FEDERAL COURT OF AUSTRALIA

Dick Smith Investments Pty Ltd v Ramsey [2016] FCA 939

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    The directions of the delegate of the Trade Marks Registrar made on 25 February 2014 be set aside.

3.    The respondent pay the applicants’ costs of the appeal and of the application to the Australian Trade Marks Office.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    This proceeding together with the related proceeding NSD 362 of 2014 represent the latest battles in a long-running war between traders over the registration as trade marks of the homophones, ozemite and aussie mite, which, since mid-2012, have competed in the Australian marketplace with the iconic Vegemite brand, once quintessentially Australian, but now owned by an American conglomerate.

2    ozemite is the brainchild of the well-known Australian entrepreneur, Richard (Dick) Smith AC, and his associates; aussie mite the creation of Roger Ramsey, a South Australian businessman. There is no love lost between the two protagonists, although each professes to be actuated, at least in part, by a common goal: the protection and promotion of Australian industry. Two principal features set them apart. One is Mr Smith’s high public profile and media pulling-power. The other is that Mr Ramsey’s product, AussieMite, is a commercial venture, whereas all profits from the sale of OzEmite go to charity.

3    Ozemate Pty Ltd (“Ozemate”) as trustee for the Dick Smith Foods Foundation is the registered owner of the ozemite trade mark (No 811789), Dick Smith Investments Pty Ltd (“DSI”) the former owner. Mr Smith is the founder and director of both companies.

4    Although the ozemite trade mark was registered before its phonetic namesake and, although it was heavily promoted from time to time thereafter, no goods were offered for sale under the mark for in excess of eight years. In the meantime, a delegate of the Registrar of Trade Marks accepted an application by Mr Ramsey to register the trade mark aussie mite over the opposition of DSI (Dick Smith Investments Pty Ltd v Roger Ramsey (2006) 70 IPR 428; [2006] ATMO 82) (“the first decision”). The long delay in taking goods to market under the ozemite mark led to a successful application by Mr Ramsey to have the ozemite mark removed from the Register for non-use (Dick Smith Investments Pty Ltd v Ramsey (2014) 105 IPR 452; [2014] ATMO 16) (“the second decision”).

5    The applicants, who I shall call “the Dick Smith parties”, have appealed the second decision. They have also brought rectification proceedings to have the aussie mite trade mark removed from the Register, a move they described as purely defensive. Mr Ramsey and his daughter, Elise, retaliated by filing in the rectification proceedings a cross-claim seeking to have the ozemite trade mark removed. Orders were made for both proceedings to be heard together and for the evidence in one to be evidence in the other. The parties asked, however, that addresses and judgment in the rectification proceedings await the publication of the judgment in the appeal. Consequently, this judgment is concerned only with the issues arising on the appeal.

6    The battle lines are clear.

7    In a nutshell, the Dick Smith parties claim that publicity featuring the Ozemite name during the non-use period is evidence that the name was used as a trade mark, despite the fact that no product had been sold under that name and none was then available for sale. In the alternative, they claim they have a defence to the non-use application in that there are circumstances amounting to an “obstacle” to the use of the mark which caused the delay in the launch of the OzEmite product. In essence, the “obstacle” is a reference to the difficulties Mr Smith and his companies experienced in sourcing spent brewer’s yeast, a key ingredient in Vegemite, the taste of which they were seeking to replicate. It is apparently uncontroversial that Kraft, the American purchaser of Vegemite, had cornered the market on spent brewer’s yeast by entering into contracts with major Australian breweries. If they fail on both counts, the Dick Smith parties say that the Court should exercise its discretion to allow the ozemite trade mark to remain on the Register.

Background facts

8    The following facts are agreed or not in dispute.

9    Dick Smith is an Australian businessman, aviator and philanthropist, former Australian of the Year and “National Living Treasure”. He is renowned for championing Australian ownership and manufacturing.

10    Mr Ramsey runs a business known as “All Natural Foods”, which produces a product known as “Aussie Mite” and, jointly with Ms Ramsey, is a registered owner of the aussie mite trade mark.

11    On 23 June 1999 DSI registered ozemite as a business name in New South Wales and two weeks later, on 8 July 1999, Mr Smith announced to the media that a new company, Dick Smith Foods (Pty Ltd) (“Dick Smith Foods”), planned to make a yeast spread of the same name. Dick Smith Foods, I interpolate, was founded by Mr Smith and he was its director. Articles referring to the planned ozemite product appeared in The Sydney Morning Herald, The Daily Telegraph (Sydney), The Age (Melbourne) and The Advertiser (Adelaide) on that date and in several other publications in the days that followed. From that time Mr Smith, on behalf of DSI and Dick Smith Foods (“the Dick Smith Companies”), has generated publicity for ozemite.

12    On 28 October 1999 DSI filed an application to register the word ozemite as a trade mark in respect of “Spreads and snack foods” in class 29 and “Yeast; yeast extracts; spreads and snack foods” in class 30.

13    On 12 April 2000 Mr Ramsey applied for membership of the Australian Companies Institute Ltd (colloquially known as “Ausbuy”). He identified three products in his application. One of those products was called “Dinky Di-nemite” and was described as a “yeast extract spread”. The name “Aussiemite” was not mentioned on the application form. Mr Ramsey’s yeast extract product was never commercially produced under the name “Dinky Di-nemite”.

14    On 19 May 2000 DSI filed an application to register ozecola as a trade mark in class 32. Dick Smith Foods launched the OzEcola product in September 2000. It remained on the market until around October 2001. The trade mark application did not proceed to registration.

15    Mr Ramsey made their yeast spread commercially available under the name AussieMite in or around January 2001.

16    In early February 2001 Mr Ramsey had a telephone conversation with John Pym, then the President of Ausbuy. There is a dispute about what was said in this conversation but it is common ground that Mr Ramsey informed Mr Pym that he had changed the name of his yeast extract spread from Dinky Di-nemite to AussieMite and on 7 May 2001 Mr Ramsey filed an application to register aussie mite as a trade mark in class 30: “Spreads; spreads and snack foods containing yeast and yeast extracts”.

17    On 30 July 2001 Dick Smith Foods filed an application to register ozechoc as a trade mark in classes 29, 30 and 32. The application was registered on 8 March 2002 and the mark remains on the Register. Dick Smith Foods launched the OzEchoc product, a drinking chocolate, in October 2001.

18    On 14 March 2002 Mr Ramsey filed a notice of opposition to DSI’s application number 811789 for registration of the ozemite trade mark. The notice of opposition was withdrawn on 17 October 2003 and ozemite was registered on 23 October 2003.

19    On 9 October 2003 DSI filed a notice of opposition to Mr Ramsey’s application for registration of the aussie mite trade mark, but on 27 September 2006 a delegate of the Registrar of Trade Marks found that the opposition had failed and that the aussie mite trade mark should proceed to registration on the basis of s 44(3)(b) of the Trade Marks Act 1995 (Cth) (“the Act” or “the 1995 Act”).

20    On or around 29 March 2010, the aussie mite trade mark registration was assigned from Mr Ramsey to himself and Ms  Ramsey, as joint owners.

21    On 1 June 2011 Mr Ramsey filed an application for the removal of the ozemite trade mark (“the removal application”).

22    On 12 October 2011 Dick Smith Foods applied to register dinky di-nemite as a trade mark, and the trade mark was entered on the Register on 24 May 2012.

23    In around November 2011 Dick Smith Foods announced a major campaign re-launch.

24    On 2 December 2011 Dick Smith Foods applied to register ozenuts in Class 29 for peanut butter. A decision was made to abandon the application following objections from the examiner. Dick Smith Foods’ peanut butter product had been commercially available for over 10 years and in March 2012 the product was renamed OzEnuts. Dick Smith Foods also launched OzEhoney in January 2013, but no application was made to register the name as a trade mark.

25    In around mid-2012 OzEmite was made commercially available and it has been on the market ever since.

26    In around August 2012 Dick Smith Foods launched a tomato sauce product under the name OzEsauce.

27    On or around 6 August 2013 the ozemite trade mark registration was assigned to Ozemate.

28    On 25 February 2014 a delegate of the Registrar upheld Mr Ramsey’s application for removal of the ozemite trade mark and directed that it be removed from the Register within a month, subject to the filing of an appeal.

29    On 6 March 2014 the trustee for Dick Smith Foods applied to register a composite trade mark for dick smith’s ozemite. This application remains under examination and is deferred.

The relevant legislative provisions

30    Trade marks may be registered in respect of goods or services. As this case is concerned only with goods, I will pass over the references in the Act to services.

31    A trade mark is relevantly defined in the Act as “a sign used, or intended to be used, to distinguish goods … dealt with or provided in the course of trade by a person from goods … so dealt with or provided by any other person”: s 17. A “sign” includes a word: s 6.

32    A person infringes a trade mark if, amongst other things, “the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark” or in relation to goods of the same description as that of goods, in respect of which the mark is registered: s 120. A mark is taken to be deceptively similar to another mark “if it so nearly resembles that other mark that it is likely to deceive or cause confusion”: s 10.

33    Any person may apply to the Registrar to have a trade mark that is or may be registered removed from the Register (s 92(1)) unless an action concerning the trade mark is pending in a prescribed court, in which case the application is to be made to the court (s 92(3)).

34    The grounds on which an application may be made are set out in s 92(4). Mr Ramsey relies on s 92(4)(b) which provides:

(4)    An application under subsection (1) or (3) (non-use application) may be made on either or both of the following grounds, and on no other grounds:

…

(b)    that the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non-use application is filed, and, at no time during that period, the person who was then the registered owner:

(i)    used the trade mark in Australia; or

(ii)    used the trade mark in good faith in Australia;

in relation to the goods and/or services to which the application relates.

(Original emphasis.)

35    Mr Ramsey filed the non-use application in the present case on 1 June 2011. The period for the purposes of s 92(4)(b), then, is from 1 May 2008 until 1 May 2011. I shall refer to this period as “the statutory” or “non-use” period.

36    “[U]se of a trade mark in relation to goods” means use of the trade mark “upon, or in physical or other relation to, the goods”: s 7(4). Where, as here, a trade mark consists of a word, “any aural representation of the trade mark” is a use of the mark for the purposes of the Act: s 7(2).

37     “[U]se in good faith” means “real, as opposed to token, use in a commercial sense”: Woolly Bull Enterprises Pty Ltd v Reynolds (2001) 107 FCR 166 (“Woolly Bull”) at [16] (Drummond J). Put another way, it connotes “a genuine intent to use the mark for commercial purposes”: Liquideng Farm Supplies Pty Ltd v Liquid Engineering 2003 Pty Ltd (2009) 175 FCR 26 (Tamberlin, Sundberg and Besanko JJ) at [56]. “Use” includes “authorised use”: s 7(3). An authorised use, for the purpose of the Act, is use of the trade mark under the control of the trade mark owner: s 8. “[C]ontrol” includes quality control: see Pioneer Kabushiki Kaisha v Registrar of Trade Marks (1977) 137 CLR 670.

38    Where the application is opposed, the burden is on the opponent (in this case the Dick Smith parties) to rebut the allegation of non-use made under s 92(4)(b): s 100(1)(c). For this purpose, s 100(3) provides that the opponent is taken to have rebutted the allegation if, amongst other things:

(c)    the opponent has established that the trade mark was not used by its registered owner in relation to those goods … during that period because of circumstances (whether affecting traders generally or only the registered owner of the trade mark) that were an obstacle to the use of the trade mark during that period.

(Emphasis added.)

39    The Registrar may decide to remove the trade mark from the Register in respect of any or all of the goods to which the application relates in the circumstances described in s 101. Section 101 relevantly states:

101 Determination of opposed application—general

(1)    Subject to subsection (3) … , if:

(a)    the proceedings relating to an opposed application have not been discontinued or dismissed; and

(b)    the Registrar is satisfied that the grounds on which the application was made have been established;

the Registrar may decide to remove the trade mark from the Register in respect of any or all of the goods and/or services to which the application relates.

(2)    Subject to subsection (3) … , if, at the end of the proceedings relating to an opposed application, the court is satisfied that the grounds on which the application was made have been established, the court may order the Registrar to remove the trade mark from the Register in respect of any or all of the goods ... to which the application relates.

(3)    If satisfied that it is reasonable to do so, the Registrar or the court may decide that the trade mark should not be removed from the Register even if the grounds on which the application was made have been established.

…

40    The effect of s 101(3) is that, even if the grounds of the application are made out, the Registrar or the court (as the case may be) has a discretion not to remove the mark from the Register.

41    The Court’s powers are very wide. Section 197 provides that the Court may make any one or more of the following orders:

(1)    admit evidence, orally, or on affidavit or otherwise;

(2)    permit the examination and cross-examination of witnesses, including those who testified before the Registrar;

(3)    order an issue of fact to be tried as it directs;

(4)    affirm, reverse or vary the Registrar’s decision or direction;

(5)    give judgment or make orders that in all the circumstances it thinks fit; and

(6)    order a party to pay the costs of another party.

42    It is not in dispute, having regard to these powers, and notwithstanding what was said in some early authorities, that the appeal is in the nature of a hearing de novo. For a discussion of the subject see Food Channel Network Pty Ltd v Television Food Network, GP [2009] FCA 68 at [5] (Greenwood J).

The issues on the appeal

43    The issues arising on the appeal were agreed. They are:

(1)    whether, at any time during the statutory period, DSI used the ozemite trade mark in Australia within the meaning of s 92(4)(b) of the Act, that is to say in relation to the goods to which the application relates;

(2)    whether, if the Court finds that the ozemite trade mark was not used for the purposes of s 92(4)(b) of the Act, there were circumstances (whether affecting traders generally or only the registered owner of the trade mark) that were an obstacle to use of the ozemite trade mark during the statutory period; and

(3)    whether, even if the grounds on which the removal action was made have been established, the Court is satisfied that it is reasonable that the trade mark should not be removed.

44    Before considering the issues, however, it is necessary to say something more about the evidence.

The development of OzEmite

45    Most of the evidence about the development of the OzEmite product and the development and use of the ozemite trade mark was given by Mr Smith. Despite a valiant attempt made to discredit him, I am satisfied that he was an honest and generally reliable witness and, generally speaking, I accept his evidence. Contrary to Mr Ramsey’s contention, the contemporaneous documents largely supported Mr Smith’s account. Mr Ramsey submitted that he exaggerated his evidence about the manufacturing obstacles. I do not accept the submission. It seems to me that Mr Smith set himself a high and probably unrealistic goal: recreating a product that corresponded to a flavour he claimed to recall from his youth and when an essential ingredient became unattainable. Such a project would be bound to falter, if not fail. A less determined individual may have given up.

46    I make the following findings.

47    OzEmite was the brainchild of Mr Smith, who for many years has been an ardent supporter of Australian products and businesses. It was devised in 1999 as an Australian competitor to Vegemite, then owned by Kraft Foods Limited (“Kraft”), an American company, which at least at that time was owned by the American tobacco giant, Philip Morris. Although Vegemite is made in Australia, it was important to Mr Smith that OzEmite should not only be made here but that it should be made from Australian ingredients provided by Australian suppliers. Mr Smith explained the selection of the name:

I first selected the prefix “OZE” in part because it sounded like the made-up word, “AUSSIE”, which is often used to describe Australian people. I chose the suffix “MITE” because that suffix is commonly used in relation to yeast spread products (for example, “VEGEMITE”, “PROMITE” and MARMITE”). I consider that the combination of “OZE” and “MITE” communicate a very powerful message to consumers about the product. I particularly liked the name “OZEMITE” because it made it clear that it was an Australian product.

48    Mr Smith also selected the name because he intended to develop a range of food products sourced from Australian growers and Australian owned manufacturers, all of which would begin with the prefix “OZE”.

49    Although Ozemite was registered as a business name on 23 June 1999 and the corresponding trade mark accepted for registration on 23 October 2003, there was a long delay before the product reached the market. I will come to the explanation for the delay in due course.

50    In early July 1999 Mr Smith announced his intention to establish Dick Smith Foods. In an article in The Australian Financial Review, published on 8 July 1999, he was reported as saying:

I want to set up a food company which uses only Australian food, which is processed in Australia, which creates jobs for Australians and which keeps its profits in Australia after it has paid its full tax in Australia.

51    At the same time Mr Smith announced his intention to produce a product called OzEmite.

52    The Advertiser (in an article entitled “Why Dick’s a mite miffed”) reported that Mr Smith was willing to put at least $5 million into the venture.

53    The announcement was enthusiastically received and heavily promoted in the press around the country. Mr Smith was depicted as a saviour of Australian industry and a champion of the Australian people. A photograph which accompanied an article in The Australian published on 9 July 1999, entitled “Fighting Back; Dick’s new flight of fancy: Aliens go home”, was captioned “Mr Smith: true blue” — high praise for an Australian. According to an article in The Daily Telegraph published the previous day, Mr Smith had taken out thousands of dollars’ worth of newspaper advertisements promoting a competition to come up with a new Vegemite recipe. He was reported in the Fairfax Media press the same day as having secured the agreement of the Woolworths supermarket chain to stock the product and, somewhat optimistically as it transpires, predicted that OzEmite could be ready within six months. The articles all support Mr Smith’s evidence in this proceeding of his determination to make genuine Australian products available for Australians and, specifically, one to compete with Vegemite.

54    At various points in time since, there have been other bursts of publicity. For example, in February 2000, Mr Smith took a trans-Tasman hot air balloon flight. The balloon carried advertising for Dick Smith Foods and the flight itself was described in press reports at the time as “a symbolic launch of Dick Smith Food, which includes plans for an Australian-made substitute for Vegemite, called Ozemite”. Indeed, OzEmite was heavily promoted in these articles. The Daily Telegraph, for example, reported Mr Smith saying on 23 February 2000:

I have an important reason for attempting this flight — the desire to draw attention to Australian ownership of our food industry. As we fly, we are proud to trial a prototype for Ozemite ... This flight symbolises bringing food ownership back to Australia.

55    Mr Smith’s successful landing was front page news at The Northern Star, published in the Northern Rivers region of New South Wales, which noted that Mr Smith and his co-pilot were carrying Dick Smith Peanut Butter, Dick Smith Helicopter Jelly and a jar of OzEmite, “in a flight symbolic of the difficulty of bringing Australian ownership back to the country”.

56    Stories about Dick Smith Foods and OzEmite appeared in metropolitan and regional newspapers at various times later in the year and in 2001, 2002, 2009, 2011 and following. Articles also appeared from time to time in trade publications and magazines. In addition, publicity was generated by Mr Smith’s numerous appearances on television and radio in 2010, 2011, 2012 and 2013. There were paid advertisements, too. A schedule of the publicity evidence displayed in chronological order appears annexed to these reasons.

57    As I have already explained, it was important to Mr Smith that, if at all possible, the product be made from Australian ingredients and sourced from Australian suppliers so that all profits from the sales of the product would remain in Australia. It was also important to Mr Smith to capture the taste and texture of the Vegemite he had known as a child. Mr Ramsey was dismissive of this evidence, describing it as “‘marketing spin’, designed to conjure up interest in an Ozemite Product people would generally regard as different from Vegemite”. I do not doubt that there is a marketing element to Mr Smith’s statements. Mr Smith wanted to promote interest in the product. Indeed, he seized many opportunities to do so. I am satisfied, however, that achieving a product which was as close as possible to the Vegemite of yesteryear was not a mere marketing ploy but it was also an important manufacturing objective.

58    Extensive research and development was undertaken to develop the OzEmite product. Development proved difficult, in large part because of the desire to achieve a specific, possibly even elusive, flavour and texture together with certain nutritional qualities, in a product sourced entirely from Australian ingredients.

59    In order to achieve these multiple goals, Mr Smith and his companies worked with numerous designers and manufacturers, including (in chronological order) the Manildra Group (“Manildra”), Green’s General Foods Pty Limited (“Green’s Foods”), Sanitarium Health Food Company (“Sanitarium”), Southern Sky Foods Pty Limited (“Southern Sky”), Windsor Farm Food Group (“Windsor Farm”), The Green Group (Aust) Pty Limited (“The Green Group”), AB Mauri (Australia), Qualdes and Spring Gully Foods Pty Ltd (“Spring Gully Foods”).

60    Mr Smith and his companies encountered two particular difficulties in the development of the product: obtaining access to spent brewer’s yeast, which was traditionally used in similar yeast products like Vegemite, and deriving a product that tasted like the Vegemite of old.

61    In 1999 Mr Smith was informed that Kraft had asked the Australian breweries, which supplied it with spent brewer’s yeast, to sign agreements with Kraft essentially giving the American company exclusive rights to purchase spent brewer’s yeast. Mr Smith wrote to the President and Chief Executive Officer of Kraft on 21 October 1999, claiming that his aim of producing an Australian owned yeast spread had been “curtailed” because he had found that the necessary brewer’s yeast was not available. He asserted that that was because Kraft had apparently “sewn up all of the available supplies for years to come”. He asked whether Kraft would be interested in selling the Vegemite brand and product. Thomas Park, the Managing Director of Kraft, replied on 3 November 1999, indicating that Kraft had no present wish to sell Vegemite to anyone and emphatically denied Mr Smith’s assertion that Kraft had apparently “sewn up” supplies of brewer’s yeast. His rather unconvincing explanation was that “Kraft has entered into contracts in order to secure a reliable source of brewer’s yeast so as to enable Kraft to meet consumers’ demand for Vegemite”.

62    These difficulties caused Mr Smith and his companies to commission the Manildra Group, in conjunction with Green’s Foods, to develop a suitable alternative yeast extract. They undertook extensive research.

63    On 23 April and 7 June 2000 Mr Smith appeared on television to discuss these developments. On 23 April, on the ABC’s Landline program, he displayed a sample bearing the Manildra Group label and said:

We are trying to bring out OzEmite. We are using the Manildra Group, we can’t get enough brewer’s yeast because Vegemite have basically cornered the market, so we are now working on making it out of really good Australian flour, which we turn into baker’s yeast and then hopefully make OzEmite from that.

64    On 7 June, on the Nine Network’s Today Show, which was telecast the day after a public rally in Brisbane to promote Australian produce, Mr Smith again discussed the OzEmite developments.

65    On 15 June 2000 Mr Smith was extremely optimistic, having tasted two prototypes of OzEmite, describing the flavour in correspondence with the Manildra Group as “really fantastic and nearly there”.

66    But Dick Smith Foods was counselled not to “rush the process”. In a memorandum to Mr Smith dated 30 August 2000 Mr Smith was informed that the yeast extract contained too much liquid and needed to evaporate further before the yeast base would be right for blending with other ingredients and that it was evident when compared with Vegemite that the product was “not yet satisfactory”.

67    Five months later, on 22 January 2001, Creswell James, the general manager of DSI, who, with Mr Smith, was running Dick Smith Foods, was concerned at the time the project was taking and Dick Smith Foods considered taking over the production if Green’s Foods failed to “come up with the goods”.

68    On 23 January 2001 Mr James noted that Manildra was waiting for further blending to be carried out to achieve “the right OzEmite product” but that Rob Stevenson from Manildra had told him that, to produce a good yeast product commercially, considerable funds would need to be injected to establish the production line.

69    On 5 February 2001 Mr James wrote to Mr Smith saying that he had told Doug Green of Green’s Foods that it was necessary to put pressure on the blending company in Melbourne to carry out final work on laboratory samples and that he expected it to be completed by 16 February. Mr Green informed him that they would have to put on extra staff to carry out the final blending and that they needed to add more yeast to the Manildra yeast extract in order to change the profile. He also informed Mr James that once the final sample was “reached”, $150,000 had to be invested to produce a 40–50kg batch as a final test before investing “large amounts in capital equipment to produce the product”.

70    After discussions between Mr Smith and a well-known nutritionist, Rosemary Stanton, a decision was made that OzEmite should contain iron, if it was not already included in the ingredients, and also folate, which Ms Stanton told Mr Smith was an important B group vitamin. Mr James wrote to Nelson Green of Green’s Foods on 4 April 2001 to inform him of the decision and instructed him to ensure that the ingredients were incorporated into the product. He also inquired of the progress of the latest sample. Samantha Lapthorne of Green’s Foods replied on 11 April 2001. Amongst other things, she reported that new samples had been “sensory panelled”, that “the flavour profile” needed “slight changes”, but that the texture was “not yet to the standard that is required”. “Sensory panelling” I understand to be taste testing, on this occasion by 40 panellists. The test results were dispatched on 24 May 2001. They were certainly encouraging. The author of the report concluded that Manildra’s samples had been “very well received as they proved to be very close to the Kraft Vegemite samples in appearance, colour, flavour, aroma, saltiness, bitterness and tanginess”.

71    On 31 May 2001 a “project review meeting” was held at Green’s Foods over the production of OzEmite and a 10 stage “action plan” was developed. The final step in the action plan was a further project review scheduled for completion on 4 September 2001.

72    In June 2001 more “sensory tests” were conducted, this time using some 20 samples of Vegemite because the formulation of Vegemite apparently changes depending on the source of the yeast extract. Mr James was advised by fax on 27 June 2001 that, as a result of the tests, one version of Vegemite had been identified as “the most preferred” and would therefore become “the benchmark” for future development. He was also told that Manildra had developed two new formulations, which they had tested against the Vegemite benchmark and the earlier OzEmite sample, but that further development was needed to improve the texture of OzEmite.

73    A Dick Smith Foods company presentation for the 2001 financial year reported on the progress thus far. Once again, the predictions were optimistic:

Development continues on OzEmite and in early July it was considered that the flavour of the product was as close as they could develop to the Kraft Vegemite product. Both Green’s and Manildra are now assessing the financial viability of OzEmite, however, it appears during the many months of development that Manildra are experiencing difficulties in maintaining their original cost structures. Once all of the issues have been determined it is envisaged that it will take approximately 6 months before the product is available in the market place.

74    It also seems that identifying a source for the yeast was still a problem.

75    On 10 August 2001 Mr Smith wrote to the President and Chief Executive Officer of the Fosters Brewing Group Limited:

You are no doubt aware that I am proposing to include a yeast spread product in my food range called OzEmite, to compete against the Kraft product Vegemite.

Would you please advise whether your company are able to supply a de-bittered brewers yeast, identical to the yeast you supply to Kraft.

76    Michael Brooks, Vice President, Operations at Carlton & United Breweries replied, indicating that he had been aware of Mr Smith’s plans since March 2000, following an earlier inquiry for yeast. He told Mr Smith that “[w]ith the exception of some very small volumes of bittered yeast from our Hobart and Perth breweries, all of our yeast product is currently under a sales contract with Kraft” and they were unable to offer yeast to Dick Smith Foods. He assured him that, if the situation changed in the future, discussions on the matter would be welcome. There is no evidence of any change. Mr Smith said, and I accept, that the volume of brewer’s yeast available to him in 2001 would have been insufficient to enable commercial quantities of OzEmite to be produced so that it was not commercially viable to use the small amount available from the major breweries. Consequently the Dick Smith companies set about trying to find a suitable alternative source of yeast, although from time to time thereafter they also “revisited” the question of whether sufficient amounts of brewer’s yeast could be obtained from the breweries.

77    On 25 January 2002 Natasha Ben Cheung, Assistant Brand Manager for Green’s Foods, advised Dick Smith Foods that there were ongoing problems identifying a source for the yeast and continuing the development of a satisfactory product. In addition, she said:

Bio Springer continues to work on developing a formulation we’re happy with, they are using two sources for the products they’re working on. The first is the yeast from Manildra, the second from a source they use themselves in Europe. They are having problems with the flavour of the product using the Manildra yeast due to the nature of the yeast and have had more success using their own sourced yeast. Bio Springer sent us some samples of the product they have developed using their own yeast and the sensory was quite positive, although further work needs to be done. Don [the General Manager, Research and Development] has told them to continue developing the formulation of the product.

With regards to the supply of yeast, Don is trying to identify possible yeast sources in NZ and has already spoken to Lion Nathan who have indicated they are contracted to Kraft. He is in the process of contacting other breweries. …

78    At some point in time, however, the ownership of Green’s Foods changed. The publicly owned Australian company was taken over by a foreign company. Mr Smith could no longer work with them. As he explained the position:

[I]t would go completely against the whole ethos of the company and very quickly the press would write about it.

79    Mr Smith then started discussions with Sanitarium and, with assistance from Windsor Farm, took over the research and development of the OzEmite product. On 27 June 2002 the Dick Smith companies entered into an agreement with Southern Sky Foods, a company associated with Sanitarium, to licence the day-to-day running of certain Dick Smith Foods brands, including the development of OzEmite.

80    Southern Sky came up with a proposal for the development of OzEmite, which, had things gone according to plan, would have seen the product on supermarket shelves by mid-July 2004.

81    It seems, however, that OzEmite was not a priority for Southern Sky. Initial trial work did not begin until 27 April 2004, when two samples were made. Further trials were conducted on 20 July, 3 August and 24 August 2004. A commercial trial of two tonnes was attempted on 1 November 2004 but “[f]ormulation issues” meant that yet another trial was conducted on 1 April 2005, at which time a three tonne batch was made and small-scale trials took place “to confirm the suitability of the amended ingredient mix”. Samples failed to achieve “the required taste and texture” and costs had escalated. By August 2004 Mr James was informed by Windsor Farm that at least $100,000 had been spent on the project. More than two years after the agreement had been signed, Sanitarium was still dithering about who should have ongoing responsibilities for the Dick Smith companies, with the result that progress was described as “painfully slow”. Towards the end of 2005 Sanitarium and Southern Sky withdrew from the project.

82    In October 2005 The Green Group, a company apparently formed by the Green brothers, Nelson and Doug Green, who had been working on the development of OzEmite at the time of the involvement of Green’s Foods, was engaged to take over from Southern Sky. On 7 November 2005 a similar licence agreement was signed.

83    On 7 February 2006 The Green Group informed Mr James and Phillip Murrell, the General Manager of DSI, that it was having difficulty sourcing “raw materials/base”. Recognising the need to look for a different source of yeast, Dick Smith Foods then entered into discussions with Bakels-Lesaffre Yeast Pty Ltd (“Bakels-Lesaffre”) to establish whether it could help with the provision of suitable baker’s yeast, raw material, and technical expertise. Work commenced and continued for some months until Bakels-Lesaffre considered they had a conflict of interest because of previous involvement with Sanitarium, which manufactures Marmite (a yeast based spread) in New Zealand.

84    On 25 July 2006 Andrew Craig, New Product & Technical for Dick Smith Foods, reported to Mr Murrell that the customer service line regularly received calls from people asking about the availability of OzEmite. He observed:

Many people believe that it has already been made; such is the power of Dick’s appearance over the years. We feel it must rank as the best “pre-marketed” product ever.

85    After the withdrawal of Bakels-Lesaffre, another Australian company, AB Mauri, was approached. AB Mauri specialised in the supply of dry yeast products. It also supplied baker’s yeast. It was not until February 2008, however, that it came on board to assist The Green Group with product development. But on 25 February 2008, at a meeting with representatives from AB Mauri, the Green brothers noted that there was “a foreign ownership issue” with AB Mauri, which needed to be overcome. On 27 March 2008 AB Mauri supplied The Green Group with an “update” on the progress of OzEmite. The following passage is an extract from that “update”:

Our technologists have fixed the consistency/texture issue and are now working on colour match, which we do not anticipate to be a major problem.

We have sourced a possible supplier for a PET jar and they are sending a few samples for us to fill -- we will mock up a simple label

The product as from our process has a lower salt content than Vegemite. Do you want us to produce a “low salt” version as well as a salt match for comparison purposes? -- This may or may not be a plus for the product, what is your view?

86    At this point the documentary evidence comes to an abrupt halt. The next document in chronological sequence is dated 14 March 2011. It is quotation from a professional development company, Qualdes, addressed to Doug Green, for the development of OzEmite “as an exact match to Vegemite”, emphasising that it was The Green Group’s responsibility to source the yeast extract.

87    Mr Smith’s evidence, however, which I accept, is that in about August and December 2010 he was provided by The Green Group with sample jars of OzEmite to test. He was dissatisfied with the taste and the inability of The Green Group to develop a final formulation of the product with “the required taste and texture”. Consequently, a decision was made to bring the Dick Smith Foods business in house. Nothing seems to have come of the Qualdes proposal and Dick Smith Foods turned to Spring Gully Foods for assistance.

88    An email sent by Mr James to Mr Smith on 5 April 2011 provides some contemporaneous evidence that OzEmite was still under development at that time. Mr James wrote:

The Green Group were instructed that they were to do no more work on the development of OzeMite (sic) or any other products, unless they received specific advice from either yourself or Phil [presumably Mr Murrell]. …

89    Finally, a product was developed which met Mr Smith’s stringent requirements, using neither brewer’s nor baker’s yeast, but corn yeast

90    In the meantime, in either May or September 2011 (the evidence is not clear), Mr Smith appeared on the Nine Network’s A Current Affair wearing an OzEmite t-shirt, promoting his business and his message. Others, including a representative of Ausbuy and the independent South Australian senator, the Hon Nick Xenophon, supported the message. Indeed, so did the reporter, at one point urging viewers: “If you call yourself a proud Australian, Dick needs you to put your hand in your pocket”. During the segment the national anthem and Australia’s national song (sometimes referred to as our unofficial national anthem), Waltzing Matilda, can be heard in the background.

91    In early September Mr Smith sponsored a crocodile at Australia Zoo named “Ozemite”. A Current Affair promoted this event, too. The Irwin family, which operates the zoo, appeared in the episode. Terry Irwin announced the name to the cheers of her children. Ozemite was mentioned a total of nine times. Mr Smith was profusely thanked. He was described by Bindi Irwin as a true “wildlife warrior” and both he and his wife were warmly mentioned. Viewers were encouraged to go to Australia Zoo’s website to follow “Ozemite’s adventures”.

92    Since then, both OzEmite and other Dick Smith Foods brands were extensively promoted, online, in print media, and on television and radio, invariably appealing to patriotic sentiment, whether in articles or paid advertisements.

93    In early November an article appeared in The Age newspaper about the Melbourne Cup accompanied by a photograph of Mr Smith in a suit and tie sporting a wide-brimmed Akubra hat covered in an OzEmite label. In early February 2012 The Sydney Morning Herald featured the same photograph in an article, entitled “Flying the flag for home-grown”, focussed on Mr Smith. Whilst not entirely uncritical of him, the article promoted OzEmite and his crusade against foreign ownership.

94    A Current Affair featured two further sympathetic, if not sycophantic, stories about the OzEmite product in May and July 2012. These were little more than unpaid commercials for OzEmite and Dick Smith Foods. In the May episode Mr Smith, wearing his OzEmite hat, could be seen going from house to house, followed by a reporter, offering residents $500 cash if they had a Dick Smith Foods item in their fridge or cupboard and lovingly embracing those who did. The host, Tracey Grimshaw, invited viewers to share their thoughts on the campaign on Facebook and Twitter.

The arrival of OzEmite

95    OzEmite became commercially available in the middle of 2012. On 25 July 2012 Coles supermarkets ordered 600 cartons (3,600 units) of OzEmite and, not to be outdone, six days later Woolworths supermarkets ordered 900 cartons (5,400 units).

96    Publicity for OzEmite, both paid and unpaid, followed. Much of the unpaid publicity, certainly that on commercial television, was of the same kind as that which featured on A Current Affair. When, for example, in January 2013 the Nine Network refused to broadcast an amusing, irreverent advertisement for Dick Smith Foods at the time of Mr Smith’s choosing, the Seven Network aired the entire advertisement on its breakfast program, Sunrise (rerunning parts of it without the sound). During an affectionate interview with Mr Smith, the presenters appeared in front of a backdrop featuring various Dick Smith Foods products and dominated by the image of Mr Smith in his OzEmite t-shirt. The advertisement was also an item on Seven News, which featured clips from both the Sunrise program and the advertisement, itself. The newsreader reported that the advertisement had been viewed nearly 95,000 times online.

During the statutory period did DSI use the ozemite trade mark in Australia within the meaning of s 92(4)(b) of the Act?

97    The answer to this question turns on the meaning of the concept of use of a trade mark in the Act and s 92(4) in particular. The question must be determined objectively: E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 (“Gallo”) at [33].

98    It is common ground that the product now known as OzEmite was not sold or offered for sale at any time during the statutory period. Indeed, it was still under development. Despite this, the Dick Smith parties contend that the ozemite trade mark was used during the non-use period in relation to the goods the subject of the application. They point to two occasions of what they describe as “pre-launch publicity” for the OzEmite product, which are said to be analogous to activities held to constitute use of a trade mark in the case law to which I will come shortly.

99    The first instance occurred when Mr Smith featured in a skit on The Chaser’s ABC television program in August 2010 in the lead-up to the 2010 federal election.

100    The second occurred during a lengthy interview with Mr Smith on radio station 5AA in Adelaide on 28 March 2011. The interviewer was Leon Byner.

101    It is not in dispute that, if either of these two instances amount to use for the purposes of s 92(4), then it is use by the registered owner, either by itself or through an authorised user.

102    The Chaser skit was a satirical piece on migration. Mr Smith appeared as a “spokesman” for the presumably fake organisation: “Australians Against Further Emigration”. His appearance on the supposedly commercial-free national broadcaster (which lasted for about 30 seconds) saw him unashamedly promoting Dick Smith Foods. For about 12 of those 30 seconds he can be seen wearing a t-shirt emblazoned with the OzEmite logo, surrounded by Dick Smith Foods products.

103    The focus of the interview on Adelaide radio was the decision by the major supermarket chain, Woolworths, to continue to stock Dick Smith Foods products. There, Mr Smith disclosed that at one point he was contemplating closing down Dick Smith Foods because of the pressure from competition from foreign companies but that Woolworths talked him out of it when they assured him they were interested in promoting Australian produce and his products in particular. Mr Smith also told Mr Byner that he would be expanding his product line and in about four to six months a range of quality Australian made and owned food products would be appearing on supermarket shelves. This is the relevant part of the interview, which runs for about 26 seconds:

SMITH:    We’ve got … I’ve been talking to Spring Gully down in Adelaide, they are a fantastic manufacturer, they have been manufacturing for us in the past. We’re also looking … you remember we were going to bring out Ozemite?

BYNER:    Yes.

SMITH:    The Ozemite, to compete with Vegemite, because Vegemite should be called Yankeemite because it’s owned in America, you know they try and make out its Australian … no, its American, and I’ve been trying to work on Ozemite well I am now committed, we are going to bring out Ozemite because, see, Vegemite has now changed; they’ve got Cheesy-Bite, … they’re making all these changes, well I want to go back to the original taste.

104    Is this enough?

105    Mr Ramsey submits not. He contends that there can be no use unless there is “an occasion of trade” in respect of “vendible articles” and that this means that unless there is at least a single act of sale, there is no use. The source for these propositions is said to be two references in the reasons of the plurality (French CJ, Gummow, Crennan and Bell JJ) in Gallo at [44] and [51]. At [44] their Honours observed that the reference in s 17 to “the course of trade” “encompasses the idea that use of a trade mark is use in respect of ‘vendible articles’”, emphasising that a mark is used only if it is used “in the course of trade”.

106    In any case, Mr Ramsey contends that there was almost “no promotion” of the OzEmite product from June 2001 until 2011.

107    The alternative contention can be disposed of swiftly.

108    Under the Trade Marks Act 1955 (Cth) (“the 1955 Act”), an application to have a trade mark removed for non-use could be defeated by any use of the mark in Australia during the statutory period. This represented a significant change from the position under the earlier Act, the Trade Marks Act 1905–1948 (Cth), s 72 of which enabled a mark to be removed unless at the date of the application it was in bona fide use and had been so for a period of six months immediately before that date. That required “a course of conduct extending substantially over the period and still continuing at the end of it”: Continental Liqueurs Pty Ltd v GF Heublein and Bro. Inc. (1960) 103 CLR 422 at 430 (Kitto J). In Estex Clothing Manufacturers Pty Limited v Ellis and Goldstein Limited (1967) 116 CLR 254 (“Estex”) at 258, however, Windeyer J, speaking of s 23 of the 1955 Act, said:

But under the present Act, the issue is not whether the mark had been in use for a period but whether there was no use during a period. I do not think that, in this context, the word “during” means “throughout” so as to require a regular and continuous course of conduct for the whole period. If during the period the registered proprietor uses his mark in good faith that will keep the mark alive, and will rebut what I may call the statutory presumption of abandonment which s. 23 creates.

Thus, the question in that case was whether anything occurred at the relevant time which “amounted to a use of the mark in Australia by the respondent”. The onus was on the applicant to show an absence of use.

109    In Woolly Bull Drummond J held at [14]–[17] that a single bona fide use of the mark in the relevant period is also sufficient to answer an application for removal under the current Act. See also Unilever Australia Ltd v Karounos (2001) 113 FCR 322 at [64] (Hill J). In Gallo at [64] the High Court expressly refrained from considering the question.

110    Thus, just one use of the ozemite trade mark in good faith in relation to spreads and snack foods in class 29 and/or yeast, yeast extracts, spreads and snack foods in class 30, they being the goods the subject of Mr Ramsey’s application, is sufficient to resist removal. The only real issue, then, is whether at least one of the two occasions upon which the Dick Smith parties rely constitutes “use”. This brings me to Mr Ramsey’s principal argument.

111    In Gallo their Honours cited two authorities for the above propositions: Jackson & Co v Napper (1886) 35 Ch D 162 (“Jackson”) at 179 (Stirling J); Aristoc Ltd v Rysta Ltd [1945] AC 68 (“Aristoc”) at 102 (Lord Wright).

112    In Jackson at 179 Stirling J said that a trade mark has been used in England if the articles marked with it have been “actually vendible articles in the market in England”. Stirling J relied on Lord Westbury’s statements about the essential ingredients of a trade mark appearing in McAndrew v Bassett (1864) 4 DJ&S 380 at 384.

113    In Aristoc the House of Lords held that use of a trade mark on stockings to indicate that the stockings had been repaired by the trade mark owner was not a trade mark use. Lord Wright noted (at 101) that “the fundamental idea of the function of a trade mark” was “to indicate the origin of the goods” (original emphasis) and (at 102) that “[t]he word ‘origin’ … denotes at least that the goods are issued as vendible goods under the aegis of the proprietor of the trade mark, who thus assumes responsibility for them, even though the responsibility is limited to selection …”. His Lordship continued:

The proprietor is required to be a trader who places the goods before the public as being his goods. That is the vital connexion, not some later partial and ephemeral attribution to some one else. “Trade” is a very wide term … But it must always be read in its context … In the Act of 1938 the context shows that “trade” refers to selling or otherwise trading in the goods to which the mark is applied. Thus in s. 26, sub-ss. 2 and 6, we find the words “goods to be sold or otherwise traded in”; the same collocation of words is found in s. 31; and again in s. 68 in the definition of limitations. These instances show that “trade” is here used in the particular sense of merchanting, selling or the like, which would nowadays include the more modern practices of hire purchase, leasing (e.g., of valuable machines), letting out for public use, exporting, etc. But equally it is clear that repairing or processing or the like is not included, because it is not trade in the particular sense intended. This construction is consonant with the established user in the past of the word.

114    Similarly, Lord Macmillan said in Aristoc at 97:

“Trade” is no doubt a wide word but its meaning must vary with and be controlled by its context. A connexion with goods in the course of trade in my opinion means, in the definition section, an association with the goods in the course of their production and preparation for the market. After goods have reached the consumer they are no longer in the course of trade. The trading in them has reached its objective and its conclusion in their acquisition by the consumer.

(Emphasis added.)

115    To like effect, Viscount Maugham (with whom Lord Thankerton agreed) observed at 89 that it was “beyond doubt” that the purpose of a registered trade mark in relation to goods has always been to indicate the origin of the goods, “in other words, for the purpose of indicating either manufacture or some other dealing with the goods in the process of manufacture or in the course of business before they are offered for sale to the public”.

116    While the plurality in Gallo did not refer to any of these remarks, neither did they disapprove of them.

117    In my opinion, the reference in Gallo to “vendible goods” should be read as goods which are “sold or otherwise traded in”, but not so as to limit the scope of trade mark use to goods which are actually sold. After all, “vendible” does not mean sold. It means capable of being sold. It also means “marketable”. See The New Shorter Oxford English Dictionary (1993).

118    Furthermore, the Act contemplates the registration of trade marks in relation to goods at a time before they are traded. The language used in the very definition of a trade mark in s 17 is of “a sign used, or intended to be used, to distinguish goods … dealt with or provided in the course of trade …” (emphasis added). Similarly, the 1955 Act defined a trade mark as “a mark used or proposed to be used in relation to goods for the purpose of indicating or so as to indicate, a connexion in the course of trade between the goods and a person who [was entitled to use the mark (as its proprietor or registered user)]” (emphasis added). What is more, as Barwick CJ, McTiernan, Taylor and Owen JJ emphasised in the appeal in Estex at 271, “use” is “not limited by any concept of the physical use of a tangible object”.

119    Like the words of a statute, remarks in a judgment must be read in context. Gallo also concerned an application for the removal of a trade mark from the Register for non-use but that is where the similarity ends. The facts and the issues in Gallo were very different from those in the present case.

120    Proceedings in Gallo began in this Court as an infringement suit, but by a cross-claim Lion Nathan Australia Pty Ltd (“Lion Nathan”), the alleged infringer, applied for an order under s 101(2) that the mark be removed from the Register for non-use. The primary judge held that there had been no infringement and granted Lion Nathan’s application. A Full Court reversed the finding on infringement but upheld the order for removal. But the High Court allowed the appeal, all five justices holding that there had been use of the trade mark in good faith during the statutory period.

121    The relevant trade mark was barefoot. It was registered under the 1995 Act in relation to wines. E & J Gallo Winery (“Gallo”), an American company, was the owner of the mark at the time of trial. On 14 February 2001 another American company, Grape Links Inc, trading as Barefoot Cellars (to which the mark had been licensed by its previous owner, Michael Houlihan), shipped 60 cases of wine carrying the barefoot mark to a company in Germany. In June 2002 some 144 bottles from those 60 cases were sold to a Victorian liquor wholesaler, Beach Avenue Wholesalers Pty Ltd, which imported the wine into Australia. During the statutory non-use period (7 May 2004 to 8 May 2007, which was during the time that Gallo acquired ownership of the barefoot mark with its purchase of Barefoot Cellars) it sold 41 of the bottles. There was no evidence, however, that Barefoot Cellars, Mr Houlihan or Gallo knew that wine bearing the mark was being offered for sale at that time in Australia.

122    The relevant question was whether there was “use” by Gallo or its predecessor in title (Mr Houlihan) of the barefoot mark in respect of wines “in good faith” during the statutory period. Lion Nathan’s contention was that the requirement of “use in good faith” involved consideration of the volume of use (which it urged had to be “substantial”) and the state of mind of the registered owner concerning the matter of use. Lion Nathan argued that use in the statutory period was neither substantial nor genuine and that there could be no use by the owner in good faith when the owner was unaware that the goods were being used: see [60].

123    It was in this context that the plurality considered the concept of “use” of a trade mark. It is from that consideration that the passages upon which Mr Ramsey relies have been drawn.

124    First, their Honours referred to the definition of a trade mark in s 17 of the Act (at [41]), observing (at [42]) that, whilst the definition does not refer to a trade mark as an indication of “a connexion in the course of trade” between the goods and the trade mark owner, which appeared in s 6(1) of the 1955 Act, the requirement in s 17 that the trade mark “distinguish” goods encompasses the orthodox understanding that one function of a trade mark is to indicate the origin of “goods to which the trade mark is applied”, citing Aristoc at 91 (Viscount Maugham), 96 (Lord Macmillan), and 102 (Lord Wright). They emphasised that distinguishing goods of a registered owner from the goods of other traders and indicating a connection in the course of trade between the goods and the registered owner are “essential characteristics of a trade mark”. They then approved (at [43]) the statement of the Full Court in Coca-Cola Co v All-Fect Distributors Ltd (1999) 96 FCR 107 at [19] that use “as a trade mark” under the current Act is use of the mark as “a badge of origin”, that is to say, to indicate “a connection in the course of trade between goods and the person who applies the mark to the goods” and that that is “the concept embodied in the definition of ‘trade mark’ in s 17 — a sign used to distinguish goods dealt with in the course of trade by a person from goods so dealt with by someone else”. It was at this point that the passage upon which Mr Ramsey relied appeared. Its purpose was to emphasise that the mark is used only if it is used “in the course of trade”.

125    To say that this expression “encompasses the idea that use of a trade mark is use in respect of ‘vendible articles’” does not signify that the articles must be vendible at the time the mark is used and I do not believe that in saying so their Honours intended that meaning. The “course of trade” is not confined to sales. It includes “merchandising, advertising and promotion, making offers, selecting, distributing, selling, hiring, leasing, letting out for public use, exporting, importing, repairing, processing, maintenance, servicing — all the operations of a commercial character by which a trader provides to customers for reward some kind of goods or services”: Lahore JW, Patents, Trade Marks & Related Rights (LexisNexis Butterworths, 2006), vol 1A, at [60,130] and the cases referred to there.

126    The expression “occasion of trade” which Mr Ramsey drew from the plurality’s reasons in Gallo at [51] must also be read in context. The relevant context was Lion Nathan’s submission (to which the plurality referred at [49] and which it was addressing at [51]) that “it was a necessary condition to establish a use in Australia that an overseas manufacturer knowingly ‘projects’ his goods into the course of trade in Australia”. At [49] their Honours said that Lion Nathan’s submission was based on a misreading of the judgment in Estex, which, they said, was authority for “the proposition that the foreign owner of an Australian trade mark uses it in Australia when he sells goods for delivery abroad to Australian retailers and those retailers import them into Australia for sale and there sell them”. At [51] their Honours applied Estex to dismiss Lion Nathan’s submission:

The capacity of a trade mark to distinguish a registered owner’s goods from those of others, as required by s 17, does not depend on whether the owner knowingly projects the goods into the Australian market. It depends on the goods being in the course of trade in Australia. Each occasion of trade in Australia, whilst goods sold under the trade mark remain in the course of trade, is a use for the purposes of the Trade Marks Act. A registered owner who has registered a trade mark under the provisions of the Trade Marks Act can be taken, in general terms, to have an intention to use that trade mark on goods in Australia. It is a commonplace of contemporary international trade that prior to consumption goods may be in the course of trade across national boundaries.

127    I acknowledge that at [64] their Honours also made the observation that “a single act of sale may not be sufficient to prevent removal”. Mr Ramsey relied upon it to impress upon the Court his fundamental position: that there must be a single act of sale before the Court can consider whether the use is in good faith and thus, absent a single act of sale, there is no use. But the observation at [64] must also be read in context. The immediate context can be seen here:

Whilst a single act of sale may not be sufficient to prevent removal, in the case of genuine use, a relatively small amount of use may be sufficient to constitute “ordinary and genuine” use judged by commercial standards. …

(Footnotes omitted.)

128    It is abundantly clear that the plurality was not saying that a single act of sale was necessary to defeat a removal application; merely that it may not be sufficient to establish use.

129    The plurality cited in support of the opening statement (that a single act of sale may not be sufficient to prevent removal) Re Nodoz Trade Mark [1962] RPC 1 (“Nodoz”). In that case Wilberforce J expressed the view at 7 that “in a suitable case one single act of user of the trademark may be sufficient”. In that case, the question was whether medical preparations bearing the mark nodoz had been used in England. The only evidence proffered by the trade mark owner to prove use was a reply to a letter apparently written from an English address to the then owner of the mark asking it to send him, at his expense, 200 nodoz tablets. In the reply the owner said that it was sending him by mail two vials each containing 60 nodoz tablets. At the same time the owner sent an invoice directing the shipment to a General Post Office address in Brighton, Sussex, upon which the following words appear “shipped by airmail, c.i.f. destination, 2 bottles only 60’s nodoz awakeners”, together with the price. The documents were taken from the company’s records. While some effort was made to establish delivery, no evidence was offered that the tablets or the invoice had arrived in England or that they had reached the supposed buyer or the GPO and were awaiting delivery to the buyer. In these circumstances, Wilberforce J said he was not satisfied that the goods had arrived and thus that during the statutory period there had been any use of the mark in relation to the goods by its owner in England.

130    In Gallo (as in Nodoz), to demonstrate use of the trade mark the registered owner was relying on sales (and only on sales). As the Dick Smith parties submitted, the circumstance that a single act of sale may not be sufficient to establish use does not prove that there has been no use. Use may be demonstrated by other means. Each case will turn on its own facts.

131    After all, it could not seriously be contended that, if a trader offers for sale goods to which his or her mark is attached but no-one chooses to buy them, there has been no use of the mark in relation to the goods. The mark is being employed in the course of trade just as surely as it would have been if the trader managed to secure a sale.

132    For all these reasons I accept the submission by the Dick Smith parties that Gallo is not authority for the proposition that there must at least be “a single act of sale”. Since in Gallo actual sales of goods to which the trade mark was attached had taken place during the statutory period, there was no occasion to consider whether something short of an actual sale could amount to use of the trade mark in relation to the relevant goods.

133    In the following authorities, however, upon which the Dick Smith parties relied, that occasion squarely arose. To the extent that these authorities detracted from Mr Ramsey’s primary position, he had no satisfactory answer to them.

134    The first is Hermes Trade Mark [1982] RPC 425 (“Hermes”). In that case a French company, Hermes Société Anonyme, applied to rectify the register by expunging for non-use during the statutory period the registration of hermes, a trade mark registered in a class for watches and clocks. Before the statutory non-use period (five years) the registered owners had sold watches under the mark, but during the statutory period they had sold none, and no clocks either. They claimed, nonetheless, that they had used the trade mark in relation to goods in the relevant class because they had used the mark in advertisements in a directory of trade names ever since they purchased the mark, that is for more than 20 years before the expiration of the non-use period, on invoices for repairs to hermes watches, on orders to their suppliers during preparations for a re-launch of the hermes watches on the market and price-lists prepared for the same purpose. The application failed before the Assistant Registrar of Trade Marks and the appeal was dismissed.

135    Falconer J sitting in the Chancery Division of the High Court of Justice in England considered that use of a mark in advertising need not be “concurrent with a placing of the goods on the market if it is to be regarded as ‘trade mark’ use …”, although to amount to use sufficient to defeat an application to remove the mark from the register for non-use, it had to be “use in the course of trade” (picking up on the definition of “trade mark” in s 68(1) of the Trade Marks Act 1938 (UK) (at 429 and 430)). His Honour accepted that use of a trade mark in an order to suppliers to acquire goods to be marketed by the trade mark owners under the mark was a use of the mark in the course of trade “in … other relation to the goods”, although the goods were not then in existence. He described this (at 431) as “a use in the course of trade in the watches — their acquisition for future sale”. He expressed his agreement with the Assistant Registrar that the phrase “in the course of trade” is “wide enough to embrace the steps necessary for the production of the goods as well as the actual placing of them on the market”. His Honour also said this at 430:

[I]f the registered proprietor should commence a series of advertisements featuring his mark as part of an introductory campaign, prior to putting his goods on the market under the mark, but before they were actually on the market, in my judgment such use would clearly be use of the mark in the course of trade, not upon the goods or in physical relation thereto, but it would be in other relation thereto, the point being that it would be use in the course of trade in those goods, albeit in advertisements.

136    But his Honour did not consider that advertisements appearing annually in a trade directory during the statutory non-use period (five years under the UK Act s 26(1)(b)) amounted to use of the trade mark. The particular evidence which his Honour found was insufficient to amount to use was reproduced at 428 of the judgment. It was the evidence of Mr Crockett, who was a director of the registered trade mark owner:

I am advised that advertisements featuring the trade mark in relation to the goods and the existence of printed price lists during the five-year period ending 18 March 1977 without there being goods available to meet orders which may be placed as a result of such advertising and issue of price lists may not constitute a complete defence in these proceedings … but I wish to make it clear that my company have never abandoned the trade mark and continually advertised it in the way referred to herein, in the belief that this would keep the trade mark in the minds of those engaged in the trade and in the belief that this would protect them from any allegation of non-use of the trade mark.

137    These advertisements, his Honour held at 430, were not advertisements put out in the course of trade in the goods covered by the registration. If those advertisements were insufficient to amount to use of the trade mark in the course of trade, it is difficult to see how the unpaid advertising relied upon in the present case would be sufficient.

138    Nevertheless, in Buying Systems (Australia) Pty Ltd v Studio SRL (1995) 30 IPR 517; [1995] AIPC 91–119 (“Buying Systems”) Gummow J accepted that steps taken before any sale of the goods in question could be use of a trade mark under the 1955 Act — as long as there was an existing intention to offer or supply the goods in trade. In the present case there is no dispute that at all relevant times the trade mark owner had that intention.

139    In Buying Systems, Studio SRL, an Italian company, applied to register the word “Studio” for goods specified as “fashion and hairdressing magazines”. An Australian company, Buying Systems (Australia) Pty Ltd, opposed the application, alleging, amongst other things, that Studio SRL could not properly claim to be the proprietor of the trade mark because Buying Systems (Australia) was already using “Studio” as a trade mark. A delegate of the Registrar dismissed the opposition, but on appeal, Gummow J reversed the delegate’s decision and refused the Studio SRL’s application, holding that Buying Systems (Australia)’s actions in obtaining business cards, printing letterhead, contacting potential advertisers, making arrangements for the placing of some advertisements and distributing a large number of copies of a promotional brochure in respect of a new magazine (no edition of which had yet been produced, let alone sold) were sufficient to constitute a relevant use of the mark in Australia for the purpose of indicating, or so as to indicate, a connection in the course of trade between it and the new magazine.

140    Gummow J had come to a similar conclusion in an earlier case, New South Wales Dairy Corporation v Murray Goulburn Co-Operative Company Ltd (1989) 86 ALR 549; 14 IPR 26 (“Dairy Corporation”), to which neither party referred in submissions. Although this judgment was relevantly concerned with an application for removal from the Register for non-use under s 23(1)(b) of the 1955 Act, the words used in s 23(1)(b) are not materially different from those used in s 92(4)(b).

141    In Dairy Corporation, as in the present case, there had been no sale of the relevant product (milk) during the statutory period. Orders had been placed for the production of containers and art work provided to the manufacturer of the containers and during the period the first packs were delivered to the trade mark owner, the first trial production run had taken place, and, on the very last day, “the first commercial production of chocolate milk”. But the goods were not available for sale, let alone sold, until after the expiration of the period.

142    Gummow J held at 44 (citing Hermes at 432) that “[t]he phrase ‘in the course of trade’ is wide enough to cover steps necessary for the production of goods, as well as the actual placement of the goods on the market”.

143    In Moorgate Tobacco Co Limited v Philip Morris Ltd (No 2) (1984) 156 CLR 414 (“Moorgate”) the relevant question was whether Moorgate had become the proprietor of the mark “kent golden lights” for the purposes of s 40(1) of the 1955 Act so as to entitle it to apply for registration and resist an application made by some other person who might apply for registration purporting to be the proprietor. Moorgate’s claim to have become the proprietor of the mark was necessarily based on prior use. Deane J explained at 432:

The prior use of a trade mark which may suffice, at least if combined with local authorship, to establish that a person has acquired in Australia the statutory status of “proprietor” of the mark, is public use in Australia of the mark as a trade mark, that is to say, a use of the mark in relation to goods for the purpose of indicating or so as to indicate a connexion in the course of trade between the goods with respect to which the mark is used and that person …

144    To prove prior use in Australia, Moorgate relied on evidence that on three occasions, in or in connection with discussions between Philip Morris and Loew’s Theatres Inc (from which Moorgate purchased the Kent cigarette business and the kent trade mark) about the introduction into Australia of a low tar and nicotine cigarette, packets of cigarettes and associated advertising material displaying the name “kent golden lights” were handed or posted to representatives of Philip Morris in Australia. The discussions relevantly included Philip Morris selling low tar and nicotine cigarettes under licence from Loew’s. At that time, however, Loew’s did not intend to trade in the goods in Australia. Moreover, no decision had been made as to “what name would be used if Philip Morris were, under licence from Loew’s, to commence to manufacture and market the goods in Australia at some indefinite future time”: see 156 CLR at 433. That use was considered insufficient to establish use of the mark as a trade mark.

145    In the course of his reasons, however, Deane J, with whom the other members of the Court agreed, observed at 433–4:

The cases establish that it is not necessary that there be an actual dealing in goods bearing the trademark before there can be a local use of the mark as a trade mark. It may suffice that imported goods which have not actually reached Australia have been offered for sale in Australia under the mark … or that the mark has been used in an advertisement of the goods in the course of trade: Shell Co. of Australia v. Esso

Standard Oil (Australia) Ltd. [(1963) 109 CLR 407 at 422]. In such cases, however, it is possible to identify an actual trade or offer to trade in the goods bearing the mark or an existing intention to offer or supply goods bearing the mark in trade.

146    In that case, his Honour held that there was no such intention, only preliminary discussions. Not even the choice of trade mark had been determined.

147    I note that in Winton Shire Council v Lomas (2002) 119 FCR 416 at [36] Spender J concluded from Deane J’s remarks, that if it was possible to identify “an actual trade or offer to trade in the goods … bearing the mark, or an existing intention to offer or supply goods … bearing the mark in trade, that is sufficient”. In other words, as his Honour put it later in his reasons (at [38]), the passage in Moorgate I cited above (at [143]) “clearly envisages” that either of two alternatives will suffice to establish use: on the one hand “preparatory steps coupled with an actual trade or offer to trade”, on the other, “preparatory steps coupled with an existing intention to offer or supply goods in trade”. He cited Buying Systems as an instance of the latter.

148    I would add that in Lomas v Winton Shire Council [2002] FCAFC 413 at [39] a Full Court of this Court (Cooper, Kiefel and Emmett JJ) accepted that it was unnecessary that there be an actual dealing in goods bearing a trade mark before there can be said to be trade mark use, adding, citing Moorgate, that it “may even be possible to establish use where the mark has been used in an advertisement of goods in the course of trade in circumstances where there is an existing intention to offer or supply goods bearing the mark in trade …”.

149    In Woolly Bull Drummond J observed (at [20] and [40]) that, without more, subjective intention to use the mark was not sufficient. But his Honour accepted (albeit in obiter dicta) that it is unnecessary for relevant purposes that there be “an actual trade in the sense of the offering for sale and the sale of goods bearing the mark”. His Honour went on to emphasise (at [40]):

[T]he owner will not use its mark unless it has so acted to show that it has gone beyond investigating whether to use the mark and beyond planning to use the mark and has got to the stage where it can be seen objectively to have committed itself to using the mark, that is, to carrying its intention to use the mark into effect.

150    In QH Tours Ltd v Mark Travel Corporation (1999) 45 IPR 553, the relevant issue was whether a small amount of preparation by the opponent during the statutory period to use the words “Fiji Funjet” was sufficient to denote use of one or both of the registered marks, registered in respect of travel agency services, each of which incorporated the word “Funjet”, and thus to defeat an application to remove the marks from the Register for non-use. The period in question was from 17 May 1994 to 17 May 1997. The hearing officer found that it was.

151    The use of the mark during the statutory period was described in the reasons as follows (at 557):

Sometime on or earlier than 15 March 1997, [there was] a weekly marketing brainstorm session where it was decided to revive the FIJI FUNJET concept, previously run in the period 1974 to 1978 … [A]n intra-office memorandum from Ann Johnson, marketing controller, dated 15 March 1997[,] … mentions the Fiji Funjet in the context of a four-page flyer to be released in July 1997.

152    The hearing officer went on to refer to another intra-office memorandum, dated 20 May 1997, from the marketing controller to a corporate lawyer for Qantas, which, he said, “confirm[ed] an intention to use the ‘Fiji Funjet name’ on their next Fiji product flyer to be released in July 1997”. He also referred to the production of flyers and other promotional material after July 1997 which carried the fiji funjet trade mark, and others simply displaying the word “Funjet”, including a plastic cup. He considered that the process of ordering brochures, scheduling advertising and the like was “directly analogous to ‘tak[ing] positive steps to acquire goods marked with the trade mark’” referred to in Hermes at 432.

153    The hearing officer distinguished Moorgate, holding that, although services under the fiji funjet trade mark had not been offered to the public during the statutory period, the trade mark owner had “a fixed and existing intention” at that time “to immediately use the trade mark” and did in fact do so within three months of the end of the period.

154    Although neither Hermes nor Buying Systems is mentioned in the plurality’s reasons in Gallo, there is one reference to the judgment in Woolly Bull (at [64]) (and three in the report of the argument) and two to Dairy Corporation (at [62] and [63]) (and two in the report of the argument). Gummow J, it will be recalled, was a member of the plurality.

155    In all these circumstances, I accept the submission made by the Dick Smith parties to the effect that Gallo should not be read as excluding from “use as a trade mark” during the statutory period all steps antecedent to a sale or the offering for sale of the goods the subject of the application.

156    The evidence in the present case establishes that the Dick Smith parties did not merely have a subjective intention to use the ozemite trade mark in relation to the goods the subject of the application. As in Buying Systems, the evidence went well beyond preliminary investigations and showed “an objectively ascertainable commitment” (Woolly Bull at [28]) to producing a “vendible” product which would carry the mark. I am satisfied that the OzEmite product remained under development during the non-use period and that, notwithstanding the various setbacks and, at times, some understandable frustration, the Dick Smith parties were intent on bringing it to market. Considerable funds had been invested in its development. While there was no evidence about the full extent of the expenditure, as I mentioned above the evidence does disclose that by August 2005 over $100,000 had been spent. I expect that by the end of the statutory period that sum would have been significantly greater.

157    It may not be strictly correct to describe the broadcasts in 2010 and 2011 as “pre-launch publicity”, as the launch of the product was not then imminent. But that is beside the point. What matters is whether the mark was being used as a trade mark to distinguish the prospective product from the products of others. The references to Ozemite in the two promotional pieces answer this description. To adopt Lord Macmillan’s language in Aristoc, they reveal uses of the mark in “association with the goods in the course of their production and preparation for the market” and in this way were uses of the mark in connection with goods in the course of trade. Their objective purpose was to revive, if not maintain, interest in the OzEmite product amongst potential purchasers so that there would be a viable market for the product once it was released. I do not doubt that in each of these appearances, and notwithstanding the humour in The Chaser skit, Mr Smith’s promotion of OzEmite was an expression of a genuine intent to use the mark for commercial purposes. Consequently, each involved a use of the mark in good faith for the purposes of s 94(1)(b)(ii). I find that at the time of the broadcasts Mr Smith (the controlling mind and will of DSI, the then owner of the mark) had a genuine expectation that his intentions would shortly be realised. It just took longer than he predicted.

158    For these reasons I am satisfied that the Dick Smith parties have discharged their burden of proof. I find that DSI, the then registered owner of the ozemite trade mark, used the mark in Australia during the statutory period in relation to goods to which the non-use application relates.

During the statutory period were there circumstances that were an “obstacle” to use of the ozemite trade mark?

159    In case my conclusion in relation to the initial question be wrong, I will consider the remaining two questions. I turn first to the question of whether there were circumstances in the statutory period which amounted to an obstacle to the use of the mark.

160    The Dick Smith parties submitted that there were two major obstacles to producing OzEmite in the period:

    obtaining access to spent brewer’s yeast; and

    developing a formula which would produce a product with a similar taste and texture to Vegemite.

161    The two are not unrelated. Vegemite was made with spent brewer’s yeast. It is reasonable to expect that to make a product with a similar taste and texture to Vegemite would require the use of the same ingredients. The point of distinction is that, following unsuccessful attempts to secure spent brewer’s yeast, the Dick Smith companies looked to other sources of yeast which might provide a suitable substitute.

162    I am satisfied that for some time the Dick Smith companies did have trouble finding spent brewer’s yeast, but I am not satisfied that that difficulty presented itself as an obstacle to the use of the mark during the statutory period. In this respect, I interpolate, this case is factually similar to UCP Gen Pharma AG v Mesoblast Inc (2012) 95 IPR 562; [2012] FCA 210. By then, it appears that the Dick Smith parties had resigned themselves to manufacturing OzEmite using other sources of yeast.

163    It is true that in his second affidavit, affirmed on 9 July 2015, Mr Smith said that:

Between 2001 and 2011 from time to time, and in parallel with the development of an alternative yeast product, we [he, Mr James, and the different organisations which were involved in the development of Ozemite] also revisited whether we could source sufficient amounts of brewer’s yeast from the breweries, such as Lion Nathan and the Blue Tongue brewery, about opportunities to source brewer’s yeast. On occasions when it appeared likely that sufficient quantities of brewer’s yeast may be available, we investigated further whether brewer’s yeast would provide us with a better option to the alternative yeast product that was in development. In each instance we discovered that there were serious obstacles to the use of each brewer’s yeast. These included the complex yeast extraction process, such as the process of de-bittering the yeast and achieving consistency across batches, and the difficulty in transporting live yeast from the brewery to a manufacturing plant. On each occasion I considered that our only commercially viable option was to continue with the development of the alternative yeast product.

164    I accept Mr Smith’s description of the difficulties in sourcing and using brewer’s yeast. But the reference in this paragraph to the period between 2001 and 2011 is the only evidence suggesting that those difficulties presented themselves during the statutory period. Qualified as it is by the phrase “from time to time”, the evidence is too imprecise to persuade me that on the balance of probabilities sourcing brewer’s yeast or, more accurately, spent brewer’s yeast was an obstacle to the use of the ozemite trade mark in the statutory period.

165    That said, it is clear that the Dick Smith companies were still having trouble getting the taste right. But is that circumstance an obstacle within the meaning of s 100(3)(c)? The authorities suggest otherwise.

166    In Woolly Bull at [46]–[50] and [55]–[56] Drummond J held, in effect, that to qualify as an obstacle within s 100(3)(c), the circumstances had to meet three conditions.

167    First, they had to be “of a trading nature” (at [46]).

168    Secondly, they had to “arise from or comprise events external to the registered owner in the sense of not having been brought about by the voluntary act of the owner” (at [47]).

169    Thirdly, there must be events “capable of disrupting trade in the area of commercial activity in which goods bearing the registered owner’s mark are traded” (at [48]).

170    The Dick Smith parties queried whether the construction Drummond J placed on the scope of this provision was too broad but refrained from submitting that it was clearly wrong. Indeed, they went further, saying they would accept it.

171    In my opinion there is substance in the concerns raised by the Dick Smith parties.

172    Drummond J’s interpretation rested on a consideration of certain extrinsic materials from which his Honour discerned the intention of the Parliament and then the meaning of the statutory language.

173    The origin of the construction in Woolly Bull which requires that the obstacles be independent of the will of the trade mark owner appears to be the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS Agreement”) annexed to the Marrakesh Agreement Establishing the World Trade Organisation (Marrakesh, 15 April 1994) and ratified by Australia.

174    Article 19(1) of the TRIPS Agreement states:

If use is required to maintain a registration, the registration may be cancelled only after an uninterrupted period of at least three years of non-use, unless valid reasons based on the existence of obstacles to such use are shown by the trademark owner. Circumstances arising independently of the will of the owner of the trademark which constitute an obstacle to the use of the trademark, such as import restrictions on or other government requirements for goods or services protected by the trademark, shall be recognized as valid reasons for non-use.

(Emphasis added.)

175    Ratification of any international convention does not make its terms part of Australian municipal law. Consequently, the TRIPS Agreement is only in force in Australia to the extent to which its terms are recognised by the common law or have been implemented by Australian legislation. The expression “[c]ircumstances arising independently of the will of the owner of the trademark” does not appear in the Act. Nevertheless, it is reasonable to infer that circumstances arising from a decision by a trade mark owner not to use the mark would not amount to an obstacle. Otherwise trade marks could be registered merely to thwart a competitor from using the mark. In my respectful opinion, however, whether the subsection goes any further than this is open to doubt. Moreover, circumstances may arise which are independent of the will of the trade mark owner but are nevertheless not external. In a small business, for example, illness of the trade mark owner, the very matter found in Woolly Bull not to constitute an obstacle under the section, may well constitute such an obstacle.

176    Given the stance taken by the Dick Smith parties, however, I express no concluded view on the matter. I note that Drummond J’s opinion has been followed or cited with apparent approval by other members of this Court: see, for example, Austin Nichols & Co Inc v Lodestar Anstalt (2011) 202 FCR 462 at [103]–[108] (Cowdroy J) (and not challenged on the appeal in that case) and UCP Gen Pharma AG v Mesoblast Inc at [26] (Jessup J).

177    In the result, I cannot conclude that, understandable though they may be, the concerns of the Dick Smith companies to achieve a particular taste were “circumstances … that were an obstacle to the use of the trade mark during [the statutory] period”. To the extent that the objective of capturing the old Vegemite flavour caused or even contributed to the non-use of the mark during this period, it did not arise from or comprise events external to the registered owner or independent of its will.

178    For the above reasons, I am not satisfied that the Dick Smith parties have established that the trade mark was not used by its registered owner in relation to the relevant goods during the statutory period because of circumstances that were an obstacle to its use during that period.

Is it reasonable to order that the mark not be removed from the Register?

179    As I have already observed, if the grounds on which the application was made have been established, if the Court is satisfied that it is reasonable to do so it may decide to order that the mark not be removed from the Register: Once again, having regard to my conclusions on the primary question, it is strictly unnecessary to deal with this issue but in case there is an appeal I propose to do so.

180    The discretion is a broad one, subject to no express fetters, and constrained only in its exercise by the subject-matter, scope and purpose of the Act and Pt 9 in particular: Austin Nichols & Co Inc v Lodestar Anstalt (No 1) (2012) 202 FCR 490 (“Lodestar”) at [35] (Jacobson, Yates and Katzmann JJ).

181    The factors upon which the Dick Smith parties relied were that:

    the registered owner of the mark (initially DSI, now Ozemate) had never abandoned or intended to abandon it;

    the owner has always been committed to bringing the product to market;

    the owner has a residual reputation in the mark;

    since the statutory period substantial quantities of OzEmite have been sold;

    in registering aussie mite Mr Ramsey misappropriated the ozemite mark; and

    removal of the mark could lead to public confusion.

182    Mr Ramsey did not contend that these matters were irrelevant, merely that, when correctly analysed, they were either not proved or, taken together, did not favour the exercise of the discretion. He also contended that the lengthy “non-use period”, of itself, militates against it.

183    For the following reasons I reject his arguments. For the same reasons, notwithstanding the delay, I am satisfied that it is reasonable to order that the ozemite mark not be removed from the Register.

184    It is convenient to deal first with the question of delay. The relevant delay, it seems to me, is not the 12 plus years from the registration of the Ozemite business name or the announcement of the plans to manufacture a product to be called by that name, as Mr Ramsey submitted. Rather, it is the 8 plus years from the registration of the ozemite trade mark.

185    That said, there was a considerable delay in bringing the goods to market. Mr Ramsey likened this case to Conquip Holdings Pty Ltd v S & A Restaurant Corporation [2000] AIPC 91–547; [2000] FCA 256 (“Conquip”) in which Heerey J said at [90] that 18 years of non-use was “destructive of the purpose of the trade mark registration”. Quite apart from the fact that the delay in this case is nowhere near as long as it was in Conquip¸ that was a very different case. The trade mark owner was an American company which had not used the trade mark in Australia at any time and appears to have never conducted a business or advertised or promoted its goods or services here. In other words, it did nothing to protect its mark.

186    In contrast, DSI was not idle during the period since registration. ozemite was not registered and then left to languish. This is not a case of a trader registering a mark for the purpose of preventing its use by another. Moreover, there is a credible explanation for much, if not all, of the delay. Although they may not amount to obstacles for the purposes of s 100(3)(c), the thwarted attempts by the Dick Smith companies to source a sufficient quantity of spent brewer’s yeast, their difficulties in securing a suitable alternative, the trouble they had in achieving the desired taste, intellectual property and conflict of interest issues, production costs, foreign ownership concerns, even ambivalence from some manufacturers, all contributed to the lengthy time it took to get the product onto supermarket shelves.

187    Mr Ramsey sought to discredit Mr Smith through a remark Mr Smith made to the journalist, Ticky Fullerton, in an interview on the ABC network’s television program The Business on 18 July 2012. Mr Smith’s remark was that two years earlier he had decided to “go ahead with the Ozemite, we really want a good competitor for Vegemite”. It was not suggested (nor could it be in the light of the evidence) that this was a concession that no steps had been taken to develop Ozemite until 2010. Rather, Mr Ramsey’s point was that Mr Smith did not mention any manufacturing difficulties. When Mr Smith was confronted with this proposition in cross-examination, he said that it would have been “too boring for people” to “go into the explanation of the 10 years [of] work”. I have no doubt that it would have been boring for him to engage in such a discourse. Mr Smith is a skilled media player. As he said himself, it is important to keep things simple. Even so, he was reconstructing. I doubt that the reason why he did not mention the manufacturing difficulties in that interview was that he was concerned not to bore the audience. More likely he did not mention it because it would have distracted the viewer from his message. He was intent on promoting his product, which had only recently come on to the market. Immediately after the remark upon which he was challenged in cross-examination, he told Ms Fullerton:

and the amazing thing is we’ve now got Ozemite going, similar taste to Vegemite. In fact, it’s like Vegemite was in the 1950s when I was a kid before the Americans changed the taste …

188    Furthermore, the apparent impetus for the interview was a comment by Ms Ramsey that Mr Smith said that he supported “fellow Australian-owned businesses”, yet “squash[ed]” ours. The very question to which he was responding was: “Why did you choose to want to compete with them anyway rather than back an Australian-owned company?” Most of his answer was directly responsive to this question. The focus of the interview was on Mr Smith’s public image as a champion of Australian business. At no point was he asked about the reason for the delay in bringing OzEmite to market.

189    Mr Ramsey submitted that the delay was unreasonable, pointing to evidence that Vegemite only took “a couple of years to create” and that AussieMite was first sold in February 2001. But it is not to the point that Vegemite was created in a relatively short period of time. There was no evidence about the circumstances in which it was created. Nor is it to the point that Mr Ramsey apparently took even less time to develop AussieMite. His objectives were different from Mr Smith’s. Self-evidently, he was not striving to capture the taste and texture of the Vegemite Mr Smith recalled with affection from his childhood. Indeed, Mr Ramsey never set out to reproduce or approximate the taste of Vegemite or, indeed, any other yeast-based product. His ambition was much more modest. He wanted a product which tasted “a bit like Vegemite and a bit like Promite”. Moreover, his evidence was that he was intent on beating Mr Smith to market in the belief that “the first to market won”, that is to say, the first to market would be able to secure registration of the mark to the exclusion of the other.

190    Secondly, while it seems that, at times, the development process stalled, it is not in dispute that at all relevant times DSI had a genuine intention to use the mark, in relation to goods in the classes in which it was registered and that from the time of its conception DSI never abandoned the mark.

191    Thirdly, the Dick Smith companies’ actions over the years it took to bring the product to market “bespeak not only the intention to use the mark but the commitment of resources” (UCP Gen Pharma AG v Mesoblast Inc at [36]) to that end. It follows that, notwithstanding the dearth of documentary evidence during the statutory period, I do not accept Mr Ramsey’s submission that the Dick Smith parties simply “sat by and allowed research to occur from time to time in which it ha[d] a passing interest” (Kowa Company Ltd v NV Organon (2005) 66 IPR 131; [2005] FCA 1282 at [99]).

192    Fourthly, there is the question of reputation.

193    The learned authors of Shanahan’s Australian Law of Trade Marks and Passing Off (5th ed) point out at [70.2505] that removal might be refused if the trade mark, though unused for the purpose of s 92, is nevertheless well-known because it retains a “residual reputation” from earlier use or from advertising or publicity coming from abroad. Bennett J referred to these observations (made in an earlier edition of the text) with apparent approval in Pioneer Computers Australia Pty Ltd v Pioneer KK (2009) 176 FCR 300 (“Pioneer”) at [178].

194    Mr Ramsey contended that reputation is only relevant where the goods exist and they did not exist until they went onto the market in 2012. It is true that reputation is commonly inferred from sales (amongst other things): see Lodestar at [45], citing McCormick & Company Inc v McCormick (2000) 51 IPR 102; [2000] FCA 1335 (Kenny J) at [86]. But neither of these decisions stand for the proposition that a trade mark can have no reputation unless it applies to existing goods. Here, in 2006, some seven years after the initial burst of publicity surrounding the proposal to manufacture a product called OzEmite, Dick Smith Foods’ customer service line was regularly receiving calls from people asking about its availability. In his radio interview with Mr Smith on station 5AA, Mr Byner admitted to recalling the name in connection with the proposed product in 2011, more than a decade later.

195    I accept the submission of the Dick Smith parties that the ozemite mark has a residual reputation derived from the long period during which it had been publicised, albeit sporadically.

196    Matthew Cole, a marketing consultant with over 30 years of marketing experience, including of products sold in supermarkets, gave the following evidence for the Dick Smith parties, based on certain factual assumptions (which are substantially borne out by the evidence) and having examined some, but not all, of the promotional material upon which the Dick Smith parties relied (listed in the annexure to these reasons).

197    Mr Cole expressed the opinion that the publicity campaign run by Dick Smith Foods to promote its brand “from its inception in 1999 was hugely effective in increasing consumer awareness of the DSF brand and the Ozemite Product even though the product was not available for purchase at that time”. Mr Cole went on to give his reasons. They included:

    the nature of the campaign, which he described as a “protest” style “promoting a highly charged issue (globalisation of Australian icon brands) by offering a business solution”, which, through the use of Australian farmers, manufacturers and producers, would keep all the wealth generated from the sales in Australia, positioning Mr Smith and his business as the “People’s Champion”; and

    the enormous amount of free publicity Mr Smith generated from 1999 onwards. Mr Cole said that consumers tend to find non-paid media publicity more credible than traditional advertising.

198    Mr Cole stated that a protest-style campaign “when done well is highly engaging as it creates a ground swell of emotion and passion acting like a rallying cry to create change”. He pointed to the headlines in many of the newspaper articles, which picked up on this theme. He said that the campaign was “particularly effective” because of Mr Smith’s role as spokesman. After listing some of Mr Smith’s numerous achievements, he concluded that Mr Smith had “a high level of credibility and trust with the Australian public”, which he attributed to his involvement in matters of public interest, such as his position as chairman of the board of the Civil Aviation Safety Authority and a former Australian of the Year.

199    Mr Cole also expressed the opinion that, where there is extensive publicity in relation to a product, there is some prospect that consumers will assume the product is available.

200    Consequently, it was Mr Cole’s opinion that, even if there had been no publicity for OzEmite in the period between 2003 and 2011 (he was not provided with any examples):

[T]he intensity and volume of the earlier publicity of [OzEmite] as the hero product in the “protest-style” launch campaign … and the reputation of Dick Smith as the spokesman for the [Dick Smith Foods] brand (plus the fact that the [Dick Smith Foods] products were available for sale in supermarkets in this period) meant that … there would still be awareness of [OzEmite] amongst consumers in 2011.

201    This opinion was challenged, but not discredited, in cross-examination. It is not inherently implausible and I accept it. Mr Smith is a popular public figure with a knack for self-promotion and a talent for working the media, who propounds a simple patriotic message which appeals to the media and resonates with the general public. Mr Cole’s opinion about consumer assumptions is supported by other evidence in this case (see [84] above).

202    Mr Cole considered that the reputation and consumer recognition of OzEmite had grown since 2011 with the increased selection of Dick Smith Foods brands available in supermarkets in 2014 and the revenue generated by sales of OzEmite. In this respect, he was not challenged.

203    Fourthly, there have been substantial sales in the period since the product has been on the market. The figures in evidence, taken from the royalty statements of Spring Gully Foods, the licensee of Dick Smith Foods, show total sales (nationally) to supermarkets and grocery stores to October 2015 of 956,868 jars of OzEmite, generating over $4.4 million in revenue.

204    Mr Ramsey contended, however, that these sales should be disregarded because DSI proceeded with its “eyes wide open, aware that its trade rival had commenced selling Aussie Mite Product many years earlier, and aware that its launch of [the] Ozemite Product was in the face of a removal action for non-use”. He also sought to minimise the significance of the sales figures to advance an argument that there have not been “substantial sales”.

205    There is no doubt that DSI knew that AussieMite was being sold well before OzEmite was offered for sale and while the removal application was pending. It is therefore unarguable that DSI proceeded with its “eyes wide open”, so to speak. But this was the culmination of many years of effort, which began well before AussieMite came onto the market.

206    Moreover, as the question is whether it is reasonable not to remove the mark, the Court is entitled, if not bound, to have regard to the current state of affairs (Lodestar at [41]).

207    I reject the argument that sales have not been substantial. While there may not have been a run on OzEmite (at least not continuously during the period since it was first sold), as I mentioned earlier it sold nearly a million jars in a little over three years. By any measure that is substantial.

208    I also reject the submission that the use of the mark by the Dick Smith parties after the statutory period is “colourable”. The facts point in the opposite direction.

209    The non-use period ended on 1 May 2011. The licence with The Green Group was terminated a month later and the management of the development of the product brought in-house. But plans were under way before May 2011. The removal application was actuated by Mr Ramsey’s perception that in 2011 “[t]he threat of an actual OzEmite product being released appeared to be gaining momentum”.

210    Mr Ramsey filed his removal application on 1 June 2011 but there was no flurry of activity by the Dick Smith parties at this point. The first step taken by the Dick Smith parties following the application was to register a different trade mark (dinky di-nemite). The OzEmite product itself did not become commercially available until around more than a year after the filing of the removal application and some of the publicity was generated by the mere fact that the application was made.

211    Sixthly, the interests of the trade mark owner plainly favour the retention of the mark on the Register, especially now that there is a product being sold in not inconsiderable quantities under the mark. This is not an irrelevant consideration. Indeed, it is the very reason for the discretion. See Lodestar at [35]–[38].

212    Seventhly, as I indicated earlier, the Dick Smith parties also contended that Mr Ramsey’s conduct was a relevant consideration which weighed in their favour. They did not suggest that he entered the market without having taken steps to ascertain whether anyone had a right to prevent its use of the mark, a factor which has been accepted as relevant to the exercise of the discretion: E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2008) 77 IPR 69; [2008] FCA 934 at [202]–[203] (Flick J) (not disturbed on appeal) (relying on Hermes at 433–5); Pioneer at [169] (Bennett J); Tivo Inc v Vivo International Corp Pty Ltd [2012] FCA 252 at [468], [497] (Dodds-Streeton J). Rather, they submitted that Mr Ramsey entered the market in January 2001 in circumstances which they described as “a deliberate attempt to misappropriate the reputation of the ozemite mark”, by trading off the publicity generated by Mr Smith for OzEmite. Thus, they argued, his conduct was “far worse” than the conduct of an applicant for removal who merely fails to search the Register.

213    Mr Ramsey did not submit that his own conduct was irrelevant. Nor did he deny that he had misappropriated the reputation of the Ozemite name. His counsel described his conduct as “opportunistic”. Rather, he invited the Court not to attach significance to it and sought to deflect attention from it by disparaging Mr Smith.

214    It is clear from the evidence that Mr Ramsey knew about Mr Smith’s proposal to make a yeast-based spread called OzEmite at the time of the public announcement in July 1999 and that he proceeded to label his product in September 2000 as AussieMite, well aware that a large segment of the public was aware of Mr Smith’s plans to launch OzEmite. In cross-examination he admitted to taking advantage of the publicity for OzEmite to “leverage off that publicity”. He said that was “unavoidable”, but it was only unavoidable if he was proposing to use a substantially identical or deceptively similar name.

215    Mr Ramsey claimed that the name AussieMite had been “coined to [him]” before Mr Smith’s announcement, which I understood to mean suggested to him. This was also the evidence he presented to the delegate of the Registrar. He asserted in submissions to the delegate that the name came up during discussions with another South Australian businessman, Mike Thomas, about a similar idea of making produce in Australia from local sources under vernacular trade marks.

216    I reject this claim. When Mr Thomas was called in this proceeding he was asked about the brand names he and Mr Ramsey were considering and failed to mention AussieMite. Given the purpose of his evidence, it is inconceivable that, if the name had come up in discussions Mr Thomas would not have recalled it.

217    Furthermore, I have no confidence in Mr Ramsey’s evidence.

218    On 12 August 2005, in a submission to the Trade Marks Office he asserted that:

Ozemite and aussie mite are phonetically different. ozz as oppose to aus i.e. ozztralia and australia.

219    He admitted during cross-examination that he did not believe the proposition when he propounded it. Unsurprisingly, he had difficulty in these circumstances explaining himself. Finally, he conceded that he was prepared to say anything in opposition to the Dick Smith parties even if he did not believe it. He also admitted to giving false evidence in the appeal (at ts 261). The conclusion is irresistible that he would say anything if he thought it would assist his case. Unless his evidence is against his interest, or corroborated by independent evidence, it would be unsafe to rely on it.

220    I find that Mr Ramsey did not come up with the AussieMite homophone for some time thereafter, probably not until late 2000 at the earliest. It was in February 2001 that he told Mr Pym that he had decided to use Mr Smith’s concept and was changing the name of his yeast extract spread from “Dinky Di-nemite” to “Aussie Mite”.

221    It is likely that Mr Ramsey was motivated to act against Mr Smith and his companies, at least in part, by spite, perhaps because at the time that Mr Smith announced his plans to produce a yeast-based product to be called OzEmite he had not thought of “Aussie Mite”, or at least not taken any steps to promote, protect or register the name. Mr Smith’s idea was a good one. Mr Ramsay may well have been annoyed he had not come up with it first. Although Mr Ramsey vacillated a little in his evidence about this, he agreed that he was angry when he learned of Mr Smith’s plans back in 1999. And his anger did not abate.

222    Notwithstanding that Mr Ramsey considered it to be an act in bad faith to use the name aussie mite while a registration for that name was pending, he used the name knowing of DSI’s application to register ozemite. Moreover, knowing that the name he had chosen was homophonous with the ozemite name, he must have recognised the potential for consumer confusion, if not deception. In all likelihood, he desired to capitalise on that confusion.

223    Yet, Mr Ramsey argued that the Court should attach no significance to his own conduct in the light of a number of matters he submitted reflected poorly on DSI and Mr Smith, in particular:

    relying in the opposition to the registration of aussie mite, on Mr Ramsey’s original plans to call a yeast extract spread Dinky Di-nemite, when it applied to register the same word as a trade mark;

    giving inconsistent evidence about his own business practices;

    being sued by Arnotts for infringement of the tim tam trade mark through the use of the brand name “Tem p Tins”, which was settled on the basis that he increase the size of the “p”;

    admitting to engaging in advertising to achieve a reaction; and

    failing to appear at the hearing before the Registrar or to appeal the opposition decision.

224    I reject these submissions.

225    The Dick Smith parties were legally represented before the delegate of the Registrar and evidence from Mr Smith had been presented. Mr Smith’s conduct in failing to appeal the decision of the Registrar to allow the registration of the trade mark aussiemite seems to me to be beside the point. In any case, there is a perfectly acceptable explanation for it. By the time the decision was made, Mr Smith said, the product had disappeared from supermarket shelves. Mr Smith concluded that, in the circumstances, it was not worth spending any more money on the matter.

226    Mr Ramsey may have come up with the name Dinky Di-nemite, but, unlike Mr Smith’s actions with respect to ozemite, he never used it. As Mr Smith said in cross-examination, Mr Ramsey had completely abandoned it.

227    Mr Ramsey submitted that Mr Smith “admitted that he deliberately flirts close to copyright through his product names and expects trouble” (emphasis added). But he made no such admission. Indeed, the italicised proposition was never put to him in cross-examination. Rather, it was drawn from an article appearing in The Bulletin in November 2000. It reflects the journalist’s opinion. The italicised words were not attributed to Mr Smith. All Mr Smith was quoted as saying was that he expected he would be taken on by one of the big foreign companies. His buy-Australian strategy, it was reported, was starting to hurt the multinationals.

228    Mr Ramsey insinuated that Mr Smith was a hypocrite for criticising Mr Ramsey for “pinching” his OzEmite concept when Dick Smith Foods’ strategy is to copy the brands of others. I do not accept the insinuation. I accept the submission of the Dick Smith parties that the Dick Smith Foods’ strategy does not copy a name devised by a foreign-owned company in order to appropriate the company’s reputation. Its strategy is parody. As their senior counsel, Mr Cobden, put it in oral argument, no one is going to buy Dickheads matches thinking they are produced by Redheads.

229    Finally, as the Dick Smith parties submitted, removal is “potentially conducive to public confusion”: Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 15 NSWLR 158 at 224 (McLelland J).

230    Any member of the public who knew of OzEmite and who was to consult the Register only to find aussiemite might may well conclude that it is connected with Mr Smith, or one of his companies, led astray by the homophony and an imperfect recollection of the ozemite mark.

231    Furthermore, if the ozemite mark were removed from the Register, the Dick Smith parties would be vulnerable to an action for trade mark infringement. There could be no doubt that Mr Ramsey would pursue such a course; it is the basis for the cross-claim in the rectification proceeding.

232    An infringement suit is more likely to succeed if the ozemite mark were removed from the Register because the owner of the mark would lose its defence under s 122(e) of the Act (that it was exercising its statutory right to use a trade mark). The marks are undeniably similar and there was evidence of actual confusion, even deception. When a controversial advertisement for AussieMite was posted on YouTube and apparently also broadcast on television, a call centre to which Dick Smith Foods had outsourced its customer inquiry line received 33 telephone calls, almost twice the highest number for the month, 14 of which complained about the advertisement, attributing it to Dick Smith Foods. Callers were recorded as having made comments such as:

•    As a catholic very offended with ‘ewes’ [scil. “youse”] advertisement about OzEmite

•    Regarding DS advertisement campaign on TV and online - it breaches the code of ethics. Understand it’s (sic) aim is to offend and create controversy, but this is unacceptable. Please be more prudent in the way you advertise going forward

•    Ozemite advertisement: violating rules and legislation because it goes against my faith and insulting should be banned from internet because it is really offending. He wants someone to call him back asap.

•    Ozemite ads - wants to make a complaint - gave email address.

•    Making complaint that its insulting they’re catholic religion (sic) (give general email)

•    The OzeMite advertisement - please refrain from using someone’s belief’s as a joke to make a sale

•    The OzEmite advertisement - highly offensive as a catholic. Will be organising (scil.) an e-mail to send out for people to boycott (scil.) the product

233    If Mr Ramsey were to succeed, there is every chance that goods could no longer be sold under the ozemite mark. The evidence indicates that OzEmite is well-known as a Dick Smith Foods product, much more famous than AussieMite. While the jars of OzEmite and AussieMite appear on supermarket shelves, if not side by side, in close proximity to each other, it is obvious which is the Dick Smith Foods product. The get up of each is quite distinctive. The design, the colours, the fonts are all different. The one bears no resemblance to the other:

234    But if ozemite were removed from the Register and its eponymous product disappeared from supermarket shelves, consumers might well wonder whether the AussieMite product is in fact OzEmite or at least produced by, or associated with, the owner of the ozemite mark. This is not idle speculation. There is evidence to support it.

235    Mr Ramsey agreed in cross-examination, that some people who recalled from a reference in a catalogue or the press AussieMite but saw OzEmite on the supermarket shelf might well wonder whether OzEmite was the product that they had recalled. The converse necessarily follows. And, while Mr Ramsey denied that any confusion would arise if only one of the products was available, his denial defies logic. It is also inconsistent with his submission to the Trade Marks Office in 2005. There, he pointed to the marketing of OzEmite in association with Mr Smith:

[B]oth products can coexist in the marketplace.

...

The opponents (sic) trademark would be marketed with the face of Dick Smith and not as a separate product.

The expectation of the consumer would be to look for his face on the label and to associate ozemite with Dick Smith.

One must, therefore, take into account [that] the opponents (sic) trademark would be visually linked with Dick Smith.

The applicant’s trademark aussie mite has for the last four and half (sic) years featured the name aussie mite over a map of Australia.

The visual difference between the two trademarks is significant.

236    In this respect, it seems to me that Mr Ramsey is right. There is likely to be less confusion if the ozemite mark remains on the Register, than if it is removed. The extent of publicity generated by Mr Smith over many years, including the extraordinary publicity given to the Ozemite name at the time of its conception, suggests that for many years to come a product which has the identical sound will be associated, at least in the minds of a not insignificant number of people, with Mr Smith. The best way of dispelling the notion that aussie mite is a Dick Smith product is to enable the two products to compete for attention on the supermarket shelves where consumers can see clearly which is the Dick Smith product and which the Ramsey one.

Conclusion

237    The appeal should be allowed. I am satisfied that DSI, the then registered owner of the ozemite trade mark, used the mark in Australia during the statutory period in relation to the goods to which the non-use application relates. Even if I were not so satisfied, I would exercise my discretion to order that the mark remain on the Register.

238    Costs should follow the event. The Dick Smith parties sought an order that Mr Ramsey pay its costs of both the appeal and his application to the Trade Marks Office. It was never suggested that if the Dick Smith parties succeeded, the Court should not make orders in these terms and I see no reason not to.

Associate:

Dated:    12 August 2016

Annexure

CHRONOLOGICAL SCHEDULE OF PUBLICITY EVIDENCE