Lee Cooper Group Plc v Levi Strauss & Co

[1996] ATMO 7

TRADE MARKS ACT 1955

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

Opposition by LEVI STRAUSS & CO to registration of trade mark application number 437428 in the name of LEE COOPER GROUP PLC

Background

Application number 437428 was lodged, on 3 December 1985, in the name of LEE COOPER GROUP PLC (the applicant).  The application was for registration of the mark as shown below, for a statement of goods subsequently amended to, "Shirts, skirts, blouses, slacks, trousers, shorts, dungarees, jeans and jackets", in Class 25.  The mark was advertised as accepted in Part B of the Register in the Official Journal of 8 June 1989.

Notice of opposition to the mark's registration was lodged, on 8 December 1989, by LEVI STRAUSS & CO, (the opponent). The primary grounds of the opposition which were pursued at the hearing were based on s.33 of the Trade Marks Act, that the present trade mark was substantially identical or deceptively similar to a prior registered trade mark owned by the opponent, and on s.28, that use of the mark by the applicant would be likely to cause deception and confusion and would also be contrary to law.

The evidence

The service and lodgment of the initial evidence relied upon by both sides in the matter were completed by 9 June 1993.  The evidence comprised:

Evidence in support

*Statutory declaration by Paul James Carter dated 7 September 1990  (first Carter declaration) and exhibits PJC-1 to PJC-8(h).

Evidence in answer

*Statutory declaration by Alan Jeffrey Richards dated 14 November 1991 (first Richards declaration) and exhibits 1 to 7

Evidence in reply

*Statutory declaration by Paul James Carter dated 9 June 1993 (second Carter declaration) and exhibits PJC-9 to PJC-12.

On 29 September 1994, the opponent was granted special leave to adduce further evidence in the matter and the applicant then served evidence in reply to this further evidence.  This process was completed by 23 March 1995.  The evidence comprised:

Further evidence

*Statutory declaration by Paul James Carter dated 7 September 1994          (third Carter declaration)

*Statutory declaration by Jim Alexander dated 5 September 1994 and         exhibit JA-1-confidential

Evidence in reply to the further evidence

*         Statutory declaration by Alan Jeffrey Richards dated 1 March 1995           (second Richards declaration) and annexures A and B

In his first declaration forming the evidence in support, Mr Carter, the Marketing Services Manager of a subsidiary of the opponent, described the history, background, sales and advertising of the opponent's mark, and exhibited advertisements bearing the mark, lists of overseas registrations and major retailers who sell the opponent’s goods.

The applicant's secretary, Mr Richards, in his first declaration lodged as the evidence in answer, outlined the history of the applicant and use of its mark, gave sales figures of goods bearing the subject mark, exhibited examples of advertising and point of sale material, and also copies of labels attached to the back pockets of other traders’ jeans which incorporated a stitch device on the back pockets of their garments.

Mr Carter, in his second declaration forming the opponent’s evidence in reply, gave further details of the history, background and reputation of the opponent’s “arcuate” stitching device and other of the opponent’s marks, and gave details of legal actions taken against other companies for alleged infringement of its marks since the 1970s.  Exhibited to his declaration were details of the opponent’s unit prices.

Mr Carter’s third declaration, which comprised part of the opponent’s further evidence, further outlined the opponent’s reputation and covered the balance of the evidence, the declaration by Mr Alexander, the Chief Executive Officer of the Research Division of AGB McNair Pty Ltd.  Annexed to Mr Alexander’s declaration was a survey report, prepared by his company.  The survey had been commissioned by the opponent to assess the extent to which the public associated certain of its trade marks with its jeans.

In Mr Richards’ second declaration forming evidence in reply to the further evidence, the declarant referred to, and commented upon, the AGB McNair survey.  Annexed to his declaration was a copy of article pages from Sportswear International, a clothing publication, which referred to pocket stitched trade marks in the jeans industry.

The matter was set down before the Registrar's delegate, for hearing in Sydney.  The opponent was represented at the hearing by Mr David Catterns of Counsel instructed by Baker & McKenzie.  Appearing on behalf of the applicant, was Mr Ray Walton of Griffith Hack & Co.

Submissions

Mr Catterns said that the opponent would be relying upon ss. 28(a) and 33 of the Trade Marks Act in the present proceedings and that each of the related issues would be addressed in turn.

With respect to the objection based on s.33, Mr Catterns said that the opponent relied upon the closeness of the subject mark to the opponent’s own registration, number 302847, for an arcuate stitched pocket device - as shown below:

This mark was a purely visual one and any comparison between it and the present mark would be on that basis. He said that, for the purposes of s.33, fair and normal use of both marks should be considered. It was in this context that it would be usual to find that jeans trade marks were usually located on the hip pocket.

He referred to the applicant’s evidence, beginning with the first Richards declaration, where it was said that the present trade mark was only designed five to six months before registration was applied for.  He said that the “idea” of the opponent’s mark had been clearly picked up at that time and because of imperfect recollection of marks which involved such arcuate stitching, use of the present mark would evoke the opponent’s trade mark so as to cause confusion.  He discounted the feature of the stitching device around the outside of the opponent’s and applicant’s marks, which he said looked like a normal hem and was not significant.  He said that the addition of the words LEE COOPER and the diamond device in the subject mark was not sufficient to avoid deception and confusion, as some purchasers might regard the mark as merely a brand extension of the opponent’s mark.  He referred for support here to the words of Williams J at page 205 in Mark Foy’s Ltd v Davies Coop & Co Ltd (1956) 95 CLR 190 - the TUB HAPPY case.

Mr Catterns then referred to the second Carter declaration which, he said, demonstrated long use of the opponent’s arcuate stitched mark as an identifying feature on the hip pockets of jeans and on cards sewn on the back of jeans.  Both of these were deliberately located there in order to be highly visible when they were stacked on shelves in sales outlets.  Although no instances of actual confusion had been shown, for the purposes of passing off this was not necessary and it was up to the Registrar to determine the matter of whether or not it could happen.  Regardless of this, he said that the opponent had been vigilant in the past in defending its mark and, by its actions, it had never allowed that device to become generic.

Mr Catterns submitted that the Alexander declaration covering the market survey, although mainly important in any consideration of the matter of the s.28 objection, was also pertinent, in paragraph 8, to considerations under s.33. This was because of the high recognition of the opponent’s arcuate device by survey respondents. He said that, by extension, this meant that the arcuate stitching device was an important element in their selection of the opponent’s goods. Although the survey had been carried out in 1994, the arcuate mark had been used by the opponent on its goods since the 1960s and one could infer that, as at the date of application in 1985, the results would be similar. He submitted that people selecting jeans could do so on the basis of the device alone and thus they could be deceived into thinking that the goods sold under the applicant’s visually similar mark were those of the opponent - despite the addition of the words included in the present mark.

He said that the normal and fair use of the opponent’s mark was its arcuate device applied to the back pockets of its jeans, while that of the subject mark was the words LEE COOPER within a diamond device and also its arcuate device also applied to jeans pockets.  He said that, as a matter of impression and comparison, the marks were similar enough to be confusing.  He said that he disagreed that the words LEE COOPER were dominant in the applicant’s mark and they were likely to be ignored by people in a hurry when both sets of goods were located together, particularly in shelves or on tables.  This was particularly so if any cardboard marks were ripped off the jeans to which they were attached - perhaps during a sale - leaving only the respective marks on the clothing involved.

In relation to the objection under the s.28 (a) ground, Mr Catterns referred to the declarations made by Mr Carter.  This document, he said, showed the opponent’s powerful reputation stemming from long and widespread use in Australia and internationally of the opponent’s marks.  It was against this reputation that the opposed mark should be tested and given this reputation, it was clear that use of the present mark would be likely to lead to deception and confusion amongst purchasers.

Mr Catterns said that the Registrar's present practice of requiring blameworthy conduct to be shown at the application stage, for a case to be successful under that section, was an incorrect reading of the relevant case law.  He said that the Office interpretation of the High Court decision in New South Wales Dairy Corp v Murray Goulbourn Co-op Co Ltd 18 IPR 385 - the MOO/MOOVE case, as outlined in the Office decision in Titan Manufacturing Company Pty Ltd v John Terrence Coyne 22 IPR 613 - the TITAN case, was incorrect.  He said that, although the MOO/MOOVE decision clearly established that blameworthy conduct was required for an expungement action after registration, it did not support the idea of such a requirement at the application stage.  It was not fair, he said, for the proprietor of an unregistered mark to have, in effect, perpetual title such as if the mark was registered unless blameworthy conduct could be shown.

He said that, in Johnson and Johnson Australia Pty Ltd v Kalnin (1993) 26 IPR 435, Gummow J had found that an opposition to registration succeeded under a s.28(a) ground without blameworthy conduct needing to be shown. He said that the situation in the present case was similar but, if such conduct needed to be shown, then it resided in the applicant seeking to register its mark in the face of the opponent's well known registration. He said that, although no allegations of fraud were being made, this action amounted to the copying of a famous mark. Such conduct was “sailing close to a known mark with eyes open”, sufficient to be considered blameworthy conduct at the time of application.

Mr Catterns then made extensive submissions on whether there should be a conjunctive or a disjunctive reading of paragraphs (a) and (d) of s.28, addressing the individual findings of the seven Justices in the MOO/MOOVE case.  In essence, he submitted that four of the Justices came down in favour of finding that paragraph 28(a) and paragraph 28(d) should be read disjunctively.  Those Justices in favour of a disjunctive reading, he said, were Mason C.J., Brennan J., Deane J. and McHugh J.  The judges in favour of a conjunctive reading, he said, were Dawson J., Toohey J. and Gaudron J.

He concluded his submissions by submitting that, given all of the foregoing, the applicant had not discharged its onus of showing why the mark should be registered.  He then asked that costs be allowed on behalf of the applicant.

In reply, Mr Walton said that, if one looked at the mark applied for, it was obvious that it was a composite one on the device of a pocket.  The dominant features were the words LEE COOPER and diamond device, and some double “flared” stitching beginning at a common point in the middle of the pocket and arcing towards either side of the pocket.  He referred to the first Carter declaration, submitting that the declarant referred to the opponent’s mark as “the” arcuate device.  However, the opponent’s mark was not simply any arcuate device - as was evidenced by its description in the certificate of registration.  He quoted the description on the certificate as being a mark that comprised double arcuate lines, as shown in the representation.  These were consistent double arcuate lines which would need to be of a contrasting colour to that of the clothing it was applied to, in order to be seen.

He further criticised the Carter declaration, saying that many of the exhibits and other evidence, such as the videos, were related to overseas use and had no relevance at all to the reputation of the opponent’s mark in Australia.  Much of the declaration went towards establishing whether the extensive use of that mark made it distinctive of the opponent’s own goods and did nothing towards showing any deceptive similarity of that mark to that of the applicant’s mark, or if there was any deception or confusion, or likelihood of such.  He also referred to the second Carter declaration which, he said, suffered the same shortcomings as the first, and also referred to its own and other traders’ marks - none of which bore any similarity to the mark being opposed here.  He said that there appeared to be a large number of jeans manufacturers using stitching on the back pockets of jeans.  This, he said, must be doing a great deal to dilute the value of relying upon this kind of mark alone to identify the opponent’s goods.

Mr Walton then referred to the Richards’ declarations which, he said, established that the subject mark had been first used in Australia in 1985, soon after it was designed.  Mr Richards had also declared that such “stitch” marks were commonplace on the back pockets of various manufacturers’ jeans.  He further declared that he was not aware of any instances of confusion between the applicant’s and opponent’s marks in Australia and he observed that the opponent had not asserted any instances of such confusion or deception.

Mr Walton turned to the further evidence comprising the Alexander and Carter declarations.  He said that Mr Carter had put a gloss upon the survey results covered by Mr Alexander’s declaration.  Mr Walton said that the applicant did not question the results of the survey but merely Mr Carter’s extrapolation of them which, he said, was invalid.  Mr Walton further analysed the survey, saying that he was not surprised that it showed a high recognition of the opponent’s arcuate device, given that entity’s position of being the leading jeans manufacturer in Australia.  However, it was deficient for the present purposes because it only gave respondents one mark to consider which only went towards showing the distinctiveness of the opponent’s mark.  This, he said, did nothing to bring into question the registrability of the applicant’s trade mark.  The present mark was not shown to respondents to test possible confusion between it and the opponent’s mark, something which would have been very difficult to show given the prominence of the words LEE COOPER in the applicant’s mark.  Further, as Mr Richards had said in his second declaration, the survey was deficient, having been held in 1994.  Respondents were not questioned regarding the state of their knowledge as at the date of application, nine years previous.  What was significant from the survey was that the stitching device was the least recognised aspect of the marks employed by the opponent.

He said that he disputed that the applicant’s flared stitching device, which formed only part of the disputed mark, was deceptively similar to the opponent’s arcuate device.  Notwithstanding this, it had been found in the case of Montres Rolex Societe Anonyme v Hallmark Chauffeured Limousines Pty Ltd 28 IPR 25 that, although the devices in the marks in dispute were deceptively similar, the addition of a word was sufficient to differentiate the two. Here, the words LEE COOPER were prominent in the applicant’s mark and there were also other significant differences between it and the opponent’s mark. He referred to page 172 of Australian Law of Trade Marks and Passing Off (Second Edition) by D.R.Shanahan and the rules of comparison of marks under s.33 listed there. These had been laid down by Parker J in Pianotist Co's App'n (1906) 23 RPC 774. Mr Walton said the applicant’s and opponent’s marks were substantially different in appearance. Using the criterion of sound, it was obvious that the opponent’s mark would not be a spoken one, as it comprised arcuate lines that would only be visually recognised. Purchasers would not ask for the “jeans with arcuate lines mark” but would select them off a shelf or ask for a pair of Levis. In contrast, the applicant’s jeans would be requested by the name LEE COOPER.

With respect to the objection under s.28(a), Mr Walton said that there was absolutely no chance that use of the present mark could lead to deception and confusion. This was because of the prominence of the words LEE COOPER and the difference in other features to the opponent’s mark. Any suggestion that the way jeans were folded for sale, leaving the pocket devices uppermost, would lead to deception and confusion between the applicant’s and opponent’s marks was also not true. The opponent’s goods were always marked with a combination of its arcuate device, tab and leather patch, compared with the present mark on the applicant’s jeans.

Mr Walton said, with respect to the matter of the conjunctive/disjunctive reading of s.28, saying that he accepted that the Office was determined to follow its interpretation of the MOO/MOOVE decision that s.28 should be read conjunctively.  However, even if it was necessary to look at whether there had been some blameworthy action on behalf of the applicant, then no evidence had been put forward of such behaviour.  This was despite the allegations of blameworthy action on behalf of the applicant in choosing the mark.  Nothing could be inferred from this action.  The marks were clearly different because of the prominence of the words LEE COOPER and the addition of the flared stitching in the applicant’s mark which was different to the arcuate stitching found in that of the opponent.  These elements clearly differentiated the two marks.

Mr Walton said that, in view of his submissions, the opposition should be dismissed.  He referred to s.44 of the Act, saying that the Registrar had no option but to accept the applicant’s mark if he was satisfied that there was no lawful ground of objection to the application.  He finished his submissions by asking that costs be awarded in the matter to the applicant.

Discussion

Section 33 - Substantially identical or deceptively similar

Sub-section 33(1) reads:

Subject to this Act, a trade mark is not capable of registration by a person in respect of goods if it is substantially identical with or deceptively similar to a trade mark which is registered, or is the subject of an application for registration, by another person in respect of the same goods, of goods of the same description as those goods, or of services that are closely related to those goods, unless the date of registration of the first-mentioned trade mark is, or will be, earlier than the date of registration of the second-mentioned trade mark.

There is no doubt that the respective sets of goods covered by the marks are the same.  The present mark is accepted in class 25 for “shirts, skirts, blouses, slacks, trousers, shorts, dungarees, jeans and jackets” - the goods of interest undoubtedly being jeans.  The opponent’s mark 302847, for its arcuate lines device, is registered in class 25 for “pants for men, women and children”.

In considering the question of whether the mark in question is caught by the provisions of s.33, I must firstly determine whether it is substantially identical with, or deceptively similar to, the marks owned by the opponent.

To judge whether the subject mark is substantially identical to the opponent's mark, it is necessary to carry out a straight comparison of the two marks.  The pertinent tests are as outlined by Windeyer J. in the case of Shell Co (Aust) Ltd v Esso Standard Oil (Aust) Ltd, supra.  These are:

In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or similarity that emerges from the comparison ...

When the marks in question here are compared side by side, they have distinct differences which are readily observed.  The applicant's mark comprises a pocket device with dotted lines resembling stitching around the border, double dotted lines emanating from the centre of the mark in a diverging fan-like fashion to either side of the mark, and the words LEE COOPER.  On the other hand, the opponent's mark comprises a pocket device with its arcuate lines device, solus.  Despite both marks having lines which arc from a central point to each side of the viewed area, the additional material in the subject mark is sufficient to differentiate it from that of the opponent.  Having applied the test of Windeyer J., I therefore find that the marks are not substantially identical and move on to decide if the marks are deceptively similar.

Sub-section 6(3) defines a mark as deceptively similar if it is likely to deceive or cause confusion.  Here, the marks should not be placed side by side but consideration should be given to any common net impression inferred from the two marks.  I refer here to the judgment in Australian Woollen Mills Ltd v F.S.Walton & Co Ltd (1937) 58 CLR 641, where Dixon and McTiernan JJ. said:

In deciding this question, the marks ought not, of course, to be compared side by side.  An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought.  The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same.  The effect of spoken description must be considered.  If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, their similarities both of sound and of meaning may play an important part.  The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected.  Potential buyers of goods are not to be credited with any high perception or habitual caution.  On the other hand, exceptional carelessness or stupidity may be disregarded.  The course of business and the way in which the particular class of goods are sold gives, it may be said, the setting, and the habits and observation of men considered in the mass affords the standard.  Evidence of actual cases of deception, if forthcoming, is of great weight.

In the present case, there has been no evidence adduced of instances of actual confusion and so I will have to consider the matter from a theoretical viewpoint.  The most obvious difference between the marks is that the present application includes the words LEE COOPER - along with a dotted line fan-type device - whilst the opponent’s mark is comprised of its arcuate lines device alone.  Mr Catterns submitted that the words in the applicant’s mark could be largely discounted and the main focus should be on what he alleges is the deceptively similar devices obviously intended to represent stitching on the back of a jeans pocket.  However, I must agree here with Mr Walton that the primary feature of the present mark - that which first draws the eye - is the diamond device enclosing the words LEE COOPER.  It is only after first comprehending this element that one looks at the remainder of the mark - the double fan-shaped dotted lines emanating from the centre and diverging from each other as they reach the edge of the mark, and the double dotted lines around the outside of the pocket device.  On the other hand, the opponent’s mark comprises the arcuate lines device and the double lines around the outside of the pocket.  I agree with Mr Catterns that the lines around the outside of both of the marks can be discounted in any comparison, as viewers would be almost certain to see these as stitching to apply the pocket to the rear of the jeans.

From my own knowledge, there exists in the marketplace a plethora of stitching devices on the back of jeans pockets.  To my mind, this means that more emphasis should be placed upon any differences in alleged deceptively similar constituents of marks - in this case, the line devices in both marks.  Having considered the two representations, I cannot agree that they are so similar as to be classified as deceptively similar.  The devices, in my opinion, are sufficiently different in construction to not be confused - and more so when the other integers in the applicant’s mark are taken into consideration

In relation to the tests laid out by Dixon and McTiernan JJ. in the Australian Woollen Mills case, supra, I think that the net impression left by the applicant’s mark would be the words LEE COOPER and some stitched lines.  That of the opponent’s mark would be the arcuate device.  As Mr Walton submitted, the spoken description of the applicant’s mark would almost certainly be “the LEE COOPER mark” whilst it would be less likely that there would be a spoken description of the opponent’s arcuate lines device, given its highly visual nature.  I think that ordinary jeans customers would normally purchase those goods with some care and would be aware of the differences between the applicant’s mark on one hand and the opponent’s on the other.

These factors, combined with the lack of evidence of actual instances of confusion are sufficient, in my opinion, to differentiate the marks. I am therefore of the opinion that there is very little possibility of the present marks being considered deceptively similar, even taking into consideration the doctrine of "imperfect recollection". For the foregoing reasons, I find that the opponent's objection, as it is based on s.33, must fail.

Section 28 - Deception and confusion

The provisions of this section of the Act read as follows:

A mark -

(a) the use of which would be likely to deceive or cause confusion;
           (b) the use of which would be contrary to law;
           (c) which comprises or contains scandalous matter; or

(d) which would otherwise be not entitled to protection in a court of justice,

shall not be registered as a trade mark.

The test to be applied under paragraph (a) of these provisions, on which the opponent partly relies, has been well established by cases such as Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd, (1954) 91 CLR 592, where it was said:

Registration should be refused if it appears that there is a real risk that 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 the two products come from the same source.

However, that risk must extend to a substantial number of people likely to be concerned in the purchasing of the goods: Kendall Co v Muslyn Paint and Chemicals (1963) 109 CLR 300.

From my own observation of the Australian marketing scene, I think it would be usual for even the occasional jeans buyer - and in my estimation that would include, since at least the 1970s, most of the Australian community between the ages of 10 and 60 - to expect that there is usually some from of stitching on the back of jeans pockets.  I think that those purchasing the highest volume of this form of clothing - young people in their teens and twenties - have a wide knowledge of jeans brands and they comprise a discriminating public.  They would, I believe, take some care in the selection of these items, primarily because of price - because jeans can cost upwards of $100 - and secondly because of the “fashion statement” that the wearing of certain brands can make.
I must here reject the argument advanced by Mr Catterns that the method of presentation for sale of jeans might contribute to deception or confusion.  People do not merely rush up and grab a pair of jeans from a shelf on the basis of a quick glance at a pocket thinking that they are a particular make.  They would more usually carefully inspect them for size, style, colour and make - the last criterion demanding a reasonably close inspection to ensure that they are selecting perhaps the opponent’s product instead of the applicant’s.

As I have said in my discussion of the issues relating to s.33, despite the applicant’s and opponent’s marks both including a device comprising lines arcing from the centre to the outside of a pocket - with the previously referred to differences - I do not think that it would be generally inferred amongst purchasers that this meant that goods sold under the marks would originate from the same source. Whilst I agree with Mr Catterns that the opponent’s arcuate lines mark is an extremely powerful one, I am also inclined to the view, seemingly supported by Mr Alexander’s survey, that the market reality is that a higher proportion of the public identify the opponent’s goods by recognising the combination of the arcuate device, tab and leather patch, rather than relying upon the arcuate device alone. The applicant’s mark is such a combination, although it could be argued that it is even more identifiable given the presence of the words LEE COOPER. The use of various stitching devices on the back pocket of jeans has been widespread for a considerable period of time. There is no doubt that some perform a trade mark function - as in the case of the opponent’s and applicant’s marks - but others appear to be merely intended as a decorative item. I feel that, to some extent, this goes towards lessening the possibility of deception and confusion stemming from the use of the applicant’s mark, even given the reputation enjoyed by the opponent’s arcuate line device.

In assessing the reputation of the opponent's mark in Australia, the relevant date is the date of lodgment of the opposed application - Southern Cross, supra, - 3 December 1985.  From the evidence, I have no doubt that the opponent’s mark enjoyed a widespread reputation as at that date.  However, I think my comments on the public’s perception of jeans marks would be just as apt in the mid-eighties as they are today.

Notwithstanding the above, it is true that there are cases, such as De Cordova v Vick Chemical Co. (1951) 68 RPC 103 and Saville Perfumery Ltd v June Perfect Ltd (1941) 58 RPC 147, where it was found that, if the later mark incorporates the essential or distinguishing feature of the earlier mark, then confusion is likely to result. However, as I have previously said, I do not agree that the present case falls into this category. Taking all of the preceding factors together into consideration, I am satisfied that use of the applicant's mark will not lead to deception or confusion. I therefore find that the requirements of paragraph 28(a) have not been made out.

Given that I have found as I have with respect to s.28(a), I need no longer pursue the matter of considering all of the s.28 objection. However, as Mr Catterns did make comprehensive submissions on Office practice in the matter of the interpretation of the precedent case law in this respect, I will continue in the matter. As he said, following the High Court decision in the MOO/MOOVE case, supra, the Registrar now follows the practice as laid out in the decision of Hearing Officer Homann in the TITAN case - that is, that all paras of s.28 should be read together.  This means that, had I found that the mark was likely to deceive or cause confusion, then it would also have been necessary to find that it would not have been entitled to protection in a court of law before an opposition could succeed under s.28.

The particular matter of the conjunctive versus disjunctive reading of s.28 has been considered in many Office decisions.  One recent decision, which was issued on 16 August 1995 by Ms Helen Hardie, Deputy Registrar Hearings, is that of Sporoptic Pouilloux S.A. v Arnet Optic Illusions Inc. (as yet unreported).  There, Ms Hardie considered very similar submissions which were made by Mr Catterns on the subject.  Having the benefit of Ms Hardie’s deliberations before me, I agree with her findings in the matter.  Given that Mr Catterns’ present arguments on how s.28 should be read are in line with those she had to decide there, I think that her findings on that aspect in that case should apply in the present instance.

For the sake of convenience, I now reproduce here Ms Hardie’s deliberations on the subject:

Mr Catterns addressed this matter in some detail.  He says the practice is not correct, and advocated that Mr Homann's decision is a wrong interpretation of the MOO/MOOVE case. He argues this on the ground that it is not clear that a majority on the High Court Bench favoured a conjunctive reading of s28; that the issue of blameworthy action was raised in respect of expungement, not of registration; and that for the purpose of an application for registration, the paragraphs of section 28 should be read disjunctively. He adopted Mason C.J.'s comment at p383 ((1991) AIPC 90-726 ) and said they succinctly stated his submissions - viz:

the opponent's principal submission is that par. (a) of 28 should be read independently of par. (d) so that an opponent who relies upon par. (a) is not required in addition to show that the mark is, or would not be, entitled to protection in a court of justice.

Mr Catterns' argument addresses the individual findings of the seven Justices in the MOO/MOOVE case and, in essence, he submits that four of the Justices come down in favour of finding that paragraph 28(a) and paragraph 28(d) should be read disjunctively.  Those Justices in favour of a disjunctive reading, he says, are Mason C.J., Brennan J., Deane J. and McHugh J.  The judges in favour of a conjunctive reading, he says, are Dawson J., Toohey J. and Gaudron J.. 

Mr Catterns agrees that for the purpose of applying section 28(a) in expungement actions, Mason C.J. imports the blameworthy conduct test. However he says that His Honour reaches this conclusion by consideration of policy issues and not by reading the paragraphs of 28 conjunctively. He drew my attention particularly to page 384. Here Mason C.J. notes that the Act, per sections 34 and 58, permits identical marks to remain on the register. He then comments that this policy justifies an implication 'that s.28(a) looks to supervening likelihood of deception or confusion only if that likelihood is the result of blameworthy conduct on the part of the registered proprietor'. Having reached this point, his Honour then continues :

But I should say that it may not be necessary to read s. 28(a) as though it were governed by s. 28(d). So to read s. 28(a) is a difficult exercise as a matter of construction. It may be sufficient to say that in the context of the entire statutory scheme a trade mark is only liable to be expunged under s. 28(a) if use of it becomes likely to deceive or cause confusion and that likelihood is due to the fault or blameworthy conduct of the registered proprietor. However, for the purpose of this appeal I am content to accept that the fault of blameworthy conduct must be such as to disentitle the mark to protection in a court of justice.

I agree with Mr Catterns that from the tenor of these comments Chief Justice Mason indicated that he prefers to find that the blameworthy conduct test is imported into paragraph 28(a) by way of general policy considerations, rather than through a conjunctive  reading of section 28.  I also note  that he expresses the opinion that it is a difficult exercise to read section 28 conjunctively.  However, he does not say that it cannot and should not be done, and moreover, he says that the policy of the Act justifies the implication of blameworthiness. Consequently, although I would agree that to some extent His Honour's point of view is not fully expressed, nevertheless I cannot accept Mr Catterns' submission that His Honour wavers as regards the reading of section 28.  On the contrary, I consider that he has simply indicated two means of arriving at the requirement for blameworthy conduct - the first is through a conjunctive reading which he does not find easy, but certainly does not rule out; and a second, through consideration of general policy - which he decides to adopt.

I therefore reject Mr Catterns' submission that Mason C.J. expresses the view that the paragraphs of section 28 should be read disjunctively.

Brennan J. proceeds in a similar vein to Mason C.J..  He considers the policy implications and says that in his opinion, page 390

the Act does not contemplate that a registered proprietor should continue to enjoy the rights which s. 58 confers if he has produced the circumstances which make the further use of the mark likely to deceive or cause confusion ... But, where the registered proprietor has not produced those circumstances and where no provision other than s. 28(a) warrants expunction of the registered trade mark, there is no reason apparent on the face of the Act why the registered proprietor should not continue to enjoy the rights which registration of the trade mark confers. The Act does not make the avoidance of deception or confusion absolute, even in the case of an application for original registration : see, e.g., s. 34.

Having reached this point by considerations of general policy, however, he then says

A similar view would be reached if pars. (a) and (d) of s. 28 were so read as to make par.  (d) govern par. (a) but I do not rest my view on par. (d) of s. 28.  Paragraph (d) is not expressed to relate to the conduct of the applicant for original registration or of the registered proprietor after registration but to the character of the mark itself: a "mark which would otherwise be not entitled to protection in a court of justice". 

This, says Mr Catterns, is an indication that Brennan J. does not consider that as applied to trade mark applications, paragraph 28(a) is governed by paragraph 28(d).  Dr Emmerson put the view that Justice Brennan clearly comes down in favour of the blameworthy conduct test in the post registration operation of paragraph 28(a) and he says that by parity of reasoning, the same requirement holds true for marks at application.   However, on my reading of Justice Brennan's judgement, I find I am in agreement with Mr Catterns, that His Honour finds paragraph 28(d) is not expressed to relate to the conduct of the applicant for original registration, and by this he means that in the application of paragraph 28(a) pre-registration, it is not necessary to import a requirement of blameworthy conduct.

Justice Deane's findings are different again.  First he finds that the language of section 28 confines its operation to trade mark application.  Then he states that the paragraphs of the section are disjunctive: page 398

Paragraphs (a), (b), (c) and (d) of s. 28 are clearly disjunctive. The word "otherwise" in par. (d) can be readily explained by the fact that each of the circumstances indicated in pars. (a), (b) and (c) could, depending  upon the fact, deprive a mark of entitlement to protection in a court of justice.

and at p399

Once it is accepted that s. 28 of the Act should be so construed, there remains no reason why the words of s. 28(a) should be given other than their ordinary meaning and effect, that is to say, as precluding the actual registration of a mark "the use of which would be likely to deceive or cause confusion".

Justice Deane's judgement clearly supports Mr Catterns' argument that paragraph 28(d) does not govern paragraph 28(a), and that the opponent, Sporoptic, is not required to establish that Arnet is culpable of any blameworthy action.

Dawson J. and Toohey J., however, both hold that paragraph 28(a) is governed by the operation of paragraph 28(d).  They come to this conclusion by reasoning through the function of the word 'otherwise'.  At  p406:

Section 28(a) must be read together with s. 28(d) so that the reference in s. 28(a) to a "use ... which would be likely to deceive or cause confusion" is a reference to a use which would not only be likely to deceive or cause confusion but would be not entitled to protection in a court of justice.

Gaudron J. agrees with Dawson J. and Toohey J at p414 that the operation of section 28(a) must be confined by a requirement of blameworthy or disentitling conduct.

McHugh J. agrees with Deane J. and with the primary judge, Gummow J., who found that the paragraphs of section 28 are disjunctive.  He said, at p427:

In my opinion, an interpretation of s. 28 which holds that a mark does not offend its provisions even though the use of the mark is "likely to deceive or cause confusion" ignores the wording and structure of s.28.  As Northrop J. said in Riv-Oland [(1988) 19 FCR at 582] "According to normal canons of construction the use of the word 'or' between par. (c) and (d) makes each paragraph a true alternative to each of the other paragraphs. On this construction par. 28(a) stands alone.

In my analysis only three of the MOO/MOOVE case Justices coming down in favour of Mr Catterns' argument - viz, Brennan, Deane and McHugh.  I therefore do not consider that he has shown that the Registrar's published practice or the directives from the TITAN decision,  are at odds with the decisions of the High Court. 

One further matter that Mr Catterns wished me to consider is the fact that in Johnson & Johnson v Kalnin, 26 IPR 435, section 28(a) was applied without reference to the provisions of 28(d). Mr Catterns observed that the question of blameworthy conduct was not dealt with at the hearing level because the hearing officer found no likelihood of deception and confusion and therefore had no need to go on to blameworthy conduct. But Justice Gummow allowed the appeal. Mr Catterns submits that it is inconceivable that His Honour was not aware of the problems of blameworthy conduct because he was the judge at first instance in the MOO/MOOVE saga.

The fact is, however, that the question of the limiting effect of paragraph 28(d) was not argued in Johnson & Johnson v Kalnin, and thus this case cannot be said to have any bearing on the Registrar's established practice concerning section 28(a).

In sum, I reject the opponent's argument that in order to establish grounds under paragraph 28(a), Sporoptic is not required to establish blameworthy conduct on the part of Arnet.

In any event, in the present case, I note that there is nothing before me to show that there has been any blameworthy conduct on the part of the applicant, nor any other circumstance which would disentitle the mark to protection in a court of justice.  I cannot agree with Mr Catterns that, by applying for the present mark in the face of the opponent's registration, the applicant has committed a blameworthy act.  I find, therefore, the requirements of paragraph 28(d) have also not been made out.  The opponent's case, in terms of its objection under s.28, must therefore fail.

Conclusion

I find that the opponent has failed on all of the grounds relied upon in the notice of opposition.  I therefore dismiss the opposition and, subject to any appeal from this decision, the mark should proceed to registration.  I can see no reason why costs should not follow the result and I accordingly award costs in the matter to the applicant.

Ian Forno
Hearing Officer

7 February 1996