Microsoft Corporation v CPL Notting Hill Pty Ltd (No 7)

Microsoft Corporation filed a lawsuit against CPL Notting Hill Pty Ltd and others, seeking relief for alleged trademark infringement. The dispute centred on the use of Microsoft’s Windows 7 software trade marks on computers assembled by CPL Notting Hill. Microsoft argued that the affixing of the Certificate of Authenticity (COA) labels to these computers constituted trademark infringement. CPL Notting Hill defended the action by asserting that the use of the trade marks was covered under section 123 of the Trade Marks Act 1995 (Cth).

The court had to decide whether the affixing of COA labels to computers by CPL Notting Hill constituted trademark infringement. The legal issues involved interpreting section 123 of the TM Act, which provides a defence against trademark infringement where the trade mark is used in relation to genuine goods. Another issue was whether the COA labels applied to the computers created a connection in the course of trade between Microsoft and these computers, or if the connection was with the Windows 7 software pre‑installed on them.

The court found that the affixing of COA labels to the computers did not signify a connection in the course of trade between Microsoft and the computers. The relevant goods in issue were Microsoft’s Windows 7 software pre-installed on the computers, not the computers themselves. The reasoning followed from the Full Court's decision in Scandinavian Tobacco Group Ltd v RJ Reynolds Tobacco Holdings Inc, which held that the goods connected in the course of trade were those to which the trade marks were affixed. Here, the Windows 7 COA labels were connected with the Windows 7 Pro software, not the computers. Microsoft's licensing of the COA labels to a Refurbisher Company meant they had consented to the application of their trade marks in relation to their software.

The court concluded that CPL Notting Hill had successfully made out their defence under section 123 of the TM Act. Therefore, Microsoft's trademark claim failed. For completeness, the court noted that if the Microsoft parties had succeeded in establishing their trademark case, it would have ordered only nominal damages, as the lost licence fee had already been awarded under the Copyright Act.