FEDERAL COURT OF AUSTRALIA
Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd (No 3) [2017] FCA 865
ORDERS
Applicant | ||
AND: | Respondent | |
DATE OF ORDER: | 1 August 2017 |
THE COURT ORDERS THAT:
1. The application be dismissed.
2. On or before 4 pm on 22 August 2017 the parties file and serve any joint proposed minutes of orders in relation to the costs of the proceeding.
3. If the parties do not agree on proposed minutes of orders in relation to the costs of the proceeding, any submissions on costs, including whether the Court should make lump sum orders for costs, together with any affidavit material on which the parties wish to rely are to be filed and served on or before 4 pm on 19 September 2017.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
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MORTIMER J:
1 This proceeding seems at once simple and complex. It seems simple because it is about an everyday word: “shape”. It seems complex because the arguments the parties have built about their respective uses of that word in their trading names and commercial activities lead the Court in many directions.
2 As I observed to the parties at the end of closing submissions, this proceeding has been hard fought, but efficiently and effectively conducted. As a result, I am satisfied each party advanced the forensic case it chose as fully and forcefully as it could.
3 I have concluded that the application should be dismissed.
4 I propose to identify the parties as the “applicant” and the “respondent” throughout these reasons. Ordinarily, I would personalise the identities of the parties to a greater extent than this. However any personalisation in these proceedings runs the risk of unwittingly intruding into some of the very issues in the case. For example, in its submissions the applicant called itself “Shape Shopfitters” and called the respondent “Shape Australia”: each of which reflects the parties’ corporate names but also identifies the similarity between their names by the use of the word “Shape”. In contrast, the respondent identified the applicant as “Shopfitters” and identified itself as “SHAPE Australia”: each of which best approximates to the aspects of the parties’ corporate names that the respondent has sought to emphasise in its evidence and submissions.
5 It is preferable therefore to use the terms “applicant” and “respondent”.
THE UNCONTESTED BACKGROUND AND FACTUAL SETTING
6 The parties filed an agreed statement of facts in this proceeding, which was admitted in accordance with s 190 of the Evidence Act 1995 (Cth). The summary I set out here is taken largely from that agreed statement, together with any evidence the parties’ submissions revealed was not contested. I leave to later in these reasons my fact finding on the evidence as necessary to resolve each claim.
7 Although the spheres of trading activity in which the parties engage, and any overlap between them, is one of the central factual issues in the proceeding, at a broader level the parties agree they both work in the commercial construction industry, and both engage in the fit-out and refurbishment of third party premises.
8 The applicant was incorporated in May 1998 and until 1 July 2012 was called Billings Long Constructions Pty Ltd. On 2 July 2012, it changed its name to its current name, Shape Shopfitters Pty Ltd. Mr Billings, a co-founder and director of the applicant and its principal witness explained in his evidence how the name change was part of the “re-branding” of the applicant into a specialist shopfitting company, and the creation of a separate corporate entity (Billings Long Pty Ltd) to continue the performance of residential and commercial general construction services.
9 Mr Billings gave the following evidence about the change of corporate name and the choice of “Shape Shopfitters”:
One of the names suggested by Hub Group for the re-branded company was ‘Shape’, along with others including ‘The Co-Op’, ‘360’ and ‘Jack’. The leadership group at the company (which I was part of) unanimously voted for the name ‘Shape’. I felt the name would be well-received by the industry and provided opportunities for a play on words from a marketing perspective. For instance, since the company re-branded in about mid-2012, the ‘About Us’ page on the Shape website has stated ‘our expertise means we’ve become partners who work with you to shape your business and your brand at a customer experience level in-store’.
(Emphasis in original.)
10 It was an agreed fact that the applicant’s promotion, provision and sale of services under the name “Shape Shopfitters” included the shopfitting or maintenance of retail food outlets, including quick service restaurants (which, as the parties did during trial, I will abbreviate to “QSR”), the supply and installation of bespoke joinery; the supply and installation of custom signage and the performance by subcontract of specialist joinery work for other builders. The applicant promotes its services, amongst other ways, through a website at “www.shapeshopfitters.com.au”.
11 The applicant is a company of significant size, having been built up by Mr Billings and his business partner. Its total revenue from sales in the financial years from 2013 to 2015 ranged between approximately $10 million and $13 million each year. Its office is located in Victoria and while it undertakes some interstate work, about 50% of its work is in Victoria. Where it undertook work outside Victoria between its name change in July 2012 and the end of the financial year in June 2016, by revenue at least 88.4% of that work involved the same seven clients, being one of Grill’d, Nando’s, Sumo Salad, San Churro, Mad Mex, Schnitz and Coco Cubano.
12 At the time of trial, the applicant employed approximately 26 permanent staff, including project coordinators, a production manager at its factory, cabinet makers, site supervisors, site tradesmen, labourers and apprentices, a truck driver, receptionist, financial controller and an accounts assistant. The company also engaged about seven regular contractors, mostly site managers.
13 Between 1 July 2012 and 30 June 2016, the applicant secured no more than 1,250 contracts, 66.1% of those being for work valued at less than $5,000, and 92.7% of those being for work valued at less than $200,000. Its largest contract during this period had a value of $715,000, and the average mean size of its contracts was just over $39,000. In that same period, the overwhelming majority of the applicant’s work was in retail food shopfitting. The adjective “retail” is discussed further below, more in relation to the respondent’s work than the applicant’s. The manufacture of bespoke joinery or signage was also a significant component of its work. A high proportion (at least two thirds) of the applicant’s clients during this period were established clients, in the sense of having been clients prior to the name change in July 2012. These included some of the applicant’s largest clients, such as Grill’d, Nando’s, and Sumo Salad. In the 1 July 2012 and 30 June 2016 period, Grill’d and Nando’s accounted for more than 52.6%, by revenue, of the applicant’s total business.
14 The parties agreed that during the period 1 July 2012 and 30 June 2016, the applicant secured most of its contracts through one of two methods. Either it was involved in a “closed” or “private” tender process, where the client or its representative (such as a project manager) had selected a limited number of tenderers; or the applicant had directly negotiated the contract with the client or the client’s representative. The respondent submits evidence of this kind is relevant in assessing who, if anyone, might be misled by the respondent’s representations and conduct using “SHAPE” in its name.
15 The parties agreed there were some instances where the applicant had secured work in other ways. Notably, there were four contracts, all performed on premises in the immediate vicinity of the Melbourne Sports and Aquatic Centre in Albert Park, where the work derived from an existing business relationship between the applicant and the client or clients.
16 Subject to what Mr Billings said in evidence about the intentions of the applicant to diversify its business (to which I return below), there was no suggestion in the evidence that there had been any material change in the patterns of the provision of fit-out and refurbishment services by the applicant after 30 June 2016 and up to the date of trial.
17 The respondent was incorporated approximately a decade before the applicant and its three corporate names until 26 October 2015 all involved the acronym “ISIS”. Unsurprisingly, its directors considered, by 2015, that the respondent should find a new corporate identity. Mr Gary Anderson, the principal witness on behalf of the respondent, explained how he and other key personnel went about choosing a new corporate name and identity during the course of 2015. There is no dispute the name “SHAPE Australia” was chosen without knowledge of the existence of the applicant.
18 There is also no dispute that, for the purpose of assessing and determining each of the causes of action on which the applicant relies in this proceeding, the Court should examine the respondent’s conduct on and from 26 October 2015.
19 The respondent operates a large business, on a materially greater scale than the applicant. Indeed, this discrepancy in the size of the parties’ businesses features in the way the applicant puts its claims, as well as in the way the respondent seeks to illustrate the different markets in which the two companies operate. In other words, each party relies on the size discrepancies between them for different forensic purposes. The respondent provides (and promotes itself as providing) fit-out and refurbishment services in relation to (usually large) existing buildings, such as office buildings, hotels, university buildings, banks, health facilities and casinos. The respondent promotes its services, amongst other methods, through a website at www.shapegroup.com.au. In the financial years from 2013 to 2015, the total revenue from sales received by the respondent ranged between approximately $373 million and $409 million. It has an office in the capital city of every state and territory in Australia, except Tasmania.
20 Mr Anderson’s evidence (on these aspects, not challenged, and which I accept) is that the respondent’s average project size is $1.55 million, and its role in most of its projects is as a head contractor and construction manager, meaning that it “identif[ies], engage[s], and manage[s] specialist trade contractors and consultants”. Mr Anderson gave evidence that the respondent does not “actively target” projects below about $1 million. This latter evidence must be evaluated in the context of what I set out at [131]-[140] below.
21 Mr Anderson’s evidence was that the respondent holds various independent certifications and accreditations, and had been appointed to various panels. Some of this specialist knowledge and accreditation, according to Mr Anderson, was required for airport and government work. Mr Mahady also gave evidence in support of the requirement for accreditations and certifications for work with listed or large privately owned companies and governments. The respondent has a board of directors, a CEO and a COO, an executive team, and a management team. Undoubtedly, it is a much bigger enterprise than the applicant. As I noted, the applicant relies on this feature in articulating the nature of the impression or representation it says is conveyed by the respondent’s use of “SHAPE” in its business name, promotion, marketing and provision of services.
22 The parties agreed that the respondent is not a specialist joinery trade contractor and does not promote or perform specialist trade services for other builders. Rather, it subcontracts any specialist joinery work it requires for its clients.
23 There were, by the time the evidence closed, some real disputes about the nature and extent of the overlap in the fit-out and refurbishment services provided by the parties, in terms of the nature of the services and sector of the market in which they were promoted and provided. However, a number of facts about the absence of an overlap between the respondent’s business activities and those of the applicant were agreed. They are that in the period 1 July 2012 and 30 June 2016, the respondent did not tender for any of the contracts secured by the applicant; that since the critical date of 26 October 2015, the respondent has not performed nor sought to perform any work for any organisation or individual that has been a client of the applicant in the period from 1 July 2012 to 9 September 2016; and finally that between October 2015 and 30 June 2016, the only project the respondent performed involving retail food shopfitting was a fit-out of the Pizza Pasta Boulevard in Perth. It secured that contract through a personal relationship: namely, that the owner of the restaurant was related to a manager employed by the respondent.
24 There was some cross-examination of Mr Billings concerning whether the applicant and respondent were “competitors”. Fairly, Mr Billings accepted they were not, but consistently with his evidence about plans to diversify the applicant’s business (and no doubt, I infer, his plan that the applicant’s business will grow), he adhered to a description of the parties as “potential competitors”.
25 As will become clearer further on in these reasons, the applicant’s case does not depend on the parties being competitors, or even potential competitors, so this debate is not of great significance in the resolution of the proceeding.
26 One qualification, or need for caution about these agreed facts, emerged in the cross-examination of Mr Anderson, which I deal with at [131] below.
27 The applicant’s trade mark infringement case was based on its ownership of Australian registered trade mark 1731525, which is depicted in the IP Australia registration certificate and on the register of Trade Marks as follows:
28 Represented in black and white, the Mark has the following appearance (taken from the applicant’s written closing submissions):
29 This Mark has been registered since 30 October 2015, in respect of:
class 37: Shopfitting; construction; construction consultation; advisory services relating to construction; supervision of construction projects; installation of fittings for buildings; building internal fitouts for commercial buildings; interior refurbishment of buildings; on site building project management; renovation of buildings
30 The Mark was sometimes depicted in evidence in black and white, such as on monochromatic invoices. In most of the evidence however, the Mark was depicted in colour: in the registration certificate, as used by the applicant on its website, in much of its promotional material, and as a logo on its trucks, company clothing, stationery, commercial documents and the like, the background to the areas within the scalloped edge is in the colour blue. There is a debate between the parties, in terms of the scope of the protection afforded by the Trade Marks Act 1995 (Cth), to the Mark in relation to colour. The marks used by the respondent are not used with the colour blue.
31 One feature of the Mark, and of the name and mark used by the respondent, is that the respondent also uses the word “Shape” in capital letters.
CAUSES OF ACTION AND LEGISLATIVE PROVISIONS
32 At the outset I note that the only relief sought by the applicant is declaratory and injunctive relief.
33 The applicant relies first on an alleged contravention of s 18 of the Australian Consumer Law (ACL), which provides:
18 Misleading or deceptive conduct
(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
(2) Nothing in Part 3-1 (which is about unfair practices) limits by implication subsection (1).
Note: For rules relating to representations as to the country of origin of goods, see Part 5-3.
34 It then also relies on an alleged contravention of s 29(1)(g) and (h) of the ACL. Section 29 provides:
29 False or misleading representations about goods or services
(1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:
(a) make a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use; or
(b) make a false or misleading representation that services are of a particular standard, quality, value or grade; or
(c) make a false or misleading representation that goods are new; or
(d) make a false or misleading representation that a particular person has agreed to acquire goods or services; or
(e) make a false or misleading representation that purports to be a testimonial by any person relating to goods or services; or
(f) make a false or misleading representation concerning:
(i) a testimonial by any person; or
(ii) a representation that purports to be such a testimonial;
relating to goods or services; or
(g) make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; or
(h) make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation; or
(i) make a false or misleading representation with respect to the price of goods or services; or
(j) make a false or misleading representation concerning the availability of facilities for the repair of goods or of spare parts for goods; or
(k) make a false or misleading representation concerning the place of origin of goods; or
(l) make a false or misleading representation concerning the need for any goods or services; or
(m) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3-2); or
(n) make a false or misleading representation concerning a requirement to pay for a contractual right that:
(i) is wholly or partly equivalent to any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3-2); and
(ii) a person has under a law of the Commonwealth, a State or a Territory (other than an unwritten law).
Note 1: A pecuniary penalty may be imposed for a contravention of this subsection.
Note 2: For rules relating to representations as to the country of origin of goods, see Part 5-3.
(2) For the purposes of applying subsection (1) in relation to a proceeding concerning a representation of a kind referred to in subsection (1)(e) or (f), the representation is taken to be misleading unless evidence is adduced to the contrary.
(3) To avoid doubt, subsection (2) does not:
(a) have the effect that, merely because such evidence to the contrary is adduced, the representation is not misleading; or
(b) have the effect of placing on any person an onus of proving that the representation is not misleading.
35 The applicant also alleges the respondent has committed the tort of passing off. Save for the damage aspect, to which I return at [233]-[240] below, there was no dispute between the parties about the elements of the tort. They are set out in Gummow J’s reasons for judgment in ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 355-356, by reference to Lord Oliver’s judgment in Reckitt & Colman Products Ltd v Borden Inc [1990] RPC 341 at 406. While observing that the law of passing off “contains sufficient nooks and crannies to make it difficult to formulate any satisfactory definition in short form”, Gummow J endorsed the “classical trinity” described by Lord Oliver as “(1) reputation (2) misrepresentation and (3) damage”.
36 Finally, the applicant alleges an infringement of its Registered Trade Mark. Section 120(1) of the Trade Marks Act provides:
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.
37 The applicant relies only on the deceptive similarity limb of s 120(1).
38 As I have noted, one of the issues in the trade marks aspect of the proceeding concerns the use in the registration of the applicant’s Mark of a blue coloured background. The applicant contends, by reference to s 70 of the Trade Marks Act, that its Mark is registered without limitation as to colour. The respondent contends its protection is limited to the mark with a blue coloured background. Section 70 provides:
70 Colours in registered trade marks
(1) A trade mark may be registered with limitations as to colour.
(2) The limitations may be in respect of the whole, or a part, of the trade mark.
(3) To the extent that a trade mark is registered without limitations as to colour, it is taken to be registered for all colours.
Note: For limitations see section 6.
39 Section 70 must be read with the definition of “limitation” in s 6 of the Trade Marks Act:
limitations means limitations of the exclusive right to use a trade mark given by the registration of the trade mark, including limitations of that right as to:
(a) mode of use; or
(b) use within a territorial area within Australia; or
(c) use in relation to goods or services to be exported.
40 The applicant adduced evidence from 12 witnesses. Mr Billings was, as I have noted, the applicant’s primary witness. Mr Billings swore three affidavits in this proceeding, dated 5 October 2016, 20 December 2016 and 13 February 2017. Where I refer to Mr Billings’ affidavit in these reasons, I refer to his first affidavit unless otherwise specified. Of the remaining witnesses, they fell into several categories. There was a group of witnesses who were people fitting within the applicant’s alleged class of “participants” in the commercial construction industry. Joseph Charles, Cavin Chait, Steven Mooney, Tracey Easthope, Brittany Newall, Rebecca Higgins, Nicholas Ellery and Shae Wood fell into this category. Some of these witnesses gave more expansive evidence than others, but essentially each was relied upon by the applicant to demonstrate either the applicant’s reputation in the commercial construction industry (and in particular, in retail food shopfitting) (Mr Charles, Mr Chait and Mr Mooney); or to demonstrate examples of actual confusion between the applicant and the respondent (Ms Easthope, Ms Newall, Ms Higgins, Mr Ellery and Mr Wood).
41 There was another group of witnesses whose evidence related to actual or potential confusion in other ways, or overlap, between the activities of the applicant and those of the respondent, because of the respondent’s use of the word “SHAPE”. Mark Gentz, an employee of the applicant, gave evidence about a worksite (Monash University) where the applicant and respondent were working “side-by-side”. Adrian Jones, a researcher at BCI Australia, a company that reports on building and construction projects, gave evidence about entries in a BCI online database that lists building and construction projects being undertaken in Australia, and an entry which attributed a project to the respondent when in fact it was one of the applicant’s projects.
42 Finally, the evidence of Michael Sherlock, a consultant for the applicant, was relied on by the applicant to establish its areas of activity and the nature of interior fit-out work, and the reasoning behind the acquisition of the business name “Shape Shopfitters”.
43 The respondent relied on the evidence of nine witnesses. The respondent relied on the evidence of three individuals not employed by the respondent, but otherwise five witnesses were its employees and one its solicitor. As I have noted, Mr Anderson, a sales and marketing executive employed by the respondent, was its principal witness. Scott Jamieson, Michael Barnes and Kate Evans, all employees, gave uncontroversial evidence about how the respondent’s new corporate name came to be determined and about the nature and size of the respondent’s business activities. William Paley, a project manager employed by the respondent, gave evidence concerning the McDonald’s refurbishment project, to which I return later in these reasons. Gregory Henry, the respondent’s solicitor, gave evidence about other businesses using the word “shape” in their business names. A considerable portion of his evidence was excluded after objection by the applicants, but some remained and I consider that evidence where necessary in my reasons below.
44 Three of the witnesses with no direct connection to the respondent were put forward as giving opinion evidence. Howard Gerrard is the General Manager, Property, Projects and Legal, of Bakers Delight Holdings Ltd. He was put forward as giving expert evidence, concerning the nature of food outlet shopfitting and the way Bakers Delight goes about securing its contractors. He was cross-examined on some issues about work done by the applicant for Bakers Delight, which I deal with below. Terence Mahady was a project manager employed by Gallagher Jeffs Pty Ltd, a construction project and property management firm whose evidence concerned his opinions about how different size building and construction firms in the industry could be characterised, and also how “consumers” of those services could be divided up and characterised. Catherine Dix, the head of content marketing and search engine optimisation for Web Profits, a business that specialises in digital marketing, gave evidence on affidavit concerning the parties’ respective websites and what would occur in internet searches for the parties’ names or for the word “shape”. Ms Dix’s highly detailed and quite lengthy affidavit is an example (not the only one) of specific and voluminous evidence produced by each party, which the other party essentially dismissed as of little or no consequence. It is also an illustration of the different forensic approaches taken by each party.
45 As I have noted, evidence was given on affidavit in this proceeding, and by one witness under subpoena. Other individuals subpoenaed by the applicant eventually agreed to give affidavit evidence. There were a number of witnesses who were not required for cross-examination. Cross-examination on both sides was conducted with a view to establishing flaws in the party’s case, rather than any issues of reliability or credibility. The exception to this was the cross-examination of Mr Anderson, which was squarely directed at establishing his evidence, though the spreadsheet which is tab 5 of Exh GJA-1, was incomplete and therefore unreliable. As I have noted, this cross-examination did not extend to any credit or credibility issues.
46 All witnesses who gave oral evidence appeared to me to be doing their best to be accurate in their evidence. Some of the subpoenaed witnesses appeared rather bemused, and cautious, in being brought into the dispute between the applicant and respondent. Nevertheless, each witness answered frankly and I have no concerns in relying on the evidence as presented.
47 I consider the witnesses and their evidence in those sections of my reasons where I make necessary findings of fact on each of the applicant’s causes of action.
48 This proceeding was commenced on 23 December 2015 through the filing of a fast track application and fast track statement. Initially, the applicant sought pecuniary as well as injunctive relief, however limited its claims to the claims under the ACL and the tort of passing off. The proceeding was then referred by me to mediation, which was not successful. During the early stages of the proceeding, there were a number of interlocutory disputes, including whether the trial should be split between the issues of liability and quantum, whether security for costs should be ordered, and disputes regarding discovery categories. On 30 May 2016, I refused the application for a split trial: see Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd [2016] FCA 610.
49 On 6 October 2016, the parties communicated with my chambers, confirming that the applicant no longer pressed its claims for pecuniary relief, and providing proposed consent orders for leave to file an amended fast track application and amended fast track statement. Leave was granted, and on 10 October 2016, the amended documents were filed. In the amended application, the applicant no longer sought pecuniary relief, but inserted an additional claim for trade mark infringement. This was the final form of the fast track application and statement which the applicant relied on at trial, however as I note below, the case was further narrowed during the course of the trial.
50 The applicant’s case at trial had narrowed considerably from the claims set out in the Amended Fast Track Statement. That narrowing is of some significance to the capacity of the applicant to prove the contraventions of the ACL as it now puts them.
51 In the applicant’s Amended Fast Track Statement at [4], the applicant identified the general activities of the respondent which gave rise to the contravening conduct as “promoting, providing and selling commercial construction services… in Australia under or by reference to the Shape Trade Mark”. In turn, in [1] the applicant identified the trade mark as the word “SHAPE”. Separately, the applicant alleged infringement of its registered trade mark which in the Amended Fast Track Statement it described as the “Shape Logo Trade Mark”.
52 The applicant made the following claims about its reputation (at [10]-[13] of the Amended Fast Track Statement):
Since about July 2012, Shape Shopfitters has continuously promoted, provided and sold the Shape Shopfitters Services on an extensive scale throughout Australia under or by reference to the Shape Trade Mark.
The Shape Trade Mark in connection with the Shape Shopfitters Services has become, and is, and has at all material times been, well-known in the commercial construction sector in Australia.
As a result of the matters set out in paragraphs 10 and 11 above, the Shape Trade Mark in Australia means, and distinctively and exclusively indicates, Shape Shopfitters, the Shape Shopfitters Services or an association with them.
As a result of the matters set out in paragraphs 10 and 11 above, Shape Shopfitters has developed a valuable reputation and substantial goodwill among members of the commercial construction sector in Australia in relation to the Shape Shopfitters Services and the Shape Trade Mark.
53 The contravening conduct in which the respondent was alleged to have engaged is dealt with in [14] of the Amended Fast Track Statement:
From at least October 2015, Shape Australia has promoted, provided and sold the Shape Australia Services in Australia under or by reference to the Shape Trade Mark without the licence or authority of Shape Shopfitters.
PARTICULARS
(a) On or about 26 October 2015, Shape Australia’s corporate name was changed to “Shape Australia Pty Ltd” from “ISIS Group Australia Pty Ltd”.
(b) Since at least 30 October 2015, Shape Australia has promoted the Shape Australia Services through a website located at the Shape Australia Domain. The Shape Australia Services are promoted on this website under or by reference to the Shape Trade Mark.
(c) Since at least 9 November 2015, Shape Australia has promoted the Shape Australia Services online through a Facebook Page, located at <https://www.facebook.com/SHAPEAustraliaPtyLtd>. The Shape Australia Services are promoted on this Facebook Page under or by reference to the Shape Trade Mark.
(d) Since at least 9 November 2015, Shape Australia has promoted the Shape Australia Services online through a Twitter Page, located at <https://twitter.com/SHAPE_Group>. The Shape Australia Services are promoted on this Twitter Page under or by reference to the Shape Trade Mark.
(e) Since at least 9 November 2015, Shape Australia has promoted the Shape Australia Services online through a LinkedIn Page, located at <https://www.linkedin.com/company/shape-australia>. The Shape Australia Services are promoted on this LinkedIn Page under or by reference to the Shape Trade Mark.
(f) Since at least 9 November 2015, Shape Australia has promoted the Shape Australia Services online through a YouTube Page, located at <https://www.youtube.com/user/MyISISTV>. The Shape Australia Services are promoted on this YouTube Page under or by reference to the Shape Trade Mark.
(g) From a date unknown to Shape Shopfitters, but from about late 2015, Shape Australia has promoted the Shape Australia Services under and by reference to the Shape Trade Mark as a word trade mark. For example, Shape Australia published a document titled “Shape at a glance”, which bears the following use of the Shape Trade Mark:
(h) From a date unknown to Shape Shopfitters, but from about late 2015, Shape Australia has promoted the Shape Australia Services under and by reference to device trade marks incorporating the Shape Trade Mark including:
(Shape Australia Device Marks). By way of example, the Shape Australia Device Marks are depicted in a document titled 2015 Year in Review, which can be accessed at the following page of Shape Australia’s website: http://www.shapegroup.com.au/media/386902/shapeyirdigital_v1.pdf.
Shape Shopfitters may provide further particulars after the conclusion of evidence and prior to trial.
54 The applicant then alleged (at [15]) that by reason of the conduct in [14], the respondent made four representations (and continued to make and/or threaten to make those representations). Those representations were:
(a) the Shape Australia Services are the Shape Shopfitters Services;
(b) the Shape Australia Services are promoted, provided and sold with the licence or authority of Shape Shopfitters;
(c) the Shape Australia Services have the sponsorship or approval of Shape Shopfitters; and/or
(d) Shape Australia has the sponsorship or approval of, or an affiliation with, Shape Shopfitters
55 After alleging that the respondent’s conduct was in trade or commerce (which is not in dispute), the applicant then alleged at [17] that the four representations identified in [15] were misleading, deceptive and false because:
(a) the Shape Australia Services are not the Shape Shopfitters Services;
(b) the Shape Australia Services are not promoted, provided or sold with the licence or authority of Shape Shopfitters;
(c) the Shape Australia Services do not have sponsorship or approval of Shape Shopfitters; and
(d) Shape Australia does not have the sponsorship or approval of, or an affiliation with Shape Shopfitters.
56 Contraventions of s 18 and s 29(1)(g) and (h) of the ACL were then alleged.
57 By the time the matter came to trial as I have noted above, the applicant’s case had narrowed substantially. Senior Counsel for the applicant opened its case on the basis that the only representation the applicant alleged had been made by the respondent was the representation in [15(d)] of the Amended Fast Track Statement: namely that the respondent has the sponsorship or approval of, or an affiliation with, the applicant. As Senior Counsel for the applicant submits, that is an allegation that the respondent has through its conduct (as set out in [14] of the Amended Fast Track Statement) represented that there is some kind of commercial connection between the respondent and the applicant. The allegation that the respondent’s conduct represented that its promotion, provision and selling of commercial construction services was the promotion, provision and selling of the applicant’s construction services was no longer pressed. That was the allegation made in sub-para (a) of [15] of the Amended Fast Track Statement. Nor were the other two allegations about the respondent’s “services” pressed. Rather what was pressed was an alleged representation, not about the services provided by the parties, but about the connection between the parties themselves.
58 The applicant’s passing off case was put on the basis of injury to the reputation and goodwill of the applicant, its services and its trademark as described in [1] of the Amended Fast Track Statement (that is, the mark SHAPE). The applicant then alleged that by its conduct as alleged the respondent has passed off, is passing off and/or threatens to pass off (at [22] of the Amended Fast Track Statement):
(a) the Shape Australia Services as the Shape Shopfitters Services;
(b) the Shape Australia Services as a services that are promoted, provided and/or sold with the licence or authority of Shape Shopfitters;
(c) the Shape Australia Services as having the sponsorship or approval of Shape Shopfitters; and
(d) itself as having have the sponsorship or approval of, or an affiliation with, Shape Shopfitters.
59 As I understood the applicant’s opening and closing submissions, consistently with the narrowing of its case in relation to the ACL, the applicant also narrowed its case in passing off so that the only passing off it pressed in relation to the respondent’s conduct was the passing off articulated in sub-para (d) of [22].
60 The applicant’s trade mark infringement case was put in the following way (at [22D]-[22F] of the Amended Fast Track Statement):
By promoting the Shape Australia Services under and by reference to the Shape Trade Mark as a word trade mark (see paragraph 14 above), Shape Australia has, without the licence or authority of Shape Australia, used a mark which is deceptively similar to the Shape Logo Trade Mark in respect of services for which that mark is registered.
By promoting the Shape Australia Services under and by reference to the Shape Australia Device Marks (see paragraph 14 above), Shape Australia has, without the licence or authority of Shape Australia, used a mark which is deceptively similar to the Shape Logo Trade Mark in respect of services for which that mark is registered.
By reason of the matters set out in paragraphs 14, and 22A to 22E above, Shape Australia has infringed, is continuing to infringe and/or threatens to infringe the Shape Logo Trade Mark.
61 Consistently with the amendments to the Fast Track Application, the only relief claimed by the applicant was declaratory and injunctive relief. The parties agreed it would be appropriate for the Court to hear further submissions on the question of relief should it find any of the applicant’s causes of action to be proven. Therefore the only context in which I consider the limited nature of the applicant’s claims for relief is where the applicant submitted that the nature of the relief sought (as injunctive relief) affected what it needed to prove in order to make out one or more of its causes of action.
62 In closing submissions, as in opening submissions, Senior Counsel for the applicant gave what I considered, with respect, to be a very clear summary of his client’s case. He noted that what lies at the heart of each cause of action brought by the applicant is the respondent’s use of the word “SHAPE”. In relation to the claim under the ACL and in passing off, the applicant’s case is that the respondent’s use of that word in its corporate name, in its promotions on its website and in other places on the internet and in its marketing and advertising where it incorporates the word “SHAPE” into a word trade mark or a device trade mark, leads relevant members of the industry erroneously to believe there is a connection in the course of trade between the applicant and the respondent.
63 The applicant contends that when one examines the nature of each party’s business and how they use the name “SHAPE”, taking into account what the applicant contends is a material overlap in the business activities of the parties, there is a likelihood that persons and entities whom the applicant describes as “participants in the commercial construction industry” will be, and have been, misled or deceived into believing (erroneously) that there is a commercial connection of some kind between the respondent and the applicant.
64 Two key aspects of the applicant’s case emerge from these submissions. The first is that the kind of connection between the parties which the applicant contends will erroneously be perceived is wider than the example given in the applicant’s written and oral opening submissions. The example, seized upon by the respondent, is that participants would be led erroneously to believe the applicant is a “specialist shopfitting arm (or business unit)” of the respondent. There was some debate in closing submissions whether by specifying this particular kind of perceived relationship, the applicant had narrowed its case even further to one which contended the representation arising from the respondent’s impugned conduct was a representation that the applicant was a specialist shopfitting arm or business unit of the respondent, and no more. As I have noted, the respondent seized on this example and highlighted it prominently in both its opening and closing submissions, making a consistent submission that there was no evidence whatsoever of any such perception amongst participants in the commercial construction industry. On that basis, the respondent submits the applicant’s case under the ACL and in passing off must inevitably fail.
65 Despite the respondent seizing on this “specialist shopfitting arm” aspect of the applicant’s opening submissions in particular, I do not consider it is a fair description or summary of the way the applicant has put its case. No doubt there was good forensic reason for the respondent to seize on that description, because it was correct in its submission that there was no evidence of any such perception in the market. However, the applicant did not abandon the terms of its Amended Fast Track Statement and it opened and closed its case, in my opinion, in a consistent manner by reference to [15(d)] of the Amended Fast Track Statement. So much can be seen in [3] of the applicant’s outline of opening submissions which states:
Shape Shopfitters alleges that Shape Australia’s use of the name SHAPE falsely represents that there is an affiliation, connection, association or relationship between Shape Shopfitters and Shape Australia. In particular, Shape Shopfitters submits that participants in the commercial construction industry would be falsely led to believe that there is a relationship between Shape Shopfitters and Shape Australia because of their shared use of the name SHAPE (sometimes in conjunction with a second word which is either generic or descriptive – ‘Shopfitters’ / ‘Australia’). An obvious conclusion to be drawn having regard to the similarity of their names is that Shape Shopfitters is the specialist shopfitting arm (or business unit) of Shape Australia (a larger and more general business). There is no such relationship. Accordingly, Shape Shopfitters submits that Shape Australia’s conduct gives rise to an actionable wrong.
(Footnote omitted.)
66 That contention was repeated at the start of its closing submissions, again in [3]:
Shape Shopfitters alleges that Shape Australia’s use of the name SHAPE falsely represents that there is an affiliation, connection, association or relationship between
Shape Shopfitters and Shape Australia.
(Footnote omitted.)
67 The footnote to [3] of the applicant’s closing submissions made it very clear that only [15(d)] and [22(d)] of the Amended Fast Track Statement were pressed by the applicant. However, the footnote and the submissions in my opinion made it clear that there was also no further narrowing of the way the applicant put its case from the expressions in those paragraphs.
68 I return to the second feature of the submissions to which I referred above. The second feature is that the applicant identifies the class of persons to whom it alleges the representations have been made as a much wider class than the class identified by the respondent. The applicant relies on a class it described consistently as “participants in the commercial construction industry”. The applicant described the services provided by both parties as “relatively complex commercial services”. Involved in the provision of those complex commercial services, the applicant submitted, were people such as trade contractors, for example plumbers and fire protection services service providers, and other service providers such as designers and architects. These are the kinds of people the applicant identifies as “participants” without limiting the class to the clients, or purchasers of the services provided by the applicant and the respondent. Thus, its case sought to avoid the emphasis placed by the respondent on the complex and particular contractual arrangements between the respondent and consumers of the respondent’s services, instead contending that its case is:
primarily directly at the extensive substratum of commercial relationships which sit beneath the provision of services by Shape Australia and Shape Shopfitters.
69 Thus, in order to make good a case of this kind, the applicant accepted it needed to establish sufficient overlap in the commercial construction activities between the applicant and the respondent, such that those trade contractors and other service providers the applicant identified would, in fact, be likely to be misled and deceived by the respondent’s use of the word “SHAPE” in its corporate name and its promotion and provision of services. Without an overlap, whereby these participants might encounter the respondent’s promotion and provision of services, the applicant’s case under the ACL and in passing off could not succeed.
70 It was in this context that the applicant’s considerable emphasis both in evidence and in submissions on an understatement, or an alleged understatement, by the respondent of its commercial construction activities in retail fit-out and specifically in retail food fit-out became prominent. Going forward, the applicant contends that there was no suggestion the respondent would stop pursuing or performing work of that kind, and further contended the Court should not accept the respondent’s minimising case about the proportion of its work which fell into this category.
71 As to the nature of the deception, or misleading, which the applicant contends has been a result of the respondent’s use of the mark “SHAPE”, the applicant contends this goes well beyond mere confusion. Consistently with its pleaded allegations, it contends the evidence has borne out that there are a meaningful number of participants in the industry who have been in fact led erroneously to believe that the applicant is a member of a larger “group” comprising the respondent or is part of the respondent’s “group”. While contending it was not required to prove actual deception or misleading, the applicant correctly understood the probative value of doing so in making out its case under the ACL or in passing off. According, as I have described above, much of its affidavit evidence was directly towards proof of participants in the industry being misled or deceived into believing there was a relationship between the parties of some kind. When pressed in final submissions on this, Senior Counsel for the applicant identified evidence which went to the belief of participants that the applicant is part of the Shape Australia “group” as the most probative evidence.
72 All of the matters I have outlined to this point were also relied on by the applicant in its tort case. The only additional matter specifically identified in the passing off case by the parties’ submissions was the role of damage as an element of the tort. I deal with this below, but in summary the applicant submits that although damage was recognised as an element of the tort of passing off, such damage could be inferred from the very engagement of the respondent in the impugned conduct, because the law will, from the impugned conduct, infer that the value of the reputation and goodwill of the applicant was diminished, and that was sufficient to complete the necessary ingredients of the tort. The respondent disputes this.
73 The applicant’s claims of trade mark infringement were made on the basis of deceptive similarity under s 120(1) of the Trade Marks Act and no reliance was placed on substantial identity. The applicant contends that there were three ways in which the respondent had used the word SHAPE as a trade mark:
(a) first, the word SHAPE simpliciter (Word Mark);
(b) secondly, as a stylised device mark against a coloured circular background and with a stylised A resembling an upside down ‘V’ (Circle Mark);
(c) thirdly, as a stylised device mark against a transparent background with a circular border and with a stylised A resembling an upside down ‘V’ (Transparent Mark).
(Footnotes omitted.)
74 The applicant contends, and I did not understand the respondent seriously to dispute, that each of the ways in which the respondent used the name SHAPE constituted a trade mark use because the respondent had deliberately adopted the name SHAPE as its brand.
75 The applicant’s case centred on the proposition that the “essential eye-catching and memorable feature” of its Registered Mark is the word SHAPE. It contends that it was this feature which would be the dominant impression or recollection that the hypothetical “person of ordinary intelligence and memory” encountering the Mark would recall. By using the word “SHAPE” in each of the three ways identified above, the respondent would, the applicant submitted, cause a number of persons to wonder whether it might be the case that the applicant’s commercial construction services came from the same source as the respondent’s commercial construction services: see Southern Cross Refrigeration Company v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 595 (Kitto J). As with its case under the ACL and in passing off, the applicant characterises the class of people for the purposes of its trade mark infringement case more widely than the respondent. It submits:
…when Shape Australia uses the word SHAPE as a trade mark, it is encountered by many people other than specialists within in particular trade. It is encountered by a very wide range of people from Shape Australia’s customers through to the personnel of the diverse businesses that provide services to Shape Australia.
76 Finally, as I have set out above, the applicant contends that notwithstanding the use of the colour blue in its Registered Mark, the Mark was registered without limitation as to colour and was to be taken as registered for all colours.
77 The respondent put forward two essential contentions in answer to the applicant’s case under the ACL. The first was that the applicant’s “narrowed case” was that the respondent’s conduct represents that the applicant is a specialist shopfitting arm of the respondent, and there was no evidence that this representation was made. For the reasons I have set out above I do not accept that this an accurate description of the applicant’s case as put in opening and in closing, and as put in the Amended Fast Track Statement.
78 In oral submissions, in dealing with the alternative proposition that the applicant’s case had remained wider than the respondent articulated, counsel for the respondent made two key submissions. The first was that the applicant had failed to articulate or identify the kind of connection or affiliation between the applicant and the respondent which members of the relevant class might be led to apprehend or believe existed. The respondent submits that the applicant had left the kind of connection or affiliation wholly undefined and in that sense had failed to discharge its burden of proof. Connected to this, counsel for the respondent contends that while the authorities make it clear (see Twentieth Century Fox Film Corporation v The South Australian Brewery Co Ltd (1996) 66 FCR 451; 34 IPR 225 (Duff Beer case)) that members of the applicable class for the purposes of the ACL do not have to hold a belief concerning a particular legal relationship said to arise between the parties, it is nevertheless incumbent on an applicant to adduce evidence that establishes the particular kind of relationship to which it submits the representation gives rise. For example is it a principal and subsidiary relationship? Is it a head contractor and subcontractor relationship? Is it, as the example given by the applicant, a generalist and specialist kind of relationship? Counsel for the respondent submits that even if the respondent was incorrect in its submission that the case had narrowed to the “specialist shopfitting arm” particular, the applicant could not discharge its burden of proof by a vague allegation that the respondent’s conduct gave rise to a representation of a “connection” between it and the applicant.
79 The second principal reason the respondent articulates for the rejection of the applicant’s ACL case is that the relevant class of persons to whom the representation should be found to have been made (if the Court finds one was made) is “prospective purchasers of SHAPE Australia’s services, being buyers of head contracting or construction management services for commercial building projects”. It contends on the authorities that this was the correct class, in the sense that the ACL’s purpose was one of consumer protection and in the context of the current set of allegations, the “consumers” were those it had identified. If this were the appropriate class for the purposes of the ACL, the respondent submits that buyers of head contracting or construction management services for commercial building projects are a sophisticated class of consumers who are very familiar with the service providers who compete to do this kind of work. It submits that the services were purchased after a careful and detailed process in which the buyers have access to a lot of information about the potential service providers and there was no reasonable likelihood of any mistake about the identity of those service providers arising during such a process. Even if, against its case on the evidence, the Court were to find that some purchasers were “initially caused to wonder about a connection” between the parties, any such misconception would, the respondent submits, be quickly dispelled during the engagement process prior to any contractual arrangements being finalised. The respondent further contends that the evidence shows much of the kind of work for which the applicant promoted itself and its services was work which came in by reason of established relationships with buyers, formed over a long period of time and that these relationships led to the initial engagement process, even at the tender stage.
80 Alternatively, if the Court found the relevant class should be described in the way for which the applicant contends, the respondent’s case is that the evidence did not establish that reasonable members of the wider class of “participants in the commercial construction industry” would be likely to be led into error in the way the applicant asserted. The respondent submits there was no evidence that any trade contractors or other service providers in fact laboured under any misapprehension that the applicant was the “specialist shopfitting arm” of the respondent. Nor could any such inference be drawn from the evidence as a whole.
81 What evidence did exist demonstrated, on the respondent’s submission, no more than isolated instances of confusion, generally arising at the end of the process of service provision: that is, at the point of issuing invoices and the like. Not only were the examples in the evidence isolated and incapable of founding any likelihood of deception as the authorities required, the kind of confusion which those isolated evidentiary examples illustrated was confusion of the kind set out in [15(a)] of the applicant’s Amended Fast Track Statement. If, contrary to the respondent’s primary submissions, the Court were to find proven on the evidence adduced by the applicant some instances of confusion, the respondent submits in the alternative that confusion was not related to any connection between the respondent and the applicant but rather was related to individuals mistaking the respondent for the applicant, or vice versa. That, the respondent submits, was an aspect of the applicant’s case it had expressly abandoned.
82 Further, the respondent contends that such evidence as there was which demonstrated some overlap in the commercial construction activities between the respondent and the applicant was of a minimal nature. The parties were not competitors, and the highest that Mr Billings’ evidence could be put was an assertion that they may be “potential competitors”. Even this assertion, the respondent contends, ignores the substantial amount of evidence indicating that the respondent’s commercial construction activities occurred in relation to sites such as government buildings, airports and banks, all of which were worksites where the applicant was not engaged. In the area of retail food fit-outs, which was on the respondent’s case, the applicant’s overwhelmingly principal area of activity, the respondent’s activities were isolated and minimal, and where they occurred were usually explicable on the evidence because of some pre-existing commercial relationship or because of some opportunistic event. That is, there was insufficient evidence to establish that the respondent promoted its services in the retail food fit-out industry in a way which brought it into an overlap in its business activities with the applicant. Without any material overlap, the respondent contends there was no real likelihood of any class of persons (whether as defined by the applicant or as defined by the respondent) being misled or deceived into believing there was a connection between the applicant and the respondent.
83 As to the applicant’s passing off case, the respondent relies on its contentions under the applicant’s ACL case, adding two principal contentions. The first is that the applicant’s reputation is only for QSR shopfitting work, and the applicant does not have a reputation in the field in which the respondent operates. The second contention is that the applicant is required to demonstrate a “real and tangible risk that it will suffer damage by reason of the alleged passing off” and the applicant has not done so. The respondent expressly disputes the applicant’s submission that the authorities established damage could be inferred as an element of the tort of passing off.
84 In relation to the trade mark infringement case, the respondent contends the applicant could not prove deceptive similarity. Again, the respondent relies on the evidence about how buyers of the parties’ services behaved, the context in which the parties’ services are bought and sold, and submits that however the class was defined for the purposes of the trade mark infringement case, it was a sophisticated class of buyers who were armed with detailed information about the services providers with whom they might engage. For the purposes of the trade mark infringement case, the respondent submitted that the relevant consumers were the “consumers of both parties’ services” who were, the respondent submitted, sophisticated experts. The respondent also disputes that suppliers and subcontractors would be brought within the class of consumers of the parties’ services for the purposes of the trade mark infringement case.
85 The respondent submits that the applicant’s trade mark was a device mark, not a word mark. The respondent placed considerable reliance on the Full Court’s decision in Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd [2004] FCAFC 196; 209 ALR 1; 61 IPR 212, submitting that the word SHAPE was only part of a composite mark that comprised a number of elements, all of which had to be taken into account in applying the established tests about what is the overall impression created by the mark and what would be recalled of it at the time the hypothetical consumer encountered the respondent’s mark.
86 The respondent submits that it is incorrect to see the word SHAPE as the only essential feature of the applicant’s mark. It submits a mark may have more than one essential feature. Alternatively, where no component on its own is sufficiently prominent, a mark may not have any essential features.
87 In the present case, the respondent submits that a viewer with imperfect recollection may not recall “finer details” such as the text “EST 1998” or the white shadow effect on the word SHAPE or the double line around the border. However the respondent contends that the hypothetical viewer with imperfect recollection would recall not only the word SHAPE but rather the name “SHAPE SHOPFITTERS”, the “fact of some embellishment under ‘Shopfitters’, although likely not the precise text”, the “bottle-top border” which can be seen around the mark and the overall “old-fashioned” look and feel of the mark. All these things, the respondent submits, would remain in the memory of a person who looked at the mark, as would the colour blue in the background of the mark. On this latter point, the respondent contends that the applicant’s registration was, in law, limited to the colour blue. That submission was based on a construction of s 70(3) of the Trade Marks Act.
88 The respondent relies on uncontested evidence that the applicant has in fact applied for a word mark for the word SHAPE (although that is not the mark subject to this proceeding). It relies on the observations of the Full Court in Crazy Ron’s that a court would fall into a trap if it were to substitute a word mark for a word and device mark. It submits the mark in issue in this proceeding cannot be treated as if it were a word mark, and that is the thrust of the applicant’s submissions. The additional features on which the respondent relies mean, the respondent submits, that there can be no “contextual confusion” of the kind asserted by the applicant. The respondent submits the concept of contextual confusion is usually raised in cases dealing with the sale of consumer goods, where a consumer might reasonably think that a respondent’s similar name denoted a sub-brand within the applicant’s stable of related marks. That, the respondent submits, was not this case because this case was a case about specialist services bought and sold in a specialist industry. That led the respondent to make a further submission which was to the effect that because this is a case about specialised services, the applicant should have adduced evidence from persons engaged in the specialised market as to the likelihood of deception and confusion. In making this submission, it relied on the authority of General Electric Co (of USA) v General Electric Co Ltd [1973] RPC 297 at 321; [1972] 1 WLR 729 at 737-8 (General Electric), and the Full Court’s decision in Interlego AG v Croner Trading Pty Ltd [1992] FCA 992; 39 FCR 348 at 388. The applicant needs to establish, by evidence, that the sophisticated specialist buyers of the parties’ commercial construction services were likely to be deceived and confused by the respondent’s use of the word SHAPE in its logos and its marketing and promotional documentation.
89 Finally, in the trade mark case, the respondent correctly contends that the applicant did not challenge the use of “SHAPE Australia” as infringing the applicant’s registered trade mark, and that the applicant’s case is confined to the use of the word “SHAPE”. The respondent notes that if such a case had been advanced, it would have had a defence under s 122(1)(a)(i) of the Trade Marks Act.
90 I propose to deal with each of the applicant’s claims sequentially, although many of my factual findings in relation to the ACL claim will flow through to the other two claims, and in particular to the passing off claim.
91 A likelihood of deception under the ACL (or, for that matter, in passing off) in circumstances such as the present proceeding requires the applicant to establish two main matters. First, that its use of the name or word “SHAPE” has sufficient familiarity amongst a relevant class of persons to mean that such persons associate the name (and the word as it is used in the name) with the applicant and its business activities. Inherent in this is establishing what that familiarity or reputation is, and amongst what class of persons it has been established, although it is not necessary as some kind of precondition to a successful claim under the ACL to establish a specific “reputation”: see Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd [2007] FCAFC 70; 159 FCR 397 at [99]. Second, the applicant must prove that members of the class identified will, erroneously, believe (or infer) from the respondent’s use of the word or name “SHAPE” that the respondent’s business is related or connected to the applicant’s business. Inherent in this second matter, given the applicant’s narrowed case, is that the belief which must be established is a belief that there is a connection in the nature of a subsidiary or member of the respondent’s “group”, or alternatively, that the applicant on the one hand (as the smaller business) is a “specialist arm” of the respondent (as the larger business).
92 It is necessary to deal first with the contested issue of the identification of the appropriate class for the purposes of the ACL claim.
93 It is well established that:
where the issue is the effect of conduct on a class of persons (rather than identified individuals to whom a particular misrepresentation has been made or particular conduct directed), the effect of the conduct or representations upon ordinary or reasonable members of that class must be considered[.]
See Flexopack S.A. Plastics Industry v Flexopack Australia Pty Ltd [2016] FCA 235; 118 IPR 239 at [261] (Beach J), citing Campomar Sociedad, Limitada v Nike International Limited [2000] HCA 12; 202 CLR 45 at [102] and [103].
94 As I have noted, the applicant describes the class as participants in the commercial construction industry. By the use of the term “participants”, it seeks to include subcontractors and others (such as architects and designers) who provide, or might provide, services to both the applicant and the respondent. The respondent, again as I have noted, submits the relevant class of consumer (and it emphasises the need for that word) is the buyers of head contracting or construction management services for commercial building projects, being the people to whom the respondent’s impugned conduct is directed. It submits subcontractors are not the relevant class, nor are the buyers of the applicant’s services, because the respondent’s conduct is not directed to them.
95 The respondent contends that the ACL is consumer protection legislation, and what must be identified is a class of consumers likely to be affected by the impugned conduct. The authorities it cites for that proposition are Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; 149 CLR 191 at 199; Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; 238 CLR 304 at [25].
96 In the passage from Campbell on which the respondent relies, French CJ’s description of the characterisation exercise necessary to determine if conduct is misleading or deceptive tends in my opinion to support the approach taken by the applicant rather than that taken by the respondent. At [25], his Honour said:
Characterisation is a task that generally requires consideration of whether the impugned conduct viewed as a whole has a tendency to lead a person into error. It may be undertaken by reference to the public or a relevant section of the public. In cases of misleading or deceptive conduct analogous to passing off and involving reputational issues, the relevant section of the public may be defined, according to the nature of the conduct, by geographical distribution, age or some other common attribute or interest. On the other hand, characterisation may be undertaken in the context of commercial negotiations between individuals. In either case it involves consideration of a notional cause and effect relationship between the conduct and the state of mind of the relevant person or class of persons. The test is necessarily objective.
(Footnotes omitted; emphasis added.)
97 In this passage, French CJ is describing the context in which the impugned conduct occurs, or in which impugned statements are made. Nevertheless, in giving that description, his Honour identified the nature of the conduct as informing the frame of reference in which to assess whether it has a misleading or deceptive character. Here, the nature of the impugned conduct is the promotion, provision and sale by the respondent of commercial construction services using the SHAPE mark. While it can be accepted that “promotion, provision and sale” of these services includes the buyers of those services, the respondent’s conduct in using the SHAPE mark is not restricted to those buyers. The “sector” of the public affected by the conduct is capable of encompassing third parties who contract with, or provide services to, the respondent, and to the applicant.
98 It is true that in Puxu at 199, Gibbs CJ uses the term “consumers” to describe the group of people his Honour had a few lines above identified as “possible victims” of the impugned conduct. However that is in the factual context where, on any view, the “section of the public” affected by the impugned conduct in Puxu were purchasers of furniture. That the primary task (outside cases involving specific representations to identified individuals or entities) is to identify whether, and which, “members of the public” have been misled or deceived, is confirmed by Gibbs CJ’s uses of that phrase in the paragraph above the one relied on by the respondent. I do not accept that the observations of Gibbs CJ should be taken as delineating the operation of s 52 of the Trade Practices Act 1974 (Cth) (nor s 18 of the ACL) to “consumers” in the sense of purchasers of goods or services. Indeed, Mason J said, at 202:
The general words of s. 52(1) should be widely interpreted without being read down by reference to the heading of Pt V ‘CONSUMER PROTECTION’ or to the more specific succeeding sections (see Hornsby Building Information Centre Pty. Ltd. v. Sydney Building Information Centre Ltd.[(1978) 140 CLR 216 at 225]). Although s. 52(1) is intended to protect members of the public in their capacity as consumers of goods and services, competitors may seek an injunction to restrain breaches (s. 80(1)(c); Reg. v. Federal Court of Australia; Ex parte Pilkington A.C.I (Operations) Pty. Ltd. [(1978) 142 CLR 113]). The remedy to prevent deception of the public often has the incidental effect of protecting a competing trader’s goodwill which would be also injured by that deception.
99 The question is, as the applicant submits, to whom is the impugned conduct or representation directed? This was the way Finkelstein J expressed the question in .au Domain Administration Ltd v Domain Names Australia Pty Ltd [2004] FCA 424; 207 ALR 521; 61 IPR 81 at [15] and [22]. At [22], his Honour spoke of the necessity to identify “the group to whom the representation is directed are likely to have been misled or deceived” (emphasis added). I note that at [25], his Honour disagreed with the proposition that s 52 required there to be “significant numbers” of such people, or any similar quantities measure. At least two of his Honour’s reasons for not imposing any such constraint or limit on s 52 are ones I would respectfully see as applicable to the current contention by the respondent in respect of s 18 of the ACL. Finkelstein J’s decision was affirmed on appeal: Domain Names Australia Pty Ltd v .au Domain Administration Ltd [2004] FCAFC 247; 139 FCR 215 (although the Full Court expressed caution about Finkelstein J’s view that there is no requirement that “significant numbers” of the public be misled: see [27]-[28] of the Full Court’s reasons.)
100 First, s 18 (and its predecessor) does not prescribe a requirement that those who are misled must be “consumers” or “purchasers” or any such category. Second, there is no reason in principle to confine the operation of s 18 in such a way. The point of the provision, in the context of trade and commerce, is to prohibit conduct which misleads or deceives, or is likely to do so. The nexus required by the section is between the conduct and the deception, or likely deception. That requires, as the authorities suggest, an analysis of the group to whom the conduct is directed. That group need not itself have any particular characteristics such as being capable of being described as “consumers”. It is not difficult to imagine a circumstance where a head contractor could, through a representation, mislead and deceive its subcontractors – for example, in relation to the terms on which it might engage all its subcontractors, or the kinds of work it can offer those subcontractors. Those subcontractors are not “consumers” or “purchasers”. They are, however, a section of the public. And they are the persons, in this example, to whom the representation is directed. That is sufficient to identify them as the relevant class for the purposes of s 18 in this hypothetical example.
101 This position is also consistent with the observations, obiter, of the High Court in Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; 169 CLR 594 at 604, where the plurality said:
What the section [that is, s 52] is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character.
(Emphasis added.)
102 It should be noted that within this relevant class or “section of the public”, the effect of the impugned conduct must be considered on “reasonable members” of that class, which includes “the inexperienced as well as the experienced, and the gullible as well as the astute”, but does not include “persons who fail to take reasonable care of their own interests”: see Puxu at 199 (Gibbs CJ). The question is then “whether a not insignificant number within the class or cohort have been misled or deceived or are likely to be misled or deceived by the respondent’s alleged conduct, whether in fact or by inference”: see Hansen Beverage Company v Bickfords (Australia) Pty Ltd [2008] FCAFC 181; 171 FCR 579 at [46] (Tamberlin J) and [66] (Siopis J), affirmed in Peter Bodum A/S v DKSH Australia Pty Ltd [2011] FCAFC 98; 280 ALR 639 at [205] (Greenwood J, with whom Tracey J agreed) (cf Finkelstein J’s view in Domain Names and in Hansen Beverage Company at [55]).
103 As I have noted above, it can readily be accepted that buyers of head contracting or construction management services (often referred to in the evidence as the “clients”) are persons to whom the respondent’s conduct in promoting, providing and selling commercial construction services by using the mark “SHAPE” is directed. Nevertheless, in order to promote, provide and sell those services, the respondent (like the applicant) needs to engage subcontractors, and needs to utilise the provision of services from third parties in order to compete for and secure contracts to provide such services. The evidence disclosed, for example, that the respondent contracts out all its joinery manufacturing, in contrast to the applicant. If anything, it might be said to depend more on subcontractors than the applicant. When the respondent, in trade and commerce, uses the mark “SHAPE” in the context of this conduct, any representation is, in my opinion, directed at those subcontractors who may be engaged by it, or wish to be engaged by it.
104 I do not take the use of the word “directed” in the authorities to be confined to “intentionally directed”, or “aimed at” in some deliberate sense. I take it to refer to those members of the public, or the section of the public, which on the evidence are likely to receive, see or otherwise become aware of the representations: see Hansen Beverage Company at [46] (Tamberlin J).
105 Accordingly, I proceed on the basis that the relevant class of people for the purposes of determining the applicant’s claims under ss 18 and 29 of the ACL is as the applicant has identified that class: namely, participants in the commercial construction industry, including subcontractors and others who provide services to either or both of the parties.
The nature of the representation alleged
106 In Lego Australia Pty Ltd v Paul’s (Merchants) Pty Ltd [1982] FCA 140; 60 FLR 465, Deane and Fitzgerald JJ said at 472:
the question whether particular conduct of which complaint is made is misleading or deceptive or is likely to mislead or deceive is, in the ordinary case, a question of fact to be answered in the context of the evidence as to the alleged conduct and as to relevant surrounding facts and circumstances and that, irrespective of whether conduct produces or is likely to produce confusion or misconception, it cannot, for the purposes of s 52, be categorized as misleading or deceptive unless it contains or conveys in all the circumstances of the case, a misrepresentation.
(Emphasis added.)
107 I accept to some extent the respondent’s submissions that the applicant needs to be able to put some “meat on the bones” of its pleading and submission that the representation made by the respondent through its conduct as set out in [14] of the Amended Fast Track Statement is that there is an affiliation, connection, association or relationship between the applicant and respondent. In my opinion, taking into account the applicant’s submissions (which, even if not directly, appears to accept the need for some particularity), the representation which could be said to arise from the respondent’s conduct is that, through the use of the mark SHAPE, the applicant has a business relationship with the respondent of a kind whereby the applicant is part of a group controlled by the respondent, or headed by the respondent: that is, an arm or a subsidiary of the respondent. The alleged representation is not that the parties have some kind of contractual relationship in the work they perform, while otherwise maintaining their separate identities. That would be inconsistent with the thrust of the applicant’s case.
108 Rather, the representation, if any, must be that the applicant is a (smaller) part or subsidiary of the respondent’s group: that is, of the “Shape Group”, and this is because of the way the respondent provides, promotes and sells its commercial construction services using the mark SHAPE. This characterisation of the representation is broader than the respondent’s characterisation of the applicant’s claim, which is more specifically that the applicant is a “specialist shopfitting arm (or business unit)” of the respondent. The respondent takes this characterisation from the applicant’s contentions, but I accept the applicant used this as an example rather than a complete characterisation.
The ACL allegations: fact finding
109 The parties did not dispute that the findings of fact to be made by the Court would apply equally to the alleged contraventions of s 18 and s 29.
110 I have set out the uncontroversial factual matters at [6] to [31] above. What those facts disclose is that the respondent’s current business is markedly different in terms of size, and in terms of the nature of the many projects in which it is engaged. There was no real factual contest that the applicant was not operating in the same markets as the respondent and that deception would occur in the markets occupied by the respondent. That is, as I understood it, why Mr Billings conceded the parties were not competitors, although I find that from his perspective he aspires to them being “potential” competitors in some respects at least. The propositions were the other way around. The applicant’s case hinged on the respondent’s alleged intrusion into the markets, and areas of business activity, of the applicant: that is, the smaller scale work, work involving retail fit-outs, and work involving retail food fit-outs. It was the respondent’s alleged intrusion into those areas which was said to provide the context for the misleading or deceptive representation alleged by the applicant, notwithstanding that these activities were a small and not financially significant part of the respondent’s business activities. Therefore, while most of the respondent’s submissions about its relatively larger size, its different market focus, the nature of the project work it targets and the highly sophisticated characteristics of most of its customers in multi-million dollar markets can be accepted, those factual matters do not engage with the applicant’s case.
111 Thus, the factual issues in the applicant’s ACL case (relevant also to its passing off claim) reduce substantively to the following:
(1) The existing and historic (since October 2015) overlap in the parties’ business activities;
(2) What, if anything, can be made of the gaps in Mr Anderson’s evidence about the respondent’s business activities;
(3) The applicant’s business into the future, in the sense of the likelihood of any change to the level of overlap otherwise existing;
(4) Whether by the respondent’s conduct the class (even if taken as the applicant describes it) is likely to be led into the error specified in the applicant’s Amended Fast Track Statement.
112 I use the word “overlap” as a shorthand term to cover the applicant’s evidence and submissions that there is an overlap in the businesses of the parties in respect of work types, trades used, subcontractors and service providers used, as well as the “possibility of parties working at sites side-by-side”.
113 It is the occurrence of overlap which is said to provide the occasion or opportunity for deception. Although, as the applicant submits, it is not necessary to prove that the parties operate in a common field of activity in order to establish a contravention of s 18, any overlap in the parties’ activities is, as I have noted, likely to be forensically relevant because it provides the setting or context for the alleged likely erroneous belief on which the applicant relies: see Chase Manhattan Overseas Corporation v Chase Corporation Ltd (1986) 12 FCR 375 at 381 (Neaves J) and 384-385 and 391-392 (Beaumont J).
114 The overlap on which the applicant relies is of two kinds. First, there is overlap in terms of clients, customers and worksites. Second, there is overlap in terms of the trade and other contractors used by the parties (even if those contractors are working on different projects and different sites).
115 In relation to the first kind of overlap, the evidence demonstrates only small areas of overlap between the applicant’s fit-out activities predominantly in the retail food industry and the respondent’s commercial construction activities.
116 The applicant relied on documents it had obtained during discovery to put to Mr Anderson in cross-examination a number of projects the respondent had undertaken which fell into this category. For instance, Davvero café was a project undertaken by the respondent in 2014, while it was still trading under the name ISIS.
117 Some of the documents (such as the Davvero proposal) included statements about the respondent’s prior project experience and referred to restaurant projects – an example being a project completed for the Rockpool restaurant and bar in Melbourne. The applicant relied on documentation taken from the respondent’s website indicating a project completed by the respondent for the Delaware North Companies for the fit-out of three food tenancies within the Darwin airport. The three tenancies were Hungry Jack’s, Bumbu Asian Restaurant and Giancarlo coffee. This project was completed in August 2013.
118 Mr Anderson also listed in his affidavit the following retail food projects that the respondent had undertaken (in addition to Davvero): the “Brisbane Club” refurbishment, Pizza Pasta Boulevard, Oyster Bar fit-out, Voyager Estate Restaurant, Veloce Café, Shooters Nightclub, a Subway store at Adelaide airport, and “Italian Restaurant Express Buffett and Kitchen” at Jupiters Gold Coast.
119 Mr Anderson was cross-examined about the respondent’s website information concerning a project at Flinders University which the documentary evidence showed consisted of an Australia Post office, a day and night pharmacy and a convenience store, the latter appearing to be a wholefoods store. This project was completed in November 2014, again, before the respondent changed its name.
120 Mr Anderson was cross-examined about the details of many of these projects and he was unable to give any substantive evidence because he had not been personally involved. At best, he could confirm what the document said but he was unwilling, correctly, to give evidence by speculating about the nature of the work undertaken on each project when he had no personal knowledge.
121 There was certainly evidence of the respondent having undertaken other projects in places attended or frequented by the public which Mr Anderson had not identified as “retail” projects in his evidence. These included the fit-out of bank branches for Suncorp and Westpac, of offices for the insurance company Bupa (the evidence related to a tender in January 2016), and stores for Australia Post. There was considerable evidence given, in chief and in cross-examination, about the respondent’s work on projects for the Australian Red Cross blood donor centres. The respondent’s work on these blood donor centres was one of the few examples in the evidence of the respondent having completed projects for this type of public-facing client at multiple locations. Most of the other evidence related to projects at a single location, or a single project.
122 One distinction about the blood donor centre projects is that the applicant has also fitted out donor centres for the Australian Red Cross: see Mr Billings’ affidavit at [20(b)]. This was one of a small number of examples where the parties had common clients with each completing more than one project for those clients.
123 Considerable emphasis was placed by the applicant on evidence which emerged during the trial about a project the respondent had completed in relation to the fit-out of a McDonald’s store in Rundle Mall in Adelaide in the second half of 2016. It was not disputed that the applicant has done at least one fit-out for McDonald’s. Mr Billings included McDonald’s in a list given in his affidavit, where he gave the following evidence:
As well as maintaining existing clients, since July 2012, Shape Shopfitters has steadily built a range of new clients, both food and non-food related. Some of the additional clients secured by Shape Shopfitters in the retail food space include the following:
(a) Chocolateria San Churro – a chocolate store and café franchise;
(b) Coco Cubano – a chain of Cuban restaurants;
(c) Degani – a café chain;
(d) Gelatissimo – an ice-cream store franchise;
(e) Jolly Miller – a chain of cafes, some of which were previously called ‘Seed & Stone’;
(f) Mad Mex – a national Mexican fast-food franchise;
(g) McDonald’s Australia – the international burger fast-food franchise;
(h) Red Rooster – a national chicken fast-food franchise;
(i) Snag Stand – a sausage fast-food franchise; and
(j) Zambrero – a national Mexican fast-food franchise.
124 No details were given in evidence by Mr Billings about how many fit-outs for McDonald’s the applicant had undertaken, or in which locations they had occurred. This is relevant because, if the applicant is not working in South Australia, for instance, then the possibility of contractors and other “participants” based in that state being misled into believing there is a relationship between the two parties would seem remote.
125 As I have noted in the section at [6] to [31] above, the applicant’s work in the non-food retail market is relatively small. Although Mr Billings gave some evidence about the applicant’s plans to expand these aspects of its business activities and to diversify from retail food fit-outs and QSR in particular, the respondent submits:
Mr Billings gave evidence that, although it is currently rare for the parties to have the same clients, there was “a real chance of clash” in relation to “potential clients”. Mr Billings sought to include in his affidavits as much information as he could that would demonstrate actual or potential confusion between the parties. Despite this, there is no material in evidence that could demonstrate that Shopfitters’ business is changing so as to target non-retail-food work.
The best indicator of the future direction of Shopfitters’ business is the work it is currently doing. As set out above, almost all of Shopfitters’ work in the last three financial years has been retail food shopfitting work (and its work has not changed since then). The minimal non-retail-food work Shopfitters has done to date was mostly by reason of pre-existing relationships, not by reason of any market-facing material, or any concerted effort to chase this work.
In fact, Shopfitters’ strategic plans from 2010 to 2015 and from 2013 to 2016 say that Shopfitters’ ‘core purpose’ is to be the number one shopfitter for a number of leading retail food brands across Australia. Mr Billings confirmed in cross-examination that that is still Shopfitters’ core purpose. There is no reference in Shopfitters’ strategic plans to non-food work.
Shopfitters is presented to the market as a shopfitter, and its publicity materials are exclusively focused on retail food. Mr Billings accepted that there was no material by which the market could pick up on Shopfitters’ desire to do general commercial refurbishment work.
(Footnotes omitted.)
126 I accept those submissions. They reflect the evidence, in particular that the applicant’s non-retail-food work has been obtained through personal relationships rather than any marketing and promotion. Mr Billings’ evidence about a change in the applicant’s business activities, while no doubt expressing his genuine intentions for the applicant, was aspirational in nature. It does not assist in establishing that any overlap between the parties’ current activities is likely to alter (and increase) in the foreseeable future.
127 On any view, and I refer back to the uncontested facts I have set out at [6] to [31] above, this aspect of the respondent’s work was a small part of its business activities. Nevertheless, as I have also noted, the proportion of work this represents for the respondent is not the point. The point is the alleged intrusion of this aspect of the respondent’s work into the market occupied by the applicant and the potential for (taking the applicant’s case) participants in that market to be led into error about there being a relationship between the applicant and respondent. None of these propositions depend on the proportion of the respondent’s work that these kind of projects represents.
128 Overwhelmingly, what this evidence shows is that the respondent’s promotion of itself to future clients and customers centred on fit-outs of non-retail, and certainly non-retail-food sites. That is so even if one uses the most generous concept of retail, as employed on behalf of the applicant during cross-examination – namely, a place or site where members of the public attend for the provision of goods or services. The Red Cross blood donor centres, Mr Anderson accepted in cross-examination, fell within this broad concept of “retail”, but in fact such projects are quite distinct from the projects and sites on which the applicant conducts the majority of its commercial fit-out activities, recalling that what the applicant mostly does is best described as shopfitting, and largely retail food fit-outs, especially QSR.
129 There was some point made in cross-examination of Mr Anderson that when he had compiled his list of projects (which I consider below), some of these projects, which could have been classified as “retail”, were classified by a description that did not involve “retail”. He accepted that was the case. Nothing turns on the respondent’s internal classification of these projects.
130 In conclusion, I accept the applicant’s submissions that the evidence does not demonstrate the respondent will cease undertaking retail fit-outs, including retail food fit-outs. However I am satisfied this would will remain a small but measurable part of its business activities. I also accept that the McDonald’s project evidence establishes that where an opportunity arises, the respondent may seize it – unsurprisingly for a commercial operator – even if it is in its “non-core” work of QSR, and even if on a relatively small scale (see in particular, Mr Paley’s affidavit). Thus, there is, I accept, some overlap in the parties’ business activities. It is of a small proportion. For reasons I explain below, it is not the kind of overlap which in my opinion is likely to lead any participants in the industry into error about a business connection or relationship between the applicant and the respondent, so that the applicant would be perceived to be part of the respondent’s group.
(2) Gaps in Mr Anderson’s evidence
131 A key part of Mr Anderson’s affidavit evidence was his description of the commercial construction activities in which the respondent had engaged. At [38] of his first affidavit, Mr Anderson divided his description by category, identifying the area of activity or industry in which the respondent operated: commercial office fit-out and refurbishment, education, health, hotel refurbishments, retail and “speciality” (which included airports).
132 Mr Anderson then deposed (at [39]) to having caused to be prepared several tables and charts summarising the respondent’s business, by using data from the respondent’s “SalesForce” customer relationship system. Mr Anderson explained in his evidence that SalesForce was an “opportunity database”, so that it recorded, amongst other things, jobs that the respondent had tendered or sought but had not secured.
133 Mr Anderson further deposed to having chosen two date ranges for the search:
(a) the three-year period between 15 October 2013 and 15 October 2016; and
(b) the one-year period between 15 October 2015 and 15 October 2016, which roughly reflects the period in which the company has been trading as ‘SHAPE Australia’.
134 Mr Anderson’s affidavit was affirmed on 8 December 2016, so the end point of the search was only shortly before his affidavit was affirmed.
135 The material produced by Mr Anderson was contained in spreadsheets attached to his affidavit, and was also summarised by him in the body of his affidavit. He was cross-examined on the basis that the information he had provided about the nature and range of the respondent’s business in the commercial construction industry was incomplete. In its final written submissions at [65], the respondent correctly identifies the three ways in which Mr Anderson’s evidence was incomplete. In short, these were:
(1) Projects may have been outside the search dates used by Mr Anderson. This included projects where completion dates were within the search range but the earlier “expected win” date was not, so they were not captured. Mr Anderson readily conceded the projects in this category that he was shown in cross-examination were undertaken by the respondent.
(2) Projects for which the respondent tendered but did not win the tender. Mr Anderson confirmed unsuccessful tenders were capable of being captured by the SaleForce database because it was an “opportunity” database, but he had not searched for projects in this category.
(3) Projects that may have received a classification in the SalesForce database other than “retail” work and where the description did not include the food-related words searched for by Mr Anderson. I have referred to this category above: these are premises such as medical centres, or banks, which Mr Anderson accepted in cross-examination were premises where the public attended to “purchase” goods or services.
136 The applicant submitted that these aspects of Mr Anderson’s evidence, and the documents he had produced meant that:
the Court cannot safely rely on the evidence that Shape Australia has advanced which purports to confine the extent of its involvement in work relating to the retail sector. The picture that Shape Australia has presented in its evidence as to its involvement in this sector is clearly understated. This situation arises as a result of the inadequacies in Mr Anderson’s evidence.
137 The respondent appeared to take this as impugning Mr Anderson’s credit, or his personal reliability, and as a consequence quite a lot of time in submissions was spent on this issue. That is not how I understood the applicant’s submissions, and I accept Mr Anderson was a credible and reliable witness, insofar as his evidence went.
138 Mr Anderson did not shy away from the suggestions in cross-examination that the spreadsheets he produced from the SalesForce database were incomplete in these ways. The applicant is correct to submit that these matters mean Mr Anderson’s evidence cannot be accepted as presenting a complete or comprehensive picture of the respondent’s business. However I do not consider that submission advances the applicant’s case in any material respect. The respondent bears no onus of proof in this case, nor does it bear any evidentiary burden. If the applicant’s real contention is that there are significant aspects of the respondent’s business which overlap with its own and those aspects or parts have been concealed from the Court, then it bore the evidentiary onus of making good such a submission. In the end, no such submission was put. What was put was simply that Mr Anderson’s evidence could not be accepted as providing a complete or reliable picture of the respondent’s business. On the basis of the evidence, that submission is too broad, especially when measured against the agreed facts.
139 Mr Anderson’s evidence gave, I am satisfied, a reliable picture of the predominant aspects and features of the respondent’s business. The areas in which it was established to be incomplete were either areas where there was, in any event, no real overlap with the applicant’s business (fit-out of banks, medical centres, insurance companies or fit-outs where special clearances were required, such as Darwin airport), or were isolated examples of an overlap, such as the McDonald’s project in South Australia. I see no basis in the evidence to doubt Mr Anderson’s explanation that these were “opportunity” projects, which may well occur again, but will remain a small proportion of what the respondent does. Further, there is the location factor to which I have earlier referred – these projects undertaken by the respondent and to which the applicant points as indicating overlap have occurred all over Australia. For there to be any overlap of the kind likely to give rise on the reputation on which the applicant relies, and to the class the applicant relies, I do not consider that the respondent’s activities in parts of Australia where the applicant has minimal business activity assists the applicant’s case.
140 Therefore, in my opinion, although it can be accepted Mr Anderson’s evidence may have been incomplete in some respects so that the extent of overlap with the applicant’s businesses could not be identified with absolute precision, in the absence of positive evidence from the applicant, this does not advance its case. The state of the evidence about overlap was the applicant’s responsibility as part of its burden to prove its case. In the absence of any suggestion (and none was made) of some kind of improper withholding on the part of the respondent, if there is insufficient or incomplete evidence about the nature of the overlap between the parties’ business activities, this tells against support of the applicant’s claims. It does not defeat or rebut the respondent’s defence in this proceeding.
(3) The applicant’s business into the future
141 Further, the applicant has not proven that there will be any substantial or material change in the nature of its business in the foreseeable future, such that there is a likelihood of increased overlap. Mr Billings gave some evidence about his plans and aspirations for the applicant’s business, but there was nothing sufficiently certain in his evidence to alter the view I have formed about the absence of material overlap. See also [222] of my reasons below.
(4) Whether identified class likely to be led into error
142 Is the respondent’s conduct as set out at [14] of the Amended Fast Track Statement and at [53] above, likely to lead participants in the commercial construction industry into error, by leading them to incorrectly believe that there is a commercial relationship between the applicant and the respondent, and in particular that the applicant (as the smaller business) is a part of the respondent’s group, or a specialist “arm” of the respondent’s business?
143 To make good a positive answer to this question, the applicant relied on the following matters: its reputation, the objective features of the respondent’s brand, the nature and extent of commonality in the trades people and other service providers who would encounter both parties, and evidence about misidentification and confusion by participants in the industry about the parties.
144 Proof of reputation is not an essential element in a contravention of ss 18 and 29 of the ACL: Cadbury at [99]; Flexopack at [272]. However, establishing what the applicant has been known for since 2012, and the asserted centrality of the word “SHAPE” in its reputation, forms a key contextual plank of the applicant’s case.
145 I accept that since adopting the name “Shape Shopfitters Pty Ltd” in 2012, the applicant has developed a reputation in the commercial fit-out and refurbishment industry under that name, and that there is some evidence that some participants have come to refer to the applicant simply as “Shape”. Examples of this shorthand could be found in the evidence of Messrs Chait, Charles and Mooney.
146 Mr Billings gave evidence about this, on which he was not cross-examined:
In my experience, I have regularly heard clients and sub-contractors refer to Shape Shopfitters as ‘Shape’ alone, particularly in conversations, but also in writing. I refer to the company as ‘Shape’ and to myself as ‘Wayne from Shape’, particularly when dealing with clients and sub-contractors.
147 Mr Chait, who is an architect, and whose company works with the applicant particularly in relation to fit-outs of Nando’s stores, gave the following evidence (at [19] of his affidavit):
Since the company re-branded, I have always referred to it as ‘Shape’ (as I do in this affidavit). While I am aware that another company has also started using the name ‘Shape’ relatively recently, when I hear the name ‘Shape’ in relation to the specific market in which I work, I think of Wayne’s business.
148 However, some of the evidence on this issue was not quite as clear as the applicant’s submissions might suggest. Mr Mooney for example said at [12] of his affidavit, “I now refer to the business as either ‘Shape’ or ‘Shape Shopfitters’” (emphasis added.)
149 The respondent submits that such evidence provides no detail of how often or to whom Messrs Billings, Charles and Mooney use the name “Shape” in contrast to their usage of the name “Shape Shopfitters”. To the extent that Mr Chait and the applicant use the name “Shape” simpliciter to refer to the applicant, the respondent submits, with some force, that such usage is merely shorthand for the company’s name. It is not a use of the word as the company’s name.
150 In my opinion, the evidence more comfortably supports the respondent’s contention that the applicant’s reputation, and therefore the extent of any knowledge in the commercial construction industry of the applicant by the word “Shape” is more confined than the applicant’s submissions might suggest. The applicant’s reputation, and predominant activity, is in the sector of retail food shopfitting and refurbishments. Mr Billings confirmed in cross-examination that the applicant’s core purpose was to become the number one shopfitter for a number of leading retail food brands across Australia.
151 As the respondent also submitted, correctly in my opinion, the majority of the applicant’s work is done in Victoria and its reputation and recognition through the word “Shape” in its corporate identity is the strongest in Victoria. The evidence about its reputation and recognition through the word “Shape” outside Victoria is slight.
152 I accept that within this more confined area of activity, there are at least some participants who know the applicant as “Shape”. However, others know the applicant as “Shape Shopfitters” and in my opinion the applicant’s marketing, promotion and brandings, including its Registered Trade Mark, would suggest that it is just as likely the applicant is known and referred to as “Shape Shopfitters”, especially given it is shopfitting as the activity which dominates its business.
153 It is true that on some of its signage, such as its trucks, the word “Shape” has some prominence. Where that occurs, it is in the context of the reproduction of the applicant’s Registered Mark, in which the word “Shape” also has prominence. What is also seen on the sides of the applicant’s trucks is the applicant’s website address which is “shapeshopfitters.com.au”. These features explain why some industry participants may well refer to the applicant as “Shape”, while others may refer to it as “Shape Shopfitters”. I do not consider the evidence tends strongly one way or the other, beyond accepting, at its highest, that within the retail food fit-out and refurbishment industry in Victoria, it may be more likely that a participant might use, recall or think of the applicant rather than the respondent in conjunction with the word “Shape”, but this tendency does not advance the particular misrepresentation case put by the applicant under the ACL.
154 I am not satisfied on the evidence that the word “Shape” has come to have a secondary meaning associated with the applicant, even in the more confined market to which I have referred, of the applicant’s business. In my opinion the evidence remains equivocal on this matter.
2. Objective features of the respondent’s brand
155 As to the objective features of the respondent’s brand, similarly, the prominence of the word “Shape” in each party’s name and branding can be acknowledged. However, each party uses the word “Shape” to different effect, both in terms of the other words it is combined with (“Shopfitters” and “Australia” respectively) and in terms of how the word is represented on logos and other corporate identification or promotional material. I accept that the respondent’s use of the generic word “Australia” does convey the impression of a national presence, and the applicant’s use of the word “Shopfitters” conveys a specialisation, which, when considered together is a factor that might lend support to the kind of misapprehension pleaded by the applicant. The difficulty for the applicant is that other factors tend against its contention.
3. Commonality of participants
156 The respondent’s witness Mr Gerrard accepted in cross-examination that a wide range of subcontractors and trade services suppliers are used in retail food shopfitting projects. In cross-examination, Mr Gerrard confirmed that the following trades, among others, are commonly used: services to install doors and windows, carry out glazing, tiling, electrical works, plumbing, fire protection, information technology, signage and graphics and security systems. The applicant submits, and I accept, that many of these trade people and service providers are also necessary in the kind of work the respondent undertakes. The respondent does not dispute such a proposition at this level of generality.
157 What it disputes (putting to one side its primary concerns about how the relevant class should be described) was that any reasonable members of this class would be led into error in the way alleged, or indeed, in any way, about a commercial connection or relationship between the parties.
158 The applicant submits, and the respondent does not dispute, that there are more than 100 subcontractors and service providers that provide to both parties services of the kind put to Mr Gerrard. Mr Billings’ evidence was that, on reviewing the respondent’s list of suppliers, he identified 122 companies “that Shape Shopfitters also engages for the various purposes described in this Affidavit”. Those companies are contained in an exhibit to Mr Billings’ affidavit, WPB-25. Some of the companies listed there are large entities, and describing them as “service providers” entails a broad use of that phrase. Others, apparent from their corporate names, are quite specialist companies providing, I infer, quite specialised services. Within this group, some corporate names would be familiar to many members of the public and many would not.
159 I do not consider it is possible from a list such as this, accepting (as I do) Mr Billings’ evidence about commonality, to make any finding about whether and how employees and officers of these companies may be led into error about any relationship between the applicant and the respondent. Aside from the specific evidence of instances of misdirection and mistakes to which I refer below, there is insufficient contextual information about the circumstances in which employees and officers of the companies on this list would encounter each of the parties, and the respondent in particular, in the provision by those companies of trades and services.
160 At the most, what can be said is that there is the potential or opportunity for confusion, and perhaps misidentification, because of the commonality. The evidence to which I refer in the next section establishes that potential is real, and not fanciful, but it does not establish the case pleaded by the applicant.
4. Instances of misidentification and confusion
161 The applicant led evidence about one particular incident at Monash University, when the parties were working “side-by-side”. The remaining incidents occurred within the processes of those companies the applicant has identified as “participants” in the commercial construction industry.
162 Evidence about the events at Monash University was adduced through Mr Gentz, a project manager employed by the applicant. The respondent objected to some of his evidence on the grounds of hearsay and that objection was upheld. His evidence as admitted was that in May 2016, he went to the Caulfield campus of Monash University to carry out a site measure for a new “Sumo Salad” retail food premise, one of four premises in a new food court on the campus. There was no debate that “Sumo Salad” is a franchise which fits within the retail food category, although there was some disagreement (not presently relevant) as to whether Sumo Salad fitted in the “QSR” category or what Mr Billings referred to as the “franchise food fit-out” category. Mr Gentz gave evidence about “other workers” working on the common food court part of the construction project, and although a portion of his evidence concerning what a building manager on the site said to him about those other workers was excluded, the remainder of his affidavit evidence (in particular in [10]-[12]) makes it clear that he came to understand that the “other workers” were the respondent’s workers who were doing the fit-out for the food court area. Mr Gentz’s evidence was that the two sets of employees (that is, the applicant’s employees and the respondent’s employees) worked “next” to each other for a period of two to three weeks.
163 The respondent is correct to submit that the excluded evidence robs Mr Gentz’s evidence of some of its force, in terms of being evidence of any actual misidentification or misunderstanding. In any event, what the remainder of Mr Gentz’s evidence reveals is that, if one excludes the day on which he arrived at the worksite on the basis that there is no admissible evidence about what occurred on that date in terms of his interactions with others, from that point on there does not appear to have been any substantial incidents of confusion or misidentification during a period of two to three weeks when the parties’ employees were working “side-by-side”.
164 I turn to deal with the remainder of the applicant’s evidence about misidentification.
165 The first series of incidents relates to some conduct by employees of ARA Fire Protection Services Pty Ltd, a company which has done fire protection work for the applicant since about 2012. They are one of the “common” contractors between the parties. Ms Newall, a contracts administrator employed by ARA, described how, in February 2016, she had created a job in the ARA accounts system, in relation to a project at the Swissôtel in Sydney, where ARA had subcontracted with the respondent. She deposed that instead of typing in “SHA 19 Shape Australia” (ARA’s code for the respondent), she keyed in “SHA 17 Shape Shopfitters”. The documentation produced by ARA and tendered in evidence shows the client as “Shape Group”. Ms Newall’s evidence was that she did not realise ARA had two clients with the word “Shape” in their name. The error was discovered when the applicant queried the invoice sent to it. A few months later, in September 2016, ARA was undertaking another subcontract with the respondent, this time in relation to Curtin University in Western Australia. Again, the ARA documentation in evidence identified the client as “Shape Group”. An invoice was instead generated and sent to the applicant, because again the applicant rather than the respondent had been identified in ARA’s project management system. This time, it was Ms Higgins from ARA who made the mistake of the same kind Ms Newall had made, although Ms Higgins had only been in her job at ARA for two days. The evidence discloses that when the invoice was queried by the applicant, an employee of ARA (one Ms George) directed the applicant’s employee to follow it up with an employee of the respondent.
166 The applicant submits this particular interaction means “ARA still saw no distinction between Shape Australia / Shape Group and Shape Shopfitters”.
167 Ms Higgins deposed:
However, I incorrectly selected the client ‘SHA 17 Shape Shopfitters’ instead of ‘SHA 19 Shape Australia’ because ‘Shape Group’ was not in the system as a debtor and ‘Shape Shopfitters’ sounded like the right name because in my understanding, Shape Group is a shopfitter – that is what they do. It did not occur to me that the client identified in ARA’s system as Shape Shopfitters might be a different business to the business identified in Derek’s e-mail to Mr Slowe (and which is only referred to in Mr Slowe’s e-mail address) as ‘shapegroup’.
168 Another ARA employee, Ms Easthope, gave evidence about a specific checking mechanism placed in ARA’s accounts system to prevent, or minimise the risk of this kind of event occurring again. She deposed that she has seen staff having to employ the checking mechanisms on a couple of occasions since these events, although she has not had to do so.
169 Contrary to the applicant’s submissions, I do not accept that the evidence from ARA rises above confusion of the applicant with the respondent. It certainly demonstrates specific examples of that. It also demonstrates how ARA has taken steps to try and minimise or avoid that confusion. However it does not demonstrate that the respondent’s conduct in using the word “Shape” in its trading activities and in its business name has led ARA into erroneously believing that the applicant is part of, or an arm of, the respondent.
170 The applicant also relied on some evidence from Mr Ellery, an assistant accountant employed by Olsson Fire and Risk Pty Ltd. Olsson is a fire engineering contractor. The evidence relates to some events in late 2016, after an Olsson employee had sent an invoice for a job to the respondent, in the usual way. When Olsson followed up payment of this invoice, instead of sending a reminder to the respondent, it sent an email and a copy of the invoice to the applicant. In November 2016, the applicant’s lawyers drew Olsson’s attention to this mistake in the correspondence. Mr Ellery deposed in his affidavit to attempting to find out why the mistake occurred. What he discovered in Olsson’s database was that there was “a mixture of information” in the database so that the project to which the invoice related contained some information relating to the applicant and some relating to the respondent. He explained the mix-up in the following way:
Based on these entries in the Olsson Database, it appears that when the entry for the Shape Group Project was created, the information relating to Shape Shopfitters was overwritten in part with new information relating to Shape Group. This resulted in a mixture of information relating to these businesses.
171 This was the only specific instance relied on in relation to Olsson.
172 A further example in the evidence was a series of five tender proposals submitted by Perth Mechanical Services erroneously to the applicant in relation to jobs being conducted by the respondent. Mr Billings was cross-examined about this and he accepted that the applicant did not draw these matters to the attention of the respondent or to the attention of Perth Mechanical Services. As the applicant submits, this fact does not detract from the nature of the mistake that was made.
173 A not dissimilar kind of mistake was referred to in the evidence of Mr Wood, concerning a plumbing job carried out by his firm Precise Plumbing Pty Ltd for the respondent at Adelaide Airport. In Precise Plumbing’s accounting database the new account which was created was one in the name of the applicant rather than the respondent, which meant that the applicant received an invoice from Precise Plumbing for this job rather than the respondent. Once the error was discovered the invoice was reissued to the respondent.
174 The applicant submits that the evidence in these three examples, like the previous examples “shows that people involved in providing services to Shape Australia have failed to adequately distinguish between the businesses of Shape Australia and Shape Shopfitters”. The applicant submits that “[t]he only obvious explanation for this is their shared name – SHAPE.”
175 It can readily be accepted that the explanation for the mistakes and confusion to which all this evidence refers is indeed the use of the word “Shape” by both parties in their business names and trading activities. Once again however, the applicant’s case is not that participants in the industry will believe one company is in fact the other company. I do not consider this evidence demonstrates that participants in the industry are led into the kind of error the applicant alleges in this proceeding. This evidence, rather, is evidence of confusion and no more.
176 A slightly different example can be seen from the evidence of Mr Jones from the BCI. BCI is an organisation which publishes information on the internet, by way of an online database, recording building and construction projects being undertaken in Australia (and elsewhere) and who is undertaking them.
177 Mr Jones deposed to researching a particular proposal in December 2015 and having found that the project was awarded to “Shape”. Mr Jones then caused a listing on the BCI database to be posted for this project which showed it had been awarded to the respondent, when in fact it was awarded to and completed by the applicant. Mr Jones had his attention drawn to the mistake after he received a subpoena to give evidence and produce documents in this proceeding, and he then took steps to correct the entry.
178 The explanation given by Mr Jones for this mix up was as follows:
I assumed that this was a reference to Shape Australia Pty Ltd (Shape Australia) – a company that I was aware of from my experience as a researcher and which I was aware of from the days when it was known as ISIS. This is the only ‘Shape’ I knew of then. The MSAC Project – which was a refurbishment and fit-out project - seemed to me to be the type of project that would be awarded to Shape Australia, as it tied in with what I knew about the type of work Shape Australia did.
179 The applicant submits that Mr Jones’ evidence:
…highlights the significant potential for participants in the trade (such as trade contractors and other service providers) to simply treat all businesses referred to as SHAPE as, in effect, one business. This is the crux of Shape Shopfitters’ case.
180 It is not entirely accurate to submit the applicant’s case can be described in those terms. The applicant’s case is not that participants in the industry will see all businesses that use the name “Shape” as part of the respondent’s group. The applicant’s case is that participants in the industry will see the applicant as part of the respondent’s group. I do not see Mr Jones’ evidence as necessarily suggesting that was his belief. Rather, the evidence that I have just quoted, which is the key evidence on which the applicant relied, suggests that Mr Jones only knew of one business with the name “Shape” and it was the respondent’s business. All that suggests that is that the respondent may have a more prominent, and dominant, market presence than the applicant. Given the discrepancy in the size that is not surprising.
181 The applicant also led some evidence about two other construction companies: Long Contracting Pty Ltd and Vos Construction and Joinery Pty Ltd. An exhibit (exhibit A13) reproducing print-outs from the websites of these two companies was largely ruled inadmissible. It would appear that the purpose of the evidence was to demonstrate that some commercial and residential construction companies have specialist or dedicated shopfitting aspects to the services they provided. In broad terms, the cross-examination of Mr Gerrard on the Long Contracting documents tended to support the proposition that Long Contracting was such a business. The same could be said about the cross-examination of Mr Gerrard in respect of Vos Construction’s business.
182 I do not consider this evidence assists the applicant. It demonstrates, it can be accepted, in conjunction with Mr Gerrard’s evidence in cross-examination, that there are commercial and residential construction companies which are sufficiently large to incorporate within them specialist or dedicated shopfitting arms. That would be the highest the evidence could go in favour of the applicant. The inference the applicant asks the Court to draw from this evidence, it would seem, is that a participant in the industry could take the same view about the respondent: namely that it also had a specialist or dedicated shopfitting service operating within its group. The next inference the applicant invites the Court to draw (although this was not expressly spelled out in the submissions) is that the applicant would be perceived by participants in the industry as being that specialist or dedicated shopfitting service, operating within the respondent’s group. It simply does not follow from evidence that other large companies engage in shopfitting, that participants in the industry would see the applicant as connected with the respondent. More than this would be required for any such conclusion to be drawn.
183 The evidence to which I have referred demonstrates that potential for misdirection or confusion, especially in terms of the way industry participants might administer their accounts or other records management systems is not fanciful, but real. However, the occurrences are sporadic, and on inquiry or further investigation, are quickly dispelled. No sustained or ongoing belief in a connection or relationship between the applicant and the respondent results.
184 In Puxu, as the plurality in Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640 observed at [46], the s 52 claim failed despite the appearance of the parties’ furniture being almost identical. That was because a majority of the Court held purchasers acting reasonably would pay attention to the label, brand or mark of the suite they were minded to buy and because of this, such purchasers “would not be misled by similarities in the getup of rival products”.
185 I am satisfied the same could be said in the current circumstances. Whether or not they are described as “sophisticated”, all industry participants (not just the potential clients or buyers) engage specifically over long periods of time, and often repetitively, with the applicant and the respondent. This means these participants, acting reasonably, will not be misled into believing the applicant is connected or related to the respondent, in the sense of being part of the respondent’s group, or a specialist “arm” of the respondent. The evidence discloses the applicant’s work is mostly obtained through personal contacts and existing business relationships. This was made clear in the cross-examination of Mr Billings, where the following exchange occurred:
[Counsel for the respondent:] A very common way in which in Shape Shopfitters will secure a new project will be for a regular client – say, for example, Grill’d – to ask Shape Shopfitters to tender on a particular project? [Mr Billings:]---Correct.
[Counsel for the respondent:] And I suggest that’s the most common way in which your projects are acquired? [Mr Billings:]---Yes, it would be the most common. Yes.
[Counsel for the respondent:] And it’s also the most important, I suggest? [Mr Billings:]---Yes.
186 Mr Billings also agreed with counsel for the respondent, when counsel suggested to him that “undertaking repeat work for established clients, particularly the national QSR chains, is a very important part of your company’s business.”
187 Work obtained in this way is less likely to be susceptible to the kind of impression for which the applicant contends. Those participants, acting reasonably, will realise that despite using the word “SHAPE” in their names, the applicant and the respondent operate separate businesses, with their own expertise and specialisation, and their own particular ways of operating.
188 The specific evidence adduced by the applicant establishes a minor level of confusion, or misdirection occurring in everyday transactions, which proportionately is very small, and likely to arise between any two industry participants which use the same commonplace word in their corporate names.
189 The respondent also adduced some evidence from Ms Dix, who was the “Head of Content Marketing + SEO (search engine optimisation)” for a business called Web Profits, which specialises in digital marketing. In her field of internet-based search engine optimisation, she deposed that her work involved analysing websites for their effectiveness in terms of attracting visitors, and developing strategies to maximise a website’s ability to attract desired types of visitors.
190 Ms Dix deposed that she considered performance in Google searches:
as the best indicator of a website’s effectiveness in attracting traffic from people based in Australia, because Google attracts far more searches from people based in Australia than any other internet search engine.
191 After describing how searches occur, the role of keywords in internet searches and how websites are “optimised” for search engines, Ms Dix’s evidence dealt with her analysis of the parties’ websites, in terms of their results from internet searches. Ms Dix concluded that the applicant’s website was “a very small one”, irregularly updated, and not frequented very much in terms of people searching and accessing it (or “measured traffic”). She also concluded that searches which did result in access to the applicant’s website arose mostly from the use of the term “shopfitters” rather than the term “shape”. Indeed, she deposed that “at least 99.95% of measured traffic to the Shape Shopfitters Website was derived from internet searches that did not include the word ‘shape’”.
192 Ms Dix’s views on the respondent’s website was that, although it was much larger than the applicant’s, it was also irregularly updated, with no attempts made to target “valuable keywords”. She found that the word “shape” comprised the largest percentage (over 69%) of the keywords which resulted in the respondent’s website coming up in internet searches. Ms Dix concluded:
(a) The Shape Shopfitters Website in its current form is not likely to have ever ranked highly (ie, in the first five or even ten results on Page 1) in searches for the keywords ‘shape’ or ‘shape australia’.
…
(c) Because the SHAPE Australia website is not designed to rank in searches for ‘shape shopfitters’ (or similar expressions), it is unlikely to rank well in search results for those expressions. My searches show that it does not appear for most of those terms, and when it does, it is outranked by the Shape Shopfitters Website. Because of this, people searching for the Shape Shopfitters Website through searches for these terms are very unlikely to be misdirected to the SHAPE Australia website.
(d) The Shape Shopfitters Website generates, and has traditionally generated, a very small amount of traffic. This is because it is a small website, it is not optimised for search engines, it is not regularly updated, and there are very few other websites linking to it. This indicates that the Shape Shopfitters Website is not likely to produce many (if any) leads for the Shape Shopfitters business.
193 The respondent submits that Ms Dix’s evidence shows that clients and potential clients of the applicant are not finding its business online by reference to the term “shape”, but rather by reference to terms such as “shopfitters” and by searching for the applicant’s previous clients.
194 The applicant did not cross-examine Ms Dix, and did not take issue with the respondent’s submissions about her evidence. Rather, it submitted that it was not part of its case that potential or existing clients found the applicant through internet searches, so that Ms Dix’s evidence had no weight in relation to the issues in dispute.
195 The applicant’s submission accords with the evidence, in the sense that the evidence shows the applicant secures most of its work from word-of-mouth recommendations, and that it has a well-established client base. It would appear from the evidence that its suppliers and subcontractors are also well-established. I infer the applicant does not place internet marketing as a high priority, and does not promote its website as the principal contact point for “participants” in the industry.
196 Nevertheless, in my opinion Ms Dix’s evidence is not without weight. It accords with the views I have formed about the impression created by the applicant’s mark, and by its business name, in conjunction with the kind of work it performs. The applicant’s specialisation and expertise as a shopfitter is what is prominent about its business. This distinguishes it from the respondent’s business and business activities, and for reasons I set out elsewhere, the fact of this specialisation by the applicant does not lead inevitably, or even logically, to industry participants believing there is a relationship between the applicant and the respondent through the respondent’s use of “SHAPE” in its name, and in its marks.
197 Finally, the respondent also adduced, through Mr Henry, some evidence about the number of other businesses in Australia which have the word “Shape” in their corporate names. This evidence was adduced by way of ASIC and ABR searches. The respondent also sought to adduce screenshots of the websites of some of these companies into evidence, however this was ruled inadmissible: see Shape Shopfitters Pty Ltd v Shape Australia Pty Ltd (No 2) [2017] FCA 474.
198 Mr Henry’s evidence covered the following companies:
Shape Building Pty Ltd
Shape Design
Shape Property Developments
Shape Consulting
Shape Constructions Pty Ltd
Shape Project Management Pty Ltd
Shape Builders Pty Ltd
Shape Joinery & Design Pty Ltd
Shape Fitouts Pty Ltd
Shape Projects Pty Ltd
Shape Construction
199 There was also evidence from Mr Henry about a company called Shape Developments Pty Ltd. The applicant noted that in March 2017 this company has changed its name to Coolah Group Pty Ltd. There was no evidence as to why it did this. This company had performed retail fit-out work for one of the applicant’s clients, San Churro, although the invoices in evidence were for small sums of money. In cross-examination Mr Billings said that he was not aware of this company until it came to his attention during the conduct of this proceeding.
200 The applicant submitted all this evidence was of little probative value because there was no evidence about the nature of work performed by these companies, and in particular (aside from Mr Billings’ concession in cross-examination about Shape Developments) whether they performed any shopfitting work.
201 I accept that evidence of the bare existence of these entities cannot take the matter very far. However, the number of such entities using the word “shape” in their corporate names, and (I am prepared to infer) trading activities, is not without significance. Even without more information about those entities, the relative prevalence of the word “shape” in corporate and trading names, frequently in conjunction with construction-related words such as “joinery” and “projects” suggests that “participants in the industry” (including potential clients, purchasers and subcontractors) might well come across other entities using the word “shape” in the provision, sale and promotion of their particular services. That possibility cannot be discounted, and it tends against the linear proposition on which the applicant’s case relies: namely, the likelihood that the applicant (and it would appear, only the applicant) will be perceived to be part of the respondent’s larger group, and perhaps as its specialist shopfitting arm. That linear proposition must depend, it seems to me, on the applicant occupying something of a unique place in the market so that such a representation by the respondent’s use of the word “SHAPE” could only be made in respect of the applicant, and not other entities. This evidence tends against such a conclusion.
Conclusions on the s 18 allegations
202 It will be apparent that I do not consider that the respondent’s conduct as alleged conveys a representation of the kind alleged by the applicant and which I have set out at [106]-[108] above.
203 The governing consideration is whether the conduct, as alleged (which may or may not consist only of “representations”) has the “tendency to lead” the ordinary and reasonable member of the class as identified “into error”: see TPG at [39] per French CJ, Crennan, Bell and Keane JJ).
204 This “tendency to lead into error” was said by the High Court in TPG at [39] to relate to the need for a causal connection between the impugned conduct and the deception. The authority cited by the High Court was Gummow J’s reasons for judgment in Elders Trustee & Executor Co Ltd v EG Reeves Pty Ltd (1987) 78 ALR 193 at 241. Elders was a case, as Gummow J pointed out at 241, where a:
complaint is made in an action to recover actual loss or damage, not an application for injunctive relief brought by one trader concerning conduct of another trader in respect of third parties. Further, the complaint arises from particular negotiations and other conduct of identified individuals with reference to particular transactions.
205 In those circumstances, Gummow J said (citing Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 202):
In such proceedings, primary attention will of necessity be focused upon the conduct of those individuals and the establishment of a sufficient causal link between the respondent’s conduct and the applicant’s loss or damage[.]
206 Whether or not the same kind or level of causal connection is required in all circumstances in which s 18 is invoked, is less clear, but this is not a matter the parties debated in this proceeding. The parties’ submissions both identified the correct approach to be whether the respondent’s conduct, as set out in [14] of the Amended Fast Track Statement, had the tendency to lead a not insignificant number within the relevant class of persons into error, of the kind identified by the applicant at 15(d) of the Amended Fast Track Statement.
207 On the findings as I have made them, the relevant class is all those industry participants affected by or exposed to the respondent’s conduct in the promotion, provision and sale of commercial construction services, including buyers and clients, third party trade subcontractors and providers of other services such as design and architectural services.
208 Conduct that leads a section of the public “into error” requires something more than confusion, or capacity to confuse: see Puxu at 198 (Gibbs CJ), referring with approval to the reasons of Smithers and Fisher JJ in McWilliam’s Wines Pty Ltd v McDonald’s System of Australia Pty Ltd [1980] FCA 159; 33 ALR 394.
209 The conduct must also have done more than cause persons to wonder, or be capable of causing persons to wonder, whether two products or services come from the same source: see Puxu at 209 (Mason J), and also Gibbs CJ at 198, again referring to the McWilliams case. At 210 in Puxu, Mason J also made it clear that if a respondent’s conduct caused “some uncertainty” in the minds of the public about the recognition or identification of goods (or services), that would also be insufficient.
210 The distinctions between these concepts – of confusion and wonderment on the one hand and being led into error on the other – were reiterated by the High Court in Campomar at [106], although one might observe that the distinctions are easier to set out in writing than they are to apply.
211 Of course, all these authorities and the approaches they expound (and those they reject) must be understood and applied in the particular context present in each case, including by reference to the nature of the misrepresentations alleged. In other words, the question is not whether a member of the relevant class or section of the public has been led into any error. Rather, the question is have they been led into the error identified by the applicant? Or have they simply been confused because of what the respondent has done? Confusion or uncertainty would suggest less particularity, and a more amorphous state of mind. Error suggests something much more identifiable and concrete.
212 The High Court in Campomar, citing Mason J in Puxu at 205, considered (at [97]) that Pt V of the Trade Practices Act “encouraged manufacturers to compete vigorously without adopting restrictive practices and to observe prescribed standards of conduct in their dealings with consumers”. The Court went on to say (at [106]), quoting Deane and Fitzgerald JJ in Taco Bell at 201:
Their Honours thus decided in Taco Bell that the ‘question whether particular conduct causes confusion or wonderment cannot be substituted for the question whether the conduct answers the statutory description contained in s 52’. This reasoning should be accepted.
(Footnote omitted.)
213 The insistence in the authorities on “error” rather than confusion reveals a more purposive focus. In Chase Manhattan at 377, Lockhart J said, in the context of explaining why confusion was insufficient:
The purpose of Pt V of the Trade Practices Act 1974 is to protect consumers by eliminating unfair trade practices. The object of s 52 is to prevent misleading or deceptive conduct which will affect the identification of goods or services.
(Emphasis added.)
214 Even if actual error is not an element of a contravention, the purpose of the prohibition is to protect those seeking to access goods and services from being misled when they do access such goods or services. The reasonable and ordinary class member must be placed in the reality of the conduct of the parties’ business activities.
215 The particular error identified by the applicant is that people will believe there is a connection or relationship between the respondent and the applicant, including but not limited to a relationship by way of the applicant being an “arm” of the respondent’s larger “group”.
216 I am not satisfied that participants in the industry would be led into such an error. The parties’ business activities are too different, they operate in different areas, with the applicant being far more specialised and more geographically contained. The link the applicant posits is possible and not fanciful in a theoretical sense, but it is without any foundation in the reality of the way the parties’ business activities are conducted, and in the way the “participants in the commercial construction industry” encounter the two businesses. That is especially so when one considers evidence such as that from Mr Billings that the applicant secures a lot of its business through word-of-mouth referrals.
217 The most that can be said is that there is a likelihood that participants in the industry, on isolated occasions, may be led to confuse the two entities because they both have the word “Shape” in their name, and occasionally communications may be directed to one when meant for the other. That is what the evidence discloses has in fact occurred, from time to time, in relatively few instances.
218 I am also not satisfied on the evidence that, in fact, any participants in the industry have been led into an error of the kind alleged. Although such evidence is not necessary to make out a contravention of s 18 (or s 29) (see Chase at 380 (Neaves J); Puxu at 198-199 (Gibbs CJ)), nevertheless if such evidence does exist it may be probative of a likely misrepresentation of the kind asserted by an applicant. The evidence in this proceeding, as I have set out, discloses examples of what is properly described as confusion. The applicant has been mistaken for the respondent, and vice versa. The evidence may also be said to suggest some uncertainty – in the sense of employees not being certain who the correct addressee of an invoice was and choosing one because of the common denominator in the word “shape”, without really being sure it was the correct entity. None of this suggests any of the individuals in the evidence have believed that the applicant was related or connected to the respondent or to its group.
219 The other feature of the evidence adduced is that any confusion or misapprehension about which entity using the name “SHAPE” was the correct entity to direct invoices or communications to was, or could have been, quickly dispelled: see Flexopak at [268] (Beach J); SAP Australia Pty Ltd v Sapient Australia Pty Ltd [1999] FCA 1821; 169 ALR 1 at [51] and Knight v Beyond Properties Pty Ltd [2007] FCAFC 170; 242 ALR 586, [56] and [58]. Where the mistake or misapprehension was not quickly dispelled, that was because the applicant and its solicitors chose not to do so. For instance, in relation to the five misdirected tender proposals sent by Perth Mechanical Services to the applicant between about 26 November 2015 and 20 April 2016, Mr Billings accepted during cross-examination that neither he nor the applicant’s employees contacted Perth Mechanical Services to dispel the misapprehension, despite the erroneous conduct recurring over some five months. Indeed, evidence adduced by the respondent (exhibit R7) included an email sent by a Mr Rees from Perth Mechanical Services to the applicant’s solicitors in November 2016, after he had been informed of the error during the course of this proceeding. In the email, Mr Rees said:
If your client was aware that Mr Johnson was in fact sending the quotes to the wrong contractor, why didn't anyone inform us?
That would of stopped this stone dead, however they chose not to with the result we may of lost business because of this, all it would of taken was a phone call.
220 Similarly, the applicant chose not to request a correction to the BCI database which incorrectly listed the respondent as the contractor for the construction project at MSAC. Despite Mr Billings noticing the error on the database on or around 1 March 2016, Mr Billings’ evidence during cross-examination was that he could not recall whether he had contacted someone at BCI to correct the error. He gave evidence that this was because the information on the BCI database would appear only for a short period of time and, I infer, he was therefore not overly concerned about the error being visible to the public. Mr Jones from BCI gave evidence that he was not aware of the error – indeed, he was not aware of there being more than one “Shape” entity – until he was subpoenaed in this proceeding in December 2016. The database was then subsequently amended.
221 As the applicant submits, there was no requirement that it should seek to correct such mistakes, and the forensic purpose in continuing to be able to point to mistakes of this kind is readily apparent. However, a knowing refusal to correct a misapprehension also does not preclude the conclusion that when the third parties (such as ARA) were informed of the mistake, the misapprehension or confusion which existed was quickly dispelled. There was no evidence, for example that having been informed of the correct destination for the invoice, any of the employees of companies such as ARA continued to have any misunderstanding about whether the applicant and the respondent were the same business, members of the same “group” or were otherwise connected.
222 It is true, as Neaves and Beaumont JJ said in Chase Manhattan at 381 (Neaves J) and 391-2 (Beaumont J) (see also Lockhart J at 377), that as well as examining whether there are any existing common fields of business activity between the parties, the Court should examine whether there are any business activities in which the applicant intends to engage where there may be an overlap with those of the respondent, if those intended activities are “natural extensions” of the applicant’s existing business. However, I do not consider there is sufficient evidence that the applicant’s business activities are likely to be subject to any material extension in a way which would bring them into closer overlap with those of the respondent, either by way of the applicant extending its geographic reach of its current activities outside Victoria or in terms of the nature of the commercial construction activities in which it engages. In my opinion the evidence clearly establishes that, although Mr Billings may have aspirations for his company to diversify, its expertise and reputation, and the majority of its work remains and will remain into the foreseeable future in retail food outlet shopfitting, and QSR shopfitting in particular.
223 As in Chase Manhattan (at 377 per Lockhart J), in my opinion to accept the applicant’s case under s 18 would be approaching an acceptance that the applicant has a statutory monopoly in the word “shape”, an otherwise ordinary English word. I see no real risk of error as between the respondent’s use of the word in its business activities and that of all the other businesses identified by Mr Henry in his affidavit.
224 It must be acknowledged that conclusions reached in cases such as the current proceeding involve impression and matters of degree. The difference between the reasons for judgment of Lockhart and Neaves JJ on the one hand and Beaumont J on the other in Chase Manhattan is illustrative. Those circumstances were not so very far removed from the circumstances of the present case.
225 Ultimately I do not consider the applicant has discharged its burden of proving a contravention of s 18 of the ACL.
Conclusions on the s 29 ACL allegations
226 No separate attention was paid in written or oral submissions by the parties to the applicant’s claim under s 29. It was treated as dependent for its success on the success of the s 18 claim.
227 Accordingly, given the findings I have made, that claim must also fail at the general level, and that is without considering whether, in any event, the conduct alleged against the respondent could fall within s 29(1)(g) and (h) in their specific terms.
228 The applicant recognised the tort of passing off protects the goodwill of a business, and is thus concerned with protection of a proprietary interest, rather than being aimed at consumer protection. As a practical matter (in terms of discharge of its burden of proof especially on the first element of the tort), the applicant accepted that if it did not succeed under the ACL, it would not succeed in passing off.
229 The nature of the tort, and the gist of the cause of action was set out by Lord Fraser of Tullybelton in Erven Warnink Besloten Vennootschap v Townend & Sons (Hull) Ltd [1979] 2 All ER 927; [1979] AC 731 at 754 (cited with approval by Franki J in Taco Bell at 183):
I note in passing that the justification for the passing off action to prevent such misrepresentation continuing is not to protect the public (who might suffer no prejudice from it, if they have never tasted genuine advocaat) but to protect the appellants’ property in the goodwill.
230 In .au Domain Administration, Finkelstein J explained the proprietary nature of the interests protected by the tort (at [23]):
Franki J was correct in stating that in a passing off action it is necessary for the plaintiff to show that a large number of consumers are liable to be deceived by the defendant’s use of a particular name or get up: Saville Perfumery Ltd v June Perfect Ld (1941) 58 RPC 147 at 175-6; (1939) 1B IPR 440. This is hardly surprising. The basis for a passing off action is a proprietary right in goodwill established through the use of a name or get up in connection with the plaintiff’s goods: A G Spalding & Bros v A W Gamage Ltd (1915) 32 RPC 273 at 284 ; Erven Warnink Besloten Vennootschap v J Townend & Sons (Hull) Ltd [1979] AC 731 at 741-2, 754; (1979) 1A IPR 666 at 670-1, 681-2; [1979] 2 All ER 927 at 931-3, 942-3. The action is for damage done or threatened to be done to that property by the defendant. That is the reason the plaintiff must show that a significant number of people are likely to be misled. Unless many people are misled it is unlikely that the plaintiff’s goodwill will be damaged.
231 As I noted earlier in these reasons at [35], the elements of the tort of passing off were clearly set out in Gummow J’s reasons in ConAgra at 355-356, being (1) reputation, (2) misrepresentation and (3) damage.
232 It can be comfortably concluded on the evidence that the applicant has established the existence of a commercial reputation within Victoria together with sufficient market activity in that jurisdiction, in the area of retail food shopfitting and especially QSR shopfitting, to prove that it has goodwill entitled to protection by the tort. There is less evidence that the applicant has established a commercial reputation wider than this: that is, outside Victoria, or in the “commercial construction industry” generally. I accept the respondent’s contention (summarised at [83] of my reasons above) that on the evidence, the applicant’s reputation is more limited than it claims. However, even on a wider and more favourable view of the applicant’s reputation, I do not consider the respondent’s business activities using the name “SHAPE” threaten to damage or otherwise adversely affect that reputation and goodwill. That is because, as I have explained, I do not consider that the use of the word “SHAPE” by the respondent is likely to convey to the potential class the misleading impression that the respondent’s business is connected or related to that of the applicant (or vice versa). That is so whether the class is defined narrowly, as participants in retail food shopfitting, or widely, as participants in the commercial construction industry.
233 If, contrary to my findings, I had been persuaded there was misleading or deceptive conduct established in the use by the respondent of the word “Shape” in its corporate name and business activities, then the absence of proof of actual damage (in terms of established economic loss or the like) would not have prevented the applicant succeeding in passing off. Since the matter was the subject of detailed submissions, I explain in summary why I would have reached that conclusion.
234 Speaking in the context of a passing off action, in Harrods Limited v R Harrod Limited (1924) 41 RPC 74, Sargant LJ said (at 87):
... it is essential for an action of that sort that there should be tangible probability of injury to the property of the Plaintiffs, but I think that under the word ‘property’ may well be included the trade reputation of the Plaintiffs.
235 Where reputation is considered as property for the purpose of the tort, damage to reputation necessarily has an intangible aspect to it, in terms of proof. It cannot be proved in the same way economic loss can be proved. The drawing of inferences may be required.
236 In my opinion, that is the point made by Kenny J in Nutrientwater Pty Ltd v Baco Pty Ltd [2010] FCA 2; 265 ALR 140 at [79], where her Honour said (after referring to a great many authorities):
Nothing here turns on the differences in the formulations. If a case of passing off is made out, a court will presume damage, but, as to the measure of damage, the court will consider all the circumstances of the case: see Childrens Television Workshop Inc v Woolworths (NSW) Ltd [1981] 1 NSWLR 273 at 281-2; (1980) 1B IPR 609 at 616-18 per Helsham CJ in Eq and Draper v Trist [1939] 3 All ER 513 at 525-7 (1939) 56 RPC 429 at 442 per Goddard LJ.
237 In Draper, having observed (at 441) that it was “odd” that there was no clearer expression of principle about the assessment of damages in the tort of passing off, in order to address the issues in the matter before him, Lord Goddard went back to an analysis of the cause of action in passing off (as a species of deceit) and the “right” of action, noting (at 442) that the right of action was conferred where there was damage. However, his Honour then noted that passing off was an “exception” or apparent exception to an action of deceit:
But, in passing-off cases, the true basis of the action is that the passing-off by the defendant of his goods as the goods of the plaintiff injures the right of property in the plaintiff, that right of property being his right to the goodwill of his business. The law assumes, or presumes, that if the goodwill of a man’s business has been interfered with by the passing-off of goods, damage results therefrom. He need not wait to show that damage has resulted, he can bring his action as soon as he can prove the passing-off; because it is one of the class of cases in which the law presumes that the Plaintiff has suffered damage.
It is in fact, I think, in the same category in this respect as an action for libel. We know that for written defamation a plaintiff need prove no actual damage. He proves his defamation. So, with a trader; the law has always been particularly tender to the reputation and goodwill of traders. If a trader is slandered in the way of his business, an action lies without proof of damage. That does not mean that the plaintiff cannot give evidence showing that he has suffered damage in fact. The more he can show that he has suffered damage in fact, the larger the damages he can recover. The more the defendant can show that he has suffered no damage in fact, the less he will recover. In the case of a libel published to a person who knew the true facts, and to him only, although the plaintiff would have a cause of action, the damage would probably be small. In the case of a libel published in a newspaper with a large circulation, the damages would naturally be larger.
238 And at 443:
I think that the case of Rodgers v. Nowill shows that, once you have established passing-off, there is injury to goodwill; and the Court or the jury must assess, by the best means they can, what is a fair and temperate sum to give to the Plaintiff for that injury.
239 It is this “tenderness” (as Lord Goddard expressed it) of the law towards goodwill and reputation that explains what would appear to be an inconsistency: namely, that damage is an element of the tort but no particular damage must be proved. The following extract from Helsham CJ’s reasons in Children’s Televisions Workshop Inc v Woolworths (NSW) Ltd [1981] 1 NSWLR 273 (at 281-282) also demonstrates the point:
If toys, mistaken for the ones that form the end of the plaintiffs’ business chain, are being sold as and for those that have the imprimatur of the plaintiffs, as they are, then the plaintiffs’ business must suffer in some way. I do not believe that the law requires the plaintiffs to point to a particular loss, to quantify a diminution in licence royalties, to demonstrate that they cannot negotiate a licence on such favourable terms as they otherwise might. They have lost the benefit of having Woolworths goods sold under license to them, and there must be some benefit to be derived from sales under licence. I do not think that evidence need be called to prove an adverse effect upon reputation, and consequent damage to business, resulting from goods of inferior quality being on the market, or from “lousy imitations”. The presence of these goods in the same market place as those emanating from the plaintiffs’ business, and the deception as to their authenticity, leads to a proper inference that the business of the plaintiffs is bound to be adversely affected in some way. It is true that neither of the first two plaintiffs can point to a local goodwill in the same way as a local licensee could probably do. But the first plaintiff, at least, has a business reputation, and the activities of the defendants are calculated to appropriate that business reputation by deception for their own pecuniary benefit.
(Emphasis added.)
240 Accordingly, if I had made different findings on the applicant’s ACL claims, which would then have flowed through to the tort claim, I would have accepted the applicant’s submission that the absence of any evidence of actual damage (such as loss or misdirection of projects) would not have precluded the claim in passing off from succeeding.
The authorities and the parties’ reliance on them
241 It is possible, as the Full Court decision in Bing! Software v Bing Technologies [2009] FCAFC 131; 180 FCR 191 establishes, for an applicant to succeed in a claim that a respondent’s mark is “deceptively similar” to the registered trade mark of an applicant, although an applicant’s claim under the ACL and passing off is not made out: see Bing! at [44] (Kenny J). However, in my opinion, the applicant has also failed to establish that the respondent’s mark is deceptively similar to its own Registered Mark, and this claim should also fail.
242 In Puxu at 210, Mason J described the difference between a trade mark action and an action under s 18 of the ACL (or rather, s 52 of the TPA as his Honour was considering it):
The Trade Marks Act is concerned with deception or confusion to the public as to the source of goods. The Trade Practices Act is concerned with deception of the public as consumers of goods or services. The function of a trade mark is to identify the source of goods; the purpose of s. 52 is to prohibit misleading or deceptive conduct which will affect the recognition or identification of goods. Registration of a mark confers rights of a proprietary nature. The applicant for a trade mark bears the onus of establishing that use of his mark is not likely to deceive or cause confusion. Under s. 52 the onus is on the plaintiff to show that the conduct is likely to mislead or deceive. Therefore conduct which merely causes some uncertainty in the minds of relevant members of the public does not breach s. 52.
243 Thus when applying the approach set out below, it is important to recall that the deception is to relate to the source of the goods or services provided by the respondent.
244 Further, in Saville Perfumery Ld v June Perfect Ld (1941) 58 RPC 147 at 161, Sir Wilfrid Greene MR described the difference between passing off and trademark infringement in the following way:
The Statute law relating to infringement of trade marks is based on the same fundamental idea as the law relating to passing-off. But it differs from that law in two particulars, namely (1), it is concerned only with one method of passing-off, namely, the use of a trade mark, and (2), the statutory protection is absolute in the sense that once a mark is shown to offend, the user of it cannot escape by showing that by something outside the actual mark itself he has distinguished his goods from those of the registered proprietor.
245 The assessment of whether an impugned mark is “deceptively similar” to a registered mark must be recognised as being somewhat intuitive and impressionistic. It is not a mechanical comparison, nor an artificial reconstruction of memory. The approach asks what a reasonable member of the appropriate class as identified, of “ordinary intelligence and memory”, would recall of the applicant’s mark in relation to the full range of services in respect of which it is registered, and whether such a person would be misled or deceived by the respondent’s use of its mark into believing it was the applicant’s mark: see generally MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236 at 244-246.
246 In Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020; 93 FCR 365 at [40], French J said:
In the end there is one practical judgment to be made. Whether any resemblance between different trade marks for goods and services renders them deceptively similar will depend upon the nature and degree of that resemblance and the closeness of the relationship between the services and the goods in question. It will not always be necessary to dissect that judgment into discrete and independent conclusions about the resemblance of marks and the relationship of goods and services. Consistently with that proposition, the Registrar or a judge on appeal from the Registrar could determine in a particular case that, given the limited degree of resemblance between the relevant marks he or she could not be satisfied, no matter how closely related the goods and services concerned, that the use of the applicant’s marks would be likely to deceive or to cause confusion.
247 In terms of the comparison to be made, in Wingate Marketing Pty Limited v Levi Strauss & Co (1994) 49 FCR 89 at 128, Gummow J said:
The comparison is between any normal use of the plaintiff’s mark comprised within the registration and that which the defendant actually does in the advertisements or on the goods in respect of which there is the alleged infringement, but ignoring any matter added to the allegedly infringing trade mark…
248 In considering what the “imperfect recollection” of the hypothetical person will be, the authorities have also focused on what it is about the registered mark that will be recalled. As with any exercise involving memory (even a hypothetical one), there may be a feature which “strikes at the eye and fixes itself in the recollection”: Saville Perfumery at 162, where Sir Greene MR said:
In deciding whether or not a feature is of this class, not only ocular examination, but the evidence of what happens in practice in the particular trade is admissible. In the present case the evidence leaves me in no doubt as to the word ‘June’ being the distinguishing or essential feature of the Appellants’ mark. It is by this word that traders and members of the public who see the mark on the goods which they purchase describe the Appellants’ goods, and indeed I should have been surprised if it had been otherwise.
249 It is an approach such as this that the applicant submits the Court should take to the use of the word “SHAPE” in its mark, and in the three impugned marks used by the respondent.
250 Another way to express what the Court should be comparing is given by Latham CJ in Jafferjee v Scarlett [1937] HCA 36; 57 CLR 115 at 121-122:
It is important to consider what has been described as the ‘idea of the mark,’ that is, the idea which the mark will naturally suggest to the mind of one who sees it…
The question which arises is always whether there is a probability of deception because there is a resemblance, though there are also differences, between two marks.
251 His Honour continued after this passage to describe the assumed memory process of the hypothetical observers of the impugned mark (at 122):
They will compare the actual mark which they see upon goods which are offered to them with the memory of the other mark, which they will retain in a more or less distinct form… The court must endeavour to put itself in the position of ordinary purchasers of goods who have noticed a trade mark as being distinctive of particular goods, but who have not compared that mark with any other mark, and who are quite probably not aware of the fact that another more or less similar mark exists.
252 Finally, in terms of the appropriate description of the class of person comprehended by the hypothetical “persons of ordinary intelligence and memory” (MID Sydney at 245), the respondent accepted the class was wider at least in one way, than the class it posited for the ACL and passing off claims. It accepted the class included consumers of both parties’ services, not just the respondent’s clients (as it submitted for the ACL case). However it maintained that suppliers and subcontractors are not relevant consumers at all.
253 The applicant relied on the observations of Keane CJ in Vivo International Corp Pty Ltd v Tivo Inc [2012] FCAFC 159; 294 ALR 661 at [77]-[78]. In those passages, his Honour is dealing with the need for the impugned marks to cause confusion. At [78], his Honour says:
The authorities make it clear that is the likely effect of the use of the new mark in the market place which must be considered by the court: see Aristoc Ltd v Rysta Ltd (1944) 1B IPR 467 at 472 ; [1945] AC 68 at 86 ; [1945] 1 All ER 34 at 39 (Aristoc); Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353 at 362 ; 1 ALR 443 at 449 (Berlei Hestia).
(Emphasis added.)
254 The applicant seized on the use by his Honour of the term “market place” to indicate his Honour had a broader class in mind than purchasers or “consumers”. I do not agree his Honour’s observations should be read in that way. His Honour thereafter referred to “customers” at [80] of his Honour’s reasons, and read in context it is clear that is the class his Honour had in mind when using the phrase “market place”. Further, there is his Honour’s finding at [93], which was as follows:
In my opinion, it is a reasonable inference, and the inference that I draw, that, if sales staff are confused, there is a reasonable probability of confusion on the part of consumers: see Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 49 FCR 89 at 130C ; 121 ALR 191 at 230 ; 28 IPR 193 at 232 .
255 Thus, it was not only the perception of purchasers of the goods and services which mattered to deciding whether a mark was deceptively similar, but in this passage Keane CJ is using evidence about confusion of sales staff to draw an inference about potential confusion of customers. His Honour’s focus is on potential confusion amongst customers, as the consumers of the goods and services offered by the applicant and respondent. In the Vivo case, the subject matter of the infringement claim was both goods and services: computer hardware and software and television subscription services.
256 It is true that in Polo Textile Industries Pty Limited v Domestic Textile Corporation Pty Limited (1993) 42 FCR 227; 114 ALR 157, Burchett J refers to the use of an impugned mark “in the course of trade”, in a relatively broad context, and does not appear to limit the object of the alleged deception to “consumers” or “purchasers” or the like. However, such an observation must be read in context. At 232, Burchett J in Polo Textile also said:
Bearing in mind that the test requires consideration of the customer with an imperfect recollection of the mark, it is important that the distinctive impact of the word ‘Polo’ is likely to affect the mind although the presence or absence of the blander word ‘Club’ may escape notice.
257 It is clear from this quote that what his Honour had in mind was consumers or customers in the course of trade.
258 In the context of this proceeding, whether one describes the hypothetical person as a member of a class of “buyers” of the parties’ commercial construction services (that is, the ultimate “clients” as the respondent submits), or whether one describes such a person as a “participant” in the commercial construction industry, the outcome is the same. In neither the wider nor the narrower class would there be any confusion, or cause for wonderment in relation to the use by the respondent of any of the three identified marks. In my opinion a reasonable member of ordinary intelligence and memory in either class would not be led by the respondent’s marks to believe that the parties’ commercial construction services “come from the same source”: Southern Cross Refrigeration at 595 (Kitto J).
259 The respondent supplements its contentions on this issue by reference to the case of General Electric at 737-8 (Lord Diplock), referred to with approval in Interlego at 387-388 (Gummow J). The passage on which the respondent relied is as follows (at 737-8):
My Lords, where goods are of a kind which are not normally sold to the general public for consumption or domestic use but are sold in a specialised market consisting of persons engaged in a particular trade, evidence of persons accustomed to dealing in that market as to the likelihood of deception or confusion is essential. A judge, though he must use his common sense in assessing the credibility and probative value of that evidence, is not entitled to supplement any deficiency in evidence of this kind by giving effect to his own subjective view as to whether or not he himself would be likely to be deceived or confused.
260 Lord Diplock then continued, contrasting this situation with one where “goods are sold to the general public for consumption or domestic use”. In such a case, his Lordship said, “the question whether such buyers would be likely to be deceived or confused by the use of the trade mark is a ‘jury question.’”
261 The General Electric case concerned two companies (one English, one American) with almost identical names involving the phrase “General Electric Company”. Lord Diplock described the business of both companies as the manufacture and sale of “a wide variety of electrical machinery and goods including electrical goods for domestic use”. It was a factually complex case, and Lord Diplock summarised the background at 733:
[T]he English company registered as its trade marks for various classes of electrical goods the initials of its name G.E.C. in block capitals. In the following year, 1907, the American company registered as its trade mark for electrical goods in one of the same classes, its initials G.E. in script enclosed in an ornamental circle, which is conveniently referred to as the rondel mark. Subsequently, the English company registered as a trade mark in respect of the same and other classes of electrical goods its initials G.E.C. in script. It is in this form that the trade mark has been mainly used for the last 40 years.
262 The dispute between the parties arose decades after registration, and (putting the complicated factual saga to one side) related to an application to remove the rondel mark from the English trade mark register, after it had been used in England for some time. It was in this context that Lord Diplock emphasised (at 737) the significance of evidence of actual (rather than potential) confusion, although his Lordship then also emphasised there was still a hypothetical question to be answered:
Would any normal and fair future use of the mark in the course of trade be likely to cause deception or confusion? If actual confusion in the past is proved, this is a strong indication that continued confusion is likely; but the absence of evidence of past confusion may be accounted for by the small extent to which the mark has been used or by special circumstances affecting its past use which may not continue to operate to prevent confusion in the future.
263 It was in this context that his Lordship referred to (also at 737) the contention of:
the American company that the Court of Appeal fell into error in relying on their own common sense in deciding whether the use of the rondel mark simpliciter would be likely to cause confusion. They ought, it is said, to have limited their consideration to the evidence, which consisted in the main of the public opinion survey, and to have given no weight to their own subjective impressions as to whether they themselves would have been likely to be confused.
(Emphasis added.)
264 Lord Diplock however, rejected this contention. His Lordship considered that the “jury question”, referred to at [260] above, could also be answered by a judge alone, as he (or she) would, like any member of the public, be a potential buyer of the goods and able to assess potential confusion. Lord Diplock found (at 738) that the contentions about confusion in the General Electric case were, indeed, “jury questions”, which the judge could answer himself (or herself) without reliance on expert or other evidence.
265 The passage on which the respondent relied was cited by Gummow J in Interlego (at 388), as authority for the proposition that “evidence of consumers and retailers as to the likelihood of deception will be critical if a special market is involved.”
266 In that case, Gummow J found (in relation to Lego products) (at 388):
Here, the products are not specialised in any particular sense and the respondent’s marketing was directed at a large body of consumers, not comprising persons engaged in a particular trade. Hence the evidence of witnesses accustomed to dealing in a particular market was not necessary.
267 The respondent’s contention has some attraction, at first glance. However, had I otherwise been persuaded of the applicant’s case (which I am not), I would not have seen the absence of such evidence as standing in the way of success. As Senior Counsel for the applicant pointed out, the respondent’s mark is encountered on the evidence by a wide variety of persons who could not be described as “specialists”: see the list of suppliers and subcontractors I have set out at [156] above. This is in contrast to a situation like that facing Jessup J in Symbion Pharmacy Services Pty Ltd v ldameneo (No 789) Ltd [2011] FCA 389; 91 IPR 547 (at [26]) which concerned radiology services, and more particularly diagnostic imaging services. There, the evidence showed the primary customers were general practitioners, specialists and doctors working at hospitals who identified a need for, and referred patients to, such services. Jessup J saw (at [28]) the approach from General Electric and Interlego as applicable “particularly in markets which involve the delivery of scientific goods or services”, where a “specialised eye” would be applied to the two competing marks.
268 That is not the current situation. While the commercial construction industry is a market different from the general public and the parties’ services are not offered to as wide a class of the general public as a retail product might be, nevertheless the commercial construction industry comprises such a broad range of suppliers, contractors and clients that it should not be considered “specialised” in the way this term was used in General Electric, Interlego or Symbion.
269 That diversion notwithstanding, for the reasons set out below, the applicant has not made out its claim for trade mark infringement.
The application of these principles in this case
270 In the present proceeding, the applicant’s Registered Mark appears, and would be seen, in a variety of contexts. It appears on the side of the applicant’s trucks, as a logo on shirts worn by its employees, on its stationery and invoices, on letterheads, emails and other communications with clients, suppliers and contractors, on worksites, at trade shows and conferences, on its website and in its media advertising. The reasonable person of ordinary intelligence and memory recalling the applicant’s Mark may thus have come across it in a large form, and in smaller forms.
271 The use of capitals for the word “SHAPE” in the applicant’s Mark is, I accept, a feature likely to be recalled. In part, it is the use of capitals which is likely to make the word “shape” stick in the memory, as well as its proportionate size in the Mark. It is also correct that the word “Shopfitters” is much smaller, as is “Est 1998”. I see no basis to find that the latter phrase would be generally recalled, however I consider the word “Shopfitters” may well be recalled in conjunction with the word “SHAPE”. There is an alliterative effect between the two words, as well the positioning of “Shopfitters” underneath the word “SHAPE”. An industry participant’s eye (to take the applicant’s wider class of people) will, in my opinion, be drawn to that word as well and what is just as likely to be recalled is the phrase “SHAPE Shopfitters”, rather than just the word “SHAPE”.
272 Further, I consider the bottle cap border to the applicant’s Mark is also something which would stick in a person’s memory. Allowing as one must for imperfect recollection, if not the precise pattern, then at least the fact that there is a definite border, and that it is one which is not smooth and circular. The border, in my opinion, is quite distinctive, and likely to be recalled in the way I have explained. I reject the applicant’s submission that the “essential, eye-catching and memorable” feature (see [165] of the applicant’s closing submissions) of its Mark is the word “SHAPE”.
273 Of the three impugned marks used by the respondent, the Word Mark simply uses the word “SHAPE” in conjunction with other words. There is nothing deceptively similar about this use in relation to the applicant’s Trade Mark.
274 The Circle Mark and the Transparent Mark have a closer similarity, because of – in combination – the use of capitals of the word “SHAPE”, the placement of that word inside a circle, and the use of a circle itself. However, as I have set out, in my opinion even imperfectly, a reasonable industry participant of ordinary intelligence and memory is likely to recall the word “Shopfitters” in conjunction with the word “Shape”, especially because of the alliteration involved. I also consider such a person will recall the applicant’s Mark has a distinctive border that is not a smooth circle.
275 I do not consider the evidence about several industry participants referring to the applicant as “SHAPE” affects these findings in a way which means that word would be recalled as the only essential feature of the applicant’s Mark. Rather, that evidence is evidence of the contraction of the applicant’s business and trading name in ordinary speech, and such a contraction does not necessarily carry over to what a reasonable person is likely to recall of the applicant’s Mark. It goes only to how industry participants might refer to the applicant in conversation.
276 For these reasons, I do not accept that the reasonable industry participant of ordinary intelligence and memory would be caused to wonder whether the respondent’s services, and the business it markets and promotes, come from the same source as that of the applicant.
277 If I had otherwise been persuaded by the applicant’s case on trademark infringement, the question would have arisen whether the fact that the Registered Mark has a blue background and the respondent’s marks do not, could prevent a finding in the applicant’s favour because of the operation of s 70 of the Trade Marks Act, read with the definition of “limitation” in s 6 of that Act.
278 There are some significant issues of statutory construction involved in determining that question, which do not previously appear to have been decided. In my opinion it would not be appropriate to express an opinion on the matter, in a case where the issue does not arise because of the findings I have made. Its determination should await an appropriate case.
279 The application should be dismissed. The parties will be given an opportunity to attempt to agree appropriate orders as to costs, taking note of the Court’s Practice Notes concerning lump sum orders as to costs. Failing that, directions for competing submissions as to costs will be given.
I certify that the preceding two hundred and seventy-nine (279) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mortimer. |
Associate:
