Shape shopped

Mortimer J has dismissed Shape Shopfitters claims against Shape Australia for misleading or deceptive conduct, passing off and trade mark infringement.

Much of the focus of the decision is on the misleading or deceptive conduct claim (and will have to be the subject of a future post). This post will look at the trade mark infringement claim.

Shape Shopfitters has registered Trade Mark No. 1731525 for shopfitting, construction and advisory services relating to construction in class 37 for this trade mark:

TM No. 1731525

It alleged that Shape Australia infringed that trade mark by using these signs:

Shape Australia provided construction services, apparently on a much larger scale, but was not specifically engaged in shopfitting – sub-contracting out those parts of its jobs. Also, Shape Australia did not provide its services to the particular people who were customers of Shape Shopfitters.[1]

Mortimer J found that Shape Australia’s trade marks were not deceptively similar to Shape Shopfitters’. Her Honour considered that the imperfect recollection of the relevant public would recall not just the word SHAPE, but also its collocation with the word Shopfitters (albeit it was subsidiary) and the distinctive “bottle cap” shape of the border.

Of the four elements comprising Shape Shopfitters’ trade mark (apart from the blue colouring), Mortimer J explained:

  1. The use of capitals for the word “SHAPE” in the applicant’s Mark is, I accept, a feature likely to be recalled. In part, it is the use of capitals which is likely to make the word “shape” stick in the memory, as well as its proportionate size in the Mark. It is also correct that the word “Shopfitters” is much smaller, as is “Est 1998”. I see no basis to find that the latter phrase would be generally recalled, however I consider the word “Shopfitters” may well be recalled in conjunction with the word “SHAPE”. There is an alliterative effect between the two words, as well the positioning of “Shopfitters” underneath the word “SHAPE”. An industry participant’s eye (to take the applicant’s wider class of people) will, in my opinion, be drawn to that word as well and what is just as likely to be recalled is the phrase “SHAPE Shopfitters”, rather than just the word “SHAPE”.

As a result, the prospect that the word mark would be deceptively similar was roundly dismissed. The two devices with the word in a circle were closer, but the absence of the word Shopfitters and the difference between a circle and the “bottle cap” border were decisive.

  1. The Circle Mark and the Transparent Mark have a closer similarity, because of – in combination – the use of capitals of the word “SHAPE”, the placement of that word inside a circle, and the use of a circle itself. However, as I have set out, in my opinion even imperfectly, a reasonable industry participant of ordinary intelligence and memory is likely to recall the word “Shopfitters” in conjunction with the word “Shape”, especially because of the alliteration involved. I also consider such a person will recall the applicant’s Mark has a distinctive border that is not a smooth circle.
  2. I do not consider the evidence about several industry participants referring to the applicant as “SHAPE” affects these findings in a way which means that word would be recalled as the only essential feature of the applicant’s Mark. Rather, that evidence is evidence of the contraction of the applicant’s business and trading name in ordinary speech, and such a contraction does not necessarily carry over to what a reasonable person is likely to recall of the applicant’s Mark. It goes only to how industry participants might refer to the applicant in conversation.

Given these findings, it was unnecessary for her Honour to express an opinion on whether the registration of Shape Shopfitters’ trade mark with the blue background imposed a limitation on the scope of the registration.[2]

Mortimer J’s conclusions do not explicitly turn on the fields of activity of the respective parties, apparently a closely fought battle in the context of the misleading or deceptive conduct case. Indeed, at [258] her Honour expressly said it made no difference whether the relevant public was defined as the “buyers” of construction services or participants in the commercial construction industry.

Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd (No 3) [2017] FCA 865


  1. Although Shape Australia was much larger than Shape Shopfitters, you might recall that for much of its life it had operated under the name ISIS Group Australia and had changed its name after Shape Shopfitters came on to the scene and the name of the ancient Egyptian goddess took on some rather unfortunate (to say the least) connotations.  ?
  2. Referring to s 70 read with the definition of “limitation” provided by s 6.  ?

Pham Global 2: the new law of substantial identity

Having ruled that Pham Global’s trade mark was invalidly registered because Mr Pham was not the owner of the trade mark when he filed the application, the Full Court also indicated a substantially expanded role for the test of substantial identity in stating that Pham Global’s trade mark was substantially identical with Insight Clinical’s.

To recap, Insight Clinical’s trade mark is on the left below while Pham Global’s is on the right:

The trial Judge had applied the well-known ‘side by side’ test explained by Windeyer J:[1]

In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison. “The identification of an essential feature depends”, it has been said, “partly on the Court’s own judgment and partly on the burden of the evidence that is placed before it”: de Cordova v. Vick Chemical Co. (1951) 68 R.P.C. 103, at p 106. Whether there is substantial identity is a question of fact ….[2]

capped with Gummow J’s summation in Carnival Cruise:

Thus, if a total impression of similarity emerges from a comparison between the two marks, the marks are “substantially identical”: Carnival Cruise Lines Inc v Sitmar Cruises Limited [1994] FCA 936; (1994) 120 ALR 495 at [62].

Generally, courts have found that the two trade marks must be virtually identical before a finding of substantial identity will be made.

The trial Judge had applied what many would consider to be a conventional analysis in rejecting substantial identity. At [18], her Honour held:

…. Whilst both composite marks use the word “insight”, there are clear visual differences in presentation. The appearance of the words “insight” and “radiology” in the IR composite mark run into each other, are equally prominent (the same font and size) and appear all in lower case. This is quite distinct from the words in the ICI composite mark where the letter “S” is capitalised in “inSight” and the words “Clinical Imaging” are secondary and beneath “inSight” in smaller and unbolded font. The capitalisation of the word “Sight” in “inSight” has the effect of emphasising the word “Sight”. There are also distinct visual differences in the appearance and positioning of the device. The ICI composite mark has a complete inner circle and is all in green with clear lines whereas the IR composite mark does not have a complete inner circle, the outside circle is in black and the lines are different. There is not a “total impression of resemblance”. The visual differences combined with the different wording, albeit that “imaging” and “radiology” may be interchangeable in relation to the services to which the marks relate, make the marks sufficiently different on a side by side comparison.

The Full Court held that the trial Judge had erred by failing to identify the essential features in the trade marks and make the comparison based on them. At [52], the Full Court stated:

…. The required exercise of side-by-side comparison is not carried out in a factual and legislative vacuum. The purpose of the exercise is to decide if two trade marks are substantially identical, where a trade mark is “a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person” (s 17). Given this context, it is unlikely that the essential elements of a mark or its dominant cognitive clues are to be found in mere descriptive elements, which are not apt to perform this distinguishing role in respect of the relevant goods or services. While this does not mean that differences, including descriptive differences, may be ignored, it does mean that the side-by-side comparison is to be carried out cognisant of the essential elements of the mark. (emphasis supplied)

The Full Court held that the essential features of the two trade marks were the words “insight” and, to a lesser extent, the circular “eye” image. The words “radiology” and “clinical imaging” were merely descriptive and the differences in the circular devices were relatively minor. At [56]:

The essential elements are the words “Insight” and the device. The word is the same in both marks. The device appears to the left of the word in both marks. While the differences which her Honour noted do exist, the dominant cognitive clues in both marks is a device which is circular in shape evoking an eye to the left of the word “Insight”, in circumstances where the other words “clinical imaging” and “radiology” are descriptive of the services offered. The importance of the visual differences which her Honour noted, and which we accept exist, must be assessed having regard to these essential elements of the marks. Once this necessary exercise is undertaken, we consider that not only is there a total impression of resemblance between the marks, but also that the differences between the marks are slight having regard to their essential elements or the dominant cognitive clues which they present.

Accordingly, the Full Court considered that Insight Clinical’s opposition to registration of the trade mark should also have succeed on the grounds that Pham Global was not the owner of the trade mark based on Insight Clinical’s prior use of its trade mark.

The Full Court’s analysis, with respect, has all the hallmarks of a deceptive similarity analysis. Given their earlier ruling that the trade mark was invalid because Mr Pham as not the owner when he applied to register it, this part of the Full Court’s decision is obiter.

For most purposes, it does not make much difference as most cases involving a comparison of marks ultimately turn on deceptive similarity.

It is (if followed), however, particularly significant in the context of ownership disputes. As Janice Luck (here and here) has noted, the Full Court’s approach gives much wider scope for the operation of s 58. It blurs the operation of the test for substantial identity with the test for deceptive similarity in ways arguably previously thought outside the scope of an ‘ownershp’ objection. In Carnival Cruise under the 1955 Act, for example, Gummow J had continued after the summation of principle quoted above:

…. The phrase “substantially identical” as it appears in s. 62 (which is concerned with infringement) was discussed by Windeyer J in The Shell Company of Australia Limited v Esso Standard Oil (Australia) Limited (1963) 109 CLR 407 at 414. It requires a total impression of similarity to emerge from a comparison between the two marks. In a real sense a claim to proprietorship of the one extends to the other. But to go beyond this is, in my view, not possible. There is, as Mr Shanahan points out in his work, p. 158, real difficulty in assessing the broader notion of deceptive similarity in the absence of some notional user in Australia of the prior mark (something postulated by s. 33) or prior public recognition built up by user (para. 28 (a)). [3] (emphasis supplied)

It means that we won’t be able to concede, or skip over, the “substantially identical with” limb of trade mark comparisons in future.

The Full Court’s explanation of the operation of s 60 will have to await a future post.

Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83 (Greenwood, Jagot and Beach JJ)


  1. The Shell Co. of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 414; [1963] HCA 66.  ?
  2. Notwithstanding the high authority of Windeyer J’s statement, it is worth noting that Lord Radcliffe appears to have been referring to identification of essential features in the context of assessing whether or not a trade mark was likely to cause confusion or deception – the test for deceptive similarity. Thus, Lord Radcliffe rejected the appeal against the finding of infringement because “The likelihood of confusion or deception in such cases is not disproved by placing the two marks side by side and demonstrating how small is the chance of error in any customer who places his order for goods with both the marks clearly before him, for orders are not placed, or are often not placed, under such conditions. It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole.” Compare de Cordova to s 10.  ?
  3. Note also the questions his Honour posed at 58.  ?

Little Brown Balls Bounced Again

Jessup J has ruled that MALTITOS may be registered for confectionary in the face of MALTESERS.

Mars had successfully opposed Delfi’s application before the Office on the grounds of its prior registration for MALTESERS and its reputation in Australia.

On the s 44 point, both marks consisted of three syllables and had the word “malt” in common as the first syllable, but the different appearance and sound of the remaining two syllables were sufficiently strong that ordinary purchasers would not be caused to wonder if there was a common trade source. Both parties accepted (apparently on the basis of Delfi’s overseas use) that MALTITOS would be pronounced “toes”. Jessup J was favoured with the expert evidence of a linguist, Ass Prof Cox, including that:

the consonant between the final two syllables is ‘t’, phonetically described as a voiceless alveolar stop sound /t/, whereas for ‘Maltesers’ it is ‘s’ pronounced as /z/, a voiced alveolar fricative sound. The difference between the two sounds /t/ and /z/ is a difference of manner of articulation (stop vs fricative) and also of voicing (voiceless vs voiced). /t/ is a voiceless speech sound whereas /z/ is voiced. These differences are highly functional in English and separate words like ‘seat’ vs ‘seize’, ‘shoot’ vs ‘shoes’.

Jessup J conceded he was not in a position “to engage with her in her field of technical expertise”, but her evidence confirmed his impression as a layperson. In his Honour’s view:

if the notional consumer under contemplation was someone whose eye fell upon the applicant’s mark, in isolation, displayed on a package sitting on a rack or shelf, I am quite unpersuaded that it would, because of the limited similarities between that mark and the respondent’s mark, enter his or her mind that the product in question derived, or might have derived, from the same source as products sold under the latter.

The Bali Bra case [1] notwithstanding, Jessup J did not consider that he was concerned with the potential for sales assistants to mishear the product request across a noisy counter.

Delfi tried to argue that s 60 could be invoked only by unregistered marks, but Jessup J, after some consideration, was not prepared to buy that. Rather, the reputation (if proved) provided the basis for the comparison:

the only respect in which s 60 requires an exercise different from that arising under so much of s 44 as relates to deceptive similarity is that the reputation in Australia of the “other” mark must be the reason why the use of the mark proposed to be registered is likely to deceive or cause confusion. What this means in practice is that the notional consumer of average intelligence thinking of making a purchase by reference to goods in association with which the latter mark is used, or intended to be used, is no longer someone who has had no more than some exposure to the “other” mark: he or she is someone who is assumed to have that level of awareness of that mark as is consistent with the content and extent of the reputation of it.

His Honour accepted that MALTESERS had a widespread, solid reputation. As in the Malt Balls case, however, that in the end told against deception:

with a stronger awareness of the respondent’s mark, I consider that such a consumer would be immediately struck by the differences between the two marks, as discussed above. He or she may observe the limited similarities between the marks and, because the subject of the presumptive interest would be confectionery, may assume that the products were of the same nature as those sold under the respondent’s mark, but, giving the matter a moment’s reflection, would readily conclude that those products were not Maltesers. As I say, the strong reputation of the respondent’s mark would, if anything, make that conclusion a more likely one.

Delfi Chocolate Manufacturing S.A. v Mars Australia Pty Ltd [2015] FCA 1065


  1. The Bali Bra case is not referred to in the judgment but, consistently with Jessup J’s view, Mason J did appear to be concerned with the prospect that the consumer would have misheard what the sales person said over the phone: “No doubt orders are sometimes placed by telephone. And in considering the likely reaction of a customer it is important to take into account, not the person whose knowledge of the two marks and the goods sold under them enables her to distinguish between them, but the person who lacks that knowledge.”  ?

Coke v Pepsi – “second” look

Last week, Besanko J dismissed Coca-Cola Co’s claims that PepsiCo’s “Carolina” bottle shape infringed Coke’s trade marks, and was passing off and misleading or deceptive conduct.

Contour v Carolina

Some background

Coca-Cola Co relied on four trade marks: TM Nos 63697, 767355, 1160893 and 1160894 registered in class 32 for non-alcoholic beverages. The first two might be thought of as 2D representations of the shape of Coca-Cola Co’s “Contour” bottle, which has been in use in Australia since 1938.

1287.2

The second two were essentially the silhouette of the bottle; one image in white, the other in black.

1287.3

PepsiCo had introduced its Carolina bottle shape into Australia in August 2007 on a very small scale. It seems not to have been on the market at all between May 2008 and February 2009, when it was reintroduced on a larger, but still small scale. The Carolina bottle shape had apparently not been the subject of any advertising or promotion. At the time when PepsiCo introduced the Carolina bottle, there were 4, perhaps 6, other bottles used for soft drinks in the market with “waists of varying degrees” so the Contour bottle was not unique in that respect.

The trade mark infringement claims

Besanko J found that PepsiCo was using the Carolina bottle shape as a trade mark, but did not infringe because it was not deceptively similar to Coca-Cola Co’s trade marks.

In deciding that PepsiCo was using the overall shape of the Carolina bottle as a trade mark, Besanko J noted that the relevant goods were the beveage, a formless substance, and the bottle was just a container. So, the cases like Philips v Remington where the shape was the shape of the goods themselves did not apply. At [213], his Honour found that the shape was distinctive and intended to be so.

Besanko J was not prepared to find, however, that PepsiCo used the silhouette of the Carolina bottle as a trade mark. A number of factors played into this conclusion. His Honour accepted that the outline or shape of the bottle may be one of the first things seen by a consumer from a distance. However, that was not enough in itself. Among the factors that led to the finding, his Honour noted at [215]:

…. All bottles have an outline or silhouette and the fact that a bottle has a waist is not so extraordinary as to lead to the conclusion that that feature alone is being used as a trade mark.

and at [216]:

…. the outline or silhouette of the Carolina Bottle is likely to become less important in the consumer’s mind as he or she approaches the refrigerator or cooler and focuses on word marks, logos, and brands. As I have said, the fact that an aspect of a product may be seen at one point does not lead to the conclusion that consumers would see it as a badge of origin.

deceptive similarity

Besanko J agreed with the Full Court’s analysis of the shape depicted in TM Nos 63697 and 767355:

  • the sides of the bottle are curved rather than flat;
  • there is fluting on the top and lower portions of the bottle and no fluting in a central section;
  • the top and lower portions of the bottle have the same number of flutes; and
  • the bottle has a flat base and banded neck.

In contrast, PepsiCo’s Carolina bottle did not have flutes or the clear band; it had a horizontal “wave” feature and its waist was both more gradual and extended higher up the bottle. These differences at [235] were “significant”.

At [240], his Honour rejected Coca-Cola Co’s argument that the overall impression consumers would take away from the Carolina bottle was of “a bottle having a low waisted contoured shape”. Instead:

I do not accept that that is the view which would be held by the ordinary consumer. In my opinion, the waist, the horizontal wave feature, and, to a lesser extent, the frustoconical neck are the significant features of the Carolina Bottle.

Besanko J was not prepared to find that outline or silhouette of the bottle was the essential feature of thes trade marks. Rather, the vertical flutes and the clear belt band were as prominent. At [238]:

…. It cannot be said, for example, that a bottle with a waist is so extraordinary, or a bottle with vertical flutes and a clear belt band so common, that the outline or silhouette should be considered the essential feature.

However, Besanko J also found that the Carolina bottle was not deceptively similar to the silhouette marks represented in TM Nos 1160893 and 1160894. His Honour found that the Carolina bottle was distinctive in itself and, therefore, not deceptively similar. So, at [247], his Honour said:

Even if the outline or silhouette is the only feature of the marks, or is the essential idea of the marks, the comparison is with the sign the alleged infringer has used as a trade mark. In this case, I have found that is the whole shape of the Carolina Bottle. The following are the distinctive features of the Carolina Bottle which I think are distinctive but are not part of the registered marks:

(1) the Carolina Bottle has a gently curving waist at a higher point than that in the marks and does not have an abrupt pinch near the base;

(2) the Carolina Bottle has a cylindrical shoulder, not a curved shoulder;

(3) the Carolina Bottle has a frustoconical neck, not a curved neck;

(4) the Carolina Bottle has a twist top enclosure, not a cap lid seal; and

(5) the Carolina Bottle has a distinctive horizontal embossed wave pattern across the bottom half of the bottle.

Then, at [248], his Honour pointed out that the first 4 factors related to the silhouette and “it seems to me … the outline or silhouette of the Carolina Bottle would not be deceptively similar to either [trade mark].”

I am not at all sure, with respect, that the question is whether the accused sign is distinctive in its own right. Perhaps this means that, in a market where there are other low waisted bottles, the differences were sufficiently important that consumers would not be caused to wonder whether there was a connection with the trade mark owner.

Passing off / misleading or deceptive conduct

On this part of the case, Besanko J thought it was difficult to see why the ordinary consumer would not make his or her purchase on the basis of the [famous] brand names, device marks or logos. However, “not without some hesitation”, his Honour was prepared to find at [270] that a sufficient number of consumers who select a bottle from the store’s refrigerated drinks cabinet themselves “may well make their selection based on overall bottle shape” as a result of their minimal involvement in the purchase.

There was no likelihood of deception or confusion, however, as the shape of the bottles was too different. At [271]:

The difficulty for [Coca-Cola Co] is that, even accepting that and accepting that both bottles will contain dark brown cola and be sold within a similar, if not the same, context, I do not think that such a consumer would be misled or deceived, or would be likely to be misled or deceived, in the case of overall bottle shape because I think he or she would detect quite clearly the difference between the Contour Bottle and the Carolina Bottle. The most noticeable difference between the two bottles is that the Contour Bottle has the very distinctive fluting and the Carolina Bottle has the distinctive horizontal waves. Other noticeable features are the different shaped neck and shoulders and the fact that the waist on the Contour Bottle is lower and more pinched. In other words, if overall bottle shape is the cue, I do not think that there is any real likelihood of deception.

The role of intention

On all 3 aspects of the case, Coca-Cola Co contended that PepsiCo had intentionally designed the Carolina bottle to take advantage of the reputation in the Contour bottle. While Besanko J noted there were features of the relevant PepsiCo executive’s evidence “which caused me to scrutinise it carefully”, his Honour was not prepared to find an intention to deceive or cause confusion.

In any event, Besanko J did not think the resemblance of the Carolina bottle to the Contour shape was sufficiently close for PepsiCo’s intentions to lead to findings of infringement, passing off or misleading or deceptive conduct.

Coca Cola Company v PepsiCo Inc (No 2) [2014] FCA 1287

When do 4 stripes infringe 3?

adidas has successfully sued Pacific Brands for infringing its “3 stripes” trade mark through the sale of three styles of shoes with 4 stripes; but failed in respect of six other styles. Three other styles settled before action, 2 without admissions.

adidas relied on 2 registered trade marks, TM No 131325 dating from 1957 and TM No 924921 dating from 2002. (If you have been on Mars for the last 50 years) you get the basic picture from TM No 924921:

TM 924921
TM 924921

registered for “footwear including sport shoes and casual shoes” in class 25. There is also an endorsement:

Trade Mark Description: The trademark consists of three stripes forming a contrast to the basic color of the shoes; the contours of the shoe serves to show how the trademark is attached and is no component of the trademark. * Provisions of subsection 41(5) applied.*

First, accepting that the stripes played a decorative role, Robertson J nonetheless found that Pacific Brands used all the stripe combinations on the shoe styles in issue as trade marks. In reaching this conclusion, his Honour was heavily influenced at [64] by the evidence [1] that sports shoe manufacturers typically placed their trade marks on the side of the shoe. Consistently with orthodoxy, it was nothing to the point that consumers might not know which manufacturer was actually behind the product or that other trade marks such as “Grosby” also appeared on the shoe.

The Airborne Shoe illustrates why Robertson J held some styles infringed:

Airborne shoe
Airborne shoe

The fact that there were 4 stripes rather than 3 tended against a finding or infringement. However, that was outweighed by the overall impression conveyed. At [235], his Honour explained:[2]

this shoe is deceptively similar to the applicants’ trade marks. I note in particular the parallel equidistant stripes of equal width (with blue edgings) in a different or contrasting colour to the footwear, running from the lacing area to the instep area of the shoes.

In contrast, the shoes found not to infringe were all found not to convey the sense of equidistant stripes against a contrasting background, let alone a sub-set of three “parallel” stripes.[3]

Perhaps, most strikingly, the Basement style at [282] conveyed the idea of two sets of two stripes rather than three or four equidistant stripes.

Basement shoe
Basement shoe

Next, the Boston shoe:

Boston shoe
Boston shoe

did not convey the idea of a group of stripes against a contrasting background:

there are four stripes rather than three and an obvious slightly wider gap between the second and third stripes. That is the first point. I do not conclude that there are two groups of two stripes. In addition, the inclusion of panels in the shoe of a similar colour to the stripes (black or close to black), and the stitched-in element of contrasting colour (white) extending behind the stripes, mean that as a matter of impression there is no deceptive similarity with the applicants’ trade marks. There is no sufficiently clear impression of the stripes forming a contrast to the basic colour of the shoes or being a colour different from that of the article of footwear to which the stripes were applied.

The idea of four stripes with the central pair “bridged” extended through into the Apple Pie Pink style at [296]:

Apple Pie shoe
Apple Pie shoe

Robertson J also found that the Stingray Black style did not infringe:

Stingray Black shoe
Stingray Black shoe

At [305], his Honour explained:

there are four “stripes”; the stripes taper to a narrower end towards the sole of the shoe and are therefore not of equal width; the gaps between the stripes are not equal and taper towards the top of the shoe at the lacing; and the four stripes have a curved element and are therefore not parallel. The features of the applicants’ trade marks relied on by the applicants in relation to this shoe are not those which give rise to the dominant visual impression of the trade marks as three parallel equidistant stripes of equal width. This shoe does not create the visual impression of three parallel equidistant stripes of equal width.

A couple of other points

First, Robertson J did not buy adidas’ invitation to infer an intention to infringe, or at the very least “to sail too close to the wind”[4] from an alleged pattern of copying. Pacific Brands withdrew two shoe styles said to be the foundation of this pattern without any admission of liability. A third style, the Stringray boot was withdrawn with an admission, but his Honour regarded that matter as resolved.

Secondly, adidas made an interesting attempt to bolster its case on infringement by the use of a survey. The survey purported to show that some 14%, 34% and 19% of those shown three different styles “similar” to Pacific Brands’ styles identified adidas as the source of the product because of the presence of stripes.

The survey was conducted online. Each participant was shown one of four images of a leg with a shoe style on its foot. (Three were intended to be versions of Pacific Brand styles; one, the control, was unmarked.) The participants were then asked a series of questions including:

B1. Who do you think makes this shoe?

B2. Why do you say that? Please be specific and explain the reasons for your answer in question B1.

Robertson J, however, accorded the survey little weight in making his assessment. There were a variety of reasons for this. These included, first, at [196] that the showing of the images online did not sufficiently replicate or correspond to the experience of the consumer in the market place (apparently this is known as “ecological validity”). Secondly, at [205] question B1 was impermissibly leading. Thirdly, at [210]-[211] the “control leg” was inadequate for the purpose because the absence of decoration signalled to some consumers that it was not sourced from a major brand.

adidas AG v Pacific Brands Footwear Pty Ltd (No 3) [2013] FCA 905 (version with images here)


  1. Referred to at [54].  ?
  2. Likewise, the Stingray shoe at [293] and the Apple Pie at [296].  ?
  3. At [217], his Honour found these features constituted the dominant impression conveyed by the registered trade marks.  ?
  4. Invoking the well-known formulation from Australian Woollen Mills at 658.  ?

Superman KOs “superman workout”

DC Comics, the owner of rights to the, er, man of steel character, has successfully blocked an attempt the register “superman workout” for “conducting exercise classes; fitness and exercise clinics, clubs and salons; health club services (exercise)” in class 41. It did have to appeal from the Registrar of Trade Marks to the Federal Court and it did not win for the reasons you might think.

Like the Registrar, Bennett J rejected DC Comics’ opposition based on s 60. Her Honour accepted that the superhero was indeed well-known, but noted that the term “superman” was also an ordinary English word defined as such in both the Macquarie and Oxford Dictionaries:

[49] …. the use of the word “superman” in the Trade Mark is, or has become, descriptive. Use of a word originally associated with a particular trade source, may over time become descriptive of a class of goods or characterisations.

[50] When the Trade Mark is used without reference to any of the well known indicia associated with the DC Comics superhero and as contained in the registered Trade Mark or other trade marks registered by DC Comics, there is no likelihood that use of the Trade Mark would be likely to deceive or cause confusion by reference to the Superman word mark, or the subject matter of DC Comics’ registered trade marks. The public would not be caused to wonder whether “superman workout” came from the same source as the Superman character or DC Comics.

Accordingly, there was no real, tangile danger of people confusing use in relation to fitness workouts with the superhero.

When Cheqout began using “superman workout”, however, it also used it with this logo:

cheqout logo
cheqout logo

Bennett J was willing to infer that this logo was being used to strengthen the allusion to the Man of Steel and so appropriate the benefit of DC Comics’ reputation for Cheqout’s fitness services. That was not in accordance with acceptable commercial standards and so the application was made in bad faith contrary to s 62A.

In reaching that conclusion, Bennett J adopted the approach previously taken by Dodds-Streeton J in the Tennis Warehouse case. Bennett J emphasised that Dodds-Streeton J rejected a submission that exploitative conduct alone could never constitute ‘bad faith’. Rather, it was the particular circumstances of that case, especially the US company’s failure to follow up its demands for 2 years.

DC Comics v Cheqout Pty Ltd [2013] FCA 478

High Court allows appeal in Barefoot case

E & J Gallo owns TM No 787765, BAREFOOT, for “wines” in class 33. It had acquired ownership of the trade mark by assignment in 2005 from a Mr Houlihan.

Lion Nathan introduced a new beer into Australia under the trade mark BAREFOOT RADLER (with a barefoot device):

The Full Federal Court found that Lion’s beer infringed Gallo’s trade mark as goods of the same description, but ordered the trade mark removed because it had not been used for the 3 year statutory period prescribed by s 92(4) – in this case between 7 May 2004 and 7 May 2007.

Neither Gallo nor Mr Houlihan had ever sold, or specifically authorised the sale of, any wine under the BAREFOOT trade mark in Australia. If that were all, it would have been an end to the matter. However, there was a complication. Wine made by Mr Houlihan’s company, Barefoot Cellars, in California had actually found its way into Australia and been offered for sale.

Barefoot Cellars had sold a shipment of 60 cases of its wine to a distributor in Germany in 2001. Some of the consignment to the German distributor was imported into Australia by a liquor wholesaler, Beach Avenue. In the 3 years relevant to the non-use claim, Beach Avenue imported 144 bottles of the wine; at least 41 of which were actually sold during the period (and a further 18 were given away).

Lion Nathan argued, and the Full Federal Court had accepted, that there had been no use of the trade mark as a trade mark because neither of the trade mark owners had intended to project their goods into the Australian market.

There was use in the course of trade

The High Court rejected this argument.

51  The capacity of a trade mark to distinguish a registered owner’s goods from those of others, as required by s 17, does not depend on whether the owner knowingly projects the goods into the Australian market. It depends on the goods being in the course of trade in Australia. Each occasion of trade in Australia, whilst goods sold under the trade mark remain in the course of trade, is a use for the purposes of the Trade Marks Act. A registered owner who has registered a trade mark under the provisions of the Trade Marks Act can be taken, in general terms, to have an intention to use that trade mark on goods in Australia. It is a commonplace of contemporary international trade that prior to consumption goods may be in the course of trade across national boundaries.

52  An overseas manufacturer who has registered a trade mark in Australia and who himself (or through an authorised user) places the trade mark on goods which are then sold to a trader overseas can be said to be a user of the trade mark when those same goods, to which the trade mark is affixed, are in the course of trade, that is, are offered for sale and sold in Australia. This is because the trade mark remains the trade mark of the registered owner (through an authorised user if there is one) whilst the goods are in the course of trade before they are bought for consumption[29]. As affirmed by Gummow J in Wingate Marketing Pty Ltd v Levi Strauss & Co[30],
“whilst a trade mark remains on goods, it functions as an indicator of the person who attached or authorised the initial use of the mark”.
During the trading period, the trade mark functions as an indicator of the origin of the goods, irrespective of the location of the first sale.

That is, what is required is that (1) there be some sign which functions as a trade mark – a badge of origin – and (2) the sign be used in the course of trade in Australia.

The sale in England by the English manufacturer to retailers for resale in Estex was sufficient for this, but awareness that the retail markets in Australia was the intended destination was not necessary.

As the High Court’s references to Champagne Heidsieck v Buxton (a case, if not exactly dear to my heart, certainly engraved on it!) show, any other conclusion would be inconsistent with the cases establishing that parallel imports do not infringe trade marks and which have been enshrined in s 123.

In context, therefore, the last sentence of [50], noting that the goods had been sold to the German trader without any limitation on resale should not be determinative.

Was there enough use?

Lion’s first fall back position was to rely on the insubstantiality of the 144 bottles imported compared to the size of the market for wine in Australia. The High Court rejected this attack:

65  A commercial quantity of wine, some 144 bottles, was imported and offered for sale under the registered trade mark by Beach Avenue during the statutory period. Some 41 sales during that time were proven by reference to invoices and tax paid. There was no suggestion in the evidence that the offering for sale and selling either overseas or in Australia was for any purpose other than making profit and establishing goodwill in the registered trade mark. It was not contended that the use was fictitious or colourable. In all the circumstances the use was genuine and sufficient to establish use in good faith for the purposes of Lion Nathan’s application for removal.

That is, the High Court adopted a qualitative rather than quantitative approach. It is also worth noting the careful reservation that it was not called upon to decide whether or not a single use would suffice.

What trade mark was used?

Lion’s next attack argued that use of BAREFOOT with a representation of a bare footprint on the wine bottle label was not use of the trade mark as registered – BAREFOOT.

The High Court did not reject this argument on the grounds that there was use of BAREFOOT alone.

Rather, at [68] it distinguished the Colorado case (a case from which special leave was refused) on the grounds that the word COLORADO had no inherent capacity to distinguish because of its geographical significance and so the mountain peak device used with the word element was “not a mere descriptor but a distinguishing feature”. In this case, however, at [69] the device element was an addition which did not substantially affect the trade mark’s identity: consumers were likely to identify the mark by reference to the word, the device merely illustrated the word and, except in the case of honest concurrent use, the device alone would not be registrable in the face of the word mark.

An evidential issue about authorised use

Lion’s last attack, arguing that Barefoot Cellars was not an authorised user when it applied the trade mark to the wine, also failed. The potential problem for Gallo here was that neither Mr Houlihan nor anyone else involved in the production of the wine gave evidence about what quality control, if any, Mr Houlihan had exercised. There were 2 strands to this attack.

The first strand was to contend that some assertions of quality control recorded in a consultancy  agreement were not in fact statements of fact. This failed as a matter of interpretation of the document. In a separate concurring judgment, Heydon J explained that the consultancy agreement constituted a “business record” and the statements were therefore admissible as an exception to the hearsay rule.

The second argument that there was no quality control by Mr Houlihan because he was only a joint principal in Barefoot Cellars and in addition a third person was the winemaker. This was not, however, sufficient to preclude the exercise of quality control by Mr Houlihan.

E. & J. Gallo Winery v Lion Nathan Australia Pty Limited [2010] HCA 15 (19 May 2010)

Update: should have added links to report on Full Federal Court and first instance (here and here).

Some things the High Court didn’t deal with:

  1. The Full Federal Court’s finding that, notwithstanding the order to remove the trade mark for non-use, Lion still had to pay damages for infringement until the judgment.
  2. Whether or not Gallo’s negotiations with McWilliams Wines to introduce a BAREFOOT wine into Australia constituted use of the trade mark or warranted an exercise of discretion to leave the trade mark on the Register. The negotiations culminated in the grant of a licence to McWilliams and the sale of products under the trade mark in September 2007, some 4 months after the expiry of the relevant 3 year period.
  3. Whether beer and wine are goods of the same description.

The first question, of course, did not arise as a result of the High Court’s principal ruling. The third question was part of the “evaluative findings” which did not raise general questions of public importance. See [72]

Health World v Shin Sun – round 563?

This round of the litigation raise the question ‘Who is a person aggrieved for the purposes of seeking revocation of a registered trade mark?’

Health World isn’t, at least when it comes to Shin Sun’s registration.

Health World uses and has registrations for INNER HEALTH PLUS in respect of probiotic capsules and has a registration for ‘Pharmaceutical preparations; dietetic substances adapted for medical use; products in this class sold by pharmacies and/or health food shops including vitamins, minerals, health foods, dietary foods, Chinese and ayurvedic herbs, and nutrition bars included in class 5’.

Shin Sun uses HealthPlus for products derived from bees, their wax and/or squalene (something to do with sharks) and its Australian trade mark registration is for ‘‘pharmaceutical products including vitamins and dietary supplements’ in class 5′. Shin Sun’s registration had 4 years’ priority over Health World’s.

Health World’s opposition to Shin Sun’s application having failed, it sought revocation on the basis of prior reputation (s 60 or via s 42(b)). This failed because, while anyone could oppose on the grounds of s 60 relying on anyone’s reputation, s 88 required an applicant for revocation to be an aggrieved person and this, in turn, required that the misleading and deceptive nature of the mark sought to be revoked must affect the application for revocation in a meaningful way – the legal or practical effect test from Ritz.

Health World failed this test because its established reputation was in a rather discrete field and there was no risk of overlap with Shin Sun’s own particular, narrow field.

Health World tried a number of arguments to avoid this conclusion, particularly based on the litigious history of the parties including Shin Sun’s own oppositions and other objections to Health World’s trade mark registration. These failed, largely because Shin Sun had withdrawn the objections by the time Health World launched its revocation proceeding or Shin Sun’s actions could be characterised as defensive manoeuvres in response to Health World’s attacks.

I’m not sure what the policy objective being served here is – as the Court notes, the requirement for standing is intended to keep out mere busybodies and officious bystanders. I guess, if there is no overlap in the respective parties’ business fields, the conclusion must follow.

As an aside, the Full Court appeared to endorse the trial judge’s finding that Shin Sun’s registration  was vulnerable on the grounds that it was confusing – because the goods Shin Sun’s trade mark was used on were not Shin Sun’s but some related entities (see [18]). I’m not at all clear why that’s the case, but it seems very bizarre that a ‘confusing’ trade mark can happily be left on the Register?

Health World Limited v Shin-Sun Australia Pty Ltd [2009] FCAFC 14 (Perram J with Emmett and Besanko JJ agreeing)