Hy-Line Chicks Pty Ltd v Swifte [1966] HCA 19; (1966) 115 CLR 159 (6 April 1966)

HIGH COURT OF AUSTRALIA

HY-LINE CHICKS PTY. LTD. v. SWIFTE [1966] HCA 19; (1966) 115 CLR 159

Trade Mark

High Court of Australia
Windeyer J.(1)

CATCHWORDS

Trade Mark - Infringement - Use of trade mark in good faith of name of place of business or continuously in relation to goods before use or registration by registered proprietor - Defence of prior user made out as to name of business but not as to goods - Form of injunction - Trade Marks Act 1955-1958 (Cth), s. 64 (1) (a), (c).

HEARING

Melbourne, 1966, March 4;
Sydney, 1966, April 6. 6:4:1966
ACTION.

DECISION

April 6.
WINDEYER J. delivered the following written judgment:-
This is an action for the infringement of a trade mark. It is of a somewhat is a breeder of chickens. It is the registered proprietor of a trade mark, number A. 152,678, registered in class 31, for "chickens and all other bred poultry". The mark is the word "Hy-Line". It was registered on 16th February 1959 for a period of seven years and has been renewed until 16th February 1980. This invented word was apparently adopted by the original proprietor, from whom the plaintiff got it by assignment, because it is well known in the United States as the trade name of a particular breed or strain of poultry. It is not suggested that the poultry that the plaintiff breeds is of this strain. Indeed the only evidence before me suggests that this is not so. But the plaintiff claims that it breeds chickens "in accordance with genetic principles with the object of producing high quality poultry capable of volume production of either flesh or eggs". It sells its chickens to poultry farmers. It also sells them to persons who conduct what it calls "enfranchised hatcheries" and who are themselves registered users of the mark. They in turn breed, it is said, from this stock and sell the progeny under the name "Hy-Line". From their sales the plaintiff gets royalties. (at p160)

2. The defendants, a husband and his wife, conduct in partnership a poultry farm and hatchery in South Australia. They began this business in 1955. Copying from the United States, they adopted the trade name "Hi-Line Poultry Farm". This name was on 22nd April 1958 registered as their business name under the Business Names Act, 1928-1955 (S.A.). They had in fact been using the name ever since they commenced business, but in ignorance that they should register it: they were required to pay a penalty for the delay in registration. Their business was at first small, but they steadily built it up. On 9th September 1959 they had their registered business name altered to "Hi-Line Hatchery and Poultry Farm". In applying for registration of this new name they stated that their business was that of breeding and egg production and that it had been commenced on 3rd September 1959. They used the name in various ways. The male defendant gave evidence that a notice board that was near the gate of their premises for about three years from 1957 read "Hi-Line Chickens Ready Now". Later, and at some time after the business name was changed in 1959 a large sign was erected reading "Hi-Line Hatchery - Hi-Line chicks are champs". It apparently is still there. And since 1959 the defendants have been using the name "Hi-Line" fairly extensively in advertisements, labels on chicken boxes, and otherwise. They claim in these advertisements to be, and in fact are, conducting a hatchery and stud poultry farm under the name "Hi-Line Hatchery and Australorp stud farm". They have on occasions even adopted the plaintiff's spelling "Hy-Line". They do not deny any of this. Their defence is a claim of right. Their acts they say were not infringements because of their continuous use of the name "Hi-Line" before the registration of the plaintiff's trade mark "Hy-Line". (at p161)

3. This defence is based upon s. 64 (1) of the Trade Marks Act 1955-1958 (Cth). So far as relevant the enactment reads as follows: "64. (1) Notwithstanding anything contained in this Act, the following acts do not constitute an infringement of a trade mark: - (a) the use in good faith by a person of his own name or the name of his place of business or the name, or the name of the place of business, of any of his predecessors in business; (b) . . . (c) the use by a person of a trade mark in relation to goods in relation to which that person has, by himself or his predecessors in business, continuously used the trade mark from a date before - (i) the use of the registered trade mark by the registered proprietor, by his predecessors in business or by a registered user of the trade mark; or (ii) the registration of the trade mark, whichever is the earlier". (at p161)

4. Paragraph (c) was the only part of the section relied upon as a defence, and to it the evidence on the behalf of the defendants was directed. I may, however, say at this point that, whatever be the correct conclusion on the main issue of infringement, the defendants are it seems to me entitled, by virtue of par. (a) of the sub-section, to describe their premises as the "Hi-Line Poultry Farm and Hatchery", for it is the name of their place of business. The term "Hi-Line" they had confessedly copied from America, as the plaintiff had its trade mark "Hy-Line". There is no evidence that when in 1959 the defendants added the word "Hatchery" to their business name this was not done in good faith. They had been calling their farm the "Hi-Line Poultry Farm" for some time before that. The addition was an amplification of the earlier name made, it seems, because they were extending the nature of their business. (at p161)

5. I turn now to the critical issue under s. 64 (1) (c). Unless they be protected by that provision there is no dispute that the defendants have infringed the plaintiff's trade mark. To have the benefit of the exemption which that provision gives, the defendants must prove a use by them of the trade mark continuously in relation to goods from a time before the registration of the mark. It was contended on behalf of the plaintiff that this means that the protection depends upon the use having been a use of the mark strictly as a trade mark. And counsel for the plaintiff concedes that if such user was not of the mark as a trade mark, then the continuance of it could not be an infringement of the trade mark. I am not sure that the construction of the par. (c) contended for was entirely correct. But I am convinced that the defendants must show that their earlier use of the word "Hy-Line" was the same manner of use as they now assert is available to them and for goods of the same kind as now. The critical question is therefore, did the defendants continuously use the name "Hi-Line" in a relevant sense in relation to chickens before the date of registration of the trade mark "Hy-Line"? I am not satisfied that they did. I am not satisfied that they had a trade in live chickens before about September 1959. They conducted a poultry farm. They sold eggs and dressed fowls and occasionally some young pullets. But they were not hatching chickens for sale in the way of trade. They hatched chickens for their own purposes by incubation and I do not say that they never sold any young chickens. But I am very far from satisfied that they had in those days a regular business of selling day-old chickens. The first defendant in his affidavit, and at first in his evidence in the box, swore that they did. But he was somewhat prone to general statements that under cross-examination he had to qualify or retract. He seemingly laboured under a sense of grievance, because he thought that the plaintiff was unfairly trying to stop the use of the name that he and his wife had chosen for their business, a business that they had by hard work developed from a small poultry farm into an important hatchery. And his sense of grievance may have overcome his sense of accuracy and blurred his memory. I cannot accept his evidence as reliable on all points. It seems to me probable that the hatchery side of the defendants' business began at about the time that they added the word "Hatchery" to their business name. At all events, I am not satisfied that it existed before the date of the registration of the plaintiff's mark. The most that can be said is that the defendants in the relevant period called their poultry farm the "Hi-Line Poultry Farm", and that it is highly probably that some people who bought the products of the farm, eggs and dressed poultry principally, knew them as having come from a place of that name. (at p162)

6. Turning from this to the position under the registered trade mark "Hy-Line": The quality or attribute that it connotes in the chickens sold under that name is that they are of a particular strain or breed, not that they come from a particular farm. The mark describes or indicates their thoroughbred character rather than the place where they were born. Had the defendants been in fact carrying on the trade or business of chicken breeders and sellers of chickens before the date of registration the defence on which they rely might have had validity. But, as I am not satisfied that they were, I cannot find that the use of the name "Hi-Line" as the name of their farm now entitles them to sell or advertise their chickens as of the "Hy-Line" strain or breed or under any variant of the name which would suggest that. But this does not mean that the defendants can be prevented from using the name "Hi-Line" for their farm. And, of course, they can there hatch and sell chickens. Had they not used the name before the plaintiff's predecessor got his trade mark, it may be that they could now be restrained from using it in any way in relation to poultry. But, in fact, they were first in the field, and the plaintiff's counsel concedes that they are entitled to describe their premises and their business by the registered name. (at p163)

7. I do not have to consider whether the plaintiff's mark should have been registered. No question of that has been raised. It is not disputed in these proceedings that it is validly on the register. (at p163)

8. On the evidence and the admissions on the pleadings I consider that the plaintiff is entitled to an injunction to restrain the defendants from infringing its mark. As I see the matter, the defendants are not entitled to use the words "Hy-Line" (so spelt) in the course of their trade: and they infringe the plaintiff's mark if they use the word "Hi-Line" (so spelt) in relation to chickens, for the purpose of indicating, or so as to indicate, a breed or strain of chickens. But the proceedings seem to have been launched by the plaintiff in the belief that it could prevent the defendants from using the word "Hi-Line" in connexion with their business in any way at all. For example, an order is sought that the defendants deliver up all articles in their possession bearing the word "Hi-Line". This far-reaching claim the plaintiff does not now seek to make good : and, as I have already said, the defendants are, in my view, entitled to carry on their business under the name "Hi-Line Hatchery and Poultry Farm". That there is a possibility of confusion in the concurrent use of the same word in the same field, although for different purposes, I do not doubt. But this is no reason for depriving the defendants of their right to sell chickens; or of their right to call their farm by the name they had called it before the plaintiff adopted the same name as its trade mark for chickens; or of their right to describe chickens from their farm as from their farm. A duty to avoid, as far as possible, the confusion that can arise falls upon both parties. Each has rights that the other must respect. The plaintiff's rights do not override the defendants' rights. The defendants must not infringe the plaintiff's mark. The plaintiff must not threaten them because they do what they lawfully may do, or try to trick them into doing unwittingly what they may not lawfully do. The defendants would be on the safe side if they described their premises as "Swiftes' Hi-Line Hatchery and Poultry Farm", The plaintiff's counsel said that that would content the plaintiff. They could then safely sell their chickens not, of course, as Hi-Line chickens, but as chickens from their hatchery calling it by its name. (at p164)

9. It is not the ordinary practice of the Court to do more than restrain infringement in general terms. It is not the ordinary practice to tell an infringer what he may do to be saved. But I have come to the conclusion that in an unusual case I should make a somewhat unusual order. The order that I shall make is as follows: - First: an injunction restraining the defendants from infringing the plaintiff's trade mark. Secondly: a declaration that the use, in the course of trade, and without the plaintiff's permission, of the word "Hy-Line" so spelt or "Hi-Line" (or any other word or words, however spelt, deceptively similar to the word "Hy-Line") as the name or description of a breed or strain of chickens constitutes an infringement of the plaintiff's trade mark. Thirdly: a declaration that the use by the defendants of the name "Hi-Line Hatchery and Poultry Farm" or "Swiftes' Hi-Line Hatchery and Poultry Farm" as the name of their place of business at Happy Valley in South Australia, and as the description of the business carried on there, does not constitute an infringement of the plaintiff's trade mark: and that the sale or offering for sale by the defendants of chickens described as bred at or coming from the said place does not constitute such an infringement. Fourthly: an order that the defendants pay two-thirds of the plaintiff's costs of the action incurred up to this date. (at p164)

10. I reserve the further consideration and further costs of the action to a date to be fixed. This is to enable the parties to consider my judgment, to make any submissions they may wish to make as to the form of this order before it is finally drawn up and entered, and to hear any application that the plaintiff may wish to make concerning damages or for an account of profits. The injunction granted, however, is to operate immediately, except that the defendants may have fourteen days to remove any notices or advertisements already in existence and under their control which would amount to breaches by them of the injunction. (at p165)

11. The further consideration of the matter stands adjourned to a day to be fixed.*

*The parties subsequently settled the action and did not proceed with the further consideration of the matter - Ed. (at p165)