Tivo Inc v Vivo International Corporation Pty Ltd
[2012] FCA 252
•19 March 2012
FEDERAL COURT OF AUSTRALIA
Tivo Inc v Vivo International Corporation Pty Ltd [2012] FCA 252
Citation: Tivo Inc v Vivo International Corporation Pty Ltd [2012] FCA 252 Parties: TIVO INC. and TIVO BRANDS, LLC. v VIVO INTERNATIONAL CORPORATION PTY LTD (ACN 087 480 171) and FABIO GRASSIA; VIVO INTERNATIONAL CORPORATION PTY LTD (ACN 087 480 171); TIVO BRANDS, LLC. File number: VID 25 of 2011 Judge: DODDS-STREETON J Date of judgment: 19 March 2012 Catchwords: TRADE MARKS – Whether respondents’ mark deceptively similar to applicants’ mark – Whether honest concurrent use – Whether use of respondents’ mark likely to deceive or cause confusion, because applicants’ mark had acquired reputation in Australia or due to convergence of goods sold under each mark – Whether discretionary factors justify maintenance of registration of respondents’ mark – Whether infringement of applicants’ trade mark – Whether second respondent liable as joint tortfeasor – Whether applicants’ or respondents’ mark should be removed from the Register due to non-use in respect of particular goods or services Legislation: Evidence Act 1995 (Cth) ss 79, 140(2), 190(3)
Trade Marks Act 1995 (Cth) ss 10, 14, 44(1), 44(2), 44(3)(a), 44(3)(b), 60, 72, 88(2)(a), 88(2)(c), 89, 92(3), 92(4), 101(3), 120, 122(1)(e)
Trade Marks Regulations 1995 (Cth) reg 8.2Cases cited: American Power Conversion v Tecom Resources Pty Ltd [2004] ATMO 58 cited
Anakin Pty Ltd v Chatswood BBQ King Pty Ltd (2008) 250 ALR 620 cited
Anheuser-Busch Inc v Budejovicky Budvar, Narodni Podnik & Ors (2002) 56 IPR 182 cited
Aristoc Ltd v Rysta Ltd [1945] AC 68 discussed
Austin, Nichols and Co Inc v Lodestar Anstalt [2012] FCAFC 8 discussed
Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641 cited
Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353 cited
CA Henschke & Co v Rosemount Estates Pty Ltd (1999) 47 IPR 63 cited
Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 cited
Caterpillar Loader Hire (Holdings) Pty Ltd v Caterpillar Tractor Co (1983) 48 ALR 511 cited
CEPU v ACCC (2007) 162 FCR 466 cited
Chocolaterie Guylian NV v Registrar of Trade Marks (2009) 180 FCR 60 cited
Clinique Laboratories Inc v Luxury Skincare Brands Pty Ltd (2003) 61 IPR 130 cited
Coca-Cola Company v All-Fect Distributors Ltd (1999) 96 FCR 107 cited
Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 cited
Conde Nast Publications Pty Ltd v Taylor (1998) 41 IPR 505 cited
Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd (1952) 86 CLR 536 cited
Crazy Ron's Communications Pty Limited v Mobileworld Communications Pty Limited (2004) 209 ALR 1 cited
Dasreef Pty Ltd v Hawchar (2011) 277 ALR 611 cited
E&J Gallo Winery v Lion Nathan Australia Pty Ltd (2008) 77 IPR 69 discussed
E & J Gallo Winery v Lion Nathan (2009) 175 FCR 386 cited
Edwards v Liquid Engineering 2003 Pty Ltd (2008) 77 IPR 115 cited
EOS Australia Pty Ltd v Expo Tomei Pty Ltd (1998) 42 IPR 277 cited
Frigiking Trade Mark [1973] RPC 739 cited
Hansen Beverage Co v Bickfords (Australia) Pty Ltd (2008) 75 IPR 505 distinguished
Hansen Beverage Company v Bickfords (Australia) Pty Ltd (2008) 171 FCR 579 discussed
Haw Par Corporation Limited v The Thai Enterprises Limited (2004) 63 IPR 666 cited
Health World Ltd v Shin‑Sun Australia Pty Ltd (2008) 75 IPR 478 cited
Hills Industries Limited v Bitek Pty Ltd (2011) 90 IPR 337 distinguished
Jaferjee v Scarlett (1937) 57 CLR 115 cited
Johnson & Johnson v Kalnin (1993) 26 IPR 435 cited
Jones v Dunkel (1959) 101 CLR 298 applied
Keller v LED Technologies Pty Ltd (2010) 185 FCR 449 discussed
Kimberly-Clark Worldwide, Inc v Goulimis cited
Le Cordon Bleu BV v Cordon Bleu International Ltee (2000) 50 IPR 1 cited
Magnavox (Aust) Pty Ltd’s Trade Mark (1964) 34 AOJP 2075 cited
McCormick & Co Inc v McCormick (2000) 51 IPR 102 discussed
McHattan v Australian Specialised Vehicle Systems Pty Ltd (1996) 34 IPR 537 cited
Melhero Pty Ltd & Anor v Club X and Others (1997) 37 IPR 151 cited
Men’s Gallery Pty Ltd v Platinum 253 Pty Ltd (2008) 78 IPR 71 cited
NEC Corporation v Punch Video (S) Pte Ltd (2005) 67 IPR 17 cited
Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd (1997) 38 IPR 495 cited
PB Foods v Malanda Dairy Foods Ltd (1999) 47 IPR 47 cited
Pfizer Products Inc v Karam (2006) 237 ALR 787 distinguished
Pioneer Computers Australia Pty Ltd v Pioneer KK (2009) 176 FCR 300 discussed
Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1979] RPC 410 cited
Podravka Prehrambena Industrija DD v Przedsiebiorstwo Produkcyjno Handlowe “Prymat” Ryszard Lechowski (2004) 64 IPR 414 cited
Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227 cited
Prefel SA v Merchant Corporation Pty Ltd (2001) 52 IPR 227 cited
Protiviti Inc v Probiti Pty Ltd [2005] FCA 1114 cited
Re Alex Pirie & Sons Ltd’s Application (1933) 50 RPC 147 cited
Re Carl Zeiss Pty Ltd’s Application (1969) 122 CLR 1 cited
Re John Fitton & Co Ltd’s Application (1949) 66 RPC 110 cited
Re Pianotist CoLtd’s Application (1906) 23 RPC 774 cited
Re Rysta Ltd’s Application [1943] 1 All ER 400 cited
Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 discussed
Renaud Cointreau v Cordon Bleu International Ltd (2001) 193 ALR 657 cited
Shell Company of Australia Ltd v Rohm and Haas Co (1949) 78 CLR 601 cited
Shell Co of Australia v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407 cited
South Cone Inc v Reg Barton Spencer [2007] ATMO 43 cited
Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 cited
Sporte Leisure Pty Ltd v Paul’s International Pty Ltd (2010) 88 IPR 242 cited
Starr Partners Pty Ltd v Dev Prem Pty Ltd (2007) 71 IPR 459 cited
Toddler Kindy Gymbaroo Pty Ltd v Gymboree Pty Ltd (2000) 100 FCR 166 cited
Unichema Chemicals Ltd v Tiozide Co Inc (1993) 26 IPR 624 cited
Unilever Australia Ltd v Karounos (2001) 113 FCR 322 cited
VB Distributors v Matsushita Electrical Industrial Co Ltd (1999) 53 IPR 466 distinguished
Vitasoy International Holdings Ltd v Green Spot Company Limited [2008] ATMO 45 cited
Wingate Marketing Pty Ltd and Another v Levi Strauss & Co and Another (1994) 28 IPR 193 citedDate of hearing: 5 September to 9 September 2011 Date of last submissions: 9 September 2011 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 538 Counsel for the Applicants: Mr D Shavin QC with Mr E Heerey Solicitor for the Applicants: Davies Collison Cave Law Counsel for the Respondents: Mr M Wyles SC with Mr S Rebikoff Solicitor for the Respondents: Polczynski Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 25 of 2011
BETWEEN: TIVO INC.
First ApplicantTIVO BRANDS, LLC.
Second ApplicantVIVO INTERNATIONAL CORPORATION PTY LTD (ACN 087 480 171)
Cross-ClaimantAND: VIVO INTERNATIONAL CORPORATION PTY LTD (ACN 087 480 171)
First RespondentFABIO GRASSIA
Second RespondentTIVO BRANDS, LLC.
Cross-Respondent
JUDGE:
DODDS-STREETON J
DATE:
19 MARCH 2012
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
INTRODUCTION
The principal issue for determination in this proceeding is whether the respondents’ registered trade mark “VIVO” should be removed from the Register because it was, as at the priority date, deceptively similar to the applicants’ registered trade mark “TIVO” and, or alternatively, was likely to deceive or cause confusion by reason of the latter’s reputation in Australia.
The second applicant, TiVo Brands LLC, a company incorporated in Delaware on 22 March 2005, and ultimately owned and controlled by the first applicant, TiVo Inc, a publicly listed company which was incorporated in Delaware on 4 August 1997, is the registered owner of all the trade marks of the TiVo group of companies, including the Australian Registered Trade Mark No 813297 for the word “TIVO” (“the TiVo trade mark”). An application to register the TiVo trade mark in Australia was lodged on 10 November 1999. The TiVo trade mark was registered on 18 July 2000 for a period of ten years commencing from 10 November 1999 in respect of goods and services as follows:
(a)class 9: computer hardware and software including computer hardware, software and peripherals for personalised, interactive television programming; televisions; television peripheral remote controls; communication devices, including, transmitters, receivers and controls, and software for use therewith, and accompanying manuals sold as a unit;
(b)class 35: the promotion and sale of goods and services for others;
(c)class 38: subscription television services; transmission of cable television and interactive audio and video services; personalised and interactive television transmission services; and
(d)class 41: entertainment services, namely, personalised and interactive entertainment services; online guide to personalised and interactive television programming.
Unless the context otherwise indicates, I shall refer to the first applicant and second applicant collectively as “TiVo”.
On 18 February 2008, the second respondent, Fabio Grassia, on behalf of the first respondent, Vivo International Corporation Pty Ltd, a company he controlled (which was then known as Natcomp International Corporation Pty Ltd (“Natcomp”)), lodged an application to register the following device mark:
(“the Vivo trade mark”)The application was accepted and the Vivo trade mark was registered on 24 April 2009 as Australian Registered Trade Mark No 1223930 in respect of goods and services in the following classes:
(a)class 9: apparatus for use in audio visual communication; and
(b)class 38: transmission of data by audio-visual apparatus.
Unless the context otherwise indicates, I shall refer to the first respondent and the second respondent collectively as “Vivo”.
ISSUES FOR DETERMINATION
The proceeding raises the following issues for determination:
(1)Should the Vivo trade mark be removed from the Register or its registration cancelled under s 88(2)(a) of the Trade Marks Act 1995 (Cth) (“the Act”), because its registration could have been successfully opposed under s 44(1) and (2) of the Act as being deceptively similar to the TiVo trade mark, and neither honest concurrent use under s 44(3)(a) nor other circumstances under s 44(3)(b) could be established?
(2)Further or alternatively, should the Vivo trade mark be removed from the Register or its registration cancelled under s 88(2)(a) of the Act, because its registration could have been successfully opposed under s 60, as the TiVo trade mark had acquired, before the priority date of the Vivo trade mark, a reputation in Australia, which was such that use of the Vivo trade mark would be likely to deceive or cause confusion?
(3)Further or alternatively, should the Vivo trade mark be removed from the Register or its registration cancelled under s 88(2)(c) of the Act, because the circumstances applying as at 14 January 2011 (the date of TiVo’s application for rectification) were such that the use of the Vivo trade mark was likely to deceive or cause confusion, due to the circumstances as at 18 February 2008, and additionally, the increasing convergence between the goods sold under the Vivo and TiVo trade marks which had occurred since that time?
(4)If the Vivo trade mark should otherwise be removed from the Register pursuant to s 88(2)(a) or (c), or both, are there discretionary factors which justify the maintenance of its registration?
(5)Are there grounds for removal of the TiVo trade mark from the Register under s 92(3) of the Act in respect of televisions in class 9, because there has been no good faith use in relation to televisions within the specified three year period; and, if so, should the court exercise its statutory discretion under s 101(3) of the Act in favour of maintaining the registration?
(6)Further or alternatively, should the Vivo trade mark be removed from the Register pursuant to s 92(4)(b) of the Act in respect of all services in class 38, on the ground that on 18 February 2008, Vivo had no intention to use the Vivo trade mark in Australia in relation to those services, and had not in fact made good faith use of the Vivo trade mark in relation to those services prior to the commencement of the proceeding? If so, should the court exercise its discretion under s 101(3) of the Act in favour of maintaining the registration?
(7)Has Vivo infringed the TiVo trade mark by its sales of televisions, set top boxes, remote controls, computer monitors, portable DVD players, digital photo frames and home theatre systems?
(8)If Vivo has infringed, is Mr Grassia liable as a joint tortfeasor for Vivo’s infringement?
WITNESSES AND EVIDENCE
TiVo read and tendered the following affidavits:
(1)Affidavit of Joshua Danovitz, TiVo’s Vice President and General Manager, dated 12 July 2011.
(2)Affidavit of Joshua Danovitz dated 30 July 2011.
(3)Affidavit of Peter Bernard Simons, the Sales Manager – Australia and New Zealand for Hybrid Television Services (ANZ) Pty Ltd (“HTS”), dated 13 July 2011.
(4)Affidavit of Roberta Lynn Minicola, the Chief Executive Officer of HTS, dated 15 July 2011.
(5)Affidavit of Warren Keith Toomey, a technology enthusiast and the co‑founder of OzTiVo, dated 11 July 2011.
(6)Affidavit of Ally Akbarzadeh, solicitor for TiVo, dated 11 July 2011.
(7)Affidavit of Ally Akbarzadeh dated 13 July 2011.
(8)Affidavit of Ally Akbarzadeh dated 1 August 2011.
(9)Affidavit of Ally Akbarzadeh dated 31 August 2011.
(10)Affidavit of Mark Alister Newstead, a technical auditor and consultant to OzTAM, dated 11 July 2011 (subject to the court’s ruling on admissibility, discussed below).
(11)Affidavit of Mark Alister Newstead dated 31 August 2011 (subject to the court’s ruling on admissibility, discussed below).
(12)Affidavit of Paul Dovas, the Chief Executive Officer of the Audit Bureau of Circulations, dated 12 July 2011.
(13)Affidavit of Lori Flekser, the General Manager of the Motion Picture Distributor Association of Australia, dated 19 July 2011.
Of the above, only Mr Danovitz was cross‑examined.
Vivo read and tendered the following affidavits:
(1)Affidavit of Fabio Michael Grassia, the second respondent and the director of Vivo, dated 11 August 2011.
(2)Affidavit of Pablo Maidana, the manager of Dick Smith Electronics Pty Ltd’s Fountain Gate store, dated 12 August 2011.
(3)Affidavit of Gregory Alan Hirsch, the Merchandise Manager of Dick Smith Electronics Pty Ltd, dated 12 August 2011.
(4)Affidavit of Danielle Cavill, solicitor for Vivo, dated 8 July 2011.
(5)Affidavit of Danielle Cavill dated 16 August 2011.
(6)Affidavit of Bryan Anthony Lukas, a Professor of Marketing and Area Head in the Department of Management and Marketing at the University of Melbourne, dated 28 July 2011.
(7)Affidavit of Felicity Margot Cox, a Senior Lecturer and phonetician at Macquarie University, dated 28 July 2011.
Of the above, only Mr Grassia and Mr Maidana were cross‑examined.
TiVo also relied on the following:
(a) outline of opening submissions dated 24 August 2011;
(b) outline of submissions in reply to cross-claim dated 2 September 2011;
(c) outline of closing submissions dated 9 September 2011; and
(d)submissions on admissibility of Mr Newstead’s evidence dated 7 September 2011.
Vivo also relied on the following:
(a)outline of opening submissions dated 31 August 2011;
(b)outline of closing submissions dated 8 September 2011; and
(c)submission on the evidence of Mark Alister Newstead dated 5 September 2011.
FAST TRACK
Although the proceeding was filed in Fast Track, approximately 20 affidavits, voluminous written submissions, approximately 30 court books and volumes of exhibits and five volumes of authorities were filed. Uncertainty initially attended the adequacy of the time allocated for trial, which was the maximum permitted for Fast Track. Whatever its original scope, the proceeding was ultimately beyond that appropriate for Fast Track.
TIVO’S CLAIMS
In this proceeding, by a Fast Track application dated 14 January 2011, TiVo seeks an injunction restraining Vivo from infringing the TiVo trade mark by the use of the word “Vivo” or the Vivo trade mark.
As the Vivo trade mark is registered and, by s 122(1)(e) of the Act, the exercise of rights given by a registered mark is a defence to infringement, the Vivo trade mark’s registration would be a defence should infringement of the TiVo trade mark be otherwise established.
TiVo accordingly seeks that the registration of the Vivo trade mark be cancelled or that the Vivo trade mark be removed from the Register pursuant to s 88(2)(a) of the Act, on the grounds that its registration could have been opposed under s 44 as it was deceptively similar to the TiVo trade mark, and under s 60, as TiVo’s reputation in Australia was such that use of the Vivo trade mark would be likely to deceive or cause confusion. TiVo also seeks that the Vivo trade mark be removed under s 88(2)(c), because, as at the date of TiVo’s application for rectification, the use of the Vivo trade mark was likely to deceive and confuse on the added basis of the convergence of the goods sold under the marks. TiVo also seeks removal of the Vivo trade mark under s 92(3) in respect of services in class 38 on the grounds of non‑use. TiVo contended that honest concurrent use was not established and other discretionary considerations did not apply or justify the exercise of the discretion in Vivo’s favour.
VIVO’S CROSS-CLAIM
Vivo, by a Fast Track cross‑claim dated 9 March 2011, sought that the TiVo trade mark be removed from the Register in respect of televisions on the ground of non‑use.
BACKGROUND FACTS
Set out below is a brief chronological summary of key background facts, many of which are discussed in greater detail in relation to the particular claims.
On 4 August 1997, the first applicant was incorporated (as Teleworld Inc).
On 21 March 1999, TiVo launched a “personal television service” in the United States, including a digital video recorder (“DVR”), remote control and broadcast centre. TiVo’s principal product was its DVR (also known as a personal video recorder (“PVR”)). When introduced, the TiVo DVR had a number of desirable novel features and functions which were unavailable in other such devices. In particular, the TiVo DVR was capable of recording multiple television broadcasts simultaneously, recording television programs selected by reference to favourite genres or key words, and, based on the consumer’s past viewing record, “recommending” television programs and movies.
TiVo also sold remote controls, hard drives, wireless adapters, antennas, cables, wireless modem jacks, modem spitter cables, wireless radio frequency remote control extenders, HDMI switches, USB phone line adaptors and associated software products, together with support services.
On 7 May 1999, the first respondent was incorporated (under its original name, Natcomp). It was controlled by the second respondent, Fabio Grassia, who, with a background in electrical engineering, in 1987 had established an “IT” direct marketing and selling business. In 1992 Natcomp became involved in importing computer products into Australia. Thereafter, it imported computer monitors and accessories.
On 29 May 1998, TiVo applied to register “TIVO” as a trade mark in the United States.
On 21 July 1999, the first applicant changed its name to TiVo Inc.
Between 1998 and 2008, TiVo in the United States, advertised and promoted its DVR and related products and services through brochures and other point-of-sale material, at trade shows, in print and online media, on television, on its website and through press releases. It is not disputed that TiVo achieved substantial sales in the United States.
On 10 November 1999, TiVo filed an application to register “TIVO” as a trade mark in Australia. On 18 July 2000 it was accepted for registration. Prior to late July 2008, however, TiVo did not supply goods or services or use the TiVo trade mark in Australia. Nevertheless, between 1999 and the Australian launch, TiVo and its products and services received exposure in newspaper articles, television programs, magazines, movies, Internet chat rooms and other media in Australia. This is discussed in detail below.
Although TiVo did not supply its media device in Australia prior to July 2008, some Australians who had learnt of the TiVo device acquired one and modified it for use in Australia. In July 2000, Andrew Tridgell, a computer programmer from Canberra, acquired a TiVo DVR. The TiVo DVR sold in the United States would not function in Australia without significant modification, and it also required local electronic program guide (“EPG”) information.
In October 2000, the TiVo DVR was launched in the United Kingdom.
On 23 January 2001, the TiVo trade mark was registered in the United States.
In January 2001 Mr Tridgell delivered a presentation titled “Inside the mind of… TiVo” at a technology conference in Sydney, and presented the same paper in Canberra in June 2001. In July 2001, another Australian, Bryan Burgess, purchased two TiVo DVRs on eBay.
Other Australians also acquired TiVo DVRs at various times prior to its official Australian launch in 2008 (see below).
Between September 2001 and December 2003, Warren Toomey, a technology enthusiast and academic, developed software to create EPG data and a “service emulator”, which enabled Australians to use all of the features of the TiVo DVR in Australia prior to its official launch.
In 2002, Mr Grassia was involved in litigation in which Microsoft alleged the sale of counterfeit Microsoft products by Mr Grassia or his interests, which settled without admission of liability upon the payment of $200,000 in legal costs and submission to an injunction.
On 3 March 2002, TiVo entered into an exclusive vendor agreement with Best Buy Co Inc for the distribution of its DVR and related products and services in the United States.
In July 2002, Mr Toomey created an online “oztivo” mailing list for Australian TiVo enthusiasts and, in June 2003, created an associated online “wiki” at >
In 2004, Mr Grassia terminated his IT business due to concerns over its relatively low profit margins and moved into the luxury boat business for the next 18 months to two years.
On 22 March 2005, the second applicant was incorporated as a wholly owned subsidiary of TiVo.
In May 2006, Mr Grassia terminated his boat business and established a business importing audio visual products, which he initially sold under the names of the relevant manufacturers. Shortly thereafter, he decided to introduce his own brand.
Mr Grassia deposed that in May 2006, he and his wife began to discuss possible Italian-sounding names for the brand.
On or about 29 May 2006, Mr Grassia informed his graphic designer, Mr Khaled, that he had selected the name “Vivo”. Although Mr Khaled expressed concern that the name could already be in use, Mr Grassia confirmed that Vivo was his choice. Mr Grassia deposed that he nevertheless considered the alternative name “Vinci” for much of June 2006, but by the end of June 2006, finally decided on “Vivo”. This is discussed in detail below.
On 28 November 2006, TiVo entered into a distribution arrangement with Cablevision S.A. for the supply and distribution of the TiVo DVR and related products and services in Mexico. (Between 2006 and 2010, TiVo entered a number of distribution arrangements or strategic alliance agreements with other entities for supply and distribution of the TiVo products, including the TiVo DVR, software and services, in various countries, including Canada, Spain, Norway, Denmark, Sweden and Finland).
From around late 2006, in order to locate products to import, Mr Grassia investigated the manufacture of televisions in China and subsequently began to oversee the manufacture of products, including televisions, in factories in China and Taiwan.
In 2007, Vivo (initially known as Natcomp), with only three employees including Mr Grassia, began selling Vivo products.
From around June 2007, Vivo began to import, promote, distribute, sell and offer for sale in Australia, the first electronic home entertainment products under the name “Vivo”, including Vivo-branded televisions and related electronic products. By 30 June 2007, approximately 658 Vivo-branded products had been sold in Australia. The Vivo products were then, and are still, principally manufactured in factories in China under, inter alia, joint ventures between Chinese manufacturers and a related entity of Vivo.
On 19 March 2007, TiVo Inc, prior to the supply of TiVo products in Australia, entered into a “Strategic Alliance Agreement” with Seven Network (Operations) Limited and HTS, inter alia, appointing HTS the exclusive distributor of the TiVo products in Australia and New Zealand and an authorised user of the TiVo trade mark in Australia.
In early May 2007, Mr Grassia engaged a graphic designer, Ms Stathakis, to prepare a logo for the Vivo brand. On 14 May 2007, Mr Grassia settled on a logo with a curved stripe at the top of the word Vivo, which has remained unchanged since that time.
Between 1 July 2007 and 18 February 2008, approximately 3,210 Vivo-branded products were sold in Australia, valued at about $1 million as follows:
PRODUCT UNITS SOLD VALUE Plasma televisions 299 $136,513 LCD televisions 704 $323,313 LCD monitors 1,100 $195,305 Portable DVD players 1,765 $349,755 TOTAL 3,868 $1,004,886
The Vivo products were sold during the relevant period at about 100 Strathfield stores, WOW Sight and Sound stores and in a national network of between 200 and 300 independent retail stores.
In around August 2007, Mr Grassia agreed with the owner of a factory in China to purchase exclusive use of two of the factory’s five production lines to manufacture Vivo televisions.
In October and November 2007, Vivo was advertised in a weekly Chinese language magazine and, in January 2008, in a newsletter sent to Vivo resellers.
On 18 February 2008, Mr Grassia filed an application to register the Vivo trade mark in Australia.
In April, May, June and July 2008, the Vivo brand was advertised in the Appliance Retailer magazine. In April and May 2008, articles about the Vivo brand were published on and >
On 27 July 2008, HTS commenced selling the TiVo DVR in Australia. The launch of the DVR in Australia was advertised by Harvey Norman stores in print media and in-store, and on Channel 7 television. Since the launch, HTS has promoted the TiVo DVR on television, radio, in magazines, online and via email newsletters and has achieved sales, the number of which is contained in a confidential exhibit. While a considerable number of units were sold, TiVo was disappointed with the sales, which were substantially fewer than those of Vivo units.
In August 2008, Dick Smith commenced selling Vivo-branded products.
Dick Smith thereafter promoted the Vivo brand in print and television advertisements, on its website and in its catalogues regularly distributed across Australia, and became its leading retailer. Over seven million Dick Smith catalogues have advertised Vivo products and, as the principal retailer of Vivo products, Dick Smith has sold around 120,000 products valued at over $50 million.
In around August 2008, according to his affidavit, Mr Grassia first became aware of the TiVo brand. This is discussed in detail below.
TiVo’s arrangements for the TiVo DVR in Australia differed somewhat from those applicable in the United States, as Australian users were not required to pay for associated services such as the EPG, but were entitled to them on payment of a total amount at the outset. Unlike other DVRs then available, the TiVo DVR required an Internet connection in order to access the services, including, most importantly, the EPG.
The TiVo DVR was initially sold only through Harvey Norman stores. The channels for TiVo DVRs subsequently expanded and now include Dick Smith (which commenced selling the device in October 2008), JB Hi‑Fi, Myer, Clive Peeters, RT Edwards and Radio Rentals. At the time of the launch of the TiVo DVR in Australia, its retail price was $699.
Apart from the DVR, TiVo offers “peripherals” for sale in Australia, including remote controls, a wireless adaptor and a Western Digital external hard drive.
Between 2008 and 2011, Vivo products have been advertised in catalogues published by its major resellers, Dick Smith television advertisements, print advertising in various newspapers, and in-store, online and outdoor advertising by its resellers.
On 24 April 2009, the Vivo trade mark was entered on the Register of Trade Marks with effect from 18 February 2008.
On 21 May 2009, Mr Grassia changed the first respondent’s name from Natcomp to Vivo International Corporation Pty Ltd.
In May 2009, Dick Smith conducted a television advertising campaign for the TiVo DVR.
In May, June, July, August, September and November 2009, advertisements for the Vivo brand appeared in the Appliance Retailer magazine, and, at around the same time, other media exposed the Vivo brand, such as the Australian Personal Computer magazine and the website >
At the end of 2009, Mr Grassia decided to revise the Vivo product range to focus primarily on televisions and to remove products such as HDMI cables and digital photo frames.
In 2010, Vivo commenced a marketing strategy aimed at consumers, which included a new website and more advertisements in the Appliance Retailer magazine.
In around October 2010, Peter Simons, Sales Manager of HTS for Australia and New Zealand, visited the Menai Central Dick Smith store and introduced himself as “Peter from TiVo”, to which the manager replied in effect, “Oh, you’re from Vivo?”. At around the same time, Mr Simons visited the Dick Smith store at the Macarthur Shopping Centre and again introduced himself as “Peter from TiVo”, to which the sales person replied in effect, “You must be from Vivo”. When corrected, the salesperson replied, in effect, “Aren’t they the same?” or “Isn’t it the same thing?”. (This is discussed in detail below).
On 14 January 2011, TiVo issued the present proceeding against Vivo.
On 19 January 2011, the licensing and distribution arrangement between TiVo, Seven Network and HTS became non-exclusive.
Between March and June 2011, Vivo conducted a television advertising campaign for the Vivo brand in New South Wales, Queensland and Victoria.
In the 2010/2011 financial year, sales of Vivo marked products totalled 120,000 units valued at over $37 million.
The total sales of Vivo products since 2006 comprise about 260,000 units valued at over $87 million. About 90% of the sales were televisions. The balance of Vivo sales related to other products as follows: 4% comprised computer monitors, 3.5% comprised portable DVD players, 1.18% comprised digital photo frames, 0.9% comprised digital set top boxes, 0.75% comprised home theatre systems and 0.18% comprised remote controls.
Vivo products are advertised nationally on television, print, online and in store by retailers including Dick Smith, WOW Sight and Sound, Strathfield, Bi-Rite Electrical and about 200 independent retailers.
On 31 July 2011, TiVo commenced selling televisions in the United States.
WHETHER THE VIVO TRADE MARK SHOULD BE REMOVED OR ITS REGISTRATION CANCELLED UNDER S 88(2)(A) OF THE ACT ON GROUNDS ON WHICH REGISTRATION COULD HAVE BEEN OPPOSED
Section 88 of the Act relevantly provides:
Amendment or cancellation—other specified grounds
(1)Subject to subsection (2) and section 89, a prescribed court may, on the application of an aggrieved person or the Registrar, order that the Register be rectified by:
(a)cancelling the registration of a trade mark; or
(b)removing or amending an entry wrongly made or remaining on the Register; or
(c)entering any condition or limitation affecting the registration of a trade mark that ought to be entered.
(2)An application may be made on any of the following grounds, and on no other grounds:
(a)any of the grounds on which the registration of the trade mark could have been opposed under this Act;
(b)an amendment of the application for the registration of the trade mark was obtained as a result of fraud, false suggestion or misrepresentation;
(c)because of the circumstances applying at the time when the application for rectification is filed, the use of the trade mark is likely to deceive or cause confusion;
(e)if the application is in respect of an entry in the Register—the entry was made, or has been previously amended, as a result of fraud, false suggestion or misrepresentation.
The grounds of cancellation under s 88(2)(a) of the Act incorporate the grounds under which the registration could have been opposed under ss 44 or 60 of the Act, which TiVo alleged were made out.
It was common ground that, until the conflicting lines of authority on the standard of proof for applications under ss 44 and 60 of the Act were resolved by a Full Court, they should be determined on the conventional balance of probabilities in accordance with the approach of Gyles J in Clinique Laboratories Inc v Luxury Skincare Brands Pty Ltd (2003) 61 IPR 130 and Pfizer Products Inc v Karam (2006) 237 ALR 787 (“Pfizer Products”) and Sundberg J in Chocolaterie Guylian NV v Registrar of Trade Marks (2009) 180 FCR 60 (“Guylian”).
Opposition under s 44 of the Act
Whether Vivo trade mark substantially identical with or deceptively similar to TiVo trade mark
Section 44 of the Act relevantly provides:
Identical etc. trade marks
(1)Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of goods (applicant’s goods) must be rejected if:
(a)the applicant’s trade mark is substantially identical with, or deceptively similar to:
(i)a trade mark registered by another person in respect of similar goods or closely related services; or
(ii)a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and
(b)the priority date for the registration of the applicant’s trade mark in respect of the applicant’s goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.
(2)Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of services (applicant’s services) must be rejected if:
(a)it is substantially identical with, or deceptively similar to:
(i)a trade mark registered by another person in respect of similar services or closely related goods; or
(ii)a trade mark whose registration in respect of similar services or closely related goods is being sought by another person; and
(b)the priority date for the registration of the applicant’s trade mark in respect of the applicant’s services is not earlier than the priority date for the registration of the other trade mark in respect of the similar services or closely related goods.
(3) If the Registrar in either case is satisfied:
(a)that there has been honest concurrent use of the 2 trade marks; or
(b)that, because of other circumstances, it is proper to do so;
the Registrar may accept the application for the registration of the applicant’s trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant’s trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area.
(4)If the Registrar in either case is satisfied that the applicant, or the applicant and the predecessor in title of the applicant, have continuously used the applicant’s trade mark for a period:
(a)beginning before the priority date for the registration of the other trade mark in respect of:
(i)the similar goods or closely related services; or
(ii)the similar services or closely related goods; and
(b)ending on the priority date for the registration of the applicant’s trade mark;
the Registrar may not reject the application because of the existence of the other trade mark.
Section 10 of the Act defines “deceptively similar” as follows:
For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.
TiVo did not allege that the Vivo trade mark was substantially identical to the TiVo trade mark, but submitted that the requirements of ss 44(1) and (2) of the Act were satisfied, because it was deceptively similar to the TiVo trade mark registered in respect of similar goods or closely related services, or similar services or closely related goods, and the priority date of the Vivo trade mark was not earlier than the priority date for the registration of the TiVo trade mark.
TiVo further contended that Vivo had not established honest concurrent use of the TiVo and Vivo trade marks within the meaning of s 44(3)(a) of the Act, “other circumstances” within the meaning of s 44(3)(b), which would permit the Registrar to accept the registration of the Vivo trade mark notwithstanding the deceptive similarity, or other discretionary factors which would deny TiVo relief.
By the combined effect of the definitions of “priority date”, “filing date”, “date of registration” and s 72 of the Act, the priority date of the Vivo trade mark is the date on which the Vivo application was filed, that is, 18 February 2008, which is not earlier than the priority date for the registration of the TiVo trade mark.
In order to determine under s 44 whether a trade mark is deceptively similar to another trade mark which is already registered, it is necessary first to assess and consider the marks, and secondly, to determine whether the registration is in respect of similar goods or closely related services or similar services or closely related goods.
TiVo submitted that the Vivo trade mark’s incorporation of the essential and distinguishing “-IVO” component of the TiVo mark, which was both visually and aurally identical, was, in the context of fair and normal use permitted by Vivo’s registration, likely to deceive or confuse. It submitted, in reliance on Frigiking Trade Mark [1973] RPC 739 (“Frigiking”), that the inherent distinctiveness of the part common to both marks was most significant, and in the present case, the relevant part “-IVO” lacked any inherent distinctiveness.
TiVo contended that Dr Cox’s comparative analysis of the marks (discussed below at [136] to [138]) was a striking example of the meticulous, letter by letter and syllable by syllable comparison which the authorities held to be inappropriate.
TiVo, while conceding that each case turned on all the circumstances, relied, inter alia, on the following instances in which marks were held to be deceptively similar:
(a)STARR PARTNERS and STAR REALTY (Full Federal Court), Starr Partners Pty Ltd v Dev Prem Pty Ltd (2007) 71 IPR 459 per Lindgren, Emmett and Finkelstein JJ;
(b)BAREFOOT and BAREFOOT RADLER (Full Federal Court), E & J Gallo Winery v Lion Nathan (2009) 175 FCR 386 at [75];
(c)BAND-AID and BAND>>IT, Johnson & Johnson v Kalnin (1993) 26 IPR 435 (“Johnson & Johnson”) at 439 (Gummow J);
(d)LIQUID ENGINEERING and LIQUIDENG FARM SUPPLIES, Edwards v Liquid Engineering 2003 Pty Ltd (2008) 77 IPR 115 (Gordon J); finding of deceptive similarity not challenged on appeal: (2009) 175 FCR 26 (Tamberlin, Sundberg and Besanko JJ);
(e)HUGGIES and HUGGIE MUMMY, Kimberly-Clark Worldwide, Inc v Goulimis (2008) 78 IPR 612 (Jagot J); and
(f)BBQ KING and CHATSWOOD BBQ KING, Anakin Pty Ltd v Chatswood BBQ King Pty Ltd (2008) 250 ALR 620 (Branson J).
TiVo also submitted that Mr Simons’ evidence of actual confusion amongst sales assistants or managers at Dick Smith stores (discussed in further detail below) strongly supported its case, as the evidence indicated that approximately 80% of television purchasers and most audio visual product purchasers are influenced by sales persons in their choice of product.
Vivo disputed that there was any real tangible danger that a number of persons would have been caused to wonder whether products sold under the two marks came from the same source. It submitted that the differences in appearance, sound and meaning of the TiVo and Vivo trade marks, together with the surrounding circumstances, excluded the likelihood of confusion.
Vivo submitted that the trade marks differed in appearance, as the words “TiVo” and “Vivo” commence with a different letter and the two letters “v” used in Vivo created a different impression, accelerated by the curved shape of the device and the coloured dot on the letter “i” in Vivo, whereas the TiVo word mark was visually dominated by the letter “T”, which stood apart from the other letters.
Vivo also submitted that the words “Vivo” and “TiVo” were aurally very different, as their respective commencing “V” and “T” represented contrasting consonant speech sounds in English and differed on the three fundamental articulatory features distinctive of sound. Vivo submitted, in that context, that the first syllable of a trade mark was usually the most important feature for distinguishing sound, as there was a tendency in English to slur the termination of words, and accordingly, in a number of cases, marks with similar structures (such as “Tiolube” and “Priolube”, and “Strada” and “Prada” – see paragraphs [124] to [131]) had been distinguished on the basis of the first syllable.
Vivo submitted that while TiVo had no meaning, Vivo was, in contrast, a real word, capable of conveying an idea, which reduced the likelihood of confusion.
Vivo submitted that the circumstances of purchase also militated against confusion, as the relevant products were “high involvement” and likely to be bought by less hurried, more discerning customers. The evidence of confusion given by Mr Simons was in store managers or assistants, rather than customers, and might have been due to mishearing. Further, actual confusion was not dispositive and Mr Simons’ evidence, as a “one off” example, should be accorded little weight. In contrast, both Mr Maidana and Mr Grassia had experienced no confusion, although both Vivo televisions and TiVo DVRs had been offered for sale in Dick Smith stores since October 2008.
Principles governing deceptive similarity
The principles governing the determination of whether a trade mark is substantially identical with or deceptively similar to a trade mark registered by another person under s 44 of the Act were not in dispute. Subject to a minor exception, discussed below, it was not disputed that the rights of the parties under ss 44 and 60 of the Act were to be determined as at the date of Vivo’s trade mark application, that is, 18 February 2008. (Section 60 expressly refers to the priority date, and a like approach has been applied in the context of ss 44, 44(3)(a) and 44(3)(b) of the Act).
In Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 (“Woolworths”), French J (with whom Tamberlin J agreed) noted that despite the legislative change which removed the onus to establish registrability formerly imposed on the applicant, the essentials of deceptive similarity had remained constant, and earlier case law, such as Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641 (“Australian Woollen Mills”), remained an authoritative guide to the construction of ss 10 and 44 of the Act.
French J stated at [49]:
The judgment of the likelihood of deception or confusion is a very practical one and what has long been accepted as the proper approach to making that judgment was set out in Australian Woollen Mills Ltd. It requires assessment of the effect of the challenged mark upon the minds of potential customers. Impression or recollection taken away from the point at which the challenged mark is observed will be the basis of any belief about a connection between the new and the old marks. The effect of spoken description must be considered. What confusion or deception may be expected is to be based upon the behaviour of ordinary people. As potential buyers of goods they are not to be credited with high perception or habitual caution. Exceptional carelessness or stupidity may be disregarded. The question ultimately is not susceptible of much discussion (at 659):
“It depends on a combination of visual impression and judicial estimation of the effect likely to be produced in the course of the ordinary conduct of affairs.”
French J also restated the classical propositions enunciated in relation to the 1905 Act by Kitto J in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 (“Southern Cross”) at 594–5, to accord with the 1995 Act (which extended to service marks and removed the onus upon the applicant), as follows (at [50]):
(i)To show that a trade mark is deceptively similar to another it is necessary to show a real tangible danger of deception or confusion occurring. A mere possibility is not sufficient.
(ii)A trade mark is likely to cause confusion if the result of its use will be that a number of persons are caused to wonder whether it might not be the case that the two products or closely related products and services come from the same source. It is enough if the ordinary person entertains a reasonable doubt.
It may be interpolated that this is another way of expressing the proposition that the trade mark is likely to cause confusion if there is a real likelihood that some people will wonder or be left in doubt about whether the two sets of products or the products and services in question come from the same source.
(iii)In considering whether there is a likelihood of deception or confusion all surrounding circumstances have to be taken into consideration. These include the circumstances in which the marks will be used, the circumstances in which the goods or services will be bought and sold and the character of the probable acquirers of the goods and services.
(iv)The rights of the parties are to be determined as at the date of the application.
(v)The question of deceptive similarity must be considered in respect of all goods or services coming within the specification in the application and in respect of which registration is desired, not only in respect of those goods or services on which it is proposed to immediately use the mark. The question is not limited to whether a particular use will give rise to deception or confusion. It must be based upon what the applicant can do if registration is obtained.
In contrast to the side-by-side comparison used to determine whether marks are substantially identical, the “familiar comparison of trade mark law” in the context of deceptive similarity is, as Windeyer J stated in Shell Co of Australia v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407 at 415:
the impression based on recollection of the plaintiff's mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impression that such persons would get from the defendant’s [use of its marks].
In Woolworths at [43], French J referred to Kitto J’s statement in Southern Cross at 594 to 595 that in determining whether a mark is “likely to deceive or cause confusion”:
The use of the word "likely" in this context does not import a requirement that it be more probable than not that the mark has that effect. The probability of deception or confusion must be finite and non-trivial. There must be a "real tangible danger of its occurring".
In Crazy Ron's Communications Pty Limited v Mobileworld Communications Pty Limited (2004) 209 ALR 1 (“Crazy Ron’s”) at [77], the Full Federal Court reiterated the House of Lords’ unanimous approval in Aristoc Ltd v Rysta Ltd [1945] AC 68 (“Aristoc”) at 86 of Luxmoore LJ’s recognition in Re Rysta Ltd’s Application [1943] 1 All ER 400 at 407 that the court must allow for consumers who know only of one of the marks and have an “imperfect recollection” of it when encountering the other trade mark, and that accordingly:
[l]ittle assistance… is to be obtained from a meticulous comparison of words, letter by letter, and syllable by syllable, pronounced with the clarity to be expected from a teacher of elocution. The court must be careful to make allowance for imperfect recollection and the effect of careless pronunciation and speech on the part not only of the person seeking to buy under the trade description, but also of the shop assistant ministering to that person’s wants.
In Re Pianotist CoLtd’s Application (1906) 23 RPC 774 (“Re Pianotist”) (endorsed by the High Court in Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd (1952) 86 CLR 536 at 538), Lord Parker stated at 777:
You must take the two words. You must judge of them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks. If, considering all those circumstances, you come to conclusion that there will be confusion—that is to say, not necessarily that one man will be injured and the other will gain illicit benefit, but that there will be a confusion in the mind of the public which will lead to confusion in the goods—then you may refuse the registration, or rather you must refuse the registration in that case.
It is necessary to compare the trade marks both visually and aurally. The test is not whether customers might think that the marks are the same, but rather whether there is a real risk that the respondents’ use of the Vivo trade mark will cause a significant number of ordinary persons to wonder or to entertain a reasonable doubt (see Crazy Ron’s at [76]; Southern Cross at 595; Woolworths at 382) as to whether the respondents’ products come from the same source as those of the applicants. It is sufficient to “cause confusion” if the minds of the purchasing public are merely “perplexed” or “mixed up” (see Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1979] RPC 410 at 423, as cited by Black CJ in Coca‑Cola Company v All-Fect Distributors Ltd (1999) 96 FCR 107 at [39]).
When assessing the visual impression created by the mark, one must consider “the idea which the mark will naturally suggest to the mind of one who sees it” (Jaferjee v Scarlett (1937) 57 CLR 115 at 121, per Latham CJ (McTiernan J agreeing)). Unlike the court, consumers will be influenced by “a general recollection or impression of the mark which they have seen” (per Latham CJ at 122).
Aural similarities may also be important. In Australian Woollen Mills, the majority stated at 658:
In deciding this question, the marks ought not, of course, to be compared side by side. An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought. The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same. The effect of spoken description must be considered. If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, then similarities both of sound and of meaning may play an important part. The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected. Potential buyers of goods are not to be credited with any high perception or habitual caution. On the other hand, exceptional carelessness or stupidity may be disregarded. The course of business and the way in which the particular class of goods are sold gives, it may be said, the setting, and the habits and observation of men considered in the mass affords the standard. Evidence of actual cases of deception, if forthcoming, is of great weight.
It is well established that trade marks may be deceptively similar for the purposes of ss 44(1) and (2) of the Act even if confusion is unlikely to persist up to the point of, and contribute to, inducing sale.
Although both TiVo and Vivo produce and market, and have registered their respective trade marks in relation to, a variety of products, TiVo has, since July 2008 in Australia, principally marketed a DVR which is priced at the more expensive end of the market, while Vivo has, from mid‑2007 up to and including the present, principally marketed televisions which are priced at the cheaper end of the market.
While Vivo relied on the historical and current differences in the uses of the marks, the question of deceptive similarity must nevertheless be considered as at the priority date and in relation to the legitimate notional scope of the registration, by reference to the use that could properly be made of the Vivo trade mark in the future, rather than Vivo’s past usage of the trade mark.
As Mason J observed in Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353 (“Berlei Hestia”) at 362, where the appellant sold mass produced, inexpensive brassieres while, in contrast, the respondent sold expensive, specialty line brassieres:
[T]he question whether there is a likelihood of confusion is to be answered, not by reference to the manner in which the respondent has used its mark in the past, but by reference to the use to which it can properly put the mark. The issue is whether that use would give rise to a real danger of confusion.
In Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45, the High Court reiterated at [72] that:
The question whether there was a likelihood of confusion was not to be answered by reference to the manner in which the applicant for registration had used its mark in the past. Rather, regard was to be had to the use to which, within the ambit of the registration, the applicant could properly put the mark if the application were to be granted… Thus, if registration were sought in respect of particular goods and there would be a likelihood of deception if the mark were used upon such goods marketed as expensive products, it was no answer that the applicant proposed to use the mark only upon goods to be sold as inexpensively produced items.
In the present case, despite Vivo’s present and historically limited use of the Vivo trade mark, its registration in respect of apparatus for use in audio visual communication and transmission of data by audio visual apparatus entitles Vivo to use the Vivo trade mark not only on low cost televisions and the items it currently supplies, but in relation to goods across the entire broad scope of its registration at any price range or level. Vivo’s registration also entitles it to use the Vivo trade mark in relation to the specified services in class 38.
As discussed below, I consider that Vivo’s audio visual apparatus are goods similar to the goods in respect of which TiVo is registered. Vivo could use its mark in relation to an expensive DVR, just as TiVo could use its mark in relation to an inexpensive television.
Case law - deceptively similar marks
In Aristoc, Viscount Maugham agreed with Luxmoore LJ’s view that the court must make allowance for imperfect recollection, and that (at 86) “[t]he tendency to slur a word beginning with ‘a’ is, generally speaking, very common”, and held that the similarity between “Aristoc” and “Rysta” for stockings was such that taking “the effect of careless and slurred pronunciation, imperfect recollection, and the limitation of the knowledge of the customer and the shop assistant to one only of the marks, that being the one of which the other is ignorant”, the two words were likely to deceive and cause confusion.
Lord Macmillan also stated at 99 that:
the proposed trade mark “Rysta” ought not to be registered because it so nearly resembles, phonetically, the appellants’ trade mark “Aristoc” as to be likely to cause confusion.
Lord Simonds stated (at 104) that a comparison of the two words syllable by syllable would serve to emphasise differences rather than similarities, and the truer test was of a hypothetical sales assistant:
… who has heard of “Rysta” stockings but not of “Aristoc” stockings, being asked by a customer whether she has any “Aristoc” stockings… It is easy, perhaps, to exaggerate the risk of careless pronunciation, but it may at least be said that the standard of ordinary speech is not the precise articulation of the perfect announcer and that the inquiry for one article or the other will not be made in the quiet atmosphere of the studio.
In Shell Company of Australia Ltd v Rohm and Haas Co (1949) 78 CLR 601, Williams J held that the marks “Dithane” and “Ditrene”, if used in respect of the same goods, so nearly resembled one another as to be likely to deceive, as “[t]he prefix of both words is the same and the suffix very similar. To the eye and ear of [a person who only knows the one word and has perhaps imperfect recollection of it] there would be a marked resemblance between the two words in appearance and pronunciation” (at 605).
In Berlei Hestia, in which the High Court held that Berlei and Bali-Bra trade marks were deceptively similar in relation to brassieres, Mason J noted the phonetic similarity of the respective pronunciations “Burley” and “Barley” (at 362).
In Pfizer Products, Gyles J stated that but for the considerable existing reputation of the mark VIAGRA, the mark HERBAGRA would not be deceptively similar, as although both marks had a common suffix with no relevant meaning or connotation, there was evidence that such marks were not uncommon for goods sold in chemist shops, and although some would wonder whether the goods had the same source, others would wonder if they had the same characteristics or a common ingredient (at [51]).
His Honour nevertheless noted (albeit in the context of s 60), that although the marks did not look alike, one could not underestimate “the impact of the aural similarity between the words by virtue of the suffix “-AGRA””, which formed “a clear link between the marks which is not explained in any way as “AGRA” has no relevant meaning. To see invented words such as this is to invite attention to the sound as well as the sight… In any event, the sound is used in discussion about the product for sale, ordering the product for sale, and so on” (at [42]).
In Protiviti Inc v Probiti Pty Ltd [2005] FCA 1114, Heerey J considered the marks “Protiviti” and “Probiti” quite similar, as they commenced with the same syllable “Pro” and (at [22] at [23]):
[i]mportantly they both end with the letter “i” pronounced “ee”. This is an unusual ending for words in the English language. The internal consonants “v” in the one word and “b” in the other can often be confused. It is a matter of common experience that people looking at a word often do not read it carefully. If they have in mind an earlier word they can mistakenly leap to the conclusion that the word they are looking at, if it has some similarity, is the one that they had in mind. This is particularly so when the opening syllables are the same.
This is the more so when both words are invented words and the person reading or hearing them does not have reference to a tangible thing to fasten one meaning in his or her mind compared with another.
In Wingate Marketing Pty Ltd and Another v Levi Strauss & Co and Another (1994) 28 IPR 193, the Full Court held that the mark “Revise” closely resembled “LEVI’S” both visually and aurally, as the evidence suggested that many consumers and persons pronounced “Revise” to rhyme with “LEVI’S” (at 232). Further, “Revise” was chosen as a rather clever play on “LEVI’S”, with the possibility that consumers might associate it with “LEVI’S”.
In NEC Corporation v Punch Video (S) Pte Ltd (2005) 67 IPR 17, Branson J, despite an initial disinclination, concluded that the marks NEC and NECVOX were deceptively similar, because (noting the relevant observations in Woolworths), she rejected the applicant’s account of independently devising the challenged mark.
In Frigiking, Whitford J accepted that where a distinctive mark or a highly distinctive part of a mark was used with an addition or substitution, consumers might think that the new mark indicated the same source of origin as the old mark.
Whitford J thought that the inherent distinctiveness of the part common to both marks was relevant. His Lordship found the word “King” incorporated in the mark “Frigiking” was not a highly distinctive word, and unless it bore a secondary meaning of special distinctiveness, people would not be likely to believe that there was a connection between the marks FRIGIKING and THERMO‑KING.
In Unichema Chemicals Ltd v Tiozide Co Inc (1993) 26 IPR 624 (“Unichema”), the Senior Examiner considered that the mark TIOLUBE, in respect of a lubricant to coat surfaces, was not deceptively similar to PRIOLUBE, in respect of lubricants and chemical products for use in industry.
The Senior Examiner referred to Australian Woollen Mills and Re Pianotist at 777. He noted that any class of customers of the relevant goods would exercise a degree of care, either because they knew the serious consequences of applying the wrong product or from caution in relation to such products (at 628).
Although both words were invented and neither prefix had a readily described meaning as an aide memoire for the consumer, the Senior Examiner found that the prefixes PRIO and TIO looked and sounded quite different. He considered that the care with which the first syllable was pronounced would fix itself in the mind, the differing number of consonants in the prefix would also act as an aide memoire and the similarity of the prefix PRIO to the word PRIOR would further separate the marks (at 628).
In Prefel SA v Merchant Corporation Pty Ltd (2001) 52 IPR 227 (“Prefel”), the Senior Examiner held that the trade mark STRADA in respect of men’s and women’s clothing was not deceptively similar to PRADA, which was registered in a range of classes of overlapping goods.
The Senior Examiner found that the visual impression created by each mark was not deceptively similar. As the word PRADA was in stylised form and the letters ST and P were unlike in appearance, the buying public was unlikely to retain a similar visual impression of each mark (at 236).
The Senior Examiner, in reliance on London Lubricants (1920) Ltd’s Application (1925) 42 RPC 264 at 279, considered that there was a tendency in English to slur the termination of words and to accentuate the beginning of a word in comparison, so that the first syllable of a word was, as a rule, the most important for the purpose of distinction (at 236-237).
The Senior Examiner noted that although the marks had a common suffix “RADA”, the stress was likely to be placed on the initial elements ST and P, which in normal English pronunciation were most unalike aurally, as the former produced a checked sibilatory sound while the latter produced a plosive or breathed sound, which was unlikely to give rise to confusion (at 237).
The Senior Examiner considered that the goods (clothing) were unlikely to be ordered over the telephone or over the counter by the spoken words, and although not limited to high cost items, would be sold in a manner that would afford the purchaser the opportunity for careful inspection and comparison with other similar goods, so that the visual impact of the respective marks was likely to be of considerable importance. Further, while some goods might be ordered by the spoken word, the marks had sufficient aural differences to render confusion unlikely.
In VB Distributors v Matsushita Electrical Industrial Co Ltd (1999) 53 IPR 466 (“VB Distributors”)¸ Hammond J found that the trade mark PALSONIC, with a logo of three stars in relation to televisions, VCRs, audio equipment and other appliances, was not deceptively similar to the trade mark PANASONIC.
His Honour found that the marks were not similar visually and the phonetic differences, even when slurring, were very marked, as the pronunciation of “pal” was a very powerful sound and produced a distinctively different sound (at [60]).
His Honour also took into account that the trade marks were applied to relatively “big ticket” items, in which consumers typically took close interest, and purchased on a “one off” basis (at [62]). Moreover, an incident of alleged apparent confusion was not, on analysis, established (at [69]-[71]).
The evidence –deceptively similar
Vivo relied, in this context, on the evidence of Professor Cox, Mr Maidana and Professor Lukas.
Professor Cox, a phonetician currently employed as a senior lecturer in the Centre for Language Sciences in the Department of Linguistics at Macquarie University, is an authority on the phonetic characteristics of Australian English. Professor Cox deposed that TiVo and Vivo commenced with two contrasting consonant speech sounds, the difference between which was “highly functional in English” and would be “pronounced differently and would be auditorily perceived as different words by ordinary Australians”. “T” and “V” were differently articulated, and their place of articulation and voicing features also differed. Further, the “acoustic percept of each word… would be easily differentiated and produced by listeners and speakers”.
Dr Cox also observed that Vivo, although used relatively infrequently, was a real foreign word, used in English in the context of a Latin scientific phrase, an Italian musical direction and as an acronym in communication technology. In contrast, TiVo was clearly a non‑word. Dr Cox deposed that where one word has a meaning and another does not, it is relevant to the impression they create, and they will be more readily distinguished than two words with apparent meaning.
Dr Cox considered it highly probable that both TiVo and Vivo would be pronounced with the stress on the first syllable, and although there were several possibilities, it was more probable that Vivo would be pronounced “vee” and “voh” and TiVo would be pronounced “tee” and “voh”.
Professor Lukas, Professor of Marketing and Area Head of the marketing discipline in the Department of Management and Marketing at the University of Melbourne, who is a frequently cited Australian marketing academic, deposed that while on some occasions the level of consumer involvement in the purchase of an audio visual product was low (as some consumers simply will not care much about the audio visual product to be purchased), it was usually high, because the product was important to lifestyle, and its purchase (which was not easily reversible) could involve a high level of financial commitment. With high involvement purchases, memory was enhanced, consumers were motivated to visit more than one store, to spend more time on purchases and to make a careful purchase decision.
Professor Lukas considered that in deciding to buy an audio visual product, a consumer would consider the desired features, would rate them in order of importance and would consider a set of alternative audio visual products with each alternative rated according to relevant criteria.
Professor Lukas deposed that purchasers typically engaged in some research for audio visual products by one or more means of conversing with sales assistants or with family or friends about the advantages and disadvantages of “a focal object and viable alternatives” or by visiting more than one store to compare product ranges and prices, by studying sales brochures and by visiting websites.
Professor Lukas considered that customers could obtain product information in the retail environment from the nature of the merchandise on offer (which would affect their ability to compare) and the nature of services offered, as if the sales persons were highly trained, it was more likely that customers would make an informed purchase. Customers could have high information needs in relation to “high involvement” audio visual products, which many customers found complex and neither easy to operate or evaluate. Professor Lukas considered that the sales person’s role in the purchase process of audio visual products was therefore highly important.
Professor Lukas considered a TiVo DVR to be a high involvement audio visual product purchase and that customers seeking to purchase a TiVo product would, in addition to the usual forms of research described above, engage in some or all of the following:
(1) search for relevant product and brand information;
(2) pay attention to the product under consideration;
(3) evaluate alternatives in some detail;
(4) remember the Tivo brand;
(5) remember alterative [sic] product brands;
(6)perceive differences between the Tivo brand and other brands in a product class;
(7)decide to what extent Tivo is their favourite or preferred brand; and
(8)make a careful purchase decision.
Professor Lukas considered that the same factors would apply equally to someone seeking to purchase a Vivo product.
Pablo Maidana, a store manager and sales person at Dick Smith’s Fountain Gate store, had about 10 years experience in selling audio visual products to customers at Dick Smith stores in various locations across Melbourne. In March 2011, Mr Maidana was promoted to store manager at Dick Smith’s Fountain Gate “Powerhouse” store (which is a larger Dick Smith store selling a broader range of consumer products), having previously acted as store manager in other Dick Smith stores. His role included the supervision of staff and ensuring that they complied with staff training, which included instruction about products on sale.
Mr Maidana deposed that although most television purchasers now conducted research on the Internet, shopped around, compared product range and prices and had more product knowledge than previously, the vast majority still consulted and were influenced by sales persons.
Mr Maidana deposed:
Generally speaking, however, once the customer had decided to buy, the purchase of a television is still one that in almost every case involves speaking to a salesperson about the product, in order to find out the features of the product and discuss its advantages and disadvantages over other, comparable products, or see what the best deal on the product is available. Our salespeople will speak to almost all customers who come into the store, to find out what products they are interested in and assist them to purchase the right product for them.
Mr Maidana deposed that customers spoke to a sales person, who, in 80% of cases, had some influence on purchase decisions, while about 20% of customers were not influenced by sales persons.
Mr Maidana deposed that in his experience, customers coming to the store to purchase a television generally sought a particular type or size of television, a particular deal they had seen in the Dick Smith catalogue or (in 20% of the cases) a particular brand.
Mr Maidana deposed that nevertheless, in the majority of cases:
… customers enter the store looking for a new television but without knowing exactly what they want, other than that they want a good quality television at the lowest price. They will come into the store saying something like: “my old TV has broken down” or “I am looking to upgrade my TV”. They will then look to the salesperson to show them what’s available to suit their needs.
Mr Maidana deposed that he trained his staff to enter into dialogue with customers to establish which television would best suit their needs. He generally restricted staff from selling televisions until they had sufficient technical knowledge. Mr Maidana himself usually showed customers the cheapest model first, which was often a Vivo product.
Mr Maidana deposed that a PVR or a DVD recorder was likely to be the second‑most expensive product after a television, and, due to the constantly changing nature of the technology, customers tended to approach the purchase of a PVR or DVD recorder in much the same way as the purchase of a television.
In Mr Maidana’s experience, most customers needed a significant amount of guidance in their purchase of a PVR, “owing to the need to explain the function of the product to the customers and compare the different types of product available on the market”.
Mr Maidana estimated that over 40% of customers who purchased a TiVo PVR came specifically to buy that product, as they had seen it advertised or promoted on television. The remainder simply wished to buy a PVR or DVR and decided that a TiVo was right for them.
Mr Maidana had never experienced any customers expressing confusion between the TiVo and Vivo products. He deposed:
In particular, I have never had customers ask about TiVo when I show them Vivo (or vice versa), or express anything which makes me think they believe Vivo products are produced by or have any sort of association with TiVo.
Based upon my experience in the audio-visual industry, I believe that the chance of customers being confused between the TiVo and Vivo products is very minimal. This is partly because the products sold by TiVo and Vivo are so different, but also because I believe the brand names look and sound sufficiently different that customers are unlikely to draw a connection between them.
TiVo relied on the evidence of Mr Simons, a Sales Manager for Australia and New Zealand of TiVo’s Australian distributor, HTS, of instances of confusion. Mr Simons deposed to a number of conversations he had with management and sales staff of Dick Smith stores in New South Wales during October 2010.
In around October 2010, as part of his regular visits to retailers supplying TiVo products, Mr Simons attended the Menai Central Dick Smith store in Menai, New South Wales. When he introduced himself to the store manager as “Peter from TiVo”, the manager replied, in effect, “Oh, you’re from Vivo?”. Mr Simons believed that the manager assumed that he was a representative of Vivo. Mr Simons gained the impression that the store manager was confused about the connection between TiVo and Vivo, and replied, in effect, “No, I am Peter from TiVo. TiVo make the Tivo PVR”.
At around the same time, Mr Simons also visited the Dick Smith store in the Macarthur Shopping Centre in Campbelltown, New South Wales. He spoke with a member of the sales staff and again introduced himself by stating words to the effect of “Hi, I am Peter from TiVo”. The sales person replied, in effect, “You must be from Vivo”. Mr Simons gained the impression that the sales person either misheard him or thought that there was some connection between TiVo and Vivo. He replied with words to the effect of “No, I am from TiVo”. The sales person replied, in effect, “Aren’t they the same?” or “Isn’t it the same thing?”.
Mr Simons deposed that the instances at the Dick Smith stores in Menai and Campbelltown were typical of other occasions at other retail stores where he had similar conversations with staff of those stores and, from those conversations, he had understood that they had assumed that he was a representative of Vivo, rather than a representative of TiVo. Mr Simons estimated that, in addition to the two occasions mentioned above at Menai and Campbelltown, there were approximately six other such instances around October 2010.
Discussion – deceptively similar
The TiVo and Vivo trade marks are not substantially identical. The words “TiVo” and “Vivo” are neither visually or aurally identical because each word begins with a different letter. While the marks have visual similarity because they consist of words with the same number (four) of letters, three of which are the same, visually the TiVo and Vivo trade marks are differentiated by the initial letters and further, by the depiction of the word “Vivo” with a curved shape and a blue dot above the “i” in the Vivo device mark, whereas TiVo is simply a word mark.
In my opinion, however, the TiVo and Vivo trade marks are deceptively similar.
Save for the different commencing letter, which is pronounced differently in English, according to Dr Cox’s evidence, ordinary Australians would probably pronounce the identical components of each word (the “-IVO” element) in the same way as “ee” and “voh”. Thus, each word consists of two syllables, the second of which is identical, while the first is distinguished in spelling and aurally (in the most probable pronunciation) only by a single initial consonant.
The cases are not entirely consistent in relation to whether, and if so, which parts of words are more likely to be slurred, emphasised or misheard, and much appears to depend on the particular circumstances of, and the evidence led in, individual cases.
In Aristoc, Viscount Maughan considered that a first letter (if an “a”) was more likely to be slurred. In Unichema, the Senior Examiner considered that the first syllable would be pronounced with more care and would be more likely to be fixed in the mind. In Prefel, the Senior Examiner considered that the first syllable of a word would generally be the most important for the purposes of distinction.
The authorities consistently recognise, however, that as a matter of common experience, people often do not read words carefully and do not pronounce them distinctly.
In the present case, there was no expert evidence that people tend to pronounce initial syllables more carefully or distinctly and indeed, the marks at issue do not commence with different syllables but only with different consonants. While Dr Cox’s uncontradicted evidence was that “T” and “V” would be pronounced quite differently, there was nothing to suggest that ordinary speakers would place particular emphasis on the initial consonant of each of the words or articulate it with particular care relative to other parts of the word.
“-IVO”, the component common to both marks, appears dominant as it comprises almost the entirety of each mark. It is not descriptive of the relevant goods and services for which the marks are registered. It has no apparent meaning and the substantial common element of the marks is thus distinctive, thus, as Gyles J observed in Pfizer Products, inviting attention to sound as well as sight. It is identically spelt and probably identically pronounced, and the impact of the aural similarity of the distinctive, dominant component is likely to be very strong, particularly when allowance is made for careless pronunciation, cursory reading and imprecise articulation in the context of imperfect recollection.
In contrast to Pfizer Products, there was no evidence that audio visual products are commonly supplied under trade marks which are identical save for a single commencing letter, which could reduce the likelihood of confusion. While Vivo relied on the registration of five marks incorporating “IVO” in class 9 (NVIVO, RIVO, AQIVO, EVOKE VIVO and ACTIVO), the marks were either registered in respect of goods unknown or goods other than audio visual and (save for a single mark) had two added consonants, added syllables or added words.
Nor, in my view, did the evidence establish that Vivo had any meaning which, as an aide memoire, would materially reduce the likelihood of confusion amongst consumers. While TiVo is a non‑word and Vivo has some uses as a word in English, Dr Cox did not contend that Vivo was itself an English word. The uses she instanced were, as she acknowledged, relatively infrequent, and in my view, relatively esoteric. There was nothing to suggest that the Latin, musical or acronym usage was sufficiently widespread within the broad class of purchasers of audio visual products to accord it much weight.
In my opinion, the identical two syllable “ee voh” termination of each mark, which has no meaning and is distinctive, rather than descriptive, of the goods and services within the scope of registration, creates a marked aural similarity, which is not displaced by the different initial consonants or any heightened likelihood of distinction on recollection due to the meaning of the word “Vivo” as a foreign word or acronym.
TiVo relied on non‑use pursuant to s 92(4)(b) of the Act as an additional alternative basis for the cancellation of the Vivo trade mark in relation to services. TiVo submitted:
227.The Respondents’ evidence does not demonstrate any intention by the First Respondent, as at 18 February 2008, to use or authorise the use of the VIVO Trade Mark in Australia, or to assign that trade mark to a body corporate for use in Australia, in respect of the class 38 services specified in the VIVO Trade Mark Registration, that is, transmission of data by audio-visual apparatus.
228.The Respondents’ evidence does not demonstrate any subsequent use of the VIVO Trade Mark in respect of those services from 18 February 2008 until one month before the issue of this proceeding.
229.In the circumstances, the VIVO Trade Mark Registration ought to be removed under s 92(4)(a) of the TMA in respect of those class 38 services of transmission of data by audio-visual apparatus.
Vivo acknowledged that it has not used the Vivo trade mark in respect of the services in class 38. Nor was there any evidence that it intended to do so. Vivo nevertheless prayed in aid the court’s discretion pursuant to s 101(3), on the same basis on which TiVo (as discussed above) invoked it in respect of televisions, namely, the convergence of digital technology. Vivo relied particularly on Mr Grassia’s evidence that Vivo intended to launch an Internet connected smart television within the next three months, which would probably (as indicated by an article in The Sydney Morning Herald dated 13 September 2010 exhibited to Mr Akbarzadeh’s affidavit) include the provision of services involving the transmission of data by audio visual services. Vivo submitted that convergence thus strongly supported preservation of its registration in relation to data transmission services.
While much of the reasoning against the removal of televisions from TiVo’s registration would equally favour the retention of the relevant services within Vivo’s registration were it otherwise to be maintained, as I have found that the Vivo trade mark should be removed from the Register on a number of different grounds, the issue of non‑use is overtaken and the exercise of the discretion would be futile.
It follows that the Vivo trade mark should be removed from the Register in respect of the specified services in class 38 on the additional basis of non‑use pursuant to s 92(4)(a).
Further, to the extent that they are relevant, the considerations prescribed by reg 8.2 of the Trade Marks Regulations 1995 (Cth) do not assist Vivo.
The public interest will be negatively affected, as contemplated by reg 8.2(a), if the Vivo trade mark registration is not cancelled, given the evidence of actual confusion, the prior registration of the TiVo trade mark, and the public interest in maintaining the integrity of the Register.
The circumstances which gave rise to the application for cancellation have not ceased to exist, as contemplated by reg 8.2(b), being Vivo’s selection, registration and use of the Vivo trade mark.
Reg 8.2(c) is not relevant to the present case, as it relates to a trade mark’s loss of distinctiveness since registration, rather than a likelihood of confusion between trade marks.
No apparent alternative remedy, as contemplated by reg 8.2(d), would be adequate in this case, as cancellation is necessary to ensure the integrity of the Register, to remove the defence to infringement of the TiVo trade mark under s 122(1)(e) and to enable the court to enjoin Vivo’s use of the Vivo trade mark.
The court is entitled under s 89(2)(b) to take into account other matters it considers relevant. As discussed above, while in my opinion, relevant matters in relation to the claims under ss 44 or 60 exclude post‑priority date events or conduct, the consideration of such matters in the present case would not justify the exercise of the discretion against cancellation under either ss 88(1) or 89(1) of the Act.
INFRINGEMENT
Section 120 of the Act relevantly provides:
(1)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.
(2)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:
(a)goods of the same description as that of goods (registered goods) in respect of which the trade mark is registered; or
(b)services that are closely related to registered goods; or
(c)services of the same description as that of services (registered services) in respect of which the trade mark is registered; or
(d)goods that are closely related to registered services.
However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion.
Section 122 of the Act relevantly provides:
When is a trade mark not infringed?
(1)In spite of section 120, a person does not infringe a registered trade mark when:
…
(e)the person exercises a right to use a trade mark given to the person under this Act; or
Vivo is currently the registered proprietor of the Vivo trade mark, which it has used in relation to the goods it supplies, and has the rights conferred by s 20 of the Act, including the exclusive rights to use or to authorise use of the mark in respect of the relevant goods.
Irrespective of whether Vivo’s use of the Vivo trade mark would otherwise infringe the TiVo trade mark pursuant to s 120(2) of the Act, as s 122(1)(e) of the Act provides that “in spite of section 120, a person does not infringe a registered trade mark when… the person exercises a right to use a trade mark given to the person under this Act”, Vivo’s use of the Vivo trade mark in respect of the goods in relation to which it is registered cannot infringe while its registration is maintained.
It is thus only upon removal of the Vivo trade mark from the Register that infringement could be made out. Accordingly, in this proceeding, TiVo sought an injunction pursuant to s 126(a) of the Act should removal of the Vivo trade mark from the Register be ordered. It did not seek damages or an account of profits.
For the reasons discussed in detail above, I have concluded that the Vivo trade mark should be removed from the Register pursuant to the grounds in ss 44, 60 and 88(2) of the Act. Vivo nevertheless submitted that in the event of such a finding, its use of the Vivo trade mark in relation to home theatre systems, computer monitors, digital photo frames or portable DVD players would not infringe the TiVo trade mark because such goods were not (in contrast to televisions, remote controls and set top boxes) goods in respect of which the TiVo trade mark is registered, goods of the same description, or goods closely related to the services in respect of which TiVo is registered.
Vivo reiterated, in that context, its alleged fundamental distinction between the sophisticated computer constituted by the branded TiVo DVR and the Vivo products used solely for audio visual display, and its submissions on the lack of substitutability between the TiVo DVR and the relevant Vivo products.
For the reasons discussed in detail above, I have concluded that the relevant Vivo goods are goods within the scope of the TiVo registration, and goods of the same description as the TiVo goods.
I am also satisfied, broadly for the reasons stated in relation to the application under s 44 of the Act, that (taking account of all the surrounding circumstances and Vivo’s actual, rather than notional, use of the Vivo trade mark, including its sale primarily of low cost televisions and different packaging), there is a real, tangible danger and likelihood that such use in relation to home theatre systems, computer monitors, digital photo frames or portable DVD players would be likely to deceive or cause confusion. I refer to and repeat my discussion in relation to s 44, including the significance of Mr Simons’ unchallenged evidence indicating a number of instances of actual confusion amongst Dick Smith sales staff in New South Wales stores within the course of a single month.
It follows that, in my opinion, use of the Vivo trade mark upon its removal from the Register in respect of the specified Vivo-branded goods would infringe the TiVo trade mark.
ACCESSORIAL LIABILITY
Tivo submitted that Mr Grassia was a joint tortfeasor with accessorial liability for Vivo’s infringement in circumstances where:
270.As well as being the chief executive officer, managing director and the sole registered director, secretary and shareholder of the First Respondent since 11 May 1999, the Second Respondent is described by the First Respondent’s website as the “visionary” behind the company who “personally manages” the range of products imported by it. His evidence makes clear that he was personally and instrumentally involved in each key decision to use the VIVO trade mark on the various products imported and sold by the First Respondent.
271.In the circumstances, the Second Respondent has
(a)directed or procured the infringing conduct of the First Respondent;
(b)was involved in invading the Applicants’ rights;
(c)had a close involvement in the infringing acts of the First Respondent;
(d)made the First Respondent’s tort his own; and/or
(e)used the First Respondent as an instrument of his own wrong.
TiVo submitted that Mr Grassia directed or procured Vivo’s infringing conduct, as he was “personally and instrumentally involved” in each key decision to use the Vivo trade mark.
Vivo submitted that Mr Grassia, although the managing director, sole shareholder and the person responsible for the adoption of the Vivo trade mark, acted solely as an agent, employee and representative of Vivo, and adopted the Vivo trade mark without awareness of the TiVo trade mark in the reasonable belief that the sale of goods under the Vivo trade mark did not infringe any rights of TiVo.
A degree of artificiality attends the determination of this issue as, for the reasons stated above, while the Vivo trade mark remains registered, there will be no finding of infringement, in the absence of which the question of accessorial liability is moot.
The parties directed no oral argument and only minimal written submissions at the question of accessorial liability, but both principally relied on Keller v LED Technologies Pty Ltd (2010) 185 FCR 449 (“Keller”) in which, at first instance, two directors were held liable as joint tortfeasors for their companies’ infringement of another party’s registered designs for combination rear lights for motor vehicles. The primary judge found that:
At the time of the “relevant events”, Mr Keller and Mr Armstrong were directors of [the companies] together with Mr Armstrong acting also as Chairman. Mr Keller’s evidence was that he, together with Mr Armstrong, “is the boss” of [the companies]. In relation to Version 1 lamps, the “relevant events” included, but were not limited to, the conception and design of the infringing Condor lights at a time when at least Mr Keller was aware of the existence of the Designs, discussions with manufacturers about the manufacture of those lights and the subsequent importation and sale of them in Australia. In addition, Mr Keller designed and conceived the Version 2 and 3 lights and arranged for their manufacture and importation into Australia. Moreover, Mr Armstrong was the nominated signatory for all applications for CRNs [Component Registration Numbers] and the addressee for all correspondence from DOTARS [the Department of Transport and Regional Services] relating to CRNs. In addition, he was involved in photometric testing of Condor LED lights and knew what Mr Keller was doing in relation to the Condor Products.
On appeal, the majority (Emmett and Jessup JJ), in separate judgments, held that neither director was liable as a joint tortfeasor, while Besanko J (dissenting) held that Mr Keller only was liable.
Emmett J stated at [83]-[84]:
A company cannot act other than through a natural person. In considering whether a natural person is a joint tortfeasor with a company, it is necessary to show something more than that the company acted through that person. Where a person is acting in the capacity of a director, the person will not be liable for the act of the company unless it can be shown that, in so acting, the director was doing something more than acting as a director. The person must do something that makes him or her, in addition to the company, an invader of the victim’s rights (see O’Brien v Dawson (1942) 66 CLR 18 at 32-33). The mere fact that a company is small and that the director has control over its affairs is not, of itself, sufficient to make the director a joint tortfeasor with the company (see C Evans & Sons Ltd v Spriteband Ltd [1985] 1 WLR 317 at 329).
…
Infringement by a principal actor, of course, is an objective matter. For a director of a company to be held to be invading the rights of a victim of the company, by reason of the actions committed in the capacity of a director, there must be some mental element involved. Thus, in circumstances where a director can be shown to be making use of a corporation or company as an instrument whereby infringement is perpetrated, such that the director can be seen to be hiding behind the corporate veil, it may be thought that the director is going beyond actions performed merely in the capacity as director. If a company is merely the alter ego of a director, such that there is no real difference between the mind of the officer and the mind of the company, there may well be circumstances where it will be appropriate to conclude that the officer is invading the rights of a victim of the company.
Emmett J noted that Mr Armstrong had no involvement in the day-to-day running and operation of the companies, and while aware of the other party’s registered designs, there was no evidence to support a conclusion that he set out to infringe its monopoly or had any reason to believe that the sale of the companies’ products constituted infringement (at [85]-[86]). His Honour concluded (at [88]) that while Mr Keller’s involvement was greater than Mr Armstrong’s:
the findings do not support the conclusion that Mr Keller intended and procured that infringement would take place or shared a common design that infringement should take place. Mr Keller was not effectively standing apart from [the companies], directing or procuring them as separate entities. The findings would not support the conclusion that Mr Keller was using [the companies] as the instrument of his own conduct. What he did was done in the service of [the companies] and not in his own personal capacity. There is no dimension to the role of Mr Keller that was separate from the good faith discharge of his duties to the service of [the companies]. In those circumstances, he would not be held to be personally liable for the infringements of [the companies].
Jessup J noted at [399] that “the state of the law as to the liability of a director for the torts of his or her company is unclear”. After an extensive analysis of the applicable authorities, his Honour stated at [404]-[405]:
For a director to be liable because he or she directs or procures his or her company to commit a wrong, the context must be such that the director is effectively standing apart from the company and directing or procuring it as a separate entity. There must be a sense in which the director is using the company as an instrument of his or her own wrong…
I agree substantially with so much of the judgments of Le Dain J in Mentmore Manufacturing, of Nourse J in White Horse and of Beazley J in Milpurrurru as make it a requirement of liability that the director should make the tort his or her own… [I]n a situation in which the company role and the personal role of the director may be blurred, the formula does highlight the crucial distinction between acts which are done for and in the service of the company and acts which, in addition, are done in the director’s own personal capacity — a “non-company capacity” as it were.
Jessup J considered that a director should not be liable for acts done “in what he or she, in good faith, reasonably perceives to be the interests of the company”. In such circumstances, the acts of the director should be seen as the “means by which the company itself acts”, rather than the director “directing or procuring the company” to act, or participating in a joint enterprise (at [406]).
His Honour concluded that the directors were not liable as joint tortfeasors, as, on his preferred approach to the applicable authorities, the facts relied on by the primary judge could not sustain a finding of personal liability.
In Sporte Leisure Pty Ltd v Paul’s International Pty Ltd (2010) 88 IPR 242 (“Sporte Leisure”), on which Vivo also relied, Nicholas J analysed the decision in Keller and stated (at [118]):
I think the authorities demonstrate that something more will usually be required if a director is to be held liable as a joint tortfeasor than a simple finding that he or she, while acting in that capacity, caused or directed his or her company to perform acts which are later held to be infringing acts. The extent of the director’s personal involvement in the commission of the infringing acts is no doubt critical. But his or her state of mind is itself an important aspect of that involvement. That does not mean that knowledge that the relevant acts are infringing is a prerequisite to liability. The authorities are clear in holding that it is not. Even so, a finding that a director who held an honest belief that the acts which he or she directed or procured were not unlawful is a significant consideration telling against the director’s liability.
In Sporte Leisure, Nicholas J concluded that while the director in that case was closely involved in the company’s infringing acts, and directed and procured his company to perform them, his actions were done in his capacity as a director, and at a time when he “genuinely believed that the infringing products imported and sold by [the company] were “genuine” goods…” (at [117]). He was thus not liable as a joint tortfeasor.
As stated above, I have rejected Mr Grassia’s testimony that he was, at the time of selecting the name “Vivo”, unaware of the TiVo name and products, together with his account of how he came to adopt “Vivo”. I also rejected his explanation of the failure to seek professional advice in relation to the adoption of the name “Vivo”.
Mr Grassia was also the sole controller and shareholder of Vivo who, despite the attested input of his wife, was primarily instrumental in the adoption of the name “Vivo”. In my opinion, in selecting the name Vivo, Mr Grassia was inspired by the TiVo trade mark and intended to obtain an advantage or spin‑off benefits for his company. The evidence does not establish that Mr Grassia held an honest belief that the adoption of “Vivo” would not infringe TiVo’s rights. Nevertheless, the evidence does not establish that the company was merely the alter ego of Mr Grassia, which he employed as a shelter or personal instrument of his own wrong by standing apart and directing or procuring it to adopt the Vivo name. No dimension of Mr Grassia’s role appears materially separate from that of the company. Thus, although Mr Grassia had a key role in adopting and maintaining use of the Vivo mark, accessorial liability for any infringement could not, in my view, be established.
I observe that as Vivo has not, at this stage, been found to have infringed, any accessorial liability of Mr Grassia for infringement could logically arise only in future, following the removal of the Vivo trade mark from the Register. The relevance of Mr Grassia’s earlier conduct in relation to Vivo’s adoption of the mark to any accessorial role in future infringement by Vivo was unclear.
CONCLUSION
In my opinion, the registration of the Vivo trade mark should be cancelled and the Vivo trade mark removed from the Register pursuant to s 88(2)(a) and (c) of the Act.
The registration of the TiVo trade mark should be permitted to remain on the Register pursuant to the discretion in s 101(3) of the Act.
I shall invite submissions in relation to the form of orders and relief reflecting these reasons.
I certify that the preceding five hundred and thirty-eight (538) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dodds‑Streeton. Associate:
Dated: 19 March 2012
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