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Federal Court of Australia |
Last Updated: 31 October 2000
C A Henschke & Co v Rosemount Estates Pty Ltd [2000] FCA 1539
INTELLECTUAL PROPERTY - trade mark - appeal from a decision of a primary judge - whether the primary judge erred in finding that the respondent's proposed conduct in selling Hill of Gold wine did not constitute an infringement under s 120(1) of the Trade Marks Act 1995 (Cth) of the appellants' registered mark, Hill of Grace - whether the primary judge erred in holding that the reputation of a trade mark (or the goods to which it is affixed) is not to be taken into account in deciding whether it has been infringed under s 120(1) - whether the primary judge otherwise erred in finding that the respondent's Hill of Gold sign was not deceptively similar to the appellants' Hill of Grace mark - primary judge dismissed the appellants' claim under s 92 for removal of the Hill of Gold mark from the Register on the ground of non-use - whether the primary judge erred in finding, consequent upon his earlier conclusions, that the appellants were not "persons aggrieved" for the purposes of s 92(1) and therefore lacked standing to make such a claim - primary judge dismissed the respondent's claim under s 92 for removal of the Hill of Grace mark from the Register on the ground of non-use - whether the primary judge erred in finding that the persons using the mark were "authorised users" of the mark within the meaning of s 8 - whether the primary judge had, in any event, exercised his discretion under s 101(3) not to order the removal of the mark from the Register even though the grounds for its removal had been established and, if so, whether he erred in so doing
TRADE PRACTICES - whether the primary judge erred in finding that the respondent's proposed conduct in selling Hill of Gold wine was not, for the purposes of s 52 or s 53(a), (c) or (d) of the Trade Practices Act 1974 (Cth), likely to cause consumers to mistake the respondent's wine for the appellants' wine or to mislead consumers into believing that there was some other relevant association between them
EVIDENCE - expert opinion evidence of wine writers and critics, retailers, restaurateurs and academics adduced at trial by both parties as to (i) the extent to which members of the relevant section of the wine-consuming public were aware of the appellants' Hill of Grace wine and how they regarded it and (ii) the likelihood that the sale by the respondent of wine under the Hill of Gold sign would confuse, mislead or deceive the relevant group of consumers - whether the primary judge erred in ruling that much of the evidence given by the non-academic witnesses, and the evidence given by the academic witnesses as to (i), was either inadmissible or to be accorded little weight - whether the primary judge erred in his assessment of the evidence of the academic witnesses as to (ii)
PRACTICE AND PROCEDURE - appellants had, by their counsel, expressly declined to argue at trial that the reputation of a trade mark (or the goods to which it is affixed) may be taken into account in determining whether it has been infringed - whether the appellants should be permitted to argue on appeal that the primary judge erred in failing to take the reputation of the Hill of Grace mark into account in the trade mark infringement case, in circumstances in which senior counsel for the respondent conceded that he would not have called different or additional evidence if the point had been taken at trial and acknowledged that he was in a position to deal with it on appeal, and a Full Court decision on which the appellants sought to rely had been given since the judgment of the primary judge
PRACTICE AND PROCEDURE - whether the primary judge erred in declining to order that the appellants' pay, on the indemnity basis, the respondent's costs of obtaining and preparing expert opinion evidence in response to similar evidence, filed on behalf of the appellants, read at trial and ultimately found by the primary judge to be inadmissible or of little weight, in circumstances where the respondent had, prior to the trial, communicated its concerns about the evidence to the appellants, sought an early ruling as to its admissibility and foreshadowed an application for payment of its costs on the indemnity basis
Trade Marks Act 1995 (Cth), ss 7, 8, 10, 92, 101(3), 120(1)
Trade Practices Act 1974 (Cth), ss 52, 53(a), 53(c), 53(d)
House v R [1936] HCA 40; (1936) 55 CLR 499, referred to
Australian Woollen Mills Ltd v F S Walton & Co Ltd [1937] HCA 51; (1937) 58 CLR 641, referred to
Saville Perfumery Ltd v June Perfect Ltd (1941) 58 RPC 147, referred to
Aristoc Ltd v Rysta Ltd [1945] AC 68, referred to
de Cordova v Vick Chemical Co (1951) 68 RPC 103, considered
The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd [1961] HCA 75; (1961) 109 CLR 407, referred to
Pioneer Kabushiki Kaisha v Registrar of Trade Marks [1977] HCA 56; (1977) 137 CLR 670, referred to
Colgate-Palmolive Ltd v Pattron (1978) RPC 635, considered
New South Wales Dairy Corporation v Murray Goulburn Co-operative Company Ltd (1989) 86 ALR 549, followed
Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227, referred to
Jones v Minister for Immigration and Ethnic Affairs (1995) 63 FCR 32, referred to
Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631, referred to
Quick v Stoland (1998) 87 FCR 371, referred to
MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236, referred to
Coca-Cola Company v All-Fect Distributors Ltd [1999] FCA 1721; (1999) 96 FCR 107, distinguished
Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020; (1999) 45 IPR 411, distinguished
Abbott v Random House Australia Pty Ltd [1999] FCA 1540, followed
S Odgers, Uniform Evidence Law, 4th ed 2000
D R Shanahan, Australian Law of Trade Marks and Passing Off, 2nd ed 1990
T A Blanco White and R Jacob, Kerly's Law of Trade Marks and Trade Names, 12th ed 1986
C A HENSCHKE & CO and DORIS ELVIRA HENSCHKE and CHRISTINE ANN STEVENS (as executors in the estate of the late Cyril Alfred Henschke) v ROSEMOUNT ESTATES PTY LTD
S 3 OF 2000
RYAN, BRANSON AND LEHANE JJ
31 OCTOBER 2000
SYDNEY (HEARD IN ADELAIDE)
IN THE FEDERAL COURT OF AUSTRALIA |
|
NEW SOUTH WALES DISTRICT REGISTRY |
S 3 OF 2000 |
1. The appeal be dismissed.
2. The appellants pay the respondent's costs of the appeal.
3. The cross-appeal be dismissed.
4. The cross-appellant pay the cross-respondents' costs of the cross-appeal.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA |
|
NEW SOUTH WALES DISTRICT REGISTRY |
JUDGES: |
RYAN, BRANSON AND LEHANE JJ |
DATE: |
31 OCTOBER 2000 |
PLACE: |
SYDNEY (HEARD IN ADELAIDE) |
1 The first appellant is a partnership which since 1958 has made and sold wine under the name "Hill of Grace". The wine is made exclusively from shiraz grapes from a small vineyard at Keyneton, South Australia, also bearing the name "Hill of Grace". "Hill of Grace" is a translation of the German "Gnadenberg", the name of a Lutheran Church near the vineyard. The second appellants are the executors of the estate of Cyril Alfred Henschke. They are the registered owners of Australian trade mark no 244411 comprising the words "Hill of Grace"; it is registered under the Trade Marks Act 1995 (Cth) in class 33 in respect of wines, spirits and liqueurs. Mr Henschke, at the time of his death, was the registered owner of that trade mark.
2 The respondent, Rosemount, also makes and sells wine. Rosemount has, since its foundation in 1969, become a large and successful wine producer. It has vineyards in a number of wine growing areas. One of those areas is the district surrounding Mudgee in New South Wales. Rosemount acquired a property there known as the Mountain Blue block in 1995. Shortly afterwards, Rosemount acquired a vineyard and winery already known as Hill of Gold. It had been so named by an earlier owner, Peter Edwards. Mr Edwards made wine there under the name Hill of Gold. In 1979 he registered a trade mark (no 333055). That mark included the name Hill of Gold and a design. In 1996 Rosemount acquired the mark from Mr Edwards. Rosemount now makes and sells wine (Chardonnay, Shiraz and Cabernet Sauvignon) under the name Hill of Gold.
3 In proceedings in the Court, the appellants claimed that Rosemount (which at that stage had not commenced to sell Hill of Gold wine) threatened to infringe the Hill of Grace trade mark and to engage in conduct which would both contravene s 52 and s 53 of the Trade Practices Act 1974 (Cth) and amount to passing off. The appellants also sought an order for the removal of the Hill of Gold trade mark from the register on the ground of non-use. Rosemount, by cross-claim, sought an order for removal of the Hill of Grace trade mark on the same ground. By orders made on 21 December 1999, a judge of the Court dismissed, in each case with costs, both the application and the cross-claim. The appellants appeal from the order dismissing the application and seek, in substitution, declarations that Rosemount's proposed use of the mark "Hill of Gold" will constitute conduct contravening s 52 and s 53 of the Trade Practices Act and an infringement of the Hill of Grace mark; an injunction; and an order for the removal of the Hill of Gold mark from the register. Rosemount, by cross-appeal, appeals from the order dismissing its cross-claim and seeks, instead, an order for the removal from the register of the Hill of Grace trade mark. Rosemount also seeks (as it sought unsuccessfully from the primary judge) an order that the appellants pay, on an indemnity basis, the costs incurred by Rosemount in relation to its preparation of evidence responding to certain expert evidence tendered by the appellants which, ultimately, the primary judge rejected or accorded little weight.
ADDITIONAL FACTUAL BACKGROUND
(a) A "crowded" market; "topographical" names
4 The evidence before the primary judge established that there were over 1000 wine producers in Australia who sold wine under more than 16,000 brands. The use of words describing topographical features, as part of a brand name, was common. There were many "Hills": for example, Ashton Hills, Chalk Hill, Montgomery's Hill, Penfolds Koonunga Hill, Red Hill Estate and Vasse Felix Forest Hill Riesling. There were also many "mountains" or "mounts": for instance, Bald Mountain, Henschke's Mount Edelstone, McWilliams Mount Pleasant, Mount Avoca Vineyard and Plantaganet Mount Barker. Similarly, there were several "Ridges". Among all those names, "Hill of ..." was a rarity. Apart from Hill of Grace and Hill of Gold there were only four such names: Hill of Grapes, Hill of Hope, Hill of Roses and Hill of Content. Of those, all except Hill of Hope were marks registered by the Henschke family (a term which, like "the Henschkes", we use to describe the widow and descendants of Cyril Henschke), the registration of which had inadvertently been allowed to lapse. Another company applied in 1997 to register the name "Hill of Content"; the Henschkes have lodged a notice of opposition to that application. The Henschkes also own the Hill of Hope mark: they acquired that mark from Mr Michael Hope who, for a short period after 1996, made wine from grapes grown in a vineyard which he called Hill of Hope in the Hunter Valley and sold it under the name "Hill of Hope". The evidence apparently did not disclose that any wine had ever actually been made or sold under a "Hill of ..." name other than Hill of Grace, Hill of Gold and Hill of Hope.
(b) Circumstances surrounding Rosemount's introduction of Hill of Gold wine
5 Mr Stephen Henschke, a son of Cyril Henschke, was at relevant times the managing partner of the partnership and the Hill of Grace winemaker. Mr Robert Oatley founded Rosemount and was its chairman; his son, Mr Ian Oatley, was a director of Rosemount; Mr Chris Hancock was Rosemount's managing director and Mr Keith Lambert its chief executive officer. In July 1997 Mr Stephen Henschke discovered that Rosemount had acquired the Hill of Gold mark. He was concerned about the effect on the Hill of Grace brand of the marketing by Rosemount, a very substantial competitor, of wine under the name "Hill of Gold". Mr Henschke made his concerns known to Mr Ian Oatley, who on 4 August 1997 wrote the following memorandum to Mr Lambert, copies of which went also to Mr Robert Oatley and Mr Hancock:
"Stephen Henschke telephoned to discuss our intention concerning the vineyard and registered trade mark HILL OF GOLD. He is seeking to protect his very valuable asset "Hill of Grace" from similarly described wines.He indicated that he had a "verbal" agreement with Mr Peter Edwards that [the] Hill of Gold [mark] would not be passed on to anyone but himself and that that agreement preceded Peter Edwards' ownership.
There is a legal skirmish between a Hunter producer who is seeking registration of HILL OF HOPE, and it would seem our position may well impact upon the outcome.
If we decide to protect our position, it may encourage other detractors, however if we submit to Henschke it would be consistent with protecting the values inherent with trade mark regulations.
Recommendation One
Treat Henschke as a competitor and pursue our own brand development. This would produce a valuable product line.
Recommendation Two
Treat Henschke with the respect he probably deserves and allow Hill of Grace its iconic status to be unchallenged [sic]. This would stand us in good stead within the industry and its many commentators."
Mr Hancock responded:
"(1) Hill of Gold is a long standing Brand name. If Henschke had pre-emptive rights to the name why then did he not act on them.(2) Hill of Grace is a Red wine from the Barossa/Eden region. Hill of Gold is a white wine from Mudgee. The [sic] is no intent of `passing off'.
(3) Hill of Hope has more problems than Hill of Gold because of similarity of meaning to Grace (?religious context) - even though I understand that the owners [sic] name is Hope.
(4) Hill of Gold is too good a name to give up on the back of Henschke's protest - although I understand his position. We probably need to clearly explain the genesis of the name (releases/labels etc).
(5) With respect to attitude of commentators etc - the bona fides of the brand plus the quality of the product will clarify that issue.
(6) Unless there is a serious threat of recrimination by the trade and/or critics I would be inclined to hold our ground - we have a defensible position. You may want to consider giving Henschke some assurances eg dissimilar packaging, No Red wine as Hill of Gold.
Unfortunately with the proliferation of wine brands and names this problem is ongoing and examples abound eg Diamond device and the word `Diamond', Cloudy Bay and Cloud Valley, The Range and Grange.
On balance I am inclined to support progressing Hill of Gold at the same time giving some recognition to Henschke's sensitivities ie keeping our distance from anything that could be misconstrued as running off the reputation of Hill of Grace."
6 In late 1997 Rosemount decided to produce wine under the Hill of Gold name. Mr Lambert considered that there was a need for a new product under a new brand. Mr Robert Oatley suggested a new line of wines from Mudgee using the name Hill of Gold. His evidence was that he did not see this as trading off the Hill of Grace name: Rosemount, when it acquired a new vineyard, frequently named wine sourced from it by reference to the name of the vineyard or some feature of the area; Hill of Gold was already the name of a vineyard and winery which Rosemount had acquired in the Mudgee area and Mudgee had been a significant goldmining area. In due course labels were selected for the Hill of Gold wines. The bottle, with the labels attached, looked like this:
Click here for Picture
The body of the label was white for the Chardonnay, red for the Shiraz and black for the Cabernet Sauvignon. In each case the arc at the top and bottom of the label was gold.
7 Two other aspects of the label may be noted. First, the Hill of Gold trade mark was not reproduced. The mark comprises the words "Hill of Gold" and a design, as follows:
Click here for Picture
Secondly, the label included (as Rosemount's witnesses accepted, a secondary brand) the word "Rosemount". There was some discussion within Rosemount about whether that name should be included. Both including and not including it were seen to have advantages and corresponding disadvantages. For example, if the wine were identified as "Rosemount", there was a view that, for it to find a place on the shelves of wine merchants, some other Rosemount wine might have to make way for it. In the event, the decision was made to include "Rosemount". Witnesses called by Rosemount accepted that the name "Rosemount" might be omitted from the "Hill of Gold" labels at some indeterminate time in the future.
8 The projected price range of Hill of Gold wine was between $20.00 and $25.00. There was reason to think that the price might increase reasonably rapidly and substantially. The primary judge accepted evidence that wine retailing for more than $20.00 was regarded as premium wine and that wines retailing at more than $35.00 were regarded as "super premium". Hill of Gold wine might be expected to be readily available through wine retailers. It would be released in relatively large volume.
(c) Reputation; Hill of Grace as "icon"; its place in the market
9 It will be recalled that Mr Ian Oatley, in the memorandum we have quoted, referred to the "iconic status" of Hill of Grace. There is much controversy about several aspects of reputation and its relevance. What at least is uncontroversial, however, is that Hill of Grace, a shiraz wine made in low volume from grapes of old vines in a single, relatively small vineyard, is a wine of exceptional quality. The primary judge's findings included the following:
"In the last decade the market price of the wine has increased dramatically. The recommended price of the latest release (the 1994 vintage) was in the $170 range. The demand for this wine is such that it is in effect pre-sold through a process of allocations made to particular wine merchants, restaurants, etc and in small quantities. Such now is the value attributed to the wine that in common with, for example, Penfolds Grange, a secondary market has developed for it in which it is treated as a commodity to be bought and sold rather than as a wine to be consumed."
10 In those circumstances, very few consumers would have seen, let alone tasted, the wine. It is highly unlikely that a consumer would ever see it on a retailer's shelves. Nor, of course, would many consumers be familiar with the Hill of Grace label. In the early days, it was white with black markings. The current form of label is black with white, or silver, markings. The following is a reproduction of it:
11 Nevertheless, evidence was tendered by the appellants which was claimed to establish that Hill of Grace, and its exceptional quality, were widely known. Thus, evidence was given of the results of searches for newspaper references to "Hill of Grace" or "Henschke Hill of Grace". The searches covered The Advertiser (SA) from 1986, The Sunday Mail (SA) from 1988, The Messenger (SA) from 1988, The News (SA) between 1989 and 1992, The Herald Sun (Vic) from 1995, The Sunday Herald Sun (Vic) from 1995, The Australian from 1995 and The Weekend Australian from 1995. In total there were 129 references in the South Australian newspapers, sixty-nine to Henschke Hill of Grace and sixty to Hill of Grace, of which twenty-five made no reference to Henschke; there were twenty-two in Victorian newspapers, sixteen referring to Henschke Hill of Grace and six to Hill of Grace, of which three made no reference to Henschke; and there were thirty references in The Australian and The Weekend Australian, of which sixteen referred to Henschke Hill of Grace and fourteen to Hill of Grace, of which five made no reference to Henschke.
12 Secondly, a good deal of opinion evidence was read and tendered before the primary judge by the appellants (and in response by Rosemount) on the reputation of Hill of Grace. The evidence was said to demonstrate the extent to which the wine consuming public, or sections of it, were aware of Hill of Grace and how they regarded it. It was said to be relevant also to the question whether the Hill of Gold mark or name was deceptive or confusing and to the question whether the conduct of Rosemount, in relation to the then threatened release of its Hill of Gold wine, was likely to mislead or deceive. The evidence was given on the basis that the primary judge would, in his reasons for judgment, rule on its admissibility and weight. The witnesses fell into two broad categories. One comprised wine writers and critics, wine merchants and restaurateurs. They spoke of the reputation and standing of Hill of Grace and of the extent to which, in their opinion, the use by Rosemount of the Hill of Gold mark and name would deceive, mislead or cause confusion. The witnesses in the other category were Dr Lawrence S Lockshin, Associate Professor of Wine Marketing and Director, Wine Marketing Research Centre, School of Marketing in the University of South Australia (who was called by the appellants) and Dr Robert Maclean Hall, a psychologist, a director of a market research company called Environmetrics Pty Ltd and a visiting fellow in the Schools of Psychology and Marketing at the University of New South Wales, called by Rosemount. Professor Lockshin had, but Dr Hall had not, particular expertise in relation to the marketing of wine. Both gave evidence as to the processes involved in decision-making by consumers and their reaction to brands and labelling. Each expressed an opinion as to the likelihood that consumers, or a group of them, would think that there might be an association between Hill of Grace and Hill of Gold - particularly, that the maker of one might also be the maker of the other.
13 Because of the critical part played, in argument before us, by the expert or opinion evidence, the primary judge's rulings on it and his Honour's findings on matters relating to reputation and to the likelihood that consumers would be deceived, misled or confused, it is convenient to deal with those matters before turning to the specific arguments concerning the appellants' claims of trade mark infringement and contravention of the Trade Practices Act.
TREATMENT OF EVIDENCE AS TO REPUTATION AND LIKELIHOOD OF CONFUSION ETC
(a) The non-academic witnesses
14 We have mentioned that the appellants read, at trial, affidavits of writers and commentators about wine, restaurateurs and retailers. We have mentioned also that Rosemount's objections to all that evidence were reserved to be dealt with by the primary judge in his reasons for judgment. The objections included lack of proved expertise to found opinions expressed; that reputation was irrelevant to the question of trade mark infringement; that evidence as to likelihood of deception or confusion was in any event inadmissible; and that the character of the evidence in any event required its exclusion under s 135 of the Evidence Act 1995 (Cth). Rosemount, nevertheless, took the precaution of reading a number of affidavits in response to those read by the appellants. There was an arrangement between the parties that only one of these witnesses, on each side, would be cross-examined, neither party taking any point based on Browne v Dunn (1893) 6 R 67. The existence of that arrangement reduces the force of the submissions on behalf of the appellants before us to the effect that weight should be given to certain of the opinions expressed because the witnesses had not been cross-examined.
15 The witnesses for the appellants were Mr James Halliday, Group Winemaker - Regional Wineries of Southcorp Wines and a well known wine writer, judge and consultant; Mr Giuseppe Polese, whose family owns and manages Beppis Restaurant and Mezzaluna Restaurant, both in Sydney; Mr Max Allen, a wine writer, judge and consultant; Mr Walter Bourke, the director of Walter's Wine Bar, Southgate and Walter's Wine Bar, Brisbane, who has extensive experience as a chef, restaurateur and wine collector; Mr Peter Forrestal, another well known wine writer and judge; and Mr David Matters, who has long experience as a retailer of wine and, at the time of the trial, owned and ran Best Cellars in Sydney. Mr Forrestal was cross-examined, and the primary judge derived, as will appear, some assistance from his evidence. All of the witnesses had extensive experience in the wine industry and several of them, at least, substantial experience in dealing with retail purchasers and consumers of wine. Each gave evidence that Hill of Grace has a wide reputation as a wine of consistently outstanding quality. The following evidence of Mr Allen is reasonably typical:
"... I consider that Hill of Grace wine is unarguably the most revered Australian Shiraz after Penfold's Grange. The wine has been particularly highly regarded in the last 10 years or so, with the 1986 and 1990 vintages being some of the best red wine to ever to [sic] come out of Australia. The name Hill of Grace is so well known that most wine consumers will have heard of Hill of Grace wine and know it to be a wine of exceptional quality even if they have never actually tasted or seen the wine. It could be said that Hill of Grace's reputation precedes it."
Each witness also expressed the opinion that wine consumers would be misled or confused by Rosemount's use of the Hill of Gold name into believing that, at least, there was some association between Hill of Grace and Hill of Gold; some expressed the opinion that such consumers might be misled or confused particularly by wine lists which included Hill of Gold or, more especially, both Hill of Grace and Hill of Gold.
16 Much of the evidence was expressed in general and conclusory terms. The primary judge described that of Mr Halliday and Mr Polese as "unilluminatingly cryptic": that description was challenged by senior counsel for the appellants but it was, in our view, plainly justified. In part, senior counsel's submission may fairly be paraphrased as: "The witness's experience and reputation are such that he is himself an icon and therefore his expression of opinion, however little he justifies or explains it, must be given substantial weight". That submission must be rejected.
17 The primary judge dealt with the evidence in the following way:
* He was prepared to accept that the witnesses were able to give expert opinions on aspects of Hill of Grace's reputation, especially as to quality; despite doubts in relation to all but one of the witnesses (Mr Forrestal), he was not prepared to reject the evidence so far as it expressed opinions as to the reputation of the wine among the relevant segment of the wine consuming public; thus, he admitted the evidence on reputation (in relation to the Trade Practices Act claims) but, except where he indicated otherwise, he attributed "little if any weight to it". He commented that the general character of the evidence itself invited that course.
* His Honour held that, to the extent that the witnesses expressed opinions about the possibility of mistake or confusion arising from the use of the names, their evidence would not, apart from the Evidence Act, be admissible: the wine market being one in which the general public participates, it was not a "special market" as that term was used by Lord Diplock in Re GE Trade Mark [1973] RPC 297 at 321, 322 and adopted by Gummow J (with whom Black CJ and Lockhart J agreed) in Interlego AG v Croner Trading Pty Ltd (1992) 25 IPR 65 at 105, 106. He was prepared to assume in the appellants' favour that, given the abolition by s 80 of the Evidence Act of the "ultimate issue" rule, an appropriately qualified expert might now give evidence about the possibility that consumers would be misled or confused. However, with the exception of Mr Forrestal, and in the light of the evidence of the academic witnesses as to matters affecting consumer behaviour, his Honour did not accept that the witnesses had the appropriate specialised knowledge to express opinions about the likelihood of mistake or confusion. His Honour concluded:
"Accordingly, Mr Forrestal apart, I do not admit their evidence insofar as it relates to the issue of mistake, deception etc. caused by the Hill of Gold name. Even if admissible, and I here include Mr Forrestal, I have grave doubts that any weight could or can be attributed to this body of evidence. The opinions represent little more - if that - than a general statement of practical experience and then a conclusion by way of assertion on the issue in this case".* His Honour provided a summary of his rulings before proceeding to make similar rulings in relation to evidence adduced by Rosemount:
"Having ruled the applicants' expert evidence (a) on reputation admissible but to be accorded little weight unless otherwise indicated in a particular instance; and (b) on the issue of mistake, etc, inadmissible or else of little weight, I make like rulings for like reasons in relation to the same type of expert evidence adduced in response by the respondent."
(His Honour proceeded to make one exception to that general rule.) In the light of what precedes that passage, his Honour is clearly, in our view, to be taken, on the issue of mistake or confusion, to be saying that the evidence of all witnesses, apart from Mr Forrestal, was rejected as inadmissible on the issue of mistake; but that, if his Honour were wrong in that, and in any event in the case of the evidence of Mr Forrestal, the evidence should be accorded little weight.
18 His Honour's approach and rulings were criticised by counsel for the appellants, who referred us, in both written and oral submissions, to a large number of passages in the evidence. An examination of a large part of the evidence both written and oral, including all the passages to which we were referred, leaves no doubt that his Honour's description of it was both fair and accurate. Nor would we interfere with his rulings. Particularly, given the academic evidence to which we shall come, we see no reason to doubt the correctness of the primary judge's conclusion that none of the witnesses - Mr Forrestal perhaps excepted - was proved to have appropriate expertise to express an opinion on the question whether consumers might be misled or confused by the use of the Hill of Gold name. Nor, on any view, was there any error in giving little weight to the evidence. The very general and largely conclusory character of the evidence provided a sound basis for that approach. There were particular indications, also, to which his Honour referred in relation to certain of the evidence: for example, assertions that consumers would be misled by restaurant wine lists which disclose only the names, but not the makers, of wines listed, in circumstances where the appellants tendered no wine lists and those tendered by Rosemount in each case described Hill of Grace as "Henschke's Hill of Grace".
(b) "Involved" and "uninvolved" consumers
19 We have mentioned that the primary judge made one exception to the rulings made in relation to the evidence adduced by Rosemount. The exception - which it is appropriate to mention before turning to the academic evidence - related to Mr Craig Watkins, the managing director of Liquorland Pty Ltd. His evidence was that the vast majority of wines in Australia sell for below $15.00 a bottle. Eighty-seven per cent of sales of the Liquorland group, including its more "upmarket" Vintage Cellars, were for less than $15.00 a bottle. The next step is Professor Lockshin's distinction between "uninvolved" and "involved" wine consumers:
From my studies of consumers of wine, I believe that there are broadly two categories of wine consumers. There are those who are `involved' in wine, by which I mean those who take a real interest in, and have some knowledge of, the wine that they are purchasing, and those who are not so involved. From my research I believe that these involved wine consumers form a minority of wine consumers, not only in Australia but also in the United Kingdom and the United States and elsewhere, although this group often buys and consumes much more wine per person than the other group.In my experience, the involved consumer typically will read the label and the fine print, will enquire of the retailer, or read commentaries as to qualities or characteristics of the wine and will generally have reasonably detailed knowledge about the wine they [sic] are purchasing. In a restaurant, such a consumer will draw upon their [sic] knowledge and experience or have an informed discussion with the wine waiter.
The uninvolved consumer, by contrast, is one who has less sophisticated wine selection criteria. These consumers form a substantial majority of wine consumers. Typically he or she will be guided primarily by price. In my experience, these consumers will also respond to certain `triggers' or `cues'. ..."
The primary judge recorded that, in cross-examination, Professor Lockshin added that the price level at which the uninvolved consumer tended to buy was, roughly, in the $10.00 -$12.00 range for everyday use but then moving up one or two ranges for special occasion purchases.
20 It was common ground that, if any segment of the wine-consuming public was likely to be deceived, misled or confused by Rosemount's use of the Hill of Gold name, it was the "uninvolved" segment: "involved" consumers would know Hill of Grace, would know by whom it was made, would know Rosemount and would be unlikely to suppose that there was any association between the Hill of Grace which they knew (at least by reputation) and Rosemount's Hill of Gold. Controversy centred on the likely reaction of uninvolved consumers.
(c) The academic witnesses
21 His Honour's treatment of the evidence of Professor Lockshin and Dr Hall was criticised by counsel for the appellants. For reasons which will appear, we do not consider the criticism to be well founded. His Honour summarised the evidence of each of the academic experts in some detail. On a review of their evidence, both written and oral, we find no unfairness or material incompleteness in the summary; nor, beyond a very brief account of the evidence, is there any need to repeat it.
22 Professor Lockshin expressed the opinion that the process of selection, by an uninvolved consumer, was unsophisticated and not a process that the consumer could necessarily articulate. An important factor was price; another was the occasion for which wine was being purchased; others were a number of "cues" or "triggers" (already referred to), the most important of which were, first, brand and then style (that is, colour or variety). "Safety" was also important: that is, a consumer would wish to have some assurance of quality; and although the consumer would expect a lower priced wine to be of lesser quality than a higher priced one, the consumer nevertheless would look for connections or associations between a lower priced wine and a more expensive one of reputed quality. The concern for "safety" arose particularly because of the proliferation of brands which left the uninvolved consumer "overawed by choice". Though very expensive and produced in very small volume, Hill of Grace was recognised by uninvolved as well as involved consumers as an "icon". It had received wide publicity both in the specialist wine press and in the general media. For that reason, and from his "research", Professor Lockshin believed that "most wine consumers know its name and know of its reputation as an exceptionally fine wine". Wine consumers knew that wine producers marketed ranges of wines of various qualities: this could be done by the use of "themes either of names or get-up". The use of "Hill of ..." was almost unique to Hill of Grace. An uninvolved consumer would see a "positive association" between Hill of Gold and Hill of Grace; that would cause many consumers to purchase Hill of Gold as a safe choice.
23 Dr Hall readily conceded that he had no particular expertise in relation to the marketing of wine. He had, however, substantial experience more generally in psychology and marketing and in relation to consumer behaviour in making choices between competing products. His evidence was that the process involved in choice-making by consumers was more complex than Professor Lockshin would have it and that one could not confidently say, without empirical evidence, that a particular cue (such as "Hill of ...") would have a dominant or particularly significant influence. No relevant empirical evidence being offered, Dr Hall's opinion was that it could not be concluded that uninvolved consumers would react to Rosemount's use of the name "Hill of Gold" in the way suggested by Professor Lockshin.
24 In an affidavit in reply, Professor Lockshin gave evidence of the time and expense likely to be involved in empirical testing. He expressed the confident opinion that "[any] empirical testing of consumers in relation to potential confusion as to any relationship between the Hill of Grace mark and the Hill of Gold mark or the wines to which they are applied would merely confirm the opinion that I have expressed in my earlier affidavit". He gave some further evidence about studies in relation to the relative importance or "hierarchy" of various cues. He agreed with Dr Hall that consumer decision making is a very complex "black-box". His experience led him, however, to the conclusion that uninvolved consumers did not read labels in detail or cognitively process words or features: "[for] instance, a non involved consumer will not read exactly `Hill of Gold' or `Hill of Grace'. They will just take in the whole concept and, at that point, might be mislead [sic] into attributing the wine to Henschke instead of Rosemount". Professor Lockshin also referred to a survey conducted by Gregory John Hutton, an analyst employed by PricewaterhouseCoopers, at two wine shops in South Australia. Mr Hutton described his survey and its results as follows:
"2. I was instructed by Finlaysons to conduct a survey of customers at two wine shops asking the following questions:(a) `What do you think of Hill of Content wine? Do you know anything about the wine's quality?'
(b) `Where do you think it comes from and who would make it?'
3. I might add that I understand that the second question was supposed simply to be, `Do you know anything about the wine?', but in the event I asked the questions as formulated in paragraph 2 above.'
...
6. In response to the question `Where do you think it comes from and who would make it?':
(a) 71 respondents could not offer a suggestion as to where the wine came from or who made it;
(b) 8 respondents suggested that Hill of Content came from one of the following regions: Clare, Barossa, Coonawarra or Southern Vales; and
(c) 4 respondents said:
`I've heard of Hill of Grace'.
(d) The remaining 10 respondents made the following comments:
`Is it the same people that make Hill of Grace?'
`Is it connected with Hill of Grace?'
`What about Hill of Grace? Sorry don't know.'
`I've heard of Hill of Grace. Henschke's. Am I right?'
`It's not made by the same people as Hill of Grace is it?'
`Is it the Hill of Grace. Henschke's?'
`Is it associated with Hill of Grace? No idea.'
`Hill of Grace, Hill of Content? No idea.'
`Hill of Grace, yes. Hill of Content, no.'
`It might be made by the same people as Hill of Grace. Henschke.' "
25 Cross-examination of Professor Lockshin revealed that the "research" which formed one of the bases of his opinion of the reputation of Hill of Grace among uninvolved consumers comprised what can be described, not unfairly, as random conversations over a substantial period with students and wine consumers; and that the Hutton survey was not particularly aimed at uninvolved consumers and was highly likely to have included a number of involved consumers. Additionally, Professor Lockshin was unable to think of an actual example of an existing range of wines of the sort that the appellants might market if they introduced a "Hill of ..." range: senior counsel for Rosemount suggested to Professor Lockshin the hypothetical example of a range extending from "Jacob's Creek" to offerings such as "David's Creek" and "Rebecca's Creek", but the prompt did not help.
(d) Primary judge's conclusions on reputation and on evidence as to whether consumers would be misled
26 The primary judge was not prepared, as we have mentioned, to give any weight to the "expert evidence" of reputation among uninvolved consumers, other than the academic evidence. He was unconvinced that the material in the general media was so extensive that it would have been widely read by uninvolved consumers so as to give rise to a widespread reputation in the name "Hill of Grace" without an immediate or close association with the Henschke name. He derived little help from the Hutton survey, both because of the nature of the questions and because of the likely presence of involved consumers among those who were surveyed. He found unconvincing the "research and experience" on which Professor Lockshin relied, since it was based not on systematic research on the subject in question but on apparently adventitious communications. He derived some help from certain of the evidence of Mr Forrestal, whose evidence was based on dealings with people in varying settings who were interested in wine but did not have a sophisticated understanding of it. His Honour's conclusion on this topic was expressed as follows:
"I am in consequence prepared to find, albeit with some misgivings in the absence of more direct evidence on the matter, that there is a segment of the uninvolved wine consuming public ... that knows the Hill of Grace name as such and its reputation for quality. No more so than Professor Lockshin's `involved consumer' category, this segment to which I refer is probably not likely to be a particularly large percentage of the wine consuming public."
27 His Honour proceeded to deal with the question whether uninvolved consumers were likely to think that there might be an association between Hill of Grace and Hill of Gold. He regarded the Hutton survey, on this topic, as at best equivocal. He found Professor Lockshin's evidence unconvincing: if it were accepted that consumer decision-making was a complex "black box", no acceptable reason had been given for the making of the particular association asserted. This was so despite any reputation that Hill of Grace might have (Professor Lockshin's views about that being summed up in his observation that "If you would say `Hill of', [consumers] would say `Grace' "). His Honour preferred Dr Hall's evidence, despite his lack of specific expertise in wine marketing, as to the complexity of consumer decision-making:
"While I do not for present purposes rely upon Dr Hall's opinion as to how a consumer would read the Rosemount Hill of Gold label, his reservations on the critical process of linkage - of association - suggested by Professor Lockshin are reservations I share. With the greatest of respect, for my own part I consider the Professor's reasoning in this to be conjectural and, moreover, to be contrived in the sense of describing a possibility not a likelihood. A possibility will always be there. There is no accounting for the courses of the human imagination. But I am not concerned with bare possibilities."
(e) Submissions; conclusion
28 The appellants' attack on the primary judge's reasoning leading to his findings on reputation and the likelihood that consumers would be misled was based principally on two propositions. One was that he erred in discounting as heavily as he did the opinions expressed by eminent wine writers, restaurateurs, and retailers. The other was that his Honour erred in preferring the evidence of Dr Hall, who admittedly had no expertise in wine marketing, to that of Professor Lockshin, who had substantial expertise and long experience in that specific subject. (There was a conceptually distinct attack on his Honour's understanding of the significance of the mark "Hill of Grace", which we shall consider separately below). However, there is no doubt that his Honour was right in describing the former category of evidence substantially as mere assertion, both as to reputation and as to the possibility that consumers would see an association. (See Quick v Stoland Pty Ltd (1998) 87 FCR 371, especially at 374, 375 per Branson J; S Odgers, Uniform Evidence Law, 4th ed 2000 at 177-183). Mr Forrestal's evidence apart, to the extent that particular justifications were suggested (for example, the way in which wines are described in wine lists) they were not made good. As for his Honour's treatment of the evidence of Professor Lockshin and Dr Hall, little more need be said. A reading of the evidence given by both - including cross-examination - makes it quite clear why his Honour took the view that he did. The value of expert evidence depends very largely on the cogency of the reasoning on which it is based. An opinion is not necessarily to be accepted simply because it is offered by someone who has expertise and experience in the particular field. In our view, no error is demonstrated in the way in which his Honour treated the expert evidence. Nor - despite a submission to the contrary - was there any error in the way in which his Honour dealt with the Hutton survey or with any of the other evidence, for example the newspaper extracts, led on the question of reputation.
29 In short, the primary judge's findings were based upon a careful analysis of the evidence. No error is demonstrated in the reasoning which led to the findings. The findings not only were clearly open but were, in our view, appropriate. They should not be disturbed.
THE TRADE MARK INFRINGEMENT CASE
(a) A different case on appeal
30 The case which the appellants sought to make on the appeal was significantly different from their case at trial. Senior counsel for the appellants opened the appeal with an argument that the primary judge had entirely missed the real point of the case. The argument was expressed, with considerable elegance, as follows:
"Now, the learned judge missed, in our submission, the real point in the case. Neither Hill of Grace nor Hill of Gold refers to a topographical or a geographical feature. Hill of Grace is no more a physical hill than `this vale of tears' is a physical valley. The `slough of despond' was not a physical swamp; it was a spiritual mire through which the soul of the pilgrim had to pass on its way to salvation. And in the King James Bible in the Song of Solomon, chapter 4, verse 6, the singer says:`I will get me to the mountain of myrrh and to the hill of frankincense.'
Neither the mountain nor the hill is a physical hill, nor is it a pile or a heap. This is the sense in which `Hill of' is used in both Hill of Grace and Hill of Gold. Hill of Grace is a figurative or allegorical expression and idea, and that is its inherent character. So, too, is Hill of Gold. The idea of the mark is not a physical hill or a pile or a heap of the metal gold. It is used in the same sense as `heart of gold'.
So, senior counsel submitted, references made by the primary judge (in dealing with arguments put to him) of phrases like "Hill of Goats" or "Hill of Goannas" were beside the point: they missed the intrinsic significance of the Hill of Grace mark.
31 Secondly, it was submitted that this was a case where the high reputation of Hill of Grace - (again) its "icon" status - was very relevant to the question of trade mark infringement; and his Honour fundamentally erred in failing to take it into account (as well as in his assessment of the evidence relating to it).
32 The contrast with the case presented at trial is easily demonstrated. Both at trial and on the appeal senior counsel of considerable experience of trade mark matters appeared for the appellants. On the appeal the appellants were represented by Mr Lyons QC; at trial Mr Shavin QC appeared for them. On the question of reputation, the approach taken by counsel at trial appears clearly from the following propositions which he put following an exchange, in the course of final submissions, with the primary judge:
"There is a fine line between saying `An association with Hill of Grace' and then saying, `I'm trying to incorporate reputation into trademark law'. I'm not seeking to propound that far dramatic an extension of trademark law. I appreciate the hurdles. One doesn't, however, look at a trademark in isolation. One doesn't look, for example, it is clear - and clearly settled - at just the use of the mark which the respondent has used. You look at the use to which the respondent can lawfully put the mark but you, of course, also look at it in the context of the market in which it's placed, and that much too must be clear. ..."
A little later in final submissions, following a submission that the important aspect of the `Hill of Grace' mark was the words `Hill of', which (it was said) were not common but were distinctive, the following exchange took place.
"His Honour: So that is the end point of that submission, it doesn't matter what the noun is that comes after `Hill of'? It could be toadstools, rainbows - you name it. Any noun when used in this industry after the words `Hill of' would fall foul of the Hill of Grace trademark.Mr Shavin: Yes. That is my primary submission, your Honour. In my secondary submission I point additionally to the consonant `G'."
Then, a little later:
"Mr Shavin: I think I would take it in three layers. My first submission is any noun, and that is the one which I primarily urge upon your Honour. My secondary position is that if I can't have any noun, I have any noun with a `G' as its first letter, particularly where it's hard.His Honour: Goats?
Mr Shavin: Yes.
His Honour: Even though `goats' and `grace' are some distance apart, aren't they? So it would be Hill of Goats?
Mr Shavin: Yes. Whether of course one is likely to market a wine of Hill of Goats with your connotation of cheese, I'm not sure."
Then, as a tertiary position, counsel submitted that any noun beginning with a hard "G" with a "sympathetic connotation" would, if used with "Hill of ...", be an infringement.
33 The primary judge rejected the claim of trade mark infringement. His Honour's treatment of the claim, naturally enough, reflected the arguments put to him. He applied the well known test as stated, for example, in Australian Woollen Mills Ltd v F S Walton & Co Ltd [1937] HCA 51; (1937) 58 CLR 641 at 658 and Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd [1961] HCA 75; (1993) 109 CLR 407 at 415. The comparison to be made was one between the impression based on recollection of the Hill of Grace mark that persons of ordinary intelligence and memory would have and the impressions those persons would derive from the Hill of Gold mark. His Honour noted that "it is particularly important in the infringement case to emphasise, as the parties accept, that the reputation of the Hill of Grace wine and such magnetism as it may in consequence exert do not provide a proper or available basis for proving an association between Hill of Gold and Hill of Grace. The comparison is between the marks themselves, ignoring extraneous circumstances ..." . Having discussed a number of the authorities dealing with particular applications of the "deceptive similarity" test, his Honour said at par 40:
"In my view it is most unlikely that the impression based on recollection of the Hill of Grace mark would be the words `Hill of' followed by some other word. I should add my view in this is reinforced by the aural effect of the mark when spoken. This again gives emphasis to `Grace' through the combination of the long `a' vowel sound and the combination of consonants surrounding it. The words `of Grace', it seems to me, are of the essence of what some number of wine writers in the articles exhibited in this proceeding refer to as `one of the world's loveliest wine names'."
His Honour also rejected the submission that the use of any word beginning with "G", used in combination with "Hill of", would amount to infringement. He considered that this might be demonstrated simply by referring to such possible names as Hill of Goannas and Hill of Goats. Nor did his Honour accept the alternative "sympathetic connotation" submission. He concluded at par 44:
"I would be reluctant in any event to find a likelihood of confusion being caused simply by a suggested feeling generated for whatever reason by the evocation of a G-word that is alleged to have the flavour of, or to be akin to, what is suggested by Grace. I am not satisfied that, to the person of ordinary intelligence and imagination, Gold would be such a word in any event even when considered as a metaphor. And I am far from satisfied in this particular setting that a monopoly in the use of words should turn on so opaque a measure, notwithstanding the significance that can properly be attributed to imperfect memory and visual and aural associations: ..."
34 The first question that arises is whether the appellants should be permitted to depart so significantly (particularly in relation to the relevance of reputation) from the position which they took at trial. The principles are well established: see, for example, the judgment of R D Nicholson J in Jones v Minister for Immigration and Ethnic Affairs (1995) 63 FCR 32 at 47, 48 where his Honour refers to many of the relevant authorities. Generally, a party will not be permitted to rely on appeal on a case different from that made at trial where, if the new ground had been relied on at trial the other party might have conducted its case differently and, in particular, might have called different or additional evidence. In other cases, the judgment to be made is whether it is expedient and in the interests of justice that leave should be given to argue new grounds. In making that judgment, the public interest in the finality of litigation is an important consideration, especially in a case where, at trial, counsel has explicitly disclaimed reliance on grounds upon which, subsequently, an appeal is sought to be based. In Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631, Mason P stated the principles at 645, 646, as follows:
"A party seeking to advance for the first time on appeal a new ground not taken at trial will be precluded from doing so if the new ground could possibly have been met by calling evidence at the hearing or if, had the ground been raised below, the respondent might have conducted the case differently at trial. ...However there is another principle of more direct relevance. A party does not have a right to insist that a new point be decided on appeal simply because all of the facts have been established beyond controversy or the point is one of construction or of law, even constitutional law. This is because it remains a question of whether the appellate court `may find it expedient and in the interests of justice to entertain the point': .... The rule is not an absolute one, as evidenced by this Court's decision in Della Patrona v Director of Public Prosecutions (Cth) [No 1] (Court of Appeal, 1 September 1995, unreported). .... However:
`it is a sound general principle, leading not only to the maintenance of fair play, but also to the repression of unnecessary litigation, that parties must be bound by the course they deliberately adopted at the trial.': Rowe v Australian United Steam Navigation Co Ltd [1909] HCA 25; (1909) 9 CLR 1 at 24, per Isaacs J; see also Browne v Dunn (1893) 6 R 67 at 75; Banque Commerciale SA (In Liq) v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 at 284.
In Coulton [v Holcombe [1986] HCA 33; (1986) 162 CLR 1] (at 7), Gibbs CJ, Wilson J, Brennan J and Dawson J said that:
`It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish.' "
35 Any tendency to treat trials in that way is, in our view, firmly to be discouraged. It is by no means self evident that the appellants should be permitted, in the circumstances, to rely on a proposition which they unequivocally disclaimed before the trial judge. The following considerations lead us to the view, however, that in this case we should entertain and deal with the arguments submitted to us. Senior counsel for the respondent accepted that, had the point been raised at trial, he would not have called different or additional evidence. He readily accepted that he was in a position to deal with the relevance of reputation on appeal. One significant decision, on which the appellants rely - Coca-Cola Company v All-Fect Distributors Ltd [1999] FCA 1721; (1999) 96 FCR 107 - was decided by the Full Court after the primary judge delivered his judgment. Additionally, the point is an important one in trade mark law and, since we have heard full argument on it, there are advantages in dealing with it rather than leaving it undecided.
(b) The statutory provisions; the authorities; relevance of reputation
36 Having reached that point, it is necessary to start again at the beginning. Section 120 of the Trade Marks Act answers the question, when is a registered trade mark infringed? It provides:
(1) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.(2) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to:
(a) goods of the same description as that of goods ("registered goods") in respect of which the trade mark is registered; or
(b) services that are closely related to registered goods; or
(c) services of the same description as that of services ("registered services") in respect of which the trade mark is registered; or
(d) goods that are closely related to registered services.
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.
(3) A person infringes a registered trade mark if:
(a) the trade mark is well known in Australia; and
(b) the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to:
(i) goods ("unrelated goods") that are not of the same description as that of the goods in respect of which the trade mark is registered ("registered goods") or are not closely related to services in respect of which the trade mark is registered ("registered services"); or
(ii) services ("unrelated services") that are not of the same description as that of the registered services or are not closely related to registered goods; and
(c) because the trade mark is well known, the sign would be likely to be taken as indicating a connection between the unrelated goods or services and the registered owner of the trade mark; and
(d) for that reason, the interests of the registered owner are likely to be adversely affected.
(4) In deciding, for the purposes of paragraph (3)(a), whether a trade mark is "well known in Australia", one must take account of the extent to which the trade mark is known within the relevant sector of the public, whether as a result of the promotion of the trade mark or for any other reason."
37 The appellants' case is not, of course, that Hill of Gold is substantially identical with Hill of Grace. The claim is that it is deceptively similar to Hill of Grace. It is uncontroversial also that the alleged infringement falls within subs (1), not subs (2) or subs (3). The use proposed by Rosemount is use in relation to goods - wines - in relation to which the Hill of Grace trade mark is registered.
38 Section 10 of the Trade Marks Act provides that:
"For the purposes of this Act, a trade mark is taken to be `deceptively similar' to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion."
39 The combination of s 120(1) and s 10 is by no means novel in trade mark law: see Trade Marks Act 1955 (Cth), s 62(1) and s 6(3).
40 There is no room for doubt, in general terms, about the test to be applied. In Australian Woollen Mills Ltd v F S Walton & Co Ltd [1937] HCA 51; (1937) 58 CLR 641 at 658, Dixon and McTiernan JJ described it as follows:
"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 play an important part. The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected. Potential buyers of goods are not to be credited with any high perception or habitual caution. On the other hand, exceptional carelessness or stupidity may be disregarded. The course of business and the way in which the particular class of goods are sold gives, it may be said, the setting, and the habits and observation of men considered in the mass affords the standard. Evidence of actual cases of deception, if forthcoming, is of great weight."
41 Equally well known is the following passage from the judgment of Windeyer J in The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd [1961] HCA 75; (1961) 109 CLR 407 at 415:
"On the question of deceptive similarity a different comparison must be made from that which is necessary when substantial identity is in question. The marks are not now to be looked at side by side. The issue is not abstract similarity, but deceptive similarity. Therefore the comparison is the familiar one of trade mark law. It is between, on the one hand, the impression based on recollection of the plaintiff's mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions that such persons would get from the defendant's television exhibitions."
42 Windeyer J added, at 416, that "[the] deceptiveness that is contemplated must result from similarity; but the likelihood of deception must be judged not by the degree of similarity alone but, by the effect of that similarity in all the circumstances". Thus, for instance, although the present Trade Marks Act contains no analogue of s 66 of the Trade Marks Act 1955 (Cth), it is still true that questions of deceptive similarity must be considered against the background of the usages in the particular trade (Shell at 410). So, in this case, no doubt it was relevant to know that the wine market is a crowded one but that, although names incorporating topographical or geographical references are common, "Hill of ..." is almost unique. Equally, we see no reason to doubt that the characteristics of consumers of wine, and of particular categories of consumers, were relevant; so too was the way in which wine is marketed, including - for example - the way wines are commonly described in restaurant wine lists. The significance of surrounding circumstances of that nature was discussed in the judgment of the Full Court in MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236 at 245, 246: such circumstances provide the context for consideration of the question whether a near resemblance between two marks is likely to deceive or cause confusion.
43 But there is another important aspect of infringement by use of a deceptively similar mark. It is that the test of deceptive similarity must be applied whether the mark of which infringement is alleged is newly registered and almost unknown or has been prominently displayed on well known merchandise for many years. It must also be applied where the mark appears on goods (or in advertisements of goods) commonly seen, for example, on supermarket shelves in Sydney but rarely seen in Victoria or South Australia. The consumer posited by the test is hypothetical, although having characteristics of an actual group of people.
44 Essentially what is required is a comparison between the mark of the registered owner and that of the alleged infringer. A wider inquiry of the kind that might be undertaken in a passing off action, or in a proceeding in which contravention of Pt V of the Trade Practices Act is alleged, is not appropriate. In New South Wales Dairy Corporation v Murray Goulburn Co-operative Company Ltd (1989) 86 ALR 549, in a passage in his judgment not affected by the proceedings on appeal, Gummow J said at 589:
"In determining whether MOO is deceptively similar to MOOVE, the impression based on recollection (which may be imperfect) of the mark MOOVE that persons of ordinary intelligence and memory would have, is compared with the impression such persons would get from MOO; the deceptiveness flows not only from the degree of similarity itself between the marks, but also from the effect of that similarity considered in relation to the circumstances of the goods, the prospective purchasers and the market covered by the monopoly attached to the registered trade mark: Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd [1961] HCA 75; (1963) 109 CLR 407 at 414-15; Polaroid Corp v Sole N Pty Ltd [1981] 1 NSWLR 491 at 498. The latter case is also authority (at 497) for the proposition that the essential comparison in an infringement suit remains one between the marks involved, and 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."
As to the limited range of the inquiry in an infringement action, see also Saville Perfumery Ltd v June Perfect Ltd (1941) 58 RPC 147 at 175 (the reference by Sir Wilfrid Greene MR in the judgment of the Court of Appeal, at 161, to the significance of cases in which traders and perhaps the public might be expected to receive a strong impression of the actual mark, is plainly, in our view, intended as a reference not to the reputation of a particular trader or of a particular name but to the way, or circumstances, in which a particular class of goods is marketed). See also D R Shanahan, Australian Law of Trade Marks and Passing Off, 2nd ed 1990 at 338, 339; T A Blanco White and R Jacob, Kerly's Law of Trade Marks and Trade Names, 12th ed 1986 at 14-16.
45 Consistently with the nature of the test of deceptive similarity and the authorities to which we have referred, it is not easy to see what relevance the reputation an applicant may have in a particular mark (even the "icon status" of that mark) has in an action for infringement brought in reliance on s 120(1) of the Trade Marks Act. (Clearly, and by contrast, it is relevant under s 120(3) and may be relevant under s 120(2)). Nor, with certain exceptions to which we shall come, were we directed to a course of authority in which, where there has been a question of infringement by use of a deceptively similar mark, the reputation of the plaintiff in the mark allegedly infringed has been taken into account. Indeed, the course of authority has been quite to the contrary. The search has concentrated on such matters as ascertaining the essential element of a mark, the impression taken away by one who looks at it, and how it sounds when pronounced. (Australian Woollen Mills, Shell, Saville Perfumery and Aristoc Ltd v Rysta Ltd [1945] AC 68 are all well known examples).
46 The earliest of the cases on which senior counsel for the appellants placed particular reliance is de Cordova v Vick Chemical Co (1951) 68 RPC 103. The proprietor of two marks, "Vicks VaporRub Salve" and "VapoRub" complained that the sale of goods of the defendant under the name of "Karsote Vapour Rub" infringed the registered marks and amounted to passing off. It was alleged that the defendant used, in relation to its goods, a mark which was deceptively similar to the registered marks. Lord Radcliffe, who delivered the advice of the Privy Council, stated the test in familiar terms. His Lordship recognised, however, a particular circumstance in which reputation might be relevant. Lord Radcliffe said, at 106:
"Since words can form part of, or indeed the whole, of a mark, it is impossible to exclude consideration of the sound or significance of those words. Thus it has long been accepted that, if a word forming part of a mark has come in trade to be used to identify the goods of the owner of the mark, it is an infringement of the mark itself to use that word as the mark or part of the mark of another trader, for confusion is likely to result."
His Lordship, at 107, used (no doubt uncontroversially) similar language in dealing with the appellants' claim on the defence that their use of the words "Vapour Rub" was a bona fide descriptive use:
"... it seems plain on the facts of this case that `Vapour Rub' cannot be regarded in Jamaica as a `bona fide description' of the character or quality of the Appellants' goods. Perhaps the matter can be put most simply in this way: when the words `Vapour Rub' appear on the jars of ointment sold by the Appellants they do not present themselves in Jamaica as a description of the character or quality of the substance which is sold, but as the name of a substance which everyone regards as a product of the Respondents' manufacture."
That, in our view, offers a clue as to the nature and limits of the proposition previously stated by his Lordship. What is to be considered is the significance of a particular word or phrase among traders and consumers in a particular market. If among those persons particular words have come to mean exclusively the goods of a proprietor of a registered mark, the registered mark being or including those words or a "fancy word" composed of them and, when pronounced, sounding virtually the same, then use by another trader of those words in relation to goods in the class for which the mark is registered will infringe because, necessarily in the circumstances, use of the words by that trader is likely to cause confusion. It is difficult, nevertheless, to resist two impressions: one, that reliance on the proposition was hardly necessary to establish infringement given the obvious similarity of "Vapour Rub", when pronounced, to "VapoRub"; the other, that what thus (unnecessarily) intruded was a consideration more relevant, strictly, to the claim in passing-off (and, perhaps, to the defence of bona fide descriptive use).
47 The second case on which the appellants relied is Colgate-Palmolive Ltd v K F Pattron (1978) RPC 635. That also involved allegations of both trade mark infringement and passing-off. There were two registered marks. One was the word "Colgate". The other was a label containing the word "Colgate" printed in distinctive script in white on a red background. The marks were registered in respect of a class of goods which included toothpaste. The defendant began marketing toothpaste in tubes and boxes bearing a label consisting of the word "Tringate" printed in white script against a red background. Again, there is no obvious reason why the plaintiff would not have succeeded in its infringement case without regard to reputation. It seems reasonably clear, however, that members of the Court of Appeal of Trinidad and Tobago regarded it as relevant to the trade mark claim that the word "Colgate" had long been associated with and had been the brand name for the plaintiff's toothpaste for very many years: see at 648 per Sir Isaac Hyatali CJ and at 652 per Corbin JA. There was an appeal to the Privy Council and Lord Edmund-Davies delivered a brief opinion in favour of dismissing the appeal. Evidently their Lordships regarded the appeal as hopeless. Equally evidently, particularly having regard to the authorities they cited, their Lordships had in mind principally the passing-off claim. Their Lordships did not, in terms, consider the test of "deceptive similarity". Certainly they did not endorse a proposition that reputation was generally relevant in applying that test.
48 The most recent of the cases cited in support of the appellants' submission was, as we have mentioned, Coca-Cola Company v All-Fect Distributors Ltd [1999] FCA 1721; (1999) 96 FCR 107. In that case it was alleged that the importation for sale of confections or sweetmeats (apparently, in less elevated language, jubes) infringed a registered mark owned by the applicant, being (as the Full Court described it) a contour drawing of the glass bottle in which Coca-Cola has traditionally been sold. Each jube had the word "COLA" inscribed on it and that word was descriptive of the flavour of the jubes. Left to themselves, they tended to curl up so as not obviously to resemble the mark. Laid out flat, however, (and presumably restrained from acting in accordance with their natural tendency) their shape somewhat resembled the mark. Infringement was alleged under s 120(2) and, in the alternative, under s 120(3) of the Trade Marks Act. As in this case, there was also an allegation of conduct contravening s 52 and s 53 of the Trade Practices Act. There was also a passing-off claim. Subsections (2) and (3) of s 120 are mutually exclusive, in the sense that if one is infringed by the use of a mark in relation to goods, the other is not: see 120(2)(a) and s 120(3)(b)(i). At trial and on appeal the respondent conceded that the jubes were to be regarded as goods of the same description as that of goods in respect of which the mark was registered. Consequently, subs (3) fell from the picture and, if the respondents were held to have used in relation to the jubes a mark which was deceptively similar to the registered mark, it was open to the respondent to seek to establish that use of the sign as the respondent used it was not likely to deceive or cause confusion. Perhaps for that reason, and certainly for the purposes of the allegations of contraventions of the Trade Practices Act and passing-off, evidence of the applicant's reputation in the mark was relevant. Consequently, it is no surprise that the Full Court recorded that it was common ground before the primary judge that:
* since 1938 the appellant has carried on the business of manufacturing, promoting and selling non-alcoholic carbonated beverages known as Coca-Cola throughout Australia under and by reference to the marks "Coca-Cola" and "Coke" and the contour bottle, which was a bottle of distinctive appearance* since at least 1938 the appellant has widely advertised its business and beverages in Australia by reference to the word marks "Coca-Cola" and "Coke" and the contour bottle
* the appellant's business and goods have become widely and favourably known and identified in the minds of the general public throughout Australia by means of the word marks "Coca-Cola" and "Coke" and the contour bottle
* the appellant's business and goods have a substantial, exclusive and valuable reputation and goodwill throughout Australia by reference to the word marks "Coca-Cola" and "Coke" and the contour bottle
* members of the public who have acquired or propose to acquire goods or services from, or otherwise transact or propose to transact business with, any person carrying on business under or by reference to the word marks "Coca-Cola" and "Coke" and the contour bottle, expect to be dealing with persons associated with or licensed or approved by the appellant, and rely upon the reputation acquired by the appellant in Australia."
49 The Full Court held that deceptive similarity had been established. The question whether the "defence" under s 120(2) was made out was remitted to the primary judge. In circumstances which for present purposes do not matter, the Full Court did not consider for itself the Trade Practices Act or passing-off claims and remitted those also to the primary judge. The Full Court at 123 dealt as follows with the question whether the respondent had used a sign which was deceptively similar to the registered mark:
"Taking into account the "imperfect recollection" that customers may have of the contour bottle mark, and the fact that the "idea" suggested by the mark is more likely to be recalled than its precise details, the factors that have led us to conclude that the features of the confectionary are likely to cause confusion in consumers, that is to say, cause them to wonder whether it might be the case that the confectionary comes from the same source as Coca-Cola, are these:* the contour bottle is extremely well known
* there are similarities between the features of the confectionary and the contour bottle mark:
- both have curved rather than flat sides
- both have a top portion with longitudinal fluting, a central portion without fluting and a lower portion with fluting
- the upper and lower portions have the same number of flutes
- the fluting on the confectionary closely resembles that on the contour bottle mark
- both have a flat base and a banded neck
* to a greater or lesser degree depending on the feature, the respondent has taken all significant features of the contour bottle mark
* the word COLA on the confectionary, though not itself a mark, reinforces the link between the confectionary and Coca-Cola that is conveyed by the shape of the confectionary
* when fresh, the lower half of the confectionary is the same colour as Coca-Cola, again reinforcing the link referred to."
50 Clearly, the Full Court regarded the fact that the contour bottle was extremely well known as a relevant matter to take into account in deciding whether the respondent had used as a trade mark a sign which was deceptively similar to the registered mark. Equally, however, we do not think that their Honours, by that brief reference, are to be taken to have decided that reputation evidence, of the kind which is undoubtedly relevant in a passing off action, is generally relevant to a question of deceptive similarity. Before considering further what the Full Court should be taken to have decided, it is convenient to consider the fourth of the principal authorities on which the appellants relied.
51 Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020; (1999) 45 IPR 411 involved an "appeal" to the Court from a decision of a delegate of the Registrar by which the delegate rejected the respondent's application for registration of a mark comprising the words "WOOLWORTHS Metro" on a background of flag like wavy lines. One of the grounds of rejection was that the mark was deceptively similar to a number of marks, including the word "Metro", some registered in respect of services, others registered in respect of goods which were closely related to the services in respect of which the respondent sought registration of its mark. The Full Court by majority (French and Tamberlin JJ; Branson J dissenting) dismissed an appeal from a decision at trial by which Wilcox J had allowed the appeal from the delegate's decision and held that deceptive similarity was not made out. An important element in the reasoning by which both the primary judge and the majority of the Full Court came to that conclusion was that the word "Woolworths" was so well known that it was the element of the mark applied for most likely to be recalled, so that the mark was not likely to deceive or cause confusion. French J, at 431, approved the approach of the trial judge, as follows:
"In respect of the fourteenth cited mark which is an accepted application pending opposition, his Honour found that there is likely to be some similarity between the services in respect of which registration of this mark is sought and the services offered by Woolworths. However, in that respect he said ...:`As the name would not be displayed on goods, the aural impression may here be more important than the manner of visual presentation. But it is only possible to say the aural use of the term `Woolworths Metro' is deceptively similar to `Metro' if one ignores or discounts the word `Woolworths'. In comparing the marks, it is not legitimate to ignore a major element in one of them; and, for the reasons I have given, I do not think that word should be discounted. On the contrary, having regard to its aural prominence and familiarity to Australians, it is the element of the mark most likely to be noticed and remembered.'
His Honour's reference to the familiarity of the name `Woolworths' in Australia was appropriate. Where an element of a trade mark has a degree of notoriety or familiarity of which judicial notice can be taken, as in the present case, it would be artificial to separate out the physical features of the mark from the viewer's perception of them. For in the end the question of resemblance is about how the mark is perceived. In the instant case the visual impact of the name `Woolworths' cannot be assessed without a recognition of its notorious familiarity to consumers."
52 Woolworths was not an infringement case and, of course, the notoriety taken into account was not any notoriety attaching to marks already registered (or marks applications for which had been lodged before the Woolworths application); the notoriety attached to an element of the mark for registration of which Woolworths had applied. Nevertheless, in our view, Woolworths suggests a proposition for which the cases on which the appellants rely may be taken as authority. It is that, in assessing the nature of a consumer's imperfect recollection of a mark, the fact that the mark, or perhaps an important element of it, is notoriously so ubiquitous and of such long standing that consumers generally must be taken to be familiar with it and with its use in relation to particular goods or services is a relevant consideration. It is unnecessary to consider whether the cases are authority for precisely that proposition. All that is necessary for present purposes is to hold, as we would, that they are authority for no wider proposition in relation to the relevance, on a question of deceptive similarity in proceedings where it is alleged under s 120(1) that a registered mark has been infringed, of evidence as to the reputation attaching to the mark. A wider proposition would not, in our view, be consistent with the earlier, and binding, authority to which we have referred. It is unnecessary, in order to decide this case, to go further.
53 If the findings of the primary judge as to the "reputation evidence" are upheld, as we would uphold them, that evidence is in any event of no assistance to the appellants on the trade mark infringement case. But, if the view of the law which we have expressed be correct, it would not on any reasonable view have been relevant to it: whatever, on the most benevolent view, the evidence might have said about an uninvolved consumer's recall or recognition of "Hill of Grace", it was not in any sense a notorious or ubiquitous mark as - for example - "Woolworths" or the Coca-Cola bottle shape were. It follows, in our view, that the concession by counsel at the trial was properly made.
54 That conclusion does not, of itself, dispose of the claim of trade mark infringement. There is considerable force in the appellants' submissions about the general character of the Hill of Grace mark. It is quite true, in our view, that, as a matter of ordinary usage, expressions such as "Hill of ...", "Sea of ...", "River of ..." or "Mountain of ..." are almost invariably used metaphorically. On the other hand, the multitude of wine names including topographical references, to which the primary judge referred, were "... Hill", "... Ridge", "... River" and so on, all, in ordinary usage, referring to an actual topographical feature. That may well be why "Hill of ..." is rare indeed among wines, and "River of ...", "Sea of ..." etc apparently unknown. We have quoted Mr Lyons' opening in which he cited some particularly good examples of the metaphorical usage. Others might be mentioned, some considerably less attractive: "River of Blood"; "River of Gold". The "Sea of Tranquillity", as we understand it, describes an area of the moon; but certainly not a real sea. On the other hand, the ocean to the east of Australia is the Pacific Ocean, not the Ocean of Peace. It may have been called "Pacific" because of a first impression of its character, but "Ocean of Peace" and "Pacific Ocean" convey entirely different notions. It is not easy to think of exceptions to what appears to be a rule. "Mount of Olives" may be one.
55 But there are metaphors and metaphors. "Hill of Beans" is a metaphor of a quite different kind from "Hill of Grace" or "Slough of Despond". "Hill of Goannas" (to continue to use examples which cropped up in the reasons of the primary judge or in argument) is a metaphor of a different kind again: if it refers to anything, it may be a heap or pile of goannas, hardly an actual hill upon which they are to be found in numbers. Such a hill might be named "Goanna Hill" or, if the residents were goats, "Goat Hill", but hardly "Hill of Goannas" or "Hill of Goats".
56 Thus, we think, to assert that any "Hill of ..." expression would infringe, or even any "Hill of G..." (or, indeed, any "Hill of G..." with a "sympathetic connotation"), is to cast the net wide and to invite a consideration of the kind which the primary judge gave to the question, leading to a conclusion that there was no infringement: a conclusion with which we agree, substantially for the reasons which his Honour gave.
57 "Hill of Gold" is, as senior counsel submitted, a metaphorical expression of the same general character as "Hill of Grace". The reference to a hill is not, in reality, a topographical reference any more than it is in the name "Hill of Grace". A real hill might be named "Gold Hill" or "Golden Hill"; it is highly unlikely that it would be named "Hill of Gold". If that is accepted, the presence in the market of a large number of wines branded "Hill", "Ridge" etc is of little importance. The imperfect recollection of the uninvolved consumer would not, we think, be of a brand of that general kind. That being so, we are less confident of the outcome of the comparison that must be made than his Honour was of the result of the comparison which he was invited to make. Both the metaphorical character of the names and the common "Hill of" are, we think, important matters to be taken into account in assessing the effect of the "Hill of Gold" mark on an uninvolved consumer who has an imperfect recollection of "Hill of Grace". They are two points of similarity and, we think, in a crowded market, reasonably striking ones. But we do not think that any metaphorical "Hill of ..." mark would necessarily be an infringement. For example, we greatly doubt that "Hill of Frankincense" would be: both might be seen to have a vaguely biblical or religious connotation, but aurally, and as they strike the eye, the two are substantially different. "Hill of Enmity", Hill of Malevolence" or "Hill of Greed" are even less likely candidates for infringement. Similarly, though both names are metaphorical, we agree with the learned judge in thinking that it is the word "Grace" which gives the appellant's mark its peculiar and distinctive character; the use of the word "Gold" turns the "Hill of .." phrase into one of a significantly different character. "Grace" and "Gold" sound different and evoke, we think, quite distinct impressions. Precise analysis may not help much in matters of this kind; but "Gold", in our view, has a much more earth-bound, even mercenary, signification than "Grace". The amazement which may be evoked by grace is of a character quite different from any usual responses to gold. Though we accept that it is a matter on which opinions could well differ, our view is that, applying the test established by the Australian authorities, "Hill of Gold" does not so nearly resemble "Hill of Grace" that it is likely to deceive or cause confusion: that is, to cause the uninvolved consumer to wonder whether the two wines may come from the same source. For that reason, we would uphold the primary judge's decision on this aspect of the case.
58 There was a suggestion that the internal Rosemount memoranda, quoted in par 5, might be taken as admissions - and the admissions of experts - that the use of "Hill of Gold" was likely to mislead or cause confusion (Australian Woollen Mills at 657 per Dixon and McTiernan JJ). But, in our view, there is nothing in the memoranda which suggests (much less specifically acknowledges) that a purpose in adopting the "Hill of Gold" name was to trade off the reputation of Hill of Grace so that the Court might be prepared to infer that the respondent had achieved what it set out to do; nor is there an admission in any other form. And, as senior counsel for Rosemount submitted, these matters were not squarely put to the Rosemount witnesses.
59 The appellants claimed that Rosemount's then proposed conduct, in producing and selling Hill of Gold wines, would infringe both s 52 and s 53(a), (c) and (d) of the Trade Practices Act. Particularly, it was claimed that, as a result of Rosemount's conduct, members of the public were likely to mistake Hill of Gold wine for Hill of Grace wine, falsely to associate Hill of Gold wine with Hill of Grace wine or mistakenly to assume that Hill of Gold wine was produced by, or had the sponsorship or approval of, or that its producer was somehow affiliated with, the producer of Hill of Grace.
60 Because of his findings on the evidence, the primary judge held that the claims had not been made out, even assuming that the primary cue which would influence an uninvolved consumer in making a purchase of Hill of Gold wine would be the words "Hill of Gold" themselves. The conclusion followed from the findings; and, because we would uphold the findings, it follows that we would uphold the conclusion.
61 His Honour also expressed the following view, at pars 141-144:
"Accepting that persons in [the group of uninvolved wine consumers] ... are influenced by cues, I am not satisfied that, when confronted with Rosemount's bottle and label, a substantial number would be likely to be influenced in the manner suggested by Professor Lockshin as opposed to in some other way.I preface what I have to say by again indicating that, on the respondent's submission, there are features on the bottle and label that are capable (either individually or as part of an information mosaic) of being used by consumers to give the wine its own individuality as an object of purchase devoid of any association with another wine: the most obvious of these is "Rosemount"; "Mudgee" may, but by no means necessarily, be so used; and there is the total impression of the label itself.
Professor Lockshin had proposed a hierarchy of cues that indicate their relative frequency as influences. This he bases on his experience and research ...
Given Professor Lockshin's espousal of the view that uninvolved consumers take the "peripheral", not the "cognitive", route in decision-making, and given that I am not satisfied by his opinion on how consumers would read and interpret what is referred to as the primary cue (the "Hill of Gold" words themselves), I am not satisfied that consumers of the class with which I am concerned would necessarily react to the Rosemount bottle/label in a manner that conforms to his hierarchy, nor that the primary branding on it - the Hill of Gold name - would necessarily secure the dominance suggested."
62 His Honour commented that those considerations reinforced his view that there was no contravention. It is sufficient to say that, far from seeing any error in what his Honour said, we see a great deal of force in it.
63 For those reasons, we would uphold his Honour's decision on the Trade Practices Act claims as well.
CLAIM FOR REMOVAL OF THE "HILL OF GOLD" MARK
64 In his principal reasons for judgment, the primary judge recorded that he had heard no submissions on this claim (referred by the Registrar to the Court under s 94 of the Trade Marks Act) and gave the appellants the opportunity to file and serve written submissions. In further reasons for judgment, delivered on 21 December 1999, his Honour said this:
"The applicants accept that in light of my findings both in their Trade [Marks] Act and Trade Practices Act claims, they are not "persons aggrieved" for s 92 purposes. Nonetheless, against the contingency of a successful appeal against my judgment, they have requested that I give reasons and conclusions on the non-use claim. While I accept that there are circumstances in which it may be appropriate to express a view on matters that do not strictly arise in consequence of findings already made, I do not consider that the present case is one in which such a view should be expressed. The applicants do not have standing to make their non-use application. That in my view must be the end of the matter in the circumstances."
Because of the appellants' lack of standing, their claim for removal of the mark was dismissed. Having come to the same conclusion as his Honour on the Trade Marks Act and Trade Practices Act claims, and not having the benefit of findings or reasons of the primary judge in relation to the substantive claim for removal, we would simply, once again, uphold his Honour's decision.
ROSEMOUNT'S APPLICATION FOR REMOVAL OF THE "HILL OF GRACE" MARK
65 Rosemount's cross-claim was made in reliance on s 92(1) and (3) of the Trade Marks Act. The primary judge set out the relevant statutory provisions and his account of the relevant facts is not challenged. It is sufficient, therefore, simply to reproduce several paragraphs of his Honour's judgment:
"The Statutory SettingSection 92 of the TM Act insofar as presently relevant provides:
"92 Application for removal of trade mark from Register etc
(1) A person aggrieved by the fact that a trade mark is or may be registered may, subject to subsection (3), apply to the Registrar for the trade mark to be removed from the Register.
... (3) An application may not be made to the Registrar under subsection (1) if an action concerning the trade mark is pending in a prescribed court, but the person aggrieved may apply to the court for an order directing the Registrar to remove the trade mark from the Register.
(4) An application under subsection (1) or (3) (non-use application) may be made on either or both of the following grounds, and on no other grounds:
... (b) that the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non-use application is filed, and, at no time during that period, the person who was then the registered owner:
(i) used the trade mark in Australia; or
(ii) used the trade mark in good faith in Australia;
in relation to the goods and/or services to which the application relates."
By s 7 of the Act an "authorised use" of a trade mark under s 8 is to be taken for the purposes of the Act to be a use by the owner of the trade mark.
Section 8 in turn provides:
"8 Definitions of authorised user and authorised use
(1) A person is an authorised user of a trade mark if the person uses the trade mark in relation to goods or services under the control of the owner of the trade mark.
(2) The use of a trade mark by an authorised user of the trade mark is an authorised use of the trade mark to the extent only that the user uses the trade mark under the control of the owner of the trade mark.
(3) If the owner of a trade mark exercises quality control over goods or services:
(a) dealt with or provided in the course of trade by another person; and
(b) in relation to which the trade mark is used;
the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.
(4) If:
(a) a person deals with or provides, in the course of trade, goods or services in relation to which a trade mark is used; and
(b) the owner of the trade mark exercises financial control over the other person's relevant trading activities;
the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.
(5) Subsections (3) and (4) do not limit the meaning of the expression under the control of in subsections (1) and (2)."
Finally, in relation to an opposed application for removal of a trade mark, s 101(3) provides:
"(3) If satisfied that it is reasonable to do so, the Registrar or the court may decide that the trade mark should not be removed from the Register even if the grounds on which the application was made have been established."
2. The Factual Setting
The relevant facts both are distinctive and fall within a narrow compass.
(i) At all times since the first vintage of Hill of Grace was released in 1958, the wine has been produced by the Henschke partnership. While the composition of that partnership has changed over time, its members all are, or (in the case of the corporate members) are owned by, the immediate members of the Henschke family.
(ii) In 1972, Cyril Henschke became the registered proprietor of the Hill of Grace mark. After his death in 1979 probate of his will and a codicil were granted to his executors Doris Henschke and his daughter Christine Stevens, the second cross respondents. Under that will Cyril Henschke gave (inter alia) his share in the partnership to Stephen and his residuary estate to his children Stephen, Christine and Paul. No specific legacy was given of the Hill of Grace mark.
(iii) After Cyril Henschke's death, his executors entered into an agreement on 28 April 1980 with the surviving partners under which the parties to the agreement carried on the partnership business pending the administration of the estate. Stephen Henschke thereafter succeeded to his father's share in the partnership. Pursuant to an agreement dated 17 January 1986 the present partners have since carried on the family business. Stephen Henschke is the managing partner and has the care and conduct of the day to day running of the partnership business.
(iv) No steps were taken to transfer the Hill of Grace trade mark out of Cyril Henschke's name until 1997 when the mark was transferred to the executors by way of transmission. It would appear that the transfer occurred without the then knowledge of the executors, though they became aware of it in 1998.
(v) For reasons which were the subject of evidence by Stephen Henschke, which are unnecessary to enter upon in these reasons, but which relate to the proper administration of Cyril Henschke's estate in accordance with his will, the executors are not as yet in a position to take the steps necessary to transfer the trade mark to its beneficial owners. All I need say in relation to this is that that beneficial ownership resides directly or indirectly (via shareholdings in the Henschke companies) in members of the Henschke family.
(vi) I would note, finally, that while the executors have not themselves given evidence in relation to the cross-claim, Stephen Henschke has done so. A deal of documentary evidence was also tendered."
66 It should be added that certain confidential evidence which was tendered makes it clear that it is not yet known precisely when the executors will be in a position to distribute the mark or precisely how they will do so.
67 The primary judge found, in effect, that the partnership was an authorised user of the mark. His Honour pointed out that both before and after Cyril Henschke's death the mark was used by the partnership, so that:
"... it was and is the continuing exertions of that partnership that gave and gives the mark its value and reputation. Its present use by the partnership can, I am prepared to infer, reasonably be said to be in the interests of those persons in whom the beneficial ownership resides."
68 The following reasoning led his Honour to the conclusion that the use by the partnership was authorised use:
"Where, as here, there is an immediate impediment of a testamentary character to the transfer of the trade mark to those persons in whom the beneficial ownership resides, and where, as here, the executors allow the mark to be used by the partnership (there is clear evidence of their continuing acquiescence in this) and in a manner which preserves its integrity, value and reputation, it seems to me it properly can be said that, consistent with the reason and end of the executors' ownership, both the user and the use of the trade mark are under their control. This conclusion can be justified in either of two ways. First, as executors, they are relevantly exercising quality control (s 8(3)) by allowing the person most likely to ensure that control, Stephen Henschke, to conduct the business. I would note in this that the executors, as partners and/or shareholders, are in a position on the evidence before me to know if and when a matter of proper concern in relation to quality arises. Secondly, alternatively, as executors of Cyril Henschke's estate, they are in very distinctive family and business circumstances now exercising such control over this part of the estate, as would in the circumstances justify it being said, consistently with s 8(5) that the partnership's use is under their control. I consider that that subsection can properly be invoked in this unusual case. Consistent with the purposes of maintaining quality control over the "goods" in question (s 8(3)) and, possibly, the maintenance of "financial" control over the user's trading activities (s 8(4)), a purposive construction of s 8(1) and (2) in light of s 8(5) would in my view accommodate the actions of the executors as executors since at least some time in 1998."
69 It is, we think, neither to do an injustice to the argument on behalf of Rosemount nor to diminish its force to say that it amounted, in summary, to a submission that none of the matters referred to by his Honour established the existence of quality control of the kind contemplated by s 8(3), financial control as contemplated by s 8(4) or control in any more general sense contemplated by s 8(5).
70 There is, we consider, a good deal of force in that submission. The evidence does not appear to have suggested any basis on which the executors might be said to have exerted financial control over the partnership's trading activities. While, clearly enough, there was a degree of consultation over matters going to "quality", it was also clear that decisions in that respect, ultimately, were made by Mr Stephen Henschke. If a power, on the part of the executors, to revoke the authority had been relied upon, the evidence suggested that a powerful retort might well have been that there were obstacles, both practical and legal, standing in the way of such a course, and, in any event, it would perhaps be a bold argument that a mere revocable authority is sufficient to ensure that the licensor has "control" for the purposes of s 8.
71 Broadly, the concept of "authorised user" represents a significant departure from the regime of the earlier legislation. The new statutory scheme has not yet been the subject of substantial consideration by the Court; we were referred only to McHattan v Australian Specialised Vehicle Systems Pty Ltd (1996) 34 IPR 537, an interlocutory decision in which the question which arose in this case did not have to be considered. It remains to be decided to what extent those earlier authorities which were concerned with whether use, authorised by the registered owner, by someone other than a registered user, sufficiently indicated a connection with the registered owner remain significant in relation to questions of "control" under s 8. It may be that "control" within s 8(5) has a reach substantially as wide as the "connection" which would be held to be sufficient under the old regime, applying the observations of Aickin J in Pioneer Kabushiki Kaisha v Registrar of Trade Marks [1977] HCA 56; (1977) 137 CLR 670 at 680-683 and of Burchett J in Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227 at 237-239. Because, in our view, his Honour gave a separate, independent, ground for his decision (to which we shall come) and because argument concerning the effect of the present statutory scheme was relatively brief, we prefer to say no more about this aspect of the case, than that, if the principles stated in Pioneer and Polo remain substantially applicable, there is a good deal to be said for his Honour's conclusion.
72 The primary judge, however, proceeded to hold that, if he were wrong on the question of "control", he would nevertheless exercise his discretion favourably to the executors under s 101(3). His reasoning was as follows:
"There is no evidence that any member of the public has been deceived by the "non use". The executor's legal title to the mark is unimpeachable. All who have any beneficial interest in the mark (in the members of the Henschke family directly or via their shareholdings) have acquiesced in the actual user. There is no public interest adversely affected as a result of what has occurred: cf Paragon Shoes Pty Ltd v Paragini Distributors (NSW) Pty Ltd (1988) 13 IPR 323 at 345 (a decision under the 1955 TM Act). I can see no useful purpose to be served by removing the trade mark from the register simply for the purpose of, in effect, compelling a fresh application to be made by what I will inexactly call the Henschke interests. The mark is, and will remain, within the family. It should not be disturbed. It should be preserved as an established mark associated with a family and a business that have given it its present national and international standing."
73 It was submitted on behalf of Rosemount that, strictly speaking, his Honour did not exercise his discretion (indicating merely how he would have done so if it had been necessary) so that the House v R [1936] HCA 40; (1936) 55 CLR 499 consideration did not arise. In our view, however, his Honour should be treated as having exercised the discretion by way of a second, independent, ground of decision. Viewed in that way, his decision was a discretionary judgment to which the House principles apply. Contrary to Rosemount's submissions, in our view his Honour did not proceed on any wrong principle. It may be that the difficulties preventing distribution of the mark will not immediately be overcome, but that certainly is not decisive in the exercise of the broad discretion conferred by s 101(3). If Rosemount is right in submitting that the public is "formally" deceived (because, presumably, of an impression given to it that the partnership, rather than the executors, owns the mark) we do not regard that as a substantial or, indeed, material deception. In short, we do not think that his Honour's exercise of discretion is open to attack; and, were we exercising the discretion afresh, we would, on the material before us, exercise it in the same way.
CROSS-APPEAL: INDEMNITY COSTS
74 Rosemount sought, before the primary judge, an order that the appellants pay, on an indemnity basis, its costs of obtaining evidence from a number of witnesses in response to the opinion evidence, filed on behalf of the appellants and ultimately read at the trial, which his Honour found to be inadmissible or of little weight. The circumstances on which Rosemount based its application included the following:
* Rosemount communicated to the appellants its concerns about the evidence
* Rosemount sought (before trial) an early ruling as to the admissibility of significant parts of the evidence
* On the hearing of Rosemount's motion for that purpose, a ruling on admissibility was deferred to the trial, but his Honour mentioned the possible availability of indemnity costs as a means of mitigating prejudice caused by a perceived need to counter the evidence
* Before trial, Rosemount notified the appellants that it would seek an order for indemnity costs in relation to the preparation of evidence responding to the contentious evidence, should it be found inadmissible
* Apart from Mr Forrestal's evidence, the evidence either was rejected or given little weight.
75 The primary judge applied the well-established principles, quoting Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 233, per Sheppard J, and referring to Re Wilcox: ex parte Venture Industries Pty Ltd (1996) 141 ALR 727 at 732, 733. His Honour took the view that, in deciding to prepare evidence to counter the opinion evidence tendered by the appellants, Rosemount made its own forensic choice; the circumstances were not otherwise such as to justify a departure from the ordinary party/party rule.
76 The appellants argued, before us, that the "forensic choice" was, in reality, no choice at all: given that no ruling had been given on the admissibility of the disputed evidence, the necessary or proper course for Rosemount to take was to call evidence itself against the possibility that the evidence tendered by the appellants would be admitted. The position, the appellants submitted, was analogous to the persistence by an applicant in the prosecution of a manifestly flawed case which the respondent nevertheless had no choice but to meet: Yates Property Corp Pty Ltd v Boland (No 2) (1997) 147 ALR 685.
77 The matter was one, no doubt, on which minds might differ. In our view, it cannot be said that his Honour applied any wrong principle. We would adopt the approach taken by the Full Court in Abbott v Random House Australia Pty Ltd [1999] FCA 1540 at par 7:
Whether or not his Honour should have made such an exceptional order was, of course, a matter for the exercise of his judicial discretion. We should be reluctant to interfere with that discretion, especially in the area of costs. There can be no real suggestion that the discretion miscarried. The correct legal principles to be applied were identified by his Honour. Their application was essentially a matter for his Honour's judgment ...
CONCLUSION
78 For those reasons, we would dismiss both the appeal and the cross-appeal, in each case with costs.
I certify that the preceding seventy-eight (78) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Court. |
Associate:
Dated: 31 October 2000
Counsel for the Appellants: |
J F Lyons QC |
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E A Strong |
Solicitor for the Appellants: |
Finlaysons |
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Counsel for the Respondent: |
D K Catterns QC |
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Solicitor for the Respondent: |
Freehill, Hollingdale & Page |
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Date of Hearing: |
29, 30 and 31 May 2000 |
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Date of Judgment: |
31 October 2000 |
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