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

[2010] FCA 1380

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 (1987) 79 ALR 299
.au Domain Administration Ltd v Domain Names Australia Pty Ltd (2004) 207 ALR 521; [2004] FCA 424
Angoves Pty Ltd v Johnson (1982) 43 ALR 349
Anheuser-Busch Inc v Budejovicky Budvar (2002) 56 IPR 182; [2002] FCA 390
Aristoc Ltd v Rysta Ltd [1945] AC 68
Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (2007) 160 FCR 321
Australian Securities and Investments Commission v  National Exchange Pty Ltd (2003) 202 ALR 24; [2003] FCA 955
Australian Woollen Mills Limited v F.S. Walton and Company Limited (1937) 58 CLR 641
Angelides v James Stedman Hendersons Sweets Ltd (1927) 40 CLR 43
Baume & Co Ltd v A H Moore Ltd [1958] RPC 226
Bavaria NV v Bayerischer Brauerbund eV (2009) 177 FCR 300
Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd (1980) 32 ALR 387
CA Henschke & Co v Rosemount Estates Pty Ltd (2000) 52 IPR 42; [2000] FCA 1539
Campomar Sociedad, Limitada v Nike International Limited (2000) 202 CLR 45
Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) 120 ALR 495
Coca-Cola Co v All-Fect Distributors Ltd (1999) 96 FCR 107
ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302
ConAgra Inc v McCain Foods (Aust) Pty Ltd (1991) 101 ALR 461
Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd (2004) 209 ALR 1; [2004] FCAFC 196
Damberg v Damberg (2001) 52 NSWLR 492
de Cordova v Vick Chemical Company (1951) 68 RPC 103
Designers Guild Ltd v Russell Williams (Textiles) Ltd [2001] 1 All ER 700
E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 265 ALR 645; [2010] HCA 15
E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2008) 77 IPR 69; [2008] FCA 934
Estex Clothing Manufacturers Pty Limited v Ellis and Goldstein Limited (1966) 116 CLR 254
Hansen Beverage Co v Bickfords (Australia) Pty Ltd (2008) 75 IPR 505; [2008] FCA 406
Hansen Beverage Company v Bickfords (Australia) Pty Ltd (2008) 171 FCR 579
Health World Ltd v Shin-Sun Australia Pty Ltd (2008) 75 IPR 478; [2008] FCA 100
Hy-Line Chicks Pty Ltd v Swifte (1966) 115 CLR 159
Kowa Company Ltd v N V Organon (2005) 223 ALR 27; [2005] FCA 1282
Lever Brothers, Port Sunlight Limited v Sunniwite Products Ltd (1949) 66 RPC 84
Mark Foy’s Ltd v Davies Coop and Co Ltd (1956) 95 CLR 190
McCormick & Co Inc v McCormick (2000) 51 IPR 102; [2000] FCA 1335
McHattan v Australian Specialised Vehicle Systems Pty Ltd (1996) 34 IPR 537
Mobileworld Communications Pty Ltd v Q & Q Global Enterprise (2003) 61 IPR 98; [2003] FCA 1404
National Exchange Pty Ltd v Australian Securities and Investments Commission (2004) 61 IPR 420; [2004] FCAFC 90
Nature’s Blend Pty Ltd v Nestle Australia Ltd (2010) 86 IPR 1; [2010] FCA 198
New South Wales Dairy Corporation v Murray Goulburn Co-Operative Company Limited (1989) 86 ALR 549
Pacific Dunlop Ltd v Hogan (1989) 23 FCR 553
Parker-Knoll Ltd v Knoll International Ltd [1961] RPC 346
Parker-Knoll Ltd v Knoll International Ltd [1962] RPC 265
Polaroid Corporation v Sole N Pty Ltd [1981] 1 NSWLR 491
Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227
Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365
Re Ducker’s Trade Mark (1928) 45 RPC 397
Re Hermes Trade Mark [1982] RPC 425
Re Rysta Ltd’s Application (1943) 60 RPC 87
Re Trade Mark “Yanx”; Ex parte Amalgamated Tobacco Corporation Ltd (1951) 82 CLR 199
Rothmans LtdvW D & H O Wills (Australia) Ltd (1955) 92 CLR 131
Saville Perfumery Ltd v June Perfect Ltd (1941) 58 RPC 147
Siddons Pty Ltd v The Stanley Works Pty Ltd (1991) 29 FCR 14
Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1953) 91 CLR 592
Sydney Markets Ltd v Sydney Flower Market Pty Ltd [2002] FCA 124
Thai World Import & Export Co Ltd vShuey Shing Pty Ltd (1989) 17 IPR 289
The Shell Company of Australia Limited v Esso Standard Oil (Australia) Limited (1961) 109 CLR 407
Ward Group Pty Ltd v Brodie & Stone Plc (2005) 143 FCR 479
WD & HO Wills (Australia) Ltd v Rothmans Ltd (1956) 94 CLR 182
Wellness Pty Ltd v Pro Bio Living Waters Pty Ltd (2004) 61 IPR 242; [2004] FCA 438

Date of hearing:

22-26, 29-31 March 2010, 8 April 2010

Place:

Sydney

Division:

GENERAL DIVISION

Category:

Catchwords

Number of paragraphs:

438

Counsel for the Applicant:

Mr D Catterns QC and Mr M R Hall

Solicitor for the Applicant:

Baker & McKenzie

Counsel for the Respondents:

Mr J M Hennessy and Ms M R Cairns

Solicitor for the Respondents:

Mok & Associates (until 28 June 2010)
BC Lawyers (from 28 June 2010)

FEDERAL COURT OF AUSTRALIA

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

CORRIGENDUM

1.In paragraph 99 of the Reasons for Judgment, in the first sentence, the words “Sir Greene MR” should read “Sir Wilfrid Greene MR”.

2.In paragraph 319 of the Reasons for Judgment, in the first sentence, the word “applicants” should read “applicant’s”.

I certify that the preceding two (2) numbered paragraphs are a true copy of the Corrigendum to the Reasons for Judgment herein of the Honourable Justice Yates.

Associate:

Dated:       26 May 2011

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 316 of 2008

BETWEEN:

OPTICAL 88 LIMITED
Applicant / Cross-Respondent

AND:

OPTICAL 88 PTY LIMITED (ACN 060 355 437)
First Respondent / Cross-Claimant

ANGUS HAU-SUM LAW
Second Respondent

LESLEY LOK-YEE LAW
Third Respondent

JUDGE:	YATES J
DATE OF ORDER:	10 december 2010
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

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

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 316 of 2008

BETWEEN:

OPTICAL 88 LIMITED
Applicant / Cross-Respondent

AND:

OPTICAL 88 PTY LIMITED (ACN 060 355 437)
First Respondent / Cross-Claimant

ANGUS HAU-SUM LAW
Second Respondent

LESLEY LOK-YEE LAW
Third Respondent

JUDGE:	YATES J
DATE:	10 december 2010
PLACE:	SYDNEY

REASONS FOR JUDGMENT

INTRODUCTION........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[1]
BACKGROUND........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[5]
The applicant’s business........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[6]
The first respondent’s business........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[34]
The applicant’s demands upon the respondents........ ........ ........ ........ ........ ........ ........ ..	[54]
REGISTERED TRADE MARK CLAIMS........ ........ ........ ........ ........ ........ ........ ........ .....	[59]
The applicant’s registered trade marks........ ........ ........ ........ ........ ........ ........ ........ ........	[59]
Registered trade mark 520707........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[60]
Registered trade mark 1083966........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[66]
Registered trade mark 1160979........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[68]
Registered trade mark 1160985........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[70]
Registered trade mark 1250545........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[72]
Registered trade mark 1253320........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[74]
The pleaded case........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[76]
The alleged infringing use........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[83]
Relevant legal principles........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[87]
The parties’ submissions........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[115]
Consideration........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[131]
The specific defences........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[149]
Use of own name........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[159]
Prior continuous use........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[165]
Obtaining registration........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[173]
Conclusions on specific defences........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[196]
REMOVAL FOR NON-USE........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[198]
The pleaded case........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[198]
Relevant legal principles........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[208]
The transactions relied upon by the applicant........ ........ ........ ........ ........ ........ ........ .....	[223]
The Pitt transaction........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[233]
The Bagnall Transaction........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[234]
The Krause transaction........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[235]
The Walters transaction........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[236]
The other transactions........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[237]
The parties’ submissions........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[240]
Consideration........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[248]
Intention to use........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[264]
Discretion........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[271]
THE COPYRIGHT CLAIM........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[282]
The pleaded case........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[282]
Subsistence and ownership of copyright in the applicant’s logo........ ........ ........ ........ .	[284]
The making and use of the first respondent’s logo........ ........ ........ ........ ........ ........ ......	[291]
Consideration........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[310]
TRADE PRACTICES ACT CLAIMS AND PASSING-OFF........ ........ ........ ........ ........	[319]
The pleaded case........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[319]
Relevant legal principles........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[324]
The strands of evidence........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[343]
Migration patterns and demography........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[352]
The survey........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[371]
The survey methodology and its implementation........ ........ ........ ........ ........ ........ .....	[374]
The survey results........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[385]
The parties’ submissions on the facts........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[408]
Consideration........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[420]
DISPOSITION........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[434]
SCHEDULE 1........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .
SCHEDULE 2........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .
SCHEDULE 3........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .
SCHEDULE 4........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .

INTRODUCTION

1. This proceeding concerns the use in Australia of the name OPTICAL 88 and related trade indicia with respect to the retail supply of optical goods and accessories, and of optometry services.

2. The applicant says that this conduct was engaged in by the first respondent and its directors, the second and third respondents (respectively, Mr and Mrs Law) or one or more of them, or was procured by one or more of them, thereby infringing certain of the applicant’s registered trade marks and its copyright claimed in a particular artistic work (a logo) as well as contravening ss 52 and 53 of the Trade Practices Act 1974 (Cth) (the Trade Practices Act) and constituting passing-off.

3. Although certain factual matters are admitted by each of the respondents, they each deny the infringements that have been pleaded.  In relation to trade mark infringement they raise specific defences and, by way of cross-claim, the first respondent seeks removal of two of the applicant’s registered trade marks under the non-use provisions of the Trade Marks Act 1995 (Cth) (the Trade Marks Act). As to the cross-claim for removal, the applicant says that, even if grounds for removal are made out, the registrations should not be removed on discretionary grounds. The respondents also dispute that they or any of them have contravened the Trade Practices Act or engaged in passing-off, as alleged by the applicant.

4. 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

5. 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

6. 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. 

7. 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. 

1. 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.

2. 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

3. I should add, for completeness, that another company in the Stelux Group, City Chain Company Limited, operates a network of retail stores supplying watches.  In fact the Stelux Group commenced business in 1963 as a manufacturer of watch components.  It expanded into the market for optical goods by acquiring a majority shareholding in the applicant on 4 October 1988.  All the issued shares in the applicant are now held by companies within the Stelux Group.

4. In late 1984 a company called Yat Cheong Optical Company Limited opened an optical store in Hong Kong under the name OPTICAL 88.  The evidence does not disclose the form in which that name was used or the extent to which it was used at that time.  This company is referred to in the evidence as the applicant’s “predecessor in title”.  The relationship between the company and the applicant is not described in any greater detail.

5. When the Stelux Group acquired a majority shareholding in the applicant in 1988, the applicant was using the name OPTICAL 88 and the name “OPTICAL 88” (in Chinese characters).  The applicant used the name OPTICAL 88 in written documents such as tenancy agreements. It used the name “OPTICAL 88” (in Chinese characters) for its store signage.  At that time the applicant also used a logo comprising four overlapping circles in the form of the numerals “88”.  Each circle had a dark spot at its centre to represent an eye.  Shortly after the acquisition, a new logo (the applicant’s logo) was created and came to be used in the applicant’s business.  I will say more about the development of the applicant’s logo later.

6. The Chief Executive Officer of the Stelux Group (Joseph C.C. Wong), who was closely involved in the Stelux Group’s acquisition of its shareholding in the applicant, gave evidence that he decided to retain the name OPTICAL 88 because, at that time, he perceived it to be an “up and coming” brand that was desirable for reasons which included the fact that the word OPTICAL had obvious relevance to the nature of the business; the fact that the numeral “8” represents luck and good fortune in Chinese culture; the fact that the numeral “8” is visually similar to a pair of spectacles when turned sideways; and the fact that OPTICAL 88 was a name that could be easily remembered by consumers. 

7. There has been a significant expansion in the number of stores conducting the applicant’s business, although over the period from 1988 to the present time the number of stores has fluctuated, including over localities.  When the Stelux Group acquired its majority shareholding in the applicant in 1988 there were 15 to 17 stores operating in Hong Kong (the evidence is not more specific), having expanded from seven stores in 1987 and from five stores in 1986.  In 1991 there were 53 stores in Hong Kong.  In 1992 the applicant opened a store in Macau.  By that time there were 63 stores operating in Hong Kong.  In 1993 the number of stores in Hong Kong had reduced to 58 stores.  However, in 1997 there were 68 stores in Hong Kong, two in Macau, 16 in Thailand and seven in Singapore.  In 2008 there were 83 stores in Hong Kong, four stores in Macau, 21 stores in mainland China, 38 stores in Thailand, 24 stores in Singapore, 23 stores in Malaysia and two stores in Canada.  Some of these stores are franchised.  The details of these arrangements are not in evidence.  At the present time about 50 stores in Hong Kong are conducted by franchisees.   The two stores in Canada are also conducted by franchisees. 

8. There is a significant body of evidence describing how the stores currently operate.  The position is less clear in earlier times, particularly in the period 1992 to 1993, which assumes particular importance in this case.  I accept, however, that in that period, the applicant’s business was conducted using the name OPTICAL 88, the name “OPTICAL 88” (in Chinese characters), and the applicant’s logo, on many occasions in combination with each other.

9. Statistics compiled by the Census and Statistics Department in Hong Kong show the numbers of establishments for retail and optical supplies in Hong Kong in various years to be as follows:  1988 (601 establishments); 1991 (733 establishments); 1992 (740 establishments); and 1993 (715 establishments). 

10. At the time the Stelux Group acquired its majority shareholding in the applicant in 1988, the applicant itself realised that there was a need to establish the name OPTICAL 88 as a brand.  In the words of Mr Wong:

    The critical challenge in the first two years in which I operated the Optical 88 business was to establish the Optical 88 name and mark, including the Chinese mark [a reference to “Optical 88” (in Chinese characters)], as a strong brand and household name in Hong Kong, with a distinctive brand image embedded in the public consciousness.

11. Whether, on the evidence before me, it can be said that this marketing objective was achieved as at August 1993, when the first respondent commenced to carry on business in Australia, or at any intervening time, is a matter to which I shall return.  It should be noted in this regard, however, that, on the applicant’s own evidence, some optical traders in Hong Kong in the early 1990s began using trading names which included the word OPTICAL with a number, such as OPTICAL 68, OPTICAL 98 and OPTICAL 128.  Evidence was also given of an optical business trading as OPTICAL 2000, although it is not clear on the evidence when this business commenced. 

12. The applicant did not seek to contend that the adoption by these other businesses of these names, or their use in Hong Kong at that time, was an infringement of its rights or was otherwise unlawful.  On the contrary, the applicant saw the existence of these other optical businesses as a reason for it to attempt to project a strong brand image.  The applicant’s evidence was that, by the mid 1990s, “most” (but, I infer, not all) of these businesses had ceased trading.  There is evidence from its own business records that, as at the end of 1991, the applicant saw OPTICAL 68, OPTICAL SHOP and OPTICAL CENTRE as being its main competitors for the purpose of planning its marketing strategies. 

13. The evidence establishes that, at the present time, the stores conducting the applicant’s business are located in retail shopping areas that are subject to high pedestrian traffic.  These stores operate in what the applicant describes as a “single integrated network” in which promotional activities, such as exclusive bonus offers and a VIP customer program, enable customers to obtain benefits which can be redeemed across stores.  Similarly, frames that are purchased at one store can be replaced or repaired at another store. 

14. The evidence also establishes that, at the present time, the stores conducting the applicant’s business prominently display the name OPTICAL 88 on exterior signage.  This is mostly done alongside the applicant’s logo.  In some cases “OPTICAL 88” (in Chinese characters) appears with the applicant’s logo, or the name OPTICAL 88 is represented by characters in the language spoken in the country in which the store is located.  The evidence does not enable me to make any finding as to the relative numbers of stores where OPTICAL 88 is represented in the English language or in another language.  In some cases the exterior signage shows OPTICAL 88 represented separately in English and in a foreign language (such as “OPTICAL 88” (in Chinese characters)).  In some cases an OPTICAL 88 store is located alongside a City Chain store. 

15. The name OPTICAL 88 is also displayed on internal signage and other in-store material as well as on promotional materials such as posters, brochures, calendars and discount coupons.  There are examples of the use of OPTICAL 88 in combination with the applicant’s logo and “OPTICAL 88” (in Chinese characters) on sales documentation, such as customer receipts.  There are examples of use on stationery (such as business cards) of the corporate name OPTICAL 88 LTD in combination with the applicant’s logo, and sometimes also with Chinese characters and the numerals “88”.

16. Sales figures for the period 1988 to 2008 show annualised turnover (year end 31 March) in foreign currencies (based on country location) that is substantial (by country and cumulatively).  As at 31 March 1991, the applicant had a recorded annual turnover in Hong Kong of HKD 207.45 million (approximately AUD 34.3 million).  As at 31 March 1993, the applicant had a recorded annual turnover in Hong Kong of HKD 234.29 million (approximately AUD 43 million).  It is not possible, however, on the evidence, to make findings as to the relative significance of the applicant’s business in Hong Kong in these particular years.

17. Complete records of expenditure on the marketing and promotion of the applicant’s business have not been retained.  There is evidence of the production and broadcasting of television and radio advertising.  The applicant says, however, that the majority of marketing expenditure in the period 1990 to 1995 was directed to television advertising.  Advertising expenditure during that period was as follows:

    ·at least HKD 1.8 million in 1991 (approximately AUD 298,000);

    ·at least HKD 1.1 million in 1992 (approximately AUD 185,000);

    ·at least HKD 4.47 million in 1993 (approximately AUD 819,000);

    ·at least HKD 6.8 million in 1994 (approximately AUD 1.25 million); and

    ·at least HKD 10 million in 1995 (approximately AUD 1.66 million).

    These commercials were generally of 30 second duration, although some were shorter (15 seconds) and some were longer (60 seconds).

18. In 1989 three television commercials were produced using two celebrity actors and a particular cartoon character, all well-known in Hong Kong.  In 1990 a series of television commercials, called “Stand By Me”, was produced and broadcast on the Hong Kong television channels TVB Jade and ATV Home, including at least 99 times in the period June to September 1991.  In July 1992 two versions of a television commercial, called “Father & Son” were produced.  These commercials were broadcast on the two television channels, including 132 times in the period June to December 1993.  A further series of television commercials called “See the Truth” was broadcast at least 130 times on the two television channels in the period July to September 1994.

19. At the end of 1993, the applicant’s advertising agency had informed the applicant that it was the category leader in advertising expenditure for August 1993 (with Hong Kong television being the only media used).  For the period January to August 1993 the same advertising agency ranked the applicant first in the optical shop category with 48% of total media spending.  However it was noted that “the advertising campaign in August heavied up the overall spending of Optical 88 within the category”. 

20. The applicant’s business has also been promoted by print advertising in newspapers and magazines.  After television advertising, it was said to be the most significant area of marketing expenditure.

21. In April, June and October 1992, full-page advertisements for the “Smash” range of spectacle frames and “Master-Lux” lenses were placed in Hong Kong newspapers and magazines, including Oriental Daily News, Oriental Sunday, Ming Pao, Ming Pao Weekly, Sing Pao, Tin Tin Daily News, Next Magazine, Yuk Long and Yes.  These advertisements incorporated the applicant’s logo in combination with the name OPTICAL 88 or “OPTICAL 88” in Chinese characters.  Other examples of newspaper and magazine advertisements are in evidence for various dates in July, August, September, October and December 1992.  The extent of circulation of the newspapers and magazines carrying these advertisements is not in evidence. 

22. In September and October 1993 advertisements were placed in the Oriental Daily News.  These advertisements featured the applicant’s logo and also included that logo in combination with the words OPTICAL 88.  Once again, the extent of circulation is not in evidence.  Evidence was also given of the placement of advertisements for employment opportunities within the applicant’s business in a number of Hong Kong newspapers in the period December 1991 to January 1994 which were said to have included the applicant’s logo, the name OPTICAL 88, and “OPTICAL 88” (in Chinese characters).

23. For completeness I should record that there was evidence of advertising in Hong Kong newspapers and magazines and Singaporean magazines in later years (2004 to 2006) in which the applicant’s logo in combination with “OPTICAL 88” (in Chinese characters) and the applicant’s logo with OPTICAL 88 were used.   

24. Finally there was evidence of the fact (but not of the content) of advertising by radio broadcasts in Hong Kong, including in July 1994, on radio stations Commercial Radio 1 and Commercial Radio 2. 

25. In December 2001, a website at the domain was launched.  This website displays the applicant’s logo in combination with OPTICAL 88 and “OPTICAL 88” (in Chinese characters). 

26. Evidence was also given of miscellaneous promotional and marketing activities such as the distribution of calendars for the 1993 year in Hong Kong stores.  The calendars incorporated the applicant’s logo in combination with the name OPTICAL 88.  There was evidence of similar activity in subsequent years.  Functional accessories and promotional items are also provided from time to time to customers in-store, including glasses cases; lens cloths; bags of various kinds; contact lens cases; pens and erasers.  Examples of these were tendered.  The evidence does not make clear when these activities were engaged in or the extent of them.  The physical exhibits do show, however, that there has been use on such items of the applicant’s logo in combination with the name OPTICAL 88 and in combination with “OPTICAL 88” (in Chinese characters), as well as other trade indicia.

    The first respondent’s business

27. Mr Law was born in Hong Kong and migrated to Australia with his family in 1978.  He subsequently qualified as an optometrist.  Mrs Law was also born in Hong Kong.

28. In November 1984 Mr Law established an optometry practice at Campsie, a suburb in south-western Sydney, New South Wales.  He called the practice “Angus Law Optometrists”.  He provided eye-sight examinations and sold optical goods such as optical lenses, spectacle frames and sunglasses, and accessories such as contact lens solutions, eye drops, spectacle cases and spectacle chains.  His patients and customers were drawn from different parts of Sydney.  He developed a significant Asian customer base.  His patients and customers included those who had migrated from Hong Kong, mainland China, Malaysia, Singapore, Vietnam and other Asian countries.

29. By 1992 he was considering expanding his practice and business.  He contemplated the possibility of entering into franchise arrangements.  He decided that it would be a good idea to trade using a corporate vehicle.  To that end he began thinking about an appropriate corporate name.  He wanted the name to be easily identified by his established Asian patients and customers as well as being “in tune with the traditional thinking of Asians”.

30. Mr Law’s evidence was that he was aware that the numeral “8”, especially the combination “88”, was being used in the names of various businesses in Sydney, such as newsagents, butchers and tobacco stores.  He thought that OPTICAL 88 was a good and appropriate name to use.  He thought that the word “OPTICAL” was a “precise, descriptive and efficient word” to identify an optometry practice and business, which could be used in combination with a more “catchy” word or words.  He thought the numerals “88” were apt because, as a number, it was considered to be propitious in Asian cultures.  He believed that his Asian patients and customers would be likely to appreciate the symbolism and significance of the numerals in a business name.  Also, the numerals represented, in an abstract way, spectacle frames. 

31. On 11 February 1992 he caused the business name OPTICAL 88 to be registered.  The evidence does not disclose whether Mr Law in fact used that name on his own account at that time.  Certainly neither the applicant nor the respondents sought to rely on any such use, beyond the fact of registration of the name itself as a business name.  Some 17 months later, on 30 July 1993, Mr Law caused the first respondent to be registered under its present corporate name.  In August 1993 he transferred the practice and business at Campsie to the first respondent, which, since that time, has carried on business using its corporate name and the trading name OPTICAL 88 at Campsie and in other locations to which I will refer. 

32. On balance, I find that the first use in trade by one of the respondents of the name OPTICAL 88 was from August 1993 when the first respondent commenced to carry on the business formerly conducted by Mr Law at Campsie. 

33. At the time these events took place in 1992 and 1993, Mr Law says that he was unaware of the applicant, its business and the various trade indicia used in its business.   

34. Between 1984 and 1992 Mr Law visited Hong Kong on a number of occasions.  He read professional and trade literature, attended local and international professional and trade conferences, and read local ethnic newspapers (such as the Australian edition of the Sing Tao Chinese Newspaper, and the Chinese Daily Newspaper) and conversed and socialised with many people who had migrated from Hong Kong to Australia.  Mr Law’s evidence was that, despite having done these things, he was unaware of the applicant. 

35. Mr Law also travelled to Hong Kong on several occasions between 1993 and 1997.  However it was only during the course of his visit in May 1997 that he says he noticed one of the applicant’s stores in the central business district of Hong Kong.  He gave this evidence:

    I did not have any concern about the similarity between [the first respondent’s] name and the applicant’s name because I presumed that I held the legitimate business name and trading name in Australia.  I did not investigate the size of the applicant’s operation in Hong Kong as I had no intention to expand the business into Hong Kong.  I was contented that my business in Australia was protected.

36. A significant issue in the case is whether Mr Law’s evidence that he was unaware of the applicant, its business and the various trade indicia used by it in its business until his visit to Hong Kong in May 1997, should be accepted.  The applicant submitted that it should not be accepted.  It contended that Mr Law was aware of the applicant’s trading name and style in 1992 at the latest and that he deliberately adopted the name OPTICAL 88 and later applied it to the first respondent and its business to take advantage of an association with the applicant’s business that he believed would be perceived by customers or potential customers of the first respondent.    

1. In this connection the applicant relied on its claimed reputation in Hong Kong in that period, particularly at the time of visits to Hong Kong by Mr and Mrs Law; on evidence of actual and potential migration and travel from Hong Kong at that time; on the fact that, soon after a visit to Hong Kong in 1992, Mr Law registered the business name OPTICAL 88; and the fact that the first respondent was registered under its corporate name soon after a visit to Hong Kong by Mr Law in 1993.  It also submitted that, in order to accept the truthfulness of Mr Law’s evidence, it would be necessary to accept that it was no more than a coincidence that the first respondent trades under the same name as the applicant’s business.

2. The applicant also sought to call in aid the circumstances surrounding the creation of the first respondent’s logo in 2003 (a representation of which is shown in Schedule 2 to these reasons) (the first respondent’s logo) which the applicant contends is an infringing reproduction of its logo.  It submitted that those events can and should inform my assessment of Mr Law’s reason and motive for adopting the name OPTICAL 88 as the first respondent’s corporate name and trading style.  The difficulty with that submission is that it relates to events occurring some 10 years after the adoption and first use of the name OPTICAL 88 by the first respondent.  I am not persuaded that the reason or motive for creating the first respondent’s logo in 2003 can safely or usefully inform the reason or motive for adopting the name OPTICAL 88 ten years before.

3. Mr Law was challenged in cross-examination with the applicant’s contentions in this regard.  It was put to him that while he was in Hong Kong in January 1992 he saw OPTICAL 88 stores or OPTICAL 88 advertising and came back and registered the business name because of that awareness.  It was put to him that while he was in Hong Kong in May 1993 he saw OPTICAL 88 stores or OPTICAL 88 advertising and, because of that awareness, he came back to Australia and registered the first respondent under its corporate name.  It was suggested to Mr Law (at least implicitly) that he was motivated to do these things because OPTICAL 88 was known in Hong Kong and he believed that there would be increased migration from Hong Kong to Australia leading up to the handover of Hong Kong to China in 1997.  It was also put to Mr Law that he conducted trade mark searches in Australia in 1992.  Mr Law denied having any such awareness as at 1992 or 1993 and being motivated to register the business name or register the first respondent under its corporate name because of any such awareness.  He denied having carried out any trade mark searches in Australia at that time. 

4. Mrs Law was similarly challenged in cross-examination.  It was put to her that in one of her trips to Hong Kong in 1991 or 1992 she first saw an OPTICAL 88 store or OPTICAL 88 advertising and that, at the time of the first respondent’s registration as a company in 1993, she was aware that the name OPTICAL 88  was being used in Hong Kong for a significant and successful business for optical goods.  It was put to her that she wanted to get the benefit of the success of the Hong Kong business for the first respondent.  She denied each of those allegations.

5. Both Mr and Mrs Law gave their evidence in a considered way. Having observed them as they gave their evidence, I do not doubt the truthfulness of their denials.  Moreover, I accept Mr Law’s explanation of why he originally chose the name OPTICAL 88 and how it came to be adopted as the first respondent’s corporate name and trading style in 1993.  There is nothing in the evidence that, objectively, compels a different conclusion.  Bearing in mind the nature of the trade involved, and the cultural significance of the numeral “8”, I do not think that the name OPTICAL 88 is so unusual as to warrant the conclusion that its derivation could only have come from a knowledge of the applicant’s business in Hong Kong.  Indeed, the fact that, at about that time, other businesses in Hong Kong had also been using the word OPTICAL in association with the numeral “8” as trading names shows that there was nothing unique in that combination.  Once again, the applicant did not suggest that there was anything untoward in the adoption by these other businesses of these names, or in their use of them in Hong Kong at that time.    

6. I also accept as truthful Mr Law’s evidence that he had an awareness that the numeral “8”, especially the combination “88”, was being used in the names of various businesses in Sydney, such as newsagents, butchers and tobacco stores, at the time that he came to consider a new trading name as a step in his plans for the expansion and development of the practice and business which he had established. 

7. In early November 1993 the first respondent opened a new shop at Chatswood, a suburb on the North Shore of Sydney. 

8. In July 1995 the first respondent opened another new store in Eastwood, a northern suburb of Sydney.

9. The respondents do not dispute that, since August 1993, the first respondent has used the name OPTICAL 88 in conducting its practice and business.  It has used the name on store signage; business cards, reminder cards, invoices and other business stationery; spectacle cases and cleaning cloths; plastic shopping bags; loyalty cards and advertising in local Chinese newspapers.  Sometimes this use has been in combination with, or in proximity to, “OPTICAL 88” (in Chinese characters) or the first respondent’s logo. Sometimes the name has been used in association with the word “Vision” or “Vision Centre”.  I will refer to this use in greater detail later in these reasons.

10. The question that arises is whether these various forms of use constitute the infringements, contraventions or other unlawful conduct of which the applicant complains.  Undoubtedly the impugned use is, and has been, in relation to what may be broadly described as the retail sale and supply of optical goods and accessories, and of optometry services.

    The applicant’s demands upon the respondents

11. In about mid-2001 the applicant became aware of the first respondent’s business in Australia.  However, it took no steps to advance the claims it now makes or otherwise to protect its interests as it now sees them to be.  Mr Wong gave as the reason for that inactivity the fact that the applicant’s business in Hong Kong had suffered losses and that he was careful to control the costs being incurred by it.  He said that, although he was concerned by the first respondent’s conduct, it was his view that the applicant should not divert its resources in taking legal action against the first respondent.  For present purposes I leave to one side the question whether those reasons, if accepted, justified the applicant taking no steps whatsoever at that time to give notice to the respondents of the claims it now makes against them. 

12. Mr Wong gave evidence that in 2005 the applicant’s sales turnover had increased and that his attention turned back to the Australian market.  In 2006 one of the applicant’s employees visited Australia to assess opportunities for establishing the applicant’s stores in Australia.  I will say more about this visit later.

13. Eventually, by letter dated 24 October 2006, the applicant, through its solicitors, gave notice of its claims and made demands upon the respondents.  The demands included the giving by the respondents of certain undertakings.  Without descending to the detail of the undertakings that were sought, their effect was to require the respondents, within 14 days, to cease all use of the name OPTICAL 88 and the first respondent’s related trade indicia, and to require the first respondent to change its corporate name.  By letter dated 17 November 2006, the respondents, through their solicitors, rejected those demands.  Correspondence continued between the solicitors until 26 February 2007, when the respondents’ solicitors confirmed the respondents’ rejection of the applicant’s claims and demands.  Nothing further appears to have happened until 2 November 2007 when the applicant’s solicitors sent a further letter of demand in which the applicant pressed its demands for undertakings to be given by the respondents.  Those demands were again rejected by a letter from the respondents’ solicitors to the applicant’s solicitors dated 25 November 2007. 

14. Mr Law’s evidence was that he first became aware that the applicant had Australian registered trade marks shortly after he received the first letter of demand informing the respondents of the claim that the respondents were infringing the applicant’s intellectual property rights.  I accept this evidence. 

15. Mr Law said that he took immediate steps to protect the first respondent’s position.  He did this by arranging for the first respondent to apply to register an Australian trade mark comprising the first respondent’s logo. 

    REGISTERED TRADE MARK CLAIMS

    The applicant’s registered trade marks

16. The applicant is the registered owner of the following Australian registered trade marks: 520707, 1083966, 1160979, 1160985, 1250545 and 1253320 (the pleaded trade marks).  These are either composite marks or device marks.  Registered trade marks 1160979 and 1250545 are for the same mark.  Similarly, registered trade marks 1160985 and 1253320 are for the same mark.  Representations and other brief details of the pleaded trade marks are shown in Schedule 3 to these reasons, which reproduces Annexure 1 to the further amended application (the application) and the further amended statement of claim (the statement of claim).  Annexure A to the applicant’s closing submissions also identifies the pleaded trade marks.

    Registered trade mark 520707

17. Registered trade mark 520707 (the ‘707 mark) was registered with effect from 6 October 1989 in respect of the following goods in Class 9:

    Optical products; spectacles, sunglasses, contact lenses, frames and cases for the aforesaid goods and all other optical related goods in class 9.

18. The ‘707 mark is a composite mark comprising the applicant’s logo, to the right of which are the name “OPTICAL 88” (in Chinese characters) and the name OPTICAL 88, with “OPTICAL 88” (in Chinese characters) placed above OPTICAL 88.

19. The mark was registered under the Trade Marks Act 1955 (Cth) (the repealed Act) in Part A of the old register, bearing an endorsement and disclaimer pursuant to s 32 of the repealed Act, which currently reads:

    Registration of this trade mark shall give no right to the exclusive use of the numerals 88* Registration gives no right to the exclusive use of the word AN GENG which is a transliteration of the Chinese character in the mark which may be translated as OPTICAL* The preceding endorsement(s) were recorded prior to commencement of the Trade Marks Act 1995.*

20. Section 238 of the Trade Marks Act provides that a disclaimer made under s 32 of the repealed Act has effect as a disclaimer made under s 74 of the later Act.

21. Section 74 of the Trade Marks Act provides:

    (1)An applicant for the registration of a trade mark, or the registered owner of a registered trade mark, may, by notice in writing given to the Registrar, disclaim any exclusive right to use, or authorise the use of, a specified part of the trade mark.

    (2)The disclaimer affects only the rights given by this Act to the registered owner of the trade mark on registration of the trade mark.

    (3)The Registrar must, on registering the trade mark or on receiving notice of the disclaimer (whichever is later), enter the particulars of the disclaimer in the Register.

    (4)A disclaimer properly made may not be revoked.

22. Section 122(2) of the Trade Marks Act provides that, if a disclaimer has been registered in respect of a part of a registered trade mark, it is not an infringement to use that part of the trade mark.

    Registered trade mark 1083966

23. Registered trade mark 1083966 (the ‘966 mark) was registered with effect from 2 November 2005 in respect of the following goods in Class 9:

    Optical products, spectacles, glasses, sunglasses, contact lenses, frames for eyeglasses, and cases for the aforesaid goods, spectacle bags.

    and the following services in Class 35:

    Retail and wholesale services of eyewear, optical products including spectacles, glasses, sunglasses, contact lenses, anti-glare glass cases, contact lens cases, optical frames, lenses, correcting lens (optics), accessories, parts and fittings for glasses, optical apparatus and instruments, cleaning cloths for spectacles, contact lenses care regimen products.

24. The ‘966 mark is a composite mark comprising the applicant’s logo, to the right of which are the name OPTICAL 88 and the name “OPTICAL 88” (in Chinese characters), with OPTICAL 88 placed above “OPTICAL 88” (in Chinese characters).

    Registered trade mark 1160979

25. Registered trade mark 1160979 (the ‘979 mark) was registered with effect from 14 February 2007 in respect of the following services in Class 35:

    Retail and wholesale services of eyewear, optical products including spectacles, glasses, sunglasses, contact lenses, anti-glare glass cases, contact lens cases, optical frames, lenses, correcting lens (optics), accessories, parts and fittings for glasses, optical apparatus and instruments, cleaning cloths for spectacles, contact lenses care regimen products being services in class 35.

26. The ‘979 mark is a device mark comprising the applicant’s logo. 

    Registered trade mark 1160985

27. Registered trade mark 1160985 (the ‘985 mark) was also registered with effect from 14 February 2007 in respect of the following services in Class 35:

    Retail and wholesale services of eyewear, optical products including spectacles, glasses, sunglasses, contact lenses, anti-glare glass cases, contact lens cases, optical frames, lenses, correcting lens (optics), accessories, parts and fittings for glasses, optical apparatus and instruments, cleaning cloths for spectacles, contact lenses care regimen products being services in class 35.

28. The ‘985 mark is a composite mark comprising the name “OPTICAL 88” (in Chinese characters).

    Registered trade mark 1250545

29. Registered trade mark 1250545 (the ‘545 mark) was registered with effect from 9 July 2008 in respect of the following services in Class 44:

    Optometric, sight-testing and opticians’ services including services in relation to the prescription and dispensing of optical apparatus and instruments, spectacles, lenses and contact lenses.

30. The ‘545 mark comprises the applicant’s logo.  As I have noted, the ‘545 mark is the same as the ‘979 mark.  It is, however, registered for different services.

    Registered trade mark 1253320

31. Registered trade mark 1253320 (the ‘320 mark) was registered with effect from 24 July 2008 in respect of the following services in Class 44:

    Optometric, sight-testing and opticians’ services including services in relation to the prescription and dispensing of optical apparatus and instruments, spectacles, lenses and contact lenses.

32. The ‘320 mark is a composite mark comprising the name “OPTICAL 88” (in Chinese characters).  As I have noted, the ‘320 mark is the same as the ‘985 mark.  It is, however, registered for different services.

    The pleaded case

33. The applicant pleaded its case on trade mark infringement in a somewhat complex fashion: see paragraphs 13 to 24 of, and the definitions used in, the statement of claim.  Stripped of that complexity, the case that emerged in the course of the applicant’s opening, and subsequently in closing submissions (which is reflected in the broad compass of the pleading on trade mark infringement in the statement of claim), was that the respondents have infringed one or more of the pleaded trade marks by using, as a trade mark, signs that are: (a) deceptively similar to one or more of the pleaded trade marks, and, or alternatively, (b) the same as, or substantially identical with, the ‘979 and ‘985 marks.  This was identified as an element of conduct more broadly defined in the statement of claim as “Unauthorised Conduct”.

34. In the statement of claim the applicant did not seek to relate a particular instance or particular instances of alleged infringing use to a particular trade mark.  Rather, its approach was to identify a particular suite of trade marks (the pleaded trade marks), on the one hand, and a particular body of alleged instances of infringing use on the other, and to allege that one or more of the trade marks was infringed by one or more instances of the total body of conduct which it had identified.

35. The liability of the respondents was also pleaded on the footing that they were either individual tortfeasors or joint tortfeasors.  In the case of Mr and Mrs Law, it was also specifically pleaded that they directed, procured and controlled the first respondent in its acts, and were knowingly concerned in those acts. 

36. As pleaded, the applicant’s case encompassed infringement under ss 120(1) and (2) of the Trade Marks Act. The applicant did not plead or advance any case that any of the pleaded trade marks was a “well known” mark for the purposes of s 120(3) of the Trade Marks Act.

37. By relying on s 120(2), the applicant broadened the scope for infringement to goods of the same description as the “registered goods”, services closely related to the “registered goods”, services of the same description as the “registered services” and goods closely related to the “registered services”, as those terms are defined in s 120(2). I do not think that the issue of liability for trade mark infringement in this case turns in any contentious way on the identification of goods or services within the scope of the particular registrations or within the broadened range of goods and services identified in s 120(2) of the Trade Marks Act.

38. It is convenient to note at this juncture that the respondents did not plead, and did not seek to establish, for the purposes of s 120(2), that there were aspects of the particular use of the impugned signs which showed that that use was not likely to deceive or cause confusion. The respondents did, however, dispute a different contention which was that, in contravention of ss 52 and 53 of the Trade Practices Act, they had engaged in conduct that was misleading or deceptive (or likely to mislead or deceive) or had made false representations by using the signs or that, by that use, they had engaged in passing-off.

39. The respondents did raise a number of specific defences to trade mark infringement, particularly as they applied to the first respondent: see paragraph 22 of each amended defence, pleaded in substantially the same terms.  I will return to these issues.

    The alleged infringing use

40. The alleged infringing use was exemplified in the course of the applicant’s opening and closing submissions by reference to a section called OPL signs in a document entitled Trade Mark Infringement Analysis, which, by way of refinement of the more general allegations pleaded in the statement of claim, identified the following specific instances of use commencing from the dates specified in that document:

    (a)The use of the name OPTICAL 88 on store signage (which I will call example A).  This use is evident from August 1993 at the Campsie store (where that use has been in association with the words “Vision Centre”) and from July 1995 at the Eastwood store.  The use is also evident from November 1993 at the Chatswood store.  In that case, the name “OPTICAL 88” (in Chinese Characters) is also used in proximity (but not in close proximity) to the name OPTICAL 88.  Contrary to the applicant’s submissions, in that instance I do not see the name OPTICAL 88 and the name “OPTICAL 88” (in Chinese characters) as comprising, in combination, one sign but two separate signs, whose use calls for individual consideration.

    (b)The use of the name “OPTICAL 88” (in Chinese characters) on store signage (which I will call example B).  Following from my finding above, this use is evident from November 1993 at the Chatswood store. 

    (c)The use of the name OPTICAL 88 in combination with the name “OPTICAL 88” (in Chinese characters) on store signage (which I will call example C).  This use is evident from August 1993 at the Campsie store, where “OPTICAL 88” (in Chinese characters) is placed in close proximity to and above OPTICAL 88.  Although appearing to be in separate neon signs, their proximity is such that, contrary to the respondents’ submissions, I would regard this as being the use of one sign, and the relevant sign, for the purpose trade mark comparison.  This use is evident from July 1995 at the Eastwood store, where the name OPTICAL 88 and the name “OPTICAL 88” (in Chinese characters) are in close proximity, with “OPTICAL 88” (in Chinese characters) being immediately to the right of OPTICAL 88.  Once again, although appearing to be in separate neon signs, their proximity is such that, contrary to the respondents’ submissions, I regard this as being the use of one sign, and the relevant sign, for the purposes of trade mark comparison.

    (d)The use of the name OPTICAL 88 in combination with the name “OPTICAL 88” (in Chinese characters) on business cards (which I will call example D).  This use is evident from August 1993.  In this instance “OPTICAL 88” (in Chinese characters) appears in close proximity to and under OPTICAL 88.  Once again, it is the use of one sign, and the relevant sign, for the purpose of trade mark comparison.

    (e)The use of the name OPTICAL 88 on stationery in association with the words “Vision Centre” and, in the case of “loyalty cards”, in association with the words “V.I.P. Card”, from August 1993.  This use is also evident on promotional literature (a benefit concert program sponsored by the first respondent) in association with the words “Vision” and “VISION CENTRE” in December 1993 and on promotional items (such as spectacle cases and cleaning cloths) in association with the words “VISION CENTRE”, from about 1996 (I will call these, collectively, example E).

    (f)The use of the first respondent’s logo on business cards and reminder cards since late 2003 (I will call this example F). 

1. This exemplified use and the dates of its commencement were also identified in a separate section of the applicant’s submission documents entitled “Images Chronology”.

2. The applicant relied on another instance of alleged infringing use said to have arisen from the fact of the first respondent’s lodgement of its application to register its logo as a trade mark with the Registrar of Trade Marks on 20 November 2006 (trade mark application 1147926).  I am able to deal with this allegation of infringement immediately. 

3. In my view the mere lodgement of this application for registration was not the use of a sign (the first respondent’s logo) as a trade mark in relation to goods or services, within the meaning of s 120 of the Trade Marks Act. Use of a trade mark in relation to goods is use of the trade mark upon, or in physical or other relation to, the goods: s 7(4) of the Trade Marks Act. Use of a trade mark in relation to services is use of the trade mark in physical or other relation to the services: s 7(5) of the Trade Marks Act. The lodgement of the trade mark application may have said something about the intended use by the first respondent of its logo as a trade mark in relation to the goods or services for which registration was sought, but it was not a use by the first respondent of its logo as a trade mark in physical or other relation to those goods and services, or upon those goods.

   Relevant legal principles

4. Section 120 of the Trade Marks Act conditions infringement on the use of a sign, as a trade mark, that is “substantially identical” with or “deceptively similar” to a registered trade mark.

5. There are three species of infringement:  (a) use of the impugned sign in relation to goods or services in respect of which the trade mark is registered (s 120(1)); (b) use of the impugned sign in relation to goods of the same description as the registered goods or of services closely related to the registered goods, or in relation to services of the same description as the registered services or of goods closely related to the registered services (s 120(2)), and (c) use of the impugned sign in relation to “unrelated goods” or “unrelated services” (s 120(3)).   

6. However, whatever species of infringement is alleged, the question of trade mark infringement invites, indeed requires, a comparison to be made between the registered trade mark and the sign whose use as a trade mark is impugned. 

7. As the text of s 120 makes plain, the comparison is based on two separate tests, “substantial identity” and “deceptive similarity”. It is trite law that the tests are fundamentally different. In this proceeding the applicant placed emphasis on the existence of “deceptive similarity”, relying (as I have already noted) on “substantial identity” only in respect of the alleged infringement of the ‘979 and ‘985 marks.

8. In The Shell Company of Australia Limited v Esso Standard Oil (Australia) Limited (1961) 109 CLR 407 Windeyer J (at 414) said with respect to “substantial identity”:

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

9. In relation to “deceptive similarity”, his Honour said (at 415):

   On the question of deceptive similarity a different comparison must be made from that which is necessary when substantial identity is in question.  The marks are not now to be looked at side by side.  The issue is not abstract similarity, but deceptive similarity.  Therefore the comparison is the familiar one of trade mark law.  It is between, on the one hand, the impression based on recollection of the plaintiff’s mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions that such persons would get from [the impugned mark].

10. Earlier, in Australian Woollen Mills Limited v F.S. Walton and Company Limited (1937) 58 CLR 641, Dixon and McTiernan JJ (at 658) said with respect to “deceptive similarity”:

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

11. It is to be borne in mind that the essential task is one of trade mark comparison. So much is made clear by s 10 of the Trade Marks Act itself: it is the resemblance between the two marks that must be the cause of the likely deception or confusion. The inquiry for trade mark infringement purposes is thus a relatively limited one. However, in cases of alleged “deceptive similarity”, the context of surrounding circumstances is not to be ignored. As Australian Woollen Mills makes clear, the comparison takes place in a particular context in accordance with a particular standard: “the course of business and the way in which the particular class of goods are sold” gives the setting and “the habits and observation of men considered in the mass” affords the standard in determining whether the impugned mark is, properly judged, “deceptively similar”.  In Shell Windeyer J observed (at 416) that, although deceptiveness must result from similarity, the likelihood of deception must be judged not by the degree of similarity alone but by the effect of that similarity in all the circumstances.

12. However, the inquiry into surrounding circumstances should not be confused with the wider inquiry that may be (and is in most cases likely to be) involved in cases of alleged passing-off or alleged misleading or deceptive conduct (for example, in the context of alleged contravention of s 52 of the Trade Practices Act). The boundary between the two types of inquiry is not always easy to discern and does not appear to have been always observed. Moreover, it is necessary, in this regard, to distinguish between the species of infringement created by s 120 of the Trade Marks Act itself.

13. In this connection it is generally recognised that, for the purposes of infringement under s 120(1), consideration of the trade mark owner’s reputation in the registered mark is not relevant, save (perhaps somewhat contentiously) where reputation is a matter of notoriety: see, conveniently, the discussion in CA Henschke & Co v Rosemount Estates Pty Ltd (2000) 52 IPR 42; [2000] FCA 1539 at [45] to [52]. Thus the same test of deceptive similarity must be applied whether the mark is newly registered and unknown or whether it has been prominently displayed on well-known merchandise for many years. If the test is not applied in this fashion a trade mark owner may be deprived of the monopoly conferred by registration under the Trade Marks Act.

14. Recognition of this aspect of infringement under s 120(1), in so far as it concerns the question of deceptive similarity, highlights another aspect of the relevant test for the purposes of s 120(1): intending purchasers are assumed to have knowledge of the mark alleged to have been infringed. Thus consideration of the question of deceptive similarity proceeds from an anterior premise that is hypothetical rather than actual.

15. It is, of course, otherwise when considering infringement under s 120(3) of the Trade Marks Act. In that context actual knowledge of the mark is all important: the mark is well known in Australia and, because the mark is well known, use of the allegedly infringing sign as a trade mark would be likely to be taken as indicating a connection between “unrelated” goods or services (see s 120(3)(b)) and the registered owner of the trade mark. Questions of reputation may also be relevant when considering infringement under s 120(2), if, unlike here, the alleged infringer does seek to rely defensively on the particular manner in which the impugned mark has been used as not leading to a likelihood of deception or confusion.

16. So too it is recognised that, for the purposes of considering infringement under s 120(1), it is beside the point that the alleged infringer has added other material to the impugned trade mark, even if those steps were taken to avoid the likelihood of deception: Saville Perfumery Ltd v June Perfect Ltd (1941) 58 RPC 147 at 161 (Sir Greene MR) and at 174 (Viscount Maugham); Lever Brothers, Port Sunlight Limited v Sunniwite Products Ltd (1949) 66 RPC 84 at 89; Mark Foy’s Ltd v Davies Coop and Co Ltd (1956) 95 CLR 190 at 205; Polaroid Corporation v Sole N Pty Ltd [1981] 1 NSWLR 491 at 495; New South Wales Dairy Corporation v Murray Goulburn Co-Operative Company Limited (1989) 86 ALR 549 at 589; Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227 at 231-232. Considerations of this kind, if raised by an alleged infringer, are relevant when considering infringement under s 120(2) and may be relevant when considering infringement under s 120(3). However, the general position under s 120(1) is that infringement cannot be avoided by, for example, the use of additional matter if the mark itself is taken and used. Once again, if the test is not applied in this fashion a trade mark owner may be deprived of the monopoly conferred by registration.

17. When considering the question of deceptive similarity, each mark must be compared as a whole.  This is of particular significance in relation to composite marks and device marks which may consist of a number of elements: Angelides v James Stedman Hendersons Sweets Ltd (1927) 40 CLR 43 at 68. It is necessary to look at all these elements in their context. This will include the size, prominence and stylisation of words and device elements used in the mark and their relationship to each other: Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd (2004) 209 ALR 1; [2004] FCAFC 196 at [91]-[103]; Bavaria NV v Bayerischer Brauerbund eV (2009) 177 FCR 300 at [21]-[22] and [32]. The impression created by the mark, considered as a whole, can only be determined by doing this. However, in this connection, it is recognised that deceptive similarity may be established when an impugned mark uses an “essential” or “distinguishing” feature of the mark as registered. This proposition may be illustrated by reference to the following leading cases.

18. In Saville Perfumery the registered trade mark was a composite mark comprising word and device elements. It was described (at 172) as consisting of the word “June” “printed in a special manner with a bar as a kind of background behind the letters and a garland of flowers depending as an arc from either end of the bar”. The registration was endorsed with a disclaimer of the exclusive right to use the flower device. It was held that the registered trade mark was infringed by the use, as a trade mark, of the word “June” in relation to goods in respect of which the trade mark was registered. Viscount Maugham (with whom Lord Russell of Killowen and Lord Romer agreed), held (at 174-175) that the “distinguishing feature” or “essential feature” of the registered trade mark was the word “June” represented in a special script. It is not clear on the face of the report whether the impugned use of the word “June” employed a stylised rendering of that word, although it is recorded that the word was printed on the accused product in inverted commas: see at 160.

19. Viscount Maugham at 175 said:

    The Appellants’ use of the word “June” as a mark on the goods in question so nearly resembles the Respondents’ mark as to be likely to deceive or cause confusion in the minds of purchasers with a normally imperfect recollection of the precise picture representing or containing the registered mark.

20. In de Cordova v Vick Chemical Company (1951) 68 RPC 103 one of the registered trade marks was a composite mark comprising the words “Vicks VapoRub Salve”, a device consisting of a triangle with the words “Vicks Chemical Company” printed on the sides, and other subsidiary words below the triangle. The other registered trade mark comprised the word “VapoRub”. It is, however, the composite mark (identified in the report as Trade Mark 1852) that is of present significance.

21. Lord Radcliffe, in delivering the advice of the Privy Council, said (at 105‑106):

    Their Lordships consider that the Court of Appeal were right in holding that the Appellants had infringed Trade Mark 1852.  They have not used the mark itself on the goods that they have sold, but a mark is infringed by another trader if, even without using the whole of it upon or in connection with his goods, he uses one or more of its essential features.  The identification of an essential feature depends partly on the Court’s own judgment and partly on the burden of the evidence that is placed before it.  A trade mark is undoubtedly a visual device; but it is well-established law that the ascertainment of an essential feature is not to be by ocular test alone.  Since words can form part, or indeed the whole, of a mark, it is impossible to exclude consideration of the sound or significance of those words.  Thus it has long been accepted that, if a word forming part of a mark has come in trade to be used to identify the goods of the owner of the mark, it is an infringement of the mark itself to use that word as the mark or part of the mark of another trader, for confusion is likely to result.  It is sufficient to refer to the words of Lord Cranworth, L.C., in Seixo v. Provezende, (1866) L.R. 1 Ch. 192 at p. 197: “If the goods of a manufacturer have, from the mark or device he has used, become known in the market by a particular name, I think that the adoption by a rival trader of any mark which will cause his goods to bear the same name in the market, may be as much a violation of the rights of that rival as the actual copy of his device.” Decisions of the same effect are to be found in Ford v. Foster (1872) L.R. 7 Ch. 611, Orr Ewing & Coy. v. Johnston & Coy. (1880) 13 Ch. D. 434, Saville Perfumery Ld. v. June Perfect, Ld. (1941) 58 R.P.C. 147. The likelihood of confusion or deception in such cases is not disproved by placing the two marks side by side and demonstrating how small is the chance of error in any customer who places his order for goods with both the marks clearly before him, for orders are not placed, or are often not placed, under such conditions. It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole.

22. Proceeding on that basis the Privy Council held (at 106) that the word “VapoRub” must be treated as an “essential” feature or “a material or substantial element” of Trade Mark 1852 and that it was infringed by the use of the name “Karsote Vapour Rub”.  It is to be noted that the addition of the word “Karsote” did not avoid the finding of infringement.  This is another illustration of the general proposition that, for the purposes of infringement, it does not avail a defendant to point to other material added to the trade mark to distinguish trade origin.  

23. In Crazy Ron’s one of the registered trade marks (identified as “the 1995 mark”) was a composite mark comprising a cartoon character of a man represented comically as a “crazy man” holding a mobile telephone and sitting astride a stylised globe with meridians, bearing the letters “M” and “W”. It included the words CRAZY JOHN upwardly angled at shoulder height to the cartoon character, with the word CRAZY to the left, and the word JOHN to the right, of the cartoon character: see at [18].

24. In allowing an appeal from a finding of infringement of that mark by the use, as a trade mark, of “Crazy Ron” and “Crazy Ron’s”, the Full Court identified as a threshold question whether the primary judge erred in finding that the words CRAZY JOHN constituted an essential element of the 1995 mark for the purposes of undertaking the comparison required by s 120(1) of the Trade Marks Act.

25. The Full Court (at [93]) said:

    As the earlier discussion of the authorities shows, the concept of an “essential feature” of a registered trade mark is well-established, notwithstanding that the statutory language does not explicitly incorporate such a concept. Neither party suggested that the case should be decided without reference to the “essential feature” of the 1995 mark. It is, however, worth noting that the court’s duty is ultimately to the statutory language rather than to the complexities brought forth by many years of decisional authority: cf Aktiebolaget Hassle v Alphapharm Pty Ltd (2002) 212 CLR 411 at 446 [87] ; 194 ALR 485 at 508 per McHugh J (dissenting); at CLR 449 [99]; ALR 510–11 per Kirby J (dissenting). While recognising that decisions in other cases cannot resolve the threshold factual question in this case, it is perhaps suggestive that decisions relying on an “essential feature” of a registered mark generally appear to involve much less elaborate marks than the 1995 mark. At all events, they have tended to involve trade marks in which the words said to constitute an essential feature of the mark occupy a much more prominent place than the words “CRAZY JOHN ” in the 1995 mark. Saville and de Cordova provide examples.

26. The Full Court (at [97]) held:

    If attention is confined to the 1995 mark itself, it is in our opinion very difficult to characterise the words “CRAZY JOHN” as an essential feature. The words form but part of a composite mark comprising a number of elements. The words themselves are not especially prominent and indeed are subsidiary to the fantasy character, which occupies the dominant position in the overall image. If anything, the words seem to identify the fantasy character, having regard to the deranged look on his face. The words also compete for attention with the letters “MW” which themselves occupy a central position on the stylised globe.

27. Importantly the Full Court went on to caution (at [100]) against a too ready characterisation of words in a complex composite registered trade mark as an “essential feature” of that mark when assessing the question of deceptive similarity.  The Full Court remarked that if such a characterisation is made incautiously it may effectively convert a composite mark into “something quite different”.

28. At the end of the day the question of deceptive similarity is one to be resolved in a given case by judicial estimation based on the visual and aural impression created by each mark and on the likely effect to be produced by each mark on the minds of likely customers of the goods and services in the course of the ordinary conduct of affairs:  Australian Woollen Mills at 659. 

29. The question of the impression of the marks on the minds of likely customers is important because, although they are assumed to have knowledge of the mark alleged to have been infringed, those customers are not to be treated as having perfect recollection of the mark in all its details.  Quite to the contrary; in considering the question of deceptive similarity, allowance must be made for imperfect recollection based on impression:  Aristoc Ltd v Rysta Ltd [1945] AC 68 at 86; Re Rysta Ltd’s Application (1943) 60 RPC 87 at 108-109.

1. Dr Bednall was cross-examined on this topic, as follows:

   Question:Reflecting on 1992 or 1993 being a relevant date in this proceeding, if you had your way again, would you really have maintained, as an age group that constituted just over 20% of the sample, an age group where the minimum age was 16? 

   Answer:If I were instructed to focus on people who were of a certain age in 1992, then quite obviously, I would have designed this differently, yes.

2. Dr Bednall later accepted that, realistically, the minimum age of any person to be interviewed in the survey should have been “something like 25”, if testing awareness as at 1992 or 1993 was a relevant consideration in the proceeding. 

3. In my view this criticism of the survey and the reliability of its results is well-founded if the results are to be used for any purpose other than for showing awareness of the signs in Picture R and Picture V at the time the survey was conducted in July 2009.

4. Whilst acknowledging that he did not, as part of his analysis of the survey data, focus on answers relating to recognition of the signs in Picture R and Picture V in or before 1993, Dr Bednall accepted in cross-examination that it was possible to use the data to examine responses as to awareness at particular dates. Dr Bednall agreed that it was possible, for example, to do this using the sign in Picture V and 2003 as the date of reported first awareness of that sign. 

5. Encouraged by this answer, the respondents undertook such an analysis in their closing submissions, in which they isolated from the 460 interviewees those who claimed to have seen the sign in Picture V; then isolated the interviewees further by reference to their responses to question 19 (when they first arrived in Australia) and questions 4 and 5 (recognition of shops using the sign); then removed interviewees who arrived after 2003 and who did not recognise the sign (thus leaving those who had arrived in Australia before 2003 and recognised the sign); and then sorted the data by the location at which interviewees said they first saw the sign. 

6. The applicant, in its closing submissions in reply, criticised that analysis, submitting that there was no evidence that such an analysis would yield a statistically useful result that could be extrapolated to the relevant population of interest.  The applicant also submitted that, unless such an exercise is undertaken by an expert, and opened up to criticism by an expert, it cannot be useful because of the need for expert judgment in classifying the data. 

7. Whilst it does not seem to me that the exercise actually undertaken by the respondents (focussing as it does on the year 2003) addresses the relevant time for considering the existence and extent of the applicant’s reputation in Australia, it does direct attention to the fact (which the applicant accepted in submissions) that the survey did not attempt to measure the applicant’s reputation at any particular time before the dates on which the interviews were actually conducted.  This, in my view, serves to underscore the limited utility of the survey.

8. In summary:

   (a)The survey does not measure whether and, if so, to what extent, members of the chosen population of interest were misled or deceived by the first respondent’s conduct in one or more of the ways alleged by the applicant.

   (b)The survey does not measure awareness of the signs shown in Picture R (the name OPTICAL 88) and Picture V (accepted to be the ‘707 mark) as at August 1993 by persons who were resident in Sydney on or before that date.  Table 16 in Dr Bednall’s report shows that only 41% (approximately) of interviewees first came to live in Australia in or before 1993.  It follows that a clear majority of the responses on which Tables 10 and 11 are based were given by interviewees who were not resident in Australia in or before 1993.

   (c)The survey only sought to measure recognition by members of the chosen population of interest as at July 2009 of the signs shown in the pictures.

   (d)The survey results, as presented, contain coding errors which affect the reliability of parts of those results.

   (e)The survey results, as presented, include a significant proportion of responses (approximately 20%) from those in the 16 to 24 years age group as at July 2009 (who would have been aged 8 years or less as at August 1993).

   (f)In so far as the survey results show the date of first awareness of the signs shown in the pictures, those results need to be treated cautiously because of possible errors of time estimation and because of the lack of specificity of a number of the responses that were given.  In any event, the reliability of those results, as presented, is affected by each of the matters in (d) and (e).  For those reasons, I do not regard the results as presented in Tables 10 and 11 of Dr Bednall’s Report as reliable.  I accept Mr McCallum’s criticisms of them.

9. Finally, it should be noted that the population of interest in the survey (people resident in Sydney who were born in Hong Kong, Macau, Singapore or Thailand, who were aged 16 years and over and who wore contact lenses or spectacles) does not correlate with the population of Hong Kong-born residents in the data discussed by Professor Hugo.  Moreover, as at August 1993 the applicant’s stores were only operating in Hong Kong with one store in Macau.  The expansion of that business to other countries (such as Singapore and Thailand) did not take place until later.

   The parties’ submissions on the facts

10. The applicant submitted that, whilst it has not operated retail stores in Australia, it has had, since 1993, an established reputation in Australia. 

11. The applicant submitted that it had a strong and long-standing reputation in Hong Kong (and elsewhere) in the OPTICAL 88 Branding.  In that connection the applicant pointed to the evidence of its business as at August 1993 in terms of the number of shops, annual turnover, advertising expenditure and advertising activities.  It identified its principal case as being that, because of a unique pattern of migration and other trade between (in particular) Hong Kong and Australia, there is and always has been an important population in Sydney of Australian residents who migrated from Hong Kong after the applicant’s reputation was established, including those who returned there frequently, including to shop.  It submitted that the applicant’s activities in Hong Kong had taught customers for optical goods and services in Hong Kong to recognise these names and marks, and that the customers then moved to Australia in “exceptionally large numbers”.

12. Although based on the so-called OPTICAL 88 Branding, the focus of the applicant’s case was in fact the name OPTICAL 88 as the brand of a chain of retail optical shops in Hong Kong.  It submitted that the survey it had carried out established that, as at 2009, the name OPTICAL 88 had a secondary meaning: “a significant proportion of Australian residents who had migrated from Hong Kong (etc) recognised the name OPTICAL 88 and associated it with a chain of optical shops in Hong Kong or (a much lesser extent) the other south-east Asian countries in which the Applicant operates”.  Once again, it is to be borne in mind that, as at August 1993, the applicant’s stores were only operating in Hong Kong with one store in Macau.

13. The applicant then submitted that this provided “powerful evidence” of a secondary meaning at “earlier dates”.  In short, the applicant submitted that, by having regard to the survey results as at 2009 and, in particular, the level of awareness of the applicant’s business established by the survey as at that date, I should make “a qualitative judgment” about the extent of that awareness as at August 1993 taking into account differences between August 1993 and 2009 in the source of awareness “including the number of shops, the lesser cumulative effect of advertising and word of mouth etc”.  It submitted that this was a “routine process”. 

14. I should say at the outset that I accept the applicant’s submission to the extent, but only to the extent, that it is necessary for me to form a judgment – which would be aptly described as a qualitative or, perhaps more precisely, an evaluative judgment – about the extent of the applicant’s reputation in Australia as at August 1993.  That judgment is one to be based on the objective evidence bearing on that issue, including what the survey results can show about that question.  The weight to be given to the survey results as part of that evaluation is another matter.  However, it would not be correct to undertake that evaluation by the essentially tendentious approach advocated by the applicant which takes as its starting point the very fact that the applicant wishes to establish as at August 1993, namely that the name OPTICAL 88 had a secondary meaning in Australia (and, in particular, in Sydney) associated exclusively with the applicant and its business in Hong Kong and Macau. 

15. The true question – which informs the correct approach – is: what inferences can be drawn, and what conclusions can be made, about the applicant’s reputation in Australia (specifically in those places from which the first respondent was carrying on business) as at August 1993, having regard to (amongst other things) its business and promotional activities in Hong Kong and the movement of Hong Kong-born people to Australia – the two factors which the applicant submitted produced the results recorded in the survey.

16. The applicant also advanced a slightly different submission.  It submitted that a survey conducted in 1993 would have produced broadly similar results to the survey conducted in 2009.  This submission was based on the hypothesis that there was (what the applicant submitted to be) “a continuum”: in 1993 the population in Sydney of Hong Kong-born people was “already substantial” and “similar to that today” and in 1993 (it submitted) the applicant’s reputation in Hong Kong was broadly similar to that today, accepting that the cumulative impact of sales and advertising in 1993 would have been less.

17. The obvious difficulty with that submission is the applicant’s hypothesis that there is “a continuum”.  The applicant’s acceptance that the cumulative impact of its sales and advertising would be different over the sixteen year period between 1993 and 2009 shows that the hypothesis is hardly likely be to correct as a matter of fact.  Ultimately its submission simply begs the question of the existence, nature and extent of the applicant’s reputation in Australia, and specifically in Sydney, as at August 1993.

18. In its submissions the applicant also relied on evidence as to the development and significant growth of its overseas business after 1993.  This reliance seems to have been in furtherance of the proposition that the applicant sought to draw from the decision in Thai World.  For the reasons I have given rejecting the applicant’s proposition, I do not see this evidence as being relevant to the question of the existence, nature and extent of the applicant’s reputation in Australia, and specifically in Sydney, as at August 1993.

19. The respondents submitted that the applicant’s evidence concerning its business and marketing in the period up to and including 1993 was sparse, particularly as to the context in which those activities took place.  They submitted that, although evidence had been given about the size and earnings of the applicant’s business, and the extent of its marketing activities through television commercials, print advertising and other promotional activities (which, the respondents submitted, were somewhat limited in extent), the relevant significance of those matters, such as they were, in terms of the Hong Kong economy, was unknown because of the absence of “further and appropriate” contextual evidence.  In a related context, the respondents’ written submissions adverted to the “crowded, cramped and visually riotous environment” of Hong Kong.

20. The respondents submitted that the evidence of the availability of foreign (Hong Kong) publications in Australia should be given little weight; that the evidence of Hong Kong immigration to Australia (as the principal vector by which the applicant’s reputation was allegedly exported to Australia) was of limited utility because of its generality; that the applicant’s survey was deficient and its underlying methodology inappropriate; and that its post-August 1993 evidence was irrelevant to the question of establishing the applicant’s claimed reputation in Australia. 

21. 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

22. 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. 

23. 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.

24. 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. 

25. While these activities were in progress, Australia was experiencing its peak migration from Hong Kong.  That migration exhibited a concentration in New South Wales, with an emerging concentration in the northern suburbs of Sydney.  However, as I have observed, that population as at 1991 was, relatively speaking, numerically and proportionally small.  I have no reason to think that the position was significantly different as at August 1993.

26. The applicant did not adduce direct evidence from any person resident in Sydney as at August 1993 who professed to have knowledge or an awareness of the applicant’s business in Hong Kong or Macau at that time.  The applicant did not seek, by its survey, to analyse the question of the awareness of the name OPTICAL 88 as at August 1993 by members of the chosen population of interest who were resident in Sydney in or before August 1993. 

27. As I have stated, I do not regard the survey results with respect to first awareness of the signs shown in Picture R and Picture V (Tables 10 and 11 of Dr Bednall’s Report) to be reliable.  In any event, as I have also noted, a clear majority of the interviewees who gave responses were not even resident in Australia in or before 1993.

28. I am really left to make an evaluative judgment about the existence and extent of the applicant’s reputation in Australia, and in particular in Sydney, based on the evidence of its activities in Hong Kong and Macau in the period up to August 1993 and the evidence of migration from Hong Kong to Australia, taking from the survey results whatever broad assistance they can provide.

29. In that connection, if I were to regard the results presented in Table 11 of Dr Bednall’s report as providing some useful information, it would be necessary, in my view, to take account of the adjustments made by Mr McCallum for coding errors.  So adjusted, Table 11 would indicate that 5.2% of interviewees stated that they had an awareness of seeing the signs in Picture R and Picture V in Hong Kong in the last 20 years or more.  To this could be added a further 3.3% who stated that they had an awareness of those signs in Hong Kong in the last 19 years (but longer than 16 years ago).  I would need to discount this 8.5% (5.2% plus 3.3%) in an evaluative sense to take account of the real possibility of time estimation errors (including the fact that about 20% of interviewees were aged 8 years or less as at August 1993) and that only about 41% of all interviewees (of whatever age) were first resident in Sydney in or before 1993.  It would then be necessary to apply this resulting, evaluatively small, percentage figure to a population which, on the available data, was itself numerically small at the relevant time, particularly in the locations of interest which were relied on as showing concentrations of Hong Kong-born residents.

30. Proceeding on this basis, I am not satisfied on the evidence that, when the first respondent commenced to carry on business under the name OPTICAL 88 in August 1993, it could be said that a significant or substantial number of persons (in the sense I have explained) in Australia, and in particular in Sydney, were aware of the name OPTICAL 88 as the brand of a chain of retail optical shops in Hong Kong and Macau.  It is certainly possible that some were.  For example, it is possible that some within the migrant population discussed by Professor Hugo may have been customers of the applicant’s stores or have been exposed to the applicant’s television and print advertising before August 1993.  It is possible that a number of other persons resident in Australia (and, in particular, in Sydney) who visited Hong Kong for travel or business in the period up to August 1993 may have been customers of, or may have seen, one of the applicant’s stores or been exposed to its advertising.  It is not possible, however, to be any more definite about those matters. 

31. On balance, the migration and demographic data, considered in light of the information that can be usefully drawn from the survey, does not support the applicant’s submission that it had an established reputation in Australia in August 1993 of any significance. At most the evidence would indicate the possibility that a very small number of people resident in Sydney in or before August 1993 may have seen or heard of the applicant’s stores in Hong Kong or Macau. Even for those people it does not follow that they were, or were likely to have been, misled or deceived in the ways alleged by the applicant as at August 1993. Awareness of the existence of a business under a particular name in another country is one thing. It is another thing to translate that awareness into a state of belief that a business operating under the same name locally is the same as, or connected with, the foreign business and thereby to be misled or deceived in the sense required by s 52 of the Trade Practices Act. Some may make that assumption. Others will simply acknowledge that the same name is being used locally without attributing any association between the two businesses.

1. The applicant did not seek to adduce any evidence from any consumer that he or she was misled or deceived in any of the ways it alleged.  Whilst I acknowledge that such evidence is not necessary, and, indeed, may have been difficult to obtain as it related to circumstances as at August 1993, its absence is noteworthy given the fact that it was a feature of the applicant’s case that its reputation at the present time could be taken into account in assessing whether the first respondent’s conduct was or is misleading or deceptive or likely to mislead or deceive.  No direct evidence was adduced that, as at the present time, any consumer thought that the first respondent’s stores were the applicant’s stores or were in any way associated in trade with the applicant or its stores.

2. In all the circumstances I find that the adoption and use of the name OPTICAL 88 by the first respondent in August 1993, and its use thereafter by the first respondent in the operation of its Campsie, Chatswood and Eastwood stores, was not conduct in trade or commerce that is or was misleading or deceptive or likely to mislead or deceive in the ways alleged by the applicant. It follows, in my view, that the applicant’s claim based on contravention of s 52 of the Trade Practices Act does not succeed.

3. I have noted that the applicant’s claim based on contravention of s 53 of the Trade Practices Act has not been articulated by reference to the specific paragraphs of that provision. However, I would not understand the applicant’s case based on contravention of that provision to rise any higher than its case based on contravention of s 52. It follows, therefore, that the applicant’s case based on s 53 of the Trade Practices Act does not succeed.

4. Similarly, the applicant’s case based on passing-off was not pleaded or put in any way that could succeed if its case on contravention of s 52 of the Trade Practices Act did not succeed. The conduct pleaded was based on the same alleged pre-existing reputation. It follows from my findings above that the applicant’s case based on passing-off does not succeed.

   DISPOSITION

5. I have found that the applicant’s claims of trade mark infringement and copyright infringement, and its claims based on contravention of the Trade Practices Act and for passing-off do not succeed.

6. The conclusions to which I have come make it unnecessary for me to determine the question of Mr and Mrs Law’s liability as joint tortfeasors with the first respondent on the various bases that were pleaded.  My conclusions also mean that any further substantive hearing is unnecessary and that final orders in the applicant’s application can now be made. 

7. I have found that the first respondent’s cross-claim for removal of the ‘707 mark succeeds and that its claim for removal of the ‘966 mark succeeds in part.  Final orders in the cross-claim can now be made. 

8. The only order that I make at the present time is that the parties are to bring in short minutes of order giving effect to these reasons.

9. I will hear the parties on the question of costs.    

I certify that the preceding four hundred and thirty-eight (438) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates.

Associate:

Dated:       10 December 2010

SCHEDULE 1

SCHEDULE 2

SCHEDULE 3

Applicant's Registered Trade Marks

Registration No.	Trade Mark	Class
(a)	520707	9: Optical products; spectacles, sunglasses, contact lenses, frames and cases for the aforesaid goods and all other optical related goods in class 9
(b)	1083966	9: Optical products, spectacles, glasses, sunglasses, contact lenses, frames for eyeglasses, and cases for the aforesaid goods, spectacle bags; and 35: Retail and wholesale services of eyewear, optical products including spectacles, glasses, sunglasses, contact lenses, anti-glare glass cases, contact lens cases, optical frames, lenses, correcting lens (optics), accessories, parts and fittings for glasses, optical apparatus and instruments, cleaning cloths for spectacles, contact lenses care regimen products
(c)	1160979	35: Retail and wholesale services of eyewear, optical products including spectacles, glasses, sunglasses, contact lenses, anti-glare glass cases, contact lens cases, optical frames, lenses, correcting lens (optics), accessories, parts and fittings for glasses, optical apparatus and instruments, cleaning cloths for spectacles, contact lenses care regimen products being services in class 35
(d)	1160985	35: Retail and wholesale services of eyewear, optical products including spectacles, glasses, sunglasses, contact lenses, anti-glare glass cases, contact lens cases, optical frames, lenses, correcting lens (optics), accessories, parts and fittings for glasses, optical apparatus and instruments, cleaning cloths for spectacles, contact lenses care regimen products being services in class 35
(e)	1250545	44: Optometric, sight-testing and opticians' services including services in relation to the prescription and dispensing of optical apparatus and instruments, spectacles, lenses and contact lenses.
(f)	1253320	44: Optometric, sight-testing and opticians' services including services in relation to the prescription and dispensing of optical apparatus and instruments, spectacles, lenses and contact lenses.

SCHEDULE 4