Australia

To be estopped or not …

Leave a Comment / Patents / By war / 25 September 2023 / abuse of process, anshun estoppel, Australia, estoppel, opposition, Patents, privy, revocation

O’Bryan J has ruled that Vehicle Management Systems (VMS) is not estopped from seeking revocation of Orikan’s patent despite earlier opposition proceedings in which VMS could have raised the allegations, but did not.

Under the pre Raising the Bar versions of the Patents Act, it was clearly established that an unsuccessful opponent was not estopped from subsequently seeking revocation on the same grounds. This was at least because of the different onus: an opponent had to show that it was “practically certain” the patent application was invalid to succeed whereas a party seeking revocation only had to satisfy the balance of probabilities standard.[1] The Raising the Bar amendments, however, sought to change the burden at the examination and opposition stages to the balance of probabilities standard. The debate since then has been whether this meant an unsuccessful opponent was estopped from seeking revocation on the same grounds.

Overview

Orikan is the registered owner of Australian Patent No. 2013213708 titled “Vehicle Detection”, having been assigned the patent by SARB Management Group. It has sued VMS for infringement. In addition to denying infringement, VMS has cross-claimed seeking revocation of the Patent. So, this is another campaign between VMS and SARB-related entities over competing systems and apparatus to detect cars which have overstayed parking.

In this particular application, Orikan was seeking to have VMS’ cross-claim stayed on grounds of Anshun estoppel or, alternatively, as an abuse of process.

Some background

Back in happier days, VMS and SARB had explored jointly developing systems for detecting vehicles which were parked without paying the fee or after the alotted time had expired.

Things didn’t work out and, by a decision handed down in 2013, VMS successfully sued SARB for infringement of one of VMS’ patents for vehicle detection systems.

In 2008, however, SARB had applied for its own patent. That application led to two divisional patents: Australian Patent No. 2011101179 (Innovation Patent), which was filed in 2011, and secondly the Patent the subject of these proceedings, which was filed in 2013. As you might suspect, there was considerable overlap between the claims of the Innovation Patent and the Patent.

In 2012, SARB sued VMS for infringement of the Innovation Patent. VMS defended, including a cross-claim for invalidity on grounds including lack of novelty, secret use and lack of sufficiency and best method. This proceeding settled before trial in 2014.

In 2016, VMS opposed the grant of the Patent. That opposition failed in both the Office and the Court.[2] The Opposition Proceeding in the Court involved extensive evidence and 5 days’ trial. According to O’Bryan J, however, it did not involve the grounds of invalidity or particulars that VMS sought to argue in this proceeding.

In addition to challenging the priority date, clarity and sufficiency grounds, VMS sought to revoke the Patent in this proceeding on grounds of lack of novelty, secret use and failure to disclose the best method.

Given this prior history, Orikan contended VMS’ cross-claim should be stayed on grounds of either Anshun estoppel or abuse of process.

Legal tests

The parties were not really in dispute about the principles.

Anshun estoppel

At [26], O’Bryan J explained:

Anshun estoppel operates to preclude the making of a claim, or the raising of an issue of fact or law, in a subsequent proceeding if the claim or issue was so connected with the subject of an earlier proceeding that it would have been unreasonable, in the context of the earlier proceeding, for the claim not to have been made or the issue not to have been raised in that proceeding …. [3]

Thus, at [28] his Honour considered three conditions needed to be satisfied:

(1) the relevant cause of action, defence or issue must be one that could have been raised in the earlier proceeding;

(2) the same or substantially the same facts must arise for consideration in the second as in the first proceeding; and

(3) it must have been unreasonable in all the circumstances for the party not to have raised the issue in the first proceeding – i.e. it is not enough that the issue could have been raised; in all the circumstances it should have been raised.

The third requirement means the test has an element of discretion and evaluation.

The requirement of “unreasonableness” is a “severe test” and not to be made lightly. O’Bryan J noted one situation where unreasonableness was likely to be established is where a judgment or order made in the second proceeding was likely to conflict with a judgment or order in the earlier proceeding. But, the doctrine is not limited only to such situations.

Abuse of process

Abuse of process is not capable of explanation in terms of closed categories. At [38], O’Bryan J noted the principles governing its application are broader and more flexible than those governing estoppels.

In general terms what needs to be shown is that the use of the Court’s procedures would be unjustifiably oppressive to the party or would bring the administration of justice into dispute. At [39], O’Bryan J noted that this brought into play considerations of the overarching purpose of civil litigation as set out in s 37M.

Why O’Bryan J dismissed Orikan’s application

At [71], O’Bryan J accepted that Orikan, as the assignee of the rights in the Innovation Patent and the Patent, could take the benefit of an Anshan estoppel arising from the earlier proceedings. It had not been a party to the earlier proceedings but, as the assignee, was a “privy” of the SARB entity which had been.

It was not in dispute between the parties that VMS could have raised the invalidity issues it now wished to argue in the earlier Opposition Proceeding. The matters VMS now sought to rely on were either known to it or it ought to have been aware of them. In fact, the grounds and particulars had been asserted by VMS in the Innovation Patent Proceeding and, while they were different patents, they were both derived from the same parent and the claims were substantially similar.

Nonetheless, O’Bryan J considered that it was not unreasonable for VMS not to have raised the issues it now sought to agitate in the Opposition Proceeding.[4]

First, at [75] his Honour considered there was not a relevant risk of inconsistent judgments. His Honour accepted that a finding that the Patent was invalid in this proceeding would be inconsistent with the result in the Opposition Proceeding. As the grounds and particulars relied on in this proceeding were different, however, the basis of an invalidity finding in this proceeding would be different to the basis of the findings in the Opposition Proceeding.

Secondly, O’Bryan J considered at [76] there was a fundamental difference between the nature and consequences of an opposition proceeding and a revocation proceeding. The Opposition Proceeding involved an election by VMS to challenge the Patent on limited grounds. In contrast, in this proceeding, VMS was being sued for infringement and so compelled to come to court. Later, at [80] O’Bryan J noted that his conclusion might have been different if VMS had initiated the proceedings rather than being the respondent.

O’Bryan J also noted that the Innovation Patent Proceeding had not proceeded to trial and so the invalidity claims had not been tested in court.

Thirdly, O’Bryan J considered that allowing the invalidity claims to go forward in this proceeding would not result in more costs and delay than would have been the case if the claims had been brought in the Opposition Proceeding.

There was one overlap with the Opposition Proceeding in that one of Orikan’s witnesses, a Mr Del Papa, had been cross-examined about a particular document and both Mr Del Papa and the document were involved in this proceeding. However, the relevance and cross-examination in the Opposition Proceeding was limited to an issue of entitlement, not in issue in this proceeding.

Finally, O’Bryan J did not place “significant weight” on the public interest in the integrity of the Register or the fact the Act specifically provided for pre-grant oppositions.

O’Bryan J dismissed the abuse of process attack for essentially the same reasons.

An observation

Interestingly, while O’Bryan J did have regard to the in rem nature of patents, the public interest in the integrity of the Register and the specific provision in the Act for pre-grant opposition (and the change in onus), his Honour did not give those considerations much weight. His Honour eschewed adopting a general principle and instead applied an approach very heavily based on the particular facts of the case.

For example, it is often said (as is the case) that defeating an opposition is not a guarantee that the patent is valid. That is also true of an unsuccessful revocation proceeding. The fact one person’s revocation proceeding failed does not preclude anyone else seeking to revoke the patent. And there are cases where the second challenger succeeded despite the failure of the first.

In considering the fundamental difference between the nature and consequences of opposition proceedings and infringement/revocation proceedings, O’Bryan J emphasised VMS’s choice to fight the Opposition Proceeding on limited grounds in light of the nature and purpose of opposition proceedings. At [76], his Honour explained:

But the Opposition Proceeding involved an election by VMS to challenge the validity of the Patent. It did so on limited grounds, and did not raise the grounds and particulars of invalidity that had been raised in the earlier Innovation Patent Proceeding. There is no proper basis to criticise that election. …. The election made by VMS confined the scope of the issues in dispute in the Opposition Proceeding and therefore the costs and time required for its determination. That course was consistent with the overarching purpose of civil litigation expressed in s 37M of the Federal Court of Australia Act 1976 (Cth). It was also consistent with the character and purpose of pre-grant opposition proceedings, which are intended to provide a swift, economical means of settling disputes: Genetics Institute at [19]. Although it is desirable to avoid a multiplicity of proceedings and to ensure that parties address, as far as possible, the issues arising between them in a single proceeding, parties ought not to be encouraged to raise each and every possible claim or issue irrespective of the time and cost associated with doing so. Anshun estoppel must operate conformably with the demands of s 37M, as well as the substantive statutory context in which it is said to arise. (Emphasis supplied)

This suggests his Honour’s conclusion might reflect a reaction to Beach J’s heartfelt paragraph 1784. It is also consistent with a number of extra-judicial comments encouraging some effort on the part of parties to simplify proceedings. It does seem a little odd, however, that an opposition proceeding taking up 5 days’ of the Court’s time and a carefully reasoned 274 paragraph judgment might qualify as a swift economical means of resolving the dispute between the parties especially when the consequences lead to a further infringement proceeding with what promises to be an even more involved revocation component.

Orikan Group Pty Ltd v Vehicle Monitoring Systems Pty Limited [2023] FCA 1031

In at least one case (which I haven’t been able to find again in the time available), the judge did warn the opponent / revoker that it was at risk of indemnity costs if its revocation action also failed. ?
There was also an appeal to the Full Court which, by the time of the hearing, was limited to the issue of entitlement. ?
Citing Anshun at 598, 602–3 (Gibbs CJ, Mason and Aickin JJ); Tomlinson v Ramsey Food Processing Pty Limited (2015) 256 CLR 507 at [22] (French CJ, Bell, Gageler and Keane JJ). ?
Yes I realise that double negatives are “awkward” (to say the least) but that the point! ?

A cautionary trade mark tale

Leave a Comment / Trade marks / By war / 7 September 2023 / amendment, appeal, Australia, discovery, intention to use, MOTHER, privilege

In a rare case of a successful opposition under s 59, Energy Beverages has successfully opposed in the Court KMA’s attempt to register KANGAROO MOTHER.

Overview

As you might recall, Energy Beverages is the owner of registered trade marks in Australia for MOTHER in respect of amongst other things, non-acoholic beverages in class 5 and pharmaceutical and veterinary preparations, dietetic substances and food and beverages for babies in class 32.[1]

A New Zealand company, Erbaviva, applied to register KANGAROO MOTHER for a range of goods in classes 5, 29, 30, 31 and 32. Subsequently, the application was assigned to KMA. A Mr Zheng was the sole director and shareholder of both companies.

Energy Beverages’ opposition to the application on the basis of ss 42(b), 44 and 60 of the Trade Marks Act was unsuccessful. Energy Beverages “appealed” the Delegate’s decision to the Federal Court on the basis of s 59, s 44 and s 60.[2]

Secion 59

Section 59 provides:

The registration of a trade mark may be opposed on the ground that the applicant does not intend:

(a) to use, or authorise the use of, the trade mark in Australia; or

(b) to assign the trade mark to a body corporate for use by the body corporate in Australia;

in relation to the goods and/or services specified in the application.

which mirrors s 27.

Unlike s 92(4)(a), however, the person opposing registration under s 59 bears the onus of proving the lack of the requisite intention.

In very broad terms, this requires demonstration that the applicant does not have “a resolve or settled purpose at the time the application was filed to use the trade mark as a trade mark in relation to the relevant goods or services. A mere ”speculative possibility“ or ”a general intention to use the mark as some future but unascertained time” is not enough.

What happened

Before he incorporated Erbaviva and later KMA, Mr Zheng worked as the “Assistant to the Group Chairman” of NZ Skin Care Company. NZ Skin Care Company, as its name suggests, sold a range of skin care products and also home cleaning products.

The Group Chairman Mr Zheng assisted was a Mr Liu. Mr Liu was also the Chairman of a Chinese company, Shanghai Urganic. Mr Liu, however, was not a director of NZ Skin Care Company and Shanghai Urganic was not a shareholder in NZ Skin Care Company (although later it did become the ultimate shareholder of that company).

While he was still working for NZ Skin Care Company, Mr Zheng incorporated Erbaviva to sell “Erbaviva” brand skin care products and, after the trade mark application in issue had been filed, KMA. Neither company, however, has ever traded.

In the course of 2018, Erbaviva applied for and became registered as the owner of trade marks for a “Kangaroo Mother” logo and Kangaroo Mother in respect of a range of goods in classes 3, 5 and 21.[3]

In February 2019, Mr Zheng received an email from a Shanghai Urganic employee, Ms Lim,[4] informing him that Director Liu had “mentioned” we should apply for a food trade mark for “Kangaroo Mother”. Ms Lim supplied a catalogue for another company’s products to illustrate the goods under consideration. This exchange led to the application the subject of the appeal.

After some back and forth, Mr Zheng contacted Erbaviva’s then trade mark attorneys with instructions to file a trade mark application in Australia for a range of goods in classes 5, 29, 30, 31 and 32. (With the exception of “chocolate flavoured cola drinks”, Mr Zheng had simply cut and pasted the specification for another, unrelated company’s trade mark he had found on the IPONZ site.)

The attorney indicated he could file for this range of goods but proposed he amend it to ensure that Erbaviva had “the widest scope of protection in those classes.” So, after Mr Zheng approved that proposal, the application wound up in the form under opposition.[5]

What O’Callaghan J found

As the application was filed in Erbaviva’s name, the relevant intention was Erbaviva’s at the time the application was filed. That is, the question was whether or not Erbaviva had an intention to use the trade mark in any of the ways specified in s 59 when it filed the application.

O’Callaghan J held it did not.

First, the goods specified in the application as filed were much broader than those suggested by Ms Lim or proposed to the attorney by Mr Zheng.

Secondly, in cross-examination Mr Zheng’s evidence was that he did not regard Ms Lim’s report about what Director Liu “mentioned” as an instruction.

Thirdly, there were no documents produced through discovery or evidence of any plan or proposal beyond use for “gel candies, pressed candies, drops, powdered dairy products, solid beverages or capsules”.

Fourthly, Mr Zheng had simply cut and paste the specification he proposed to the attorney in a matter of minutes.

Fifthly, although the application had been made over four years ago, there was no evidence of any use or preparations to use.

Sixthly, there was no evidence to support the contention that Shanghai Urganic, NZ Skin Care Company and Erbaviva were part of a “conglomerate” (see “secondly” above).

Mr Zheng’s evidence unfortunately only went as far as claiming Erbaviva intended to use or authorise another company to use. So submissions that it intended to assign to KMA on its incorporation did not fly.

The evidence also included a non-disclosure agreement with an Australian manufacturer of various goods, but the counterparty was NZ Skin Care, not Erbaviva.

So O’Calaghan J found the s 59 ground proven and allowed the appeal to refuse registration. By way of obiter, O’Callaghan J would also have upheld the opposition grounds under s 44 and s 60.

Some observations

As noted above, successful oppositions under s 59 are not very common in view of the onus – unlike removal actions under s 92 in which s 100 places the onus on the trade mark owner to prove use.[6] And this case seems to have been particularly assisted by Mr Zheng’s problematic evidence and the amorphous nature of the relationship(s) with Director Liu.

That said, the first thing to note is that Energy Beverages did not pursue the ground before the Registrar but only on “appeal” where the Court procedures of discovery and cross-examination were deployed.

Next, it is significant that this was an opposition rather than an application under s 92. This is because O’Callaghan J followed Yates J’s decision in Apple (at [232]) and accepted that the whole application should be rejected if it failed in respect of any specified goods. At [28]:

There is but one application covering registration of the mark for all the services that have been specified. If the application fails in one respect, it fails as a whole….

In contrast, an application under s 92 may often result in removal of some, but not all, goods or services.

Thirdly, recognising this problem, KMA made an application on the penultimate day of the trial under s 197 to amend the specification of goods for a much more limited scope.

At [35], O’Callaghan J accepted that he should exercise this power in similar manner to that exercised by the Court when considering amendments to patents under s 105 of the Patents Act. That is, the power to amend was discretionary and required consideration of all the circumstances including when the owner became aware of the need to amend and any explanation for delay.

At [36] – [38], O’Callaghan J refused the request. KMA had been aware that Energy Beverages relied on the Apple approach from at least the opening. KMA failed to provide any explanation for its delay or the basis on which it proposed to exclude some goods but not others. Also, Erbaviva had deliberately sought the widest scope of protection possible, much broader than its own instructions.

In that connection, it is unusual to get the communications between the client and the attorney. While it is part of our jobs to ensure the client is getting appropriate protection, this case should serve as a warning against being too enthusiastic.

The question of discovery is also instructive. In October 2022, KMA had made discovery of 5 documents and a number of other documents over which privilege was claimed.

Two days before trial, however, KMA announced it proposed to rely on documents over which it had previously claimed privilege and, in the course of the trial just before Mr Zheng’s cross-examination, KMA sought to rely on a “further, extensive, tranche of documents which ought to have been produced in answer to the order for discovery”. At [62], O’Callaghan J invoked Aon Risk and refused that attempt on the grounds of prejudice and KMA’s failure to adequately explain the delay.

Energy Beverages LLC v Kangaroo Mother Australia Pty Ltd [2023] FCA 999 (O’Callaghan J)

The class 32 goods were specified in TM No 1320799 for the “Mother” mark in gothic script. ?
Because the “appeal” is a hearing de novo, it is possible to raise grounds not raised before the Registrar. ?
After the trade marks were assigned to KMA, the logo mark has subsequently been removed for non-use under s 92 on application by Energy Beverages. KMA did not seek to defend the non-use application. ?
Although not an employee of NZ Skin Care Company, she did have the use of a NZ Skin Care Company email account. ?
Reasons for decision at [93] – [94]. ?
S 92(4)(a) can be rebutted by showing use in good faith after the application was filed. And s 92(4)(b) proceedings can be brought only after the expiry of the period specified in s 93 (which is different depending on whether the application was filed before or after the Productivity Commission Implementation Act amendments). ?

Motherland, Mothersky and Mother

Leave a Comment / Trade marks / By war / 14 August 2023 / Australia, coffee, deceptive similarity, leave to appeal, MOTHER, MOTHERLAND, MOTHERSKY, non-alcoholic beverages, non-use, Trade mark, trade mark use, Trade marks

The Full Court has allowed Energy Beverages’ (EB) appeal opposing Canteralla’s registration of MOTHER as a trade mark for coffee and related products. However, the Full Court rejected EB’s appeal against the removal of its MOTHERLAND trade mark for non-use. In the process, the Full Court provided helpful clarification of the role of Trade Marks Act s44(3)(b) “other circumstances”.

Some background

Cantarella applied to register MOTHERSKY in class 30 in respect of coffee, coffee beans and chocolate, coffee beverages and chocolate beverages and in class 41 in respect of coffee roasting and coffee grinding (TMA 1819816).

EB – the producer and distributor of the MOTHER energy drink – opposed, relying on its prior registered trade marks for MOTHERLAND (TM 1345404), MOTHER LOADED ICED COFFEE (TM 1408011) and MOTHER (TM 1230388) all registered, amongst other things, for non-alcoholic beverages.

Cantarella countered by seeking the removal of the MOTHERLAND and MOTHER LOADED ICED COFFEE marks for non-use under s 92 and deleting coffee beverages and chocolate beverages from its specification of goods.

The delegate ordered removal of MOTHERLAND (here) and MOTHER LOADED ICED COFFEE (here) from the Register for non-use. The delegate also dismissed EB’s opposition to the registration of MOTHERSKY. On appeal, the primary Judge upheld the delegates’ decisions.

EB sought leave to appeal the decisions in respect of MOTHERLAND and allowing the registration of MOTHERSKY. The Full Court refused leave to appeal the MOTHERLAND decision but allowed leave and upheld the appeal against registration of MOTHERSKY.[1]

MOTHERLAND

At [61], the Full Court quoted the well settled principles for trade mark use from Nature’s Blend:

(1) Use as a trade mark is use of the mark as a “badge of origin”, a sign used to distinguish goods dealt with in the course of trade by a person from goods so dealt with by someone else: Coca-Cola Co v All-Fect Distributors Ltd (1999) 96 FCR 107 at 19; E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 265 ALR 645 at [43] (Lion Nathan).

(2) A mark may contain descriptive elements but still be a “badge of origin”: Johnson & Johnson Aust Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 at 347–8; 101 ALR 700 at 723; 21 IPR 1 at 24 (Johnson & Johnson); Pepsico Australia Pty Ltd v Kettle Chip Co Pty Ltd (1996) 135 ALR 192; 33 IPR 161; Aldi Stores Ltd Partnership v Frito-Lay Trading GmbH (2001) 190 ALR 185; 54 IPR 344; [2001] FCA 1874 at [60] (Aldi Stores).

(3) The appropriate question to ask is whether the impugned words would appear to consumers as possessing the character of the brand: Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 422; [1963] ALR 634 at 636; 1B IPR 523 at 532 (Shell Co).

(4) The purpose and nature of the impugned use is the relevant inquiry in answering the question whether the use complained of is use “as a trade mark”: Johnson & Johnson at FCR 347; ALR 723; IPR 24 per Gummow J; Shell Co at CLR 422; ALR 636; IPR 532.

(5) Consideration of the totality of the packaging, including the way in which the words are displayed in relation to the goods and the existence of a label of a clear and dominant brand, are relevant in determining the purpose and nature (or “context”) of the impugned words: Johnson & Johnson at FCR 347; ALR 723; IPR 24; Anheuser-Busch Inc v Budejovicky Budvar (2002) 56 IPR 182; [2002] FCA 390 (Anheuser-Busch).

(6) In determining the nature and purpose of the impugned words, the court must ask what a person looking at the label would see and take from it: Anheuser-Busch at [186] and the authorities there cited.

The problem for EB was that its product is the energy drink MOTHER and its uses of MOTHERLAND focused on it being a fictional fantasyland tailored to “MOTHER-drinking” consumers.

An example of its use, taken from one of two commercials using MOTHERLAND, is:

Another example of use – the description in the “About Us” page of EB’s YouTube channel was “Welcome to MOTHERland”.

The Full Court considered that EB used only MOTHER as a trade mark in respect of energy drinks; MOTHERLAND was just used as the name of the fictional theme park and no more. Accepting that there could be more than one trade mark used in relation to a product, in context MOTHERLAND was not being used as a trade mark to indicate the trade source of the drink. At [67] – [68]:

The depiction of MOTHERLAND in the commercial with the prominent MOTHER in the well-known gothic script representation in contradistinction to LAND, appended in plain red font, emphasises the use of the distinctive gothic script MOTHER mark as the only mark possessing the character of a brand. MOTHERLAND was the name of the fictional theme park, and no more.

The presence of the dominant gothic script MOTHER mark each time MOTHERLAND appears in the commercial, including as the central part of the mark itself, is part of the context relevant to the assessment of the role of MOTHERLAND: Anheuser at [191]. The focus on the well-known gothic script MOTHER, including as part of MOTHERLAND, supports the conclusion that the gothic script MOTHER is the only mark being used to distinguish the MOTHER energy drinks in the commercial from the energy drinks of others.

There was a further problem with reliance on the commercials. The commercials had been run on television well before the non-use period. The commercials had also remained publicly available during the non-use period as they had been uploaded to EB’s YouTube and Facebook pages. There was no evidence, however, that anyone in Australia had accessed the commercials on either site. At [76], the Full Court explained:

Under existing authority, which has not been challenged in the present application, the mere uploading of trade mark content on a website outside Australia is not sufficient to constitute use of the trade mark in Australia …

citing Ward Group Pty Ltd v Brodie & Stone plc [2005] FCA 471; 143 FCR 479; Sports Warehouse Inc v Fry Consulting Pty Ltd [2010] FCA 664; 186 FCR 519; Christian v Societe Des Produits Nestle SA (No 2) [2015] FCAFC 153; 327 ALR 630.

Consequently, EB failed to demonstrate that the primary judge’s order to remove MOTHERLAND for non-use in respect of non-alcoholic beverages etc. was attended by sufficient doubt to warrant leave being granted to appeal.

MOTHERSKY

Despite the deletion of coffee beverages from Cantarella’s specification of goods, both parties conducted the proceedings on the basis that “coffee” included coffee beverages, not just the product of the coffee plant or coffee beans.

In contrast to the MOTHERLAND proceeding, the Full Court found that the primary judge made two material errors. First, his Honour had examined whether coffee beverages were similar goods to energy drinks and the powders and syrups for bottling energy drinks and concluded that the respective products had fundamentally different taste and flavour and were presented for sale and consumed in different circumstances.

This was in error. Section 44(1) calls for comparison of Cantarella’s “coffee” across the full scope of its normal and fair meaning to the full scope of EB’s specification. The correct comparison therefore was between “coffee” and “non-alcoholic beverages”.

Given the way the case had been conducted, the Full Court had little difficulty concluding that coffee beverages were “non-alcoholic beverages” within the scope of EB’s registration.

The fact that coffee as a beverage was classified in class 30 and not class 32 was a matter of administrative convenience and, at [132], irrelevant given Cantarella contended “coffee” covered “coffee beverages”.

Further, contrary to the primary judge’s approach, Cantarella’s claim for “coffee beverages” was not limited to “pure” coffee but extended across a range of beverages. Cantarella argued that coffee beverage did not include coffee flavoured milk. The Full Court accepted at [129] that there may be “a penumbra of uncertainty” about when a coffee flavoured beverage is not “coffee”. Treating “coffee” as meaning “coffee beverage”, however, at [128]:

there is nothing in the specification, so construed, which would limit the meaning of “coffee” to any particular coffee beverage or to any particular kind or type of coffee beverage. For example, there is nothing to limit “coffee” to black coffee as opposed to white coffee or coffee made with milk. There is nothing to limit “coffee” to coffee that does not include some additive such as, for example, a flavoured syrup. Further, there is nothing to limit “coffee” to a hot beverage or a freshly-brewed beverage as opposed to a cold or iced beverage. Further still, there is nothing to limit “coffee” to coffee produced by a particular process or prepared in a particular way, or to coffee packaged and promoted in a particular way. There are many permutations of what constitutes “coffee” as a beverage. Thus, coffee beverages cover a range of goods.

Further still, there was a sufficient body of evidence demonstrating that, at the priority date of the MOTHERSKY application, drinks such as pre-packaged iced coffee were regarded in the trade as non-alcoholic beverages and, further, of overlap between the trade channels through which coffee beverages and energy drinks were marketed and sold.

Secondly, the Full Court considered the primary judge materially erred when undertaking the deceptive similarity comparison.

The Full Court recognised that the comparison the test of deceptive similarity called for involved matters of judgment and degree about which opinions could reasonably differ. In the absence of legal error, mere difference of opinion was not enough. In undertaking the comparison, however, the primary judge’s assessment was heavily coloured by his Honour’s conclusion that “coffee beverages” and the goods covered by EB’s MOTHER registration were not the same or even of the same description.

Further, the primary judge erred by comparing only the specific way Cantarella actually used its trade mark with the specific way EB used its mark rather than comparing how notionally the competing marks could fairly be used across their full scope.

Undertaking the comparison themselves, the Full Court concluded that MOTHERSKY was deceptively similar to MOTHER.

First, at [167], while “mother” is a commonly used English word, it is not in any way descriptive of “non-alcoholic beverages” and was inherently distinctive of such goods. This was of considerable importance in the assessment. (emphasis supplied)

Secondly, at [168], “mother” was wholly incorporated in MOTHERSKY and did not lose its identify merely by the addition of “sky”.

Thirdly, at [169] to [170], “sky” did not have a well-understood meaning when added to “mother”. It might for example be understood according to its ordinary signification. Or it might be treated as some sort of playful variant or as creating a diminutive of “mother”. The Full Court considered that “mother” remained the dominanting element and, consequently, the likelihood of confusion arose.

As a result, s 44(1) operated to preclude registration of MOTHERSKY in the face of EB’s MOTHER registration for non-alcoholic beverages.

Other circumstances

It is well established that the registrability of a trade mark application falls to be determined at the date of the application.

Cantarella’s tactic of applying to clear the way for its MOTHERSKY application by removing EB’s blocking registrations for non-use is also long-standing although, of course, as at the date of the MOTHERSKY application, EB’s registrations were still in the way – removal for non-use being prospective, not retrospective.

At [176] – [178], however, the Full Court endorsed the Registrar’s practice (albeit by way of obiter dicta) of allowing an application to proceed to registration if the blocking citation was removed for non-use as “other circumstances” for the purposes of s44(3)(b). There would be “something perverse” in testing the registrability of the application against a mark which will be removed from the Register.

It is understood that an application for special leave to appeal to the High Court has been filed.

Energy Beverages LLC v Cantarella Bros Pty Ltd [2023] FCAFC 44 (Yates, Stewart and Rofe JJ)

Leave to appeal being required under s 195(2) and so EB needed to persuade the Full Court that “(a) whether, in all the circumstances, the decision below is attended with sufficient doubt to warrant it being considered by a Full Court; and (b) whether substantial injustice would result if leave were refused, supposing the decision to be wrong.” citing Decor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398 – 399 and Primary Health Care Ltd v Commonwealth [2017] FCAFC 174; 260 FCR 359 at [206]. ?

ToolGen’s CRISPR/Cas9 patent application rejected

Leave a Comment / Patents / By war / 20 July 2023 / appeal, Australia, clarity, crispr, enablement, inventive step, novelty, opposition, Patents, priority, priority from provisional, raising the bar, support, toolgen

Nicholas J has ruled that ToolGen’s application for a patent, AU 2013335451, for “what is now a well-known gene editing system known as the CRISPR/Cas9 system” for editing target DNZ sequences in eukaryotic cells. His Honour has allowed ToolGen until 11 August 2023 to bring any application for leave to amend pursuant to s 105(1A).

As the complete specification was filed after 15 April 2013, the Patents Act in the form amended by the Raising the Bar Act applied.

The matter came before his Honour on ToolGen’s “appeal” from an opposition in which the Commissioner’s delegate found that all but one of the claims should be refused but allowed ToolGen 2 months to amend.

At [13], Nicholas J summarised his Honour’s findings:

For the reasons that follow I have concluded:

(a)          None of the claims are entitled to priority based on P1 (s 43(2A)).

(b)          All of the claims lack novelty or do not involve an inventive step (s 18(1)(b)).

(c)          The complete specification does not provide an enabling disclosure of the invention (s 40(2)(a)).

(d)          The claims are not supported by matter disclosed in the specification (s 40(3)).

(e)          Claim 19 lacks clarity (s 40(3)).

More detailed consideration will have to wait for another day.

ToolGen Incorporated v Fisher (No 2) [2023] FCA 794

The Agency Group v The North Agency: How to deal with Self Care v Allergan

Leave a Comment / Trade marks, Trade Practices / By war / 27 June 2023 / Australia, botox, deceptive similarity, passing off, protox, Trade marks

Jackman J has dismissed The Agency Group’s claims of trade mark infringement and misleading or deceptive conduct / passing off against The North Agency. In doing so, his Honour directly confronted the problem arising from the High Court’s reasons in Self Care v Allergan.

Some facts

The Agency Group is a real estate agency that operates nationwide including, amongst other places, on the Northern Beaches of Sydney. It services the Northern Beaches from offices in Manly and Neutral Bay.

In the 12 months or so up to 31 March 2023, between them the two offices sold more than 190 properties, with some 40 others up for sale. They had also leased over 300 properties, with another 17 still up for rent. The Agency Group had spent over $4.4 million on advertising its Northern Beaches properties on <realestate.com.au> and <domain.com.au>. In the 12 months to 31 March 2023, the properties serviced by the Neutral Bay and Manly offices had attracted 1,868,000 property views on <realestate.com.au> alone.[1]

And, from February 2017 to March 2023, the two offices had generated almost $40 million in revenue.

H.A.S. Real Estate Agency began trading in the Northern Beaches area in March 2023 from offices in Dee Why, also in the Northern Beaches region. From the start, the business operated as “The North Agency”. Its two directors had been working in real estate in the area since 2007 and 2008.

Screenshots of the businesses’ respective websites before his Honour showed:

[2]

The Agency Group also had two registered trade marks for real estate services in class 36:

A figurative trade mark consisting of the words The Agency in which the letter "A" is presented as an inverted "v" over a horizontal bar

(TM 1836914) and a second registered trade mark for the figurative letter “A”.

The respondent of course also used “The North Agency” in plain text to refer to itself and in the URL for its website and email addresses etc.

The Self Care v Allergan “problem”

There have been a number of first instance and Full Court decisions since Self Care v Allergan but Jackman J’s decision is the first to confront what the High Court said and what it actually did directly.

At [55], Jackman J distilled helpfully 12 principles from Self Care v Allergan. Then at [56] to [58] his Honour considered a further principle: noting that the High Court at [29] and [33] stated as a matter of principle that trade mark infringement is concerned with a comparison of the two trade marks and is not looking at the totality of the respondent’s conduct as would be the case in passing off or for misleading or deceptive conduct. His Honour observed that:

(1) At [29] footnotes 67 and 68, the High Court expressly endorsed the Full Federal Court’s proposition in MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236 at 245, “that it is irrelevant that the respondent may, by means other than its use of the mark, make it clear that there is no connection between its business and that of the applicant”;

(2) “On the same page, their Honours said that the comparison is between marks, not uses of marks, and hence it is no answer that the respondent’s use of the mark is in all the circumstances not deceptive, if the mark itself is deceptively similar”;

(3) Also, the High Court approved Gummow J’s statement in the Moo-Moove case that disclaimers are to be disregarded as are price differences, colour and target audiences;[3] and

(4) At [33], the High Court stated “the court is not looking to the totality of the conduct of the defendant in the same way as in a passing off suit” and cited numerous authorities in footnote 81 endorsing that proposition.

At [59], however, Jackman J recognised that, in explaining why PROTOX was not deceptively similar to BOTOX the High Court in fact took into account additional “matter” extraneous to the two trade marks such as a disclaimer on the PROTOX website that “PROTOX has no association with any anti-wrinkle injection brand”.

His Honour, with respect, rightly pointed out it is impossible to reconcile the principles declared by the High Court with what the High Court actually did. In those circumstances, Jackman J proposed to apply the principles declared by the High Court and disregard what the High Court actually did at [70] and [71] of Self Care v Allergan. Jackman J explained at [60]:

With the greatest respect, those passages are impossible to reconcile with the Court’s approval of the authorities referred to above which state that such additional material used by the respondent is irrelevant to the issue of trade mark infringement. The internal contradiction places a trial judge in an awkward dilemma, which I propose to resolve by simply disregarding the passages quoted above from [70] and [71] as unfortunate errors. On the High Court’s own reasoning, it would be a fundamental error of longstanding legal principle if I were to adopt their Honours’ mode of analysis in [70] and [71] by taking into account on the question of deceptive similarity, for example, that the use by H.A.S. Real Estate of “THE NORTH AGENCY” was typically accompanied by the distinctive N Logo, thereby implicitly disavowing any association with the applicants or their services.

It can be hoped that other judges will also follow this brave course.

It has to be acknowledged, however, that the the High Court went on in [33] after footnote 81 to say:

…. In addition to the degree of similarity between the marks, the assessment takes account of the effect of that similarity considered in relation to the alleged infringer’s actual use of the mark[82], as well as the circumstances of the goods, the character of the likely customers, and the market covered by the monopoly attached to the registered trade mark[83]. Consideration of the context of those surrounding circumstances does not “open the door” for examination of the actual use of the registered mark, or, as will be explained, any consideration of the reputation associated with the mark[84].

But, as the cases cited by the High Court show, those decisions were not engaged in the whole circumstances type of inquiry which characterises claims under the ACL and in passing off.

Why The North Agency did not infringe

The issue here is whether the respondent’s use of The North Agency was deceptively similar to The Agency Group’s registered trade mark.

Even on the “traditional” trade mark infringement analysis, Jackman J found that The North Agency was not deceptively similar to The Agency Group’s trade mark.

First, at [69] – [71], the inclusion of “North” in the respondent’s trade mark was a signficant differentiating factor. It was larger and more prominent in advertising material such as the website. But even in plain use such as the website URL and email addresses where “The North” was not given any particular prominence, it remained a striking aspect. As his Honour explained at [76] in rejecting the brand extension or franchising risk, “the Agency” and “the North Agency emphasised different businesses.

Secondly, at [62], Jackman J noted that TM No. 1836914 was not a word mark but a composite mark consisting of words and device elements. This was important as it meant that a trade mark consisting of a number of elements had to be considered as a whole. Moreover, where a trade mark consisted of words and other device elements, care needed to be taken before characterising the words as an essential feature lest what was distinctive because it was a composite mark be converted into “something quite different”.

Thirdly, that was important in this case as (at [63] and [72] – [74], [76]) the word “Agency” was commonly used by real estate agents to describe their businesses. This evidence of trade usage was admissible. It meant that the word itself had less distinctive force. Instead, it was the combination as a whole which operated as the badge of origin.

It is respectfully submitted his Honour’s approach to the significance of the commonality of the word “agency” in both the registered trade mark and the alleged infringement is the sort of contextual significance that the traditional case law has taken into account; assisting the Court to determine what the essential, memorable features of the trade mark are for the purposes of imperfect recollection.

It was the public’s familiarity with “Chifley” as a surname (including a prime minister) and as geographical places that meant The Chifley and Chifley on the Wharf were not deceptively similar to The Chifley Tower in Mid Sydney v Australian Tourism Co. For similar reasons, the High Court had ruled in the Mond Staffordshire case that Mulsol did not infringe Mondsol, way back in 1929 – “sol” and “ol” being commonly used in germicidal and medicinal preparations.

So, if this is the way the Courts will deal with the dilemma posed by Self Care v Allergan, we can probably breathe a sigh of relief (except when acting for a respondent!).

Jackman J went on to reject the claim of infringement of TM by the “N” logo. His Honour considered the slant of the “N” logo coupled with the degree symbol reinforced the idea of a compass pointing north in contrast to a stylised representation of a house.

For completeness, Jackman J did acknowledge at [60] that there would be even less prospects for deceptive similarity if one were to take into account the extraneous considerations referenced by the High Court in Self Care v Allergan and, consequently, the claims under the ACL and for passing off failed too.

The Agency Group Australia Limited v H.A.S. Real Estate Pty Ltd [2023] FCA 482

The Agency Group’s figures nationally were $2, 788.5 million in sales revenue and, in the 12 months ending on 31 March 2023, there had been 8,748,102 views of its properties on <realestate.com.au> from NSW and a further 15,246,484 page views from the rest of Australia. ?
The Agency Group’s Neutral Bay office had a profile page on Domain: The Agency North but the applicant was not allowed to run a case of misleading or deceptive conduct based on that as a matter of pleadings (@ [104]) and, in any event, (@ [105]) there was not sufficient evidence to support a claim for reputation in the absence of evidence of how many page views there had been of the profile page or other use of the phrase. ?
See Self Care v Allergan at [33] footnotes 81 and 84. ?

Designs law reform

Leave a Comment / Copyright, Designs / By war / 15 June 2023 / Australia, consultation, Copyright, Designs, icon, incremental design, partial design

IP Australia has published 3 consultation papers on proposed reforms to registered designs law:

Public consultation of Protection for Virtual Designs
Public consultation on Protection for Partial Designs; and
Public consultation on Protection for Incremental Improvements of Designs

There are also 3 one page “fact” sheets to go with them:

(a) Virtual Designs;

(b) Partial Designs;

but you probably want to read the consultation papers proper to understand them.

Incremental improvements

The idea here is that a designer may file a low-cost preliminary design and within 6 months file the “main design”. The priority date of the “main” design would be the preliminary design’s priority date. The “main” design may include “incremental” improvements over the preliminary design. This apparently means the “main” design must still be substantially similar in overall impression to the design disclosed in the preliminary design.

The term and rights to sue for infringement would run from the “main” design. Prior user rights, however, would end with the filing of the preliminary design.

In addition, after the “main design” has been registered, subsequent applications for “incremental” improvements may be linked to the registered main design. The “main” design and the preliminary design would not form part of the prior art base for the linked design. As with the preliminary design and the “main” design, it is proposed that a subsequent design must be substantially similar in overall impression to the “main” design. It is also proposed that “linking” could be requested during certification if the “main” design is cited against a later design application by the design owner.

According to the consultation paper, the term of the subsequent design would start from the filing date of the subsequent, linked design but end on the expiry of the maximum term (i.e. currently 10 years) of the “main” design.

Virtual designs

The consultation proposes to amend the definition of “product” from “a thing that is manufactured or handmade” to include virtual designs and to define a virtual design as “an intangible thing, the use of which results on the display of visual features through electronic means” and would make it clear it includes images only temporarily displayed on a screen.

It appears it is still contemplated that the virtual design would have to be registered for specific products – so the consultation paper gives the example that a graphical user interface (GUI) could be registered as a user for a coffee machine but not simply as just a “user interface”.

The consultation paper discusses a number of other issues including, in particular, how the copyright / design overlap provisions (Copyright Act 1968 ss 74 to 77A) and, especially, the concept of “industrially applied” would operate in this brave new world.

I guess one could ask, if X registers a design for a GUI, or icon, for a smartphone, does X just lose the ability to sue for copyright infringement in smartphones, or tablets and watches as well, or only after the expiry of the design for smartphones or not lose rights to enforce copyright at all?

Partial designs

This consultation looks at a range of amendments required to permit design registration for partial designs: that is, for parts only of a product. An obvious example is the handle of a cup rather than just the cup as a whole.

The consultation paper contemplates that products for this purpose may be physical products or virtual products or composites. One example given by the consultation is the protection of the pattern and ornamentation of a logo. However, the consultation paper contemplates that the logo would not provide protection for all products but would still need to be registered in respect of particular products such as travel bags, shoes, wallets etc. – that could mean a lot of registrations would be required!

The consultation paper discusses a range of other considerations and, in addition to welcoming general comments asks:

>1. Do you support IP Australia’s approach (outlined in this paper) to implementing partial designs protection in Australia? If not, why not?

>2. Would you register your partial designs using the proposed system? If not, why not?

>3. Are there any particular risks or unintended consequences that would arise from this proposal?

>4. Would the copyright/design overlap provisions have any adverse effect on how design businesses commercialise their partial designs?

Submissions

Submissions are due by 8 August 2023.

The consultation process landing page, with links to the documents etc. is here.

Zarya of the Dawn – copyright and an AI

Leave a Comment / Copyright / By war / 26 April 2023 / AI, artificial intelligence, Australia, computer-generated, Copyright, IceTV, midjourney, subsistence, USA

Those of you who heard Shira Perlmutter, the US Register of Copyright, on her Australian tour last year will recall the US Copyright Office had withdrawn and was reconsidering the copyright registration for Zarya of the Dawn.[1] On 21 February 2023, the US Copyright Office announced the outcome of that review. While the Copyright Office allowed registration of some aspects, it rejected the claim to copyright in the images created by Midjourney, an AI.

Image of a young feminine looking person with golden skin, dark brown eyes and dark brown hair in corn rows - against a teal background — Zarya of the Dawn – Cover Page

The work(s)

Zarya of the Dawn [2] is a comic consisting of images and text depicting Zarya’s adventure to different worlds to collect mental health tools to handle their emotions, thoughts as a non-binary person.

A page with 4 comic images; the first of which is a postcard of some otherworldly place. The young, feminine looking person reads the card addressed to 'My Dearest Zarya'. They wonder if they are Zarya and why they cannot remember their name — Page 2 of the Zarya of the Dawn comic book

The Copyright Office accepted that the applicant, Ms Kristina Kashtanova, was the author of both the text and the selection and arrangement of the text and images. However, the Copyright Office refused registration for the images themselves on the grounds that they were generated by Midjourney and did not have a human author.

How Midjourney generated the images

As described by the Copyright Office, Midjourney generates an image in response to instructions (called “prompts”) input by the user. The Copyright Office illustrated this process by the prompt:

/imagine cute baby dinosaur shakespeare writing play purple

which generated the images below:

4 images generated by Midjourney of purple coloured, baby dinosaurs each holding a pen and working over a manuscript. In 2 images, the dinosaur looks to the right bottom corner; in the other two, to the right bottom corner — Baby dinosaur writing a play

The user could click on the blue “recycle” image to generate four new images. The user could also refine the images regenerated by providing URLs of images to be used as models or by providing more detailed instructions.

This was not authorship for copyright purposes

For copyright to subsist in original works such as text (literary works) or images (artistic works), US law, like Australian law (see further below), requires the work to be original. That requirement in turn requires the work to be made by a human who is an author. And, according to the Copyright Office, an author is the person “who has actually formed the picture,” the one who acts as “the inventive or master mind.”

At least in theory, if someone gave a draftsperson sufficiently detailed instructions about what a drawing should depict, they rather than the draftsperson may be the author.[3]

The Copyright Office, however, found that the instructions Ms Kashtanova gave to Midjourney did not make her the author of the resulting images. This was because it was not possible to predict the outcome resulting from her prompts:

A person who provides text prompts to Midjourney does not “actually form” the generated images and is not the “master mind” behind them. Instead, as explained above,[4] Midjourney begins the image generation process with a field of visual “noise,” which is refined based on tokens created from user prompts that relate to Midjourney’s training database. The information in the prompt may “influence” generated image, but prompt text does not dictate a specific result. See Prompts, MIDJOURNEY, https://docs.midjourney.com/docs/prompts (explaining that short text prompts cause “each word [to have] a more powerful influence” and that images including in a prompt may “influence the style and content of the finished result”). Because of the significant distance between what a user may direct Midjourney to create and the visual material Midjourney actually produces, Midjourney users lack sufficient control over generated images to be treated as the “master mind” behind them.

The Copyright Office recognised that additional prompts could be applied to initial images to influence subsequent images, however, the process was not controlled by the user as it was “not possible to predict what Midjourney will create ahead of time.”

The Copyright Office contrasted the way Midjourney works with the way an artist might use Photoshop or other tools:

The fact that Midjourney’s specific output cannot be predicted by users makes Midjourney different for copyright purposes than other tools used by artists. See Kashtanova Letter at 11 (arguing that the process of using Midjourney is similar to using other “computer- based tools” such as Adobe Photoshop). Like the photographer in Burrow-Giles, when artists use editing or other assistive tools, they select what visual material to modify, choose which tools to use and what changes to make, and take specific steps to control the final image such that it amounts to the artist’s “own original mental conception, to which [they] gave visible form.”15 Burrow-Giles, 111 U.S. at 60 (explaining that the photographer’s creative choices made the photograph “the product of [his] intellectual invention”). Users of Midjourney do not have comparable control over the initial image generated, or any final image. (emphasis supplied) (footnotes omitted)

Ms Kashtanova also contended that her modifications in Photoshop to some images constituted authorial contribution to support her claim to copyright. From the description in the Copyright Office’s decision, some of the work seems more like touching up or editing rather than authorship. As the material before the Copyright Office did not include the “before” and “after” images, however, the Copyright Office was not include to accept those claims either.

An Australian perspective

Australian courts have also ruled that an author must be a human. Applying the IceTV case, the Full Federal Court has ruled that the processing of telephone subscriber name, address and phone number details into a directory by a computerised database did not qualify as an original copyright work as there was no human author. In the first Telstra v PDC case, Perram J explained at [118] – [119]:

The Act does not presently deal explicitly with the impact of software on authorship (although this is not so in the United Kingdom: s 9(3) Copyright, Designs and Patents Act 1988 (UK)). But a computer program is a tool and it is natural to think that the author of a work generated by a computer program will ordinarily be the person in control of that program. However, care must taken to ensure that the efforts of that person can be seen as being directed to the reduction of a work into a material form. Software comes in a variety of forms and the tasks performed by it range from the trivial to the substantial. So long as the person controlling the program can be seen as directing or fashioning the material form of the work there is no particular danger in viewing that person as the work’s author. But there will be cases where the person operating a program is not controlling the nature of the material form produced by it and in those cases that person will not contribute sufficient independent intellectual effort or sufficient effort of a literary nature to the creation of that form to constitute that person as its author: a plane with its autopilot engaged is flying itself. In such cases, the performance by a computer of functions ordinarily performed by human authors will mean that copyright does not subsist in the work thus created. Those observations are important to this case because they deny the possibility that Mr Vormwald or Mr Cooper were the authors of the directories. They did not guide the creation of the material form of the directories using the programs and their efforts were not, therefore, sufficient for the purposes of originality.

The consequence of those conclusions is that the directories were not copied from elsewhere but neither were they created by a human author or authors. Although humans were certainly involved in the Collection Phase that process antedated the reduction of the collected information into material form and was not relevant to the question of authorship (other than to show that the works were not copied). Whilst humans were ultimately in control of the software which did reduce the information to a material form, their control was over a process of automation and they did not shape or direct the material form themselves (that process being performed by the software). The directories did not, therefore, have an author and copyright cannot subsist in them. (emphasis supplied)

GIs, free trade, Australia and the EU

Leave a Comment / Trade, Trade marks / By war / 17 April 2023 / Australia, DOC, free trade, geographic indication, GI, prosecco

With the closing stages of the negotiations between Australia and the EU over the proposed free trade agreement almost upon us, the EU has proposed a list of 55 further wine geographical indications it wants to protect.[1] Amongst others, the list includes “prosecco” and “vittoria”. The Department of Agriculture is holding a Public Objections Process to assess the impact of accepting these names.

There are four grounds for potential objection (and only four):

The EU GI name is used in Australia as the common name for the relevant good, including as a type or style of wine.
The EU GI name is used in Australia as the name of a grape variety, plant variety or an animal breed.
The EU GI name is identical to, or likely to cause confusion with, a trade mark that is registered in Australia or the subject of a pending application made in good faith in Australia. Confusion may be likely where a trade mark consists of, or contains, the EU GI name or something so nearly resembling it.
The EU GI name is identical to, or likely to cause confusion with, an unregistered trade mark that has acquired rights through use in good faith in Australia. Confusion may be likely where a trade mark consists of, or contains, the EU GI name or something so nearly resembling it.

You can see what the problem is with a name like “prosecco” as there are lots of Australian producers of wines under that name, all the more so when the grape variety formerly known (or thought to be known) as prosecco was renamed in 2009 by an Italian government decree as “glera”.

SBS Italian published an article (in Italian) looking at the issue.[2]

I also wonder about “Vittoria”, especially if the EU is pressing for protection not just against use of the name itself but terms and expressions which “evoke” that. There are, afterall, lots of wines which are made in a place called “Victoria”.

Whether Australia agrees to these names or not, Australian producers using these names are effectively giving up the potential to sell in the EU (unless they go to the trouble and expense of different labelling).

The consultation process has been running since late March and closes at 12 NOON AEST Friday 21 APRIL 2023. If you want to lodge an objection (good luck!), you must make your submission via here. Be warned: this is a “hard” deadline; finalisation of the deal is that close.

If you are feeling a little bit like “deja vu”; you’re right, there was a whole round of consultations about a much more extensive range of names two years ago.

The full list of the new wines is Appendix A to the Public Objections Process: EU Wine Geographical Indications also available here (pdf). ?
If like me your Italian is not up to that here’s a link to Google Translate’s interpretation. Lid dip (for the article in the original) Dr Paula Zito. ?

Self Care v Allergan – Part 2

Leave a Comment / Trade marks, Trade Practices / By war / 31 March 2023 / ACL, Australia, deceptive similarity, infringement, misleading or deceptive, ordinary or reasonable consumer, target market, Trade marks, use as a, Yes-Vite

Previously on IPwars.com we looked at why the High Court held PROTOX did not infringe BOTOX. The High Court also ruled that “instant BOTOX® alternative” did not infringe and overturned the Full Court’s ruling that the phrase was misleading or deceptive contrary to the ACL.

A recap

You will recall that Allergan has registered BOTOX as a trade mark for “[p]harmaceutical preparations for the treatment of … wrinkles” in class 5. The product Allergan makes and sells under the BOTOX trade mark is an injectable pharmaceutical which must be administered by a health professional. One treatment of BOTOX preparation can last for up to several months.

Because of its “overwhelming” and “ubiquitous” reputation in BOTOX, however, Allergan has also achieved registration of BOTOX in class 3 for anti-ageing and anti-wrinkle creams.

The second FREEZEFRAME product Self Care sells is INHIBOX. The INHIBOX product is a cream which the user can apply themselves at home and which lasts for up to a few hours to reduce the visible signs of ageing.

The INHIBOX product was sold in two forms of packaging:

Old packaging – Packaging A

Image of INHIBOX packaging showing FREEZEFRAME and INHIBOX trade marks, instant Botox® alternative and explanatory text on back

New packaging – Packaging B:

Both forms of packaging included the phrase “instant BOTOX® alternative”. You will also notice that the back of both forms of packaging includes a longer declaration: “The original instant and long term Botox® alternative”.

Why “instant Botox® alternative” did not infringe

Self Care’s INHIBOX product being an anti-wrinkle cream falling squarely within the scope of Allergan’s BOTOX registration in class 3, the High Court had identified at [22] that the trade mark owner had to prove two things to establish trade mark infringement under s 120(1):

that the impugned sign was being used as a trade mark; and
that the impugned sign was substantially identical or deceptively similar to the registered trade mark.

At [23], a sign is being used as a trade mark when it is being used as “a badge of origin” to indicate a connection between the goods and the user of the mark.[1]

And whether that is the case is to be determined objectively in the context of the use without regard to the subjective intentions of the user. To repeat the High Court’s explanation at [24]:

Whether a sign has been “use[d] as a trade mark” is assessed objectively without reference to the subjective trading intentions of the user[50]. As the meaning of a sign, such as a word, varies with the context in which the sign is used, the objective purpose and nature of use are assessed by reference to context. That context includes the relevant trade[51], the way in which the words have been displayed, and how the words would present themselves to persons who read them and form a view about what they connote[52]. A well known example where the use was not “as a trade mark” was in Irving’s Yeast-Vite Ltd v Horsenail[53], where the phrase “Yeast tablets a substitute for ‘Yeast-Vite’” was held to be merely descriptive and not a use of “Yeast-Vite” as a trade mark. Therefore, it did not contravene the YEAST-VITE mark. (citation omitted)

Applying that test, the High Court held that Self Care was not using “instant Botox® alternative” as a trade mark. There were a number of reasons contributing to this conclusion.

First, Self Care did not present the phrase in a consistent style.

Secondly, the phrase was presented alongside two obvious trade marks – FREEZEFRAME and INHIBOX – so that the phrase was less likely to be taken as a trade mark.

And thirdly, while FREEZEFRAME and INHIBOX were presented as trade marks, the phrase “instant Botox® alternative” was a descriptive phrase which in context was used only with that descriptive purpose and nature.

As to the first consideration, the High Court explained at [55]:

The presentation of “instant Botox® alternative” was inconsistent in size, font and presentation on each of Packaging A, Packaging B and the website, indicating “instant Botox® alternative” was not being used as a badge of origin to distinguish Self Care’s goods from those dealt with by another trader[126]. On Packaging A the phrase was presented vertically, marked out by four vertical lines separating each of the words. On Packaging B and on the website the phrase was presented horizontally without any lines separating the words. The arrangement of the words differed. On the packaging, each word in the phrase occupied its own line. On two website pages the phrase occupied a single line. On two other website pages the words “Instant” and “Botox®” shared a line and the word “ALTERNATIVE” appeared on the next line. The font was inconsistent. The packaging used a different font to the website pages, and one website page used a different font to the other website pages. The capitalisation was inconsistent. Three different forms were adopted: “instant Botox® alternative” on the packaging, “INSTANT BOTOX® ALTERNATIVE” on one website page and “Instant Botox® ALTERNATIVE” on three other website pages.

Then, the High Court explained at [56] that the likelihood “instant Botox® alternative” would be taken as a trade mark was diminished because its use was not as dominant as the use of FREEZEFRAME and INHIBOX:

…. This diminishes the likelihood that the phrase “instant Botox® alternative” could be objectively understood to indicate origin in itself[127]. This is because its use was not as dominant as the use of the other signs, FREEZEFRAME and INHIBOX. This is most evident on the packaging. On both Packaging A and Packaging B, “instant Botox® alternative” appeared only once, on the front of the box, in much smaller font than FREEZEFRAME and INHIBOX. FREEZEFRAME and INHIBOX were also featured prominently on the left and right sides of each box. Further …. (citations omitted)

At [57], the High Court recognised that a sign can be both descriptive and used as a trade mark (see also [25]) but the phrase “instant Botox® alternative” was not in this case:

The FREEZEFRAME and INHIBOX script style and presentation is also significant. FREEZEFRAME and INHIBOX were both distinctive and stylised signs that were apt to be perceived as brands. In contrast, “instant Botox® alternative” was a descriptive phrase that had an ordinary meaning and included within it the trade mark BOTOX (identified as such with a ® symbol). It was descriptive of the product to which it was attached as an alternative product. While a sign can both be descriptive and serve as a badge of origin, the better view is that the use of the phrase, consistent with its ordinary meaning, had only a descriptive purpose and nature[128]. As the primary judge found, the phrase amounted to “ad?speak”. (citation omitted)

As the phrase was not used as a trade mark, there was no need to consider whether it was deceptively similar to Allergan’s trade mark.

Some aspects of the High Court’s reasons

In reaching its conclusions, the High Court drew on three different uses – the two forms of packaging and the website collectively. At [54], the High Court said it was permissible “to address them together, identifying relevant similarities and differences in use.”

In this case at least, there appears to have been some overlap between Self Care’s use of Packaging A and Packaging B – the latter being introduced on the market in September 2016, the former still being on the market until February 2017. The website of course was contemporaneous with both.

Nonetheless, it might be thought a bit odd that generally the old form of packaging informed the understanding of the new form of packaging. And, if the question is whether or not the particular use on the packaging is use as a trade mark, one might wonder about the relevance of use elsewhere. It must also be acknowledged that the form of use was one only of the factors contributing to the conclusion.

The High Court’s approach therefore reinforces INTA’s longstanding message that the trade mark owner should ensure it presents its trade mark consistently. Giving this consideration too much weight in isolation, however, risks creating some sort of pirate’s charter.

Ultimately, it might be thought the result is not too surprising. Afterall, phrases like this have not been considered to be trade mark use since the House of Lords’ decision in 1934 that “Yeast tablets a substitute for Yeast-Vite” did not infringe the registered trade mark YEAST-VITE.

In explaining why the Full Court wrongly found use as a trade mark, however, the High Court advanced a very different explanation why “instant Botox® alternative” was not use as a trade mark. The Full Court had impermissibly conflated the tests of use as a trade mark and deceptive similarity. At [60], the High Court then said:

Conflation of those elements is not uncommon. As Shanahan’s Australian Law of Trade Marks & Passing Off observes, “[t]here is a common misconception that an infringer uses a sign as a trade mark if the use indicates or is likely to indicate a connection between the infringer’s goods and the owner of the registered mark”[129]. However, “factors relevant to whether there is a misrepresentation or likelihood of deception have no role to play in deciding the question of what constitutes ‘use as a trade mark’”[130]. As was stated in Coca-Cola Company v All-Fect Distributors Ltd, the inquiry is not “whether the sign indicates a connection between the alleged infringer’s goods and those of the registered owner”[131]. The correct approach is to ask whether the sign used indicates origin of goods in the user of the sign[132]. (emphasis supplied) (citations omitted)

This may be contrasted with the reason why the House of Lords held that there had been no use as a trade mark. Lord Tomlin explained:[2]

This is clearly a use of the word “Yeast-Vite” on the respondent’s preparation to indicate the appellant’s preparation and to distinguish the respondent’s preparation from it. It is not a use of the word as a trade mark, that is, to indicate the origin of the goods in the respondent by virtue of manufacture, selection, certification, dealing with or offering for sale.

The High Court’s endorsement of Coca-Cola v Allfect on this point cannot be the result of some change in the meaning or concept of “use as a trade mark”. In the Yeast-Vite case, Lord Tomlin said:[3]

The phrase “the exclusive right to the use of such trade mark” carries in my opinion the implication of use of the mark for the purpose of indicating in relation to the goods upon or in connection with which the use takes place, the origin of such goods in the user of the mark by virtue of the matters indicated in the definition of “trade mark” contained in s 3.

That is the same explanation of the concept as adopted by the High Court in Gallo at [42] and in Self Care at [23] and [53].

It also cannot really be explained by the introduction into the Trade Marks Act of s 122A and s 123. Lord Tomlin roundly rejected a similar argument by the trade mark owner in Yeast-Vite:

nor do I think it is legitimate to treat special defences available under other sections of the latter Act as constituting a measure of the right conferred by s 39.

It appears therefore that the High Court has resolved the point left open in the Gallo case at [53] – whether a retailer uses the trade mark as a trade mark when using it in relation to the genuine goods of the trade mark owner.[4]

Whether that means our law now needs amendment to provide a defence for parody and satire, or other types of nominative fair use, remains to be seen.

The ACL case

The Full Court had found that the phrase “instant Botox® alternative” conveyed the representations that use of INHIBOX would result in a similar reduction in the appearance of wrinkles to using Botox and, secondly, that the effects would last for a period equivalent to that resulting from use of Botox.

The Full Court found that Self Care had reasonable grounds for the former representation, but not the latter – the long term efficacy representation. Therefore, Self Care’s use of the phrase was misleading or deceptive in contravention of the ACL.

On appeal, Self Care did not contend INHIBOX had a similar long term efficacy to Botox. Rather, it denied that the phrase “instant Botox® alternative” conveyed the long term efficacy representation at all.

Recap of the ACL principles

At [81], the High Court confirmed that determining whether there had been a breach of s 18 required a four step analysis:

Identifying the conduct said to contravene with precision;
Confirming that the conduct was “in trade or commerce”;
Considering what meaning the conduct conveyed; and
Determining whether the conduct in light of that meaning was misleading or deceptive or likely to mislead or deceive.

At [82], the High Court also confirmed that the third and fourth steps required characterisation as an objective matter. This required viewing the conduct as a whole and its notional effects, judged by the conduct in context, on the state of mind of the relevant person or class of persons.

The context includes the immediate context – all the words in the communication and the way they are conveyed, not just the word or phrase in isolation. The context also includes the broader context – all the relevant surrounding facts and circumstances.

Next, in cases of this kind the High Court re-affirmed at [83] that it is necessary to identify an ordinary and reasonable representative member of the relevant class “to objectively attribute characteristics and knowledge to that hypothetical person (or persons), and to consider the effect or likely effect of the conduct on their state of mind.” This required allowing for a range of reasonable reactions to the conduct by excluding from consideration reactions of the ignorant or very knowledgeable, those resulting from habitual caution or exceptional carelessness and the extreme or fanciful.

The misrepresentation was not made

The High Court analysed each of the three types use – Packaging A, Packaging B and the website – separately. But the reasons why “instant Botox® alternative” was not misleading or deceptive are essentially the same.

In the case of Packaging A, the High Court noted the use of the trade marks FREEZEFRAME and INHIBOX and “instant Botox® alternative” on the front of the packaging. On the side of the packaging were printed the words “Clinically proven to erase wrinkle appearance in 5 minutes”. And on the back, there was the vertical script “The world’s first Instant and Long Term Botox® Alternative” in larger, blue lettering than the panel of explanatory text. Under the heading “Freeze wrinkles instantly”, the first paragraph of that explanatory text read:

Why wait for weeks to look dramatically younger when you can wipe away the years this very minute! freezeframe’s exclusive INHIBOX complex is clinically proven to wipe away visible expression wrinkles around the eyes and on the forehead within 5 minutes, so you get an immediate wrinkle freeze and eye lift that lasts for hours. (emphasis supplied)

The remainder of the text included three more references to the effects of INHIBOX being “long term”. This included a heading “And long term!” under which the packaging stated “”freezeframe technology is scientifically proven to reduce the appearance of wrinkles by up to 63.23% in just 28 days“ and ”freezeframe’s Dual Effect technology gives you proven instant wrinkle reduction, plus the world’s best long term wrinkle relaxing”.

Under the heading “Two of the world’s most potent wrinkle erasers* in one formula”– the packaging stated “[i]magine… the power of an instant wrinkle freeze, combined with the long term benefits of the most potent, cumulative facial relaxing technology on the planet. All in one simple formula.”

Despite all these references to “long term”, the High Court held at [102] that both the immediate and broader contexts meant the phrase “instant Botox® alternative” would not convey to the reasonable consumer in the target market that either a single treatment or long term use of INHIBIX would last for an equivalent period to a BOTOX injection.

In the immediate context – the packaging, the words “long term” must be understood in the context of “lasts for hours” and that the treatment was “instant” and working “within 5 minutes”. As a result, “long term” was mere puffery. At [99], the High Court explained:

…. The fact that the effect of Inhibox was said to be instant makes it less likely that the reasonable consumer would believe that those effects would last for as long as those of Botox. Put differently, the reasonable consumer would likely believe it too good to be true that the effects of Inhibox are both instant and as long lasting as those of Botox.

The broader context included that INHIBOX was a cream applied by the user while BOTOX is a pharmaceutical injection requiring a visit to a healthcare professional. INHIBOX was much cheaper. The two products were not sold in the same locations. In these circumstances, the High Court concluded at [101]:

Taking into account that broader context, it is difficult to conceive why the reasonable consumer in the target market would think that a topically self-applied cream obtained from the pharmacy at a relatively low cost and worn in the course of the usual activities of life (including bathing and exercise) would have the same period of efficacy after treatment as an injectable anti-wrinkle treatment that is only available to be administered by healthcare professionals at a higher cost. ….

Moreover, the reasonable consumer would not assume that the use of BOTOX in the phrase indicated a common trade connection between INHIBOX and BOTOX.

Similar reasoning led to the same conclusion in respect of Packaging A and the website even though the latter, in particular, seems to have used “long term” rather more prominently.

The errors made by the Full Court

The High Court’s reasons why the phrase “instant Botox® alternative” was not misleading or deceptive suggest a rather robust approach to assessing the impact of the conduct on the target market. In addition, its reasons provide further guidance about how the conduct should be analysed.

First, at [88] – [89], the High Court agreed the trial judge had made an appealable error by considering only the phrase and the broader context, not taking into account the immediate context as well. So, it is necessary to consider all three aspects.

Secondly, the Full Court had also erred. There are a number of strands to this. One key error was misidentification of the ordinary and reasonable consumer. A second was the false premise that consumers would think the phrase “instant Botox® alternative” conveyed an association between INHIBOX and the trade source of BOTOX.

On the second point at [89], the High Court pointed out that the trial judge had found “instant Botox® alternative” would not convey an association between INHIBOX and BOTOX and there had been no appeal from that finding.

On the first point, the Full Court had found that some members of the relevant class would know that the effects of BOTOX lasted four months. The High Court criticised the factual basis for the conclusions about how long BOTOX lasted and whether consumers knew that.

More generally, however, the High Court said the Full Court had been wrong to assess the effects of the phrase on the target market on the basis that some reasonable consumers would have been misled. At [90], the High Court explained:

…. Further, the Full Court’s statement that the target market “would have included” reasonable consumers who had that knowledge demonstrated a misunderstanding of the relevant test. The ordinary and reasonable consumer is a hypothetical construct to whom the court attributes characteristics and knowledge in order to characterise the impugned conduct. The class in fact will always have reasonable consumers with varying levels of knowledge; the question was whether the knowledge should be attributed to the hypothetical reasonable consumer in this case.

Then, as already discussed above, the High Court proceeded to analyse how the phrase “instant Botox® alternative” would be perceived and understood by the ordinary reasonable consumer in all the circumstances.

Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8

Picking up the definition of What is a trade mark in s 17 as explained in Campomar and E & J Gallo at [42]: “the requirement that a trade mark ”distinguish“ goods encompasses the orthodox understanding that one function of a trade mark is to indicate the origin of ”goods to which the mark is applied“[16]. Distinguishing goods of a registered owner from the goods of others and indicating a connection in the course of trade between the goods and the registered owner are essential characteristics of a trade mark[17]. There is nothing in the relevant Explanatory Memorandum[18] to suggest that s 17 was to effect any change in the orthodox understanding of the function or essential characteristics of a trade mark.” (citations omitted) ?
Irving’s Yeast-Vite Ltd v F A Horsenail (trading as The Herbal Dispensary) (1934) 51 RPC 110 at 115.36; 1B IPR 427 at 431.37. ?
51 RPC 115.36; 1B IPR 432. ?
See also Scandinavian Tobacco Group Eersel BV v Trojan Trading Company Pty Ltd [2016] FCAFC 91 at [49]ff and Warwick A Rothnie, ‘Unparalleled importing and trademarks in Australia,’ (2020) 21(3) Business Law International 229. ?

Did the High Court change the law of trade mark infringement to a kind of registered passing off?

1 Comment / Trade marks / By war / 22 March 2023 / Australia, deceptively similar, disclaimers, infringement, passing off, Trade marks, use as a trade mark

A unanimous High Court has upheld Self Care’s appeal and ruled that PROTOX and “instant Botox® alternative” do not infringe Allergan’s BOTOX registered trade mark. Nor was “instant Botox® alternative” false, misleading or deceptive conduct contrary to the ACL.

The High Court’s ruling that the reputation of the registered trade mark has no part to play in infringement under section 120(1) has finally settled that issue. More interestingly, in explaining why PROTOX did not infringe BOTOX their Honours also may also have changed how infringement is assessed. Thirdly, the High Court’s explanation why “instant BOTOX® alternative” did not infringe confirms that the plain English 1995 Act fundamentally changed the nature of trade mark use.

Some facts

Allergan owns various registered trade marks in Australia for BOTOX including in class 5 for “pharmaceutical preparations for the treatment of … wrinkles” and in class 3 for “anti?ageing creams” and “anti?wrinkle cream”.[1]

Allergan’s BOTOX product is an injectable pharmaceutical product containing botulinum toxin, type A which is administered by healthcare professionals and which can last for several months. That is, a class 5 product type. It does not sell an anti-ageing or anti-wrinkle cream. Its class 3 registration, however, is a defensive registration under section 185. As the High Court pointed out at [17], it was the reputation Allergan had derived from its extensive use of BOTOX for the goods in class 5 that was the basis for the defensive registration in class 3.[2]

Self Care markets anti-wrinkle creams under the trade mark FREEZEFRAME. Its FREEZEFRAME products come in at least 2 lines – PROTOX and INHIBOX. These creams could be self-administered and could reduce the appearance of ageing for up to a few hours. The image below shows the PROTOX packaging the subject of the litigation:

The INHIBOX labels are similar, but bearing INHIBOX AND the slogan “instant BOTOX® alternative”.

Some differences between trade mark infringement and passing off / ACL

To consider what the High Court did when finding PROTOX did not infringe BOTOX, I want to recall four or five main differences between actions for “traditional” trade mark infringement and passing off or misleading or deceptive conduct contrary to the ACL.

For “traditional” trade mark infringement (that is, infringement under section 120(1)), the trade mark owner just has to prove that the trade mark was registered – there is no need to prove reputation; just the fact of registration;
For “traditional” trade mark infringement at least, it was necessary to show that the accused conduct was conduct in relation to the goods or services for which the trade mark was registered whereas passing off and the ACL were not so limited;[3]
Trade mark infringement can occur where a reasonable member of the public is caused to wonder whether or not there is some connection between the accused conduct while passing off and the ACL require a likelihood of deception or being misled;[4]
At least for trade mark infringement, the accused use must be use as a trade mark; that is, as a “badge of origin” to identify trade source; and
“Traditional” trade mark infringement required a comparison of the mark as registered to the particular sign alleged to infringe alone. The Court has ignored the use of other marks or indicia that may distinguish the relevant goods. In contrast, the comparison for false or misleading conduct or in passing off involves the accused use in context of all the circumstances.

This last point is well illustrated by the June Perfect case.[5] There, Saville Perfumery had “June” registered in fancy script for toiletry articles including shampoo and lipsticks. June Perfect brought out its own range of lipsticks and shampoo under the name “June”. The packaging made it clear that the goods were the products of June Perfect.

The House of Lords held there was a clear case of trade mark infringement as the comparison was between the mark as registered and the sign used by June Perfect. On the question of passing off, however, the House of Lords accepted that June Perfect might be able to use its name in such a way that the trade source of the goods was clearly distinguished from Saville Perfumery. While there was an injunction to restrain June Perfect from infringing the trade mark, the passing off injunction restrained only the use of “June” without clearly distinguishing the trade source of the articles from Saville Perfumery.[6]

There has been some relaxation over time to propositions 1 and 2.

First, section 120(2) extends the trade mark owner’s rights to cover not just the goods or services specified in the registration but also to things of the same description or closely related. Unlike the case with infringement under s 120(1), however, it is a defence to this extended form of infringement if the alleged infringer can show that the way they use their sign is not likely to deceive or cause confusion. Thus, the proviso to s 120(2) states:

However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion.

Thus, Burley J quoted with approval Yates J’s dictum:[7]

So too it is recognised that, for the purposes of considering infringement under s 120(1), it is beside the point that the alleged infringer has added other material to the impugned trade mark, even if those steps were taken to avoid the likelihood of deception: Saville Perfumery Ltd v June Perfect Ltd (1941) 58 RPC 147 at 161 (Sir Greene MR) and at 174 (Viscount Maugham); Lever Brothers, Port Sunlight Limited v Sunniwite Products Ltd (1949) 66 RPC 84 at 89; Mark Foy’s Ltd v Davies Coop and Co Ltd (1956) 95 CLR 190 at 205; Polaroid Corporation v Sole N Pty Ltd [1981] 1 NSWLR 491 at 495; New South Wales Dairy Corporation v Murray Goulburn Co-Operative Company Limited (1989) 86 ALR 549 at 589; Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227 at 231–232. Considerations of this kind, if raised by an alleged infringer, are relevant when considering infringement under s 120(2) and may be relevant when considering infringement under s 120(3). However, the general position under s 120(1) is that infringement cannot be avoided by, for example, the use of additional matter if the mark itself is taken and used. Once again, if the test is not applied in this fashion a trade mark owner may be deprived of the monopoly conferred by registration. (emphasis supplied by Burley J)

As the High Court recognised in the Self Care case, the 1995 Act introduced a further broadening of what could be infringement in s 120(3). If a trade mark owner could show that its trade mark was well-known in Australia, it could claim infringement by use of a sign on wholly unrelated goods or services where the use would be likely to indicate a connection to the trade mark owner and the trade mark owner’s interests were likely to be prejudicially affected.[8]

With that background, we can turn to the High Court’s reasons.

Self Care and some principles

The appeal is concerned only with infringement under s 120(1). The extended versions of infringement for similar or closely related products (s 120(2)) and “famous” or “well-known” trade marks (s 120(3)) were not in issue in this case.

The High Court at [22] pointed out that infringement under s 120(1) requires 2 distinct questions to be addressed:

Did the alleged infringer use the sign “as a trade mark” – that is, as a “badge of origin” to indicate trade source?
If so, was the sign deceptively similar to the registered trade mark?[9]

These are, as the High Court emphasised, two different issues and the High Court approached them separately.

Use as a trade mark

The High Court confirmed that whether a sign is being used as a trade mark is to be determined objectively, without reference to the subjective intentions of the user. At [24], their Honours explained:

Whether a sign has been “use[d] as a trade mark” is assessed objectively without reference to the subjective trading intentions of the user[50]. As the meaning of a sign, such as a word, varies with the context in which the sign is used, the objective purpose and nature of use are assessed by reference to context. That context includes the relevant trade[51], the way in which the words have been displayed, and how the words would present themselves to persons who read them and form a view about what they connote[52]. A well known example where the use was not “as a trade mark” was in Irving’s Yeast-Vite Ltd v Horsenail[53], where the phrase “Yeast tablets a substitute for ‘Yeast-Vite’” was held to be merely descriptive and not a use of “Yeast-Vite” as a trade mark. Therefore, it did not contravene the YEAST-VITE mark. [citations omitted]

At [25], their Honours affirmed the longstanding principle that the existence of a descriptive element or purpose was not determinative if there were several purposes for the use of the sign. So long as one purpose is to distinguish the trade source, that will be sufficient.

Further, their Honours acknowledged that the presence of ‘a clear dominant “brand”’ can be relevant to assessing the balance of the label or packaging, but that did not mean that another sign on the labelling was not also functioning as a trade mark.

For the last proposition, the High Court cited Allsop J’s decision in the Budweiser case at [191]. In that case, Anheuser-Busch, the owner of trade mark registrations for BUDWEISER successfully sued the Czech company for infringement by the latter’s use of BUDWEISER on labels such as:

At [191], Allsop J explained:

It is not to the point, with respect, to say that because another part of the label (the white section with ‘Bud?jovický Budvar’) is the obvious and important ‘brand’, that another part of the label cannot act to distinguish the goods. The ‘branding function’, if that expression is merely used as a synonym for the contents of ss 7 and 17 of the TM Act, can be carried out in different places on packaging, with different degrees of strength and subtlety. Of course, the existence on a label of a clear dominant ‘brand’ is of relevance to the assessment of what would be taken to be the effect of the balance of the label.

Turning to the PROTOX label, there cannot really be any dispute that PROTOX is used as a trade mark. The question then is whether it is deceptively similar to BOTOX.

The test for deceptive similarity

The High Court discussed the principles for determining whether a trade mark is deceptively similar to another at [26] – [51].

Noting that section 10 defines a deceptively similar mark to be one that so nearly resembles the registered trade mark that it is likely to deceive or cause confusion, at [26] the High Court stated the resemblance of the two marks must be the cause of the likely deception or confusion. And this involved an assessment of the two marks as a whole taking into account both their look and sound.

At [27], their Honours endorsed the much quoted explanation of the principles given by Dixon and McTiernan JJ in Australian Woollen Mills at 58 CLR 658:

“But, in the end, it becomes a question of fact for the court to decide whether in fact there is such a reasonable probability of deception or confusion that the use of the new mark and title should be restrained.

In deciding this question, the marks ought not, of course, to be compared side by side. An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought. The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same. The effect of spoken description must be considered. If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, then similarities both of sound and of meaning may play an important part.

At [28], their Honours emphasised the artificial nature of the inquiry. Stating at [29]:

…. The notional buyer is assumed to have seen the registered mark used in relation to the full range of goods to which the registration extends. The correct approach is to compare the impression (allowing for imperfect recollection) that the notional buyer would have of the registered mark (as notionally used on all of the goods covered by the registration), with the impression that the notional buyer would have of the alleged infringer’s mark (as actually used). …. (original emphasis) (citations omitted)[10]

Returning to this issue, at [33] their Honours emphasised that “the court is not looking to the totality of the conduct of the defendant in the same way as in a passing off suit”.[11] The High Court continued:

…. In addition to the degree of similarity between the marks, the assessment takes account of the effect of that similarity considered in relation to the alleged infringer’s actual use of the mark, as well as the circumstances of the goods, the character of the likely customers, and the market covered by the monopoly attached to the registered trade mark. (citations omitted)

Cases approved by the High Court in Self Care have acknowledged that questions of some subtlety can arise assessing the context of a use to determine if the sign is being used as a trade mark and assessing whether the infringing sign is deceptively similar.[12]

All of the cases endorsed by the High Court in these propositions, however, make the same point: the comparison is between the registered trade mark and the mark being used by the alleged infringer without regard to the totality of the conduct by the infringer such as the presence of other trade marks or disclaimers.

One example of the role of impression in this mark to mark comparison, expressly cited by the High Court at [29], is the Chifley Tower case.[13] There, MID Sydney’s registration of CHIFLEY TOWER for building management services was not infringed by Touraust’s proposed use of CHIFLEY for the names of the hotels it managed – such as “Chifley on the Wharf” or “The Chifley”.

One reason was that the services were not the same or of the same description.

Importantly for present purposes, the Full Court also found the marks were not deceptively similar because the public was familiar with many different uses of “Chifley” – apart from MID Sydney’s. This included the name of the Prime Minister, a restaurant and numerous geographical places. With that general background knowledge, therefore, the distinctive power of MID Sydney’s trade mark lay in the combined term, not in the common element CHIFLEY alone.

While this should not be surprising to trade mark lawyers, therefore, where it becomes interesting lies in what the High Court did when finding PROTOX did not infringe BOTOX.

Before turning to that issue, however, the High Court squarely addressed the role of reputation in infringement proceedings under section 120(1).

The role of reputation

Noting that the role of reputation has been contentious for a number of years, the High Court ruled at [50] that reputation is not relevant to infringement under section 120(1).

A number of considerations led the High Court to this conclusion. The first point at [37] was that it is registration which confers the rights in the trade mark on the owner and defines the scope of the registration. If considerations other than the registration could be taken into account “the level of protection afforded to that right would vary and be inherently uncertain.”

Another point was that the legislation specified various matters to be entered on the Register and available for public inspection. Reputation was not one of those matters and at [40] taking into account the reputation which had accrued to a trade mark would be contrary to the objective of the registered trade mark system:

which is to provide “a bright line that delineates the property rights” of a registered owner, for the benefit of the owner and the public, and runs the risk of collapsing the long standing distinction between infringement and passing off. (citations omitted)

Further, the Trade Marks Act expressly identified a role for reputation in four places:

section 60 providing a ground of opposition on the basis of the reputation in the opponent’s trade mark;
the provision for registration as a ‘defensive’ trade mark provided by section 185;
the extended form of infringement provided by section 120(3); and
the provision by section 24 for “genericide” when a trade mark has become known as the generic description of the goods or services.

Why PROTOX did not infringe BOTOX

At [63], the High Court summarised the trial judge’s finding that PROTOX was not deceptively similar to BOTOX. His Honour accepted that the two marks looked and sounded very similar but less so in idea or meaning. Further, the trial judge had held that the reputation of BOTOX was so strong that it was not likely to be recalled imperfectly. Even if there was imperfect recollection, no-one was likely to be deceived. His Honour was reinforced in this conclusion by the close proximity of PROTOX to FREEZEFRAME and the lack of evidence of actual confusion.

At [64], the High Court noted the Full Court held the trial judge had erred by failing to consider whether the use of PROTOX might cause people to wonder if there was some connection to the owner of the BOTOX mark. In finding deceptive similarity, however, the Full Court had made two errors.

First, it had relied on Allergan’s reputation in BOTOX for pharmaceutical preparations to conclude that the public might wonder whether PROTOX was some form of brand extension. Secondly, in doing so, their Honour’s had relied on the way Allergan actually used BOTOX rather than taking into account its notional use for anti-wrinkle creams in class 3.

Considering the effect of the use of PROTOX on potential customers of anti-wrinkle creams in class 3, the High Court accepted at [69] that “pro” and “bo” looked and sounded similar and the common element “otox” was both distinctive and identical. But consumers would not have confused PROTOX or BOTOX:

…. The words are sufficiently different that the notional buyer, allowing for an imperfect recollection of BOTOX, would not confuse the marks or the products they denote. The visual and aural similarities were just one part of the inquiry. (emphasis supplied)

Despite the surprise many trade mark practitioners have felt about the trial judge’s similar conclusion, up to this point the High Court’s reasoning can be seen as consistent with the extensive array of case law endorsed by the High Court which distinguishes trade mark infringement from passing off. After all, as the High Court emphasised from Australian Woollen Mills, the ultimate conclusion on about deceptive similarity is a question of fact.

However, the last sentence from [69] quoted above picks up what their Honours had said in [68]. In considering the visual and aural impact of PROTOX, it was permissible to have regard to both the packaging and the website from which PROTOX was promoted:

it was necessary to consider the marks visually and aurally and in the context of the relevant surrounding circumstances. Considering both the packaging and the website for Protox accords with assessing the “actual use” of the PROTOX mark as required by the test for deceptive similarity. ….

The High Court then explained at [70] that the packaging and the website together dispelled the risk of implied confusion:

…. The notional buyer sees the PROTOX mark used on a similar product – a serum which is advertised on its packaging and website to “prolong the look of Botox®”. While the reputation of BOTOX cannot be considered, the relevant context includes the circumstances of the actual use of PROTOX by Self Care. “[P]rolong the look of Botox®” may suggest that Protox is a complementary product. However, as was observed by the primary judge, “it will be the common experience of consumers that one trader’s product can be used to enhance another trader’s product without there being any suggestion of affiliation”[136]. In this case, the back of the packaging stated in small font that “Botox is a registered trademark of Allergan Inc” and, although the assumption is that Botox is an anti?wrinkle cream, the website stated that “PROTOX has no association with any anti-wrinkle injection brand”. (emphasis supplied)

It is very difficult, with respect, to see how these conclusions sit with the High Court’s earlier endorsement of the authorities that additional matter such as the presence of disclaimers does not avoid infringement.

Perhaps, given the copious citation of case law endorsing the “traditional” position that it is a mark to mark comparison only, the role of the packaging and the website will ultimately be characterised as reinforcing the finding of deceptive similarity rather than determining it. Indeed, at [71], their Honours concluded there was no real, tangible danger of deception or confusion:

…. As explained, the marks are sufficiently distinctive such that there is no real danger that the notional buyer would confuse the marks or products. The similarities between the marks, considered in the circumstances, are not such that the notional buyer nevertheless is likely to wonder whether the products come from the same trade source. That conclusion is reinforced by the fact that the PROTOX mark was “almost always used in proximity to the FREEZEFRAME mark” and that there was “no evidence of actual confusion”.

instant Botox® alternative

As noted at the outset, the High Court also found that Self Care’s use of “instant Botox® alternative” did not infringe Allegan’s trade mark. Nor was it misleading or deceptive conduct in contravention of the ACL. Given the length of this post, however, consideration of those issues will have to await another day.

Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8 (Kiefel CJ, Gageler, Gordon, Edelman and Gleeson JJ)

Edit: on 3 April to clarify that it is the ultimate conclusion about deceptive similarity that is the question of fact. Thanks, Craig Smith SC.

That is, Allergan has used BOTOX so extensively, its use by someone else in relation to class 3 goods such as anti-ageing creams will falsely indicate a connection with Allergan. Where the reputation in the trade mark is so extensive to achieve a defensive registration, it does not matter whether the trade mark owner actually uses the trade mark for the goods or services covered by the defensive registration. ?
At [19], the “overwhelming” and “ubiquitous reputation of BOTOX”. ?
For an extreme case where the services were so far removed from the goods associated with the reputation – Tabasco sauce – that deception or misrepresentation were so unlikely that there was no contravention of the ACL or passing off, see McIlhenny Co v Blue Yonder Holdings Pty Ltd formerly trading as Tabasco Design [1997] FCA 962; 39 IPR 187. ?
Compare Trade Marks Act 1995 (Cth) s 10 to the High Court’s approval in Campomar Sociedad, Limitada v Nike International Limited
[2000] HCA 12 at [106] quoting Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 201 (Deane and Fitzgerald JJ). ?
Saville Perfumery Ld. v. June Perfect Ld. (1941) 58 RPC 147. ?
As Lord Tomlin explained at 176, “It seems to me, and the form of the second injunction supports the view, that these Appellants may be able by proper precautions to sell the three articles in connection with their name of June Perfect Ld., while clearly distinguishing those goods from the Respondents’ goods. If that can be done there is no probability that the ultimate purchaser will be deceived.”. See also e.g. Puma Se v Caterpillar Inc [2022] FCAFC 153; 168 IPR 404 (Nicholas, Rofe and McElwaine JJ) at [43] (Nicholas, Rofe and McElwaine JJ); In-N-Out Burgers, Inc v Hashtag Burgers Pty Ltd [2020] FCA 193; 377 ALR 116; 150 IPR 73 at [80] and [160] (Katzmann J) (affirmed on appeal) and many others. ?
Goodman Fielder Pte Ltd v Conga Foods Pty Ltd [2020] FCA 1808; 158 IPR 9 at [364] citing Optical 88 Limited v Optical 88 Pty Limited (No 2) [2010] FCA 1380 at [99]. ?
If you know of a court case where s 120(3) has been successfully asserted, please let me know. ?
Curiously, s 120 does not in terms require the trade mark owner to prove that alleged infringer did not have the owner’s consent to use the trade mark. An alleged infringer who claims to be licensed or set up consent must do so by way of [section 123][s123] in the case of services or, in the case of goods, the wonders of [section 122A][s122a]. (I tried to untangle the latter provision in Warwick A Rothnie, ‘Unparalleled importing and trademarks in Australia,’ (2020) 21(3) Business Law International 229.) ?
The High Court cited Shell (1961) 109 CLR 407 at 415; Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 49 FCR 89 at 128; MID Sydney v Australian Tourism Co (1998) 90 FCR 236 at 245 and Swancom (2022) 168 IPR 42 at [70]. ?
Citing numerous authorities: New South Wales Dairy Corporation v Murray-Goulburn Co?operative Co Ltd (1989) 86 ALR 549 at 589 (emphasis added), approved in Henschke (2000) 52 IPR 42 at 62 [44], Hashtag Burgers (2020) 385 ALR 514 at 532 [64], Combe International Ltd v Dr August Wolff GmbH & Co KG Arzneimittel (2021) 157 IPR 230 at 238 [27], PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd (2021) 285 FCR 598 at 622 [97] (see also 626 [111]) and Swancom (2022) 168 IPR 42 at 56 [73]. See also Self Care at [40] where the High Court acknowledged “the risk of collapsing the long standing distinction between infringement and passing off[101].” ?
See e.g. Optical 88 at [95] and Budweiser at [226]. Generally, one might have thought the emphasis in actual use in an infringement context lay in contrast to the situation at the examination and opposition stages where it is necessary to consider all fair and reasonable notional use that may be made by the applicant within the scope of the applied for registration. ?
MID Sydney v Australian Tourism Co (1998) 90 FCR 236. ?

Overview

Some background

Legal tests

Anshun estoppel

Abuse of process

Why O’Bryan J dismissed Orikan’s application

An observation

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Overview

Secion 59

What happened

What O’Callaghan J found

Some observations

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Some background

MOTHERLAND

MOTHERSKY

Other circumstances

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Some facts

The Self Care v Allergan “problem”

Why The North Agency did not infringe

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Incremental improvements

Virtual designs

Partial designs

Submissions

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The work(s)

How Midjourney generated the images

This was not authorship for copyright purposes

An Australian perspective

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A recap

Why “instant Botox® alternative” did not infringe

Some aspects of the High Court’s reasons

The ACL case

Recap of the ACL principles

The misrepresentation was not made

The errors made by the Full Court

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Some facts

Some differences between trade mark infringement and passing off / ACL

Self Care and some principles

Use as a trade mark

The test for deceptive similarity

The role of reputation

Why PROTOX did not infringe BOTOX

instant Botox® alternative

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