FEDERAL COURT OF AUSTRALIA

Moroccanoil Israel Ltd v Aldi Foods Pty Ltd [2017] FCA 823

ORDERS

PENAL NOTICE

TO:    THE PROPER OFFICER, ALDI FOODS PTY LTD (ACN 086 210 139)

THE PROPER OFFICER, ALDI PTY LTD (ACN 086 493 950)

You will be liable to imprisonment, sequestration of property or other punishment if you:

(a)    refuse or neglect to do any act within the time specified in this Order for the doing of the act; or

(b)    disobey the order by doing an act which this Order requires you to abstain from doing.

Any other person who knows of this order and does anything which helps or permits you to breach the terms of this order may be similarly punished.

THE COURT DECLARES THAT:

1.    By exhibiting, offering for sale, selling, supplying, advertising, and/or promoting each of the:

(a)    Moroccan Argan Oil Treatment (Version 1);

(b)    Moroccan Argan Oil Treatment (Version 2);

(c)    Moroccan Argan Oil Shampoo; and

(d)    Moroccan Argan Oil Dry Shampoo

products, in conjunction with the word “Naturals” (including on the packaging and labelling of the products depicted in cells 1–7 and 11 of the Schedule to these orders), the First and Second Respondents (together, the Aldi Partnership) have represented to the Australian public that each of the products referred to in 1(a) to (d) above contains only or substantially natural ingredients (individually and collectively, the Natural Representations).

2.    The Natural Representations are misleading.

3.    By making the Natural Representations the Aldi Partnership has:

(a)    engaged in conduct that is misleading or deceptive or likely to mislead or deceive, in contravention of s 18 of the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (ACL); and

(b)    made misleading representations as to the composition of the products referred to in 1(a) to (d) above, in contravention of s 29(1)(a) of the ACL.

4.    By exhibiting, offering for sale, selling, supplying, advertising, and/or promoting each of the products referred to in 4(a) to (g) below, including by use of the packaging and labelling depicted in cells 1–10 and 12–15 of the Schedule, the Aldi Partnership has represented to the Australian public that:

(a)    the argan oil in the formulation of the Moroccan Argan Oil Treatment (Version 1):

(i)    makes a material contribution to the performance of the product;

(ii)    helps strengthen hair;

(iii)    restores shine and provides long term conditioning; and

(iv)    used regularly leaves hair shiny and healthy;

(b)    the argan oil in the formulation of the Moroccan Argan Oil Shampoo:

(i)    makes a material contribution to the performance of the product;

(ii)    helps strengthen hair and restore shine;

(iii)    helps protect hair from styling, heat and UV damage;

(iv)    leaves hair soft and silky; and

(v)    makes hair feel healthier, soft and silky making it easier to style;

(c)    the argan oil in the formulation of the Moroccan Argan Oil Conditioner:

(i)    makes a material contribution to the performance of the product;

(ii)    helps strengthen hair and restore shine;

(iii)    helps protect hair from styling, heat and UV damage;

(iv)    leaves hair soft and silky; and

(v)    makes hair feel healthier, soft and silky making it easier to style;

(d)    the argan oil infused in the bristles of the Moroccan Argan Oil Hair Brushes:

(i)    makes a material contribution to the performance of the product; and

(ii)    aids in delivering shine and hydration;

(e)    the argan oil infused in the heating element of the Moroccan Argan Oil Hair Dryer:

(i)    makes a material contribution to the performance of the product;

(ii)    delivers high shine and protection;

(iii)    provides heat protection against breakages and split ends caused by using heated styling tools; and

(iv)    provides conditioning for a smooth and silky styling finish;

(f)    the argan oil infused in the ceramic heating plates of the Moroccan Argan Oil Hair Straightener:

(i)    makes a material contribution to the performance of the product;

(ii)    protects and nourishes dry or damaged hair;

(iii)    provides heat protection against breakages and split ends caused by using heated styling tools; and

(iv)    provides conditioning for a smooth and silky styling finish; and

(g)    the argan oil infused in the barrel of the Moroccan Argan Oil Hair Curler:

(i)    makes a material contribution to the performance of the product;

(ii)    protects and nourishes dry or damaged hair;

(iii)    provides heat protection against breakages and split ends caused by using heated styling tools; and

(iv)    provides conditioning for a smooth and silky styling finish

(individually and collectively, the Argan Oil Representations).

5.    The Argan Oil Representations are false.

6.    By making the Argan Oil Representations, the Aldi Partnership has engaged in conduct that is misleading or deceptive or likely to mislead or deceive, in contravention of s 18 of the ACL.

THE COURT ORDERS THAT:

1.    The reasons distributed confidentially to the parties on 24 July 2017 be withdrawn.

2.    As and from four (4) weeks from the date of these orders, the Aldi Partnership, whether by itself, its partners, employees, servants, agents, or otherwise, be permanently restrained from exhibiting, offering for sale, selling, supplying, advertising, and/or promoting in Australia:

(a)    the following products depicted in cells 1–7 and 11 of the Schedule:

(i)    Moroccan Argan Oil Treatment (Version 1);

(ii)    Moroccan Argan Oil Treatment (Version 2);

(iii)    Moroccan Argan Oil Shampoo; and

(iv)    Moroccan Argan Oil Dry Shampoo

(or the same products by another name) in conjunction with the word “Naturals” or as natural or substantially natural, whether in packaging, on labelling, or otherwise; and

(b)    the following products depicted in cells 1–10 and 12–15 of the Schedule:

(i)    Moroccan Argan Oil Treatment (Version 1);

(ii)    Moroccan Argan Oil Shampoo;

(iii)    Moroccan Argan Oil Conditioner;

(iv)    the Moroccan Argan Oil Hair Brushes;

(v)    the Moroccan Argan Oil Hair Dryer;

(vi)    the Moroccan Argan Oil Hair Straightener; and

(vii)    the Moroccan Argan Oil Hair Curler

(or the same products by another name) in conjunction with the Argan Oil Representations, whether in packaging, on labelling, or otherwise.

In this order, “the same products” means products containing the same ingredients in the same percentages as the products depicted in the Schedule.

3.    The application otherwise be dismissed, save for:

(a)    the question of damages and compensation in respect of the contraventions of the ACL by the Aldi Partnership; and

(b)    the question of costs.

4.    Pursuant to s 92(3) of the Trade Marks Act 1995 (Cth), the Registrar of Trade Marks be directed to remove the following goods in class 3 from the registration of Trade Mark Registration No 1221017 (the First Trade Mark):

skin care products in this class; skin cleansers; skin toners; skin moisturizers; anti-aging cream; eye cream; beauty masks; body creams; hand creams; non-medicated foot cream; eye makeup; foundation makeup; lip liner, lipsticks and lip balms; eyeliners; blushes; eye shadow; nail enamels; toiletries and cosmetics including shaving preparations, shaving creams and soaps, after shave creams and lotions, body massage creams and oils, soaps, bath oils and shower gels, talcum powders; antiperspirants; dentifrices; sunscreen and suntan oils and creams; fragrances in this class, including perfumes, colognes, essences and essential oils.

5.    Pursuant to s 92(3) of the Trade Marks Act 1995 (Cth), the Registrar of Trade Marks be directed to remove the following goods in class 3 from the registration of Trade Mark Registration No 1375954 (the Second Trade Mark):

shaving preparations, shaving creams and soaps, after shave creams and lotions.

6.    The cross-claimants’ Notice of Cross-Claim filed 15 September 2015 be otherwise dismissed, save for the question of costs.

7.    Within five (5) business days, the applicant serve a copy of these orders on the Registrar of Trade Marks.

8.    The time for any application for leave to appeal from any of these orders be extended pursuant to r 35.13(b) of the Federal Court Rules 2011 (Cth) to 4.00 pm on 21 September 2017.

9.    The exhibits be returned to the parties 28 days after the final disposition of the proceedings, including applications for leave or special leave to appeal and any appeals.

10.    Within 28 days the applicant file and serve submissions in relation to costs.

11.    Within 14 days thereafter the respondents file and serve their submissions in response.

12.    Any submissions in reply be filed and served 7 days later.

13.    Pursuant to s 37AF(1) of the Federal Court of Australia Act 1976 (Cth), in order to prevent prejudice to the proper administration of justice, until further order the following information not be published or disclosed to any person apart from the parties and their lawyers:

(a)    The numbers and amount referred to in [363];

(b)    The amount referred to in [364];

(c)    The percentages referred to in [472] and [473];

(d)    All words after “Oval Cushion Brush” in the second sentence, and all words after “Radial Brushes” in the third sentence of [569];

(e)    The amounts mentioned in the first sentence and the percentage referred to in the second sentence of [570]; and

(f)    The amounts referred to in the second sentence of [571].

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

Schedule

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    The decision of the Registrar given by her delegate on 9 October 2015 be set aside.

3.    The respondent’s notice of opposition to the applicant’s Australian trade mark application no. 1463962 be dismissed.

4.    The applicant’s trade mark, moroccanoil, proceed to registration.

5.    The respondent pay the applicant’s costs of the appeal and of the opposition proceeding below.

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

REASONS FOR JUDGMENT

Table of contents

1    “Like brands, only cheaper” is both an advertising slogan used by the German supermarket giant, Aldi, and its business model. This proceeding brings these business practices into sharp focus, as its genesis lies in concerns that some of Aldi’s products are not just “like brands” but deceptively like a particular brand and so contravene Australian trade mark and consumer protection laws. That brand is Moroccanoil.

2    The focus of the case is on both the labelling and get-up of Aldi’s “Moroccan Argan Oil” hair care products, brushes and tools, each of which contains some amount of argan oil. Argan oil is the oil extracted from the nut of the argan tree, a tree native to Morocco, which has apparently been used for centuries by Moroccan women as a hair and beauty product. It is reputedly rich in antioxidants, essential fatty acids, and vitamin E.

BACKGROUND

3    Some years ago two enterprising Israelis established a business selling a product containing argan oil under the sign “Moroccan Oil”.

4    In 2006, on a visit to a hairdressing salon in Israel, a Canadian tourist, Carmen Tal, received a hair treatment with a product called “Moroccan Oil”. Ms Tal was so taken with the product that she purchased all the bottles in the salon and began to distribute it in North America. She later acquired the worldwide rights to the product, including exclusive distribution, manufacturing, customer information, goodwill, and intellectual property. “Moroccan Oil” became “Moroccanoil”, the trade dress was redesigned, and the product took off like wildfire. In October 2007 a new company — Moroccanoil Israel Ltd (MIL) — was incorporated, and a range of hair care and beauty products became available for sale in a number of countries under the brand name moroccanoil. MIL’s hair care products, including an oil treatment, shampoo and conditioner, were launched in Australia in September 2009.

5    The business has been remarkably successful. moroccanoil hair care products are currently offered for sale in almost 80 countries. In over 20 of those countries MIL has expanded its line into skin care. In the wake of its success a number of other companies began selling hair and beauty products containing argan oil. Amongst them are the respondents (Aldi). Aldi sells a range of hair care products under the name “Moroccan Argan Oil”. Each of those products is also branded “protane® naturals” (protane naturals) or visage® (visage). MIL sued Aldi, contending that by its use of the “Moroccan Argan Oil” sign Aldi has infringed MIL’s registered trade marks, engaged in misleading or deceptive conduct in contravention of the Australian Consumer Law, contained in Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL), and is liable in tort for passing off. Aldi denied the allegations and retaliated with a cross-claim seeking the cancellation of the MIL trade marks.

6    The MIL registered marks are composite marks. The word mark moroccanoil is not registered in Australia. On 7 December 2011 MIL applied to the Registrar of Trade Marks to have the word mark registered but its application was unsuccessful. MIL appealed and the appeal was heard together with MIL’s trade mark infringement/ACL/passing off application.

7    I shall deal first with the trade marks infringement case and cross-claim, then the ACL and passing off case, and finally the appeal. But before doing so, it is necessary to set out some salient facts.

THE FACTS

8    Some of the facts are agreed, some are not in dispute. Unless otherwise indicated, the summary below is uncontroversial.

The MIL Business

9    MIL is an Israeli company. Since about late 2007, it has produced and sold hair care products in Israel, and, through distributors, in various other countries including Australia. In Australia sales of MIL products are effected exclusively through Privity Pty Ltd, trading as Haircare Australia. As at the time of the hearing the products were distributed to approximately 4,012 accounts. As at 21 August 2015 there were 24 active authorised online resellers in Australia.

10    MIL’s products have been marketed and advertised in Australia by various means including: since about January 2013, through MIL’s websites (www.moroccanoil.com and www.moroccanoil.com/australia); since about July 2012, on MIL’s Facebook page; by press releases sent by email to subscribers; in print and online media publications; and in editorial articles in print and online media publications. Publications in which advertisements have been placed in Australia and overseas include: Vogue, Instyle, Harper’s Bazaar, Elle, Russh, Marie Claire and L’Officiel.

The MIL Trade Marks

11    MIL is the registered proprietor of two Australian trade marks. The First Trade Mark bears the registration number 1221017. It has a priority date of 24 January 2008. It looks like this:

12    The Second Trade Mark bears the registered number 1375954. It has a priority date of 4 August 2010. It looks like this:

13    Both the First and Second Trade Marks are registered in class 3 in relation to the following goods:

Hair care products, including oil, mask, moisture cream, curly hair moisture cream, curly hair mask, curly and damaged hair mask, rassoul mask, argan and saffron shampoo, hair loss shampoo, dandruff shampoo, dry hair shampoo, hair loss ampoules, dandruff ampoules, gel, glisten spray, mousse, conditioner, hair spray; skin care products in this class; skin cleansers; skin toners; skin moisturizers; anti-aging cream; eye cream; beauty masks; body creams; hand creams; non-medicated foot cream; eye makeup; foundation makeup; lip liner, lipsticks and lip balms; eyeliners; blushes; eye shadow; nail enamels; toiletries and cosmetics including shaving preparations, shaving creams and soaps, after shave creams and lotions, body massage creams and oils, soaps, bath oils and shower gels, talcum powders; antiperspirants; dentifrices; sunscreen and suntan oils and creams; fragrances in this class, including perfumes, colognes, essences and essential oils.

(Emphasis added.)

14    In the period between their respective filing dates and 15 August 2015, however, MIL did not use either the First Trade Mark or the Second Trade Mark in respect of any of the goods emphasised in the previous paragraph.

15    On 7 December 2011 MIL filed an application to register the word mark moroccanoil (the Third Trade Mark).

16    The application was made in class 3 in relation, amongst other goods, to:

Hair care products, including oil, mask, moisture cream, curly hair moisture cream, curly hair mask, curly and damaged hair mask, argan and saffron shampoo, hair loss shampoo, dandruff shampoo, dry hair shampoo, gel, mousse, conditioner and hair spray.

17    The Third Trade Mark was accepted for possible registration in respect of the above-listed goods and the official notice of acceptance was published in the Australian Official Journal of Trade Marks on 18 October 2012.

18    On 16 January 2013 Aldi filed a notice of opposition.

19    On 9 October 2015, a delegate of the Registrar of Trade Marks refused the application on the basis that the ground of opposition under s 41 of the Trade Marks Act 1995 (Cth) was established. In short, he found that the Third Trade Mark, which I shall generally refer to as the word mark, was a sign that was not inherently adapted to distinguish MIL’s goods and was not otherwise registrable under s 41(6).

20    MIL filed a notice of appeal on 29 October 2015.

MIL’s Get-Up

21    “Get-up” refers to the style, appearance and trade dress of goods. In JB Williams Co v H Bronnley & Co Ltd (1909) 26 RPC 765 at 773 (CA), Fletcher Moulton LJ defined the get-up of an article as “a capricious addition to the article itself”. It includes colours, shapes, and packaging.

22    MIL asserted, and I accept, that the get-up of its product and packaging is distinctive. In its own words, it “includes the predominant use of turquoise blue with white writing and a prominent letter M in orange on the product labelling and packaging”, featuring, in the case of its hair care products, one or both of the First and Second Trade Marks, and, in the case of its moroccanoil Treatment (MIL Oil Treatment), dark brown glass bottles (described in submissions as “apothecary-style”).

23    The table below depicts the get-up of the MIL Oil Treatment from 2010 until the time of the hearing.

Table 1: MIL Oil Treatment

24    Images of the other MIL products currently sold in Australia are displayed in Annexure A to these reasons. Descriptions of the products appear in Annexure B.

The Aldi business

25    The two respondents are, respectively, the general and limited partners of the Aldi stores (the Aldi Partnership). The Aldi Partnership is the partnership through which Aldi conducts its business in the Australian market.

26    From about 26 September 2012, the Aldi Partnership has periodically offered for sale and sold in Australia hair care products depicted in the tables in paragraphs 29, 30, 34, and 35 below (collectively, the Aldi Product Range). Images of the products in the Aldi Product Range also appear in Annexure A to these reasons, and descriptions of the products appear in Annexure B.

27    With two exceptions, all products in the Aldi Product Range were sold in “Special Buy” promotions. Special Buy products are heavily discounted. They are offered for sale for a limited time on the basis of limited stock and are sold until stock runs out. They are displayed for sale in a dedicated Special Buy area located in the central section of each Aldi store in what one of Aldi’s witnesses described as “the wire cage section”.

28    At all material times the vast majority of products sold in Aldi stores have been Aldi exclusive brand products. As at 30 October 2013, around 8.4% of the core and seasonal goods offered for sale in Aldi stores across Australia did not fall into that category. Twelve months later, the figure was slightly larger at 8.99%. By 30 October 2015, it had risen to 9.45%.

Aldi’s Get-Up

29    From about 26 September 2012, the Aldi Partnership has periodically offered for sale and sold in Australia a hair treatment product containing argan oil (the Aldi Oil Treatment). The table below depicts the variants of the packaging for this product. The product was offered for sale (and sold) in a number of “Special Buy” promotions commencing on the dates indicated in the table.

Table 2: Aldi Oil Treatment

30    The next table depicts the variants of the packaging for other products in the range as sold in the Special Buy promotions commencing on the dates indicated.

Table 3: PROTANE NATURALS Product Range

31    The products depicted in the above tables are goods in respect of which the First and Second Trade Marks are registered.

32    From 10 April 2015 to approximately 8 December 2015 the protane naturals Moroccan Argan Oil Shampoo and Conditioner were sold as part of Aldi’s “core range” in the following packaging:

33    Core range products are available for sale every day and are regularly stocked in Aldi stores. The Shampoo and Conditioner were sold on shelves in the health and beauty sections, usually on the back wall of the store.

34    The table below depicts the hair brushes included in the Aldi Product Range (Aldi Hair Brushes). Each of these products was sold in the Special Buy promotions commencing on the dates indicated.

Table Four: Aldi Hair Brushes

35    The next table depicts the Hair Dryer, Hair Straightener and Hair Curler forming part of the Aldi Product Range (Aldi Hair Tools). Each of these products was offered for sale in the Special Buy promotions beginning on the dates indicated.

Table 5: Aldi Hair Tools

36    As at 15 September 2015 the Aldi Oil Treatment was being sold in 374 Aldi stores in metropolitan and regional centres of New South Wales, the Australian Capital Territory, Queensland, and Victoria.

37    Items from the Aldi Product Range have been advertised in a variety of ways: through catalogues in the case of its Special Buy promotions; on the Aldi website at the domain name aldi.com.au; in newsletters; on Aldi’s Facebook page during the period from 31 December 2013 to 23 September 2014; and in NSW, on 23 and 24 April 2015, in a television commercial.

38    The catalogues were distributed to members of the Australian public through Aldi’s stores and delivered to homes in the above-mentioned States and Territories. Each month in the period from July 2013 to September 2015 the Aldi website received between about 900,000 and 1.5 million visits from Australian IP addresses. The newsletters were sent by email to consumers who subscribed to a mailing list via the Aldi website or microsites operated by Aldi for limited promotional periods in connection with the respective Special Buy promotion(s) in which they were sold. As at December 2015 there were approximately 295,000 consumers on the Aldi website mailing list.

39    On 8 December 2015, however, the protane naturals Moroccan Argan Oil Shampoo and Conditioner were replaced by shampoo and conditioner labelled “protane naturals Argan Oil of Morocco”. By January 2016 Aldi had substituted the name “Argan Oil of Morocco” for “Moroccan Argan Oil” on all of the products in the range and, with the exception of the shampoo, also changed the colour of the packaging.

The development of the Aldi Product Range

40    Evidence about the development of the Aldi Product Range was given on Aldi’s behalf by Meagan Spinks.

41    Ms Spinks began working for Aldi in July 2011. She was employed as a buying assistant in the Corporate Buying Department under the supervision of Deborah Heng, the buying director. Ms Spinks was responsible, among other things, for hair care products. In that role she assisted in the development of new products.

42    Ms Spinks said that, once “a new and interesting trend” is identified, she seeks out what “other competitor products” are available on the market that are part of the trend. She said that in her experience Aldi’s practice was to introduce its own “version” of a product in “an on-trend product category”. In developing “Aldi versions” of these products, the packaging used by competitors is considered in order to ensure that the Aldi “house brand” packaging was “consistent with” the trend. As part of this process, a “benchmark” product is selected from a range of “on-trend products”. The purpose of identifying a benchmark, Ms Spinks explained, is to enable Aldi to identify “cues” that customers may associate with “the product type generally” and then adapt them. In cross-examination she clarified that by cues she meant colour; wording associated with the benchmark product, including product description; claims of benefits associated with the product; and packaging. Ms Spinks was at pains to point out that, when undertaking that process herself, she “consciously set out to ensure that the product being developed is dissimilar to the benchmark product as a brand”. In this respect she adverted to the prominent use of the Aldi brand name protane. The object of the exercise, she said, was to ensure that the Aldi product was consistent with Aldi’s “main ‘pitch’ to its customers”, captured in its advertising slogan: “Like Brands. Only Cheaper”.

43    According to Ms Spinks, this was the process deployed in the development of the Aldi Product Range.

44    By mid to late 2011 Ms Spinks concluded that health and beauty products containing argan oil were “on trend”. At the time, she said that the following products containing argan oil were available in Australia:

    Organix Moroccan Argan Oil, Shampoo and Conditioner (and possibly other products in the Organix range);

    MIL’s moroccanoil products, including at least the MIL Oil Treatment, Shampoo and Conditioner;

    Pure Oil of Marrakesh;

    Dontay Aria Argan Gold range of products, including at least an oil treatment, shampoo and conditioner;

    Maijan Moroccan Argan Oil;

    One & Only Argan Oil treatment by Babyliss;

    Showpony Moroccan Argan Oil;

    NAK Aromas Oil, including at least an oil treatment, shampoo and conditioner;

    BabylissPro, including at least an oil treatment, shampoo and conditioner; and

    Lee Stafford ArganOil of Morocco.

45    This evidence was not contested and I accept it. In cross-examination, Ms Spinks acknowledged that the MIL Oil Treatment was the market leader in oil treatment products.

46    It is not clear that Ms Spinks was aware of all these products at the time Aldi developed the Aldi Product Range. What is clear is that she was aware at that time of MIL’s products and of the Organix range. She said she had used both the MIL Oil Treatment and the Organix range before her marriage in 2010 and had seen MIL products in magazines and hairdressing salons, sometimes in the windows of the salons.

47    By late October or early November 2011 Ms Heng instructed Ms Spinks to proceed with the development of a range of argan oil hair care products to be sold under the protane naturals brand. To this end Ms Spinks contacted a number of Aldi’s suppliers and invited them to submit proposals for a number of products including a “Moroccan oil ALDI Private Label Protane” product. She received several responses and, in consultation with Ms Heng, settled on one in particular.

48    Ms Spinks then set about preparing product advice statements and arranged for the development of the packaging and labelling. In settling on the artwork for the Aldi products, however, she said that she was concerned to ensure that they looked “sufficiently different”. She deposed that her preferred option answered that description. She nominated 11 points of difference in particular:

(1)    the prominent M and the name moroccanoil appearing in white in a vertical position on the MIL product;

(2)    the rectangular label on the MIL product in contrast to the “semi-circular top” on the Aldi label;

(3)    the presence of the protane logo on the Aldi product, indicating a different brand;

(4)    differences in the layout of the text on the labels: all horizontal on the Aldi label and a mixture of vertical and horizontal on the MIL label;

(5)    the greater prominence on the MIL label of the word moroccanoil in comparison to the phrase “Moroccan Argan Oil” on the Aldi label;

(6)    differences in the respective fonts;

(7)    the use of ticks instead of bullet points on the Aldi label;

(8)    the use of black and white in the marketing text on the MIL label in contrast to the use of black only in the text on the Aldi label;

(9)    the use of a sticker joining the lid to the bottle on the MIL product;

(10)    the fact that the Aldi product was to be sold with a pump attached whereas the pump for the MIL product was separate; and

(11)    MIL’s use of a glass bottle when the Aldi product was to be sold in a plastic bottle.

49    Ms Spinks suggested that the phrase “Moroccan Argan Oil” be in lower case (including the “M”) “so that it is not the same as the brand” in order to avoid “legal issues”, although she frankly acknowledged in her affidavit that she did not regard the change of case to be “all that significant”. In the first and second versions of the Aldi Oil Treatment the phrase appeared in this way but in the third and fourth versions of the product upper case letters were deployed and an oil drop was substituted for the first “o” in “Moroccan” and the “o” in “Oil”.

50    Ms Spinks also said that when the colour choice was made, the colour selected was different from the colour in the get-up of the MIL Oil Treatment.

51    In cross-examination Ms Spinks agreed that Aldi’s policy objective was “to match the clear market leader in quality attributes including size and packaging design cues”. Ms Spinks said that it was her intention to replicate the benchmark product but in a way that would distinguish the Aldi product. She said that her rule of thumb was to have “at least 10 points of difference”. She said that her intention was to make the Aldi product look like other products but not exactly like them. Her aim, she claimed, was to ensure that, if the Aldi product was sitting side by side on a shelf with the MIL product, you could tell them apart — notwithstanding that the products are never sold in that way. This was presumably the “sufficient difference” to which she referred in her affidavit.

52    Little evidence was given about the development of the appliances. Ms Spinks said that this was outside her area of responsibility and within the portfolio of another buying director, Chris Raju. She said that Ms Heng told her in about 2013 that she had spoken to Mr Raju, he said that “he could do a range of heated hair styling tools which have argan oil infused in them” and that it would be a good idea to have them sold together with protane naturals Moroccan Argan Oil products in the same Special Buy promotion. She asked Ms Spinks to help Mr Raju’s buying assistants to source the oil and to send her a copy of the latest artwork for use in their products. Ms Spinks said that she provided the assistant with some examples of the artwork for the packaging for the “Protane Oil Range” but nothing more.

53    No evidence was given by either Ms Heng or Mr Raju, and Aldi offered no explanation for their absence. Ms Spinks testified that Ms Heng was alive and well and living in Sydney. I infer that nothing either of them could say would have assisted Aldi’s case.

Consumer complaints

54    Daniel Gavin Baker, Aldi’s Quality Assurance and Corporate Responsibility Director, gave evidence about Aldi’s electronic record of “feedback” received from customers. Mr Baker deposed that he had reviewed the database at the request of Aldi’s solicitors to see if there was any record indicating that a consumer had confused or otherwise associated any product in the “Moroccan Argan Oil” line with products sold by MIL under the moroccanoil brand. In fact, he delegated that task to the Customer Department Manager, Rania Faraq, who produced a report, which was annexed to Mr Baker’s affidavit. The report showed that there was none. Mr Baker was not required for cross-examination and there is no reason to disbelieve him. Indeed, MIL accepted his evidence. Accordingly, I find that from the time Aldi launched the Aldi Product Range until April 2016, when Mr Baker’s affidavit was filed, Aldi did not receive a single report that a customer had confused any of the products in the range with any MIL product.

55    MIL, on the other hand, adduced evidence from a number of witnesses of apparent “confusion”.

56    Evidence of “confusion” was given by three MIL employees: Violet Sainsbury, MIL’s International Education Manager in the Asia Pacific; Abbie Williamson, an International Brand Manager for MIL; and Kayla Juhasz, MIL’s Director of Brand Managers International and former Brand Manager for Australia and New Zealand. Evidence of this kind was also given by three hair stylists: Nicole Abela, Orla Fogarty, and Courtney Jane Spreen.

57    Further evidence was also given by two employees of Haircare Australia, the sole distributor of MIL products in Australia. They included the NSW State Manager, Thierry Fayard, and a sales representative, Christopher Clegg.

58    Direct evidence of apparent confusion, if not deception, was led from one Mony Royds, a mother of young children, who described an episode when she purchased the Aldi Oil Treatment and Shampoo, claiming to have mistaken them for MIL’s products.

59    Ms Sainsbury reported that from the time she started working for MIL in 2012 and, in particular, during the period from 2012 to the end of 2014 when she was conducting in-salon education, she became aware of “many instances” of consumers mentioning that they had purchased “the MOROCCAN ARGAN OIL Products” from an Aldi supermarket. She was unable to recall any details, however, except for one occasion when she was setting up for an in-salon education class. On that occasion, Ms Sainsbury said, a client of the salon said to her as she was leaving: “Oh, I saw Moroccanoil at Aldi”. Ms Sainsbury disabused her, assuring her that “the MOROCCANOIL Products are not sold at supermarkets”.

60    Mr Fayard deposed that in September 2012 one of Haircare Australia’s customers telephoned to complain that clients had seen the MIL Oil Treatment advertised at Aldi at a cheaper price. Mr Fayard did not keep a record of the conversation and could not recall the identity of the caller. Although he handled inquiries from between 500 and 600 salons, had no record of the conversation, and could not recall the caller’s identity, he said that he recalled a conversation to the following effect:

Caller:    “Thierry, I am very disappointed. I have been told by clients of mine that they have seen the MOROCCANOIL Treatment product advertised at Aldi at a cheaper price. If you are going to supply Aldi with the MOROCCANOIL Treatment product, I don't want to deal with your company anymore.”

Fayard:    “Hold on. I can guarantee you that we aren't supplying Aldi with the MOROCCANOIL Treatment product. Let me look in to this for you. I will get back to you as soon as I can.”

61    Mr Fayard also said that, within about a month of that call, he received similar complaints from “four or five other customers” in NSW and that “10 to 20” salon owners or employees complained to him about the Aldi Oil Treatment at around the time they were offered for sale as “Special Buys” at Aldi stores in the State. Once again, however, he was unable to recall the names of the people or their businesses.

62    On 11 May 2013 a post appeared on the website www.productreview.com.au concerning the MIL Moisture Repair Shampoo. It read:

This is a great shampoo & conditioner & if you are lucky enough to get it when it is in special at Aldi’s, grab plenty. It is a real bargain. I got some today & should keep me going until the next catalogue. It really does make a difference to you hair, but I couldn’t afford to pay the top dollars. Aldi’s is the same product but quarter then price. Thanks Aldi.

+ It makes my hair feel thick and shiny

63    Mr Clegg, a sales representative at Haircare Australia, visited the Evolve Salon between July and September 2013. Mr Clegg deposed to speaking there with Nerina Schiliro, the mother of the owner of the salon, who told him that they had not been selling many Moroccanoil products recently because Aldi was selling them at a much cheaper price. When Mr Clegg remonstrated with her that Aldi did not sell Moroccanoil products, she insisted that it did, telling him that a customer had told her that she had bought the MIL Oil Treatment from Aldi.

64    In April 2014 after being shown the full range of MIL products at the Zowie Evans Hairdressing salon in Melbourne, a client of Courtney Spreen reported seeing Moroccanoil products at Aldi.

65    Three months later, in July 2014, a client of the salon “Stylize Professional Haircut and Colour” in Little Lonsdale Street in Melbourne, told Abbie Williamson that she had recently bought products in Aldi that “look like MOROCCANOIL products”.

66    Between 15 and 17 July 2014 five salon owners or employees in regional Victoria reported to Ms Williamson that they had clients who told them they had purchased the MIL Oil Treatment from Aldi stores. Consequently, she visited five Aldi stores in Melbourne and purchased some of its Moroccan Argan Oil products. On or about 17 July 2014 she emailed Sarah Linder (of MIL) in Israel, notifying her of these conversations and of her purchases.

67    The following year, in May 2015, during the Sydney Fashion Weekend, which curiously ran for four days, Ms Williamson said that she was told by “at least three clients a day” that they had either bought from Aldi or had seen in Aldi stores, the MIL products, in particular, the MIL Oil Treatment, but also the MIL Shampoo, Conditioner and Mask. Ms Williamson deposed that the conversations were to the following effect:

Comment #1: “I have definitely bought this at Aldi.”

Comment #2:    “What I bought from Aldi has the same colour blue packaging and dark brown bottle.”

Comment #3: “They look the same.”

Comment #4:    “I didn't know that the MOROCCANOIL Product was available in Aldi until I saw it when I was shopping there recently.”

Comment #5: “Your products are cheaper in Aldi.”

68    Ms Williamson not only disabused these “clients” but encouraged them to photograph the MIL products so that they knew exactly what to look for when they were in a salon.

69    Other MIL employees had similar experiences at the same event.

70    At least five women at this event told Nicole Abela, who was working at the MIL booth (known as the “Moroccanoil Styling Suite”), that they had purchased or seen certain MIL products at Aldi stores.

71    On 16 May 2015 Courtney Spreen, who was also working in the Moroccanoil Styling Suite, asked a woman in her mid-20s whose hair she was styling whether she had used the MIL Oil Treatment before, the woman replied: “Yes, I used to get that from Aldi”.

72    The same day, Kayla Juhasz had a conversation in the Moroccanoil Styling Suite with a woman who insisted that she had purchased both the MIL Oil Treatment and the MIL mask from Aldi and that during the conversation the woman was pointing to those products on the display stand. That conversation was to the following effect:

Ms Juhasz:     “Hi, my name is Kayla. Have you heard of MOROCCANOIL?”

Woman #1:     “Yes, I've got MOROCCANOIL.”

Ms Juhasz:     “Great. Where is the salon you buy it from?”

Woman #1:     “No, I buy it from Aldi.”

Ms Juhasz:     “MOROCCANOIL Products are only available for sale at salons and are not available for sale at Aldi. If you like, I can provide you with a toll free number to assist you to locate your nearest MOROCCANOIL stockist. Can I ask you which products you purchased?”

Woman #1:     “I'm sure that I bought the products from Aldi. I bought the oil and the Mask as well. I bought it for my daughter, she absolutely loves it.”

73    Ms Juhasz said that she also had a conversation with another woman who told her that she bought her daughter the MIL Oil Treatment. Ms Juhasz said that she pointed out the MIL Oil Treatment to the woman’s daughter who told her that it had been recommended by her hairdresser and that she had it at home: “it’s the same brown bottle”. When Ms Juhasz asked where she had bought it, her mother replied that she had bought it at Aldi. When Ms Juhasz told her that the product was not available for sale at Aldi, the mother replied:

Does that mean the one I bought wasn’t the real MOROCCANOIL product? I thought it was a lot cheaper, but thought it must have been on sale.

74    In July 2015 Mony Royds, purchased the Aldi Oil Treatment and Shampoo from Aldi's Leichhardt store believing that they were MIL products.

75    Some time earlier Ms Royds had purchased the MIL Oil Treatment once and used it regularly for a while. She said that she was also aware of other MIL products, including shampoos and conditioners, but had never bought any. One weekend in July 2015, accompanied by her husband and two young children, she was shopping at an Aldi store in Leichhardt, an inner western suburb of Sydney, when she spotted what she believed to be MIL products. She said that the store was “very busy and crowded and difficult to navigate with a trolley”. As she headed towards the section of the store where the toiletry items were displayed, she said she noticed from a distance “a block of turquoise blue products” located just below eye level on one of the shelves. She said she thought immediately of the MIL products and that when she drew closer to the turquoise blue products, she saw the words “Moroccan” and “Oil” on their labels, she concluded that the products on display were the MIL Oil Treatment and a MIL Shampoo. She recognised that the branding and get-up of the products were different, but she thought that the MIL products might have undergone “some rebranding exercise (as brand name products tend to do from time to time) because the shade of blue on the packaging of the products was slightly different from the shade of blue that [she] recalled seeing in the past”. Without any further thought, she put (what she later discovered were) the Aldi Oil Treatment and the Aldi Shampoo into her trolley. She estimated that she spent less than a minute in this part of the store before moving on. She said that she did not recall seeing the prices but assumed that they would be less than the prices of the products in a salon. She paid no attention to the receipt on purchase.

76    Every day for the following two weeks Ms Royds used the Aldi Oil Treatment on her daughter’s hair, still thinking she was using the MIL Oil Treatment. She only realised her mistake two weeks after purchase when she noticed “an unpleasant chemical smell” when using the Aldi Shampoo for the first time. She said:

28    Once I noticed the smell, I inspected the packaging of the Aldi MOROCCAN ARGAN OIL Shampoo product more closely and formed the view that I had not in fact bought a MOROCCANOIL Shampoo product, but a cheaper imitation, which had the words “Protane Naturals” printed on the label.

29    I did not notice the words “Protane Naturals” in the store as the black text of “Protane Naturals” did not jump out at me. The words “MOROCCAN ARGAN OIL” did. The words “Protane Naturals” are also quite small when compared to the words “MOROCCAN ARGAN OIL”. Given the chemical smell of the product, I thought that “Protane” might be a chemical ingredient used in the Aldi MOROCCAN ARGAN OIL Shampoo or a brand name, but did not think much more about it at the time.

30    Once I had realised that I had not purchased a MOROCCANOIL Shampoo Product, I also inspected what I now know to be the MOROCCAN ARGAN OIL Treatment Product more closely. At this point, I realised that the product that I was using in my daughter's hair was not the MOROCCANOIL Original Treatment Product …

77    On 26 August 2015, while Ms Royds was having her hair coloured by Ms Abela at LSG Creative, they had a conversation to the following effect:

[Ms Royds]:    “Nicole, I have been using an argan oil product on my daughter’s hair and it has become ridiculously dry and flaky.”

[Ms Abela]:     “What product have you been using? You know the MOROCCANOIL Products won’t do that.”

[Ms Royds]:    “No, it wasn’t the original, sorry. It was the Aldi version of the MOROCCANOIL Original Treatment Product. I tried to use the oil to detangle the knots in my daughter’s hair and it gave her a really dry scalp.”

[Ms Abela]:     “Well the MOROCCANOIL Products are not sold at Aldi, they are only available for sale at salons.”

[Ms Royds]:    “I’m aware of that now. The blue was almost exactly the same as the MOROCCANOIL Products. It really did look the same on the shelf![”]

[Ms Abela]:     “Alright, don’t throw the product away. I’d actually like to see it. Can I see it when I come to your house next?”

[Ms Royds]:    “I already threw the Aldi MOROCCAN ARGAN OIL Treatment product away. I won’t be using it again. I bought the Aldi MOROCCAN ARGAN OIL shampoo though. I can show it to you when you come around for my birthday party.”

78    The final piece of evidence upon which MIL relies to establish confusion came from Ms Fogarty. On or around 23 September 2015 she was using the MIL Oil Treatment on a client’s hair. When she asked the client whether she had used it before, the client told her she had and that she had bought it from Aldi. Although she had a clear memory of the discussion with the client, she could not identify her and, since the client had not previously attended the salon and had not made an appointment, she had no documents to assist her recollection in this respect.

The expert evidence

79    Expert evidence was adduced in three specialist areas: lexicography, marketing, and industrial chemistry. With the exception of the lexicographers who were prevented by logistical difficulties from doing so, the expert witnesses in each field testified in concurrent session.

80    The two lexicographers, Ghil’ad Zuckermann and Susan Butler, gave evidence touching upon the use of the terms “Moroccanoil” and “Moroccan Oil” as at the priority dates for the three MIL trade marks. A summary of Professor Zuckermann and Ms Butler’s experience and qualifications is set out below at [606] and [607] respectively.

81    Four marketing experts gave evidence about marketing practices and consumer behaviour.

82    MIL adduced evidence from Mr Paul Blanket and Professor Pascale Quester. It would be fair to describe Mr Blanket as a marketing practitioner and Professor Quester as a marketing academic.

83    Mr Blanket is the principal of the company First Impressions Pty Ltd, which, since 1987, has carried on business providing marketing, advertising and promotional consulting services to industry and government. Mr Blanket has a both a Bachelor and a Master of Commerce Degree (Marketing) from the University of New South Wales and completed the University of Melbourne’s Management Program as well as the FCB Advanced Advertising Program in Chicago run by the Massachusetts Institute of Technology (MIT). He is also a Fellow of the Australian Marketing Institute and is a Certified Practising Marketer.

84    Mr Blanket formerly worked as a Group Account Director with the advertising agency Foote, Cone & Belding, and has worked in various marketing positions at Unilever Australia Pty Ltd. He described his work as involving advising on the development of new products and brands or “repositioning” an existing product or brand in a particular market. As part of his commercial experience, Mr Blanket was involved in or commissioned approximately 100 qualitative and quantitative research studies for brands such as British Airways, Vitasoy, Melitta Coffee, New Zealand Natural Ice Cream, Randstad Recruitment, Australian Egg Corporation and Waste Service New South Wales.

85    Mr Blanket is also a lecturer in advertising and marketing at the Macquarie Graduate School of Management, having lectured in various courses since 1992 including “Advertising and Promotions Management” and “Marketing Management”.

86    Professor Quester is the inaugural Professor of Marketing and Head of Discipline (Marketing) in the School of Commerce (now the Adelaide Business School) at the University of Adelaide. She holds a Bachelor of Business Administration from Audencia in Nantes, one of the top three business schools in France, a Master of Arts in Marketing from Ohio State University in the United States of America, and a PhD in Marketing from Massey University in Palmerston North, New Zealand. She is also a Certified Practising Marketer, a Fellow of the Australian Marketing Institute, a Distinguished Fellow of the Australia and New Zealand Academy of Marketing, and Founder of the Franco-Australian Centre for International Research in Marketing.

87    Professor Quester has been employed by the University of Adelaide since at least 1991, initially as a lecturer in marketing in the Graduate School of Management, then senior lecturer and later Associate Professor in Marketing in the School of Commerce, before being appointed in 2002 to her current position. Over the years she has held appointments as a Visiting Professor in a number of universities in France. She has taught various aspects of marketing and a course in consumer behaviour to both undergraduate and postgraduate students. Amongst many publications bearing her name, she is co-author of several leading textbooks on marketing and consumer behaviour. She is the lead author of Consumer Behaviour: Implications for Marketing Strategy, first published in 1994 and now in its 7th edition, and of Marketing: Creating and Delivering Value, first published in 1994 and now in its 5th edition. For a number of years she has been a member of the editorial boards of several marketing journals.

88    In addition to her academic achievements, Professor Questor is the Director of Hexagon, which, since 1997, has carried on business providing to both government and industry consulting services on consumer behaviour, marketing, advertising, and promotion as well as teaching material on consumer behaviour and marketing. From time to time she has also taken on small scale projects advising local firms on their marketing strategy.

89    Aldi led evidence from Jill Klein and John Heath Roberts, both marketing academics.

90    Professor Klein is a Professor of Marketing at the Melbourne Business School, University of Melbourne, and has occupied that chair since 2009. Since 2015 she has spent half her time as a Professorial Fellow at Melbourne Medical School. She is a member of the Association for Consumer Research and the Society for Consumer Psychology. She currently lectures, amongst other things, in advanced consumer behaviour and decision making. She has conducted research in, amongst other things, how people form impressions of other people and products. Professor Klein has published many papers in the area, including in top tier social psychology and marketing journals. Recently, she has conducted research on consumer perceptions of brand labelling on packages to understand how consumers understand a sub-brand label.

91    From 1990 to 1997, Professor Klein was an Assistant Professor of Marketing at Kellogg Graduate School of Management, Northwestern University, then one of the top business schools in the United States of America. During this period she also spent time as a Visiting Professor at various universities in in Australia, the United States, and elsewhere.

92    Professor Klein’s commercial experience includes consulting and executive education with international firms such as Ericsson, AstraZeneca, Servier, Syngenta, Toshiba, Adidas, Clemenger (an advertising agency) and Accenture. Her executive education teaching covers topics such as consumer behaviour and psychology, including brand image, consumer memory, information processing and consumer decision-making.

93    Professor Roberts is Professor of Marketing at the University of New South Wales School of Business. He is also a Fellow of the London Business School, Shanghai’s Fudan University, the Australian Academy of Social Sciences, the Australia and New Zealand Academy of Marketing, the Australian Institute of Management, the Australian Marketing Institute, the Australian Institute of Advertising, and the Australian Market and Social Research Society. He has worked as an academic since 1984 but he also has managerial experience, for example, in marketing, as Market Planning Director of Telecom Australia (now Telstra), then Australia’s largest company, in consulting as founder and Chairman of Marketing Insights (now part of Nielsen Research), and in market research as a Senior Research Officer in the Sampling and Methodology Branch of the Australian Bureau of Statistics. His areas of expertise include branding, forecasting and models of consumer behaviour, quantitative modelling, and marketing practice, including in the area of packaged goods.

94    His work has been recognised and acclaimed in numerous respects.

95    Professor Roberts also has extensive consulting experience for various companies, including IBM, DHL, Cerebos, Philips Electronics, Unilever, Kellogg (notably concerning “leverage points in the consumer decision process”), and MobilCom.

96    MIL led evidence from two industrial chemists, Dr Graeme Haley and Richard Williams. Dr Haley’s evidence went to the second and third ACL claims (the naturals claim and the performance benefits claim). Mr Williams was retained by MIL late in the piece and his evidence was restricted to the Aldi Hair Brushes and Hair Tools.

97    Dr Haley is an industrial chemist with 36 years’ experience in Australia and overseas formulating and manufacturing a wide variety of hair care products, with particular expertise in shampoos, conditioners, treatments, and hair styling products. He has a Bachelor of Science (Honours) majoring in polymer science and a PhD from the University of New South Wales, and a Graduate Diploma in Administration from the University of Technology Sydney. In 1993 he was elected as a Fellow of the Royal Australian Chemical Institute a professional body for chemical scientists in Australia, and he is a member of the Australian Society of Cosmetic Chemists. He is the author of the Australian chapter of the Cosmetic, Toiletry and Fragrance Association International Regulatory Resource Manual (6th ed.) published in 2007.

98    Dr Haley has held various technical positions in companies that formulate and manufacture hair care products, including Beecham Australia Pty Ltd, Rexona Pty Ltd (working on the development of sunsilk and pears hair care products), and various companies associated with Unilever. Today Dr Haley is a director and consultant of Engel, Hellyer & Partners Pty Ltd, a consultancy firm that provides advice and other services to industry bodies in relation, amongst other things, to hair care products and their labelling. Dr Haley is also a member of two committees of Standards Australia, which concern the standardisation of labelling of personal care and hair care products in Australia.

99    Mr Williams has a Bachelor of Science from the University of New South Wales majoring in pure and applied chemistry and a Diploma of Environmental Studies from Macquarie University. While he does not have a PhD, he boasts 46 years’ experience in the hair care industry, most of which involved all aspects of production of hair care products, from concept to marketing. He said that a substantial part of his work as an industrial chemist has required him to use his knowledge and experience in chemical formulation to create hair care products based on a design and marketing brief. He is also a Fellow of the Australian Society of Cosmetic Chemists. From November 2007 until September 2012 he was the Research and Development Manager for NxGen Pharmaceuticals Pty Ltd in Sydney and since then he has been the business director and principal scientist for Cosmopeutics International, a consultancy specialising in the development, regulation and production of high quality cosmetics and beauty therapies, amongst other things. He has also lectured from time to time in cosmetic chemistry, including in the formulation of cosmetic products.

100    Mr Williams formulated approximately 2000 personal care products across his career, of which a third have been hair care products. Approximately 50 of these products contained argan oil, including shampoos, conditioners, and treatment products, and, in early May 2016, when he swore his affidavit, he was in the process of formulating approximately 20 more.

101    Aldi relied on evidence given by Dr Paul Wynn-Hatton. Dr Wynn-Hatton works as a consultant to chemical manufacturing companies, and has experience in providing specialist advice on cosmetic products including hair care products. He has a Bachelor of Science (Honours) and a PhD in organic chemistry from the University of Sydney. Throughout his career he has been a member of the Australian Society of Cosmetic Chemists, the Royal Australian Chemical Institute and the Association of Therapeutic Goods Consultants.

102    Dr Wynn-Hatton’s experience in hair care products began in 1992 when he was employed by Reckitt & Colman. He worked there until 1997 on the review and improvement of the formulations of the Decore range of products. He later worked for a number of other companies including Glaxo Smith Kline, Pax Australia, and Bristol-Myers Squibb, where he worked on developing new claims for the Herbal Essences range of hair care products.

THE APPLICATION TO RELY ON TENDENCY EVIDENCE

103    On 18 May 2016 MIL gave notice under s 97(1) of the Evidence Act 1995 (Cth) of its intention to adduce “evidence of character, reputation, conduct or tendency to prove that the [r]espondents have, or had, a tendency to act in a particular way, or to have a particular state of mind”.

104    Section 97(1) relevantly provides that evidence answering this description is not admissible to prove that a person has or had a tendency to act in a particular way or has a particular state of mind unless:

(a)    the party seeking to adduce the evidence gave reasonable notice in writing to each other party of that intention; and

(b)    the court thinks that the evidence will, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value.

105    Paragraph (1)(a) does not apply in the circumstances set out in subs (2), but it is not suggested that any of those circumstances obtains here.

106    If the evidence is not admissible to prove the alleged tendency, then it cannot be used to prove it, even if it is relevant for another purpose: Evidence Act, s 95.

107    The rule in s 97(1), known as “the tendency rule”, does not apply to evidence that relates only to the credit of a witness. Nor does it apply to evidence of the character, reputation or conduct of a person or to a tendency that a person has or had if that character, reputation, conduct or tendency is a fact in issue: see s 94. But MIL did not submit that the evidence answered any of these descriptions.

108    The High Court explained in IMM v The Queen (2016) 257 CLR 300 at [45]:

The use of the term “probative value” and the word “extent” in its definition rest upon the premise that relevant evidence can rationally affect the assessment of the probability of the existence of a fact in issue to different degrees. Taken by itself, the evidence may, if accepted, support an inference to a high degree of probability that the fact in issue exists. On the other hand, it may only, as in the case of circumstantial evidence, strengthen that inference, when considered in conjunction with other evidence.

109    The evidence in question is contained in annexure PJD-100 to the affidavit of Paul James Dimitriadis, one of MIL’s solicitors, affirmed on 24 December 2015. It consists of photographs of a number of Aldi’s “house brand” products alongside well-known brands, purchased from other supermarkets, which the Aldi products are said to closely resemble.

110    Aldi objected to the evidence. It contended that it was not given reasonable notice of MIL’s intention and that the evidence lacks significant probative value. Alternatively, it invited the Court to exercise its discretion to reject it because of the danger that its probative value is substantially outweighed by the danger that it might be unfairly prejudicial, be misleading or confusing, or cause or result in undue waste of time (see s 135). The parties did not seek a ruling at the time the evidence was adduced and were content for the matter to be dealt with in the judgment.

The alleged tendency

111    The tendency sought to be proved by this evidence was described in MIL’s notice as follows:

[Aldi] adopt and implement policies and strategies, and engage in consequential conduct, by which they copy, for use on Aldi house brand products, elements of the get-up of Third Party Branded Products, and, further or alternatively, do so intending that consumers will be attracted to purchasing the Aldi house brand products by the presence of similar diagnostic cues to those that make the Third Party Branded Products attractive to the same consumers.

(Emphasis added.)

112    In written submissions, however, MIL put the matter somewhat differently. Now, the evidence was said to be “a link in the process of proving that Aldi deliberately copied the get-up including trade marks of MIL’s branded products and/or it did so because those branded products had a reputation”.

113    Necessarily, this means that MIL’s contention is that the evidence in question would support a finding that:

(a)    Aldi has a tendency to copy elements of the get-up of other brands;

(b)    because of that tendency, it is more likely that it copied elements of MIL’s get-up on the products the subject of the proceeding; and/or

(c)    Aldi’s purpose was to appropriate or capitalise on the reputation of the other brands.

Did MIL give Aldi reasonable notice of its intention?

114    In contrast to the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), the Federal Court Rules 2011 (Cth) merely prescribe the form of the notice; they do not prescribe what constitutes reasonable notice. Some guidance might come, however, from the NSW position. There, notice must be given 21 days before the proceeding is fixed for trial: see UCPR, r 31.5.

115    The evidence in question was served in December 2015. On 10 May 2016 Aldi notified MIL that it would object to the Court receiving it. It appears that this was the trigger for the issue of the tendency notice for it was eight days later, on 18 May 2016, that the notice was sent. This was months after the time had expired for Aldi to serve its evidence, 12 working days before the trial was due to start, five months after MIL had filed and served its evidence in chief, three months after it served its evidence in reply, and 9 months after the proceeding was fixed for trial.

116    In my view the notice was not reasonable. It should have been given at the latest when MIL served Mr Dimitriadis’ evidence. That would have given Aldi a reasonable opportunity to investigate the allegation, interview relevant witnesses, and file evidence. In the absence of any indication as to the use to which MIL intended to put annexure PJD-100, it was no answer for MIL to say, as it did, that Aldi had been in possession of the evidence for six months. The evidence was prima facie inadmissible.

117    Furthermore, the notice itself was inadequate. A properly drafted notice should “explicitly identify the tendency sought to be proved” (Gardiner v R (2006) 162 A Crim R 233 at [128] per Simpson J), outline the specific conduct and its circumstances, and enable the party whose conduct is in question to meet the evidence: Martin v New South Wales [2002] NSWCA 337 at [91] (Giles JA). The description of the tendency in the notice lacked the necessary degree of specificity. As Aldi submitted, it did not clearly identify that MIL intended to argue that Aldi deliberately copied third party get-up on the basis suggested in MIL’s written submissions, namely, with the intention of appropriating the reputation of other brands or misleading consumers. Neither, I might add, did it identify the fact or facts in issue to which the evidence was said to relate.

118    For this reason alone I consider that annexure PJD-100 should not be admitted.

Does the evidence have significant probative value?

119    No evidence is admissible unless it is relevant (Evidence Act, s 56). Evidence is not relevant unless, if it were accepted, it could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding (s 55).

120    The first task then is to identify the fact or facts in issue which the evidence has been adduced to prove.

121    MIL pointed to the allegations made in the current pleading that:

    in adopting the sign “Moroccan Argan Oil” used on or in relation to each of the allegedly infringing products, Aldi “deliberately copied” the moroccanoil sign and/or one or both of its two registered trade marks;

    the get-up of the Aldi Oil Treatment and the box in which it was packaged were both “deliberately copied” from the MIL counterpart;

    the get-up of all of the products in the Aldi Product Range was “deliberately copied” from the get-up of the MIL products; and that

    in each case Aldi acted in this way for the purpose of appropriating part of MIL’s trade or reputation or that of the authorised distributors and resellers of the MIL products; and

    Aldi “flagrantly” infringed the MIL trade marks.

122    Each of these matters is denied. It follows that each is a fact in issue.

123    I accept that evidence that Aldi has a tendency to copy the get-up of other successful brands in order to appropriate part of their trade or reputation would at least be indirectly relevant to the question of whether it copied MIL’s get-up. If evidence that has been or will be given shows that Aldi copied the get-up of other well-known brands, that could rationally affect the assessment of the probability that it copied MIL’s. While there is no direct evidence in any of these other cases of “deliberate copying”, the similarity in the appearance of each of the 13 Aldi products and its respective third-party branded counterpart might support an inference to this effect. For the inference to be drawn, however, it would be necessary to point to evidence that the third-party branded products came on the market before Aldi’s and to show that the third-party brands had a reputation in the market at the time Aldi copied from them.

124    Evidence was adduced in cross-examination of Ms Spinks that three of the third-party brands — Old El Paso, Garnier Fructis and Lynx — are well-known, but there was no evidence to that effect about the other 10. Be that as it may, I accept that it is common knowledge at least in Sydney, which it is not reasonably open to question, that the other brands (Heinz, SPC, Kellogg’s, Colgate, Palmolive, Sanitarium, CSR, Pantene, Panadol and Arnott’s) are also well-known and well-established brands.

125    The evidence discloses that the first Aldi supermarket in Australia opened in 2001. On the other hand, there is no evidence as to when the third-party branded products came on the market.

126    Similarities in get-up are immaterial to a trade mark infringement claim. For this reason, even if the evidence supports the alleged tendency, the tendency could not be relevant to that claim, let alone be of significant probative value. The alleged tendency however, is, potentially relevant to the first ACL and passing off claims. But is it of significant probative value?

127    “Probative value” refers to the extent to which the evidence could rationally affect the assessment of the probability of the existence of the fact in issue (Evidence Act, Dictionary). “Significant” in the context of the expression “significant probative value” means “important” or “of consequence” though less than “substantial”: R v Lockyer (1996) 89 A Crim R 457 at 459 (Hunt CJ at CL).

128    The assessment of whether the evidence in question has significant probative value involves two considerations: first, the extent to which the evidence supports the alleged tendency and second, the extent to which the tendency is capable of rationally affecting the assessment of the probability of the existence of these facts in issue: see Hughes v R [2017] HCA 20 at [41] (Kiefel CJ, Bell, Keane and Edelman JJ), and [89] (Gageler J).

129    As Aldi submitted, tendency evidence is generally used to prove, “by a process of deduction, that a person acted in a particular way, or had a particular state of mind, on a relevant occasion, when there is no, or inadequate, direct evidence of that conduct or that state of mind on that occasion”: Elomar v R [2014] NSWCCA 303; (2014) 300 FLR 323 at [360]. Here, however, there was direct evidence from Ms Spinks of the development process in relation to the goods in question. The evidence MIL wished to adduce as “tendency evidence” consisted merely of samples and images of other, unrelated products. It did not include any evidence as to how or why the get-up for the particular products was selected. It takes the evidence given by Ms Spinks no further. Consequently I am not persuaded that the evidence in question has significant probative value.

Conclusion

130    For these reasons the evidence is inadmissible to prove either alleged tendency. It is unnecessary in the circumstances to deal with Aldi’s alternative argument.

THE TRADE MARK INFRINGEMENT CASE

131    Section 120 of the Trade Marks Act relevantly provides that:

(1)    A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.

(2)    A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to the trade mark in relation to:

(a)    goods of the same description as that of goods (registered goods) in respect of which the trade mark is registered; …

…

However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion.

132    “Use of a trade mark in relation to goods” is defined in s 7 as “use of the trade mark upon, or in physical or other relation to, the goods”.

133    The parties agree that the Aldi Oil Treatment and the Aldi Product Range (except the Aldi Hair Brushes and Aldi Hair Tools) are goods in respect of which both MIL trade marks are registered.

134    MIL alleges that Aldi has used the sign “Moroccan Argan Oil” as a trade mark upon or in relation to the containers and packaging of the Aldi Product Range, the packaging of the Aldi Hair Tools, and the handle and swing-tag of the Aldi Brushes, that they are used in relation to goods in respect of which the First and Second Trade Marks are registered or in relation to goods of the same description, and that the Aldi marks were deceptively similar to MIL’s two registered marks.

135    The following issues arise for consideration:

(1)    whether Aldi has used the sign “Moroccan Argan Oil” as a trade mark in respect of the relevant products;

(2)    if so, whether that sign is deceptively similar to MIL’s two registered trade marks (or either of them);

(3)    whether the Aldi Hair Brushes and Aldi Hair Tools are goods in respect of which either of the MIL trade marks is registered or goods of the same description as the goods in respect of which either of the MIL trade marks is registered;

(4)    if they are goods of the same description, whether Aldi has established that using the sign as it did is not likely to deceive or cause confusion; and

(5)    if infringement is made out, whether Aldi is liable to pay additional damages under s 126(2) of the Trade Marks Act.

136    It is to those issues that I now turn.

Has Aldi used the sign “Moroccan Argan Oil” as a trade mark?

137    To answer the question it is necessary to begin with the definition of “trade mark” in the Trade Marks Act.

138    A trade mark is defined in s 17 of the Act as “a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person”. “Sign” is broadly defined in s 6 to include “the following or any combination of the following”: “any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent”. It is unarguable that the name “Moroccan Argan Oil” (no matter how it is written) is a sign.

139    It is well established that a sign is used or intended to be used as a trade mark if it is used as a badge of the goods’ origin, that is to say, to denote “a connection in the course of trade between goods and the person who applies the mark to the goods”: E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 at [43], citing Coca-Cola Company v All-Fect Distributors Ltd (1999) 96 FCR 107 at [19]. Aldi contends that it did not use or intend to use the “Moroccan Argan Oil” sign in this way. It claims that the words are descriptive and that descriptive use of a sign is not trade mark use. According to Aldi, the phrase simply refers to oil derived from argan trees grown in, or native to, Morocco. Aldi compared it to “Spanish olive oil” and submitted that the adjectival use of a country’s name in conjunction with a product, ingredient, or other thing, is well known as a matter of ordinary English usage.

140    I accept that the adjectival use of a country name in connection with a product, ingredient, or other thing is well known as a matter of ordinary English usage. I have difficulty, however, accepting that the name “Moroccan argan oil” as used in relation to the Aldi product line is merely descriptive and I consider the analogy with “Spanish olive oil” an imperfect one. A bottle or tin of Spanish olive oil only contains olive oil, whereas “Moroccan Argan Oil” is the label given to a product that contains a combination of several ingredients of which argan oil is but one. That is best illustrated by the Aldi Heat Protection Spray which in the attributes of the product listed below the name states:

•    With Organic Argan Oil to provide shine

141    One would no more describe spaghetti or bread as “flour”, although both are made with flour, or a fruit juice “sugar”, although it contains a good deal of sugar.

142    Ingredients other than colour additives or those in concentrations of less than 1% are required to be listed on a product label in descending order by volume or mass: see Trade Practices (Consumer Product Information Standards) (Cosmetics) Regulations 1991 (Cth), r 5(1) and (2). Careful scrutiny of the list of ingredients on the rear label of the Aldi products reveals that argan oil is the 13th of 30 listed ingredients in the shampoo, 12th in a list of 21 for the conditioner, and 11th in a list of 13 for the hair spray. Even in the case of the Aldi Oil Treatment it is third in a list of seven.

143    Even so, that does not dispose of the question at hand. The answer to the question does not depend on the meaning of the sign; but on the “‘purpose and nature’ of the impugned use”: Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 at 347 (Gummow J), citing Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 426 (Kitto J).

144    The submission that Aldi makes appears to be the same submission that was rejected in Aldi Stores Ltd Partnership v Frito-Lay Trading Company GmbH [2001] FCA 1874; 190 ALR 185 at [23] (Hill J) and [60] (Lindgren J). That case concerned the use of the names “Cheesy Twists” and “Cheese Twists”, which were alleged to be substantially identical with, or deceptively similar to, “Twisties”. Lindgren J observed at [60] that it is “well established that words which, devoid of any context or which in one particular context may be understood to be descriptive, may nonetheless be used as a trade mark”. His Honour pointed out at [62] that, although it has been said that “general laudatory epithets and geographical terms are inherently incapable of ever being used as trade marks” (referring to a number of authorities), “the trend of modern authority seems to be against a priori categorisation”.

145    Attention was also drawn to the importance of context by the Full Court in Nature’s Blend Pty Ltd v Nestlé Australia Ltd [2010] FCAFC 117; (2010) 272 ALR 487 at [19]:

Consideration of the totality of the packaging, including the way in which the words are displayed in relation to the goods and the existence of a label of a clear and dominant brand, are relevant in determining the purpose and nature (or ‘context’) of the impugned words: Johnson & Johnson at 347; Anheuser-Busch, Inc v Budějovický Budvar, Národní Podnik (2002) 56 IPR 182; [2002] FCA 390.

146    No doubt, the circumstance that the sign consists of ordinary English words may be taken into account in deciding whether the use of the sign is use as a trade mark: Johnson & Johnson at 347 (Gummow J). Yet, a sign may be descriptive or contain descriptive elements and still be “a badge of origin”: Johnson & Johnson at 347 (Gummow J) and at 339 (Lockhart J); Nature’s Blend at [19]. As Hill J put it in Frito-Lay at [23], “it is well established that there is no true dichotomy between words capable of being used as a badge of trade origin and words that are descriptive”. In other words, a sign may describe the goods but still be intended to denote a connection in the course of trade between the goods and the person who applied the mark to the goods. This is the point that Dixon CJ made in Mark Foys Ltd v Davies Coop and Co Ltd (the Tub Happy case) (1956) 95 CLR 190 at 194–195 when he said that it was a mistake to ask what the words mean. At 194 his Honour explained:

The fallacy of asking what is the meaning of the phrase lies in the basal assumption that the words are intended to convey some definite meaning and perhaps the further assumption that the meaning has reference to the garments or the cottons. The assumption is fallacious because it overlooks the fact that language is not always used to convey an idea. Many uses of words are purely emotive. A word or words are often employed for no purpose but to evoke in the reader or hearer some feeling, some mood, some mental attitude. This is true of much advertising, which common experience shows to be full of meaningless but emotive expressions supposedly capable of inducing a generally favourable inclination in the almost subconscious thought of the passing auditor or hasty reader. Words put forward as trade marks are very likely indeed to be chosen in the same way.

147    In the light of s 219 of the Act (formerly s 66 of the Trade Marks Act 1955 (Cth) (the 1955 Act)), the nature of the use by the alleged infringer may be considered in the light of evidence concerning usage in the trade. Where the mark is a word mark, the relevant context also includes the way in which the word has been displayed in relation to the goods and in advertisements for the goods. See Johnson & Johnson at 347 (Gummow J).

148    The question is whether, “in the setting in which the [words are used]”, they would appear to the consumer as “possessing the character of … [a brand]” so as to distinguish the Aldi Product Range in the course of trade from the goods of other traders: Shell at 425. Although this question is to be determined objectively, there is authority that the alleged infringer’s intentions are not irrelevant: Lift Shop Pty Ltd v Easy Living Home Elevators Pty Ltd [2014] FCAFC 75; (2014) 311 ALR 207; 106 IPR 419 at [38].

149    MIL claims that Aldi used the sign “Moroccan Argan Oil” as a trade mark in each of the following respects:

    on containers and packaging of the Aldi Product Range in various fonts and colours on a turquoise blue background, both with and without the oil drop graphic;

    on the packaging of the Aldi Hair Tools in white/copper stylised font incorporating the oil drop graphic, on a plain or turquoise background;

    on the Aldi Hair Brushes which carry the stylised sign with oil drop graphic on the handles and the swing-tags;

    on display boxes used at point of sale in stylised font and incorporating the oil drop graphic printed in white text on the front and sides of the boxes;

    in Aldi Catalogues advertising the Aldi Product Range; and

    in promotions for the Aldi Product Range on the Aldi Facebook page and website.

150    Notwithstanding its submission as to the descriptive nature of the sign, Aldi appears to accept that whether it has used or intended to use the sign as a trade mark must be decided having regard to contextual matters. It submitted that the following matters of context should be considered:

(1)    the circumstance that all the products in the Aldi Product Range and the Aldi Hair Brushes also carry the protane trade mark and the Aldi Hair Tools prominently feature the visage trade mark, and that both marks have been used since 2007 as “house brands” in relation to a range of products sold in Aldi stores;

(2)    the fact that the products were sold alongside other protane and visage branded products in Aldi stores and promoted with them in Aldi’s catalogues and television advertisements; and

(3)    the fact that third parties marketing similar hair care products containing argan oil have used the same or a similar descriptor (such as “Argan Oil of Morocco” or “Argan Oil from Morocco”) on their products and that this fact was known to Aldi at the time it developed its product line.

151    None of these matters is persuasive.

152    As to the first two matters, a sign may still be used as a trade mark even if another trade mark is also used on the same packaging or advertisement: Johnson & Johnson at 349 (Gummow J). In Tub Happy, for example, the use by the respondent of the words tub happy was held to be trade mark use although they were used in conjunction with the respondent’s trade mark exacto, as in the phrase “Exacto Cotton Garments – Tub Happy Cotton Fresh Budget Wise”. Aldi’s submission is based on the false premise that, if there is one, albeit frequently used, trade mark on a line of products, then there is no room for another.

153    The third tells us nothing about whether Aldi has used or intended to use the sign “Moroccan Argan Oil” as a trade mark.

154    There was no dispute among the marketing experts that businesses in the hair care market deploy both brands and “sub-brands”. Uncontroversial examples include L’Oréal’s “Elvive”, “Kerastase” and “Professional” sub-brands, Wella’s “System Professional” and “Pro-Series”, and Schwarzkopf’s “Osis” and “Extra Care” sub-brands. But there was disagreement between the marketing experts as to whether the words “Moroccan Argan Oil” would appear to consumers as a brand or sub-brand or product descriptor. Professor Klein said that protane was used as the brand and protane naturals as a sub-brand (although there was evidence from an Aldi employee (Ms Spinks) that both protane and protane naturals were Aldi house brands). The reasons Professor Klein gave were that protane appeared in large font, incorporated a design element, and in “the usual place for a brand name”, that is, at “the top/centre of the bottle”; that it appeared before the words “Moroccan Argan Oil” on the packaging and store signage and also, for the most part, in the catalogues; and that the words “Moroccan Argan Oil” refer to an ingredient. For the same reasons Professor Klein concluded that “Moroccan Argan Oil” was not being used as a brand on the visage products. Mr Roberts considered that “Moroccan Argan Oil” was used to distinguish products containing argan oil from other protane or visage products that do not.

155    I am not impressed by either of these opinions. None of these considerations would necessarily lead to the conclusion that Aldi has not used the words “Moroccan Argan Oil” as a trade mark.

156    First, as I have already observed, in law the fact that a phrase may be descriptive does not mean that its use is not use as a trade mark. In Frito-Lay chazoos was the Aldi house brand but the Full Court held that cheezy twists was used as a trade mark. Hill J concluded at [26] that in that case two trade marks were used, “one a generic word used over a product range and the other used as a badge of origin in respect of a particular product”. In my opinion, that is what happened here. protane is the generic word used for a range of Aldi products. protane naturals is also generic. “Moroccan Argan Oil” is used as a badge of origin for those protane naturals products containing argan oil.

157    Secondly, for the reasons I have already given (at [140]), “Moroccan Argan Oil” is not the name of an ingredient. The ingredient is argan oil, albeit that it may be derived from argan trees grown in, or native to, Morocco. Nor, with the possible exception of the Aldi Oil Treatment, could “Moroccan Argan Oil” be taken as identifying a product. Consumers thinking of buying the Aldi shampoo, conditioner, hair spray, mask, brushes, hair dryers, and straighteners would not do so in the belief that they were buying argan oil.

158    Thirdly, Professor Klein proceeded from the position that there may be only one sub-brand per product. There is no necessary reason why a product can have only one sub-brand. In any case, Professor Klein’s evidence is at odds with the evidence of Ms Spinks that protane naturals is an Aldi brand.

159    Mr Roberts presupposed that there may be only one purpose in the selection of a name. While the name “Moroccan Argan Oil” could distinguish protane and visage products containing argan oil from other such products which do not contain argan oil, that may not be the sole purpose in selecting the name. “Argan oil” would serve that purpose. Neither of Aldi’s experts referred to the oil drop in this context, to the products which carry the sign “Moroccan Argan Oil”, but separately, on the same label, refer to the product as containing argan oil or infused with argan oil, or to the products on which the phrase “Moroccan Argan Oil” appears enclosed in a circle.

160    Taking into account all these matters as well as its appearance, place, size, and prominence on each of the Aldi products, including the tools, I consider that the sign “Moroccan Argan Oil” is being used as a brand and not (or not merely) as a description or allusion to the products’ contents or one of its ingredients.

161    The use of both the name “Moroccan Argan Oil” and the phrases “with organic argan oil” on the front label of the heat protection spray and “contains argan oil” on the front labels of the dry shampoo and the hair spray suggests that the composite expression “Moroccan Argan Oil” is not intended to be a descriptor or at least merely descriptive. Similarly, in the case of each of the visage branded products — the hair straightener, curler, and dryer — the sign “Moroccan Argan Oil” appears as well as the words “Moroccan argan oil infused”, the former carrying the stylised “o’s”, depicted as oil drops.

162    The presence of the oil drop is particularly distinctive. It was plainly intended to mark out Aldi’s products from the products of its competitors. In addition, the two signs “protane naturals” and “Moroccan Argan Oil”, with the oil drop replacing the first “o” in “moroccan” and the “o” in “oil”, both appear on the handles of, and swing tags on, all the Hair Brushes in such a way that I am well satisfied that both would appear to the consumer as possessing the character of a brand. This stylised version of the phrase “Moroccan Argan Oil” was also used on the packaging of the other protane naturals products in versions sold from 24 September 2014, including the oil treatment, shampoo, conditioner, mask, and heat protection spray.

163    Furthermore, the contemporaneous evidence indicates that Aldi, itself, regarded the stylised version of “Moroccan Argan Oil” as a brand. In an email sent to Ms Spinks from the quality assurance assistant, Shae Blizzard, on 4 July 2014 entitled “Moroccan Argan Oil Logo”, she was asked whether it was “our product’s logo” and Ms Spinks confirmed that it was. She also confirmed this in answer to questions in cross-examination.

164    The promotion of the products together, whether in catalogues, online or in stores, reinforces the idea that the sign “Moroccan Argan Oil” has been used to distinguish Aldi’s argan oil product line from similar goods sold by other traders.

165    While the case is stronger when the oil drops are used, I am satisfied that at all material times Aldi has used the sign “Moroccan Argan Oil” as a badge of origin to indicate that its hair care products and appliances are made by or with its authority and to distinguish its range of products and appliances which contain argan oil from other products on the market that also contain argan oil.

Is the sign “Moroccan Argan Oil”, as used, deceptively similar to the MIL registered trade marks?

166    MIL does not complain that “Moroccan Argan Oil” is substantially identical to the MIL registered marks. Its complaint is one of deceptive similarity.

167    One trade mark is taken to be deceptively similar to another if it so nearly resembles the other that it is likely to deceive or cause confusion: Trade Marks Act, s 10. Thus, the question here is whether “Moroccan Argan Oil” has been used in such a way that it is likely to deceive or cause confusion.

168    The legal principles are well established and not in dispute.

169    First, the question of whether a mark is deceptive or likely to deceive is “a jury question”. That is to say it is one for the tribunal of fact and not the expert: Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 at 387 (Gummow J, Black CJ and Lockhart J agreeing at 349) citing General Electric Co (of USA) v General Electric Co Ltd [1972] 1 WLR 729 at 738; [1972] 2 All ER 507 at 515 per Lord Diplock. As Diplock LJ explained in that case, in a passage cited by Gummow J in Interlego at 388 with evident approval, the judge is a potential buyer of the goods and the judge’s approach should be the same as a jury’s, albeit that the judge should be “alert to the danger of allowing [her or] his own idiosyncratic knowledge or temperament to influence [her or] his decision”. His Lordship continued:

That in issues of this kind judges are entitled to give effect to their own opinions as to the likelihood of deception or confusion and, in doing so, are not confined to the evidence of witnesses called at the trial is well established by the decisions of this House itself.

170    Secondly, in contrast to the position when substantial identity is in issue, the marks are not to be compared side by side. The comparison to be made is between the impression based on recollection people of ordinary intelligence and memory would have of the applicant’s (registered) mark and the impression they would have on seeing the mark or marks of the alleged infringer: Shell at 414–415 (Windeyer J); Australian Woollen Mills Ltd v FS Walton and Company Limited (1937) 58 CLR 641 at 658 (Dixon and McTiernan JJ). It follows that the Court must make allowance for the imperfect recollection a person may have of the registered trade mark(s): Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd [2004] FCAFC 196; (2004) 209 ALR 1; 61 IPR 212 at [77]; Saville Perfumery Ltd v June Perfect Ltd (1941) 58 RPC 147; Aristoc Ltd v Rysta Ltd [1945] AC 68 at 86 (applied by the High Court in Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353).

171    Thirdly, each mark must be compared “as a whole”: Optical 88 Ltd v Optical 88 (No 2) Pty Ltd [2010] FCA 1380; (2010) 275 ALR 526; 89 IPR 457 at [100] (Yates J). As Isaacs ACJ observed in Angelides v James Stedman Hendersons Sweets Ltd (1927) 40 CLR 43 at 68 (to which Yates J referred in Optical 88):

[I]t is trite law that a registered trade mark means the whole trade mark, the whole device. However prominent a single word in a composite mark may be, the composite registration gives no statutory right whatever to the word alone, and it would be a distinct untruth to tell the world that the single word alone was registered.

172    Fourthly, where a mark consists of a number of elements, it is necessary to consider the elements in their context. That includes “the size, prominence and stylisation of words and device elements used in the mark and their relationship to each other”: Optical 88 at [100].

173    Fifthly, the marks are to be compared both visually and aurally: Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 49 FCR 89 at 105. This naturally follows from the fact that s 7(2) of the Act relevantly provides that, for the avoidance of doubt, if a trade mark consists of a letter, word, name or numeral or any combination thereof, an aural representation of the mark is a use of the mark for the purposes of the Act.

174    Sixthly, where, as here, the alleged deception or confusion relates to the source of the goods, to deceive means to create an incorrect belief or mental impression or mislead the consumer into thinking that the goods bearing the applicant’s mark come from another source and to confuse means to cause the consumer to wonder whether that might be so: Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1979] RPC 410 at 423 (Richardson J), cited with approval by the Full Court in All-Fect at [39]. In the latter instance, it will be enough that the ordinary person entertains a reasonable doubt: Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 at [50] (French J) following Southern Cross Refrigeration Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 (Kitto J).

175    Seventhly, while it is not necessary to prove that it is more probable than not that a trade mark will deceive or confuse, it is necessary to show that there is “a real tangible danger” that a number of people will be deceived or confused: Woolworths, ibid.

176    Eighthly, all the surrounding circumstances are to be taken into account, including the circumstances in which the goods will be bought and sold and the character of the probable consumers: Woolworths, ibid. As Yates J observed in Optical 88 at [94], drawing on what was said in Australian Woollen Mills at 658:

[T]he comparison takes place in a particular context in accordance with a particular standard: “the course of business and the way in which the particular class of goods are sold” gives the setting and “the habits and observation of men considered in the mass” affords the standard in determining whether the impugned mark is, properly judged, “deceptively similar”.

177    Ninthly, the question of whether the “Moroccan Argan Oil” sign is deceptively similar to either the First or the Second Trade Mark (or both) in relation to goods in respect of which the mark is registered or in relation to goods of the same description, is “never susceptible of much discussion”, since it depends on “a combination of visual impression and judicial estimation of the effect likely to be produced in the course of the ordinary conduct of affairs”: Australian Woollen Mills at 659.

178    Tenthly, no intention to deceive or cause confusion is required; s 10 is concerned with the effect of the mark on prospective purchasers: All-Fect at [39]. Nevertheless, evidence of intention is not irrelevant. Dixon and McTiernan JJ said in Australian Woollen Mills at 657:

The rule that if a mark or get-up for goods is adopted for the purpose of appropriating part of the trade or reputation of a rival, it should be presumed to be fitted for the purpose and therefore likely to deceive or confuse, no doubt, is as just in principle as it is wholesome in tendency … [W]hen a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he has done is in fact likely to deceive.

179    MIL relied heavily on the following statement of principle by Lord Radcliffe in de Cordova v Vick Chemical Company (1951) 68 RPC 103 at 105–6:

[A] mark is infringed by another trader if, even without using the whole of it upon or in connection with his goods, he uses one or more of its essential features. The identification of an essential feature depends partly on the Court’s own judgment and partly on the burden of the evidence that is placed before it. A trade mark is undoubtedly a visual device; but it is well-established law that the ascertainment of an essential feature is not to be by ocular test alone. Since words can form part, or indeed the whole, of a mark, it is impossible to exclude consideration of the sound or significance of those words. Thus it has long been accepted that, if a word forming part of a mark has come in trade to be used to identify the goods of the owner of the mark, it is an infringement of the mark itself to use that word as the mark or part of the mark of another trader, for confusion is likely to result … The likelihood of confusion or deception in such cases is not disproved by placing the two marks side by side and demonstrating how small is the chance of error in any customer who places his order for goods with both the marks clearly before him, for orders are not placed, or are often not placed, under such conditions. It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole.

180    In Crazy Ron’s the Full Court endorsed this principle, describing it at [93] as “well-established”, despite the absence of an explicit reference in the statute to the “essential features” of a trade mark, saying at [79] that:

If a registered trade mark includes words which can be regarded as an essential feature of the mark, another mark that incorporates those words may well infringe the registered trade mark. The other mark may also infringe if there is a tangible danger of deception or confusion by reason of consumers retaining an imperfect recollection of the words constituting an essential feature of the registered mark.

(Original emphasis.)

181    MIL’s argument was as follows.

182    First, the (or, at least, a) dominant and essential feature of the MIL marks — both visually and aurally — is the word “moroccanoil”. Whether or not the words “moroccan” and “oil” are conjoined is immaterial; aurally there is no difference. Thus, the sign “Moroccan Argan Oil” is likely to be understood as containing an essential feature of the two MIL marks.

183    Secondly, the fact that Aldi products are fast-moving consumer goods sold in supermarkets increases the likelihood of consumer confusion. The marketing experts agreed that supermarket products tend to be “low involvement” products in that they are associated with a relatively lower level of information search and cognitive decision making as the risks associated with making an “incorrect” purchase decision are relatively low.

184    Thirdly, the signs “Moroccan Argan Oil” and moroccanoil are deceptively similar because they both have a high degree of “diagnosticity as a cue or heuristic that consumers would ordinarily associate with the MIL products”, namely, the common use of the words “moroccan” and “oil” on the labels and the containers of turquoise-coloured hair care products. Once a consumer sees these words against that background, they will assume that the products are, or are in some way associated with, MIL products and are unlikely to enquire further as to the source of the products. The addition of “argan” between “moroccan” and “oil” is unlikely to interrupt the consumer’s recall of the moroccanoil brand, particularly one whose recollection is imperfect or one who has heard about the MIL products but who has not, or who has barely, seen them.

185    Fourthly, the evidence discloses that Aldi periodically promotes or refers to its Moroccan Argan Oil products as “Moroccan Oil”. That can be seen in catalogues, on receipts, and in-store signage, including price tickets. This circumstance contributes to the likelihood of confusion as to the source of the Aldi products.

186    Fifthly, Ms Royds’ evidence was that, after spending less than a minute selecting the products, she purchased the Aldi Oil Treatment and Shampoo in the erroneous belief that she was buying the MIL products. Her experience is unlikely to be unique. Indeed, it is likely to be common for a not insignificant number of consumers buying Aldi products, and tends to confirm the opinion of the marketing experts that purchases of this kind are low involvement purchases.

187    Sixthly, at least 58 individual consumers in the period between 2012 and 23 September 2015 wrongly believed that the Aldi products were MIL products and purchased the Aldi products under that mistaken belief. The Court can infer that the use of the sign “Moroccan Argan Oil” contributed to that confusion in that consumers would have understood that the sign referred, or was in some way related, to moroccanoil.

188    Seventhly, the evidence supports a finding that Aldi intended to trade off the reputation of MIL’s product including the brand moroccanoil.

189    I turn first to the essential features of the First and Second Trade Marks.

190    First and foremost, the two marks are composite marks (described in the Register as “fancy”) and it is each mark as a whole which must be compared to the Aldi mark: see above at [171]. As Aldi submitted, the rights conferred by registration are limited by the combination of features that constitute the registered marks. Aldi contended that the First Trade Mark includes the word moroccanoil in white text appearing vertically and accompanied by a prominent orange M on a turquoise background, and that the Second Trade Mark also features the word moroccanoil, this time depicted horizontally, with the orange M superimposed. Aldi submitted that the words “Moroccan Argan Oil” are plainly not deceptively similar to either trade mark as they omit entirely the other features including the striking orange M. It said that “the complex of elements” is “apt to leave in the mind of the ordinary consumer a very different impression to that of the three descriptive words “Moroccan Argan Oil”. Aldi also submitted that the two MIL trade marks are both visually and aurally distinct because of the presence in its products of the word “Argan” between “Moroccan” and “Oil”.

191    Broadly speaking, the First Trade Mark consists of the word moroccanoil in a vertical position to the left of a capital M and the Second Trade Mark consists of the word moroccanoil in a horizontal position behind a large capital M. In the First Trade Mark I would say that the two features I have mentioned are equally prominent and in the Second the M is possibly more prominent.

192    Contrary to Aldi’s submission, the colour turquoise appearing in the background of the two marks, the colour orange used to mark out the singular M, and the colour white used in the word “moroccanoil” are not features of the registered mark. A trade mark may be registered so as to create a monopoly in the use of a particular colour through the process of registration with limitations as to colour: Trade Marks Act, s 70(1). To the extent that a trade mark is registered without limitations as to colour, however, it is taken to be registered for all colours: s 70(3). Although the First and Second Trade Marks appear in the Register in the colours described and depicted above, no limitation as to colour is recorded in the Register for either of the marks in question. In particular, there is no endorsement on the Register which defines the scope of registration by reference to colour. The usual form of endorsement, according to the Trade Marks Office Manual of Practice and Procedure published online by IP Australia is:

Registration of this trade mark is limited to the colours ____________, ________ and _________ as shown in the representation of the trade mark attached to the application form.

(See Pt 10.3.5.3.)

193    The learned authors of the leading Australian text, Shanahan’s Australian Law of Trade Marks and Passing Off (5th ed), state at [45.2005] that a limitation as to colour would not now be inferred merely from the filing of a representation of the mark in particular colours (as it was a century ago in William Charlick Ltd v Wilkinson & Co Pty Ltd (1913) 16 CLR 370).

194    I consider that both the large M and the word “Moroccanoil” are essential features of the First and Second Trade Marks.

195    The question here is whether there is a real, tangible danger that a not insignificant number of people with an imperfect recollection of the word “Moroccanoil” might at least wonder, on seeing or hearing the sign “Moroccan Argan Oil” whether it is MIL’s product?

196    At first blush the evidence from Ms Royds might suggest there is.

197    In her affidavit Ms Royds deposed that she had seen “the moroccanoil Original Treatment Product” on prominent display in several shopping centre salons from around late 2010, so much so that it seemed to be “everywhere”. She said that she was struck by the turquoise blue colour on the box and the label but that it was the combination of the coloured box and label with the word moroccanoil in bold text that stood out to her. She purchased the product once only and had never purchased any other MIL product. Ms Royds shops at Aldi about once a month, mostly at its Leichhardt store, but also in the Drummoyne and Canterbury stores. It will be recalled that Ms Royds gave evidence about an occasion when she purchased “Moroccan Argan Oil” products at the Leichhardt Aldi store under the mistaken belief that she was buying MIL’s products. When she approached the section of the store where the Aldi products were situated she said that she saw the words “Moroccan” and “Oil” on the labels and concluded that moroccanoil “may have undergone some rebranding exercise”. While she was not clear about some matters and her evidence was inconsistent in some respects, she adhered to this evidence in cross-examination, saying that “on the day”, she just saw “Moroccan Oil”. She insisted that the words “Moroccan” and “Oil” stood out to her and that she believed that she was looking at “the true moroccanoil product”. I accept that her evidence might indicate that a person with an imperfect recollection of the word moroccanoil might be confused or misled into thinking that the product she was looking at was a MIL product.

198    There are, however, difficulties with Ms Royds’ evidence.

199    First, she was an unsatisfactory witness. Under cross-examination she was easily confused and her memory proved to be generally poor.

200    Secondly, she admitted to being distracted at the time by her children and under considerable stress. These circumstances might have caused her to overlook the obvious differences between the two marks.

201    Thirdly, in concluding that moroccanoil might have been rebranded, she volunteered in cross-examination that she had “a background in advertising” and admitted to drawing on that background in assuming that this was a rebranding. There is no evidence to suggest that the ordinary consumer would make the same assumption.

202    Fourthly, Ms Royds insisted that both the Aldi Oil Treatment and the Aldi Shampoo were on a shelf. The evidence was that the Oil Treatment was sold in the “Special Buys” section in the “wire cage section” in the centre of the store. Indeed, that was an agreed fact. Apart from Ms Royds’ account, the evidence is to the effect that this mode of sale was common to all Aldi stores. While it is possible that the position in the Leichhardt store was different, it is unlikely.

203    Fifthly, what Ms Royds took away from the MIL product was the combination of the turquoise colour, the packaging, and the word moroccanoil. It was the colour which drew her to the Aldi product. That this is likely to be the case is supported by the evidence given on MIL’s behalf by Mr Blanket that “colour is regularly a strong diagnostic tool for a brand which is intrinsically linked with the consumer’s perception of that brand within its category”. Mr Blanket cited some obvious examples including the Tiffany blue and the yellow and black deployed by the Commonwealth Bank of Australia. It is also supported to some extent by the evidence of MIL’s marketing strategy, involving as it does the use of the same shade of turquoise on all its products and in all its advertising and its insistence that MIL products always be displayed en bloc.

204    Yet, similarities in colour or get-up (assuming colour is not part of the get-up), though relevant to the ACL and passing off claims, are irrelevant to the trade mark infringement case. In such a case “any deceptive similarity arising from get-up or aspects of packaging is to be disregarded”: Frito-Lay at [155] (Lindgren J); Henschke at [44].

205    Ms Royds did not disregard the similarities arising from the get-up or packaging of the product. Indeed, those similarities may well have convinced her that Aldi sold moroccanoil before she even looked at the products. Ultimately, I am not persuaded that she was misled or confused by an imperfect recollection of either of the MIL Trade Marks or the Moroccanoil name.

206    The other evidence of alleged confusion is unhelpful. That is because the evidence largely consists of reports given to others in a way that makes it impossible to decide what was responsible for the confusion. Certainly, there is nothing to suggest that any deceptive similarity arising from the get-up of the products or aspects of it were disregarded. The evidence provides either no or no sufficient foundation for the conclusion that any purchase of an Aldi product was made because of the deceptive similarity of the respective marks.

207    As Aldi submitted, having regard to the indirect nature of the evidence there is little or no context for the alleged instance of confusion.

Matters such as the following are often left unclear, or are completely unexplained: whether the person was aware of MIL’s products when they encountered the Aldi products, and if so to what extent; which Aldi product(s) were in issue; in what circumstances the alleged confusion occurred, including what level of attention the person gave to the Aldi products at the time; whether there were other factors at play that might have led to the person acting in the way that they did; and any other relevant circumstances. It would be essential to understand these matters in order to accord any weight to the evidence.

208    In view of the way in which the evidence was adduced (predominantly through witnesses to whom the reports were either directly or indirectly made by anonymous consumers), and in the absence of contemporaneous records, it was not possible for these matters to be explored in cross-examination.

209    Furthermore, even at face value a number of the reports do not bespeak of confusion, let alone deception. In one case, reported by Ms Williamson, the consumer said that she had bought products at Aldi that “look like” MIL’s products. While this is illustrative of similarity, it does not denote deceptive similarity. Some of the evidence consists of second-hand hearsay, such as the complaints received by Thierry Fayard. As a matter of common experience this evidence is unreliable and particularly so when Mr Fayard had made no contemporaneous record of any of the complaints and could not remember the names of the complainants. As for Mr Fayard’s evidence of complaints about the Aldi Oil Treatment being offered for sale as “special buys” (see [61] above), without more this is not evidence of consumer confusion. It might just reflect the stockists’ concerns that they were being undercut by Aldi selling similar, though not necessarily deceptively similar, products at a substantially lower price.

210    It is, of course, possible that some or all of the consumers who had purchased Aldi products had an imperfect recollection of the word Moroccanoil and that their imperfect recollection contributed to their confusion but the evidence is too vague to enable me to reach a conclusion either way. Furthermore, in almost all cases, the product the people had purchased was the Aldi Oil Treatment. The similarities in the get-up of the two products are much closer than the similarities in get-up between the respective shampoos and conditioners. If they were confused, it is at least just as likely as anything else that the get-up of the Aldi products was responsible. The position might well have been different if the evidence indicated that even one of them had asked a sales assistant at an Aldi store whether it sold moroccanoil and had been directed to the Moroccan Argan Oil products.

211    In these circumstances the evidence of confusion is not entitled to any weight.

212    The submission that Aldi intended to trade off MIL’s reputation is also problematic. The evidence upon which MIL relied came from Ms Spinks. As I have already observed, neither Ms Heng nor Mr Raju gave evidence and no explanation was offered for their absence. In those circumstances a Jones v Dunkel inference may be drawn (see Jones v Dunkel (1959) 101 CLR 298, but such an inference (that evidence from them would not have assisted Aldi) does not go very far.

213    It is a serious matter to find that Aldi chose the name “Moroccan Argan Oil” dishonestly and in an attempt to mislead consumers and take advantage of MIL’s trade or reputation in its registered trade mark, and the Court must proceed with caution before making it: Frito-Lay at [97] (Lindgren J). As the High Court pointed out in Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 at [33], in a passage cited by Lindgren J in Frito-Lay, “even an imitation of one product by another does not necessarily bespeak an intention to deceive purchasers”.

214    Ms Spinks’ evidence is insufficient to demonstrate that by the choice of the name “Moroccan Argan Oil” Aldi set out to mislead consumers into thinking that the Aldi brand was moroccanoil. No precise evidence was led as to how Aldi settled on the name “Moroccan Argan Oil” and no questions on this subject were asked in cross-examination. If its object were as alleged, then one would think it would call its products “Moroccan Oil”. The name Aldi chose was different. The name Aldi chose —“Moroccan Argan Oil” — was the name then used by Organix, whose products Aldi had used as the “benchmark” for its shampoo and conditioner. Further, the ultimate product was not taken to market before Aldi had received advice as to compliance with Australian laws. Ms Spinks said that an organisation known as “Silliker” (Silliker Australia Pty Ltd) was retained to undertake “due diligence checks” to ensure that proposed product packaging and labelling complied with relevant “regulations” and the Australian Consumer Law. She was not challenged about this evidence in cross-examination.

215    In any case, as Hill J pointed out in Frito-Lay at [34], while the presumption of likely deception from evidence of intention would not lightly be rejected, absent a real, tangible danger of deception or confusion there can be no infringement.

216    Even if the tendency evidence were admissible and should have been received, the tendency alleged in the notice was a tendency to copy “elements of the getup of Third Party Branded Products”. As I have already observed, for the purpose of determining whether a trade mark has been infringed, get-up is irrelevant. In these circumstances, an intention to copy the get-up must also be irrelevant.

217    Of course, the mere fact that the evidence of confusion has no probative value and that Aldi may not have intended to confuse does not mean that the sign “Moroccan Argan Oil” is not deceptively similar to the MIL marks. The question is whether it is likely to confuse.

218    “Moroccanoil” is the relevant essential feature of the MIL Trade Marks. “Moroccanoil”, however, whether conjoined or not, does not appear on the Aldi Products. That said, I accept that the presence of the word “Argan” between “Moroccan” and “Oil” may well not interrupt the recall of the brand moroccanoil, as Professor Quester’s evidence indicated.

219    There is authority for the proposition that the first word of a composite mark is usually the most important for comparison: NV Sumatra Tobacco Trading Company v British American Tobacco (Brands) Incorporated [2010] NZCA 24; (2010) 86 IPR 206 at [32]. In Re London Lubricants (1920) Ltd’s Application (1925) 42 RPC 264 at 270, cited with approval in NV Sumatra Tobacco, Sargent LJ observed that English speakers tend to slur the endings of words and that necessarily means that the beginnings of words are accentuated in comparison, adding that, as a rule, the first syllable of a word is far more important (one might say memorable) for the purpose of distinction. Nevertheless, it is one thing to recall moroccanoil upon seeing the Aldi brand. It is another to confuse the one with the other. There is no necessary correlation between the two.

220    Ultimately, taking all relevant matters into account, I am not persuaded that the Aldi trade mark “Moroccan Argan Oil” is deceptively similar to either the First or the Second Trade Mark. In my view, there is no real, tangible danger that an ordinary or reasonable consumer with an imperfect recollection of one or other or both those marks or, as was argued, the name “Moroccanoil”, would wonder whether a mark called “Moroccan Argan Oil” is or is associated with either of the composite marks that are the First and Second Trade Marks. Ignoring similarities in the get-up of the respective products, including the colour-scheme and packaging, I am not satisfied that the hypothetical consumer would mistake the Aldi “Moroccan Argan Oil” mark for the First or Second Trade Marks or wonder whether the Aldi product is made by the owner of the First and Second Trade Marks. Considering each of the First and Second Trade Marks as a whole, I find that the Aldi mark is not deceptively similar to either of the MIL marks.

Are the Aldi Hair Brushes and Aldi Hair Tools goods in respect of which the MIL trade marks are registered or goods of the same description?

221    As I noted at [13] above, the First and Second Trade Marks are registered in class 3 in relation to various products including “hair care products”. Aldi correctly submitted that no brushes or mechanical or electrical tools are specified. But MIL did not make any submissions in support of the first alternative (whether the brushes or tools are goods in respect of which the MIL marks are registered); it was content to rely on the second. All other things being equal, subject to the defence, it makes no difference.

222    So what are “goods of the same description” as the goods in respect of which a trade mark is registered?

223    Aldi submitted that the concept of “goods of the same description” is a narrow one and that it must mean “the same kind of thing”. I cannot accept the submission. To be “goods of the same description” goods need not be “substantially analogous in kind” or substitutes or alternatives: Re J Lyons & Co Ltd’s Application [1959] RPC 120 at 128. The mere fact that the goods are different in character is “by no means conclusive”: Southern Cross at 606. The question must be approached “from a commercial point of view”: In the Matter of an Application by Ladislas Jellinek for the Registration of a Trade Mark (1946) 63 RPC 59 at 64 (Romer J). The answer depends on “whether the goods belong to the same or different trades”: ibid. In determining the answer in Jellinek, Romer J took into account the nature of the goods in question, the uses to which the respective goods were put, and the trade channels through which they were bought and sold. Similarly, in Reckitt & Colman Ltd v Boden (1945) 70 CLR 84 at 94 Dixon J said:

What forms the same description of goods must be discovered from a consideration of the course of trade or business. One factor is the use to which the two sets of goods are put. Another is whether they are commonly dealt with in the same course of trade or business … [that is] commonly sold in the same kinds of shops or departments.

In Southern Cross the Full Court had regard to the same considerations.

224    Here, the Aldi Hair Brushes and Hair Tools are different in nature from the goods in respect of which the First and Second Trade Marks are registered. The goods for which the First and Second Trade Marks are registered include “hair products” but the list that follows is of various lotions and potions. The goods in question are mechanical devices and electrical equipment. But they are put to the same use as many of the hair products for which the First and Second Trade Marks are registered. They are in this wider sense “hair care products”. Hair brushes, dryers, straighteners and curlers are used to style hair. So, too, are oil, masks, conditioner, mousse, and hair spray. The brushes and tools were developed as an extension of the Moroccan Argan Oil hair products range. They contain argan oil, just like the shampoos, conditioners, and other products. Furthermore, they are sold through the same trade channels.

225    Evidence was given by Arthur Mitroulas, the Chief Executive Officer of Hairhouse Warehouse, which has 142 stores, that it sells both hair care products and “styling tools”, including straightening irons, blow dryers, curlers, tongs, clippers, trimmers, and hair brushes. Samuel Jarred, the Operations Manager of Price Attack, another retailer of hair care products gave evidence to the same effect. He said that since its inception in “around 1985” Price Attack has sold hair styling tools such as straightening irons, blow dryers and hair brushes with shampoos, conditioners, treatments, and other hair care products. Similarly, MIL hair brushes are displayed and offered for sale alongside the other MIL products at hair salons. Aldi brushes and hair tools are sold at Aldi stores and advertised in Aldi catalogues, in stores, and online alongside its hair products. An illustration of this kind of advertising appears in a promotion for a “special buy” advertised on 24 September 2014 entitled:

salon results

3 steps to beautiful hair with Moroccan Argan oil

Step 1 involved washing the hair with Moroccan Argan Oil Hydrating Shampoo, Hydrating Conditioner, and Conditioning Treatment mask. Step 2 involved adding the Aldi Oil Treatment referred to as “serum”. Step 3 was “blow dry” with the Hair Dryer “infused with ‘Moroccan Argan Oil’”. Also depicted were a number of hair brushes and other hair accessories. A copy of this advertisement is annexed to these reasons as Annexure C.

226    It is a matter of common knowledge that the brands L’Occitane, Aesop, and Crabtree & Evelyn all sell products within all four categories of the non-use products listed at [272] below. It is also a matter of common knowledge that the products of each of the three brands are sold in eponymous stores and grouped together by brand in department stores. The Court is required to take knowledge of this kind into account: Evidence Act, s 144.

227    I conclude that the Aldi Hair Brushes and Aldi Hair Tools are goods of the same description as the First and Second Trade Mark registered goods.

Has Aldi established that the use of the signs as Aldi did is not likely to deceive or cause confusion?

228    MIL argued that Aldi had not discharged its burden of proof, relying, in particular, on the evidence of Ms Royds and the other evidence of consumer confusion. As I have already said, however, I am persuaded that that evidence is not entitled to any weight and Aldi received no complaint by a consumer that she or he had bought an Aldi product under the mistaken belief that it was moroccanoil. I do not consider Aldi’s use of the sign is likely to deceive or cause confusion, particularly as it always (or almost always) appears in close proximity to the protane brand, which Aldi customers would recognise as an Aldi house brand a fortiori with the adaptation of the sign in 2014. As I found above at [162] and [165], the use of the oil drop in the name “Moroccan Argan Oil” is particularly distinctive and shows an intention by Aldi to mark out its products from the products of its competitors. Contrary to MIL’s submission, I do not consider that the occasional use by MIL of an oil drop in its advertising (never in the brand name itself) is likely to have had any appreciable impact.

If infringement is made out, is Aldi liable to pay additional damages under s 126(2) of the Trade Marks Act?

229    By agreement this question was deferred. In the light of my conclusions on infringement, however, it is now moot.

Conclusion

230    I am not persuaded that Aldi’s “Moroccan Argan Oil” mark is deceptively similar to either the First or the Second Trade Mark. The Aldi Hair Brushes and Tools are goods of the same description as the goods in respect of which the First and Second Trade Marks are registered. I am satisfied, however, that Aldi’s use of the mark on or in relation to those goods is not likely to deceive or cause confusion.

ALDI’S CROSS-CLAIM FOR RECTIFICATION OF THE REGISTER

231    Aldi seeks rectification of the Register by the cancellation of the registration of the First and Second Trade Marks under s 88(1) of the Act. In the alternative, it seeks an order under s 92(4)(b) for the removal from the Register of the registration of the two marks in respect of those goods highlighted in [13] of these reasons. I shall refer to these, as the parties did, as “the Non-Use Goods”.

The legislative basis for the claim for cancellation of the MIL marks

232    On the application of “a person aggrieved” and only on the grounds set out in s 88(2) of the Trade Marks Act, the Court may order that the Register be rectified by, amongst other things, cancelling the registration of a trade mark. One of those grounds and the ground upon which Aldi relies is “any of the grounds on which the registration of the mark could have been opposed under [the] Act”: s 88(2)(a). Under s 57, registration may be opposed on any of the grounds on which an application for registration may be rejected, except the ground that the trade mark cannot be represented graphically. The grounds on which an application may be rejected are set out in Pt 4 Div 2 of the Act (ss 39-44). Aldi relies on s 41. In substance, s 41 is concerned with whether the mark the subject of an application for registration is capable of distinguishing the goods (or services) in respect of which the mark is sought to be registered (the designated goods). As Aldi submitted, it raises questions relating to the capacity of the mark to act as a badge of origin and the central focus of the inquiry is an examination of the mark’s distinctiveness.

The claim for cancellation

233    Broadly speaking, Aldi alleges that the two marks should be cancelled because they should never have been accepted for registration as they did not satisfy the requirements of s 41 of the Trade Marks Act at their respective priority dates: 24 January 2008 and 4 August 2010. In each case Aldi claims that at its priority date neither the First nor the Second Trade Mark was capable of distinguishing MIL’s goods within the meaning of s 41(2) of the Act and was not otherwise capable of proceeding to registration under s 41(6). Alternatively, if it was to some extent inherently adapted to distinguish MIL’s goods, it was not otherwise capable of proceeding to registration under s 41(5).

The issues

234    While there was originally an issue about Aldi’s standing, MIL now accepts that Aldi is a “person aggrieved” in respect of all goods for which the First and Second Trade Marks are registered. Initially there was also an issue about whether MIL had an intention in good faith to use either mark in relation to the Non-Use Goods and/or to authorise its use in relation to those goods as required by s 92(4)(a), but this point was abandoned during Aldi’s opening. That leaves the single issue arising under s 41(2) of whether the First and Second Trade Marks are capable of distinguishing MIL’s goods in respect of the designated goods from the goods of others.

Are the Trade Marks capable of distinguishing MIL’s goods from the goods of others?

235    Section 41 was amended by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth), which, for the most part, commenced on 15 April 2013. It is common ground that the pre-amendment form applies in this case. At that time, insofar as it is relevant, s 41 read as follows: