Smith Kline and French Laboratories (Aust) Ltd v Registrar of Trade Marks

[1967] HCA 42

HIGH COURT OF AUSTRALIA

Windeyer J.

SMITH KLINE AND FRENCH LABORATORIES (AUSTRALIA) LTD. v. REGISTRAR OF TRADE MARKS

(1967) 116 CLR 628

27 October 1967

Trade Marks

Trade Marks—Registration—Description of goods by appearance and colour—Whether registrable trade mark—Trade Marks Act 1955-1958 (Cth), ss. 6 (1), 24 (1) (e), 107.

Decision

October 27.
WINDEYER J. delivered the following judgment:-
A considerable body of evidence mainly in the form of affidavits has been put before me. The case has been carefully and helpfully argued. It raises a question which, in my experience, is unusual; but I do not think that I shall be any better equipped to come to a conclusion by reserving my decision. I therefore give my judgment now. (at p631)

2. The case is an appeal from a decision of the Registrar of Trade Marks. He refused to accept applications by the appellant (a company which I shall call "the applicant") for the registration of trade marks all similar in character. The appeal to this Court is pursuant to s. 46 of the Trade Marks Act 1955-1958 (Cth). The applicant's claim is that it is entitled to have what it asserts to be a trade mark registered in Pt A of the register or alternatively in Pt B. The Registrar based his refusal to accept the applications on several grounds. He thought that to allow such marks to be registered might prevent persons doing acts which they might lawfully do in carrying on their trade. (at p632)

3. In the proceedings before the Registrar it became apparent that the applications were expressed in a way which was at best ambiguous and certainly seemed to be inconsistent with what the applicant really sought. The Registrar considered the applications in the sense that the applicant said they were meant to have and read them in that way notwithstanding their actual terms. He did not formally allow any amendment of them. As he saw the case that was not necessary, as on any view of the applications he rejected them. This creates a difficulty which counsel for the Registrar has properly brought to my notice, but without urging that I should not deal with what I may call the substance of the matter. I must however first consider the technical aspect which he has brought to my notice. (at p632)

4. It may well be that the general power of amendment which the Registrar has by s. 127 could not be invoked in this case. The amendment sought, it could well be said, would substantially affect the identity of the trade mark as specified in the applications. Nevertheless I think I should deal with the case in the way suggested - that is, as if the applications had been amended in the way suggested. To do otherwise would mean that I was dealing with a matter different in substance from that which the Registrar had actually considered. The costs of the proceedings before him and before me would have been thrown away. Moreover this Court - although described as the "Appeal Tribunal" in s. 56 - exercises a jurisdiction in this matter which is not in the strict sense the hearing of an appeal. The proceedings are in the original jurisdiction of the Court. They are the first judicial proceedings in the case. The powers of the Court under s. 114 are wide, and it seems to me that, sitting to deal with a matter as an original matter, I may treat the applications as if they had been framed in accordance with the proposed amendment. That in substance is what the Registrar ultimately did. I therefore allow the amendments as asked for in the summons dated 24th July 1967 and proceed on that basis. I do so bearing in mind that the time for public advertisement has never arrived, and therefore no person is prejudiced by this course. (at p632)

5. All the applications are similar and related, differing only in respect of colours. They are virtually a series. To my mind they all stand or fall together. I shall therefore deal with them as one application and so speak of them. (at p633)

6. Before coming to the actual application it is desirable I think to state briefly the nature of the trade in relation to which the case has arisen. That trade is the manufacture and sale of pharmaceutical products, drugs sold for medicinal use. As I understand the evidence - of Mr. Graham in particular - medicines in earlier times were, generally speaking and apart I suppose from inorganic salts, preparations made from crude vegetable extracts. They might be made from one vegetable drug alone, or they might be mixtures. They were taken by patients in liquid form or as powders or pills, or applied as ointments and so forth. Some of the drugs used were coloured in nature ; others were colourless. In modern times there have been great developments in organic chemistry and pharmacology. These have led to the production of a great number of synthetic organic compounds. As I understand the evidence, these modern synthetic drugs embody the active principle of an organic compound in its pure form, with its utmost potency. As knowledge of complex organic compounds has increased, so have the number of separate substances having a therapeutic value. Each new drug created is commonly given a name. These names are very often fancy names : they are not indicative of the chemical composition of the drug ; they are new names, trade names really, given very often by the manufacturer or discoverer of the drug. These names and the characteristics of the drugs so named become known to pharmacologists, medical practitioners and pharmacists. They are used by physicians in prescribing drugs and by pharmacists who dispense drugs: and drugs are ordered from and supplied by manufacturers under those names. There is a body of literature in which they are catalogued and described - not only the various national pharmacopoeias but also other lists compiled from data supplied by manufacturers and sellers. There is too a large circulation of advertising literature ; and samples are sent to medical men. The given names are often registered trade marks. (at p633)

7. Two of the more common forms in which drugs are today put out by manufacturers are tablets and capsules. Each tablet or capsule contains a dose of the active principle of the drug with some innocuous material as a vehicle. Most synthetic drugs as produced are, I gather from Mr. Graham, white or colourless. It has become the practice of many drug manufacturers to put out their tablets and capsules on the market in various colours. There is no conventional colour code indicative of the various drugs or classes of drugs by reference to chemical composition, chemical genus or special properties. Each manufacturer apparently colours his goods according to his own fancy. Each manufacturer, however, generally adheres to his own colour scheme ; so that tablets of drugs which bear the names he has given them are of a constant colouring. In trade publications where drugs are described by these given names or trade names, their colours are often stated and sometimes shown by coloured illustrations. For the maker of a particular drug to change its appearance as supplied to pharmacists might therefore be undesirable. (at p634)

8. Whether this unco-ordinated colouring of drugs serves any very useful purpose seems doubtful. No doubt pharmacists may get to know drugs bearing particular names as coming in tablets or capsules of particular colours and from particular manufacturers or suppliers. And in domestic use people probably do find it convenient to be able to distinguish readily one bottle of pills from another. And a medical practitioner knowing the colours of the tablets he prescribes might say to his patient, "Take the white one in the morning and the red one in the afternoon" and so on. Thus, although it may be unsystematic and unregulated, the commercial colouring of drugs has, I shall assume, some advantages. It can give a distinctive appearance to some drugs. Moreover it seems that coloured tablets and pills have some kind of attraction for some people. There is a reference in two patent specifications put before me to "pharmacological elegance". This peculiar expression seems to mean that a tablet or capsule is of a size convenient for swallowing and has a pleasing appearance for those persons who like medicines to have an attractive appearance. No doubt drug manufacturers are not unlike sellers of other goods today who find it advantageous to put their wares in fancy packages and wrappings. This adds to the ultimate cost to the consumer, but it is common practice today ; presumably it promotes sales. (at p634)

9. Capsules as well as tablets are quite commonly coloured. Many manufacturers appear to have abandoned altogether the transparent gelatine capsule. They now use coloured capsules, sometimes of a single colour sometimes multi-coloured. (at p634)

10. One development in the field of pharmacology in recent times is the preparation of drugs having what has in these proceedings been called a "sustained release" character. That is the dose is prepared in such a way that it affects the bodily organs over a period. Instead of the whole dose dissolving at the same time and becoming operative then, the dose takes effect over a period. A sustained release effect can be achieved by coating part of the constituent of the dose with a substance which will itself take some time to dissolve thereby making the dose as a whole dissolve over a longer period. I do not profess to have stated this in detail or with scientific precision ; but I think that what I have said is a sufficient statement of the general effect of this part of the evidence. (at p635)

11. The applicant in this case put on the market some sustained release drugs in capsules. The contents of the capsules are pellets, that is small globules. These are made by a process described in some detail in the affidavits. I need not recount it here. It produces pellets consisting of a core of some innocuous material, such as sugar, coated with the medicament ; and some of them are given an outer coating to delay the time when the pellet is dissolved and takes effect. Thus some pellets in each capsule dissolve more quickly than others. As put out for sale some pellets in each capsule are coloured. At least two colours, one of them white, are used. The general appearance of the pellets, both in size and colouring, is much like "hundred and thousands", the sweetmeats which are spread on bread and butter for children. The colouring itself has no medicinal properties. Nor does it indicate which pellets have been coated so as to delay their dissolution to obtain the sustained release result. The capsules used are as to one half coloured, as to the other half colourless and transparent. In some cases the coloured half may also be transparent. The pellets, being of at least two colours mixed together, give what has been called a "speckled" appearance to the clear half of the capsule. (at p635)

12. For some years past, and in the case of one product since 1957, some of the applicant's goods have been marketed in this form in Australia. Huge numbers have been sold. The statistics given in evidence show that the Australian population is much given to taking pills and tablets. In this period only one other manufacturer has been selling in Australia capsules containing coloured pellets. Its capsules are also in part transparent and in part coloured. But its products, although to my eye close indeed in general appearance to those of the applicant, do not have a speckled appearance, because the pellets were, and are, all of one colour. I shall refer to this again later. (at p635)

13. A large number of people connected with the pharmacy trade, or with the administration of drugs in hospitals or the prescribing of drugs know the colour pattern of the applicant's goods. Many of them know these capsules as the applicant's products. They associate this colour pattern with the applicant. It may be that some patients for whom these medicines are prescribed would also think that the colour combination indicated some connexion in the course of trade between the capsules and a particular manufacturer. They would not necessarily know the name of that manufacturer. But I think it likely that most patients would suppose the colouring had a different significance. They would probably think it was the natural colour of a particular drug, or the colours of several drugs to be taken together. They would not be likely to think of it as applied only for the purposes of decoration or ready recognition, or to identify the product as that of a particular maker of drugs. It is, I think, a matter of common experience that a retail pharmacist puts capsules which he supplies pursuant to a prescription into a bottle, and puts his own name on the label with the prescribed directions as to the dose, the number to be taken and when to be taken. He may put, and I think in recent times ordinarily does put, the trade name of the drug on the label. But this does not tell the buyer by whom the goods were made. Tablets and capsules are I imagine thought of by many patients as the modern equivalent of medicines which they used to get in bottles upon a doctor's prescription, the bottle being labelled "The Mixture". Pellets of different colours would naturally be thought of as a dry mixture of different components. (at p636)

14. So far I have been referring to the appearance of drugs which are dispensed by pharmacists on the prescription of medical practitioners. These I was told are for some reason known in the trade as "ethical preparations". The applicant also sells a preparation which is not an "ethical", although no one using that word in its ordinary sense would say that it was unethical to sell it. It is said to be a "proprietary pharmaceutical made to ethical standards", whatever that may mean. It is sold as a remedy for coughs and colds. It can be bought from retail pharmacists, and in other shops, without a prescription. It is sold in capsules part red, part transparent containing red, white and yellow pellets. Again there is no medicinal purpose in the colouring. It is merely decorative and to give the product a recognizable and a persuasive appearance. The printing on the carton in which these capsules are sold describes their suspended release effect. They are each filled with "tiny time pills" to give "continous action". Each capsule is stated to contain stated ingredients in stated proportions. The varied colours of the pellets might be taken by some people to demonstrate this. In other words consumers would not necessarily take this colour scheme to have the basic characteristics of a trade mark distinguishing the product from the product of other manufacturers or suppliers, but rather as indicative of its nature and composition. (at p637)

15. For the reasons I have given I think it is a far-fetched proposition that, either in relation to the "ethical" or the "non-ethical" products of the applicant, the ultimate consumers would regard their colour scheme as a manufacturer's trade mark. I fully appreciate, however, that this case does not turn on that. If what the applicant seeks can be regarded as a trade mark, and if it is adapted to distinguish its products for physicians and pharmacists and others who deal with drugs, it would not matter that it had a different meaning for those who take medicine. Nor does the way in which the applicant's suspended release pellets are produced seem to me of much importance, although much evidence was given as to it. The process of production appears to be complex and costly, requiring special equipment, skilled operators and careful and precise supervision. But a trade mark is not given as a reward. And the only relevance of this evidence seemed to me to be that it may explain, if it be relevant to explain, why the applicant is apparently the only Australian manufacturer producing sustained release pellets on a very large scale. The cost may have discouraged others. Another reason, if reasons are to be sought, may be that the applicant has a patent for its particular manufacturing process, and this may have deterred others from entering the same field. But if in fact the applicant could establish that it has a trade mark which has become distinctive, I need not consider how it obtained this distinction. The applicant has been at some pains to describe its coloured capsules with their speckled contents as a trade mark. That is stated to be so on some of the containers in which these capsules are sold to the trade. And some of the deponents of affidavits filed spoke of this colouring of the applicant's goods as its "trade mark". They were not however using the word in the sense of a registrable trade mark. And their statements cannot be read as begging the question or as concluding the question for me. They merely mean to say that the applicant's goods could be recognized by their appearance. That I think is established by the evidence. It is also established that many people, concerned, in one way or another, with drugs and knowing the names of their manufacturers, do associate parti-coloured capsules containing many coloured pellets with the applicant. (at p637)

16. I turn now to the applications themselves. When what I am saying has been transcribed from shorthand, I shall annex to the record a copy of the first application, number 180,801. I need only say now that there the "Representation of the Mark" is a picture of a capsule containing pellets of different colours (shewn in black and white), with an accompanying legend ; "The Trade Mark consists of a capsule of which one half is coloured, the other half colourless, containing pellets of two or more colours, one of which may be white." (at p638)

17. The other seven applications were for variations of this. I take as examples the legend which accompanies the pictorial representations in two of them : "The Trade Mark consists of a capsule of which one half is coloured transparent light green, the other half colourless, containing pellets coloured green and white." "The Trade Mark consists of a capsule of which one half is coloured opaque black, the other half colourless, containing pellets coloured lime green, blue and white." All the applications were thus for a device mark - the device being a picture of a coloured capsule containing coloured pellets as described and depicted. I do not have to decide whether marks thus depicted and described could have been registered. Perhaps not, for they seem to be only pictorial representations of goods in capsules coloured in particular ways : compare Re Maschinenfabrik Gustav Eirich's Application (1958) RPC 493 . (at p638)

18. However, it turned out before the Registrar that the applicant did not really want to register a device mark which it could use in relation to its goods by affixing it to boxes, jars and so on, or by publishing it in its advertising literature. What it really wanted was to register the total appearance of its capsules, and thus to obtain a monopoly for the sale of parti-coloured capsules containing pellets of different colours. The amendments which I have mentioned were therefore proposed to the Registrar. There are two of them in each case. The need for the first is not obvious to me ; but it seems not objectionable. It is to narrow the description of the kind of goods for which the mark is sought, so that it will read "Pharmaceutical substances in pellet form contained in capsules" instead of as originally stated, "Pharmaceutical substances sold in capsules". (at p638)

19. The other amendments which were foreshadowed before the Registrar have since been more precisely formulated. They are, in each case, an amendment of the legend accompanying the representation of the mark. It is enough to quote the form of words as applied to the first application, number 180,801, the others being the same mutatis mutandis. It reads : "The Trade Mark consists of colour applied to half of the capsule at one end the other half being colourless and transparent and two or more colours one of which may be white each applied to the pellets so that each pellet is coloured with one colour only and so that together they present a speckled appearance substantially as illustrated in the representation of the mark." What the applicant has asked me to consider is its claim to have an application thus formulated accepted. This is what I have considered. As I have said, I have for this purpose treated the application as amended as asked. The applicant's claim is for a monopoly for any products it may put on the market, consisting of pellets in capsules, having the kind of colour scheme it has used for its sustained release drugs in capsules. (at p639)

20. The various drugs which the applicant makes, which are its own special products, have each been given a name, a trade name or brand name. These names are registered trade marks. They are registered as distinctive word marks. It may be that they are capable of becoming in time descriptive of substances of a particular chemical composition rather than distinctive of the products of a particular manufacturer. That however is not a matter of any importance for me now. The present application is for something entirely different from either a device mark or a word mark. It is said that it is comprehended by the words in s. 24 (1) (e) : "other distinctive mark". The basic question is whether what is sought is registrable as a trade mark at all, whether it is capable of being a trade mark within the meaning of the Act. (at p639)

21. A trade mark is defined in the Act as "a mark used or proposed to be used in relation to goods" for the purposes stated. This definition assumes, it seems to me, that the mark is something distinct from the goods in relation to which it is used or to be used. It assumes that the goods can be conceived as something apart from the mark and that the mark is not of the essence of the goods. The goods are assumed to have an existence independently of the mark. As Sargant L.J. put it, in stating the difference between a design and a trade mark, "A trade mark is something which is extra, which is added to the goods for the purpose of denoting the origin of the goods" : Charles Goodall &Son Ltd. v. John Waddington Ltd. (1924) 41 RPC 658, at p 668 . And Lord Lindley, then Lindley L.J., said in In re Jame's Trade-Mark (1886) 33 Ch D 392, at p 395 , "We must be careful to avoid confusion of ideas. A mark must be something distinct from the thing marked. A thing cannot be a mark of itself . . .". This does not mean that today a trade mark must be a mark to be physically applied to the goods. It may now be a mark to be used in other ways in relation to goods. A thing can always be described and distinguished in appearance by any visible characteristic which it has, its shape, colour or any mark which it bears. But the test is not - Can the goods be described or depicted without reference to their markings? As I see it, a mark for the purposes of the Act must be capable of being described and depicted as something apart from the goods to which it is to be applied, or in relation to which it is to be used. This view is supported by the provisions of s. 107 of the Act. It accords too with the various things included in the definition of "mark". That list is not expressed as exhaustive but it is certainly illustrative. I do not think that a mere description of goods simply by shape, size or colour can be a trade mark in respect of those goods. (at p640)

22. For these reasons, which differ in some ways from those which influenced the Registrar, I uphold his decision. Taking that view of the case I do not think I need discuss all the matters put to me in argument. I may say, however, that even if this application in the way it is now put forward were an application for a trade mark, I would be very doubtful whether the mark sought is distinctive of the applicant's goods or adapted to distinguish its goods from those of other persons. Certain capsules produced and sold in Australia by Upjohn Pty. Limited are not unlike those of the applicant for which the mark is sought. They are less well known it seems ; but they are on the market and described and illustrated in literature available to pharmacists and physicians, including the publication called New Ethicals Desk Reference 1966 tendered as an exhibit. They differ from the applicant's goods in that the pellets in the capsule are all of one colour. They appear to be green ; either they are coloured green, or appear green being seen through a green transparent part of the capsule. Another drug called "insoral" made by another manufacturer, William Warner &Co. Pty. Ltd., is sold in the form of pellets visible in a capsule part blue and part colourless. In it all the pellets are white. The drug is described in New Ethicals Desk Reference 1966, p. 594, as "timed disintegration" capsules having a "sustained action". It was suggested to me that the applicant's goods were distinguishable from these others not only by the pellets not being uniform in colour, but also by a distinction between pellets and "granules". It is true that in some of the specimens exhibited the particles in the capsules seem to be fragments of irregular shape rather than all spherical as the applicant's pellets appear to be. This may be the result of a different process of manufacture. It is not to my eye a marked distinction in appearance. It is worth noticing that in the Shorter Oxford Dictionary "granule" is defined as "a small grain ; a small compact particle ; a pellet". And in Desk Reference 1966, p. 292, the product called "medrol-medules" is described as consisting of "green granules" in a clear and dark green capsule. These in the illustration on p. 408 and in the specimen exhibited appear as spherical. From the matter on p. 591 I take the word "medule" to mean a capsule. It is not a word known to me. If it means a capsule perhaps it is derived in some way from a modullary sheath ; or perhaps it refers to a dose and is derived from "module". Whatever a medule is it seems to me that pellets or granules, white or coloured, in coloured capsules being well known in the trade in Australia, any manufacturer of such wares could for legitimate reasons, in the ordinary course of his business, for no improper motive, and not to pass off his goods as those of the applicant, desire to have pellets or granules of different colours in the same capsule instead of having them all of the one colour. Drugs in tablet form are made in different colours. It would not to my mind be surprising if a manufacturer wished to produce a combination of two or more drugs as a single dose in one capsule, giving each drug a different colour. There is on sale in the United States of America a proprietary drug the product of Tutag and Co. It is put out in pellets or granules of two colours in a parti-coloured capsule, the whole being called a "granucap". The word "granucap" is a registered trade mark in the United States of the Tutag Co. for its sustained release capsules. It seems to be only another instance of jargon and the needless multiplication of trade names in this field. For present purposes it matters not that the capsule is called a granucap. It is in fact a capsule containing pellets of two colours. It is illustrated in colour in the 1965 Physician's Desk Reference, published in the United States ; see also pp. 969, 970. The evidence is that it has never been sold in Australia and counsel for the applicant has urged that I must ignore it, having regard to general principles covering foreign marks. He referred to The Seven Up Co. v. O.T. Ltd. (1947) 75 CLR 203 , and Aston v. Harlee Manufacturing Co. (1960) 103 CLR 391 . I would add to these a passage in the judgment of Pollock M.R. in Reddaway &Co. Ltd's Application (1925) 42 RPC 397 , where his Lordship said : "I think the Court is entitled and ought to look at all the circumstances of the case, including the evidence as to user in markets at home and abroad, for I cannot agree with the learned judge that in the first instance distinctiveness in the home market alone is to be considered. Mr. Justice Tomlin accepts the proposition that evidence of user in another country may be some evidence of an inherent quality of distinctiveness, but holds that the user in another country cannot be evidence that the mark is adapted to distinguish in the market of this country. I repeat that, in my judgment, the Court must look at all the circumstances, and I cannot separate the market at home so completely from markets abroad. The commodity on which the mark is to be put is of special, rather than general, use, and the markets at home and in foreign countries must react and inter-act on each other. Those who trade in the goods will, without difficulty, become familiar with the trade marks registered in any of them" (1). (at p642)

23. From the publication called Prescription Proprietaries Guide 1966-67 (which is in evidence), p. 90, it appears that drugs distributed in the United States of America do become progressively available in Australia. The New Ethicals Desk Reference 1966 states that in dealing with pharmaceutical products "the information is quickly and frustratingly out of date". For this reason an Australian publication, New Ethicals continuously "up-dates" (sic) Desk Reference. I am not prepared to assume that the speckled preparation of Tutag and Co. will not in the future become available here. That, I suppose, depends on trade demands and also on government controls. Medicinal drugs can hardly be regarded today, any more than can medicine itself, as confined by geographical limits. I make that observation without it being necessary in this case to found any conclusion on it. All that I mean to say is that I doubt whether, all other considerations aside, the appearance or get-up of a drug as sold in the United States - that appearance and get-up being I must assume known in Australia as the result of publications available here - should be regarded as being in the statutory sense distinctive of, or adapted to distinguish, a different drug produced by another manufacturer in Australia. (at p642)

24. I dismiss the appeal from the Registrar's decision in each case. I direct that the applications as amended be not accepted by him. (at p642)

25. I have already said that certain affidavits and exhibits to affidavits filed by the applicant are to be placed in a sealed envelope as they contain statements about the applicant's manufacturing methods and business which it asks should not be made known to competitors. The Registrar may allow these documents to be seen by the legal representative of either party so far as necessary for the purposes of any further proceedings in this case. Otherwise they are not to be taken from their packet except by order of a Justice of this Court. In the event of an appeal, copies of these documents may be produced to the Court without being printed in the appeal book. (at p643)

26. I do not make the usual order as to exhibits. Instead I order that the exhibits are to remain in Court for the time being, but any articles which were exhibits (other than documentary exhibits - whether they were exhibited to affidavits or tendered in evidence at the hearing) may be handed out by the Registrar to the party producing the same on a written consent by both parties or on the order of a Justice of this Court. (at p643)

27. The applicant must pay the Registrar's costs. (at p643)

28. As the parties may wish to consider this judgment after they have been supplied with a transcribed copy of the shorthand I shall make the whole order in each case bear date this day week, that is 3rd November 1967. (at p643)

Orders

In each appeal :

Appeal from the Registrar dismissed with costs.

Application deemed to have been amended as asked in summons dated 24th July 1967.

Direct that the application, as so amended, be not accepted.

Those documents directed to be placed in a sealed envelope to be available to either party so far as necessary for any proceedings in this case ; otherwise the envelope not to be opened except by the consent of the applicant or order of a Justice of the Court.

Exhibits, other than documentary exhibits, may be handed out by the Registrar with the consent of both parties or on the order of a Justice of the Court.

Order to bear date 3rd November 1967.