PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd
[2020] FCA 1078
•30 July 2020
FEDERAL COURT OF AUSTRALIA
PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd [2020] FCA 1078
File number:
NSD 1354 of 2018
Judge:
MARKOVIC J
Date of judgment:
30 July 2020
Catchwords:
TRADE MARKS – infringement claim pursuant to s 120 of the Trade Marks Act 1995 (Cth) (Act) – claims for rectification of the Register pursuant to s 88(2)(a), relying on the grounds under ss 44, 58, 59 and 60, and s 88(2)(c) of the Act – claims for removal from the Register for non-use pursuant to s 92(4) and s 101 of the Act
COMPETITION – misleading or deceptive conduct in contravention of s 18 and s 29 of the Australian Consumer Law – whether relevant reputation was established at the date of the impugned conduct – whether there was any relevant misrepresentation – application dismissed
TORTS – passing off – whether relevant reputation was established at the date of the impugned conduct – whether there was any relevant misrepresentation – application dismissed
Legislation:
Competition and Consumer Act 2010 (Cth), Sch 2, ss 18, 29
Federal Court of Australia Act 1976 (Cth), ss 37AE, 37AF, 37AG, 37AJ
Trade Marks Act 1995 (Cth), ss 6, 7, 8, 10, 14, 17, 20, 27, 44, 58, 59, 60, 88, 89, 92, 100, 101, 120
Cases cited:
Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd (2018) 259 FCR 514
Aristocrat Technologies Australia Pty Ltd v Vidtech Gaming Services Pty Ltd [2006] FCA 275; (2006) 68 IPR 229
Aston v Harlee Manufacturing Company (1960) 103 CLR 391
Austin Nichols & Company Inc v Lodestar Anstalt (No 1) (2012) 202 FCR 490
Australian Competition and Consumer Commission v Air New Zealand Ltd (No 4) [2012] FCA 1439
Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 4) [2017] FCA 1590; (2017) 353 ALR 460
Australian Education Union v Department of Education and Children’s Services (2012) 248 CLR 1
Australian Woollen Mills Limited v FS Walton and Company Limited (1937) 58 CLR 641
Barton v Croner Trading Pty Ltd (1984) 3 FCR 95
Bauer Consumer Media Ltd v Evergreen Television Pty Ltd [2019] FCAFC 71; (2019) 367 ALR 393
Bing! Software v Bing Technologies (2009) 180 FCR 191
Bohemia Crystal Pty Ltd v Host Corporation Pty Ltd [2018] FCA 235; (2018) 354 ALR 353
Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397
Campomar Sociedad, Limitada v Nike International Limited (2000) 202 CLR 45
Cassidy v Saatchi & Saatchi Australia Pty Ltd (2004) 134 FCR 585
Coca-Cola Company v All-Fect Distributors Ltd (1999) 96 FCR 107
Coca-Cola Company v PepsiCo Inc (No 2) [2014] FCA 1287; (2014) 322 ALR 505
Conde Nast Publications Pty Ltd v Taylor (1998) 41 IPR 505
Crazy Ron’s Communications Pty Limited v Mobileworld Communications Pty Limited [2004] FCAFC 196; (2004) 209 ALR 1
Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199
Dunlop Aircraft Tyres Limited v Goodyear Tire and Rubber Company (2018) 262 FCR 76
E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144
Estex Clothing Manufacturers Pty Ltd v Ellis & Goldstein Ltd (1967) 116 CLR 254
Food Chanel Network Pty Ltd v Television Food Network GP (2010) 185 FCR 9
Global Brand Marketing Inc v YD Pty Ltd [2008] FCA 605; (2008) 76 IPR 161
Health World Ltd v Shin-Sun Australia Pty Ltd (2010) 240 CLR 590
Hills Industries Ltd v Bitek Pty Ltd (2011) 214 FCR 396
In the matter ofJohn Fitton & Company Limited’s Application (1949) 66 RPC 110
In the matter of London Lubricants (1920) Limited’s Application (1925) 42 RPC 264
Jones v Dunkel (1959) 101 CLR 298
JT International SA v Commonwealth of Australia; British American Tobacco Australasia Limited v Commonwealth of Australia (2012) 250 CLR 1
Lodestar Anstalt v Campari America LLC (2016) 244 FCR 557
Louis Vuitton Malletier SA v Toea Pty Ltd (2006) 156 FCR 158
McCormick & Company Inc v McCormick [2000] FCA 1335; (2000) 51 IPR 102
Mobileworld Communications Pty Ltd v Q & Q Global Enterprise [2003] FCA 1404; (2003) 61 IPR 98
New South Wales Dairy Corporation v Murray Goulbourn Co-operative Co Ltd (1989) 86 ALR 549
Optical 88 Limited v Optical 88 Pty Limited (2011) 197 FCR 67
Optical 88 Limited v Optical 88 Pty Limited (No 2) [2010] FCA 1380; (2010) 275 ALR 526
Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd (2017) 251 FCR 379
Pioneer Computers Australia Pty Ltd v Pioneer KK (2009) 176 FCR 300
Playgro Pty Ltd v Playgo Art & Craft Manufactory Limited [2016] FCA 280; (2016) 335 ALR 144
Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365
Saville Perfumery Ld v June Perfect Ld and FW Woolworth & Co Ld (1941) 58 RPC 147
Scandinavian Tobacco Group Eersel BV v Trojan Trading Company Pty Ltd (2016) 243 FCR 152
Sensis Pty Ltd v Senses Direct Mail and Fulfillment Pty Ltd [2019] FCA 719; (2019) 141 IPR 463
Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd (No 3) [2017] FCA 865; (2017) 124 IPR 435
Shell Company of Australia Limited v Esso Standard Oil (Australia) Limited (1963) 109 CLR 407
Singtel Optus Pty Limited v Optum Inc [2018] FCA 575
SMA Solar Technology AG v Beyond Building Systems Pty Ltd (No 5) [2012] FCA 1483
Solahart Industries Pty Ltd v Solar Shop Pty Ltd [2011] FCA 700; (2011) 281 ALR 544
Southcorp Brands Pty Ltd v Australia Rush Rich Winery Pty Ltd [2019] FCA 720; (2019) 369 ALR 299
Swole Gym Wear Group Pty Ltd v Swole O’Clock Ltd [2019] FCA 685
Telstra Corporation Limited v Phone Directories Company Australia Pty Ltd (2015) 237 FCR 388
Trident Seafoods Corporation v Trident Foods Pty Ltd [2019] FCAFC 100
Unilever Australia Limited v PB Foods Ltd [2000] FCA 798
Unilever Australia Ltd v Karounos (2001) 113 FCR 322
Vivo International Corporation Pty Ltd v TiVo Inc [2012] FCAFC 159; (2012) 294 ALR 661
Zivanovic v Australian Securities and Investments Commission [2017] FCA 1633
Date of hearing:
16-19 September 2019
Date of last submissions:
19 September 2019 (Respondent)
20 September 2019 (Applicants)
Registry:
New South Wales
Division:
General Division
National Practice Area:
Intellectual Property
Sub-area:
Trade Marks
Category:
Catchwords
Number of paragraphs:
602
Counsel for the Applicants:
Mr M R Hall SC and Ms S L Stewart
Solicitor for the Applicants:
Clayton Utz
Counsel for the Respondent:
Mr J S Cooke and Mr D B Larish
Solicitor for the Respondent:
Bennett & Philp Lawyers
ORDERS
NSD 1354 of 2018
BETWEEN:
PDP CAPITAL PTY LTD ACN 164 349 008
First Applicant
PDP FINE FOODS PTY LTD ACN 121 302 850
Second Applicant
AND:
GRASSHOPPER VENTURES PTY LTD ACN 142 896 286
Respondent
JUDGE:
MARKOVIC J
DATE OF ORDER:
30 JULY 2020
THE COURT ORDERS THAT:
1. Subject to Order 2 below, pursuant to s 37AF and s 37AG(1)(a) of the Federal Court ofAustralia Act 1976 (Cth), until 30 July 2023, in order to prevent prejudice to the proper administration of justice, Confidential Exhibit PDP-2 to the affidavit of Paul Dean Polly sworn on 29 March 2019 (Confidential Exhibit PDP-2) be treated as confidential and not be published or made available, and not be disclosed to any person or entity other than:
(a) the Court for the purposes of this proceeding;
(b) the respondent’s external legal advisors as follows:
(i) partners, employed solicitors, paralegals and secretaries of the respondent’s external solicitors retained in this proceeding; and
(ii) barristers briefed in this proceeding and their assistants; and
(c) any other persons designated by agreement by the applicants or by order of the Court, provided that those persons have first signed a confidentiality undertaking in the form of Annexure A to these orders.
2. Order 1 above does not apply to pages 36-54, 58, 61-62, 64-71, 74, 76 of Confidential Exhibit PDP-2.
3. Subject to Orders 4 and 5 below, on or before 13 August 2020 the parties are to endeavour to agree on the appropriate form of orders to be made giving effect to these reasons and to provide a copy of those draft orders to the Associate to Markovic J.
4. If no agreement is reached, on or before 13 August 2020 the parties are each to notify the Associate to Markovic J of the orders for which they contend and to provide submissions, not exceeding three pages in length, explaining why those orders should be made.
5. If agreement cannot be reached pursuant to Order 3 above, the proceeding will be listed before Markovic J on 21 August 2020 at 9.30 am.
6. On or before 20 August 2020 the parties are to file and serve submissions, not exceeding three pages in length, on the question of costs of the proceeding.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Annexure A
REASONS FOR JUDGMENT
1 The trade marks
[8]
1.1 PDP’s trade marks
[8]
1.2 Grasshopper’s trade marks
[12]
2 The evidence
[16]
2.1 The witnesses
[16]
2.2 The Wicked Business
[20]
2.2.1 The structure and development of the Wicked Business, the Wicked brand and its trade marks
[20]
2.2.2 Rebranding of Wicked products
[46]
2.2.3 Wicked adopts the New Wicked Mark
[61]
2.2.4 Ownership and use of the Wicked Tail Mark and the New Wicked Mark
[64]
2.2.5 Wicked product range
[68]
2.2.6 Sales of Wicked branded products
[72]
2.2.7 Promotion of Wicked branded products
[78]
2.2.8 Mr Valentine’s awareness of Wicked Sister
[82]
2.3 The Wicked Sister business
[86]
2.3.1 The ownership of the Wicked Sister Marks
[87]
2.3.2 Wicked Sister Products
[91]
2.3.3 Establishment of PDP and the development of the Wicked Sister brand
[96]
2.3.4 Production of Wicked Sister rice pudding
[109]
2.3.5 Distribution of Wicked Sister Products
[112]
2.3.6 Advertising and promotion of Wicker Sister Products
[117]
2.3.7 Third party market research
[122]
2.3.8 Private label dessert sauces supplied to Coles
[124]
2.3.9 Mr Polly’s understanding of the Wicked products
[126]
2.3.10 Dessert products
[128]
2.3.11 Instances of confusion
[132]
2.3.11.1 Ms Medley
[133]
2.3.11.2 Mr Brebbia
[138]
2.3.11.3 Mr Masluk
[143]
2.3.11.4 Consumer complaints
[146]
2.3.12 Mr Polly’s concerns about the New Wicked Mark and confusion
[149]
3 THE ISSUES IN THE PROCEEDING
[153]
4 COMMON ISSUES
[157]
4.1 Substantial identity and deceptive similarity
[157]
4.1.1 Legal principles
[159]
4.1.2 Is the New Wicked Mark deceptively similar to the Wicked Sister Marks?
[163]
4.1.2.1 Parties’ submissions
[163]
4.1.2.2 Consideration
[165]
4.1.3 Is the New Wicked Mark substantially identical with the Wicked Sister Marks?
[202]
4.2 Goods are the same or of the same description
[208]
4.2.1 Legal principles
[209]
4.2.2 The First WS Device Mark
[213]
4.2.2.1 Parties’ submissions
[213]
4.2.2.2 Consideration
[218]
4.2.3 The Later Registered WS Marks
[230]
4.2.3.1 Parties’ submissions
[230]
4.2.3.2 Consideration
[232]
4.3 Conclusion on common issues
[234]
5 GRASSHOPPER’S CROSS-CLAIM
[235]
5.1 Legislative framework
[236]
5.2 The First WS Device Mark
[246]
5.2.1 Sections 44, 60 and 88(2)(c) of the TM Act
[247]
5.2.2 Sections 92(4)(b) and 101 of the TM Act
[248]
5.2.2.1 Consideration
[252]
5.2.2.2 Should the First WS Device Mark be removed from the Register in respect of the First Non-Use Goods?
[262]
5.3 The Later Registered WS Marks
[272]
5.3.1 Section 44 of the TM Act
[274]
5.3.1.1 Consideration
[280]
5.3.2 Section 58 of the TM Act
[307]
5.3.2.1 The Second WS Device Mark
[311]
5.3.2.1.1 Consideration
[320]
5.3.2.2 The WS Word Mark
[338]
5.3.2.2.1 Consideration
[343]
5.3.3 Section 60 of the TM Act
[346]
5.3.4 Section 88(2)(c) of the TM Act
[348]
5.3.5 Section 88(1) of the TM Act
[350]
5.3.6 Sections 92(4)(a) and 101 of the TM Act
[358]
5.3.6.1 Consideration
[366]
5.3.6.2 Annexure B
[377]
5.3.6.2.1 Dessert sauces
[377]
5.3.6.2.2 Bakery products
[381]
5.3.6.2.3 Cakes
[386]
5.3.6.2.4 Confectionery
[387]
5.3.6.2.5 Ice cream confections
[391]
5.3.6.2.6 Puddings
[393]
5.3.6.2.7 All other desserts in this class including prepared desserts
[394]
5.3.6.2.8 Dipping sauces
[400]
5.3.6.2.9 Yoghurts
[401]
5.3.6.2.10 Summary
[402]
5.3.6.3 Should the Later Registered WS Marks be removed from the Register in respect of the Remaining Second Non-Use Goods and/or should the registrations of the Later Registered WS Marks be amended?
[403]
5.4 Conclusion on Grasshopper’s cross-claim
[428]
6 PDP’S CLAIMS
[429]
6.1 Trade mark infringement claim
[429]
6.1.1 Legislative framework
[430]
6.1.2 Consideration
[435]
6.1.3 The threshold issue
[439]
6.2 ACL claim
[489]
6.2.1 Legal principles
[492]
6.2.2 Parties’ submissions
[498]
6.2.3 Consideration
[506]
6.3 Passing off claim
[522]
6.3.1 Legal principles
[523]
6.3.2 Parties’ submissions
[525]
6.3.3 Consideration
[528]
6.4 Claims in relation to the Wicked Tail Mark
[529]
6.4.1 The Wicked Tail Mark rectification claim
[532]
6.4.1.1 Section 58 of the TM Act
[534]
6.4.1.1.1 Parties’ submissions
[536]
6.4.1.1.2 Consideration
[542]
6.4.1.2 Section 59 of the TM Act
[548]
6.4.1.3 Conclusion on the Wicked Tail Mark rectification claim
[555]
6.4.2 The Wicked Tail Mark removal claim
[556]
6.4.2.1 Parties’ submissions
[562]
6.4.2.2 Consideration
[572]
6.4.2.3 Should the Wicked Tail Mark be removed from the Register in respect of the Registered Wicked Tail Mark Goods other than dips including chocolate dips?
[582]
6.5 Conclusion on PDP’s claims
[588]
7 CONFIDENTIALITY
[589]
8 CONCLUSION
[600]
MARKOVIC J:
PDP Capital Pty Ltd and PDP Fine Foods Pty Ltd (individually PDP Capital and PDP Fine Foods and collectively PDP), the applicants, manufacture and sell a range of chilled dairy desserts and snacks in Australia under the brand WICKED SISTER.
Grasshopper Ventures Pty Ltd (Grasshopper), the respondent, is a holding company of intellectual property assets used in a business involving the sale of dipping sauces and other shelf stable products under the brand WICKED (Wicked Business).
PDP alleges that Grasshopper has infringed its trade marks (described below at [8]-[10]) pursuant to s 120 of the Trade Marks Act 1995 (Cth) (TM Act) by using its trade mark (New Wicked Mark) which PDP says is substantially identical with or deceptively similar to its marks, contravened s 18 and s 29 of the Australian Consumer Law being Sch 2 to the Competition and Consumer Act 2010 (Cth) (ACL) by engaging in conduct that is false or misleading or likely to mislead or deceive, and passed off its goods as those of PDP.
PDP also seeks rectification of the Register of Trade Marks (Register) by cancellation or amendment of the registration of Grasshopper’s trade mark (Wicked Tail Mark) pursuant to s 88(2)(a), relying on the grounds under s 58 and s 59 of the TM Act, and removal of the Wicked Tail Mark from the Register of Trade Marks (Register) pursuant to s 92(4)(a) and (b) and s 101 of the Act.
Grasshopper says that it has not infringed PDP’s trade marks or engaged in any conduct that would amount to passing off by its use of the New Wicked Mark and denies that its conduct amounts to a breach of s 18 and/or s 29 of the ACL or that there are any grounds for cancellation or removal of the Wicked Tail Mark from the Register or for amendment of the Register in relation that mark.
Grasshopper has also filed a notice of cross-claim in which it contends that PDP’s trade marks are liable to be cancelled or amended pursuant to s 88(1)(a) and (2)(a) of the TM Act, relying on the grounds under ss 44, 58, 60 of the TM Act, or pursuant to s 88(2)(c) of the TM Act, and/or removed from the Register pursuant to s 92(4)(a) and (b) and s 101 of the TM Act.
On 7 December 2018 I made an order pursuant to r 30.01 of the Federal Court Rules 2011 (Cth) (Federal Court Rules) that issues of liability be heard and determined separately and before issues relating to pecuniary relief. These reasons thus address questions of liability only.
1. The trade marks
1.1 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) 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.
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) 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.
In these reasons I will refer to the First WS Device Mark and the Second WS Device Mark collectively as the WS Device Marks and to the WS Device Marks and the WS Word Mark collectively as the Wicked Sister Marks.
1.2 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 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.
On 28 June 2011 Grasshopper applied to register WICKED (Wicked Word Mark). Various divisional applications have been filed since that time, each with a priority date of 28 June 2011, including application no 1740090 which was lodged on 9 December 2015 and lapsed on 4 May 2017 and application no 1835886 which was accepted for registration but has been opposed by PDP Capital. That opposition is presently before IP Australia.
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).
Since that time Grasshopper has filed various divisional applications for the New Wicked Mark, each with a priority date of 19 March 2015, including application no 1681885 which was lodged on 19 March 2015 and lapsed on 11 May 2017 and application no 1959818 which was lodged on 4 October 2018, which is under examination by IP Australia.
2. The evidence
2.1 The witnesses
PDP led evidence from the following witnesses:
(1) Paul Dean Polly, the sole director of PDP Capital and PDP Fine Foods and the chief executive officer and founder of each company. Mr Polly gives evidence about the establishment and development of the Wicked Sister business, advertising and promotion of Wicked Sister products, future marketing plans for Wicked Sister products, how and where Wicked Sister products are sold, his opinion about whether the Wicked products are desserts and his concerns about the New Wicked Mark and instances of confusion;
(2) Brett Chapman Doyle, a solicitor in the employ of PDP’s solicitors. Mr Doyle gives evidence about searches undertaken by him of the records of IP Australia in relation to the Wicked Tail Mark, of the “ website and of the records of the Australian Securities and Investments Commission (ASIC) in relation to Grasshopper and other companies associated with Grasshopper;
(3) Alexandra Victoria Grace Finch, a solicitor in the employ of PDP’s solicitors. Ms Finch gives evidence about her visits to various Coles supermarkets and a Romeo’s IGA store and puts into evidence photographs that she took on those visits as well as photographs taken by other employees of PDP’s solicitors on visiting various Coles supermarkets, screenshots of the online catalogues of Woolworths, Coles and a number of independent retailers showing Wicked Sister products for sale, screenshots from the “ website and the Wicked Sister Instagram and Facebook pages, screenshots from the “ website and the Wicked Instagram and Twitter pages, and copies of online dessert menus from the Domino’s Pizza and Oporto websites;
(4) Dean Gerakiteys, a solicitor in the employ of PDP’s solicitors. Mr Gerakiteys gives evidence about the nature of material the subject of an application for confidentiality (see [589] ff below) and why, based on his instructions from Mr Polly, that material is confidential;
(5) Davide Brebbia, head of sales at Emmi Dessert Italia S.p.A (Emmi), an Italian food manufacturer specialising in a range of traditional Italian and international desserts. Mr Brebbia is based in Vergiate, Varese in Italy. Since 2017 Emmi has produced at its facilities in Pero, Milan and Gattico, Novara some chilled dairy dessert products on behalf of PDP which are then exported for sale under the Wicked Sister brand in Australia and New Zealand including Wicked Sister Classic Tiramisu, Chocolate Mousse and Chocolate Profiteroles;
(6) Paul Anthony Masluk, also known as Paul Musk, managing director of InterPlay Management Pty Ltd, a sport and entertainment management agency based in Sydney, who met Mr Polly in 2017 through friends; and
(7) Lauren Medley, a category manager for the value added category at Coles Group (Coles), who was the category manager for chilled desserts at Coles between June 2015 and July 2017 during which time PDP Fine Foods supplied Coles with Wicked Sister branded products.
Each of Messrs Brebbia and Masluk and Ms Medley give evidence about instances when they came across Wicked products and thought they were produced by Wicked Sister. That is, they give what is referred to as “confusion evidence”. Grasshopper objects to the totality of this evidence or, in the alternative, submits that the Court would give it no or little weight. That objection is addressed at [191]-[200] below.
Grasshopper led evidence from the following witnesses:
(1) Ralph Christopher Valentine who has been responsible for, and in control of, each of Grasshopper, Wicked Products Pty Ltd (Wicked Products), Brisbane Market Brokers Pty Ltd (BMB) and Brisbane Fine Foods Pty Ltd (Brisbane Fine Foods) (each a Valentine Company and collectively the Valentine Companies) since their respective dates of incorporation and has made the major decisions in relation to each of the Valentine Companies since that time. Mr Valentine gives evidence about the establishment and growth of the Wicked Business and its trade marks, the rebranding of Wicked products, the Wicked product range, the sales and promotion of Wicked products and his awareness of Wicked Sister;
(2) David Ralph Valentine, Mr Valentine’s son, who has worked in the Wicked Business for eight years in various roles and currently holds the position of warehouse supervisor. Without meaning any disrespect and to avoid confusion I will refer to Mr David Valentine as David. David gives evidence about the process undertaken to design and select the New Wicked Mark;
(3) David William Heseltine who is a chartered accountant with PT Partners responsible for looking after BMB’s accounting work. Mr Heseltine gives evidence about the amount of sales of the Wicked dipping sauces to retailers in the financial years ended 30 June 2014 to 30 June 2018 (inclusive);
(4) Hubert Michael Glencross Finney who is a solicitor in the employ of Grasshopper’s solicitors. Mr Finney gives evidence about inquiries he made of Scott Balson of Interactive Presentations Pty Ltd and Craig Low of ASC Print & Promotional Brokers as to their willingness to give evidence in this proceeding; and
(5) Rodney Glen Ahchay, a salesman in the employ of MurrayBros Pty Ltd (MurrayBros) at the Brisbane Markets Rocklea, Queensland. Mr Ahchay worked on weekends during the period 2002 to early 2003 at the Cannon Hill flea markets selling fruit near where Mr Valentine sold his products and gives evidence about his observations of the manner in which Mr Valentine sold his products at that time.
As noted above, each of Messrs Polly and Valentine, as the persons principally responsible for the development of the Wicked Sister brand and the Wicked brand, gives evidence about the establishment and growth of their respective businesses. I set out their evidence below as well as the evidence of other witnesses called by PDP and Grasshopper, as relevant.
2.2 The Wicked Business
2.2.1 The structure and development of the Wicked Business, the Wicked brand and its trade marks
In 2002 Mr Valentine started a business involving the sale of dipping sauces and other products under the trade mark Wicked as described more fully below. From 2002 to 2003 Mr Valentine operated the Wicked Business in his own name. Since 2003 the Wicked Business has been operated by the following Valentine Companies:
(1) from about 30 July 2003 to 15 November 2009 – Wicked Products;
(2) from about 15 November 2009 to about 30 June 2010 – Brisbane Fine Foods; and
(3) from about 1 July 2010 to date – BMB and Brisbane Fine Foods. Mr Valentine explained that sales of products under the Wicked brand is split as to about 90% by BMB and about 10% by Brisbane Fine Foods which also sells Wicked branded products to BMB.
Mr Valentine has held or holds the following roles in relation to each of the Valentine Companies:
(1) since its incorporation on 30 July 2003 until 15 April 2009 he was Wicked Products’ sole director and secretary;
(2) since 12 March 2013 he has been the sole director and secretary of Brisbane Fine Foods;
(3) from 17 January 1995 to 8 December 1995 and from 17 January 1995 to 15 April 2009 respectively, he was the chief executive officer and a director of BMB. Since 30 May 2012 and 17 May 2013 respectively, he has been its sole director and secretary; and
(4) since 10 October 2012 he has been the sole director of Grasshopper.
Mr Valentine has been responsible for the day to day operations of the Wicked Business, whether it was operated in his name or, as was the case from about July 2003, by one of the Valentine Companies.
Mr Valentine has been involved in selling fruit and other farm produce for over 45 years. In the early 1990s he commenced selling strawberries and other fresh produce at flea markets in and around Brisbane. In doing so Mr Valentine handwrote a description of what he was selling with a crayon on a piece of cardboard which he then mounted on one of the display tables alongside the particular product. He used a new piece of cardboard on each day of trade at the flea markets and threw out the sign at the end of the day.
In the late 1990s Mr Valentine decided that he wanted to add value to the strawberries he was selling by offering them for sale with something else. From about 2000 he came up with the idea of, and started to sell, a chocolate dipping sauce with the strawberries at flea markets. Initially the chocolate dipping sauce was packaged in a tub with the following label:
In about mid-2002 Mr Valentine decided that he should market his range of dipping sauces, which by then included chocolate, caramel, white chocolate and vanilla varieties, under a different brand to make it stand out from other products. He came up with the name “Wicked” with an extended tail on the letter “D” as depicted below (Wicked Sign):
Mr Valentine liked the word “wicked” as he thought it was a play on the idea that having chocolate with strawberries is “naughty but nice”.
From about mid-2002 to early 2003, when selling the dipping sauces at the flea markets, Mr Valentine:
(1) wrote the Wicked Sign on a piece of cardboard and displayed it in the way described at [23] above;
(2) had a tub of the Wicked dipping sauce open so that people could dip a strawberry in the tub to try it; and
(3) sold the Wicked dipping sauce in a plastic tub without any label but wrote the Wicked Sign with the added word “dips” on the lid of the tub in texta.
According to Mr Valentine the cardboard signs he used looked like this:
The lids of the dipping sauce tubs looked like this:
Since 1994 Mr Ahchay has been a salesman for MurrayBros at the Brisbane Markets in Rocklea, Queensland. In 2002, separate to his employment with MurrayBros, Mr Ahchay began working on weekends selling fruit at the Cannon Hill flea markets. From 2002 to early 2003 Mr Ahchay often set up his stand close to the stand from which Mr Valentine sold his fruit and dipping sauces. Mr Ahchay observed that he and Mr Valentine were in competition insofar as they both sold fruit but that Mr Valentine was also selling his chocolate and other dipping sauces.
At that time Mr Ahchay observed that Mr Valentine would offer his dipping sauces for sale on a table on which he also placed a cardboard sign with handwritten on it and that the plastic tubs of dipping sauces offered for sale had handwritten on the tops of the containers.
From about mid-2002 Mr Valentine started work on having a label printed featuring a form of the Wicked Sign. He contacted ASC Print & Promotional Brokers to assist in its development. The label was finalised in about early 2003 and was as follows (Wicked Label):
Mr Valentine explained that: both the Wicked Label and the handwritten label depicted at [27] above included the statement “Packed for Ralphberry Distribution, Block D, Section 15, Rocklea Markets 4106”; “Ralphberry” is a combination of the words “Ralph” and “strawberry”; and “Ralphberry Distribution” is a short form of “Ralphberry Distribution Centre”, a business name used by Mr Valentine and of which he was the registered holder in the period 1 March 2000 to 27 May 2003. In that period the principal place of business for Ralphberry Distribution Centre was Block D, Brisbane Markets, Rocklea, Queensland.
Once the Wicked Label was finalised Mr Valentine continued to sell the dipping sauces at flea markets in the same manner as described at [26] above save that he affixed the Wicked Label to the lids instead of handwriting on the lids in texta. The flea markets at which he sold his dipping sauces in this way were Carrara, a privately owned market situated in the Gold Coast, which was open on Saturdays and Sundays from about 6.00 am to midday or 1.00 pm; and Cannon Hill in Brisbane which was open only on Sundays from around 6.00 am to midday or 1.00 pm. On Sundays Mr Valentine would start to set up the first stall at around 4.00 am so that he could then set up the next stall in time for both to be ready for market opening at 6.00 am. He hired casual staff to work at each market so he could go between the two of them while the flea markets were open.
Although most of his sales were at the flea markets, from mid-2002 to early 2003 Mr Valentine also sold Wicked dipping sauces to small shops in Brisbane. All of the sales, whether at the flea markets or to shops, were in cash and accordingly Mr Valentine has no record of them. Mr Valentine stopped selling his dipping sauces at flea markets about 10 years ago, once supermarkets started seven-day trading.
By early 2003, based on his experience of selling the dipping sauces at the flea markets, Mr Valentine could see that the combination of dipping sauces and strawberries was popular so he decided to take steps to commercialise the Wicked Business as follows:
(1) on 24 March 2003 Mr Valentine applied to register the business name “Wicked Products” in his name;
(2) on 9 April 2003 Mr Valentine filed trade mark application no 949862 in his own name for the following trade mark (Wicked Devil Mark):
(3) in 2003 he hired Sales Net Marketing to discuss stocking his Wicked branded products in one of the large supermarket chains. A “discussion report” prepared by Sales Net Marketing dated 20 June 2003 includes the Wicked Tail Mark;
(4) in May 2003 Mr Valentine wrote a letter to IP Australia in support of his application to register the Wicked Devil Mark as described at [34(2)] above. He pointed out that “about nine months ago”, that is nine months prior to May 2003, he “decided to have a name change and use an icon” as follows:
(5) on 20 May 2003 and 22 May 2003 respectively, Mr Balson of Interactive Presentations Pty Ltd and Mr Low of ASC Print & Promotional Brokers each provided statutory declarations to the Trade Marks Office as part of Mr Valentine’s registration process for the Wicked Devil Mark. Mr Balson, who at the time had worked with Mr Valentine for two years, confirmed that Mr Valentine had used the word “Wicked” in relation to his chocolate dipping sauces prior to January 2003. Mr Low, who at the time had known Mr Valentine for two years, said that Mr Valentine had “always been coming up with new ways to market his chocolate ‘Dipping Sauce’”, that it was no surprise when Mr Valentine came up with the “word & picture of wicked” and that over the past 6 to 12 months Mr Valentine had improved the label to its then current form.
On 30 July 2003, having decided that he wished to approach supermarkets to stock Wicked dipping sauces, Mr Valentine established Wicked Products. He did so because he understood that supermarkets preferred to deal with companies rather than individuals running businesses in their own name.
In 2003 Mr Valentine also decided that Wicked branded products should be sold in packaging which continued to include a form of the Wicked Sign but without the devil image. He decided on the following form of the Wicked Sign:
That is, the Wicked Tail Mark.
From that time on, the form of packaging for Wicked branded products had the Wicked Tail Mark on it. An example is as follows (Original Packaging):
In about late 2003, the Wicked Business started selling dipping sauces in the Original Packaging to Coles. Since that time, the Wicked Business has sold Wicked branded products to Australian retailers, with Coles being the largest purchaser. In addition, since the mid to late 2000s many other Australian retailers have bought Wicked branded products from the Wicked Business including IGA, Metcash, Bi-Lo (later rebranded as Coles), Fruitlink, Foodworks, Drakes Food Markets, Fresh Selections and other independent retailers.
On 18 February 2005 Mr Valentine applied for registration of the Wicked Tail Mark. At the time of making that application he intended that Wicked Products would use the Wicked Tail Mark for each of the designated goods (i.e. the Registered Wicked Tail Mark Goods) and that he would permit it to do so. He also thought that the Wicked product range would expand from dipping sauces into fruit flavoured toppings or sauces and confectionery.
Mr Valentine explained that one central focus of the Wicked Business was and has always been for the Wicked product range to be made up only of non-refrigerated products. This is because his roots are in the fresh fruit industry and he feels most comfortable dealing with value added shelf products which generally have a longer shelf life and are cheaper to store and transport than refrigerated products.
The current website for the Wicked Business at “ (Current Wicked Website) included as at March 2019 a page titled “About Us”. It tells a slightly different story about the development of the Wicked Business to that recounted by Mr Valentine as follows:
Originally established in 2004 as Wicked Products Pty Ltd, the Brand Wicked was then purchased by Mr Ralph Valentine on behalf of the Valentine Family as a subsidiary business of the Ralphberry Group, which established as its own identity in 2014 as Brisbane Fine Foods (QLD) Pty Ltd.
Brisbane Fine Foods (QLD) Pty Ltd is foremost a Family business striving to maintain the integrity and their values of supplying outstanding Australian Products to the retail sectors.
The Wicked Dip product is a value add item, originating from a concept in the fresh fruit market where the humble beginning saw the dips created the night before they were sold in flea markets alongside fresh strawberries. The idea expanded to the manufacture and distribution of the “Wicked” [range] of dips.
“Wicked” was a successful brand in its own right and having achieved success on the domestic markets with its inclusion in the retail chain Coles group, IGA & Independent Retailers as a value add item, it had also penetrated the USA markets with great success.
In 2007-08 the Global Financial Crisis caused a dramatic change for the Wicked Dips business then owned under the brand “Wicked Products” seeing the sale of major retail chain in Australia resulted in a major drawback from the domestic and international markets.
Mr Valentine purchased the distribution rights of the “Wicked” brand continuing to believe that the [products’] original success could be replicated.
Under the direction of Ralph Valentine, whom has over 50 years of fresh fruit experience Wicked Dips has been increasing its market share in the Australian Retail sector.
Working alongside him are his son David Valentine and daughter, Sandra Valentine, both integral members of the “Wicked” name.
2014 saw the Wicked Dips re-brand their packaging, including the verification of the Australian Made status, the start of its next exciting development stage.
2018 Wicked launched a new line – Wicked Waffle Dippers! Available nationwide at major retailers and independently owned chain stores
2019 Wicked will release another range – keep checking back for more!
In cross-examination Mr Valentine accepted that there was nothing included in the “About Us” section of the Current Wicked Website which suggested that the Wicked Business was established prior to 2004. However, Mr Valentine explained that the Current Wicked Website was designed and written by a web design company, Fireworks, and not by him. While Mr Valentine accepted that Fireworks would have had to obtain the history of the Wicked Business from somebody, they did not do so from him. Mr Valentine thought that the information included in the “About Us” page was sourced by Fireworks from one of his office staff who did not, at the time, ask him about the history of the business.
Mr Valentine cannot recall whether he saw the “About Us” page prior to it being shown to him for the purpose of this proceeding but, if he did, he did not undertake a close review of the text. Having undertaken a close review of it for the purposes of giving evidence Mr Valentine says that the “About Us” page is a “simplified”, i.e. condensed, version of the history of the Wicked Business in that it does not refer to a number of the matters that he describes in his evidence. Mr Valentine has now caused the “About Us” page on the Current Wicked Website to be updated.
In a statutory declaration made by Mr Valentine on 17 August 2016 and filed with the Registrar of Trade Marks (Registrar) in support of Grasshopper’s application for registration of the New Wicked Mark Mr Valentine said, among other things, that:
(1) “[m]y company has continuously offered” dipping sauces for sale under the Wicked Tail Mark or the New Wicked Mark;
(2) “[s]ince 2004 the goods have been offered continuously throughout Australia under the [Wicked Tail Mark] initially, for ten years from 2004 and until 2014 then, from 2014 to date, under the [New Wicked Mark] which is the subject of this application”; and
(3) “[t]he only one which has an earlier lodgement date than, when my company commenced use of the older version of the [Wicked Tail Mark] back in 2004, is cited Registration No. 849007 for the trade mark WICKED FIZZ in respect of [confectionery] only”.
In cross-examination Mr Valentine accepted that the first reference to “[m]y company” (see [44(1)] above) included everything he does and included Wicked Products and that the second reference to “my company” (see [44(3)] above) was not a reference to Grasshopper, the applicant for registration of the New Wicked Mark, but an earlier company and is very likely to have been Wicked Products.
2.2.2 Rebranding of Wicked products
As at 2014 the Wicked Business had continuously been selling dipping sauces using the Original Packaging. At that time Mr Valentine’s son, David, suggested that the Original Packaging and the Wicked Tail Mark should be modernised.
Mr Valentine told David to go ahead with his proposal to modernise the Wicked Tail Mark. However, it was critical to Mr Valentine in any rebranding for the Wicked brand to continue to operate as “Wicked”, given it had been known as that since 2002.
David was not experienced in creating logos or branding material but was aware of a web-based business known as “99 Designs” which he understood operated in the following way:
(1) the person seeking a design, the customer, places a “brief” on the 99 Designs website;
(2) individual designers then “bid” for the projects by providing a design;
(3) the customer then selects a design/designer; and
(4) payment is only made to or for the selected design/designer and not the other bidders for the work.
In early to mid-2014 David placed a “brief” on the 99 Designs website (Design Brief) using the email address “[email protected]”. That brief included the following (as written):
What is your organisation?
Brisbane Fine Foods
…
Describe what your organization or product does and its target audience
We are a family business, and we want to take it to the next level. Seems we have been stick in the twilight zone for a little while, we have now discovered Facebook!
Dads in his element selling the dips, but really we think we are taking as backwards direction on visual attractions of the label.
The product we are selling is and indulgent dip that accompanies fruit, ice cream/Deserts and other snacks. It is a value Add, item, which means people want to buy it, we just want to make more people want to buy it!
Target mid 20’s to 40’s - and all the oldies that want an aphrodisiac
It is in the fresh Fruit Industry and we nationally supply to a major chainstore, But we want to get noticed by more people.
Describe what you want designed
A heat seal foil label for a dip (three flavors) Chocolate, Caramel, White Chocolate. Size 77x77mm
We want a label and logo combo that is new, fresh and exciting – we want to stand out on the shelf.
References
Is there anything else you would like to communicate to the designers?
…
We have attached copies of the old labels:
Really what we don’t like about this label is:
There is no barcode on the label (13 digit barcode)
It’s old and dull - just like dad.
Not aimed at the market we want (Market is Mid 20’s to late 40’s looking for an indulgent addition to Fruit, Ice-cream and other snacks and deserts.) – You know those fun folk that want to have a party.
Our web address is wrong: is not clear - people want to know what they are eating! I know I do.
We hate the logo - Have you seen it? Really what has a devil’s tail got to do with dip! Seriously!
We think Logo might be too big and the product is lost to the logo. (IE White Chocolate dip)
What am I buying? Dip or a devil’s tail?
The main buyer likes the fruit, we are not keen with how it looks and is presented (Plonked on the label) looks like Grandma put it together. Or maybe it was dad!
What we like about the label:
It’s the right size
What other brands we like:
Charlie’s Fruit Juice (NZ)
Collective Yogurt (NZ)
Ben & Jerrys
Flying Fox Ice Blox’s (AUS)
We love quirky, Funky and Fresh. As we can’t choose where the product is placed, we need impact.
Links to files which contained copies of the Wicked Tail Mark as it appeared on the Original Packaging were attached to the Design Brief.
David received a number of responses to the Design Brief. In relation to those responses David discarded 20 of the designs and sorted the remaining 14 designs into categories by rating them. In that regard he:
(1) did not rate eight of the designs;
(2) allocated 1-2 stars to one of the designs; and
(3) allocated 3-5 stars to five of the designs.
A printout of the 99 Designs website showing eight of the “active” designs including those to which stars were allocated as set out in the preceding paragraph shows:
David recalls that he showed all of these designs to Mr Valentine and discussed them with him. Mr Valentine recalls that David showed him a number of designs, but could no longer recall the exact designs he was shown.
David eventually selected and engaged Phil Smithson to provide the new Wicked logo. Mr Smithson, who was located in the United Kingdom, had the username “gugi21”. Mr Smithson designed the following logo:
David liked the design and decided to adopt it. When shown the design by David, Mr Valentine approved it.
David believed that the original design submitted by Mr Smithson which led to the final design was:
David explained that this design was in his and Mr Valentine’s top three designs. The other two designs in that category had been submitted by “Radostella” and “andrea.abmr”.
David agreed that, of the designs submitted, Mr Smithson’s design depicted in the preceding paragraph was:
(1) the only one which had a “spiky or pointy motif” on the “w” and that in doing so it reflected the Original Packaging which included a devil holding a pitchfork. That is, it was similar to the Original Packaging because the “w” represented all the things on the Original Packaging – the trident, the devil’s tail and the arrow; and
(2) the only design that presented the word “wicked” entirely in lower case letters.
A subsequent design submitted by Mr Smithson was as follows:
However, David did not like, and rejected, the devil’s tail included in this design.
David recalls that Mr Smithson was paid $495 for his design and that, while he has had no further dealings with Mr Smithson since that time, Mr Smithson has been engaged on other design projects for the Wicked Business, including the design for the Wicked Waffle Dippers, and most recently, in about mid-2019, in a project for health food bars.
David was aware of Wicked Sister in 2014 and first encountered its products in a Woolworths supermarket. He did not purchase any products but recalls trying the Wicked Sister rice pudding product while living at his parents’ home at some time prior to 2014. David only visited the Wicked Sister website and Facebook page when it objected to registration of the New Wicked Mark and not prior to that time.
David said that the Design Brief for the new Wicked logo did not refer to the Wicked Sister brand and he did not think of Wicked Sister in deciding to modernise the Wicked logo or when he saw Mr Smithson’s design.
When cross-examined about similarities between the Second WS Device Mark and Mr Smithson’s design, David agreed that:
(1) the presentation of the letters “icked” in lower case letters was “similar” in both and that Mr Smithson’s design was the only design submitted that had that similarity;
(2) both Mr Smithson’s design and the Second WS Device Mark had a curved lower branch on the letter “k”, although David said that in the Second WS Device Mark the “k” only had a small curve, and that Mr Smithson’s design was the only design submitted with that feature; and
(3) both Mr Smithson’s design and the Second WS Device Mark had no tail at the end of the letter “d” and, again, that Mr Smithson’s design was the only design submitted with that feature.
However, David did not agree that of the designs submitted through 99 Designs he picked the one that was closest to the way that Wicked Sister presents the word “wicked”.
Mr Valentine was also cross-examined about the process undertaken to select a new Wicked logo. Among other things, he was taken to and asked a series of questions about the following design which he recalls being shown in 2014:
According to Mr Valentine, the pitchfork device, which he described as a “halo”, was suggestive of the tail device used in the Wicked Tail Mark. Relevantly, the exchange between senior counsel for PDP and Mr Valentine included the following:
Mr Valentine: Yes. The artwork follows our – our old trademark with the halo on the – on the – on the tail of the Wicked.
Mr Hall: I beg your pardon, Mr Valentine. Looking at the document in front of you there, are you saying that you can see a halo on the tail of the Wicked?
Mr Valentine: It looks like a halo on the W. It’s the same that’s on our old trademark.
…
Mr Hall: Okay. I think we might be confusing one another, Mr Valentine. I’m going to ask you to call it a trident, or a pitchfork, if you wouldn’t mind, because that’s what you’re referring to?
Mr Valentine: Or a pitchfork, whatever you want to call it.
2.2.3 Wicked adopts the New Wicked Mark
After the new Wicked logo (which became, and which I will refer to as, the New Wicked Mark) was selected, new packaging was developed for Wicked dipping sauces, for example, as follows (New Packaging):
From about late 2014 the Wicked Business gradually phased in the New Packaging. Initially the product range in the New Packaging was sold in Coles and other chain stores while the Wicked range with the Original Packaging continued to be sold in independent stores. The Wicked Business phased out the Wicked Tail Mark in about early 2016, once all the pre-printed labels for the Original Packaging had been used. Despite this some sellers of the Wicked product range, such as Fruitlink (a wholesaler in Brisbane), have continued to use images of the Original Packaging to sell Wicked products. A screenshot from the Fruitlink website dated 27 May 2019 which was in evidence before me showed:
In cross-examination Mr Valentine accepted that, despite what is included on Fruitlink’s website, any Wicked products supplied by Fruitlink to customers both presently and for some years prior would have been and are in the New Packaging. Mr Valentine also said that invoices issued at the time of sale of Wicked dips did not differentiate between supply of products in the Original Packaging or the New Packaging and that since 2002 invoices had always been drafted in the same way, simply referring to “wicked dips”.
2.2.4 Ownership and use of the Wicked Tail Mark and the New Wicked Mark
The Wicked Tail Mark has had the following ownership:
(1) from 18 February 2005, the date of its registration, until 28 August 2008 Mr Valentine was its registered owner;
(2) on 28 August 2008 Mr Valentine assigned the Wicked Tail Mark to BMB. That change in ownership was recorded by IP Australia on 19 September 2008. BMB was its registered owner until 1 July 2010; and
(3) on 1 July 2010 BMB assigned the Wicked Tail Mark to Grasshopper. That change in ownership was recorded by IP Australia on 19 August 2010.
Wicked Products used the Wicked Tail Mark during the period in which Mr Valentine was its registered owner. Mr Valentine explains that while Wicked Products was using the Wicked Tail Mark he oversaw all of Wicked Products’ daily operations and undertook regular checks of the quality of the products it sold under the Wicked Tail Mark to ensure they were fit for sale. This involved checking the label and tasting the products to test their consistency and texture.
Wicked Products also used the Wicked Tail Mark in the period during which BMB was its registered owner until 15 November 2009 when Wicked Products was deregistered. BMB and Brisbane Fine Foods used the Wicked Tail Mark from 15 November 2009 to 1 July 2010. During the period that BMB was the registered owner of the Wicked Tail Mark:
(1) Mr Valentine was a director of BMB from 28 August 2008 to 15 April 2009; and
(2) regardless of whether he held the position of director, Mr Valentine was responsible for the day to day running and control of BMB and, in that capacity, oversaw all of Wicked Products’ and then Brisbane Fine Foods’ daily operations relating to the Wicked Business and undertook regular checks in the same way as described in the preceding paragraph.
As set out at [64] above, since 1 July 2010 Grasshopper has been the registered owner of the Wicked Tail Mark. Mr Valentine explains that Grasshopper is a holding company of various of the Wicked Business’ intellectual property assets. Mr Valentine says that:
(1) since 10 October 2012, he has been the sole director of Grasshopper. He was not a director prior to that date i.e. from the date of Grasshopper’s incorporation until 10 October 2012; and
(2) regardless of whether he held the position of director of Grasshopper, Mr Valentine has overseen all of BMB’s and Brisbane Fine Foods’ daily operations relating to the Wicked Business and has been responsible for signing off on the quality of the products sold under the Wicked Tail Mark, and later the New Wicked Mark, to ensure they were fit for sale as described at [65] above.
2.2.5 Wicked product range
Since late 2003 the main products sold by the Wicked Business have been the flavoured dipping sauces in 130 gram tubs. About five or six years ago the Wicked Business also started selling flavoured dipping sauces in 65 gram tubs. The dipping sauces have been sold as follows:
(1) since about late 2003 the 130 gram tubs have been sold to retailers in cartons of 12, at that time, for about $14.40 per carton or $1.20 per tub. A carton of 12 is currently sold to retailers for about $15.60 per carton or $1.30 per tub. Over the period 2003 to date the 130 gram tubs have been sold by retailers for approximately $1.90 to $2.50 per tub; and
(2) the 65 gram tubs have been sold to retailers in cartons of 18 for about $15 per carton and each 65 gram tub has retailed for approximately $0.99 to $1.99. The sale of 65 gram tubs has made up about 5% to 10% of the Wicked Business’ overall sales of dipping sauces.
Before about 2015 the Wicked Business also sold other products featuring the Wicked Tail Mark including:
(1) from about 2005 to 2012 it sold chocolate but this was not a successful product and made up less than 2% of the sales made by the Wicked Business during that period;
(2) from about 2005 to 2012 it sold rocky road but again this was not successful and made up less than 2% of the sales made by the Wicked Business during that period; and
(3) from about 2010 to 2015 it sold honey using the trade mark “Wicked Sting” but it was also not successful and made up less than 0.5% of the sales made by the Wicked Business during that period.
According to Mr Valentine, the Wicked Business was not successful in launching the products described in the preceding paragraph because of a lack of time and money spent on marketing. However, Mr Valentine intends to relaunch these products in the future and to release a range of fruit flavoured topping sauces such as blueberry, raspberry, fig, strawberry and mango. In 2010 Mr Valentine had artwork done for labels for some of these products, but the products were never launched.
The current product range featuring the New Wicked Mark comprises:
(1) Wicked Chocolate, White Chocolate and Caramel Flavoured Dips 65 gram tubs;
(2) Wicked Chocolate, White Chocolate and Caramel Flavoured Dips 130 gram tubs;
(3) Wicked Chocolate, White Chocolate and Caramel Waffle Dippers; and
(4) Wicked Waffle Crunch.
A copy of the webpage at “ as at 27 May 2019 containing images of those products was in evidence before me. Those images show that the three flavoured dips have similar ingredients. By way of example, the Wicked Chocolate Flavoured Dip comprises sugar, water, vegetable fat, milk solids, cocoa (4.7%), caramelised sugar syrup, salt, vegetable gum (415, 401), preservative (202), flavour, emulsifier (471, 322). The ingredients for the waffle biscuits included in the Wicked Waffle Dippers are flour (wheat flour, vitamin thiamin), sugar, vegetable shortening, egg (6% minimum), leaving (503), soy lecithin (382), salt and flavour (vanilla).
2.2.6 Sales of Wicked branded products
From July 2003, the time of incorporation of Wicked Products, for a period of about three years, about 80% of the Wicked Business’ sales were of Wicked dipping sauces sold in the Original Packaging. The balance of the sales were complementary sales of strawberries. BMB sold strawberries. The Wicked Business did not itself sell strawberries.
Mr Valentine has been able to locate financial statements for Wicked Products from its incorporation up to and including the financial year ended 30 June 2006. For the Wicked Business:
(1) in the financial year ended 30 June 2004 there was $606,803.89 in sales. Applying an average of $1.20 per tub to 80% of the sales, around 400,000 dipping sauces featuring the Wicked Tail Mark were sold;
(2) in the financial year ended 30 June 2005 there was $974,940.66 in sales. Applying an average of $1.20 per tub to 80% of the sales, around 650,000 dipping sauces featuring the Wicked Tail Mark were sold; and
(3) in the financial year ended 30 June 2006 there was $1,221,401 in sales. Applying an average of $1.20 per tub to 80% of the sales, around 800,000 dipping sauces featuring the Wicked Tail Mark were sold.
Mr Valentine has been unable to locate Wicked Products’ financial statements for the remaining financial years until it was deregistered or BMB’s or Brisbane Fine Foods’ financial statement for the financial year ended 30 June 2010.
Mr Valentine recalls that, once the Wicked Business’ sales reached over $1.2 million in the financial year ended 30 June 2006, with the exception of the financial year ended 30 June 2008, the sales level remained at about that level, i.e. $1.2 million for the next six or so financial years. According to Mr Valentine, in the financial year ended 30 June 2008 there was a drop in the Wicked Business’ sales because, after Wesfarmers took over Coles, value added lines were removed from Coles’ fresh produce sections. However, the Wicked Business continued to sell to other retailers. The Wicked branded dips were reinstated in Coles about a year later.
Mr Valentine estimates that about 90% of the sales referred to in the preceding paragraph were of Wicked dipping sauces with the Original Packaging and that the sales of complementary products, i.e. strawberries, with the dipping sauces decreased to about 5% because most stores started buying strawberries from major suppliers. The Wicked Business also made some sales, estimated at less than 5% of total sales, of Wicked branded confectionery such as chocolate (see [69] above).
In the financial year ended 30 June 2011 the Wicked Business’ sales of dipping sauces was at least $1,207,676.12. Applying an average of $1.20 per tub, over 1 million dipping sauces featuring the Wicked Tail Mark were sold. At that time the Wicked Business was run by BMB. Based on BMB’s financial statement for the financial year ended 30 June 2011, sales of the Wicked dipping sauces made up 25% to 30% of BMB’s overall sales of $4,244,504.10 in that period.
BMB’s financial statements for the financial years ended 30 June 2012 up to and including 30 June 2018 were in evidence before me. They showed that:
(1) in the financial year ended 30 June 2012 BMB’s overall sales (which included Wicked dipping sauces sold with the Original Packaging featuring the Wicked Tail Mark and other non-Wicked products) were $4,524,617;
(2) in the financial year ended 30 June 2013 BMB’s overall sales (which included Wicked dipping sauces sold with the Original Packaging featuring the Wicked Tail Mark and other non-Wicked products) were $5,686,038. In the period July to December 2012, BMB’s profit and loss statement showed that BMB’s sales of “Dips” was $832,032.99 and sales of “Wicked Chocolate” was $488.37. Each “Dip” sale was of Wicked dipping sauces sold with the Original Packaging featuring the Wicked Tail Mark. Applying an average of $1.25 per tub, over 650,000 dipping sauces featuring the Wicked Tail Mark were sold in that period;
(3) in the financial year ended 30 June 2014 BMB’s overall sales were $5,939,258;
(4) in the financial year ended 30 June 2015 BMB’s overall sales were $5,035,418;
(5) in the financial year ended 30 June 2016 BMB’s overall sales were $5,927,393;
(6) in the financial year ended 30 June 2017 BMB’s overall sales were $6,105,798; and
(7) in the financial year ended 30 June 2018 BMB’s overall sales were $6,478,330.
Other than BMB’s profit and loss statement for the period July to December 2012, BMB’s financial statements did not separately record sales of Wicked dipping sauces. According to Mr Valentine, since the financial year ended 30 June 2011 sales of the Wicked dipping sauces have made up approximately 25% to 30% of BMB’s overall sales.
2.2.7 Promotion of Wicked branded products
In about 2004 the Wicked Business started a national radio advertising campaign for Wicked dipping sauces which involved five different radio advertisements and the radio stations referring to “Wicked” during traffic updates. The Wicked Business’ advertising spend for the radio campaigns was as follows:
(1) in the financial year ended 30 June 2004 – $2,319.52;
(2) in the financial year ended 30 June 2005 – $63,015.38; and
(3) in the financial year ended 30 June 2006 – $158,990.12.
Mr Valentine stopped the national radio advertising campaign in about 2007 because he considered that the Wicked brand was already well-known and that the money spent on advertising could be better used to keep the price of Wicked products low for retailers and, in turn, their customers. In addition, by about 2007 the Wicked Business was getting free media exposure through articles in magazines.
From about 2006 to 2016 the Wicked Business operated a website at “ (First Wicked Website) which featured the Wicked Tail Mark and the word “Wicked”. The homepage for the First Wicked Website for that period was as follows:
Since about 2016 the Wicked Business has operated the Current Wicked Website which features the New Wicked Mark and the word “Wicked”. The homepage for that site:
(1) in 2016 to 2019 was as follows:
(2) in 2019 was as follows:
Mr Valentine explained that the difference between these versions of the homepage on the Current Wicked Website is that the current version allows customers to buy the products online at just above their wholesale prices.
2.2.8 Mr Valentine’s awareness of Wicked Sister
When Mr Valentine came up with the Wicked Sign and its later form, the Wicked Tail Mark, he was not aware of the Wicked Sister brand. Mr Valentine first became aware of the Wicked Sister brand about 8 to 10 years ago when he saw it in a supermarket and he has seen the products on subsequent occasions. As the Wicked Sister products are in a different category, Mr Valentine did not pay much attention to them but at some point he purchased some of the products to sample.
Mr Valentine never considered that anyone could be confused between the Wicked Sister brand and the Wicked brand or wonder whether they came from the same source because the names of, and the fonts used for, each brand are different. Mr Valentine is not aware of anybody having been confused between the two brands. Mr Valentine also observes that the product ranges of the two brands are different and that the Wicked branded products do not require refrigeration while the Wicked Sister branded products do. In fact the Wicked dipping sauces have always been provided to retailers in boxes marked “NO REFRIGERATION NEEDED”, although the tubs themselves are marked “REFRIGERATE AFTER OPENING”. Mr Valentine is aware that retailers often choose to stock Wicked dipping sauces in the refrigerated section of their stores but observes that it is ultimately a matter for the retailer where they choose to stock the Wicked dipping sauces.
For the reasons set out in the preceding paragraph, when the Wicked Tail Mark was modernised in about 2014, and became the New Wicked Mark, neither the Wicked Sister brand nor any of its trade marks crossed Mr Valentine’s mind.
Mr Valentine explained that the Wicked brand has been used to sell dipping sauces and other products for nearly 17 years and, given the customer recognition of the brand, it would not be viable to rebrand away from the use of the word “Wicked”. In Mr Valentine’s view such a rebrand would put the Wicked product range out of business.
2.3 The Wicked Sister business
Mr Polly, as the sole director and chief executive officer of each of PDP Capital and PDP Fine Foods, is responsible for managing each company’s affairs and making decisions affecting each company.
2.3.1 The ownership of the Wicked Sister Marks
PDP Capital is the trustee of the PDP Capital Unit Trust. It was established for the purpose of holding all of the PDP group’s intellectual property as part of an asset protection strategy to protect it from commercial trading risks and to provide a vehicle whereby the intellectual property could be licensed to third parties. It is for those reasons that the Second WS Device Mark and the WS Word Mark are registered in the name of PDP Capital.
On 13 June 2017 Mr Polly signed a letter of consent addressed to the Registrar, on behalf of PDP Fine Foods as owner of the First WS Device Mark, consenting to the “use and restriction” by its related entity, PDP Capital as trustee for the PDP Capital Unit Trust, of the Second WS Device Mark and the WS Word Mark (Letter of Consent).
Mr Polly explained that the First WS Device Mark remains registered in the name of PDP Fine Foods, the company that applied for registration of that mark, and has not been assigned to PDP Capital because of “potential capital gains tax implications”.
PDP Fine Foods is the entity responsible for recipes, production, promotion and distribution of all of the products sold under the Wicked Sister brand and trade mark. On 11 February 2016 Mr Polly executed an intellectual property licence agreement on behalf of PDP Capital as trustee for the PDP Capital Unit Trust and PDP Fine Foods pursuant to which PDP Capital licensed the use of the Second WS Device Mark and the WS Word Mark to PDP Fine Foods (PDP Licence Agreement).
2.3.2 Wicked Sister Products
The range of products manufactured, promoted and distributed by PDP under the Wicked Sister Marks as at March 2019 was as follows:
(1) Wicked Sister Classic Tiramisu 2 x 85 gram twin pack;
(2) Wicked Sister Crème Caramel Madagascan Vanilla Bean 2 x 150 gram twin pack;
(3) Wicked Sister Madagascan Vanilla Bean Custard 500 gram;
(4) Wicked Sister Mousse Chocolate 2 x 80 gram twin pack;
(5) Wicked Sister Panna Cotta Raspberry Coulis 2 x 150 gram twin pack;
(6) Wicked Sister Panna Cotta Mango and Passionfruit 2 x 150 gram twin pack;
(7) Wicked Sister Vanilla Crème Brûlée 2 x 100 gram twin pack;
(8) Wicked Sister Matcha Green Tea Crème Brûlée 2 x 100 gram twin pack;
(9) Wicker Sister Rice Pudding Apple and Cinnamon 2 x 150 gram twin pack;
(10) Wicked Sister Rice Pudding Creamy Coconut 2 x 170 gram twin pack;
(11) Wicked Sister Rice Pudding Madagascan Vanilla Bean 2 x 150 gram twin pack;
(12) Wicked Sister Rice Pudding Madagascan Vanilla Bean 500 gram; and
(13) Wicked Sister Chocolate Profiteroles 2 x 80 gram twin pack,
(collectively, Wicked Sister Products).
Examples of the packaging for some of the Wicked Sister Products which feature in these reasons are set out below:
According to Mr Polly in excess of 20 million units of Wicked Sister Products are sold each year across Australia and New Zealand. Those products:
(1) regularly retail between $2.00 and $5.00; and
(2) are also sold in non-retail packaging, for example, to airlines and caterers.
All Wicked Sister Products sold in Australia are manufactured in Australia at the PDP facility located at Ingleburn, New South Wales, other than Wicked Sister Classic Tiramisu, Chocolate Profiteroles and Mousse Chocolate which are manufactured overseas and imported. All Wicked Sister Products manufactured in Australia are made from premium quality predominantly fresh ingredients including milk, cream and rice from Australia and New Zealand and non-artificial flavourings. Prior to this all Wicked Sister Products were manufactured in the former PDP facility located in Bankstown, New South Wales.
As all Wicked Sister Products are made predominantly from fresh ingredients they require refrigeration and are sold from the supermarket dairy aisle as depicted below:
2.3.3 Establishment of PDP and the development of the Wicked Sister brand
From 2000 to 2006 Mr Polly worked in a family business, Olympus Grove Pty Ltd (Olympus Grove), which manufactured and distributed a range of antipasto and which was owned by Mr Polly’s father. Mr Polly was Olympus Grove’s general manager. Olympus Grove supplied private label antipasto to Coles and its own branded antipasto to independent distributors throughout Australia.
In about August 2006 Mr Polly registered Zillia Fine Foods Pty Ltd (Zillia) and in March 2008 he changed Zillia’s name to PDP Fine Foods. The letters “PDP” are Mr Polly’s initials.
In about late 2006 or early 2007 Mr Polly left Olympus Grove and took off about a year to decide what he wanted to do next. He wanted to develop his own business, the success of which was not seasonally dependent, as was the antipasto business as antipasto is, according to Mr Polly, generally consumed through the summer months. Mr Polly was looking for a gap and opportunity in the grocery marketplace to establish a new product. He first looked at the yoghurt category and then the ice cream category but chose not to pursue either of these categories as he felt they were already too crowded.
Mr Polly said that he had his “lightbulb moment” in about mid-2007 when he was in a café in Marrickville, New South Wales. While there he walked over to the self-serve refrigerator to buy a drink and saw what appeared to be homemade rice puddings topped with cinnamon for sale in round takeaway containers. Mr Polly purchased one of the rice puddings, ate it and was instantly reminded of his grandmother’s recipe which took him back to his childhood.
This experience led Mr Polly to search in groceries for a product of the same or similar quality. In doing so he observed that the only similar products available were located in the chilled section of supermarkets, near the yoghurts. Mr Polly recalls that there were only a limited number of dessert-type products and brands available at the time. Apart from the “Yoplait Le Rice” product, there did not appear to be any other chilled rice pudding products and there was no pudding of the same thick and creamy quality as Mr Polly had sampled at the Marrickville café. Mr Polly also thought that the chilled dairy dessert section seemed very small such that there was an opportunity to develop a business selling a high quality rice pudding to enter this category and potentially to develop other high quality chilled dairy dessert products, for example, crème caramel, chocolate mousse or tiramisu.
At this time Mr Polly was still living at home with his mother. Before he began developing any product or trading he discussed his new business idea with his mother and asked for a rice pudding recipe. Mr Polly’s mother did not have a recipe which he wanted to use so be began to experiment in her kitchen, trying to develop a rice pudding recipe that tasted as good as the one he had purchased at the Marrickville café and which could be produced in commercial quantities. During this time Mr Polly engaged a quality assurance consultant who he knew from his time at Olympus Grove to help him start developing a food safety manual.
The process described in the preceding paragraph continued from late 2007 until early 2008. During this period Mr Polly also started looking for suitable premises from which he would be able to manufacture rice pudding in commercial quantities. He eventually located premises in Bankstown, New South Wales and in late 2007 signed a lease for those premises on behalf of Zillia. Over the next months Mr Polly commenced construction on a food grade kitchen and cool room at the Bankstown premises.
In about late 2007, whilst still living at his mother’s home and experimenting with rice pudding recipes, Mr Polly was thinking about a suitable brand for the rice pudding and dessert products and had been discussing this with his brother. Mr Polly recalls that one evening his brother came out of his room or the shower and said to him “what about wicked sister?” and that he responded “I love it!”. Mr Polly explained that the reason why he liked the brand was that it was so different to anything in the market at the time and it was not attached to heritage or any one product which meant it would be suitable for use across a range of chilled dessert products.
In late 2007 or early 2008 Mr Polly engaged William McGuire of WAG Design to develop a logo featuring the brand Wicked Sister and incorporating the words “Fine Foods” which would be suitable for use on both the olives and antipasto he was selling as well as the chilled rice pudding products and other desserts which he was in the process of developing. I pause here to note that, insofar as Mr Polly refers to the sale of olives and antipasto, it is not clear how those sales were being made. The only evidence of sales of those types of goods was that in mid-2008, that is, it seems, after Mr Polly had engaged WAG Design and while still developing the recipes for the rice pudding product, in order to pay the rent on the Bankstown premises Mr Polly started repacking olives and antipasto into small tubs and on-selling those to a distributor in Parramatta, New South Wales. However, the olives and antipasto were sold under the distributor’s branding. Putting that to one side, WAG Design created a logo which Mr Polly liked and on 29 May 2008 he applied to register that logo, which became the First WS Device Mark, in the name of PDP Fine Foods.
In Mr Polly’s opinion the most distinctive aspects of the First WS Device Mark were and are:
(1) the devil’s pitchfork in the first letter “W”; and
(2) the curved and forked tail in the “s” in the word “Sister”.
Because it incorporates the pitchfork, Mr Polly considered the “W” to be the most important and memorable part of the WS Device Marks. Mr Polly considered the “W” as used in the WS Device Marks to be so iconic and memorable that in 2017 he had his designers develop a short form of the WS Device Marks incorporating the first letters of each of the words “Wicked” and “Sister” as follows (WS Logo):
PDP Capital applied for registration of as a trade mark on 18 December 2017 and since 2017 PDP has used the WS Logo on the packaging of its Wicked Sister Products. It was also used on a limited edition range of “WS Creations” desserts.
The Wicked Sister branding also appealed immediately to Mr Polly because it was different from the trade marks and branding collateral used by other companies in the market which included what Mr Polly considered to be “old fashioned” stylisation and graphics, such as references to Greece, Italy and Spain.
At no time during the development and registration of the First WS Device Mark was Mr Polly aware of Grasshopper or any of its grocery products featuring the word “Wicked”.
2.3.4 Production of Wicked Sister rice pudding
By the second half of 2008 Mr Polly had developed a vanilla rice pudding recipe which he believed was a good representation of his grandmother’s recipe and one that he could say brought him back to his childhood and had obtained a licence to produce dairy products from the New South Wales Food Authority. Mr Polly started producing rice pudding from his Bankstown premises for sale and found a distributor, Victoria Foods, to distribute the rice pudding products. Mr Polly recalls that Victoria Foods mainly distributed the Wicked Sister rice pudding products through independent supermarkets and food shops as well as fruit shops in Victoria and New South Wales.
By early 2009 Mr Polly had developed Wicked Sister chocolate, banana and strawberry rice pudding recipes in addition to the original vanilla rice pudding with cinnamon. At that time Mr Polly was manufacturing the rice pudding products from the Bankstown premises in a 60 litre pot. Its manufacture was a manual process: the heating and stirring was done manually; the cups were filled with a jug; and the sealing of the tubs and packing of them into cartons was done by hand.
As the rice pudding products gained popularity Mr Polly realised that he needed new equipment to automate the manufacturing process in order to be able to produce higher volumes. He wanted to purchase a new 150 litre automated kettle which would reduce the level of labour and improve the quality and consistency of the desserts at a cost of approximately $120,000. However to fund this acquisition PDP Fine Foods needed to borrow money which meant Mr Polly needed to secure a larger distribution agreement before it would be able to get a loan.
2.3.5 Distribution of Wicked Sister Products
In about July 2009 Mr Polly approached Woolworths about supply of two of the Wicked Sister rice pudding products, vanilla rice pudding with cinnamon and chocolate rice pudding. In October 2009 PDP was given the opportunity to launch these two products into approximately 150 Woolworths stores.
According to Mr Polly the Wicked Sister single serve 200 gram vanilla rice pudding with cinnamon and single serve 200 gram chocolate rice pudding products were a success and, within two years, Wicked Sister products were rolled out to all Woolworths stores across the east coast of Australia and, by the end of 2012, to all Woolworths stores nationally. Since its launch in Woolworths in 2009 the Wicked Sister product range has continued to expand and now includes nine different products which are typically displayed together to create a “wall” of Wicked Sister Products.
In addition:
(1) Wicked Sister Products were released in Coles stores nationally in about mid-July 2015 and, as at March 2019, were available in all Coles stores nationally as well as being available for purchase online from Coles;
(2) in the second half of 2008 Costco began selling Wicked Sister Crème Caramel Madagascan Vanilla Bean and Wicked Sister Rice Pudding Madagascan Vanilla Bean;
(3) Wicked Sister Products are available at over 1,100 independent grocery stores across Australia including, for example, IGA, Romeo’s, Drakes, Ritchies and FoodWorks. They are distributed to these stores via PDP’s national distribution partner, Manassen Foods;
(4) Wicked Sister Products are available at over 345 stores in New Zealand including New World, Countdown and PAK’nSAVE;
(5) Wicked Sister Products are exported to Hong Kong, Thailand, Singapore and Malaysia; and
(6) Wicked Sister Products are also sold in 24 unit cartons for individual distribution on airlines and for other catering purposes. PDP supplies Wicked Sister Products to Qantas international flights and Qantas domestic and international lounges located in Australia as well as to Gate Gourmet, an airline catering firm headquartered in Zurich Airport, Switzerland, which supplies Wicked Sister Products to Virgin Atlantic, Hainan Airlines and Tianjin Airlines.
For those reasons, PDP has not established that it could have relied on s 58 as a ground on which the registration of the Wicked Tail Mark could have been opposed for the purposes of s 88(2)(a) of the TM Act.
6.4.1.2 Section 59 of the TM Act
Section 59 of the TM Act relevantly provides that registration of a trade mark may be opposed on the ground that the applicant does not intend to use or authorise the use of the trade mark in Australia or to assign the trade mark to a body corporate for use by the body corporate in Australia in relation to the goods specified in the application.
PDP alleges that Mr Valentine, the applicant for registration of the Wicked Tail Mark, as at 18 February 2005 did not use, intend to use, authorise or intend to authorise another person to use the Wicked Tail Mark or intend to assign it. It made no additional submissions in relation to the availability of the ground of opposition under s 59 other than the general submission recorded at [531] above concerning the interaction between ss 27, 58, 59 and 92(4)(a) of the TM Act.
Grasshopper submits that the allegation that Mr Valentine did not intend to use, authorise the use of or assign the Wicked Tail Mark at the priority date is not borne out by the evidence. It contends that as at that date, 18 February 2005, Mr Valentine had an intention to authorise the use of the Wicked Tail Mark by Wicked Products, an intention which is also borne out by Mr Valentine’s subsequent conduct. I accept that is so.
Mr Valentine gives express evidence that at the time he made the application to register the Wicked Tail Mark he intended that Wicked Products would use the Wicked Tail Mark for each of the goods the subject of the application, namely the Registered Wicked Tail Mark Goods. Those goods are: dips, including chocolate dips and 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. Mr Valentine’s evidence is that at that time he thought the Wicked product range would expand from dipping sauces into fruit flavoured toppings or sauces and confectionery.
Mr Valentine’s intention to use the Wicked Tail Mark is also borne out by his subsequent conduct. While intention to use is to be assessed at the priority date, later use permits the drawing of inferences as to intention as at that date: see Food Channel at [74]. Relevantly, from 18 February 2005 to 28 August 2008, the period during which Mr Valentine owned the Wicked Tail Mark, Wicked Products was authorised to use and used that mark under Mr Valentine’s control (see [65] above). That is, there was authorised use, pursuant to s 8 of the TM Act, of the Wicked Tail Mark by Wicked Products during that period.
I also accept that Mr Valentine’s intention to use, or authorise use of, the Wicked Tail Mark extended to all of the Registered Wicked Tail Mark Goods:
(1) at the time of making the application to register the Wicked Tail Mark, Mr Valentine intended that Wicked Products would use that mark for all of the Registered Wicked Tail Mark Goods;
(2) in addition, at that time Mr Valentine thought that the Wicked product range would expand from dipping sauces into fruit flavoured toppings or sauces and confectionery;
(3) as it transpired, the Wicked product range expanded into confectionery, selling chocolate and rocky road from about 2005 to 2012; and
(4) in 2010 Mr Valentine had artwork done for labels for blueberry, raspberry, fig, strawberry and mango fruit flavoured topping sauces but the products were never launched; and
(5) Mr Valentine intends for the Wicked Business to relaunch or launch chocolate, rocky road and fruit flavoured topping sauces in the future.
For those reasons, PDP has not established that it could have relied on s 59 as a ground on which the registration of the Wicked Tail Mark could have been opposed for the purposes of s 88(2)(a) of the TM Act.
6.4.1.3 Conclusion on the Wicked Tail Mark rectification claim
As PDP has not made out either of the grounds on which it relies for the purposes of s 88(2)(a) of the TM Act, it has not made out its grounds for cancellation of the Wicked Tail Mark or for amendment of the Register in relation to the Registered Wicked Tail Mark Goods.
6.4.2 The Wicked Tail Mark removal claim
PDP seeks to have the Register amended pursuant to s 92 of the TM Act (see [242] above) by the removal of the registration for the Wicked Tail Mark in respect of any and all of the Registered Wicked Tail Mark Goods from the priority date on the grounds set out in s 92(4)(a) and (b) of the TM Act.
Sections 100 and 101 of the TM Act, which are also relevant to an application for non-use made under s 92, are set out at [243]-[245] above.
Section 92(4) sets out the grounds on which an application for non-use can be made under subs (1) or (3). In summary those grounds are that:
(1) on the day on which the application for registration of the relevant trade mark was filed, the applicant had no intention in good faith to use or authorise the use of the trade mark in Australia or to assign the trade mark to a body corporate for use by it in Australia in relation to the goods to which the non-use application relates and the registered owner has not used the trade mark, or used it in good faith, in Australia in relation to those goods at any time up to one month before the non-use application was made (s 92(4)(a)); or
(2) the trade mark has been registered for a continuous period of three years ending one month before the day on which the non-use application is filed and, at no time during that period, did the then registered owner use the trade mark, or use it in good faith, in Australia in relation to the goods to which the application relates (s 92(4)(b)).
Despite making a claim in reliance on s 92(4)(a) of the TM Act, PDP makes no submissions in support of that claim. Grasshopper contends that the claim relying on s 92(4)(a) of the TM Act is superfluous in the circumstances of this case as it contains an additional limb, that is the lack of intent to use the trade mark as at the date of its application for registration. For that reason, Grasshopper has addressed s 92(4)(b). I will do the same but before doing so I note that, in any event, I have already found that Mr Valentine did have an intention to use or to authorise the use of the Wicked Tail Mark as at 18 February 2005 in the context of PDP’s claim relying on s 59 as a ground on which it could have opposed the registration of the Wicked Tail Mark for the purposes of s 88(2)(a) of the TM Act (see [551]-[553] above). That being so, PDP cannot make out its claim based on s 92(4)(a) of the TM Act.
I turn then to consider PDP’s claim for removal of the Wicked Tail Mark from the Register for non-use based on s 92(4)(b) of the TM Act.
As noted above, to succeed on this ground, PDP must establish that Grasshopper did not use the Wicked Tail Mark in relation to the Registered Wicked Tail Mark Goods in the three year period ending one month before it brought its non-use claim, being the period from 18 September 2015 to 18 September 2018 (Third Non-Use Period).
6.4.2.1 Parties’ submissions
PDP submits that pursuant to s 100 of the TM Act Grasshopper bears the onus of proving use in good faith of the Wicked Tail Mark, as a trade mark, in the Third Non-Use Period. PDP contends that there is no evidence of use of the Wicked Tail Mark during that period beyond Mr Valentine’s vague assertion that the “Wicked Business phased out the Wicked Tail Mark around early 2016” and there is no evidence of any sales referable to the Wicked Tail Mark by Grasshopper or by any third party retailers selling stock in the Original Packaging bearing the Wicked Tail Mark.
Insofar as Grasshopper relies on the extract from Fruitlink’s website which continues to use images of the Original Packaging to sell Wicked products (see [62] above) PDP submits that the screenshot in evidence was taken on 27 May 2019 and is prima facie not itself evidence of use of the Wicked Tail Mark as a trade mark during the Third Non-Use Period. PDP says that while Mr Valentine asserts that “Fruitlink has used this form of webpage since the period before the Wicked Business began using the New Packaging”, in circumstances where there is no evidence of the actual appearance of the webpage during the Third Non-Use Period, Mr Valentine’s assertion is not itself evidence of use of the Wicked Tail Mark as a trade mark in good faith during the Third Non-Use Period for the purposes of the TM Act.
PDP submits that it is not clear from the screenshot of the Fruitlink website whether the chocolate dip product on which the Wicked Tail Mark appears was available for purchase from Fruitlink during the Third Non-Use Period and, even if it was available, there is nothing to prove that a potential customer would have received packaging bearing the Wicked Tail Mark during the Third Non-Use Period in circumstances where the New Packaging had been launched in late 2014. PDP also submits that it is not use by the registered owner who was firmly directing its customers not to use the Wicked Tail Mark but to use the New Wicked Mark.
PDP submits that even if Mr Valentine’s evidence about the Fruitlink webpage is accepted, where a registered owner purports to rely upon a single use, the quality of that evidence must amount to “overwhelming convincing proof”, if not “conclusive proof”, of the bona fide use of the trade mark during the relevant non-use period and the screenshot from the Fruitlink website is nothing more than an outdated webpage. PDP notes that there are no invoices showing sales in the Third Non-Use Period and that Mr Valentine accepted that any invoices would simply record “wicked dips” and would not permit a person to determine whether the dips were in the Original Packaging or the New Packaging.
PDP contends that even if the single use relied on by Grasshopper, i.e. use by way of the image on the Fruitlink website, is sufficient for the purposes of the TM Act, it would only be the case that the Wicked Tail Mark was used on the Fruitlink webpage in respect of chocolate dips. It says that there is no evidence that Grasshopper used the Wicked Tail Mark on the balance of the goods in relation to which it was registered during the Third Non-Use Period, namely savoury dips, fruit flavoured toppings and sauces, and confectionery, including chocolates and sweets, but excluding frozen confections.
Grasshopper submits that the Wicked Business continued to manufacture dips with the Old Packaging featuring the Wicked Tail Mark even after adopting the New Wicked Mark in 2014 and that it continued to use the Original Packaging until early 2016, which involved use during the Third Non-Use Period.
Grasshopper notes that it is not in dispute that any uses of the Wicked Tail Mark, or the New Wicked Mark, during the Third Non-Use Period were authorised by Grasshopper.
Grasshopper submits that Fruitlink continued to use images of packaging with the Wicked Tail Mark to sell Wicked products for the whole of the Third Non-Use Period which constitutes a relevant use of the Wicked Tail Mark during the Third Non-Use Period.
Grasshopper contends that, pursuant to s 7(1) and s 100(3)(a) of the TM Act, it is taken to have used the Wicked Tail Mark during the Third Non-Use Period if it establishes use of the mark with additions or alterations not substantially affecting its identity. Grasshopper says that use of the New Wicked Mark constitutes use of the Wicked Tail Mark with alterations not substantially affecting its identity and that it is not in dispute that the New Wicked Mark was used during the Third Non-Use Period.
Based on those submissions Grasshopper says that it has used the Wicked Tail Mark during the Third Non-Use Period in respect of “dips” but accepts that it has not made any use of the Wicked Tail Mark in respect of dessert toppings and sauces, including chocolate toppings and sauces, and fruit flavoured toppings and sauces.
6.4.2.2 Consideration
Grasshopper accepts that it has not used the Wicked Tail Mark in relation to the following Registered Wicked Tail Mark Goods: dessert toppings and sauces, including chocolate topping and sauces, and fruit flavoured toppings and sauces. I understand Grasshopper’s position to be that it has not used the Wicked Tail Mark in relation to those categories of goods at all and thus it follows that it has not used that mark in relation to those categories in the Third Non-Use Period.
The issue that remains for resolution is whether Grasshopper has used the Wicked Tail Mark in the Third Non-Use Period in relation to the Remaining Registered Wicked Tail Mark Goods which are: dips, including chocolate dips and savoury dips; confectionery, including chocolates and sweets, but excluding frozen confections. Grasshopper bears the onus of rebutting the allegation that the Wicked Tail Mark has not been used at any time during the Third Non-Use Period, or been used in good faith, in relation to the Remaining Registered Wicked Tail Mark Goods: s 100(1)(c) of the TM Act. Grasshopper will be taken to have rebutted the allegation if it establishes that the Wicked Tail Mark, or the Wicked Tail Mark with additions or alterations not substantially affecting its identity, was used in good faith by it in relation to the Remaining Registered Wicked Tail Mark Goods in the Third Non-Use Period.
The following facts are relevant to a determination of whether Grasshopper used the Wicked Tail Mark during the Third Non-Use Period in relation to the Remaining Registered Wicked Tail Mark Goods:
(1) from about late 2014 the Wicked Business gradually phased in the New Packaging, which featured the New Wicked Mark. According to Mr Valentine, initially the New Packaging was sold in Coles and other chain stores while products in the Original Packaging continued to be sold in independent stores;
(2) the Wicked Business phased out the Wicked Tail Mark in about early 2016, once all the pre-printed labels for the Original Packaging had been used;
(3) Fruitlink features an image of the Original Packaging on its website in relation to chocolate dip. The screenshot of the Fruitlink webpage is dated 27 May 2019;
(4) despite what is included on Fruitlink’s website any Wicked Products supplied by Fruitlink to customers currently and for some years prior were and are in the New Packaging; and
(5) invoices issued at the time of sale of Wicked dips do not differentiate between supply of products in the Original Packaging or New Packaging.
As set out at [69] above, Mr Valentine’s evidence is that the Wicked product range expanded into confectionery, selling chocolate and rocky road from about 2005 to 2012. However, there is no evidence of any sale or indeed use of the Wicked Tail Mark in relation to those or similar products during the Third Non-Use Period. Thus there is no evidence of use in relation to “confectionery, including chocolates and sweets, but excluding frozen confections”. Grasshopper has not rebutted the allegation that the Wicked Tail Mark has not been used or been used in good faith at any time during the Third Non-Use Period in relation to “confectionery, including chocolates and sweets, but excluding frozen confections”.
Grasshopper bears the onus of rebutting the allegation that the Wicked Tail Mark has not been used or been used in good faith at any time during the Third Non-Use Period in relation to its Wicked dips. Insofar as use in relation to “dips, including chocolate dips” is concerned, in summary the evidence is that:
(1) the Original Packaging using the Wicked Tail Mark was phased out by early 2016, which covers the beginning of the Third Non-Use Period, once all of the pre-printed labels for the Original Packaging had been used. Beyond Mr Valentine’s general assertion, the evidence does not disclose in what quantities or to which independent grocers or retailers Wicked dips continued to be sold in the Original Packaging in the period up to early 2016; and
(2) as at 27 May 2019 the Fruitlink website featured a photograph of the Wicked chocolate dip in the Original Packaging which includes the Wicked Tail Mark.
The parties both rely on E & J Gallo in relation to the question of whether there was use in the Third Non-Use Period. In E & J Gallo the High Court considered the concept of use of a trade mark in the context of ss 92(4)(b), 100(1)(c) and 100(3)(a) of the TM Act. In that case the owner of the trade mark, E & J Gallo Winery, a company incorporated in California in the United States of America, distributed its alcoholic beverages around the world. The trade mark was transferred to E & J Gallo Winery as part of a sale transaction by which it acquired Grape Links Inc, trading as Barefoot Cellars, which was finalised in January 2005. Prior to January 2005, Barefoot Cellars had international distribution arrangements, including with a German company, to which it shipped some cases of wine bearing the registered trade mark in 2001. Some bottles of wine from that consignment were sold in 2002 to a Victorian liquor wholesaler, Beach Avenue Wholesalers Pty Ltd. Beach Avenue commenced selling the bottles of wine bearing the registered trade mark in 2003. The principal issue identified for consideration on the appeal by French CJ, Gummow, Crennan and Bell JJ was whether there was use by E & J Gallo Winery or its predecessor in title of the registered trade mark in respect of wines in good faith during the statutory period. Their Honours said (at [28]) that there was.
In setting out their reasons for why that was so, French CJ, Gummow, Crennan and Bell JJ said (at [51]-[52]):
51 The capacity of a trade mark to distinguish a registered owner’s goods from those of others, as required by s 17, does not depend on whether the owner knowingly projects the goods into the Australian market. It depends on the goods being in the course of trade in Australia. Each occasion of trade in Australia, whilst goods sold under the trade mark remain in the course of trade, is a use for the purposes of the Trade Marks Act. A registered owner who has registered a trade mark under the provisions of the Trade Marks Act can be taken, in general terms, to have an intention to use that trade mark on goods in Australia. It is a commonplace of contemporary international trade that prior to consumption goods may be in the course of trade across national boundaries.
52 An overseas manufacturer who has registered a trade mark in Australia and who himself (or through an authorised user) places the trade mark on goods which are then sold to a trader overseas can be said to be a user of the trade mark when those same goods, to which the trade mark is affixed, are in the course of trade, that is, are offered for sale and sold in Australia. This is because the trade mark remains the trade mark of the registered owner (through an authorised user if there is one) whilst the goods are in the course of trade before they are bought for consumption. As affirmed by Gummow J in Wingate Marketing Pty Ltd v Levi Strauss & Co, “whilst a trade mark remains on goods, it functions as an indicator of the person who attached or authorised the initial use of the mark”. During the trading period, the trade mark functions as an indicator of the origin of the goods, irrespective of the location of the first sale.
(Footnotes omitted.)
There was also a notice of contention before the High Court which raised, among other things, whether the relevant use was “use in good faith” as required by s 92(4)(b)(ii) of the TM Act. In relation to that issue, the respondent contended that the requirement that there be “use in good faith” involved consideration of the volume of use, which should be substantial, and of the state of mind of the registered owner in respect of the use. The respondent said that in that case the use of the registered trade mark was neither substantial nor genuine, describing the volumes of sales in Australia as “miniscule” and noting that a registered owner of a mark should not be taken to have used the mark in good faith when the owner was unaware that such use was occurring.
In considering that issue at [64] French CJ, Gummow, Crennan and Bell JJ said:
Whilst a single act of sale may not be sufficient to prevent removal, in the case of genuine use, a relatively small amount of use may be sufficient to constitute “ordinary and genuine” use judged by commercial standards. It has been recognised by the Court of Justice of the European Communities, dealing with the expression “genuine use” as used in Arts 10 and 12 of Directive 89/104 of the Council of the European Communities, that use of a mark “need not … always be quantitatively significant for it to be deemed genuine”. On the facts here, it is not necessary to decide whether a single use of the registered trade mark in good faith would have been sufficient to resist removal.
(Footnotes omitted.)
Here there has been use in the Third Non-Use Period as summarised at [576] above. Contrary to PDP’s submission, the use is not limited to the publication of Fruitlink’s webpage but includes the use on the Original Packaging in the period in which that packaging was phased out. While there is no evidence of the volume sold in the Original Packaging in that period, I am satisfied that even if it was a relatively small amount of use by comparison to total sales, it is sufficient to constitute use. There is no suggestion that the use during this period was not genuine. As Mr Valentine said, Grasshopper used its diminishing stock of Original Packaging featuring the Wicked Tail Mark for its dips sold to independent grocers.
6.4.2.3 Should the Wicked Tail Mark be removed from the Register in respect of the Registered Wicked Tail Mark Goods other than dips including chocolate dips?
I am satisfied that Grasshopper has not used the Wicked Tail Mark in relation to the following goods for which it is registered: savoury dips; dessert toppings and sauces, including chocolate topping and sauces, and fruit flavoured toppings and sauces; confectionery, including chocolates and sweets, but excluding frozen confections. Use has been established for “dips, including chocolate dips”.
As I have already observed, the Court retains a discretion under s 101(3) of the TM Act not to make an order for removal if it is “satisfied that it is reasonable to do so” in relation to the registration of the Wicked Tail Mark insofar as PDP has established that Grasshopper has not used the Wicked Tail Mark in relation to the goods set out in the preceding paragraph. The principles applicable to the exercise of the discretion are set out at [263]-[266] above.
PDP submits that the evidence does not disclose any reason why the Court should exercise its discretion pursuant to s 101(3) of the TM Act to leave the Wicked Tail Mark on the Register. It contends that it is clearly not being used by Grasshopper.
Grasshopper submits that the Court should exercise its discretion pursuant to s 101(3) of the TM Act in its favour. Grasshopper relies on three matters: first it says that the public interest will be adversely affected if, relevantly, the registration is removed for any of the Registered Wicked Tail Mark Goods; secondly, it says that no member of the public is likely to have been deceived or confused by the circumstances said to justify removal; and thirdly, to the extent that it did not use the Wicked Tail Mark in relation to any of the Registered Wicked Tail Mark Goods, it intends to do so in the future, including by way of the Wicked Word Mark and the New Wicked Mark, “as to which see s 7(1) of the TM Act”.
In my opinion the Wicked Tail Mark should be removed only in respect of the category of “savoury dips”. There is no evidence of use or intention of use of the Wicked Tail Mark in relation to that category. Grasshopper does not explain how it is that the public interest would be affected by removal of that category from the Register and I am not satisfied that would be so. Rather, the maintenance of the integrity of the Register is a factor to be taken into account and an unused trade mark or, in this case a lack of use or intention to use in relation to a category of goods for which a mark is registered, should not remain on it.
The balance of the Registered Wicked Tail Mark Goods should remain. Given my findings about use at [581] above, there is no issue about “dips, including chocolate dips”. As to the balance of the categories, dessert toppings and sauces, including chocolate topping and sauces, and fruit flavoured toppings and sauces, and confectionery, including chocolates and sweets, but excluding frozen confections, the evidence before me, which I have accepted, is that Mr Valentine intends to use or authorise use of the Wicked Tail Mark in the future in relation to chocolate, rocky road and fruit flavoured topping sauces. Accordingly, I would not exercise my discretion in favour of removing the Wicked Tail Mark from the Register in respect of those categories of goods.
6.5 Conclusion on PDP’s claims
PDP has been successful in one aspect of its claims. That is that the Wicked Tail Mark should be removed from the Register in respect of “savoury dips”. It has otherwise failed to establish any of its claims.
7. CONFIDENTIALITY
At the hearing I made an order pursuant to s 37AI of the Federal Court Act that confidential exhibit PDP-2 to Mr Polly’s affidavit sworn on 29 March 2019 (Confidential Exhibit PDP-2) be treated as confidential and not be published or made available, and not be disclosed to any person or entity other than the Court for the purposes of this proceeding, Grasshopper’s external legal advisors and any other persons designated by agreement by the applicants or by order of the Court (provided that those persons have first signed a confidentiality undertaking in the form provided), pending the making of an application pursuant to s 37AF and s 37AG of the Federal Court Act.
An issue that arose at the hearing was that that Confidential Exhibit PDP-2 appeared to include documents which could not be classified as confidential. That was remedied and those pages of Confidential Exhibit PDP-2 which are of that nature have been identified. PDP seeks an order pursuant to s 37AF and s 37AG of the Federal Court Act in relation to the remainder of Confidential Exhibit PDP-2.
Mr Polly gives evidence that he believes that Confidential Exhibit PDP-2 contains information which is not publicly available and is commercially sensitive and which, if published or disclosed to Grasshopper as a competitor or to other third party competitors, could seriously and adversely affect PDP’s commercial position. More detailed evidence about the nature of the material included in Confidential Exhibit PDP-2 is given by Dean Gerakiteys, a solicitor in the employ of PDP’s solicitors. Mr Gerakiteys describes the categories of material included in Confidential Exhibit PDP-2 and why, based on his instructions from Mr Polly, each category is confidential. The categories of material so described include information about royalty and fee arrangements, sales figures, information about marketing and promotional activities and strategy, business plans and brand expansion strategies. In summary Mr Gerakiteys’ evidence is that disclosure of the material could prejudice PDP’s business and provide a competitive advantage to its competitors.
Section 37AF(1)(b) of the Federal Court Act empowers the Court to make a suppression order or non-publication order prohibiting or restricting the publication or other disclosure of information that relates to a proceeding before the Court and is, relevantly, information that comprises evidence or information about evidence. It is clear that Confidential Exhibit PDP-2 is of that nature.
Section 37AG of the Federal Court Act sets out the grounds upon which such an order can be made including that the order is necessary to prevent prejudice to the proper administration of justice: see s 37AG(1)(a). The suppression order or non-publication order must specify the ground or grounds on which the order is made: see s 37AG(2).
Section 37AE of the Federal Court Act provides that, in deciding whether to make a suppression order or non-publication order, the Court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice.
Section 37AJ provides that a suppression order or non-publication order operates for the period decided by the Court and specified in the order and that, in deciding the period for which an order is to operate, the Court is to ensure that it operates for no longer than is reasonably necessary to achieve the purpose for which it is made.
In Zivanovic v Australian Securities and Investments Commission [2017] FCA 1633 Gleeson J set out the legal principles which guide the Court in making an order pursuant to s 37AF of the Federal Court Act including at [27]-[28] that:
27 In LHRC v Deputy Commissioner of Taxation (No 4) [2015] FCA 70; (2015) 326 ALR 150, Perry J stated at [10] and [11]:
10. Section 37AE provides that, in deciding whether to make a suppression or non-publication order, the Court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice. As, for example, Hill J observed in SRD v Australian Securities Commission (1994) 52 FCR 187 at 189:
It will ordinarily be essential in order to maintain confidence in the integrity and independence of the Court that its proceedings be open to scrutiny by the general public and it will only be in exceptional cases where the interest of justice would override the ordinary requirement of open justice.
11. Consistently with this primary objective, s 37AG provides that the Court may make a suppression or non-publication order on the grounds that the order is “necessary” relevantly to prevent prejudice to the proper administration of justice. As such, the section imposes a high threshold for the making of such an order consistently with the principle that open justice is a fundamental tenet of the rule of the law. As the High Court said in Hogan v Australian Crime Commission (2010) 240 CLR 651; [2010] HCA 21 at [30], “‘necessary’ is a strong word.” However, as the Court also said in Hogan at [33], once the court has reached that state of satisfaction, it would be a misreading of s 50 of the Federal Court Act (and, by analogy, its successor provisions, ss 37AF and 37AG) to then refuse to make the order. Furthermore, under s 37AJ, in deciding the period for which an order is to operate, the Court is to ensure that the order operates for no longer than is reasonably necessary to achieve the purpose for which it is made.
28 Contrary to the submission made by senior counsel for the applicant, Mr Coleman SC, that the applicant’s application requires a balancing exercise between the interests of open justice on the one hand and, on the other, preventing prejudice to the proper administration of justice by preserving the subject matter of the dispute, s 37AF is relevantly enlivened because it is necessary to avoid prejudice to the administration of justice. As Perram J observed in Australian Competition and Consumer Commission v Air New Zealand Ltd (No 4) [2012] FCA 1439 at [4], in relation to former s 50, “Once the necessity appears, there is no balancing exercise to be engaged in; the order is simply to be made. This is because the word “may” in former s 50 does not disclose the presence of a discretion”, citing Hogan v Australian Crime Commission [201] HCA 21; (2010) 240 CLR 651 at [31]–[32].
In Australian Competition and Consumer Commission v Air New Zealand Ltd (No 4) [2012] FCA 1439 at [5] Perram J observed that the “orderly conduct of commerce can justify the conclusion that the interests of the administration of justice require the suppression of evidence”.
Subject to the matter referred to below, I am satisfied that it is in the interests of the administration of justice to make the order sought by PDP in the form it seeks given the commercial sensitivity of the material included in Confidential Exhibit PDP-2 after its review referred to at [590] above. The evidence before me establishes that the material is commercially sensitive in that it directly relates to and comments on PDP’s business including its plans and future strategies and that if it was made available to a competitor it would affect its business.
PDP has sought the order pursuant to s 37AF and s 37AG of the Federal Court Act “until further order” without explaining why. In my opinion it is not reasonably necessary to achieve the purpose for which the order is to be made for it to continue to operate for what, in effect, may be an indefinite period or at least until such time as a party takes a positive step in relation it. Given the nature of the material included in Confidential Exhibit PDP-2 and its period of currency I am satisfied that the order should operate for a period of three years from the date it is made. To do so achieves the purpose for which the order is to be made.
8. CONCLUSION
I will make orders requiring the parties to attempt to agree on the appropriate form of orders to be made reflecting my reasons and the conclusions I have reached and, if they can agree, to submit the draft orders to my Associate within 14 days of the date of delivery of these reasons. If the parties cannot agree on the form of orders then, within that time frame, each party is to provide its proposed draft orders to give effect to these reasons together with submissions, not exceeding three pages in length, explaining why those orders should be made. In the event that the parties cannot agree on a form of orders the proceeding will be listed before me on 21 August 2020 at 9.30 am.
The parties asked that I reserve on the question of costs of the proceeding. Accordingly, I will also make orders requiring the parties to provide submissions in relation to the costs of the proceeding, not exceeding three pages in length, within 21 days of the date of delivery of these reasons. Unless any party requests an oral hearing, the question of costs will be dealt with on the papers.
Finally, I will make orders in the form sought by PDP pursuant to s 37AF and s 37AG of the Federal Court Act for a period of three years from the date of delivery of these reasons.
I certify that the preceding six hundred and two (602) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Markovic.
Associate:
Dated: 30 July 2020
6
3