Yarra Valley Dairy Pty Ltd v Lemnos Foods Pty Ltd
[2010] FCA 1367
•10 December 2010
FEDERAL COURT OF AUSTRALIA
Yarra Valley Dairy Pty Ltd v Lemnos Foods Pty Ltd [2010] FCA 1367
Citation: Yarra Valley Dairy Pty Ltd v Lemnos Foods Pty Ltd [2010] FCA 1367 Parties: THE YARRA VALLEY DAIRY PTY LTD (ACN 067 021 863) v LEMNOS FOODS PTY LTD (ACN 078 380 855) and TERRY PAULE File number: VID 400 of 2009 Judge: MIDDLETON J Date of judgment: 10 December 2010 Catchwords: TRADEMARKS – whether trade mark capable of distinguishing designated goods – geographic reference – description of style of goods – cancellation of trade mark – onus of proof - Trade Marks Act 1995 (Cth), ss 41, 88(2)(a), (e)
TORTS – passing off – whether there has been representation by the respondent to the public leading the public to believe the goods offered by the respondent are the applicant’s goods
TRADE PRACTICES – misleading and deceptive conduct – clear distinguishing features – Trade Practices Act 1974 (Cth), ss 52, 53
EVIDENCE – hearsay – ss 60, 136, 190(3) Evidence Act 1995 (Cth)Legislation: Evidence Act 1995 (Cth)
Trade Marks Act 1995 (Cth)
Trade Marks Amendment Act 2006 (Cth)
Trade Practices Act 1974 (Cth)Cases cited: A Bailey & Co Ltd v Clark, Son & Morland; Re Glastonbury’s Trade Mark (1928) 55 RPC 253
Alcon Inc v Bausch & Lomb (Australia) Pty Ltd [2009] FCA 1299
Aldi Stores Ltd Partnership v Frito-Lay Trading Co GmbH (2001) 190 ALR 185
Austereo Pty Ltd v DMG Radio (Australia) Pty Ltd (2004) 61 IPR 257
Australia Pty Ltd v The Kettle Chip Company Pty Ltd (1996) IPR 161
Bavaria NV v Bayerischer Brauerbund eV [2009] FCA 428
Blount Inc v Registrar of Trade Marks (1998) 83 FCR 50
British Sugar plc v James Robertson & Sons Ltd [1996] RPC 281
Burger King Corporation v Registrar of Trade Marks (1973) 1A IPR 504
Chocolaterie GuylianNV v Registrar of Trade Marks (2009) 82 IPR 13
Clark Equipment Co v Registrar of Trade Marks(Michigan case) (1964) 111 CLR 511
Colorado Group Ltd v Strandbags Group Pty Ltd (2007) 164 FCR 506
Hall v Lewis (2004) 64 IPR 61
Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326
Joseph Crosfield & Sons Ltd to Register a Trade Mark (“Perfection”) (1909) 26 RPC 837
Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks [2002] FCAFC 273
Liverpool Electric Cable Co Ltd’s Application (1928) 46 RPC 99Mark Foy’s Ltd v Davies Co-op & Co Ltd (1956) 95 CLR 190
Mars Australia Pty Ltd v Sweet Rewards Pty Ltd (2009) 81 IPR 354
MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 42 IPR 561
Ocean Spray Cranberries Inc v Registrar of Trade Marks [2000] FCA 177
Philmac Pty Ltd v Registrar of Trade Marks (2002) 56 IPR 452
Reckitt and Colman Products Ltd v Borden Inc and others (1990) 17 IPR 1
Registrar of Trade Marks v W & G du Cros Ltd [1913] AC 624
Registrar of Trade Marks v Woolworths Ltd (1999) 45 IPR 411
Woolworths Ltd v BP plc (No 2) (2006) 154 FCR 97
Yorkshire Copper Works Ltd’s Application for a Trade Mark (1954) 71 RPC 150Date of hearing: 22, 23, 24 February 2010 and 5 March 2010 Date of last submissions: 29 June 2010 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 288 Counsel for the Applicant: Mr B Fitzpatrick Solicitor for the Applicant: Phillips Ormonde Fitzpatrick Counsel for the Respondents: Mr EJC Heerey with Mr B Gardiner Solicitor for the Respondents: Zervos Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 400 of 2009
BETWEEN: THE YARRA VALLEY DAIRY PTY LTD (ACN 067 021 863)
ApplicantAND: LEMNOS FOODS PTY LTD (ACN 078 380 855)
First RespondentTERRY PAULE
Second Respondent
JUDGE:
MIDDLETON J
DATE OF ORDER:
10 DECEMBER 2010
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.The parties confer and submit minutes of orders reflecting these reasons and any agreed orders as to costs by 4:00pm on 17 December 2010.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 400 of 2009
BETWEEN: THE YARRA VALLEY DAIRY PTY LTD (ACN 067 021 863)
ApplicantAND: LEMNOS FOODS PTY LTD (ACN 078 380 855)
First RespondentTERRY PAULE
Second Respondent
JUDGE:
MIDDLETON J
DATE:
10 DECEMBER 2010
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
INTRODUCTION
This is a proceeding primarily concerning the validity of the registered trade mark, PERSIAN FETTA, and also the alleged infringement of that trade mark by the first respondent Lemnos Foods Pty Ltd (‘Lemnos’). The applicant, The Yarra Valley Dairy Pty Ltd (‘Yarra Valley’), also brings actions for passing off and seeks relief under the Trade Practices Act 1974 (Cth) (‘the TPA’) for misleading and deceptive conduct.
OVERVIEW OF YARRA VALLEY’S BUSINESS
Yarra Valley is a farm-based cheese maker in the Yarra Valley in the State of Victoria which has been making and selling a range of cheese products since 1994.
In 1994, Mary Mooney and her husband Leo Mooney joined with Richard Thomas in setting up a new cheese making business at the Mooney family farm property ‘Hubertswood’ in the Yarra Valley. The original focus of the business was on the production and sale of a camembert style cheese together with small amounts of fresh cow curd to local customers, including a number of restaurants in the Yarra Valley and in Melbourne.
Richard Thomas was employed by Yarra Valley to establish the cheese making facility and to develop cheeses. Mary and Leo Mooney provided the capital required to start the business as well as the location. Although Richard Thomas was the primary cheese maker, Mary Mooney was also involved in making, delivering and selling the cheese.
In mid 1995, Yarra Valley commenced making goat’s milk fetta. The seasonal nature of goat’s milk flows in that year meant that there was more milk, and consequently fresh cheese, than could be sold. The goat’s milk fetta was not easy to sell and competed against less expensive fettas. In 1995, goat’s cheese was a relatively new product to the Australian market and most consumers were unfamiliar and somewhat suspicious of it. Consequently, the market was relatively small and generally restricted to customers, particularly chefs, with knowledge of European cheeses.
This oversupply created the problem of finding a way to preserve the surplus cheese. Richard Thomas and Mary Mooney decided to marinate the cheese as a way of preserving, value adding and attracting a higher price for the cheese. A traditional Italian mix of herbs (thyme, bay leaf, garlic and black pepper) in olive oil was used to produce the marinade.
After this marinated cheese product was developed Yarra Valley called the product ‘Persian Fetta’. I will return later to the making of this decision.
Yarra Valley started selling the PERSIAN FETTA product in the tasting room at the Hubertswood farm. Yarra Valley then sold some of this goat’s cheese product to delicatessens, speciality cheese shops and restaurants in Melbourne.
By autumn 1996, the goat’s milk supply was seasonally fading just as interest in the PERSIAN FETTA product was developing. Yarra Valley was faced with an inability to supply customers’ orders. This problem was resolved by making the product from cow’s milk. The change from using goat’s milk to cow’s milk was not difficult as Yarra Valley was already producing fresh curd from cow’s milk at that time.
From 1995, the PERSIAN FETTA product has been sold in a distinctive ‘paint tin’. Until commencement of the Lemnos conduct, the PERSIAN FETTA product was the only cheese product sold in a tin of this type and dimension. Similar cheese products were typically sold in plastic tubs or glass containers, which were less expensive and allowed the product to be viewed prior to purchase. The PERSIAN FETTA tin product was typically sold in delicatessens and speciality cheese shops as well as directly from the Yarra Valley farm.
On 21 March 2000, Yarra Valley filed a trade mark application for PERSIAN FETTA in class 29 for “dairy products including cheese”. Registration was obtained on 24 May 2002 and has remained on the Trade Mark Register from that date (‘the PERSIAN FETTA registration’).
In 2002, Yarra Valley entered into a licence agreement with National Foods which licensed use of the PERSIAN FETTA mark to National Foods to use as part of its ‘South Cape’ range. The PERSIAN FETTA product was and continues to be made by Yarra Valley for National Foods. The PERSIAN FETTA product has been made available in supermarket chains, including Coles, since 2003.
Sales and promotion of the PERSIAN FETTA product has grown since 1996 and continues to grow. I will return to the extent of the sales and promotion later.
Yarra Valley now has 17 full-time employees and revenue in excess of $5 million per annum.
OVERVIEW OF LEMNOS’ BUSINESS
Lemnos is a cheese manufacturer which produces a range of cheese products principally for supermarket chains, including Coles. The second respondent is the managing director of Lemnos.
The Lemnos business was started in the 1960s by Kon and George Tsantis and was originally based in Lang Lang in Gippsland, Victoria.
From the back of their van, the Tsantis brothers sold fetta, amongst other things, to migrant families in Melbourne in the late 1960s and 1970s. They also sold their products through continental delicatessens, restaurants and market stalls.
In 1998, when the Tsantis brothers were in their seventies, the second respondent Terry Paule, his brother Spiro Paule, and Peter Biantes bought the Lemnos business.
Since then, Terry Paule and his partners have built Lemnos into a medium sized speciality food manufacturer. Lemnos is now Australia’s leading manufacturer of fetta and haloumi cheeses.
Lemnos produces seven different varieties of fetta as well as varieties of haloumi, ricotta and paneer, all of which are sold under the LEMNOS brand, which appears with a lambda in circle device as shown here:
The LEMNOS name and lambda device have been registered in Lemnos’ name as Australian Trade Mark Registration 890174 for goods including cheese, with effect since 26 September 2001.
In 2008, Choice Magazine’s judges independently tested various fetta products available in Australia and nominated LEMNOS as Australia’s best fetta brand. Choice Magazine’s judges awarded a number of prizes to LEMNOS branded fetta products.
Other white cheese products sold by Lemnos prior to the launch of LEMNOS PERSIAN MARINATED CHEESE included:
(a)LEMNOS HALOUMI – CYPRUS STYLE CHEESE;
(b)LEMNOS SMOOTH FETTA;
(c)LEMNOS REDUCED FAT FETTA;
(d)LEMNOS SMOOTH/SPREADABLE RICOTTA CHEESE;
(e)LEMNOS RICOTTA;
(f)LEMNOS RICOTTA DIPS;
(g)LEMNOS PANEER.
Lemnos has sold its LEMNOS branded products through supermarkets and delicatessens for decades, and advertises them in various ways including food and recipe magazines, radio, supermarket catalogues, internet and trade shows.
In addition to its own brands, Lemnos manufactures products for other companies, including Coles, which sells fetta products under the Coles house brand “You’ll Love Coles”.
Lemnos has used two variant marks: PERSIAN FETTA and PERSIAN MARINATED CHEESE.
Lemnos first started using the PERSIAN FETTA mark in 2009 in response to a request from Coles to replace the South Cape PERSIAN FETTA product. Initially, Lemnos used the PERSIAN FETTA mark on its web-site. Subsequently, Lemnos commenced selling a marinated cheese product through Coles under the PERSIAN MARINATED CHEESE mark. This product was sold in a ‘paint tin’ of almost identical shape and dimension to the Yarra Valley PERSIAN FETTA tin.
Since 2000, Lemnos has been exporting its products overseas to places including Saudi Arabia, the United Arab Emirates, India, Taiwan, Hong Kong, China, Indonesia, Malaysia, Singapore, New Zealand, Canada and the United States.
REGISTERED TRADE MARK VALIDITY AND INFRINGEMENT
Introduction
Lemnos’ use of the words PERSIAN FETTA and PERSIAN MARINATED CHEESE will constitute an infringement of the PERSIAN FETTA registration if, contrary to s 120(1) of the Trade Marks Act 1995 (Cth) (‘the TMA’), in either case:
(a)The words are found to be substantially identical with or deceptively similar to the PERSIAN FETTA registration; and
(b)Lemnos is found to have used the words as a trade mark in relation to any of the goods covered by the PERSIAN FETTA registration.
The Respondents’ primary contention in relation to trade mark infringement is that the PERSIAN FETTA registration should be cancelled pursuant to s 88(2)(a) and (e) of the TMA on the basis that:
(a) the registration could have been successfully opposed; and
(b)the application for registration was accepted as a result of misrepresentation.
Onus of Proof
The question of onus of proof in relation to the claim pursuant to s 88(2)(a) of the TMA and reliance upon s 41 of the TMA was raised. I do not consider it has any practical significance in this proceeding. Nevertheless, I make the following comments.
In my view, the onus is on Lemnos to establish grounds of cancellation, including an allegation that the registered mark does not satisfy the requirements of s 41 of the TMA.
Section 41 of the TMA is relevant in this proceeding by virtue of the Respondents (as cross-claimants) (whom unless the context otherwise requires I will now refer to collectively as Lemnos) relying on s 88(2)(a) of the TMA. This provides that the grounds for seeking cancellation of a registered trade mark include grounds of opposition available under Div 2 of Pt 5 of the TMA. This in turn incorporates substantive grounds of examination (including s 41) under Div 2 of Pt 4 by which the Registrar of Trade Marks is required to determine whether to accept a trade mark application.
After examination, the Registrar of Trade Marks accepted Yarra Valley’s application for PERSIAN FETTA pursuant to s 41(5) of the TMA on 30 January 2002. No third parties opposed registration of the application. The application was registered with effect from the filing date of 21 March 2000.
Lemnos relies on the authority of Chocolaterie Guylian NV v Registrar of Trade Marks (2009) 82 IPR 13 to assert that the trade mark owner bears the onus of establishing that its registered mark should remain on the Register. In Guylian there was an appeal from a refusal of the Registrar of Trade Marks to register a trade mark under Div 2 of Pt 4 of the TMA. The Court’s comments on the burden imposed by ss 41(5) and (6) were in the context of the presumption of registerability imposed on the examination process by s 33 of the TMA, and in light of the references to an applicant needing to establish certain matters, and the Registrar reaching a certain state of satisfaction.
In Guylian the trade mark applicant appealed the decision of the Registrar of Trade Marks pursuant to s 35 of the TMA. Such an appeal is a de novo hearing where the court in effect puts itself in the position of the Registrar of Trade Marks: see eg Registrar of Trade Marks v Woolworths Ltd (1999) 45 IPR 411 (Full Court); Blount Inc v Registrar of Trade Marks (1998) 83 FCR 50 at 59; Philmac Pty Ltd v Registrar of Trade Marks (2002) 56 IPR 452 at 455 and Ocean Spray Cranberries Inc v Registrar of Trade Marks [2000] FCA 177 at [16].
Accordingly, the question of whether the trade mark is to be accepted in accordance with s 41 is a matter for the court. In other words, the reference to the “Registrar” in s 41 is, for the purposes of the de novo appeal, a reference to the Court.
In contrast, an application for cancellation pursuant to s 88 of the TMA is not a de novo hearing of the application for registration and the Court is not standing in the shoes of the Registrar.
There is no basis for inferring a legislative intention that the evidentiary burdens imposed on an applicant for registration should be imposed on a registered trade mark owner seeking to defend a cancellation action.
Undoubtedly, there may be practical difficulties for either party if the burden of proof is placed upon that party. Requiring a registered proprietor to provide evidence to a court as to the state of the market at the application date in order to prove that the trade mark satisfied s 41(5) or s 41(6), potentially many years after the application date of the registration, may be said to impose an inappropriate burden on the registered proprietor. However, the registered proprietor may be better placed than an applicant seeking rectification, with such evidence more likely to be in the possession of the registered proprietor. It may also be practically difficult for the party seeking rectification to prove the negative proposition that the trade mark applicant had not used the mark to the extent necessary.
Be that as it may, in a matter such as this one, coming before the Court pursuant to s 88(2)(a) of the TMA, the normal burden of proof upon a claimant should be imposed subject to any legislative indication to the contrary. I see no such indication to alter the burden of proof which would normally be upon a claimant seeking relief, no matter which subsection of s 41 becomes applicable.
Section 88(2)(a) – Section 41
The primary contest between the parties has been on the operation of s 41. The result of this contest will be determinative of the primary issue in this proceeding for the reasons I am about to give.
Lemnos contends that the trade mark PERSIAN FETTA was not capable of distinguishing Yarra Valley’s goods from the goods of other persons, contending that the trade mark was not to any extent inherently adapted to distinguish at the filing date.
The relevant question posed by s 41(2) is whether “the trade mark is not capable of distinguishing the applicant’s goods … in respect of which the trade mark is sought to be registered … from the goods … of other persons”. Section 41 requires that a trade mark must possess the requisite capability to distinguish in order to be registrable. That is, the mark must distinguish (or be capable of distinguishing) Yarra Valley’s goods from those of other persons.
This question must be considered in the context of the TMA as a whole, including s 17 of the TMA.
In determining whether a mark is capable of distinguishing the relevant goods the Registrar, and thus this Court, is obliged by s 41(3) to undertake an initial inquiry as to the extent to which Yarra Valley’s mark is “inherently adapted” to distinguish Yarra Valley’s goods from the goods of other persons.
The relevant date for assessing a trade mark’s capability to distinguish is the priority date of the trade mark application.
An issue arose as to whether the claim under s 88(2)(a) of the TMA giving rise to the application of s 41 of the TMA should be decided under the terms of s 41 as it stood prior to the amendments affected by the Trade Marks Amendment Act 2006 (Cth). The aim of the relevant amendment to s 41 was merely to clarify the existing provision. Whatever form of that provision is adopted the same conclusion would be reached in this proceeding. This has been accepted by the parties.
In these reasons, I rely upon the existing provisions of s 41. In so doing, I do not necessarily endorse the view that the existing provisions are applicable. I see a strong basis for applying s 41 of TMA in the terms that stood at the time when Yarra Valley’s trade mark “could have been opposed”. However, I need not dwell on this issue any further.
Unlike the other grounds of examination, s 41 sets out, in effect, a decision tree to follow in the assessment of a trade mark’s capability to distinguish.
I adopt the analysis of Branson J in Blount at [56]-[57]:
Subsections (3)–(6) of s 41 of the Act are designed to control the process by which the registrar is to reach a conclusion as to whether the trade mark for which registration is sought is capable of distinguishing the applicant's goods or services in respect of which the trade mark is sought to be registered (the designated goods or services). If the trade mark is not so capable, the application for its registration must be rejected: s 41(2). Subsection (3) requires the registrar first to ``take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons'’. Having taken such matter into account, it is theoretically open to the registrar to conclude:
(a)that the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons and capable, on that basis alone, of so distinguishing the designated goods or services; or
(b)that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; or
(c)that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, but there is uncertainty, on that basis alone, that the trade mark is actually capable of so distinguishing the designated goods or services.
If conclusion (a) is reached, the application will be accepted unless there are other reasons to reject the application. If conclusion (b) is reached, the application can proceed, if at all, only if s 41(6) is satisfied. Where the examiner comes to conclusion (c), and is satisfied of the matters referred to in s 41(5)(a)(i), (ii) and (iii), the application will be accepted because the trade mark is taken to be capable of distinguishing. If not so satisfied, the examiner will reject the application.
The test for determining a trade mark’s inherent adaptation to distinguish was formulated by Kitto J in Clark Equipment Co v Registrar of Trade Marks(Michigan case) (1964) 111 CLR 511, at p 514, where his Honour described the test as follows:
…the question whether a mark is adapted to distinguish [is to] be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess – will think of the word and want to use it in connection with similar goods in any manner which would infringe a registered trade mark granted in respect of it.
Justice Kitto, in Clark Equipment at p 513, also referred to Lord Parker of Waddington in Registrar of Trade Marks v W & G du Cros Ltd [1913] AC 624 at 634-635, where his Lordship said:
The applicant's chance of success in this respect [ie in distinguishing his goods by means of the mark, apart from the effects of registration] must, I think, largely depend upon whether other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connection with their own goods.
In Clark Equipment at 517, Kitto J identified an improper motive as a “desire to get for themselves a benefit from the appellant’s reputation”.
The ‘Clark Equipment test’ has been applied on numerous occasions by the courts in determining a trade mark’s inherent adaptation to distinguish pursuant to s 41 of the TMA: see eg Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks [2002] FCAFC 273 at [18] [85] [146]; Blount at [506]-[507]; Philmac at [42]; Ocean Spray Cranberries at [26] and MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 42 IPR 561 at [572].
I do not consider that any party before me sought to reformulate this test. Each party accepted it as the current and correct statement of the law. To the extent it was suggested otherwise, I do not consider that Foster J in Alcon Inc v Bausch & Lomb (Australia) Pty Ltd [2009] FCA 1299 was suggesting any reformulation.
The test to be applied in assessing the extent to which a geographical term is inherently adapted to distinguish the designated goods is the same test that is applied to all trade marks. There is no separate test applicable to marks which may contain a geographical reference.
I do not accept that general laudatory epithets or geographical terms are inherently incapable of ever being used as trade marks: see Aldi Stores Ltd Partnership v Frito-Lay Trading Co GmbH (2001) 190 ALR 185, at [62].
The categories of descriptive words on the one hand and those that are capable of distinguishing goods and services on the other are not mutually exclusive. As Lockhart J said in Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 at [335]-[336]:
The mere fact that a word is descriptive or has a descriptive flavour does not necessarily prevent it being distinctive of somebody’s goods: see Re application of H N Brock & Co Ltd, for a trade mark (“Osowoolo”) and trade marks (“Orlwoola”) (1909) 26 RPC 683, 850, 854 (the Orlwoola case) and Re application of Joseph Crosfield & Sons Ltd to register a trade mark (“Perfection”) (1909) 26 RPC 837 (the Perfection case).
If a word is prima facie descriptive the difficulty of establishing that it is distinctive of the plaintiff’s goods is considerably increased. Also, if the plaintiff has not used the word simply for the purpose of distinguishing his own goods from those of others but primarily for the purpose of describing the particular kind of article to which he has applied it and only secondarily, if at all, for the purpose of distinguishing his own goods, it will be more difficult for him to establish that it is distinctive of them.
A word may be so totally descriptive of the goods concerned as to be unregistrable, for example, ELECTRICS for electrical apparatus: see Electrix Ltd’s application for the registration of trade marks [1959] RPC 283 at 288. In less extreme cases the question is one of degree. There must be a sufficient degree of distinctiveness to counterbalance the descriptive character of the word: see Re application by J & P Coates Ltd for registration of a trade mark (1936) 53 RPC 355 at 368 and Yorkshire Copper Works Ltd v Registrar of Trade Marks [1954] 1 WLR 554; [1954] 1 All ER 570. A word which is prima facie descriptive may become distinctive in connection with particular goods and yet retain its descriptive meaning: see Burberrys v J C Cording & Co Ltd (1909) 26 RPC 693 at 704, per Parker J and the Perfection case (supra) (at 857-858). But the word must, in order to become distinctive, have a new and secondary meaning different from its primary descriptive one and thus cease to be purely descriptive: see Reddaway v Banham [1896] AC 199 at 213, per Lord Herschell.
Distinctive means distinctive in the sense that the mark distinguishes the registered proprietor’s goods from others of the same type in that market, though it does not mean that the goods must specifically identify the plaintiff as the source of those goods. Often the identity of the supplier will be unknown, but what is important is that a significant number of consumers in the relevant market identify the plaintiff’s goods as coming from one trade source: see S Ricketson, par 25.8.”
Nevertheless, geographical names do require specific attention.
In Clark Equipment, Kitto J said at [514]-[516]:
The fact that this is the test is the basic reason for the frequent refusal, exemplified in this Court by the case of Thomson v B Seppelt & Sons Ltd (1925) 37 CLR 305, to register as a trade mark a word of prima facie geographical signification. It is well settled that a geographical name, when used as a trade mark for a particular category of goods, may be saved by the nature of the goods or by some other circumstance from carrying its prima facie geographical signification, and that for that reason it may be held to be adapted to distinguish the applicant's goods. Where that is so it is because to an honest competitor the idea of using that name in relation to such goods or in such circumstances would simply not occur: see per Lord Simonds in the Yorkshire Copper Works Ltd v Registrar of Trade Marks (1954) 71 RPC 150, at p 154. This is the case, for example, where the word as applied to the relevant goods is in effect a fancy name, such as "North Pole" in connexion with bananas: A Bailey & Co Ltd v Clark, Son & Morland Ltd (the Glastonbury Case) (1938) AC 557, at p 562; (1938) 55 RPC 253, at p 257 (see also the Livron Case (1937) 54 RPC 327, at p 339), or where by reason of user or other circumstances it has come to possess, when used in respect of the relevant goods, a distinctiveness in fact which eclipses its primary signification. Compare the case of a descriptive word: Dunlop Rubber Co's Application (1942) 59 RPC 134. But the probability that some competitor, without impropriety, may want to use the name of a place on his goods must ordinarily increase in proportion to the likelihood that goods of the relevant kind will in fact emanate from that place. A descriptive word is in like case: the more apt a word is to describe the goods, the less inherently apt it is to distinguish them as the goods of a particular manufacturer. This may seem at first blush a paradox, as Lord Simonds and Lord Asquith suggested in the Yorkshire Copper Works Case (1954) 71 RPC 150, at pp 154, 156, but surely not when Lord Parker's exposition of the subject is borne in mind.
The consequence is that the name of a place or of an area, whether it be a district or a county, a state or a country, can hardly ever be adapted to distinguish one person's goods from the goods of others when used simpliciter or with no addition save a description or designation of the goods, if goods of the kind are produced at the place or in the area or if it is reasonable to suppose that such goods may in the future be produced there. In such a case, the name is plainly not inherently, ie in its own nature, adapted to distinguish the applicant's goods; there is necessarily great difficulty in proving that by reason of use or other circumstances it does in fact distinguish his goods; and even where that difficulty is overcome there remains the virtual if not complete impossibility of satisfying the Registrar or the Court that the effect of granting registration will not be to deny the word to a person who is likely to want to use it, legitimately, in connexion with his goods for the sake of the geographical reference which it is inherently adapted to make. The leading authorities on the subject include the Yorkshire Copper Works Case (1954) 71 RPC 150 (the judgment of Lord Evershed in that case when it was in the Court of Appeal (1953) 70 RPC 1 contains a valuable discussion of the topic), the Glastonbury Case (1938) AC 557; (1938) 55 RPC 253 and the Liverpool Electric Cable Co Ltd's Application (1929) 46 RPC 99. These cases show, as the Registrar said in "Dan River" Trade Mark (1962) RPC 157, at p 160, in a decision which was endorsed by Lloyd-Jacob J, that there is a category of words which are so adapted for descriptive purposes that no amount of acquired distinctiveness can justify their registration, and that among such words are the names of large and important industrial towns or districts, and also of smaller towns or districts if they are a seat of manufacture of the goods for which registration is sought.
After referring to Kitto J’s judgment in Clark Equipment, Bennett J in Bavaria NV v Bayerischer Brauerbund eV [2009] FCA 428 made the following comments:
This has led to the rejection of a word of prima facie geographical signification, particularly when it is used simpliciter and where goods of the kind for which it is sought to be registered are produced at the place or in the area (Clark Equipment at 515-516), or if it is reasonable to suppose that such goods in the future would be produced there (Chancellor, Masters and Scholars of the University of Oxford (Trading as Oxford University Press) v Registrar of Trade Marks (1990) 24 FCR 1 at 23 per Gummow J). This is because other traders have a legitimate interest in using the geographical name to identify their goods and it is this interest which is not to be supplanted by permitting any one trader to effect trade mark registration (Clark Equipment at 514-515). Justice Gummow in University of Oxford came to the view that, if a court is in doubt as to the likelihood of another trader legitimately wishing to use a mark, the application should be refused (at 25). In Clark Equipment, Kitto J held that the word MICHIGAN was not adapted and was not capable of becoming adapted to distinguish earth-moving and other equipment. Similarly, OXFORD was refused for printed publications (University of Oxford) and COLORADO refused for bags (Colorado Group Ltd v Strandbags Group Pty Ltd (2007) 164 FCR 506). In each case, the registration sought was of a word mark that connoted a geographical location.
I accept the contention of Yarra Valley that a number of English cases (including Joseph Crosfield & Sons Ltd to Register a Trade Mark (“Perfection”) (1909) 26 RPC 837; the Liverpool Electric Cable Co Ltd’s Application (1928) 46 RPC 99; A Bailey & Co Ltd v Clark, Son & Morland; Re Glastonbury’s Trade Mark (1928) 55 RPC 253 and Yorkshire Copper Works Ltd’s Application for a Trade Mark (1954) 71 RPC 150) indicate that the question of whether a mark referring to a geographical location is inherently adapted to distinguish is to be looked at on a sliding scale, with examples given of, at one end, “British”, and at the other end, “Monte Rosa Cigarettes”, “Teneriffe Boiler Plates” and “North Pole Bananas”. The cases in which it was held that the marks referring to geographical locations were not registrable (Yorkshire, Liverpool and Glastonbury) were cases in which the geographical location was associated or could be associated with the goods in respect of which registration was sought.
It was submitted by Yarra Valley that the vice consistently identified by the courts in these cases and in Clark Equipment was the difficulty registration of the trade mark would present to honest traders wishing to refer to their products or potential products as originating in that geographical centre. For instance, a trader in copper tubes made in Yorkshire has a legitimate right to refer to its goods as Yorkshire copper tubes. Similarly, in the case of Glastonbury slippers, Liverpool cables and Michigan Cranes. Of course, context is important. Therefore, the term “North Pole Bananas” may be considered fanciful, because clearly bananas are not grown at the North Pole and therefore no honest trader would want to describe its bananas as coming from the North Pole.
Undoubtedly, then, the degree of association of the place with the goods may assist in determining where along the scale of inherent adaptability to distinguish a given mark lies. Even well known places such as “Sahara”, “Atlantic” or “North Pole” could be capable of distinguishing a variety of products if no reputation or association for the designated goods or services exists in relation to the relevant geographical area. Again, it will all depend upon context.
In this respect, I should indicate that the context must be viewed in light of the product the subject of the trade mark registration. In the case of this proceeding, much mention was made of various products ‘described’ as Persian other than dairy (including cheese) products. I think there is a danger in relying upon such use of the word “Persian” in a context other than that of dairy products. However, as observed later, I do rely upon the use of the word “Persian” in other contexts to demonstrate the common usage or common heritage of the word, and in the context of considering the legitimate actions of honest traders in dairy products who may wish to adopt such a word. The honest traders are those who do or may wish to trade in Australia.
The Colorado Decision
It is convenient at this point to refer to the Full Court decision in Colorado Group Ltd v Strandbags Group Pty Ltd (2007) 164 FCR 506. There was much discussion in the submissions of the parties as to the findings of the Full Court.
The Full Court effectively decided in its reasoning that the word “Colorado” was not (to any extent) inherently adapted to distinguish the designated goods or services from the goods or services of other persons. This would have involved the Full Court then considering s 41(6) of the TMA.
However, the Full Court did not direct its attention to s 41(6) because the respondent had accepted that the word was to some extent inherently adapted, and s 41(5) applied.
Justice Allsop at [129] recognised that after concluding that “Colorado” was not (to any extent) inherently adapted to distinguish, the correct next step might be seen to be to examine the position under s 41(6):
[129] On this basis, the correct next step might be seen to be to examine the position under s 41(6) on the hypothesis that the trade mark is not inherently adapted to distinguish the designated goods or services from those of others: cf Woolworths Ltd v BP plc (No 2) (2006) 154 FCR 97. The respondent, however, accepted in submissions in its approach to the appeal that the word was to some extent inherently adapted to distinguish the designated goods or services and submitted that the relevant enquiry was under s 41(5). It is unnecessary, therefore, to consider the application of s 41(6) and whether it would lead to any different result than would the application of s 41(5).
Justice Gyles confirmed this at [41] of the Full Court’s judgment:
As Allsop J has explained, the respondent accepted that the relevant inquiry was under s 41(5).
The Full Court then identified the specific reasons for its finding that the trade mark COLORADO was not inherently adapted to distinguish. In doing so, the reasoning recognises that “Colorado” was not to any extent inherently adapted to distinguish.
Justice Allsop explained as follows:
[126] Thus, the respondent submitted that the relevant question was not, as the primary judge stated, whether the word was used by the appellants in a geographical sense, but whether the word has a “signification” which it ordinarily possesses (geographic or not) which other traders may wish to use (honestly) for that signification in relation to similar goods. Thus, it was submitted that if, as his Honour found, “the word “Colorado” conjures up notions of trekking, ruggedness, fashion, Rocky Mountains and so on” (see [36] of the first judgment), other traders may wish to use the word for the signification of such attributes as well as a simple geographic signification.
[127] The submissions of the respondent showed that the evidence was replete with recognition by witnesses that the word was used to conjure up an image of adventure, the outdoors, ruggedness, trekking and the like by association with the Rocky Mountains and Colorado. This, it was submitted was not “arbitrary use making it inherently distinctive” as the primary judge found at [35] of his first judgment. Thus, it was submitted, proof of secondary meaning was required, as the Registrar had found.
[128] The appellants relied upon and supported the primary judge’s approach. In particular, they tended to brush away the importance of the geographical indicator by saying that the State of Colorado was not recognised as a place with any reputation for shoes, clothes, bags or wallets. This approach of the appellants rather ignores the possible relationship between backpacks and mountains and trekking — Colorado backpacks, for instance, is a possible signification of backpacks from that State or backpacks that might conjure the images redolent of that State that his Honour found. I have difficulty in accepting that the word “Colorado” is inherently adapted to distinguish backpacks, or even bags, wallets and purses. It is not a fancy or made up word. It is the use of a name being a State of the United States of America which has well-known mountains and is a rugged holiday area. In my view, the honest trader could well wish to make use of the signification of the word for geographic reasons — especially in relation to backpacks, or to raise a connotation from the geographic attributes of that State. In my view, the primary judge was wrong to conclude that the word was inherently adapted to distinguish.
Justice Gyles said:
[35] The issues on the appeal and cross-appeal have been comprehensively analysed in the reasons of Allsop J that I have had the benefit of reading in draft. In my opinion, the trade mark Colorado is not capable of distinguishing the appellants’ goods from the goods of other persons within the meaning of s 41 of the Trade Marks Act 1995 (Cth) (the Act) thus leading to a failure of the appeal and success of the cross-appeal as to the trade mark issues on the basis explained by Allsop J. I agree with the reasoning of Allsop J on this point but wish to add some supplementary reasons of my own.
[41] As Allsop J has explained, the respondent accepted that the relevant inquiry was under s 41(5). When the questions posed by s 41(5) are addressed, in my opinion, the word “Colorado” is inherently adapted to distinguish the designated goods or services only to a slight extent. Whether taken to indicate the origin of goods or the association of the goods with the known or perceived characteristics of the American state, “Colorado” is unlikely to distinguish the goods of the first appellant compared with the goods of other parties who may legitimately choose to use the word in connection with such goods. The use or intended use of the trade mark by the first appellant can be taken to be considerable. It may be that some people would associate the mark with the first appellant and would not make the connection between the mark and the place. However, it is likely that many would. In my opinion, the use and intended use by the first appellant would not distinguish its goods in the manner required. That conclusion is put beyond doubt by considering the “other circumstances”. In my opinion, they must include the considerable use of the word in connection with goods by the respondent and its predecessor. In my opinion, that circumstance is decisive against a finding that the trade mark does or will distinguish the designated goods or services of the first appellant.
Justice Kenny said:
[29] Presumably, the phrase “inherently adapted to distinguish the designated goods from the goods of other persons” in s 41(3) of the 1995 Act is intended to be understood in light of earlier decisions under the 1955 Act, such as Clark Equipment. I agree with Gyles and Allsop JJ that the word “Colorado” as applied to backpacks, bags, wallets, purses, shoes and other goods of the first appellant was not a “fancy name” as that expression was used by Kitto J in Clark Equipment: at CLR 515; ALR 346. It is the name of a state in the United States of America. There was evidence that the word was used to invoke adventure, ruggedness, trekking and like images associated with the state of Colorado, on account of the Rocky Mountains being there. The use of the word “Colorado” was entirely different from the use of the expression “North Pole” in connection with bananas, which was one of Kitto J’s examples of a “fancy name”. The use of the word “Colorado” was not arbitrary and its use was not equivalent to a made-up word or device. I agree in substance with Allsop J that it is likely that another trader will want to use the word “Colorado”, legitimately, with regard to his goods, for the sake of the geographical reference which it is inherently adapted to make or the connotations that that geographic reference invokes. Accordingly, I agree in the conclusion of Gyles and Allsop JJ that the word “Colorado” alone is not inherently adapted to distinguish the designated goods or services of the first appellant from the goods or services of other persons.
[30] Further, I agree, for the reasons stated by Allsop J, that the use by the respondent of the word “Colorado” is relevant to an inquiry under s 41(5) of the 1995 Act (and, for the same reasons, an inquiry under s 41(6)). Having regard to the evidence, which is set out in detail by Allsop J, it is tolerably clear that, as his Honour concludes, it cannot be said that, as at 2001, the appellants’ use of the word “Colorado” alone or in conjunction with any device was such that the word did or would distinguish the designated goods as being the appellants’. If s 41(5) applied, then it did not assist the appellants. There seems no reason to believe that s 41(6) would offer them any greater assistance.
In a written submission by Yarra Valley dated 19 March 2010, it was contended by Yarra Valley that the Full Court in Colorado did not find that the trade mark COLORADO was not to any extent inherently adapted to distinguish.
The written submissions continued:
In Colorado at first instance Finkelstein J referred to a mark being “inherently adapted to distinguish” or “inherently distinctive”. In that case his Honour found that the use of the word ‘Colorado’ in connection with the kinds of goods concerned in that case was arbitrary making it “inherently distinctive and thus requiring no proof of secondary meaning.” On appeal the Full Court took a different view. Justice Allsop stated that the primary judge was wrong to conclude that the word (Colorado) was inherently adapted to distinguish. Although his Honour then went on to say that “the correct next step might be seen to be to examine the position under s 41(6) on the hypothesis that the trade mark is not inherently adapted to distinguish the designated goods or services from those of others” his Honour did not consider s 41(6). As has been pointed out previously the Respondent accepted that the word “Colorado” was to some extent inherently adapted to distinguish designated goods or services and submitted that the relevant enquiry was under s 41(5). The remainder of his Honour’s discussion is in respect of s 41(5). The finding by Allsop J therefore is that the mark COLORADO was not inherently adapted to distinguish in the sense referred to by the trial judge, namely that is sufficient to satisfy s 41 without the need for evidence of use (s 41(3)). Justice Gyles states that “the word ‘Colorado’ is inherently adapted to distinguish the designated goods or services only to a slight extent. (emphasis added).
There is no suggestion in the decision of Gyles J that s 41(6) applied. Justice Kenny states that she agrees “with the conclusion of Gyles and Allsop JJ that the word ‘Colorado’ alone is not inherently adapted to distinguish the designated goods or services of the first appellant from the goods or services of other persons”. Given the clear statement by Gyles J that his Honour considers that the mark was inherently adapted “to a slight extent“, the statement of Kenny J that she agrees with Gyles and Allsop JJ indicates that not only does her Honour consider that Colorado is to at least to some extent inherently adapted to distinguish but also that Allsop J had that view.
In my view, this is a wrong interpretation of the approach taken by the Full Court. Their Honours in the Full Court effectively came to a view that the word “Colorado” alone was not to any extent inherently adapted to distinguish. They only considered s 41(5), and not s 41(6), because of the concession made in the appeal. The reference that Gyles J made to “a slight extent” emphasised above must be seen in context. That phrase was prefaced by the words:
[41] As Allsop J has explained, the respondent accepted that the relevant inquiry was under s 41(5). When the questions posed by s 41(5) are addressed, in my opinion, the word ‘Colorado’ is inherently adopted to distinguish the designated goods or services only to a slight extent. (emphasis added)
I have otherwise referred to the full statements made by the members of the Full Court, which in my view, properly read, indicate the approach taken by the Full Court. In the end, the differing interpretations as to the approach of the Full Court in Colorado may not matter, for as I explain later, recourse by Yarra Valley to either s 41(5) or s 41(6) will make no difference to the result in this proceeding.
Yarra Valley’s Primary Contentions as to Section 41
In addition to the above submissions on the Full Court’s decision in Colorado, the primary contentions of Yarra Valley on the application of s 41 were as follows:
(1)Lemnos failed to establish that, as at 21 March 2000, Yarra Valley’s PERSIAN FETTA trade mark was not capable of distinguishing its marinated cheese product from similar products of other persons operating in the relevant trade in Australia.
(2)The PERSIAN FETTA mark has a significant degree of inherent adaptation to distinguish. At the filing date of 21 March 2000, the term PERSIAN FETTA did not possess a signification such that honestly motivated traders in Australia would be likely to think of the term and want to use it in connection with similar goods.
(3)The first task in applying s 41 is to determine the “likelihood” that other traders would legitimately think of the word and want to use it for the signification which it ordinarily possesses.
(4)Lemnos’ argument involved two separate concepts, first, as to the geographic origin; and secondly as to type (more particularly, that PERSIAN FETTA indicated that the cheese or the cheese product was made in Iran).
(5)These two concepts are separate and involve different factual considerations. To conflate them would lead to error.
(6)The term PERSIAN FETTA had a significant degree of inherent adaptability to distinguish at the filing date of 21 March 2000 for the following reasons:
(a)The inherent unlikelihood that a trader in Australia would legitimately want to use PERSIAN FETTA to indicate that cheese goods emanated from Iran.
(b)The inherent unlikelihood that a trader in Australia would legitimately want to use PERSIAN FETTA to indicate a kind, type or style of cheese recognised in Australia, or indeed anywhere else.
(7)The trade mark PERSIAN FETTA arises in the circumstances different from the Colorado decision:
(a) Unlike Colorado, Persia is not the current name of any geographical location.
(b)There is no association between Persia and cheese in the same sense as there is with Colorado and outdoor clothing and equipment.
(c)In Colorado the Court found that “Colorado” had a connotation that was directly descriptive of a character or quality of the designated goods. That is, “Colorado” denoted qualities of ruggedness and durability, for example in relation to outdoor shoes or clothing. By contrast any association between “Persian” and cheese is at best indirect, being of exoticness and mysticism. These are not qualities of a product.
(d)Unlike the trade mark COLORADO, PERSIAN FETTA is a combination of two terms – similar to “California Syrup of Figs”.
(8)As noted by Dixon CJ in Mark Foy’s Ltd v Davies Co-op & Co Ltd (1956) 95 CLR 190 at p 194-195:
… in ordinary English speech the words do not possess a connotation sufficiently definite to amount to a direct reference to the character or quality of the goods ... Many uses of words are purely emotive. A word or words are often employed for no purpose but to evoke in the reader or hearer some feeling, some mood, some mental attitude ... They may have an emotive tendency, but they do not appear to me to convey any meaning or idea sufficiently tangible to amount to a direct reference to the character or quality of the goods.
Evidence and Findings of Fact
A great deal of evidence was relied upon by the parties in this proceeding. It is convenient to deal with such evidence and make findings of fact. Some of this evidence and findings of fact applies to the actions brought by Yarra Valley for passing off and misleading and deceptive conduct, as well as being relevant to the question of validity.
Yarra Valley’s witnesses
Yarra Valley filed the following main affidavits:
(a)Affidavit of Neil Willman dated 4 September 2009, who was a consultant and educator working in the cheese industry;
(b)Second Affidavit of Neil Willman dated 13 October 2009;
(c)Affidavit of Steven Alan Berman dated 7 September 2009, who was the National Foods executive responsible for adding PERSIAN FETTA to National Foods’ ‘South Cape’ range of products;
(d)Affidavit of Mary Antoinette Mooney dated 8 September 2009, who was Yarra Valley’s managing director;
(e)Second Affidavit of Mary Antoinette Mooney dated 12 October 2009;
(f)Affidavit of Kristine Helen Baird Van Ruiten dated 8 September 2009, who was a trade marks attorney and private investigator;
(g)Second Affidavit of Kristine Helen Baird Van Ruiten dated 12 October 2009;
(h)Affidavit of Stephanie Anderton dated 10 September 2009, who was the Group Marketing Manager (Cheese) for National Foods;
(i)Affidavit of Gary Allan Cooper dated 5 October 2009, who was the chef and part owner of a restaurant in the Yarra Valley;
(j)Affidavit of David John Brown dated 11 October 2009, who was the Managing Director of Milawa Cheese Company Pty Ltd;
(k)Affidavit of Iwona Chrzaszcz dated 12 October 2009, who was a consultant and Technical Auditor of OzTAM Pty Limited.
Lemnos’ witnesses
Lemnos filed the following main affidavits:
(a)Affidavit of Benjamin Fraser Dowling dated 7 September 2009, who was Lemnos’ solicitor;
(b)Second Affidavit of Benjamin Fraser Dowling dated 15 October 2009;
(c)Third Affidavit of Benjamin Fraser Dowling dated 12 January 2010;
(d)Fourth Affidavit of Benjamin Fraser Dowling dated 3 February 2010;
(e)Fifth Affidavit of Benjamin Fraser Dowling dated 9 April 2010;
(f)Sixth Affidavit of Benjamin Fraser Dowling dated 16 April 2010;
(g)Affidavit of Richard Peter Thomas dated 7 September 2009, who was the primary cheese maker;
(h)Second Affidavit of Richard Peter Thomas dated 6 November 2009;
(i)Third Affidavit of Richard Peter Thomas dated 12 April 2010;
(j)Affidavit of Denny Karamoshos dated 12 October 2009, who was Lemnos’ National Sales and Marketing Manager;
(k)Affidavit of Hari Raman dated 12 October 2009, who was Lemnos’ General Manager of Exports and International Marketing;
(l)Affidavit of Terry Paule dated 23 October 2009, who was the second respondent and the managing director of Lemnos.
Development of the cheese by Yarra Valley
As I have already indicated, the YARRA VALLEY DAIRY PERSIAN FETTA product was first developed by Yarra Valley in about 1996 when the business was in its infancy. At this time, goat’s cheese was a relatively new product to the Australian market and tended to be of interest only to those with knowledge of European cheeses.
I find that Mr Thomas was primarily responsible for cheese production at the Yarra Valley Dairy at this time and that he developed a new goat’s cheese based on his experience in Iran in 1973. Mr Thomas said that in the early years at Yarra Valley, he:
… came up with all sorts of ideas and conducted considerable experimentation … including trying to replicate the white fetta style cheese that I had first seen in the Iranian village in 1973. The working name I had for the cheese at this stage was simply “Iranian White Cheese”.
Whether or not Mr Thomas’s motivation to develop a new goat’s cheese product was based solely on his experiences in Iran, I have no doubt they strongly influenced his approach.
Mr Thomas stated in his third affidavit that at the time he was developing the PERSIAN FETTA product he recalls using a book by Kosikowski which he owned. In his third affidavit he says that in his earlier affidavit he was referring to a specific recipe in Kosikowski, being that entitled “Feta and Iranian White Cheese from Pasteurised Cow’s Milk (suited for American conditions)”.
Although Mr Thomas says he used the Kosikowski recipe during the time he developed the Persian Fetta product he does not state how he used it. Mr Thomas did not depose that he followed the recipe in exhibit RT-19 entitled “Feta and Iranian White Cheese from Pasteurized Cow’s Milk” (‘the Recipe’) fully or exactly. He merely deposed that he “recalls using” the book.
Lemnos did not assert that the Yarra Valley Persian Fetta cheese and the cheese described in the Recipe were relevantly similar cheeses and did not seek to rely on any alleged similarities between the Yarra Valley Persian Fetta cheese and the cheese described in the Recipe as “Feta and Iranian White Cheese from Pasteurized Cow’s Milk”. However, there is the similarity of the names which both carry a reference to Iran (in the Recipe) or Persia (Yarra Valley Persian Fetta) which include the word Fetta or Feta. Both cheeses are white coloured cheeses made from pasteurised cow’s milk.
“White Cheese”, Mr Thomas said, was “a common way of describing fetta or fetta style cheeses from Europe and the Middle East.” It was also commonly used to describe cheeses made from goat’s or sheep’s milk as the milk from these animals lacks the protein that causes cow’s milk to produce yellow cheese. Cow’s milk is not white unless bleached.
Whether Mr Thomas or Mrs Mooney was responsible for the concept of a cheese marinated in an oil base was in dispute, but I do not consider it matters. Mrs Mooney has said that at this time she was aware of marination of cheese being done in Italy and France but not anywhere else. I think that both Mr Thomas and Mrs Mooney probably made a contribution to this concept.
Mr Thomas said that the use of olive oil in the Yarra Valley Persian Fetta product was for “final presentation to the market” and for its preservative qualities. He said he used a low flavour olive oil so as not to impact too much on the flavour of the cheese in the way that an unfiltered olive oil, for example, would. Olive oil, he said, was compatible with the flavour of the cheese but it was not used for flavour enhancement. Rather, it was complimentary to the flavour of the cheese. The marinade was undoubtedly a significant part of the product as presented to the consumer. It was not just packaging, it interacted with the cheese and added olive oil taste and herb flavours to the cheese.
Mr Thomas said that there were other cheeses in herb-flavoured oils in existence at the time he developed the PERSIAN FETTA product for Yarra Valley but that these other products used inferior ingredients:
[these products] were in herb-flavoured oils, which were incidentally not olive oil, and vegetable oils, and they used also, I guess as a cost saving matter, dried herbs in those marinades. And they were, in my opinion, unacceptable in terms of quality, and the sort of market that we were pitching for, and we ultimately got the likes of Tetsuya Wakuda restaurant in Sydney.
He said there were many aspects in addition to quality oil and fresh herbs that distinguished the Yarra Valley PERSIAN FETTA from the other products that were on the market.
With regard to the choice of the name YARRA VALLEY DAIRY PERSIAN FETTA, Mrs Mooney stated that:
… having developed what I regarded was a new and unique product; I wanted to give it a unique name. The cheese used for the product was a fetta style of soft cheese. Rather than simply calling it marinated fetta, I suggested that we call the product Persian Fetta and Richard agreed. I had never heard of anyone using the word “Persian” in relation to cheese and I thought that the name suggested a sense of the exotic, which is what I wanted to convey…
She said that the name “in no way acted to describe the product.”
In contrast, Mr Thomas claimed that he was responsible for the choice of name and style of cheese. He said:
I decided that it would be called Persian Fetta. My reason[s] for giving the cheese this description were as follows:
(a)it retained the link with my experience in the Iranian village in 1973;
(b)Iran had negative political connotations due to the Iranian Government of the day; and
(c)I felt that Persian Fetta had the right mix of mysticism and exoticness as well as descriptiveness that would be attractive and identifiable to the consumer.
In my mind, the word Persian always described the culture of that country, even if the official name is now Iran.
In the course of cross-examination, Mr Thomas was asked what he meant by the word “descriptiveness” in the above passage. He explained that the use of the word fetta was descriptive and:
… the Persian part was to draw people’s focus away from the fettas that they had seen, which were very low-priced in the marketplace, and give it a sense that this was something different.
He continued:
… the Persian thing had two connections, in my mind. The cheese that came most notably to mind was the style that I had first experienced in Iran. I had eaten brick fetta before that, but that is a totally different, had totally different texture. In fact, I have never actually made fetta of that style, of the Greek style.
Mr Thomas said in his second affidavit that he chose the word “Persian” because it:
… emphasised that it came from a different culture and would have different qualities to other fetta or white cheeses such as Greek fetta or Danish fetta.
He recognised that:
... [n]aming a cheese using a Middle Eastern reference was unusual and commercially risky at that time.
Nevertheless, he said:
… the name Persian had personal significance to me and I also thought that because the name had a story behind it, it would help to capture the imagination of food writers and journalists.
Mr Thomas explained in his oral testimony that he was reluctant to use the word fetta because fetta was a cheese that, at that time, brought very low prices. He said that:
… some of the very best fetta in the world is made in Bulgaria and such places; but no one had a concept of the style of cheese that I had developed at the Yarra Valley Dairy, inspired by this experience in Iran. None of the fettas, so-called, at the time were – had the textural qualities that are very important to solubility in the mouth, particularly with cold wines. But it gave people a picture of something white, something that had a shape to it, and it would be, it is, very hard to define any particular cheese, and it just gave people a mental picture they couldn’t see on the tin.
In giving this evidence, I do not consider that Mr Thomas was using the word “Persian” to only distinguish the product from other fettas, but was using the word to describe a different style of fetta that was known as “Persian”. In this sense, it was descriptive, referring to a textural quality of the cheese. This is not to say the word “Persian” does not also conjure up feelings of mysticism associated with an area of the world previously known as Persia. However, the reference to Persia is not a reference that is used for no other purpose than evoking some feeling, mood or mental attitude. According to Mr Thomas, the reference is one directly to a style of cheese from Persia as it was then known. This is not, therefore, the type of situation referred to by Dixon CJ in Mark Foy’s Ltd at p 194-195, which was referred to and relied upon by Yarra Valley.
In re-examination, Mr Thomas confirmed the evidence he had given in his affidavit which was that “[u]sing ‘Persian’ also reflected where I had first come across this style of cheese and the source of my inspiration.” Here I accept that Mr Thomas is recalling the source of his inspiration and a ‘style’ of cheese, which although difficult to define, is still a reference to a quality or style of cheese.
Mrs Mooney, in her second affidavit, reaffirms her claim that she was responsible for the idea of the name PERSIAN FETTA and says that both she and Mr Thomas thought it was a good name and that they decided on the name together. She says that she believes customer interest in the product was due to the “mysticism and exoticness” of the name. As I have indicated already, Mrs Mooney did not see the reference as being in any way descriptive.
In oral testimony, Mrs Mooney said that she had been inspired by “house decoration books, Vogue Living and so on” and well as food magazines where one of the trends at the time was “Persian, the idea of Persian.” She said that the word was also chosen because it gave “the idea of luxury and exoticness.”
Having regard to the working relationship between Mrs Mooney and Mr Thomas, and the responsibilities and background of each person, with the prime responsibility as cheese maker being with Mr Thomas, I find that the idea of the name “PERSIAN FETTA” was that of Mr Thomas based upon his earlier experience. This is consistent with the later promotional material coming from Yarra Valley, expressly referring to traditional Persian or Middle Eastern recipes, to which I will shortly refer. I do not accept the explanation given by Mrs Mooney that this promotional material was not in fact true, and was just part of the “marketing exercise”. In my view, it is more probable that Mr Thomas’ version of events as to the choice of name PERSIAN FETTA and his account of the style of cheese were correct.
Criticisms were made by Yarra Valley of Mr Thomas’ evidence which included the following:
(a)he had limited cheese making experience prior to 1973;
(b)the cheese making he saw in Iran was in a desolate and remote part of Iran;
(c)the equipment used was extremely rustic;
(d)he did not write down a recipe;
(e)he did not know the details of the manufacturing process he saw in Iran; and
(f)the process used by Yarra Valley was different to what he saw in Iran.
Each of these criticisms can be accepted. However, I do not consider any of these criticisms individually or cumulatively detract from the evidence that Mr Thomas was replicating a style of cheese, and that his experience in Iran was the reason for the choice of the name PERSIAN FETTA and the source or inspiration for a style of cheese. I do not consider it matters, as is certainly the case here, that Mr Thomas did not exactly replicate a recipe from Iran for the fetta cheese.
With regard to the choice of a tin as packaging for Yarra Valley’s PERSIAN FETTA product, Mrs Mooney’s evidence was that while she was painting the tasting room floor at Yarra Valley it occurred to her:
… that the tins used for the [paint] samples would be a good option for packaging of the Persian Fetta product. I had never seen this type of packaging being used for cheese, but that was part of the attraction.
Mrs Mooney has said that apart from bulk packs of fetta, she is unaware of any other marinated cheese products being sold in tins in Australia.
In contrast to Mrs Mooney’s evidence, Mr Thomas said that the choice of a tin for the packaging of the new product was his idea. He said that he considered a number of options for the packaging of the new cheese and that he:
… determined that a tin would be ideal because it is very good for storing oil and also reminded me of the tins I saw back in Iranian village in 1973 (although they were a much larger size), and I had been aware of tin being used for many other cheese products. I remember that tin packaging was used for cheese which was sent to Australian soldiers in the Middle East in World War II.
My impression is that the choice of a tin for packaging the product was made by Mr Thomas. On balance, I so find. However, I do not think whether the choice of a tin was that of Mrs Mooney or Mr Thomas makes any difference to the outcome of these proceedings.
Yarra Valley’s sales and promotion
Since its release in 1996, the YARRA VALLEY DAIRY PERSIAN FETTA product has always been Yarra Valley’s biggest selling product, representing more than half total sales.
The YARRA VALLEY DAIRY PERSIAN FETTA product has been advertised through various media such as newspapers, magazines and websites since it was launched in 1996. Yarra Valley has also promoted its YARRA VALLEY DAIRY PERSIAN FETTA product at trade shows and in-store tastings as well as to chefs for use in their restaurants. The product has been promoted at food and wine festivals, racing carnivals and cheese making workshops and has won many cheese awards both in Australia and overseas.
As Yarra Valley’s Managing Director between 1996 and 2004, Mrs Mooney was personally responsible for sales and promotion.
However, most of the promotion occurred after 21 March 2000. I find that prior to this date, the promotion was minimal, and focussed upon a specific boutique market. Sales were also not extensive prior to 21 March 2000, and again were mainly to a boutique market.
Nevertheless, the promotional material did refer to a Persian recipe and Middle Eastern recipes, and to Richard Thomas in his capacity as a cheese maker from Yarra Valley.
Press coverage of the YARRA VALLEY DAIRY PERSIAN FETTA product included:
(a)an article in the Sunday Times newspaper on 14 November 1999 in which a retailer was quoted as saying that “the cheese was developed by Australian cheesemaker Richard Thomas after a trip to Iran where he learnt how to make the cheese”; and
(b)an entry in an Autumn/Winter edition of a Vogue Entertaining Cookbook, which was undated but was in Yarra Valley’s possession by October 2001, which described the Yarra Valley Persian Fetta as a “farmhouse cheese developed from a traditional Persian recipe.”
Further, since about June 2001, the YARRA VALLEY DAIRY PERSIAN FETTA product had been promoted via an entry on the citysearch.com.au website (but not currently), which was controlled by Yarra Valley, as being “a very soft style fetta which originates in the Middle East.”
Yarra Valley also promoted its YARRA VALLEY DAIRY PERSIAN FETTA product by entering it into many national and international cheese shows. These occurred in the main after 21 March 2000. In the program for the 2002 Australian Specialist Cheesemakers’ Show, for example, Yarra Valley’s Persian Fetta was described as “A smooth textured feta based on traditional Middle Eastern recipes, marinated in olive oil and fresh herbs.”
YARRA VALLEY DAIRY PERSIAN FETTA has also featured in several books. In her first affidavit, Mrs Mooney referred to a book called “Cheese Slices” by Will Studd, which was published in 2007. The reference to YARRA VALLEY DAIRY PERSIAN FETTA in that book includes the following:
This was the first of the Australian cow’s milk fetta cheeses to be marinated in oil. It was originally developed from the traditional Persian recipe by Richard Thomas, hence the name.
Mrs Mooney also referred in her first affidavit to a book called “World Cheese Book” by Juliet Harbutt, which was published in 2009. The reference to YARRA VALLEY DAIRY PERSIAN FETTA in that book contains the following sentence:
There are dozens of marinated fetta style cheeses in Australia, but the first was created by Richard Thomas in 1994, inspired by a Persian recipe and using milk collected from Yarra Valley Dairy’s herd of Holstein Friesian Cows.
Mrs Mooney said in her affidavit evidence that both of these books are “mainstream books aimed at the general consumer”.
There is nothing in any of Yarra Valley’s promotional material which seeks to dispute or correct the repeatedly expressed fact that YARRA VALLEY DAIRY PERSIAN FETTA is based on a traditional Persian recipe. However, Yarra Valley’s current web-site no longer contains this assertion. Nor does the promotional material now produced by Yarra Valley to promote the PERSIAN FETTA product.
In cross-examination, Mrs Mooney confirmed the evidence she had given in her affidavit that the book “Cheese Slices”, by Will Studd, was a mainstream book aimed at the general consumer and that the book had general exposure to people in Australia and she accepted that Will Studd was an expert in the field and that he knew a lot about cheese and the history of cheese.
Mrs Mooney agreed that the statement in Mr Studd’s book was probably correct, that:
Fetta has been produced from a blend of ewe’s and goat’s milk in the Eastern Mediterranean for at least the last 5000 years making it the oldest European cheese known today.
She accepted as correct Mr Studd’s statement that:
Fetta is made on the Greek mainland, the surrounding islands and several neighbouring countries.
In addition to such coverage in the media and in books, for many years Yarra Valley has been a popular tourist destination attracting tourists from local areas, interstate and overseas. Mrs Mooney estimated that Yarra Valley has had approximately half a million visitors to its tasting room since 1996.
Yarra Valley has spent more than $300,000 on advertising and promotion of its products over the last three years and Mrs Mooney has estimated that at least 50% of this expenditure could be attributed to its YARRA VALLEY DAIRY PERSIAN FETTA product alone. This, of course, says nothing about the position prior to 21 March 2000.
I should also indicate that none of the press articles and advertisements exhibited by Mrs Mooney refers to the YARRA VALLEY DAIRY PERSIAN FETTA product without the words YARRA VALLEY DAIRY or YARRA VALLEY either immediately adjacent to the words PERSIAN FETTA or very nearby. The use of PERSIAN FETTA was consistently accompanied by the use of the ® symbol immediately next to PERSIAN FETTA.
Yarra Valley’s application to register PERSIAN FETTA as a trade mark
As I have indicated, Yarra Valley applied to register the words PERSIAN FETTA as a trade mark on 21 March 2000. That application was the subject of prolonged correspondence between Yarra Valley and the Trade Marks Office. Separate research was also carried out by the Registrar of Trade Marks.
By letter dated 7 December 2000 a Trade Marks Office Examiner (acting as a delegate of the Registrar of Trade Marks) wrote to the solicitors for Yarra Valley and advised that the phrase PERSIAN FETTA:
… is not capable of distinguishing your goods because it is a term other traders will need to use in the ordinary course of business to describe their Persian style fetta cheeses appropriately. However, I may be able to reconsider this matter if you:
Exclude cheeses from your specification of goods so that it reads dairy products excluding cheeses
OR
Provide evidence of use of your trade mark under s 41 (5). Please note that the amount of evidence will have to be substantial as PERSIAN FETTA has a very limited inherent adaptation to distinguish cheeses.
By letter from Yarra Valley’s solicitors to the Examiner dated 2 May 2001, Yarra Valley requested reconsideration of Yarra Valley’s application and stated:
… there is no such thing as a Persian style cheese nor Persian style fetta cheese. Indeed there is no longer a country known as Persia and so there is no need for any manufacturer of cheeses to designate a product as Persian Fetta. Thus, there is no basis for the objection.
By a letter dated 25 May 2001 the Examiner replied in the following terms:
I have considered your submission that the word “Persian” no longer has a meaning in relation to the goods specified in your client’s application because it is no longer needed to indicate the origin of the goods.
I am however maintaining my objection to your trade mark under s 41(5) of the Trade Marks Act 1995 as being descriptive of a characteristic of your client’s goods.
The term “Persian” is well known in relation to food products. It is used to designate a style of food preparation. Persian cuisine would include, amongst other things, a style of making various cheeses, yoghurts and other diary [sic] products. The term “Persian Fetta” therefore refers to fetta cheese made in the traditional Persian style. My research has shown that some restaurants are using the term “Persian Fetta” on their menus to indicate the style of fetta cheese they offer.
I may be able to reconsider the objection if you provide evidence of use of your trade mark under s 41(5) of the Trades Marks Act 1995.
By letter from Yarra Valley’s solicitors to the Examiner dated 5 June 2001, Yarra Valley replied:
We refer to the Official Report. We are not aware of any use of the term “Persian” to indicate a style of cheese making or in relation to dairy products. We note that the Examiner has undertaken research and we would like to receive the specific detail.
The Examiner replied by letter to Yarra Valley’s solicitors dated 18 June 2001, enclosing a number of articles and internet references indicating the Examiner’s research into the use of the term PERSIAN FETTA or the word “Persian” in relation to cheese. The Examiner said:
The research indicates that Persian cuisine is a recognised style of food preparation and that the term Persian is being used in restaurants and recipes as a descriptive term indicating the style of fetta cheese being used.
The reference to your applicant’s site also indicates that the term Persian is being used on their site in a descriptive sense to indicate the style of fetta cheese.
By letter from Yarra Valley’s solicitors to the Examiner dated 28 August 2001, Yarra Valley requested that its application be amended to reflect that the mark PERSIAN FETTA was sought to be registered with respect only to “dairy products other than cheese”. This request was subsequently countermanded by Yarra Valley’s solicitors as noted below.
By letter to Yarra Valley’s solicitors dated 5 September 2001, the Examiner said:
I have reviewed this application. The request to amend the statement of goods to read “dairy products other than cheese” is noted. It is also noted that this was suggested in an earlier examination report. However, I consider that the proposed amendment creates a question that needs to be clarified, that is would the words PERSIAN FETTA be misdescriptive, deceptive or confusing if applied to goods that were not Persian Fetta, or at the very least fetta.
Your comments in relation to Persian being an out of date term are also noted. The fact that the original country of origin may no longer exist does not however, mean that consumers do not recognise the term as indicating a type of product. For example Turkish Delight is made all over the world and is instantly recognised as a form of confection. Siamese Ginger is a ginger type spice used in South East Asia. Siam is no longer the term used to refer to a nation however, the product Siamese Ginger would still be recognisable to consumers who would have an expectation of that product that is not limited by the demise of the name of the nation it theoretically originated from.
The internet material shows that that the term Persian Fetta is used to describe a cheese. Other traders should be free to use the words Persian Fetta for the purpose of ordinary description. Equally the use of the term Persian Fetta in relation to cheeses appears to indicate that consumers purchasing dairy products could reasonably expect a product marked with the words Persian Fetta to be a description of the contents of the product.
Further consideration could be given to the acceptance of this application if examples of the mark in use could be supplied. Alternatively, evidence in terms of s 41 (5) that establishes that the trade mark is capable of distinguishing the applicant’s goods from those of other traders is requested.
By letter from Yarra Valley’s solicitors to the Examiner dated 17 December 2001, Yarra Valley formally withdrew its letter to the Examiner dated 28 August 2001, and enclosed a statutory declaration by Mrs Mooney dated 19 October 2001 which sought to show significant use of PERSIAN FETTA as a trade mark. That declaration also sought to show a reputation having been established due to the promotion of PERSIAN FETTA and the business associated with it.
Yarra Valley’s solicitors’ letter dated 17 December 2001 also claimed that:
… there is an appropriate generic name for this style of cheese, being panir, thus the trade mark is not one that other traders will wish to use unless with improper motive. Alternative and accepted terminology is available to them.
Yarra Valley’s solicitors’ letter dated 17 December 2001 further stated that:
… nobody knows what country or countries are “Persian”, hence, the various references to “Iran” and “the Middle East” throughout the [research material]. In some cases where the word “Persian” is used it seems necessary to have added the word Iranian.
In the statutory declaration attached to the 17 December 2001 letter Mrs Mooney said:
Fetta is a popular cheese style widely known in Australia. Originally it was either goats or sheep cheese produced in Greece and other Mediterranean countries. The fetta cheese sold under the trade mark PERSIAN FETTA is a soft style fetta derived by marinating cheese derived from cow’s milk in a blend of virgin olive oil and herbs. Because of this my company adopted the name Persian Fetta to distinguish the cheese produced from the traditional fetta varieties.
By letter to Yarra Valley’s solicitors dated 1 February 2002, the Examiner indicated that Yarra Valley’s trade mark application for the words PERSIAN FETTA in relation to dairy products including cheese had been accepted subject to an endorsement that the provisions of s 41(5) had been applied. The certificate of registration carries that endorsement.
None of the above letters from Yarra Valley’s solicitors to the Examiner, nor Mrs Mooney’s declaration dated 19 October 2001, made any reference to the fact that Mr Thomas’ idea for a marinated soft fetta was derived from his experiences in Iran in 1973. Mrs Mooney said she had known this fact since some time shortly after the product was launched in 1996.
I make mention at this point to the references to panir cheese. Mr Willman, a cheese consultant, had inspected and tasted each of the YARRA VALLEY DAIRY PERSIAN FETTA and LEMNOS PERSIAN MARINATED CHEESE products. Mr Willman concluded that each product was a marinated cheese product made in the same way in which the cheese component is a fresh curd made from cow’s milk. Mr Willman believed each product to be quite different to what he understood paneer or panir cheese to be. Mr Willman was not familiar with the spelling ‘panir’ and assumed it was just a different spelling of ‘paneer’. Mr Willman said specifically:
I am not familiar with the spelling “panir”, but assume it is a different spelling of “paneer” and refers to the same type of cheese as paneer that I have described above. I note that the Lemnos Product lists “cheese (panir) [cow’s milk, cultures, salt, non-animal (microbial) rennet]” in the list of ingredients on the tin. As discussed above I consider that the cheese used in the Lemnos Product is a fresh curd, which is the same as the cheese used in the PERSIAN FETTA product. It is quite different to what I understand “paneer” or “panir” cheese to be (on the assumption that “panir” is simply an alternative spelling of “paneer”).
Mrs Mooney stated in her first affidavit that the Yarra Valley PERSIAN FETTA product was “a feta style of soft cheese” which might properly be described as “marinated feta”. She also stated in her second affidavit that the base cheese used in the LEMNOS PERSIAN MARINATED CHEESE product was different from what she understood paneer (or panir) to be. However, like Mr Willman, Mrs Mooney thought that paneer and panir were synonyms and referred to the same type of cheese.
Mr Paule, the managing director of Lemnos, gave evidence that ‘panir’ was the Persian word for cheese and that ‘paneer’ was commonly associated with Asia or India.
He said that the Lemnos product was “Persian marinated cheese with panir as its ingredient” and that “panir is a better description of what is in the tin”. This last statement did not detract from Mr Paule’s view that the cheese was still of a “Persian” style, and that the use of the word ‘Persian’ was descriptive and an accurate description of what was in the tin. Mr Paule said in his evidence that a Persian style product is “a style of panir cheese made in Persia which would be as opposed to a Greek style”.
I accept Mr Paule’s evidence. Both Mr Willman and Mrs Mooney did not have the knowledge that Mr Paule had on this topic. Both Mr Willman and Mrs Mooney were either not familiar with the terms or had an inexact understanding of them. I should indicate that this disposes of any contention by Yarra Valley that the use of the word “Panir” by Lemnos was in itself misleading and deceptive. It was a reference to cheese of a particular texture and style, being a reference to the Persian word for cheese and style of cheese. On the basis of my other findings in this proceeding as to the style of cheese referred to by Mr Thomas, the word “panir” was appropriately used by Lemnos. It is to be recalled that both parties accepted that the competing products were similar, as Mr Willman and Mrs Mooney attested.
Lemnos’ development of the LEMNOS PERSIAN MARINATED CHEESE product
In such circumstances, the Court must be wary of the type of “sleight of hand” which Jacob J warned against in Unilever plc’s Trade Mark, Re (Striped Toothpaste Case) [1984] RPC 155. In that case, Unilever sought registration of the shape of its “Viennetta” ice cream product. Justice Jacob considered survey evidence which demonstrated a “high degree” of association (approximately 67% of ice cream eaters) between an image of the “Viennetta” ice cream and “Walls”, a name long used by the applicant for its ice cream products. His Lordship dismissed the value of such evidence as follows:
Putting the other products on one side for the moment, there can be no doubt that the product appearance has achieved considerable recognition on its own as denoting Walls’ “Viennetta” – the product of a particular manufacturer. Is that enough to give it a “distinctive character” within the meaning of Art.3(3)? For what has not been proved is that any member of the public would rely upon the appearance alone to identify the goods. They recognise it but do not treat it as a trade mark.
There is a bit of sleight of hand going on here and in other cases of this sort. The trick works like this. The manufacturer sells and advertises his product widely and under a well-known trade mark. After some while the product appearance becomes well-known. He then says the appearance alone will serve as a trade mark, even though he himself never relied on the appearance alone to designate origin and would not dare to do so. He then gets registration of the shape alone. Now he is in a position to stop other parties, using their own word trade marks, from selling the product, even though no-one is deceived or misled.
I do not think that is what the European Trade Mark system is for. It is a system about trade marks, badges of trade origin. For that reason I think that in the case of marks consisting of product shapes it is not enough to prove the public recognises them as the product of a particular manufacturer. It must be proved that consumers regard the shape alone as a badge of trade origin in the sense that they would rely upon that shape alone as an indication of trade origin, particularly to buy the goods. If that cannot be proved, then the shape is not properly a trade mark, it does not have a “distinctive character” for the purposes of trade mark law.
Justice Sundberg applied the above passage from Unilever with approval in Guylian.
Even if the PERSIAN FETTA trade mark became well known and well associated with Yarra Valley, in my view this was only because of the fact that PERSIAN FETTA or its products is invariably presented together with YARRA VALLEY DAIRY.
Consistent with the approach of Jacob J in Unilever and Sundberg J in Guylian, no member of the public would rely upon the words PERSIAN FETTA alone to identify the goods – they may recognise PERSIAN FETTA and associate such a term with YARRA VALLEY DAIRY, but they would not treat PERSIAN FETTA as a badge of trade origin.
It is also important to recall that s 41(6) requires use of PERSIAN FETTA “as a trade mark”.
In Woolworths Ltd v BP plc (No 2) (2006) 154 FCR 97, the Full Federal Court held that s 41(6) requires specific consideration of the extent to which BP had used each of the marks applied for as a trade mark before the date of filing and whether that use was sufficient to distinguish the designated goods and services as being those of BP.
The Full Court in Woolworths (No 2) found that the primary judge had fallen into error by failing to make an express finding about what precisely had been used as a trade mark.
The Full Court considered that despite BP’s acknowledged heavy use of the colour green, it had not been used “as a trade mark” and therefore could not meet the test provided by s 41(6). The Full Court found specifically that green was an important part of BP’s “get-up” and was part of their method of identifying and distinguishing BP’s products and services, but had not been used separately as a trade mark.
More recently, in Guylian, a s 41(5) case, Sundberg J applied the Full Court’s reasoning in BP to conclude that the seahorse shape for which the applicant sought trade mark registration had not been used by the applicant “as a trade mark.” This was because:
(a)the seahorse picture on the front of the Guylian box was descriptive of or “an example of” the box’s contents; and
(b)the GUYLIAN trade mark on the applicant’s packaging had the effect of diluting any trade mark significance the seahorse shape might otherwise have had.
Similarly, in Ocean Spray Cranberries, Wilcox J held that the words CRANBERRY CLASSIC were not used “as a trade mark” because the words were:
(a)descriptive of the particular product on which they were displayed; and
(b)always used on the product label with the words OCEAN SPRAY which was the applicant’s brand name.
In the present inquiry under s 41(6), a key question is whether Yarra Valley’s use of the phrase PERSIAN FETTA before 21 March 2000 would have appeared to consumers as possessing the character of a brand.
In my view, the presence of the YARRA VALLEY DAIRY name and logo on all versions of the YARRA VALLEY DAIRY PERSIAN FETTA product makes it “difficult to conclude”, as Sundberg J said in Guylian, that the phrase PERSIAN FETTA “has by itself become distinctive” of Yarra Valley’s products.
There are similarities between this case and the facts considered by the Full Courts who decided Johnson & Johnson, Pepsico Australia Pty Ltd v The Kettle Chip Company Pty Ltd (1996) IPR 161, Mars Australia Pty Ltd v Sweet Rewards Pty Ltd (2009) 81 IPR 354 and the decision of Sundberg J in Guylian.
Nevertheless, every case needs to be determined on its own facts and in context. In this proceeding, it is the YARRA VALLEY DAIRY name and logo on Yarra Valley’s PERSIAN FETTA product that does the work of identifying the commercial source or trade origin of Yarra Valley’s product, and not the words PERSIAN FETTA.
It follows from the above that s 41(6) cannot apply to allow Yarra Valley’s registration of PERSIAN FETTA because Yarra Valley did not use the words PERSIAN FETTA as a trade mark prior to 21 March 2000 to the extent necessary to establish that by then the words PERSIAN FETTA no longer conveyed their inherent descriptive meaning, but instead distinguished Yarra Valley’s cheese from the cheese of other persons. The use by Yarra Valley prior to 21 March 2000 had certainly not ‘eclipsed’ the primary descriptive nature of or the primary signification of the term PERSIAN FETTA.
Application of section 41(5) TMA
As explained above, and consistent with the analysis of Branson J in Blount and the Full Court in Colorado, s 41(5) should not arise for consideration in the present case.
However, I turn to make some observations as to the application of s 41(5).
Section 41(5) provides as follows:
(5) If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services:
(a) the Registrar is to consider whether, because of the combined effect of the following:
(i) the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;
(ii) the use, or intended use, of the trade mark by the applicant;
(iii) any other circumstances;
the trade mark does or will distinguish the designated goods or services as being those of the applicant; and(b) if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services--the trade mark is taken to be capable of distinguishing the applicant's goods or services from the goods or services of other persons; and
(c) if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services--the trade mark is taken not to be capable of distinguishing the applicant's goods or services from the goods or services of other persons.
Section 41(5) TMA requires a balancing exercise. If a mark is inherently adapted only to a small degree it will require greater evidence of the fact that it has been (or will be) used in such a way as to distinguish the relevant goods.
The relevant date for assessment of capacity to distinguish is the priority date of the trade mark application, which in this case is 21 March 2000.
In Austereo Pty Ltd v DMG Radio (Australia) Pty Ltd (2004) 61 IPR 257, Finn J considered the authorities relevant to s 41(5) and explained that:
(a)the criterion is forward looking but the required capability must be possessed by the mark at the priority date;
(b)it is insufficient that the mark may have the potential or capacity to acquire that capability in the future;
(c)evidence of use after the priority date, no less than evidence of intended use, is relevant only to the question of whether the mark possessed the required capability at the priority date; and
(d)It will not assist an applicant for registration if that use after the priority date demonstrates no more than:
(i)the mark has the potential or capacity to acquire that capability in the future; or
(ii)that the mark has acquired distinctiveness only because the relevant community has since the priority date been “educated” to see the mark as an indicator of the origin of particular services.
Accordingly, in this case, the question would be whether the phrase PERSIAN FETTA had the capability, as at 21 March 2000, to distinguish the Yarra Valley’s product from the products of other traders.
There were a large number of reports that Yarra Valley’s product was derived from Iran which continued to be republished after 2001, including on Yarra Valley’s own website and at public cheese industry shows. These are relevant factors under s 41(5)(a)(iii) of the TMA which weigh against Yarra Valley by reinforcing the descriptive, not distinctive, nature of PERSIAN FETTA, as the public had been educated to believe that PERSIAN FETTA was descriptive of Yarra Valley’s product.
In Colorado, one of the factors taken into account by the Full Federal Court under s 41(5) of the TMA was the use of COLORADO by persons other than the trade mark applicant.
As noted above, apart from Yarra Valley and Lemnos, other persons have sought to use “Persian” and “Fetta” and similar descriptive terms in Australia in relation to cheese products. As in Colorado, such use by persons other than Yarra Valley weighs heavily against the conclusion that PERSIAN FETTA distinguishes Yarra Valley’s cheese from the cheeses of other persons, particularly other persons’ Persian style fetta cheeses.
Insofar as s 41(5)(a)(ii) of the TMA requires consideration of Yarra Valley’s actual or intended use of PERSIAN FETTA, it refers to use “of the trade mark” in terms comparable to s 41(6). It follows that, consistently with the Full Court’s interpretation of s 41(6) in Woolworths (No 2), the use relevant to s 41(5)(a)(ii) is Yarra Valley’s use of the words PERSIAN FETTA as a trade mark.
For the reasons set out above with respect to s 41(6) of the TMA, Yarra Valley’s use of PERSIAN FETTA prior to 21 March 2000 was not use of those words as a trade mark.
Insofar as Yarra Valley’s conduct after 21 March 2000 is relevant to demonstrate the capability of PERSIAN FETTA to distinguish Yarra Valley’s cheese at that date, the evidence after that date does not lead to any different conclusion. Both before and after 21 March 2000, the YARRA VALLEY DAIRY brand name was prominently displayed at the top of the front of Yarra Valley’s product and it is this name that does the work of distinguishing the product.
In the same way, the use of the words PERSIAN FETTA by National Foods (since 2003) under licence from Yarra Valley, is descriptive and issued always in conjunction with the distinctive trade mark SOUTH CAPE.
Moreover, Yarra Valley’s change of packaging to its current YARRA VALLEY DAIRY PERSIAN FETTA product has substantially decreased the size and prominence of the words PERSIAN FETTA, and increased the size and prominence of YARRA VALLEY DAIRY and a blue cow logo. This could be seen as consistent with the conclusion that YARRA VALLEY DAIRY has always designated the brand of that product, whereas PERSIAN FETTA has described its contents.
It follows that s 41(5), even if applicable, would not prevent Yarra Valley’s registration from being cancelled.
PASSING OFF AND MISLEADING AND DECEPTIVE CONDUCT
I now turn to the causes of action for passing off and misleading and deceptive conduct.
Generally speaking, there are three elements that must be established in a passing off action:
(a)that the applicant’s “get-up”, including any brand name, is recognised by the public as distinctive, specifically of the applicant’s goods or services;
(b)that there has been a misrepresentation by the respondent to the public (whether or not intentional) leading or likely to lead the public to believe that the goods offered by the respondent are the applicant’s goods; and
(c)that the applicant suffers or, in a quia timet action is likely to suffer, damage by reason of the erroneous belief engendered by the respondent’s misrepresentation that the source of the respondent’s goods is the same as the source of those offered by the applicant.
As noted by the House of Lords in Reckitt and Colman Products Ltd v Borden Inc and others (1990) 17 IPR 1:
Although your Lordships were referred in the course of the argument to a large number of reported cases, this is not a branch of the law in which reference to other cases is of any real assistance except analogically. It has been observed more than once that the questions which arise are, in general, questions of fact. Neither the appellants nor the respondents contend that the principles of law are in any doubt. The law of passing off can be summarised in one short general proposition – no man may pass off his goods as those of another.
The principles relating to the application off ss 52 and 53 of the TPA need not be repeated and were not in dispute between the parties.
In my view, Yarra Valley’s case for passing off and breach of s 52 and s 53 of the TPA cannot succeed because there is an insufficient likelihood that consumers would have been misled by the packaging of the LEMNOS PERSIAN MARINATED CHEESE product to think that Lemnos or its product was associated with Yarra Valley.
There is insufficient likelihood that consumers or retailers would be misled to establish any claim for passing off or breach of s 52 and s 53 of the TPA, by reason of:
(a)the prominent, distinguishing features on Lemnos’ product consisting of Lemnos’ well known trade mark LEMNOS and lambda device;
(b)the prominent distinguishing features on Yarra Valley’s product consisting of Yarra Valley’s trade mark YARRA VALLEY DAIRY and cow (or map) design;
(c)the descriptive role played by PERSIAN MARINATED CHEESE on Lemnos’ product;
(d)the other differentiating features of the two products, including:
(i) the background colour, which is:
(A) black on Yarra Valley’s product; and
(B) yellow/gold on Lemnos’ product, with a swirling pattern;
(ii)orange text on Yarra Valley’s product;
(iii)corrugated tin background design on Yarra Valley’s product;
(iv)around the top and bottom of Lemnos’ product, and in a circle around the lid label, a band of text reading “PERSIAN CHEESE MARINATED IN THE FINEST BLEND OF HERBS AND OILS”;
(v)the name, address and webpage of each of Yarra Valley and Lemnos on each respective product.
The respective current products would appear to consumers (if shown side by side) as follows:
Further, as noted above on the question of use as a trade mark, the distinctiveness of the LEMNOS product and the associated lambda device is reinforced by:
(a)the fact that Lemnos is Australia’s leading manufacturer of fetta and haloumi cheeses, producing seven different varieties of fetta as well as varieties of haloumi, ricotta and paneer, all of which are sold under the LEMNOS brand;
(b)the fact that Lemnos and its predecessors in business have sold fetta and other white cheeses under the LEMNOS brand since the 1960s, over 25 years before Yarra Valley sold any relevant product, through supermarkets and delicatessens, market stalls and other retail outlets;
(c)the recognition of LEMNOS branded fetta products as high quality fetta products;
(d)the recognition of the LEMNOS and lambda device trade mark as a distinctive mark by way of its registration as Australian Trade Mark Registration 890174 for goods including cheese.
In the present case, notwithstanding the use of similar tins, Lemnos has clearly distinguished its product from that of Yarra Valley.
I accept that the evidence establishes that Yarra Valley’s tinned PERSIAN FETTA product is typically sold in delicatessens and speciality food stores, whilst the Lemnos product is sold primarily in Coles supermarkets. Therefore, there may not always be a side by side comparison of the two products. Even so, the extent of the differences would lead a consumer to differentiate the two products even though a side by side comparison is not possible. No evidence was introduced by Yarra Valley to indicate anything to the contrary. Whilst the lack of such evidence is not decisive or conclusive, the lack of evidence is a factor to be considered.
I have reached the above conclusions, even though the evidence establishes a clear intention on the part of Lemnos to adopt the key indicia of the PERSIAN FETTA product. It is apparent from Lemnos’ contemporaneous documents and the oral evidence of Mr Raman and Mr Karamoshos that the Lemnos Persian Fetta/Persian Marinated Cheese product was consciously modelled on the Yarra Valley Persian Fetta product.
The three key indicia of Yarra Valley’s PERSIAN FETTA product were:
(i)The product itself, being a cow’s cheese marinated in extra virgin olive oil, garlic, thyme, black peppercorn and bay leaf;
(ii)The term “Persian”; and
(iii)The distinctive paint tin.
Undoubtedly, these are the indicia that a consumer recalls. In addition to these key indicia, the use of similar wording “in the finest blend of herbs and oil”, and the use of the same recipe and ingredients could increase the risk of persons being misled and deceived.
However, I do not accept that the composition of the product, the prominent use of the word “Persian” and the characteristic paint tin, when used in marketing Lemnos’ product, individually or cumulatively form a representation that Lemnos’ product is Yarra Valley’s PERSIAN FETTA or that it is associated with the maker of the PERSIAN FETTA product. I do not accept that consumers would be likely to be misled or deceived.
Accepting in favour of Yarra Valley that consumers either would not have the opportunity to make a side by side comparison or would not be motivated to do so in the circumstances of filling a supermarket trolley, it is the extent of the differences (which I have described above) between the products that would alert the consumer to the different origin of the products. This is particularly so in a ‘boutique market’ where consumers probably are either already aware of the different products, or at least take some care in choosing the product they intend to purchase. The consumer of this type of product is likely to be astute as to the characteristics of the product, and discerning in his or her purchasing habits. This is certainly not a situation of impulse purchasing.
Therefore, I would dismiss the application of Yarra Valley seeking relief on the basis of passing off and misleading and deceptive conduct.
ANOTHER MATTER
Notification to Registrar of Trade Marks
An issue was taken up by Yarra Valley that Lemnos had failed to notify the Registrar of Trade Marks of its application as required by s 90 of the TMA.
On 23 March 2010 (after the initial hearing of the proceeding) notification was given by Lemnos to the Registrar of Trade Marks. The Registrar responded by not seeking to intervene.
On 13 May 2010, the Court made orders giving leave for the re-opening of the case of Lemnos. A further hearing was fixed on 29 June 2010 for that purpose.
As the matter was re-opened after the notification to the Registrar of Trade Marks, in my view no issue arises in relation to the requirements of s 90 of the TMA not being met.
In any event, I would not regard any failure of giving notification as impacting on the jurisdiction of this Court to grant relief in relation to the cancellation action based on s 62 or s 88(2)(a) of the TMA. With respect, I do not agree with the decision in Hall v Lewis (2004) 64 IPR 61, to the extent it decided that the consequence of non-compliance means the Court has no jurisdiction. Undoubtedly, the requirements in s 90 are couched in mandatory terms, but the consequence of non-compliance is not that the Court lacks jurisdiction to proceed, but may mean the Court should not grant the relief sought without giving the Registrar of Trade Marks the notification so that an appearance can be made if necessary.
CONCLUSION
As the cross-claim for removal of Yarra Valley’s mark from the Register is successful, there is no need for the Court to consider the claim for trade mark infringement.
It is also unnecessary to consider the other grounds sought to have the trade mark removed.
As the claims by Yarra Valley against the first respondent have failed, the claims against the second respondent, Mr Paule, must similarly fail.
It is apparent that in light of the above the registration of the trade mark should be cancelled in accordance with s 88(1)(a) of the TMA. I will leave it to the parties to formulate the appropriate orders and seek to agree as to costs. If agreement cannot be reached, proposed directions can be submitted for the determination of any outstanding matters.
I certify that the preceding two hundred and eighty-eight (288) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton. Associate:
Dated: 10 December 2010
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