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High Court of Australia |
NEW SOUTH WALES DAIRY CORP. v. MURRAY GOULBURN CO-OP CO. LTD. [1990] HCA 60; (1990) 171
CLR 363
F.C. 90/053
Trade Marks
High Court of Australia
Mason C.J.(1), Brennan(2), Deane(3), Dawson(4), Toohey(4), Gaudron(5) and
McHugh(6) JJ.
CATCHWORDS
Trade Marks - Rectification of register - Expunging mark - Mark "likely to deceive or cause confusion" not to be registered - Whether mark becoming deceptive or confusing after registration removable - Whether blameworthy conduct on part of proprietor required for removal - Trade Marks Act 1955 (Cth), ss. 22, 28, 56(1), 61(1)(b).
HEARING
1990, May 2, 3; December 20. 20:12:1990DECISION
MASON C.J. The appellant is a statutory authority created by the Dairy Industry Act 1979 (N.S.W.). As it is the successor in name and title to the Dairy Industry Authority of New South Wales and the Dairy Industry Marketing Authority, it will be convenient hereafter to use the expression "the appellant" to refer not only to the present appellant but also to its two predecessors in name and title. The appellant is responsible for the regulation and control of production, supply and distribution of milk in New South Wales, as well as for the fixing of prices for milk and other dairy products.2. The respondent is a Victorian corporation with approximately 25,000 shareholders who reside predominantly in rural areas. It is one of the largest farm co-operatives in Australia. It manufactures and supplies a large number of dairy products, including milk, receiving supplies of milk from Victoria and southern New South Wales.
3. The appellant is the registered proprietor under the Trade Marks Act 1955 (Cth) ("the Act") of the trade mark consisting of the word "MOOVE", which was registered with effect from 1 November 1978 in respect of all goods in Class 29. Those goods include milk and other dairy products. In January 1979, the appellant launched a flavoured milk product under the name "MOOVE". Since then, MOOVE flavoured milk has been extensively promoted and sold in New South Wales and the Australian Capital Territory. There have also been substantial sales elsewhere in Australia. The product is available in several flavours and is distributed both in the form of fresh milk and long life (UHT) milk. The fresh milk is packaged in 300 ml. and 600 ml. gable-topped cartons and in labelled 2 litre plastic bottles. The UHT milk is sold in 250 ml. brick-shaped Tetrapaks. In each case the colouring on the packaging or labels is two tonal, depending upon the particular flavour of the milk, and the word "MOOVE" is printed within a slightly curved block reflecting a theme of activity. The UHT product accounts for between 2 per cent and 4 per cent of total MOOVE sales. The advertising of MOOVE is targeted primarily to encourage purchases by people aged between thirteen and seventeen, with secondary target groups of children in their immediate pre-teen years and people aged between seventeen and twenty-five.
4. The respondent is the registered proprietor of the trade mark consisting of the word "MOO", which was registered with effect from 26 August 1966 in respect of dairy products as goods included in Class 29. The respondent took by way of assignment under a deed expressed to be made on 29 September 1987 from the original proprietor of the mark, Healthway Dairy Products Pty. Limited ("Healthway"). The assignment was registered on 24 February 1988. For some seven years before March 1974 the trade mark was used by Healthway in relation to a reduced fat cream product sold in Victoria and, for a short time, in Sydney. However in 1974, Healthway ceased to market the product. Thereafter the MOO trade mark was not used until after it was assigned to the respondent. The appellant challenged the validity of the assignment. That challenge was rejected by the courts below. The appellant sought to appeal against that rejection. However, in the course of the hearing in this Court, we rescinded the grant of special leave to appeal in so far as it related to this point. The validity of the assignment is therefore not an issue for determination in the appeal.
5. In November 1987, the respondent launched in Queensland a packaged cheese product under the name "MOO". The respondent extended the sale of this product to New South Wales in 1988. In mid-August 1988, the respondent commenced sale of a flavoured milk product under the name "MOO" in New South Wales. The MOO flavoured milk is sold in groups of six 200 ml. brick-shaped Tetrapaks and is only available in UHT form. The packaging varies in colour according to the flavour of the contents and bears the word "MOO" in large letters, in smaller letters the words "reduced fat milk" and in quite small letters the word "Devondale" as part of a device coloured green, white and red. There is also on the packaging a drawing of the head of a cow, together with an inane verse. The product is intended to appeal to children aged between approximately four and ten years, and it is said, especially by virtue of its sale in blocks of six, to be attractive to mothers aged twenty-five to forty preparing school lunches.
6. The appellant commenced proceedings against the respondent on 5 August 1988 claiming injunctive and ancillary relief directed to the respondent's marketing of milk drink products with or by reference to the "MOO" trade mark. In the action, the appellant sought relief on several grounds, but for the purposes of this appeal the only relevant ground is alleged infringement of the "MOOVE" trade mark. In separate proceedings, the appellant sought the removal of the "MOO" trade mark for non-use under s.23 of the Act. Those proceedings were dismissed and are not directly relevant to this appeal.
7. At first instance, Gummow J. found that the "MOO" trade mark wrongly remained in the Register of trade marks in respect of goods other than cheese and ordered rectification of the Register accordingly. The Full Court of the Federal Court (Lockhart, Pincus and von Doussa JJ.) allowed an appeal against these orders, but ordered rectification of the Register by limiting the goods in respect of which the trade mark "MOO" was registered to cheese and flavoured milk. It will be necessary to return to the decisions in the courts below after making reference to two relevant findings of fact made at first instance.
8. After a thorough review of the evidence, Gummow J. said:
"In all the circumstances, my conclusion is that the
use by the first respondent of MOO in relation to its UHT
flavoured milk product is such that a substantial number
of purchasers and prospective purchasers of the MOO UHT
flavoured milk, being persons who know of MOOVE flavoured
milk, including the UHT MOOVE product, will be caused to
wonder whether it might not be the case that the two
products come from the same source; they would entertain a
reasonable doubt."
likely to deceive or cause confusion, expressing his conclusion in the terms
of the test formulated by Kitto J. in Southern Cross
Refrigerating Co. v.
Toowoomba Foundry Pty. Ltd. (1954) 91 CLR 592, at p 595.
9. In the context of dealing with another of the appellant's grounds of
attack, Gummow J. made a second finding of fact which his
Honour expressed in
the following terms:
"I accept what was said by the witnesses for the ...
respondent to the effect that the ... respondent was not
acting fraudulently in the sense of choosing MOO in the hope
or expectation of deriving benefit from its resemblance to
MOOVE. The ... respondent's position was that the products
would be directed at different 'target' markets and be
promoted accordingly."
10. Because the appellant's claim of infringement of the "MOOVE" trade mark could not succeed so long as the respondent's registration of "MOO" in relation to dairy products remains in place (see ss.58(3) and 64(1)(e) of the Act), it was necessary for the appellant to seek rectification of the Register. For the purposes of this appeal, the only relevant argument directed to that question is that the "MOO" trade mark wrongly remained in the Register within the meaning of s.22 of the Act on the ground that at the date of institution of the proceedings the mark contravened s.28 by reason either of its use being likely to deceive or cause confusion or of the mark itself being one which would otherwise be disentitled to protection in a court of justice.
11. Section 22(1)(b) permits the rectification of the Register "by the
expunging or amendment of an entry wrongly made in or remaining
in the
Register". Section 28 provides:
"A mark -Although on its face s.28 appears to be directed simply to the act of registration of a trade mark, the section has a secondary operation in relation to the continuance in the Register of a trade mark after its initial registration: Berlei Hestia Industries Ltd. v. Bali Co. Inc. [1973] HCA 43; (1973) 129 CLR 353, at p 360. The extent of that secondary operation is central to this appeal.
(a) the use of which would be likely to deceive or
cause confusion;
(b) the use of which would be contrary to law;
(c) which comprises or contains scandalous matter; or
(d) which would otherwise be not entitled to
protection in a court of justice,
shall not be registered as a trade mark."
12. In light of the fact that the "MOO" trade mark was registered as long ago
as 1966, the appellant was also faced with those provisions
of the Act which
confer a measure of protection upon long-standing registrations. Section 60
provides:
"In legal proceedings relating to a trade markMoreover, s.61(1) provides:
registered in Part A of the Register (including applications
under section 22) instituted after the expiration of 3 years
from the date of registration, the trade mark shall not be
removed from the Register or be held invalid on the ground
that it was not a registrable trade mark under section 24,
unless it is proved that it was not, at the commencement of
the proceedings, distinctive of the goods of the registered
proprietor."
"In legal proceedings relating to a trade markTo complete the legislative picture, it is necessary to set out s.24(1), which is in these terms:
registered in Part A of the Register (including applications
under section 22), the original registration of the trade
mark under this Act shall, after the expiration of 7 years
from the date of the original registration, be taken to be
valid in all respects, unless it is shown -
(a) that the original registration was obtained by
fraud;
(b) that the trade mark offends against the provisions
of section 28; or
(c) that the trade mark was not, at the commencement
of the proceedings, distinctive of the goods or
services of the registered proprietor."
"A trade mark is registrable in Part A of theIn contrast to Part A of the Register, Part B may contain trade marks which are not distinctive but are capable of becoming distinctive: s.25(1). The marks in the present case are registered in Part A.
Register if it contains or consists of -
(a) the name of a person represented in a special or
particular manner;
(b) the signature of the applicant for registration or
of some predecessor in his business;
(c) an invented word;
(d) a word not having direct reference to the
character or quality of the goods or services
in respect of which registration is sought and
not being, according to its ordinary meaning, a
geographical name or a surname; or
(e) any other distinctive mark."
13. At first instance, Gummow J. considered that the concepts of lack of distinctiveness and deceptiveness required separate treatment, notwithstanding that the two notions could tend to coalesce. His Honour noted that the challenge to the "MOO" trade mark was not directed to its original registration, since the mark was not said to have been deceptive when first registered in 1966. Rather, the appellant contended that, by reason of supervening events, the registration had become a source of deception by August 1988. Similarly, the appellant argued that the "MOO" trade mark was not distinctive of the respondent's goods at the commencement of the proceedings. Gummow J. found for the appellant on the question of distinctiveness.
14. The central question before Gummow J., therefore, and the issue in this appeal, is whether the fact that a mark has, since its registration, become one the use of which is likely to deceive or confuse is of itself a sufficient basis for ordering its expungement. The appellant contends that the words of s.28(a) demand an affirmative answer to that question. On the other hand, the respondent submits that s.28 is directed only to that deception or confusion which causes the mark to be disentitled to protection in a court of justice. In other words, s.28(d) is said to govern and limit the meaning of s.28(a) and to import a requirement of culpability on the part of the registered proprietor before a mark can be removed for offending against s.28(a) where such contravention arises after the mark's initial registration.
15. In the view of Gummow J., the category of marks referred to in s.28(d) includes cases where trade marks have lost distinctiveness by disuse, being marks lacking strong inherent adaptation to distinguish, at least where the result is likelihood of deception or confusion. Accordingly, his Honour held that the "MOO" trade mark was one in respect of which the respondent was not entitled to relief in equity, "both for want of the necessary distinctiveness at 5 August 1988 and also as a consequence of the lengthy period of use of MOOVE before the commencement of use of MOO by the ... respondent". His Honour referred also to the likelihood that the use of the "MOO" trade mark would deceive or cause confusion. In this way, Gummow J. relied upon s.28(d) rather than upon the construction of s.28(a) urged by the appellant.
16. On appeal, the Full Court of the Federal Court held that s.28 does not comprehend loss of distinctiveness as a ground for non-registration. Therefore, the fact that the "MOO" trade mark had ceased to be distinctive of the respondent's goods did not provide a ground for rectification of the Register under s.22. The Full Court stated that it was not to the point that an unregistered trade mark would not be entitled to relief under the general law if it lacked distinctiveness, because a registered trade mark would be so entitled as long as the original registration was lawful. Moreover, the Full Court held that the long period of use of "MOOVE" before the commencement of the use of "MOO" was a matter going to non-use of the "MOO" trade mark. Since the application for removal for non-use had failed, non-use did not disentitle the mark to the protection afforded to registered trade marks. Finally, the likelihood that use of the "MOO" mark would cause deception or confusion was not of itself sufficient to justify removal because s.28(a) did not ordinarily encompass a case of deception or confusion arising merely from the lawful registration of a trade mark sufficiently similar to an existing lawfully registered mark to satisfy the literal words of s.28(a).
17. In the course of its decision, the Full Court relied upon the view expressed by Bowen C.J. and Lockhart J. in Riv-Oland Marble Co. v. Settef SpA (1988) 19 FCR 569 to the effect that s.28(d) refers back to and limits the scope of s.28(a). The Full Court also accepted the related proposition that a lawfully registered trade mark is only liable to expungement under s.28(a) by reason of supervening likelihood of deception or confusion if that likelihood is the result of some blameworthy conduct on the part of the registered proprietor. That view was forcefully expressed by Lord Diplock in General Electric Co. v. General Electric (1972) 1 WLR 729; (1972) 2 All ER 507 ("G.E. Trade Mark") and endorsed by Fox J. in HTX International Pty. Ltd. v. Semco Pty. Ltd. [1983] FCA 203; (1983) 78 FLR 57, at p 64; [1983] FCA 203; 49 ALR 636, at p 644.
18. The "blameworthy conduct" test of Lord Diplock has been the subject of some controversy: see, for example, An Annual Survey of Australian Law, 1988, pp 294-295; 1989, p 370. It did not find favour with Gummow J. in the present proceedings. Nor does the notion that s.28(a) is to be read as being subject to par.(d) sit easily with the disjunctive form of the section, which differs in that respect from the United Kingdom provision under consideration in G.E. Trade Mark. The test was developed in association with the construction of s.28(a) by reference to s.28(d), in order to deal with what was perceived to be the extensive secondary operation of s.28 in relation to marks "wrongly ... remaining in the Register" within the meaning of s.22(1)(b). Because it was considered that the operation of s.28 could result in a trade mark "wrongly remaining" in the Register by reason of supervening events or circumstances since its initial, lawful, registration, it became necessary to consider how par.(a) would apply in those circumstances.
19. It is desirable at the outset to examine s.28 and to consider the extent of its secondary operation so as to identify in what circumstances the questions of construction already outlined may arise. A convenient starting point is the decision of this Court in Berlei Hestia. In that case the appellant was registered as proprietor of the trade mark "BERLEI" in 1917. The respondent became the registered proprietor of the trade mark "BALI-BRA" in 1947. The appellant sought an order expunging the respondent's mark from the Register on the basis that the use of the mark was likely to deceive or cause confusion within the meaning of s.28(a). It was agreed between the parties that, if the evidence established such a likelihood at the date of the proceedings, then it would also establish the existence of that likelihood at the date of original registration of the trade mark: see at p 361.
20. The Court found that the necessary likelihood existed. It was then
necessary to consider whether the trade mark offended against
s.28 for the
purposes of s.61(1)(b). In that context, I said, at p 360:
"Despite earlier authority to the contrary, it mayOn this basis, "the words 'shall not be registered' in s.28 refer not only to the act of making an entry in the register but also to permitting the continuance of the entry of a trade mark in the register": at p 360.
now be accepted that a trade mark 'offends against' (s.28)
within the meaning of (s.61) if it would be likely to
deceive or cause confusion at the date when application is
made to rectify the register ... What is of importance is
that for persuasive reasons which need not be reiterated the
view that s.28 ... was merely a prohibition against original
registration was rejected."
21. Against the factual background of that case, these remarks were not essential to the decision in the case. They related to the expression "offends against the provisions of section 28" in s.61(1)(b), not to the words "wrongly ... remaining in the Register" in s.22(1)(b). In any event, when the likelihood of deception or confusion is produced by the inherent similarity of the trade marks rather than by some supervening event or circumstance, s.28 has an obvious continuing effect in that the existence at the time of the proceedings of a likelihood of deception or confusion will then point to the likelihood at the time of original registration of such deception or confusion. But the case was not concerned with deception or confusion outside that context, and it would not be right to regard that issue as necessarily foreclosed by Berlei Hestia.
22. However, the arguments presented by the parties in the present case proceeded on the footing that s.28 authorizes the removal of a mark the use of which has become deceptive or a cause of confusion since the date of original registration, no doubt because the view which I expressed in Berlei Hestia conforms with the interpretation placed by the House of Lords on the comparable, but not identical, provisions of the Trade Marks Act 1938 (U.K.): see G.E. Trade Mark, at pp 749-750; pp 524-525 of All ER. That interpretation is, of course, related to the substantial question which was argued in this appeal, namely, whether s.28(a) imports the "blameworthy conduct" test.
23. In England, s.11 of the Trade Marks Act 1938 is expressed somewhat
differently to s.28 of the Act. Section 11 states:
"It shall not be lawful to register as a trade mark orSection 6 of the Trade Marks Registration Act 1875 (U.K.) and s.11 of the Trade Marks Act 1905 (U.K.) were in substantially similar terms.
part of a trade mark any matter the use of which would, by
reason of its being likely to deceive or cause confusion or
otherwise, be disentitled to protection in a court of
justice, or would be contrary to law or morality, or any
scandalous design."
24. It is convenient to notice here that s.114 of the Trade Marks Act 1905
(Cth) (the predecessor of s.28 of the Act) was different
from both s.28 and
the United Kingdom provisions. Section 114 was in the following terms:
"No scandalous design, and 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,
or the use of which would be contrary to law or morality,
shall be used or registered as a trade mark or part of a
trade mark." (emphasis added)
25. The Act was enacted following the recommendations of the Dean Committee in 1954, which was appointed to report to the Attorney-General on what alterations were desirable in Commonwealth trade marks law. In relation to s.28, the Committee stated that it had "in substance the same effect" as s.114 of the previous Act. No reason was given either for the new arrangement of the section or for the deletion of the words "used or". As to the first of these matters, it must be inferred that the disjunctive form of s.28 was thought to afford greater clarity. If that is correct, then several assumptions were clearly made as to the meaning of s.28. Thus, the Committee must have thought either that the word "otherwise" in par.(d) of s.28 qualifies the preceding paragraphs or that a mark whose use is likely to deceive or confuse is necessarily one disentitled to protection in a court of justice. If that were not so, then s.28 would have given the ground of likelihood of deception or confusion an enlarged scope by applying it to cases where there was no disentitlement to protection, which was not possible under s.114.
26. The reason for omitting the words "used or" is not immediately clear. Perhaps the Committee thought they added nothing in the case where the use of a trade mark was disentitled to protection in a court of justice, for whatever reason, or in the case where a design was scandalous, in which event common law would govern its use. But the omission of the words serves to focus attention upon the content of pars (a) to (d) of s.28 as they are expressed and to suggest that the Committee did not regard ongoing use as the concern of s.28, or, for that matter, s.114. Certainly the words do not appear in the successive United Kingdom provisions.
27. The views of the Dean Committee and the form of the previous section can be of only secondary importance in ascertaining the meaning of s.28. In the end it is the words of the section and their statutory context, including their legislative history, which must be interpreted. For that purpose, judicial decisions concerning the interpretation of comparable provisions may be of use in elucidating the meaning of those words. If there was a settled view of the meaning of s.114 or comparable provisions in other jurisdictions when the Act was passed, then that would be relevant to the interpretation of s.28. Even then, it would be necessary to bear in mind the differences in wording.
28. The English authorities reveal that s.11 of the United Kingdom Acts of 1905 and 1938 had no settled meaning until at least 1969. It was held in 1909 that a trade mark contravened s.11 of the 1905 Act by becoming calculated to deceive as a result of a supervening event after registration: R. Thorne and Sons Ltd. v. Pimms Ltd. (1909) 26 RPC 221, per Neville J. at p 227. In this way, s.11 was seen as speaking to the continuing registration of a trade mark as well as its original registration. A similar view was taken by the Court of Appeal in Bowden Wire Ltd. v. Bowden Brake Company Ltd. (1913) 30 RPC 580, at pp 590, 592, 594. In both of these cases, conduct of the registered proprietor had given rise to the likelihood of deception or confusion after registration. The House of Lords dismissed an appeal in the latter case, Lord Dunedin (with whom Earl Loreburn and Lord Atkinson concurred) and Lord Shaw of Dunfermline agreeing that s.11 had an ongoing operation: (1914) 31 RPC 385, at pp 393, 395-396.
29. On the other hand, in In re Imperial Tobacco Company's Trade Marks (1915) 2 Ch 27, Eve J. held that a trade mark could not be removed from the Register merely because its continued use had, since registration, become contrary to law. Again, in W. Woodward Ltd. v. Boulton Macro Ltd. (1915) 32 RPC 173, Eve J. held that s.11 "refers only to the moment of registration" (at p 198). It seems that Wynn-Parry J. was inclined to take the same view in In re Pan Press Publications Ltd.'s Applications (1948) 65 RPC 193, at pp 199-200, but felt bound by the decision in Bowden Wire to limit the dictum of Eve J. to a case where subsequent events had taken place beyond the control of the registered proprietor.
30. The question was still regarded as undecided when the Court of Appeal delivered its judgment in BALI Trade Mark (1968) RPC 426. Lord Denning M.R., at pp 430-431, agreed with the view of Eve J. that the section looks only to the date of registration. Diplock L.J., dissenting, regarded the date of the proceedings as the relevant date: at p 434. Salmon L.J. found the question unnecessary to decide, but was "far from convinced" that Eve J. was wrong in his opinion: at p 438. When the matter went to the House of Lords, the parties agreed that their Lordships should look only to the date of registration: Berlei (U.K.) Ltd. v. Bali Bra. Inc. (1969) 1 WLR 1306, at pp 1311, 1321; (1969) 2 All ER 812, at pp 815, 825.
31. In the G.E. Trade Mark litigation, the conflicting authorities called for resolution. The two trade marks in those proceedings had become deceptive or confusing since their respective registrations. At first instance, Graham J. agreed with the view of Diplock L.J. in BALI Trade Mark: see (1969) RPC 418, at p 461. In the Court of Appeal, Salmon L.J. expressed his agreement with the view of Diplock L.J. in the earlier case: (1970) RPC 339, at p 368. He did not regard the ongoing effect of s.11 as being limited to the case where the likelihood of deception or confusion had arisen as a result of the conduct of the registered proprietor. Winn L.J. and Cross L.J. were also of the view that the section had an ongoing operation: at pp 377-381, 391.
32. In the House of Lords, the principal speech was that of Lord Diplock. He repeated his earlier view as to the ongoing operation of s.11 (at pp 749-751; pp 525-526 of All ER) and held that if the likelihood of deception or confusion was the result of events occurring after initial registration of the trade mark, then the mark could not be expunged as one wrongly remaining in the Register unless that likelihood resulted from some blameworthy conduct on the part of the registered proprietor of the mark or of a predecessor in title of the registered proprietor: at p 751; p 526 of All ER. Lord Reid expressed agreement with the opinion of Eve J., but was alone in this view: at p 732; p 510 of All ER.
33. As will appear, the interpretation of Eve J., favoured by Lord Reid, derives very strong support from the actual terms of s.28. However, that interpretation leads to the consequence that a trade mark, the use of which has become likely to deceive or cause confusion by reason of events taking place after registration, is not liable to be expunged except for non-use under s.23. So long as a mark continues to be registered, the registered proprietor has the right to the exclusive use of the mark in relation to the goods or services in which it is registered and to obtain relief in respect of infringement of the mark in the manner provided by the Act: s.58(1). So, the registered proprietor of a mark, the use of which has become likely to deceive or cause confusion by reason of supervening events, is entitled to restrain infringement of that mark, subject to the limitation imposed by s.58(3) in relation to the use by another proprietor of a registered mark which is a substantially identical or deceptively similar mark. The consequence, flowing from an interpretation of s.28 that confines the prohibition to entry in the Register, that the registered proprietor can restrain infringement of a mark, the use of which is likely to deceive or cause confusion, has been seen as an argument for giving s.28 a continuing operation after registration. This argument has gained some force from the circumstance that, historically, the object or policy of the earlier Trade Mark Acts was to protect the public interest rather than the private interests of traders: Eno v. Dunn (1890) 15 AppCas 252, at p 264; Radio Corporation Pty. Ltd. v. Disney [1937] HCA 38; (1937) 57 CLR 448.
34. Turning to the language of s.28, it can be observed at once that the natural and prima facie meaning of the words "shall not be registered" is that an entry shall not be made in the Register. The mandatory language prohibits the act of registration of a mark in contravention of the section. And the future tense of the words "would be" in pars (a) and (b) also suggests that the section has its focus on the act of entry in the Register; otherwise one might have expected a form of words to take account of past and present use.
35. The question then is whether the Act indicates that the section is to have an operation beyond that suggested by its prima facie meaning. So, it should be noted that s.61(1), when it provides that "the original registration ... shall ... be taken to be valid in all respects", unlike s.28, speaks of "original registration" rather than simply "registration". This is an indication that the legislative concept of "registration" and the past participle "registered" extend beyond the concept of "original registration". But the legislative differentiation between these concepts is explicable by reference to the need to take account of the provisions respecting the renewal of registrations and the registration of assignments and transmissions of trade marks: see, for example, ss.55, 59. In conferring protection on the original registration of a trade mark, s.61 speaks of registration in its primary, as distinct from its secondary, sense and prescribes the circumstances in which the trade mark is deprived of the protection which s.61(1) would have accorded otherwise to that registration. Thus, the entry of a trade mark in the Register and its continuation in the Register is deemed to be valid in all respects unless one of the circumstances mentioned in pars (a), (b) or (c) is shown.
36. The argument in favour of a broader reading of s.28 derives support from
s.61(1)(b) which speaks of a mark that "offends against
the provisions of
section 28". The contrast between the past tense of "was obtained" in par.(a)
of s.61(1) and the present tense
of the words just quoted from par.(b) is
significant, as is the change from the reference to "original registration" in
par.(a) to
the use of the words "the trade mark" in par.(b): see BALI Trade
Mark (1968) RPC per Diplock L.J. at p 434. On the other hand,
a mark which
should not have been originally entered in the Register in defiance of the
prohibition in s.28 may be described as one
which "offends" against s.28.
Nonetheless, had the legislature intended to confine par.(b) to the time of
original registration,
it would have been natural to say:
"(b) that the original registration offended against theSo expressed, the paragraph would have plainly excluded a mark which is now deceptive, but was not so when registered.
provisions of section 28".
37. Of course, to conclude that the words in s.61(1)(b) mean that a trade mark which comes within one of the paragraphs of s.28 is literally one which "offends against the provisions of section 28" does not necessarily mean that the mark becomes one wrongly remaining in the Register. I shall turn to that question in a moment. The only immediate consequence of making out a case under par.(b) of s.61(1) is to deprive the trade mark of the protection which s.61(1) would have otherwise afforded to its original registration. But the ultimate consequence, if a mark that offends against the provisions of s.28 is one that wrongly remains in the Register, is that the mark loses the protection which is given to its continuing original registration and that it will be liable to be expunged.
38. At this point it is necessary to consider s.22. The words "or remaining" after the words "wrongly made" in s.22(1)(b) indicate that a registration may subsequently become one wrongly remaining in the Register notwithstanding that its original registration was not wrongly made. Section 56(3) deems certain marks consisting solely of a word as the name or description of an article, substance or service to be wrongly remaining in the Register. But s.56(3) alone does not account for the presence of the words "or remaining" in s.22(1)(b). For one thing, there was no counterpart to s.56(3) in the Trade Marks Act 1905 (Cth) when the power to order rectification of the Register also extended to the expunging of an entry wrongly remaining in the Register: see s.71(1)(b) of the 1905 Act. For another thing, s.56 is intended to be restrictive, not exhaustive, of the grounds on which registration of a trade mark becomes invalid by reason of matters occurring after registration. Furthermore, the section would be unnecessary if the likelihood of deception or confusion as a ground for removal was to be considered at the date of registration only. The section appears to assume that the registration of a mark, initially validly registered, may become "invalid" by reason of use, after the date of registration, leading to the likelihood of deception or confusion: see s.56(1). The notion of invalidity in s.56(1) is directly linked to the concept of an entry "wrongly remaining in the Register": see s.56(3). Thus, a mark is invalid if it was wrongly made or wrongly remains in the Register or if the court or the Registrar would rectify the Register by removing it.
39. The proposition that a mark is liable to be expunged if, by reason of events occurring after registration, its use is likely to deceive or cause confusion, is associated to some extent with the statutory definition of "trade mark" in s.6(1). The essence of that definition, except in relation to Pt XI of the Act, is that a mark is "used or proposed to be used in relation to goods or services for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the goods or services and a person who has the right ... to use the mark". True it is that there is no provision for removal of a mark for the reason that, through a change of circumstances, it no longer qualifies for registration under ss.24 and 25, e.g., by ceasing to be distinctive: see York Trade Mark (1984) RPC 231, per Lord Wilberforce at p 256. But once a mark becomes likely to deceive or cause confusion as, for example, by becoming deceptively similar to another mark (see s.6(3)), it lacks the essential characteristic of the statutory definition and in such a way as to be detrimental to the public interest. It is natural to suppose that in such circumstances, subject to the provisions of the Act, the mark is liable to be expunged. This would accord with the object or policy of the earlier Trade Marks Acts in protecting the public interest rather than the private interests of traders.
40. On the other hand, the Act now contains certain provisions which are designed to protect the private interests of traders by permitting trade marks to remain in the Register in some circumstances in which use of the marks would formerly have generated a likelihood of deception or confusion. See, for example, s.34(1) (honest concurrent use of marks which are substantially identical or deceptively similar), s.34(2) (concurrent registration), s.56 (use of marks embodying a word or words as the name or description of an article, substance or service), s.58(3) (proprietors of identical or deceptively similar registered marks have rights against others but not each other), Pt IX (registered users) and s.82 (assignments without goodwill). Although these provisions, especially s.58(3), significantly alter the old predominance of public interest over private interests, the provisions do not justify a general implication that identical or deceptively similar trade marks are permitted to continue in the Register and are not liable to be expunged.
41. As the foregoing analysis reveals, the arguments for and against the broad construction of s.28 are finely balanced. Nevertheless, I prefer the broad interpretation not only because it is better supported by authority but because it also gives substantial effect to so much of s.22(1)(b) as refers to an entry wrongly remaining in the Register, to the assumptions on which s.56(1) appears to proceed and to the terms of s.61(1)(b). There is also the consequence of the narrow interpretation, already mentioned, that the registered proprietor of a mark the use of which has become deceptive or a source of confusion by reason of supervening events is entitled to exercise the statutory rights of a registered proprietor. I acknowledge that registered proprietors have been enjoined from using a trade mark where that use would constitute a passing-off of the plaintiff's goods: Van Zeller v. Mason, Cattley and Co. (1907) 25 RPC 37, at p 41; R. Thorne and Sons Ltd. v. Pimms Ltd. But it is curious, to say the least of it, that a mark the use of which is deceptive should remain in the Register (except where the Act permits it to remain in the Register) and any restriction on the registered proprietor's entitlement to exercise his statutory rights turns on the availability of relief against him by way of passing-off or perhaps under s.52 of the Trade Practices Act 1974 (Cth).
42. This brings me to a consideration of the appellant's principal submission that par.(a) of s.28 should be read independently of par.(d) so that an applicant who relies upon par.(a) is not required in addition to show that the mark is, or would not be, entitled to protection in a court of justice. The natural reading of the section with the four paragraphs separated by the disjunctive "or" accords with the appellant's submission. So does the decision of the New Zealand Court of Appeal in Pioneer Hi-Bred Corn Company v. Hy-Line Chicks Pty. Ltd. (1978) 2 N.Z.L.R. 50 on s.16 of the Trade Marks Act 1953 (N.Z.). That section is expressed in terms so similar to s.28 that I am unable to detect any material difference between the two provisions.
43. In the United Kingdom, in the context of applications for original registration, there is long-standing authority for the view that, once a likelihood of deception is shown, it follows that there is disentitlement to the protection of the court: Eno v. Dunn; In re McDowell's Application (1926) 43 RPC 313; Berlei (U.K.), per Lord Morris of Borth-y-Gest at p 1317; p 821 of All ER; per Lord Wilberforce at p 1329; p 831 of All ER. There is force in the argument that no distinction should be drawn in the application of s.28(a) as between the time of entry of a mark in the Register and its continuing registration since the need to protect the public from deceptive marks is the same at any stage. However, this argument in favour of a literal reading of s.28(a) loses some of its force once it is appreciated that s.28(a) must be subordinated to the Registrar's power to permit registration of marks which are substantially identical or deceptively similar, in cases of honest concurrent use or other special circumstances.
44. As I have already noted, in G.E. Trade Mark Lord Diplock (with the concurrence of Lord Simon of Glaisdale and Lord Kilbrandon) concluded that a lawfully registered trade mark is only liable to be expunged under s.11 of the Trade Marks Act 1938 by reason of supervening likelihood of deception or confusion if that likelihood is the result of some blameworthy conduct on the part of the registered proprietor. In reaching that conclusion his Lordship regarded the counterpart of our s.28(a) as being governed by the equivalent of our s.28(d) so that an applicant seeking removal of a mark on the ground that it infringed s.28(a) would be required to show not only likelihood of deception or confusion but also that the mark was disentitled to protection in a court of justice. That interpretation of s.11 depended very largely on the legislative history of the statutory provisions as outlined by Lord Diplock in his speech, a legislative history which has its counterpart in Australia. But the interpretation also depended on the presence of the provisions permitting identical or similar marks to remain in the Register. The presence of those provisions is inconsistent with the existence of a statutory intention that likelihood of deception or confusion ipso facto leads to disentitlement to protection in a court of justice or to liability to expungement. To my mind, those provisions, particularly ss.34 and 58(3), justify an implication that s.28(a) looks to supervening likelihood of deception or confusion only if that likelihood is the result of blameworthy conduct on the part of the registered proprietor. Moreover, as Bowen C.J. pointed out in Riv-Oland Marble (at pp 573-574), echoing the words of Windeyer J. in Re Bali Brassiere Co. Inc.'s Registered Trade Mark and Berlei Ltd.'s Application [1968] HCA 72; (1968) 118 CLR 128, at p 133 (at first instance - reversed on appeal [1973] HCA 43; (1973) 129 CLR 353), it is legitimate to lean against the literal construction of s.28(a) on the ground that it would not protect the registered proprietor from "the assiduous efforts of a misappropriating user". That consideration, taken in conjunction with the presence of the provisions permitting identical or similar marks to be entered and to remain in the Register, supports the adoption of the interpretation of s.28(a) favoured by the Full Court of the Federal Court in Riv-Oland Marble and in this case. But I should say that it may not be necessary to read s.28(a) as though it were governed by s.28(d). So to read s.28(a) is a difficult exercise as a matter of construction. It may be sufficient to say that in the context of the entire statutory scheme a trade mark is only liable to be expunged under s.28(a) if the use of it becomes likely to deceive or cause confusion and that likelihood is due to the fault or blameworthy conduct of the registered proprietor. However, for the purpose of this appeal, I am content to accept that the fault or blameworthy conduct must be such as to disentitle the mark to protection in a court of justice.
45. This conclusion is sufficient to dispose of the appellant's main argument. Before passing from it, I should point out that the argument excites some unresolved questions. On a literal construction of s.28(a) what happens in the case of two marks the use of each of which gives rise to the likelihood of deception or confusion? If one only is to be removed, how is the choice to be made? Is it to be made against that mark which is the later registration? Or are the two marks liable to be expunged?
46. These questions, in the context of the interpretation of s.28(a) which I favour, are relevant to the appellant's final submission that the Full Court of the Federal Court misdirected itself in holding that there was an absence of blameworthy conduct on the part of the registered proprietors of the MOO mark. One aspect of the appellant's submission on this point is that, by reason of non-use, the respondent's mark has lost its distinctiveness. True it is that there is an element of overlapping in the concept of loss of distinctiveness and the likelihood of deception or confusion. As Kitto J. pointed out in Bayer Pharma Pty. Ltd. v. Farbenfabriken Bayer Aktiengesellschaft (1965) 120 CLR 285, at p 303, "(t)he questions of distinctiveness and absence of a likelihood of deception tend to run into one another". However, the Full Court of the Federal Court was correct in concluding that loss of distinctiveness as such does not fall within s.28 so that the fact that the MOO trade mark had ceased to be distinctive of the goods of the registered proprietor did not provide a ground for rectification of the Register under s.22. On the other hand, if a mark's loss of distinctiveness leads to the use of the mark becoming deceptive or a cause of confusion due to the blameworthy conduct of the registered proprietor, then the mark falls within s.28(a) and is liable to expungement.
47. It is appropriate, at this point, to consider the content of the benefit of registration. Section 58(1) confers upon the registered proprietor two rights - the right to exclusive use and the right to obtain relief in respect of infringement. These rights are closely related. The right to obtain relief is an essential counterpart to the right to exclusive use of a mark. The Act, in conferring both rights upon the registered proprietor, contemplates that the registered proprietor will protect his right to exclusive use of the mark by exercising his right to relief. Expressed slightly differently, the Act confers on a registered proprietor not protection per se but the right to protection. True it is that s.58(3) contemplates that two or more substantially identical or deceptively similar marks may continue to be registered. But that provision speaks to a situation where the marks have obtained registration due to honest concurrent use or other special circumstances: s.34(1). It should not be read as speaking to the situation where the use of a mark has become deceptive or confusing through the fault or blameworthy conduct of the registered proprietor.
48. A consequence of expungement of a mark or rectification of the Register is that both rights conferred by s.58(1) are lost in relation to a mark. The right to exclusive use of a trade mark may be lost, and thereby the related benefits of registration, through non-use of a mark over a period of time prescribed by the Act: s.23. Non-use, however, is not the only way in which the benefits of registration may be lost. Section 56(3) provides another instance of a situation where a mark may be deemed to be an entry wrongly remaining in the Register. Furthermore, lack of distinctiveness, occasioned by blameworthy conduct on the part of a registered proprietor, if it results in the use of a mark becoming deceptive or confusing, provides a ground for rectification of the Register. The Full Court of the Federal Court was in error in holding that, after lawful registration, a mark may only be removed for lack of distinctiveness pursuant to s.23 or s.56 of the Act.
49. Just as failure to take advantage of the right to exclusive use may, after the effluxion of the requisite time period, provide grounds for removal, failure to take advantage of the related right to obtain relief against infringement may, in certain circumstances, constitute or contribute to "blameworthy conduct" so as to render a mark liable for expungement.
50. I now turn to consider what those circumstances might be and whether they are present in this case, bearing in mind that the consequences of any relevant failure on the part of the original proprietor to take advantage of the right to obtain relief attach to the mark and are not eliminated by assignment of the mark.
51. At first instance Gummow J. rejected any suggestion that the respondent took an assignment of the MOO mark with a view to appropriating or taking advantage of the goodwill attached to the MOOVE mark and accepted the respondent's submission that the flavoured milk sold under the MOOVE mark was aimed "at an entirely different market". These findings do not necessarily negate the possibility that the respondent was guilty of blameworthy conduct in taking an assignment of a dormant trade mark and using it in relation to milk products so as to cause confusion because the appellant's similar mark had been extensively used and was being used in relation to such products. Of course, if his Honour formed an adverse view about the respondent's conduct at the stage of taking the assignment, this might well have constituted sufficient disentitling blameworthy conduct in itself.
52. In this Court, there was no question as to the validity of the assignment. By virtue of that assignment, the respondent became entitled to the rights of the original assignor, the registered proprietor, and was in no better and no worse position than the assignor. Accordingly, if the original registered proprietor had been guilty of blameworthy conduct so as to cause or contribute to the use of the mark becoming deceptive or confusing, then the mark would be liable to be expunged. A mark which is liable to be expunged on the ground mentioned in s.28(a) does not cease to be so liable by reason of its being assigned. Otherwise the consequences of any blameworthy conduct which had contributed to a mark becoming deceptive or confusing could be readily circumvented.
53. On the facts of this case, the question is whether the conduct of the registered proprietor of the MOO mark or the conduct of the registered proprietor's predecessor in title (or a combination of both sets of conduct) in not using the mark for a lengthy period of time (albeit that the relevant period of non-use did not lead to a finding of non-use under s.23) and allowing the appellant to use its similar mark extensively in relation to milk products and build up a valuable goodwill, without seeking to restrain that use, and thereafter using its MOO mark, thus bringing about confusion, amounts to disentitling blameworthy conduct. That issue was considered by the Full Court of the Federal Court and answered in the negative on the ground that the provisions in s.23 for removal of a mark for non-use constitute the only remedy, if it be available, for the kind of conduct of which the appellant complains. According to the Full Court, the failure of the application for removal for non-use left the appellant without any other remedy.
54. Apart from the fact, as has been seen, that s.23 does not constitute the only ground for removal in such circumstances, I am unable to detect in s.23, or for that matter in any other provision of the Act, a legislative intention that s.23 constitutes an exclusive or exhaustive code governing removal of a mark from the Register in circumstances where non-use is but one of the factors which has led to the use of that mark becoming deceptive or confusing. The section enables a mark to be removed for non-use in the situations mentioned in sub-s.(1)(a) and (b). The section says nothing about, and is not inconsistent with, the existence of a liability to expungement when the use of a mark becomes deceptive or confusing as a result of a combination of factors which include blameworthy conduct on the part of a registered proprietor in (1) failing to exercise his statutory rights for a long period in order to restrain use of a similar mark with the results already described, and (2) thereafter commencing to use his mark so that its use becomes deceptive or confusing.
55. The respondent seeks to answer this conclusion with the submission that the Act gives effect to the principle or policy that the rights of the proprietor of the mark which is first registered are paramount and take priority over the rights of the proprietor of a similar mark which is registered later, except where the initial registration of the first mark is invalid or it is removed for non-use. This submission is based on s.33. But that section is directed to priority at the time of registration only. It does not look to or in any way govern a situation, such as the present, where the two marks have already obtained registration.
56. Furthermore, it seems to me that the Act proceeds on the fundamental assumption that the registered proprietor of a mark will protect the integrity of his mark by exercising his statutory right to restrain infringement of it. It is scarcely to be supposed that the legislature intended that a registered proprietor who failed to protect the integrity of his mark by restraining infringing use in the circumstances already outlined and who seeks to make a deceptive or confusing use of that mark should be permitted to do so.
57. Our attention has not been drawn to a case in which, in circumstances similar to the facts of this case, a mark has been held disentitled to protection in a court of justice. However, in light of the long-standing failure of the registered proprietor of the MOO mark to protect the integrity of that mark, leading to the consequences already described ending with the respondent's necessarily confusing use of its mark, there can be no doubt that the respondent's mark is not entitled to protection by way of injunction. The combination of the original registered proprietor's initial failure to make use of the right conferred by s.58(1) to attempt to restrain the use of another mark together with the use by the current registered proprietor of the mark in circumstances where that mark's use would be, as found, a source of deception or cause of confusion, constitutes the requisite blameworthy conduct.
58. In the result I consider that the Full Court of the Federal Court misdirected itself on the issue of blameworthy conduct and that a finding of blameworthy conduct on the part of the respondent should be substituted for the Full Court's finding on that issue.
59. The appeal should be allowed.
BRENNAN J. For the reasons stated by the Chief Justice, I am of the opinion that s.61(1)(b) of the Trade Marks Act 1955 (Cth) ("the Act") applies if, at the time when the validity of the original registration of a trade mark is attacked, the mark "offends against the provisions of section 28" and that s.28 has a continuing operation after original registration: see Berlei Hestia Industries Ltd. v. Bali Co. Inc. [1973] HCA 43; (1973) 129 CLR 353, at pp 360,361. As s.28 has a continuing operation after registration, a registered trade mark which offends against its provisions might constitute, for the purposes of s.22(1)(b), an entry "wrongly ... remaining in the Register". However, though s.28(a) is expressed in absolute terms, I would not hold that a registered trade mark is necessarily remaining wrongly in the Register merely because its use has become likely to deceive or cause confusion by reason of circumstances occurring after registration.
2. Paragraph (a) of s.28 prohibits the original registration of a mark the use of which would be likely to deceive or cause confusion (albeit the prohibition is qualified by the concurrent use provisions: s.34) but, after registration, par.(a) operates in a different regime. Upon registration, the proprietor acquires the statutory right to the exclusive use of the mark "subject to any conditions or limitations to which the registration is subject": s.58(2). In that regime, to hold that a registered trade mark is "wrongly ... remaining in the Register" whenever the use of the mark becomes likely to deceive or to cause confusion would be to expose the registered proprietor's statutory right to destruction at the hands of any person who creates the likelihood of deception or confusion. A premium would be placed on what Windeyer J. called "the assiduous efforts of an infringer": Re Bali Brassiere Co. Inc.'s Registered Trade Mark and Berlei Ltd.'s Application [1968] HCA 72; (1968) 118 CLR 128, at p 133. On the other hand, to hold that a trade mark, validly registered, can never be expunged if its use becomes likely to deceive or cause confusion by reason of circumstances occurring since registration would empower the registered proprietor himself to create that likelihood with impunity. Neither of these constructions accords with the objects of the Act which seeks both to give some protection to the public against the deceptive or confusing use of trade marks (Eno v. Dunn (1890) 15 App Cas s.252, at pp 263-264; Radio Corporation Pty. Ltd. v. Disney [1937] HCA 38; (1937) 57 CLR 448, at pp 458-459) and to confer on a registered proprietor for the time being a species of property in a trade mark (see ss.57,82) entitling him to the rights conferred by s.58 and allowing permitted users the derivative benefits to which s.77 refers.
3. In an application for original registration, there is only one object to which effect must be given but, in an application after registration, effect must be given to both objects. The operation of s.28(a) therefore depends on whether it is applied to an application for original registration or to an application for expunction of an entry which is attacked in s.22 proceedings as wrongly remaining in the Register. If it be right to say that, in s.22 proceedings, s.28(a) sometimes does and sometimes does not authorize the removal of a registered trade mark when its use has become likely to deceive or cause confusion, it is necessary to ascertain the condition upon which liability to removal depends. In my opinion, the Act does not contemplate that a registered proprietor should continue to enjoy the rights which s.58 confers if he has produced the circumstances which make the further use of the mark likely to deceive or cause confusion: s.58 cannot be understood as conferring rights which might be exercised by the holder to frustrate an object of the Act. But, where the registered proprietor has not produced those circumstances and where no provision other than s.28(a) warrants expunction of the registered trade mark, there is no reason apparent on the face of the Act why the registered proprietor should not continue to enjoy the rights which registration of the trade mark confers. The Act does not make the avoidance of deception or confusion absolute, even in the case of an application for original registration: see, e.g., s.34. It strikes a balance between the public interest in avoiding deception or confusion and the private interest of the person entitled to use the trade mark. The view that a registered proprietor may, by his conduct, become disentitled to claim the benefit of the rights conferred by s.58 arises simply from the need to give to s.28(a), when it is invoked in proceedings under s.22 to expunge a registered trade mark on the ground that it is "wrongly ... remaining in the Register", an operation which will give effect to the provisions of s.58 except to the extent necessary to deny to the registered proprietor the capacity to frustrate with impunity the statutory object of protecting the public against deception and confusion. A similar view would be reached if pars (a) and (d) of s.28 were so read as to make par.(d) govern par.(a) but I do not rest my view on par.(d) of s.28. Paragraph (d) is not expressed to relate to the conduct of the applicant for original registration or of the registered proprietor after registration but to the character of the mark itself: a "mark which would otherwise be not entitled to protection in a court of justice". In this respect the Act differs from s.11 of the Trade Marks Act 1938 (U.K.) which, though generally similar to the Act, speaks of a mark "the use of which would, by reason of its being likely to deceive or cause confusion or otherwise, be disentitled to protection in a court of justice".
4. In General Electric Co. v. General Electric (1972) 1 WLR 729, at p 751;
(1972) 2 All ER 507, at p 526, Lord Diplock stated (with
the concurrence of
Lord Simon of Glaisdale and Lord Kilbrandon) four propositions derived from
the 1938 United Kingdom Act, the third
of which was -
" If the likelihood of causing confusion did not exist atGiving the term "blameworthy" the meaning to which I next refer, I would respectfully agree with his Lordship's proposition. I would take to be "blameworthy" any conduct (whether by act or omission) on the part of a registered proprietor or his predecessor in title which he knew or ought to have known would result in the likelihood that the use of the mark would deceive or cause confusion and which has in fact caused or contributed to that result. I would accept also his Lordship's next proposition (at p 751; p 526):
the time when the mark was first registered, but was the
result of events occurring between that date and the date
of application to expunge it, the mark may not be expunged
from the register as an entry wrongly remaining on the
register, unless the likelihood of causing deception
resulted from some blameworthy act of the registered
proprietor of the mark or of a predecessor in title of his
as registered proprietor."
" (4) Where a mark is liable to be expunged under ... (3)It is unnecessary now to consider the scope of this discretion and the circumstances which may evoke its exercise, except to say that it may be relevant not only to consider the public interest but also to compare the respective contributions made by the conduct of the parties to expunction proceedings under s.22 in creating a likelihood that use of a registered trade mark would deceive or cause confusion.
the court has a discretion whether or not to expunge it and
as to any conditions or limitations to be imposed in the
event of its being permitted to remain on the register."
5. In the present case, the Full Court of the Federal Court acquitted the respondent of any blameworthy conduct. Their Honours were able to reach this conclusion by treating the non-use of the MOO mark while the MOOVE mark was in use in respect of flavoured milk (a period commencing in January 1979 and continuing until mid-August 1988) merely as a matter going to non-use of the mark - presumably, as a matter relevant only to an application for removal for non-use under s.23. I am respectfully unable to accept that conclusion. If a proprietor of a registered trade mark abstains for a time from using it in respect of a class of products so that the mark loses its distinctiveness, and he permits another during that time to use a different mark so as to foster in the public mind a connection between the latter mark and products of the relevant class to the exclusion of any connection between the former mark and such products, with the result that any further use of his own mark would be likely to deceive or cause confusion, the conduct of the registered proprietor is, in my opinion, blameworthy in the relevant sense. Such conduct would be a cause of any deception or confusion which would be likely to follow the further use of his own mark. Section 58 could not support that further use for the conduct of the registered proprietor would have converted the statutory right to exclusive use of a registered trade mark into an instrument of likely deception or confusion. In evaluating the conduct of a registered proprietor in such a case, much depends on what he knew or ought to have known of the other person's use of a trade mark in respect of the relevant class of products, the length of time during which the registered proprietor remained supine, the opportunities for objection and the scale of the deception or confusion that is likely to result from the further use of his registered trade mark. It may be going too far to say that the registered proprietor must, in all circumstances, protect his statutory right by applying for an injunction; some other objection may suffice in particular circumstances.
6. In the present case, however, the registered proprietor of the trade mark
MOO (the respondent's predecessor in title) did nothing
while the appellant's
predecessor and the appellant used the trademark MOOVE in respect of flavoured
milk so that the subsequent
use of the trade mark MOO in respect of flavoured
milk would be likely to cause confusion. Gummow J. at first instance declined
to find that the present respondent was guilty of blameworthy conduct but, as
I understand his Honour's reasons, he used this term
as equivalent to conduct
of the respondent - excluding the conduct of the original registered
proprietor - which equity would describe
as unclean hands. His Honour said:
" The mark of the first respondent was one in respect ofIn my opinion, such facts as his Honour found when taken in conjunction with facts which were not in issue (the period and extent of the use of the trademark MOOVE in respect of flavoured milk and the absence of any objection by the then registered proprietor of the trademark MOO) are sufficient to show that the registered proprietors of the trade mark MOO were guilty of blameworthy conduct in the relevant sense. An assignee of a registered trade mark stands in no better position than the assignor when an application for expunction is made and reliance is placed by the party seeking expunction on the blameworthy conduct of the assignor.
which it was not entitled to relief in equity. This was
not because of any 'blameworthy conduct' as understood when
applying the maxim as to unclean hands. Rather, there was
'otherwise' no entitlement to such protection, both for
want of the necessary distinctiveness at 5 August 1988
and also as a consequence of the lengthy period of use of
MOOVE before the commencement of use of MOO by the first
respondent. Further, use of the MOO mark in relation to
milk was likely to cause confusion by causing persons, in
the sense I have explained, to wonder whether the MOO and
MOOVE products might not come from the same source, and to
entertain a reasonable doubt."
7. I would allow the appeal. I agree with the order proposed by the Chief Justice.
DEANE J. The detailed facts are set out in the judgments of the Chief
Justice and of Dawson and Toohey JJ. As those judgments explain,
the appeal
gives rise to two questions relating to the construction of s.28 of the Trade
Marks Act 1955 (Cth) ("the Act"). At the
cost of some repetition, it is
convenient to set out that section at the commencement of this judgment. It
reads:
"A mark --
(a) the use of which would be likely to deceive or
cause confusion;
(b) the use of which would be contrary to law;
(c) which comprises or contains scandalous matter;
or
(d) which would otherwise be not entitled to
protection in a court of justice,
shall not be registered as a trade mark."
2. The first of the two questions is whether the direct operation of s.28 is confined to the original registration of a mark or whether the section extends to require or authorize the expungement or removal from the Register of a registered mark which was properly entered in the Register but which, by reason only of events occurring subsequent to registration, answers one or more of the designated descriptions. The second question is whether, by reason of contextual and policy considerations and the presence of the word "otherwise" in par.(d), par.(a) of s.28 should be read as incorporating some implied additional requirement such as a requirement that the mark "be not entitled to protection in a court of justice" by reason of some blameworthy conduct on the part of the registered owner. Strictly speaking, the second question only arises in the present case if s.28 is construed as prohibiting the continued registration of a mark which was originally duly registered but which has, by reason of subsequent events, become a mark of one of the relevant descriptions. The reason why that is so is that it is not contended that the original registration of the mark was contrary to s.28 by reason of the mark being, at that time, of a kind referred to in that section. As will be seen, however, the two questions are closely related.
3. As a matter of mere language, it appears to me that the direct operation of s.28 is confined to the act of registration. Prima facie, a provision that a "mark ... shall not be registered as a trade mark" if it is a mark of a certain description says nothing about the circumstances in which a mark which is a duly registered trade mark should be removed from the Register. This prima facie effect of the words of s.28 is supported by the section's context in a Part which is headed "Registrable Trade Marks" (a phrase traditionally used to refer to marks which are eligible to become, as distinct from remain, registered: see, e.g., Trade Marks Act 1905 (Cth), Pt III) and which contains a number of sections, including the two immediately following sections, which are obviously concerned with applications for registration as distinct from prescribing conditions for the continued registration of a registered mark.
4. That prima facie construction of s.28 is not precluded by authority, at
least in so far as this Court is concerned. Indeed,
it is strongly supported
by what appears to me to be the only convincing analysis in judgments of
persuasive authority, namely, that
of Eve J. in W. Woodward Ltd. v. Boulton
Macro Ltd. (1915) 32 RPC 173. In speaking of a corresponding, though somewhat
differently
worded, United Kingdom section (s.11 of the Trade Marks Act 1905
(U.K.)), Eve J. said (at p 198):
"Am I entitled to say that a Trade Mark which, when tendered
for registration, was on the evidence neither calculated to
deceive nor otherwise disentitled to protection, must be
judged years after the registration, and notwithstanding a
user of it consistent throughout with that registration,
by the existence of facts for which the owner of the mark
may be in no way responsible and which indeed he may not
have been able to control? I am not suggesting that that is
either the position of this Trade Mark or that those are
the facts relating to this Trade Mark, but in determining
the moment of time to which the attention of the Court is
to be directed I must assume, and am entitled to assume, the
strongest case which might be put from the opposite point of
view, and I put the case of a mark which it is not suggested
was calculated to deceive when it was registered and not
otherwise disentitled to protection, but which in course of
time, through circumstances over which the owner of the mark
had no control, has become calculated to deceive. I adhere
to what I said in the case which was before me last Term of
the Imperial Tobacco Company ((1915) 2 Ch. 27), that I do
not believe that that is the construction which the Court
ought to put upon this Section."
5. On the other hand, support for the view that s.28 should be construed as extending to prohibit the continuation of the registration of a duly registered mark is to be found in decisions and judgments of strong persuasive authority, including judgments in this Court in Berlei Hestia Industries Ltd. v. Bali Co. Inc. [1973] HCA 43; (1973) 129 CLR 353 and the decision of the House of Lords in General Electric Co. v. General Electric (1972) 1 WLR 729; (1972) 1 All ER 507.
6. The leading speech in the General Electric Case was that of Lord Diplock, with whom Lord Simon of Glaisdale and Lord Kilbrandon agreed. His Lordship concluded that the United Kingdom equivalent of our s.28 (Trade Marks Act 1938, s.11: "It shall not be lawful to register") referred both to original registration of a mark and to retention in the Register of a duly registered mark. The other member of the House, Lord Reid (at p 732; p 510 of All ER), disagreed, preferring the view of Eve J. in Woodward Ltd. v. Boulton Macro Ltd. Lord Diplock's view can be traced back to his judgment in the BALI Trade Mark Case in the Court of Appeal (1968) RPC 426. It was based, to no small extent, on the consideration that s.13(1)(b) of the United Kingdom Act (like s.61(1)(b) of the Act) contemplates that it might be "shown" that a registered trade mark "offends" against the provisions of s.11 of the United Kingdom Act (i.e. the section corresponding to our s.28). With due respect, however, that consideration is hardly persuasive since the use of the word "offends" can readily be explained by the fact that a registered mark "offends" against a provision such as s.28 if the act of entering it in the Register was prohibited by that provision.
7. In Berlei Hestia Industries Ltd. v. Bali Co. Inc., it was common ground that, if the evidence established the existence of a likelihood of deception or confusion at the date of the proceedings, it also established the existence of that likelihood at the date of the original registration. That being so, the question whether s.28 applied to prohibit the continued registration of a mark which had been initially duly registered but which had subsequently become a mark of the kind referred to in s.28(a) did not necessarily arise. There are, however, statements in two of the judgments which indicate approval (per Barwick C.J. at p 356) or acceptance (per Mason J. at p 360) of the views expressed by Lord Diplock in the General Electric Case. I do not, however, read the judgments of the other two members of the Court (McTiernan and Stephen JJ.) as containing any definite indication of such approval or acceptance. In a context where both Barwick C.J. and Mason J. clearly indicated that the case did not turn upon that point (see per Barwick C.J. at pp 356-357, and per Mason J. at p 361), the views expressed in the judgments in the Berlei Hestia Case cannot properly be seen as constituting an authoritative determination by this Court of the proper construction of s.28.
8. The construction of s.28 which confines the directive that a "mark ... shall not be registered as a trade mark" to the act of entering it in the Register is, on balance, more in accordance with my own understanding of the basic notions and underlying policy of trade mark law than is a construction which reads that directive as extending to require expungement from the Register of a trade mark which was duly registered in conformity with applicable statutory provisions at the time of registration. If the use of an unregistered mark is likely to deceive or cause confusion, one can see compelling reasons of policy why, subject to some limited exceptions (see, e.g., ss.34,36), registration of it should be denied. If, on the other hand, the use of an unregistered mark is not likely to deceive or cause confusion, registration as a trade mark should itself provide some protection for any goodwill attaching to the registered mark notwithstanding that subsequent events or circumstances may bring about a situation in which original registration of the mark would be precluded. It is true that there are considerations of policy which favour removal from the Register of any registered mark whose use is likely to deceive or cause confusion. Those considerations are, however, modified by the availability of ordinary criminal or civil procedures to prevent dishonesty, fraud and passing-off and by the fact that registration of a trade mark does not ordinarily constitute a licence for what would otherwise be unlawful conduct (see, e.g., Lyle and Kinahan Ltd.'s Application (1907) 24 RPC 249, at p 262; Van Zeller v. Mason, Cattley and Co. (1907) 25 RPC 37, at p 41; and note the narrowness of the trade mark exception in s.51(3)(c) of the Trade Practices Act 1974 (Cth)). On balance, it appears to me that the policy considerations favouring a construction of s.28 which would make the section directly applicable to prohibit the continued registration of any duly registered mark which was brought within par.(a) by subsequent events are outweighed by the considerations militating against the lessening of the effective protection of a mark which due registration was, in my view, intended to provide.
9. The construction of s.28 as not extending to require expungement from the
Register of a duly registered trade mark obtains, in my view, some support
from
a consideration of the section's history. The immediate predecessor of
s.28 in Commonwealth legislation was s.114 of the Trade Marks Act 1905 (Cth).
That section, unlike the United Kingdom provision upon which
it was based
(Patents, Designs, and Trade Marks Act 1883, s.73), was not confined to
registration. It was contained in Pt X ("Miscellaneous")
of the 1905 Act and
provided:
"No scandalous design, and no mark the use of whichWhen the 1955 Act was enacted, s.28 was introduced in terms which correspond more closely to the United Kingdom provision and which, like that provision, contain no reference to "use". The clear weight of authority at that time was to the effect that the corresponding United Kingdom provision did not extend to prohibit the continued registration of a trade mark which had been duly registered (see the cases referred to by Lord Denning M.R. and Salmon L.J. in the BALI Trade Mark Case, at pp 431 and 438). In other words, the United Kingdom section had been construed as identifying circumstances which would preclude an unregistered mark from being a registrable mark. There is nothing to suggest that it was the legislative intent that our s.28 should be differently construed. To the contrary, as has been seen, the section was included in the 1955 Act in a Part headed "Registrable Trade Marks".
would by reason of its being likely to deceive or otherwise
be deemed disentitled to protection in a court of justice,
or the use of which would be contrary to law or morality,
shall be used or registered as a trade mark or part of a
trade mark" (emphasis added).
10. That construction of s.28 is also supported by a consideration of other provisions of the Act. In particular, as the judgments of the Chief Justice and of Dawson and Toohey JJ. in the present case demonstrate, to treat s.28 as requiring removal of a duly registered mark which, by reason of subsequent events, becomes a mark of the type referred to in par.(a) of that section gives rise, in the context of other provisions of the Act and presumed legislative policy, to a need to confine the effect of the plain words of s.28(a) in what seems to me to be a most artificial way. I turn to explain why that is so.
11. Paragraphs (a), (b), (c) and (d) of s.28 are clearly disjunctive. The word "otherwise" in par.(d) can be readily explained by the fact that each of the circumstances indicated in pars.(a), (b) and (c) could, depending upon the facts, deprive a mark of entitlement to protection in a court of justice. As a matter of mere construction of words, there is nothing in the section to suggest that the word "otherwise" should be used to confine the circumstances designated in par.(a) (or, for that matter, pars.(b) or (c)) to cases where the specified circumstances would lead to a loss of entitlement to protection in a court of justice by reason of some "blameworthy conduct" on the part of the registered owner. To the contrary, so to read down par.(a) would be effectively to render it otiose since the fourth paragraph would embrace the circumstances to which it refers. Yet, if s.28 is construed as applying directly to prohibit continued registration of a mark if events occurring subsequent to its registration have brought about one or other of the circumstances referred to in the section, par.(a) must be confined by some such device since it would seem plain that it would not have been the legislative intent that, in a context where the Act contemplates deception or confusion by reason of continuing use of properly registered but "deceptively similar" marks in at least some circumstances (see, e.g., ss.36, 58(3) and 6(3)), a registered mark should be expunged from the Register merely because an infringing use of the mark by some other person had created a situation in which the continued use of the mark by the registered proprietor would be likely to deceive or cause confusion.
12. Obviously, due weight must be given to the views expressed in judgments in this Court in the Berlei Hestia Case and in the speech of Lord Diplock in the General Electric Case. Nonetheless, on balance, it seems to me that the words a "mark ... shall not be registered as a trade mark" in s.28 should be read as directed to the act of registering and not to the state of remaining registered. So construed, the section prohibits the original entry in the Register of a mark of the designated kind. The section, so construed, has an indirect continuing operation to the extent that a mark whose original registration was unlawful in the sense that it contravened the prohibition of s.28 may be expunged from the Register for that reason (see s.22(1)(b) and Berlei Hestia Industries Ltd. v. Bali Co. Inc.). The section does not, however, have a direct continuing operation in the sense that it requires what it does not say, namely, that a mark which was validly registered without contravention of the section must be removed from the Register if the circumstances specified in s.28 arise by reason of subsequent conduct or events. Once it is accepted that s.28 of the Act should be so construed, there remains no reason why the words of s.28(a) should be given other than their ordinary meaning and effect, that is to say, as precluding the actual registration of a mark "the use of which would be likely to deceive or cause confusion". That general prohibition must, of course, be read as subject to any special provision expressly or impliedly authorizing registration in circumstances where actual registration would otherwise be precluded by s.28 (see, e.g., ss.34 and 36).
13. The effect of this construction of s.28 of the Act is that the appeal must be dismissed. I am conscious of the fact that, no doubt because of the statements made in two judgments in the Berlei Hestia Case in this Court, it was not argued on behalf of the respondent that the direct operation of s.28 of the Act is confined in the sense which I have explained. That fact does not, however, avoid the need to express what I see as the correct construction of an important general statutory provision. Nor, in circumstances where my views about the proper construction of s.28 differ from those of the majority of the Court, does it give rise to a need to consider whether the matter should be relisted for further argument. In all the circumstances, however, it seems appropriate that I indicate that I would have been in favour of dismissing the appeal even if I had been of the view that s.28 should be construed in the manner favoured by the Chief Justice and Dawson and Toohey JJ. If I had been of that view, the question would have arisen whether the respondent's registered "MOO" mark had, notwithstanding its registration and the failure of the appellant's case based on alleged non-use, become disentitled to protection in the courts by reason of some blameworthy conduct on the part of the respondent or its predecessor as owner of the registered "MOO" trade mark. In the light of the findings of the trial judge, including the specific finding to the effect that there was no belief (or intent) on the part of the respondent that its conduct would encourage deception or confusion or involve or lead to the appropriation to itself of any of the "MOOVE" goodwill, I would have agreed with Dawson and Toohey JJ. that that question should be answered in the negative. In view of that specific finding and of the failure of the appellant to make out its claim for expungement for non-use, the fact that laches or acquiescence on the part of the respondent may have given rise to personal equities in the appellant if the respondent had brought proceedings to prevent or restrain continued registration or use of the "MOOVE" mark by the appellant does not, in my view, mean that the respondent can, in the absence of such proceedings, be said to have been guilty of blameworthy conduct or that its registered "MOO" trade mark can be said to be disentitled to protection in a court of justice (cf. the Act, s.58(3)).
DAWSON AND TOOHEY JJ. On 26 August 1966, Healthway Dairy Products Pty. Limited registered the trade mark "MOO" in respect of dairy products. The trade mark has been renewed from time to time. It was used in relation to a reduced fat cream product until 1974, but after that received little or no use for some thirteen years. In September 1987, Healthway Dairy Products Pty. Limited assigned the trade mark to the respondent, Murray Goulburn Co-Operative Company Limited. Following the assignment of the trade mark, the respondent used it in relation to a packaged cheese product and, in August 1988, began to use it in relation to flavoured milk.
2. The appellant, the New South Wales Dairy Corporation, is the proprietor of the trade mark "MOOVE", which was registered on 1 November 1978 in respect of, amongst other things, milk and milk products. It uses the trade mark in relation to a flavoured milk product which was launched in January 1979.
3. On 5 August 1988 the appellant brought proceedings in the Federal Court claiming relief of various kinds, including an application under s.22 of the Trade Marks Act 1955 (Cth) ("the Act") for rectification of the register of trade marks by the expunction of the "MOO" mark. The trial judge ordered the register to be rectified by restricting the use of the "MOO" mark to cheese: see New South Wales Dairy Corporation v. Murray Goulburn Co-operative Co. Ltd (1989) 86 ALR 549; see also (1989) 14 I.PR. 75, at p 79. The Full Court of the Federal Court allowed an appeal by the respondent and ordered that the "MOO" mark be left on the register with respect to cheese and flavoured milk, but not otherwise: Murray Goulburn v. New South Wales Dairy Corporation [1990] FCA 32; (1990) 92 ALR 239. The appellant appeals by special leave from the decision of the Full Court.
4. The principal question which arises is the proper construction of s.28 of
the Act, which provides:
"A mark -But before coming to the construction of s.28, it is necessary to examine how it may be applied in this case where no attack is, or could be, made upon the original registration of the "MOO" mark. The attack which is made is based upon events occurring after the original registration, which, it is said, now make the use of the "MOO" mark likely to deceive or cause confusion. Rectification of the register as claimed by the appellant would have the effect of rendering the use of the "MOO" mark an infringement of the "MOOVE" mark.
(a) the use of which would be likely to deceive or
cause confusion;
(b) the use of which would be contrary to law;
(c) which comprises or contains scandalous matter; or
(d) which would otherwise be not entitled to protection
in a court of justice,
shall not be registered as a trade mark."
5. Section 61(1) of the Act provides that in legal proceedings relating to a
trade mark registered in Pt A of the register (as are
the two marks in this
case), including applications under s.22 of the Act, the original registration
of the trade mark shall, after
the expiration of seven years from the date of
the original registration, be taken to be valid in all respects, unless it is
shown:
"(a) that the original registration was obtained by fraud;It is apparent from the use of the present tense in par.(b) that, in considering whether the use of a mark would be likely to deceive or cause confusion within the context of s.61, it is proper to look at its current use rather than its use at the time of the original registration. The use of the words "original registration" in par.(a), in contrast with the use of the words "trade mark" in par.(b), confirms this construction of par.(b). And in an application to rectify the register upon the ground specified in par.(b), it is use at the time when the application for rectification is made which is relevant: Berlei Hestia Industries Ltd. v. Bali Co. Inc. [1973] HCA 43; (1973) 129 CLR 353, at p 360. Thus, because it is an exception to the protection afforded by s.61(1), a mark, the use of which would be likely to deceive or cause confusion within the meaning of s.28 at the time of an application to rectify the register, is not deemed to be validly registered even after seven years. Paragraph (b) of s.61(1) does make it necessary to give s.28 a continuing operation. But s.61(1) is concerned only with the validity of the original registration. When the sub-section applies, the original registration is to be taken to be valid in all respects. When it does not apply, there is no presumption of validity of the original registration; that is all. That is of little assistance in a case such as the present where the original registration of the "MOO" mark may be seen, without resort to any presumption, to have been clearly valid. The likelihood of deception or confusion is said to have arisen after the original registration and because of supervening events.
(b) that the trade mark offends against the provisions of
section 28; or
(c) that the trade mark was not, at the commencement of the
proceedings, distinctive of the goods or services of
the registered proprietor."
6. It is s.22 itself which establishes that in rectification proceedings attention need not be confined to the original registration. That section speaks of the expunging or amendment, not only of an entry wrongly made, but also of an entry wrongly remaining in the register, thus drawing a clear distinction between an entry wrongly on the register because it was wrongly made and an entry otherwise wrongly on the register. An entry can only be wrongly on the register, otherwise than because it was wrongly made, as a result of changed circumstances. There is then the question of what changed circumstances will make it wrong for a mark to remain on the register. Section 56, to which we shall refer later, provides one instance of a mark wrongly remaining on the register. In certain circumstances set out in that section, an entry is deemed to be wrongly remaining on the register. But that section is not intended to be exhaustive. In relation to the United Kingdom legislation, Lord Diplock in General Electric Co. v. General Electric (1972) 1 WLR 729, at p 739; (1972) 2 All ER 507, at p 516, expressed the opinion that "an entry which was lawful at the time it was originally made can only be expunged ... if, at the time of the application, its continued presence on the register is prohibited by virtue of some other provision of the Act". We see no reason to doubt that view in relation to the Australian legislation, though it may be closer to the language of the legislation to say that its continued presence is not authorized by any other provision of the Act. And, if it has a continuing operation, s.28 is such a provision. It is at this point that reference to s.61(1) is helpful because it demonstrates that s.28 was intended to have a continuing operation, at least for the purpose of establishing the validity of the original registration of a mark, and we can see no reason, once the continuing operation of s.28 has been recognized to that extent, why one should not recognize its operation for the purpose of establishing whether the registration of a mark continues to be valid. When the latter section says that a mark with the characteristics specified shall not be registered as a trade mark, it means not only that it shall not be placed on the register, but also that it shall not remain on the register. The language is capable of bearing that two-fold meaning and, if nothing else, s.61(1) indicates that such is the meaning which it should bear.
7. The case turns upon which of two alternative constructions of s.28 is the
proper one. Should pars (a), (b), (c) and (d) of that
section be read
entirely disjunctively, so that if the appellant can establish that, by reason
of events which have occurred since
registration, the use of the respondent's
"MOO" mark in relation to flavoured milk would be likely to deceive or cause
confusion,
it is entitled to an order that the register be rectified by the
expunction or amendment of the entry in respect of the "MOO" mark?
Or should
par.(a) be read together with or take colour from par.(d), so that the
appellant must show, not only that the use of the
"MOO" mark would be likely
to deceive or cause confusion, but also that it would not be entitled to
protection in a court of justice?
The problem was recognized by Mason J. in
Berlei Hestia Industries Ltd. v. Bali Co. Inc., although it was unnecessary to
offer any
answer in that case, when he said, at p 361:
"The meaning of the words 'the use of which would beBerlei Hestia Industries Ltd. v. Bali Co. Inc. was, of course, a case in which it was agreed that, if a current likelihood of deception or confusion by the use of the two competing marks was established, it would establish the same likelihood at the time of the original registration of the mark alleged to offend. The problem in this case did not then arise.
likely to deceive or cause confusion' in s.28(a) is
influenced by the language in which s.28(d) is expressed
when it refers to a mark 'which would otherwise be not
entitled to protection'. Thus, a special problem may
confront the Court when a mark which was not likely to
deceive or cause confusion at the time of its original
registration subsequently becomes so or when two marks
substantially identical or deceptively similar have been
registered following honest concurrent user (see s.34)."
8. That problem is whether the use of the expression "which would otherwise be not entitled to protection" in s.28(d) indicates that the mere likelihood of deception or confusion arising from the use of a mark is insufficient to bring it within s.28(a); that, in addition, the circumstances must be such as to disentitle the mark to protection in a court of justice. For it is not every mark, the use of which would be likely to deceive or cause confusion, which is disentitled to protection in a court of justice. That is the point of Mason J.'s reference to s.34 which, in the case of honest concurrent user, allows the registration of trade marks which are substantially identical or deceptively similar, their use being governed by s.58(3). And unless some such construction is given to s.28(a), the word "otherwise" in s.28(d) has no work to do; it is superfluous. On the other hand, s.28 is, apart from this, clearly expressed in a disjunctive form.
9. The predecessor of s.28 was s.114 of the Trade Marks Act 1905 (Cth) which
read:
"No scandalous design, and no mark the use of whichPlainly the construction of s.28 for which the respondent contends is supported by the wording of the old s.114, if the breaking up of that section into separate paragraphs in the new s.28 was not intended to effect a change in meaning. A committee known as the Dean Committee (the Committee Appointed by the Attorney-General of the Commonwealth to Consider What Alterations are Desirable in The Trade Marks Law of the Commonwealth) in 1954 recommended alterations in the law. It did so, having reviewed the recommendations of a previous committee, the Knowles Committee, which had proposed a Bill simply adopting the form of s.114 of the 1905 Act with the addition of the words "or cause confusion". The Dean Committee proposed that s.28 take its current form and commented at par.63 that "Clause 28, while in different words, has in substance the same effect as section 114 of the present Act, but it relieves the Registrar and the Court from consideration of 'morality'." It was the recommendation of the Dean Committee which was accepted. If the Dean Committee had sought to remove the requirement of disentitlement to the protection of a court where deception or confusion was relied upon, a requirement which was plainly present in the old s.114, it is probable that they would have made their intention apparent. But they asserted the contrary. Thus, the circumstances in which the present legislation was enacted suggest that no such change was intended. Of course, it is the wording of the new s.28 which is of primary significance, but the presence of the word "otherwise" in par.(d) creates an obvious ambiguity in the face of the otherwise disjunctive form of the section. It is in the resolution of this ambiguity that the history of the section is of assistance.
would by reason of its being likely to deceive or otherwise
be deemed disentitled to protection in a court of justice,
or the use of which would be contrary to law or morality,
shall be used or registered as a trade mark or part of a
trade mark." (our underlining)
10. Section 114 of the 1905 Act was worded in a manner similar to that of
s.11 of the Trade Marks Act 1938 (U.K.). The latter section
provides:
"It shall not be lawful to register as a trade mark orThat section was examined in an historical context by Lord Diplock, with whom Lord Simon and Lord Kilbrandon concurred, in General Electric Co. v. General Electric. One aspect of Lord Diplock's examination centred upon the nature of the legal protection afforded, initially by the Court of Chancery, to trade marks as a form of property. Sections which were the predecessors of s.11 spoke of marks not being "entitled to protection in a court of equity". The reference to "a court of equity" was changed to "a court of justice" because of the passage of the Judicature Acts. Injunction was the principal means by which equity protected property in a trade mark. But an injunction has always been a discretionary remedy and, in some circumstances where there was the simultaneous use of deceptively similar trade marks, the owner of one would be refused relief against the owner of the other, provided the latter's use of the mark had been honest.
part of a trade mark any matter the use of which would, by
reason of its being likely to deceive or cause confusion
or otherwise, be disentitled to protection in a court of
justice, or would be contrary to law or morality, or any
scandalous design."
11. At common law the right to a trade mark was an adjunct of the goodwill in a business and incapable of an existence separate from it. If, however, the goodwill of a business was divided, the need to recognize more than one user of a trade mark arose, despite the possibility of confusion. For each proprietor to have been able to seek an injunction against the other would have been to undermine ownership. In addition, the increase in the ease of communications during the nineteenth century meant that goods displaying deceptively similar marks, which previously had been restricted to a particular locality, might be offered to a wider set of purchasers, thus producing a greater likelihood of confusion through simultaneous use. The doctrine of honest concurrent user, now embodied in the legislation, developed at common law as a response to this. It prevented one owner of a trade mark from bringing an action of infringement against the proprietor of a substantially identical or deceptively similar mark, but permitted either owner to obtain an injunction to restrain the use of the mark by a usurper. See General Electric Co. v. General Electric, at p 743; p 519 of All ER; Dent v. Turpin (1861) 2 J. and H. 139, at pp 147-148 [1861] EngR 484; (70 ER 1003, at p 1007); Alex. Pirie and Sons Ltd.'s Application (1933) 50 RPC 147, per Lord Tomlin at pp 159-160; James F McKenzie and Co. v. Leslie [1909] HCA 38; (1909) 9 CLR 247, at p 255.
12. The doctrine of honest concurrent user meant that a degree of confusion had to be tolerated within the system. The mere fact that the use of a mark would be likely to deceive or cause confusion was not necessarily sufficient to support an injunction restraining that use. That, Lord Diplock explained, at pp 745, 748; pp 521, 524 of All ER, was how s.11 and its predecessors came to be interpreted in such a way that something more than mere deception or confusion was required to disentitle a trade mark to protection in a court of justice.
13. The doctrine of honest concurrent user is also an explanation of the form
of s.114 of the Trade Marks Act 1905 (Cth) and if,
as we think is the case,
s.28 was not intended to effect any relevant change in meaning, it is an
explanation of the use of the word
"otherwise" in s.28(d). It is a reference
back to s.28(a). Section 28(a) must be read together with s.28(d) so that the
reference
in s.28(a) to a "use ... which would be likely to deceive or cause
confusion" is a reference to a use which would not only be likely
to deceive
or cause confusion but would be not entitled to protection in a court of
justice. The word "otherwise" in s.28(d) is
thus given some work to do. It
means then that the enquiry must in every case be whether some remedy would or
would not be available.
As Dixon J. put it in relation to s.114 of the 1905
Act in Radio Corporation Pty. Ltd. v. Disney [1937] HCA 38; (1937) 57 CLR 448,
at p 459:
"If the circumstances are such that its adoption will giveIt is consistent with that view that a mark should be removed from the register if circumstances arise after the date of original registration which leave its proprietor without protection.
the applicants no right to protection by injunction or other
remedy under the general law, then it should be kept off the
register."
14. This view of s.28 is, we think, supported by the scheme of the Act. Not only is it consonant with s.34 which permits the registration of trade marks which are substantially identical or deceptively similar in the case of honest concurrent user, but any other construction would allow a person who "assiduously infringed" a trade mark to exploit the infringement by producing a situation in which the use of the registered mark would be likely to deceive or cause confusion: see Re Bali Brassiere Co. Inc.'s Registered Trade Mark and Berlei Ltd.'s Application [1968] HCA 72; (1968) 118 CLR 128, per Windeyer J. at p 133. The greater the infringement, the greater the probability that the infringing user would have a ground for claiming rectification against the registered user. There may be a residual discretion to refuse relief, but it seems preferable to construe the provision in such a way as to give no encouragement to such conduct.
15. Furthermore, s.82 of the Act allows the registered proprietor of a trade mark to assign the mark without the goodwill of the business concerned. This allows for the almost inevitable result that some confusion will occur concerning the origin of the goods or services in respect of which the trade mark is registered. The fact that such confusion must have been anticipated by the legislature suggests that it could not have intended that confusion alone should invalidate the registration of a mark. Of course, were the mark otherwise to become deceptive the validity of its registration might be impugned: see Pioneer Kabushiki Kaisha v. Registrar of Trade Marks [1977] HCA 56; (1977) 137 CLR 670, per Aickin J. at p 683; Heublein Inc. v. Continental Liqueurs Pty. Ltd. [1960] HCA 37; (1960) 103 CLR 422, per Fullagar and Taylor JJ. at p 451.
16. In Pioneer Hi-Bred Corn Company v. Hy-Line Chicks Pty. Ltd. (1978) 2 NZLR
50, the New Zealand Court of Appeal took a different
approach. The equivalent
section of the Trade Marks Act 1953 (N.Z.), s.16, provides:
"It shall not be lawful to register as a trade mark orThe Court pointed to the difference in wording of s.16 in comparison with its predecessor, which bore obvious similarities to s.11 of the United Kingdom Act of 1938. Richardson and Woodhouse JJ. concluded that the deliberate change meant that the new section had to be read disjunctively so that likelihood to deceive or confuse is not modified by the final phrase of the section. Richmond P. took the view that, if it was so modified, the likelihood of confusion or deception alone would ipso facto disentitle the mark to protection, so that the effect of the final phrase was not to impose any additional requirement. The Court concluded that the purpose of s.16 is to protect the public rather than traders' interests in trade marks.
part of a trade mark any scandalous matter or any matter the
use of which would be likely to deceive or cause confusion
or would be contrary to law or morality or would be
otherwise disentitled to protection in a Court of justice."
17. In previous legislation the emphasis may have been upon avoiding the deception of the public: Eno v. Dunn (1890) 15 App Cas 252, at pp 263-264; Radio Corporation v. Disney, at pp 458, 459. But now it is clear that, whilst the protection of the public no doubt remains an important purpose, it is not the only purpose. Plainly, since the Act permits some deceptively similar marks to remain on the register, the protection of the proprietary interest in a registered trade mark is another. And the construction given to s.16 by Richardson and Woodhouse JJ. in New Zealand renders otiose the word "otherwise" appearing in the final phrase. Finally, perhaps most significantly, there is not the same indication with the New Zealand section, as there is with its Australian equivalent, that no relevant change in meaning was intended by the change in wording.
18. In Australia, authority favours the construction for which we have expressed a preference. It is consistent with the decision of this Court in Berlei Hestia Industries Ltd. v. Bali Co. Inc. In HTX International Pty. Ltd. v. Semco Pty. Ltd. [1983] FCA 203; (1983) 78 FLR 57; 49 ALR 636, Fox J. adopted Lord Diplock's approach saying, at p 64; p 643 of ALR: "It seems inconsistent with the policy of the Act that the activity of a competing trader which would otherwise be regarded as infringement can bring about a situation where the proprietor's use of its mark, because of confusion, leads to its invalidity." And in Riv-Oland Marble Co. v. Settef SpA (1988) 19 FCR 569, the Full Court of the Federal Court (Bowen C.J. and Lockhart J; Northrop J. dissenting) held that s.28 should be construed in such a manner that the word "otherwise" in s.28(d) serves to limit the circumstances in which s.28(a) would invalidate the registration of a trade mark.
19. In General Electric Co. v. General Electric, Lord Diplock, in summarizing
the legal status under the United Kingdom Act of 1938
of a registered trade
mark, the use of which is likely to cause confusion, gave as one proposition:
"If the likelihood of causing confusion did not existThe use of the term "blameworthy act" is, we think, no more than a shorthand method of referring to all those circumstances which might disentitle an applicant to relief in a court of equity. It was not intended to posit an all-embracing test. As Lord Diplock said, at p 752; p 527 of All ER:
at the time when the mark was first registered, but was the
result of events occurring between that date and the date of
application to expunge it, the mark may not be expunged from
the register as an entry wrongly remaining on the register,
unless the likelihood of causing deception resulted from
some blameworthy act of the registered proprietor of the
mark or of a predecessor in title of his as registered
proprietor." (at p 751; p 526 of All ER)
"It seems to me to be impossible to hold there was any suchIt would, in our view, be quite wrong to use the term to erect an independent standard against which a registered proprietor's conduct must be judged. Not only would it be an impermissible extension of the language of the section, but it would shift the focus from the true question and introduce notions of a subjective kind.
blameworthy conduct by the (appellants) as would amount to
an equitable ground for disentitling them to protection for
the use of the mark."
20. It would clearly be a most significant circumstance, in defending a trade mark against expunction from the register, that the registered proprietor would have been refused relief in proceedings brought by him for infringement because he did not come with clean hands, being himself responsible in some way for the deception or confusion. That may be blameworthy conduct but it is not the only conduct which would disentitle an applicant to relief. And, in some circumstances, it may not disentitle an applicant to relief. For example, it may be more important that equity grant a remedy in the public interest than that it does not aid a wrongdoer: see Money v. Money (No.2) (1966) 1 NSWR 348, at pp 351-352. But this is merely to emphasize that in equity the remedy was discretionary, notwithstanding that it was exercised along defined lines.
21. The only issue which is raised upon the appeal before us is that which arises under s.28(a), namely, whether there should be an order for rectification of the register so as to preclude the respondent from using the "MOO" mark in relation to flavoured milk because such use would be likely to deceive or cause confusion. The trial judge found that there had been a non-use of the mark in relation to dairy products, other than cheese and flavoured milk, and would have made an order under s.23, which provides for relief in respect of non-use, limiting the goods in respect of which the "MOO" mark was registered to those two products. However, the trial judge also found that the appellant had made out a case under s.28 in respect of flavoured milk and so ordered that the register be rectified by limiting the goods in respect of which the mark was registered to cheese alone. The Full Court came to a contrary conclusion under s.28 and, consequently, made an order for rectification which extended the limited class of goods in respect of which the mark was entitled to registration by adding flavoured milk to cheese.
22. The trial judge, applying the test formulated by Kitto J. and approved by the Full Court in Southern Cross Refrigerating Co. v. Toowoomba Foundry Pty. Ltd. (1954) 91 CLR 592, at pp 595, 608, found that there was a likelihood of deception or confusion in the use of the two marks. He found that "a substantial number of purchasers and prospective purchasers of the Moo UHT flavoured milk product, being persons who know of Moove flavoured milk, including the UHT Moove product, will be caused to wonder whether it might not be the case that the two products come from the same source; they would entertain a reasonable doubt" (at p 558). He found that the primary cause of confusion lay in the phonetic similarity of the two marks, particularly to people who knew only of "MOOVE" flavoured milk but had an imperfect recollection of it. The Full Court held that this finding was not only open but correct.
23. For the reasons which we have given, the likelihood that use of the "MOO"
mark would deceive or cause confusion was not, of
itself, sufficient to
disentitle it to registration by rectification of the register. The
likelihood of deception or confusion had
to be such that the mark would not be
entitled to protection in a court of justice. Blameworthy conduct on the part
of the respondent
would have been sufficient for that purpose, but the trial
judge found that the respondent's conduct was not blameworthy. There
were
other factors which, in the view of the trial judge, disentitled the mark to
protection in a court of justice. He said, at
p 587:
"The mark of the first respondent was one in respectIn that passage the trial judge appears to us to be saying that:
of which it was not entitled to relief in equity. This was
not because of any 'blameworthy conduct' as understood when
applying the maxim as to unclean hands. Rather, there was
'otherwise' no entitlement to such protection, both for
want of the necessary distinctiveness at 5 August 1988
and also as a consequence of the lengthy period of use of
MOOVE before the commencement of use of MOO by the first
respondent. Further, use of the MOO mark in relation to
milk was likely to cause confusion by causing persons, in
the sense I have explained, to wonder whether the Moo and
Moove products might not come from the same source, and to
entertain a reasonable doubt."
application for rectification was sufficient to disentitle it to(b) non-use of the "MOO" mark or the failure to take steps to prevent
protection in a court of justice, thus providing a ground under
s.28(d) for rectification;
infringement of "MOO" by the use of the "MOOVE" mark was(c) the matters referred to in (a) and (b) rendered the likelihood of
sufficient to disentitle the "MOO" mark to protection in a
court of justice, thus providing a ground under s.28(d) for
rectification;
confusion or deception such that the mark would not have beenThe order made by the trial judge contained a declaration that the use of the "MOO" mark was likely to deceive or cause confusion within the meaning of s.28(a). It contained no declaration in relation to s.28(d): 14 IPR 75, at p 81.
entitled to protection in a court of justice, thus providing a
ground under s.28(a) for rectification.
24. The Full Court of the Federal Court took the view that neither lack of distinctiveness nor non-use, by itself or coupled with a failure to prevent infringement, was sufficient to disentitle the "MOO" mark to protection in a court of justice. Thus, neither in itself provided a ground for rectification under s.28(d), nor did either do so under s.28(a) when coupled with the likelihood of deception or confusion. We agree with the view taken by the Full Court.
25. The absence of distinctiveness is, of course, relevant to the likelihood of deception or confusion. As Kitto J. observed in Bayer Pharma Pty. Ltd. v. Farbenfabriken Bayer Aktiengesellschaft (1965) 120 CLR 285, at p 303, they "tend to run into one another". But they are not the same thing and the Act deals with them quite separately. The distinctiveness required for the original registration of a trade mark is dealt with in ss.24, 25, 26 and 27. Thus s.28 does not impart any separate requirement of distinctiveness at the time of registration and it is hardly to be thought that it does so subsequently.
26. Lack of distinctiveness after registration is dealt with elsewhere in the Act. Under s.26(2)(b), the distinctiveness of a mark rendering it registrable under Pt A may be by reason of its use. It may lose that distinctiveness by subsequent non-use. A mark registered under Pt B may fail to become distinctive through lack of use. The consequences of non-use are dealt with in s.23. Distinctiveness may be lost otherwise than through non-use. Section 56 provides that, in certain circumstances, the registration of a trade mark becomes invalid because it contains a word or words which have come to be used in a generic sense to name or describe an article, substance or service. Under s.64(1)(b), a person alleged to infringe a trade mark may have a defence if he uses the mark in good faith as a description of the character or quality of his goods or services.
27. The way in which the Act deals explicitly with lack of distinctiveness or the circumstances giving rise to lack of distinctiveness is a clear indication that s.28 was not intended to embrace them by implication, at all events as grounds in themselves. Moreover, s.61(1)(c), in denying the presumption of validity to a trade mark that is not distinctive, deals with lack of distinctiveness separately and does not include it as something which offends against the provisions of s.28(a). It is, we think, clear that lack of distinctiveness does not, of itself, disentitle a registered trade mark to the protection of a court of justice, nor does it do so merely because it gives rise to the likelihood of deception or confusion. We have already referred to ss.34 and 58 which contemplate the registration of trade marks which are substantially identical or deceptively similar in the case of honest concurrent user or other special circumstances.
28. As we have said, s.23 deals with circumstances in which a trade mark may be removed from the register for non-use. The trial judge found that those circumstances did not exist in respect of the "MOO" mark in relation to cheese and flavoured milk and declined to make an order under s.23 in relation to those products. That being so, it is not in our view possible to say that, because of non-use, that trade mark was not entitled to protection in a court of justice at the relevant time. In any event, the presence of s.23 would, upon the ordinary canons of construction, exclude non-use as a ground of disqualification under s.28. Of course, non-use may result in the likelihood of deception or confusion, but that is a different thing.
29. Equity may have refused protection to the "MOO" mark if the respondent
had sought to benefit from the establishment of the "MOOVE"
mark in the market
by waiting for a substantial period before entering the market with "MOO"
flavoured milk. But, in our view, the
findings of the trial judge preclude
such a conclusion. He rejected the appellant's claim that the respondent had
deliberately set
out to cause confusion in the market place with the intention
or expectation of gaining a benefit from the deceptive similarity between
"MOO" and "MOOVE". He held that it was not the respondent's intention to gain
part of the appellant's market share because of the
resemblance between the
two marks. Nor was the respondent, in the trial judge's words, "setting out to
'cash in' on the reputation
of Moove or to sail as close to the wind as it
might without attracting legal liability" (at p 594). He said:
"The evidence satisfies me that when, over the period
August-September 1987, the first respondent selected 'Moo'
for its cheese and milk products, it was aware that 'Moo'
was not in current use by the second respondent and had not
been used for some time, but the legal significance of this
was not appreciated by the first respondent. Further, the
first respondent was well aware that there was significant
aural similarity between 'Moo' and 'Moove' and that the
latter was the name under which the applicant had produced
flavoured milk products for a number of years. But I accept
that what was said by the witnesses for the first respondent
to the effect that the first respondent was not acting
fraudulently in the sense of choosing 'Moo' in the hope
or expectation of deriving benefit from its resemblance
to 'Moove'. The first respondent's position was that the
products would be directed at different 'target' markets
and be promoted accordingly. The acquisition of the
registration of 'Moo' confirmed the first respondent in the
view that there would be no problem with the proposed course
of conduct." (at pp 593-594)
30. These findings were open to the trial judge on the evidence. The words "MOO milk" were first suggested to the respondent by its advertising agents as suitable for attracting children as the consumers of dairy products. An alternative, "Farm Fun", was considered to be not suitable. The respondent quite properly instructed its patent and trade mark attorneys to search the register and, as a consequence, learnt that the "MOO" mark was registered. The respondent purchased the mark from the registered proprietor for a nominal consideration. The consideration was nominal because the mark had been dormant for some time and its registration was about to expire. The dormancy was, however, insufficient to amount to non-use which would justify the removal of the mark from the register. The respondent took no steps to protect the "MOO" mark against the "MOOVE" mark, although it was aware of the latter. But the evidence was that the respondent believed that the use of the "MOO" mark created no problem for either party "because it (MOOVE) was aimed 'at an entirely different market' ... and was promoted so as to appeal significantly to that market" (at p 593). As we have said, the trial judge found that there was no blameworthy conduct on the part of the respondent and we are unable to see in the circumstances anything which would otherwise disentitle the "MOO" mark to protection. Moreover, in those circumstances, there is no justification for treating the absence of any activity on the part of the respondent's predecessor as a factor disentitling the "MOO" mark to protection.
31. The Act provides the means by which the registered proprietor of a trade mark may obtain relief for infringement. If he fails to act in circumstances where he ought to do so in order to protect his mark, there may be a basis upon which the mark should be denied protection, namely, that there is a likelihood of deception or confusion for which the registered proprietor is responsible in failing to pursue his remedies. But in this case, in the light of the respondent's explanation and the findings of the trial judge, the conduct of the respondent cannot, in our view, be regarded as disentitling the mark in question to protection.
32. We would dismiss the appeal.
GAUDRON J. On the basis that s.28(a) of the Trade Marks Act 1955 (Cth) has an operation with respect to a trade mark which at the time of the registration was not likely to deceive or cause confusion but which has since become likely to do so, I agree with Dawson and Toohey JJ. that that operation must be confined by a requirement of blameworthy or disentitling conduct and that no such findings can be made in the present case.
2. The argument in the present case proceeded on the basis of an assumption that a properly registered trade mark could, by reason of some supervening event, offend against s.28 which, in terms, does no more than specify those marks that "shall not be registered as a trade mark". That assumption is supported by the decision in General Electric Co. v. General Electric (1972) 1 WLR 729; (1972) 2 All ER 507 and by statements by Barwick C.J. and Mason J. in Berlei Hestia Industries Ltd. v. Bali Co. Inc. [1973] HCA 43; (1973) 129 CLR 353, at pp 356, 360. However, as is pointed out in the judgment of Deane J., there is no authority requiring this Court to treat s.28 as having that operation.
3. The issues raised by the present case are such that I am content to decide it on the basis upon which it was argued. However, the assumption inherent in the argument does not appear to me to be well founded. It is contrary to the language of s.28 and it seems to me that it creates a number of difficulties, including the difficulty in the present case, for which the Act provides no ready solution.
McHUGH J. This appeal concerns the construction of s.28 of the Trade Marks
Act 1955 (Cth) ("the Act") which provides:
"A mark -
(a) the use of which would be likely to deceive or
cause confusion;
(b) the use of which would be contrary to law;
(c) which comprises or contains scandalous matter; or
(d) which would otherwise be not entitled to
protection in a court of justice,
shall not be registered as a trade mark."
2. The questions which arise in the appeal are:
1. Does s.28 prohibit the continued registration of a mark which
contravenes its provisions only by reason of events which have2. Does par.(d) qualify the operation of par.(a)?
occurred after the mark has become registered?
become likely to deceive or confuse only liable to expunction if4. If the foregoing questions are answered in the affirmative, was
its registered proprietor is guilty of blameworthy conduct?
the respondent guilty of blameworthy conduct?
3. In my opinion, the first question must be answered in the affirmative
because of the way the case was conducted in this Court
and the Federal Court.
However, the second question should be answered in the negative. This
conclusion has the consequence that
the appeal must be allowed and it becomes
unnecessary to answer the third and fourth questions.
The factual background
4. The appellant was granted registration of the trade mark MOOVE in relation to Class 29 goods on 1 November 1978. In January 1979, it commenced to market flavoured milk under the trade mark MOOVE. MOOVE flavoured milk is available in both UHT (long life) and fresh milk.
5. The respondent is the registered proprietor of the trade mark MOO. The respondent manufactures and supplies a large number of dairy products under the name "Devondale". Prior to August 1987, the respondent decided to expand its market. After consultation with market researchers and advertising agents, the respondent decided to market a children's cheese product and a school milk product. The advertising agents suggested the name MOO. A search of the trade mark Register revealed that this trade mark was held in relation to Class 29 goods by Healthway Dairy Products Pty. Limited ("Healthway"). At the instigation of the respondent, the registration was renewed on 26 August 1987. On 29 September 1987, Healthway assigned the mark to the respondent. The assignment was registered on 24 February 1988. Healthway had once used the trade mark in relation to a reduced fat cream product but had ceased production of that product in 1974. In November 1987, the respondent launched a packaged cheese product in Queensland under the name MOO. In February 1988, sales of MOO cheese were extended to New South Wales. In August 1988, the respondent began marketing flavoured UHT milk in New South Wales under the trade mark MOO.
6. In the Federal Court, the appellant sought to remove MOO from the Register
on the ground that, at the time of the institution
of these proceedings, the
registration contravened s.28. The appellant contended that, although the MOO
mark had been correctly
registered, events occurring since registration have
made that mark "likely to deceive or cause confusion" contrary to s.28(a).
It
followed, so the appellant asserted, that the mark was an "entry wrongly ...
remaining in the Register" within the meaning of
s.22(1)(b) and should be
removed.
The judgment of Gummow J.
7. Gummow J. said that, although s.28 operates principally at the time of
registration, it also operates to allow removal of marks
which come to offend
its provisions after registration and that such marks are marks "wrongly
remaining" within the meaning of s.22(1)(b).
His Honour also held, following
Berlei Hestia Industries Ltd. v. Bali Co. Inc. [1973] HCA 43; (1973) 129 CLR 353, at p 361,
that
the phrase "would
otherwise be not entitled to protection in a court of
justice" in par.(d) should
be read as referring back to and
qualifying par.(a)
of s.28. His Honour said ((1989) 86 ALR 549, at p 585) that:
"the words 'or otherwise' (in s.28) do cover cases whereas well as cases of blameworthy conduct. His Honour was conscious of the fact that this conclusion was contrary to the holding in HTX International Pty. Ltd. v. Semco Pty. Ltd. [1983] FCA 203; (1983) 78 FLR 57, at pp 66-67; [1983] FCA 203; 49 ALR 636, at p 646. However, he drew support from Lord Diplock's comment in General Electric Co. v. General Electric ("the G.E. Case") (1972) 1 WLR 729, at p 746; (1972) 2 All ER 507, at p 522, that the words "or otherwise" may have been included to cover the cases of marks the title to which have been lost by disuse and from the comment of Kitto J. in Bayer Pharma Pty. Ltd. v. Farbenfabriken Bayer Aktiengesellschaft (1965) 120 CLR 285, at p 303, that the issues of deceptiveness and lack of distinctiveness could tend to run into one another.
trade marks have lost distinctiveness by disuse (being marks
not otherwise of strong inherent adaptation to distinguish)
at least where the consequence is likelihood of deception or
confusion"
8. The above construction of s.28 resulted in Gummow J. concluding that use
of the MOO mark in relation to milk contravened s.28;
for his Honour found
that the use of the MOO mark was likely to deceive or cause confusion and that
it was not "otherwise ... entitled
to protection in a court of justice"
because of the lack of distinctiveness and the lengthy period of disuse. He
ordered that the
Register be rectified by limiting the goods in respect of
which the MOO mark is registered to "cheese".
The judgment of the Full Court of the Federal Court
9. Lockhart, Pincus and von Doussa JJ. allowed an appeal from the judgment of Gummow J. They agreed with Gummow J. that s.28 operates with respect to a mark that, although correctly registered, has since registration come to offend s.28 and that par.(d) of that section qualifies the operation of par.(a). They also agreed that blameworthy conduct is not the only circumstance which renders a mark "not entitled to protection in a court of justice" under s.28(d).
10. However, the Full Court held that lack of distinctiveness is not relevant
under s.28. First, the requirement of distinctiveness
is dealt with at the
time of registration by ss.24, 25 and 26, not s.28. Thus, it would be
surprising, said the Full Court, if s.28
were to deal with this issue after
registration. Indeed, provisions in the Act other than s.28 deal with lack of
distinctiveness
after registration. Thus, s.23 applies to marks which lose
their distinctiveness through non-use; s.56 deals with marks that are
no
longer distinctive because they are generic. Secondly, the Full Court said
that the interpretation of s.28 proposed by Gummow
J. would present
difficulties in the case of marks in Part B of the Register. A mark may
obtain registration in Part B even if it
is not distinctive: s.25. Such a
mark may eventually be removed under s.23 for non-use. But their Honours said
that it is difficult
to see how, consistently with the spirit of s.25 of the
Act, such a mark could be liable to expunction under s.28 on the ground that
it was not entitled to protection in a court of justice because of lack of
distinctiveness.
The construction of s.28 1. Does s.28 have a continuing operation?
11. In the courts below and even in this Court, the parties assumed that s.28 applied to registered marks as well as to applications to register marks. But it is an assumption which should not be allowed to go unchallenged.
12. At first sight, s.28 appears to operate only at the time of registration.
The natural meaning of the words "shall not be registered"
is that they refer
to the act of registering rather than the state of being registered. This was
the view that Lord Reid took of
the corresponding U.K. provision in the G.E.
Case. As Bradley, "Loss of Distinctiveness, Deception and Expungement of Trade
Marks",
(1973) 7 Sydney Law Review 62 points out, at p 66:
"Standing alone, s.28 appears to be designed only to
prohibit registration of unregistered marks and thus to be
addressed to the date of original registration. Section 28
speaks of 'marks' simpliciter, not registered trade marks,
and is found in Part IV of the Act which is concerned to
describe Registrable Trade Marks. This view of s.28 is
further supported by the subjunctive mood of 'would be
likely to deceive', 'would be contrary to law' and 'would
otherwise be not entitled to protection'. All these phrases
indicate that the enquiry is to the prospective character of
a mark as yet unregistered."
13. Nevertheless, it must be conceded that the word "registered" is capable
of referring to a trade mark's continuing status. In
fact, the use of the
words "be registered", rather than "registrable" (see ss.24 and 25) or
"capable of registration" (see s.33),
gives support to the view that s.28 is
intended to have a continuing operation. Moreover, s.11 of the Trade Marks
Act 1938 (U.K.)
("the U.K. Act") (which corresponds to s.28) has been
interpreted so as to operate in respect of marks after registration. Section
11 provides:
"It shall not be lawful to register as a trade markThe verb "to register" suggests that the section only applies as at the time of registration. Yet, in the G.E. Case, Lord Diplock thought (at p 740; p 517 of All ER) that as "a matter of ordinary usage of the English language" s.11 could refer equally to "the act of making an entry on the register" or "the retention of an entry on the register".
or part of a trade mark any matter the use of which would,
by reason of its being likely to deceive or cause confusion
or otherwise, be disentitled to protection in a court of
justice, or would be contrary to law or morality, or any
scandalous design."
14. Furthermore, other sections of the Act are said to support the argument
that s.28 was intended to have a continuing operation.
Thus, s.61(1)
provides:
"In legal proceedings relating to a trade mark(Section 13 of the U.K. Act does not have par.(c), otherwise it is substantially the same as s.61.) In BALI Trade Mark (1968) RPC 426, at p 434, Diplock L.J. drew attention to:
registered in Part A of the Register (including applications
under section 22), the original registration of the trade
mark under this Act shall, after the expiration of 7 years
from the date of the original registration, be taken to be
valid in all respects, unless it is shown -
(a) that the original registration was obtained by fraud;
(b) that the trade mark offends against the provisions of
section 28; or
(c) that the trade mark was not, at the commencement of the
proceedings, distinctive of the goods or services of
the registered proprietor."
"The contrast between the past tense in paragraph (a) ofand concluded:
section 13(1) 'was obtained' and the present tense in
paragraph (b) 'offends', and the change from the words 'that
registration' ... in paragraph (a) to 'the trade mark' in
paragraph (b)"
"If the date of registration were the relevant date underSee also the G.E. Case, per Lord Diplock at p 749; p 525 of All ER, and Berlei Hestia Industries Ltd. v. Bali Co. Inc., per Barwick C.J. at p 356, and per Mason J. at p 360. The use of the present tense in s.61(1)(b), however, is explicable on the basis that, if contrary to s.28 a mark has obtained registration, it "offends" against the provisions of that section. With great respect to those who have thought to the contrary, I do not think that the terms of s.61 provide any sure foundation for cutting down the natural meaning of s.28.
paragraph (b), the natural way of expressing this would be
to say, 'unless that registration (a) was obtained by fraud,
or (b) offended against the provisions of section 11 of this
Act'."
15. Support for the argument that s.28 has a continuing operation is also
said to arise from the terms of ss.22(1)(b) and 56 of
the Act. Section 22(1)
provides:
"Subject to this Act, a prescribed court may, on theSection 56 provides in part:
application of a person aggrieved or of the Registrar, order
the rectification of the Register -
(a) by the making of an entry wrongly omitted to be made in
the Register;
(b) by the expunging or amendment of an entry wrongly made
in or remaining in the Register;
(c) by the insertion in the Register of a condition or
limitation affecting the registration of a trade mark
which ought to be inserted; or
(d) by the correction of an error or defect in the
Register."
"(1) Subject to this section, the registration of a trade
mark does not become invalid by reason only of the use,
after the date of the registration, of a word or words which
the trade mark contains, or of which it consists, as the
name or description of an article, substance or service.
(2) The succeeding sub-sections have effect where -
(a) there is a well-known and established use of a word as
the name or description of an article, substance or
service by a person or persons carrying on a trade in
that article, substance or service, not being used in
relation to goods or services connected in the course
of trade with the proprietor or a registered user of
the trade mark or, in the case of a certification trade
mark, in relation to goods or services certified by the
proprietor; or
(b) the article or substance was formerly manufactured
under a patent or the service formerly provided was
a patented process, as the case requires, a period
of 2 years or more after the patent has ceased has
elapsed, and the word is the only practicable name or
description of the article, substance or service.
(3) If the trade mark consists solely of that word,
the registration of the trade mark, so far as regards
registration in respect of the article or substance or of
any goods of the same description, or of the services or of
any services of the same description, as the case requires,
shall be deemed for the purposes of section 22 to be an
entry wrongly remaining in the Register."
16. The words "or remaining" in s.22(1)(b) certainly demonstrate that a mark, originally validly registered, may nevertheless become one "wrongly remaining" in the Register. However, in the present Act, it is possible to explain the operation of this paragraph by reference to s.56(3) which deems certain marks to be "wrongly remaining in the Register". Those who rely on s.22 as an indication that s.28 applies to marks which become deceptive or confusing after registration point out, however, that there was no provision comparable to s.56(3) in the Trade Marks Act 1905 (Cth) ("the 1905 Act") but that s.22 had its equivalent in s.71 of the 1905 Act. Nevertheless, the history of these provisions is not as illuminating as it appears to be. Under the 1905 Act, a registered trade mark was determinable with its goodwill: s.58. Under that Act, therefore, a trade mark that was validly registered would wrongly remain in the Register if the goodwill attached to the mark was lost. Consequently, s.71 empowered the removal of such a mark because it wrongly remained in the Register. Thus, the absence of any provision equivalent to s.56(3) in the 1905 Act tells little about the construction of s.22(1)(b). Its predecessor - s.71 of the 1905 Act - operated in respect of marks which had lost the goodwill attached to them; and s.22(1)(b) can operate in respect of marks which are deemed to wrongly remain in the Register pursuant to s.56(3). In any event, the terms of s.56 are not necessarily inconsistent with the proposition that, under s.28, likelihood of deception or confusion is a ground to be considered only at the date of registration. If that proposition is valid, s.56 is simply an exception to the general rule that the likelihood of deception or confusion is a matter to be considered only as at the time of registration.
17. Enough has been said to demonstrate that neither the text nor the context of s.28 provides any clear answer to the construction of s.28.
18. Moreover the purpose of the legislation as a whole provides no real guidance as to whether s.28 should be construed as operating after the act of registration. It has often been said that the purpose of s.28 itself is the protection of the public: see, for example, Eno v. Dunn (1890) 15 App Cas 252; Radio Corporation Pty. Ltd. v. Disney [1937] HCA 38; (1937) 57 CLR 448. If no more appeared, that purpose would be a powerful reason for giving the section a continuing operation, for the public is as easily deceived or confused by a mark which has become deceptive or confusing after registration as it is by a mark which would be deceptive or confusing if registered. But the Act has other competing purposes. Since the decision in Eno v. Dunn, the scope of the legislation has changed. Thus, while the Act has the purpose of protecting the public by indicating the origin or nature of goods or services, it also has the purpose of protecting the valuable rights which a proprietor acquires in relation to a trade mark. Since the decision in Eno v. Dunn, the enactment of provisions with respect to registered users (ss.73-81) and assignment of trade marks without goodwill (s.82) has changed the focus of the Act. The registered user provisions, the assignment provisions and the limited indefeasibility given to registered proprietors tend to suggest that, after registration, the interests of traders are preferred to the competing interests of consumers in being protected from the use of marks which are likely to deceive or confuse. Thus, the presence in the Act of ss.73-82 tends to neutralise the inference to be drawn from s.28 standing alone.
19. The Dean Committee (1954), on whose recommendations the present Act was
adopted, stated that s.28:
"while in different words, has in substance the same effectUnfortunately, this statement does not assist in resolving the questions about the true construction of s.28. First, the exact meaning of s.114 of the 1905 Act is a matter of debate. Secondly, there is a significant difference in the wording of the two sections. Section 114 provided:
as section 114 of the (1905) Act, but it relieves the
Registrar and the Court from consideration of 'morality'."
"No scandalous design, and no mark the use of whichThe words "used or registered" in s.114 suggest that that section had a continuing operation. If that is correct, the language of the report of the Dean Committee would require s.28 to have a continuing operation. But this would mean that the Committee believed that "used or registered as a trade mark" in s.114 was equivalent to "registered as a trade mark" in s.28. This seems so unlikely that the omission of the words "or used" in s.28 suggests that the Committee did not regard use after registration as any concern of s.28.
would by reason of its being likely to deceive or otherwise
be deemed disentitled to protection in a court of justice,
or the use of which would be contrary to law or morality,
shall be used or registered as a trade mark or part of a
trade mark." (my emphasis)
20. An examination of the case law shows that the courts have also had trouble construing s.28 of the Act and s.11 of the U.K. Act. In R. Thorne and Sons Ltd. v. Pimms Ltd. (1909) 26 RPC 221, Neville J. held that a trade mark should be expunged on the basis that it was "wrongly remaining" under s.35 of the Trade Marks Act 1905 (U.K.) ("the 1905 U.K. Act") (the equivalent to s.22) because it was "calculated to deceive" under s.11 of the 1905 U.K. Act. His Lordship thought that the mark only became calculated to deceive by reason of facts occurring after registration. That is, he did not think the mark was "calculated to deceive" at the time of registration. Section 6 of the Trade Marks (Amendment) Act 1937 (U.K.) amended s.11 so that, like s.28, it now reads "likely to deceive or cause confusion" instead of "calculated to deceive". However, this amendment did not change the meaning of s.11: in In re McDowell's Application (1927) 44 RPC 335, at p 341, it was said that "calculated to deceive" did not mean "intended to deceive" but meant "likely (or reasonably likely) to deceive or mislead".
21. Section 11 of the 1905 U.K. Act was also given a continuing operation by the Court of Appeal in Bowden Wire Ltd. v. Bowden Brake Company Ltd. (1913) 30 RPC 580. The marks of the plaintiff had become deceptive after registration because of a licensing arrangement. The Court of Appeal held that the plaintiff's trade marks should be removed from the Register because they were not distinctive and were calculated to deceive. The House of Lords upheld this decision: see (1914) 31 RPC 385. In In re Pan Press Publications Ltd.'s Applications (1948) 65 RPC 193, at p 200, Wynn-Parry J. said that the real basis of this decision was that the licensing agreement was contrary to s.70 of the 1883 U.K. Act or s.22 of the 1905 U.K. Act. These sections prevented the assignment or transmission of trade marks without the goodwill of the business. Whether the comment of Wynn-Parry J. is or is not correct, the decision in Bowden Wire Ltd. illustrates the need to treat many of the earlier cases with caution. The current Act sanctions the use of a trade mark by someone other than the registered proprietor (see ss.73-81). In that context, the current Act arguably prefers the rights of registered trade mark proprietors to the interests of consumers.
22. In In re Imperial Tobacco Company's Trade Marks (1915) 2 Ch 27, Eve J.
found that the trade marks under consideration were not
deceptive, but added
(at p 40):
"In my opinion s.11 has no application to, and it would beThis statement is equivocal. However, in W. Woodward Ltd. v. Boulton Macro Ltd. (1915) 32 RPC 173, Eve J. stated that s.11 applies only at the time of registration.
an abuse of language so to construe it as to make it have
any application to, a mark which was in no sense contrary to
law when registered and the use of which to-day is identical
with that which has obtained ever since it was registered
and for years before that. It does not, of course, follow
that such a mark might not be so used as to become contrary
to law or a deceptive mark within the section, but that is a
wholly different case from the present".
23. In Pan Press, Wynn-Parry J. had to consider the validity of the
respondents' two registered trade marks, a device consisting
of a
representation of the Greek god Pan and the words "Pan-Books". These marks
were registered on 17 November 1943. The appellant
was incorporated on 12
August 1943 under the name "Pan Press Publications Ltd." and commenced
publishing in 1945. The appellant
complained that the respondents' marks
wrongly remained in the Register because they were, contrary to s.11, likely
to deceive or
cause confusion. Wynn-Parry J. said (at p 200):
"I confess that, had the matter been res integra, I shouldHowever, he felt bound by the decision in R. Thorne and Sons Ltd. v. Pimms Ltd. He concluded (at p 201), however, that:
have had considerable doubt as to whether Sec. 11 could
apply at all, having regard to the circumstance that, as was
pointed out in the later case of Woodward v. Boulton Macro
(32, RPC, 173), Sec. 11 only refers to the moment of
registration."
"the Court will not direct a mark to be expunged of whichHe held that the respondents were not responsible for any actual or potential confusion and upheld the registrations. This compromise is similar to that reached by Lord Diplock in the G.E. Case.
it cannot be suggested that it was calculated to deceive
when it was registered or was not otherwise disentitled
to protection, but which in course of time, through
circumstances over which the owner of the mark has had no
control, has become calculated to deceive, unless, possibly,
as was suggested by the Assistant-Comptroller, in a case
where the public interest is strongly concerned and the
damage which would be inflicted upon the registered
proprietor by the expunction of his mark would be
comparatively slight. I do not desire to be taken as
expressing any view as to this possibility or doing more
than leaving the matter open for consideration if such a
case should arise."
24. The issue as to whether s.28 has a continuing operation was again considered in the cases concerning the Bali trade mark. The applicant was the registered proprietor of the trade mark Berlei which was first registered in England in 1924 and in Australia in 1917. The respondent had registered the trade mark Bali in England in 1938 and in Australia in 1947. Both companies applied the mark to brassieres. The applicant ultimately succeeded in having Bali removed from the Register in both countries on the basis that it was likely to deceive or cause confusion. In BALI Trade Mark, Lord Denning M.R. said that s.11 only applied at the time of registration and Salmon L.J. said (at p 438) that he was "far from convinced that the view expressed by Eve, J. in Woodward Ltd. v. Boulton Macro Ltd. (1915) 32 RPC 173 and by Wynn-Parry, J. in Pan Press Publications Ltd.'s Application (1948) 65 RPC 193, was wrong". Diplock L.J., on the other hand, considered that the section had a continuing operation and said that one had to assess the likelihood of confusion at the date of the application for expunction. Diplock L.J. largely based this conclusion on inferences drawn from the wording of s.13(1) (the U.K. equivalent to s.61(1)). In the House of Lords, the parties agreed that the case should be approached on the basis that the relevant inquiry was whether the Bali mark was correctly registered in 1938: Berlei (U.K.) Ltd. v. Bali Bra. Inc. (1969) 1 WLR 1306, at pp 1311, 1321; (1969) 2 All ER 812, at pp 815, 825.
25. This Court did not decide the comparable Australian case until after the
House of Lords' decision in the G.E. Case. The judgments
of Barwick C.J. and
Mason J. were influenced by Lord Diplock's reasoning. Both their Honours said
that s.28 has a continuing operation.
Mason J. said (at p 360):
"for persuasive reasons ... the view that s.28 (s.11 of theThe observations in Berlei Hestia Industries Ltd. were obiter. The likelihood of confusion between Bali and Berlei was said to arise from their phonetic similarity, which was obviously the same at the date of registration as at the date of application for expunction. That is, the likelihood of confusion existed both at registration and at the time of the application for expunction.
1938 (U.K.) Act) was merely a prohibition against original
registration was rejected. Although there are differences
in the expression of the United Kingdom and Australian
provisions, they are not of such significance as to justify
a departure from the conclusion, conformably with what has
been said, that the words 'shall not be registered' in s.28
refer not only to the act of making an entry in the register
but also to permitting the continuance of the entry of a
trade mark in the register."
26. The major case on s.11 of the U.K. Act is the House of Lords decision in the G.E. Case. Lord Reid expressed agreement with the view of Eve J. in W. Woodward Ltd. v. Boulton Macro Ltd. Lord Simon of Glaisdale and Lord Kilbrandon, however, agreed with Lord Diplock who reiterated the view he had expressed in BALI Trade Mark. Lord Diplock held that s.11 could in certain circumstances operate with respect to marks that had come to offend its provisions only since registration.
27. Since the G.E. Case, Australian courts have treated the debate about the
scope of s.28 and the meaning of the words "shall not
be registered" as
resolved. They have considered themselves bound by the obiter dicta of
Barwick C.J. and Mason J. in Berlei Hestia
Industries Ltd. v. Bali Co. Inc.
and have held that s.28 has a continuing operation: see HTX, at pp 63-64; p
643 of ALR; Riv-Oland
Marble Co. v. Settef SpA (1988) 19 FCR 569, at p 594;
and The Ritz Hotel Ltd. v. Charles of the Ritz Ltd. (1988) 12 IPR 417, at p
469. Likewise, the text writers treat the issue as settled: see Shanahan,
Australian Law of Trade Marks and Passing Off, 2nd ed.
(1990), at p 138, and
Lahore, Intellectual Property in Australia: Patent, Designs and Trade Mark
Law, at par.4.3.023. However, the
question is still open in this Court.
Unfortunately, because of the course which the argument took in the Federal
Court and in this
Court, the question as to whether s.28 operates by reference
to events which occur after registration will not be settled by this
case. My
present inclination is that the section should be seen as operating as at the
time of registration and not after. But
the conduct of this case requires
that the Court should proceed on the basis that the section applies to events
occurring after registration.
2. Are the paragraphs of s.28 to be read disjunctively?
28. In the G.E. Case, Lord Diplock thought that a limitation on the
prohibition of the registration of a deceptive or confusing
mark was imposed
by the requirement that its use "would ... be disentitled to protection in a
court of justice". He concluded (at
p 751; p 526 of All ER) that:
"If the likelihood of causing confusion did not existThe requirement of blameworthy conduct was derived from the equitable doctrine of unclean hands which Lord Diplock perceived as subsumed under the words "disentitled to protection in a court of justice".
at the time when the mark was first registered, but was the
result of events occurring between that date and the date of
application to expunge it, the mark may not be expunged from
the register as an entry wrongly remaining on the register,
unless the likelihood of causing deception resulted from
some blameworthy act of the registered proprietor of the
mark or of a predecessor in title of his as registered
proprietor."
29. Although the requirement of blameworthy conduct was at the heart of the
dicta of Eve J. in Imperial Tobacco (at p 40) and Wynn-Parry
J. in Pan Press
(at p 201), it cannot be said that, prior to Lord Diplock's judgment in the
G.E. Case, it was established doctrine
that marks which became deceptive after
registration would only be expunged if the registered proprietor was guilty of
blameworthy
conduct. For example, in the G.E. Case in the Court of Appeal
(1970) RPC 339, at p 368, Salmon L.J. said:
"I do not consider that the criterion as to whether it
wrongly remains on the register because it has become likely
to deceive or cause confusion can depend upon whether or not
this deception or confusion has been caused by a wrongful
act of the proprietor. The public mischief flowing from
deception or confusion is the same whether or not it has
been caused by a wrongful act. No doubt, however, the
proprietor's conduct may be taken into account, amongst
other things, when it comes to exercising the court's
discretion as to whether the entry should be expunged from
the register."
30. Further, the requirement of blameworthy conduct has not been universally
accepted since the decision of the House of Lords.
In Pioneer Hi-Bred Corn
Company v. Hy-Line Chicks Pty. Ltd. (1978) 2 NZLR 50, the New Zealand Court of
Appeal said that the phrase
"likely to deceive or confuse" was not modified by
the words "disentitled to protection in a Court of justice". The Court drew
attention
to the difference in wording between the U.K. and New Zealand
sections. Section 16 of the Trade Marks Act 1953 (N.Z.) provides:
"It shall not be lawful to register as a trade mark orThis section is very similar to s.28 of the Australian Act. Pioneer Hi-Bred Corn was an opposition case. In the G.E. Case, Lord Diplock appears to say that blameworthiness is only relevant where a mark had become deceptive or confusing since registration. Nevertheless, the comments of the New Zealand Court of Appeal were expressed in general terms.
part of a trade mark any scandalous matter or any matter the
use of which would be likely to deceive or cause confusion
or would be contrary to law or morality or would otherwise
be disentitled to protection in a Court of justice."
31. Australian courts, however, have adopted the approach of Lord Diplock in
the G.E. Case. In Berlei Hestia Industries Ltd. v.
Bali Co. Inc., Mason J.
said (at p 361):
"The meaning of the words 'the use of which would beIn HTX, Fox J. (at p 64; p 644 of ALR) expressed agreement with Lord Diplock's judgment in the G.E. Case. In Riv-Oland, the majority of the Full Federal Court held that the word "otherwise" in s.28(d) served to limit the circumstances in which the operation of s.28(a) would disentitle a trade mark to the protection given by registration. In the present case, all members of the Federal Court accepted that the phrase "would otherwise be not entitled to protection in a court of justice" should be read as referring back to and limiting par.(a) of s.28. They went on to say, however, that blameworthy conduct is not the only circumstance which would render a mark "not entitled to protection in a court of justice".
likely to deceive or cause confusion' in s.28(a) is
influenced by the language in which s.28(d) is expressed
when it refers to a mark 'which would otherwise be not
entitled to protection'."
32. In my opinion, an interpretation of s.28 which holds that a mark does not
offend its provisions even though the use of the mark
is "likely to deceive or
cause confusion" ignores the wording and structure of s.28. As Northrop J.
said in Riv-Oland (at p 582):
"According to normal canons of construction the use of theSimilar comments were made in Pioneer Hi-Bred Corn in relation to s.16 of the New Zealand Act which is almost identical to s.28: see at pp 52 and 72. The structure of s.28 is so different from its predecessor, s.114 of the 1905 Act, and its U.K. equivalent that the English cases, including the the G.E. Case, cannot be regarded as persuasive.
word 'or' between par (c) and (d) makes each paragraph a
true alternative to each of the other paragraphs. On this
construction par 28(a) stands alone".
33. Nor can I accept the conclusion that the word "otherwise" in par.(d)
requires that par.(d) be read as limiting the operation
of pars (a) to (c).
In Riv-Oland, Lockhart J. said (at p 598):
"The use of the word 'otherwise' in s 28(d) appears to meHowever, the word "otherwise" merely indicates that a mark which comes within par.(a), (b) or (c) is ipso facto considered to be not entitled to protection in a court of justice. As Northrop J. said in Riv-Oland (at p 583):
to be otiose unless it refers back to the preceding pars
(a), (b) and (c). In my view, the syntactic function of
that word requires that par (d) be taken to involve such
reference back, which in consequence will limit the
circumstances in which the factors specified in pars
(a), (b) and (c) will disentitle a trade mark to protection."
"The word 'otherwise' when used as an adverb usually
denotes 'in another way' or 'other ways' or 'in other
respects': see the Shorter Oxford English Dictionary.
In the context of the syntax of s 28 of the Act, the word
'otherwise' is used correctly and does give a direct
force to s 28(d) to operate in its own right and not as a
qualification on s 28(a), (b) or (c). On this view s 28(a),
(b) and (c) each operate independently of par (d) which is a
catch-all provision proscribing the registration of a mark
where that mark would not be entitled to protection in a
court of justice even though the mark did not come within
s 28(a), (b) or (c)."
34. Nor do I think that the fact that "some degree of deception and confusion
seems to be inherent in the system when you have provisions
such as s 34 and s
82" (Riv-Oland, per Bowen C.J. at p 574) is a ground for reading down s.28(a).
Those sections together with ss.73-81,
which provide for a system of
registered users, are the foundation of the argument that to remove a
registered mark simply because
it is confusing or deceptive is to contradict a
basic assumption of the Act, viz., that registration is not inconsistent with
deception
and confusion. Accordingly, so it is argued, something more than
confusion or deception must be required before a mark can be removed.
However, as Lahore points out (at par.4.3.030):
"the present assignment and registered user provisions doAnd the existence of s.34 provides no ground at all for giving s.28 an operation in respect of events which have occurred since registration.
not and were never intended to authorise the use of a mark
in a way which was likely to cause deception and confusion".
35. Many of the recent Australian decisions which have held that a registered
trade mark is not liable to expunction merely because
it is likely to deceive
or cause confusion have in truth been motivated by a desire not to reward "the
assiduous efforts of an infringer".
In Re Bali Brassiere Co. Inc.'s
Registered Trade Mark and Berlei Ltd.'s Application [1968] HCA 72; (1968) 118 CLR 128, at p
133,
Windeyer J. asked
rhetorically:
"Is a mark which was valid when registered to be removedIn HTX, Fox J. said (at p 64; p 644 of ALR):
because later events, perhaps the assiduous efforts of an
infringer, have created a likelihood of confusion?"
"It seems to me to be contrary to the scheme and policyIn Riv-Oland, Bowen C.J. said (at p 574):
of the Act to allow what Windeyer J. in the Bali Brassiere
case (supra) called 'the assiduous efforts of an infringer'
(at p 133) to invalidate (or render void) a registered trade
mark unless, at least, there has been 'blameworthy' conduct
on the part of the registered proprietor. Doubtless a
registered proprietor is expected to take due steps for
the protection of his mark, but the infringer must also be
expected to take such steps as the Act allows in order to
establish an equal or superior right to the use of the mark,
or to have the register appropriately rectified. While
registration by no means creates indefeasibility, it gives
notice, and encouragement should not be given to the trader
who fails to search it, or disregards the results of a
search, and creates a substantial business using the mark,
to the point that the registration is to be regarded as
invalid, and liable to be expunged."
"I am, I think, conscious of leaning against a constructionIn the same case, Lockhart J. said (at pp 598-599):
of s 28 in regard to blameworthy conduct on the part of a
proprietor which would lead to a situation described by
Windeyer J where the proprietor of a mark might be denied
or lose registration by reason of 'the assiduous efforts
of an infringer' ..., or to adapt the words to cover the
period before registration 'the assiduous efforts of a
misappropriating user'."
"If ... s 28(a) has an operation which is not restricted by
reference to s 28(d), then a trader who uses the registered
trade mark of another trader may exploit that infringing use
of the mark in the market-place to the point where it can be
said that the use of the registered mark by the proprietor
of the mark would be likely to deceive or cause confusion.
... It would be an extraordinary result if this conduct,
which constituted infringing conduct, could produce either
the invalidity of the mark or its liability to expungement.
It is no answer to say that a court has a residual
discretion to decline to order expungement even where a
mark is shown to be invalid. The fact that the infringing
conduct of a rival trader, in the circumstances to which
I have referred, could produce the consequence that a
registered mark becomes invalid is itself so extraordinary a
result that its correctness could only be accepted as a last
resort."
36. But as the author of an article in An Annual Survey of Australian Law
1988 points out (at p 295):
"It is difficult to see the need for this massive swing
from one extreme to the other: from denying the (infringer)
her or his ill-gotten fruit to granting the (registered
proprietor's) mark this presumptive immunity unless he
or she was at fault. If the court had said that the
(registered proprietor) would not lose a mark which had
become deceptive as a result of an infringer's wrongful
conduct, this would have taken care of the assiduous efforts
of an infringer; but the proprietor would still lose the
mark if it was deceptive for any other reason - that is,
irrespective of who was to blame."
37. In any event, the registered proprietor of a mark which is constantly
infringed by the assiduous efforts of an infringer is,
to some extent, also
guilty of blameworthy conduct. Registered proprietors have a duty to be
vigilant in protecting their rights.
If they are not, it is possible that
s.56(3) or s.64(1)(b) will eventually diminish their rights. This caused
Gummow J. in the
present case to ask (at p 577):
"Why should not s 28 produce a comparable result where a
registered mark becomes likely to deceive or cause confusion?"
38. Moreover, if s.28 is considered to have a continuing operation, it must be because its purpose is to protect the public in respect of marks which have been registered as well as those which seek registration. On that hypothesis, any requirement of blameworthy conduct on the part of the registered proprietor before that section can be utilised appears to be contrary to its essential purpose.
39. Accordingly, s.28(a) should be given its natural meaning. That is, a mark offends against it if, at the time of registration or later, it is "likely to deceive or cause confusion".
40. Gummow J. found that the MOO mark was likely to deceive or cause confusion. The appeal should be allowed.
ORDER
Appeal dismissed with costs.
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