Powell v Glow Zone Products Pty Ltd
[1997] FCA 1401
•11 DECEMBER 1997
FEDERAL COURT OF AUSTRALIA
TRADE MARKS - Validity - distinctiveness - whether CAPS THE GAME adapted to distinguish - generic use of term “caps” in the United States of America - generic use of term “caps” in trade in Australia - whether, had mark originally been distinctive, such distinctiveness was lost - infringement - whether deceptive similarity between CAPS THE GAME and GLO-CAPS.
Trade Marks Act 1955 (Cth) ss 24, 26, 28, 56, 62(1)
Trade Marks Act 1995 (Cth)
Anheuser-Busch Inc v Castlebrae Pty Ltd (1991) 32 FCR 64, refd
Burger King Corporation v Registrar of Trade Marks (1973) 128 CLR 417, refd
Clark Equipment Co v Registrar of Trademarks (1964) 111 CLR 511, appl
Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302, refd
FH Faulding & Co Ltd v Imperial Chemical Industries of Australia & New Zealand Ltd (1965) 112 CLR 537, refd
Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326, refd
Mark Foy’s Ltd v Davies Coop & Co Ltd (1956) 95 CLR 190, appl
Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414, dist
New South Wales Dairy Corporation v Murray Goulburn Co-operative Company Ltd (1990) 171 CLR 363, refd
Philippart v William Whiteley Ltd (1908) 25 RPC 565, refd
Reddaway & Co Ltd’s Application (1945) 42 RPC 397, refd
Saville Perfumery Ltd v June Perfect Ltd (1939) 58 RPC 147, refd
Seven-Up Co v Bubble Up Co Inc (1987) 9 IPR 259, refd
Seven-Up Company v O.T. Ltd (1947) 75 CLR 203, refd
Smith Kline & French Laboratories (Australia) Ltd v Registrar of Trade Marks (1967) 116 CLR 628, refd
W.D. & H.O. Wills (Aust) Ltd v Rothmans Ltd (1956) 94 CLR 182, refd
LARRY POWELL v GLOW ZONE PRODUCTS PTY LTD
NG 1008 of 1996
JUDGES: DAVIES, BURCHETT & LEHANE JJ
DATE: 11 DECEMBER 1997
PLACE: SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 1008 of 1996
BETWEEN:
LARRY POWELL
APPELLANTAND:
GLOW ZONE PRODUCTS PTY LTD
RESPONDENTCORAM:
DAVIES, BURCHETT & LEHANE JJ
DATE OF ORDER:
11 DECEMBER 1997
WHERE MADE:
SYDNEY
MINUTES OF ORDER
THE COURT ORDERS THAT:
The appeal be dismissed with costs.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 1008 of 1996
On Appeal from a judge of
the Federal Court of Australia
BETWEEN:
LARRY POWELL
APPELLANTAND:
GLOW ZONE PRODUCTS PTY LTD
RESPONDENT
CORAM:
DAVIES, BURCHETT & LEHANE JJ
DATE:
11 DECEMBER 1997
PLACE:
SYDNEY
REASONS FOR JUDGMENT
Davies J: This is an appeal from a judgment of a judge of the Court, Sheppard J, in which his Honour dismissed an application seeking relief for infringement of trademark and ordered that the relevant trademark, No. A631259, be expunged from the Register of Trademarks.
The Trade Marks Act 1995 (Cth) came into force on 1 January 1996, after the trial of the proceedings but before judgment had been concluded; but it was not in dispute before his Honour or in the appeal that the legislative provisions which effectively govern the issues which are before the Court are those appearing in the Trade Marks Act 1955 (Cth) ("the 1955 Act").
The mark in question was "Caps the Game". The mark was registered in Part A of the Register in respect of games and amusement goods in Class 28, excluding goods which used toy percussion caps such as cap pistols. Some years ago, a game originated in Hawaii. It was first played with milk caps, being cardboard discs which were placed on the top of milk containers to seal them. The caps were saved and collected by children. The object of the game was to strike a stack of milk caps with a harder disc or cap which came to be known as a "slammer". The player striking a stack was entitled to those caps which were turned over after they were struck. This game spread to mainland America where games were manufactured having cardboard or plastic discs and slammers of plastic, metal or wood. The game became a craze in the United States. Many of the discs were printed with wording, diagrams or pictures and became collectables, and were swapped by children. Many names were given to the discs, including that of "POGS", which was part of a registered trademark exploited by what was known as the "World POG Federation", its trademark being "POG THE GAME". However, perhaps because of the origin of the game, the discs were commonly described in conversation as "caps" and the game became known colloquially as "the cap game".
The trial Judge was satisfied that the term "caps" was used generically in relation to the discs in the United States prior to 31 May 1994, the date of application for the trademark, which was registered on 5 December 1994.
The appellant, Larry Powell, had visited the United States in May 1994, had seen the game there and had returned to Australia with the intention of marketing the game in Australia. Many other Australian manufacturers and importers also took an interest in the game, for it had been heavily promoted at the New York Trade Fair in February 1994 and was a popular game in the United States throughout 1994. The respondent, Glow Zone Products Pty Limited, applied for the mark "GLOCAPS" and commenced marketing its game in about October 1994. The respondent's discs were luminescent and ultimately took about 50% of the Australian market.
Distinctiveness
The 1955 Act provided, inter alia:-
"24.(1)A trade mark is registrable in Part A of the Register if it contains or consists of:
...
(d)a word not having direct reference to the character or quality of the goods or services in respect of which registration is sought and not being, according to its ordinary meaning, a geographical name or a surname; or
(e)any other distinctive mark.
...
(1) For the purposes of this Act, a trade mark is not distinctive of the goods or services of a person unless it is adapted to distinguish goods or services with which that person is or may be connected in the course of trade from goods or services in respect of which no such connexion subsists, either generally or, where the trade mark is sought to be registered, or is registered, subject to conditions or limitations, in relation to use subject to those conditions or limitations.
(2)In determining whether a trade mark is distinctive, regard may be had to the extent to which:
(a)the trade mark is inherently adapted so to distinguish; and
(b)by reason of the use of the trade mark or of any other circumstances, the trade mark does so distinguish.
..."
The trial Judge held that the mark "Caps the Game" was not distinctive in Australia as at 31 May 1994.
It is a general principle that a person may become a registered proprietor of a mark in Australia notwithstanding that the mark has been used extensively by another person as a mark of similar goods in a foreign country, provided that the foreign mark has not been used in Australia at the date of the application for registration. In The Seven-Up Company v O.T. Limited (1947) 75 CLR 203, it was held that the use of a trademark elsewhere than in Australia was not in itself a relevant matter nor was the registration of the trademark abroad a relevant matter. Accordingly, knowledge in Australia of the American "7 UP" trademark did not prevent registration of a deceptively similar mark "8 UP" in this country, for there had been no use of the American mark "7 UP" in Australia. See also W.D. & H.O. Wills (Australia) Ltd v Rothmans Ltd (1956) 94 CLR 182; Anheuser-Busch Inc v Castlebrae Pty Limited (1991) 32 FCR 64 at 67-9.
The case put for Mr Powell, both before the trial Judge and in the appeal, was that the word "caps" was not a term which was ordinarily descriptive of the cardboard or plastic discs of the game as they were not intended to cap or top anything. It was submitted that Mr Powell was entitled to appropriate this description to himself which, in Australia, although not in the United States, was distinctive.
There had, in fact, been some prior use of the term "caps" in the trade in Australia. In June 1993, a company of which Mr G. Bertolini was managing director, Trading Cards Australia Pty Ltd, which dealt in collectable trading cards, imported 72 foil packs each containing six cardboard discs called "Skycaps". These products were offered for sale to hobby and other shops and also for sale to the public in retail premises which the company then operated at Moonie Ponds. The term "caps" was often used as a short reference to "Skycaps". In February 1994, Trading Card Australia Pty Limited received a further importation of Skycaps and, after that time, continued to import Skycaps together with other cap products. Moreover, a number of manufacturers and distributors had visited the New York Toy Fair in February 1994. Even before that time, some had become aware of the game. Mr J.D. Hunter of Hunter Toyline Pty Limited had visited the United States in December 1993 and had obtained samples of cap game products which he had brought back to Australia. There were other witnesses who gave evidence that they had become aware of the cap game in 1993 or early 1994 either by visiting the United States or through magazines received from the United States. Therefore, before the trademark was applied for, there had been some use of the term "caps" in trade in Australia and the term was known to many in the trade who were beginning to take an interest in promoting the game.
Before the trial Judge, counsel for Mr Powell emphasised that the United States proprietor of the mark "Skycaps" had not supplied the goods to Trading Cards Australia Pty Ltd and that the proprietor of the mark had had no intention of trading in the goods in Australia. Counsel referred to Moorgate Tobacco Co Ltd v Philip Morris Ltd [No 2] (1984) 156 CLR 414 where, at 433-4, Deane J, in speaking of the circumstances required to establish prior use of a mark in Australia, said:-
"The cases establish that it is not necessary that there be an actual dealing in goods bearing the trade mark before there can be a local use of the mark as a trade mark. It may suffice that imported goods which have not actually reached Australia have been offered for sale in Australia under the mark (Re Registered Trade Mark `Yanx'; Ex parte Amalgamated Tobacco Corporation Ltd (1951) 82 C.L.R., at pp.204-205) or that the mark has been used in an advertisement of the goods in the course of trade: Shell Co. of Australia v Esso Standard Oil (Australia) Ltd. (1963) 109 C.L.R., at p.422. In such cases, however, it is possible to identify an actual trade or offer to trade in the goods bearing the mark or an existing intention to offer or supply goods bearing the mark in trade."
In the present case, however, the issue is not whether there had been prior use of an overseas registered trademark in Australia. The question is whether Mr Powell had a right to apply for a registered trademark in respect of a word which was a generic name for similar products in the United States, which had already been used in Australia in trade in relation to such a product and of which a number of Australian traders and customers were already aware.
The evidence given as to the trade in "Skycaps" in Australia was not irrelevant for it showed that the name "Skycaps" had been used in Australia as the name of goods sold in Australia and that the term "caps" was used in the course of trade and would have been used by the purchasers to describe the discs which were sold. Moreover, other persons in the trade were using the term "caps" within their organisations and in their thinking as the generic description of the discs in the game which they were considering manufacturing or importing. As the trial Judge said:-
"The importance of Mr Bertolini's evidence lies in the fact that his observation of the trade from the middle of 1993 was that these objects were being described as caps in some areas of the trade and to a degree by the public."
The trial Judge took these facts into account when holding that the mark "Caps the Game" was not capable of being distinctive of Mr Powell's product.
The learned trial Judge relied upon the remarks of Kitto J in Clark Equipment Co v Registrar ofTrademarks (1964) 111 CLR 511 where his Honour said at 513-4:-
"The question is whether the mark, considered quite apart from the effects of registration, is such that by its use the applicant is likely to attain his object of thereby distinguishing his goods from the goods of others. In Registrar of Trade Marks v. W. & G. Du Cros Ltd. [1913] A.C. 624, at pp.634, 635 Lord Parker of Waddington, having remarked upon the difficulty of finding the right criterion by which to determine whether a proposed mark is or is not `adapted to distinguish' the applicant's goods, defined the crucial question practically as I have stated it, and added two sentences which have often been quoted but to which it is well to return for an understanding of the problem in a case such as the present. His Lordship said: `The applicant's chance of success in this respect [i.e. in distinguishing his goods by means of the mark, apart from the effects of registration] must, I think, largely depend upon whether other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connexion with their own goods. It is apparent from the history of trade marks in this country that both the Legislature and the Courts have always shown a natural disinclination to allow any person to obtain by registration under the Trade Marks Acts a monopoly in what others may legitimately desire to use.' The interests of strangers and of the public are thus bound up with the whole question, as Hamilton L.J. pointed out in the case of R.J. Lea, Ltd. [1913] 1 Ch. 446, at p.463; (1913) 30 R.P.C. 216, at p.227; but to say this is not to treat the question as depending upon some vague notion of public policy: it is to insist that the question whether a mark is adapted to distinguish be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives - in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess - will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it." (emphasis added)
The trial Judge concluded:-
"But what the evidence does is to show that, because of the use of the word "caps" in the United States well before the end of May 1994 and the dealings which occurred between some organisations and United States companies in relation to the importation or proposed importation of either product or samples before that time, the word "caps" was in fact a word which traders, acting reasonably and in good faith, would be likely to wish to use in connection with a similar product if it were imported into Australia."
In my opinion, his Honour's conclusion was correct. The word "caps" was an ordinary word of the English language. It did not denote the subject cardboard and plastic discs without there being some explanation; but having regard to the history of the matter, the term "caps" was a convenient and appropriate name for the discs which were the subject of the game and the subject of collection. It can readily be appreciated that the term "caps" was a generic name for the goods in the United States and that that name would carry over to Australia.
It was inevitable that traders and consumers in Australia would use the term "caps" in relation to the discs unless prevented from doing so. That is because the term was a suitable and appropriate one. As Kitto J said in Clark Equipment, the question is not whether the mark would be adapted to distinguish the applicant's goods if it were registered and other persons were precluded from using it, the question is whether the mark was such that, by its use, the applicant would be likely to attain his object of distinguishing his goods from the goods of others. In my opinion, that was never likely to occur unless, by the threat of or the taking of legal proceedings, Mr Powell may have been able to stop the generic use of the term "caps". As matters turned out, that was not the case for, by the date of registration, the term "caps" was used in Australia as a generic name of the discs.
Once it was found that the term "caps" was not adapted to distinguish the appellant's goods from other goods, it followed that his Honour considered that the trademark failed as a whole. As Parker J said in Philippart v William Whiteley Ltd (1908) 25 RPC 565 at 572:-
"It seems to me that a person, who is advertising or bringing on the market under a particular name a game which everyone has a right to sell, and is, at the same time, marking part of the apparatus used in the game with the name of the game, can hardly be said to be using the mark for the purpose of distinguishing his own goods from those of other manufacturers, and similarly an intention to use the name as the name of the game seems to me to be inconsistent with any bona fide intention to use it as a distinguishing mark for his own goods."
Loss of Distinctiveness
Section 56 of the 1955 Act provided, inter alia:-
"56. (1) Subject to this section, the registration of a trade mark does not become invalid by reason only of the use, after the date of the registration, of a word or words which the trade mark contains, or of which it consists, as the name or description of an article, substance or service.
(2)The succeeding subsections have effect where:
(a)there is a well-known and established use of a word as the name or description of an article, substance or service by a person or persons carrying on a trade in that article, substance or service, not being used in relation to goods or services connected in the course of trade with the proprietor or a registered user of the trade mark or, in the case of a certification trade mark, in relation to goods or services certified by the proprietor; or
(b)the article or substance was formerly manufactured under a patent or the service formerly provided was a patented process, as the case requires, a period of 2 years or more after the patent has ceased has elapsed, and the word is the only practicable name or description of the article, substance or service.
...
(4) If the trade mark contains that word and other matter, a prescribed court, in deciding whether the trade mark shall remain in the Register, so far as regards registration in respect of the article or substance or of any goods of the same description, or of the services or of any services of the same description, may, in the case of a decision in favour of the trade mark remaining in the Register, require as a condition that the proprietor shall disclaim any right to the exclusive use of that word in relation to that article or substance or to any goods of the same description, or to the services or to any service of the same description, as the case may be, but no such disclaimer affects any rights of the proprietor of the trade mark except such as arise out of the registration of the trade mark in respect of which the disclaimer is made.
(5)For the purposes of any other legal proceedings relating to the trade mark:
(a)if the trade mark consists solely of that word, all rights of the registered proprietor to the exclusive use of the trade mark; or
(b)if the trade mark contains that word and other matter, all rights of the registered proprietor to the exclusive use of that word;
in relation to the article or substance or to any goods of the same description, or to the service or to any services of the same description, as the case requires, shall be deemed to have ceased on the date at which the use mentioned in paragraph (a) of subsection (2) first became well-known and established, or at the expiration of the period of 2 years mentioned in paragraph (b) of that subsection."
The trial Judge held:-
"The evidence which I have accepted establishes that, whatever the position may have been before November 1994, there was a well-known and established use of the word "CAPS" as the name or description of the articles in question from about October or November 1994. That use was certainly widespread in the trade and it should be inferred that it existed also amongst customers for the product no matter who was the manufacturer, distributor or vendor of it. As from November 1994, therefore, subsec. 56(5) operated to deprive the applicant of the right of action for infringement of trade mark which he seeks to pursue in this action. That is enough to dispose of the case in itself."
It is unnecessary to consider whether his Honour's finding was correct. There is at least one problem with it, namely, that the mark was not registered until December 1994, although the registration dated back to 31 May 1994. There was not a registered trademark as at October or November 1994. The deeming provision could not have operated at those dates. The section is concerned with the circumstance where a trademark is registered and the registered proprietor fails to take steps to protect its exclusivity. Section 56 is a section which has been read narrowly, according to its terms: FH Faulding & Co Ltd v Imperial Chemical Industries of Australia & New Zealand Ltd (1965) 112 CLR 537.
However, the evidence as to what occurred after the lodgment of the application for registration supported by hindsight the finding of the trial Judge that the trademark was not distinctive. By October or November 1994, the term "caps" was in common use in the trade to describe the goods which were the subject of the game.
The evidence which his Honour accepted, that by October or November 1994 the word "caps" was in Australia an established description of the discs, may well have been sufficient to justify an application of s 28 of the 1955 Act. See New South Wales Dairy Corporation v MurrayGoulburn Co-operative Company Ltd (1990) 171 CLR 363 ("the Moo case"). However, this point was not argued before the trial Judge or in this appeal.
Infringement
The 1955 Act provided, inter alia:-
"62. (1) A registered trade mark is infringed by a person who, not being the registered proprietor of the trade mark or a registered user of the trade mark using by way of permitted use, uses a mark which is substantially identical with, or deceptively similar to, the trade mark, in the course of trade, in relation to goods or services in respect of which the trade mark is registered."
The trial Judge held that the respondent's mark, "Glo-caps", was not an infringement of Mr Powell's mark, "Caps the Game". The trial Judge held there was not deceptive similarity between the two marks. His Honour considered that the term "caps" had a descriptive quality being a reference to the discs which were the subject of the game whilst the word "Glo" was distinctive.
The matter is very much one of impression. It follows from my agreement with the trial Judge that the term "caps" was not distinctive of Mr Powell's product and my agreement with the trial Judge that the word "GLO", the first word in the respondent's mark, had at least some distinctiveness about it, that I agree that the two marks were not deceptively similar. However, much seems to turn upon the view that the word "caps" was simply a description of the discs which were used in the game. Had I been of the view that the term "caps" was distinctive of the appellant's goods, I may have come to a different view.
For these reasons, I am of the view that the orders made by the trial Judge were correct. The appeal should be dismissed with costs.
I certify that this and the preceding 9 pages
are a true copy of the reasons for judgment of
the Honourable Justice Davies.
Associate:
Date: 11 December 1997
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 1008 of 1996
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:
LARRY POWELL
AppellantAND:
GLOW ZONE PRODUCTS PTY LTD
Respondent
JUDGES:
DAVIES, BURCHETT AND LEHANE JJ
DATE:
11 DECEMBER 1997
PLACE:
SYDNEY
REASONS FOR JUDGMENT
BURCHETT J
Like Lehane J, with whose reasons for judgment I agree, I gratefully accept Davies J’s statement of the facts.
The key issue in the case seems to be whether a special American meaning of the word “caps”, as a descriptive word, which is not a natural meaning to an Australian ear, is relevant to the well known test of distinctiveness adopted by Kitto J in Clark Equipment Company v Registrar of Trade Marks (1964) 111 CLR 511 at 514 from Lord Parker of Waddington: “whether other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connexion with their own goods”. Where a trader has tried to appropriate a word signifying a quality of his goods, as Kitto J made clear, the desire of other traders to which Lord Parker referred may spring from the purposes served by the common stock of words available to all. In the past, when many fewer people were aware of usages overseas, and any new meaning travelled slowly if at all, it would have been appropriate, for relevant purposes, to ignore a meaning as yet unfamiliar here. Cf. the somewhat different problems dealt with in The Seven Up Company v O.T. Limited (1947) 75 CLR 203 at 211, 215, 216-217; Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302. But in a world in which television daily brings the languages of other countries into Australian living-rooms, and travel continually renews and extends our acquaintance with foreign ways, the logic of Lord Parker’s test requires it to be given a wider application. At least where, as here, the foreign usage has been seeded in some areas of our language, with every sign of a spreading crop, the test must be applied with a recognition that traders will desire to adopt the imported sense of the word as well as the imported idea of the product. Therefore, although I do not think this conclusion would have been favoured formerly, I agree that the use of the American meaning in Australia proved here, slight though it was, was sufficient, given the likelihood that its acceptance would extend, to prevent the mark being distinctive.
Accordingly, I agree with the orders proposed by Davies J.
I certify that this and the preceding one (1) page are a true copy of the Reasons for Judgment herein of the Honourable Justice Burchett
Associate:
Dated: 11 December 1997
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 1008 of 1996
ON APPEAL FROM A SINGLE JUDGE
OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:
LARRY POWELL
AppellantAND:
GLOW ZONE PRODUCTS PTY LTD
Respondent
JUDGES:
DAVIES, BURCHETT and LEHANE JJ
DATE:
11 DECEMBER 1997
PLACE:
SYDNEY
REASONS FOR JUDGMENT
LEHANE J
I have had the advantage of reading in draft the judgment of Davies J. I agree with the orders proposed by his Honour. For the purpose of what follows, I gratefully adopt his statement of the facts.
Validity
There is no doubt, in my view, that the trial judge (correctly) treated the date at which the distinctiveness, or otherwise, of the mark was to be determined as 31 May 1994, the date of application for registration. Nor do I think that any of the judge’s references to evidence as to the use, at a later time, of the word “caps” in relation to games or “collectables” indicates any deviation or distraction from that position.
Samples of the objects in question, some the appellant’s products, some of those of other manufacturers (including the respondent), were handed up for our inspection. Whether they are regarded as pieces used in playing a game or things which children might like to collect and, possibly, swap, “caps” does not suggest itself as the appropriate generic noun. They are discs. An appropriately sized disc, made of plastic or laminated cardboard and decorated with a picture of a character from a television show, may be placed over the top of an open bottle or carafe, but that does not make it a “cap” in any ordinary sense of that word. His Honour accepted evidence that a company, Trading Cards Australia Pty Ltd, had imported in June 1993 and again in January 1994 a quantity of a product known as “skycaps” (which comprised in part discs of the same general kind as those of the appellant); that was the only evidence as to distribution to the public of these products before 31 May 1994, under a description including the word “caps”. The trial judge found also, however, on the evidence before him that such goods were, by 31 May 1994, known generically as “caps” in the United States of America; he held that persons in the trade, who had visited the United States, had become aware of that usage; and that there had thus developed, before 31 May 1994, some generic use of the word “caps” within trading organisations in Australia which dealt in goods of this general kind. There was no use of the word “caps” or of a combination of words including “caps” as a trademark; but “there was some limited [generic] use of the word prior to May 1994”.
It was against that background that his Honour considered the question posed by s 24(1)(e) of the Trade Marks Act 1955 (the Act), whether “CAPS THE GAME” is a distinctive mark. The test to be applied in answering that question is the statutory test, provided in s 26 of the Act. Section 26(1) provides:
For the purposes of this Act, a trade mark is not distinctive of the goods... of a person unless it is adapted to distinguish goods... with which the person is or may be connected in the course of trade from goods... in respect of which no such connexion subsists...
Subsection (2) provides that in applying that test regard may be had to the extent to which:
(a)the trade mark is inherently adapted so to distinguish;...
Having stated the statutory test, the trial judge continued:
In Clarke (sic) Equipment Co. v Registrar of Trade Marks (1964) 111 CLR 511 Kitto J said (at 514) that the test to be applied was by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives, will think of the word and want to use it in connection with similar goods in any manner which would infringe a registered trade mark granted in respect of it. The test formulated by Kitto J was applied by Gibbs J (as he then was) in Burger King Corporation v Registrar of Trade Marks (1973) 128 CLR 417 at 424.
After discussing Burger King Corporationv Registrar of Trade Marks (1973) 128 CLR 417 and Seven-Up Co v Bubble Up Co Inc (1987) 9 IPR 259, his Honour continued:
Each case must depend upon its own facts and circumstances. This case can be approached either with the aid of such evidence as there is of generic use of the term “caps” in this context prior to 31 may 1994, or, independently of that evidence by adopting an approach similar to that adopted by Kitto J in Clarke Equipment and by King J in Seven-Up. The critical question is whether “caps”, at the time the application was made, was capable of being distinctive of the goods in respect of which the mark was sought to be registered.
His Honour then referred to his finding that the word “caps” was used in the United States, well before May 1994, as a generic description of the discs and the games in which the discs are used. He referred to a suggestion - which on the evidence he rejected - that the game was generically known in the United States as “POGS” and to the registration of “POGS” as a trade mark both in the United States and, later, in Australia. His reasoning continued:
... Thus it was only natural that when manufacturers and distributors in the United States began to talk to representatives of Australian companies about the product, they should in many cases describe the product as “caps”. That was the expression that was brought back to Australia by the Australians who were in the United States or who had dealings with the United States companies prior to May 1994. It became used within those companies. The use may not have been extensive. Indeed it would appear that the only extensive use of it was made by Mr Bertolini and others in Trading Cards Australia Pty Limited. But the fact that they so easily slipped into the habit of using it tends to establish that it was a word that traders in dealing with these products would expect to use. That, I am sure, is how it came about that the respondent itself described its product as GLO-CAPS. I express no view on the validity of the mark which it seeks to have registered. But unquestionably those responsible for the design of the mark intended it to convey to purchasers and others that the products consisted of caps, used in a generic sense, which glowed in the dark as did all other products manufactured or distributed by the respondent.
For those reasons his Honour concluded that the mark “CAPS THE GAME” was not distinctive of the applicant’s product, that the registration of the mark was wrongly made and that the mark should be expunged from the Register.
This case is significantly different from cases such as Burger King and Seven-Up: in the former, “Whopper” was directly descriptive of a characteristic of the particular hamburger sandwiches and “Bubble Up”, in the latter, of carbonated soft drink. In each case that was so as a matter of the ordinary (Australian) use of language. In this case, but for the usage which has developed in the United States and the limited “spill-over” found by his Honour, neither “caps” nor “caps the game” is directly descriptive of the discs. The usage in the United States developed, on the evidence, from the use in a game of cardboard discs used to seal milk and fruit juice containers; but that history, though it explains the usage which developed in the United States, is of no particular help in answering the present question.
That question involves different considerations from those which arise where a foreign trader seeks to establish a sufficient reputation within the jurisdiction to maintain passing off (Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302). It is a different question also - though conceptually, perhaps, the difference is not as great - from the one in relation to which the judgment of Williams J in The Seven Up Company v O.T. Ltd (1947) 75 CLR 203 is commonly cited: Williams J said, at 211:
In my opinion the effect of these cases is that in the absence of fraud it is not unlawful for a trader to become the registered proprietor under the Trade Marks Act of a mark which has been used, however extensively, by another trader as a mark for similar goods in a foreign country, provided the foreign mark has not been used at all in Australia at the date of the application for registration. But the position is different if at that date the mark has become identified with the goods of the foreign trader in Australia because those goods have been brought into Australia by the foreign trader himself or by some importer or in some other manner. The court frowns upon any attempt by one trader to appropriate the mark of another trader although that trader is a foreign trader and the mark has only been used by him in a foreign country. It therefore seizes upon a very small amount of use of the foreign mark in Australia to hold that it has become identified with and distinctive of the goods of the foreign trader in Australia. It is not then a mark which another trader is entitled to apply to register under the Trade Marks Act because it is not his property but the property of the foreign trader. The registrar is entitled to refuse to register the mark for such goods. If it has been registered the court may rectify the register on the ground that the mark is wrongly entered on the register.
See also Moorgate Tobacco Ltd v Philip Morris Ltd (1984) 156 CLR 414 at 433, 434; Anheuser-Busch Inc v Castlebrae Pty Ltd (1991) 21 IPR 54; the reference to Reddaway & Co Ltd’sApplication (1945) 42 RPC 397 in the judgment of Windeyer J in Smith Kline & French Laboratories (Australia) Ltd v Registrar of Trade Marks (1967) 116 CLR 628 at 641, and his Honour’s observations at 642, are, I think, directed towards the same point. The importance of that line of authority, for present purposes, is that it indicates the relatively slight degree of use in Australia by the proprietor of a foreign trade mark which will suffice to deprive the mark, in the hands of another person who, as applicant, claims to be its proprietor for the purpose of obtaining registration in Australia, of the necessary quality of distinctiveness.
A great deal of the argument before us concerned the reliance of the trial judge on an important passage in the judgment of Kitto J in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 at 513, 514. Kitto J said:
That ultimate question must not be misunderstood. It is not whether the mark will be adapted to distinguish the registered owner’s goods if it be registered and other persons consequently find themselves precluded from using it. The question is whether the mark, considered quite apart from the effects of registration, is such that by its use the applicant is likely to attain his object of thereby distinguishing his goods from the goods of others. In Registrar of Trade Marks v. W. & G. Du Cros Ltd.[[1913] AC 624 at 634, 635] Lord Parker of Waddington, having remarked upon the difficulty of finding the right criterion by which to determine whether a proposed mark is or is not “adapted to distinguish” the applicant’s goods, defined the crucial question practically as I have stated it, and added two sentences which have often been quoted but to which it is well to return for an understanding of the problem in a case such as the present. His Lordship said: “The applicant’s chance of success in this respect [i.e. in distinguishing his goods by means of the mark, apart from the effects of registration] must, I think, largely depend upon whether other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connexion with their own goods. It is apparent from the history of trade marks in this country that both the Legislature and the Courts have always shown a natural disinclination to allow any person to obtain by registration under the Trade Marks Acts a monopoly in what others may legitimately desire to use.” The interests of strangers and of the public are thus bound up with the whole question, as Hamilton L.J. pointed out in the case of R. J. Lea, Ltd. [[1913] 1 Ch 446 at 463; (1913) 30 RPC 216 at 227]; but to say this is not to treat the question as depending upon some vague notion of public policy: it is to insist that the question whether a mark is adapted to distinguish be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives - in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess - will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.
Senior counsel for the appellant submitted that the trial judge had misread that passage by overlooking the important words “for the sake of the signification which they ordinarily possess” and had fallen into error by substituting judicial exegesis for the statutory test. In my view that criticism is not well founded. The question is whether a mark is distinctive, and in answering that question one has regard to whether the mark is inherently adapted to distinguish a particular trader’s goods from those of another. No doubt a common circumstance in which a mark will lack the quality of distinctiveness is where it is a word commonly used in Australia to describe goods of the class concerned. But the ultimate question is that referred to by Kitto J at the beginning of the passage. In a case where goods of a particular kind are described generically, overseas, by a particular word, where a limited number of those goods have been imported into Australia bearing that description and where the overseas use has become known to Australian traders likely to wish to sell similar products in Australia (some of them likely to be imported from the place where the description has become established) there is, in my view, no error in a decision that “the mark, considered quite apart from the effects of registration” is not such “that by its use the applicant is likely to attain his object of thereby distinguishing his goods from the goods of others”. The evidence accepted by the trial judge demonstrated that, apart from registration, the applicant was not likely to achieve that object for the mark “CAPS THE GAME”. The reason why that was so is, no doubt, that Australian traders in the relevant class of goods knew of the overseas usage and were likely (as in fact on the evidence they have done) to distribute goods described in accordance with it.
The “ultimate question” is not to be answered in favour of an applicant or proprietor simply because words comprising a mark have not yet become part of the common heritage in Australia, generally signifying in Australia goods of the particular kind in question. The judgment in Clark Equipment should not, in my view, be given any such restrictive effect, nor is support for such an approach to be found in the judgment of Lockhart J, in a different context, in Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 at 337: in determining whether a mark is apt to distinguish the goods of a particular trader, weight must be given to overseas use of a word forming the mark, or a part of it, where the use has become known to Australian traders who deal in goods of that general kind and are likely to put goods of the particular kind on the market in Australia. That, as I read the trial judge’s reasons, is the basis on which he decided against the appellant on validity, and I respectfully agree with it. It follows that his Honour’s decision, that the mark was wrongly entered in the Register and should be expunged, should be upheld.
Section 56
It is in the circumstances unnecessary and, no doubt, unprofitable to attempt a detailed analysis of s 56. I agree with Davies J, however, that the “well-known and established use” to which s 56(2)(a) refers is use after registration, not use during the period between application and registration. It may be added that, if there was any doubt under s 56, it is difficult to see any scope for doubt under s 24 of the Trade Marks Act 1995.
Infringement
The question on this aspect of the case was, assuming the validity of the appellant’s mark “CAPS THE GAME”, whether the respondent infringed the appellant’s rights as proprietor by using, in relation to goods of a similar kind, the mark “GLO CAPS”. It was not suggested that the two marks were substantially identical. It was, however, suggested that “GLO CAPS” was deceptively similar to “CAPS THE GAME”. The trial judge’s conclusion that (assuming validity) there was no infringement was based on the following reasoning:
...I think a person seeing the word “CAPS” or “CAPS THE GAME” would carry away the word “CAPS” as the significant word. On other hand, when one sees the mark “GLO-CAPS” the dominant feature is not “CAPS” at all. It is “GLO”. Many people would, I think, consider that this referred to caps which had the quality of glowing. Others might think that the letters “GLO” were distinctive of a variety of caps perhaps referring to the initials of the person or company that manufactured or distributed them. No doubt there are other possibilities. What I do not think anyone would do would be to regard “GLO-CAPS” as indicating that the goods came from the same source as “CAPS” or “CAPS THE GAME” if that were the mark which appeared on the packaging of particular goods. Nor do I think that anyone would be caused to wonder whether that was the case. The word “GLO” is the word which identifies the goods just as it is the words “Sky” and “PROMO” which identifies them in the case of the marks “SkyCaps” and “PROMO CAPS” referred to in the evidence. I acknowledge that there is a danger that my conclusion has stemmed from a degree of hindsight or from having become deeply immersed in the evidence led in the case. I confess to finding it difficult to place myself in the position of a member of the public, whether someone engaged in the trade or a consumer or potential consumer and it is true that the view I have formed suggests that I have given to “CAPS” in the mark “GLO-CAPS’ a descriptive quality rather than a distinctive one. But, if that be so, it is because it is the word “GLO” which to me is the feature of the mark which gives it such distinctiveness as it has. It is not, in my view, “CAPS”.
Despite his Honour’s caution, I think, with respect, that insufficient weight is given to the necessity to consider the question of infringement on the footing that “CAPS THE GAME” is a valid registered trade mark. To paraphrase Williams J in Mark Foy’s Ltd v Davies Coop & Co Ltd (1956) 95 CLR 190 at 205, the public are being invited to purchase goods of the respondents which are to be distinguished from the goods of other traders partly because they are described as a “CAPS” game or “CAPS” discs. Whatever emphasis one gives to “GLO” in the mark “GLO CAPS” it does not (on the assumption which must be made) distinguish from those of other traders goods (of a kind generically known as “caps”) the source of which is the respondent. If “CAPS THE GAME” is the valid mark of the appellant and the respondent uses “GLO CAPS” as a trade mark in relation to goods of a similar kind to those of the appellant, the fact that “GLO” indicates a trade origin other than the appellant does not mean that there is no infringement: Saville Perfumery Ltd v June Perfect Ltd (1939) 58 RPC 147 at 161, cited by Williams J in Mark Foy’s at 205. Once that is seen it is difficult, in my view, to resist the conclusion that “GLO CAPS” is deceptively similar to “CAPS THE GAME”.
Conclusion
For the reasons given on the question of validity, I agree that the appeal should be dismissed with costs.
I certify that this and the preceding eight (8) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Lehane
Associate:
Dated: 11 December 1997
Counsel for the Appellant: D K Catterns QC Solicitor for the Appellant: McCrohon Bergoeng Counsel for the Respondent: T K Tobin QC with C Golvan Solicitor for the Respondent: Aroni Colman Date of Hearing: 21 May 1997 Date of Judgment: 11 December 1997
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