Optical 88 Ltd v Optical 88 Pty Ltd (No 2)

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FEDERAL COURT OF AUSTRALIA

Optical 88 Limited v Optical 88 Pty Limited (No 2) [2010] FCA 1380

Citation: Optical 88 Limited v Optical 88 Pty Limited (No 2) [2010] FCA 1380
Parties: OPTICAL 88 LIMITED v OPTICAL 88 PTY LIMITED (ACN 060 355 437), ANGUS HAU-SUM LAW and LESLEY LOK-YEE LAW
File number: NSD 316 of 2008
Judge: YATES J
Date of judgment: 10 December 2010
Corrigendum: 26 May 2011
Catchwords:

TRADE MARKS – infringement – whether impugned marks “substantially identical” with or “deceptively similar” to registered trade marks – consideration of relevant principles – relevance of surrounding circumstances to inquiry under ss 120(1) and (2) of the Trade Marks Act 1995 (Cth) – significance of essential feature or dominant element in composite mark when assessing deceptive similarity – whether infringing trade mark use was use by first respondent only – whether admissions as to use by second and third respondents made on pleadings – whether bound to act on admissions if made

TRADE MARKS – defences to trade mark infringement – whether use was use by first respondent of its own name in good faith pursuant to s 122(1)(a)(i) of the Trade Marks Act – whether prior continuous use established pursuant to s 124(1) of the Trade Marks Act – whether the first respondent would obtain registration of its logo as a trade mark in its name pursuant to s 122(1)(fa) of the Trade Marks Act

TRADE MARKS – cross-claim for removal of trade marks for non-use under ss 92(4)(a) and (b) of the Trade Marks Act – whether use of the marks with additions or alterations not substantially affecting their identity established – consideration of principles relevant to use in relation to goods and services – whether use in the course of trade established – sending of bonus coupons and cash coupons from Hong Kong to customers resident in Australia as an incident of trade – whether use was in relation to goods or services – whether intention to use or authorise use of trade mark established at time of registration – principles relevant to exercise of discretion

COPYRIGHT – whether first respondent’s logo is a reproduction of applicant’s logo or of a substantial part of it – relevance of circumstances surrounding creation of first respondent’s logo

TRADE PRACTICES – misleading and deceptive conduct and passing off – relevant date for assessing impugned conduct for claims under ss 52 and 53 of Trade Practices Act 1974 (Cth) and for passing off – appropriate to consider impugned conduct at the time it commenced – consideration of extent of reputation required to establish contravention of s 52 and passing off – evidence of applicant’s trading and promotional activities – evidence of migration patterns and demography – survey evidence

Legislation: Copyright Act1968 (Cth), ss 14(1), 31(1)(a), 32, 36, 184
Trade Marks Act1995 (Cth), ss 7, 74, 120, 122, 124, 238
Trade Practices Act 1974 (Cth), ss 52 and 53
Cases cited: 10th Cantanae Pty Ltd v Shoshana Pty Ltd
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Details
Case
[2010] FCA 1380
Decision Date

CaseChat Overview and Summary

The case of Optical 88 Ltd v Optical 88 Pty Ltd (No 2) involved a dispute between Optical 88 Ltd, a Hong Kong-based company, and Optical 88 Pty Ltd, an Australian company, concerning trade mark infringement and other intellectual property issues. Optical 88 Ltd claimed that the Australian company was infringing its registered trade marks and engaging in misleading and deceptive conduct. The legal issues before the court included whether the Australian company's use of certain trade marks was substantially identical or deceptively similar to those of the Hong Kong company, and whether the Australian company had valid defences under the Trade Marks Act 1995 (Cth). Additionally, the court had to determine if the Australian company's logo was a reproduction of the Hong Kong company's logo and whether the Australian company had engaged in misleading and deceptive conduct under the Trade Practices Act 1974 (Cth) and passing off.

The court found that the Australian company's use of trade marks was not substantially identical or deceptively similar to those of the Hong Kong company, considering the relevant principles and surrounding circumstances. The court also held that the Australian company had valid defences under the Trade Marks Act, including use of its own name in good faith and prior continuous use. Regarding the logo, the court concluded that it was not a reproduction of the Hong Kong company's logo. On the issue of misleading and deceptive conduct, the court found that the Australian company's conduct did not contravene the Trade Practices Act or amount to passing off, as there was insufficient evidence of the Hong Kong company's reputation or confusion between the two businesses.

The court ordered the parties to bring in short minutes of order to give effect to these reasons. The decision did not address the issue of pecuniary relief, which was to be determined separately.

Orders

Orders of the court

1. The parties are to bring in short minutes of order giving effect to these reasons.

Note:

Background

Background to the litigation

The issues that fall for resolution at the present time do not extend to the determination of pecuniary relief, an order having been made on 25 September 2008 that all other issues in this proceeding be heard separately from, and prior to, any issue of quantum in relation to damages or profits.BACKGROUND The primary facts concerning the applicant’s business and the first respondent’s business are not substantially in dispute. However, the conclusions to be drawn from those facts are in dispute. The following account records my findings in relation to the establishment and conduct of those businesses, except where I state otherwise. The applicant’s business The applicant was incorporated in Hong Kong on 14 August 1987. It is a member of the Stelux Group of companies of which Stelux Holdings International Limited (Stelux) is the ultimate parent company. The applicant and several other companies in the Stelux Group operate a chain of (what the applicant described as) optical stores in various countries in the Asia Pacific region and also in Canada. For convenience I will refer to this group business as the applicant’s business and to the stores as the applicant’s stores. The applicant’s business is conducted under the name OPTICAL 88. This name is also commonly used in a form in which the word OPTICAL is represented in Chinese characters, a transliteration of which is “an geng” (meaning “optical”). For convenience I will refer to this form as “OPTICAL 88” (in Chinese characters). The applicant also uses a particular logo (a representation of which is shown in Schedule 1 to these reasons) (the applicant’s logo). These trade indicia are used individually and in combination with each other. Sometimes they are used with other trade indicia. These other trade indicia do not assume any particular importance for the purposes of the present proceeding. The stores supply by retail a broad range of optical and eye care products including prescription lenses, contact lenses and solutions, frames for spectacles and sunglasses. These stores also provide a comprehensive range of optical services, including sight-testing, eye examinations and after-sales servicing of spectacles. Eye examinations are conducted by qualified optometrists. The optical products supplied by the applicant include numerous fashion and luxury brands such as Christian Dior, Gucci, Emporio Armani, Calvin Klein, Ray-Ban and Oakley. The applicant also supplies “house” products under brands such as Solvil et Titus, Titus, Cyma, Smash and Delvina. There is no evidence that the applicant supplies products branded with any of the registered trade marks that have been pleaded in this proceeding, although it does supply promotional items (such as spectacles cases and cleaning cloths) bearing various trade indicia of the applicant, including the name OPTICAL 88, the name “OPTICAL 88” (in Chinese characters) and the applicant’s logo, in various combinations and sometimes with other trade indicia (such as the domain name

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

The respondents’ submissions pointed to the absence of direct testimonial evidence to support the applicant’s claimed reputation as at August 1993. They submitted that, whilst proof of actual deception is not required to establish contraventions of ss 52 and 53 of the Trade Practices Act, or passing-off, it was nevertheless significant that no evidence had been adduced to show even confusion between the first respondent’s business and the applicant’s business based on the use by the first respondent of its impugned trade indicia. In this connection the respondents also submitted that, in reality, the operation of the respective parties’ businesses, as made plain from the presentation of their stores, is so markedly different that it is inconceivable that, beyond possible temporary confusion, an intending purchaser would be, or would be likely to be, misled or deceived as the applicant had alleged, unless that person was careless. Consideration It may be accepted that, as at August 1993, and by Australian standards, the applicant was conducting a significant business in Hong Kong, operating 58 stores as well as one store in Macau. That business was generating significant revenue (approximately AUD 43 million for the year ended March 1993). The business had been promoted and supported by television advertising that had been broadcast in the period June to September 1991 and June to December 1993, and it would seem earlier, featuring well-known celebrity actors and a particular cartoon character, and also by print advertising. There is evidence of the applicant’s own assessment that, as at November 1991, its stores had achieved a wide distribution into premium locations, and key shopping and residential areas, when compared with its major competitors OPTICAL SHOP, OPTICAL CENTRE and OPTICAL 68. However, a broad understanding of Australian economic life and conditions would not be an appropriate frame of reference in which to consider and make evaluative judgments about the strength, nature and extent of the applicant’s reputation in Hong Kong at that time. Nevertheless, the evidence enables me to find, as I do, that the name OPTICAL 88, as the brand of a chain of retail optical shops in Hong Kong, must have been known to a significant number of consumers of optical goods and accessories and of optometry services in Hong Kong as at August 1993. What the evidence does not show is how pervasive that knowledge was within that population. The applicant’s own evidence was that, in the period immediately following the acquisition by the Stelux Group of a majority shareholding in the applicant in 1988, it perceived the need to establish the OPTICAL 88 name as a strong brand and household name in Hong Kong. It saw this as being particularly important during the early 1990s when faced with competition from optical traders in Hong Kong with very similar names like OPTICAL 68, OPTICAL 98 and OPTICAL 128. There is, however, very little evidence about the activities of the applicant’s competitors or the overall economic setting in which the applicant carried on its business and promotional activities. According to Mr Wong’s evidence, from the late 1980s and early 1990s the applicant was seeking to obtain a strong brand image and become a household name. But the evidence, such as it is, does not enable me to conclude that, by August 1993, it had achieved that objective.