Mangrovite Belting Ltd v J C Ludowici & Son Ltd [1938] HCA 67; (1938) 61 CLR 149 (23 December 1938)

HIGH COURT OF AUSTRALIA

Mangrovite Belting Limited Opponent, Appellant; and J. C. Ludowici and Son Limited Applicant, Respondent.

H C of A

23 December 1938

Latham C.J., Rich, Dixon, and McTiernan JJ.

Dudley Williams K.C. (with him Henry), for the appellant.

May (with him Kennedy), for the respondent.

Dudley Williams K.C., in reply.

The following written judgments were delivered:—

Dec. 23

Latham C.J.

This is an appeal which comes to this court by virtue of the Trade Marks Act 1905-1934, sec. 45, from a decision of the Deputy Registrar of Trade Marks allowing the registration of a trade mark upon the application of J. C. Ludowici & Son Ltd. The application was opposed by Mangrovite Belting Ltd. The trade mark which was sought to be registered consisted of a drawing of a pulley wheel crossed diagonally by a rectangle which contained the name "Ludowici" in large and prominent type. The application was for the registration of the trade mark in class 6 in respect of power-transmission appliances. The deputy registrar was of opinion that the mark was not one the use of which would be likely to deceive within the meaning of sec. 114 of the Act and he granted the application. On this appeal the court determines the matter for decision for itself and if the applicant leaves the question in dubio the application fails (Jafferjee v. Scarlett[1]).

Sec. 16 (1) of the Act provides that "a registrable trade mark must contain or consist of at least one of the following essential particulars: (a) The name of a company, individual, or firm represented in a special or particular manner; ... (d) a word or words having no direct reference to the character or quality of the goods, and not being according to its ordinary signification a geographical name or surname; (e) any other distinctive mark, but a name, signature, or word or words, other than such as fall within the descriptions in the above paragraphs (a), (b), (c) and (d) shall not, except by order of the registrar, law officer, or court, be deemed a distinctive mark." Sub-sec. 2 of the section provides that for the purposes of the section "distinctive" means adapted to distinguish the goods of the proprietor of the trade mark from those of other persons.

The word "Ludowici" is not the name, but is only part of the name, of the applicant company. The name is a surname, but it is not the name of an individual in the sense in which that phrase was interpreted in In re Benz et Cie's Application[2]. Thus sec. 16 (1) (a) is not applicable. The inclusion of the drawing of the pulley in the mark sought to be registered distinguishes this case from the Benz Case[3] where the ornamentation added to the word "Benz" was held to be quite commonplace in character so as to produce the result that the application was really an application for the use of the word "Benz" in itself with a quite undistinctive floral border. The application in this case is not an application merely for a word, and, if it were, the word is a surname. Thus sec. 16 (1) (d) is not applicable.

No order has been obtained under sec. 16 (1) (e) and the mark cannot be registered under the latter part of that provision.

The application therefore depends upon the initial words of sec. 16 (1) (e), "any other distinctive mark."

The first objection taken to the registration upon the appeal was that the mark was not a mark which was adapted to distinguish the goods of the applicant or, indeed, of any proprietor from those of other persons. It was said that it was incapable of so distinguishing goods because "Ludowici" is (as the evidence shows) the surname of a number of persons. But the trade mark claimed is the whole device. It does not consist merely of a surname. This device, as emphasized by Mr. May, is not shown to be similar to any other means used for marking goods. In my opinion it cannot be said that the mark is incapable of being a trade mark for the reason that it is necessarily non-distinctive.

The second objection relied upon by the opponent was that the evidence showed that in fact the mark was not distinctive. The third objection was that the use of the mark would be likely to deceive. Sec. 114 provides (inter alia) that "no mark the use of which would by reason of its being likely to deceive or otherwise be deemed disentitled to protection in a court of justice ... shall be used or registered as a trade mark or part of a trade mark." These two objections depend upon the same evidence. They are based upon the fact that the word "Ludowici" is a very prominent feature of the trade mark. The pulley is little more than a background upon which the name is displayed. Any verbal reference to the mark would probably be made by using the name "Ludowici."

The objections derive their significance and importance from the fact that members of the Ludowici family are associated with both the applicant and the opponent companies, and that they are engaged in the same business, namely, that of supplying power-transmission appliances, and, more particularly, machine belting.

In the year 1858 the late J. C. Ludowici established a business as a tanner and leather-belting manufacturer. His son Charles Ludowici about 1880 became the managing director of the business. In 1891 the applicant company was formed and it has continuously carried on business since that date. Charles Ludowici was the managing director of the company. In 1913 Charles Ludowici severed his connection with the applicant company and went into business upon his own account, dealing in the same class of goods. In 1917 Charles Ludowici formed the opponent company, Mangrovite Belting Ltd., and he has ever since been the managing director of that company.

The applicant company had a number of trade marks, including the word "Pioneer," which was very largely used for the purpose of marking its goods. The name of the company J. C. Ludowici & Son Ltd. was naturally and necessarily used in connection with the business of the company, but the name, "Ludowici," was not placed upon the goods of the company until the year 1933. Since that date the name "Ludowici" has been stamped on belting and on machinery supplied by the applicant company. There is evidence that the applicant company is known as "Ludowici's," and a number of deponents declare that if they saw goods bearing the name "Ludowici" they would assume that the goods were the products of or were sold by the applicant company. I take as illustrations of such evidence the following paragraphs which appear in a number of declarations filed on behalf of the applicant:—"I have heard many users in the State of New South Wales extending over the past ten years refer to applicant's power-transmission appliances as Ludowici or Ludowici's and identifying applicant's products by such name."—"I have known of the company Mangrovite Belting Ltd. for the past ten years and I have never associated the name Ludowici or any name resembling the same nor in the trade have I ever heard the same name or any name resembling the same used to refer to the goods of the Mangrovite Belting Ltd." Some deponents also stated that they had never seen any belting other than belting produced by the applicant company which bore the name "Ludowici" upon it.

On the other hand the opponent adduced evidence which is directed to show that the use of the proposed mark would be likely to deceive. This evidence shows that the Mangrovite company has taken pains to associate the name of Charles Ludowici with its business and with the goods which it sells. It has been the practice of the company, ever since it was established in 1917, to place the words "Charles Ludowici, managing director" in close association with the name "Mangrovite Belting Limited." This has been done on letter-heads, bill-heads, labels, calendars and catalogues. Double-edged belts made by the opponent company have been stamped with the name "Charles Ludowici, original patentee" ever since 1917. Declarations made by purchasers of the relevant goods and used in support of the opposition contain the following statements: "I say that if I saw that mark" (i.e., the applicant's proposed mark) "on machine belts or other power-transmission appliances I would not know definitely whether the goods were those of Mr. Charles Ludowici, Mangrovite Belting Ltd. or J. C. Ludowici & Son Ltd., but would incline to the belief that they were goods having some connection with Mr. Charles Ludowici and his company, Mangrovite Belting Ltd., for the reason that, in my mind, the name Ludowici is more closely associated with Mr. Charles Ludowici than with any other person in the same line of business."—"If I were shown goods such as leather belting or allied power-transmission appliances branded with the name Ludowici without any other indication as to origin I would not know whether such goods emanated from Mangrovite Belting Ltd. of J. C. Ludowici & Son Ltd." This evidence is relied upon as showing that if the mark were registered it would be likely to deceive.

There is further evidence, more detailed in character, which is relied upon as showing that in fact deception has taken place in the past. This evidence shows that mistakes due to confusion of the identity of the two companies have been made by customers from time to time. Letters intended for the opponent, but addressed to Mr. Charles Ludowici, its managing director, have been delivered in error to the applicant company. In 1928 the applicant instituted a passing-off action against the opponent. The action was abandoned, but in the statement of claim it was alleged that the defendant was carrying on its business "in such a manner as to lead ordinarily careful members of the trade and of the public to believe that the business so being carried on by the defendant is part of the said business of the plaintiff and that the defendant is a branch of the plaintiff company and as to cause thereby confusion between the said businesses and to cause thereby such members of the trade and of the public to deal with the defendant while intending to deal with and believe that they are dealing with the plaintiff." In the years 1930 and 1931 the applicant company published a considerable number of advertisements in newspapers and journals warning the public against confusing its goods with the opponent's goods. The warning was in the following terms:—"Warning to buyers of belting. Another belting company using a similar surname is in no way connected and should not be confused with this, the original organization." The reference in these advertisements to another belting company using a similar surname was (it is not disputed) a reference to the Mangrovite Belting Co., with which Mr. Charles Ludowici was so closely associated.

There is no real conflict between the evidence of the applicant and that of the opponent to which I have referred. The evidence for the applicant company is largely given by persons who deal with that company. The evidence for the opponent is largely given by its customers. It is possible, in substance, to accept all the evidence on both sides (except such as is merely the expression of opinion) as to the probability of deception. The fact that the use of the mark would not deceive some persons does not show that such use might not deceive other persons.

The evidence shows that some trade customers who are normal and experienced people would be liable to confuse the goods of one company with the goods of the other by reason of the use of the proposed mark and that, if the name "Ludowici" is used upon any goods of the class in which the companies deal, there is a risk of mistakes being made as to the origin of the goods. Each company is at present apparently entitled to use this name as it is in fact using it. The grant of an exclusive right to use the name, even with the picture of the pulley, would, in my opinion, almost certainly lead to deception. In these circumstances, it is not established, in my opinion, that the proposed mark is distinctive in the sense required by the Act, that is, adapted to distinguish the goods of the proprietor of the trade mark from those of other persons. In my opinion, therefore, the application should be refused upon this ground.

But, further, there is, in my opinion, a likelihood of deception within the meaning of sec. 114. There is a likelihood of deception if the mark sought to be registered is such that persons may reasonably fail to associate the mark definitely with the applicant's goods, and if it also appears that they will be subject to a real risk of associating it with the goods of a competitor. In such a case there is not a certainty, it is true, but there is a probability, of deception. The evidence shows that there would be such a probability if the applicant's mark were registered, and, accordingly, on this ground also, I am of opinion that the application should be refused.

The appeal should be allowed with costs and the decision of the deputy registrar should be set aside. The application for registration should be refused with costs of proceedings before the deputy registrar.

Rich J.

The trade mark put forward by the respondent to this appeal is presented as a device which includes a word. The word is a surname—"Ludowici." It is represented in a prominent way imposed upon a drawing of a pulley wheel such as belting passes over for the purpose of driving machinery. The respondent seeks registration of the word in connection with power-transmission appliances. Such appliances form part of the goods in which it trades.

Two companies formed by members of the same family carry on rival businesses in the same class of goods. The family of Ludowici split some twenty-five years ago and the two companies are the product of the division between them. The appellant, the managing director of which is Charles Ludowici, objects to the registration of the proposed mark. The striking feature of the mark is the surname "Ludowici." But no surname according to its primary meaning can be distinctive. For according to its primary meaning it seems to identify every individual so called. Further, as Joyce J. remarks in In re Benz et Cie's Application[4], the mere fact of a surname being printed or represented in a special or particular manner does not relieve the person who proposes to use it of the necessity of obtaining an order under sec. 16 (1) (e) of the Trade Marks Act 1905-1934. Such an order ought only to be made when a secondary meaning is established by evidence, a secondary meaning by which it is distinctive of the applicant. The present mark is a new one and taken as a whole must stand or fall by its distinctiveness, that is, subject to any question under sec. 114. But its distinctiveness must be judged in relation to the use which is to be made of it and to the circumstances of the trade. In the case of a new mark its distinctiveness must be considered quite apart from the effect of registration. "The registrar or the court has to determine before the mark be admitted to registration whether it is of such a kind that the applicant, quite apart from the effects of registration, is likely or unlikely to attain the object he has in view" (per Lord Parker, Registrar of Trade Marks v. W. & G. Du Cros Ltd.[5]). That object is actually to distinguish his goods by means of the mark from those of other persons. But among the persons from whom the applicant is to be so distinguished in the present case are those using the same name, "Ludowici," as of right. The appellant company has no title to such a name, but its managing director has and so have many of its shareholders. The appellant company is entitled to inform the world, as it has in fact habitually done, that Charles Ludowici is its managing director, and to obtain whatever benefit springs from that fact. So much of the mark as consists of the picture of the pulley wheel could have little or no importance as a distinguishing element. Any capacity for distinctiveness is drowned in the name to which it serves only as a bearing or decoration (In re Benz et Cie's Application[6]). In a passage in In re R. J. Lea Ltd.'s Application[7], quoted by Lord Russell of Killowen in A. Baily & Co. Ltd. v. Clark, Son & Morland[8], Hamilton L.J. said:—"Further the Act says adapted to distinguish; the mere proof of admission that a mark does in fact distinguish does not ipso facto compel the judge to deem that mark to be distinctive. It must be further adapted to distinguish, which brings within the purview of his discretion the wider field of the interests of strangers and of the public." In the present case I think the facts show that the name "Ludowici" by itself never came to mean the respondent company to the exclusion of the appellant company or more particularly its managing director and that part of the family whose interests the appellant company represents. Here these are the strangers of whose interests Hamilton L.J. spoke[9]. In Baily's Case[10] Lord Atkin said: "It matters little whether one says that in the circumstances the word was incapable of being adapted to distinguish, or that in the exercise of his discretion the registrar should refuse to register." In my opinion this observation applies to the present case.

In any view I think the appeal should be allowed and the registration refused.

Dixon J.

The question for determination is whether a proposed trade mark in which the surname "Ludowici" forms a prominent, if not the dominant, feature, should be placed upon the register as the mark of J. C. Ludowici & Son Ltd. The business carried on by the company is shortly described as that of manufacturers of leather belting and power-transmission engineers. The goods in respect of which registration is sought are power-transmission appliances. The proposed mark is new and was adopted in 1935, not long before the making of the application. The business carried on by J. C. Ludowici & Son Ltd. was founded in 1858 by John Charles Ludowici, now dead, a tanner and leather-belting manufacturer. He carried it on under his own name until 1891, when the company was formed to take it over. He and his eldest son, Charles, became life directors of the company. In 1905 another son, Frederick John, who had acted as secretary, became a director. The shares in the company appear to have been held for the most part by members of the family. As time wore on, differences arose between Charles, on the one side, and, on the other side, his brother Frederick John and his father. Doubtless others were involved, but it is not material how the family divided, nor is it disclosed by the evidence. In 1913 a meeting of the company was summoned at which matters were brought to a head. The issue of the meeting was the resignation of Charles, the disposal of his shares, and his complete dissociation from the company. He set up a rival business of his own, which until 1917 he carried on under the title "Charles Ludowici Tanner and Manufacturer of mechanical leathers and belting." In 1917 he formed a company called "Mangrovite Belting Ltd.," which took over his business. He is managing director. Fourteen of its shareholders bear the name "Ludowici" and four of these are directors.

The businesses of both companies have prospered. They are rivals in the same field. If there be any difference in the nature of their trade, it apparently lies in a greater tendency to develop the engineering side on the part of J. C. Ludowici & Son Ltd. But substantially both companies compete in supplying the same demand. Each has its office address in York Street, Sydney, and each has a factory on the Lane Cove River, in addition to factories elsewhere. J. C. Ludowici & Son Ltd. has used the word "Pioneer" as a trade mark, and it has formed a prominent feature of much of that company's advertising. But the name of the company has always been used in a conspicuous manner in the company's printed material and advertisements. There can be no doubt that the name "Ludowici" is widely used, as might be expected, to identify the company, its business and products. But Mangrovite Belting Ltd. has preserved the connection with the name "Ludowici" which the business it took over possessed. In its letter-heads, bill-heads and other stationery, as well as in much of its advertising matter, under the name of the company the words "Charles Ludowici, Managing Director" have appeared. Examples are given of correspondence and communications to the company which, although meant for it, are addressed to it by a description in which the name "Charles Ludowici" or even "Ludowici" simply takes a part, and it seems likely that in the minds of some customers that name is connected with Mangrovite Belting Ltd. Of these people probably the greater part would not be unaware of the existence of J. C. Ludowici & Son Ltd., though it would be hard to say what would be their impression of the relation between the two companies.

In 1928 J. C. Ludowici & Son Ltd. instituted a suit in equity against the Mangrovite Belting Ltd. complaining that the latter company was carrying on its business so as to lead to the belief that it was a branch of the former company's business and to cause confusion between the two businesses. But, after a defence had been filed, the suit was discontinued.

The application of J. C. Ludowici & Son Ltd. for registration of the mark now in question was opposed by Mangrovite Belting Ltd. The decision of the Registrar of Trade Marks was in favour of granting registration and against the opposition. The basis of his decision is the view that the mark proposed is not a surname and is not a name requiring an order before it could be deemed a distinctive mark, but consists in a combination of device and name making a mark prima facie distinctive. The question, therefore, to which he addressed himself was the probability of deception. He answered this question in favour of the mark, substantially upon the ground that the name "Ludowici" had for long been used to refer to the applicant's business and goods.

The mark applied for consists in a drawing of a pulley wheel with the name "Ludowici" placed over it. A pulley wheel is, of course, a characteristic portion of power-transmission appliances, that is, of the goods in connection with which registration is sought. It is, however, not a mere pictorial representation of the goods to which the mark is to be applied (Cf. Bowden Wire Ltd. v. Bowden Brake Co. Ltd.[11]). At the same time it has no peculiarity which would naturally strike the eye or impress the mind. It serves rather as a background, at once suggestive of the nature of the goods and attracting attention to the name as the conspicuous and effective feature of the mark.

The case is not an easy one but I have formed the opinion that registration of the mark should be refused upon the ground that the mark is not adapted to distinguish the goods of the proprietor from those of other persons (sec. 16 (2) of the Trade Marks Act 1905-1934). This conclusion I base upon the nature of the mark considered in reference to the peculiar circumstances of the case. Prima facie a surname is not distinctive. "Where the surname is not that of the proprietor, it is more easy to justify its claim to be a trade mark than where the surname is that of the proprietor. It is only in very exceptional circumstances that such an application ought to be allowed to proceed. If my name is John Smith, the name Smith may indicate that the goods are not made by Brown, but it is not adapted to distinguish my goods from those of any other person who has the surname Smith. A surname may, however, be so peculiar, and its user may have been so extensive, that it has in fact become distinctive of the proprietor's goods" (Teofani & Co. Ltd. v. Teofani[12], per Cozens-Hardy M.R.). But, "it is not for the court to lay down a rule excluding all surnames from registration, when the statute has left the matter entirely open—left it to be determined as a question of fact in each case, whether the word is in fact distinctive. The quality of distinctiveness may be inherent in the word selected, but it also may be acquired, and the statute in terms allows evidence of acquired distinctiveness to be adduced" (per Swinfen Eady L.J.[13]).

Like the name "Teofani" in the case cited the name "Ludowici" has the property of uncommonness. But it can not be held distinctive unless it is shown by evidence to have acquired in the trade a secondary meaning distinguishing the goods or business of J. C. Ludowici & Son Ltd. from any other goods or business to which the surname "Ludowici" is applied or in reference to which it is employed by other persons called by that name.

In my opinion the evidence falls short of establishing the existence of such a meaning. Doubtless J. C. Ludowici & Son Ltd. are fully entitled to use the name "Ludowici" and to enjoy the benefits which may arise from the frequent application of the word to denote the company. But, to make a word or name distinctive, what must be shown is an acquired capacity in the word to distinguish the company, its business or goods from another concern to which the name "Ludowici" might be legitimately applied were it not for that secondary meaning. In the present case I think that it is possible that the use of the name Ludowici in reference to the business founded by Charles Ludowici might in the beginning have been open to attack. That would depend upon the nature and extent of the trade reputation and meaning which at that date attached to the word. But as matters have developed, I think that the association of Charles Ludowici with the business he set up has led Mangrovite Belting Ltd. to be regarded as, so to speak, his company and a company with which the name "Ludowici" is connected.

The rest of the mark, that is, the pulley as opposed to the word, has no characteristics which would give distinctiveness in fact to the whole. The name or word would necessarily operate against the effectiveness of a design or figure forming but a background, and the figure in question has the further disadvantage of being but an unattractive representation of part of the goods.

We must form our own opinion upon the matter and not simply consider the validity of the exercise by the registrar of his discretion (Jafferjee v. Scarlett[14]).

In my opinion the appeal should be allowed.

McTiernan J.

In my opinion, the mark sought to be registered is not within sec. 16 (1) (a). It is a personal surname, but there is no evidence that there is any person known in the trade as Ludowici without any christian name or other prefix (In re Benz et Cie's Application[15]). Doubtless it is a mark. But the question is whether it is distinctive. This means "adapted to distinguish" (sec. 16 (2)). The mark, for which registration is sought, consists of the wheel, the particular type in which the name "Ludowici" is printed, and the diagonal crossing of the wheel by the name. The wheel might be regarded as a mark which would distinguish the goods of the applicant from those of other persons, but there is nothing distinctive about the way in which the name "Ludowici" is printed. The dominant element is the name "Ludowici," and if the device as a whole is distinctive, it is so by virtue of the name "Ludowici," which, to quote the words of Lord Sumner (then Hamilton L.J.) "might fasten upon the memory or even fascinate the eye" (In re Benz et Cie's Application[16]). The mark, therefore, falls within the class of distinctive marks embraced by the words, "name, signature, or word or words" in sec. 16 (1) (e), and an order of the registrar, law official, or court is required under that sub-section. No order was obtained. The mark, therefore, cannot be registered, because as the device depends upon the name "Ludowici" it is one that might be adopted in all good faith by a person of that name in the trade. The evidence does not show that the name has acquired a secondary meaning distinguishing the applicant, its business or its goods. I agree that the name cannot be held to be one which is adapted to distinguish the goods of the applicant from those of other persons.

In my opinion the appeal should be allowed.

Appeal allowed with costs. Decision of deputy registrar set aside. Application for registration refused with costs.

Solicitors for the appellant, J. T. Ralston & Son.

Solicitors for the respondent, Arthur H. Garratt & Co.

[1] [1937] HCA 36; (1937) 57 C.L.R. 115.

[2] (1913) 30 R.P.C. 177.

[3] (1913) 30 R.P.C. 177.

[4] (1912) 29 R.P.C. 357, at p. 360.

[5] (1913) A.C., at pp. 634, 635.

[6] (1913) 30 R.P.C., at p. 181.

[7] (1913) 1 Ch. 446, at p. 463.

[8] (1938) A.C., at p. 571.

[9] (1913) 1 Ch., at p. 463.

[10] (1938) A.C., at p. 567.

[11] (1913) 30 R.P.C. 580, at p. 596.

[12] (1913) 30 R.P.C., at pp. 460, 461.

[13] (1913) 30 R.P.C., at p. 464.

[14] [1937] HCA 36; (1937) 57 C.L.R. 115.

[15] (1913) 30 R.P.C. 177.

[16] (1913) 30 R.P.C., at p. 183.