Jack Gance and Mario Verrocchi v Ian Tauman - [2015] ATMO 118

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS

Re:Oppositions by Jack Gance and Mario Verrocchi to registration of trade mark applications 1572995, 1572997, 1572998 all in Classes 35 and 42 – Direct Chemist Outlet/DCO Logos - filed in the name of Ian Tauman.

Delegate:	Iain Campbell Thompson
Representation:	Opponent: Peter Creighton-Selvay of Counsel instructed by Nicola Prestia of Rotstein Commercial Lawyers Applicant: Ian Horak of Counsel instructed by Emma Mitchell of Sladen Legal
Decision:	2015 ATMO 118 s52 proceedings; sections 60 and 42(b); whether 42 ground should be decided after related Federal Court decision; s60 and 42(b) not established; neither section 60 nor 42(b) established. Request for full costs - costs awarded against Opponent as per Schedule

Background

These matters proceed under the Trade Marks Act 1995 (‘the Act’) and concern the three applications (‘the Applications’) for registration of trade marks filed by Ian Tauman (‘the Applicant’) which appear below:

Application No:  1572995
Priority Date:  6 August 2013
Services:  Class 35: Pharmacy retail services

Class 44: Pharmacy advice; Pharmacy advisory services; Pharmacy dispensary services

Trade Mark:

Application No:  1572997
Priority Date:  6 August 2013
Services:  Class 35: Pharmacy retail services

Class 44: Pharmacy advice; Pharmacy advisory services; Pharmacy dispensary services

Trade Mark:

Application No:  1572998
Priority Date:  6 August 2013
Services:  Class 35: Pharmacy retail services

Class 44: Pharmacy advice; Pharmacy advisory services; Pharmacy dispensary services

Trade Mark:

I will refer to the above services and trade marks as ‘the Services’ and ‘the Trade Marks’.
The Applications were examined as is mandated by section 31 of the Act and the Trade Marks were advertised as accepted for possible registration in the Australian Official Journal of Trade Marks on 9 January 2014.
On 7 March 2014 Jack Gance and Mario Verrocchi (‘the Opponents’) filed Notices of Intention to Oppose, followed by Statements of Grounds and Particulars (‘SGP’) on 7 April 2014. The grounds stated are under section 60 and subparagraph 42(b) of the Act as follows:
Trade mark is similar to a trade mark which has acquired a reputation in Australia - Section 60
Trade Mark No. 1197039 (Registered 4 September 2007)
Trade Mark No. 1277739 (Registered 17 December 2008)
Trade mark is scandalous or contrary to law - Section 42
The use of the Applicant's Trade Mark in the colours designated would cause a not-insignificant proportion of the public to be misled into believing that the Applicant is or was associated with the Opponents or associated with the Opponents being the owners of the Chemist Warehouse chain of pharmacies and use of the Trade Mark by the Applicant will breach section 18 of Schedule 2 of the Australian Consumer Law.
On 22 May 2014 the Applicant filed Notices of Intention to Defend.
Thereafter, the parties have filed their evidence (which I further discuss below) as allowed by the Trade Mark Regulations 1995 (‘the Regulations’).
Both parties requested to be heard and the matters came before me as a delegate of the Registrar of Trade Marks in Melbourne on 20 November 2015. The Opponents were represented by Peter Creighton-Selvay of Counsel instructed by Nicola Prestia of Rotstein Commercial Lawyers. The Applicant was represented by Ian Horak of Counsel instructed by Emma Mitchell of Sladen Legal.

Preliminary Issue

The Opponents submitted that while it is appropriate for me to decide the ground under section 60, I should delay my decisions in relation to the ground under subparagraph 42(b) because there is an appeal to the Full Bench of the Federal Court from Verrocchi v Direct Chemist Outlet Pty Ltd [2015] FCA 234 (‘Verrocchi’) which traverses that ground. The appeal has been heard and concerns the decision of Middleton J in relation to the storefront get-ups of the parties and whether they are misleadingly or deceivingly similar.
At the hearing I told the parties that I would not delay my decision in relation to the subparagraph 42(b) ground and that I would further explain my reasons why in this decision.
Initially it may be observed that, strictly speaking, there is no subparagraph 42(b) ground as stated in the SGPs. The SGPs relevantly state, “The use of the Applicant's Trade Mark in the colours designated would cause …” (Stress added).
Section 70 of the Act provides:
70Colours in registered trade marks
(1)A trade mark may be registered with limitations as to colour.
(2)The limitations may be in respect of the whole, or a part, of the trade mark.
(3)To the extent that a trade mark is registered without limitations as to colour, it is taken to be registered for all colours.
Note:For limitations see section 6.
Although the Trade Marks are filed in colour, they have no limitation as to colour and are taken to be filed in any colours. There are thus no “colours designated” on any of the applications and hence on any putative registrations of the Trade Marks which might ensue and consequently no grounds under subparagraph 42(b) to consider.
Further, in considering the proposed delay in relation to the subparagraph 42(b) ground, I refer to Cadbury UK Ltd v Registrar of Trade Marks[1] where Finkelstein J said at [12]:
[1] [2008] FCA 1126; (2008) 107 ALD 316; (2008) 77 IPR 608
12 The first point to observe is that while there is a provision permitting the Registrar (or his delegate) to adjourn a hearing (reg 21.15(9)) there is no express power to suspend or temporarily stay opposition proceedings. But, subject to the requirements of the Trade Marks Act and the Regulations, because the Registrar has control over the procedures of opposition proceedings he may presumably suspend or temporarily stay proceedings for proper reasons. At any rate this case was argued on the basis that the Registrar had the relevant power. The question here then is not whether the power to give the direction exists but whether it has been properly exercised.
13 In my view the effect of the Trade Marks Act and the Regulations is that the Registrar must take all necessary steps to get opposition proceedings ready for hearing as soon as practicable and thereafter hold the hearing. The merits are determined on the evidence before the Registrar and on the law as it is when the hearing takes place.
14 Sometimes the law is unclear. In that event, it may be appropriate to adjourn proceedings to await the law’s clarification. For example in Re Yate’s Settlement Trusts [1954] WLR 564 an application to approve a scheme of compromise or family arrangement was deferred pending the resolution of a similar case that was before the House of Lords. On appeal the decision to adjourn was set aside because the elderly settlor was in a delicate state of health and might die before his application was heard. The Master of the Rolls, Sir Raymond Evershed, said (at 567): "It may well be that if an important case is known to be subject to appeal to the House of Lords, or to appeal from a judge of first instance to the Court of Appeal, a judge may reasonably and properly think that it is in the public interest not to decide another similar case until the result of the case under appeal has become known: whether he should so decide depends very much on all the circumstances of the particular cases ...".
15 But the authorities establish that a case should not be adjourned for an indefinite period to await clarification of the law. In Geelong Football Club Ltd v Clifford [2002] VSCA 212 a trial was adjourned effectively indefinitely to await the outcome of an application in another case for special leave to appeal to the High Court and if leave were granted until the determination of that appeal. The Court of Appeal set aside the order. Ormiston JA (with whom Callaway JA agreed) said (at [6]) that the error of the trial judge was his "failure to appreciate that a party is entitled to a trial of a proceeding ready for hearing unless it is clearly shown that an injustice is likely be caused if the adjournment is refused." He went on to say (at [6]) that cases on the civil side "involving some technical rule of law or the disputed meaning of a particular section, where an appeal court has reserved its decision (or, even, is just about to hear argument), where the hearing and the resolution of the case will directly depend on the outcome of an appeal in a test case, [is an example of a case where] it would be preferable to await the expected outcome." But he pointed out that many issues are on appeal in the High Court at any one time and many applications for special leave are in the pipeline. In those circumstances it is not proper to demand that trials be adjourned merely because the outcome of any one of those appeals may have a bearing on the outcome of a trial. One exception, which Ormiston JA identified, is an appeal to the High Court which would resolve a dispute between inconsistent authorities binding on the trial court. But, as Ormiston JA said, that is a rare situation. See also City of Sydney Council v Satara [2007] NSWCA 148, where it was held that to vacate a trial to await the outcome of an application for special leave to appeal to the High Court from a judgment on arguably related principles was an improper exercise of the court’s discretion.
16 In my view, the suspension of the opposition proceedings for an indefinite period amounted to a denial of justice and a refusal by the delegate to perform her duty to hear and determine those proceedings: R v Whiteway; Ex parte Stephenson [1961] VicRp 26; [1961] VR 168, 170; compare Thornton v Repatriation Commission (1981) 35 ALR 485.
17 The second error (deference to the findings of the judge) requires some introductory comments. Proceedings in courts of law are bound by strict rules of evidence. In R v Deputy Industrial Injuries Commissioner; Ex parte Moore [1965] 1 QB 456, 488 Diplock LJ explained that "[f]or historical reasons, based on the fear that juries who might be illiterate would be incapable of differentiating between the probative values of different methods of proof, the practice of the common law courts has been to admit only what the judges then regarded as the best evidence of any disputed fact, and thereby to exclude much material which, as a matter of common sense, would assist a fact-finding tribunal to reach a correct conclusion." In contrast, unless otherwise provided by statute, rules of evidence do not bind administrative tribunals. Subject to an overriding duty of fairness (as to which see Board of Education v Rice [1911] AC 179, 182) a tribunal may have regard to probative evidence of any kind and from any source. It may even act upon its own knowledge, whether it be factual or scientific: Mahon v Air New Zealand [1984] AC 808.
18 The evidence to which an administrative tribunal may have regard can include evidence that has been given in another proceeding, including a court proceeding, provided the evidence is relevant to an issue before the tribunal: In re A Solicitor [1993] QB 69, 77. A tribunal may also accept as evidence the reasons for judgment given by a judge in other proceedings. But if the tribunal takes the approach that it should not disagree with findings made by the judge then the tribunal has fallen into error. The general rule is that a tribunal that is required to decide an issue will be in breach of that obligation if it merely adopts the decision of the judge on the same issue. (I put to one side (a) decisions which are the trigger for administrative proceedings and (b) criminal convictions which operate in rem and may not be challenged in collateral proceedings.) I do not mean to imply that reasons for decision given by a judge are irrelevant to an administrative tribunal. First of all, those reasons may, as I have said, be received into evidence. They must then be given some weight. Indeed, the judge’s findings may be treated as prime facie correct. On the other hand, if the judge’s findings are challenged, the tribunal must decide the matter for itself on the evidence before it: General Medical Council v Spackman [1943] AC 627.
19 Of course, when the tribunal is required to decide the matter for itself it is entitled to have regard to the judge’s findings. What weight it attaches to those findings will depend on a variety of considerations. Without in any way wishing to be exhaustive, the considerations can include: (a) whether the tribunal has available to it more evidence than was before the judge; (b) whether the arguments put to the tribunal were made to the judge; and (c) whether the tribunal is a specialist body with expert knowledge of the subject matter.
20 Now, in this case I fear that the delegate was intending to place too much emphasis on the judge’s or judges’ findings. In her reasons she said, correctly, that the court proceedings could "resolve issues which would require determination in the present oppositions." To proceed on the basis that it is unlikely that the Registrar will depart from the court’s findings and, that there is a public interest in avoiding inconsistent fact findings, indicates to me that there is a real risk that the delegate was not going to decide for herself the issues that must be decided to dispose of the opposition proceedings.
21 Sometimes there will be circumstances in which it is appropriate to delay opposition proceedings and await a court’s resolution of disputed facts that may be relevant in opposition proceedings. It is not possible to say with any precision what those circumstances might be. They would include (a) the degree of similarity of the issues involved, (b) the significance of the issues to the opposition proceeding, (c) whether the Registrar has more evidence than the trial judge, (d) the likelihood of the judge’s findings being challenged, and (e) whether it may be unfair (ie a breach of the rules of natural justice) to rely on the judge’s findings or the evidence on which those findings were based. In particular cases other matters will be taken into account.
My decision not to delay my decision in relation to subparagraph 42(b) ground is for the following reasons:
·    While the Opponent argued as if the decision of the Full Bench of the Federal Court were to be the end of that matter, it is quite possible (depending on the outcome) that either party might seek leave to appeal that decision to the High Court.
·    There is no doubt here about the applicable law or how it should be applied. While the decision of the Federal Court has been appealed to the Full Bench, both the facts and the interpretation of the law appear to me to be uncontroversial. There is no information as to the similarity of the evidence before me to that which was before Middleton J but I will diverge in one respect from His Honour’s reasoning in relation to the stress laid upon some of the Opponents’ evidence concerning the public recognition or reputation of the get-up of the Opponents’ shopfronts.
·    If the finding of the Full Bench of the Federal Court were to be adverse to the Applicant, it would not preclude registration of the Trade Marks; it would merely dictate the colours in which the Trade Marks might not be used only upon its shopfronts.
·    The Opponents’ arguments ask me to, at least to an extent, presuppose or guess at factors which are extraneous to the Trade Marks themselves such as the colour of the background against which they may or will be used. Again, these are factors which would not preclude registration of the Trade Marks but would only dictate the colours in which the Trade Marks might not be used or the background colour(s) against which they might not be used.

Onus

The Opponents bear the onus of establishing one or more grounds of opposition on the balance of probabilities.[2]
[2]Telstra Corporation Ltd v Phone Directories Co Pty Ltd [2015] FCAFC 156 at [132].
The relevant date at which the grounds must be considered is the filing date of the Trade Mark which is here the same as the priority date[3].
[3] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592; The Seven Up Company v O.T. Limited (1947) 75 CLR 203 at 211; Rael Marcus v Sabra International Pty Ltd (1995) 30 IPR 261 at 266.

Evidence

The evidence filed by the parties in these matters comprises the following declarations:
Evidence relied on by Opponents
Mario Verrocchi made on 28 August 2014.
Hamish Rostein made on 13 March 2015.
Evidence relied on by Applicant
Ian Tauman made on 1 December 2014
Emma Kate Mitchell made on 10 November 2015.
The latter declaration is one under regulation 21.19 and concerns the appeal to the Full Bench of the Federal Court, a matter about which I had already informed myself. I therefore do not admit the latter declaration into evidence.
Mario Verrocchi is one of the Opponents and his declaration goes to the development or evolution of the Opponents’ Chemist Warehouse trade mark in 2002 (‘the Warehouse trade mark’) via prior use and registration of the trade mark ‘Chemistop’ (which is only of incidental interest in these decisions).
This business has grown considerably and at the relevant date there were some 259 Chemist Warehouse retail outlets in Australia.
There are now several registrations in Australia of the Warehouse trade marks as is detailed below:

Registration No: 913631
Priority Date: 21 May 2002

Goods/Services: Class 3: Soaps, perfumery, essential oils, cosmetics, hair lotions and dentifrices
Class 5: Pharmaceutical, veterinary sanitary preparations, dietetic substances adapted for medical use, food for babies, plasters, materials for dressings, material for stopping teeth, dental wax, disinfectants and fungicides
Class 35: Advertising, business management, business administration and office functions, marketing, all relating to pharmacies
Class 42: Legal services, scientific and industrial research, computer programming services, all relating to pharmacies
Class 44: Medical, hygienic, beauty care services all relating to pharmacies

Trade Mark:

Registration No: 913632
Priority Date: 21 May 2002

Goods/Services: Class 3: Soaps, perfumery, essential oils, cosmetics, hair lotions and dentifrices
Class 5: Pharmaceutical, veterinary sanitary preparations, dietetic substances adapted for medical use, food for babies, plasters, materials for dressings, material for stopping teeth, dental wax, disinfectants and
Class 35: Advertising; business management; business administration; office functions; marketing including retailing, online retailing and mail ordering services; all relating to pharmacies
Class 42: Legal services, scientific and industrial research, computer programming services, all relating to pharmacies Class 44: Medical, hygienic, beauty care services all relating to pharmacies Endorsements: Provisions of subsection 41(5) applied.*

Trade Mark:

Registration No: 1029257
Priority Date: 10 November 2004

Goods/Services: Class 3: Soaps, perfumery, essential oils, cosmetics, hair lotions and dentifrices
Class 5: Pharmaceutical, veterinary sanitary preparations, dietetic substances adapted for medical use, food for babies, plasters, materials for dressings, material for stopping teeth, dental wax, disinfectants and fungicides
Class 35: Advertising; business management; business administration; office functions; marketing including retailing, online retailing and mail ordering services; all relating to pharmacies
Class 42: Legal services, scientific and industrial research, computer programming services, all relating to pharmacies
Class 44: Medical, hygienic, beauty care services all relating to pharmacies

Trade Mark: CHEMIST WAREHOUSE

Endorsement: Provisions of subsection 41(5) applied.

Registration No: 1093502
Priority Date: 06-JAN-2006

Goods/Services: Class 3: Soaps, perfumery, essential oils, cosmetics, hair lotions and dentifrices
Class 5: Pharmaceutical, veterinary sanitary preparations, dietetic substances adapted for medical use, food for babies, plasters, materials for dressings, material for stopping teeth, dental wax, disinfectants and fungicides

Class 35: Advertising; business management; business administration; office functions; marketing including retailing, online retailing and mail ordering services; all relating to pharmacies
Class 42: Legal services, scientific and industrial research, computer programming services, all relating to pharmacies
Class 44: Medical, hygienic, beauty care services all relating to pharmacies

Trade Mark:

Registration No: 1093504
Priority Date: 6 January 2006

Goods/Services: Class 3: Soaps, perfumery, essential oils, cosmetics, hair lotions and dentifrices
Class 5: Pharmaceutical, veterinary sanitary preparations, dietetic substances adapted for medical use, food for babies, plasters, materials for dressings, material for stopping teeth, dental wax, disinfectants and fungicides
Class 35: Advertising; business management; business administration; office functions; marketing including retailing, online retailing and mail ordering services; all relating to pharmacies
Class 42: Legal services, scientific and industrial research, computer programming services, all relating to pharmacies
Class 44: Medical, hygienic, beauty care services all relating to pharmacies

Trade Mark:

Registration No:  1277739
Priority Date:  17-DEC-2008
Goods/Services:  Class 5: Oils for use in pharmacy

Class 35: Pharmacy retail services

Trade Mark:

The Opponents have also extensively advertised through catalogues – “hundreds of millions” in the words of Mr Creighton-Selvay have been distributed as fold-ins with newspapers, directly placed into letterboxes or thrown at driveways. It is worth noting the use of the Warehouse trade mark and associated get-up in those catalogues at this juncture as this feeds into my decision in relation to subparagraph 42(b):

The above are, in my assessment, representative of the ways in which the Opponents use its Warehouse trade mark and the surrounding get-up in its catalogues.
Mr Verrocchi also particularises the appearance of the Warehouse trade mark on, and get-up of, the Opponents’ shopfronts:[4]
[4] These examples are from Verrocchi.
Mr Verrocchi states of the catalogue advertising by the Opponents:
Catalogues are the main form of external marketing used by the Chemist Warehouse Network.
Since about September 2002, the Chemist Warehouse Network has distributed catalogues every four (4) to six (6) weeks which feature the Chemist Warehouse Colour Scheme (Chemist Warehouse Catalogues) in areas where Chemist Warehouse stores are located. Exhibit MV-14 contains samples of Chemist Warehouse Catalogues distributed nationally across each Australian state and territory each month or so, for each year from 2003 to 2014 inclusive.
In addition to the usual Chemist Warehouse Catalogues which are distributed nationally each four to six weeks or so, whenever a new Chemist Warehouse store is opened, the new store catalogues are distributed to between 50,000 and 100,000 households in and around the surrounding suburbs nearest to the new Chemist Warehouse store (Store Opening Catalogues). Exhibit MV-15 contains samples of Store Opening Catalogues for each of the years 2003 to 2014, which each predominantly feature the Chemist Warehouse Colour Scheme.
Between September and December 2002, every four (4) to six (6) weeks a total of approximately 100,000 Chemist Warehouse Catalogues displaying the Chemist Warehouse Colour Scheme were distributed on behalf of the Chemist Warehouse Network.
In 2003, every four (4) to six (6) weeks, a total of approximately 200,000 Chemist Warehouse Catalogues displaying the Chemist Warehouse Colour Scheme were distributed on behalf of the Chemist Warehouse Network.
In 2004, every four (4) to six (6) weeks, a total of approximately 400,000 Chemist Warehouse Catalogues displaying the Chemist Warehouse Colour Scheme were distributed on behalf of the Chemist Warehouse Network.
In 2005, every four (4) to six (6) weeks, a total of approximately 1,200,000 Chemist Warehouse Catalogues displaying the Chemist Warehouse Colour Scheme were distributed on behalf of the Chemist Warehouse Group.
In 2006, every four (4) to six (6) weeks, a total of approximately 2,000,000 Chemist Warehouse Catalogues displaying the Chemist Warehouse Colour Scheme were distributed by the Chemist Warehouse Network.
In 2007, every four (4) to six (6) weeks, a total of approximately 2,500,000 Chemist Warehouse Catalogues displaying the Chemist Warehouse Colour Scheme were distributed by the Chemist Warehouse Group Network
In 2008, every four (4) to six (6) weeks, a total of approximately 4,000,000 Chemist Warehouse Catalogues displaying the Chemist Warehouse Colour Scheme were distributed by the Chemist Warehouse Network.
In 2009, every four (4) to six (6) weeks, a total of approximately 5,000,000 Chemist Warehouse catalogues displaying the Chemist Warehouse Colour Scheme were distributed by the Chemist Warehouse Network.
In 2010, every four (4) to six (6) weeks, a total of approximately 5,000,000 Chemist Warehouse catalogues displaying the Chemist Warehouse Colour Scheme were distributed by the Chemist Warehouse Network.
In 2011, every four (4) to six (6) weeks, a total of approximately 5,500,000 Chemist Warehouse catalogues displaying the Chemist Warehouse Colour Scheme were distributed by the Chemist Warehouse Network.
In 2012, every four (4) to six (6) weeks, a total of approximately 6,000,000 Chemist Warehouse catalogues displaying the Chemist Warehouse Colour Scheme were distributed by the Chemist Warehouse Network.
In 2013, every four (4) to six (6) weeks, a total of approximately 7,000,000 Chemist Warehouse catalogues displaying the Chemist Warehouse Colour Scheme were distributed by the Chemist Warehouse Network.
The current distribution of Catalogues means that we effectively cover nearly every household in urban areas and all major regional towns throughout Australia on a very regular basis.
The Chemist Warehouse Network has since 2002 spent tens of millions of dollars on printing the Chemist Warehouse Catalogues for distribution in each Australian state and territory.
Mr Verrocchi describes the Chemist Warehouse Colour Scheme:
… the "Chemist Warehouse" colour scheme […] comprises the following:
(a) a colour scheme with yellow as the major background colour in conjunction with lesser use of red and blue as background colours;
(b) white and black writing;
(c) a large "house" logo with a red background colour bearing white writing (the Chemist Warehouse Logo);
(d) the Chemist Warehouse Logo placed above a strip of blue background colour with the words "Discount Chemist" in white writing;
That is as far as I will take my discussion of the evidence filed by the parties – I will refer to the other evidence if it becomes necessary in my discussion of the grounds.

Subparagraph 42(b)

Subparagraph 42(b) of the Act provides:
42Trade mark scandalous or its use contrary to law
An application for the registration of a trade mark must be rejected if:
[…]
(b)its use would be contrary to law.
Here the Opponents argue that the use of the Trade Marks by the Applicant in the colours designated are so similar to the Chemist Warehouse Colour Scheme that the use would constitute both passing off and also misleading and deceptive contrary conduct to the Australian Consumer Law (‘the ACL’), which is contained in Schedule 2 to the Competition and Consumer Act 2010, relying upon subsection 18(1) corresponds to section 52 of the now repealed Trade Practices Act 1974 (‘the TPA’). Schedule 2 relevantly provides:

Section 18: Misleading or deceptive conduct
(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

As I have observed, there are no colours designated on the applications and I will therefore discuss the ground as if it had been correctly stated.
In Equity Access Pty Ltd v Westpac Banking Corporation [1989] FCA 506; [1990] ATPR 40-994; (1989) 16 IPR 431 Hill J said of section 52 of the TPA at [41]:
While there remain many areas of difficulty in the application of s.52 of the Act to the facts of a decided case there have been established a number of propositions, relevant to the determination of the present case, which are no longer in dispute:
1. For conduct to be misleading or deceptive the conduct must convey in all the circumstances of the case a misrepresentation: Taco Bell at 202. In the present case the misrepresentation on the part of the respondents is said to be that the financial product advertised and marketed by each of them is the product of the applicant or that there is some business relationship between the applicant and each of the respondents or that the applicant has endorsed the respective product of the respondents.
2. There will however be no contravention of s.52(1) of the Act unless error or misconception results from the conduct of the corporation and not from other circumstances for which the corporation is not responsible: Puxu per Gibbs CJ at p 6 and per Mason J at p 15, Global Sportsman Pty Ltd v. Mirror Newspapers Ltd [1984] FCA 180; (1984) 55 ALR 25, at p 34.
3. Conduct will be likely to mislead or deceive if there is a "real or not remote chance or possibility" of misleading or deception regardless of whether it is less or more than 50%: Global Sportsman at p 34. The question of whether conduct is misleading or deceptive or likely to mislead or deceive is an objective question which the Court must determine for itself. Hence evidence that persons in the relevant class have been misled will, although admissible, not be determinative. In some cases however such evidence will be very persuasive: Puxu per Gibbs CJ at pp 198-9.
4. Conduct of a corporation causing mere confusion or uncertainty in the minds of the public in the sense that they may be caused to wonder whether two products may have come from the same source is not necessarily coextensive with misleading or deceptive conduct: Puxu at p 100; Bridge Stock Brokers v. Bridges (1984) 57 ALR 401 at p 413 per Lockhart J. Since actual deception need not be shown the Court must consider whether a reasonably significant number of potential purchasers would be likely to be misled or deceived: Weitmann v. Katies Ltd (1977) 29 FLR 336, 343. The test in passing off cases is usually expressed as being whether a "substantial number of persons likely to become purchasers ... are liable to be deceived by the defendant's use of the name. On the other hand it is not necessary to show that all, or substantially all, persons in the market associate the name with the plaintiff's goods, if this can be shown of a substantial proportion of persons who are probably purchasers of the goods of the kind in question." (per Wilberforce J, as he then was, in Norman Kark Publications Ltd v. Odhams Press Ltd (1962) RPC 163 at 168 and see Saville Perfumery v. June Perfect Ltd (1941) 58 RPC 147 at 175-6, 10th Cantanae Pty Ltd v. Shoshana Pty Ltd (1987) 79 ALR 299 at 315 per Gummow J).
5. In a case such as the present the applicant must establish that it has acquired the relevant reputation in the name, that is to say that the name had become distinctive of the applicant's business in a particular country or geographical area: Sheraton Corporation of America v. Sheraton Motels Ltd (1964) RPC 202; BM Auto Sales Pty Ltd v. Budget Rent A Car System Pty Ltd (1976) 12 ALR 363. However at least in some circumstances very slight activities may be found to be sufficient to establish that a name has become distinctive of a person's business in a particular country: Miki Shoko Co Ltd v. Merv Brown Pty Ltd (1988) ATPR 40-858.
6. Section 52 is not confined to conduct which is intended to mislead or deceive: Puxu per Gibbs CJ at p 197 and a corporation which acts honestly and reasonably may none the less engage in conduct that is likely to mislead or deceive: Yorke v. Lucas [1985] HCA 65; (1985) 61 ALR 307 at p 309.
Accordingly, for this ground to succeed the Opponents must initially satisfy me that there existed a reputation in the Chemist Warehouse Colour Scheme at the relevant date.
As the Opponent puts very heavy emphasis on its catalogue advertising, it is appropriate to chiefly look at this. It will be recalled that Mr Verrocchi characterises the catalogue advertising as the Opponents’ “main form of external marketing”.
It is, in my consideration, a matter of common sense and human nature that I should look to the colours in the catalogues which are used within the headline areas in the region of the Warehouse trade mark to assess the use of the Chemist Warehouse Colour Scheme by the Opponents within its catalogues. These headline areas are at the margins of the pages within the catalogues, usually at the top but occasionally along the left-hand margin. The Chemist Warehouse Colour Scheme is described by Mr Verrocchi as incorporating the red house device and having a yellow background. However, while the red house device occurs most usually within these headline areas it is only occasionally upon a yellow background.
Thus I do not agree with either Mr Verrocchi or Counsel for the Opponents that the catalogues invariably or even usually display the Chemist Warehouse Colour Scheme in what I have termed their headline areas. The predominant colours are blue, red, and white and the examples which have a yellow background behind the Warehouse trade mark are markedly less common.
This observation must immediately lead to two conclusions – firstly, that the catalogues upon which the Opponents place much reliance do not in fact significantly contribute to the reputation of the Chemist Warehouse Colour Scheme. Secondly, that if people seek indicia within the catalogues upon which to base their purchases, it is the Warehouse trade mark to which they will refer rather than to the Chemist Warehouse Colour Scheme and that if, as has not been shown, those people recognise the Opponent’s shopfronts, that is based upon their recognition of the Opponent’s Warehouse trade mark rather than the get-up of the shopfronts.
Recognition of the Chemist Warehouse Colour Scheme by members of the public and the establishment of reputation must also rely in large part upon consistency of usage by the Opponents: the evidence shows that the use within the catalogues of the colour combination described by Mr Verrocchi has been most inconsistent. Yellow is frequently missing, occasionally used for minor lettering, and is much less commonly used as a background.
I would find that the Opponents have not established the reputation of the Chemist Warehouse Colour Scheme on the above basis.
However, there are additional problems for the Opponents’ claim that the Chemist Warehouse Colour Scheme had a reputation at the relevant date. As Middleton J observed in Verrocchi at [8]:
In this proceeding, the competing parties make heavy use of colour in the branding and promotion of their stores. However, as the Applicants correctly contended, it is important not to “over-intellectualize the likely analysis of the consumer” in undertaking the relevant legal assessment of the possible consumer responses to the branding of competitors. Further, I am mindful that the relevant consumer’s likely analysis would not involve the viewing and side-by-side comparison of all the photographs put into evidence in this proceeding; rather the consumer’s analysis will be governed by an overall impression of colours in combination with other branding features, including the relevant (and dominant) logo in situ.
While colours are generally useful in branding for ornamentation or decoration, some colours are known to perform a specific marketing function. For example, the colour yellow provides high visibility, and is therefore used in street and roadwork signs. When used on storefronts, it can similarly attract attention to the store. Justice Mansfield in Philmac Pty Ltd v Registrar of Trade Marks [2002] FCA 1551; (2002) 126 FCR 525 noted at [54] that:
...a trader might legitimately choose a colour for its practical utility. That is, the colour may be a feature of a product that serves to improve the functionality or durability of the product. The function of visibility is, for example, served by the colour yellow; heat absorption by the colour black; light reflection by the colour white; military camouflage by a combination of khaki, brown and green. ...
The external get-up of Chemist Warehouse is, as submitted by the Applicants, “highly prominent, loud and garish and prone to be noticed by potential consumers... especially in the context of the busy high street and shopping centre environments in which the stores trade”.
Examples of predominantly yellow storefronts include the following:
[5]
The colour yellow can also be used to denote a value proposition. A number of discount retailers (including discount chemists) use that colour as part of their storefront and many retailers use yellow to promote sales. The prominent, loud and garish use of yellow imparts the look and feel of “cheapness”, or heavily discounted goods or services. One such example is shown below:
Examples of discount chemists which employ a predominant use of yellow on their storefronts include the following:
[5] These retailers are Bob Jane Tyres, Ted Cameras, and JB HI-HI.
Thus in addition to the colour yellow being frequently absent from the Chemist Warehouse Colour Scheme in the Opponents’ catalogues, that colour may also be viewed as being functional when applied to shopfronts: it signals the fact that the retail stores to which it is applied are ‘discount’ outlets. This factor also weighs against the colour yellow being viewed as contributing to the reputation get-up of the shopfronts, rather than the Warehouse trade mark itself being the indicium with the reputation.
I thus consider that the Opponents have not established that the Chemist Warehouse Colour Scheme has a reputation sufficient to found the trade practices ground.
Further, while the Opponents have pointed to instances of confusion within their evidence, I consider that this is likely to arise from the highly descriptive and/or non-distinctive nature of the indicia within the parties’ trade marks rather than from the similarity of the get-ups per se. Thus, considerations come into play akin to those in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd[6] (‘Hornsby’). In Hornsby Steven J observed:
There is a price to be paid for the advantages flowing from the possession of an eloquently descriptive trade name. Because it is descriptive it is equally applicable to any business of a like kind, its very descriptiveness ensures that it is not distinctive of any particular business and hence its application to other like businesses will not ordinarily mislead the public. In cases of passing off, where it is the wrongful appropriation of the reputation of another or that of his goods that is in question, a plaintiff which uses descriptive words in its trade name will find that quite small differences in a competitor's trade name will render the latter immune from action (Office Cleaning Services Ltd. v. Westminster Window and General Cleaners Ltd. (1946) 63 RPC 39, at p 42, per Lord Simonds). As his Lordship said (1946) 63 RPC, at p 43, the possibility of blunders by members of the public will always be present when names consist of descriptive words - "So long as descriptive words are used by two traders as part of their respective trade names, it is possible that some members of the public will be confused whatever the differentiating words may be." The risk of confusion must be accepted, to do otherwise is to give to one who appropriates to himself descriptive words an unfair monopoly in those words and might even deter others from pursuing the occupation which the words describe.
[6] [1978] HCA 11; (1978) 140 CLR 216
Equally, if traders adopt strident colours and leading indicia such as (for example) ‘Chemist Warehouse’, ‘Direct Chemist’, ‘Discount Drugstore’, ‘Budget Chemist’, ‘Bargain Pharmacy’ or ‘Cut-Price Pharmacy’, to place prominently upon their shopfronts over simple devices such as outline houses, shields, rising suns, scrolls, circles, or the like, some degree of confusion between similar shopfronts is inevitable as there is no single distinctive feature on the shopfronts upon which the public can fix their attention and thus remember or recognise to distinguish between those trade marks.

I am also satisfied that if, as appears to here be the case, the Applicant has copied aspects of the Opponents’ marketing presentation, any consumer confusion between the parties retail outlets arises from reasons which may be characterised as ‘the Hornsby factors’ rather than from a deliberate misappropriation of the reputation of the Opponents’ trade dress per se. In Cadbury-Schweppes Pty Ltd v The Pub Squash Co. Ltd (1981) RPC 429 the Privy Council noted:
Where an intention to deceive is found, it is not difficult for the Court to infer that the intention has been, or in all probability will be, effective: Slazenger & Sons v. Feltham & Co. (2) (1889) VI R.P.C. 531 per Lindley L.J. at p. 538. But in dealing with the issue of deception the learned judge directed himself correctly and made the comment, which is also good law, that
" ..... the Court must be on its guard against finding fraud merely because there has been an imitation of another's goods, get-up, method of trading or trading style (see, for example, Goya Limited v. Gala of London Limited (1952) 69 R.P.C. 188)."
I consider that similar considerations and conclusions as those above are applicable here.
With regard to the passing off ground, in ConAgra Inc v McCain Foods (Aust) Pty Ltd[7] at [11] the Court said:
Attempts to produce a definition of the tort which is both succinct and comprehensive have had mixed success. In Erven Warnink Besloten Vennootschap v J. Townend and Sons (Hull) Ltd (1979) AC 731 at 742, Lord Diplock identified five essential characteristics of a passing-off action, and Lord Fraser of Tullybelton (1979) AC 731 at 755-756, also identified, but in somewhat different terms, five such characteristics. There followed in the English Court of Appeal differences of opinion as to whether these two sets of criteria were distinct, overlapping, or cumulative and whether, in any event, either was comprehensive: Anheuser-Busch Inc. v Budejovicky Budvar NP (1984)FSR 413 at 463, 472; Bristol Conservatories Ltd v Conservatories Custom Built Ltd (1989) RPC 455 at 465-467; Morcom "Developments In the Law of Passing-Off " (1991) 10 EIPR 380 at 382. As Ralph Gibson L.J. pointed out in the second of these cases (supra at 466) the probanda formulated by Lord Diplock and Lord Fraser would not, for example, allow for cases of "reverse" passing-off.
In Reckitt and Colman Products Ltd v Borden Inc. [1990] UKHL 12; (1990) RPC 341 at 406, Lord Oliver of Aylmerton formulated the essential elements in a passing-off action without referring specifically to earlier authority. Now, Nourse L.J. (in Consorzio del Prosciutto di Parma v Marks and Spencer plc (1991) RPC 351 at 368-369) has said that the formulations by Lord Diplock and Lord Fraser had not in his experience given the same degree of assistance in analysis and decision as "the classical trinity" of (1) reputation (2) misrepresentation and (3) damage. Nourse L.J. regards what was said in the Borden Case as signalling a "welcome return to the classical approach".
It is neither necessary nor appropriate for us to comment upon these vicissitudes of the recent English case law. But it is to be observed that the law of passing-off contains sufficient nooks and crannies to make it difficult to formulate any satisfactory definition in short form. However, "the classical trinity" does serve to emphasise three core concepts in this area of the law. This appeal is concerned with all of them, namely, the geographical requirements for a sufficient reputation, the nature of the interests damaged, and the significance of fraud in the making of the misrepresentation.
[7] [1992] FCA 159; (1992) 33 FCR 302; 106 ALR 465; (1992) 23 IPR 193; [1992] AIPC 90-892; [1992] ASC 56-159; [1992] ATPR (Digest) 46-095
The start point in consideration of the passing off allegation is thus ‘reputation’.
But, as regards the passing off, the same conclusions concerning any reputation of the Chemist Warehouse Colour Scheme that applied to the trade practices ground apply with equal force here.
Thus, if the ground under subparagraph 42(b) were properly stated in the SGP, I would find that the Opponents’ Chemist Warehouse Colour Scheme does not have the reputation upon which to base these grounds whether in trade practices or passing off.

Section 60

Section 60 of the Act provides:
60Trade mark similar to trade mark that has acquired a reputation in Australia
The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:
(a)another trade mark had, before the priority date for the registration of the first‑mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and
(b)because of the reputation of that other trade mark, the use of the first‑mentioned trade mark would be likely to deceive or cause confusion.
Note:For priority date see section 12.
Here the Opponents rely on the trade marks pictured hereunder:
Concerning what is meant by the word ‘reputation’, in McCormick & Co Inc v McCormick[8] (‘McCormick’) Kenny J said at [81]:
What is intended by the word "reputation" in s 60? The word is defined in The Macquarie Dictionary as follows:
reputation ... 1. the estimation in which a person or thing is held, esp. by the community or the public generally; repute ... 2. favourable repute; good name ... 3. A favourable and publicly recognised name or standing for merit, achievement, etc. ... 4. The estimation or name of being, having done, etc, something specified.
Cf. The Oxford English Dictionary. In s 60, the word is, I think, apt to refer to "the recognition of the McCormick & Co marks by the public generally".
[8] [2000] FCA 1335; (2000) 51 IPR 102; [2000] AIPC 38-192
And concerning the assessment of reputation, in McCormick, Kenny J said at [86]:
In practice, it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions, without any direct evidence of consumer appreciation of the mark, as opposed to the product: see, e.g., Isuzu-General Motors Australia Ltd v Jackeroo World Pty Ltd (1999) 47 IPR 198; Marks & Spencer plc v Effem Foods Pty Ltd (2000) AIPC 91-560; Photo Disc Inc v Gibson (1998) 42 IPR 473; and RS Components Ltd v Holophane Corp (1999) 46 IPR 451. This Court has followed this approach as well, acknowledging that public awareness of and regard for a mark tends to correlate with appreciation of the products with which that mark is associated, as evidenced by sales volume, amongst other things. Thus, in Toddler Kindy Gymbaroo Pty Ltd v Gymboree Pty Ltd [2000] FCA 618 ("Gymboree"), Moore J accepted at [94] that the applicant had established a reputation for the purposes of s 60 solely on the basis of use and promotion of the relevant mark. Another example of this approach is Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd (1997) 38 IPR 495 ("Nettlefold"), in which Heerey J relied upon the public visibility of the applicant's marks over approximately two decades as well as a $100,000 promotional campaign in finding that a reputation for the purposes of s 28 of the 1955 Act existed.
I consider that the evidence shows that the trade marks upon which the Opponents rely had reputations at the relevant date.
Concerning the assessment of the likelihood of deception or confusion in Registrar of Trade Marks v Woolworths[9] French J said at [50]:
[9] [1999] FCAFC 1020; [1999] FCA 1020; (1999) 93 FCR 365; (1999) 45 IPR 411; [1999] AIPC 91-499
In Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 594-5, which concerned the 1905 Act, Kitto J set out a number of propositions which have frequently been quoted and applied to the 1955 Act. The essential elements of those propositions continue to apply to the issue of deceptive similarity under the 1995 Act. Applied also to service marks and absent the imposition of an onus upon the applicant they may be restated as follows:
(i) To show that a trade mark is deceptively similar to another it is necessary to show a real tangible danger of deception or confusion occurring. A mere possibility is not sufficient.
(ii) A trade mark is likely to cause confusion if the result of its use will be that a number of persons are caused to wonder whether it might not be the case that the two products or closely related products and services come from the same source. It is enough if the ordinary person entertains a reasonable doubt.
It may be interpolated that this is another way of expressing the proposition that the trade mark is likely to cause confusion if there is a real likelihood that some people will wonder or be left in doubt about whether the two sets of products or the products and services in question come from the same source.
(iii) In considering whether there is a likelihood of deception or confusion all surrounding circumstances have to be taken into consideration. These include the circumstances in which the marks will be used, the circumstances in which the goods or services will be bought and sold and the character of the probable acquirers of the goods and services.
(iv) The rights of the parties are to be determined as at the date of the application.
(v) The question of deceptive similarity must be considered in respect of all goods or services coming within the specification in the application and in respect of which registration is desired, not only in respect of those goods or services on which it is proposed to immediately use the mark. The question is not limited to whether a particular use will give rise to deception or confusion. It must be based upon what the applicant can do if registration is obtained.
In respect of the last proposition, Mason J observed in Berlei Hestia Industries Ltd v The Bali Company Inc [1973] HCA 43; (1973) 129 CLR 353 at 362:
"...the question whether there is a likelihood of confusion is to be answered, not by reference to the manner in which the respondent has used its mark in the past, but by reference to the use to which it can properly put the mark. The issue is whether that use would give rise to a real danger of confusion."
The above should be read bearing in mind that there is no requirement in section 60 that the trade marks be deceptively similar. There must, however, be some similarity between the trade marks under consideration such that the reputation of an opponent’s trade mark(s) is likely to lead to confusion or deception. Deception or confusion does not arise solely from reputation.
The Opponents’ trade marks are quite different to the Trade Marks and, whatever their reputation(s), it is difficult to understand how those trade marks might be confused for those of the Applicant or vice versa.
If confusion were to arise it would be, in my consideration, only for reasons of the type already discussed above and which I have termed ‘the Hornsby factors’. That is, the leading indicia within the parties’ house or rising sun shaped borders (or adjacent to them) so lack for inherent distinctiveness that any reliance upon those features by the buying public to assist in distinguishing the trade marks is almost certain to result in confusion.
Apart from a similarity in meaning which might be apprehended of the inherently non-distinctive leading features within or adjacent to the aforesaid rising sun and house shaped borders, the trade marks under consideration are quite different.
The Opponents have not established their grounds under section 60.

Decisions

Section 55 of the Act relevantly provides:
55Decision
(1)Unless subsection (3) applies to the proceedings, 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.
Note:For limitations see section 6.
The oppositions have not been established in relation to the Trade Marks.
Trade mark applications 1572995, 1572997, and 1572998 may then proceed to registration one month from the date of this decision. If the Registrar has been served with notice(s) of appeal before that time, I direct that the registration(s) shall not occur until the appeal(s) has/have been decided or discontinued and that the disposition of the applications should be in accordance with the Court’s order or direction.

Costs

The Applicant requested its full costs in relation to these matters on the basis that it has been most unlikely that the opposition could prevent registration of the Trade Marks. However, I see no reason to depart from the costs as specified in Schedule 8 of the Regulations. Having been successful, the Applicant is entitled to those costs which I award against the Opponents with the costs in the second and third oppositions to be taxed at 20% of scale (per Hume Industries (Malaysia) Berhard v James Hardie & Coy Pty Ltd[10]).
[10] (2001) 53 IPR 591.

Iain Thompson
Hearing Officer
Trade Marks Hearings
16 December 2015