Riv-Oland Marble Co (Vic) Pty Limited v Settef S.p.A

[1989] HCATrans 68

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne No H74 of.1988

B e t w e e n

RIV-OLAND MARBLE CO. (VIC.)

PTY LIMITED

Applicant

and

stTTEF S.P.A.

Respondent

Application for .special
leave to appeal

MASON CJ DAWSON J McHUGH J

Riv-Oland

TRANSCRIPT OF PROCEEDINGS

AT 11:ELBOURNE ON FRIDAY, 17 MARCH 1989, AT 12.40 PM

Copyright in the High Court of Australia

i'

MlT?/1/PLC 1 17/3/89

MR D. SHAVIN:  May it .please the Court, I appear with my

learned friend, MRS C. HOWARD, on behalf of the

applicant. (instructed by Scomparin & Bernardi)

:MR J.M. EMMERSON, QC:  May it please the Court, I appear with

my learned friend, MR B.N. CAINE, on behalf of the

respondent. (instructed by Madden Butler Elder &

Graham)

MR SHAVIN: If the Court pleases, the application today is

with respect to leave in a matter concerning

the validity of the registration of a trade mark

which, on the unchallenged findings of the trial

judge, was a mark which at the date as of which it

was registered was not then and had not at any time

since been distinctive of the goods of the registered

proprietor, a mark which was at the date of

registration and at all times since had been

distinctive of the goods of the applicant and a

mark which, if used by the registered proprietor,

at the time of registration and at any cime since

would have been likely to cause confusion. Thus,

it is a unique set of findings of fact which give

rise to this case. But in those findings of fact

it is our respectful submission that there are

raised for consideration by this Court fundamental

questions going to the heart of trade mark law

and affecting both the very concept of a trade mark

and the registrability of a very wide range of marks,

indeed.

There are three issues, in our submission, which

are raised by this matter. These issues arise under

two sections of the Act. The first is section 28

which provides, amongst other things, that:

A mark -

(a) the use of which would be likely to

deceive or cause confusion .....

shall not be registered as a trade mark.

MASON CJ:  We are familiar with what the section provides.

MR SHAVIN:  If Your Honour pleases. The three issues, Your Honours,

in our submission, are these: first, is a trade mark

truly a badge of origin of quality which can be

relied upon as such by consumers or should the

Registrar of Trade Marks constitute simply a sterile

list of priorities created under the Act with no

~. purpose other than to identify the position of

proprietors of trade marks and facilitate enforcement

in the words of the learned Chief Justice in the court

below?

McHUGH J:  But you cannot answer that question without construing

section 28, can you?

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MR SHAVIN:  No, you cannot, Your Honour. And it was, indeed,

in the construction of section 28 that, it is our

submission, the court below has fallen into error.

The majority in the court below took two different

approaches to th~·construction of section 28.

First of all, the learned Chief Justice looked at

the English provisions, looked at the New Zealand provisions - each of which had been considered in

the GE case and HY-LINE CHICKS' case respectively -

and said, "I don't really find those of very great

assistance." What His Honour then proceeded to say

was, at page 99 of the application book:

The question is a difficult one but my own

inclination is to uphold the decision

of the learned trial Judge in the

circumstances of this appeal. I have not

obtained much assistance from the close

analysis of the slight differences in wording

adopted in the variations in language used in

the provision in the United Kingdom, New

Zealand and in Australia from time to time

or the way in which the word otherwise

appears in paragraph (d). I am, I think,

conscious of leaning against a construction

of s.28 in regard to blameworthy conduct

on the part of a proprietor which would

lead to a situation described by Windeyer J.

where the proprietor of a mark might be

denied or lose registration by reason of "the

assiduous efforts of an infringer".-

he refers to the BALI case

or to adapt the words to cover the period
before registration "the assiduous efforts
of a misappropriating user". Furthermore,
the trade mark law providing for registration

is designed rather to clarify the position of

proprietors of trade marks and facilitate

enforcement rather than to raise difficult

and complex questions which would be generated

by the contrary construction.

Now, His Honour Mr Justice Lockhart took a more

technical approach. His Honour construed carefully

section 28 but then found that the section did not

have the meaning which, on its plain reading, it

would appear to have but should be read in another

way. Your Honours will recall that the section

provides:

i'

A mark -

and then in subparagraph (a) provides:

the use of which would be likely .to

deceive or cause confusion;

MlT7/3/PLC	3	17/3/89
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and then there is (b) and (c). At the end of (c)

there appears a semicolon and the word "or" and

then goes to subparagraph (d):

which would otherwise be not entitled to

protection in a court of justice,

shall not be registered as a trade mark.

Now, His Honour Mr Justice Lockhart reached the

conclusion that (d) qualified and was cumulative to

subparagraph ( a) rather than that the section should be

construed disjunccively. In reaching that conclusion,
His Honour declined to follow the decision of the

Court of Appeal in New Zealand which, in our respectful submission, itself was following a long

line of cases in this Court which go to establish

the proposition that trade mark law is concerned
primarily with the rights of members of the public
not to be the subject of deception or confusion by
the use of a mark and is not a law to be construed

to determine the interests of rival traders.

MASON CJ:  Do you have a copy of the New Zealand decision?

MR SHAVIN:  Yes, if Your Honour pleases. If I could hand to

the Court four copies of PIONEER HI-BRED CORN CO V

HY-LINE CHICKS PTY LTD, (1979) RPC 410.

MASON CJ: Thank you.

MR SHAVIN:	I might at the same time hand to the Court a decision of the House of Lords in the GE TRADE MARK decision.
If I could take the Court to the New Zealand Courc of
Appeal decision. Section 16 of the New Zealand Act
is conveniently to be found in the reasons of the thereabouts which provides:

"It shall not be lawful to register as a

trade mark or part of a trade mark any

scandalous matter or any matter the use of

which would be likely to deceive or cause

confusion or would be contrary to law or

morality or would otherwise be disentitled

to protection in a court of justice."

The President dealt with the arguments concerning

the construction of this section and a rather

different English provision at page 297.

MASON c~~ It must be another page.

MR SHAVIN: I am sorry, yes, at page 412. In the·::las.t paragraph

at page 412, the President deals with the GE TRADE MP.RK

case and at line 40 says:

MlT7/4/PLC	4	MR SHAVIN	17/J/81.j
Riv-Olanci.

It is however clear that in 1953 the

legislature in New Zealand deliberately

departed from the previous wording as found

in section 13 of the 1939 AMENDMENT ACT.

McHUGH J:  Can I just stop you there, Mr Shavin, because in

the Dean Committee report in 1954 it was made

plain that clause 28 was, although in different

words, in substance, to have the same effect as the

old section 114, was it not?

MR SHAVIN:  Yes.

McHUGH J: And that is a point of distinction between the

Australian situation and New Zealand.

MR SHAVIN:  Save as to this, Your Honour, that although that

was commented upon by the Dean Committee, in my

respectful submission, the Court does have not

only the section itself to construe on its plain meaning but also to construe that section in the

light of the policy of the Act as a whole and

certainly there have been some developments in

that context since 1954. And it is my respectful

submission that when one goes back, even to 1937,

His Honour Mr Justice Dixon's, as he then was, comments in RADIO CORPORATION V DISNEY, made it

quite clear that this Court has followed the

principles established in ENO V DUNN that trade

mark law is concerned primarily to protect the
public. It is to protect the public against a mark
which might cause confusion. In this case,
registration has been given to a mark which the
trial judge, in an unchallenged finding, has said

if used by the registered proprietor is likely to

cause confusion. In other words, it is said that
it is more important to determine the rights as

between the user of the mark and a person who

initially obtained the mark from them than it is

to protect members of the public who are to be

subjected co a mark which the court has found is

our respectful submission, Your Honours, that this	likely to confuse them. It is in that sense, in
raises a point of general importance because if the
TRADE MARKS ACT is no longer concerned with preventing
confusion, preventing registration of marks that are deceptive, one might ask, for example, how it lies happily with Division 1 of Part V of the
TRADE PRACTICES ACT. How, indeed, the trade mark
register itself can any longer have a significance
,.	in the real world.

If a member of the public, looking at a mark,

cannot say of that mark, "Yes, it is a badge of origin
of quality" what then, I ask rhetorically, does the

mark say at all? If it is not a badge of origin of

quality, if it can be a mark which is used deceptively

MlT7/5/PLC	5	17/3/89
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or which can cause confusion, the trade mark

loses any significance. And, in my submission, that

would undermine the whole chain of authority that

this Court has established since just after

Federation as to the fundamental principles upon which

this Act is to be construed. It is, indeed, a difficult

question. As His Honour the Chief Justice in the

BALI case noted, "If this issue was to come before
the Court it would be a serious question", a difficult
issue. In our submission, that issue of itself would
justify the grant of special leave. It is a point
in which the court below is divided, in which the
majority followed Lord Diplock in the House of

Lords, who adopts the concept of blameworthy conduct as the prime motivating policy force for the

construction of section 11. It rejects the New Zealand

Courc of Appeal which says, "No, we look at the

Australian cases and the decisions of the High Court of

Australia tell us that what is most important is the protection of the public." And it is in that context

that the New Zealand Court of Appeal examined a chain

of cases starting with the DiSNEY case, going

through - - -

MASON CJ:  Mr Shavin, I think we will adjourn at this stage and

we will resume at 2.15.

MR SHAVIN: If the Court pleases.

AT 12.54 PM THE MATTER WAS ADJOURNED

-UNTIL LATER THE SAME DAY

UPON RESUMING AT 2.18 PM:

MASON CJ:	Mr Shavin, I think we might hear from Mr Emmerson
at this stage of the case.

MR SHAVIN: If the Court pleases.

MASON CJ: Yes, Mr Emmerson?

MR EMMERSON: If the Court pleases, in our submission, this is

not an appropriate case for the grant of special leave.

We say this both because, in our submission, there is

no real doubt about the correctness of the decision

i' under appeal and secondly because, in our submission,

this is not an appropriate case in which this Court

should consider the principal authority relied upon by

my learned friend, the New Zealand HY-LINE CHICKS' case.

MlT/7/PLC	6	17/3/89
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If the Court pleases, it will be clear from

the judgments that this was a matter which had very

complex facts and in which a substantial number of

different points were argued, many of whi~h are set

out again in the proposed notes of appeal. However,

the position was this: the Full Court which, in our

respectful submission was a strong court, was

unanimous in upholding the decision of the learned

primary judge on the issue of proprietorship of the

mark and also on the distinctiveness of the mark.

The only dissent was that of His Honour

Mr Justice Northrop which was confined to the

issue which he saw as raised under section 28 of

the TRADE MARKS ACT.

Now, in our submission, the issue under

section 28 is one which cannot be neatly divorced

from the other matters considered by the court and

the other matters on which the court has made findings

in our favour. My learned friend suggested that

the decision was somehow in conflict with a long

line of cases. It is our submission that that is not

the case. The point was, of course, directly

considered in the Federal Court here in the HTX

case, it was considered by the House of Lords in the

GENERAL ELECTRIC case and my learned friend is left

then with the New Zealand HY-LINE CHICKS' case.

If one goes to the facts of the HY-LINE CHICKS'

case, this is a case which raises a problem with which

our courts have grappled at various times, namely, a

conflict between the first party to make a relevant

move in the country concerned and the position of a

foreign proprietor. The Court will recall that in

the HY-LINE CH1CKS' case neither party had established

a reputation by user in New Zealand; there was an

Australian company which had applied to register and there was another foreign company which had first user overseas.

This sort of issue has been considered by this

various different factual permutations but it is	Court in a number of different cases which raise	sufficient to indicate the general character of those
cases by referring to, for example, the SEVEN UP
case which was a dispute between a foreign trade mark owner who had the first use of the trade mark and a
local applicant for registration. Now, in the
SEVEN UP case this Court held that the local applicant
should succeed on the footing that where there is no
use in this country by either party, the first party

~· to apply for registration should have the relevant

rights. The New Zealand Court, in HY-LINE CHICKS,

reached an opposite conclusion.

In our submission, the sort of facts which give

rise to difficulty in cases of that sort of competition

MlT7/8/PLC	7	17/3/89
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simply do not arise here because in our case my clients

had both first overseas user and first user in

Australia. So, the difficult problem of whether or

not the HY-LINE CHICKS' case would now be followed in

Australia rather than the SEVEN UP, "YANX",

THUNDERBIRD line of cases is one which, in our

submission, does not properly arise on these facts

and should be reserved, if it is to be considered

at all, for a case in which there is a real dispute

between conflicting priorities. That is simply not

this case. There is no element of that here in the

present case.

My learned friend has submitted that, in effect,

section 28(d) acts to cause the use of a mark by
the true priprietor of his own mark to be in conflict

with the Act. In our submission, in all the cases

that have been considered under section 28, that view

has never been supported and it cannot, in our

submission, be said to be something which raises such

large doubts that it should be the subject of special

leave in the present case. All section 28(a) cases

which have been heard up until now where the conflict

is between two conflicting marks have been cases in

which the earlier mark or, I suppose, the owners of

the earlier mark have sought to prevent the use of a

mark by a later proprietor. Section 28 has never been

applied in the converse case which is the present

case. In the present case we are, by every test which

has been considered in Australian authorities, entitled
to priority and there is, in our submission, no

reason to doubt the conclusion of the learned trial judge

and the majority of the Full Court on that point.

My learned friend also relied on a submission

relating to the public interest saying, in substance,

as I understood him, that the whole purpose of the

TRADE MARKS ACT is concerned with protecting the public

interest. In our submission, that does less than justice

to the TRADE MARKS ACT which itself provides a complicated

and detailed Code which deals with a number of competing

interests and amongst the interests which are, of course,

considered are the interests of proprietors of trade

marks, proprietors of competing trade marks, the public

and so on. Now, there is a complete Code set out in

the Act and, in our respectful submission, it is quite

wrong to treat the Act as if it said nothing more

than that there is a public interest which is to be

protected. It is a much more sophisticated exercise

than that.

McHUGH ~= Dr Ennnerson, just speaking only for myself, I find

the majority judgments fairly persuasive but having
regard to the literal words of section 28 and without
regard to its history, is it not difficult to say

though that there is not an arguable case of some

importance involved here, particularly having regard to

the dissenting judgment?

MlT7/9/PLC	8	17/3/89
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MR EMMERSON:	Your Honour, having regard to the literal words, the question, of course, is precisely what do those
words mean literally; and, of course, there is room
for argument about that.  We say that when one has
a position where you have a conflict between two
marks so that, in essence, it is the presence of the
two marks in the markec-place which causes the problem, that when one is looking to see what it is that causes
confusion, it is the use of the interloping mark, not
the use of the primary mark and, in our submission,
that is the way the matter has been approached in
all decided cases.  Even Kerly and Shanahan
have, as the heading for their section on section 28(a),
"Conflict with earlier marks", not as it were,
conflict between marks on parity.

Second, we say that in order to make sense

of section 28, one does, as the majority did, have to

give weight to section 28(d) dealing with the

entitlement to protection in a court of justice

because if you do not take that into account then,

for example, you can make no sense at all of section 82

of the Act and, in our submission, the Full Court in

its majority correctly considered that point. Once

you get to che stage where it is perfectly possible

to transfer a trade mark without goodwill so that the reputation inevitably remains with one person and the trade mark with another, then if you say, well,

provided there is any possibility of confusion, the

mark is bad, then there can be no scope for such a

transfer and yet the Act says expressly you can do this.

Now, one can make perfectly good sense of this,

however, by reading section 28 as a whole and clearly,

where you have a transfer of a mark without goodwill

in accordance with section 82, then that mark is a mark

which is entitled to protection of a court of justice

and the problem does not arise. So, you resolve not ·

only the problems of early mark as against late mark

by taking into account section 28(d); you understand

how section 82 works and you understand how section 34,

which deals with honesc concurrent user, and itself

codifies the connnon law on this particular point

works.

So, you do not treat section 28(a) as if it is totally divorced from its statutory context. Now, in

our submission, of course, one must accept wherever

you have a dissenting judgment that someone is able to

take a different view. In our submission, the decision

, of the learned trial judge and of the two judges who

i	formed the majority of the Full Court together set out
the law in a coherent and satisfactory way in which
there is no reason to doubt the correctness of the view and therefore, in our submission, there is not the doubt which would give rise to a special leave point.

MlT7/10/PLC	9	17/3/89
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McHUGH J:  I have not read Mr Justice Fox's judgment but I

assume it pursued the same analysis?

MR EMMERSON: It pursued substantially the same analysis, yes,

Your Honour. Again, it followed very heavily on

the GENERAL ELECTRIC analysis and it also took up

the point which is dealt with by His Honour

Mr Justice Lockhart that part of the reasoning

underlying the codification of trade mark law is

that you try to have a system which is certain

and so you go by registration and the rules for

registration rather than, in each case, throw open

the question of who has the relevant reputation

and Mr Justice Fox deals with that as Lord Diplock

does in part of his analysis in GE and as

Mr Justice Lockhart does in his judgment.

If the Court pleases, I want to say just a

little bit about the question of public interest.

The prohibition under section 28, which deals with:

A mark -

(a) the use of which would be likely to

de~eive or cause confusion -

is, of course, directed not to a case in which the

use of the mark must inevitably lead to a passing off

but rather to a test in which you look to see all

proper uses that might be made for the mark as

registered and you look, if there is already a

competing mark on the register or in existence, to

see whether there is likely to be some deception or

confusion.

Now, the relationship between that and the law

of passing off and the TRADE PRACTICES ACT should be

borne in mind. What section 28(a) is looking at is

the whole ambit of possibilities. It is simply not

correct to say that a finding that two marks are

sufficiently similar to fall within the prohibition of

happen in the market-place. What is going to happen	a matter of public interest as to what is going to section 28(a) is sufficient to conclude the issue as	in the market-place, in our submission, is properly
governed by the law of passing off and the law under
the TRADE PRACTICES ACT. As the Court will be aware,
registration of our trade mark gives us the right to prevent others from using it but it does not, of
course, enable us to pass off our goods as the goods
of other people. The Act itself does not provide a

,~ protection against passing off, save for a limited

remedy with respect to relief from paying damages where

one shows that the passing off is done entirely in

ignorance.

It therefore follows, in our submission, that my

learned friend's primary argument which was that this

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will lead to somehow a wholesale clash with public

interest is simply not made out on the facts. All

that we have is that the two trade marks are, of

course, idencical. We fuily accept that. So, of

course, if my learned friend's trade mark was the

earlier one in time, we would equally accept that

we would not be entitled to be registered and that

the courts could follow the decision in SOUTHERN CROSS V

TOOWOOMBA FOUNDARIES.	However, in the present case
the point is quite different.	We are, as all judges
have found, the proprietors of the mark.	The mark

is, as all members of the court have found, distinctive

and, in our submission, that is sufficient to conclude

the issue and that is sufficient to make it clear that

there can be no room for the application of section 28(a)

here. It would not be anything done by us, in our

submission, which could mislead or cause confusion.

It would not be anything done by us which woul<l not

be entitled to protection of a court of justice.

If the Court pleases, I have tried to address

my submissions to what appeared to be the principal

thrust of what my learned friend was putting to this

Court before the luncheon adjournment.

MASON CJ: Yes, section 28.

MR EMMERSON:	Yes.
MASON CJ:	Now, it had occurred to us that the notice of appeal,

in the usual Victorian fashion, seems to be extraordinarily

discursive in its all-embracing grasp.	What do you say
about the non-section 28 points?

MR EMMERSON:  About the non-section 28 points, Your Honour, we would say,

and everything else and, in particular, on

proprietorship, distinctiveness, abandonment and so

on, the fact is that four judges in two courts have

considered all these points.

MASON CJ:  They have been in your favour.

MR EMMERSON:	They have all been in our favour.
McttUGtt J:	You have got concurrent findings of fact on all of

those - - -

MR EMMERSON:	Yes, Your Honour.
MASON CJ:	I do not think you need say any more than that,

perhaps, Mr Enrrnerson.

"'

MR EMMERSON: If Your Honour pleases, those are the submissions

on behalf of the respondent.

MASON CJ: Thank you. Yes, Mr Slavin? First of all, what do you

say about these other grounds of appeal, apart from

section 28?

MlT8/2/PLC	11	17/3/89
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MR SLAVIN:  The section 26 ground we would urge strongly upon

the Court. In our respectful submission, when one

analyses the Full Court's position, with the greatest of

respect to His Honour Mr Justice Lockhart, he has

fallen clearly in conflict with both the CLARK

case and the BURGER case in that His Honour has

construed section 26(2) as having two alternative

cescs whereas both in the'MICHIGAN"case and the

"WHOPPER" case this Court quite clearly held that

it was a cumulative test and secondly, when His Honour

then went on to consider the mark, His Honour looked

at the mark and said its - - -

.MASON CJ:  Could you direct us to the pages in His Honour's

judgment where he deals with this question?

MR SLAVIN:  Yes, if Your Honour pleases. If I could take

Your Honours to page 134 of the application book.

His Honour said, after setting forth the section:

Thus certain classes of trade marks are

registerable through their being inherently

adapted to distinguish within para. 26(2)(a),

whilst other marks are registerable if, on

the facts of the case, they have become

distinctive through use of the mark or other

circumstances. If a mark is inherently
adapted to distinguish within the meaning

of para. 26(2)(a) then it satisfies the

requirements of sub-s. 26(1). There are thus

broadly speaking two kinds of distinctive
marks: those which are inherently adapted to
distinguish (para. 26(2)(a)) and those which
have acquired factual distinctiveness within
para. 26(2)(b). A third category may exist,

in respect of which the mark is "adapted to

distinguish" by reason of a combination of
inherent adaptation and use or other

circumstances.

Now, it is our respectful submission that that passage

is in fundamental conflict with both the CLARK case
and the "WHOPPER" case.	And if I could take Your Honours

to the decision of His Honour Mr Justice Gibbs, as he

then was, in BURGER KING CORPORATION V THE REGISTRAR

OF TRADE .MARKS. Can I hand to the Court copies? If

I could take the Court to page 424 of His Honour's

reasons; the passage commencing on the fifth line.

His Honour said:

It does however state, ins. 26(2), the two

~,	matters that fall for consideration in deciding whether a trade mark is distinctive,
and in deciding whether a trade mark is capable of becoming distinctive it becomes

MlT8/3/PLC	12	17/3/89
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necessary to consider whether the trade mark

is capable of meeting in the future the tests

stated ins. 26(2). That sub-section requires

two matters to be considered, inherent

adaptability to distinguish and distinctiveness

in fact acquired by use or otherwise. When the

question is whether the trade mark is capable of

becoming distinctive, no diffiulty arises about

the nature of the inquiry so far as concerns the

second of these matters; the inquiry becomes

whether the trade mark is capable in fact of

distinguishing the goods, by reason of future

use or other circumstances. However, as to the

first matter the inquiry remains the same as

that which is to be made when the issue is

whether the trade mark is distinctive, that is, whether the trade mark is inherently adapted to

distinguish the goods. Inherent adaptability is

something which depends on the nature of the

trade mark itself and therefore is not something
that can be acquired; the inherent nature of the

trade mark itself cannot be changed by use or
otherwise.

And if I could take the Court over to page 425, perhaps starting at the commencement of the page:

I am not concerned with the difficulties that

arise under s. 10(2) of the United Kingdom Act

but would point out that in Australia, where
the Act is significantly different, an inquiry

as to the inherent adaptability of the trade

mark muse be made where the question is whether

the trade mark is capable of becoming

distinctive as well as when the question is

whether it is in fact distinctive.

And it is our respectful submission that a plain

reading of the section itself dictates that result

because section 26(2), as the Court will recall, does

provide that:,

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

'I'	or of any other circumstances, the trade
mark does so distinguish.

It is our respectful submission that they are cumulative

in operation. They are not true alternatives. That

the effect of His Honour's judgment in BURGER KING is

to that effect, as was the effe~t in the earlier

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decision of His Honour Mr Justice Kitto in the

the "MICHIGAN" case.

Now, the second matter on this area to which

we would draw the Court's attention is at page 135

of the application book. If I could take the Court

to two passages appearing on that page. The first

appears in the first substantive paragraph six lines

from the top:

If a mark is inherently adapted to distinguish

it may nevertheless be registered if the

evidence discloses that it has become

distinctive in fact, in that it is recognised

in the market as a mark distinguishing the

goods of the applicant for registration

services from those of other traders. In the
case of a mark that is inherently adapted to
distinguish, the test as to its registrability

is not whether the mark is disLinctive in

fact but whether it is adapted to distinguish

in the sense contemplated by para. 26(2)(a).

Your Honours, in our respectful submission, that

confuses the concept of "distinctiveness" because
section 26(1) makes it quite clear, in our respectful

submission, that 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 in respect

of which no such connection subsists.

Now, in our respectful submission, where His Honour

has here fallen into error has been to look at whether

or not this is an invented word, conclude that because

it is an invented word it is inherently adapted to

distinguish and then slid to the point of saying,

::Therefore it must be distinctive". Yet, the findings

of fact by the trial judge were that this was a mark

which was not only not distinctive of the goods of

the registered proprietor but use by the registered

proprietor would be likely to cause confusion. So, that

in our respectful submission, it is a mark which

inherently cannot distinguish the goods of the

registered proprietor from the goods of the other

trader because, in fact, in the minds of the public,

the trial judge found, and the finding has never been
contested, that the members of the public when looking
at the mark would associated the goods with the goods

of the applicant, not the goods of the registered

i, proprietor.

So that in our respectful submission, His Honour Mr Justice Lockhart has fallen into error on the

question of distinctiveness on two grounds. The first

is he has failed to follow both the section and the

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judgments of His Honour Mr Justice Kitto in "MICHIGA.J.'l'"

and His Honour Mr Justice Gibbs, as he then was, in

"WHOPPER" and, secondly, in approaching the question

of adapted to distinguish, His Honour has failed to

place it in the context of the requirements of

"distinctiveness", and, of course, the Court will

recall that in section 24 for a mark to be registrable

it must be a distinctive mark.

MASON CJ: Yes. I think what we ought to do at this stage,

Mr Slavin, is ask Mr Emmerson if he wants to respond

to what you put on this point because by reason of

the procedure that we have adopted, cutting you short

and calling on him, Mr Emmerson has not had an opportunity

of dealing with the seccion 26 point.

MR SHAVIN: If Your Honour pleases.

MASON CJ: Yes, Mr Emmerson?

MR EMMERSON:	If the Court pleases, in our submission the decision under appeal is right and is in accordance
with both the CLARK EQUIPMENT and the BURGER KING
case.  The construction that is given to section 26,
dealing with the matter of "distinctiveness", is
simply this, that one looks to see whether a mark is
inherently adapted to distinguish and that is something
which, as both BURGER KING and CLARK EQUIPMENT show,
is inherent in the mark itself. It has got nothing to do with the use of the mark.

There are, however, as of course there were

under consideration by this Court in both CLARK

EQUIPMENT and BURGER KING, some marks which may have

a low inherent adaptability to distinguish but which

nevertheless become distinctive by use. Now, chac,

in our submission, is the correct analysis of

section 26.

McHUGH J: Dr Emmerson, what about the statement at page 134

about point 6? Is that correct, that:=

There are thus broadly speaking two kinds

of distinctive marks.

MR EMMERSON: If one - as to the third category, the answer is

"yes", Your Honour. That is to say, there are some

marks of which one can say merely by looking at them

that they are distinctive marks. Then there are

others which have a low degree or a less than full

, degree of inherent distinctiveness and so acquire ' distinctiveness by user. The marks which are not

registrable under this heading are ones which have

less than sufficient inherent distinctiveness and do

not have sufficient acquired distinctiveness by user

in order to make them distinctive.

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McHUGH J:  But His Honour seems to have taken the view that

there are three categories.

MR EMMERSON:  Yes. Your Honour, I would have to put a rider

to His Honour's second category and the reason why

I would have to put a rider to His Honour's second

category is that as CLARK EQUIPMENT and BURGER KING

and one or two English authorities show, there are

some marks which have so little inherent adaptability

to distinguish that even if one finds that they are,

as the English cases put it, "100 per cent distinctive

in fact'', that is not sufficient because, of course,

they do not satisfy the need for some inherent

capacity to distinguish.

Now, His Honour, of course, had no occasion,

in the passage that Your Honour directed my attention
to, to consider that limited class of cases but

with that qualification we would say that His Honour

was correct. It just so happens that both CLARK

EQUIPMENT and BURGER KING are cases in which the

mark sought to be registered had almost had either

zero or almost zero inherent capacity to distinguish,

"Michigan" being the name of a very large industrial

area and "whopper" being just a well-known term for

something that was large.

In our submission, the learned trial judge also

correctly analysed "distinctiveness" bearing in mind

the fact that in trade marks law one can have concurrent

users, each of whom is entitled to become registered as

proprietor of a mark. If the Court goes to page 74 of
the appeal book, the learned trial judge, at about

point 7, says this:

In the present case, if the word "distinctive"

is given an unqualified meaning, the plaintiff;

an honest concurrent user and the proprietor of

the trade mark would not have been entitled to

registration because the defendant's

misappropriation of its trade mark had deprived

it of its distinctiveness. Beside the defendant,

other persons could oppose registration and

other aggrieved persons later seek expungement

of the trade mark from the register on the

ground of invalidity for non-distinctiveness.

He then goes on to refer to His Honour Mr Justice Fox's decision in HTX V SEMCO at the top of page 75

where His Honour held that one:

~'

could not rely on loss of distinctiveness

brought about by its own "infringing" conduct.

Which His Honour then endorses. And then His Honour,

at the top of page 76 reaches an important conclusion.

At page 76, line 4, he says this:

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It would have been open to Settef to obtain

registration of its trade mark in 1978

if the defendant had been an honest

concurrent user. Settef could hardly be

treated as being in a less advantageous

position where the defendant had wrongly

misappropriated its mark and was not an

honest concurrent user.

Now, that is, in our respectful submission, an important

point to bear in mind. It arises out of section 34

which allows identical or substantially identical

marks to be registered in the case of'honest concurrent

user" or other special circumstances.

If the fact were that, in fact, it was my

learned friend's clients who had first obtained

registration and we had sought to obtain registration,

then we could have invoked, as His Honour here holds,

the provisions of section 34 and say, "Well, we're

honest concurrent user, we can be registered too."

Now, we can hardly be put in a worse position by the

fact that my learned friends, of course, have not achieved registration at the relevant date. Now, that point is made by the learned trial judge and

is taken up by the learned Chief Justice in the Full

Court at page 97 of the appeal book where he says

this in the paragraph that begins about a third of

the way from the top of the page:

It is not entirely clear to my mind whether

Sette£ was not entitled to registration

nowthstanding the terms of s. 28(a) because

it was an honest concurrent user with the

Marble.: ompany. Certainly there was no lack

of honesty on the part of Settef and the

mark was being used concurrently. However,

it is not so clear that the use by the Marble

Company -

by which His Honour means, of course, the applicant

in this case

could be described as honest concurrent user.

The remarks of the learned trial Judge

suggest that that company was prepared to

take the risk after relations were broken off

with Settef for whom formerly it was a

distributor and he described its actions as a

misappropriation of the mark. However, it

~,	would be an odd operation to give to the
provisions of s. 28(a) that if one of two
concurrent users was able to show successfully
that his use was dishonest, the result would be
that the honest proprietor's mark would be
liable to be removed from the Register.

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So, on the issue oi distinctiveness, in our submission, ·not only do the words of section 26

themselves support the view that one can achieve

distinctiveness by having a mark which has, as an

invented word, inherent distinctiveness or

one can achieve it by a combination of inherent

distinctiveness and acquired distinctiveness.

Here we have inherent distinctiveness and that is

it and, in our submission, the Court has not gone

wrong on that. That view is, in our submission,

supported by the provisions of section 34 of

the Act.

So, in our submission, it cannot be said that

there is a conflict here found between the reasoning

of His Honour Hr Justice Lockhart and the two earlier

cases in this Court. Could I perhaps just take
the Court to the reasoning of Mr Justice Kitto

in the CLARK EQUIPMENT case which I think my learned

friend handed up to the Court.

MASON CJ:  No, we have not got CLARK EQUIPMENT.

MR E1:1MERSON: Well, I am indebted; my learned friend has

cases which will save me providing ours. As I had

been putting to the Court, this was a case which was

concerned with an application to register the

trade mark "Michigan" and so the problem that the

appellant had was that its mark was a very well-known
geographical name and therefore had very little inherent

capacity to be distinctive.

His Honour Mr Justice Kitto says about the facts

at the bottom of page 512:

On the evidence before me I am satisfied

that in Australia the word MICHIGAN has been

extensively used by the appellant for more than twenty years as a mark to distinguish its goods of the description in respect of

which registration is sought, and that its

use of the word for that purpose, in

advertisements and upon its products themselves,

has resulted in a widespread recognition of

the word, among persons concerned with

products of the kind, as distinguishing the

appellant's goods from the goods of other

persons. Buts. 26 makes it plain that
that is not enough to entitle the appellant

to the registration it seeks.

~' That is, mere reputation is not sufficient.

I need not dwell upon the point that the word

"registrable" ins. 25(1) is appropriate

to allow for, and at least does not

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displace, the view often expressed or implied

in judgments of the courts that the Registrar

has a discretion to refuse registration

even where the express requirements of the

Act appear to be satisfied. I am concerned

more with the fact thats. 26, having in

sub-s (1) denied registrability unless the

mark is "adapted to distinguish" the

expression '1adapted to distinguish" so as	applicant 1 s goods, by sub-s (2) dissects the
to show that two inquiries are relevant -
not only an inquiry concerning acquired distinctiveness but an inquiry concerning the inherent fitness of the mark for the
purpose of distinguishing the applicant's
goods from those of other persons.

He then goes on to say that the mere fact that there

might be distinctiveness in fact does not establish

that you have an adaptability to distinguish and

quotes and endorses Lord Parker 1 s speech in the	at the bottom of the page, and on page 513, he
W & G case. In particular, at page 514, beginning
at line 5, he qu9tes Lord Parker:

"The applicant 1 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."

Now, my learned friend has criticized the judgments

under appeal for taking into account legitimacy in

construing the Act. But, of course, His Lordship

there is taking into account legitimacy. He is

asking the question, "Will other people without

improper motive want to use the mark?"

_ Now, in our submission, once one has the finding,as we

i• aave here, that the mark is our mark and was improperly

adopted by the applicants then, of course, we have

here a mark which is inherently adapted to distinguish

and is not one of which it can be said that other

traders, in the ordinary course of their business and

without improper motive,would desire to use. It is an invented

word and it is our invented word, we are the proprietor

of it.

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So, His Honour, in following the W & G case,

in our submission, is reasoning in a fashion which

is in support of and not in any way in conflict

with the decision under appeal. To the same effect

is the BURGER KING case and, indeed, His Honour

Mr Justice Gibbs, as he then was, at page 424, line 10, in considering section 26(2) says this:

That sub-section requires two matters to be

considered, inherent adaptability to

distinguish and distinctiveness in fact

acquired by use or otherwise. When the

question is whether the trade mark is capable

of becoming distinctive, no difficulty arises

about ..... these matters; the inquiry becomes

whether the trade mark is capable in fact of

distinguishing the goods, by reason of

future use or other circumstances. However,

as to the first matter the inquiry remains the

same as that which is to be made when the

issue is whether the trade mark is distinctive,

that is, whether the trade mark is inherently

adapted to distinguish the goods. Inherent

adaptability is something which depends on

the nature of the trade mark itself and

therefore is not something that ··can be acquired.

Now, we, having to use United Kingdom terminology

100 per cent "inherent distinctiveness", do not need

any use to add to that distinctiveness in order to

make this a distinctive mark.

So, in our submission, once again there is no

error shown in the reasoning of the judgments under

appeal. It is in accordance with both decisions of

this Court that my learned friend relied upon and,

of course, as I have already submitted, all four

judges who have heard the present case have reached
the same conclusion on the point of distinctiveness.

If the Court pleases.

MASON CJ: Thank you, Mr Ennnerson.

The Court has come to the conclusion that it

will grant special leave to appeal in this matter.

The grant of special leave will be restricted to the

grounds of appeal related to sections 26 and 28, and

the Court reserves the possibility that it will

revoke the grant of special leave in relation to

section 26 when it becomes, as it were, more closely

~. informed in relation to the matters at issue on the hearing of the appeal.

AT 3.11 PM THE MATTER WAS ADJOURNED SINE DIE

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