New South Wales Dairy Corporation v Murray-Goulburn Co-operative Commpany Ltd

Re: NEW SOUTH WALES DAIRY CORPORATION
And: MURRAY-GOULBURN CO-OPERATIVE COMPANY LIMITED and HEALTHWAY DAIRY
PRODUCTS PTY. LTD.
No. G1156 of 1988
FED No. 151
Trade Marks - Costs - Stay

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Gummow J.(1)

CATCHWORDS

Trade Marks - non-use - rectification of the Register - whether the Court should exercise its discretion under s. 23 of the Trade Marks Act 1955 by preserving the registration in respect of any goods for which it would otherwise be liable to removal for non-use - whether the applicant was "a person aggrieved" within the meaning of sub-s. 23 (1) (b) of the Trade Marks Act 1955 in respect of the retention of a trade mark on the Register of Trade Marks for all the goods for which it was registered.

Costs - whether the applicant which had succeeded in a commercial sense but not on all the legal issues should be entitled only to a proportion of its costs.

Stay - terms upon which a stay of an order for rectification of the Register of Trade Marks pending an appeal should be granted.

Patents Designs & Trade Marks Act 1883 (UK)

Trade Marks Act 1905

Trade Marks Act 1955

Trade Practices Act 1974

Farley (Aust.) Pty. Ltd. v J.R. Alexander & Sons (Qld.) Pty. Ltd. (1946) 75 CLR 487

Shell Co. of Australia Ltd. v Rohm & Haas Co. (1949) 78 CLR 601

Continental Liqueurs Pty. Ltd. v G.F. Heublein & Bro. Inc. (1960) 103 CLR 422; (1962) 109 CLR 153

Australian Institute of Marine & Power Engineers v Secretary, Department of Transport (1986) 13 FCR 124

In the matter of Powell's Trade Mark (1893) 11 RPC 4

KODIAK Trade Mark (1987) RPC 269

Lever Bros. Ltd. v Sunniwite Products (1949) 66 RPC 84

Re Carl Zeiss Pty. Ltd.'s Application (1969) 122 CLR 1

Riv-Oland Marble Co. (Vic.) Pty. Ltd. v Settef SpA (1989) 83 ALR 677

HEARING

SYDNEY

#DATE 18:4:1989

Counsel and Solicitors for J.M. Ireland instructed by
the Applicant: Messrs. Clayton Utz

Counsel and Solicitors for M.L.D. Einfeld Q.C. and P.F. Esler
the First Respondent: instructed by Swaab & Associates

ORDER

Declare that use by the first respondent of registered trade mark No. A204,602, comprising the word "MOO", in the course of trade and in relation to milk or flavoured milk is and was at the date of the institution of these proceedings, 5 August 1988, likely to deceive or cause confusion within the meaning of s. 28 (a) of the Trade Marks Act 1955.

Order that the entry in the Register of Trade Marks in respect of registered trade mark No. A204,602 be rectified by limiting the goods in respect of which that trade mark is registered to "cheese".

Order that upon the rectification of the Register of Trade Marks in accordance with order (2), the first respondent by itself, its servants and agents, be restrained from infringing the applicant's registered trade mark No. A323,613, comprising the word "MOOVE", by, in the course of trade and in relation to flavoured milk or milk, using as a trade mark the name "MOO" or any other word substantially identical with or deceptively similar to the applicant's said trade mark.

Order that the applications filed 6 July 1988 and 5 August 1988 be otherwise dismissed.

Order that the cross-claim by the first respondent be dismissed.

Order that, other than in respect of costs previously ordered, the first respondent pay the applicant's costs of the proceedings.

Order that forthwith upon the institution of any appeal from these orders, the parties lodge with the New South Wales District Registry the exhibits previously handed out to the parties.

Order that upon the first respondent by its counsel undertaking to the Court that

(a) any appeal by it from these orders will be instituted within fourteen days of the date of these orders,

(b) it will join in any application by any respondent to the appeal for expedition of such appeal, and

(c) it will keep accounts of sales of milk sold under the MOO mark until the determination of such appeal,

order (2) of these orders is stayed until the determination of such appeal or earlier further order.

Note: Settlement and entry of orders is dealt with by Order 36 of the Federal Court Rules.

JUDGE1

On 3 April 1989, I delivered reasons for judgment in these proceedings, and stood the matter over for the bringing in of short minutes to give effect to those reasons. The matter was then relisted before me, and I have had the advantage of detailed submissions by counsel for the applicant and the first respondent.

Rectification of the Register

Counsel were at issue principally as to the appropriate form of relief in respect of the entry in the Register for the first respondent's trade mark No. A204,602, comprising the word MOO. It will be recalled that this mark was registered under the Trade Marks Act 1955 ("the Trade Marks Act") with effect from 26 August 1966, and that the registration is in respect of "dairy products" being goods included in Class 29. The applicant attacked the registration both under ss. 22 and 23 of the Trade Marks Act. In response to the attack under sub-s. 23 (1) (b), the first respondent established that there had been sufficient use in relation to cheese and flavoured milk. In its application under s. 22, the applicant succeeded in establishing that the registration should be expunged in relation to milk.
The question remains as to whether the balance of the registration should be expunged for non-use, achieving a result whereby the first respondent retains registration only in respect of cheese.
In the reasons for judgment, I indicated (pp 40, 104-105) that there was an issue whether the Court should exercise its discretion under s. 23 in favour of the registered proprietor. Submissions have now been made on that question.
The first respondent has now further submitted, essentially what should have been a threshold issue, namely that so far as concerns its application under sub-s. 23 (1) (b) of the Trade Marks Act, the applicant is "a person aggrieved" within the meaning of the statute in respect of only some of the goods for which MOO is registered, namely "milk", so that the applicant lacks standing under s. 23 to complain of non-use in respect of the balance of the goods in the registration, namely other dairy products.
There was some debate before me as to the course of authority upon the meaning of the expression "a person aggrieved" in s. 23 of the Trade Marks Act, and in analogous British legislation. The subject also has been treated by the High Court of Australia when dealing with s. 71 of the Trade Marks Act 1905. But so great was the attraction of other decisions, particularly British decisions, that counsel preferred to read from them rather than referring the Court to relevant decisions of the High Court of Australia; see Farley (Aust.) Pty. Ltd. v J.R. Alexander & Sons (Qld.) Pty. Ltd. (1946) 75 CLR 487 at 491-492; Shell Co. of Australia Ltd. v Rohm & Haas Co. (1949) 78 CLR 601 at 606-607, 616; Continental Liqueurs Pty. Ltd. v G.F. Heublein & Bro. Inc. (1960) 103 CLR 422 at 427-428; (1962) 109 CLR 153 at 158.
The term "a person aggrieved" has appeared in statutes over a long period to identify the class of persons given standing to utilise a particular statutory procedure: Australian Institute of Marine & Power Engineers v Secretary, Department of Transport (1986) 13 FCR 124 at 131. In the High Court authorities mentioned above, it was accepted that guidance in construing the Australian trade mark legislation was provided by what was said in the House of Lords in In the matter of Powell's Trade Mark (1893) 11 RPC 4, when dealing with s. 90 of the Patents Designs & Trade Marks Act 1883 (UK). Lord Hershell said (11 RPC at 7):

"My Lords, I should be very unwilling unduly to limit the construction to be placed upon these words; because, although they were no doubt inserted to prevent officious interference by those who had no interest at all in the Register being correct, and to exclude a mere common informer, it is undoubtedly of public interest that they should not be unduly limited, inasmuch as it is a public mischief that there should remain upon the Register a Mark which ought not to be there, and by which many persons may be affected, who, nevertheless, would not be willing to enter upon the risk and expense of litigation."

In Farley (Aust.) Pty. Ltd. v J.R. Alexander & Sons (Qld.) Pty. Ltd., supra, at 491-492, Williams J. said that the words "an aggrieved person" had been given a wide signification and that it had been said that their purpose was to prevent the Register being attacked by common informers or for sentimental reasons. His Honour approached the issue before him by asking whether the applicant for expungement was "engaged in the same class of business" as the respondent. In Continental Liqueurs Pty. Ltd. v G.F. Heublein & Bro. Inc. (1960) 103 CLR 422 at 427-428, Kitto J. resolved the issue of locus standi by saying that it was enough that the registered proprietor had disclosed an intention of preventing the applicant for expungement from using the word "Smirnoff" if and by any means the registered proprietor could do so, and that "on some future occasion" the registered proprietor might well rely on the registered mark for this purpose.
The reasoning implicit in the remarks of Kitto J. is expressed in more direct terms in "Kerly's Law of Trade Marks and Trade Names", 12th Ed., para. 11-07, where it is said: "An alleged infringer of a mark is always a person aggrieved by its registration"; see also Shanahan "Australian Trade Mark Law and Practice" p 197.
The present proceedings included a cross-claim by the first respondent in which it was alleged that the applicant had infringed the first respondent's registered trade mark MOO, and was continuing to do so. The relief claimed included:

"An order that (the applicant) its servants and agents be restrained during the period of registration of the trade mark (MOO) from using or continuing to use the name and mark MOOVE on any goods or the labeling (sic) or packaging thereof and from otherwise infringing the trade mark (MOO)."

In the event, the cross-claim has failed but what is important is that it indicates an intention of preventing the applicant from using MOOVE as an alleged infringement, not only in relation to milk, but in any manner that would be an infringement of the MOO registration. The present is thus a case where what Kitto J. referred to as some future occasion, is in fact the present occasion.

Accordingly, in my view, the applicant was a person aggrieved in respect of the retention on the Register of "MOO" for any of the goods for which it was registered.
Reference was made in argument to the decision of the English Court of Appeal in KODIAK Trade Mark (1987) RPC 269. That was not a case in which the application for expungement was made as a step in proceedings for infringement instituted by the registered proprietor. After discussing the decision of Romer J. in Lever Bros. Ltd. v Sunniwite Products (1949) 66 RPC 84, Balcombe LJ said (at 276):

"(T)he decision in Lever Bros Ltd. v Sunniwite Products is only authority for the proposition that if an applicant for rectification fails to show that he trades, or intends to trade, in a particular class of the goods comprised in the registration which he seeks to rectify, then he should not normally be granted rectification of the register in respect of those goods. If the decision does go further than that, then it is not binding on this court and should not be followed."

The Court of Appeal decided that the applicant for expungement, a manufacturer of boots and shoes, had standing to seek rectification of the Register by removal of a registration in respect of "all articles of clothing", footwear plainly being within the category "clothing". In the present proceedings, registration of "MOO" is in respect of "dairy products", and the milk flavoured product marketed by the applicant plainly is a dairy product. Therefore, if one follows the reasoning of the English Court of Appeal, the applicant would have the necessary standing to bring the non-use application under sub-s. 23 (1) (b) of the Trade Marks Act without any limitation to some description of goods narrower than "dairy products". However, as I have indicated, I prefer to rest my decision upon the somewhat broader ground which follows from the Australian authorities.
The first respondent submitted that even if the applicant had the necessary standing, nevertheless, in the exercise of its discretion, the Court should limit the expungement of the MOO registration, so that whilst "milk" was excised therefrom (to give effect to the decision on the application under s. 22) the balance of the registration should be preserved. On the other hand, the applicant submitted that an appropriate exercise of discretion would be to permit the registration to remain only in respect of "cheese".
In Re Carl Zeiss Pty. Ltd.'s Application (1969) 122 CLR 1, Kitto J. approached the exercise of discretion under sub-s. 23 (1) of the Trade Marks Act, first (at pp 5-6) by referring to what had been said in English decisions to the effect that "exceptional circumstances" may arise which would make it just to refuse an application, and then (at p 11) by asking whether "sufficient reason appears" for leaving the mark on the Register. I should add that in the present case the first respondent placed no reliance upon the special provisions of sub-s. 23 (4) ("special circumstances in the trade") and that sub-s. 23 (2) is not applicable because of the finding I have made that the first respondent's MOO packaged cheese and its MOO flavoured milk were not "goods of the same description" for the purposes of that sub-section.
What then is the "sufficient reason" to which the first respondent points as indicating that the registration of MOO should remain, save only for the excision of "milk"? There was some documentary and oral evidence for the first respondent, given in confidential session, which deals with the question of possible "line extensions" by the first respondent. Without going into the detail, it is sufficient to say that, in my view, the evidence does not disclose, either at the relevant date for the non-use application (6 June 1988) or at the date of the hearing, the existence of anything like a firm purpose on the part of the first respondent; at most, there was consideration of what conceivably might be done at some future time. Nor, in my view, is there substance in the submission by the first respondent that there is some weight in its favour from the circumstance that in this case there has been user in respect of some, albeit not all, descriptions of goods falling within the category "dairy products". As first respondent readily conceded, the public interest in the integrity of the Register entitles the applicant to an order for removal from the Register unless sufficient reason appears for leaving the registration there, subject only to the excision of "milk".
For its part, the applicant pointed in particular to the circumstances that the mark had been registered with effect from 26 August 1966, that there had been use by the second respondent of the trade mark upon a reduced fat cream product for about seven years preceding March 1974, that there then had been a complete hiatus until the first respondent had become registered proprietor in the circumstances described in the reasons for judgment; there was then use in relation to cheese, and limited use in relation to flavoured milk.
In my view, no sufficient reason appears for leaving the registration MOO intact in respect of any goods for which it would otherwise be liable to removal for non-use. Accordingly, the registration should remain only in respect of cheese.
Costs
That brings me to the question of costs. As is apparent both from the reasons for judgment and these reasons, the case presented a number of issues and neither the applicant nor the first respondent succeeded on all of them. Much of the evidence was directed to several issues. Thus, the body of evidence as to whether MOO was substantially identical to or deceptively similar with MOOVE (trade mark issues upon which the applicant succeeded) was used also upon the different legal issues arising upon the first respondent's claims for contravention of s. 52 of the Trade Practices Act 1974 ("the TP Act") and passing-off (issues upon which the applicant failed). The first respondent also pointed to the substantial body of evidence going to the issues discussed in the reasons for judgment under the heading "The Conduct of the First Respondent", issues upon which the first respondent succeeded.
Given the outcome of circumstances of this complex litigation in which varied relief was sought by the applicant and by the first respondent, upon a range of grounds, the first respondent submitted that the applicant should be entitled only to a proportion of its costs. The applicant submitted that costs should follow the "event" in the sense that the "event" in a commercial sense had been the effort by the applicant to stop further use by the first respondent of "MOO" upon its flavoured milk product. That is an objective the applicant will have achieved by this litigation, upon the coming into effect of the rectification of the Register, and the consequent operation of the injunction to restrain trade mark infringement.
In all the circumstances, in my view, the appropriate order should be that the first respondent should pay the costs of the applicant. The second respondent has played no active part in the proceedings and there should be no order in respect of costs for or against the second respondent.
On directions hearings on 9 and 16 February 1989, there was an appearance by the Australian Government Solicitor on behalf of the Registrar of Trade Marks, in connection with the removal into this Court of the proceedings under sub-s. 23 (1) (b) of the Trade Marks Act. The attendance of the Registrar was consequent upon a request made to him by the applicant, when the proceedings before me were part heard, for the removal into this Court of the application under s. 23 (1) (b). Notice had previously been given of the s. 22 application as required by sub-s. 22 (5). Order 54B, rule 3 of the Rules of Court relevantly provides that the Registrar may appear and be heard in proceedings such as the present proceedings, but shall not be deemed to be a party. The costs of 9 and 16 February were reserved. But there has been no further attendance for the Registrar and no application by him. I make no order as to his costs.
Stay
A question then arises as to the granting of a stay of the order for rectification of the Register, pending any appeal by the first respondent. If a stay were not granted, the Register was rectified, and an appeal was successful, a question might then arise as to whether the Full Court of this Court, on appeal, might, as part of the relief granted, reinstate the trade mark registration. I express no view upon that question. It is not necessary to do so because the applicant accepts that a stay is appropriate. There was some debate as to the terms upon which such a stay should be granted.
The applicant was not dissatisfied with a stay upon terms that (a) the first respondent files a notice of appeal within fourteen days, (b) the first respondent joins in any application to the Full Court for expedition of the appeal, and (c) the first respondent keeps accounts of sales of milk sold under the MOO mark pending the determination of the appeal.

Undertaking (b) would have to be understood on the basis that the hearing of the appeal or the determination of the appeal might, if the Full Court saw fit, have to await the outcome of the appeal to the High Court in Riv-Oland Marble Co. (Vic.) Pty. Ltd. v Settef SpA (1989) 83 ALR 677.
Undertaking (c) would safeguard the position of the applicant if it were to succeed on a cross-appeal (and it has indicated that it will so appeal) on the issues of contravention of s. 52 of the TP Act or passing-off. It would not appear to assist the applicant with legal recourse for an account of profits if it were to fail on its cross-appeal but succeed in resisting the appeal. If that happened, the order for rectification would then go into effect with the consequent injunction against infringement. Upon that hypothesis, there would appear to have been no infringement pending the outcome of the appeal, given the continued operation in the interim of sub-s. 58 (3) of the Trade Marks Act. As against this contingency, the applicant did not seek the imposition upon the stay of any term, designed to assure it a contractual right to recover from the first respondent what otherwise might have been owing by way of damages or on an account of profits for infringement if there had been no stay and the injunction restraining infringement had come into effect forthwith upon rectification of the Register after I had made the orders disposing of the proceedings before me. Accordingly, I do not have to consider whether such a term, if sought, might properly have been imposed on the first respondent.
Orders
I turn now to the appropriate orders. Order (2) represents the cumulative effect of the decisions upon the applications under s. 22 and sub-s. 23 (1) (b) of the Trade Marks Act. I make orders in the following terms:

(1) Declare that use by the first respondent of registered trade mark No. A204,602, comprising the word "MOO", in the course of trade and in relation to milk or flavoured milk is and was at the date of the institution of these proceedings, 5 August 1988, likely to deceive or cause confusion within the meaning of s. 28

(a) of the Trade Marks Act 1955.

(2) Order that the entry in the Register of Trade Marks in respect of registered trade mark No. A204,602 be rectified by limiting the goods in respect of which that trade mark is registered to "cheese".

(3) Order that upon the rectification of the Register of Trade Marks in accordance with order (2), the first respondent by itself, its servants and agents, be restrained from infringing the applicant's registered trade mark No. A323,613, comprising the word "MOOVE", by, in the course of trade and in relation to flavoured milk or milk, using as a trade mark the name "MOO" or any other word substantially identical with or deceptively similar to the applicant's said trade mark.

(4) Order that the applications filed 6 July 1988 and 5 August 1988 be otherwise dismissed.

(5) Order that the cross-claim by the first respondent be dismissed.

(6) Order that, other than in respect of costs previously ordered, the first respondent pay the applicant's costs of the proceedings.

(7) Order that forthwith upon the institution of any appeal from these orders, the parties lodge with the New South Wales District Registry the exhibits previously handed out to the parties.

(8) Order that upon the first respondent by its counsel undertaking to the Court that

(a) any appeal by it from these orders will be instituted within fourteen days of the date of these orders,

(b) it will join in any application by any respondent to the appeal for expedition of such appeal, and

(c) it will keep accounts of sales of milk sold under the MOO mark until the determination of such appeal, order (2) of these orders is stayed until the determination of such appeal or earlier further order.

[1989] FCA 151

18 APRIL 1989