Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd
[1998] FCA 1704
•23 DECEMBER 1998
FEDERAL COURT OF AUSTRALIA
TRADE MARKS – Application for registration of trade mark – Use of mark likely to deceive or cause confusion – Whether this was a sufficient basis for rejection of the application – Whether it was necessary for it to appear that applicant had engaged in blameworthy conduct or that, for some other reason, the mark was disentitled to protection in a court of justice
Trade Marks Act 1955 ss 22, 28 and 61
New South Wales Dairy Corporation v Murray Goulburn Co-Operative Company Limited (1990) 171 CLR 363 – discussed
Riv-Oland Marble Co (Vic) Pty Ltd v Settef Sp A (1988) 19 FCR 570 – not followed
Radio Corporation Proprietary Limited v Disney (1937) 57 CLR 448 – discussed
G E Trade Mark [1973] RPC 297 – discussed
NETTLEFOLD ADVERTISING PTY LTD v NETTLEFOLD SIGNS PTY LTD
VG 431 of 1997
JUDGES: WILCOX, TAMBERLIN AND MERKEL JJ
PLACE: MELBOURNE
DATE: 23 DECEMBER 1998
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VG431 of 1997
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:
NETTLEFOLD ADVERTISING PTY LTD
ApplicantAND:
NETTLEFOLD SIGNS PTY LTD
RespondentJUDGE:
WILCOX, TAMBERLIN AND MERKEL J J
DATE OF ORDER:
23 DECEMBER 1998
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
Leave to appeal be granted.
The appeal be upheld and the orders made by Heerey J on 11 July 1997 be set aside.
In lieu of the said orders, it be ordered that Application no. 515704 for registration of a mark under the Trade Marks Act 1955 be rejected and that Nettlefold Signs Pty Ltd pay the costs of Nettlefold Advertising Pty Ltd of the proceeding before Heerey J.
Nettlefold Signs Pty Ltd pay the costs of Nettlefold Advertising Pty Ltd of the appeal.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VG431 of 1997
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:
NETTLEFOLD ADVERTISING PTY LTD
ApplicantAND:
NETTLEFOLD SIGNS PTY LTD
Respondent
JUDGE:
WILCOX, TAMBERLIN AND MERKEL JJ
DATE:
23 DECEMBER 1998
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
WILCOX J: This is an application for leave to appeal against a decision of a Judge of the Court (Heerey J) dismissing a challenge to a decision of a delegate of the Registrar of Trade Marks made under the Trade Marks Act 1955 (“the Act”) in relation to an application for registration of a trade mark. His Honour’s reasons for decision are reported at (1997) 38 IPR 495.
The applicant for registration was Nettlefold Signs Pty Ltd (“Nettlefold Signs”), the present respondent. The application related to a mark comprising the words “nettlefold signs” in lower case print in conjunction with a chevron device. The mark was proposed to be registered in Class 9, the nominated use being “illuminated signs including electric and neon signs”.
The application for registration was opposed by Nettlefold Advertising Pty Ltd (“Nettlefold Advertising”), the present applicant for leave, on the ground that its use “would be likely to deceive or cause confusion”: see s 28(a) of the Act. Heerey J held this assertion was made out. However, he felt constrained by authority to rule this was an insufficient basis on which to reject the application for registration.
The facts
Having regard to Heerey J’s conclusion about s 28(a), it is not necessary to refer to the detail of the extensive evidence tendered at trial. However, it is relevant to mention how it came about that both parties’ names include the word “Nettlefold” and that both seek to use a trade mark that includes that word. The following account is taken from the statement of facts by Heerey J, which both parties accept to be correct.
In 1972 David Nettlefold formed an outdoor advertising agency that carried on business in Melbourne under the name “Nettlefold &Associates”. The business specialised in posters and painted signs. In 1976 Mr Nettlefold sold the business to the 3M organisation, which thereafter carried it on by means of a company called Pacific Outdoor Advertising Pty Ltd.
In 1983 Mr Nettlefold returned to outdoor advertising. He formed a company called David Nettlefold Holdings Pty Ltd (“Nettlefold Holdings”) that traded as “Nettlefold Outdoor Advertising”. The business specialised in posters and outdoor signs. Nettlefold Holdings was partly owned by members of the Nettlefold family and partly by Corporation Australia Pty Ltd, whose principals were Alan Palmer and Andrew Peterson. Initially the business was confined to Victoria but in 1985 it expanded into New South Wales, Queensland and South Australia. In July 1986 Nettlefold Holdings changed its name to Nettlefold Advertising Pty Ltd. This company is the present applicant for leave.
In May 1986 Nettlefold Holdings (as the company then was) acquired a 75 per cent equity in a company specialising in the construction of neon directional signs. This company was then called Art Craft (Holdings) Pty Ltd. In February 1987 Nettlefold Advertising (as the company had then become) acquired the remainder of the shares in Art Craft Holdings Pty Ltd and thereafter changed its name to Nettlefold Neon Pty Ltd. This company is now Nettlefold Signs, the present respondent. It will be apparent that, at that stage, both the present parties were under the control of the Nettlefold family and Corporation Australia.
Unity of control was broken in December 1988 when the Nettlefold family and Corporation Australia sold their shares in Nettlefold Advertising to the Hoyts organisation. Hoyts did not wish to acquire Nettlefold Neon; so it was agreed that Corporation Australia should buy out the Nettlefold family’s interest in this company, giving Messrs Palmer and Peterson total control of it. Shortly afterwards, on 6 June 1989, they changed the respondent’s name to Nettlefold Signs Pty Ltd. Heerey J found this was done as a result of comments by staff that the old name was misleading; the company was involved in the manufacture of a wide range of signs, not only neon signs.
Following the change of name, Nettlefold Signs extensively promoted its business and new name. Heerey J set out the details.
Heerey J also summarised the evidence about the activities of Nettlefold Advertising, both before and after its change of name in July 1986. Between 1983 and that month, the company acquired nearly 1,000 outdoor advertising sites, spread over the four States in which it carried on business. By the end of 1988, Nettlefold Advertising controlled about 2,500 sites. The sign at each site displayed the name “Nettlefold”. On the advice of a consultant, all signs erected after January 1987 displayed the name in white lower case lettering against a black background. On approximately 1,000 “super sites” the name was illuminated. In early 1989 Nettlefold Advertising undertook an extensive promotion of the new mark within the advertising industry, culminating in a large luncheon on 28 June 1989. However, it seems Nettlefold Advertising took no steps to register its mark.
On 27 July 1989, Nettlefold Signs lodged an application for registration of its mark (Trade Mark Application No. 515704). As mentioned, this mark also uses the word “Nettlefold” in lower case printing, although it differs in other respects from the unregistered mark of Nettlefold Advertising.
The reasoning of Heerey J
After stating the facts. Heerey J set out (at 501-502) what he understood to be relevant undisputed legal principles:
“(i) The opponent bears the initial onus of establishing a reputation in its mark sufficient to found an objection under s28: Arthur Fairest Limited’s Application (1951) 68 RPC 197.
(ii)However, once this onus is discharged the burden shifts to the party seeking registration: Enno v Dunn (1890) 15 App Cas 252 at 261; Jafferjee v Scarlett (1937) 57 CLR 115 at 119.
(iii)The rights of the parties are to be determined as at the date of application for registration (here 27 July 1989): Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1953) 91 CLR 592 at 594.
(iv)The onus is on the party seeking registration to satisfy the Court that there is no reasonable possibility of deception or confusion: Southern Cross at 594-5.
(v)In order to defeat the application for registration it is not necessary for the opponent to establish that there is an actual probability of deception which will amount to a passing-off. While a mere possibility of confusion is not enough – for there must be a real, tangible danger of it occurring – it is sufficient that the result of the user of the mark will be that a substantial number of persons will be caused to wonder whether it might not be the case that the two products come from the same source. It is enough that the ordinary person entertains a reasonable doubt: Southern Cross at 594-5, 608, The Kendall Co v Mulsyn Paint & Chemicals (1963) 109 CLR 300 at 305.
(vi)In considering the issue of deception all the surrounding circumstances must be taken into consideration. The factors to be considered include the circumstances in which the marks will be used, the circumstances in which the goods will be bought and sold and the character of the probable purchaser of the goods: Jafferjee v Scarlett at 120;
(vii)A probability of confusion, if it is real, is sufficient even though the confusion may be unlikely to persist up to the point of, and be a factor in, inducing actual sales: Southern Cross at 495. There may be confusion or deception in the minds of persons to whom the mark is addressed, even if actual purchasers will not ultimately be deceived: Re Hack’s Application (1940) 58 RPC 9 at 103-104.
(viii)It is not enough for the party seeking registration to negative the likelihood of confusion in relation to the actual trade carried on by the opponent at the time of the registration and to the manner in which the latter then uses his mark. The applicant must also take into account all legitimate uses which the opponent may reasonably make of his mark within the ambit of his registration: Reckitt & Colman (Australia) Ltd v Baden (1945) 70 CLR 84 at 94, Southern Cross at 608.
(ix)The question whether the use of a mark is likely to deceive or cause confusion is in the end a question of impression and common sense; it is a ‘jury question’ in which the judge is entitled to give effect to his or her own opinion as to the likelihood of deception or confusion: Murray Goulburn Co-operative Ltd v New South Wales Dairy Corporation (1990) 24 FCR 370 at 377.”
Heerey J then turned to the contentious (and critical) issue in the case: whether s 28(d) imposed a requirement cumulative to s 28(a). In order to explain the point, it is necessary to look at s 28 of the 1955 Act. It read:
“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.”
It will be noted that paras (a), (b), (c) and (d) are expressed in disjunctive terms; applying ordinary principles of interpretation, a mark that falls within any one of the paragraphs is disqualified from registration. On this approach, and having regard to Heerey J’s finding that the use of Nettlefold Signs’ mark would be likely to deceive or cause confusion, the delegate should have rejected Nettlefold Signs’ application for registration.
As I understand his reasoning, Heerey J agreed that the natural interpretation of s 28 would be to treat the four paragraphs disjunctively: see 504-506, noting particularly the comment at 506:
“It is difficult to see how a disjunctive reading of s28 could have been unintended. After all, if para (d) is to be read conjunctively with para (a), presumably the same reading must apply to paras (b) and (c). It does seem odd, to say the least, that if a mark contained scandalous matter, a finding to that effect would not be sufficient in itself to prevent (or expunge) registration.”
The reference to expungement requires explanation. On one view, s28 operates only as a prohibition on the first registration of a mark that has one or more specified characteristics. However, as will appear, the section has been read as also prohibiting the retention of such a name on the register; accordingly, a mark that falls within the section is liable to expungement.
Notwithstanding his comment about the intended reading of s28, Heerey J was conscious of authority on the point. What might have been the leading relevant case was the decision of the High Court of Australia in New South Wales Dairy Corporation v Murray Goulburn Co-operative Company Limited (1990) 171 CLR 363. However, after a detailed analysis of the six separate judgments in that case, Heerey J concluded they provided no clear ratio decidendi; consequently, although the Court’s actual decision was binding, the reasons were not. As the facts of the case before him were dissimilar to those in Murray Goulburn, Heerey J held the decision itself was immaterial and he was free to choose between the views expressed by the individual Justices, all of whose views were entitled to respect. Exercising that entitlement, Heerey J expressed a preference for the views expressed by Deane and McHugh JJ. Those views would have led him to allow the appeal against the delegate’s decision. However, Heerey J thought himself bound to the contrary course by two decisions of Full Courts of this Court: Riv-Oland Marble Co (Vic) Pty Ltd v Settef Sp A (1988) 19 FCR 570 and Murray Goulburn at Full Court level: Murray Goulburn Co-operative Ltd v New South Wales Dairy Corporation (1990) 24 FCR 370. Those cases suggested it was not enough that the Court be satisfied the use of the mark would be likely to deceive or cause confusion; so Heerey J considered whether there was “blameworthy conduct” on the part of Nettlefold Signs, or any other reason why the mark would not be entitled to protection in a court of justice. Having negatived those questions, his Honour held the objection to registration was not sustained and dismissed Nettlefold Advertising’s challenge to the delegate’s decision.
The authorities
Radio Corporation
In order to determine whether Heerey J was in truth constrained to reach the decision he did, it will be necessary to consider the three decisions that were critical to his reasoning. But it may help to put those decisions in context, if I refer to two earlier decisions. The first of them is Radio Corporation Proprietary Limited v Disney (1937) 57 CLR 448, a decision of the High Court of Australia cited by both counsel in the present case.
Radio Corporation turned on a predecessor of s28: s114 of the Trade Marks Act 1905. That section read:
“No scandalous design, and no mark the use of which would by reason of its being likely to deceive or otherwise be deemed disentitled to protection in a court of justice, or the use of which would be contrary to law or morality, shall be used or registered as a trade mark or part of a trade mark.”
It may be noted, first, that s114 imposed a prohibition on both registration and use, whereas s28 expressly prohibits only registration. Second, although s114 was not paragraphed, it followed a generally disjunctive form. Read literally, it was a sufficient disqualification that the design was scandalous; or that its use would be contrary to law or morality. It might have been thought insufficient that the mark was likely to deceive, that the section additionally required it be deemed disentitled to protection in a court of justice; but this was not the way the High Court interpreted the section in Radio Corporation.
Radio Corporation concerned an application by Radio Corporation Pty Ltd to register as trade marks the words “Mickey Mouse” and “Minnie Mouse”, words then already well-known as the names of two Walt Disney creations. Disney and others objected to the application and the High Court unanimously upheld the Registrar’s refusal of it. Latham CJ referred (at 453) to evidence establishing “that the names and the figures are so closely associated in the public mind, in Australia and elsewhere, with Walter E Disney and his activities, that the use of either the names or the figure in connection with any goods at once suggests that the goods are ‘in some way or other connected’ with Walter E Disney”. He concluded:
“I do not decide this appeal upon the basis that the opponents have any exclusive right of any kind to the use of the words and figures in question whether by way of trade mark or under a copyright or otherwise. My opinion is based solely upon the ground that, as against the public, the applicants should not be granted the exclusive right to use the words in connection with any goods for the reason that the use of the words by them as a trade mark would be likely to deceive (sec. 114).”
Rich J spoke to similar effect. He concluded at 454-455:
“… it is, I think, impossible for the appellant to negative all likelihood of confusion. It is no part of our duty to state in definite terms precisely how the public will be misled or what kind of connection they will impute. Confusion involves indefiniteness of ideas. It is enough that they have failed to satisfy first the registrar and then the court that any confusion is improbable."
McTiernan J took the same approach; it was enough that the appellant had not negatived the likelihood of confusion.
Counsel for Nettlefold Signs, Mr R Bergland, argued that Dixon J took a different approach to his colleagues. I do not think he did; he merely spelled out more fully the elements of the ground of rejection. At 459 his Honour said:
“On the whole, I think there are present elements which leave them unable to discharge this burden. Those elements are, first, the belief which many people are not unlikely to hold that in some way or another Disney, or one of his companies has permitted, if not procured, the application of the name Mickey Mouse to the radio sets in connection with which it is used and, second, the unauthorised diversion to their own purposes on the part of the applicants of the celebrity and reputation obtained by the various activities of the opponents in relation to Mickey Mouse. The latter may give no cause of action but I think that, at any rate in conjunction with the former element, it would be enough to deprive the proposed mark of protection.”
To the extent that the terms of s28 of the 1955 Act differ from those of s114 of the 1905 Act, it might be thought Radio Corporation applies a fortiori under s28; the latter section is more clearly framed in disjunctive terms.
G E Trade Mark
Counsel for Nettlefold Advertising, Mr B Caine, said that, until 1973, nobody would have thought it appropriate to interpret s28 of the 1955 Act otherwise than as imposing disjunctive criteria. The significance of 1973 is that it was the year in which the House of Lords decided G E Trade Mark [1973] RPC 297. The leading speech in that appeal was that of Lord Diplock, with whom Lord Reid agreed generally and Lord Simon of Glaisdale and Lord Kilbrandon agreed.
The case was a contest between a United Kingdom company, General Electric Company Limited, and an American company, General Electric Company. Both companies had, for many years, manufactured and sold electrical machinery and goods. In 1906 the English company registered under United Kingdom trade marks legislation the letters GEC in block capitals; and, later, the same letters in script. In 1907 the American company registered in the same classes of the Register the letters G.E., in script enclosed in an ornamental circle (“the Rondel mark”). It was not contended in the House of Lords that, when the Rondel mark was registered, it was liable to cause confusion between the products of the American company and those of the English company; accordingly, Lord Diplock said at 317, “there was nothing wrong with the original registration of the Rondel mark”. However, the English company argued this mark should now be expunged, pursuant to s32 of the Trade Marks Act 1938 (UK), on the ground that, by reason of events since 1907, it had become an “entry wrongly remaining on the register”.
Lord Diplock held at 322 that, at the date of institution of the proceeding (1967), the use of the Rondel mark simpliciter upon electrical goods would create a likelihood of confusion among a substantial number of members of the public. He then turned to the question whether that meant it was an entry wrongly remaining on the register in 1967.
Section 32 read:
“32(1) Any person aggrieved by the non-insertion in or omission from the register of any entry, or by any entry made in the register without sufficient cause, or by any entry wrongly remaining on the register, or by any error or defect in any entry in the register, may apply in the prescribed manner to the court … and the tribunal may make such order for making, expunging or varying the entry as the tribunal may think fit.”
It will be noted the section distinguishes between an entry made without sufficient cause and an entry wrongly remaining on the register. Having regard to later cases, it is important to observe that Lord Diplock confined himself to the latter situation; he did not suggest the subject entry was made without sufficient cause. Lord Diplock commented at 323 that it was “clear that the subsection contemplates that an entry which was lawful at the time it was originally made may, as a result of subsequent events, become one which ‘wrongly remains’ on the register”. He mentioned, as a matter of legislative history, that the 1883 statute had not referred to an entry “wrongly remaining on the register” but the Court of Appeal had interpreted the power to expunge an entry “made without sufficient cause” as extending to wrongful retention. However, his Lordship was not prepared to accept a submission that the court had a discretion “to remove from the register any entry the continued use of which the court considers would be contrary to the policy of the Act”. He thought an entry that was lawfully made could only be expunged if unlawfulness attended either the original registration or the continuation of the entry on the register.
At 324 Lord Diplock commenced a lengthy and informative history of United Kingdom trade marks law, in the course of which he pointed out (at 328) that the verb “to register” may in some contexts refer, not only to the making of an entry in the register but also the continuance of the mark on the register. He held this was the situation in relation to the second sentence in s6 of the 1875 Act which read:
“It shall not be lawful to register as part of or in combination with a trade mark any words the exclusive use of which would not, by reason of their being calculated to deceive or otherwise, be deemed entitled to protection in a court of equity; or any scandalous designs.”
That provision, including the critical words “[i]t shall not be lawful to register”, was substantially reproduced in s11 of the 1905 United Kingdom Act. However, there were also changes in 1905. They included a new s41 which provided that, in all legal proceedings relating to a registered trade mark, “the original registration of such trade mark shall after the expiration of seven years from the date of such original registration ... be taken to be valid in all respects unless such original registration was obtained by fraud, or unless the trade mark offends against the provisions of this Act”.
At 333 Lord Diplock said:
“What section 41 did was to preclude removal of a trade mark from the register after seven years upon any ground of invalidity, such as lack of distinctiveness, which would have applied to the original registration. What it did not do, was to preclude removal of a mark from the register if it had become likely to deceive as a result of blameworthy conduct by its proprietor since the date of its original registration. A bona fide proprietor whose trade mark had become likely to deceive through no fault of his own did not need to look to section 41 for his protection. Section 11 itself was sufficient protection to him whether or not seven years had elapsed since the original registration of the mark.” (Emphasis added)
This was because s11 had been interpreted as authorising removal from the register of a mark whose use had become deceptive since registration only where the deception stemmed from the wrongful conduct of the proprietor.
At 334 Lord Diplock summarised the situation under the 1938 Act in these terms:
“(1) The fact that the mark is entered upon the register is prima facie evidence of the validity of the original registration and of the right of the registered proprietor to the exclusive use of the mark, subject however to the rights of concurrent user by any registered proprietor of an identical mark or one nearly resembling it.
(2)If the mark was likely to cause confusion at the time when it was first registered it may be expunged from the register as ‘entry made in the register without sufficient cause’ unless the proprietor of the mark at that time would have been entitled to have it entered on the register by reason of his honest concurrent use of the mark as a trade mark before the original registration of the mark.
(3)If the likelihood of causing confusion did not exist at the time when the mark was first registered, but was the result of events occurring between that date and the date of application to expunge it, the mark may not be expunged from the register as an entry wrongly remaining on the register, unless the likelihood of causing deception resulted from some blameworthy act of the registered proprietor of the mark or of a predecessor in title of his as registered proprietor.
(4)Where a mark is liable to be expunged under (2) or (3) the Court has a discretion whether or not to expunge it and as to any conditions or limitations to be imposed in the event of its being permitted to remain on the register.”
In terms of the present case, it is important to note the distinction between (2) and (3). Where there is a likelihood of confusion at the time of first registration, this is enough to warrant expungement on the basis that the entry was made without sufficient cause; there is no additional requirement that the confusion is the result of blameworthy conduct by the applicant for registration or the mark is otherwise disentitled to protection in a court of justice. Blameworthiness becomes relevant only under (3), where the likelihood of confusion stems from events that occurred after the date of registration.
Riv-Oland Marble
In 1988 a Full Court of this Court (Bowen CJ, Northrop and Lockhart JJ) considered an appeal from a decision of the Supreme Court of Victoria dismissing a motion by Riv-Oland Marble Co (Vic) Pty Ltd for expungement of a trade mark “Riv-Oland” registered in the name of Settef SpA. Settef was an Italian manufacturer of wall finishes. One of its products was a granular marble finish applied to the surface of walls. This product was sold in Italy and other countries, including Australia, under the name “Riv-Oland”. In 1967 or 1968 Settef appointed an Australian company, Riv-Oland Marble Co Pty Limited, as its sole distributor in Victoria. The distributor chose its name because of its intended association with Riv-Oland products. However, it soon began to purchase product elsewhere. In 1970, Riv-Oland Marble Co failed to order any product from Settef or to reply to its correspondence. So Settef terminated the distributorship. Riv-Oland Marble Co continued to trade, obtaining granulated marble products elsewhere but selling them under the name “Riv-Oland”. Its business prospered and spread to New South Wales, Queensland and Tasmania. By 1978 the name “Riv-Oland” was widely associated with the Australian company’s products. In contrast, Settef experienced difficulties in securing a satisfactory replacement distributor, so it made little use of the mark, in Australia, in the period 1970 to 1978.
In March 1978 Riv-Oland Marble Co applied for registration of the trade mark “Riv-Oland” in Australia. In June 1978 Settef made a similar application. This application proved successful; the reason being that the earlier application of Riv-Oland Marble Co lapsed when it failed to respond to certain requirements of the Registrar. The certificate of registration of Settef’s mark was sealed in June 1981.
In the meantime, in April 1980, Riv-Oland Marble Co assigned its business and assets, including its trade marks, to Riv-Oland Marble Co (Vic) Pty Ltd.
At some time between 1979 and March 1982, Settef learned that Riv-Oland Marble Co (Vic) was manufacturing and distributing product under the name “Riv-Oland”. In September 1982 it commenced infringement proceedings in the Supreme Court of Victoria. Riv-Oland Marble Co (Vic) responded with an application for expungement. McGarvie J dismissed that application on two grounds. First, he found Settef was the owner of the mark that had been used by Riv-Oland Marble Co and Riv-Oland Marble Co (Vic) and had never abandoned it. His Honour held that, although use of the mark by Settef was, in June 1978, “likely to deceive or cause confusion”, and that situation had continued, this did not invalidate the registration of the mark or render it liable to expungement under s22 of the Act; it was the conduct of Riv-Oland Marble Co (Vic) and its predecessor that had created the likelihood of deception or confusion. Second, even if grounds for expungement or removal of the mark were established, the court should not exercise its discretion in favour of those remedies.
Section 22 of the Trade Marks Act 1955 relevantly reads:
“(1)Subject to this Act, a prescribed court may, on the application of a person aggrieved or of the Registrar, order the rectification of the Register –
(a)by the making of an entry wrongly omitted to be made in the Register;
(b)by the expunging or amendment of an entry wrongly made in or remaining in the Register;
(c)by the insertion in the Register of a condition or limitation affecting the registration of a trade mark which ought to be inserted; or
(d)by the correction of an error or defect in the Register.
(2)…
(3)…
(4)…
(5)Notice of an application to a prescribed court under this section (other than an application by the Registrar) shall be given to the Registrar, who may appear and be heard and shall appear if so directed by the prescribed court.
(6)An office copy of an order under this section shall be served on the Registrar, who shall, upon receipt of the order, take such steps as are necessary to give effect to the order.”
On appeal from the decision of McGarvie J to the Full Court of this Court, three questions were argued. They were:
“1.Was the respondent the proprietor of the mark when it applied for registration on 30 June 1978?
2.Accepting the trial judge’s finding that on 30 June 1978 the respondent’s use of the mark was and since that date has been likely to deceive or cause confusion within the meaning of s28(a), is the mark invalid or liable to expungement and should it be expunged?
3.Was the mark on 30 June 1978 distinctive of the goods of the respondent?”
By majority (Bowen CJ and Lockhart J, Northrop J dissenting), the Court returned a negative answer to the second question. Lockhart J at 594 explained how the issue arose, referring to what was said by Mason J in Berlei Hestia Industries Limited v The Bali Company Inc (1973) 129 CLR 353 at 360-361:
“Despite earlier authority to the contrary, it may now be accepted that a trade mark ‘offends against’ s.11 of the Trade Marks Act, 1938 (U.K.) (the counterpart of our s.28) within the meaning of s.13 of the 1938 Act (the counterpart of our s.61) if it would be likely to deceive or cause confusion at the date when application is made to rectify the register … A similar, although slightly different, view was taken by Windeyer J. in the present case. His Honour thought that a mark ‘offends’ against s.28 ‘at the date when its validity has to be determined’, that is, ‘when the court comes to make or refuse the order for rectification’. The difference between the accepted English view and that expressed by Windeyer J. is … of no importance in the present case. What is of importance is that for persuasive reasons which need not be reiterated the view that s.28 (s.11 of the 1938 Act) was merely a prohibition against original registration was rejected. Although there are differences in the expression of the United Kingdom and Australian provisions, they are not of such significance as to justify a departure from the conclusion, conformably with what has been said, that the words ‘shall not be registered’ in s.28 refer not only to the fact of making an entry in the register but also to permitting the continuance of the entry of a trade mark in the register.
It was suggested for the respondent that s.61 confers on a trade mark, after the expiration of seven years from its original registration, an immunity from expungement on any ground which might have operated as a bar to the original registration. The power to rectify given by s.22, prefaced by the words ‘subject to this Act’, must be read, so it was said, as a subordinate provision. The argument pays insufficient attention to the form and substance of s.61. The presumption of validity attaches only to the original registration; it does not extend to the continuance of the trade mark in the register. And it is a preliminary condition essential to the existence of the presumption that it is not shown that the mark offends against s.28. Consequently, if it is shown that the mark sought to be expunged is likely to deceive or cause confusion at the date of the application (or, as Windeyer J. preferred to express it, when the court comes to make its order), no presumption of validity arises by virtue of s.61 and the power of rectification conferred by s.22 may be exercised.
Although not limited to deception or confusion flowing from similarity to another mark, s.28(a) extends to deception and confusion so caused … The meaning of the words ‘the use of which would be likely to deceive or cause confusion in s.28(a) is influenced by the language in which s.28(d) is expressed when it refers to a mark ‘which would otherwise be not entitled to protection’. Thus, a special problem may confront the Court when a mark which was not likely to deceive or cause confusion at the time of its original registration subsequently becomes so or when two marks substantially identical or deceptively similar have been registered following honest concurrent user (see s.34).” (Original emphasis)
In Berlei Hestia Mason J did not need to deal with that problem. It will be observed that he confined his comment about the exclusion of the s61 presumption to a case where it is shown that the mark sought to be expunged is likely to deceive or cause confusion at the date of the application; that is, the date of application for expungement.
In Riv-Oland Lockhart J noted the finding of McGarvie J that, at the date of Settef’s application for registration and all subsequent times, the use of the mark by Settef would have been likely to cause confusion. However, in terms at least, he addressed only the topic of continuing registration, not the validity of the first registration.
Lockhart J commented that s28 was based on s114 of the 1905 Act and was substantially similar to s11 of the 1938 United Kingdom Act. He stated at 596 that two views had been taken about s28(a). The first view was that “in 1955 the legislature in Australia deliberately departed from the previous wording of s114 of the 1905 Act so that the words ‘which would otherwise be not entitled to protection in a court of justice’ no longer govern the preceding words ‘the use of which would be likely to deceive or cause confusion’ ”. Lockhart J noted this view had been taken by the Court of Appeal of New Zealand, in relation to the New Zealand equivalent of s28: see Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50; [1979] RPC 410. However, in HTX International Pty Ltd v Semco Pty Ltd (1983) 78 FLR 57; 1 IPR 403, Fox J, in this Court, took the opposite view. As Lockhart J said, Fox J reached a conclusion which implicitly accepted that, notwithstanding the change in statutory language, “the operation of s28(a) after the initial registration of a trade mark is confined to situations where the likelihood of deception or confusion is brought about by some blameworthy act of the registered proprietor of the mark, expressly adopting the reasoning of Lord Diplock in the G E case on this point”. [Fox J accepted any expungement order would need to be made under s22. However, he did not reach consideration of the interaction between s22 and s28(a) because it was not established that use of the registered mark had ever caused deception or confusion. It is important to note, as Lockhart J did, that Fox J was concerned with the operation of s28(a) in the context of confusion arising after the first registration of the trade mark.]
Lockhart J at 598-599 expressed his own view about the contention:
“Whilst the syntax of s28 leaves much to be desired, I cannot discern any valid reason why the legislature would have intended to achieve any difference in substance between s28 of the Act and s114 of the 1905 Act or s11 of the United Kingdom Act of 1938. It appears to me that the draftsman of s28 was conscious of the syntactical problems associated with s114 and s11 and sought to render the new section more easily intelligible and of simpler grammar and syntax, but did not intend to achieve a different result by the use of the disjunctive form.
Hence, notwithstanding its literally disjunctive form, I reject the view that s28 must be construed in the disjunctive so that the words ‘the use of which would be likely to deceive or cause confusion’ are no longer governed by the words ‘which would otherwise be not entitled to protection in a court of justice’. The use of the word ‘otherwise’ in s28(d) appears to me to be otiose unless it refers back to the preceding pars (a), (b) and (c). In my view, the syntactic function of that word requires that par (d) be taken to involve such reference back, which in consequence will limit the circumstances in which the factors specified in pars (a), (b) and (c) will disentitle a trade mark to protection.
The meaning which I have placed upon s28 is derived both from the language of the section itself, notwithstanding the use of the disjunctive, and from the purpose of the section. …
In my view the test propounded by Lord Diplock with respect to s11 of the United Kingdom Act, namely, that the operation of the section is confined to situations where the likelihood of deception or confusion is brought about by some blameworthy act of the registered proprietor of the mark, is equally applicable to s28 of the Act, notwithstanding the differences in the structure and syntax of the two sections. It follows that the mere likelihood of deception or confusion engendered by the use of a registered trade mark does not necessarily result in invalidity of the mark, or render it liable to expungement. If s28 were to bear the construction for which the appellant contends in this case anomalies and unacceptable consequences would follow. …
If the appellant’s argument is correct, and s28(a) has an operation which is not restricted by reference to s28(d) , then a trader who uses the registered trade mark of another trader may exploit that infringing use of the mark in the market-place to the point where it can be said that the use of the registered mark by the proprietor of the mark would be likely to deceive or cause confusion. He may do this by increasing his volume of sales and establishing a reputation for his goods in association with the mark of the registered proprietor, resulting in the risk of confusion or deception. It would be an extraordinary result if this conduct, which constituted infringing conduct, could produce either the invalidity of the mark or its liability to expungement. It is no answer to say that a court has a residual discretion to decline to order expungement even where a mark is shown to be invalid. The fact that the infringing conduct of a rival trader, in the circumstances to which I have referred, could produce the consequence that a registered mark becomes invalid is itself so extraordinary a result that its correctness could only be accepted as a last resort.” (Emphasis added)
Lockhart J concluded this portion of his judgment by expressing agreement with McGarvie J that “the appellant is not entitled to rely on a likelihood of confusion which it brought about by its own wrongful conduct”.
It will be noted that Lockhart J’s reason for rejecting the argument that s28(a) operated independently of s28(d) was based entirely upon concern that, otherwise, the infringing conduct of a competitor might expose a registered proprietor to the risk of expungement of a mark in respect of which there was no confusion at the date of first registration. His Honour did not deal with the relationship between s28(a) and s28(d) in the context of first registration. It will be recalled that Lord Diplock had distinguished between first registration and continuing registration and Lockhart J purported to follow the GE case, but he did not mention the distinction.
Bowen CJ adopted reasoning substantially similar to that of Lockhart J, but related to the question “whether the mark was wrongly registered on 30 June 1978 upon the ground that its use was likely to deceive or cause confusion”. [30 June 1978 was actually the date of Settef’s application for registration, not the date of registration.] The Chief Justice drew no distinction between deception and confusion before registration and subsequent deception and confusion. At 574 his Honour said:
“The question is a difficult one but my own inclination is to uphold the decision of the learned trial judge in the circumstances of this appeal. I have not obtained much assistance from the close analysis of the slight differences in wording adopted in the variations in language used in the provision in the United Kingdom, New Zealand and in Australia from time to time or the way in which the word otherwise appears in par (d). I am, I think, conscious of leaning against a construction of s28 in regard to blameworthy conduct on the part of a proprietor which would lead to a situation described by Windeyer J where the proprietor of a mark might be denied or lose registration by reason of ‘the assiduous efforts of an infringer’ … or to adapt the words to cover the period before registration ‘the assiduous efforts of a misappropriating user’. Furthermore, the trade mark law providing for registration is designed rather to clarify the position of proprietors of trade marks and facilitate enforcement rather than to raise difficult and complex questions which would be generated by the contrary construction.”
As mentioned, Northrop J took a different view. At 580-581 he set out the summary of the United Kingdom law which I have already quoted. He noted that Lord Diplock’s second proposition about confusion at the time of first registration being a basis of expungement was qualified only by a reference to honest concurrent user; there was no reference to blameworthiness. At 582 Northrop J said:
“There is much to be said for the contentions made on behalf of the appellant. It seems reasonably clear that s28 of the Act is based on s114 of the Australian 1905 Act as well as on s11 of the United Kingdom Act of 1938 but the draftsman of s28 has adopted a form which was thought to be in plain English. The adoption of a form using separate paragraphs within a section to refer to different subject-matters is a helpful method of achieving clarity of expression. On its face, the four paragraphs of s28 each refer to separate criteria proscribing the registration of a trade mark. 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 and on the finding of the trial judge, the Court should, under par 22(1)(b), expunge the registration of the trade mark in suit from the register. There is no doubt that the Court has power to do that where the registration was wrongly made. …
A difficulty arises if s28(d) does apply to qualify s28(a) in the sense explained by Lord Diplock with respect to the United Kingdom Acts. The equivalent qualifying provisions in s11 of the United Kingdom Acts have no application to the other two criteria but, having regard to the structure of s28, s28(d), in logic, would apply to pars (b)and (c). It may be that a mark which came within par (b) or (c) would be not entitled to protection in a court of justice but if par (d) is to be given an application to pars (a), (b) and (c), why was it necessary to specify each of those criteria?
The real difficulty arises from the use of the word ‘otherwise’.
…
The word ‘otherwise’ when used as an adverb usually denotes ‘in another way’ or ‘other ways’ or ‘in other respects’: see the Shorter Oxford English Dictionary. In the context of the syntax of s28 of the Act, the word ‘otherwise’ is used correctly and does give a direct force to s28(d) to operate in its own right and not as a qualification on s28(a), (b) or (c). On this view s28(a), (b) and (c) each operate independently of par (d) which is a catch-all provision proscribing the registration of a mark where that mark would not be entitled to protection in a court of justice even though the mark did not come within s28(a), (b) or (c).
On this construction of s28 of the Act, the unique facts found by the trial judge that upon the unqualified words of s28(a) of the Act, the respondent’s use of its trade mark in the Australian market at the time of the registration of the mark would have been likely to cause confusion are so important. The authorities referred to in the course of the appeal were cases where the likelihood of confusion arose after the mark had been registered and arose by reason of conduct by a person not being the registered proprietor of the mark.”
At 588 Northrop J concluded:
“In my opinion, the contentions made on behalf of the appellant are persuasive and should be accepted. The common law developed rights by which a trader was able to protect his trade mark against persons infringing those common law rights. The Trade Marks Act conferred statutory rights upon registered proprietors of trade marks and empowered registered proprietors to enforce those rights against persons infringing those rights. In creating and conferring those rights Parliament prohibited the registration of trade marks which offended the provisions of what is now s28 of the Act. In particular, Parliament proscribed the registration of a trade mark which would be likely to deceive or cause confusion. At the same time Parliament has created exceptions to the general prohibitions contained in s28. The discretion conferred upon the Registrar by s34 of the Act to register a mark in the case of honest concurrent user is an illustration of such an exception. The power to assign a trade mark with or without the goodwill of the business concerned in the goods or services in respect of which the trade mark is registered is another illustration of such an exception. These exceptions do not negate the basic concept of the Trade Marks Acts that a trade mark should not be registered if its use would be likely to deceive or cause confusion.”
His Honour said at 589 that “the finding that there was no blameworthy conduct by the respondent that brought about the likelihood of confusion which the appellant’s later use of the mark has produced, is irrelevant to the application of” Lord Diplock’s second proposition. He then considered the proper exercise of the Court’s discretion and concluded relief should not be refused on that ground.
Murray Goulbourn
In 1966 Healthway Dairy Products Pty Ltd registered a trade mark “Moo” in respect of dairy products. Healthway used the mark in connection with a reduced fat cream product until 1974. After that year it made no further use of the mark. In 1979 New South Wales Dairy Corporation (“NSW Dairy”) commenced to market flavoured milk under the name “Moove”. In 1987 Murray Goulburn Co-operative took an assignment from Healthway of the registered mark “Moo” and commenced to use that mark in relation to cheese products and, later, milk products. NSW Dairy made a non-user application to the Registrar and later commenced a suit in which it sought, amongst other relief, expungement from the Register of the “Moo” mark. The trial judge held that, at the date of institution of the proceeding, the use of the “Moo” mark was likely to deceive or cause confusion. He ordered expungement of the mark from the Register. On appeal, the Full Court (Lockhart, Pincus and von Doussa JJ) set aside that order: see (1990) 24 FCR 370. Their Honours said (at 378): “It is now established that the concluding words of s28 prohibit not only the original registration of an offending mark, but the continuance on the Register of a mark that has become an offending mark since registration”. The Court went on to refer to Riv-Oland and to hold (at 381) that case was not to be distinguished on the basis that it concerned the validity of the first registration of the trade mark rather than, as in Murray Goulburn, the question whether a mark that was admittedly lawfully registered had become liable to expungement as a result of subsequent events. Nor was Riv-Oland properly to be confined to “blameworthy conduct”. Their Honours said at 382:
“In our opinion Riv-Oland leaves open the question whether s28(a) may apply where, on some other ground, the mark was not entitled to protection in a court of justice. We do not understand the majority judgments to deny the possibility that a mark may not be entitled to protection in a court of justice, for example, because the mark makes a false representation as to the nature or quality of the goods: …or because the mark would impose a clog upon the means of identifying the subject-matter of dealings between traders which operates in restraint of trade.”
The Court then considered NSW Dairy’s argument that lack of distinctiveness meant the “Moo” mark was disentitled to protection in a court of justice. The Court rejected that argument on the basis that s61(1)(c) of the Act dealt specifically with lack of distinctiveness, so it was not intended to be caught up in the reference to s28 made by s61(1)(b). The only other argument (non-use) by NSW Dairy having failed, there was no basis for applying s28(d); consequently, the Court set aside the expungement order made by Gummow J.
Section 61 of the 1955 Australian Act was similar to s41 of the 1905 United Kingdom Act. Subsection (1) read:
“61(1)In legal proceedings relating to a trade mark registered in Part A of the Register (including applications under section 22), the original registration of the trade mark under this Act shall, after the expiration of 7 years from the date of the original registration, be taken to be valid in all respects, unless it is shown –
(a)that the original registration was obtained by fraud;
(b)that the trade mark offends against the provisions of section 28; or
(c)that the trade mark was not, at the commencement of the proceedings, distinctive of the goods or services of the registered proprietor.”
NSW Dairy appealed to the High Court against the Full Court decision. By majority (Deane, Dawson, Toohey and Gaudron JJ, Mason CJ, Brennan and McHugh JJ dissenting) the High Court dismissed the appeal. There were considerable differences in the reasons of the members of the Court. At first instance in the present case, Heerey J summarised the positions taken by the seven Justices on the four critical issues in the case:
“Before the High Court, an issue was raised as to whether s28 applied at all where rectification of the register was being sought in respect of events which occurred after registration. In the courts below, the applicability of s28 to post registration events had been largely assumed because of dicta in Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353 at 360. In Murray Goulburn a majority followed the Berlei approach: Mason CJ (at 372, 376-382), Brennan J (at 389) (although his Honour thought that after registration s28(a) operates ‘in a different regime’), Dawson and Toohey JJ (at 402-403). The contrary view was expressed by Deane J (at 394-399), Gaudron J at 414 and McHugh J (at 417-426).
On the question whether para (d) of s28 imposes a requirement cumulative on para (a), Mason CJ (at 383-384), Brennan J (at 389), Dawson and Toohey JJ (at 403-408) and Gaudron J (at 414) gave an affirmative answer. Deane J (at 398) and McHugh J (at 426-431) disagreed. However Brennan J drew a distinction between the post-registration regime of s28, and an application for original registration. In the latter case, his Honour thought that s28(a) ‘prohibits the original registration of a mark the use of which would be likely to deceive or cause confusion’ – implicitly this would be a sufficient ground in itself.
A third question was whether, assuming s28(d) to be an additional requirement, it only applied to cases where there was ‘blameworthy conduct’. An affirmative answer was given by Mason CJ (at 384), Brennan J (at 391) and Deane J (at 399). Dawson and Toohey JJ (at 409) and Gaudron J (at 414) disagreed. McHugh J expressed no opinion.
As to the content of ‘blameworthy conduct’ in the circumstances of the case, Mason CJ (at 385-388) held that it was constituted by Murray Goulburn’s failure to restrain the use of NSW Dairy’s mark; Brennan J (at 391) thought that conduct would be blameworthy if it was conduct which the proprietor knew or ought to have known would result in confusion and actually did; Deane J (at 399) would have required a belief or intent to encourage deception or confusion; Dawson and Toohey JJ held that the lack of distinctiveness, non-use or failure to restrain the appellant’s use were not sufficient (at 411). Gaudron J at 414 agreed with Dawson and Toohey JJ. McHugh J did not express an opinion.
In the event the appeal was dismissed, the members of the court in favour of that result being Deane, Dawson, Toohey and Gaudron JJ. Thus of the majority, only three Justices (Dawson, Toohey and Gaudron JJ) held that para (a) of s28 was cumulative on para (a). The remaining member of the majority (Deane J) was to the contrary on that issue but joined the majority on the ground that s28 did not have a post-registration operation. Of the minority, only Mason CJ supported the cumulative view in terms applicable to the present case. Brennan J is to be taken as saying that in registration as distinct from post-registration, context, para (d) would not be cumulative.”
I gratefully adopt this analysis, adding only the rider that Dawson and Toohey JJ (with whom Gaudron J agreed on this point) thought “blameworthy act” an acceptable test only if it was understood as “no more than a shorthand method of referring to all those circumstances which might disentitle an applicant to relief in a court of equity”: see 409.
As previously mentioned, Heerey J thought the High Court decision in Murray Goulburn produced no clear ratio decidendi, so the reasons failed to provide to him any binding authority. I agree with this. For present purposes, it is interesting to consider how many Justices would have assented to the proposition that is critical to Nettlefold Signs’ argument in this case: that para (d) imposes a requirement cumulative to para (a) in relation to an application for first registration, as opposed to an expungement application. As I read their Honours’ judgments, this proposition would have been supported by Mason CJ, Dawson J and Toohey J; but disputed by Brennan J and Deane J (who each distinguished between the post-registration application of s28 and an application for first registration), and McHugh J (who held s28 ought to be read disjunctively at both the first registration and post-registration stages). It is not clear to me what view Gaudron J would have taken on the presently critical issue; although her Honour agreed with Dawson and Toohey JJ, on the assumption s28 applied to the post-registration stage, she did not address the position at first registration.
Conclusions
It is important to observe that all of the authorities I have discussed (other than Radio Corporation) were cases in which the court was considering an application for expungement; although, in Riv-Oland , Bowen CJ stated the issue as being “whether the mark was wrongly registered on 30 June 1978”. Although Lockhart J placed emphasis on s61 (which deals with the post-registration situation), he may have considered the same issue. It is not clear that he did; as I have already pointed out, his Honour’s reasoning was wholly tied to post-registration events. If he did intend to deal with first registration confusion, the decision in Riv-Oland can be seen as a majority decision by a Full Court of this Court that para (d) of s28 is to be read cumulatively with para (a) in relation to an application for first registration; but the situation is far from clear. The Full Court decision in Murray Goulburn is not an authority on first registration; in that case there was no challenge to first registration. Nor, of course, was the High Court decision. As we have seen, the members of the High Court would have been deeply divided on the issue raised in this case.
Under these circumstances, what course should this Court take? Sitting at first instance, it was understandable for Heerey J to decide to follow the apparent Full Court decision in Riv-Oland, it not having been clearly over-ruled by the High Court in Murray Goulburn. But this Court is free to depart from an earlier Full Court decision that has not been endorsed by the High Court. It will not do so lightly. A Full Court will normally follow an earlier Full Court decision unless convinced it is wrong: see Byrne v Australian Airlines Limited (1994) 47 FCR 300 at 304 (Black CJ) and 333 (Beaumont and Heerey JJ).
The actual order in Riv-Oland was correct. It will be recalled the Full Court upheld both reasons given by McGarvie J for dismissing the application for expungement. The second of these reasons was that, having regard to the conduct of Riv-Oland Marble Co (Vic) (and its predecessor), the court should decline to exercise discretion in its favour. Section 22 of the Trade Marks Act 1955 conferred a discretion on the court as to whether to order rectification and it was open to McGarvie J to hold, as he did, that the conduct of the applicant for rectification and its predecessor was such as to warrant withholding relief. The majority of the Full Court were clearly entitled to hold, as they did, that it had not been shown his Honour’s discretion miscarried. This conclusion was enough to support the Full Court order dismissing the appeal. It was not really necessary for the Court to enter upon the more difficult question of the construction of s28 of the Act.
In my opinion, the natural course is to read s28 disjunctively. I respectfully adopt what was said by Deane J on that point in Murray Goulbourn at 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 facts, deprive a mark of entitlement to protection in a court of justice. As a matter of mere construction of words, there is nothing in the section to suggest that the word ‘otherwise’ should be used to confine the circumstances designated in par. (a) (or, for that matter, pars. (b) or (c)) to cases where the specified circumstances would lead to a loss of entitlement to protection in a court of justice by reason of some ‘blameworthy conduct’ on the part of the registered owner. To the contrary, so to read down par. (a) would be effectively to render it otiose since the fourth paragraph would embrace the circumstances to which it refers.”
See also the comment of McHugh J at 427-428: “an interpretation of s28 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 s28”.
It would obviously be unfair to adopt the approach that proof that use of a mark is likely to deceive or cause confusion must necessarily lead to expungement from the register. If that approach were adopted, an infringer might engineer the climate for expungement of a registered trade mark by creating confusion amongst members of the public about ownership. The court must be enabled to refuse an expungement application where expungement would reward infringement or otherwise operate unfairly. The situation is different in relation to first registration. At that stage there is no registered mark to be infringed.
It seems to me the majority judges in Riv-Oland created a problem for the law by using s28(d) as the basis of the “something else” reasonably required for an expungement application. To do this, they had to distort the natural and proper interpretation of the section, reading para (d) cumulatively with para (a). The “something else” could have been provided – consistently with the Berlei Hestia doctrine that s28 also applies to post-registration deception and confusion – by declining to exercise the Court’s discretion adversely to a registered proprietor who is the victim of infringement-caused confusion that the proprietor could not reasonably have prevented. In this way, justice could have been done to such a proprietor without misconstruction of s28.
I say “misconstruction” because, with great respect, I cannot agree that a cumulative construction of paras (a) and (d) is mandated by the use of the word “otherwise” in para (d). It seems to me the word merely reflects a legislative view that the circumstances set out in any one of paras (a), (b) or (c) would be such as to render the mark disentitled to protection in a court of justice.
It is not too late for the Court to rectify the misconstruction in an expungement case, if such a case should now arise. In the meantime, and a fortiori, it is open to the Court to adopt the natural construction of s28 for the purposes of a first registration application.
In my view, the Court should rule in this case that, at least for the purposes of a first registration application, it is incorrect to read para (d) of s28 cumulatively with para (a). Effect should be given to the command of s28(a) that a mark shall not be registered as a trade mark if it is established that its use would be likely to deceive or cause confusion. Heerey J having so found, in relation to the subject mark, that should be the end of the matter. Leave to appeal should be granted, the appeal should be upheld with costs and the orders of Heerey J set aside. In lieu thereof, it should be ordered that the respondent’s application no. 515704 be rejected.
I certify that this and the preceding twenty-three (23) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox
Associate:
Dated: 23 December 1998
Counsel for the Appellant: B Caine Solicitor for the Appellant: Minter Ellison Counsel for the Respondent: R Bergland Solicitor for the Respondent: James Taylor & Co Date of Hearing: 20 November 1998 IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VG 431 of 1997
BETWEEN:
NETTLEFOLD ADVERTISING PTY LTD
APPLICANTAND:
NETTLEFOLD SIGNS PTY LTD
RESPONDENT
JUDGES:
WILCOX, TAMBERLIN & MERKEL JJ
DATE:
23 DECEMBER 1998
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
TAMBERLIN J: I agree with the reasons and proposed orders in the judgment of Wilcox J and with the remarks of Merkel J.
In my view, the High Court judgments in New South Wales Dairy Corporation v Murray Goulburn Co-operative Company Limited (1990) 171 CLR 363 express sufficient doubt as to the correctness of the majority approach in Riv-Oland Marble Co (Vic) Pty Ltd v Settef Sp A (1988) 19 FCR 569, as to leave open the present question for fresh consideration.
The language of s 28 of the Act clearly requires a disjunctive approach. Furthermore, on well accepted principles of statutory interpretation, I can see no reason why different interpretations as to the meaning of the section should be adopted according to whether the application is one for registration or expungment.
I certify that this page is a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin.
Associate:
Dated: 23 December 1998
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VG 431 of 1997
BETWEEN:
NETTLEFOLD ADVERTISING PTY LTD
APPLICANTAND:
NETTLEFOLD SIGNS PTY LTD
RESPONDENT
JUDGES:
WILCOX, TAMBERLIN AND MERKEL JJ
DATE:
23 DECEMBER 1998
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
MERKEL J:
I have had the advantage of reading the reasons for judgment prepared by Wilcox J. I agree with the orders proposed by Wilcox J for the reasons given by his Honour.
I would only add that the discretion conferred on the Court under s 22 of the Trade Marks Act 1955 (Cth) to expunge an entry wrongly remaining on the Registrar affords the Court ample jurisdiction to ensure that an infringer cannot engineer the circumstances giving rise to a claim for expungement of a registered mark by, for example, the creation of post-registration confusion. The issue of “blameworthiness”, which has given rise to the difficulties discussed by Wilcox J in relation to the construction of s 28, is more appropriately considered in relation to a claim for expungement under s 22 rather than by misconstruing s 28.
I certify that this page is a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel
Associate:
Dated: 23 December 1998
Counsel for the Applicant: Mr B Caine Solicitor for the Applicant: Minter Ellison Counsel for the Respondent: Mr R Bergland Solicitor for the Respondent: James Taylor & Co Date of Hearing: 20 November 1998 Date of Judgment: 23 December 1998
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