Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd (No 3)
[2017] FCA 865
•1 August 2017
FEDERAL COURT OF AUSTRALIA
Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd (No 3) [2017] FCA 865
File number: VID 953 of 2015 Judge: MORTIMER J Date of judgment: 1 August 2017 Catchwords: COMPETITION– misleading or deceptive conduct – ss 18 and 29(1)(g) and (h) of Australian Consumer Law – identification of the appropriate class of persons to whom the alleged misrepresentation was made – identification of nature of misrepresentation – whether participants in commercial construction industry likely to be led into error by respondent’s conduct – application dismissed
TORTS– passing off – identification of applicant’s commercial reputation – whether respondent’s business activities using the name “Shape” threaten to damage or otherwise adversely affect that reputation and goodwill – application dismissed
TRADE MARKS – claim that respondent’s mark is “deceptively similar” to the registered trade mark of the applicant – identification of relevant class of persons – whether commercial construction industry is “specialised” – discussion of distinction between “wonderment” and being led into “error” – application dismissed
Legislation: Competition and Consumer Act 2010 (Cth) Sch 2, Australian Consumer Law, ss 18, 29
Evidence Act 1995 (Cth), s 190
Trade Marks Act 1995 (Cth), ss 6, 70, 120, 122
Trade Practices Act 1974 (Cth), s52
Cases cited: .au Domain Administration Ltd v Domain Names Australia Pty Ltd [2004] FCA 424; 207 ALR 521; 61 IPR 81
Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640
Bing! Software v Bing Technologies [2009] FCAFC 131; 180 FCR 191
Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd [2007] FCAFC 70; 159 FCR 397
Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; 238 CLR 304
Campomar Sociedad, Limitada v Nike International Limited [2000] HCA 12; 202 CLR 45
Chase Manhattan Overseas Corporation v ChaseCorporation Ltd (1986) 12 FCR 375
Children’s Televisions Workshop Inc v Woolworths (NSW) Ltd [1981] 1 NSWLR 273
ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302
Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; 169 CLR 594
Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd [2004] FCAFC 196; 209 ALR 1; 61 IPR 212
Domain Names Australia Pty Ltd v .au Domain Administration Ltd [2004] FCAFC 247; 139 FCR 215
Draper v Trist [1939] 3 All ER 513
Elders Trustee & Executor Co Ltd v EG Reeves Pty Ltd (1987) 78 ALR 193
Erven Warnink Besloten Vennootschap v Townend & Sons (Hull) Ltd [1979] 2 All ER 927; [1979] AC 731
Flexopack S.A. Plastics Industry v Flexopack Australia Pty Ltd [2016] FCA 235; 118 IPR 239
General Electric Co (of USA) v General Electric Co Ltd [1973] RPC 297 at 321; [1972] 1 WLR 729
Hansen Beverage Company v Bickfords (Australia) Pty Ltd [2008] FCAFC 181; 171 FCR 579
Harrods Limited v R Harrod Limited (1924) 41 RPC 74
Interlego AG v Croner Trading Pty Ltd [1992] FCA 992; 39 FCR 348
Jafferjee v Scarlett [1937] HCA 36; 57 CLR 115
Knight v Beyond Properties Pty Ltd [2007] FCAFC 170; 242 ALR 586
Lego Australia Pty Ltd v Paul’s (Merchants) Pty Ltd [1982] FCA 140; 60 FLR 465
McWilliam’s Wines Pty Ltd v McDonald’s System of Australia Pty Ltd [1980] FCA 159; 33 ALR 394
MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236
Nutrientwater Pty Ltd v Baco Pty Ltd [2010] FCA 2; 265 ALR 140
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; 149 CLR 191
Peter Bodum A/S v DKSH Australia Pty Ltd [2011] FCAFC 98; 280 ALR 639
Polo Textile Industries Pty Limited v Domestic Textile Corporation Pty Limited (1993) 42 FCR 227; 114 ALR 157
Reckitt & Colman Products Ltd v Borden Inc [1990] RPC 341
Registrar of TradeMarks v Woolworths Ltd [1999] FCA 1020; 93 FCR 365
SAP Australia Pty Ltd v Sapient Australia Pty Ltd [1999] FCA 1821; 169 ALR 1
Saville Perfumery Ld v June Perfect Ld (1941) 58 RPC 147
Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd (No 2) [2017] FCA 474
Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd [2016] FCA 610
Southern Cross Refrigeration Company v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592
Symbion Pharmacy Services Pty Ltd v ldameneo (No 789) Ltd [2011] FCA 389; 91 IPR 547
Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177
Twentieth Century Fox Film Corporation v The South Australian Brewery Co Ltd (1996) 66 FCR 451; 34 IPR 225
Vivo International Corp Pty Ltd v Tivo Inc [2012] FCAFC 159; 294 ALR 661
Wingate Marketing Pty Limited v Levi Strauss & Co (1994) 49 FCR 89
Dates of hearing: 3, 4, 5, 10 April 2017
23, 24 May 2017Registry: Victoria Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 279 Counsel for the Applicant: Mr B Caine QC with Mr L Merrick Solicitor for the Applicant: Cornwall Stodart Counsel for the Respondent: Mr N Murray with Ms F St John Solicitor for the Respondent: Turtons Lawyers ORDERS
VID 953 of 2015 BETWEEN: SHAPE SHOPFITTERS PTY LTD
Applicant
AND: SHAPE AUSTRALIA PTY LTD
Respondent
JUDGE:
MORTIMER J
DATE OF ORDER:
1 August 2017
THE COURT ORDERS THAT:
1.The application be dismissed.
2.On or before 4 pm on 22 August 2017 the parties file and serve any joint proposed minutes of orders in relation to the costs of the proceeding.
3.If the parties do not agree on proposed minutes of orders in relation to the costs of the proceeding, any submissions on costs, including whether the Court should make lump sum orders for costs, together with any affidavit material on which the parties wish to rely are to be filed and served on or before 4 pm on 19 September 2017.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
TERMINOLOGY
[4]
THE UNCONTESTED BACKGROUND AND FACTUAL SETTING
[6]
CAUSES OF ACTION AND LEGISLATIVE PROVISIONS
[32]
EVIDENCE
[40]
THE COURSE OF THE PROCEEDING
[48]
The applicant’s case at trial
[50]
The respondent’s position
[77]
RESOLUTION
[90]
ACL claim
[91]
The “class” issue
[93]
The nature of the representation alleged
[106]
The ACL allegations: fact finding
[109]
(1) Overlap
[112]
(2) Gaps in Mr Anderson’s evidence
[131]
(3) The applicant’s business into the future
[141]
(4) Whether identified class likely to be led into error
[142]
1Reputation
[144]
2Objective features of the respondent’s brand
[155]
3Commonality of participants
[156]
4Instances of misidentification and confusion
[161]
Conclusions on the s 18 allegations
[202]
Conclusions on the s 29 ACL allegations
[226]
The passing off allegations
[228]
The trade mark allegations
[241]
The authorities and the parties’ reliance on them
[241]
The application of these principles in this case
[270]
CONCLUSION
[279]
MORTIMER J:
This proceeding seems at once simple and complex. It seems simple because it is about an everyday word: “shape”. It seems complex because the arguments the parties have built about their respective uses of that word in their trading names and commercial activities lead the Court in many directions.
As I observed to the parties at the end of closing submissions, this proceeding has been hard fought, but efficiently and effectively conducted. As a result, I am satisfied each party advanced the forensic case it chose as fully and forcefully as it could.
I have concluded that the application should be dismissed.
TERMINOLOGY
I propose to identify the parties as the “applicant” and the “respondent” throughout these reasons. Ordinarily, I would personalise the identities of the parties to a greater extent than this. However any personalisation in these proceedings runs the risk of unwittingly intruding into some of the very issues in the case. For example, in its submissions the applicant called itself “Shape Shopfitters” and called the respondent “Shape Australia”: each of which reflects the parties’ corporate names but also identifies the similarity between their names by the use of the word “Shape”. In contrast, the respondent identified the applicant as “Shopfitters” and identified itself as “SHAPE Australia”: each of which best approximates to the aspects of the parties’ corporate names that the respondent has sought to emphasise in its evidence and submissions.
It is preferable therefore to use the terms “applicant” and “respondent”.
THE UNCONTESTED BACKGROUND AND FACTUAL SETTING
The parties filed an agreed statement of facts in this proceeding, which was admitted in accordance with s 190 of the Evidence Act 1995 (Cth). The summary I set out here is taken largely from that agreed statement, together with any evidence the parties’ submissions revealed was not contested. I leave to later in these reasons my fact finding on the evidence as necessary to resolve each claim.
Although the spheres of trading activity in which the parties engage, and any overlap between them, is one of the central factual issues in the proceeding, at a broader level the parties agree they both work in the commercial construction industry, and both engage in the fit-out and refurbishment of third party premises.
The applicant was incorporated in May 1998 and until 1 July 2012 was called Billings Long Constructions Pty Ltd. On 2 July 2012, it changed its name to its current name, Shape Shopfitters Pty Ltd. Mr Billings, a co-founder and director of the applicant and its principal witness explained in his evidence how the name change was part of the “re-branding” of the applicant into a specialist shopfitting company, and the creation of a separate corporate entity (Billings Long Pty Ltd) to continue the performance of residential and commercial general construction services.
Mr Billings gave the following evidence about the change of corporate name and the choice of “Shape Shopfitters”:
One of the names suggested by Hub Group for the re-branded company was ‘Shape’, along with others including ‘The Co-Op’, ‘360’ and ‘Jack’. The leadership group at the company (which I was part of) unanimously voted for the name ‘Shape’. I felt the name would be well-received by the industry and provided opportunities for a play on words from a marketing perspective. For instance, since the company re-branded in about mid-2012, the ‘About Us’ page on the Shape website has stated ‘our expertise means we’ve become partners who work with you to shape your business and your brand at a customer experience level in-store’.
(Emphasis in original.)
It was an agreed fact that the applicant’s promotion, provision and sale of services under the name “Shape Shopfitters” included the shopfitting or maintenance of retail food outlets, including quick service restaurants (which, as the parties did during trial, I will abbreviate to “QSR”), the supply and installation of bespoke joinery; the supply and installation of custom signage and the performance by subcontract of specialist joinery work for other builders. The applicant promotes its services, amongst other ways, through a website at “>
The applicant is a company of significant size, having been built up by Mr Billings and his business partner. Its total revenue from sales in the financial years from 2013 to 2015 ranged between approximately $10 million and $13 million each year. Its office is located in Victoria and while it undertakes some interstate work, about 50% of its work is in Victoria. Where it undertook work outside Victoria between its name change in July 2012 and the end of the financial year in June 2016, by revenue at least 88.4% of that work involved the same seven clients, being one of Grill’d, Nando’s, Sumo Salad, San Churro, Mad Mex, Schnitz and Coco Cubano.
At the time of trial, the applicant employed approximately 26 permanent staff, including project coordinators, a production manager at its factory, cabinet makers, site supervisors, site tradesmen, labourers and apprentices, a truck driver, receptionist, financial controller and an accounts assistant. The company also engaged about seven regular contractors, mostly site managers.
Between 1 July 2012 and 30 June 2016, the applicant secured no more than 1,250 contracts, 66.1% of those being for work valued at less than $5,000, and 92.7% of those being for work valued at less than $200,000. Its largest contract during this period had a value of $715,000, and the average mean size of its contracts was just over $39,000. In that same period, the overwhelming majority of the applicant’s work was in retail food shopfitting. The adjective “retail” is discussed further below, more in relation to the respondent’s work than the applicant’s. The manufacture of bespoke joinery or signage was also a significant component of its work. A high proportion (at least two thirds) of the applicant’s clients during this period were established clients, in the sense of having been clients prior to the name change in July 2012. These included some of the applicant’s largest clients, such as Grill’d, Nando’s, and Sumo Salad. In the 1 July 2012 and 30 June 2016 period, Grill’d and Nando’s accounted for more than 52.6%, by revenue, of the applicant’s total business.
The parties agreed that during the period 1 July 2012 and 30 June 2016, the applicant secured most of its contracts through one of two methods. Either it was involved in a “closed” or “private” tender process, where the client or its representative (such as a project manager) had selected a limited number of tenderers; or the applicant had directly negotiated the contract with the client or the client’s representative. The respondent submits evidence of this kind is relevant in assessing who, if anyone, might be misled by the respondent’s representations and conduct using “SHAPE” in its name.
The parties agreed there were some instances where the applicant had secured work in other ways. Notably, there were four contracts, all performed on premises in the immediate vicinity of the Melbourne Sports and Aquatic Centre in Albert Park, where the work derived from an existing business relationship between the applicant and the client or clients.
Subject to what Mr Billings said in evidence about the intentions of the applicant to diversify its business (to which I return below), there was no suggestion in the evidence that there had been any material change in the patterns of the provision of fit-out and refurbishment services by the applicant after 30 June 2016 and up to the date of trial.
The respondent was incorporated approximately a decade before the applicant and its three corporate names until 26 October 2015 all involved the acronym “ISIS”. Unsurprisingly, its directors considered, by 2015, that the respondent should find a new corporate identity. Mr Gary Anderson, the principal witness on behalf of the respondent, explained how he and other key personnel went about choosing a new corporate name and identity during the course of 2015. There is no dispute the name “SHAPE Australia” was chosen without knowledge of the existence of the applicant.
There is also no dispute that, for the purpose of assessing and determining each of the causes of action on which the applicant relies in this proceeding, the Court should examine the respondent’s conduct on and from 26 October 2015.
The respondent operates a large business, on a materially greater scale than the applicant. Indeed, this discrepancy in the size of the parties’ businesses features in the way the applicant puts its claims, as well as in the way the respondent seeks to illustrate the different markets in which the two companies operate. In other words, each party relies on the size discrepancies between them for different forensic purposes. The respondent provides (and promotes itself as providing) fit-out and refurbishment services in relation to (usually large) existing buildings, such as office buildings, hotels, university buildings, banks, health facilities and casinos. The respondent promotes its services, amongst other methods, through a website at In the financial years from 2013 to 2015, the total revenue from sales received by the respondent ranged between approximately $373 million and $409 million. It has an office in the capital city of every state and territory in Australia, except Tasmania.
Mr Anderson’s evidence (on these aspects, not challenged, and which I accept) is that the respondent’s average project size is $1.55 million, and its role in most of its projects is as a head contractor and construction manager, meaning that it “identif[ies], engage[s], and manage[s] specialist trade contractors and consultants”. Mr Anderson gave evidence that the respondent does not “actively target” projects below about $1 million. This latter evidence must be evaluated in the context of what I set out at [131]-[140] below.
Mr Anderson’s evidence was that the respondent holds various independent certifications and accreditations, and had been appointed to various panels. Some of this specialist knowledge and accreditation, according to Mr Anderson, was required for airport and government work. Mr Mahady also gave evidence in support of the requirement for accreditations and certifications for work with listed or large privately owned companies and governments. The respondent has a board of directors, a CEO and a COO, an executive team, and a management team. Undoubtedly, it is a much bigger enterprise than the applicant. As I noted, the applicant relies on this feature in articulating the nature of the impression or representation it says is conveyed by the respondent’s use of “SHAPE” in its business name, promotion, marketing and provision of services.
The parties agreed that the respondent is not a specialist joinery trade contractor and does not promote or perform specialist trade services for other builders. Rather, it subcontracts any specialist joinery work it requires for its clients.
There were, by the time the evidence closed, some real disputes about the nature and extent of the overlap in the fit-out and refurbishment services provided by the parties, in terms of the nature of the services and sector of the market in which they were promoted and provided. However, a number of facts about the absence of an overlap between the respondent’s business activities and those of the applicant were agreed. They are that in the period 1 July 2012 and 30 June 2016, the respondent did not tender for any of the contracts secured by the applicant; that since the critical date of 26 October 2015, the respondent has not performed nor sought to perform any work for any organisation or individual that has been a client of the applicant in the period from 1 July 2012 to 9 September 2016; and finally that between October 2015 and 30 June 2016, the only project the respondent performed involving retail food shopfitting was a fit-out of the Pizza Pasta Boulevard in Perth. It secured that contract through a personal relationship: namely, that the owner of the restaurant was related to a manager employed by the respondent.
There was some cross-examination of Mr Billings concerning whether the applicant and respondent were “competitors”. Fairly, Mr Billings accepted they were not, but consistently with his evidence about plans to diversify the applicant’s business (and no doubt, I infer, his plan that the applicant’s business will grow), he adhered to a description of the parties as “potential competitors”.
As will become clearer further on in these reasons, the applicant’s case does not depend on the parties being competitors, or even potential competitors, so this debate is not of great significance in the resolution of the proceeding.
One qualification, or need for caution about these agreed facts, emerged in the cross-examination of Mr Anderson, which I deal with at [131] below.
The applicant’s trade mark infringement case was based on its ownership of Australian registered trade mark 1731525, which is depicted in the IP Australia registration certificate and on the register of Trade Marks as follows:
Represented in black and white, the Mark has the following appearance (taken from the applicant’s written closing submissions):
This Mark has been registered since 30 October 2015, in respect of:
class 37: Shopfitting; construction; construction consultation; advisory services relating to construction; supervision of construction projects; installation of fittings for buildings; building internal fitouts for commercial buildings; interior refurbishment of buildings; on site building project management; renovation of buildings
The Mark was sometimes depicted in evidence in black and white, such as on monochromatic invoices. In most of the evidence however, the Mark was depicted in colour: in the registration certificate, as used by the applicant on its website, in much of its promotional material, and as a logo on its trucks, company clothing, stationery, commercial documents and the like, the background to the areas within the scalloped edge is in the colour blue. There is a debate between the parties, in terms of the scope of the protection afforded by the Trade Marks Act 1995 (Cth), to the Mark in relation to colour. The marks used by the respondent are not used with the colour blue.
One feature of the Mark, and of the name and mark used by the respondent, is that the respondent also uses the word “Shape” in capital letters.
CAUSES OF ACTION AND LEGISLATIVE PROVISIONS
At the outset I note that the only relief sought by the applicant is declaratory and injunctive relief.
The applicant relies first on an alleged contravention of s 18 of the Australian Consumer Law (ACL), which provides:
18 Misleading or deceptive conduct
(1)A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
(2)Nothing in Part 3-1 (which is about unfair practices) limits by implication subsection (1).
Note:For rules relating to representations as to the country of origin of goods, see Part 5-3.
It then also relies on an alleged contravention of s 29(1)(g) and (h) of the ACL. Section 29 provides:
29 False or misleading representations about goods or services
(1)A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:
(a)make a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use; or
(b)make a false or misleading representation that services are of a particular standard, quality, value or grade; or
(c) make a false or misleading representation that goods are new; or
(d)make a false or misleading representation that a particular person has agreed to acquire goods or services; or
(e)make a false or misleading representation that purports to be a testimonial by any person relating to goods or services; or
(f) make a false or misleading representation concerning:
(i) a testimonial by any person; or
(ii)a representation that purports to be such a testimonial;
relating to goods or services; or
(g)make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; or
(h)make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation; or
(i)make a false or misleading representation with respect to the price of goods or services; or
(j)make a false or misleading representation concerning the availability of facilities for the repair of goods or of spare parts for goods; or
(k)make a false or misleading representation concerning the place of origin of goods; or
(l)make a false or misleading representation concerning the need for any goods or services; or
(m)make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3-2); or
(n)make a false or misleading representation concerning a requirement to pay for a contractual right that:
(i)is wholly or partly equivalent to any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3-2); and
(ii)a person has under a law of the Commonwealth, a State or a Territory (other than an unwritten law).
Note 1:A pecuniary penalty may be imposed for a contravention of this subsection.
Note 2:For rules relating to representations as to the country of origin of goods, see Part 5-3.
(2)For the purposes of applying subsection (1) in relation to a proceeding concerning a representation of a kind referred to in subsection (1)(e) or (f), the representation is taken to be misleading unless evidence is adduced to the contrary.
(3) To avoid doubt, subsection (2) does not:
(a)have the effect that, merely because such evidence to the contrary is adduced, the representation is not misleading; or
(b)have the effect of placing on any person an onus of proving that the representation is not misleading.
The applicant also alleges the respondent has committed the tort of passing off. Save for the damage aspect, to which I return at [233]-[240] below, there was no dispute between the parties about the elements of the tort. They are set out in Gummow J’s reasons for judgment in ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 355-356, by reference to Lord Oliver’s judgment in Reckitt & Colman Products Ltd v Borden Inc [1990] RPC 341 at 406. While observing that the law of passing off “contains sufficient nooks and crannies to make it difficult to formulate any satisfactory definition in short form”, Gummow J endorsed the “classical trinity” described by Lord Oliver as “(1) reputation (2) misrepresentation and (3) damage”.
Finally, the applicant alleges an infringement of its Registered Trade Mark. Section 120(1) of the Trade Marks Act provides:
A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.
The applicant relies only on the deceptive similarity limb of s 120(1).
As I have noted, one of the issues in the trade marks aspect of the proceeding concerns the use in the registration of the applicant’s Mark of a blue coloured background. The applicant contends, by reference to s 70 of the Trade Marks Act, that its Mark is registered without limitation as to colour. The respondent contends its protection is limited to the mark with a blue coloured background. Section 70 provides:
70 Colours in registered trade marks
(1) A trade mark may be registered with limitations as to colour.
(2) The limitations may be in respect of the whole, or a part, of the trade mark.
(3)To the extent that a trade mark is registered without limitations as to colour, it is taken to be registered for all colours.
Note: For limitations see section 6.
Section 70 must be read with the definition of “limitation” in s 6 of the Trade Marks Act:
limitations means limitations of the exclusive right to use a trade mark given by the registration of the trade mark, including limitations of that right as to:
(a) mode of use; or
(b) use within a territorial area within Australia; or
(c) use in relation to goods or services to be exported.
EVIDENCE
The applicant adduced evidence from 12 witnesses. Mr Billings was, as I have noted, the applicant’s primary witness. Mr Billings swore three affidavits in this proceeding, dated 5 October 2016, 20 December 2016 and 13 February 2017. Where I refer to Mr Billings’ affidavit in these reasons, I refer to his first affidavit unless otherwise specified. Of the remaining witnesses, they fell into several categories. There was a group of witnesses who were people fitting within the applicant’s alleged class of “participants” in the commercial construction industry. Joseph Charles, Cavin Chait, Steven Mooney, Tracey Easthope, Brittany Newall, Rebecca Higgins, Nicholas Ellery and Shae Wood fell into this category. Some of these witnesses gave more expansive evidence than others, but essentially each was relied upon by the applicant to demonstrate either the applicant’s reputation in the commercial construction industry (and in particular, in retail food shopfitting) (Mr Charles, Mr Chait and Mr Mooney); or to demonstrate examples of actual confusion between the applicant and the respondent (Ms Easthope, Ms Newall, Ms Higgins, Mr Ellery and Mr Wood).
There was another group of witnesses whose evidence related to actual or potential confusion in other ways, or overlap, between the activities of the applicant and those of the respondent, because of the respondent’s use of the word “SHAPE”. Mark Gentz, an employee of the applicant, gave evidence about a worksite (Monash University) where the applicant and respondent were working “side-by-side”. Adrian Jones, a researcher at BCI Australia, a company that reports on building and construction projects, gave evidence about entries in a BCI online database that lists building and construction projects being undertaken in Australia, and an entry which attributed a project to the respondent when in fact it was one of the applicant’s projects.
Finally, the evidence of Michael Sherlock, a consultant for the applicant, was relied on by the applicant to establish its areas of activity and the nature of interior fit-out work, and the reasoning behind the acquisition of the business name “Shape Shopfitters”.
The respondent relied on the evidence of nine witnesses. The respondent relied on the evidence of three individuals not employed by the respondent, but otherwise five witnesses were its employees and one its solicitor. As I have noted, Mr Anderson, a sales and marketing executive employed by the respondent, was its principal witness. Scott Jamieson, Michael Barnes and Kate Evans, all employees, gave uncontroversial evidence about how the respondent’s new corporate name came to be determined and about the nature and size of the respondent’s business activities. William Paley, a project manager employed by the respondent, gave evidence concerning the McDonald’s refurbishment project, to which I return later in these reasons. Gregory Henry, the respondent’s solicitor, gave evidence about other businesses using the word “shape” in their business names. A considerable portion of his evidence was excluded after objection by the applicants, but some remained and I consider that evidence where necessary in my reasons below.
Three of the witnesses with no direct connection to the respondent were put forward as giving opinion evidence. Howard Gerrard is the General Manager, Property, Projects and Legal, of Bakers Delight Holdings Ltd. He was put forward as giving expert evidence, concerning the nature of food outlet shopfitting and the way Bakers Delight goes about securing its contractors. He was cross-examined on some issues about work done by the applicant for Bakers Delight, which I deal with below. Terence Mahady was a project manager employed by Gallagher Jeffs Pty Ltd, a construction project and property management firm whose evidence concerned his opinions about how different size building and construction firms in the industry could be characterised, and also how “consumers” of those services could be divided up and characterised. Catherine Dix, the head of content marketing and search engine optimisation for Web Profits, a business that specialises in digital marketing, gave evidence on affidavit concerning the parties’ respective websites and what would occur in internet searches for the parties’ names or for the word “shape”. Ms Dix’s highly detailed and quite lengthy affidavit is an example (not the only one) of specific and voluminous evidence produced by each party, which the other party essentially dismissed as of little or no consequence. It is also an illustration of the different forensic approaches taken by each party.
As I have noted, evidence was given on affidavit in this proceeding, and by one witness under subpoena. Other individuals subpoenaed by the applicant eventually agreed to give affidavit evidence. There were a number of witnesses who were not required for cross-examination. Cross-examination on both sides was conducted with a view to establishing flaws in the party’s case, rather than any issues of reliability or credibility. The exception to this was the cross-examination of Mr Anderson, which was squarely directed at establishing his evidence, though the spreadsheet which is tab 5 of Exh GJA-1, was incomplete and therefore unreliable. As I have noted, this cross-examination did not extend to any credit or credibility issues.
All witnesses who gave oral evidence appeared to me to be doing their best to be accurate in their evidence. Some of the subpoenaed witnesses appeared rather bemused, and cautious, in being brought into the dispute between the applicant and respondent. Nevertheless, each witness answered frankly and I have no concerns in relying on the evidence as presented.
I consider the witnesses and their evidence in those sections of my reasons where I make necessary findings of fact on each of the applicant’s causes of action.
THE COURSE OF THE PROCEEDING
This proceeding was commenced on 23 December 2015 through the filing of a fast track application and fast track statement. Initially, the applicant sought pecuniary as well as injunctive relief, however limited its claims to the claims under the ACL and the tort of passing off. The proceeding was then referred by me to mediation, which was not successful. During the early stages of the proceeding, there were a number of interlocutory disputes, including whether the trial should be split between the issues of liability and quantum, whether security for costs should be ordered, and disputes regarding discovery categories. On 30 May 2016, I refused the application for a split trial: see Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd [2016] FCA 610.
On 6 October 2016, the parties communicated with my chambers, confirming that the applicant no longer pressed its claims for pecuniary relief, and providing proposed consent orders for leave to file an amended fast track application and amended fast track statement. Leave was granted, and on 10 October 2016, the amended documents were filed. In the amended application, the applicant no longer sought pecuniary relief, but inserted an additional claim for trade mark infringement. This was the final form of the fast track application and statement which the applicant relied on at trial, however as I note below, the case was further narrowed during the course of the trial.
The applicant’s case at trial
The applicant’s case at trial had narrowed considerably from the claims set out in the Amended Fast Track Statement. That narrowing is of some significance to the capacity of the applicant to prove the contraventions of the ACL as it now puts them.
In the applicant’s Amended Fast Track Statement at [4], the applicant identified the general activities of the respondent which gave rise to the contravening conduct as “promoting, providing and selling commercial construction services… in Australia under or by reference to the Shape Trade Mark”. In turn, in [1] the applicant identified the trade mark as the word “SHAPE”. Separately, the applicant alleged infringement of its registered trade mark which in the Amended Fast Track Statement it described as the “Shape Logo Trade Mark”.
The applicant made the following claims about its reputation (at [10]-[13] of the Amended Fast Track Statement):
Since about July 2012, Shape Shopfitters has continuously promoted, provided and sold the Shape Shopfitters Services on an extensive scale throughout Australia under or by reference to the Shape Trade Mark.
The Shape Trade Mark in connection with the Shape Shopfitters Services has become, and is, and has at all material times been, well-known in the commercial construction sector in Australia.
As a result of the matters set out in paragraphs 10 and 11 above, the Shape Trade Mark in Australia means, and distinctively and exclusively indicates, Shape Shopfitters, the Shape Shopfitters Services or an association with them.
As a result of the matters set out in paragraphs 10 and 11 above, Shape Shopfitters has developed a valuable reputation and substantial goodwill among members of the commercial construction sector in Australia in relation to the Shape Shopfitters Services and the Shape Trade Mark.
The contravening conduct in which the respondent was alleged to have engaged is dealt with in [14] of the Amended Fast Track Statement:
From at least October 2015, Shape Australia has promoted, provided and sold the Shape Australia Services in Australia under or by reference to the Shape Trade Mark without the licence or authority of Shape Shopfitters.
PARTICULARS
(a)On or about 26 October 2015, Shape Australia’s corporate name was changed to “Shape Australia Pty Ltd” from “ISIS Group Australia Pty Ltd”.
(b)Since at least 30 October 2015, Shape Australia has promoted the Shape Australia Services through a website located at the Shape Australia Domain. The Shape Australia Services are promoted on this website under or by reference to the Shape Trade Mark.
(c)Since at least 9 November 2015, Shape Australia has promoted the Shape Australia Services online through a Facebook Page, located at < The Shape Australia Services are promoted on this Facebook Page under or by reference to the Shape Trade Mark.
(d)Since at least 9 November 2015, Shape Australia has promoted the Shape Australia Services online through a Twitter Page, located at < The Shape Australia Services are promoted on this Twitter Page under or by reference to the Shape Trade Mark.
(e)Since at least 9 November 2015, Shape Australia has promoted the Shape Australia Services online through a LinkedIn Page, located at < The Shape Australia Services are promoted on this LinkedIn Page under or by reference to the Shape Trade Mark.
(f)Since at least 9 November 2015, Shape Australia has promoted the Shape Australia Services online through a YouTube Page, located at < The Shape Australia Services are promoted on this YouTube Page under or by reference to the Shape Trade Mark.
(g)From a date unknown to Shape Shopfitters, but from about late 2015, Shape Australia has promoted the Shape Australia Services under and by reference to the Shape Trade Mark as a word trade mark. For example, Shape Australia published a document titled “Shape at a glance”, which bears the following use of the Shape Trade Mark:
(h)From a date unknown to Shape Shopfitters, but from about late 2015, Shape Australia has promoted the Shape Australia Services under and by reference to device trade marks incorporating the Shape Trade Mark including:
(Shape Australia Device Marks). By way of example, the Shape Australia Device Marks are depicted in a document titled 2015 Year in Review, which can be accessed at the following page of Shape Australia’s website:
Shape Shopfitters may provide further particulars after the conclusion of evidence and prior to trial.
The applicant then alleged (at [15]) that by reason of the conduct in [14], the respondent made four representations (and continued to make and/or threaten to make those representations). Those representations were:
(a) the Shape Australia Services are the Shape Shopfitters Services;
(b) the Shape Australia Services are promoted, provided and sold with the licence or authority of Shape Shopfitters;
(c) the Shape Australia Services have the sponsorship or approval of Shape Shopfitters; and/or
(d) Shape Australia has the sponsorship or approval of, or an affiliation with, Shape Shopfitters
After alleging that the respondent’s conduct was in trade or commerce (which is not in dispute), the applicant then alleged at [17] that the four representations identified in [15] were misleading, deceptive and false because:
(a) the Shape Australia Services are not the Shape Shopfitters Services;
(b)the Shape Australia Services are not promoted, provided or sold with the licence or authority of Shape Shopfitters;
(c)the Shape Australia Services do not have sponsorship or approval of Shape Shopfitters; and
(d)Shape Australia does not have the sponsorship or approval of, or an affiliation with Shape Shopfitters.
Contraventions of s 18 and s 29(1)(g) and (h) of the ACL were then alleged.
By the time the matter came to trial as I have noted above, the applicant’s case had narrowed substantially. Senior Counsel for the applicant opened its case on the basis that the only representation the applicant alleged had been made by the respondent was the representation in [15(d)] of the Amended Fast Track Statement: namely that the respondent has the sponsorship or approval of, or an affiliation with, the applicant. As Senior Counsel for the applicant submits, that is an allegation that the respondent has through its conduct (as set out in [14] of the Amended Fast Track Statement) represented that there is some kind of commercial connection between the respondent and the applicant. The allegation that the respondent’s conduct represented that its promotion, provision and selling of commercial construction services was the promotion, provision and selling of the applicant’s construction services was no longer pressed. That was the allegation made in sub-para (a) of [15] of the Amended Fast Track Statement. Nor were the other two allegations about the respondent’s “services” pressed. Rather what was pressed was an alleged representation, not about the services provided by the parties, but about the connection between the parties themselves.
The applicant’s passing off case was put on the basis of injury to the reputation and goodwill of the applicant, its services and its trademark as described in [1] of the Amended Fast Track Statement (that is, the mark SHAPE). The applicant then alleged that by its conduct as alleged the respondent has passed off, is passing off and/or threatens to pass off (at [22] of the Amended Fast Track Statement):
(a) the Shape Australia Services as the Shape Shopfitters Services;
(b)the Shape Australia Services as a services that are promoted, provided and/or sold with the licence or authority of Shape Shopfitters;
(c)the Shape Australia Services as having the sponsorship or approval of Shape Shopfitters; and
(d)itself as having have the sponsorship or approval of, or an affiliation with, Shape Shopfitters.
As I understood the applicant’s opening and closing submissions, consistently with the narrowing of its case in relation to the ACL, the applicant also narrowed its case in passing off so that the only passing off it pressed in relation to the respondent’s conduct was the passing off articulated in sub-para (d) of [22].
The applicant’s trade mark infringement case was put in the following way (at [22D]-[22F] of the Amended Fast Track Statement):
By promoting the Shape Australia Services under and by reference to the Shape Trade Mark as a word trade mark (see paragraph 14 above), Shape Australia has, without the licence or authority of Shape Australia, used a mark which is deceptively similar to the Shape Logo Trade Mark in respect of services for which that mark is registered.
By promoting the Shape Australia Services under and by reference to the Shape Australia Device Marks (see paragraph 14 above), Shape Australia has, without the licence or authority of Shape Australia, used a mark which is deceptively similar to the Shape Logo Trade Mark in respect of services for which that mark is registered.
By reason of the matters set out in paragraphs 14, and 22A to 22E above, Shape Australia has infringed, is continuing to infringe and/or threatens to infringe the Shape Logo Trade Mark.
Consistently with the amendments to the Fast Track Application, the only relief claimed by the applicant was declaratory and injunctive relief. The parties agreed it would be appropriate for the Court to hear further submissions on the question of relief should it find any of the applicant’s causes of action to be proven. Therefore the only context in which I consider the limited nature of the applicant’s claims for relief is where the applicant submitted that the nature of the relief sought (as injunctive relief) affected what it needed to prove in order to make out one or more of its causes of action.
In closing submissions, as in opening submissions, Senior Counsel for the applicant gave what I considered, with respect, to be a very clear summary of his client’s case. He noted that what lies at the heart of each cause of action brought by the applicant is the respondent’s use of the word “SHAPE”. In relation to the claim under the ACL and in passing off, the applicant’s case is that the respondent’s use of that word in its corporate name, in its promotions on its website and in other places on the internet and in its marketing and advertising where it incorporates the word “SHAPE” into a word trade mark or a device trade mark, leads relevant members of the industry erroneously to believe there is a connection in the course of trade between the applicant and the respondent.
The applicant contends that when one examines the nature of each party’s business and how they use the name “SHAPE”, taking into account what the applicant contends is a material overlap in the business activities of the parties, there is a likelihood that persons and entities whom the applicant describes as “participants in the commercial construction industry” will be, and have been, misled or deceived into believing (erroneously) that there is a commercial connection of some kind between the respondent and the applicant.
Two key aspects of the applicant’s case emerge from these submissions. The first is that the kind of connection between the parties which the applicant contends will erroneously be perceived is wider than the example given in the applicant’s written and oral opening submissions. The example, seized upon by the respondent, is that participants would be led erroneously to believe the applicant is a “specialist shopfitting arm (or business unit)” of the respondent. There was some debate in closing submissions whether by specifying this particular kind of perceived relationship, the applicant had narrowed its case even further to one which contended the representation arising from the respondent’s impugned conduct was a representation that the applicant was a specialist shopfitting arm or business unit of the respondent, and no more. As I have noted, the respondent seized on this example and highlighted it prominently in both its opening and closing submissions, making a consistent submission that there was no evidence whatsoever of any such perception amongst participants in the commercial construction industry. On that basis, the respondent submits the applicant’s case under the ACL and in passing off must inevitably fail.
Despite the respondent seizing on this “specialist shopfitting arm” aspect of the applicant’s opening submissions in particular, I do not consider it is a fair description or summary of the way the applicant has put its case. No doubt there was good forensic reason for the respondent to seize on that description, because it was correct in its submission that there was no evidence of any such perception in the market. However, the applicant did not abandon the terms of its Amended Fast Track Statement and it opened and closed its case, in my opinion, in a consistent manner by reference to [15(d)] of the Amended Fast Track Statement. So much can be seen in [3] of the applicant’s outline of opening submissions which states:
Shape Shopfitters alleges that Shape Australia’s use of the name SHAPE falsely represents that there is an affiliation, connection, association or relationship between Shape Shopfitters and Shape Australia. In particular, Shape Shopfitters submits that participants in the commercial construction industry would be falsely led to believe that there is a relationship between Shape Shopfitters and Shape Australia because of their shared use of the name SHAPE (sometimes in conjunction with a second word which is either generic or descriptive – ‘Shopfitters’ / ‘Australia’). An obvious conclusion to be drawn having regard to the similarity of their names is that Shape Shopfitters is the specialist shopfitting arm (or business unit) of Shape Australia (a larger and more general business). There is no such relationship. Accordingly, Shape Shopfitters submits that Shape Australia’s conduct gives rise to an actionable wrong.
(Footnote omitted.)
That contention was repeated at the start of its closing submissions, again in [3]:
Shape Shopfitters alleges that Shape Australia’s use of the name SHAPE falsely represents that there is an affiliation, connection, association or relationship between
Shape Shopfitters and Shape Australia.
(Footnote omitted.)
The footnote to [3] of the applicant’s closing submissions made it very clear that only [15(d)] and [22(d)] of the Amended Fast Track Statement were pressed by the applicant. However, the footnote and the submissions in my opinion made it clear that there was also no further narrowing of the way the applicant put its case from the expressions in those paragraphs.
I return to the second feature of the submissions to which I referred above. The second feature is that the applicant identifies the class of persons to whom it alleges the representations have been made as a much wider class than the class identified by the respondent. The applicant relies on a class it described consistently as “participants in the commercial construction industry”. The applicant described the services provided by both parties as “relatively complex commercial services”. Involved in the provision of those complex commercial services, the applicant submitted, were people such as trade contractors, for example plumbers and fire protection services service providers, and other service providers such as designers and architects. These are the kinds of people the applicant identifies as “participants” without limiting the class to the clients, or purchasers of the services provided by the applicant and the respondent. Thus, its case sought to avoid the emphasis placed by the respondent on the complex and particular contractual arrangements between the respondent and consumers of the respondent’s services, instead contending that its case is:
primarily directly at the extensive substratum of commercial relationships which sit beneath the provision of services by Shape Australia and Shape Shopfitters.
Thus, in order to make good a case of this kind, the applicant accepted it needed to establish sufficient overlap in the commercial construction activities between the applicant and the respondent, such that those trade contractors and other service providers the applicant identified would, in fact, be likely to be misled and deceived by the respondent’s use of the word “SHAPE” in its corporate name and its promotion and provision of services. Without an overlap, whereby these participants might encounter the respondent’s promotion and provision of services, the applicant’s case under the ACL and in passing off could not succeed.
It was in this context that the applicant’s considerable emphasis both in evidence and in submissions on an understatement, or an alleged understatement, by the respondent of its commercial construction activities in retail fit-out and specifically in retail food fit-out became prominent. Going forward, the applicant contends that there was no suggestion the respondent would stop pursuing or performing work of that kind, and further contended the Court should not accept the respondent’s minimising case about the proportion of its work which fell into this category.
As to the nature of the deception, or misleading, which the applicant contends has been a result of the respondent’s use of the mark “SHAPE”, the applicant contends this goes well beyond mere confusion. Consistently with its pleaded allegations, it contends the evidence has borne out that there are a meaningful number of participants in the industry who have been in fact led erroneously to believe that the applicant is a member of a larger “group” comprising the respondent or is part of the respondent’s “group”. While contending it was not required to prove actual deception or misleading, the applicant correctly understood the probative value of doing so in making out its case under the ACL or in passing off. According, as I have described above, much of its affidavit evidence was directly towards proof of participants in the industry being misled or deceived into believing there was a relationship between the parties of some kind. When pressed in final submissions on this, Senior Counsel for the applicant identified evidence which went to the belief of participants that the applicant is part of the Shape Australia “group” as the most probative evidence.
All of the matters I have outlined to this point were also relied on by the applicant in its tort case. The only additional matter specifically identified in the passing off case by the parties’ submissions was the role of damage as an element of the tort. I deal with this below, but in summary the applicant submits that although damage was recognised as an element of the tort of passing off, such damage could be inferred from the very engagement of the respondent in the impugned conduct, because the law will, from the impugned conduct, infer that the value of the reputation and goodwill of the applicant was diminished, and that was sufficient to complete the necessary ingredients of the tort. The respondent disputes this.
The applicant’s claims of trade mark infringement were made on the basis of deceptive similarity under s 120(1) of the Trade Marks Act and no reliance was placed on substantial identity. The applicant contends that there were three ways in which the respondent had used the word SHAPE as a trade mark:
(a)first, the word SHAPE simpliciter (Word Mark);
(b)secondly, as a stylised device mark against a coloured circular background and with a stylised A resembling an upside down ‘V’ (Circle Mark);
(c)thirdly, as a stylised device mark against a transparent background with a circular border and with a stylised A resembling an upside down ‘V’ (Transparent Mark).
(Footnotes omitted.)
The applicant contends, and I did not understand the respondent seriously to dispute, that each of the ways in which the respondent used the name SHAPE constituted a trade mark use because the respondent had deliberately adopted the name SHAPE as its brand.
The applicant’s case centred on the proposition that the “essential eye-catching and memorable feature” of its Registered Mark is the word SHAPE. It contends that it was this feature which would be the dominant impression or recollection that the hypothetical “person of ordinary intelligence and memory” encountering the Mark would recall. By using the word “SHAPE” in each of the three ways identified above, the respondent would, the applicant submitted, cause a number of persons to wonder whether it might be the case that the applicant’s commercial construction services came from the same source as the respondent’s commercial construction services: see Southern Cross Refrigeration Company v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 595 (Kitto J). As with its case under the ACL and in passing off, the applicant characterises the class of people for the purposes of its trade mark infringement case more widely than the respondent. It submits:
…when Shape Australia uses the word SHAPE as a trade mark, it is encountered by many people other than specialists within in particular trade. It is encountered by a very wide range of people from Shape Australia’s customers through to the personnel of the diverse businesses that provide services to Shape Australia.
Finally, as I have set out above, the applicant contends that notwithstanding the use of the colour blue in its Registered Mark, the Mark was registered without limitation as to colour and was to be taken as registered for all colours.
The respondent’s position
The respondent put forward two essential contentions in answer to the applicant’s case under the ACL. The first was that the applicant’s “narrowed case” was that the respondent’s conduct represents that the applicant is a specialist shopfitting arm of the respondent, and there was no evidence that this representation was made. For the reasons I have set out above I do not accept that this an accurate description of the applicant’s case as put in opening and in closing, and as put in the Amended Fast Track Statement.
In oral submissions, in dealing with the alternative proposition that the applicant’s case had remained wider than the respondent articulated, counsel for the respondent made two key submissions. The first was that the applicant had failed to articulate or identify the kind of connection or affiliation between the applicant and the respondent which members of the relevant class might be led to apprehend or believe existed. The respondent submits that the applicant had left the kind of connection or affiliation wholly undefined and in that sense had failed to discharge its burden of proof. Connected to this, counsel for the respondent contends that while the authorities make it clear (see Twentieth Century Fox Film Corporation v The South Australian Brewery Co Ltd (1996) 66 FCR 451; 34 IPR 225 (Duff Beer case)) that members of the applicable class for the purposes of the ACL do not have to hold a belief concerning a particular legal relationship said to arise between the parties, it is nevertheless incumbent on an applicant to adduce evidence that establishes the particular kind of relationship to which it submits the representation gives rise. For example is it a principal and subsidiary relationship? Is it a head contractor and subcontractor relationship? Is it, as the example given by the applicant, a generalist and specialist kind of relationship? Counsel for the respondent submits that even if the respondent was incorrect in its submission that the case had narrowed to the “specialist shopfitting arm” particular, the applicant could not discharge its burden of proof by a vague allegation that the respondent’s conduct gave rise to a representation of a “connection” between it and the applicant.
The second principal reason the respondent articulates for the rejection of the applicant’s ACL case is that the relevant class of persons to whom the representation should be found to have been made (if the Court finds one was made) is “prospective purchasers of SHAPE Australia’s services, being buyers of head contracting or construction management services for commercial building projects”. It contends on the authorities that this was the correct class, in the sense that the ACL’s purpose was one of consumer protection and in the context of the current set of allegations, the “consumers” were those it had identified. If this were the appropriate class for the purposes of the ACL, the respondent submits that buyers of head contracting or construction management services for commercial building projects are a sophisticated class of consumers who are very familiar with the service providers who compete to do this kind of work. It submits that the services were purchased after a careful and detailed process in which the buyers have access to a lot of information about the potential service providers and there was no reasonable likelihood of any mistake about the identity of those service providers arising during such a process. Even if, against its case on the evidence, the Court were to find that some purchasers were “initially caused to wonder about a connection” between the parties, any such misconception would, the respondent submits, be quickly dispelled during the engagement process prior to any contractual arrangements being finalised. The respondent further contends that the evidence shows much of the kind of work for which the applicant promoted itself and its services was work which came in by reason of established relationships with buyers, formed over a long period of time and that these relationships led to the initial engagement process, even at the tender stage.
Alternatively, if the Court found the relevant class should be described in the way for which the applicant contends, the respondent’s case is that the evidence did not establish that reasonable members of the wider class of “participants in the commercial construction industry” would be likely to be led into error in the way the applicant asserted. The respondent submits there was no evidence that any trade contractors or other service providers in fact laboured under any misapprehension that the applicant was the “specialist shopfitting arm” of the respondent. Nor could any such inference be drawn from the evidence as a whole.
What evidence did exist demonstrated, on the respondent’s submission, no more than isolated instances of confusion, generally arising at the end of the process of service provision: that is, at the point of issuing invoices and the like. Not only were the examples in the evidence isolated and incapable of founding any likelihood of deception as the authorities required, the kind of confusion which those isolated evidentiary examples illustrated was confusion of the kind set out in [15(a)] of the applicant’s Amended Fast Track Statement. If, contrary to the respondent’s primary submissions, the Court were to find proven on the evidence adduced by the applicant some instances of confusion, the respondent submits in the alternative that confusion was not related to any connection between the respondent and the applicant but rather was related to individuals mistaking the respondent for the applicant, or vice versa. That, the respondent submits, was an aspect of the applicant’s case it had expressly abandoned.
Further, the respondent contends that such evidence as there was which demonstrated some overlap in the commercial construction activities between the respondent and the applicant was of a minimal nature. The parties were not competitors, and the highest that Mr Billings’ evidence could be put was an assertion that they may be “potential competitors”. Even this assertion, the respondent contends, ignores the substantial amount of evidence indicating that the respondent’s commercial construction activities occurred in relation to sites such as government buildings, airports and banks, all of which were worksites where the applicant was not engaged. In the area of retail food fit-outs, which was on the respondent’s case, the applicant’s overwhelmingly principal area of activity, the respondent’s activities were isolated and minimal, and where they occurred were usually explicable on the evidence because of some pre-existing commercial relationship or because of some opportunistic event. That is, there was insufficient evidence to establish that the respondent promoted its services in the retail food fit-out industry in a way which brought it into an overlap in its business activities with the applicant. Without any material overlap, the respondent contends there was no real likelihood of any class of persons (whether as defined by the applicant or as defined by the respondent) being misled or deceived into believing there was a connection between the applicant and the respondent.
As to the applicant’s passing off case, the respondent relies on its contentions under the applicant’s ACL case, adding two principal contentions. The first is that the applicant’s reputation is only for QSR shopfitting work, and the applicant does not have a reputation in the field in which the respondent operates. The second contention is that the applicant is required to demonstrate a “real and tangible risk that it will suffer damage by reason of the alleged passing off” and the applicant has not done so. The respondent expressly disputes the applicant’s submission that the authorities established damage could be inferred as an element of the tort of passing off.
In relation to the trade mark infringement case, the respondent contends the applicant could not prove deceptive similarity. Again, the respondent relies on the evidence about how buyers of the parties’ services behaved, the context in which the parties’ services are bought and sold, and submits that however the class was defined for the purposes of the trade mark infringement case, it was a sophisticated class of buyers who were armed with detailed information about the services providers with whom they might engage. For the purposes of the trade mark infringement case, the respondent submitted that the relevant consumers were the “consumers of both parties’ services” who were, the respondent submitted, sophisticated experts. The respondent also disputes that suppliers and subcontractors would be brought within the class of consumers of the parties’ services for the purposes of the trade mark infringement case.
The respondent submits that the applicant’s trade mark was a device mark, not a word mark. The respondent placed considerable reliance on the Full Court’s decision in Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd [2004] FCAFC 196; 209 ALR 1; 61 IPR 212, submitting that the word SHAPE was only part of a composite mark that comprised a number of elements, all of which had to be taken into account in applying the established tests about what is the overall impression created by the mark and what would be recalled of it at the time the hypothetical consumer encountered the respondent’s mark.
The respondent submits that it is incorrect to see the word SHAPE as the only essential feature of the applicant’s mark. It submits a mark may have more than one essential feature. Alternatively, where no component on its own is sufficiently prominent, a mark may not have any essential features.
In the present case, the respondent submits that a viewer with imperfect recollection may not recall “finer details” such as the text “EST 1998” or the white shadow effect on the word SHAPE or the double line around the border. However the respondent contends that the hypothetical viewer with imperfect recollection would recall not only the word SHAPE but rather the name “SHAPE SHOPFITTERS”, the “fact of some embellishment under ‘Shopfitters’, although likely not the precise text”, the “bottle-top border” which can be seen around the mark and the overall “old-fashioned” look and feel of the mark. All these things, the respondent submits, would remain in the memory of a person who looked at the mark, as would the colour blue in the background of the mark. On this latter point, the respondent contends that the applicant’s registration was, in law, limited to the colour blue. That submission was based on a construction of s 70(3) of the Trade Marks Act.
The respondent relies on uncontested evidence that the applicant has in fact applied for a word mark for the word SHAPE (although that is not the mark subject to this proceeding). It relies on the observations of the Full Court in Crazy Ron’s that a court would fall into a trap if it were to substitute a word mark for a word and device mark. It submits the mark in issue in this proceeding cannot be treated as if it were a word mark, and that is the thrust of the applicant’s submissions. The additional features on which the respondent relies mean, the respondent submits, that there can be no “contextual confusion” of the kind asserted by the applicant. The respondent submits the concept of contextual confusion is usually raised in cases dealing with the sale of consumer goods, where a consumer might reasonably think that a respondent’s similar name denoted a sub-brand within the applicant’s stable of related marks. That, the respondent submits, was not this case because this case was a case about specialist services bought and sold in a specialist industry. That led the respondent to make a further submission which was to the effect that because this is a case about specialised services, the applicant should have adduced evidence from persons engaged in the specialised market as to the likelihood of deception and confusion. In making this submission, it relied on the authority of General Electric Co (of USA) v General Electric Co Ltd [1973] RPC 297 at 321; [1972] 1 WLR 729 at 737-8 (General Electric), and the Full Court’s decision in Interlego AG v Croner Trading Pty Ltd [1992] FCA 992; 39 FCR 348 at 388. The applicant needs to establish, by evidence, that the sophisticated specialist buyers of the parties’ commercial construction services were likely to be deceived and confused by the respondent’s use of the word SHAPE in its logos and its marketing and promotional documentation.
Finally, in the trade mark case, the respondent correctly contends that the applicant did not challenge the use of “SHAPE Australia” as infringing the applicant’s registered trade mark, and that the applicant’s case is confined to the use of the word “SHAPE”. The respondent notes that if such a case had been advanced, it would have had a defence under s 122(1)(a)(i) of the Trade Marks Act.
RESOLUTION
I propose to deal with each of the applicant’s claims sequentially, although many of my factual findings in relation to the ACL claim will flow through to the other two claims, and in particular to the passing off claim.
ACL claim
A likelihood of deception under the ACL (or, for that matter, in passing off) in circumstances such as the present proceeding requires the applicant to establish two main matters. First, that its use of the name or word “SHAPE” has sufficient familiarity amongst a relevant class of persons to mean that such persons associate the name (and the word as it is used in the name) with the applicant and its business activities. Inherent in this is establishing what that familiarity or reputation is, and amongst what class of persons it has been established, although it is not necessary as some kind of precondition to a successful claim under the ACL to establish a specific “reputation”: see Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd [2007] FCAFC 70; 159 FCR 397 at [99]. Second, the applicant must prove that members of the class identified will, erroneously, believe (or infer) from the respondent’s use of the word or name “SHAPE” that the respondent’s business is related or connected to the applicant’s business. Inherent in this second matter, given the applicant’s narrowed case, is that the belief which must be established is a belief that there is a connection in the nature of a subsidiary or member of the respondent’s “group”, or alternatively, that the applicant on the one hand (as the smaller business) is a “specialist arm” of the respondent (as the larger business).
It is necessary to deal first with the contested issue of the identification of the appropriate class for the purposes of the ACL claim.
The “class” issue
It is well established that:
where the issue is the effect of conduct on a class of persons (rather than identified individuals to whom a particular misrepresentation has been made or particular conduct directed), the effect of the conduct or representations upon ordinary or reasonable members of that class must be considered[.]
See Flexopack S.A. Plastics Industry v Flexopack Australia Pty Ltd [2016] FCA 235; 118 IPR 239 at [261] (Beach J), citing Campomar Sociedad, Limitada v Nike International Limited [2000] HCA 12; 202 CLR 45 at [102] and [103].
As I have noted, the applicant describes the class as participants in the commercial construction industry. By the use of the term “participants”, it seeks to include subcontractors and others (such as architects and designers) who provide, or might provide, services to both the applicant and the respondent. The respondent, again as I have noted, submits the relevant class of consumer (and it emphasises the need for that word) is the buyers of head contracting or construction management services for commercial building projects, being the people to whom the respondent’s impugned conduct is directed. It submits subcontractors are not the relevant class, nor are the buyers of the applicant’s services, because the respondent’s conduct is not directed to them.
The respondent contends that the ACL is consumer protection legislation, and what must be identified is a class of consumers likely to be affected by the impugned conduct. The authorities it cites for that proposition are Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; 149 CLR 191 at 199; Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; 238 CLR 304 at [25].
In the passage from Campbell on which the respondent relies, French CJ’s description of the characterisation exercise necessary to determine if conduct is misleading or deceptive tends in my opinion to support the approach taken by the applicant rather than that taken by the respondent. At [25], his Honour said:
Characterisation is a task that generally requires consideration of whether the impugned conduct viewed as a whole has a tendency to lead a person into error. It may be undertaken by reference to the public or a relevant section of the public. In cases of misleading or deceptive conduct analogous to passing off and involving reputational issues, the relevant section of the public may be defined, according to the nature of the conduct, by geographical distribution, age or some other common attribute or interest. On the other hand, characterisation may be undertaken in the context of commercial negotiations between individuals. In either case it involves consideration of a notional cause and effect relationship between the conduct and the state of mind of the relevant person or class of persons. The test is necessarily objective.
(Footnotes omitted; emphasis added.)
In this passage, French CJ is describing the context in which the impugned conduct occurs, or in which impugned statements are made. Nevertheless, in giving that description, his Honour identified the nature of the conduct as informing the frame of reference in which to assess whether it has a misleading or deceptive character. Here, the nature of the impugned conduct is the promotion, provision and sale by the respondent of commercial construction services using the SHAPE mark. While it can be accepted that “promotion, provision and sale” of these services includes the buyers of those services, the respondent’s conduct in using the SHAPE mark is not restricted to those buyers. The “sector” of the public affected by the conduct is capable of encompassing third parties who contract with, or provide services to, the respondent, and to the applicant.
It is true that in Puxu at 199, Gibbs CJ uses the term “consumers” to describe the group of people his Honour had a few lines above identified as “possible victims” of the impugned conduct. However that is in the factual context where, on any view, the “section of the public” affected by the impugned conduct in Puxu were purchasers of furniture. That the primary task (outside cases involving specific representations to identified individuals or entities) is to identify whether, and which, “members of the public” have been misled or deceived, is confirmed by Gibbs CJ’s uses of that phrase in the paragraph above the one relied on by the respondent. I do not accept that the observations of Gibbs CJ should be taken as delineating the operation of s 52 of the Trade Practices Act 1974 (Cth) (nor s 18 of the ACL) to “consumers” in the sense of purchasers of goods or services. Indeed, Mason J said, at 202:
The general words of s. 52(1) should be widely interpreted without being read down by reference to the heading of Pt V ‘CONSUMER PROTECTION’ or to the more specific succeeding sections (see Hornsby Building Information Centre Pty. Ltd. v. Sydney Building Information Centre Ltd.[(1978) 140 CLR 216 at 225]). Although s. 52(1) is intended to protect members of the public in their capacity as consumers of goods and services, competitors may seek an injunction to restrain breaches (s. 80(1)(c); Reg. v. Federal Court of Australia; Ex parte Pilkington A.C.I (Operations) Pty. Ltd. [(1978) 142 CLR 113]). The remedy to prevent deception of the public often has the incidental effect of protecting a competing trader’s goodwill which would be also injured by that deception.
The question is, as the applicant submits, to whom is the impugned conduct or representation directed? This was the way Finkelstein J expressed the question in .au Domain Administration Ltd v Domain Names Australia Pty Ltd [2004] FCA 424; 207 ALR 521; 61 IPR 81 at [15] and [22]. At [22], his Honour spoke of the necessity to identify “the group to whom the representation is directed are likely to have been misled or deceived” (emphasis added). I note that at [25], his Honour disagreed with the proposition that s 52 required there to be “significant numbers” of such people, or any similar quantities measure. At least two of his Honour’s reasons for not imposing any such constraint or limit on s 52 are ones I would respectfully see as applicable to the current contention by the respondent in respect of s 18 of the ACL. Finkelstein J’s decision was affirmed on appeal: Domain Names Australia Pty Ltd v .au Domain Administration Ltd [2004] FCAFC 247; 139 FCR 215 (although the Full Court expressed caution about Finkelstein J’s view that there is no requirement that “significant numbers” of the public be misled: see [27]-[28] of the Full Court’s reasons.)
First, s 18 (and its predecessor) does not prescribe a requirement that those who are misled must be “consumers” or “purchasers” or any such category. Second, there is no reason in principle to confine the operation of s 18 in such a way. The point of the provision, in the context of trade and commerce, is to prohibit conduct which misleads or deceives, or is likely to do so. The nexus required by the section is between the conduct and the deception, or likely deception. That requires, as the authorities suggest, an analysis of the group to whom the conduct is directed. That group need not itself have any particular characteristics such as being capable of being described as “consumers”. It is not difficult to imagine a circumstance where a head contractor could, through a representation, mislead and deceive its subcontractors – for example, in relation to the terms on which it might engage all its subcontractors, or the kinds of work it can offer those subcontractors. Those subcontractors are not “consumers” or “purchasers”. They are, however, a section of the public. And they are the persons, in this example, to whom the representation is directed. That is sufficient to identify them as the relevant class for the purposes of s 18 in this hypothetical example.
This position is also consistent with the observations, obiter, of the High Court in Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; 169 CLR 594 at 604, where the plurality said:
What the section [that is, s 52] is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character.
(Emphasis added.)
It should be noted that within this relevant class or “section of the public”, the effect of the impugned conduct must be considered on “reasonable members” of that class, which includes “the inexperienced as well as the experienced, and the gullible as well as the astute”, but does not include “persons who fail to take reasonable care of their own interests”: see Puxu at 199 (Gibbs CJ). The question is then “whether a not insignificant number within the class or cohort have been misled or deceived or are likely to be misled or deceived by the respondent’s alleged conduct, whether in fact or by inference”: see Hansen Beverage Company v Bickfords (Australia) Pty Ltd [2008] FCAFC 181; 171 FCR 579 at [46] (Tamberlin J) and [66] (Siopis J), affirmed in Peter Bodum A/S v DKSH Australia Pty Ltd [2011] FCAFC 98; 280 ALR 639 at [205] (Greenwood J, with whom Tracey J agreed) (cf Finkelstein J’s view in Domain Names and in Hansen Beverage Company at [55]).
Accordingly, if I had made different findings on the applicant’s ACL claims, which would then have flowed through to the tort claim, I would have accepted the applicant’s submission that the absence of any evidence of actual damage (such as loss or misdirection of projects) would not have precluded the claim in passing off from succeeding.
The trade mark allegations
The authorities and the parties’ reliance on them
It is possible, as the Full Court decision in Bing! Software v Bing Technologies [2009] FCAFC 131; 180 FCR 191 establishes, for an applicant to succeed in a claim that a respondent’s mark is “deceptively similar” to the registered trade mark of an applicant, although an applicant’s claim under the ACL and passing off is not made out: see Bing! at [44] (Kenny J). However, in my opinion, the applicant has also failed to establish that the respondent’s mark is deceptively similar to its own Registered Mark, and this claim should also fail.
In Puxu at 210, Mason J described the difference between a trade mark action and an action under s 18 of the ACL (or rather, s 52 of the TPA as his Honour was considering it):
The Trade Marks Act is concerned with deception or confusion to the public as to the source of goods. The Trade Practices Act is concerned with deception of the public as consumers of goods or services. The function of a trade mark is to identify the source of goods; the purpose of s. 52 is to prohibit misleading or deceptive conduct which will affect the recognition or identification of goods. Registration of a mark confers rights of a proprietary nature. The applicant for a trade mark bears the onus of establishing that use of his mark is not likely to deceive or cause confusion. Under s. 52 the onus is on the plaintiff to show that the conduct is likely to mislead or deceive. Therefore conduct which merely causes some uncertainty in the minds of relevant members of the public does not breach s. 52.
Thus when applying the approach set out below, it is important to recall that the deception is to relate to the source of the goods or services provided by the respondent.
Further, in Saville Perfumery Ld v June Perfect Ld (1941) 58 RPC 147 at 161, Sir Wilfrid Greene MR described the difference between passing off and trademark infringement in the following way:
The Statute law relating to infringement of trade marks is based on the same fundamental idea as the law relating to passing-off. But it differs from that law in two particulars, namely (1), it is concerned only with one method of passing-off, namely, the use of a trade mark, and (2), the statutory protection is absolute in the sense that once a mark is shown to offend, the user of it cannot escape by showing that by something outside the actual mark itself he has distinguished his goods from those of the registered proprietor.
The assessment of whether an impugned mark is “deceptively similar” to a registered mark must be recognised as being somewhat intuitive and impressionistic. It is not a mechanical comparison, nor an artificial reconstruction of memory. The approach asks what a reasonable member of the appropriate class as identified, of “ordinary intelligence and memory”, would recall of the applicant’s mark in relation to the full range of services in respect of which it is registered, and whether such a person would be misled or deceived by the respondent’s use of its mark into believing it was the applicant’s mark: see generally MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236 at 244-246.
In Registrar of TradeMarks v Woolworths Ltd [1999] FCA 1020; 93 FCR 365 at [40], French J said:
In the end there is one practical judgment to be made. Whether any resemblance between different trade marks for goods and services renders them deceptively similar will depend upon the nature and degree of that resemblance and the closeness of the relationship between the services and the goods in question. It will not always be necessary to dissect that judgment into discrete and independent conclusions about the resemblance of marks and the relationship of goods and services. Consistently with that proposition, the Registrar or a judge on appeal from the Registrar could determine in a particular case that, given the limited degree of resemblance between the relevant marks he or she could not be satisfied, no matter how closely related the goods and services concerned, that the use of the applicant’s marks would be likely to deceive or to cause confusion.
In terms of the comparison to be made, in Wingate Marketing Pty Limited v Levi Strauss & Co (1994) 49 FCR 89 at 128, Gummow J said:
The comparison is between any normal use of the plaintiff’s mark comprised within the registration and that which the defendant actually does in the advertisements or on the goods in respect of which there is the alleged infringement, but ignoring any matter added to the allegedly infringing trade mark…
In considering what the “imperfect recollection” of the hypothetical person will be, the authorities have also focused on what it is about the registered mark that will be recalled. As with any exercise involving memory (even a hypothetical one), there may be a feature which “strikes at the eye and fixes itself in the recollection”: Saville Perfumery at 162, where Sir Greene MR said:
In deciding whether or not a feature is of this class, not only ocular examination, but the evidence of what happens in practice in the particular trade is admissible. In the present case the evidence leaves me in no doubt as to the word ‘June’ being the distinguishing or essential feature of the Appellants’ mark. It is by this word that traders and members of the public who see the mark on the goods which they purchase describe the Appellants’ goods, and indeed I should have been surprised if it had been otherwise.
It is an approach such as this that the applicant submits the Court should take to the use of the word “SHAPE” in its mark, and in the three impugned marks used by the respondent.
Another way to express what the Court should be comparing is given by Latham CJ in Jafferjee v Scarlett [1937] HCA 36; 57 CLR 115 at 121-122:
It is important to consider what has been described as the ‘idea of the mark,’ that is, the idea which the mark will naturally suggest to the mind of one who sees it…
The question which arises is always whether there is a probability of deception because there is a resemblance, though there are also differences, between two marks.
His Honour continued after this passage to describe the assumed memory process of the hypothetical observers of the impugned mark (at 122):
They will compare the actual mark which they see upon goods which are offered to them with the memory of the other mark, which they will retain in a more or less distinct form… The court must endeavour to put itself in the position of ordinary purchasers of goods who have noticed a trade mark as being distinctive of particular goods, but who have not compared that mark with any other mark, and who are quite probably not aware of the fact that another more or less similar mark exists.
Finally, in terms of the appropriate description of the class of person comprehended by the hypothetical “persons of ordinary intelligence and memory” (MID Sydney at 245), the respondent accepted the class was wider at least in one way, than the class it posited for the ACL and passing off claims. It accepted the class included consumers of both parties’ services, not just the respondent’s clients (as it submitted for the ACL case). However it maintained that suppliers and subcontractors are not relevant consumers at all.
The applicant relied on the observations of Keane CJ in Vivo International Corp Pty Ltd v Tivo Inc [2012] FCAFC 159; 294 ALR 661 at [77]-[78]. In those passages, his Honour is dealing with the need for the impugned marks to cause confusion. At [78], his Honour says:
The authorities make it clear that is the likely effect of the use of the new mark in the market place which must be considered by the court: see Aristoc Ltd v Rysta Ltd (1944) 1B IPR 467 at 472 ; [1945] AC 68 at 86 ; [1945] 1 All ER 34 at 39 (Aristoc); Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353 at 362 ; 1 ALR 443 at 449 (Berlei Hestia).
(Emphasis added.)
The applicant seized on the use by his Honour of the term “market place” to indicate his Honour had a broader class in mind than purchasers or “consumers”. I do not agree his Honour’s observations should be read in that way. His Honour thereafter referred to “customers” at [80] of his Honour’s reasons, and read in context it is clear that is the class his Honour had in mind when using the phrase “market place”. Further, there is his Honour’s finding at [93], which was as follows:
In my opinion, it is a reasonable inference, and the inference that I draw, that, if sales staff are confused, there is a reasonable probability of confusion on the part of consumers: see Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 49 FCR 89 at 130C ; 121 ALR 191 at 230 ; 28 IPR 193 at 232 .
Thus, it was not only the perception of purchasers of the goods and services which mattered to deciding whether a mark was deceptively similar, but in this passage Keane CJ is using evidence about confusion of sales staff to draw an inference about potential confusion of customers. His Honour’s focus is on potential confusion amongst customers, as the consumers of the goods and services offered by the applicant and respondent. In the Vivo case, the subject matter of the infringement claim was both goods and services: computer hardware and software and television subscription services.
It is true that in Polo Textile Industries Pty Limited v Domestic Textile Corporation Pty Limited (1993) 42 FCR 227; 114 ALR 157, Burchett J refers to the use of an impugned mark “in the course of trade”, in a relatively broad context, and does not appear to limit the object of the alleged deception to “consumers” or “purchasers” or the like. However, such an observation must be read in context. At 232, Burchett J in Polo Textile also said:
Bearing in mind that the test requires consideration of the customer with an imperfect recollection of the mark, it is important that the distinctive impact of the word ‘Polo’ is likely to affect the mind although the presence or absence of the blander word ‘Club’ may escape notice.
It is clear from this quote that what his Honour had in mind was consumers or customers in the course of trade.
In the context of this proceeding, whether one describes the hypothetical person as a member of a class of “buyers” of the parties’ commercial construction services (that is, the ultimate “clients” as the respondent submits), or whether one describes such a person as a “participant” in the commercial construction industry, the outcome is the same. In neither the wider nor the narrower class would there be any confusion, or cause for wonderment in relation to the use by the respondent of any of the three identified marks. In my opinion a reasonable member of ordinary intelligence and memory in either class would not be led by the respondent’s marks to believe that the parties’ commercial construction services “come from the same source”: Southern Cross Refrigeration at 595 (Kitto J).
The respondent supplements its contentions on this issue by reference to the case of General Electric at 737-8 (Lord Diplock), referred to with approval in Interlego at 387-388 (Gummow J). The passage on which the respondent relied is as follows (at 737-8):
My Lords, where goods are of a kind which are not normally sold to the general public for consumption or domestic use but are sold in a specialised market consisting of persons engaged in a particular trade, evidence of persons accustomed to dealing in that market as to the likelihood of deception or confusion is essential. A judge, though he must use his common sense in assessing the credibility and probative value of that evidence, is not entitled to supplement any deficiency in evidence of this kind by giving effect to his own subjective view as to whether or not he himself would be likely to be deceived or confused.
Lord Diplock then continued, contrasting this situation with one where “goods are sold to the general public for consumption or domestic use”. In such a case, his Lordship said, “the question whether such buyers would be likely to be deceived or confused by the use of the trade mark is a ‘jury question.’”
The General Electric case concerned two companies (one English, one American) with almost identical names involving the phrase “General Electric Company”. Lord Diplock described the business of both companies as the manufacture and sale of “a wide variety of electrical machinery and goods including electrical goods for domestic use”. It was a factually complex case, and Lord Diplock summarised the background at 733:
[T]he English company registered as its trade marks for various classes of electrical goods the initials of its name G.E.C. in block capitals. In the following year, 1907, the American company registered as its trade mark for electrical goods in one of the same classes, its initials G.E. in script enclosed in an ornamental circle, which is conveniently referred to as the rondel mark. Subsequently, the English company registered as a trade mark in respect of the same and other classes of electrical goods its initials G.E.C. in script. It is in this form that the trade mark has been mainly used for the last 40 years.
The dispute between the parties arose decades after registration, and (putting the complicated factual saga to one side) related to an application to remove the rondel mark from the English trade mark register, after it had been used in England for some time. It was in this context that Lord Diplock emphasised (at 737) the significance of evidence of actual (rather than potential) confusion, although his Lordship then also emphasised there was still a hypothetical question to be answered:
Would any normal and fair future use of the mark in the course of trade be likely to cause deception or confusion? If actual confusion in the past is proved, this is a strong indication that continued confusion is likely; but the absence of evidence of past confusion may be accounted for by the small extent to which the mark has been used or by special circumstances affecting its past use which may not continue to operate to prevent confusion in the future.
It was in this context that his Lordship referred to (also at 737) the contention of:
the American company that the Court of Appeal fell into error in relying on their own common sense in deciding whether the use of the rondel mark simpliciter would be likely to cause confusion. They ought, it is said, to have limited their consideration to the evidence, which consisted in the main of the public opinion survey, and to have given no weight to their own subjective impressions as to whether they themselves would have been likely to be confused.
(Emphasis added.)
Lord Diplock however, rejected this contention. His Lordship considered that the “jury question”, referred to at [260] above, could also be answered by a judge alone, as he (or she) would, like any member of the public, be a potential buyer of the goods and able to assess potential confusion. Lord Diplock found (at 738) that the contentions about confusion in the General Electric case were, indeed, “jury questions”, which the judge could answer himself (or herself) without reliance on expert or other evidence.
The passage on which the respondent relied was cited by Gummow J in Interlego (at 388), as authority for the proposition that “evidence of consumers and retailers as to the likelihood of deception will be critical if a special market is involved.”
In that case, Gummow J found (in relation to Lego products) (at 388):
Here, the products are not specialised in any particular sense and the respondent’s marketing was directed at a large body of consumers, not comprising persons engaged in a particular trade. Hence the evidence of witnesses accustomed to dealing in a particular market was not necessary.
The respondent’s contention has some attraction, at first glance. However, had I otherwise been persuaded of the applicant’s case (which I am not), I would not have seen the absence of such evidence as standing in the way of success. As Senior Counsel for the applicant pointed out, the respondent’s mark is encountered on the evidence by a wide variety of persons who could not be described as “specialists”: see the list of suppliers and subcontractors I have set out at [156] above. This is in contrast to a situation like that facing Jessup J in Symbion Pharmacy Services Pty Ltd v ldameneo (No 789) Ltd [2011] FCA 389; 91 IPR 547 (at [26]) which concerned radiology services, and more particularly diagnostic imaging services. There, the evidence showed the primary customers were general practitioners, specialists and doctors working at hospitals who identified a need for, and referred patients to, such services. Jessup J saw (at [28]) the approach from General Electric and Interlego as applicable “particularly in markets which involve the delivery of scientific goods or services”, where a “specialised eye” would be applied to the two competing marks.
That is not the current situation. While the commercial construction industry is a market different from the general public and the parties’ services are not offered to as wide a class of the general public as a retail product might be, nevertheless the commercial construction industry comprises such a broad range of suppliers, contractors and clients that it should not be considered “specialised” in the way this term was used in General Electric, Interlego or Symbion.
That diversion notwithstanding, for the reasons set out below, the applicant has not made out its claim for trade mark infringement.
The application of these principles in this case
In the present proceeding, the applicant’s Registered Mark appears, and would be seen, in a variety of contexts. It appears on the side of the applicant’s trucks, as a logo on shirts worn by its employees, on its stationery and invoices, on letterheads, emails and other communications with clients, suppliers and contractors, on worksites, at trade shows and conferences, on its website and in its media advertising. The reasonable person of ordinary intelligence and memory recalling the applicant’s Mark may thus have come across it in a large form, and in smaller forms.
The use of capitals for the word “SHAPE” in the applicant’s Mark is, I accept, a feature likely to be recalled. In part, it is the use of capitals which is likely to make the word “shape” stick in the memory, as well as its proportionate size in the Mark. It is also correct that the word “Shopfitters” is much smaller, as is “Est 1998”. I see no basis to find that the latter phrase would be generally recalled, however I consider the word “Shopfitters” may well be recalled in conjunction with the word “SHAPE”. There is an alliterative effect between the two words, as well the positioning of “Shopfitters” underneath the word “SHAPE”. An industry participant’s eye (to take the applicant’s wider class of people) will, in my opinion, be drawn to that word as well and what is just as likely to be recalled is the phrase “SHAPE Shopfitters”, rather than just the word “SHAPE”.
Further, I consider the bottle cap border to the applicant’s Mark is also something which would stick in a person’s memory. Allowing as one must for imperfect recollection, if not the precise pattern, then at least the fact that there is a definite border, and that it is one which is not smooth and circular. The border, in my opinion, is quite distinctive, and likely to be recalled in the way I have explained. I reject the applicant’s submission that the “essential, eye-catching and memorable” feature (see [165] of the applicant’s closing submissions) of its Mark is the word “SHAPE”.
Of the three impugned marks used by the respondent, the Word Mark simply uses the word “SHAPE” in conjunction with other words. There is nothing deceptively similar about this use in relation to the applicant’s Trade Mark.
The Circle Mark and the Transparent Mark have a closer similarity, because of – in combination – the use of capitals of the word “SHAPE”, the placement of that word inside a circle, and the use of a circle itself. However, as I have set out, in my opinion even imperfectly, a reasonable industry participant of ordinary intelligence and memory is likely to recall the word “Shopfitters” in conjunction with the word “Shape”, especially because of the alliteration involved. I also consider such a person will recall the applicant’s Mark has a distinctive border that is not a smooth circle.
I do not consider the evidence about several industry participants referring to the applicant as “SHAPE” affects these findings in a way which means that word would be recalled as the only essential feature of the applicant’s Mark. Rather, that evidence is evidence of the contraction of the applicant’s business and trading name in ordinary speech, and such a contraction does not necessarily carry over to what a reasonable person is likely to recall of the applicant’s Mark. It goes only to how industry participants might refer to the applicant in conversation.
For these reasons, I do not accept that the reasonable industry participant of ordinary intelligence and memory would be caused to wonder whether the respondent’s services, and the business it markets and promotes, come from the same source as that of the applicant.
If I had otherwise been persuaded by the applicant’s case on trademark infringement, the question would have arisen whether the fact that the Registered Mark has a blue background and the respondent’s marks do not, could prevent a finding in the applicant’s favour because of the operation of s 70 of the Trade Marks Act, read with the definition of “limitation” in s 6 of that Act.
There are some significant issues of statutory construction involved in determining that question, which do not previously appear to have been decided. In my opinion it would not be appropriate to express an opinion on the matter, in a case where the issue does not arise because of the findings I have made. Its determination should await an appropriate case.
CONCLUSION
The application should be dismissed. The parties will be given an opportunity to attempt to agree appropriate orders as to costs, taking note of the Court’s Practice Notes concerning lump sum orders as to costs. Failing that, directions for competing submissions as to costs will be given.
I certify that the preceding two hundred and seventy-nine (279) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mortimer. Associate:
Dated: 1 August 2017
10
24
4