Is there a Lenah Game Meats constructive trust?

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The short answer is: not in this case in which Snaden J awarded The Game Meats Company $130,000 damages against Farm Transparency International for trespass but rejected Game Meats’ claim to a Lenah Game Meats constructive trust over the copyright in videos made by Farm Transparency during the trespass. The case also challenges whether the victim of the trespass can get an injunction against communicating the fruits of the trespass.

What happened

Game Meats operates abattoirs, including a halal abattoir at Eurobin.

Farm Transparency is a not-for-profit charity dedicated to educating the public about animal exploitation and the prevention of cruelty to animals.

As one of its directors, Mr Delforce, put it, Farm Transparency’s overarching wish is to “…end all forms of business that involve causing harm to animals”.

To that end, Ms McDonald-Eckersall, its Strategy and Campaigns Director, developed Farm Transparency’s “Shut Down Slaughterhouses” campaign.[1] As part of this campaign, between January and April 2024, Farm Transparency operatives (including Mr Delforce and Ms McDonald-Eckersall) broke into the Eurobin abattoir and installed video cameras to record the animal slaughtering process.

In May 2024, Farm Transparency provided some of the footage from those cameras to the Commonwealth Department of Agriculture as part of a complaint about the nature of Game Meats’ operations.

A few days later, Farm Transparency provided 14 minutes of the footage to Channel 7 which broadcast a story on its Albury station, but without the footage. Farm Transparency also posted the 14 minutes of footage with commentary on its Facebook page and on its website with a press release.

Game Meats obtained injunctions ex parte against the continued publication of these materials. Game Meats then sought injunctions and exemplary damages for trespass, injunctions and damages for contraventions of the prohibitions on misleading or deceptive conduct or the tort of injurious falsehood and, finally, it sought a declaration that a constructive trust arose over the copyright in the footage obtained through the trespass.

The decision

By the time of the trial, Farm Transparency admitted liability for trespass and Snaden J ordered damages totalling $130,000 ($30,000 damages and $100,000 in exemplary damages) for the trespass.

Snaden J, however, dismissed the claims for injurious falsehood, misleading or deceptive conduct and for beneficial ownership of the copyright in the footage as a cinematograph film.

The Lenah Game Meats constructive trust

Lenah Game Meats is authority for the principle that an interlocutory injunction cannot be granted except for the protection of some legal or equitable right or interest.

Similarly to the present case, Lenah Game Meats involved an attempt to stop the broadcasting of footage of the operations of the abattoir obtained through unlawful trespassing.[2] In the course of their reasons, Gummow and Hayne JJ said in obiter at [102] (with the individual agreement of Crennan and Callinan JJ):

A cinematograph film may have been made, as in Lincoln Hunt, in circumstances involving the invasion of the legal or equitable rights of the plaintiff or a breach of the obligations of the maker to the plaintiff. It may then be inequitable and against good conscience for the maker to assert ownership of the copyright against the plaintiff and to broadcast the film. The maker may be regarded as a constructive trustee of an item of personal (albeit intangible) property, namely the copyright conferred by s 98 of the Copyright Act. ….

Snaden J noted, therefore, that whether or not a constructive trust would arise depended very much on the particular facts of the particular case.

His Honour noted that, after Lenah Game Meats, Hall J had refused to find a constructive trust arose of footage and photographs taken by trespassers in Windridge Farm Pty Ltd v Grassi.

In Windridge Farm, Hall J found that the trespassers did not intend to use the footage for publication (but to facilitate an investigation) and there was no evidence of damage resulting from their conduct. At [129], Hall J said:

Apart from the unlawfulness of the entry onto the premises by the defendants, the evidence does not establish the type of circumstances to which Gummow and Hayne JJ in Lenah] adverted. These circumstances include matters which constitute either an invasion of the legal or equitable rights (such as the right to confidentiality) of the owner or occupier of premises or facts that establish a breach of any equitable obligation operating between (in this case) the plaintiff and the defendants at the time the film and the photographs were made or taken.

First, at [174] – [175] Snaden J rejected breach of confidence as a basis for intervention. While breach of confidence could be invoked to restrain the publication of confidential information “improperly or surreptitiously obtained”,[3] Game Meats had not submitted what was depicted in the footage was confidential nor could it realistically do so.[4]

Next, Snaden J considered there might be situations where how the footage had been obtained (his Honour’s emphasis) could give rise to a sufficient equity. At [177], his Honour explained:

But for the absence of authority, I would have been disposed to the view that it should. For the best part of two centuries, courts of equity have been prepared to grant relief against defendants possessed of information obtained by reason of “…a breach of trust, confidence or contract”: Prince Albert v Strange (1849) 1 Mac & G 25; 41 ER 1171, 1178 (Cottenham LC). The fact that information has been obtained through the commission of a crime or tort might not, by itself, suffice to warrant equivalent relief: Lenah, 230–1 [55] (Gleeson CJ); Smethurst v Commissioner of the Australian Federal Police (2020) 272 CLR 177 (“Smethurst”), 219–20 [94] (Kiefel CJ, Bell and Keane JJ). But there is, in my view, much to commend the submission that, subject to discretionary considerations, equity might intervene to grant relief in relation to information that is directly obtained:

(1) as the intended consequence of wrongful conduct; and

(2) for the purposes of using it to visit prejudice upon the victim against whom that conduct was carried out.

For a respondent to realise the benefit that was intended to materialise from conduct of that kind would, I think, aptly be described as unconscionable (or unconscientious: see Lenah, 244–5 [98] (Gummow and Hayne JJ)).

However, Snaden J held that this was not a case where a constructive trust arose.

First, at [179], Snaden J noted that obtaining the footage through trespass had not been sufficient in Windridge and Smethurst. While the absence in Windridge of a purpose to shame or damage the abattoir was a difference to the present case, it was not sufficient. At [180], his Honour concluded:

…. The court should, I think, be very slow to favour a result that deviates from what transpired in those cases in the absence of some clearly apparent distinguishing feature or features.

Secondly, Snaden J was influenced at [181] by the absence of precedent recognising the proposed constructive trust. It was not appropriate for a judge at first instance to indulge “in the kind of ‘bold step’ that trial judges should ordinarily leave for higher consideration”.

Injurious falsehood and misleading or deceptive conduct

The claims for injurious falsehood and misleading or deceptive conduct failed because Snaden J found that the publications did not falsely represent that Game Meats condoned animal cruelty or was systematically cruel to the animals it slaughtered at the abattoir.

The injurious falsehood claim failed for the further reason that Farm Transparency did not make the representations in the publications maliciously. Snaden J accepted that there was no element of personal spite against Game Meats. However, his Honour rejected Farm Transparency’s claim that it did not intend harm to Game Meats. On the contrary, Farm Transparency’s very objective was to shame Game Meats and reduce custom for its products by exposing its production practices.

Even so, this was not enough – the intention to injure had to be without just cause. And that was not the case. At [131], his Honour explained:

The making of each of the Three Publications was effected to further the political ends to which FTI is committed. Whatever might be said of those ends, they cannot be impugned as unjust or improper in any sense recognised by law. It is a feature of societies the world over—and liberal democratic societies in particular—that people with shared ideological, religious, commercial or other values will group together with a view to spreading them or having them lawfully imposed upon others. That reality does not bespeak relevant injustice or impropriety.

Game Meats’ claims would also have run into difficulties proving it had suffered damage. Partly because of the state of its evidence, partly because of the speed with which the trial was brought on including the swift court action to secure interlocutory injunctions and partly because Farm Transparency had undertaken that it would not restore the footage to public view until final determination of the proceeding.

What happened to the injunction

The claims of copyright and injurious falsehood having failed, Game Meats sought an injunction to restrain Farm Transparency from publishing the footage obtained through the trespass. Game Meats argued this was necessary to prevent Farm Transparency from realising the benefits of its trespassing.

The interlocutory injunction was dissolved and no further injunction was granted!

Citing Patrick Stevedores at [33], Snaden J accepted that an injunction might be granted where the damage caused by tortious conduct is ongoing and is “extreme or at all events very serious”.

His Honour noted that Gageler, Gordon and Edelman JJ in Smethhurst had considered the invasion of Ms Smethurst’s privacy provided a sufficient interest for an injunction requiring the police to return her phone and the data it held. The police had seized the phone by executing a search warrant which was subsequently found to be invalid and so committed trespass. However, their Honours were in the minority.

At [204] – [206], Snaden J observed that the majority in Smethhurst, Kiefel CJ, Bell, Keane and Nettle JJ, accepted an injunction could be awarded where the trespass was completed only if its effects were serious and ongoing. Kiefel CJ, Bell and Keane JJ in particular had ruled the trespass did not support an injunction and there was no other right to be vindicated:

The public interest in both the investigation and the prosecution of crime would not suggest as appropriate an order that the information be taken from the [Australian Federal Police (“AFP”)] and given to the plaintiffs. The prospect that criminal conduct may be disclosed is a sufficient reason to decline the relief sought.

In the present case, the acts of trespass – at least as against the Eurobin premises – were well and truly completed although Snaden J considered it was very likely Farm Transparency would engage in similar acts against other premises.

On that basis, his Honour held that further acts of publishing the footage could not be characterised as continuations of the original trespass. And further, his Honour considered Game Meats could not establish the consequences of such publication(s) would be sufficiently serious.

As to the first point, his Honour accepted Farm Transparency’s submission:

It is correct to observe that obtaining of the footage was made possible by the trespass. However, once trespassing, the respondent did not commit any further breach of the law by filming what was there to be observed nor invade any further rights of the applicant. The respondent was not an outlaw whilst trespassing. The law treats the acts of trespass, and filming (even if whilst a trespasser), as distinct and not interrelated. One cannot slide as between those two separate matters, despite them arising from the same factual matrix.

At [214], Snaden J accepted that submission and explained at [215]:

There is a distinction that must be drawn between the commission of the tort—that is to say, the unauthorised entrance by FTI’s agents onto the Eurobin Premises and the installation there of the covert recording equipment that was thereupon installed—and the publishing of information obtained as a result thereof. The latter involves no interference with any legal right that GMC possesses and is not, in and of itself, tortious. The injury that inheres to GMC’s prejudice as a result of the trespasses is, at most, FTI’s possession of the footage; not its publication. (original emphasis)

At [216], Snaden J illustrated his proposition with the analogy that an injunction could not be granted against Mr Delforce or Ms McDonald-Eckersall to stop them telling others what they had seen during their trespasses.

In addition, Snaden J considered Game Meats could not show its injury from further publication would be sufficiently serious. At [214], his Honour explained:

…. If FTI were to publish the footage that it obtained as the fruit of its unlawful trespass, the consequences for GMC are difficult to pinpoint. I would accept, at a level of generality, that they would unlikely be positive. But the extent to which they might sound in immeasurable or extreme damage to GMC’s goodwill would depend on all manner of circumstances, not the least being the manner in which GMC sought to counter any public backlash. I do not consider it possible to conclude that the damage to GMC’s goodwill would be so significant as to clear the hurdle that needs to be cleared.

So, apart from the damages award, Farm Transparency is free to use the fruits of its trespassing with, it appears, impunity.

As a final point, although it was unnecessary to his decision, Snaden J noted he would have rejected Farm Transparency’s argument that its continued use of the footage was protected by the implied constitutional freedom of expression about matters of politics or government.

It might be questioned how allowing a trespasser to continue using the fruits of their trespassing promotes the objectives of the civil prohition on committing a trespass. This appears to be recognised by his Honour’s reaction at [177] “in the absence of authority”. Even so, one might wonder, with respect, whether telling someone what one had seen is comparable in nature and impact to showing a video. One might also wonder whether acts of unrestricted publication are comparable to disclosure to authorities or use in an investigation.

There’s an appeal

Game Meats and Farm Transparency have both appealed (VID 92/2025).

The Game Meats Company of Australia v Farm Transparency International Ltd [2024] FCA 1455 (Snaden J)

  1. Ms McDonald-Eckersall had previously achieved fame, or notoriety, through the Animal Rebellion campaign which disrupted McDonald’s national supply chain in the UK “costing the company millions”.  ?
  2. Snaden J noted that the injunction rejected by the High Court in Lenah Game Meats was an injunction against the broadcaster. However, the interlocutory injunction against the trespassers themselves was left undisturbed (because they did not appeal).  ?
  3. Citing Gleeson CJ at [34] in Lenah Game Meats.  ?
  4. This conclusion seems to be reinforced by the High Court’s ruling in Lenah Game Meats and the subsequent decision Farm Transparency International Ltd v New South Wales [2022] HCA 23; 277 CLR 537 at [41]; a case involving an unsuccessful challenge to the constitutional validity of sections 11 and 12 of the Surveillance Devices Act 2007 (NSW).  ?

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Zipped: Firstmac v Zip Co

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Firstmac has won its appeal and the Zip Co companies have been found to infringe Firstmac’s ZIP registered trade mark.

For obvious reasons, this is just going to be a fairly bald summary.

Infringement

First, the Full Court held that Zip Co’s formative ZIP marks such as ZIP PAY, ZIP MONEY and:

were deceptively similar to Firstmac’s ZIP trade mark.

The honest concurrent user defence

Secondly, the Full Court held that Zip Co companies were not honest concurrent users for the purposes of section 44(3)and so the defence based on sections 122(1)(f) and (fa) failed. On this point, the Full Court emphasised that the onus was on Zip Co to establish it was an honest concurrent user; not on Firstmac to prove it was not.

The reasons for the failure of the honest concurrent user defence also meant that Zip Co could not rely on the defence under section 122(1)(a) for use in good faith of its own name.

Cancellation because Firstmac’s mark had become deceptive

Thirdly, the Full Court accepted that as a result of Zip Co’s reputation, the use of ZIP by Firstmac would be deceptive or confusing for the purposes of section 88(2)(c). The Full Court, however, exercised the discretion under section 89 and refused to order cancellation.

This case is the reverse of the Katy Perry case.[1] Both Full Courts did reject reliance on the old law “blameworhy” conduct cases in applying section 88 and considered that “blameworthy” conduct was one, but not the only, consideration to be taken into account in the exercise of the discretion under section 89.

In the Katy Perry case, the (differently constituted) Full Court found that Ms Taylor knew of Ms Hudson’s reputation as Katy Perry and that artists such as Ms Hudson exploited their celebrity through the sale of branded merchandise such as t-shirts and the like. Consequently, in applying for her trade mark with that knowledge, Ms Taylor was precluded from relying on section 89. For example, the Full Court said at [317]:

We consider that Ms Taylor’s act of filing the trade mark application with knowledge of Ms Hudson, her reputation, and her mark in circumstances where she also knew that popular music stars, such as Ms Hudson, lend their names (and trade marks) to be used in connection with clothes and sell merchandise at their concerts, and accepted such conduct as a common practice, is sufficient not to enliven the discretion under s 89.

See also at [342] – [343].

In contrast, Firstmac was not infected with such knowledge when it registered its trade mark; the Zip buy now pay later business not even being in existence at that time. At [175], the Full Court explained:

… where, as here, the primary judge found that Firstmac was without fault, and we have found that the respondents did not prove that their use of the Firstmac Mark was honest, to exercise the discretion to remove the Firstmac Mark would reward “the assiduous efforts of a misappropriating user”. To pick up on what Brennan J said in Murray Goulburn at 389, it would place a premium on those efforts.

The Full Court also examined the other mandatory considerations prescribed under section 89(2).

Removal for non-use

Fourthly, the Full Court held that Firstmac had proved use of its trade mark through advertising and promotion of its re-launched product such as:

Accordingly, Firstmac had satisfied its burden under section 100(1)(c) to defeat Zip Co’s action for non-use.

Firstmac Limited v Zip Co Limited [2025] FCAFC 30 (Perram, Katzmann and Bromwich JJ)

  1. Killer Queen, LLC v Taylor [2024] FCAFC 149; 306 FCR 199 (Yates, Burley and Rofe JJ). ?

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Cantarella lost its appeal and the ORO trade mark

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The fallout from the High Court’s ruling that ORO is distinctive for coffee continues. In round 2 of the ORO trade mark saga (Lavazza edition), Cantarella has lost its appeal from Yates J’s ruling to expunge its ORO trade marks.

The tantalising issue of the relationship between s 58 (ownership) and honest concurrent use, however, has been left dangling.

A recap

Cantarella owns two registered trade marks for ORO in Australia in respect of coffee. TM 829098 and TM 1583290.

The earlier of the two, the 098 mark, was filed on 24 March 2000. However, Cantarella’s evidence was that it first began using ORO as a trade mark for its coffee products “at least” from 20 August 1996.

Having successfully sued Modena and fended off the ownership and distinctiveness challenges to its registrations, Cantarella sued Lavazza for infringement of these trade marks by selling in Australia LAVAZZA qualità ORO coffee in packaging such as:

Four images of packaging for coffee showing the trade marks "Caffè Molinari" and ORO

At trial, Yates J found this packaging involved use of ORO as a trade mark but did not infringe Cantarella’s trade marks because they were invalidly registered as Cantarella was not the owner:

The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

Who used the trade mark first

The key fight in the appeal, as at trial, was whether Caffè Molinari’s products had used “ORO” as a trade mark in Australia before Cantarella’s first use on 20 August 1996.

In the Modena case,[1] evidence from Molinari’s senior executive only showed use after that date. In this case, however, Yates J accepted evidence from two different Molinari employees and two witnesses from CMS / Saeco that CMS / Saeco, a coffee business in Coburg Victoria, had in fact imported shipments of the Molinari product before Cantarella’s first use. So, in contrast to the Modena case, Cantarella was not the owner of the trade mark ORO in Australia[2] and its trade marks were invalidly registered.

For the most part, this conclusion turned on Yates J’s assessment of the creditworthiness of the witnesses which, despite some question marks, the Full Court considered it was not appropriate to disturb.

The Full Court rejected Cantarella’s argument that the finding about the date of Molinari’s first use in Modena was conclusive. It was a factor, but needed to be weighed in the balance with all the other relevant evidence.

Cantarella attacked the evidence from the Molinari witnesses who advanced data from Molinari’s records and set out in Excel spreadsheets. The issue here was that the invoices and shipping documents were no longer available for the sales before the priority date of Cantarella’s use. One of the Molinari witnesses also admitted that the spreadsheet might record “pro forma” invoices. Apparently, these were what we might call quotes, sent to customers and which only became sales if the customers accepted them. The Molinari witnesses were unable to say whether the relevant entries were sales or “pro forma” invoices.

The Full Court, however, pointed out that “pro forma” invoices of this kind would still count as use of the trade mark as offers to sell. (Also, there was the evidence of the CMS / Saeco witnesses that orders were placed and product in the packaging was received.)

Did Molinari use ORO as a trade mark in Australia

Next, Cantarella challenged Yates J’s ruling that ORO was used as a trade mark on the Molinari 3 kg packaging:

Close up views showing "Miscela di Caffè" in small type and ORO underneath but in much larger type.
Molinari’s Miscela Di Caffè ORO composite usage

Cantarella argued that this was use only of a composite mark “Miscela di Caffè ORO”.

As with the finding about when Molinari first used ORO in Australia, Cantarella was unsuccessful in challenging Yates J’s acceptance of the evidence that Molinari’s 3kg packaging in 1995 and 1996 took the form of the 2007 packaging.

On that basis, the Full Court dismissed Cantarella’s appeal on this ground, explaining at [93]:

We have had regard to the primary judge’s finding, applying Modena, that the word ORO is inherently distinctive and capable of acting as a badge of origin when used in relation to coffee. We have had regard to the prominence given to the word ORO both in the context of the packaging as a whole, and relative to the words MISCELA DI CAFFÈ in the much smaller font. We have also had regard to the appearance of what Cantarella calls the composite expression as it appears on both the front and back of the 3kg packaging, where the relevant words are differently arranged. In each case the word ORO appears much more prominently than the words MISCELA DI CAFFÈ. We consider the word ORO simpliciter acts as a badge of origin. We therefore agree with the primary judge’s finding on this topic.

Use as part of a composite mark

To succeed on the s 58 ground, Lavazza had to show not just that Molinari was the first user of ORO as a trade mark in Australia, but also that it had used it continuously and not abandoned it.

During the Modena litigation, howeve, Molinari had changed its packaging to use the expression “QUALITÀ ORO” – which Cantarella had not challenged. Thus, the evidence showed a progression of uses:

Caffè Molinari’s QUALITA ORO branding vs the Miscela di Caffè ORO branding

Cantarella contended these were use of the composite mark “QUALITÀ ORO” only, not ORO alone.

Lavazza did not try to argue that “QUALITÀ ORO” was substantially identical to ORO (and so might invoke s 7(1)).[3] Rather, it argued these later forms of packaging were use of ORO itself.

At [113], the Full Court explained:

The fact that the mark in question may appear as a component of a larger mark does not preclude a finding that it has been used as a trade mark. Whether or not there has been such use will depend on the circumstances and the overall impression conveyed.

Then, the Full Court accepted Molinari had used ORO itself as a trade mark in the later forms of packaging. Their Honours noted this depended on matters of impression about which minds might reasonably differ but “on balance” agreed with Yates J’s finding explaining at [114]:

In the case of both the 6077 and 6021A/6021E products, the word ORO is given prominence by the use of a larger font and, in the case of 6021A/6021E, ORO occupies a central position on the pack separated from the word QUALITÀ by the horizontal line immediately above the word ORO. We also note that the word ORO is given prominence across the relevant product range including on packaged coffee products 1525E, 6091 (as depicted in J [201], being the December 2003 1kg packaging) and 6071. The use across the range is consistent with the use of ORO as a sub-brand within the Molinari range of packaged coffee.

No exercise of the discretion against removal

The Full Court then rejected Cantarella’s appeal from Yates J’s refusal to exercise the discretion under s 88 not to remove the registrations.

At [141], the Full Court recorded the long established proposition that, once a ground for cancellation is established, the registration should be cancelled unless sufficient reason appears for leaving it on the Register. The trade mark owner having the onus to show sufficient reason.

As this was a discretionary judgment, this required Cantarella to show legal error. The Full Court considered Cantarella failed to demonstrate any error and so this ground failed.

The main reason advanced by Cantarella was its reputation arising from its long use. However, the Full Court at [148] agreed with Yates J that this was not a matter of significant weight.

Assuming Cantarella had a strong reputation, it still retained the ability to prevent misrepresentation through passing off and the prohibition on misleading or deceptive conduct. And so, there was no compelling necessity for the marks to remain on the Register.

The unresolved issue

Cantarella sought to argue for the first time on appeal that it should be considered a joint owner of ORO at common law as a result of its long use as an honest concurrent user.

That is, Cantarella sought to throw into question the relationship between s 58 and s 44(3).

In McCormick, Kenny J had ruled that the new “plain English” version of the Act which put “honest concurrent user” in Part 4 of the Act dealing with grounds of rejection and “ownership” in Part 5 dealing with grounds of opposition meant that s 58 was in effect in a separate sphere from honest concurrent user and independent and superior to that ground. So that, even if an applicant established it was an honest concurrent user, it still could not be validly registered in the face of a successful s 58 opposition.

The Full Court refused leave for Cantarella to argue this for the first time on appeal.[4] At [134], however, their Honours did say:

The preferable solution to this difficulty may be to read s 58 and s 44(3) together to form a harmonious legislative scheme in which s 58 is read subject to s 44(3): Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69] – [71] per McHugh, Gummow, Kirby and Hayne JJ citing (inter alia) Ross v The Queen (1979) 141 CLR 432 at 440 per Gibbs J. That would involve recognising that s 58 does not apply in the circumstances where s 44(3) has been satisfied. But it is not necessary to resolve this issue in the present case because even if s 58 operates subject to s 44(3), the requirements of s 44(3) were not shown to have been met in this case. (emphasis supplied)

The problem for Cantarella was that it had not led any evidence explaining how it had come to adopt ORO and so of honest concurrent user would not be available.

I guess we shall have to wait and see whether a special leave application is forthcoming and, if it does, its fate.

Cantarella Bros Pty Ltd v Lavazza Australia Pty Ltd [2025] FCAFC 12 {Nicholas, Jackson and Rofe JJ)

  1. Modena was Molinari’s exclusive distributor in Australia. The High Court’s decision, of course, laid down the law in Australia to determine when a mark has no inherent capacity to distinguish and held ORO was inherently distinctive for coffee. Consequently, Modena’s defence to infringement failed.  ?
  2. The owner being the first person either to use the mark in Australia as a trade mark for the relevant goods or services or to apply to register it with the intention of using it as a trade mark here: Re Hicks’s Trade Mark (1897) 22 VLR 636 at 640; Food Channel Network Pty Ltd v Television Food Network GP (2010) 185 FCR 9 (Keane CJ, Stone and Jagot JJ) at [49] – [55], Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd (2017) 251 FCR 379 (Greenwood, Jagot and Beach JJ) at [18] – [19].  ?
  3. If the Registrar or a prescribed court, having regard to the circumstances of a particular case, thinks fit, the Registrar or the court may decide that a person has used a trade mark if it is established that the person has used the trade mark with additions or alterations that do not substantially affect the identity of the trade mark.  ?
  4. In fact, the issue was raised in obiter dicta by Yates J at [647] – [649].  ?

Cantarella lost its appeal and the ORO trade mark Read More »

Aldi’s ‘benchmarking’ strategy

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Moshinsky J has held that the packaging for three of Aldi’s Mamia Baby Puffs products infringed Hampden’s copyright in the packaging for Little Bellies Puffs products. However, the packaging in another eight of Aldi’s Mamia products did not infringe the copyright in the packaging for various Baby Bellies products. Moshinsky J also held that Aldi was liable for additional damages for the proven infringements in light of Aldi’s ‘benchmarking’ strategy.

There was also an issue about ownership.

Illustration of the infringing packaging

Illustration of the non-infringing packaging

Some of the background

As you no doubt know, Aldi stores largely carry private label brands (i.e., Aldi’s own in-house brands). One of its private label brands is the Mamia range of baby products.[1]

In 2018, Aldi had embarked on a redesign of the packaging for the products in this range, starting with nappies and wipes.

In 2019, Aldi had moved on to the packaging for its snacking range. As part of this exercise, Aldi identified Hampden’s Little Bellies as the market leader. This led to Aldi instructing its design contractor, Motor Design:

Snacking range architecture needs to follow Baby Bellies with real photography.

This led, in 2020, to Aldi commencing to sell a number of Mamia food products – two varieties of Rice Cakes, three varieties of Fruit Snack Cereal Bars and three varieties of Fruit & Oat Bars.

In July 2020, Aldi also decided to introduce baby puffs products into its Mamia range. As with the earlier snacking products, Aldi identified and used the Bellies puffs products as the reference or benchmark products. Aldi launched three puffs products in August 2021. (It appears the packaging design went through at least 6 versions.)

The Puffs packaging

As noted above, Moshinsky J found that Aldi’s packaging for the blueberry, apple and cinnamon and carrot puffs infringed the copyright in Hampden’s corresponding Baby Bellies products.

The packaging for the blueberry puffs products illustrates this:

At [180], Moshinsky J found Aldi’s packaging reproduced the following layout and design elements of the Baby Bellies packaging:

(a) a small, oval-shaped cartoon character, with a large, light-coloured belly;

(b) a solid white background;

(c) a two-column layout;

(d) a rounded, childlike font;

(e) on the left side, text elements of varying sizes, “stacked” vertically;

(f) on the right side, photographic images of the product and ingredients, in a vertical composition; and

(g) a number in the upper-right corner.

His Honour considered at [181] that the combination of these elements cumulatively involved a degree of creativity or originality and, considered together, were qualitatively significant.

In so finding, Moshinsky J rejected Aldi’s argument that Hampden was seeking to protect the idea or ‘look and feel’. His Honour accepted at [183] that the elements were not taken precisely by Aldi but, nonetheless, all were present in Aldi’s packaging:

Aldi’s characterisation of the applicants’ claim as residing in the ‘look and feel’ of the Applicants’ Works rested on a submission that none of the listed design elements was taken ‘precisely’ by Aldi. I do not accept that submission. Each element listed above is present in item 9 of the Impugned Works. It is true that the identification of those elements involves some degree of abstraction, but the elements are not identified at so high a level of abstraction as to venture into the protection of ideas rather than their expression.

And, at [184], his Honour pointed out that focusing on the differences was contrary to Designer Guild where Lord Hoffmann had stated:[2]

…. In the present case, [the question] is whether the features which the judge found to have been copied from Ixia formed a substantial part of Ixia as an artistic work. That is certainly a question of judgment or impression. But why, in answering that question, should it be relevant to consider whether Ixia did or did not look like Marguerite?

The non-Puffs packaging

In contrast to the findings in relation to the puffs packaging, Moshinksy J held that the packaging for the other products did not reproduce a substantial part of the copyright in Hampden’s Little Bellies products.

For example, the Mamia rice cakes products did not infringe the copyright in either the Baby Bellies blueberry puffs or the Little Bellies products

The Mamia rice cakes products reproduced the layout and design elements of:

(a) a solid white background;

(b) a rounded, childlike font;

(c) on the bottom left, a green oblong shape with writing in it;

(d) on the right side, photographic images of the product and ingredients, in a vertical composition; and

(e) a number in the upper-right corner.

Unlike the puffs packaging, however, at [198] Moshinsky J considered what had been taken was not a substantial part of the copyright. Even in combination, they did not produce something of sufficient creative significance.

At [197], his Honour had earlier drawn attention to significant differences in the Aldi design:

Unlike the Impugned Puffs Works, items 1 and 2 of the Impugned Works do not reproduce the design element of a small, oval-shaped cartoon character. The owl in items 1 and 2 of the Impugned Works is much larger, and does not resemble the cartoon character in item 1 of the Applicants’ Works. While it might be said that a large, light-coloured belly (with writing in it) has been reproduced, I do not consider that this can be considered separately from the character itself, which is not reproduced. Further, unlike the Impugned Puffs Works, items 1 and 2 of the Impugned Works do not reproduce a two-column layout. The ingredients near the bottom of the image stray into the middle of the work, and the MAMIA brand name is central, such that there is not a clear impression of two columns.

Turning to consideration of Hampden’s non-puff packaging:

Moshinsky J noted that the competing designs did both feature a large, oval-shaped cartoon character with a large, light coloured belly but Aldi’s design did not feature photographic images of the products in a vertical arrangment on the right side of the work.

At [203], Moshinsky J considered that the number of design elements that had been reproduced was too few to conclude that a substantial part of Hampden’s copyright had been reproduced:

…. Although the impugned work reproduces the design element constituted by a large, oval-shaped cartoon character, with a large, light-coloured belly (with writing in it), which may be considered to be a creative or original element, the other elements that have been reproduced are commonplace. While the question is to be approached qualitatively, the number of layout and design elements that have been reproduced can be relevant to the qualitative assessment. Here, the number of elements that have been reproduced is too few to conclude that the layout and design elements that have been reproduced, even if taken together, constitute a substantial part of item 2 of the Applicants’ Works.

Additional damages

As noted above, Moshinsky J found that it was appropriate to order additional damages against Aldi under s 115(4) in respect of the infringements. The infringements were flagrant and there was a need to deter similar infringements.

Aldi directed Modern Design to use the Hampden products as the benchmark products and both the Aldi personnel responsible for the range and the Modern Design personnel had referred closely to Hampden’s designs.

In her affidavit, Aldi’s witness had attempted to explain what Aldi meant by ‘benchmarking’:

… development of a Private Label product (or rebranding an existing Private Label product) also involves consideration of the packaging used by competitors. As part of this process a benchmark product is usually identified within the market. This is a product selected by Aldi or the Agency from amongst the range of on-trend products within an on-trend category which have been identified during the market investigation process I have described above. The purpose of the benchmark is to enable us to identify cues that customers may associate with the product type generally and then adapt them to develop the Aldi Private Label product. These cues can include:

(a) the packaging size;

(b) the use of colours known to relate to quality or characteristics – for example, purple is used for salt and vinegar flavours; and

(c) the presentation of aspects of packaging such as product name and key ingredients, and also the expected age range for consumers of the product.

(Moshinsky J’s emphasis).

Things did not improve in her cross-examination.

At [128], Moshinsky J found that he had difficulty accepting the witness’ evidence. Rather, his Honour inferred that ‘benchmarking’ meant:

a process of developing a packaging design that resembled the packaging of the benchmark product (albeit not too closely, because that would infringe the law).

It is also worth noting that Aldi’s legal advice had been that version 4 of the puffs packaging was too close to the Bellies packaging. The internal comment by Modern Design’s designer was “No shit”.

Aldi considered that a further design removing text from the owl’s tummy and amending that wording “should now move it far enough away from the benchmark”.

At [231], Moshinsky J found that Aldi had used the designs which had been developed by a trade rival for its own advantage. It took the risk that its use would exceed what the law allows. Consequently, Moshinsky J found Aldi’s conduct to be flagrant. In addition, Aldi continued selling the products in the infringing packaging after receipt of Hampden’s letter of demand.

An owership issue

Hampden, as its name might suggest, is an IP holding company. Its related company, Every Bite Counts (EBC), had arranged for B&B Studio to design the packaging for nine of the Bellies products in 2017 / 2018.

It also appears that B&B Studio prepared drafts or versions of four other packaging designs. These were sent to another company, Lacorium, where a Mr Mota amended or revised these to produce the final packaging designs for these four products.

Moshinsky J (at [144]) held that the terms of the B&B Studio assignment to Hampden that copyright “shall be assigned” on payment in full of the contract price were effective to assign copyright to EBC once the payment was made.

Aldi argued that “shall be assigned” was in effect an agreement that there would be a further document to effect the design on the basis of Acohs v Ucorp at [193]-[195]. However, Moshinsky J considered that the context in Acohs was very different and distinguishable.

In 2021, EBC purported to assign the copyright in the designs to Hampden with effect from 2018. At [145], MOshinsky J pointed out the assignment could not have retrospective effect but held it was effective to assign EBC’s rights to Hampden from the date of the deed. This also included the right to sue for past infringements.

Moshinsky J was prepared to treat the designs finalised by Mr Mota as works of joint authorship. Section 10(1) defines:

work of joint authorship means a work that has been produced by the collaboration of two or more authors and in which the contribution of each author is not separate from the contribution of the other author or the contributions of the other authors.

At [135], Moshinsky J stated that the collaboration required for joint authorship “does not require the authors to work directly with one another.” Accordingly:

alterations made by Person A to an earlier work created by Person B can, depending on the circumstances, result in a work of joint authorship of Person A and Person B together.

At [150], his Honour recorded that the works were based on the designs prepared by B&B Studio “and involved only limited input from Mr Mota”. Although his contribution was limited, it was sufficient to constitute him an author. Furthermore, the B&B Studio employees had provided feedback to Mr Mota on his drafts. As a result, Moshinsky J considered that the works were the product of collaboration between B&B Studio employees and Mr Mota and the works were works of joint authorship.

Although Lacorium had not assigned copyright to Hampden, as works of joint ownership both B&B Studio and Lacorium were the intial owners of the copyright and B&B Studio had assigned its rights to Hampden in a separate document. Accordingly, Moshinsky J held that Hampden had standing to sue for infringement as the owner of the interest in the copyright originally vesting in B&B Studio.

What happens next

Whether either side will appeal – or, rather, seek leave to appeal – is not clear yet as it appears final orders on the infringement findings have not yet been made.

Moshinsky J dismissed Aldi’s cross-claim in respect of unjustified threats on the basis of three letters as they were directed to the puffs packaging which he had found infringed. However, there is, or may be, an outstanding issue in relation to a fourth letter which is yet to be resolved.

Meanwhile, in the UK

The Court of Appeal has allowed Thatcher’s Cider’s appeal finding that Aldi’s benchmarking strategy took unfair advantage of Thatcher Ciders well-known trade mark.

Hampden Holdings I.P. Pty Ltd v Aldi Foods Pty Ltd [2024] FCA 1452

  1. You may have come across an earlier imbroglio in which Aldi’s Chazoos Cheezy Twists infringed the Twisties trade mark although, more recently, its Moroccanoil product packaging was exonerated.  ?
  2. Extracted by his Honour at [170].  ?

Aldi’s ‘benchmarking’ strategy Read More »

The undertaking as to damages: Cth v Sanofi

Leave a Comment / Enforcement, Patents / / / , , , , , , ,

The High Court (by 3:2) has dismissed the Commonwealth’s attempt to claim $325 million from Sanofi on the undertaking as to damages Sanofi gave when granted an interlocutory injunction against Apotex’ introduction of generic clopidogrel.

In the High Court, the main point was when it is appropriate for the High Court to overturn concurrent findings of fact by the primary (trial) judge and the intermediate court of appeal (here, the Full Federal Court). Apart from that (somewhat rarefied) issue, there are two more generally applicable points to consider.

Some background

Sanofi had a patent in Australia (amongst other places) for the drug clopidogrel which Sanofi marketed as Plavix and was used for the treatment of heart attacks and stroke.

Around the time Apotex obtained registration of its generic clopidogrel in the Australian Register of Therapeutic Goods (ARTG), it began Court proceedings against Sanofi seeking revocation of Sanofi’s patent. Sanofi cross-claimed for infringement and sought an interlocutory injunction.

On 25 September 2007, Gyles J granted Sanofi the interlocutory injunction restraining Apotex from infringing the patent pending trial on Sanofi giving “the usual undertaking as to damages”.[1] Earlier, in the course of the hearing on the interlocutory injunction application, Apotex in effect gave an undertaking not to apply to register its clopidogrel in the Pharmaceutical Benefits Scheme (PBS) if Sanofi was granted the interlocutory injunction against infringement.

After the trial on substantive issues, Gyles J found Sanofi’s patent valid and infringed. In August 2008, therefore, Gyles J granted a final injunction against Apotex infringing the patent.

On appeal, however, the Full Court found Sanofi’s patent invalid so it was revoked and the injunction was rescinded.

First, Apotex claimed damages on the undertaking on the basis that it had lost sales as a result of the interlocutory injunction. Sanofi and Apotex reached agreement compromising that claim without a Court determination.

Secondly, although it was not a party to the litigation, the Commonwealth also brought a claim under the undertaking. The basis of its claim was that Sanofi’s clopidogrel was listed in the PBS. Therefore, the Commonwealth paid pharmacists a subsidy for each prescription of clopidogrel.

When the first generic product was listed in the PBS, however, that would automatically trigger a 12.5% reduction in the subsidy payable for prescriptions of the drug.[2]

Because Apotex did not apply to list its generic clopidogrel in the PBS, those price reductions were not triggered. Accordingly, the Commonwealth claimed that it had suffered loss by reason of the granting of the interlocutory injunction amounting to (for present purposes) the 12.5% price reduction that did not occur multiplied by the volume of Sanofi’s sales between the date of the interlocutory injunction and the patent being declared invalid. Something like:

$ = (P – 0.875P[3]) x Q

where:

P = the price payable by the Commonwealth to phatmacies by subsidy through the PBS; and

Q = the volume or number of units sold by Sanofi between 1 April 2008 and 1 April 2010 when Apotex was finally granted a listing in the PBS. (1 April 2008 was the earliest date, but for the interlocutory injunction, Apotex could have been listed in the timings of these things.)

The Courts below

Both Nicholas J and the Full Federal Court dismissed the Commonwealth’s application.

The Commonwealth’s claim was dismissed because Nicholas J found that the Commonwealth did not prove Apotex would have sought PBS listing and commenced selling its generic clopidogrel if the interlocutory injunction had not been granted.

The Commonwealth failed on this point because as the claimant it had the onus of proving that it had actually suffered loss. However, it failed to discharge that onus because it did not call as a witness, Dr Sherman, who was the founder and CEO of the Apotex group of companies and, the evidence showed, it would have been his decision whether or not Apotex would launch “at risk” of being sued for infringement.[4] There was some evidence in February 2007 Dr Sherman had directed Apotex proceed with launching its product in Australia. There was some further evidence from June / July 2007, however, suggesting some doubt whether Apotex would in fact launch especially in light of litigation between the parties in the USA and Canada (which Apotex eventually lost).

The High Court

The decisive issue in the High Court was whether or not the circumstances warranted the High Court intervening to overturn concurrent findings of fact made by the primary judge and not disturbed by the Full Federal Court on appeal.

At [1], the plurality (Gordon A-CJ, Edelman and Steward JJ) summarised the principle:

The principled approach taken by this Court, reaffirmed in these reasons, is common to many ultimate appellate courts in the common law tradition. That principle is that, absent special or exceptional circumstances such as plain injustice or clear error, this Court will not engage in a detailed review of concurrent factual findings of lower courts.

Their Honours went on to find that the appeal did “not concern any individual rights, nor expose any plain injustice or clear error.” At [44] – [123], their Honours reviewed the findings and concluded at [124] that the facts found in the lower courts were “not only open and free from clear error but also are compelling.”

On the other hand, both Jagot J and Beech-Jones J considered there had been such an error.

Some observations of significance

Although the Court’s conclusions meant it was unnecessary to deal with Sanofi’s notice of contention, all Judges expressed views on some aspects “because it is important to do so”.

The Commonwealth was entitled to claim under the undertaking as to damages

The first significant point is that all judges considered the Commonwealth was a “person” which could legitimately claim the losses it claimed to have suffered on the undertaking as to damages even though it was not a party to the litigation.

Sanofi had argued that the losses claimed by the Commonwealth did not “directly flow” from the grant of the interlocutory injunction and so were outside the scope of the undertaking.

All judges were concerned that the test for who could claim on the undertaking not be rigidly confined to a formulaic approach. As the plurality explained at [169], the losses claimed by the Commonwealth (if they had been proved) fell plainly within the scope of the undertaking as to damages:

…. If, absent the interlocutory injunction, Apotex would have applied for listing of its clopidogrel products on the PBS (which the concurrent findings below were that it would not have) then it was common ground at the time of the hearing of the interlocutory injunction that it would have been inevitable that Apotex’s products would have been listed and that, consequently, there would have been a 12.5% price reduction for clopidogrel products listed on the PBS and subsidised by the Commonwealth. As Sanofi accepted in this Court, Sanofi, Apotex and Gyles J knew that a loss that the Commonwealth might suffer as a result of the interlocutory injunction would be loss arising from this price reduction. This was therefore the very loss to third parties “adversely affected” that was reasonably contemplated at the time the interlocutory injunction was granted and therefore within the scope of the undertaking. ….

How much could the Commonwealth have claimed for

The second point of has wider ramifications as applies to any interlocutory injunction and does not turn on the Commonwealth’s role in subsidising the price payable for medicines.

While the Commonwealth claimed $358 million, the plurality explained that if the Commonwealth had proved Apotex would have launched “at risk”, the Commonwealth’s losses would have been $11 million only.

This was because the undertaking as to damages applied only to losses flowing from the grant of the interlocutory injunction. In this case, however, the interlocutory injunction was extinguished by the grant of the final injunction in August 2008. So the Commonwealth could not claim damages after the final injunction was granted and the undertaking as to damages released.

David Shavin KC points out that in Sigma v Wyeth (No 3), the Full Court (Bennett, Nicholas and Yates JJ) explained that any release from the undertaking as to damages should be stayed pending the outcome of any appeal. In response to the primary Judge and a subsequent single Judge sitting in the appellate jurisdiction on an interlocutory basis, their Honours said at [10]:

The effect of the primary judge’s orders was to release the respondents from the undertakings as to damages even though the appellants made clear an appeal would be brought and there existed the possibility that the injunctive relief granted by the primary judge might be set aside on appeal. In such circumstances we think it would seldom, if ever, be appropriate to order that a party be released from an undertaking as to damages. The preferable course is for the undertaking to be left in place to operate in accordance with its terms.

Wyeth argued that the supersession of the interlocutory injunction by the final injunction and the release from the undertaking as to damages followed as a result of the primary judge’s findings that the patent was valid and infringe. At [13], Bennett, Yates and Nicholas JJ rejected this bluntly:

The respondents were unable to point to any authority in support of this submission. In our opinion it must be rejected. The respondents’ submission seeks to give the usual undertaking as to damages an operation that has the potential to cause substantial injustice in circumstances where an interlocutory injunction is obtained on the basis of a case which cannot be sustained on appeal. In the present case, the primary judge released the respondents from the undertakings as to damages on the basis that they had in each case established an entitlement to injunctive relief on a final basis. Once it was determined, as it was on appeal, that the respondents were not entitled to such relief then there can be no basis for not setting aside the primary judge’s order releasing the respondents from their undertaking as to damages.

Subsequently, Nicholas J refused to release an undertaking as to damages pending any appeal. In a different proceeding, Yates J specifically ordered that the undertaking as to damages remain in place “until further order”.

If you have the benefit of an undertaking as to damages and lose the trial but may be appealing at the very least therefore seek to preserve the undertaking as to damages until further order.

Commonwealth of Australia v Sanofi [2024] HCA 47

  1. GPN-UNDR: the applicant undertakes to the Court “to submit to such order (if any) as the Court may consider to be just for the payment of compensation, (to be assessed by the Court or as it may direct), to any person, (whether or not that person is a party), affected by the operation of the order or undertaking or any continuation (with or without variation) of the order or undertaking” and to pay the compensation so assessed.  ?
  2. Further reductions could and would be triggered when other events happened.  ?
  3. The 12.5% was just the initial reduction on the listing of the first generic product in the PBS. A cascading series of reductions came into play as other events occurred.  ?
  4. Dr Sherman and his wife appear to have died in suspicious circumstances but that was in December 2017 some months after the hearing on the Commonwealth’s claim and well after deadlines for filing evidence.  ?

The undertaking as to damages: Cth v Sanofi Read More »

A Designs Law Treaty

Leave a Comment / Designs / /

On 22 November 2024, the Diplomatic Conference adopted the Riyadh Designs Law Treaty.

The text as adopted is available here.

Perhaps the most notable point (apart from this long drawn process finally reaching a conclusion) is that the Treaty does not include a provision about the term of protection.

Before the Conference convened, the draft text had two competing proposals. One requiring members to provide design protection for at least 15 years. The second option provided members with the ability to choose between TRIPS (10 years) and 15 years. In the result, no agreement could be reached and the Treaty does not include either. Instead, paragraph 1 of article 2 provides:

>[No Regulation of Substantive Industrial Design Law] Nothing in this Treaty or the Regulations is intended to be construed as prescribing anything that would limit the freedom of a Contracting Party to prescribe such requirements of the applicable substantive law relating to industrial designs as it desires.

On the concrete side, Article 3(2) provides:

>This Treaty shall apply to industrial designs that can be registered as industrial designs, or for which patents can be granted, under the applicable law.

More practically, the Treaty read with the regulations does prescribe a closed list of documents and requirements for filing an application. By Article 4, each Member may require that an application contain some or all of:

>(i) a request for registration;

>(ii) the name and address of the applicant;

(iii) where the applicant has a representative, the name and address of that representative;

(iv) where an address for service or an address for correspondence is required under Article 5(3), such address; DLT/DC/26 page 7

(v) a representation of the industrial design, as prescribed in the Regulations;

(vi) an indication of the product or products which incorporate the industrial design, or in relation to which the industrial design is to be used;

(vii) where the applicant wishes to take advantage of the priority of an earlier application, a declaration claiming the priority of that earlier application, together with indications and evidence in support of the declaration that may be required pursuant to Article 4 of the Paris Convention;

(viii) where the applicant wishes to take advantage of Article 11 of the Paris Convention, evidence that the product or products which incorporate the industrial design or in relation to which the industrial design is to be used have been shown at an official, or officially recognized, international exhibition;

(ix) any further indication or element prescribed in the Regulations.

Rule 2 in the Regulations also includes a list of 16 other matters which may be permitted and Rule 3 provides for the permissible forms of representation.

Article 4(2) also permits a requirement to disclose in the application:

>an indication of any prior application or registration, or of other information, including information on *traditional cultural expressions and traditional knowledge*, of which the applicant is aware, that is relevant to the eligibility for registration of the industrial design.

To secure a “filing date”, the requirements under Article 6 are that the application contain in a language admitted by the receiving Office:

>(i) an express or implicit indication to the effect that the elements are intended to be an application;
(ii) indications allowing the identity of the applicant to be established;
(iii) a sufficiently clear representation of the industrial design;
(iv) indications allowing the applicant or the applicant’s representative, if any, to be contacted.

A jurisdiction whose laws immediately before it accedes to the Treaty require the following may also continue these requirements:

>(i) an indication of the product or products which incorporate the industrial design, or in relation to which the industrial design is to be used;
(ii) a brief description of the reproduction or of the characteristic features of the industrial design;
(iii) a claim;
(iv) the payment of the required fees;
(v) indications concerning the identity of the creator of the industrial design.

Article 8 also permits members to require that the application be filed in the name of the creator of the design. But this requirement may be satisfied by filing an application which includes a name of the creator as appellant or an assignment signed by the creator.

Article 7 also provides for a grace period of 12 months before the filing date, or priority date if priority is claimed from an earlier date, for disclosures made by the creator or his/her successor in title or by person who obtained the disclosed information directly or indirectly from the creator or his/her successor. This is consistent with section 17 of the Designs Act 2003 since the amendments introduced by the ACIP Implementation Act back in 2021. An alternative proposal providing for a grace period only in the case of disclosure at international exhibitions and the like was rejected.

Article 10(1) and Rule 6 provide that a member may a design to remain unpublished for at least 6 months.

The Treaty enters into force once 15 countries have acceded to it.

A Designs Law Treaty Read More »

The Practice

Leave a Comment / Trade marks / / / , , , , ,

O’Callaghan J has awarded “The Practice” $200,000 in damages against The Practice Business Advisers & Tax Practitioners for trade mark infringement.

The Practice has been the owner since 2016 of Registered trade mark No 1757523:

2 TRIANGLES INTERLOCKING

for tax, accounting and business management services in class 35 and financial advisory and tax services in class 36. It had been using this trade mark since 2014, having adopted it in place of two rather more stylised logos in use from 1999.

The Respondent was incorporated in January 2017 and began providing business advisory and accountancy services under this logo:

In addition to the logo and in perhaps something of a differentiation from The Agency case, the evidence showed the Respondent’s website also featured:

(i) “At the Practice, our purpose is to Open New Possibilities and Add Value to Your Business”;

(ii) “The Practice can help you with: >> Taxation Advice >> Tax Planning >> Tax Effective Structures”;

(iii) “The Practice has the best business advisory accountants to guide you through this process.”;

(iv) “Contact The Practice”;

(v) “The Practice offers a full suite of financial and administration solutions for business such as small business bookkeeping in Melbourne and preparing sample small business financial statements”;

(vi) “Whether you need big or small business succession planning, The Practice is here to help.”;

(vii) “The Practice: Experts in Tax Compliance for Small Business”; and

(viii) “© The Practice | Privacy Policy” in the footer of each page.

(c) The following statements on the Respondent’s social media accounts:

(i) “The Practice can provide the tax solutions you need.”;

(ii) “The Practice’s Main Purpose is to open new possibility and add value to your business”;

(iii) “Here at The Practice, we tailor our services to meet the unique needs of your business”; and

(iv) “Let The Practice provide tax and business solutions for you!”

(d) On invoices sent to clients the words “THE PRACTICE” are shown in different coloured font to the rest of the invoice, with “THE” in light blue and “PRACTICE” in dark blue.

(e) Mr Hassan’s email signature has the words “The Practice” in bold font above the italicised words Business Advisers and Tax Practitioners.

(the emphasis was added by O’Callaghan J).

Perhaps the most interesting aspect of the case is that the Respondent sought to rely on the use of own name in good faith (s 122(1)(a)) and honest concurrent user (s 44(3) via s 122(1)(f) and (fa) as defences to infringement.

In rejecting both defences, O’Callaghan J considered at [61] and [88] that a person would not be acting in good faith (or honestly) if they did not take the steps that an honest and reasonable person would take to ascertain the ability to use the trade mark; they had in effect taken a risk.

The basis of these defences were searches that Mr Hassan, the sole director of the Respondent, claimed to have made. These claims were rejected. They came under sustained attack as “recent invention”. But O’Callaghan J also pointed out, Mr Hassan claimed to have searched terms like “The Practice Business Advisers and Tax Practitioners”; no where did he claim simply to have searched “The Practice”. Moreover, while Mr Hassan did claim to have undertaken a trade mark search, that was only back in 2001 when he was adopting a different version of the name.

O’Callaghan J did not accept the argument that the Respondent was only a one man company, not a large multinational (at 71] to [72]):

I cannot accept that submission. In my view, a person in the respondent’s position acting honestly and reasonably would have conducted far more extensive and thorough searches than Mr Hassan says he did to ensure that his chosen name did not conflict with a registered trade mark. In those circumstances it is unnecessary to consider the veracity of Mr Hassan’s evidence about his searches in 2013, 2014 and 2017.

The onus was on the respondent to prove that it had used reasonable diligence to ascertain that a chosen name did not conflict with a registered trade mark and in my view, the respondent has not discharged that onus for the reasons I have given.

The $200,000 damages were comprised of $100,000 compensatory damages and $100,000 additional damages. The judgment doesn’t disclose the scale of the Respondent’s business or its impact on the applicant’s business – other than it was a one man company.

The Practice Pty Ltd v The Practice Business Advisers & Tax Practitioners Pty Ltd [2024] FCA 1299

The Practice Read More »

Trade Marks and bad faith

Leave a Comment / Trade marks / /

A trade mark registration may be attacked, or its registration opposed, on the grounds that the application was made in “bad faith“.

Basing themselves on UK decisions on the corresponding provision, Australian courts have sought to test this by whether people adopting proper standards would regard the decision to (apply to) register the trade mark as “falling short of acceptable commercial behaviour”. See e.g. Fry Consulting at [165] and DC Comics at [62].

Generally speaking, influenced by the examples in the EM, this has meant allegations of bad faith have tended to have success where the applicant can be said to have been aware of some other person’s trade mark and has sought to take advantage of that unfairly or opportunistically.

The IPKat, however, reports that the UK Supreme Court has accepted bad faith may be found where the applicant did not have an intention to use the trade mark in relation to all the goods, or services, specified in the application.

This decision was reached in circumstances where Sky’s trade mark was registered in respect of:

(a) good which it never had any intention of using – such as “bleaching preparations” and “whips”;

(b) categories of goods and services such as “computer software” which were so broad that Sky could not have intended to use its trade mark across the full range; and

(c) in some cases all goods or services in particular classes.

Now, it is certainly arguable that Lord Kitchin’s reasoning is not directly transferable to Australia as it was made under the strictures of EU law and his Lordship considered that the position under the 1938 Act had been superseded and replaced by the requirements of the 1994 Act implementing the requirements of the EU Trade Marks Directive.

That said, as Lord Kitchin pointed out, the EU regime has been developed to implement obligations under the Paris Convention and the TRIPS Agreement – both of which our 1995 Act sought to implement.

Moreover, Lord Kitchin recognised that challenges based on non-use did not preclude a challenge on the grounds of bad faith. At [193] – [194], his Lordship explained:

I accept these propositions and submissions [based on the non-use provisions] so far as they go. But they seem to me to be directed at the wrong target. We are not concerned at this point with a claim for revocation of a registration on the basis that the registered trade mark, though it may have been perfectly valid when it was registered, has not been put to use by the proprietor for an uninterrupted period set by the rules starting at any time after registration. I also accept that, at the time the application is made, an applicant does not need to have a firm or settled intention to use the sign as a trade mark in relation to the goods or services for which it seeks protection. That intention may, for example, be conditional on securing a source of supply at an appropriate cost, or upon finding suitable distributors, or upon perfecting a manufacturing process. None of these matters would of themselves undermine the validity of a registration granted on that application.

We are concerned here with a different objection, namely that the application was made in bad faith because it constituted (and constitutes) an abuse of the trade mark system. As the CJEU has explained, the fact that the proprietor was not using the mark at the date of the application and did not intend to use it, does not constitute an objection to the validity of the mark but may be evidence in support of an appropriate allegation that the application was made in bad faith. To understand how that may be so, it is necessary to consider some of the more important decisions in which the issue has been considered.

Indeed, in Ragopika at [73] – [74], Kennett J considered that “bad faith” requires to be tested by whether or not the conduct involves and attempt to use the trade mark system contrary to the purposes of the system:

What these examples have in common is an attempt to use the statutory regime for registration and protection of trade marks for a purpose that is foreign to the purposes of that regime, and undermines or hampers the proper use of that regime by businesses consistently with those purposes. Trade mark legislation balances various interests, as discussed by reference to the 1955 Act in Campomar Sociedad, Limitada v Nike International Limited [2000] HCA 12; 202 CLR 45 at [40]–[49], but its objectives can be said to boil down to “consumer protection and protecting the interest of traders in both the goodwill associated with their trade mark and the value of the registered trade mark as property in its own right” (Davidson and Horak, Shanahan’s Australian Law of Trade Marks and Passing Off (7th ed, Thomson Reuters 2022) at [1.05]). A leading English case described registration of a trade mark as “designed to enable bona fide proprietors to protect their proprietary rights without having to prove unfair trading” (Harrison v Teton Valley Trading Co Ltd [2004] 1 WLR 2577 at [24], quoted in Fry Consulting at [147]).

The concept of “falling short of acceptable commercial behaviour”, as an aspect of or pointer to “bad faith”, needs to be understood in this context and anchored in the Act. The behaviour needs, in my view, to be more than simply ruthless or morally questionable. If not actually fraudulent or dishonest, it needs to have some quality that makes it repugnant to the purposes for which the statutory regime exists. ….

His Honour’s reasoning is reflected in Lord Kitchin’s analysis. So, at [152] – [153], Lord Kitchin explained:

In seeking to identify the relevant principles, it is necessary to have in mind two fundamental aspects of trade mark law to which I have already referred: first, it is concerned with the use of marks in trade to denote the origin of goods and services. Secondly, the aim of the trade mark regime is to contribute to a system of undistorted competition in which businesses are able to attract and retain customers by the quality of their goods and services, and for that purpose are able to have registered signs which enable consumers to distinguish the goods and services of one undertaking from those of another. Such a system must also provide an incentive and protection for the investment by a brand owner in the quality and other beneficial aspects of its goods and services, and so allow it to develop a goodwill in its business relating to their sale and supply.

Against this background, the essence of the objection that an application to register a mark was made in bad faith may be understood: it is that the motive or intention of the applicant was to engage in conduct that departed from accepted principles of ethical behaviour or honest commercial practices having regard to the purposes of the trade mark system which I have described. Whether the conduct was undertaken with that motive or intention and did indeed depart from such ethical behaviour or honest commercial practices must be assessed having regard to all the objective circumstances of the case ….

SkyKick UK Ltd & Anor v Sky Ltd & Ors (Rev1) [2024] UKSC 36

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Coke v Pepsi: the coffee jar chapter

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Wheelahan J has ruled that Vittoria’s[1] instant coffee jar did not infringe the registered trade mark for the shape of the Moccona instant coffee jar, TM 1599824. In some consolation for KDE, however, Wheelahan J also rejected Vittoria’s attempts to have the Moccona shape trade mark cancelled.

Moccona “shape” TM

As well as (non-)infringmenet, his Honour’s 603 paragraphs cover a kitchen sink of issues including s 41, s 59, bad faith, fraud, false suggestion or misrepresentation, non-use, authorised use and, just in case the infringement case did not succeed, misleading or deceptive conduct / passing off.

One interesting aspect of this case is that both sides relied on evidence from marketing experts and industrial designers although the industrial designers proved more useful (for the Judge) than the marketers.

The Moccona Shape TM was validly registered

To give some context to the infringement findings, it is as well to start with the attack on validity.

For the purposess of this post, I will touch on the s41 attack only.

Not inherently adapted to distinguish

Wheelahan J held that the Moccona jar had no inherent capacity to distinguish at all. However, TM 1599824 was filed on 7 January 2014 and KDE had used it so extensively that it has acquired secondary meaning so that it did in fact distinguish coffee as coming from KDE.

Although the shape was the shape of a container and, unlike Kenman Kandy, not the shape of the goods – coffee, a container for “otherwise formless goods” which was purely functional could not be adapted distinguish; there must be something “extra” about the shape. (At [258] – [259]).

The Moccona coffee jar was not purely functional: it was not a plain box, sachet, tube, tin or carton. It had relatively squat proportions, a double-tiered lid and a particularly shaped shoulder.

However, the expert evidence considered the shape was essentially a traditional jar shape. There was evidence of similarly shaped jars for other prodcts, the shape was similar to food preserving jars and at least two producers, Andronicus and Park Avenue, had used similarly shaped jars in the 1980s and 1990s.

In light of this evidence, Wheelahan J considered that the non-functional features of the Moccona jar played an aesthetic role but did not play the role of a badge of origin. At [267]:

even those features of the KDE shape mark that do play an aesthetic role still do not serve any inherently distinctive role. Rather, features such as the double-tiered lid and the shoulder of the jar serve to evoke a particular tradition, forming part of the common heritage. In other words: the KDE shape mark is both primarily functional and, to the extent that it is not functional, it draws on features of the common heritage that are not apt to distinguish the goods of any one trader.

Secondary meaning

His Honour found, however, that KDE had used the shape of the Moccona jar sufficiently that it had become distinctive in fact of KDE thereby defeating the operation of s 41(3).

A number of factors led to this conclusion.

First, there were numerous coffee jars and containers in evidence but within the diversity of shapes and sizes, the Moccona jar was distinct ([293]).

Secondly, in 1981, the then rival Andronicus brand had run an advertisement featuring an unlabelled Moccona-shaped jar to identify the expensive import which Andronicus sought to be compared to and compete with ([294] – [296]).

Thirdly, while Andronicus and Park Avenue had used jars similar to the Moccona jar in the 1980s and 1990s, there was no evidence of anyone supplying instant coffee in such a shaped jar since then – except of course “Moccona” ([297]).

Fourthly, there had been some (Cantarella described it as “limited”) television or streamed video advertising in which the jars had been depicted without any labelling.[2] The “Moccona” trade mark did appear at various points in the advertisements, sometimes in close proximity to the jars, but not actually on the jars themselves. For example, Wheelahan J explained of one advertisment in the course of rejecting the non-use attack (at [352]):

6 Moccona coffee jars without labels above the Moccona logo
Unlabelled Moccona coffee jars

The “Dec Jar 2022” video, which related to the “Be Inspired” range of limited-edition Moccona glass jars, is striking. This video — which, I have already noted, has been viewed more than one million times — shows six unlabelled Moccona jars together and individually. The video never shows the jars with a Moccona label. While the Moccona logo does appear at certain points, this video illustrates clearly how the applicants have deployed the shape of the jar as a trade mark. It was accepted that the actual jars depicted, when sold in supermarkets, did bear Moccona labels. The fact that the applicants chose to advertise the jars without the Moccona labels, however, indicates that the jar was being used as a device that, in and of itself, marked out the coffee within the jars as Moccona coffee. The Moccona logo appearing in the advertisement was relatively small, and was not dominant when compared with the jars. Viewed objectively, this video is an instance of the KDE shape mark being used as a device indicating the origin of the coffee contained within the jars, and thus as a trade mark.

Returning to the question of acquired distinctiveness, his Honour concluded at [306]:

…. But from when the Andronicus advertisement was broadcast in 1981, the applicants developed a significant association between their coffee products and the jar shape in which those products were sold. In the two decades immediately preceding the priority date, there were no competitors using jars that were apt to detract from the effectiveness of this use as a badge of origin. That provides the context in which the advertisements described above must be understood. Especially by means of those advertisements, which I find to have been extensive given the amount of revenue spent on advertising that was the subject of confidential evidence, the applicants clearly deployed the KDE shape mark as a badge of origin in the last decade before the priority date. In all of the circumstances, I consider that this amounted to such significant use of the KDE shape mark as a badge of origin before the priority date as to satisfy the test of use under s 41(3)(b).

The confidentiality of the advertising expenditure figures makes it a bit difficult to assess the extent of use. Also, by my count, there were 14 TVCs / YouTube videos of which 4 or possibly 5 were before the priority date. Four of those 5 were shown in free-to-air and pay TV (presumably reaching national audiences); the fifth in 2014 was shown to have had 19,000 views. Some of the later videos were shown to have hundreds of thousands of views and even millions.[3]

Authorised use

Cantarella argued that KDE could not rely on the advertising in Australia as that advertising was produced and run by JDE Australia. JDE Australia was not a subsidiary of KDE (nor KDE, a Netherlands company) of JDE Australia. Both, however, were subsidiaries of the same ultimate parent company.

Wheelahan J found that JDE Australia’s use was nonetheless use under KDE’s control and so qualified as authorised use.

First, the evidence showed that the coffee sold in Australia had been manufactured in a factory in the Netherlands by JDE Netherlands. JDE Netherlands sold the coffee in the jars to JDE Australia. JDE Netherlands was a wholly-owned subsidiary of KDE and both shared the same address. In these circumstances, Wheelahan J at [322] was willing to infer JDE Netherlands made and sold the coffee under KDE’s control.

Cantarella argued there was no evidence that the glass jars themselves had been manufactured under KDE’s control. Wheelahan J considered this was not necessary. At [323]:

…. The question posed by s 8(3) is whether “the owner of a trade mark exercises quality control over goods or services” in relation to which a trade mark is used. Having regard to the registration of the KDE shape mark in this case, s 8(3) will be satisfied if KDE exercised quality control over the coffee or instant coffee in relation to which the shape mark was used. It is not to the point whether KDE oversaw the manufacture of the glass jars in which the coffee was sold.

I am not sure I would be willing to advise a client not to control the manner of use of the trade mark as well as the quality of the goods or services being provided. Although one might expect in this situation it was fairly safe to assume KDE was not letting JDE Netherlands send out coffee in cracked or otherwise deficient jars.

In any event, Wheelahan J also found a second basis for finding quality control. Cantarella pointed to the fact that, unlike Trident Seafoods, KDE and JDE Australia did not have common directors.

Wheelahan J accepted at [331] that common directors was one of three key considerations in the Trident Seafoods court finding a “unity of purpose” between the user and the trade mark owner. It was a significant, but not determinative, factor. His Honour considered that the principle emerging from Trident Seafoods was that “unity of purpose” would be indicative of actual control by the trade mark owner over use of the mark. Whether sufficient “unity of purpose” could be inferred will vary from the circumstances of individual cases.

In addition to the two companies both being members of the same corporate group, JDE Australia was a wholly-owned subsidiary of DE Investments. During the relevant non-use period, DE Investments and JDE Australia did share some directors.

Moreover, DE Investments and KDE had entered into a licence agreement as a result of which JDE Australia was required to comply with KDE’s “brand guidelines” and, further, to obtain KDE’s approval before introducing “any new key communication asset in Australia”. At [335], Wheelahan J found KDE did in fact exercise actual control over the advertising used by JDE Australia.

As a result, Wheelahan J found that KDE, DE Investments and JDE Australia shared a common purpose of deploying KDE’s intellectual property for the purposes of the global group.

Unless you’re acting for someone being sued by such a global tentacle, we can all with respect breathe a sigh of relief.

Infringement – or not

While Wheelahan J rejected Cantarella’s wide-ranging attacks on the validit of KDE’s registered trade mark, his Honour found Cantarella’s Vittoria jar did not infringe.

First, his Honour held that the Vittoria jar was not actually used as a trade mark.

The jar itself was relatively plain, in contrast to the Moccona jar, and for that reason less likely to draw attention. Moreover, there was no evidence of Cantarella advertising its products in unbranded jars.

And, while the use of the Vittoria logo was necessarily smaller than the jar itself, his Honour considered the Vittoria logo served the trade mark function, in some cases “swamping” any possibility that the jar would be seen as a trade mark.

An advertisement for Vittoria coffee

As his Honour explained at [463] of this advertisement:

…. the overall impression I gain from this advertisement is of a Vittoria-branded product that is packaged in a particular jar. Without more, featuring a product in its packaging as part of an advertisement does not constitute trade mark use. Nothing about the advertisement is apt to suggest to a viewer that Vittoria coffee can be distinguished from the coffee of other traders by the relatively plain shape of the jar alone. ….

Similarly, at [475] the overall appearance of the aisle fins featuring the Vittoria product including the fact that the whole product was displayed, the plainness of the jar and the prominence of other branding elements led his Honour to distinguish RB Hygeine on its facts.

Aisle fin for Vittoria coffee

Secondly, while Wheelahan J accepted KDE’s argument that purchasers of instant coffee do not spend a long time deciding which products to buy, his Honour considered at [496] (and [502]) that there was no “real, tangible risk that a notional buyer, with a recollection only of the KDE shape mark’s rough proportions and general shape, would be perplexed, mixed up, caused to wonder, or left in doubt, about whether instant coffee sold in the Cantarella jar shape has the same commercial source as coffee sold in the KDE shape mark.”

Moccona coffee jar
Vittoria coffee jar

Wheelahan J considered that a notional consumer would recall three core features of the Moccona jar: its overall proportions being a fairly squat body sitting beneath a slowing sloping should and lid; the body being roughly two thirds of the overall height. Secondly, the shape of the shoulder and the neck. Thirdly, the height of the lid.

In contrast, Cantarella’s jar had a much taller body compared to its width; the shoulder was quite rounded and involved very little height and the lid appeared as a single, flat disk wider than the neck. At [502]:

The buyer would view the Cantarella jar shape as noticeably taller in its proportions, with a compressed neck section, and a plain, low lid. Even with the imperfect recollection outlined above, there is no real risk that a buyer could confuse the Cantarella jar shape, in view of its distinct visual impression, with the KDE shape mark.

A short comment on the evidence of the marketing experts

At [187], Wheelahan J recorded that he did not find the evidence of the marketing experts of much assistance. This was essentially because the experts addressed (and had been asked by the parties to address) marketing concepts rather than the legal concepts related to trade mark use.

In the case of Prof. O’Sullivan (called by JDE), this was because his evidence was directed to “diagnostic cues”; features used by consumers to identify something or distinguish it from something else. Wheelahan J considered this did not address whether the features the Professor identified functioned as a “badge of origin”. As his Honour explained by way of an example at [190]:

For example, if only one producer of instant coffee were to market a 750-gram jar, consumers could successfully rely on the size of the jar as a “diagnostic cue” for identifying that producer’s coffee. But, without more, nothing about this example suggests that the size of the jar is being used as a badge of origin. In this way, the concepts deployed by Professor O’Sullivan were too broad to answer the narrower question the Court must confront.

On the other hand, Vittoria’s Mr Blanket addressed questions about “the core elements of a brand” rather than whether some feature was being used as a trade mark. Wheelahan J explained at [191]:

…. He seemed to suggest that a feature will not amount to a core element of a brand, or perhaps even a brand element at all, if the feature does not appear consistently in relation to the entire range of products within the brand, or if it is not necessary for consumers to use for the purposes of identifying products within that brand. During cross-examination, examples were given of the Coca-Cola bottle and the triangular prism involved in the Toblerone packaging. Mr Blanket appeared to suggest that the bottle and packaging would not amount to core brand elements because some Coca-Cola and Toblerone products are sold without them. ….

Wheelahan J also considered that “certain aspects” of the experts’ evidence were not persuasive, even in their own terms.

Thirdly, Wheelahan J considered the marketing experts’ evidence did “not provide great assistance” as it was directed the to “jury issues” which were ultimately matters for the Court to decide.

Given the expense of deploying marketing evidence, very careful thought indeed needs to be given to its desirability and how it can be made useful

Koninklijke Douwe Egberts BV v Cantarella Bros Pty Ltd [2024] FCA 1277

ps For Coke v Pepsi via here

  1. Formally, Cantarella Bros of course.  ?
  2. The advertisements and stills extracted from them are discussed at [45] – [88]. Unlike the YouTube video in Motherland, KDE’s evidence included evidence of broadcast on Australian TV or “views” by Australian consumers.  ?
  3. 2008 (TVC), 2010 (FTA and pay), 2011 (broadcast), 2012 (broadcast), 2014 (19,000 views), 2018 (440,000 views), 2018 (500 views), 2020 (1500 views), 2020 (2.4 million views), 2021 (32,000 views), 2021 (460,000 views), 2021 (160,000 views), 2022 (+1 million views).  ?

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Copyright, designs and sufficiency for patents

Leave a Comment / Copyright, Designs, Patents / / / , , , , , ,

I shall be presenting the annual Copyright and Designs Update for IPSANZ in Melbourne on 17 October 2024.

For those attending in person, lunch from 12:30 pm with the talk from 1:00 pm to 2:00 pm.

There is also an online option – but I hope to see you there in person.

Details and registration here.

and a Patents talk

On 24 October 2024, Craig Smith SC and Dr Claire Gregg from Davies Collison Cave Law are presenting on ‘Patent Claims – Support, Sufficiency and ‘Relevant Ranges‘.

Details and registration here.

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