Now for the PLAYGO word mark

Moshinsky J has now extended the declarations and injunctions in the Playgro v Playgo proceedings to include the PLAYGO word mark, but refused orders to recall infringing products and for delivery up.

The previous decision concerned the use of the PLAYGO device. This device appeared prominently on the top and the four sides of the product packaging. In small print (6 point or 8 point) on the bottom of the packaging, the following legend was printed:

Screen Shot 2016-05-11 at 12.28.21 PM

Moshinsky J has now ruled that PLAYGO in the first line of that “notice” also infringed, but not the other occurrences of PLAYGO in the company names.

The respondents argued that the PLAYGO device placed prominently on the top and sides of the packaging was clearly the trade mark and would be understood by the consumers to be the trade mark. This “notice” was just a legend referring to that device. Consumers would never even see it, unless they picked the package up and looked at its underside. His Honour said at [17]:

In the present case, the word, ‘PLAYGO’ was immediately followed by the letters, ‘TM’ in superscript and the words “is a trademark of”. These are strong indicators that the word, ‘PLAYGO’ is being used as a trade mark, that is, as a ‘badge of origin’ to distinguish the respondents’ playthings from playthings made by others. While the nature and purpose of the use of the word must be considered in the context of the packaging as a whole, which includes the Playgo Device Mark on the front and sides of the box, the fact that the Playgo Device Mark is used as a trade mark does not diminish the fact, in this case, that the word, ‘PLAYGO’ in the small print is also being used as a trade mark. This case may be contrasted with cases where a word which is arguably descriptive is used in small print on the packaging and it is concluded that, in the context of the packaging as a whole, including the use of a prominent brand elsewhere on the packet, the word is not being used as a trade mark: compare, for example, Nature’s Blend Pty Ltd v Nestle Australia Ltd (2010) 86 IPR 1 at [22], [37]-[40] per Sundberg J; Nature’s Blend Pty Ltd v Nestlé Australia Ltd (2010) 87 IPR 464 at [42], [48] per Stone, Gordon and McKerracher JJ. In the present case, the word, ‘PLAYGO’ is not descriptive and the presence of the superscript letters, ‘TM’ and the words “is a trademark of” indicate use as a trade mark.

Even if the word PLAYGO in the first line of the “notice” could be seen as a legend, it would be sufficient that one of the impressions a consumer could take away from the use was that it was used as a trade mark and that was the case here.

Bearing in mind that Playgo was outside Australia (in China) and supplied its products there to retailers who imported them into Australia for sale, the injunctions Moshinsky J ordered were against supplying for sale in Australia playthings under or by reference to the PLAYGO device or in packaging bearing both the PLAYGO device and the word PLAYGO in small print on the packaging (other than as part of a company name).

The words “under or by reference to” were preferred to “use as a trade mark” as, while the latter expression is the term used in the Act, it was liable to debate and uncertainty about its scope. The use of PLAYGO in the company names was not enjoined as it was not trade mark use. In addition, his Honour was not prepared to enjoin wider uses of PLAYGO where the trial had concerned only the limited use in small print on the bottom of the packaging.

Moshinsky J refused to order Playgo to recall all unsold goods. Playgo had stopped supplying goods with the trade mark in November 2014. His Honour considered it unlikely that stocks would still be held by retailers. Even if there were, there was no evidence that Playgo had any right to require the retailers to return the products. (That of course does not mean that retailers who sell would not infringe.)

The order for delivery up was also refused. This was because any goods in Playgo’s possession or control were in China – where it was located and operated – and could be sold to places other than Australia where there might not be an infringement.

Playgro Pty Ltd v Playgo Art & Craft Manufactory Limited (No 2) [2016] FCA 478

Playgro v Playgo

PLAYGRO v PLAYGO

Well, you’ll never guess what? It turns out that:

playgo

is deceptively similar to:

playgro

No April Fool’s. Now, maybe some of you (like me) are thinking, “Wait a minute, there must be ‘gazillions’ of trade marks for toys with PLAY in them. That’s true, but the second syllables of the verbal elements are just too close, both visually and aurally. As Moshinsky J explained:

In my view, the fact that there are other trade marks for goods in class 28 containing ‘PLAY’ as part of the word, does not assist in resolving the matter. Accepting that it is a crowded market for toys, games and playthings where the word ‘PLAY’ is used as an element of the trade mark, and therefore more attention than usual may be paid to the second syllable, there is nevertheless a closer degree of similarity between the trade marks in issue here and the marks referred to in paragraph [94] above. In the present case, the second syllable of each mark (‘GRO’ and ‘GO’ respectively) is visually and phonetically very similar, while in the other cases (for example, PLAYSKOOL and PLAYBOY) the second syllable is quite different.

The different shaped backgrounds and colours and arrangement of the verbal element(s) were not signficant matters.

A couple of other points.

Playgo is based in Hong Kong. It sold and supplied its products to Myer, Woolworths and Big W there (presumably FOB or some similar arrangement). It argued therefore that it did not use its trade mark in the course of trade in Australia as property in the goods passed on delivery in Hong Kong.

Moshinsky J rejected this argument. When Playgo sold its product to Myer and the others, it knew they were intending to import them into Australia for sale at retail. Moshinsky J considered this was just a straightforward application of Gallo and Estex. Until the goods passed into the hands of the ultimate consumers, they were still in the course of trade and the PLAYGO trade mark operated to denote Playgo as the trade source.

Perhaps surprisingly given this conclusion, however, his Honour considered that Playgo was not liable as a joint tortfeasor with Myer, Woolworths or Big W for the infringements committed by their use. Selling the goods to them, with knowledge of what they intended to do with them (i.e., import them into Australia for retail sale) did not have sufficient commonality of purpose to amount to a common design, to “acting in concert together”; it was merely facilitation:

Nevertheless, in my view, the facts do not establish that Playgo Enterprises and Myer engaged in a ‘common design’ to offer for sale and sell toys bearing the Playgo Device Mark. The relationship between Playgo Enterprises and Myer was merely that of vendor and purchaser. The Supply Agreement appears to be a standard agreement for the sale and purchase of goods; there are no special features which involve Playgo Enterprises in the process of offering for sale and sale of the goods to customers. The facts do not indicate that Playgo Enterprises played any role in the offering for sale or sale of the goods to customers. It is true that Playgo Enterprises sold goods bearing the Playgo Device Mark to Myer, and knew that they were to be offered for sale and sold to customers in Australia. Nevertheless, in my view, that is insufficient to amount to a ‘common design’ because Playgo Enterprises did not engage in any acts in furtherance of the alleged common design. At most, Playgo Enterprises facilitated the infringement by selling the goods to Myer; but mere facilitation is not enough to establish joint tortfeasorship.

Although it is not referred to in the judgment, presumably the other limb of joint tortfeasorship – directing, procuring or inducing the infringement – would also fail in the absence of some positive act (other than selling to the importer for importation in Australia and sale)?[1] If so, that illustrates that the common law principles are much less help to the right holder than the statutory prohibitions in copyright law and patent law against authorising infringement[2] and, even more so, s 117 of the Patents Act 1990.

Playgro Pty Ltd v Playgo Art & Craft Manufactory Limited [2016] FCA 280


  1. See e.g. Ramset Fasteners (Aust) Pty Ltd v Advanced Building Systems Pty Ltd [1999] FCA 898; 44 IPR 481 at [41], [52].  ?
  2. In Cooper v Universal Music, for example, the provision of links on a website which browsers could use to download infringing content did constitute infringement where the website was designed to enable anyone, including the primary infringers, to place the links on the website.  ?

Australia Wins Philip Morris’ Challenge Against tobacco plain packaging

The IPkat reports that Australia has won the claim Philip Morris brought against the Tobacco Plain Packaging laws under the investor dispute resolution clause of the Australia – Hong Kong Business Investment Treaty.

As the IPkat’s report notes, the dispute resolution panels under the WTO are still in train.

Winnebago the damages or a reasonable royalty Down Under

You will remember that Winnebago (USA) successfully sued the Knotts for passing off in Australia but (in large part because of Winnebago (USA)’s delay in asserting its rights) the Knotts had developed their own reputation in Australia and so could continue using WINNEBAGO here provided it was used with an appropriate disclaimer (here and here). The damages were to be assessed.

Now we know what the damages will be:

Knott Investments, the company that built and supplied the “Australian” Winnebagoes will have to pay a royalty calculated at 1% of its sales on all sales made from 6 years before the proceedings were started until the disclaimer was put in place.

The dealers who sold the vehicles will also have to pay a royalty of 1% on their sales in addition, but only from the date proceedings were actually commenced.

Winnebago (USA) claimed damages on the basis of a reasonable royalty. The respondents resisted. It was clear that Winnebago (USA) would never have granted them a licence and, equally, they would never have taken a licence from Winnebago (USA). In those circumstances, the respondents said, the court could not impose a royalty on the basis of an assumed agreement that would never have happened:

the applicant suffered no damage by way of a lost royalty (in effect, no lost “sale”) because the applicant would not have licensed the respondents to use the Winnebago marks in the first place.

Yates J rejected that defence and held that compensation was required to be paid on what has been called “the user principle”:

Under this principle, a plaintiff is entitled to recover, by way of damages, a reasonable sum from a defendant who has wrongfully used the plaintiff’s property. The plaintiff may not have suffered actual loss from the use, and the wrongdoer may not have derived actual benefit. Nevertheless, under the principle, the defendant is obliged to pay a reasonable sum for the wrongful use. The reasonable sum is sometimes described as a reasonable rent, hiring fee, endorsement fee, licence fee or royalty (amongst other expressions), depending on the property involved and the nature of the wrongful use.

Black CJ and Jacobson J in a copyright case in the Full Court had appeared to reject the application of that principle.[1] Yates J, however, considered the principle could and should be adopted in the context of passing off (and trade mark infringement) on the basis of a long line of English and Australian cases applying the principle in the context of trespass to real property, conversion, detinue and intellectual property infringements.[2] Otherwise, the respondents would escape liability for damages as a result of the very thing that made their conduct unlawful: the lack of consent by Winnebago (USA).

The respondents also argued that no damages should be payable because, as the Full Court found, they had a concurrent reputation in WINNEBAGO in Australia. Yates J rejected this too. His Honour considered that the existence of concurrent reputations – one which did not require a disclaimer and one which did – meant there was value in being able to use the reputation without any disclaimer. Yates J arrived at the royalty of 1% on the basis that Winnebago (USA) had granted a licence to an Australian licensee at that rate and, while various other considerations were entered into, that was an appropriate round number.

Three points in relation to the dealers.

Yates J rejected their first argument: that they should not be liable for anything as the supplier, Knott Investments would already have paid a royalty. However, the dealers’ sales of vehicles in passing off were separate wrongs to those of the manufacturer and so required separate compensation.

Secondly, while Winnebago (USA) did not submit evidence about what damages the dealers’ actions caused, it claimed a royalty of 4 or 5%. Yates J considered, in the absence of evidence, that a royalty of 1% would be consistent with that imposed on the supplier.

Thirdly, the dealers (and for that matter, the Knotts) would be liable for damages for passing off only where they acted with fraud: that is, with knowledge of Winnebago (USA)’s reputation in Australia and its desire to assert those rights here. In the absence of evidence avout what the dealers knew, Yates J considered that they could only be held to have acted with fraud once proceedings were initiated:

The difficulty for the applicant is that the evidence does not address the question of what the dealers knew or thought. Even if they might have been aware of the applicant’s activities in the United States or in other overseas markets, it does not follow that they also understood that the applicant had a reputation of any significance in Australia, let alone one that was capable of legal protection, or, more importantly, that, prior to the commencement of this proceeding, the applicant was claiming that it had rights in Australia in respect of the Winnebago marks and that the commercial activities of the first respondent and its dealers constituted an infringement of those rights. However, from the time of commencement of this proceeding, when the applicant’s claims were exposed, the position of the second to twelfth respondents was different. From that time, they were on notice of the applicant’s claimed rights. Their persistence in using the Winnebago marks after this notice constitutes fraud in the relevant sense.

The need to show “fraud” is another difference between the tort of passing off and the action for misleading or deceptive conduct under the Australian Consumer Law.

Winnebago Industries Inc v Knott Investments Pty Ltd (No 4) [2015] FCA 1327


  1. Aristocrat Technologies Australia Pty Ltd v DAP Services (Kempsey) Pty Ltd (2007) 157 FCR 564; [2007] FCAFC 40 (Aristocrat) at [27]-[28].  ?
  2. One of those cases was Bunnings Group Ltd v CHEP Australia Ltd (2011) 82 NSWLR 420; [2011] NSWCA 342, in which the leading judgment was given by Allsop P, now the present Chief Judge.  ?

When can an authorised user sue

Following on from my earlier post about the Trade Marks Act 1995 and repackaged goods, it is worth noting that there was also a dispute about the power of an authorised user to bring proceedings under s 26(1)(b) of the Act.

Amongst other things, section s 26(1)(b) provides:

Powers of authorised user of registered trade mark

(1) Subject to any agreement between the registered owner of a registered trade mark and an authorised user of the trade mark, the authorised user may do any of the following:

….

(b) the authorised user may (subject to subsection (2)) bring an action for infringement of the trade mark:

   (i) at any time, with the consent of the registered owner; or

  (ii) during the prescribed period, if the registered owner refuses to bring such an action on a particular occasion during the prescribed period; or

  (iii) after the end of the prescribed period, if the registered owner has failed to bring such an action during the prescribed period;

Scandinavian Tobacco Group Eersel, as the owner of the registered trade marks, had brought the proceeding, but it was joined as an applicant by its local distributor as an authorised user. Trojan argued that the authorised user had no standing to sue in this case. This was not an argument about whether the local distributor was an authorised user. Rather, it was whether or not the formal requirements of s 26(1)(b) had been met.

Allsop CJ confirmed that s 26(1)(b) allowed an authorised user to bring proceedings for trade mark infringement concurrently with the trade mark owner. It was not necessary for the authorised user to call on the registered owner to bring proceedings and then wait 60 days for the owner to fail to take any action.

The power of an authorised user under the Act to bring proceedings is subject to any agreement with the registered owner to the contrary. In that connection Cl 8 of the relevant distribution agreement is in fairly typical terms:

Nothing in this Agreement shall be interpreted or otherwise construed as giving the Distributor any rights to any of the Supplier Trade Marks. The Distributor shall inform the Supplier of any Infringements of the Supplier Trade Marks of which the Distributor becomes aware. Prosecutions for infringements shall be at the Supplier’s discretion and cost, but the Distributor shall offer all reasonable assistance. Any damages received shall be credited to the Supplier.

Allsop CJ considered this did not exclude the authorised user’s powers under s 26(1)(b) but, if it did, his Honour would have inferred the registered owner had given consent in the circumstances of this case: both the registered owner and the authorised user had issued the proceedings as joint applicants.

The question of the local distributor’s standing as an authorised user to bring proceedings is not necessarily an arid debate in cases where the right owner is also an applicant. It might have affected how much damages could be recovered for any infringement by Trojan.

There are of course a number of ways damages could be calculated (assuming damages and not an account of profits were pursued). One way of calculating such damages is the amount of profits that would have been made on sales lost as a result of the infringing activity. If s 123 had not provided Trojan with a defence and the applicants had pursued damages for lost sales, the quantum as measured by any profits lost by reason of the (hypothetical) infringement would probably include the local distributor’s “lost” profits only if it was an authorised user and entitled to join in the proceeding. If STG, as the owner of the registered trade marks, was the only applicant, its damages would probably have been limited only to the profits it lost on sales to its distributor and probably would not include profits on sales “lost” by the distributor.[1]

Scandinavian Tobacco Group Eersel BV v Trojan Trading Company Pty Ltd [2015] FCA 1086[2]


  1. The qualification “probably” is necessary in light of the Full Court’s decision in a copyright case: Insight SRC IP Holdings Pty Ltd v Australian Council for Educational Research Ltd [2013] FCAFC 62  ?
  2. STG’s appeal from the principal decision was heard by the Full Court on 25 November.  ?

Parallel imports – repackaging Down Under

Scandinavian Tobacco Group Eersel (STG) is the world’s largest manufacturer of cigars and pipe tobacco. Three of its brands include CAFE CREME, LA PAZ and HENRY WINTERMANS; each of which is registered in Australia as a trade mark for tobacco products.

Trojan bought up stocks of genuine STG cigars in Europe in their original packaging. STG had placed the relevant trade marks on the cigars or their packaging.

The Tobacco Plain Packaging Act, however, precludes the sale of such cigars in Australia in their packaging. Trojan took the cigars out of the packaging which STG sold them in and put them in the drab, khaki packaging with gruesome pictures and health warnings as required under the TPPA. It also placed on the new packaging the relevant trade mark in the plain font and type size in the limited places that the TPPA allows.

STG sued for infringement unsuccessfully. Trojan did use the trade marks as trade marks within the meaning of s 120, but the defence provided by s 123(1) applied.

Allsop CJ held that use of the trade mark by an importer on genuine goods was use of the trade mark “as a trade mark” and so would infringe if done without consent or other defence. While appearing to express some doubts, his Honour considered that 4 Full Courts[1] required him to find that the 1995 Act changed the law so that Champagne Heidsieck[2] was no longer good law. Accordingly, subject to the s 123 defence, Trojan would have infringed.

Section 123(1) provides:

In spite of [section 120][s120], a person who uses a registered trade mark in relation to goods that are similar to goods in respect of which the trade mark is registered does not infringe the trade mark if the trade mark has been applied to, or in relation to, the goods by, or with the consent of, the registered owner of the trade mark.

This seems like a pretty straightforward application of s 123(1). STG argued, however, that the application of the trade mark which Trojan had to show STG’s consent was the application to the plain packaging by Trojan, not the application of the trade mark to the original packaging by STG.

Allsop CJ short circuited that argument. His Honour got STG to agree that a retailer could rely on s 123(1) to avoid infringement if it printed the trade mark on a purchase receipt. One would hope that proposition was not controversial. At [82], his Honour developed the ramifications:

During argument, I posited to Mr Heerey, counsel for STG, an example: a tie with
trade mark Z woven into the tie, in a pink box with trade mark Z embossed on the box. Both trade marks have been applied by the registered owner. The shop owner advertises his stock of Z ties with a sign outside bearing trade mark Z and invoices customers with a document bearing the same mark. Mr Heerey accepted that there would be no infringement in the use of the advertising and invoices even though such use would be use as a trade mark because of the operation of s 123: Facton Ltd v Toast Sales Group Pty Ltd [2012] FCA 612; 205 FCR 378 at 398–404 [112]-[145]. (It is to be noted, and Trojan emphasised this point in its submissions, that Middleton J in Facton said at [132] that “a natural reading of the words used in s 123 suggest that the only time at which the issue of consent is to be assessed is the time of the application of the trade mark to goods.”) I then posited a change to the facts. The
shop owner preferred selling the tie in a blue box (fitting in with a blue theme to his shop) upon which he faithfully and accurately placed the trade mark Z. The tie was taken out of the pink box (which was discarded) and put in the blue box for display and sale. STG submitted that the step of placing the Z trade mark on the blue box would not be protected by s 123, but accepted that the sign and invoices remained protected. That was so, it was submitted, because of an implied consent by the registered owner of the trade mark to the advertising and invoices in the light of the trade mark on the tie. Yet, should the difference be governed by the existence of weaving on the tie? Has not the trade mark already been applied in relation to the good (the tie) by embossing on the pink box?

Allsop CJ considered that the plain, natural meaning of the statutory language led to the answer “Yes” and was to be preferred.

In this case, there was no question about the quality of the goods once Trojan had repackaged them. Section 123(1) arguably does not concern itself with such matters. Nonetheless, the approach under the Australian Act contrasts starkly with the convoluted regime applicable in the EU which even requires the parallel importing repackager to give the trade mark owner advance notice of its nefarious plans.[3]

Scandinavian Tobacco Group Eersel BV v Trojan Trading Company Pty Ltd [2015] FCA 1086


  1. The famous four: Transport Tyre Sales Pty Ltd v Montana Tyres Rims & Tubes Pty Ltd [1999] FCA 329; 93 FCR 421 at 440 [94]; [Paul’s Retail Pty Ltd v Sporte Leisure Pty Ltd [2012] FCAFC 51; 202 FCR 286 at 295 [66]; Paul’s Retail Pty Ltd v Lonsdale Australia Limited [2012] FCAFC 130; 294 ALR 72 at 82 [65] and E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2009] FCAFC 27; 175 FCR 386 at 403–404 [57]- [58]. The two Paul’s Retail cases, of course, did not involve genuine goods and the High Court in Gallo refrained from deciding this point while overtuning the Full Federal Court’s decision.  ?
  2. Champagne Heidsieck et cie Monopole Society Anonyme v Buxton [1930] 1 Ch 330.  ?
  3. See for example Case C–143/00 Boehringer Ingelheim KG v Swingward Ltd and Dowelhurst Ltd [2002] ECR–1 at [61] – [68].  ?

The word yellow is descriptive of online directories

Telstra has lost its appeal in the “Yellow” case.

The Full Court upheld the trial judge’s conclusion that the word “yellow” lacked any capacity to distinguish print or online directories under (the old version of) s 41. However, the Full Court accepted that the word “yellow” had become sufficiently distinctive of Telstra by reason of use and promotion after the date of the application that it would have been registrable if it had had some inherent capacity to distinguish.

Following the High Court’s ruling in “Oro/Cinque Stelle“, the Full Court agreed with the trial judge that the word “yellow” signifies the colour yellow and the evidence showed that the colour yellow signified print and online directories. Consequently, the word itself was descriptive. At [117], in considering the ordinary signification of the word, the Full Court said:

We would say at the outset that it was appropriate for Telstra to proceed on the basis that capacity to distinguish could not be decided by reference to inherent adaption alone even if the Court accepted all of its arguments. The word yellow describes a colour and, even without evidence, it would be appropriate to infer that at least some other traders might wish to use that colour. Furthermore, there was at the very least evidence in this case of not infrequent use of the colour yellow in connection with print and online directories.

The Full Court then considered that the evidence of use by other traders in print and online directories confirmed that consumers did in fact consider the word “yellow” descriptive of such directories. Like the trial judge, the Full Court took into account the usage of traders overseas as well as within Australia, although it may have been to support the good faith of the local traders’ use.

Survey and acquired distinctiveness – s 41(5)

If the word “yellow” had had some capacity to distinguish print and online directories, the Full Court would have allowed Telstra’s appeal that it had become sufficiently distinctive under s 41(5) by use after application. A 2008 survey (not the 2007 survey relied on by the primary judge) showed that after several years of use including millions of dollars of expenditure on advertising, at least 12% of the survey respondents identified (associated?) the word “yellow” with Telstra’s directory unprompted. A further 4%, making 16% in total, had similar unprompted association.

The Full Court distinguished British Sugar and held that would be sufficient. (The report does not disclose the terms of the question that elicited those responses.) Arguably, makes a nice contrast to the Oro/Cinque Stelle case.

What about .com.au

In dismissing a second, cross-appeal in which yellowbook.com.au was found to be deceptively similar to Telstra’s Yellow Pages trade mark, the Full Court treated the domain name “accoutrement” .com.au as largely insignificant for the purposes of the deceptive similarity analysis.

The interesting point here is that the Full Court considered this may not always be the case. It was appropriate to disregard the element here in the context where the services were online directories and consumers were shown largely to disregard such elements.

The question of onus

The Full Court also seems to have resolved the ongoing disputes about the onus of proof. The Full Court held that the opponent has the onus of proving that a proposed trade mark has no inherent capacity to distinguish. It further held that that onus was on the balance of probabilities, not the practically certain standard which some courts at first instance have applied.

Telstra Corporation Limited v Phone Directories Company Australia Pty Ltd [2015] FCAFC 156 (Besanko, Jagot and Edelman JJ)

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.”  ?

Interlocutory Injunction to transfer domain name

Nicholas J has granted Thomas International an interlocutory injunction ordering Humantech to transfer the domain names, thomasinternational.com.au and thomas.co.za, to Thomas International. Thomas International had to give the usual undertakings and, as a foreign corporation, provide security for costs.

Thomas International is an English company which provides psychological testing and psychometric assessments, and competency and skills-based assessments, particularly using computerised services accessed over the internet through thomasinternational.net. It also makes its materials and services available through distributors. It appointed Humantech, a company associated with a Mr Schutte, as its master distributor/licensee for South Africa and Australia with power to exercise its rights through distributors. Humantech was permitted to use the “Thomas” trade marks, to incorporate a company in Australia under the name Thomas International (Australia) and to register the domain names. There were also obligations when the arrangements ceased or were terminated to cease use of the trade marks and change the corporate name of Thomas International (Australia) to a name which did not include Thomas.

In due course, the Schutte interests also incorporated another entity, ACT, which offered similar services to Thomas International’s assessment and training services. Thomas International alleges that, after some successful years’ trading, revenues from Thomas International (Australia) starting dropping off and the Schutte interests were diverting customers to ACT which, without permission, was using materials based on Thomas International’s materials.

Thomas International sued Humantech, Thomas International (Australia), ACT and Mr Schutte. There was a meeting between the parties and their lawyers shortly after. Thomas International said it would not discuss a new licensing arrangement until an undertaking dealing with the existing issues was provided. As a result, Humantech and the Schutte interests provided an undertaking to cease use of Thomas International’s trade marks, intellectual property and to transfer the domain names over. Thomas International also agreed to negotiate about a new licensing arrangement in good faith.

The next day Thomas International made its licence proposal to the Schutte interests. They considered it was financially unworkable and left the meeting. Later that day, they then put Humantech (and subsequently the other corporate entities) into administration and disabled the website. Shortly thereafter, Thomas International applied for interlocutory injunctions.

As noted, Nicholas J granted the interlocutory injunctions including an order that the domain names be transferred to Thomas International. The terms of the Undertaking meant it had a prima facie case to force the Schutte interests to stop using the Thomas name and trade mark and for the transfer of the domain names.

The Schutte interests’ main attempt to rebut that was their argument that the Undertaking was invalid or unenforceable. That was said to result because, it was alleged, that Thomas International extracted the Undertaking in return for its promise to negotiate a new licence arrangement in good faith. The Schutte interests contended that the terms of the licence they were offered were so unreasonable as to show that Thomas International did not negotiate, and had no intention of negotiating, in good faith. This issue was not developed in detail at this stage, but Nicholas J pointed out that, on the current state of the law in Australia, an obligation to negotiate in good faith did not require a party to subordinate its own interests to that of the other party.

On the balance of convenience, Nicholas J accepted Thomas International’s argument that:

the present state of affairs may cause TIL significant reputational damage as a result of customers who have purchased units entitling them to make use of facilities provided by TIL at the Thomas Hub being prevented from gaining access to it through the TIA website. I accept this submission. I also consider that any such damage may be irreparable and that damages will most likely not provide an adequate remedy. The financial statements of TIA for the financial year ending 30 June 2014 show that the company has net assets of just under $145,000.

On the other hand, the Schutte interests’ main argument was the disruption to their business, and that of their customers, if they could not continue to use the domain names, the main access point for provision of services both to Thomas International (Australia)’s customers and those ACT. As Nicholas J pointed out, however, the Schutte parties had already disabled access to the websites so they had already caused that problem themselves.

It would appear that Thomas International first learned something about ACT’s activities, the subject of the complaint, in May 2014 (i.e., a year earlier). However, Thomas International was able to lead evidence showing all the work it did, and the difficulties it encounted, in trying to ascertain what ACT was doing until proceedings were issued. In this context, the termination by Humantech of the main employee with responsibilities for running the Thomas part of its business may will have been highly significant.

Permission to proceed against the companies although administrators were appointed was granted as the interests of the administrators were adequately protected by the undertaking as to damages and provision for securities.

Thomas International Limited v Humantech Pty Ltd [2015] FCA 541

What constitutes authorised use of a trade mark?

In the latest round of the worldwide war between Wild Turkey bourbon[1] and Wild Geese Irish whisky[2], Perram J has reluctantly found that actual control of the licensee is not necessary and potential control will suffice for authorised use[3] under the Trade Marks Act 1995.

Mr Sullivan QC, a barrister in South Australia, has a winery there under the name Wild Geese Wines. When he sought to register it as a trade mark, he discovered the war between Wild Turkey and Wild Geese Irish whisky. Deciding discretion was the better part of valor, in 2007 he sold his trade mark rights to Wild Turkey bourbon and received a perpetual, exclusive licence back for the princely sum of $1.00 plus he agreed to a number of quality control provisions:

  • his wine had to be of sufficient quality to obtain continuing export approval from the Australian Wine and Brandy Corporation;
  • on request from the licensor, he had to supply up to 3 bottles of his wine to the licensor each year and, if the licensor required, supply 4 bottles to the Australian Wine and Brandy Corporation for testing;
  • if his wines did not meet the Australian Wine and Brandy Corporation’s requirements, the licensor could terminate the licence;
  • he was not allowed to use the trade mark outside Australia and he could use the trade mark only on Australian wine;
  • as is typcial, he was not allowed to use the trade mark in some altered or abbreviated form or in any scandalous fashion;
  • he also had to maintain insurance; and
  • he was not allowed to represent in any way that he was a licensee of Wild Turkey.

The main point of interest about these provisions is that Wild Turkey did not actually seek to exercise any of them until April 2011, that is, four years down the track. By this time, however, Lodestar Anhalt had filed its non-use action and so Wild Turkey had to show it had used its Wild Geese Wines trade mark as a trade mark in the period September 2007 to September 2010. Its only way to do so was in reliance on Mr Sullivan’s use as an authorised user.[4]

The Wine and Brandy Corporation conditions are interesting for at least 2 reasons. The first was that Mr Sullivan proposed them so that he was not at the mercy of the licensor’s potentially subjective whim about whether or not his wine was of an acceptable quality. Secondly, while Mr Sullivan had no idea what standard was required for export approval, apparently over 99% of wine submitted to the Australian Wine and Brandy Corporation qualified for export approval.

Perram J had no trouble finding that Wild Turkey had not exercised actual control over Mr Sullivan’s use of the Wild Geese Wines trade mark. The question was whether the potential for such control was enough.

First, Perram J considered that a trade mark licence under the 1955 Act would be valid only if control was actually exercised over the licensee.

Secondly, his Honour considered that what needed to be shown under the 1955 Act was a connection in the course of trade. This was different to what was required under s 17 of the 1995 Act and the requirements for authorised use under s 7 and s 8.[5]

Left to his own devices, Perram J considered that the requirements for authorised use still required that control actually be exercised over the licensee. However, his Honour considered he was bound by the Full Court’s decision in Yau Entertainment to find that the potential to exercise control was sufficent. As Wild Turkey had that potential through the terms of the licence agreement, Mr Sullivan’s use qualified as authorised use and so his sales under the trade mark in the relevant period, while small, were sufficient to defeat the non-use action.

If his Honour had found that potential control had not been sufficient, he would not have exercised a discretion against removal.

Skyy Spirits LLC v Lodestar Anstalt [2015] FCA 509


  1. For this round of the dispute owned by Skyy Spirits, part of the Campari group. Previously, the relevant entity had been Austin Nichols.  ?
  2. Still held by Lodestar Anhalt, a Lichtenstein corporation. More wild geese. ?
  3. Authorised use counts as use by the trade mark owner: s 7(3).  ?
  4. One can imagine that the impending removal action may have been the trigger for Wild Turkey’s “sudden” interest in exercising control. Things are perhaps not so clear as that: in fact, from 2007 to 2010, Mr Sullivan was only offering for sale a merlot he had bottled in 2004. It was not until 2010 that he bottled a pinot noir, which did not go on the market until later in 2011. The reported reasons do not indicate whether anyone on the Wild Turkey side ever tasted the merlot as part of the “licensing” process although, as Wild Turkey had the onus to rebut the non-use allegation, one might expect it would have to have led evidence to establish that – if it wished to rely on it.  ?
  5. On one view, paragraph 42 of the High Court’s Gallo decision tells us that the definition of “use as a trade mark” provided by s 17 of the 1995 Act means the same thing as the definition in s 6(1) of the 1955 Act, notwithstanding that s 17 no longer refers to “a connexion in the course of trade”.  ?