PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd
[2021] FCAFC 128
•29 July 2021
FEDERAL COURT OF AUSTRALIA
PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd [2021] FCAFC 128
Appeal from: PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd [2020] FCA 1078 File number: NSD 1014 of 2020 Judgment of: JAGOT, NICHOLAS AND BURLEY JJ Date of judgment: 29 July 2021 Catchwords: TRADE MARKS – infringement – whether Trade Marks Act 1995 (Cth) imposes liability for authorising infringement of a registered trade mark – no liability for authorising infringement
TRADE MARKS – deceptive similarity – whether primary judge erred in evaluating deceptive similarity between trade marks – where primary judge considered circumstances of sale of goods bearing registered marks in deciding whether consumers would be caused to wonder whether alleged infringing goods emanated from the same source – whether error material – appeal against infringement findings dismissed
TRADE MARKS – non-use applications – whether primary judge erred in removing trade marks from register with respect to certain goods for non-use – appeal allowed in part
COMPETITION – misleading or deceptive conduct in contravention of Australian Consumer Law – whether consumers would be misled or deceived by respondent’s conduct – whether primary judge erred in assessing reputation of appellants at the time of the impugned conduct – appeal dismissed
TORTS – passing off – where appellants conceded that failure with respect to claims under Australian Consumer Law would lead to failure to establish passing off – appeal dismissedLegislation: Acts Interpretation Act 1901 (Cth) ss 15AA and 15AB
Australian Consumer Law (Competition and Consumer Act 2010 (Cth) Sch 2) ss 18 and 29
Copyright Act 1968 (Cth) ss 36 and 101
Patents Act 1990 (Cth) s 13
Trade Marks Act 1955 (Cth)
Trade Marks Act 1990 (Cth) ss 7, 17, 20, 27, 41, 44, 59, 60, 88, 92, 100, 101, 120, 122, 122A, 123 and 124
Trade Marks Bill 1995 (Cth)
Cases cited: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27
Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93; (2018) 261 FCR 301
Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2013] HCA 50; (2013) 253 CLR 284
Aristocrat Technologies Australia Pty Ltd v Vidtech Gaming Services Pty Ltd [2006] FCA 275; (2006) 68 IPR 229
Aston v Harlee Manufacturing Company [1960] HCA 47; (1960) 103 CLR 391
Austin Nichols & Co Inc v Lodestar Anstalt [2012] FCAFC 8; (2012) 202 FCR 490
Australian Meat Group Pty Ltd v JBS Australia Pty Limited [2018] FCAFC 207; (2018) 268 FCR 623
Australian Woollen Mills Limited v FS Walton and Company Limited [1937] HCA 51; (1937) 58 CLR 641
Bavaria NV v Bayerischer Brauerbund eV [2009] FCA 428; (2009) 177 FCR 300
Boensch v Pascoe [2019] HCA 49; (2019) 94 ALJR 112
Bohemia Crystal Pty Ltd v Host Corporation Pty Ltd [2018] FCA 235; (2018) 354 ALR 353
Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424
Bristol-Myers Squibb Company v F H Faulding & Co Limited [2000] FCA 316; (2000) 97 FCR 524
C A Henschke & Co v Rosemount Estates Pty Ltd [2000] FCA 1539; (2000) 52 IPR 42
Campomar Sociedad, Limitada v Nike International Ltd [2000] HCA 12; (2000) 202 CLR 45
Carnival Cruise Lines Inc v Sitmar Cruises Ltd [1994] FCA 68; (1994) 120 ALR 495
Christian v Société Des Produits Nestlé SA (No 2) [2015] FCAFC 153; (2015) 327 ALR 630
Colorado Group Limited v Strandbags Group Pty Limited [2007] FCAFC 184; (2007) 164 FCR 506
Combe International Ltd v Dr August Wolff GmbH & Co. KG Arzneimittel [2021] FCAFC 8; (2021) 157 IPR 230
Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd [2004] FCAFC 196; (2004) 209 ALR 1
E & J Gallo Winery v Lion Nathan Australia Pty Limited [2008] FCA 934; (2008) 77 IPR 69
E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2010] HCA 15; (2010) 241 CLR 144
Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58; (2010) 185 FCR 9
Goodman Fielder Pte Ltd v Conga Foods Pty Ltd [2020] FCA 1808; (2020) 158 IPR 9
Grain Pool of Western Australia v The Commonwealth [2000] HCA 14; (2002) 202 CLR 479
Habib Bank Ltd v Habib Bank AG Zurich [1981] 1 WLR 1265
Hashtag Burgers Pty Ltd v In-N-Out Burgers, Inc [2020] FCAFC 235; (2020) 385 ALR 514
Hermes Trade Mark [1982] RPC 425
Homart Pharmaceuticals Pty Ltd v Careline Australia Pty Ltd [2018] FCAFC 105; (2018) 264 FCR 422
House v R [1936] HCA 40; (1936) 55 CLR 499
In the matter of London Lubricants (1920) Limited’s Application (1925) 42 RPC 264
JT International SA v Commonwealth of Australia [2012] HCA 43; (2012) 250 CLR 1
Lodestar v Anstalt v Campari America LLC [2016] FCAFC 92; (2016) 244 FCR 557
Louis Vuitton Malletier SA v Toea Pty Ltd [2006] FCA 1443; (2006) 156 FCR 158
Marengo v Daily Sketch and Daily Graphic Ltd [1992] FSR 1
New South Wales Dairy Corporation v Murray Goulburn Co-operative Company Ltd [1989] FCA 124; (1989) 86 ALR 549
Newcastle City Council v GIO General Ltd [1997] HCA 53; (1997) 191 CLR 85
Nominal Defendant v GLG Australia Pty Ltd [2006] HCA 11; (2006) 228 CLR 529
Northern Territory of Australia vCollins [2008] HCA 49; (2008) 235 CLR 619
Optical 88 Ltd v Optical 88 Pty Ltd (No 2) [2010] FCA 1380; (2010) 275 ALR 526
Optical 88 Ltd v Optical 88 Pty Ltd [2011] FCAFC 130; (2011) 197 FCR 67
Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83; (2017) 251 FCR 379
Pioneer Computers Australia Pty Ltd v Pioneer KK [2009] FCA 135; (2009) 176 FCR 300
Pioneer Kabushiki Kaisha v Registrar of Trade Marks [1977] HCA 56; (1977) 137 CLR 670
Playgro Pty Ltd v Playgo Art & Craft Manufactory Ltd [2016] FCA 280; (2016) 335 ALR 144
Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd [1993] FCA 265; (1993) 42 FCR 227
Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
R v Young [1999] NSWCCA 166; (1999) 46 NSWLR 681
S & I Publishing Pty Ltd v Australian Surf Life Saver Pty Ltd [1988] FCA 1463; (1998) 88 FCR 354
Scandinavian Tobacco Group Eersel BV v Trojan Trading Company Pty Ltd [2016] FCAFC 91; (2016) 243 FCR 152
Secretary, Department of Health & Ageing v Nguyen [2002] FCAFC 416; (2002) 124 FCR 425
Sensis Pty Ltd v Senses Direct Mail and Fulfillment Pty Ltd [2019] FCA 719; (2019) 141 IPR 463
Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd [1963] HCA 66; (1963) 109 CLR 407
Southcorp Brands Pty Ltd v Rush Rich Winery Pty Ltd [2019] FCA 720; (2019) 369 ALR 299
Taco Co of Australia Inc v Taco Bell Pty Ltd [1982] FCA 170; (1982) 42 ALR 177
Telstra Corporation Limited v Phone Directories Company Australia Pty Ltd [2015] FCAFC 156; (2015) 237 FCR 388
Thai World Import & Export Co Ltd v Shuey Shing Pty Ltd [1989] FCA 735; (1989) 17 IPR 289
Unilever Australia Limited v PB Foods Ltd [2000] FCA 798
University of New South Wales v Moorhouse [1975] HCA 26; (1975) 133 CLR 1
Verrocchi v Direct Chemist Outlet Pty Ltd [2016] FCAFC 104; (2016) 247 FCR 570
Vivo International Corporation Pty Ltd v Tivo Inc [2012] FCAFC 159; (2012) 294 ALR 661
R Burrell and M Handler, Australian Trade Mark Law (2nd ed, Oxford University Press, Melbourne, 2016)
Division: General Division Registry: New South Wales National Practice Area: Intellectual Property Sub-area: Trade Marks Number of paragraphs: 216 Date of hearing: 20-21 May 2021 Counsel for the Appellants/Cross-Respondents: Mr C Dimitriadis SC with Ms S Stewart Solicitor for the Appellants/ Cross-Respondents: Clayton Utz Counsel for the Respondent/Cross-Appellant: Mr J S Cooke with Mr D B Larish Solicitor for the Respondent/ Cross-Appellant: Bennett & Philp Solicitors
Table of Corrections 1 April 2022 In paragraph 178, the word “dessert” has been substituted for the word “desserts” so that the reference to “desserts sauces” in paragraph 178 reads “dessert sauces”. ORDERS
NSD 1014 of 2020 BETWEEN: PDP CAPITAL PTY LTD ACN 164 349 008
First Appellant
PDP FINE FOODS PTY LTD ACN 121 302 850
Second Appellant
AND: GRASSHOPPER VENTURES PTY LTD ACN 142 896 286
Respondent
AND BETWEEN: GRASSHOPPER VENTURES PTY LTD ACN 142 896 286
Cross-Appellant
AND: PDP CAPITAL PTY LTD ACN 164 349 008 (and another named in the Schedule)
First Cross-Respondent
ORDER MADE BY:
JAGOT, NICHOLAS AND BURLEY JJ
DATE OF ORDER:
29 JULY 2021
THE COURT ORDERS THAT:
1.Save and except for orders 3 and 4 below, the appeal be dismissed.
2.The cross-appeal be dismissed.
3.Order 1 made by the primary judge on 14 August 2020 be set aside.
4.Pursuant to s 101(2) of the Trade Marks Act 1995 (Cth), the following be removed from the categories of goods in respect of which Australian registered trade mark no 1042646 is registered:
savoury dips; dessert toppings and sauces, including chocolate toppings and sauces, and fruit flavoured toppings and sauces; confectionery, including chocolates and sweets, but excluding frozen confections
5.Subject to order 6 below, PDP pay 90% of Grasshopper's costs of the appeal and cross-appeal, as agreed or taxed.
6.Any party wishing to vary order 5 may, within 7 days, file and serve written submissions not exceeding two pages identifying the costs order sought and the reasons in support. If any such submission is filed the other party may, within 7 days thereafter, file and serve written submissions in answer not exceeding two pages identifying the costs order sought and the reasons in support, whereupon the question of costs will be determined on the papers.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
THE COURT:
1 INTRODUCTION
[1]
2 THE TRADE MARKS IN ISSUE AND SUMMARY OF FINDINGS IN RELATION TO RELEVANT REGISTRATIONS
[10]
2.1 Grasshopper’s trade marks
[11]
2.2 PDP’s trade marks
[14]
3 GROUND 1: THE THRESHOLD INFRINGEMENT ISSUE
[21]
3.1 Introduction
[21]
3.2 The reasoning of the primary judge
[26]
3.3 PDP’s submissions
[37]
3.4 Consideration
[41]
4 GROUND 2: DECEPTIVE SIMILARITY
[77]
4.1 Introduction
[77]
4.2 The reasoning of the primary judge
[80]
4.3 PDP’s submissions
[89]
4.4 Consideration
[94]
5 GROUND 3: GOODS OF THE SAME DESCRIPTION
[124]
6 GROUNDS 1 AND 2 OF THE CROSS-APPEAL AND GROUND 1 OF THE NOTICE OF CONTENTION
[125]
7 GROUND 4: PDP’S REMOVAL CLAIM (AND NOTICE OF CONTENTION GROUNDS 3 AND 4)
[127]
7.1 Introduction
[127]
7.2 The reasoning of the primary judge
[134]
7.3 The submissions
[139]
7.4 Consideration
[141]
8 GROUND 5: GRASSHOPPER’S REMOVAL CLAIM
[164]
8.1 Introduction
[164]
8.2 The reasoning of the primary judge
[169]
8.3 PDP’s submissions
[179]
8.4 Consideration
[183]
9 GROUND 6: ACL AND PASSING OFF
[193]
9.1 Introduction
[193]
9.2 The reasoning of the primary judge
[195]
9.3 PDP’s submissions
[200]
9.4 Consideration
[203]
10 DISPOSITION
[215]
1. INTRODUCTION
This matter involves an appeal and cross-appeal against the primary judge’s orders dismissing claims for trade mark infringement: PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd [2020] FCA 1078; (2020) 154 IPR 68 (primary judgment).
In the early 1990’s Ralph Valentine started selling strawberries and other fresh produce at flea markets around Brisbane. Towards the end of that decade he decided that he wanted to add value to his products by selling a chocolate dipping sauce with the strawberries. As the years passed his range of dipping sauces expanded and he applied the name “Wicked” as a trade mark to the tubs that he sold. He registered a trade mark for a stylised form of that word in February 2005 which included a devil’s tail on the letter “D” (Wicked Tail Mark). Over time, various corporate entities under the control of Mr Valentine owned and used the trade mark ([18]). From about late 2014 the trade mark applied to dipping sauces was changed to take a new form (New Wicked Mark) and Grasshopper Ventures Pty Ltd, the respondent to the appeal, applied to register that trade mark on 19 March 2015 ([13]).
Paul Polly is the sole director of PDP Capital Pty Ltd and PDP Fine Foods Pty Ltd ([16]) (collectively, PDP). PDP Fine Foods is the owner of a trade mark for the words “Wicked Sister Fine Foods” in a stylised form for goods including olives, dairy desserts, rice puddings and other such goods with a priority date of 29 May 2008 (First WS Device Mark) ([8]). PDP Capital is the registered owner of another stylised “Wicked Sister Fine Foods” mark, this time with a priority date of 9 February 2016 and including, amongst other goods, dipping sauces (Second WS Device Mark) ([9]). Additionally, PDP Capital is the owner of a registered trade mark for the words “Wicked Sister” (WS Word Mark) in respect of the same goods and with the same priority date as the Second WS Device Mark ([10]).
The details of the trade marks in suit are set out in more detail in section 2 below.
PDP commenced proceedings against Grasshopper for infringement of the First and Second WS Device Marks, as well as the WS Word Mark, by reason of Grasshopper’s use of the New Wicked Mark. PDP also sued for relief for breach of ss 18 and 29 of the Australian Consumer Law (ACL) (Competition and Consumer Act 2010 (Cth) Sch 2) and the tort of passing off.
In dismissing their trade mark infringement claim, the primary judge determined four primary matters adversely to PDP on the question of infringement under s 120 of the Trade Marks Act 1990 (Cth). First, a threshold issue as to whether Grasshopper was an entity who had used the New Wicked Mark ([488]). Secondly, that the New Wicked Mark was not substantially identical with or deceptively similar to the First or Second WS Device Marks, or the WS Word Mark ([201] and [205]). Thirdly, that, with respect to the First WS Device Mark, dipping sauces are not goods of the same description to the goods in respect of which that mark was registered ([219]). Fourthly, that, with respect to the Second WS Device Mark and the WS Word Mark, dipping sauces should be removed for non-use ([428(2)]).
In the present appeal it is necessary for PDP to overturn the primary judge’s findings in respect of each of these matters in order to succeed in its claim for trade mark infringement. For the reasons set out in more detail below, the appeal fails in respect of the first and second matters which are raised in grounds 1 and 2 of the appeal. It is therefore unnecessary for us to decide the third which is raised in ground 3 of the appeal. We do, however, find that the appeal also fails in respect of the fourth matter which is raised in ground 5 of the appeal. In grounds 1 and 2 of its notice of cross-appeal, Grasshopper contends that if we conclude that grounds 2 or 3 of the appeal should succeed, then for various reasons arising under ss 44, 60 and 88 of the Trade Marks Act the First and Second WS Device Marks should be removed from the register. Having regard to our conclusion in relation to grounds 1 and 2 of the appeal, it is not necessary for us to consider these grounds. Nor is it necessary for us to consider the several statutory defences that were contingently raised by Grasshopper in answer to the infringement claim in ground 1 of its notice of contention and ground 1 of its notice of cross-appeal.
The claims brought under the ACL and for passing off were to some extent dependent on the resolution of the question of deceptive similarity between the First and Second WS Device Marks and the New Wicked Mark but also upon the relevant reputation of PDP. The primary judge rejected each of those claims at [517] and [528]. PDP appeals from those findings in ground 6 of its appeal. We have determined that this ground of appeal must also be dismissed.
The following further matters were before the primary judge concerning the validity of registered trade marks owned by the parties:
(1)PDP’s claim seeking the removal of the Wicked Tail Mark from the register for non-use pursuant to ss 92 and 101 of the Trade Marks Act. This application was largely unsuccessful ([588]), and PDP challenges that conclusion in ground 4 of the appeal. In grounds 3 and 4 of its notice of contention, Grasshopper raises further bases upon which it contends the primary judge ought to have found in its favour. We conclude below that aspects of the appeal have been made out and reject the further bases raised in the notice of contention.
(2)Grasshopper’s claim applying for the removal of each of the First and Second WS Device Marks, and the WS Word Mark. This claim was successful in relation to certain goods ([428]). In ground 5 of the appeal, PDP challenge that result insofar as it relates to the Second WS Device Mark and the WS Word Mark. We reject that challenge.
2. THE TRADE MARKS IN ISSUE AND SUMMARY OF FINDINGS IN RELATION TO RELEVANT REGISTRATIONS
Below, we adopt the definitions of the various trade marks in issue as used by the primary judge in section 1.1 of the primary judgment.
2.1 Grasshopper’s trade marks
Grasshopper is the owner of the Wicked Tail Mark, , being registered trade mark no 1042646 with a priority date of 18 February 2005. At the time of the trial it was registered in respect of the following goods in class 30 (Registered Wicked Tail Mark Goods):
dips, including chocolate dips and savoury dips; desert [sic] toppings and sauces, including chocolate toppings and sauces, and fruit flavoured toppings and sauces; confectionery, including chocolates and sweets, but excluding frozen confections.
In allowing ground 4 of the appeal and rejecting grounds 3 and 4 of the notice of contention, we have found that the goods that should be permitted to remain in the Wicked Tail Mark registration are as follows:
dips, including chocolate dips
and savoury dips;desert [sic] toppings and sauces, including chocolate toppings and sauces,and fruit flavoured toppings and sauces; confectionery, including chocolates and sweets, but excluding frozen confections.On 19 March 2015 Grasshopper applied for registration of the New Wicked Mark, , in respect of the following goods in class 30:
flour and preparations made from cereals, bread, pastry and confectionery including chocolates and sweets and frozen confections, ices; dips including chocolate, vanilla, caramel and white chocolate dips and savoury dips; dessert foods in this class including chilled and frozen sweet mousses, chocolate mousses and white mousses, dessert toppings and sauces including chocolate toppings and sauces and fruit flavoured toppings and sauces; sauces (condiments).
2.2 PDP’s trade marks
PDP Fine Foods is the owner of registered trade mark no 1240821 with a priority date of 29 May 2008 for (First WS Device Mark). At the time of the trial it was registered in respect of the goods specified below in classes 29 and 30 (Registered First WS Goods):
•class 29: cheese; olives, preserved; prepared olives; processed olives; peppers (prepared); pickled peppers; dairy desserts; food preparations with a vegetable base; food spreads consisting principally of vegetables for sandwiches; desserts made from yoghurt; fruit flavoured yoghurts; low fat yoghurts; yoghurt desserts; yoghurts containing pulped fruits; and
•class 30: creamed rice; rice puddings; rice tapioca; sauces for rice; food preparations for use as sandwich spreads; cheesecakes.
Grasshopper obtained orders for the rectification of the register by the removal of some of the Registered First WS Goods. Those orders are not challenged on appeal. The final form of the goods in respect of which the First WS Device Mark are registered are ([248], [271] and [428]):
•class 29:
cheese; olives, preserved; prepared olives; processed olives; peppers (prepared); pickled peppers; dairy desserts;food preparations with a vegetable base; food spreads consisting principally of vegetables for sandwiches; desserts made from yoghurt; fruit flavoured yoghurts; low fat yoghurts; yoghurt desserts; yoghurts containing pulped fruits; and•class 30: creamed rice; rice puddings; rice tapioca;
sauces for rice; food preparations for use as sandwich spreads; cheesecakes.PDP Capital in its capacity as trustee of the PDP Capital Unit Trust is the owner of registered trade mark no 1751267 with a priority date of 9 February 2016 for (Second WS Device Mark). At the time of the trial it was registered in respect of the goods specified below in classes 29 and 30 (Later Registered WS Goods):
•class 29: desserts made from yoghurt; fruit flavoured yoghurts; low fat yoghurts; yoghurt desserts; dairy products and dairy based foods; yoghurt; dairy based desserts including desserts made from yoghurt (excluding frozen yoghurt); fruit flavoured yoghurts; low fat yoghurts; yoghurts containing pulped fruits; yoghurt preparations; desserts made wholly or principally of dairy products; panna cottas; crème caramels; custards; chilled desserts; and
•class 30: creamed rice; rice puddings; rice tapioca; dessert sauces; dipping sauces; cheesecakes; bakery products; cakes; confectionery; frozen yoghurt; ice cream; frozen confections including ice cream desserts; all other desserts in this class including prepared desserts; chilled desserts; mousse and mousse style desserts; tiramisu; puddings, desserts.
PDP Capital in its capacity as trustee of the PDP Capital Unit Trust is also the owner of registered trade mark no 1751266 with a priority date of 9 February 2016 for the word mark WICKED SISTER (WS Word Mark) in respect of the same goods as those covered by the Second WS Device Mark i.e. the Later Registered WS Goods.
The primary judge concluded that the registrations for the Second WS Device Mark and the WS Word Mark should be rectified as set out below ([358] and [402]):
•class 29:
desserts made from yoghurt; fruit flavoured yoghurts; low fat yoghurts; yoghurt desserts; dairy products and dairy based foods; yoghurt; dairy based desserts including desserts made from yoghurt (excluding frozen yoghurt);fruit flavoured yoghurts; low fat yoghurts; yoghurts containing pulped fruits; yoghurt preparations; desserts made wholly or principally of dairy products; panna cottas; crème caramels; custards; chilled desserts; and•class 30: creamed rice; rice puddings; rice tapioca; custard
dessert sauces; dipping sauces; cheesecakes;bakery products; cakes; confectionery; frozen yoghurt; ice cream; frozen confections including ice cream desserts; all other desserts in this class including prepared desserts; chilled desserts; mousse and mousse style desserts; tiramisu; puddings, desserts.This conclusion is challenged in ground 5 of the appeal.
In the reasons set out in section 8 below, we conclude that the challenge to the rectification in ground 5 fails.
The First WS Device Mark and the Second WS Device Mark are referred to collectively as the WS Device Marks and the WS Device Marks and the WS Word Mark are referred to collectively as the Wicked Sister Marks.
3. GROUND 1: THE THRESHOLD INFRINGEMENT ISSUE
3.1 Introduction
PDP contended below that Grasshopper infringed the WS Device Marks by the sale of the following products (defined by the primary judge as the Infringing Products) being ([208]):
(1) Wicked dipping sauces which have been sold under the New Wicked Mark since 2014; and
(2) Wicked Waffle Dippers which have been sold under the New Wicked Mark since 2018.
Examples of the packaging for the Infringing Products are depicted below:
In short form, the threshold issue concerns whether Grasshopper’s authorisation of the use of the New Wicked Mark by other companies is capable, as a matter of law, of constituting trade mark infringement ([488]).
This issue arises against a background of the following findings of fact, which are not challenged on appeal:
(1)Mr Valentine is responsible and in control of each of four companies, being Wicked Products Pty Ltd, Brisbane Market Brokers Pty Ltd (BMB), Brisbane Fine Foods Pty Ltd ([18(1)]) and Grasshopper ([21], [476]), which the primary judge referred to as the Valentine Companies ([18(1)]);
(2)Grasshopper has been the owner of the Wicked Tail Mark since its registration and has applied for registration of the New Wicked Mark ([12], [14]);
(3)Since about 1 July 2010, BMB and Brisbane Fine Foods have operated the Wicked Business including by selling dipping sauces and other products under the trade mark “Wicked” with the division between them being about 90% by BMB and about 10% by Brisbane Fine Foods ([20]);
(4)The alleged Infringing Products are manufactured by Valentine Companies except for Grasshopper. Those companies apply the New Wicked Mark to the Infringing Products and supply them for retail sale with the approval of Grasshopper ([476]);
(5)The use by the Valentine Companies of the New Wicked Mark was “authorised use” within the meaning of that term as it is used in s 7(3) of the Trade Marks Act in the sense that such use was under the control of Grasshopper ([440] and [476]).
In ground 1 of the appeal PDP challenges the finding of the primary judge to the effect that the authorisation by Grasshopper of the use of the New Wicked Mark is not capable of constituting trade mark infringement.
3.2 The reasoning of the primary judge
The primary judge summarised the arguments and authorities cited by the parties and then considered the construction of the relevant sections as follows:
[449] The issue for resolution is whether, where an authorised user is alleged to have engaged in infringing conduct under s 120 of the TM Act pursuant to its authorisation, the owner of the infringing mark (whether registered or unregistered) can also be liable for direct infringement under s 120 of the TM Act.
[450] Section 7(3) of the TM Act provides that “[a]n authorised use of a trade mark by a person … is taken, for the purposes of this Act, to be use of a trade mark by the owner of the trade mark” (emphasis added). Section 8, in turn, defines “authorised user” and “authorised use” (see [433] above). Section 120 of the TM Act (see [430] above) focuses on the use by a person of a sign as a trade mark that is substantially identical with or deceptively similar to a registered trade mark in relation to, among other things, goods or goods of the same description in respect of which the trade mark is registered.
[451] Two things can be observed from the language of these sections. First, the effect of s 7(3) is that use of a trade mark, in this case the New Wicked Mark, by a person, in this case one of the Valentine Companies other than Grasshopper, under the control of the owner of the mark, Grasshopper, is taken to be use of the trade mark by the owner of that mark, that is, Grasshopper. Section 7(3) provides that the section operates for the purposes of the TM Act. Secondly, as PDP submits, there is nothing in the language of ss 7, 8 or 120 of the TM Act which limits the concept of authorised use to registered marks.
[452] Section 120 of the TM Act focuses on use of a sign by a person. That is, infringement will be made out where, for example, a person uses as a trade mark a sign that is substantially identical with or deceptively similar to a registered trade mark in relation to goods that are the same or of the same description as goods in respect of which the trade mark is registered. The notes to each of s 120(1), (2) and (3) of the TM Act relevantly refer the reader to s 6 (for the definition of registered owner) and s 10 (definition of deceptive similarity) but do not refer to s 7(3). As Grasshopper points out, this is in contrast to other sections of the TM Act. For example, note 1 to s 101(4) which is in Pt 9 “Removal of trade mark from Register for non-use” (see [245] above) refers to s 7(3) of the TM Act and includes “[i]f the registered owner of a trade mark has authorised another person to use it, any authorised use of the trade mark by that person is taken to be a use of the trade mark by the registered owner”.
It will be observed that the primary judge here recognised a distinction between the provision made for infringement in s 120 and the “authorised use” provisions of ss 7 and 8. The primary judge referred to the decision of Wilcox J in Aristocrat Technologies Australia Pty Ltd v Vidtech Gaming Services Pty Ltd [2006] FCA 275; (2006) 68 IPR 229. In that case, in rejecting an argument that the respondent had infringed Aristocrat’s trade marks by reason of the conduct of a third party applying Aristocrat’s trade marks to perspex panels, the Court observed at [134] that the Trade Marks Act did not have a comparable doctrine to the law of authorisation such as that which operates under copyright law.
The primary judge noted that this reference to copyright law was to provisions such as s 36 of the Copyright Act 1968 (Cth) which provides:
(1)Subject to this Act, the copyright in a literary, dramatic, musical or artistic work is infringed by a person who, not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorizes the doing in Australia of, any act comprised in the copyright.
(1A)In determining, for the purposes of subsection (1), whether or not a person has authorised the doing in Australia of any act comprised in the copyright in a work, without the licence of the owner of the copyright, the matters that must be taken into account include the following:
(a)the extent (if any) of the person’s power to prevent the doing of the act concerned;
(b)the nature of any relationship existing between the person and the person who did the act concerned;
(c)whether the person took any reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice.
The primary judge also referred to the decision of Dowsett J in Louis Vuitton Malletier SA v Toea Pty Ltd [2006] FCA 1443; (2006) 156 FCR 158 at [140]-[143], where his Honour made the observation that no provision extends civil liability to “secondary” tortfeasors under the Trade Marks Act and, as a result, the applicant in that case relied on principles as to liability in tort drawn from the general law.
PDP relied on three cases in support of their submissions.
The first was Scandinavian Tobacco Group Eersel BV v Trojan Trading Company Pty Ltd [2016] FCAFC 91; (2016) 243 FCR 152 (Besanko, Nicholas and Yates JJ). The primary judge distinguished this case on the basis that Trojan, the purchaser of products from the registered proprietor of the mark, affixed the registered proprietor’s marks to repackaged goods and contended that in doing so it was not using those marks as trade marks. The primary judge noted that this was a different position to the present where Grasshopper contends that whilst it has authorised the use of the New Wicked Mark by other Valentine Companies, the only alleged infringing conduct for the purposes of s 120 of the Trade Marks Act can have been by those companies ([466]).
The second was Playgro Pty Ltd v Playgo Art & Craft Manufactory Ltd [2016] FCA 280; (2016) 335 ALR 144 (Moshinsky J). This case concerned whether the company in the corporate group that owned the impugned mark had used it by reason of the conduct of another company in the same group making and applying it to the relevant products at the owner’s direction: see Playgro at [139]-[147]. However, the primary judge observed that the issue raised in the present case was not debated before Moshinsky J, and there had been no argument advanced that the owner of the impugned mark had not used the impugned mark ([475]).
The third was Southcorp Brands Pty Ltd v Rush Rich Winery Pty Ltd [2019] FCA 720; (2019) 369 ALR 299 (Beach J). This was a summary judgment case where the Court found the fourth respondent to be directly liable for infringing the trade marks in issue for the reason that it had licensed the first and second respondents to use the impugned marks. His Honour found at [71] that there had been use of the impugned marks by the first and second respondents which had been authorised by the fourth respondent and, accordingly, pursuant to s 7(3) of the Trade Marks Act such use “is taken…to be a use of the trade mark by” the fourth respondent. His Honour also concluded that the fourth respondent was liable as a joint tortfeasor: Southcorp Brands at [73].
In the present case the primary judge noted (at [483]) that it was not apparent from the reasoning of Beach J what construction arguments had been advanced on behalf of the applicant in relation to s 7(3). The primary judge also noted that that decision was irreconcilable with an earlier interlocutory decision of Moore J in Unilever Australia Limited v PB Foods Ltd [2000] FCA 798. In Unilever the applicant alleged that PB Foods had contravened s 120 of the Trade Marks Act. PB Foods sought to rely on a defence to the effect that Cadbury, the entity who authorised PB Foods’ use of the mark, would have been able to obtain registration of the impugned marks and, accordingly, it was entitled to rely on a defence under s 122(1)(f) of the Trade Marks Act ([484]). Unilever then sought to join Cadbury as a party, initially framing its case against Cadbury as one alleging that it had contravened s 120 of the Trade Marks Act by authorising PB Foods’ conduct: Unilever at [7]. Although Moore J expressed the view that there was sufficient evidence of authorisation to sustain a conclusion of a prima facie case against Cadbury, that was expressed with the caveat “if the legal foundation for that case can otherwise be demonstrated”. In relation to this the primary judge (at [486]) quoted Moore J’s reasons at [7] where his Honour determined:
The claim against Cadbury as initially framed involved a bare allegation of contravention of s 120 of the 1995 Act. Cadbury submitted that use by PB Foods did not constitute use by it for the purposes of s 120 even if it had authorised the use. Senior counsel for Unilever disavowed, at the hearing on 21 March 2000, any reliance on s 7 of the 1995 Act, notwithstanding that I had earlier accepted a submission of PB Foods (then contested by Unilever but unsuccessfully) that PB Foods’ defence based on s 122(1)(f) was not unarguable because Cadbury, though not PB Foods, might secure registration of the alleged infringing marks. Rather, PB Foods submitted that the authorisation of the use of infringing marks was itself an infringement. Reference was made to s 20 though that plainly concerns authorisation by a registered proprietor which Cadbury is not at least for the purposes of the 1995 Act. I was not referred to any material that would suggest use, in fact, by Cadbury nor any provision of the 1995 Act (apart from s 7) or authority that would support the proposition that infringing use by an authorised user rendered the owner liable for contravention of s 120. Accordingly, I am not satisfied that the case against Cadbury as originally propounded, raised a prima facie case against Cadbury.
(emphasis added)
The primary judge noted that, in Unilever, Moore J had the benefit of more developed argument in relation to the present issue than Beach J in Southcorp Brands and preferred that decision ([487]).
Her Honour concluded in relation to the threshold issue ([488]):
It follows that I would determine the threshold issue in favour of Grasshopper. Based on the matters set out above, its authorisation of the use of the New Wicked Mark is not capable of constituting trade mark infringement. That is, in its role as the owner of the New Wicked Mark who licensed it to other Valentine Companies to use, it cannot be the subject of the present action for direct liability pursuant to s 120 of the TM Act. That is not to say that no cause of action would lie against Grasshopper or a party in its position. As was the case in Southcorp and other cases, an action may lie against such a party as a joint tortfeasor. But that is not the basis on which PDP seeks to impugn Grasshopper’s conduct.
3.3 PDP’s submissions
PDP submit that s 7(3) of the Trade Marks Act provides in relation to authorised use that such use by a person “is taken, for the purposes of this Act, to be use of the trade mark by the owner of the trade mark”. Section 8 provides that an authorised use of a trade mark by a person occurs where, and to the extent that, that person uses the mark in relation to goods or services under the control of the owner of the mark, citing Lodestar v Anstalt v Campari America LLC [2016] FCAFC 92; (2016) 244 FCR 557 in relation to the concept of control. In the present case there was no dispute that the impugned use of the New Wicked Mark by related entities of Grasshopper was authorised use under the control of Grasshopper within ss 7(3) and 8 of the Trade Marks Act. Accordingly, PDP submit, it should be understood as use by Grasshopper for the purposes of infringement.
PDP submit that the plain words of s 7(3) support their argument, as they provide that an authorised use “is taken, for the purposes of this Act, to be a use by the owner of the trade mark”. This must be understood to include the infringement section, s 120. Further, they submit that there is nothing in the language of ss 7, 8 or 120 which limits the concept of authorised use to registered marks and so the concepts of ownership and control set out in ss 7(3) and 8 apply also to the owner of an unregistered mark. They contend that the primary judge erroneously relied on the absence of a note to s 120 confirming the applicability of s 7(3) to that section, citing s 15AB of the Acts Interpretation Act 1901 (Cth). Further, they submit that the primary judge’s approach undermined the clear words “for the purposes of this Act”, which PDP submit must be understood to mean for all purposes under the Trade Marks Act. PDP submit that other parts of the Trade Marks Act support the proposition that an authorised use of a trade mark may give rise to infringement by the person authorising use. In particular, they emphasise that s 20(1) provides that a registered trade mark confers on the registered owner the exclusive rights to “(a) use the trade mark; and (b) to authorise other persons to use the trade mark”.
PDP submit that the construction for which they contend harmoniously ensures that the definition of infringement in s 120 is commensurate with the scope of the registered owner’s exclusive rights, and in particular with limb (b) in s 20(1). In this context, PDP draw an analogy with: first, s 13(1) of the Patents Act 1990 (Cth) which they submit makes similar provision to s 20(1) of the Trade Marks Act and has long been held to create a species of infringement by authorisation; and, secondly, the authorisation provisions in the Copyright Act.
PDP submit that it would be incongruous if the regime providing for authorised use of trade marks operated as a “one way street” where the owner of a mark would benefit from use occurring via an authorised user, but at the same time be immune from a finding of infringement via that same authorised use. Finally, PDP submit that the authorities support the construction for which they contend, referring to or distinguishing the single judge decisions considered by the primary judge.
3.4 Consideration
The essence of PDP’s submissions on appeal is that Grasshopper should be taken to have engaged in an act of infringement by authorising one or more of the Valentine Companies to make and apply the New Wicked Mark to various products. In this sense they submit that Grasshopper’s conduct falls within that proscribed by s 120 of the Trade Marks Act. In our view, the primary judge was correct to reject that argument.
The facts of the present case do not frequently arise. This is because the well-established law in relation to joint tortfeasorship provides an available means by which an alleged infringer, who has not engaged in a primary act of infringement within s 120, may nonetheless be found to infringe: see, for instance, Hashtag Burgers Pty Ltd v In-N-Out Burgers, Inc [2020] FCAFC 235; (2020) 385 ALR 514 at [136]-[141] (Nicholas, Yates and Burley JJ). For unexplored reasons, joint tortfeasorship was not alleged in this case.
The task of the Court in construing any statute requires consideration of the text of the provisions and also consideration of their context, which includes the general purpose and policy of the provisions, in particular the mischief they are seeking to remedy: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 at [47] (Hayne, Heydon, Crennan and Kiefel JJ). The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all of the provisions of the statute. The meaning of the provision must be determined by reference to the language of the instrument viewed as a whole: Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [69] (McHugh, Gummow, Kirby and Hayne JJ). In interpreting a provision of an Act, the interpretation that would best achieve the purpose or object of the Act (whether or not that purpose or object is expressly stated in the Act) is to be preferred to each other interpretation: Acts Interpretation Act s 15AA; see also Northern Territory of Australia vCollins [2008] HCA 49; (2008) 235 CLR 619 at [16] (Gummow ACJ and Kirby J) and [99] (Crennan J). While this may permit a “strained construction” of the words used in order to ensure effect is given to the intention of the legislature, “(w)here the words actually used are not reasonably capable of being construed in the manner contended for, they will not be so construed”: R v Young [1999] NSWCCA 166; (1999) 46 NSWLR 681 at [15] (Spigelman CJ); see also Newcastle City Council v GIO General Ltd [1997] HCA 53; (1997) 191 CLR 85 at 113 (McHugh J) and Secretary, Department of Health & Ageing v Nguyen [2002] FCAFC 416; (2002) 124 FCR 425 at [22] (Black CJ, Sundberg and Finkelstein JJ). Extrinsic material may be considered in the task of construction: Acts Interpretation Act s 15AB. Nevertheless, the “words of the statute, not non-statutory words seeking to explain them, have paramount significance”: Nominal Defendant v GLG Australia Pty Ltd [2006] HCA 11; (2006) 228 CLR 529 at [22] (Gleeson CJ, Gummow, Hayne and Heydon JJ).
Part 12 of the Trade Marks Act contains ss 120-130A and is entitled “Infringement of trade marks”. Sections 120(1) and (2) provide:
(1) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.
Note 1: For registered trade mark see section 6.
Note 2: For deceptively similar see section 10.
Note 3: In addition, the regulations may provide for the effect of a protected international trade mark: see Part 17A.
(2) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to:
(a)goods of the same description as that of goods (registered goods) in respect of which the trade mark is registered; or
(b)services that are closely related to registered goods; or
(c)services of the same description as that of services (registered services) in respect of which the trade mark is registered; or
(d)goods that are closely related to registered services.
However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion.
Note 1: For registered trade mark see section 6.
Note 2: For deceptively similar see section 10.
Note 3: In addition, the regulations may provide for the effect of a protected international trade mark: see Part 17A.
Section 120 relevantly provides for infringement in three circumstances:
(1)where a person has used a substantially identical or deceptively similar mark in relation to the goods or services for which the mark is registered: s 120(1);
(2)where a person has used a substantially identical or deceptively similar mark in relation to goods or services that are in broad terms similar to those for which the mark is registered: s 120(2); and
(3)where a person has used a substantially identical or deceptively similar trade mark in relation to goods or services that are in broad terms dissimilar to those for which the trade mark is registered, but the trade mark is well known: ss 120(3) and (4).
Part 3 of the Trade Marks Act is entitled “Trade marks and trade mark rights”. Significantly, s 20(1) and (2) provides for the rights given by virtue of registration of a trade mark and states:
20 Rights given by registration of trade mark
(1)If a trade mark is registered, the registered owner of the trade mark has, subject to this Part, the exclusive rights:
(a) to use the trade mark; and
(b) to authorise other persons to use the trade mark;
in relation to the goods and/or services in respect of which the trade mark is registered.
Note 1: For registered owner see section 6.
Note 2: For use see section 7.
Note 3: In addition, the regulations may provide for the effect of a protected international trade mark: see Part 17A.
(2)The registered owner of a trade mark has also the right to obtain relief under this Act if the trade mark has been infringed.
Note: For what amounts to an infringement of a trade mark see Part 12.
It may be seen that s 20 draws a distinction between, on the one hand, the exclusive rights of the registered owner conferred by s 20(1) to use the mark and authorise the use of the mark and, on the other hand, the additional but separate right in s 20(2) to obtain relief if the trade mark has been infringed. The right of a registered owner to sue for trade mark infringement is defined, as the note to s 20(2) states, in Part 12 of the Trade Marks Act.
The rights so conferred are not co-extensive.
First, under s 20(1)(a) the exclusive right conferred is to “use the trade mark” which, when read with the definition in s 7(1), means to use the mark itself or with additions or alterations that do not substantially affect the identity of the trade mark. This has been interpreted to mean that the owner may use a trade mark that is substantially identical to the trade mark as registered: Optical 88 Ltd v Optical 88 Pty Ltd (No 2) [2010] FCA 1380; (2010) 275 ALR 526 (Optical 88 FCA) at [256] (Yates J) (affirmed on appeal Optical 88 Ltd v Optical 88 Pty Ltd [2011] FCAFC 130; (2011) 197 FCR 67 (Optical 88 FCAFC) at [39] (Cowdroy, Middleton and Jagot JJ)), citing Carnival Cruise Lines Inc v Sitmar Cruises Ltd [1994] FCA 68; (1994) 120 ALR 495 at 513 (Gummow J); Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd [1963] HCA 66; (1963) 109 CLR 407 at 414 (Windeyer J). By contrast, the right conferred by s 20(2) is defined in s 120 as including the right to obtain relief in respect of uses that are not only substantially identical with, but also deceptively similar to the registered trade mark. Secondly, the exclusive right under s 20(1) is in respect of use “in relation to the goods and/or services in respect of which the trade mark is registered”. By contrast, the right conferred under s 20(2) is defined in s 120(2) to extend more broadly to goods and services that are “of the same description” or goods/services that are “closely related” to the services/goods of the registered mark. Under s 120(3) this right extends to unrelated goods and services.
These two differences no doubt animated Gummow J in JT International SA v Commonwealth of Australia [2012] HCA 43; (2012) 250 CLR 1 to observe at [72] that the exclusive right of use in respect of the goods or services for which there is a registration is given effect and extended by the infringement provision in Part 12 by operation of s 120.
It is notable that the exclusive right in s 20(1)(b) extends explicitly to the right “to authorise other persons to use the trade mark”. No equivalent language is used in ss 20(2) or 120. It may be taken that the legislature’s decision to refrain from doing so was deliberate. This point is amplified by the legislative history of ss 7(3) and 8.
The Trade Marks Act replaced the earlier Trade Marks Act 1955 (Cth) (1955 Act). The authorised use provisions were introduced in order to modernise the law in relation to the validity of registered trade marks and, in particular, the provisions relating to whether a trade mark registration can be removed from the register on the ground of non-use.
The 1955 Act contained terms whereby a trade mark could be removed from the register if it was not used by its owner or by a “registered user” who was permitted by the owner to use the mark. In Lodestar Besanko J (with whom Allsop CJ, Greenwood and Nicholas JJ agreed) said of this scheme at [67]:
The 1955 Act contained provisions dealing with registered users, that is to say, persons who used a trade mark with the permission of the registered owner or under a licence granted by the registered owner. The 1955 Act did not refer to an authorised user. Part IX of the Act dealt with registered users and provided that they could be registered under the Act. An application was required and the information to be provided to the Registrar included particulars of the degree of control by the registered proprietor over the permitted use (s 74(2)(a)). Section 74(4) provided that the Registrar shall not register a person as a registered user of a trade mark if it appeared to him that “the registration would tend to facilitate trafficking in the trade mark”. The effect of the registration of a registered use was addressed in ss 77 (effect of permitted use) and 78 (infringement proceedings).
As Besanko J explains at [68]-[77], despite the provisions requiring use either by the registered owner or a registered user, case law in the United Kingdom and Australia developed to the point that use by a licensee, whether registered as a “user” or not, was sufficient to protect a trade mark from attack on the grounds of non-use: Pioneer Kabushiki Kaisha v Registrar of Trade Marks [1977] HCA 56; (1977) 137 CLR 670 at 683 (Aickin J); Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd [1993] FCA 265; (1993) 42 FCR 227 at 238-239 (Burchett J).
The rationale for this was stated by Aickin J in Pioneer at 683:
[T]he essential requirement for the maintenance of the validity of a trade mark is that it must indicate a connexion in the course of trade with the registered proprietor, even though the connexion may be slight, such as selection or quality control or control of the user in the sense in which a parent company controls a subsidiary. Use by either the registered proprietor or a licensee (whether registered or otherwise) will protect the mark from attack on the ground of non-user, but it is essential both that the user maintains the connexion of the registered proprietor with the goods and that the use of the mark does not become otherwise deceptive.
The new provisions addressed this rationale. As Besanko J noted in Lodestar at [95]:
The meaning of “under the control of” in s 8 is informed by the principle stated by Aickin J in Pioneer, that is to say, that the trade mark must indicate a connection in the course of trade with the registered owner. The connection may be slight, such as selection or quality control or control of the user in the sense in which a parent company controls a subsidiary. It is the connection which may be slight. Aickin J was not saying the selection or quality control or financial control which may be slight. I think the principle stated by Aickin J informs the meaning of “under the control of” for the following reasons. First, the attribute of control by the registered owner was a key feature of the principle stated by Aickin J as his Honour’s remarks make clear. The same may be said of the approach taken in England as the English cases to which I have referred make clear. Furthermore, two of the examples given by Aickin J in Pioneer of a sufficient connection, namely, quality control and financial control are embodied in s 8 (subs (3) and subs (4)). This suggests to me that Parliament did not intend to effect a major change in the law in enacting s 8 in the Act. This conclusion is supported by the report of the Working Party. The Working Party expressed the view that a sufficient connection in the course of trade between the registered owner and the goods or services of the licensee should remain the law. Finally, I am fortified in reaching this conclusion by the fact that both Gyles J at first instance and the Full Court in Yau took a similar approach.
When the Trade Marks Bill 1995 (Cth) was introduced to Parliament, the Senator in the second reading speech noted that it no longer included provisions relating to the registration of users, but rather provided that:
...where owners of trade marks exercise control over use of their trade marks by other persons, that use can be taken to be use by the owner. This is prescribed by the WTO Agreement and can be used by trade mark owners to defend an action to deregister their trade mark on the basis that they have not used it. The WTO Agreement does not require use under the control of the owner of the trade mark to be registered. Consequently, there is little benefit in retaining additional provisions for the registration of users. This change will simplify the new trade marks legislation significantly. Recent developments in Canada and the UK are consistent with this approach.
The introduction of the definitions in ss 7 and 8 was accompanied by provisions that provided powers to an authorised user under s 26 as well as provisions relevant to the validity of registered trade marks including s 59 (“Applicant not intending to use trade mark”) and those in Part 9 (“Removal of trade mark from Register for non-use”).
No reference is made in either the report prepared by the Working Party established to review the trade marks legislation, the Explanatory Memorandum to the Trade Marks Bill 1995 (Cth) or the second reading speeches given in relation to that Bill of an intention on the part of Parliament to bring about a change to the infringement provisions by means of the definition of “authorised user”. It might be said that the mischief to which s 7(3) was directed concerned bringing the old scheme of registered users into line with modern licensing practices and Australia’s international obligations.
Turning to the scheme of the Trade Marks Act, it is apparent that it designates that the ability to enforce a trade mark right arises entirely from Part 12. This proposition is reinforced when one notes that the defences to infringement are all expressed either to operate “[i]n spite of s 120” (in the case of ss 122, 122A and 123), or in language which closely mirrors that of s 120 (in the case of s 124). Were the Trade Marks Act to be construed such that enforcement action could be taken on the basis of the exclusive rights conferred by s 20(1) the consequence would be a curious bifurcation of rights enforceable by a trade mark owner into those defined by both ss 120 and 20(1). If that were the case, the defences so adumbrated in Part 12 would be subverted, a point made in Australian Trade Mark Law (2nd ed, Oxford University Press, Melbourne, 2016) by the authors (R Burrell and M Handler) at p 369.
Section 7(3) provides:
7 Use of trade mark
…
(3) An authorised use of a trade mark by a person (see section 8) is taken, for the purposes of this Act, to be a use of the trade mark by the owner of the trade mark.
Section 8 provides:
8 Definitions of authorised user and authorised use
(1) A person is an authorised user of a trade mark if the person uses the trade mark in relation to goods or services under the control of the owner of the trade mark.
(2) The use of a trade mark by an authorised user of the trade mark is an authorised use of the trade mark to the extent only that the user uses the trade mark under the control of the owner of the trade mark.
(3) If the owner of a trade mark exercises quality control over goods or services:
(a)dealt with or provided in the course of trade by another person; and
(b)in relation to which the trade mark is used;
the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.
(4) If:
(a) a person deals with or provides, in the course of trade, goods or services in relation to which a trade mark is used; and
(b) the owner of the trade mark exercises financial control over the other person’s relevant trading activities;
the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.
(5) Subsections (3) and (4) do not limit the meaning of the expression under the control of in subsections (1) and (2).
Section 120 provides that “[a] person infringes a registered trade mark if the person uses as a trade mark...” a sign in a particular way. The definition of “trade mark” in s 17 of the Trade Marks Act is not confined to registered trade marks. PDP emphasises that s 7(3) is expressed so that “authorised use” is to be taken “for the purposes of this Act” to be use of the trade mark by the owner of the trade mark. Accordingly, PDP submit, the use by a person within s 120 will incorporate authorised use within the meaning of ss 7(3) and 8.
For the reasons which follow, we do not consider that this argument points to the correct or preferable construction.
First, the language of s 120 emphasises the personal nature of an act falling within s 120. It is the act of “the person” that attracts a finding of infringement. The language does not suggest use by one person will constitute an infringement by another person. Rather, it emphasises the action of the person who uses a sign in a particular way.
Secondly, having regard to the text of the Trade Marks Act as a whole, it is apparent that not every reference to the use of a trade mark is intended to import the definition of “authorised use” by an “authorised user” as those terms are defined by s 8. This may be seen immediately from s 20(1), which distinguishes in s 20(1)(a) between “use” and s 20(1)(b) which refers separately to “authoris[ing] other persons to use” a trade mark. Many other sections in the Trade Marks Act refer to “use” per se and also separately to authorising use: see for example ss 24(3)(a), 27(1)(b), 59(a), 92(4)(a) and 100(1)(a). Sections 41(5), 44(4) and 101(4) are examples where there is a reference to trade mark use by a trade mark owner or applicant without reference to “authorised use”. Those sections incorporate notes to the following effect, no doubt in order to make clear that this is the legislature’s intention:
If the registered owner of the trade mark has authorised another person to use it, any authorised use of the trade mark by that person is taken to be a use of the trade mark by the registered owner (see subsection 7(3)).
Although somewhat lacking in clarity, it is apparent that whilst the reference to authorised use in ss 7(3) and 8 applies for the purposes of the Trade Marks Act generally, not every reference to use of a trade mark is to be taken to incorporate “authorised use”. It is necessary to consider the context in which the reference appears in order to determine how it is to be understood. In this regard it is to be noted that s 120 refers to use “as a trade mark” but not to “authorised use”, thereby leaving ambiguous how it is to be understood in light of ss 7(3) and 8. It was relevant for the primary judge to observe that there is no notation equivalent to that reproduced above, which might otherwise clarify its meaning.
Thirdly, “authorised use” must be by an “authorised user” which introduces into the Trade Marks Act a scheme whereby there must be a connection in the course of trade between the owner of the trade mark and the mark itself. By s 8, that must be by the owner of the trade mark exercising control over the user, and an “authorised use” takes place only to the extent that the user uses it under that control. Control may include the exercise of quality control or financial control. This meets the purpose of the Trade Marks Act, as set out in Pioneer, of providing an indication to consumers and traders as to the trade origin of goods or services to which the trade mark is applied.
The word “authorise” has been found under the Copyright Act and the Patents Act to mean “sanction, approve, countenance”: University of New South Wales v Moorhouse [1975] HCA 26; (1975) 133 CLR 1 at 12 (Gibbs J) and 20 (Jacobs J with whom McTiernan ACJ agreed); Bristol-Myers Squibb Company v F H Faulding & Co Limited [2000] FCA 316; (2000) 97 FCR 524 at [97] (Black CJ and Lehane J). Section 36 of the Copyright Act (see [28] above) now provides guidance as to the relevant considerations including the extent of the person’s power to prevent the doing of the infringing act, the nature of the relationship between the actor and the alleged authoriser, and whether the alleged authoriser took any reasonable steps to prevent or avoid the doing of the impugned act.
It is apparent that the concept of use under the control of the owner, so understood, sits uncomfortably in the context of trade mark infringement. The scheme of ss 7(3), 8 and 120 of the Trade Marks Act would produce an odd vehicle for establishing indirect (or secondary) infringement, which is dependent on ascertaining the identity of the “owner” of the impugned, allegedly infringing mark, and then considering matters going to the quality and financial control over the use by the alleged primary infringer. It also would raise questions that are logically irrelevant to conventional consideration of whether or not a person is indirectly liable for an act of infringement, as indicated by the meaning attributed to “authorise” as that term is understood under copyright and patent legislation.
The secondary materials to which we have referred above do not provide any indication that it was the intention of the legislature to introduce, by the operation of ss 7(3) and 8, liability for authorising infringement of a registered trade mark. Had the legislature intended to do so, it is likely that they would have said so. Further, in our view, had it been the intention of Parliament to craft a remedy for infringement by authorisation, it would not have implemented such a clumsy scheme for doing so. These matters point in favour of the position advanced by Grasshopper.
Fourthly, contrary to the submission advanced by PDP, we do not consider that PDP’s construction leads to a result that is analogous to the terms of the Patents Act or the Copyright Act. In addition to the points that we have made above we note that s 13 of the Patents Act provides explicitly for a patentee to have exclusive rights to exploit the invention and to authorise another person to exploit the invention. Unlike s 20(2) of the Trade Marks Act, the Patents Act contains no provision addressing infringement. Case law developed under the Patents Act has structured the right to relief available to a patentee around the exclusive rights; namely, the ability to exclude others from exploiting or authorising others to exploit the invention: see Grain Pool of Western Australia v The Commonwealth [2000] HCA 14; (2002) 202 CLR 479 at [81]-[85] (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ); Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2013] HCA 50; (2013) 253 CLR 284 at [293] (Crennan and Kiefel JJ).
The Trade Marks Act, on the other hand, confers on the owner of a registered trade mark a separate right to obtain relief for the infringement of that mark: s 20(2). Notably, this right is expressed as being separate to the exclusive rights conferred under s 20(1) and the note under s 20(2) directs attention to Part 12, in which s 120 is located, for what amounts to trade mark infringement. Section 120 then defines the circumstances in which a registered trade mark will be infringed (see [45] above). Given the clear textual link between the right conferred by s 20(2) to obtain relief for infringement and the definition of infringement in s 120, in our view, the statutory scheme leaves little, if any, room for the Court to develop a further species of infringement centred on the exclusive rights granted under s 20(1). The schemes established by the Patents Act and the Trade Marks Act are sufficiently different to require their differing constructions in this respect.
PDP also seeks to draw support for its construction from the Copyright Act. However, as we have noted the Copyright Act makes explicit provision for infringement by acts of authorisation: see s 36 set out at [28] above. The anomalies that arise in relation to the application of s 7(3) by reference to s 120 to which we have referred above do not arise under the Copyright Act. Accordingly, we reject the contention advanced by PDP that s 7(3) read with s 120 has the same effect as the authorisation provisions, ss 36 and 101(1)-(1A), of the Copyright Act.
Finally, we note that the primary judge considered closely a number of decisions of single judges referred to by the parties in support of their positions. We agree with the analysis that she conducted ([439]-[488]), and with the observation that to the extent that those cases differ from the view to which we have referred, it is apparent that the Court did not have the advantage of the full argument provided by the parties in the present case.
Accordingly, ground 1 of the appeal must be dismissed.
4. GROUND 2: DECEPTIVE SIMILARITY
4.1 Introduction
At trial PDP contended that the sale of the Infringing Products amounted to infringement of the Wicked Sister Marks by reason of the New Wicked Mark being either substantially identical with or alternatively deceptively similar to those trade marks. The primary judge rejected both of those contentions ([201]).
In ground 2 of their appeal PDP confined their challenge to the contention that the primary judge erred in finding that the New Wicked Mark was not deceptively similar to either of the WS Device Marks. They give particulars of this ground by reference to six asserted errors, namely that the primary judge:
(1)incorrectly adopted a side by side comparison of the marks;
(2)failed to give due weight to similarities between the respective marks (as opposed to the differences), including the word “wicked” with a stylised “W” as reflecting the prominent feature of the mark;
(3)gave undue weight to the fact that the products to which the respective marks were applied were likely to be purchased in different locations in supermarkets or other stores;
(4)failed to give sufficient weight to the lesser attention that a consumer would pay to products found to be fast moving consumer goods;
(5)gave insufficient weight to evidence of confusion from three witnesses; and
(6)ought to have found that there was a real tangible danger of confusion, allowing for imperfect recollection.
For the reasons set out in more detail below, we reject this ground.
4.2 The reasoning of the primary judge
The primary judge summarised the relevant principles applicable to the task under s 120 of determining whether one mark is deceptively similar to another ([157]-[162]). No party challenges that summary.
The primary judge posed the question for the Court as being whether there is a real, tangible danger of deception or confusion by reason of the use of the New Wicked Mark, having regard to the imperfect recollection of the notional consumer and taking into account all of the surrounding circumstances ([165]). Her Honour considered that the New Wicked Mark and the WS Device Marks were not visually or aurally similar, drawing attention to the similarities and differences between the words in each of the marks and also the stylised differences and similarities in the lettering of those marks as follows:
[168] In terms of their visual appearance, the Wicked Sister Marks are made up, in the case of the WS Device Marks, of four words and, in the case of the WS Word Mark, of two words. In the WS Device Marks both the words “wicked” and “sister” are stylised:
(1) the word “wicked” appears with:
(a)a capital “W” with a pitchfork device on the middle arm or stem only;
(b)the balance of the word in lowercase; and
(c)a flame to dot the “i”; and
(2) the word “sister”, which is unique to the Wicked Sister Marks, appears with:
(a) a capital “S”;
(b) the balance of the word in lowercase;
(c) a flame to dot the “i”; and
(d) and a swirling devil’s tail on the second “s”.
[169] In contrast, the New Wicked Mark comprises one word in lower case, and the “w”, about which PDP makes much complaint, includes a pitchfork device on all three of its arms, in contrast to the single use of the pitchfork device on the middle arm or stem of the “W” in the WS Device Marks, while the outer arms curve inwards and do not include the pitchfork device. That both the WS Device Marks and the New Wicked Mark use in the word “wicked” a shortened arm on the “e” and a sans serif “d” is not sufficient to make the marks visually similar.
Her Honour considered that the marks were not aurally similar, noting that the WS Device Marks were made up of four words “Wicked Sister Fine Foods”, and that although the latter two words were not likely to remain in the memory, the two words “Wicked Sister” would. By contrast the New Wicked Mark was made up of only the single word “wicked” ([171]).
Turning to the meaning of the respective marks, her Honour considered that when rendered alone “wicked” is an adjective, an abstract concept which could describe anything being wicked, whereas the words “wicked sister” convey a different meaning, with the “sister” being a noun ([172]). In this context her Honour drew upon the reasoning of the Full Court in Telstra Corporation Limited v Phone Directories Company Australia Pty Ltd [2015] FCAFC 156; (2015) 237 FCR 388 at [180]-[181] (Besanko, Jagot and Edelman JJ).
Her Honour next considered the main or essential features of the WS Device Marks ([174]-[178]). She considered that the word “wicked” by itself was not a strongly distinguishing feature of the WS Device Marks rejecting the submission, reliant on In the matter of London Lubricants (1920) Limited’s Application (1925) 42 RPC 264 at 279, that the word “wicked” as the first word in the WS Device Marks had more prominence or was more important as a point of distinction ([174]). Nor did the primary judge consider that the word “wicked” was any more essential than the word “sister”, both words being of ordinary English and neither being properly characterised as an “essential feature” ([177]). Her Honour noted at [178]:
PDP submits that its pitchfork shaped “w” is, however, an essential feature of the WS Device Marks. As I have already observed, the “w” in the word “Wicked” as depicted in those marks includes a pitchfork device in the middle arm or stem of the “w”. But that feature no more strikes the eye and fixes in the recollection than the devil’s tail used in the second “s” in the word “sister” or the flames which dot the “i” in both the words “wicked” and “sister”. In other words, I do not think any single feature has prominence over the others.
Having made this finding her Honour then turned to consider the question of imperfect recollection, having regard to her characterisation of the WS Device Marks, concluding at [179] that they did not satisfy the “caused to wonder” test of deceptive similarity:
People of ordinary intelligence and memory who see the Wicked Sister Marks are likely to recall that they are made up of (at least) two words and that the appearance, in the case of the WS Device Marks, of the words “wicked’ and “sister” is stylised. People of ordinary intelligence and memory who see the New Wicked Mark are likely to recall that it is made up of one word stylised in some way. But it is not the case that the marks are so similar that a person recollecting them would be left to wonder whether the goods sold under the New Wicked Mark came from the same source as the Wicked Sister Products.
Her Honour was not persuaded that the usual manner in which ordinary consumers acquired the respondents’ goods, being fast moving consumer goods, would alter the assessment ([181]).
The primary judge then turned to reject two forensic matters that PDP submitted were relevant to the assessment. In the first the primary judge was invited to find that Mr Valentine or Mr Smithson (the designer of the New Wicked Mark) were influenced by the design of the WS Device Marks in their decision to adopt the New Wicked Mark. However, after considering the evidence of Mr Valentine and his son, David, her Honour concluded at [185] that proposition had not been established. This finding is not challenged on appeal.
In the second the primary judge considered the evidence put forward by PDP as evidence of actual confusion given by three individuals, who were not cross-examined, in the context of a submission advanced on behalf of the appellants that “[e]vidence of actual cases of deception, if forthcoming, is of great weight”: citing Australian Woollen Mills Limited v FS Walton and Company Limited [1937] HCA 51; (1937) 58 CLR 641 at 658 (Dixon and McTiernan JJ). Her Honour concluded that such evidence should be given little weight, for reasons to which we refer in more detail below ([194]-[200]).
4.3 PDP’s submissions
PDP first submit that the primary judge erred in holding that the respective marks were not visually or aurally similar, which they contend involved the imposition of a threshold of similarity for the purposes of deceptive similarity that was too high and made too little allowance for the imperfect recollection of consumers. Rather, they contend that the primary judge’s reasoning was based on a detailed side by side comparison of the marks which was more apt for consideration of the question of substantial identity.
Secondly, having accepted that “Fine Foods” would not remain in the memory of consumers, PDP submit that the primary judge ought to have held that the first word “Wicked” with its stylised “W” in the form of a pitchfork “was an essential, distinctive and memorable feature” of the marks which would likely be recalled by consumers. In this context they submit that the presence of “Sister” does not detract from this, rather the consistent styling of both words would likely increase the prospect of consumers recalling the pitchfork aspect of the “W”. PDP emphasise that they do not assert any monopoly in the word “wicked” in and of itself. In this regard, they accept that the word alone is an English word which lacks any relevant distinctiveness. Rather, they submit that it is the stylised form of the marks that is important, and that stylisation of the word “wicked” and in particular the pitchfork stylisation, is critical. It is this unusual feature that PDP submit will fix itself in the idea and the recollection. In this context they submit that the primary judge was incorrect to rely on the decision of the Full Court in Telstra Corporation, which concerned only plain words.
PDP thirdly submit that having accepted that the goods in question were fast moving consumer goods at a low price point, her Honour ought to have found that this increased the likelihood of confusion.
Fourthly, they submit that at [181] her Honour erred by considering how the parties’ respective goods were in fact sold, rather than considering the full scope of PDP’s registrations, including the way in which those marks could be used. In this regard PDP emphasise their registrations including “chilled desserts and sweet snacks” were to be considered against the actual use of the sweet flavoured dipping sauces and waffle-dippers of Grasshopper which could be, and were, sold from refrigerated areas of supermarkets ([126]-[127], [150], [181]). The finding at [181] that “consumers are able to view the products and their associated trade marks” is no answer, PDP submit, to the question of deceptive similarity, which involves reference to consumers’ recollection of the registered mark, which may be imperfect.
Finally, PDP challenge the primary judge’s evaluation of the evidence of Mr Brebbia, Ms Medley and Mr Masluk, the three individuals who gave evidence of confusion, as well as that given by Mr Polly, to which PDP submit the primary judge gave insufficient weight.
4.4 Consideration
The infringement findings of the primary judge depended on the application of s 120 of the Trade Marks Act and the principles relevant to determining whether one mark is deceptively similar to another.
The test for deceptively similarity has been long settled. In Australian Woollen Mills, Dixon and McTiernan JJ described it as follows at 658:
But, in the end, it becomes a question of fact for the court to decide whether in fact there is such a reasonable probability of deception or confusion that the use of the new mark and title should be restrained.
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 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.
A little later, their Honours emphasised that the determination for the Court is one of estimation and impression, it is never susceptible of much discussion (at 659).
The distinction between consideration of whether one mark is deceptively similar to another, rather than substantially identical, lies in the point of emphasis on the impression or recollection which is carried away and retained of the registered mark, when conducting the comparison. In this context, allowance must be made for the human frailty of imperfect recollection. In New South Wales Dairy Corporation v Murray Goulburn Co-operative Company Ltd [1989] FCA 124; (1989) 86 ALR 549, in a passage in his judgment not affected by the proceedings on appeal, Gummow J said at 589:
In determining whether MOO is deceptively similar to MOOVE, the impression based on recollection (which may be imperfect) of the mark MOOVE that persons of ordinary intelligence and memory would have, is compared with the impression such persons would get from MOO; the deceptiveness flows not only from the degree of similarity itself between the marks, but also from the effect of that similarity considered in relation to the circumstances of the goods, the prospective purchasers and the market covered by the monopoly attached to the registered trade mark: Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 414–15; Polaroid Corp v Sole N Pty Ltd [1981] 1 NSWLR 491 at 498. The latter case is also authority (at 497) for the proposition that the essential comparison in an infringement suit remains one between the marks involved, and that the court is not looking to the totality of the conduct of the defendant in the same way as in a passing off suit.
This passage was approved by the Full Court in C A Henschke & Co v Rosemount Estates Pty Ltd [2000] FCA 1539; (2000) 52 IPR 42 at [44] (Ryan, Branson and Lehane JJ) and more recently by the Full Courts in Combe International Ltd v Dr August Wolff GmbH & Co. KG Arzneimittel [2021] FCAFC 8; (2021) 157 IPR 230 at [27] (McKerracher, Gleeson and Burley JJ) and Hashtag Burgers at [64].
Secondly, the primary judge was not satisfied that chocolate profiteroles fell within the description of “bakery products”. In this regard, her Honour noted that PDP Capital itself classified its products as “chilled desserts”, as did an article published in 2017 ([382]). PDP criticise this finding. They submit that “one [does not] need evidence to establish that a profiterole [is] a baked product”.
It is true that a good may be a chilled dessert and a bakery product at the same time. Goods may be susceptible to several classifications. However, the term “bakery product” (in contrast to “baked product”) refers, no doubt, to a product that may be found in a bakery. The evidence of use provided by PDP Capital was that its chocolate profiteroles are sold in a refrigerated section of a supermarket ([95]). The pastry component of a profiterole may well be baked (we were taken to no evidence on the point), but not everything baked will be a “bakery product” (baked fish, is an example). A profiterole may well be found in a patisserie, but will it be considered a “bakery product”? That was a question of fact for PDP to prove. It did not do so to the satisfaction of the primary judge. We do not consider that PDP have established error in the conclusion that she reached, based on the evidence provided. Having regard to the other matters to which the primary judge referred in her consideration of the evidence going to intention, we do not accept that PDP have established that primary judge erred in relation to her findings.
PDP also submit that as the primary judge had found use of the Later Registered WS Marks in relation to “cakes” during the relevant non-use period ([386]), her Honour ought also to have found such use was made in relation to “bakery products”. However, that proposition was not put to the primary judge at trial. Although the grounds advanced in the present case might suggest that an appeal represents an opportunity for the parties to re-run the trial at the appellate level, that is not the case. In any event, it does not follow (as PDP’s submissions suggest) from a finding that tiramisu falls within the category of a “cake”, that tiramisu also falls within the category of a “bakery product”.
Similarly, PDP now rely on the primary judge’s finding that they had used the Later Registered WS Marks in relation to “dessert sauces” (use by the sale of custard) to support the submission that her Honour ought also to have found an intention to use the marks in relation to “dipping sauces”. That submission was also not put at trial. PDP seek to circumvent this difficulty by pointing out that they contended at trial that “dessert sauces” were not relevantly different to “dipping sauces”. However, that contention could not amount to a submission that by selling custard under the Later Registered WS Marks they had used those marks in relation to dipping sauces. Furthermore, the evidence of Mr Polly, upon which PDP now rely, does not support the proposition that they are the same goods. In our view, PDP have not established a basis upon which we would permit them to rely on a case not advanced at trial in this regard. Having regard to these matters, we do not consider PDP to have established error in the primary judge’s findings as to lack of intention to use or lack of use. Nor, in our view, have they established that the primary judge erred in the exercise of discretion under s 101(3) within House v R. The reasons that we have given above suffice to address the points raised on appeal.
Accordingly, ground 5 must be dismissed.
9. GROUND 6: ACL AND PASSING OFF
9.1 Introduction
The primary judge rejected PDP’s claim that by promoting and selling products under or by reference to the New Wicked Mark, Grasshopper had engaged in conduct in breach of ss 18 and 29 of the ACL. In particular, PDP had contended that Grasshopper had made misrepresentations to consumers in Australia that the Infringing Products (being those identified in section 3.1 above) are either the same as the Wicked Sister Products (a term defined in section 4.4 above at [112]) sold under the trade mark WICKED SISTER, have the same place of origin as the Wicked Sister Products, are made and promoted by one or both of the appellants, or that Grasshopper is sponsored by or affiliated with those companies. The primary judge rejected a similar claim advanced on the basis that Grasshopper had engaged in passing off.
PDP contend in ground 6 of the appeal that the primary judge erred in finding that Grasshopper had not contravened ss 18 and 29 of the ACL and engaged in passing off by the sale of the impugned products in get-up including the New Wicked Mark. They rely on the following particulars:
(a)The primary judge erred in failing to find that PDP had an extensive and valuable goodwill and reputation in Australia in relation to the Wicked Sister Marks ([520]).
(b)The primary judge erred in giving little or no weight to the unchallenged evidence of actual confusion given by the three witnesses who encountered Grasshopper’s impugned products sold under the New Wicked Mark ([194], [521]).
(c)The primary judge erred in failing to find that a not insignificant number of ordinary or reasonable members of the relevant class of consumers would be likely to be misled or deceived, by reason of similarities between the products, the ingredients from which they were made, the locations of supermarkets or other stores in which they were sold, and their packaging ([519], cf [126], [181]).
9.2 The reasoning of the primary judge
The primary judge set out the relevant legal principles to the ACL claim ([492]-[497]), about which there is no complaint on appeal, and summarised the parties’ submissions ([498]-[505]). She rejected Grasshopper’s submission that it had not itself conduced any sales or promotional activities but rather acted simply as an intellectual property licensor for one or other of the companies controlled by Mr Valentine ([515]).
Turning to the ACL claim, the primary judge found that when the inquiry is focused on whether a not insignificant number of persons within the cohort of ordinary or reasonable members of purchasers of food products ( [518]) would be misled or deceived, or are likely to be misled or deceived, by the alleged conduct (at [519]):
(1) the Wicked Sister Marks and the New Wicked Mark are not sufficiently similar or are too dissimilar for a not insignificant number of consumers to be misled or deceived. I have recorded those differences at [168]-[171] above [as to which see section 4.2 above];
(2) added to that is the different nature of the products. As set out at [71] and [126] above, the Infringing Products are shelf stable and not dairy based while the Wicked Sister Products are refrigerated dairy desserts made from premium ingredients;
(3) each product is sold in different areas of the supermarket. As the Infringing Products are shelf stable at ambient temperatures, they do not need refrigeration and thus do not need to be sold in the refrigerated section of a supermarket. However, the Wicked dipping sauces are sometimes offered for sale in the refrigerated fresh produce area of a supermarket with the fresh berries. On the other hand, the Wicked Sister Products require refrigeration and are sold in the dairy aisle of the supermarket; and
(4) the packaging of the products is different. The Wicked dipping sauces are sold in single tubs with a brown lid bearing the New Wicked Mark and an image and the Wicked Waffle Dippers are sold in a foil pack bearing the New Wicked Mark (see [208] above) while the Wicked Sister Products are, for the most part, sold in twin packs wrapped in a cardboard package (see for example [92] above).
The primary judge considered the evidence of reputation relied upon by PDP at [520]:
The relevant date for assessing PDP’s reputation for the purposes of s 18 of the ACL is the date that the impugned conduct commenced: see Bohemia Crystal at[309]. The evidence establishes that Grasshopper commenced using the New Wicked Mark in 2014. That is thus the relevant date for assessing PDP’s reputation. The evidence before me does not establish that Wicked Sister had an “extensive and valuable goodwill and reputation in Australia and elsewhere” in each of the Wicked Sister Marks as at that date. The evidence it relies on in support of that reputation (see [498] above) is largely focused on the period commencing in 2016 and thereafter. When the cumulative sales figures for the Wicked Business and PDP are compared for the period up to 2013, it is apparent that the sales revenue generated by the Wicked Business outstrips that of PDP. By that time the Wicked Business had been trading for approximately 11 years while the PDP business had only been trading for four years. PDP has not established that it had the relevant reputation as at 2014; indeed, it appears, based on the evidence as at 2014, that it was the Wicked Business which had the stronger reputation.
The primary judge also considered the evidence of actual confusion relied upon in support of the claim. This was the same evidence relied upon by PDP for the purpose of considering deceptive similarity, to which we have referred in section 4.4 above. Her Honour concluded at [521] that she would not draw inferences from the evidence of the three trade witnesses, Mr Brebbia, Ms Medley and Mr Masluk.
The primary judge then addressed PDP’s passing off claim. After reciting the relevant legal principles ([523]-[524]), her Honour noted that PDP did not make any additional or independent submissions to those they relied upon in support of their ACL claim ([526]). For the same reasons as those set out in relation to the ACL claim, the primary judge dismissed PDP’s passing off claim ([528]).
9.3 PDP’s submissions
PDP roll together their submissions in relation to the ACL and passing off claims, while accepting in oral submissions that they place more emphasis on the ACL claim. They submit that the primary judge erred in her approach as to the role of PDP’s reputation, and incorrectly found that they did not have the requisite reputation in 2014 in circumstances where PDP’s products had been rolled out nationally in Woolworths stores by the end of 2012. They contend that the primary judge did not give sufficient weight to the cumulative sales figures of PDP’s products between 2008 and 2014 in considering reputation, and that the primary judge ought to have considered that the evidence disclosed no countervailing reputation on the part of Grasshopper in relation to the New Wicked Mark when it was introduced in 2014; matters, which they contend could not be resolved by considering cumulative sales figures for the respective businesses ([520]).
PDP submit that “for reasons similar to those in Part II above”, being their submissions advanced in relation to grounds 1, 2 and 3 on appeal concerning the trade mark infringement claim, the primary judge erred in her approach to the similarities between the New Wicked Mark and the WS Device Marks. We take this to be a general reference to the contest that we have summarised in section 4 above. PDP also submit that for reasons similar to those in Part II, the similarities between the goods in question are also relevant, being, we take it, those arising as to whether the goods are of the same description.
PDP submit that the primary judge gave undue weight to perceived differences between their goods and the alleged Infringing Products, including as to whether refrigeration was required, and inconsequential differences in packaging in circumstances when there were also similarities in packaging.
9.4 Consideration
The first particular relied upon by PDP concerns the primary judge’s consideration of PDP’s reputation in the Wicked Sister Marks and get-up. In submissions they place emphasis on some of the findings of the primary judge at [112]-[114] going to the distribution of the Wicked Sister Products. The primary judge there observed that, in October 2009, PDP were given the opportunity to launch two rice pudding products into about 150 Woolworths stores and that by the end of 2012 those products had expanded into all Woolworths stores nationally ([112]-[113]). This range of goods was expanded so that by the date of hearing it included nine different products ([113]). Her Honour referred to sales activities conducted by PDP later than 2014 in [114] (the parties agreed that the reference to “2008” in [114(2)] is a slip and should read “2018”) and at [116] referred to the confidential sales figures provided by PDP for the period from 30 June 2009 until March 2019.
PDP correctly accept that the relevant date for considering their reputation is in 2014, when the impugned conduct commenced: Thai World Import & Export Co Ltd v Shuey Shing Pty Ltd [1989] FCA 735; (1989) 17 IPR 289 at 302 (Gummow J); Taco Co of Australia Inc v Taco Bell Pty Ltd [1982] FCA 170; (1982) 42 ALR 177 at 188 (Franki J), 196 (Deane and Fitzgerald JJ); Optical FCA at [334]; Bohemia Crystal Pty Ltd v Host Corporation Pty Ltd [2018] FCA 235; (2018) 354 ALR 353 at [309] (Burley J).
In their closing submissions at trial, PDP’s submissions going to reputation did not draw attention to any sales figures that pre-dated 2016.
Nevertheless, on appeal PDP emphasise sales figures in confidential exhibit PDP-2, which show modest sales in 2009 rising to more substantial sales in 2014. They contend that these figures support a contention that the primary judge erred in her conclusion as to reputation.
In our view, PDP have not demonstrated error by the primary judge in this respect. It is apparent from [116] of her reasons that the primary judge took into account the sales figures, although it is equally apparent from the closing submissions at trial as summarised by the primary judge at [498], that PDP did not draw attention to their sales prior to 2016. The primary judge did not have before her evidence of the packaging in which Wicked Sister Products were sold prior to 2015 or any break-down of the figures provided. Sales figures alone cannot establish reputation and absent further information the primary judge was not incorrect to consider that PDP had not done so. Indeed, as Grasshopper submits, had the point now taken been taken at trial, it would have submitted to the primary judge that the get-up of the packaging in which the Wicked Sister Products were sold varied from time to time, and had changed from before 2014 to after.
Nor do we consider that it was irrelevant for the primary judge to observe that Grasshopper had established a reputation in its business trading under the mark WICKED. In a passing off case when two traders have a reputation in the same or similar names that are concurrently being used “neither of them can be said to be guilty of any misrepresentation. Each represents nothing but the truth, that a particular name or mark is associated with his goods or business”: Habib Bank Ltd v Habib Bank AG Zurich [1981] 1 WLR 1265 at 1275 (Oliver LJ). If in such circumstances there might be confusion that is just “one of the misfortunes which occur in life”, but it is not actionable as a passing off: Marengo v Daily Sketch and Daily Graphic Ltd [1992] FSR 1 at 2 (Lord Greene M.R.). These observations were approved by the Full Court in Colorado Group Limited v Strandbags Group Pty Limited [2007] FCAFC 184; (2007) 164 FCR 506 at [221] (Allsop J, as he then was) [33] and [42] (Kenny and Gyles JJ agreeing with Allsop J).
In the present case the primary judge found that by the time that it changed from the Wicked Tail Mark to the New Wicked Mark, Grasshopper had been operating the Wicked Business for approximately 11 years. Contrastingly, the PDP business had only been trading for four years ([520]). The primary judge was entitled to find that the reputation and goodwill that enured to Grasshopper in its products was material. In this respect, it is apparent that the primary judge considered that the differences between the Wicked Tail Mark and the New Wicked Mark were not such that consumers would fail to recognise that they came from the same trade source. Indeed, the get-up of the packaging in which they were supplied did not materially alter after the New Wicked Mark was introduced.
PDP’s next criticism is that the primary judge erred in her assessment that the ordinary consumer would not be misled or deceived. PDP rely in large part on the same matters relied upon in consideration of whether or not the New Wicked Mark is deceptively similar to the WS Device Marks under s 120 of the Trade Marks Act. They rightly accept that the threshold test is different, in that for conduct to be misleading or deceptive contrary to s 18 of the ACL, it must have the tendency to lead into error and (unlike in the case of trade mark infringement) mere confusion or wonderment will not suffice: see Campomar at [106].
In this context, our rejection of PDP’s submissions going to deceptive similarity in section 4.4 above tends against PDP’s success in relation to this aspect of the appeal. No error has been demonstrated in the primary judge’s finding at [519(1)] to the effect that the Wicked Sister Marks and the New Wicked Mark are not sufficiently similar or are too dissimilar for a not insignificant number of consumers to be misled or deceived. Those findings are a sufficient basis for rejecting this aspect of the appeal. However, the point made in [519(4)] that the packaging of the products is different compounds and reinforces this conclusion. The same may be said of the reasoning in [519(2)] and [519(3)].
PDP again contend that the primary judge erred in her consideration of the so-called confusion evidence given by Mr Brebbia, Ms Medley and Mr Masluk. They advance no submission additional to those considered in section 4.4 above. Consequently, for substantially the same reasons given in that section, and for the reasons set out by the primary judge at [521], we consider that this contention lacks force.
For the above reasons we are not satisfied that PDP have established that the primary judge erred in rejecting the claim based on the provisions of the ACL. PDP conceded that this result would lead to the same conclusion in respect of the claim based on the tort of passing off. That concession was correctly made. Frequently applicants bring proceedings for misrepresentation under the provisions of the ACL and tack on to those proceedings a claim, based on the same facts, for damages for passing off. Rarely are they able to articulate any good reason for doubling up in this manner. Such a course does little to promote the efficient administration of justice and should be discouraged, except perhaps where the applicant is in genuine doubt as to whether it will press for an account of profits rather than damages.
Accordingly, ground 6 of the appeal must be dismissed.
10. DISPOSITION
For the reasons set out in more detail above we have found that:
(1)Grounds 1 and 2 of the appeal fail. The consequence is that the primary judge’s conclusion, that Grasshopper has not infringed the WS Device Marks by authorising the use of the New Wicked Mark by the other Valentine Companies, was correct. We have determined that it is not necessary for us to consider ground 3 of the appeal, grounds 1 and 2 of the cross-appeal or ground 1 of the notice of contention.
(2)Ground 4 of the appeal, which concerns PDP’s non-use application in relation to the Wicked Tail Mark, succeeds and grounds 3 and 4 of the notice of contention fail, with the consequence that the register should be rectified to remove the following goods from the register in relation to that trade mark:
Savoury dips, dessert toppings and sauces, including chocolate toppings and sauces, and fruit flavoured toppings and sauces, and confectionery, including chocolates and sweets, but excluding frozen confections.
(3)Ground 5 of the appeal, which challenges the primary judge’s findings in relation to the removal of the Later Registered WS Marks, fails.
(4)Ground 6 of the appeal, which challenges the primary judge’s finding that the impugned conduct of Grasshopper was not in breach of the ACL and did not amount to passing off, fails.
The consequence is that Grasshopper has had substantial, but not complete, success in the appeal. We consider that the appropriate orders are:
(1)Save and except for orders 3 and 4 below, the appeal be dismissed.
(2)The cross-appeal be dismissed.
(3)Order 1 made by the primary judge on 14 August 2020 be set aside.
(4)Pursuant to s 101(2) of the Trade Marks Act, the following be removed from the categories of goods in respect of which Australian registered trade mark no 1042646 is registered:
savoury dips; dessert toppings and sauces, including chocolate toppings and sauces, and fruit flavoured toppings and sauces; confectionery, including chocolates and sweets, but excluding frozen confections
(5)Subject to order 6 below, PDP pay 90% of Grasshopper’s costs of the appeal and cross-appeal, as agreed or taxed.
(6)Any party wishing to vary order 5 may, within 7 days, file and serve written submissions not exceeding two pages identifying the costs order sought and the reasons in support. If any such submission is filed the other party may, within 7 days thereafter, file and serve written submissions in answer not exceeding two pages identifying the costs order sought and the reasons in support, whereupon the question of costs will be determined on the papers.
I certify that the preceding two hundred and sixteen (216) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Jagot, Nicholas and Burley. Associate:
Dated: 29 July 2021
SCHEDULE OF PARTIES
NSD 1014 of 2020 Cross-Respondents
Second Cross-Respondent
PDP FINE FOODS PTY LTD ACN 121 302 850
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