macchine Alimentari’s Application (1987) 10 IPR 81. In that case, the delegate asserted that a consideration of honest concurrent use after the priority case would be inconsistent with the accepted principle set out in Southern Cross. Hills also relied on six subsequent cases by delegates of the Registrar which followed that decision: Re Application by Coles Myer Ltd (1993) 26 IPR 577; Lister v Stingray Surf Company Pty Ltd (1997) 37 IPR 306; Aromas Pty Ltd v Aroma Coffee & Tea Co Pty Ltd (1997) 40 IPR 75; South Cone Inc v Stockline Pty Ltd (2001) 52 IPR 575; Safety Step (NZ) Ltd v Illinois Tool Works Inc [2007] ATMO 78; Trepper v Miss Selfridge Ltd (1991) 23 IPR 335. Hills asserted that those decisions demonstrate that the only evidence relevant to ascertaining the extent of concurrent use is that use which has taken place prior to lodgement of the application for registration.
Bitek argued that the Court can have regard to concurrent use after the priority date. It relied on the decision of Hammond J in VB Distributors Ltd v Matsushita Electric Industrial Co Ltd (1999) 53 IPR 466; the Privy Council in Hannaford & Burton v Polaroid Corporation [1976] 2 NZLR 14 (PC); and a decision of a delegate of the Registrar in Richard James Pty Ltd v Grant Oliver Investments [2005] ATMO 18. Bitek also referred to a number of decisions in which delegates have had regard to events occurring after the priority date: Trussardi SpA v Rundles Pty Ltd (1993) 25 IPR 503; Emdon Investments Pty Ltd v Shell International Petroleum Co Ltd (1988) 12 IPR 525; Dinning v New Balance Athletic Shoe Inc (1992) AIPC 90-931; Lister v Stingray Surf Company Pty Ltd 37 IPR 306; Analyses Conseils Informations ACI v Iguassu (No.16) Pty Ltd [2001] ATMO 4; Richard James Pty Ltd v Grant Oliver Investments [2005] ATMO 18.
Bitek’s counsel confirmed that Bitek did not request to amend its original application for removal:
MR HEEREY: Your Honour, can I just maybe clarify this before we all rise for lunch? What we didn’t have notice of was that my friend would come with this – that he would amend his application in the way he has ‑ ‑ ‑
MR CAINE: We are not amending.
Hills submitted that in those circumstances the Court was required to determine the application as originally filed.
Because there has been no request by Bitek to amend the application pursuant to s 66 of the Act I must first consider the application for removal as filed by Bitek on 2 May 2008 because in the absence of an order giving leave to amend that is the application before me. That application cannot succeed in its entirety for the reasons already given.
The next question is whether because the application cannot succeed in its entirety that means that is the end of the matter.
The Court has a discretion under s 101(2) to order the Registrar to remove “any or all of the goods to which the application relates” provided it is satisfied that the grounds for removal have been established. The relevant ground relied upon by Bitek in its removal application is s 92(4)(b).
Bitek submitted that it is permissible for the Court to rewrite the registration in order to narrow its scope: George WestonFoods Ltd v Manildra Flour Mills Pty Ltd 47 IPR 145 and New South Wales Dairy Corporation v Murray Goulburn Co-Op Corporation 14 IPR 26 at 45.
The question is whether the Court may because of the provisions of s 101(2) remove certain goods from a registration notwithstanding that the application seeks removal of “all of the goods”. In other words, does an application for non-use fail because the registered owner proved that the mark has been used for some of the goods the subject of the mark without establishing the use of all of the goods?
Hills’ argument that if the Court considered Bitek’s argument that the class of goods should be narrowed would result in a denial of procedural fairness should be rejected. Bitek’s concession means that it cannot have the relief it sought in the application but in seeking to argue that it is entitled to have the restricted relief it is thereby narrowing the scope of the inquiry. In those circumstances it could not be a denial of procedural fairness to allow the matter to proceed by reference to a narrower class of goods.
I also reject Hills’ submission that the application must fail because there is evidence of use of some of its goods. I accept Bitek’s argument that the Court may exercise its discretion under s 101(2) to narrow the scope of the registration where the applicant establishes that a ground exists in relation to only some of the goods to which the application relates.
The scope may be narrowed by excising goods from the specification: Murray Goulburn Co-op Corporation v New South Wales Dairy Corporation (1990) 17 IPR 269 (“dairy products” amended to “flavoured milk and cheese”); Mentholatum Co v Innoxa Marks Pty Ltd [2008] ATMO 61 (“sun block and sun screen preparations” expunged from the registration) or by the Court redrafting the registration to ensure that it accords with the scope of established use: George Weston Foods Ltd v Manildra Flour Mills Pty Ltd 47 IPR 145 (“flour, semolina, wheaten meal, and other products of cereals” altered to “noodle flour”); Sanyo Chemicals Industries Ltd v Nuplex Industries (Australia) Ltd [2005] ATMO 2 (“all goods in Class 1, including polyether polyols and derivatives thereof, defoamers” limited to “surfactants”); Insfin Insurance & Finance Group Pty Ltd v Razor USA LLC [2009] ATMO 81 (“Computer equipment and accessories, computer software, and electronic equipment” rewritten as “computer software being insurance comparator software”); Elan Polo Australia Pty Ltd v Blush Lingerie Inc [2009] ATMO 29 (“clothing, footwear, headgear and accessories” rewritten as “ raincoats for infants and children; gumboots for infants and children; casual shoes for women, children and infants”).
In New South Wales Dairy Corporation v Murray Goulburn Co-op Corporation 14 IPR 75, Murray Goulburn Co-op had the “MOO” mark registered in respect of “dairy products”. The New South Wales Dairy Corporation filed an application for removal of the MOO mark in relation to all the goods for which it was registered. Justice Gummow dismissed the applications for removal because there had been use of the mark during the relevant period in relation to cheese and flavoured milk. His Honour ordered that the Register be rectified so that the mark was registered only in respect of “cheese”. His Honour held that “milk” should be excised from the registration based on an application made by the applicants under s 22 of the Trade Marks Act 1955 that use of the MOO mark in respect of milk would be likely to deceive or cause confusion with the applicant’s “MOOVE” branded milk products.
In relation to the non-use application, Gummow J noted at 43:
It is clear that during the relevant period (24 February 1988—6 June 1988) there was use by the first respondent of the MOO trade mark in relation to packaged cheese. But it was hotly disputed whether there had been use in the technical sense required for s 23(1)(b) upon flavoured milk, the principal subject of contention between the applicant and first respondent. User in relation to cheese does not necessarily preserve the registration in its entirety. The trade mark may be removed in respect of those goods for which it was registered other than cheese: Hunter Douglas (Australia) Pty Ltd v Perma Blinds (1970) 122 CLR 49; Unilever plc v Johnson Wax Ltd [1989] FSR 145 at 160.
(Emphasis added.)Murray Goulburn appealed Gummow J’s findings under s 22 and sought that the registration be allowed to remain as “dairy products”. The Full Court of the Federal Court allowed an appeal in respect of s 22 but ordered rectification of the Register by limiting the goods in respect of which the trade mark MOO was registered to cheese and flavoured milk.
In Unilever plc v Johnson Wax Ltd [1989] FSR 145, the “LIFEBUOY” mark was registered in respect of “all goods included in class 3”. The only evidence of use of the mark was in respect of “soap”. Justice Whitford amended the specification of goods for the LIFEBUOY registration, limiting it to “soaps and other washing liquids, powders and preparations”.
In Hunter Douglas (Australia) Pty Ltd v Perma Blinds (1970) 122 CLR 49, Kitto J had made orders expunging certain goods from the opponent’s registration on the grounds of non-use. On appeal Barwick CJ noted that the effect of his Honour’s orders was to:
… in substance to limit the registration of the mark to the residue of the goods in respect of which it is registered, ie after elimination of “venetian blinds” and “awnings and blinds”. This course is in conformity with the provisions of the Act.
The power to excise goods from a statement of goods is consistent with the underlying policy of Part 9 of the Act which is to facilitate the removal of an unused trade mark. Removal of trade marks in respect of goods for which there is no evidence of use is warranted to ensure the integrity and accuracy of the Register: New South Wales Dairy Corporation v Murray Goulburn Co-op Corporation 14 IPR 75.
It is also consistent with s 101(2) which gives the Court a discretion “to remove the trade mark from the Register in respect of any or all of the goods and/or services to which the application relates”.
Section 101(2) assumes that the Registrar or Court may be left in circumstances where some of the grounds have been established in relation to some of the goods and/or services but not all and the subsection empowers the Registrar or Court in the exercise of its discretion to remove the trade mark from the Register in respect of any or all of the goods to which the application relates.
It follows therefore that Bitek’s failure to amend its application is not fatal to its argument that the goods to which the mark applies should be narrowed to those which Hills has proved have been used. In the end result it seems to me that the Court should determine the goods to be included in the specification by reference to the evidence of use.
The evidence of use by Hills is limited to the goods described in [282] which, as I have already said, is wider than the Bitek “amended application”.
I turn to the exercise of the discretion which is given pursuant to s 101(3) of the Act.
Once non-use has been established the trade mark should be removed “unless sufficient reason appears for leaving it there”. In Re Carl Zeiss Pty Ltd’s Application (1969) 122 CLR 1, Kitto J said at 11:
It has been urged upon me that no deception of any particular purchaser has been proved, and that there is no practical interest of the public to be served by removing the mark from the register. This seems to me to put the matter the wrong way round. The Stiftung’s omission to use the mark for the statutory period entitles the applicant to have the mark removed from the register unless sufficient reason appears for leaving it there.
In Kowa Co Ltd v NV Organon 66 IPR 131 I rejected a contention that s 101(3) required the party seeking the exercise of the discretion to show “exceptional circumstances”. Flick J arrived at the same conclusion in E & J Gallo Winery v Lion Nathan (Australia) Pty Ltd (2008) 77 IPR 69 at [198] which was not overturned by the Full Court on the appeal. So also did Bennett J in Pioneer Computers Australia Pty Ltd v Pioneer KK 176 FCR 300 at [168].
Section 101(4) informs the Registrar (and, on appeal, the Court) of the matters that the Registrar may take into account in exercising the discretion under subsection (3) not to remove a trade mark from the Register. However, s 101(4) does not purport to limit any other matters to which the Registrar (or the Court) may take into account. In determining whether it is reasonable for the mark to remain on the Register under s 101(3), s 101(4) permits the court to take into account the trade mark owner’s use of the mark on goods which are “similar to” the goods specified in the registration.
Hills submitted that its registered goods are “similar goods” to Bitek’s television installation accessories. Accordingly, it submitted that notwithstanding a lack of evidence concerning use of television installation accessories by Hills the Court should retain Hills’ registration in its current form as a matter of discretion. Hills accepted that it cannot establish use of products beyond those which Bitek conceded there is evidence of use, except as I have said remote controls and televisions. However it asserted that s 101(4) operates to permit the DGTEC registration to remain in its current form because Hills has established use of goods which are “similar goods” to television installation accessories.
Hills also relied on the decision of Bennett J in Pioneer Computers Australia Pty Ltd v Pioneer KK 176 FCR 300. In that case Pioneer KK was able to show it had used its mark on some but not all of the goods in respect of which it was registered. It sought to persuade the Court to exercise its discretion under s 101(3) to allow the mark to remain on the Register in respect of all of the goods covered by the original registration notwithstanding there was no evidence of use of some of the goods. Pioneer KK argued that the public interest would be best served by the mark remaining on the Register in its original form. Brand extension and the convergence of digital technology meant there was a likelihood of deception and confusion amongst consumers if particular goods were excised from Pioneer’s registration. Justice Bennett accepted Pioneer KK’s argument and in an exercise of the Court’s discretion under s 101(3) allowed the registration to remain unamended.
That is not the case on this application. I have found that the use of the DIGITEK mark is not likely to deceive or cause confusion. The premise upon which Bennett J relied does not exist on this application.
Bitek submitted that s 101(4), which was inserted into the Act by the Trade Marks Amendment Act 2006 (Cth), does not alter the discretionary power afforded to the Court under s 101(3). Section 101(4) merely informs s 101(3) because the use of a trade mark on closely related goods could already be taken into account under s 101(3): Pioneer Computers Australia Pty Ltd v Pioneer KK 176 FCR 300.
Bitek submitted that s 101(3) does not save Hills’ registration because there is no evidence of use of similar or closely related goods. The only evidence of use relates to a limited group of products which Bitek mainly excluded from its application for removal.
In my opinion, Hills’ argument should be rejected. The fact that it has used its mark in respect of goods which are similar to those goods marketed by Bitek is not in my opinion to the point. The circumstance which is addressed in s 101(4) is whether Hills has used the mark in respect of similar goods to those to which the application relates. In Hills’ case it has not used the goods except in relation to set-top boxes, remote controls, digital video recorders with hard drive, televisions, CD and MP3 players, DVD players, micro sound systems, iPod docking speakers and web-based cameras. I do not think there is any evidence to suggest any use of any similar goods to those proved used by Hills which ought to be retained in the statement of goods.
For those reasons, I would not exercise my discretion under s 101(3) in favour of Hills.
CONCLUSION
In my opinion, it would be appropriate to make an order that the Registrar amend the registration of DGTEC’s trade mark so that it reads:
Digital and electronic products including set top boxes, remote controls, digital video recorders with hard drive, televisions, CD and MP3 players, DVD players, micro sound systems, iPod docking speakers and web-based cameras.
INFRINGEMENT PROCEEDING
In this proceeding Hills asserts that Bitek has infringed its trade mark and it seeks relief pursuant to s 20(2) of the Act. Section 20 of the Act provides that if a trade mark is registered the owner of that trade mark has the exclusive rights to use the trade mark and the exclusive rights to authorise other persons to use that trade mark in relation to the goods and/or services in respect of which the trade mark is registered: s 20(1).
Those rights arise as from the date of registration of the trade mark: s 20(3). The “date of registration” of the trade mark is defined in s 6 of the Act to mean:
(a)in relation to the registration of a trade mark in respect of particular goods or services other than a trade mark to which paragraph (b) applies — the day from which the registration of the trade mark in respect of those goods or services is taken to have had effect under subsection 72(1) or (2); or
(b)in relation to a trade mark to which subsection 239A(3) applies — the date referred to in subsection 239A(4).
In this case s 72(1) applies which means that the registration of the trade mark is taken to have had effect from (and including) the filing date in respect of the application for registration: s 72(1). The filing date was 23 January 2002.
Section 20(2) provides for the right of the owner of the trade mark to obtain relief under the Act if the trade mark has been infringed. However, regard must be had to s 120 of the Act which provides for when a registered trade mark has been infringed. Section 120 applies to both goods and services but, in this case, the infringement is said to be only in relation to goods. Section 120 relevantly provides:
120 (1) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.
Note 1: For registered trade mark see section 6.
Note 2: For deceptively similar see section 10.Note 3:In addition, the regulations may provide for the effect of a protected international trade mark: see Part 17A.
(2) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to:
(a)goods of the same description as that of goods (“registered goods”) in respect of which the trade mark is registered; or
(b)services that are closely related to registered goods; or
(c)services of the same description as that of services (“registered services”) in respect of which the trade mark is registered; or
(d)goods that are closely related to registered services.
However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion.
Note 1: For registered trade mark see section 6.
Note 2: For deceptively similar see section 10.Note 3:In addition, the regulations may provide for the effect of a protected international trade mark: see Part 17A.
(3) A person infringes a registered trade mark if:
(a) the trade mark is well known in Australia; and
(b)the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to:
(i)goods (“unrelated goods”) that are not of the same description as that of the goods in respect of which the trade mark is registered (“registered goods”) or are not closely related to services in respect of which the trade mark is registered (“registered services”); or
(ii)services (“unrelated services”) that are not of the same description as that of the registered services or are not closely related to registered goods; and
(c)because the trade mark is well known, the sign would be likely to be taken as indicating a connection between the unrelated goods or services and the registered owner of the trade mark; and
(d)for that reason, the interests of the registered owner are likely to be adversely affected.
Note 1: For registered trade mark see section 6.
Note 2: For deceptively similar see section 10.
Note 3: For well known in Australia see subsection (4).Note 4:In addition, the regulations may provide for the effect of a protected international trade mark: see Part 17A.
(4) In deciding, for the purposes of paragraph (3)(a), whether a trade mark is “well known in Australia”, one must take account of the extent to which the trade mark is known within the relevant sector of the public, whether as a result of the promotion of the trade mark or for any other reason.
Section 120 provides three alternative tests for infringement each of which are relied upon by Hills in this proceeding.
It was not in dispute that Bitek has since 2003 used the mark DIGITEK (for which it applied for registration on 4 July 2003) in relation to antennas, cables (including speaker, coaxial, data and security), plasma TV brackets, leads, AV switch selectors, connectors, wall plates of various types, splitters, TV mounting hardware, video senders, video intercoms, industry tools, remote controls, multi-switches, set-top boxes, cable ties and cable clips. Hills contended that Bitek had used the mark in relation to other “television installation consumables”, but so much was denied by Bitek. However, Mr Bialecki’s evidence was that Bitek has used DIGITEK in relation to “other installation consumables”. There was no further evidence as to what was meant by other installation consumables and that evidence need not be further addressed.
Hills contended that Bitek’s use of DIGITEK in respect of set-top boxes, antennas, cables, splitters, AV selectors, remote controls, video intercoms, switches and multi switches amounts to infringement of the DGTEC mark. Bitek admitted using its mark in respect of those goods.
The defence raises a number of issues. First, whether DIGITEK is deceptively similar to DGTEC, DGTEK or DGTECH: s 120(1). Secondly, again in relation to s 120(1), whether the goods sold by Bitek under the DIGITEK mark are, leaving aside set-top boxes and remote controls, within the scope of the goods presently the subject of Hills’ registered trade mark. Thirdly, whether under s 120(2), the goods on which the Bitek mark is used are goods of the same description as those which are the subject of the Hills’ registered trade mark. Bitek argued it has a defence to infringement under s 120(2), because the use of its mark since 2004 did not, and is not likely to, deceive or cause confusion. Fourthly, if the respective goods are unrelated and, in those circumstances, the question whether Hills’ trade mark is well known in Australia: s 120(3). Fifthly, if Bitek is found to have infringed the DGTEC mark, Bitek relied upon s 122(1)(fa) of the Act contending that the Bitek trade mark should be registered.
Section 122(1)(fa) provides:
In spite of section 120, a person does not infringe a registered trade mark when:
…
(fa) both:
(i)the person uses a trade mark that is substantially identical with, or deceptively similar to, the first-mentioned trade mark; and
(ii)the court is of the opinion that the person would obtain registration of the substantially identical or deceptively similar trade mark in his or her name if the person were to apply for it; ...
Section 120(1)
Because I have found that the DGTEC mark and DIGITEK are “deceptively similar” the remaining issue that needs to be addressed under s 120(1) is whether the goods Bitek has sold under the DIGITEK brand are within the scope of the goods for which the DGTEC mark is registered.
Hills argued that several products sold by Bitek, including set-top boxes, remote controls, antennas, cables, splitters, AV selectors, video intercoms, switches and multi switches, fall within the description of Hills’ registered goods.
With the exception of set-top boxes and remote controls, Bitek denied that the goods in respect of which Bitek has used the DIGITEK mark are goods in respect of which the DGTEC mark is registered. Bitek made that concession in counsel’s opening submissions. Because of that concession I shall not act upon Mr Griggs’ evidence to the effect that remote controls are not both digital and electronic.
Hills asserted that Bitek’s sale of digital set-top boxes constitutes an infringement of its trade mark because set-top boxes are decoders. Bitek conceded that digital set-top boxes are decoders and as such fall within the scope of Hills’ registered goods.
Hills asserted that the term “digital and electronic products” should be interpreted disjunctively so that its registration of DGTEC extends to both digital products and electronic products. If this interpretation is accepted, Hills’ registration would cover digital products, electronic products and goods which can be considered both digital and electronic products.
If that construction were given to Hills’ goods, Hills submitted, some of the goods sold by Bitek fall within the residual description of “digital and electronic products”. Hills relied on the evidence of Mr Griggs that antennas and DVID and HDMI cables are digital products and that splitters, AV selectors, remote controls and video intercoms sold by Bitek are electronic products. His evidence was that switches and multi switches, and a subset of antennas are both digital and electronic products. I do not accept his evidence in relation to remote controls because of the concession made by Bitek’s counsel to which I have referred: [331].
Mr Griggs also said that wall plates, TV brackets, stands, audiovisual cables, component video cables and S-video cables are neither digital nor electronic products. Hills therefore did not allege any infringement for the use of the DIGITEK mark in relation to those products.
Bitek submitted that the description “digital and electronic products” should be read conjunctively so that Hills’ registration is limited to goods which are both digital and electronic. Bitek asserted that to interpret “digital and electronic products” disjunctively would impermissibly broaden the scope of Hills’ registered goods so that it included different goods such as computers.
Bitek’s witnesses, Mr Matacastri, Mr Gigliotti and Mr Kaczmarczyk said that the TV installation accessories sold by Bitek, with the exception of set-top boxes, do not fall within the range of goods covered by the Hills registration. They asserted that the DIGITEK branded TV installation accessories were not both digital and electronic products.
Bitek submitted that even if the Court accepted the evidence of Mr Griggs in preference its own witnesses, the only goods which would be covered by Hills’ registration in addition to set-top boxes, would be splitters, multi switches and a subset of antennas containing built-in amplifiers. Bitek did not directly argue that splitters and the subset of antennas were both digital and electronic.
For the reasons already given, I am of the opinion that the words “digital and electronic” should be read conjunctively so that the goods to which the mark applies must have both attributes.
The dispute between the witnesses came down to whether switches and multi switches, and a subset of antennas are both digital and electronic. Bitek conceded that set-top boxes were of that kind. Mr Griggs was cross-examined but not directly on his evidence. Insofar as he was cross-examined, he did not resile from the proposition contained in his written evidence. No application was made to cross-examine the three Bitek witnesses.
Bitek has numbers on its side but that is not a satisfactory way of resolving an evidential dispute. There is nothing in the rest of the evidence which makes either of two competing statements or opinions more likely to be credible.
I simply cannot on the evidence resolve the issue. I cannot determine whether switches and multi switches, and a subset of antennas are digital and electronic or only digital or electronic. As Hills has the onus of establishing infringement, it follows that they have not established the use of the DIGITEK mark in relation to switches and multi switches and any subset of antennas which are goods the subject of Hills’ statement of goods in that respect.
I do not think that it has been proved that any of the goods used under the DIGITEK mark with the exception of set-top boxes fall within the statement of goods under the Hills’ mark. Bitek conceded that remote controls were within Hills’ statement of goods. I therefore am of the opinion that the claim under s 120(1) should be dismissed, except in relation to set-top boxes and remote controls.
Section 120(2)
Section 120(2) applies to the use of a mark that is deceptively similar to a registered trade mark in relation to goods which are “of the same description” as the goods in respect of which the trade mark is registered.
I have found that the DGTEC and DIGITEK marks are “deceptively similar”. The question whether the goods in respect of which the DIGITEK mark has been used are goods of the same description as Hills’ registered goods requires a slightly different focus to the similar inquiry carried out in respect of s 44(1). This is because a comparison must be made between Hills’ registered goods and the goods which Bitek has used, rather than the goods in respect of which it sought registration. An infringement proceeding must of course address actual events rather than be the subject of a notional inquiry.
However, the result is the same. The notional inquiry, as I have said, in some respects had regard to the actual goods and sales after the priority date. For the reasons already given, I do not, with the exception of set-top boxes, accept that Bitek’s goods are goods of the same description as the Hills’ goods.
Because of that last mentioned finding, I do not need to decide whether Bitek has established the use of the DIGITEK mark is likely to deceive or cause confusion but again if I am wrong about the finding I should address that issue.
Hills argued that the defence is not open to Bitek because its use of the DIGITEK mark is likely to deceive or cause confusion. Hills submitted that the conclusion about deceptive similarity and similarity of goods informs consideration of whether actual use is likely to deceive or cause confusion. Hills submitted that as the DIGITEK mark is deceptively similar to DGTEC and Bitek’s use of the mark relates to goods which are of the same description as the goods in respect of which the DGTEC mark is registered, Bitek’s use is likely to deceive or cause confusion. I reject that submission because I have already found that the DGTEC and the DIGITEK goods are not, set-top boxes apart, goods of the same description.
Bitek asserted that the defence under s 120(2) is made out because the evidence disclosed that Bitek used the DIGITEK mark in a manner which was not likely to deceive or cause confusion. Bitek submitted that the DIGITEK mark was used on different goods to those the subject of the DGTEC mark; the parties operated in different market segments and trade channels; DGTEC goods were sold in retail stores whereas DIGITEK products were not sold in retail stores; there was evidence that the company was content with the existence of the DIGITEK mark if set-top boxes were excluded from DIGITEK’s registration; and DIGITEK branded products were accompanied by the phrase “Complete Digital Solutions” making it distinct from DGTEC branded products. Bitek also argued there was no evidence of actual confusion.
Hills asserted that there was evidence of actual confusion. Ms Meinberg, a receptionist employed by Hills, declared in a statutory declaration dated 23 December 2005 that she fielded telephone calls from customers who had confused DIGITEK with DGTEC.
Hills submitted that in any event it is not necessary to prove actual confusion under s 120, but only that there is a likelihood of confusion.
Hills submitted that the Court’s conclusions about deceptive similarity and the similarity between Hills’ and Bitek’s goods should inform its consideration of whether the actual use of the mark was likely to deceive or cause confusion.
In my opinion, Bitek has established that apart from the set-top boxes and remote controls there is no likelihood of deception or confusion in the use of the DIGITEK mark or the DIGITEK goods. The goods are not similar goods or goods of the same description. The infringement claim under s 120(2) fails, except in relation to set-top boxes and remote controls.
Section 120(3)
That leaves for consideration the question whether Bitek has infringed the Hills DIGITEK mark because of the provision of s 120(3).
An infringement proceeding will succeed under s 120(3) if the party alleging the infringement can establish that that party’s trade mark is well known in Australia and that a person has used a trade mark which is deceptively similar to that well known trade mark in relation to goods which are not of the same description as the goods in respect of which the trade mark is registered and, because the trade mark is well known, the sign would be likely to be taken as indicating connection between the unrelated goods.
For reasons which I have already given, these goods are unrelated for the purpose of s 120(3)(b)(i) because they are not goods of the same description. No more needs to be said about that.
However, that does not assist Hills unless Hills can establish that its trade mark is well known in Australia. It relied upon the same evidence as it adduced in relation to the claim that it had a reputation under s 60 of the Act.
In my opinion for the same reasons given in relation to that aspect of its claim, the DGTEC mark is not well known in Australia. It may be that the goods to which the mark attach were at the relevant time well known but, in my opinion, there is no evidence before the Court that the mark itself was well known. The infringement claim under s 120(3) fails.
Section 122
In any event, Bitek claimed as a complete defence to an infringement proceeding the benefit of s 122(1)(fa). It claimed that that paragraph was engaged because it had used a trade mark that was deceptively similar to Hills’ mark and the Court should be of the opinion in view of the dismissal of the appeal proceeding that Bitek would obtain registration of the deceptively similar trade mark in Bitek’s name.
In my opinion, Bitek is entitled to rely upon s 122(1)(fa) because it is entitled, in my opinion, to registration of the mark for which it already has applied and which as a result of these reasons will obtain.
In those circumstances it has not infringed Hills’ DIGITEK mark except in two respects, and so much was conceded by Bitek. For a period of time Bitek marketed under the DIGITEK name set-top boxes which it admitted is a decoder and remote controls. Those products are within the statement of goods of the Hills’ mark and the defence under s 122 would not apply.
CONCLUSION
In my opinion, Hills is entitled to relief in the infringement proceeding, but only in respect of the infringement by Bitek of the Hills’ mark by the use of the DIGITEK mark in relation to set-top boxes and remote controls.
The orders should reflect these reasons.
That finding will require further consideration.
SECTIONS 52 AND 53 OF THE TRADE PRACTICES ACT 1974 (FAIR TRADING ACT)
For this claim as part of the infringement proceeding Hills alleges, and Bitek denies, that between May 2001 and July 2003 the company substantially promoted and sold set-top box products with the result that by July and/or August 2003 the company had developed a state of knowledge by way of reputation by consumers of the DGTEC set-top box products.
Hills said it acquired a reputation in relation to DGTEC set-top boxes. It puts the same submissions as under its s 60 argument.
It is contended the sale by Bitek of set-top products using the name DIGITEK was, and is likely to, convey to consumers misrepresentations:
(a) that Bitek’s goods are DGTEC products in breach of s 52 of the TPA;
(b)that Bitek’s goods have the sponsorship or approval of the company and/or Hills in breach of s 52 and/or s 53(c) of the TPA; and/or
(c)that Bitek has the sponsorship or approval of or is affiliated with the company and/or Hills in breach of s 52 and/or s 53(d) of the TPA.
I have already found that the Hills DGTEC mark had not acquired the reputation within the meaning of s 60 and was not well known within the meaning of s 120(3) of the Act.
As I understand the s 52 case, the fact of the reputation of the mark makes Bitek’s marketing of set-top boxes under the DIGITEK mark a misrepresentation that the DIGITEK set-top boxes are marketed by DGTEC or are DGTEC products.
I have already found that the use of the Bitek mark was not in respect of similar goods or the same goods for the purposes of s 44 of the Act.
I have also found that Bitek has infringed by the use of the DIGITEK mark in respect of set-top boxes.
It is not clear to me on the submissions which have been made whether Hills seeks separate or additional relief under the TPA to which it is not entitled under the Act.
Submissions which were made by both parties in respect of this cause of action were very brief and did not identify what was said to be the misrepresentations that were made.
I propose in respect of this cause of action to allow the parties to make further submissions having regard to the findings made in respect of the claims made under the Act.
It was agreed that if a contravention were established the question of damages would be decided at a later time. In those circumstances, liability under the TPA could be determined with damages.
The parties should bring in short minutes of order to reflect these reasons within 14 days. Hills should also if it wishes to pursue relief under the TPA provide written submissions in relation to liability having regard to the findings within 21 days. If Hills wishes to pursue that cause of action and makes those submissions, Bitek should provide its written submissions in reply within 35 days.
I certify that the preceding three hundred and seventy-six (376) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. Associate:
Dated: 15 February 2011
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