Queensland Coastal Pilot Service Pty Ltd v David Richardson

[1997] ATMO 53

Trade marks act 1955

decision of a delegate of the Registrar of Trade marks with reasons

Opposition by DAVID RICHARDSON to Application No 597805 in the Name of QUEENSLAND COASTAL PILOT SERVICE PTY LTD

Trade mark application 597805 was filed on 9 March 1993 in the name of the Queensland Coastal Pilot Service Pty Ltd of 145 Eagle Street, Brisbane (“the applicant”).  The trade mark is shown below:

The application was advertised as accepted in respect of “pilot services; transport services” on 29 September 1994, subject to an endorsement that the registration of the trade mark would give no right to the exclusive use of the words TORRES and PILOTS and the numerals 1606.

On 30 September 1994 notice of opposition to the registration of the trade mark was given by David Richardson, of 25 Clarence Road, Indooripilly, pursuant to s49 of the Act.

Although the Trade Marks Act 1995 commenced on 1 January 1996, as provided in the transitional provisions of Part 22 of that Act the provisions of the repealed Trade Marks Act 1955 continue to govern this opposition.  Accordingly, unless otherwise specified, any reference to the Act in this decision is a reference to the Trade Marks Act 1955.

The grounds of opposition set out in the notice are as follows:

2.0GROUNDS

2.1The opponent is one of the members of the Queensland Coast and Torres Strait Pilot Service (hereafter called tithe Service").

2.2The Service has provided pilotage services in the Torres Strait for over 100 years.

2.3The first recorded European to navigate the waters was a Portuguese, Captain Louis Torres, in the ship "San Pedrico".

2.4Since at least 1960 the Service has used a depiction of the ship "San Pedrico" floating above a scroll reading "Torres San Pedrico Pilots" with the date 1606 to identify itself and to associate itself with navigation in the Torres Strait area.

2.5The applicant was, for a time, a company associated with the secretaries of the Service.

2.6Any association between the applicant and the Service ceased on the 30th June 1993.

2.7During the period of the association, the applicant was permitted to use the logo for the legitimate purposes of the Service.

2.8The ownership of the logo was not transferred to the applicant.

2.9The applicant was not authorised or requested to apply for a trade mark in respect of the logo.

2.10The applicant has, since the termination of its association with the Service, continued to use the logo or a similar logo and has caused confusion in the market place.

2.11The opponent and other members of the Service have commenced proceedings in the Supreme Court of Queensland (action number 1894/93) for determination, inter alia, of the ownership of the logo.

From this recital the following grounds of opposition appear to emerge:

*   that the applicant is not the proprietor of the trade mark (s40);

*   that the use by the applicant of the trade mark would lead to confusion or deception (s28).

The opponent’s evidence in support of the opposition was due to be served on the applicant on or before 30 December 1994.  No evidence was served by that date and an overdue evidence notice was sent to the solicitors for the opponent on 11 January 1995.  Failing a response to that notice both parties were notified on 16 February 1995 that if neither requested a hearing of the matter within one month the opposition would be decided on the basis of the material on file.  On 20 February 1995 the opponent’s solicitors informed the Registrar that a writ had been issued out of the Supreme Court of Queensland seeking relief in respect of passing off of the trade mark and an injunction restraining the applicant from using the trade mark or any trade mark resembling the trade mark.  The action had been tried over five days commencing on 10 October 1994 before Mr Justice Dowsett and a decision had not yet been handed down.  At the trial the ownership of the trade mark had been canvassed extensively and it was expected that the Court’s decision would determine who had the right to use the trade mark.  It those circumstances it was submitted that it would not be appropriate for the Registrar to make a decision on the matter before the Court.  On 6 March 1995 both parties were notified that the Registrar would defer making a decision pending the decision of the Court.  On 14 March 1995 the applicant applied for a hearing of the opposition invoking reg 49 of the Trade Marks Regulations.  The opponent was then advised, on 2 May 1995, that the Registrar was obliged by reg 49 to fix a time and place for a hearing unless the parties agreed to a deferral.  The opponent’s solicitors responded that the opponent wished to be heard.  However, on 27 June 1995 the attorneys for the applicant notified the Registrar that the decision of Mr Justice Dowsett had been handed down on 15 May 1995 and that the plaintiffs had appealed from the decision.  They therefore sought a postponement of the hearing pending the outcome of the appeal. 

On 18 February 1997 Kenny & Co, solicitors, notified the Registrar that they now acted for the applicant and that the Court of Appeal had handed down its decision on 24 December 1996.  They requested that the opposition matter should therefore proceed to hearing.  Accordingly, the opposition was finally heard in Brisbane on 29 August 1997.  Mr Jim Eliades of Kenny & Co appeared for the applicant.  The opponent was represented by Mr Russell Galt Walters of Walters & Co, solicitors for the opponent.

Background

The background to the dispute was set out by Dowsett J in his judgment as follows:

Prior to 1 July, 1993 the provision of pilot services to vessels navigating the coastal waters of Queensland and the Torres Strait was regulated by the Queensland Marine Act 1958-1985 and had been regulated under that or earlier legislation since last century.  Section 179 of the Act provided for the licensing of pilots.  Section 180 provided as follows:-

"Without limiting the general power to make regulations conferred by s.264 of this Act, regulations may be made under that section with respect to the granting of licenses under this Division of this Part, and prescribing the duties and liabilities of Queensland coastal pilots and providing for the proper conduct of the pilot service in which they are engaged, including, but without limiting the generality of the aforegoing, regulations in respect of all or any of the following matters:-

(i)prescribing the qualifications as to nationality, citizenship, age, experience, length and nature of service, skill, character, medical fitness, and otherwise for the grant of such licenses;

(ii)providing for the appointment of secretaries to the Queensland Coast and Torres Strait Pilot Service and prescribing their duties and remuneration;

(iv)providing for the proper conduct of Queensland coastal pilots and of any pilot services, including the prescribing of duties, and the provision for the holding of inquiries as to such conduct;

(v)     ...

(vi)    ...        

(vii)providing for the remuneration of Queensland coastal Pilots;

(viii)

The regulations prescribed the structure for the provision of pilot services.  Although the licensing authority was the Marine Board, the, "management supervision and control of the pilot service and of the working and movements of the pilots ... (was) vested in the secretary or secretaries of the pilots." (Regulation 13) The secretaries were appointed by the Board.

Regulation 18 prescribed the duties of the secretaries.  As well as managing the pilot service and the working and movements of the pilots, they were also required to keep a register of the pilots and to allot duties to pilots in turn.  The regulations made detailed provision for the so-called "turn" system, designed to equalize the distribution of work (and income) amongst the pilots.  Regulation 20 provided for remuneration of the secretaries by the deduction of 71 per cent from the pilotage fees recovered for the pilots.  The secretaries were required to bear all office and management expenses incurred by them in the execution of their duties.

Regulation 21 provided that a person requiring a pilot should direct the request to the secretaries.  Regulation 22 required the pilots to make themselves available to take their turns as directed by the secretaries and to forward to the secretaries completed pilotage orders signed by the masters of the vessels.  A pilot was not permitted to collect pilotage dues unless instructed to do so by the secretaries, in which case he was to forward the sum so collected to them.  They would subsequently refund the appropriate amount to him, after making authorized deductions.

Regulation 27 required that the pilots and secretaries provide vessels for ferrying pilots to and from ships, although the cost of embarking and discharging a pilot was recoverable against the ship in question.  Regulation 35 provided for the recovery of pilotage dues and other expenses from the master, owner or other person applying for the services of a pilot, and provided that the secretaries might sue to recover them.  If the secretaries failed to do so, or so instructed the pilot, the pilot might himself sue.  Regulation 36 provided for internal rules for the "smooth running of the service".  Such rules required the agreement of the secretaries and of at least two-thirds of the licensed pilots.  The Board had an overriding power to disallow such regulations should any pilot object to them.There was provision for appeal by a pilot against any decision of the secretaries (Regulation 37).  The secretaries might complain about a pilot to the Board, and a pilot might similarly complain about the secretaries. (Regulation 16 and 39)

The first plaintiff and those of the second plaintiffs who are natural persons have been, at all material times, licensed pilots.  The corporate second plaintiffs are, in effect, family companies formed by the various pilots to employ themselves, no doubt for financial reasons.  The third plaintiff was incorporated by the pilots in 1951 for the purpose of acquiring assets to be used by them in the course of their work.  When a new pilot was licensed, he was invited to acquire shares in the third plaintiff.  The first and second defendants were appointed secretaries on 21 November, 1989 and 5 August, 1984 respectively, and both continued in office until 30 June, 1993 when the statutory system was abolished.  The third defendant is a company of which the first defendant was a director and the second defendant remains a director.  It offers pilot services to vessels plying off the Queensland coast and in Torres Strait.  Another company, Queensland Coast and Torres Strait Pilots Association Pty Ltd (the "pilots, company"), also offers those services.  The pilots who are plaintiffs (or their companies) hold most of the shares in the pilots' company.  The fourth defendant is a company controlled by the first and second defendants.  It owns certain call signs and telephone/fax numbers claimed by the plaintiffs.

At some time in 1992, it became public knowledge that the Queensland government intended to transfer to the Commonwealth the responsibility for licensing coastal pilots.  The pilots and secretaries anticipated that this change would result in their losing control of the pilot service.  In February, 1993 many of the serving pilots decided to form their own organisation to take the place of the secretaries after the anticipated changes came into effect.  At some stage, Mr Sutton was invited to participate in the new organisation as an administrator, but he was not interested in that proposal.  He also wished to provide pilot services and decided to use the third defendant, which company had been used by the secretaries in connection with their duties for some years prior to 30 June 1993.  Most of the pilots who were licensed before that date now work with the pilots’ company, but some work for the third defendant.  Additional pilots have been licensed since the transfer of responsibility to the Commonwealth.

At the trial, a great deal of time was taken up in investigating the history of Queensland pilots.  As might be expected, it is a history which has considerable interest, not only for the pilots themselves, but also for those interested in the history of Queensland or in the history of this adventurous and important calling.  The pilots undoubtedly take great pride in this history, during most of which the secretaries played an integral role in the provision of pilot services.  Prior to 1912, the pilots themselves appointed secretaries, but in that year, as a result of differences between the pilots and the secretaries, a new system was devised by which the Marine Board appointed them.  This appears from the work, Reef Pilots by Captain John C H Foley (Banks Brothers and Street, Sydney, 1982) at pp.59-60. I was invited by the parties to make reference to this book for background information.  Two brothers, George and Tom Banks had been secretaries prior to the 1912 changes and were appointed by the Marine Board thereafter.  As appears from the second defendant's statement (ex 57), members or employees of the firm of Banks Brothers or its successor, Banks Brothers and Street continued to act as secretaries for many years.  The first and second defendants became secretaries because of their associations with the latter firm.  During that long association, it was, no doubt generally in the interests of the secretaries and the pilots that they co-operate in the provision of pilot services.  No doubt, too, informal arrangements and relationships developed between the pilots on the one hand and the secretaries on the other.

To some extent, the plaintiffs sought to colour the legal relationship between the secretaries and the pilots by reference to various incidents which occurred over the years.  For example, from time to time, both the pilots and the secretaries made attempts at promotion of the pilot service by the manufacture and distribution of mementos such as glasses and beer mats.  However it was not alleged, and it does not appear from the evidence that there was ever any firm arrangement between the parties having the effect of conferring additional obligations upon the secretaries beyond those stipulated in the legislation and regulations.

With the passage of time, the mechanisms of the pilot service became more complex because of increased shipping activity, improvements in communications, the availability of air travel, including helicopters for ferrying pilots to and from ships and changes in the routes taken by vessels as a result of the opening of Hydrographer's Passage, a route which greatly facilitates the passage of ships from the Queensland coast to south-east Asia and beyond.  These changes affected, in one way or another the distribution of work, the outgoings incurred by pilots in their work and the fee structure prescribed in the regulations.  They did not significantly affect the duties of the pilots or the secretaries or the legal relationship between those two groups.

The first plaintiff referred to in the above is the opponent and the third defendant the applicant in the present proceedings.

In his judgment Dowsett J referred to the “logo” in the context of the claim of passing off.  He said that the plaintiffs claimed that the logo was the “property” of the pilots to the exclusion of the secretaries.  Although conceding that the history of the use of the logo was not clear the evidence demonstrated that it was used extensively in connection with the pilot service prior to 30 June 1993 but that it was impossible to infer that the pilots then had any exclusive proprietary or other interest in it.  It was associated both with the pilots and the secretaries.  In particular he found that there was no fiduciary duty owed by the secretaries to the pilots which would prevent them from using the logo.  The previous regime was a statutory structure within which each pilot provided services and the secretaries coordinated the allocation of work.  There was no duty imposed on them over and above those imposed by the statute.  In asserting links to the previous regime they were merely stating a fact.  They were not asserting a connection with other persons or companies who or which also enjoyed such a connection.

In the claim relating to misleading and deceptive conduct contrary to s52 of the Trade Practices Act His Honour also found that the plaintiffs could not claim the exclusive right to the use of the logo either because it was their property or pursuant to the Trade Practices Act.  He declined to conclude that the logo was “the property of the members of the (voluntary) association so long as they remained members”.  The logo was used in conjunction with the pilot service but there was no basis for inferring any proprietary or other interest in the pilots to the exclusion of the secretaries.

His Honour gave judgment for the defendants against the plaintiffs on all claims.

In the Court of Appeal decision, of Pincus, Davies and McPherson JJA, the leading judgment was delivered by McPherson JA.  On the question of the relationship between the pilots and the secretaries His Honour said:

The Service is neither an entity in law, nor an association of individuals, but simply a name for the service, formerly provided under the authority of statutory regulations, for piloting vessels passing through Torres Strait and the coastal waters of Queensland, or at most a collective name for those who provided that service.

And again:

Plainly, however, the secretaries and the pilots were not engaged in conducting a pilotage business in partnership.  The overlay of statutory regulation prevented any such relationship from arising....The truth seems to be that the parties on both sides were in a relation to each other resembling that of independent contractors.

But the peculiarity of the case is that it was not until the Regulations came to an end, or at least were known to be coming to an end, that it became feasible or even legally permissible for the secretaries to compete with the pilots or vice versa....It was only when that restriction or monopoly was doomed to extinction, that it became possible for the first time for the secretaries to enter into competition with the pilots in the Service.

On the question of goodwill His Honour said:

The concept of goodwill arising from an activity established and conducted as a monopoly sanctioned by statute is not without some difficulties of its own.  For present purposes, however, it may be accepted that, before deregulation in mid-1993, an element of goodwill attached to the Service and the associated cable and telex numbers by means of which access to the Service was gained by customers.  The first problem confronting the appellants’ claim for passing off is establishing that the goodwill of the Service belonged exclusively to them.  As to that, the proposition advanced is that each of the pilots carried on an individual business of his own, doing so in association with the other pilots in such a way that together they were exclusively entitled to the goodwill identified with The Queensland Coast and Torres Strait Pilot Service.  On that footing, it was submitted that all the pilots together (or so many of them as are not now engaged in working for QCPS) are, on the principle applied in J Bollinger v Costa Brava Wine Co Ltd [1960] Ch. 262 (the Champagne case), entitled to relief against passing off by QCPS.

There are, in my view, several reasons for rejecting this submission.  The first is that it assumes that “the Service”, as it may be called, consisted only of the pilots, and not the secretaries as well.  It is true that pilotage services as such were supplied only by the pilots, but without having the benefit of the secretaries’ activities , it could not have functioned either in the manner prescribed by the Regulations or at all.  Not only did the secretaries provide the essential administrative framework in which the Service functioned, but in doing so they also constituted the direct link between the customers and the pilots who supplied the navigational assistance requested or required.  It is not possible to segregate one aspect of the Service goodwill from the other.  If there was a goodwill attaching to the Service, it belonged to the secretaries in common with the pilots, with the consequence that, on the approach in Bollinger v Costa Brava Wine Co, all and each of those persons was entitled to lay claim to it. (Emphasis added)

The claim with respect to the logo must follow the same fate.  If the logo was formerly distinctive of the business of the statutory Service, or of the pilots who claim to have comprised it, it is not proved to have been transferred, or to have become distinctive of, the pilotage business conducted since 1 July 1993 by the appellant company, so as to give rise to a claim for passing off based on alleged confusion by former customers between the business of QCPS and the appellant company.

Proprietorship

Mr Walters contended that the logo was a joint asset of the pilots and the secretaries and that therefore neither was entitled to the exclusive use of it.  It appears, however, from the judgment of McPherson J that if the Service was not a legal entity it was itself incapable of accruing goodwill in the logo.  It was, rather, held in common, not jointly, by both parties so that “all and each of those persons was entitled to lay claim to it”.  The basic common law principle is that the first person who uses a trade mark of an appropriate type within a country becomes the proprietor of the mark there: Re Registered Trade Mark "Yanx"; Ex parte Amalgamated Tobacco Corp Ltd (1951) 82 CLR 199 at 203; Thunderbird Products Corp v Thunderbird Marine Products Pty Ltd (1974) 131 CLR 592 at 603; Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) 59 ALJR 77 at 83. A person who becomes proprietor of a trade mark in this way is entitled at common law to restrain a person who later commences to use the trade mark. If the Service was not a person then there is no person who can defeat the applicant’s claim to proprietorship, which in the absence of evidence of use is based on authorship of the mark, the intention to use it in relation to the services and the lodgment of the application for registration as per Fullagar J in Aston v Harlee Manufacturing Co (1960) 103 CLR 391, at 398-399:

"Section 32 [of the 1905 Act]of the Act provides that any person claiming to be the proprietor of a trade mark may apply to the Registrar for the registration of his trade mark.  The right to registration depends, therefore, on proprietorship of a mark.  The conception of proprietorship, other than proprietorship acquired by a user which has made the mark distinctive of the applicant's goods, is a difficult conception, but it has been explained by Dixon J. in Shell Co. of Australia Ltd v Rohm and Haas Co (1), where his Honour refers to the history of the English legislation.  His Honour quotes Cotton L.J. as saying in In re Hudson's Trade Marks (2): "The difficulty is this:  Is a man to be considered as entitled to the use of any trade mark when he has never used it at all?  That is a difficulty, but I think the meaning is this.  If a man has designed and first printed or formed any of those particular and distinctive devices which are referred to in the first part of s 10, he is then looked upon as the proprietor of that which is under that Act a trade mark, which will give him the right so soon as he registers it." (3).  Dixon J. then sums up the position by saying:  "It is clear enough from the course of legislation and of decision that an application to register a trade mark so far unused must, equally with a trade mark the title to which depends on prior user, be founded on proprietorship.  The basis of a claim to proprietorship in a trade mark so far unused has been found in the combined effect of authorship of the mark, the intention to use it upon or in connection with the goods and the applying for registration" (4).  "Authorship", says his Honour a little later, "involves the origination or first adoption of the word or design as and for a trade mark." (5).

(1) (1949) 78 CLR 601, at pp.625 et seq.

(2) (1886) 32 Ch.D., at p.319,320.

(3) (1949) 78 CLR at p.626.

(4) (1949) 78 CLR at p.627

(5) (1949) 78 CLR at p. 628

His Honour went on to explain that authorship of a mark does not mean that the applicant must have been the "true and first inventor" or have "thought of it first". The applicant may yet be the author although he has copied or adopted a mark registered in a foreign country in respect of the same description of goods. "Local authorship" will suffice. What is essential to a valid claim to proprietorship is that no other person has acquired a prior right to use the mark in Australia for the goods or services in question.  There is no evidence that the opponent or any other person had acquired a prior right to the trade mark in suit so as to defeat the applicant’s claim.

Section 28(a)

The opponent also grounds his opposition on the likelihood of deception or confusion which would be caused by the applicant’s use of the mark.  This ground falls to be considered under s28 of the Act which is as follows:

28. A mark-

(a) the use of which would be likely to deceive or cause confusion;

(b) the use of which would be contrary to law;

(c) which comprises or contains scandalous matter; or

(d) which would otherwise be not entitled to protection in a court of justice,

shall not be registered as a trade mark.

The test to be applied under s28 may be stated as follows, paraphrasing the words of Evershed J in Smith Hayden & Co Ltd's Application (1946) 63 RPC 97, in which he compared the tests under ss.11 and 12 of the Trade Marks Act 1938 (UK), which correspond to ss.28 and 33 of the Trade Marks Act 1955 (Cth):

The questions for my decision ... have been formulated, and I think accurately formulated, as follows:

(a) (Under s.28) "Having regard to the reputation acquired by the[trade mark] is the Registrar satisfied that the mark applied for, if used in a normal or fair manner in connection with any goods covered by the registration proposed, will not be reasonably likely to cause deception and confusion amongst a substantial number of persons?";

...

The onus of establishing the reputation in the trade mark which would lead to the likelihood of deception or confusion rests on the opponent.  As the matter was put by Heery J in the recent decision in Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd (Federal Court, unreported, 11 July 1997):

With one major exception, the legal principles applicable to this case are not in dispute. They may be summarised as follows:

(i) The opponent bears the initial onus of establishing a reputation in its mark sufficient to found an objection under s 28: Arthur Fairest Limited's Application (1951) 68 RPC 197. (ii) However, once this onus is discharged the burden shifts to the party seeking registration: Eno v Dunn (1890) 15 App Cas 252 at 261, Jafferjee v Scarlett at 119. (iii) The rights of the parties are to be determined as at the date of application for registration (here 27 July 1989): Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1953) 91 CLR 592 at 594. (iv) The onus is on the party seeking registration to satisfy the Court that there is no reasonable possibility of deception or confusion: Southern Cross at 594-5. (v) In order to defeat the application for registration it is not necessary for the opponent to establish that there is an actual probability of deception which will amount to a passing-off. While a mere possibility of confusion is not enough - for there must be a real, tangible danger of it occurring - it is sufficient that the result of the user of the mark will be that a substantial number of persons will be caused to wonder whether it might not be the case that the two products come from the same source. It is enough that the ordinary person entertains a reasonable doubt: Southern Cross at 594-5, 608, The Kendall Co v Mulsyn Paint & Chemicals (1963) 109 CLR 300 at 305. (vi) In considering the issue of deception all the surrounding circumstances must be taken into consideration. The factors to be considered include the circumstances in which the marks will be used, the circumstances in which the goods will be bought and sold and the character of the probable purchaser of the goods: Jafferjee v Scarlett at 120; (vii) A probability of confusion, if it is real, is sufficient even though the confusion may be unlikely to persist up to the point of, and be a factor in, inducing actual sales: Southern Cross at 495. There may be confusion or deception in the minds of persons to whom the mark is addressed, even if actual purchasers will not ultimately be deceived: Re Hack's Application (1940) 58 RPC 9 at 103-104. (viii) It is not enough for the party seeking registration to negative the likelihood of confusion in relation to the actual trade carried on by the opponent at the time of the registration and to the manner in which the latter then uses his mark. The applicant must also take into account all legitimate uses which the opponent may reasonably make of his mark within the ambit Reckitt & Colman (Australia) Ltd v Boden (1945) 70 CLR 84 at 94, Southern Cross at 608. (ix) The question whether the use of a mark is likely to deceive or cause confusion is in the end a question of impression and common sense; it is a "jury question" in which the judge is entitled to give effect to his or her own opinion as to the likelihood of deception or confusion: Murray Goulburn Co-operative Ltd v New South Wales Dairy Corporation (1990) 24 FCR 370 at 377.

As the opponent in this case has failed to discharge the initial onus on it of establishing a reputation sufficient to found an objection under s28 the applicant has no case to answer in terms of that section. 

Conclusion

I have found that the applicant is entitled to be considered the proprietor of the trade mark applied for and that there is no evidence to show that its use of the trade mark would lead to the deception or confusion of a substantial number of persons.  The opponent has therefore failed to make out either of its grounds of opposition.  I dismiss the opposition and direct that the trade mark is to be registered  subject of course to the opponent’s right of appeal against this decision.

I award costs to the applicant.

Michael Homann
Hearing Officer

26 September 1997