Sterling Pharmaceuticals Pty Limited v Johnson & Johnson Australia Pty Limited

[1992] HCATrans 53

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S92 of 1991

B e t w e e n -

STERLING PHARMACEUTICALS PTY

LIMITED

Applicant

and

JOHNSON & JOHNSON AUSTRALIA PTY

LIMITED

Respondent

Application for special leave

to appeal

MASON CJ DAWSON J TOOHEY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY. 14 FEBRUARY 1992, AT 2.50 PM

Copyright in the High Court of Australia

Sterling 1 14/2/92

MR J.M. EMMERSON, QC: If the Court pleases, I appear with

my learned friend, MR J.T. GLEESON, for the

applicant. (instructed by Blake Dawson Waldron)

MR R.J. ELLICOTT, QC:  Your Honours, I appear with

MR J.L.B. ALLSOP and MR A. GELBART for the

respondent. (instructed by Michell Sillar McPhee

Meyer)

MR EMMERSON:  If the Court pleases, we have prepared volumes

of authorities which we can hand up to the Court.

It will be necessary, for the purpose of this

application, to make only brief reference to them

but we have collected them together in volumes in

case any matter arises.

MASON CJ: Well, the one point in the proposed appeal, as I

understand it, at least a principal point, is the

challenge to the correctness of the Shell v Essa

judgment of Justice Kitto or, at least, an attempt

to qualify the effect of that judgment.

MR EMMERSON: That is correct, Your Honour.

MASON CJ:  Now, I think it would assist us if you indicated

to us what are your grounds of challenge either for

overruling or qualification.

MR EMMERSON:  Yes, Your Honour. But in order to do that it

is necessary for me to develop part of the way we
put our case arising out of section 56. Can I say

at the outset that so far as the Shell v Essa case

is concerned, we do not challenge the proposition

that use of a trade mark in section 58 for the

purposes of infringement means use as a trade mark
but we say that this case raises a critical

question about what it is that constitutes such

use.

Furthermore, as we understand the reasoning of the Court in the Oil Drop case, it is not necessary

for us to challenge the actual decision in that

case because it would appear that His Honour Mr

Justice Kitto, who delivered the principal

judgment, accepted that if the defendant had placed

the registered mark on its own goods, then this

could be an infringement.

However, we do challenge or seek to qualify

the passage that appears at the bottom of page 425

of the judgment in so far as it seems to set up a

test for infringement which was applied by the

Full Court below and which involves overlooking the

fact that the mark in question is a registered

mark.

Sterling	2
DAWSON J:	Do you have those volumes of cases - - -?

MR EMMERSON: I am sorry, yes, if the Court pleases. Could I

hand up those volumes? The Shell v Essa case is to be found at tab 13 in those volumes and the central
passage which arises, we say, for reconsideration

on this application is to be found at page 425.

The Court will recall that that case was concerned

with a trade mark which consisted of a device being

the so-called "oil drop man". The alleged

infringement consisted of a television

advertisement showing antics of an oil drop man and

at page 425, His Honour Mr Justice Kitto

assumes, for the purpose of his argument, that at

least fleetingly the oil drop man in the television

advertisement takes on a form which is closely

similar to that of the registered trade mark.

Now, His Honour then goes on to say that the

connection between the advertisement and the petrol

he symbolizes is limited to the purpose of the

occasion. Just over half-way down the page,

His Honour says this:

This fact makes it, I think, quite certain

that no viewer would ever pick out any of the

individual scenes in which the man resembles

the respondent's trade marks, whether those

scenes be few or many, and say to himself:

"There I see something that the Shell people

are showing me as being a mark by which I may

know that any petrol in relation to which I

see it used is theirs." And one may fairly

affirm with even greater confidence that the

viewer would never infer from the films that

every one of the forms which the oil drop

figure takes appears there as being a mark

which has been chosen to serve the specific

purpose of branding petrol in reference to its

origin. No doubt if, later, the viewer were

to come across the respondent's trade mark -

he may recollect that.

Now, in our submission, it is the extended

application of that passage which has led the court

below into error because it has led to an unduly

restrictive application of the rights conferred by

registration of trade mark arising from treating

that passage in the oil drop case as being

applicable to all circumstances including the

present case where one has a word "trade mark"

which has been applied to the goods in question.

Now, we say that this case raises squarely the

question:  "What legal consequences follow if a

trader uses the registered trade mark of a rival

Sterling 3

trader as the name or description of his own

goods?", and that is the central issue in the case.

Now, the Oil Drop case stands in our way if

that statement at page 425 by His Honour

Mr Justice Kitto is treated as applying in all

circumstances because if a trader users a trade

mark of a rival trader as the name or description
of his own goods, then if one looks at the
advertisement or the packaging in isolation and
puts out of one's mind the fact that the mark in
question is a registered trade mark, then, on the
test applied by the Full Court, there is no

infringement.

In our submission, if the test taken from that

passage in the Oil Drop case is to be treated as

universal application, this is a point which should

be reconsidered by the Court and to that extent we

say that we wish to challenge the Oil Drop case.

In our submission, however, if one looks at

the question which is raised directly in this case,

as it were, one is coming at the matter from a

slightly different direction because one is asking,

"Can a rival trader use a registered trade mark as

the name or description of his goods?"

TOOHEY J: Is it right, Mr Emmerson, to put it in those

terms or is it more accurate to say, "May a trader include in the name of his own product a name or a

word which is the subject of a registered trade

mark"?

MR EMMERSON:  Either way would be correct, with respect,

Your Honour. In the present case, you see, the registered trade mark is "Caplets" and what we

complain of is the use by the respondent of the

word "Caplets" as being the name or description of

his goods. The issue does not arise as to whether

he also uses some other trade mark because it is

well established that one can have trade mark

infringement notwithstanding that the packaging

makes clear that the trade source is the source of

someone other than the owner of the trade mark.

So, we would say, with respect, that the

correct way to put it is the way in which I have

put it, though the way that Your Honour put it to

me, is not one with which we would seriously

quarrel.

Now, it is clear that if this type of use,

uses the name or description of goods, is use

within section 58, then subject to any defences

available under section 64, a case of infringement

Sterling 4

is made out.	We say that that is the correct
approach.

The Full Court has added an extra element

because it requires that the potential customer
would conclude that the usage is informing him of

the origin of the goods and it appears that in

applying this test one assumes that the potential

customer does not know that the trade mark is

registered. Now, that has a consequence which is

raised for consideration by this Court for the

first time in the present case, that if the

Full Court is right then it is possible for a

determined rival to destroy a trade mark by taking

it as the name or description of his own goods and

the registered proprietor is powerless to stop this

provided that the usage remains descriptive in

form.

DAWSON J: That is right, is it not?

MR EMMERSON:	We say that is wrong and that - - -
DAWSON J:	And that is correct?
MR EMMERSON:	- the proprietor can stop it.

DAWSON J: But it is correct as a proposition.

MR EMMERSON: Correct as a proposition that - - -?

DAWSON J:	What you say.
MR EMMERSON:	Yes.

DAWSON J:  And what you suggest is it is wrong. Why?

MR EMMERSON:  We say that it is wrong for. a number of

reasons which we would urge and the first and at

the heart of it is that if it is true to say that
the test is only one of form and provided the use

is descriptive in form, then you have the position

that a rival trader can use the mark in a way which

the registered proprietor is powerless to stop but

which will nevertheless lead to invalidity of a

trade mark because section 56(2)(a) provides that

once you have

a well-known and established use of a word as

the name or description of -

for present purposes, an article by a rival trader

then, going on to subsection (3), the trade mark is

deemed to be wrongly remaining of the register and

it therefore can be expunged.

Sterling
DAWSON J: Well, what is the different of being descriptive

in form and descriptive in substance?

MR EMMERSON:  The difference is simply this, that if you

look to substance and apply, as we say, the correct

test, namely, you start with the proposition that

the trade mark is a registered trade mark and you

ask whether the respondent has trespassed on the

rights of the registered proprietor, then the

answer follows that he infringes, and the reference

to form that I made a moment ago was the reference

to, as it were, the grammatical form on the

packaging which we say is not enough to stop

infringement.

DAWSON J:	In other words, if his motive is wrong then it is merely a matter of being descriptive in form but if
his motive is right then it may be descriptive in
substance?
MR EMMERSON:	No, that is, with respect, not correct either,

Your Honour.

DAWSON J:  What has his motive got to do with it at all?

MR EMMERSON: For the purpose of my submissions, it has not,

Your Honour. I was not conscious of having

introduced the notion of motive.

DAWSON J: Well, you did not use that word.

MR EMMERSON:  Save that in the present case what it allows,

in effect, the respondent to do is drive a coach

and horses through the registration and that is, of

course, precisely what the respondent is trying to

do in this case and the issue that is raised in

these proceedings is whether we are powerless to

stop that use which would be destructive of our

trade mark, or whether we are not and it is our

submission that the whole scheme of the Act is such

that we should be empowered to stop that use and we

to use our trade mark as a name or description of	say that it is therefore not open to a rival trader
his goods within the scope of the registration.

DAWSON J:  What if he did it not even knowing of your trade

mark?

MR EMMERSON:  That would not affect the position so far as

section 58 is concerned, Your Honour. It may give

him a defence under section 64(1)(b) which makes it

not an infringement if there is a use in good faith

by a person of a description of the character or

quality of his goods or services. So, motive may

be relevant there because it opens up the question

of good faith. So far as section 58 is concerned,

motive is not relevant.

Sterling 6 14/2/92

MASON CJ:  Mr Emmerson, is Justice Kitto's treatment of

Stone v Steelace consistent with the submission

that you are now making?

MR EMMERSON:  In a sense, it is difficult to see that it is,

Your Honour, because Stone v Steelace, we would

say, was a case which went wholly our way.

MASON CJ: Yes, but I am talking about His Honour's

treatment of the case, not the decision itself.

MR EMMERSON:  Yes. Well, His Honour uses Stone v Steelace

for one proposition which we would accept, namely,

he says at the bottom of page 422:

in my opinion it is implied both ins. 58(1)

and in s.62(1) that the use which is there

referred to is limited to a use of a mark as a

trade mark.

MASON CJ:	And you are not disputing that proposition?
MR EMMERSON:	We are not disputing that proposition but we

are saying that one has to inquire what is use as a

trade mark and we say that it includes the use in

this case. So, Stone v Steelace was a case which,

as it were, went the infringing side of the line

because the trade mark was "Alligator" and the use

was "Alligator pattern" and it was held that that

was an infringement.

One or two of the other cases that His Honour

qoutes deal with the pure comparative advertising

of which the Yeast-Vite case is perhaps the best

known English case, and there the use was solely

comparison "equivalent to Yeast-Vite??" were the

words complained of and that was held not to be

infringing.

MASON CJ: But I was concerned with His Honour's comment at

the top of page 426 where His Honour indicates in

the first three lines what the decision was, namely, infringement, but he goes on to say:

but the judgments make it plain that if the

second word had been clear enough in meaning

to make the whole expression signify only that

the goods were of a type of which "Alligator"

goods were an example there would have been no

infringement, because the context would then

have shown that the word "alligator" was being

used otherwise than as a trade mark.

MR EMMERSON:  Yes, and His Honour then goes on immediately

to the Yeast-Vite case. Now, if His Honour, in

that passage, is saying simply that a case of pure

comparative advertising, that is to say, use of a

Sterling 7 14/2/92

trade mark in one's own advertisement to refer to

the goods of some other trader, so that the context

makes that clear, then that would not be an

infringement and we would take the passage at the

top of page 426 as intending to say that.

If I am wrong in my construction of that

passage, then maybe we would challenge it. But it

would see, on its face, to be concerned with seeing

the connection between Stone v Steelace, on the one

hand, and Yeast-Vite, on the other, and we would

say that that is a distinction which is properly

drawn.

If the Court pleases, we say that the notion

that the Act which casts certain duties on a

registered proprietor but also empowers him to

carry out those duties has a number of themes which

support the view that we would put in this case.

If one starts at the most fundamental level, the

essential rights given by registration of a trade

mark are those set out in section 58:

right to the exclusive use of the trade mark

in relation to the goods or services in

respect of which the trade mark is registered

and to obtain relief in respect of

infringement of the trade mark -

Now, the limitation which has been put by the courts on that expression "use" and which has led

to the shorthand that the use must be use as a
trade mark, is a limitation which excludes such
things as the Yeast-Vite type of comparative

advertising and we say is entirely consistent with

the general notion that a trade mark is an item of

property which is established and protected under

the Act. The question is whether it is more

limited than that.

Now, the Act, as was recognized by this Court

in the Murray Goulburn case, also assumes that the

registered proprietor of the trade mark will be

vigilant to ensure the integrity of the trade mark

by exercising his statutory right to restrain

infringement of it. So, the Act imposes a duty to

ensure the integrity of the mark but also gives the

power to protect the trade mark.

Now, that, in our submission, is the scheme of

invalidity if the mark became generic but, in a

the Act but the effect of the decision of the of

major class of cases, would deny the registered

proprietor the means to ensure the integrity of his

mark. So that the assumption that the registered

Sterling

proprietor would be vigilant would be of no avail
because he would not have the power to be vigilant.

When one comes to look at the background to section 56, it is, we say, precisely to deal with

this type of problem that section 56 and its UK

predecessors were enacted. Before section 56 came

into our Act in the Act of 1955, the common law

rule was that where a word is or has become the

name by which an article is commonly known or

described, then the word ceases to be registrable

as a trade mark.

The problem that arose from this was that the

trade mark owner had no power to restrain the use

of a trade mark in ordinary speech, that is to say, by members of the public as the name of an article,

yet this could imperil the mark. So, that was

perceived as a difficulty. It is taken up in the

Goschen Report which is at tab 3 in the folder and,

for this purpose, I need to take the Court only to

one paragraph which is paragraph 286 at page 80.

There the report says this:

We think that the evidence shows clearly

the need for some protection for an advertised
trade mark which as a result of such

advertisement has been adopted by the public

as a descriptive name of the article to an

extent beyond the power of the trade mark

proprietor to control.

So, it is the adoption by the public as a

descriptive name of the article where the trade

mark proprietor cannot control it.

This tendency on the part of the public is no

doubt due largely to the fundamental changes

that have taken place in recent years in the

function and use of trade marks. Under modern

conditions it is customary to build up the

business around the trade mark by

advertisement, and it is beyond the control of

the trader to prevent the public from

identifying and ordering the goods by

reference to the mark and from using the mark

as the name of the article. The common law

rule appears therefore to be based upon

obsolete conditions, and to be a source of
embarrassment to traders, and we suggest that

provision should be made by legislation for

overcoming these difficulties by reversing the

existing rule, but subject to the conditions

which we specify. We do not believe that such

an alteration in the law will operate to

confer on the proprietor of the mark any

monopoly in the same of the goods to which he

Sterling 9

has applied it. It may give him an initial

advantage over his competitors, but not more,

we think, than is due to him in respect of his

being first in the field and of his

expenditure in research, development and

advertising.

DAWSON J: That is a little different to the case where you

contain in the trade mark in the first place a term

which is essentially descriptive in character.

MR EMMERSON:  It is dealing with a case where a trade mark

has passed into ordinary language, yes.	So far as
the question of whether the trade mark is

essentially descriptive in character - DAWSON J: Or is capable of being used in - - -

MR EMMERSON: Well, yes, but it is made-up word and we would

say that made-up words are capable of being used in

this way. It is a matter of what meaning

ultimately attaches to them by reason of

circumstances. At first a made-up word does not

have any fixed meaning.	Then it develops a meaning
in due course.

Now, the recognition that occurs at page 286

in the Goschen Report is a problem that invalidity

may arise through circumstances which are not the

fault of a trade mark owner and which he is

powerless to prevent. The solution that was

adopted in the corresponding provision of the

United Kingdom Act, which is section 15 in the Act

of 1938, and the one on which our section 56 is

based, is to provide, as our section 56 does, that

you start off with a primary proposition set out

in section 56(1), that:

the registration of a trade mark does not

become invalid by reason only of the use,

after the date of the registration, of a word

which it consists, as the name or description or words which the trade mark contains, or of of an article, substance or service.

So, if the mark has not been used in that way

before the date of registration, the primary
proposition is that it is protected after the date

of registration.

However, there is then a qualification made

and the qualification is as to, so far as presently

relevant, trade use on a substantial scale. There

is also a provision in section 56(2)(b) which

codifies the line of cases on words which arose for

articles which were hitherto patented and for which

the patent is no longer extant.

Sterling 10

Now, the balance that is drawn between

section 56(1) and section 56(2) is consistent with

the fundamental assumption that the registered

proprietor will take steps to protect his trade

mark by preventing rival traders from using it.

So, he is protected against use by members of the

general public which, as the Goschen Report

recognized, he is powerless to stop in any event

but it is open to him to stop use by rival traders.

So, if such a use springs up, then that is a use

which can invalidate the mark and it does by reason

of the combination of section 56(2)(a) and

section 56(3).

The Goschen Report was written after Stone v

Steelace had been handed down so that the state of the law was that descriptive use, as in "Alligator

pattern" could be prevented and, indeed, Stone v

Steelace itself recognizes, in the reasons for

judgment of Lord Justice Slesser, precisely the

problem that could arise in other circumstances.

If one goes to Stone v Steelace, which is set out at tab 11 - - -

TOOHEY J:  Mr Emmerson, are you saying that the Full Court

of the Federal Court misunderstood these decisions,

misapplied them, or what is the complaint made

about the judgment?

MR EMMERSON:  We say that the Full Court read, in

particular, the passage that I have drawn attention

to in the Oil Drop case as imposing a test which

applied universally whether the usage were a

descriptive use or some other use, whether the

trade mark was a word or figure, so that it, in

effect, substituted the test that appears there for

the test in the Act.

If that is a true view of what

Mr Justice Kitto intended in the Oil Drop case,

then we say that is wrong and should be reviewed by

this Court. If it was not what he was intending	and if the Full Court below has taken the matter
too far, then we say well, that should be corrected also. But we say, as central to our case, that the Full Court applied the wrong test or tests.

MASON CJ:  You say it represents a fundamental misconception

of the concept "use" as a trade mark?

MR EMMERSON: Precisely, yes, Your Honour. In fact, the

danger was adverted to in Stone v Steelace, tab 11,

page 420. If one goes to line 39, His Lordship

says:

Here admittedly, on the face of it, the word

"Alligator" is a peculiar artificial word used

Sterling 11

to describe the Plaintiffs' goods. I am

impressed by this fact, if the contention of

Mr Shelley were right, that the gradual growth of the use of a descriptive name of that sort, not a name of general description but an

artificial description, were to produce such a

generality as to destroy a Trade Mark, the

owner of every registered Trade Mark would be

in this peril, that the more popular and the

more frequent became the use of his goods, and

consequently his Trade Mark, the easier it

would be for somebody else, by applying the
word "type" or "pattern" to say that by the

very celebrity of his goods the value of his

Trade Mark had been destroyed.

So, again, it is a recognition of the fact that a contrary view to the view that we would seek

to advance can lead to the destruction of a trade

mark in circumstances which the registered

proprietor would be powerless to prevent.

MASON CJ:  I suppose you get some support from the passage

also at page 419, about line 16, where the
statement is made:

The fact that they add the word "pattern" to the Plaintiffs' Trade Mark does not prevent the user of that Trade Mark from being a user

upon or in connection with the manufacture and

sale of the Defendants' own goods.

MR EMMERSON:	Yes, Your Honour.
MASON CJ:	Now, the only question, of course, is whether or not that statement is consistent with what
Justice Kitto has said.
MR EMMERSON:	Yes.
MASON CJ:	I mean, there is no doubt the sentence follows

the language of the critical provisions conferring

the grant of exclusivity and defining the notion of

infringement.

MR EMMERSON: That is correct,-yes, Your Honour, and,

indeed, similar language making it clear that what

is given is a proprietary right as distinct from an

inquiry as to deception is present in some of the

other Australian cases of this Court which I will

come to in just a moment.

MASON CJ: Mr Emmerson, I have an idea - I may be wrong and

I cannot recall - that the prevailing view in this

country has been contrary to the contention that

you are now putting to the Court.

Sterling 12 14/2/92

MR EMMERSON:  We would say, no, Your Honour; that cases in

this Court fully recognize that a trade mark is a right of property so that the question is whether

there has been an infringement of that right of

property as distinct from an inquiry whether a

particular message has been given. For example,

the Court will recall Mark Foys v Davies Coop in

which the trade mark was "Tub Happy" and the use

that was complained of was "Exacto Cotton

Garments - Tub Happy Cotton Fresh Budget Wise" and

it was said by the defendant that this expression

"Tub Happy Cotton Fresh Budget Wise" was no more

than telling you something about the goods and this

Court held that that was not sufficient to escape

infringement because the fact is that the mark had
been used in a relevant sense with reference to the

defendant's own goods, not with respect to the

plaintiff's goods.

Similarly, in James Minifie v Edwin Davey, the

problem had arisen that the mark was applied to

goods for export but again the analysis of the

Court, which I will come to in just a moment, was

an analysis which was an analysis in terms of an

invasion of property rights.

Now, on one view it is the overlooking of the

fact that we are here concerned with an invasion of

property rights that led the Full Court into error

because they treated the case as if it were a

species of trade practices case where one simply

looked at the packaging and inquired, "Is the

public being told that these are goods from

Sterling Pharmaceuticals" and, of course, they can emphasize that, "No, they are not because it has got 'Johnson & Johnson' on it", and so on. But

they did not, in our submission, properly take into

account that once the trade mark is registered,

that establishes property rights and it is the

invasion of these property rights of which we

complain and which we say constitute an

infringement.

If the Court pleases, the notion that a trade

mark owner is able to protect himself against usage

by a rival trader of his trade mark which would

imperil that trade mark is also, in our submission,

assumed by the learned authors of Kerly on Trade

Marks in a passage which we have extracted at tab

17 in the bound volume, being paragraph 11-24. At

11-24, the learned authors are dealing - - -

DAWSON J: This is under tab - - -?

MR EMMERSON:	Kerly on Trade Marks, tab 17 at paragraph 11-24, in our submission, is also taking it for
granted that the sort of use to which section 56

Sterling 13 14/2/92

refers, if done by a rival trader, is use which the

trade mark owner is empowered to prevent. Having,

in the preceding paragraph set out the scheme of

section 15 with which, in their Act, corresponds to

our section 56, the authors say this:

Trade marks that are regarded by the

general public as merely the name of the

article may have great commercial value. The

effect of these subsections is to confirm in

general the legitimacy of such marks -

that is to say, marks which are regarded by the

general public as merely the name of an article -

provided that they are registered before such

a state of affairs comes into existence and

provided that the proprietor ensures that the

trade do not adopt a similar practice.

Now, it is implicit in that that the learned authors are taking it for granted that a trade mark

owner can prevent rival traders from using a

registered trade mark as merely the name of the

article.

MASON CJ: But Kerly, of course, is reflecting the

provisions of the English statute, is it not?

MR EMMERSON: That is correct, Your Honour.

MASON CJ: Ours is significantly different, is it not?

MR EMMERSON:  Not as regards their equivalent to section 56.

There is a difference in the test for infringement

which - - -

MASON CJ: Yes, that is what I had in mind.

MR EMMERSON:  - - - appears in section 4 in that the effect

of the Yeast-Vite case was reversed by statute in

England and so there is that difference. But that,

in our submission, has nothing to do with what

Kerly is here talking about. You see, the effect

of the Yeast-Vite case was that comparative

advertising, that is to say, using a trade mark to

identify a rival's goods, but meaning the rival's

goods, was something which could be done as a

result of Yeast-Vite, then the very complex
provisions of section 4, I think it is subsection

(3), in the UK Act were introduced and the effect

of that was to make comparative advertising fall

within the prohibition.

But Kerly, in the paragraph in question, is

not here dealing with comparative advertising which

consists of taking the name of one's rival's goods,

Sterling 14

as it were, the General Motors, referring to

"Fords" and saying that their cars are better,

which is the Yeast-Vite type of problem, but it,

that is to say Kerly, is dealing with the use by

traders or somebody else's trade mark just as the

general name of goods.

DAWSON J: But it is a different situation. That is where a

trade mark has become descriptive of goods rather
than a trade mark which contains a term which is

descriptive in its very nature from the beginning.

MR EMMERSON:  As to being descriptive by its very nature

from the beginning, Your Honour, the position, we

would say, is that if a trade mark is registered

then unless the registration is successfully

challenged, it is presumed to be valid in all

respects and that is provided for by section 59 of

the Act. Therefore, by reason of registration, the

trade mark is presumed to be distinctive and

that - - -

DAWSON J: Well, it may be but its distinctiveness may not

be derived from the particular word in question.

MR EMMERSON:  It may not be derived from the word in

question, but it is presumed to be adapted to

distinguish the goods.

DAWSON J: But you cannot presume a descriptive word not to

be descriptive, or the Act does not - - -

MR EMMERSON: Perhaps, Your Honour, the difficulty we have

is partly a linguistic one, in fact. It is not

necessary for my case nor is it part of my case to

say that no trade mark can have any descriptive element to it. There are many well-known trade

marks which are applied by traders to a limited

class of goods and so acquire a descriptiveness.

"Thermos" is a good example. It happens to be a

registered trade mark but equally, when someone

refers to "a Thermos", even if they are using the

term with some care, they mean two things: they

mean a vacuum flask, and in that sense the word is

descriptive, and they mean a vacuum flash with a

particular source, and that is where the

distinctiveness comes in.

DAWSON J: That is a mark which has become descriptive.

MR EMMERSON: That is a mark which has become descriptive.

DAWSON J: But if you use language which is, of its nature,

descriptive in a trade mark which is distinctive of

the whole trade mark, why should you be able to

prevent the use of the descriptive term by others?

Sterling	15
MR EMMERSON:	The answer is because it is registered as a

trade mark.

DAWSON J: Well, that is not the aim of the Act.

MASON CJ: But it may depend on the circumstances of the

case, may it not, Mr Emmerson?

MR EMMERSON:	Yes.
MASON CJ:	I can understand that in some situations you

might well come to the conclusion the use of the

word which is the subject of the registration is

use as a trade mark. But if the word has such a ready popular connotation as a descriptive word, the circumstances may be such that even though its
use is in association with the defendant's goods,

you can tell from the context that it is being used

in a descriptive sense.

MR EMMERSON:  The question is not whether it is being used

at least in part in a descriptive sense, however,
because trade marks of the sort that Your Honour is

putting to me are always going to have descriptive

as well as distinctive connotations. But it is

perfectly consistent with trade mark law and,

indeed, happens quite often that one gets a word

which means an article of a particular kind and is,

in that sense, descriptive, but it also means an

article which comes from a particular source.

Now, a point that we wish to argue in the

proposed appeal is to say that the Trade Marks Act

itself draws the line as to where this happens and

that once the trade mark is registered then a

person who dislikes that fact has the option,

according to the code specified by the Act, to

challenge the mark and seek to show it is invalid.

But if he cannot or does not show it is invalid

then it is, we would argue, according to the terms

of the Act, registered, the validity is presumed

according to the Act, and as this Court held in the

Eclipse Sleep Products case, it is presumed to be

distinctive and one simply cannot as, in

particular, Mr Justice Lockhart in the Full Court

below did, ignore that fact of registration and, as

it were, start from scratch and say, "Is this

package telling me that this is a product which

comes from Sterling?"

We would wish to argue that on a true

construction of the Act that makes nonsense of a

registration system in which the scheme is such

that rights are conferred by registration rather

than by other matters such as reputation and where,

if a rival trader wants to determine what he may or

may not do, then he goes to the register and he

Sterling 16

sees what rights are given and those are property

rights.

With respect, the points Your Honour

Justice Dawson was putting to me arise, if at all,

in considering the validity of the mark but under
the scheme of the Act, once the mark is validly

registered, then it is not open to a court to say,

as it were, "We do not like this mark. We won't

enforce it." The property right is there and the

property right should be enforced.

MASON CJ: Well, I think we are seized of the scope of the

argument you want to put, Mr Emmerson.

MR EMMERSON:  If Your Honour pleases. I am conscious,

Your Honour, that there are many more things that

can be said but perhaps I have sufficiently

outlined the way - - -

MASON CJ: Yes.

MR EMMERSON:  We say that these are absolutely fundamental

matters and that we would ask the Court to grant
leave so that these matters can be explored and the

matter can be authoritatively settled.

MASON CJ: Yes. The Court will take a short adjournment in

order to consider the course it will take in this

matter.

AT 3.45 PM SHORT ADJOURNMENT

UPON RESUMING AT 3.47 PM:

MASON CJ: The Court need not trouble you, Mr Ellicott.

The Court is not persuaded that in the

particular circumstances of this case the decision of the Full Court of the Federal Court is attended with sufficient doubt to justify the grant of

special leave to appeal.	The application is
therefore refused.

MR ELLICOTT:  I seek an order for costs, Your Honour.

MASON CJ:	Yes.	You do not oppose costs, Mr Emmerson?
Sterling	17	14/2/92

MR EMMERSON:  No, I cannot.

MASON CJ:  No. The application is refused with costs.

AT 3.48 PM THE MATTER WAS ADJOURNED SINE DIE

Sterling 18 14/2/92