FEDERAL COURT OF AUSTRALIA

Crazy Ron’s Communications Pty Limited v Mobileworld Communications Pty Limited [2004] FCAFC 196

INTELLECTUAL PROPERTY – Trade Marks – deceptive similarity– whether aural use of ‘Crazy Ron’ infringed a registered composite trade mark which included the words ‘Crazy John’ – whether ‘Crazy John’ an essential feature of the registered mark

INTELLECTUAL PROPERTY – Trade Marks – registration – amendment of particulars of application –whether s 65(5) of the Trade Marks Act 1995 (Cth) authorises amendment of an application which names the wrong person as the owner

Trade Marks Act 1995 (Cth) ss 6, 7, 10, 17, 20, 27, 29, 30, 58, 59, 62, 65, 72, 88, 106, 107, 108, 109, 110, 111, 120, 125, 126, 126, 212, 214, 216, 217

Trade Marks Act 1955 (Cth) s 28

Trade Practices Act 1974 (Cth) ss 80, 87

Trade Mark Regulations 1995 (Cth)

Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407 cited

CA Henschke & Co v Rosemount Estates Pty Ltd (2000) 52 IPR 42 discussed

Jafferjee v Scarlett (1937) 57 CLR 115 cited

Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641 followed

Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 cited

Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 cited

Aristoc Ltd v Rysta Ltd [1945] AC 68 cited

Rysta Ltd’s Application (1943) 60 RPC 87 cited

Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353 cited

Berlei (UK) Ltd v Bali Brassiere Co Inc [1969] 2 All ER 813 cited

Saville Perfumery Ltd v June Perfect Ltd (1941) 58 RPC 147 discussed

de Cordova v Vick Chemical Co (1951) 68 RPC 103 cited

Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227 cited

New South Wales Dairy Corporation v Murray Goulburn Co-operative Co Ltd (1989) 86 ALR 549 cited

Aldi Stores Ltd Partnership v Frito-Lay Trading Company GmbH (2001) 190 ALR 185 cited

Aktiebolaget Hassle v Alphapharm Pty Ltd (2002) 212 CLR 411 cited

Murray Goulburn Co-operative Co Ltd v New South Wales Dairy Corporation (1990) 24 FCR 370 cited

Eagle Homes Pty Ltd v Austec Homes Pty Ltd (1997) 87 FCR 415 cited

Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 cited

Shanahan’s Australian Law of Trade Marks and Passing Off (3^rd ed 2003)

CRAZY RON’S COMMUNICATIONS PTY LIMITED & ORS v MOBILEWORLD COMMUNICATIONS PTY LIMITED & ORS

V 1167 of 2003

MOORE, SACKVILLE and EMMETT JJ

SYDNEY (HEARD IN MELBOURNE)

6 AUGUST 2004

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

THE COURT ORDERS THAT:

1.                  The appeal be allowed.

2.                  Order 1 made by the primary Judge on 4 December 2003 dismissing the cross claim be set aside. 

3.                  In lieu of the order referred to in the previous paragraph, an order be made pursuant to s 88(1) of the TM Act rectifying the Register of Trade Marks by cancelling the registration of Trade Mark No 803950 in classes 35 and 38.

4.                  Order 1 made by the primary Judge on 23 December 2003, dealing with infringement of the Marks, be set aside.

5.                  Order 4 made by the primary Judge on 4 December 2003, and Order 8 made by the primary Judge on 23 December 2003, relating to costs, be set aside.

6.                  In lieu of the orders referred to in the previous paragraph, the appellants pay 70 per cent of the respondents’ costs of the proceeding at first instance, including the cross claim.

7.                  The respondents pay the appellants’ costs of the appeal.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT

THE COURT:

the proceeding

1                     This is an appeal by leave from a judgment and orders of a Judge of this Court.  By orders made under s 126 of the Trade Marks Act 1995 (Cth) (‘TM Act’)  the appellants were restrained from using the name Crazy Ron’s or certain other names so as to infringe two trade marks registered in the name of the first respondent (‘MW Communications’). 

2                     The first trade mark is Australian registered Trade Mark No 656212 (the ‘1995 Mark’).  It is a combination device and word mark, which incorporates the words ‘CRAZY JOHN’ written in what were described in argument as ‘haphazard’ block letters.  It was registered in 1995.  The second trade mark is Australian registered Trade Mark No 803950 (the ‘1999 Mark’).  It consists simply of the words ‘CRAZY JOHN’S’, also written in haphazard block letters.  It was registered in 1999.  The two trade marks (‘the Marks’) are reproduced later in the judgment (see [18], [20] below).  The Marks are registered in respect of goods that include mobile telephones.

3                     The primary Judge also made orders under ss 80 and 87 of the Trade Practices Act 1974 (Cth) (‘TP Act’) restraining the appellants from using the names ‘Crazy Ron’ or ‘Crazy Ron’s’, otherwise than in connection with the existing stores trading in south-east Queensland under the name ‘Crazy Ron’s’.  The question of damages or an account of profits was left to a later hearing.

4                     One or more of the respondents, or entities connected with them, have carried on business under the name ‘Crazy John’s’ since 1993.  A large number of retail stores selling mobile telephones under that name operates in five States and the Australian Capital Territory.  The number of outlets has increased greatly since 2000.  Prior to the expansion, stores were operated only in Victoria, although from 1995 to June 1997 two stores were operated on the Gold Coast in Queensland.

5                     Some of the appellants have carried on business since late 1996 under the name ‘Crazy Ron’s’, also selling mobile telephones.  This name was selected after the then proprietors of the business, Ron Bakir and Jean Doueihi, opened a store adjacent but one from the Crazy John’s Mermaid Beach store on the Gold Coast.  The primary Judge found that Mr Bakir appreciated fully at the time ‘the degree of similarity in rhyme and context of the two shops’.  The respondents asked Mr Bakir in December 1996 to refrain from using the name ‘Crazy Ron’s’, but he refused.  No proceedings were instituted at that time.

6                     After the closure of the two Crazy John’s Gold Coast stores in June 1997, the appellants’ business expanded.  New stores were opened in south-east Queensland and in Tweed Heads, in northern New South Wales. 

7                     Following the breakdown of their relationship in July 2000, Mr Bakir and Ms Doueihi divided the Crazy Ron’s stores between them.  Thereafter Ms Doueihi ceased to use the name.  In November 2001, as his Honour found, Mr Bakir sold the Crazy Ron’s stores and the ‘underlying corporate structure’ to the second appellant (‘BHL’), a company controlled by Mr Canzoneri.  Mr Bakir remained an employee and the ‘public face’ of the Crazy Ron’s business. 

8                     In August 2003, BHL purchased an established chain of mobile telephone stores in Sydney and Melbourne.  The Melbourne stores were rebranded under the name Crazy Ron’s from 5 August 2003 and the Sydney stores from September 2003.

9                     On 19 August 2003 the respondents commenced a proceeding in this Court to restrain the appellants from using the names ‘Crazy Ron’ or ‘Crazy Ron’s’ in connection with their business. The respondents unsuccessfully sought interlocutory relief (Mobileworld Communications Pty Ltd v Q & Q Global Enterprises Pty Ltd [2003] FCA 904; 59 IPR 107), but the matter was fixed for an early trial commencing on 16 October 2003.

10                  The respondents sought declarations, injunctions and damages:

• under the TM Act in respect of alleged infringements by the appellants of the Marks;
• under the TP Act in respect of the appellants’ allegedly misleading and deceptive conduct in promoting their business using names, logos or devices deceptively similar to those of the respondents; and
• by reason of the appellants passing themselves off as part of the respondents’ business or as having an association therewith.

The fourth appellant, Crazy Ron’s Communications Australia Pty Limited (‘Crazy Ron Communications’), cross-claimed for an order pursuant to s 88 of the TM Act rectifying the register by cancelling the registration of the 1999 Mark. 

11                  A company within the Crazy John’s group, not a party to the proceeding, was originally the applicant for registration of the 1999 Mark.  Before registration of the 1999 Mark, the application was amended to substitute a different company within the group as the applicant.  The appellants contended at trial that the substituted company was not the owner of the 1999 Mark, as required by s 27(1)(a) of the TM Act and otherwise did not satisfy the requirements of s 27(1). 

12                  Accordingly, so they argued, the registration of the 1999 Mark could have been opposed under s 58 of the TM Act and the Court had power to order rectification of the Register by cancelling the registration of the 1999 Mark: s 88(1)(a), (2)(a).  The appellants also argued that, in any event, the TM Act, as a matter of construction, did not permit the application to be amended as it was and thus the registration of the 1999 Mark was liable to cancellation: ss 62(a), 88(1)(a), (2)(a).

13                  The primary Judge dismissed the appellants’ cross-claim and upheld the claim for infringement of the Marks.  In a judgment delivered on 4 December 2003 (Mobileworld Communications Pty Ltd v Q & Q Global Enterprise [2003] FCA 1404; (2004) AIPC 91-955) (‘the First Judgment’), his Honour made an order subject to further order, restraining the appellants from infringing either of the Marks:

‘and in particular from using as a trade mark either said mark or any mark, name, word, sign, logo or device which is substantially identical or deceptively similar thereto, including but not necessarily limited to “Crazy Ron” or “Crazy Ron’s” or www.crazyrons.com.au.’

14                  That order was vacated on 8 December 2003 and on 23 December 2003 his Honour granted a permanent injunction restraining the appellants from using the names ‘Crazy John’, ‘Crazy John’s’, ‘Crazy Ron’, ‘Crazy Ron’s’ or ‘www.crazyrons.com.au’, or any names substantially identical therewith or deceptively similar thereto, so as to infringe either of the Marks.  His Honour gave brief reasons explaining the form of the orders: Mobileworld Communications Pty Ltd v Q & Q Global Enterprise Pty Ltd [2003] FCA 1579 (the ‘Second Judgment’).

15                  In the First Judgment, the primary Judge upheld the claims under the TP Act, except in relation to the appellants’ operations on the Gold Coast and elsewhere in south eastern Queensland.  His Honour rejected the TP Act claims in relation to those areas because the appellants had developed their own reputation there by means of advertising and promotional activities.  It followed, so his Honour held, that the continued use of the names Crazy Ron or Crazy Ron’s in south-eastern Queensland would be unlikely to mislead or deceive.  Ultimately his Honour made the orders under the TP Act to which we have referred (see [3] above).

16                  By the orders made on 23 December 2003, the primary Judge granted the appellants leave to appeal from the orders made, subject to certain undertakings by them.  His Honour also stayed the orders based on the appellants’ infringement of the Marks pending the appeal, but only in connection with the existing stores trading under the name ‘Crazy Ron’s’ on the Gold Coast in Queensland.  In substance, the issues on the appeal concern only the orders made in relation to the appellants’ infringement of the Marks.

the TRADE markS

Registration of the 1995 Mark

17                  On 22 March 1995, Mobile World Communications Pty Ltd (ACN 063 108 547) (‘the Original Proprietor’) applied for the registration of the trade mark that ultimately became the 1995 Mark.  The 1995 Mark was registered in Class 38, in respect of telecommunications, with effect from 22 March 1995. 

18                  The 1995 Mark is described as follows in the Register:

‘Word:             CRAZY JOHN MW

 Image:            MAN, CARTOON ATOP GLOBE, MERIDIANS HAS MOBILE PHONE’

The following image appears in the Register:

An endorsement in the Register states that registration gives no right to the exclusive use of the word ‘JOHN’ or of the letters ‘MW’.

19                  On 22 May 1996 the Original Proprietor assigned the 1995 Mark to Crazy John Pty Ltd (ACN 070 157 452).  On 1 July 1996 Crazy John Pty Ltd granted a licence to Mobileworld Communications (Aust) Pty Ltd (ACN 073 366 757) (‘MW Aust’) to use ‘the right, title, interest and good will’ in the 1995 Mark for a fee of $300,000 per annum.  On the same day, the Original Proprietor sold the business carried on by it to MW Aust. The purpose of those transactions, which were entered into on legal advice, was to vest the ownership of the 1995 Mark in a new trading entity.  From 1 July 1996 until some time in December 1999, MW Aust used the 1995 Mark in connection with the retail business of selling mobile telephones pursuant to the licence from Crazy John Pty Ltd.

Registration of the 1999 Mark

20                  On 17 August 1999 an application was lodged with the Registrar of Trade Marks for registration of the mark that ultimately became the 1999 Mark.  A scanning sheet was attached to the application form and reproduced the 1999 Mark, as follows:

21                  Mr Mark Darrer, a solicitor in the firm of Messrs Darrer Muir Fleiter, received instructions from MW Aust to lodge the application with the Registrar of Trade Marks and invoiced MW Aust for the work that he did in connection with the lodging of the application.  The form of application consisted of a document containing a series of boxes.  The name of MW Aust was inserted in the box for ‘Name of Applicant’ and the form was signed by Mr Darrer. 

22                  Particulars of the application were published, as required by s 30 of the TM Act, on 9 September 1999.

23                  On 3 November 1999, Mr Darrer had some discussions with Mr Simon Morris, a partner at Corrs Chambers Westgarth in Melbourne.  Mr Morris was at that time doing legal work in relation to a corporate restructure of the group of companies of which MW Aust was a member.  Accordingly, it did not come as a surprise to Mr Darrer to receive a communication from Mr Morris.  Mr Morris told Mr Darrer that the lodgement of the application for registration of the 1999 Mark in the name of MW Aust had been an error.  There was a discussion about the restructuring of the group, in the course of which Mr Darrer made a note ‘IP in CJ Pty Ltd a trust’.  He said in evidence that the note conveyed to him that the group’s intellectual property, including its trade marks, was in a trust, of which Crazy John Pty Ltd was the trustee. 

24                  After his discussions with Mr Morris, Mr Darrer discussed the matter with Ms Linda Orlowski who had given instructions to Mr Darrer, Mr Darrer then spoke to Mr Les Daniel at the Trade Marks Office about notifying the Office that Crazy John Pty Ltd should have been the applicant for registration of the 1999 Mark.  He told Mr Daniel that he had received instructions from Ms Orlowski that ‘she had the company wrong’ and that the applicant should have been Crazy John Pty Ltd, which was the holder of the 1995 Mark. 

25                  Following these discussions, Mr Darrer prepared a letter for Ms Orlowski to send to his firm.  On 9 November 1999, Ms Orlowski signed a letter from MW Aust addressed to Mr Darrer as follows:

‘Re:  Trademarks

We refer to your previous correspondence to us in relation to the trademark applications you have lodged on behalf of Mobileworld Communications (Aust) Pty Ltd for the marks:

1.         “Crazy John”

2.         The Crazy John Character

3.         The globe with the letters “MW”

4.         “Mobileworld Communications”

5.         “Mobileworld Communications (Aust)”

6.         “Mobileworld”

In fact the owner of the above marks is another company in our group, Crazy John Pty Ltd ACN 070 157 452 can you therefore please make the appropriate amendments, or withdraw and re-lodge the applications so that the correct proprietor of Crazy John Pty Ltd is noted.

Our apologies for this oversight on our behalf.  It has only just come to our attention, particularly when we noticed that Crazy John Pty Ltd actually has a registered trademark for “Crazy John” and the “MW” globe and the character as a whole – number 656212.

If you have any queries do not hesitate to contact me.’

26                  Mr Darrer said that he ‘scripted’ the letter in order to have a record that there was an error, which would rebut any suggestion that might subsequently be raised that there had been a transfer of the mark by MW Aust to another entity.  He said that he wanted to record that, effectively, the application for registration had been lodged in error and that the owner of the 1999 Mark at all times had been Crazy John Pty Ltd.  Mr Darrer agreed in cross-examination that the letter was intended to ‘rectify’ the original instructions.  He also accepted that there was no doubt at the date of lodgement of the application and for some time thereafter that the applicant was to be MW Aust.

27                  On 12 November 1999, Mr Darrer wrote to Mr Daniel at the Trade Marks Office, referring to the six trade mark applications mentioned in the letter of 9 November 1999.  The letter went on to say:

‘Each of the above applications, naming Mobileworld Communications (Aust) Pty Ltd as the applicant, were lodged with your office on instructions from the group’s Administration Manager.  However, this was done in error.  The applications should have been lodged in the name of a related company in the group:  Crazy John Pty Ltd which is the actual owner of each of the trademarks.  Consistent with this we refer you to registration No 656212 for the trademark “CRAZY JOHN” with graphics of a man atop a globe holding a mobile phone, that is registered in the name of Crazy John Pty Ltd.

This was an oversight by the Administration Manager.  On the basis of the above, can you please amend each of the above applications to record the correct applicant as Crazy John Pty Ltd ACN 070 157 452. 

If you have any queries do not hesitate to contact Mark Darrer at our office.’

28                  Darrer Muir Fleiter subsequently received a communication from the Trade Marks Office dated 17 November 1999 in the following terms:

‘                                   Change of Owner’s Name

RE:      Trade Mark Application Numbers 803950 in the name of Crazy John Pty Ltd

…

Date of Application to amend 12/11/1999

The owner’s name has been changed as requested.’

Assignment of the Marks

29                  On 2 December 1999, MW Aust entered into an ‘Asset Purchase Agreement’ with the first respondent, Mobileworld Communications Pty Ltd (ACN 090 451 415), (‘MW Communications’) and the third respondent, Mobileworld Operating Pty Ltd (ACN 090 451 433) (‘MW Operating’).  MW Communications at that time held all of the issued shares in the capital of MW Operating.  By the Asset Purchase Agreement, MW Aust sold to MW Operating the business carried on by it, including the distribution of telephones and any other communication equipment. 

30                  On the same day, Crazy John Pty Ltd entered into a ‘Deed of Assignment of Trade Marks’ with MW Communications, whereby Crazy John assigned to MW Communications all its property, right, title, interest, benefit and claims in and to, amongst other things, the 1995 Mark and the application for the 1999 Mark.  A single form of ‘Application to Record Assignment or Transmission of a Trade Mark’, dealing with the 1995 Mark, the pending application for the 1999 Mark and the five other pending applications, was forwarded by Darrer Muir Fleiter to the Registrar of Trade Marks, under cover of a letter dated 14 February 2000.

31                  By letters dated 28 February 2000, the Trade Marks Office informed Darrer Muir Fleiter that, with effect from 16 February 2000, MW Communications had been entered in the Register as the subsequent owner of the 1995 Mark and had been recorded as the applicant for registration of, inter alia, the 1999 Mark.  In due course, the 1999 Mark was registered in the name of MW Communications. 

legislation

32                  Section 20(1) of the TM Act provides that the registered owner of a registered trade mark has the exclusive rights to use the trade mark and to authorise others to use the mark in relation to the goods and services in respect of which the mark is registered.  The registered owner also has the right to obtain relief if the trade mark has been infringed: s 120(2).  The relief that a court may grant in an action for an infringement of a registered trade mark includes an injunction and, at the option of the applicant, damages or an account of profits: s 126.  An infringement action may be brought in a prescribed court, including the Federal Court: ss 125, 190.

33                  Section 120 of the TM Act identifies the circumstances in which a registered trade mark is infringed.  Section 120(1) provides as follows:

‘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.’

34                  Section 10 defines ‘deceptively similar’:

‘For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.’

35                  Section 7(2) of the TM Act is as follows:

‘To avoid any doubt, it is stated that, if a trade mark consists of the following, or any combination of the following, namely, any letter, word, name or numeral, any aural representation of the trade mark is, for the purposes of this Act, a use of the trade mark.’

36                  Section 6 of the TM Act defines ‘sign’ to include:

‘the following or any combination of the following, namely, any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent.’

37                  The registration of a trade mark in respect of the goods and services in respect of which the trade mark is registered is taken to have had effect from the filing date of the application: s 72.

38                  Section 27(1) of the TM Act states as follows:

‘A person may apply for the registration of a trade mark in respect of goods and/or services if:

(a)               the person claims to be the owner of the trade mark; and

(b)               one of the following applies:

(i)                 the person is using or intends to use the trade mark in relation to the goods and/or services;

(ii)               the person has authorised or intends to authorise another person to use the trade mark in relation to the goods and/or services;

(iii)             the person intends to assign the trade mark to a body corporate that is about to be constituted with a view to the use by the body corporate of the trade mark in relation to the goods and/or services.’

Section 6 defines ‘applicant’, in relation to application, to mean ‘the person in whose name the application is for the time being proceeding’.

39                  Part 6 of the TM Act deals with amendment of an application for registration of a trade mark. Section 65 is as follows:

‘(1)      If the particulars of the application have been published under section 30, the application may be amended as provided in this section.

(2)      An amendment may be made to the representation of the trade mark if the amendment does not substantially affect the identity of the trade mark as at the time when the particulars of the application were published.

(3)             An amendment may be made to correct a mistake of fact or an error in the classification of any goods or services specified in the application.

(4)             An amendment may be made to change the type of registration sought in the application (for example, an application for the registration of a trade mark as a certification trade mark may be amended to an application for registration as a collective trade mark).

(5)             An amendment may be made to any other particular specified in the application unless the amendment would have the effect of extending the rights that (apart from the amendment) the applicant would have under the registration if it were granted.’

40                  Section 88(1)(a) of the TM Act empowers a court, on the application of an aggrieved person, to order that the register be rectified by cancelling the registration of a trade mark.  Such an application may be made on the grounds specified in s 88(2) and on no other grounds.  The grounds include the following:

‘(a)      any of the grounds on which the registration of the trade mark could have been opposed under Div 2 of Part 5’.

41                  Division 2 of Part 5 sets out a number of grounds on which the registration of a trade mark may be opposed.  These include the grounds stated in ss 58, 59 and 62(a).  Those provisions are as follows:

‘58.      The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

 59.      The registration of a trade mark may be opposed on the ground that the applicant does not intend:

(a)               to use, or authorise the use of, the trade mark in Australia; or

(b)               to assign the trade mark to a body corporate for use by the body corporate in Australia;

in relation to the goods and/or services specified in the application.

            …

 62.      The registration of a trade mark may be opposed on any of the following grounds:

(a)                that the application, or a document filed in support of the application, was amended contrary to this Act…’

Other provisions relevant to the question of the validity of the registration of the 1999 Mark are referred to later in the judgment ([110] – [122] below).

issues on the appeal

42                  Except in one respect, the appellants did not challenge either the primary Judge’s conclusion that the appellants had contravened the TP Act or the form of the orders made under ss 80 and 87 of the TP Act.  The one qualification is that Mr Ireland QC, who appeared with Mr Anderson for the appellants, challenged the form of the restraining orders insofar as the exception to those orders was confined to the appellants’ existing stores in south-eastern Queensland.  Mr Shavin QC, who appeared with Ms Barker for the respondents, ultimately did not dispute that the form of the order should be modified.  We were told that the parties had reached agreement as to the appropriate modification and we shall make the necessary orders to give effect to the agreement.

43                  The appeal was therefore, in substance, confined to the appellants’ challenge to the orders based on its infringement of the Marks and to the dismissal of the cross-claim.  The appellants challenged:

(i)                  the finding that they had infringed the 1995 Mark by the use orally and in writing of the names Crazy Ron’s and Crazy Ron;

(ii)         the finding that they had similarly infringed the 1999 Mark; and

(iii)        the primary Judge’s rejection of the contention that the 1999 Mark had been incorrectly registered and should be expunged from the register.

44                  As we have noted, the third challenge rested on two distinct grounds.  Although we were told that both arguments were put to the primary Judge, there was some doubt as to whether the cross-claim encompassed the construction question.  We granted the appellants leave to amend the cross-claim to put the matter beyond doubt.  We also granted the respondents leave, to the extent necessary, to contend that even if there had been no power under the TM Act to alter the application by substituting Crazy John Pty Ltd for MW Aust as the applicant for the 1999 Mark, relief should be refused to the first appellant on discretionary grounds.

the primary judgment

The Cross-Claim

45                  The primary Judge dealt first with the cross-claim attacking the registration of the 1999 Mark.  His Honour noted that the appellants’ arguments were ‘essentially based’ on the proposition that Crazy John Pty Ltd was not the owner of the 1999 Mark. However, the appellants had also argued that Crazy John Pty Ltd did not use or intend to use the 1999 Mark (s 27(1)(b)(i)); that there was no evidence that Crazy John Pty Ltd had authorised or intended to authorise MW Aust to use the 1999 Mark (s 27(1)(b)(ii)); and that there was no evidence that Crazy John Pty Ltd intended to assign the 1999 Mark (s 27(1)(b)(iii)).

46                  The primary Judge rejected these submissions.  His Honour made a number of factual findings which, in his view, were inconsistent with the appellants’ submissions.  The findings included the following:

• On 1 July 1996, the Original Proprietor sold the business carried on by it to MW Aust.  On the same date, Crazy John Pty Ltd granted MW Aust a licence to use the 1995 Mark for a substantial fee (see [19] above).  Crazy John Pty Ltd was the trustee of a trust, while MW Aust was the operator of the business.
• Thereafter, MW Aust ran the retail business and used the phrases ‘Crazy John’ and ‘Crazy John’s’ in its advertising and promotion.
• Since 1996, it had been the intention of those directing the affairs of the Crazy John’s group that the intellectual property assets should reside in Crazy John Pty Ltd.  The assignment of the 1995 Mark to Crazy John Pty Ltd was intended to be with the goodwill attaching to the 1995 Mark.
• It was not intended that MW Aust, rather than Crazy John Pty Ltd, should be the owner of the 1999 Mark before the application was made.
• Those responsible for giving instructions to Mr Darrer to lodge the application for the 1999 Mark either did not know of or had forgotten the intention to place the intellectual property assets in Crazy John Pty Ltd.  In November 1999 it was realised that Crazy John Pty Ltd should have made the application and the Trade Marks Office was informed of the ‘error’.
• Crazy John Pty Ltd did claim to be the owner of the Mark, as shown by the terms of the letter of 12 November 1999 to the Trade Marks Office.
• Although MW Aust initially claimed to be the owner, being identified as such on the application, ‘on the evidence Crazy John Pty Ltd was the owner’.

47                  The primary Judge held that having regard to the definition of ‘applicant’ in s 6 as ‘the person in whose name the application is for the time being proceeding’, the time to judge whether s 27(1)(a) of the TM Act was satisfied was ‘during the application’.  The letter of 12 November 1999 to the Trade Marks Office expressly claimed that Crazy John Pty Ltd was the owner and, on the evidence, it was.

48                  His Honour rejected a further submission by the appellants that since Crazy John Pty Ltd did not, as at the date the application was filed (17 August 1999), claim to the owner of the Mark, s 27(1)(a) of the TM Act was not satisfied.  In his Honour’s view:

‘Crazy John Pty Ltd was a person who, while the application was proceeding, claimed to be the owner and who claimed to be the owner at the time of grant.  [MW Aust] before then claimed to be the owner, but withdrew that claim. To make the application fail because of innocent error of the kind displayed in the evidence would impermissibly narrow the power of amendment in Part 6 of the TM Act.  Crazy John Pty Ltd claimed to be the owner during the registration process.  It was an applicant.  Section 27(1)(a) was satisfied.’

49                  His Honour continued:

‘Crazy John Pty Ltd had impliedly authorised [MW Aust] to use the mark: Revlon Inc v Cripps & Lee Ltd [1980] FSR 85, and Polo Textile Industries v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227, and whilst the precise timing of the reconstruction [of the group] in 1999 is not clear, I can infer that Crazy John Pty Ltd intended, in November 1999, to authorise others to use the second mark or to assign it.’

Trade Mark Infringement

50                  His Honour identified the primary issue on infringement as

‘whether the use of the phrases “Crazy Ron” [or] “Crazy Ron’s” in writing and by sound was deceptively similar to the first and second marks for the purposes of ss 120(1) and 10 of the TM Act.  There was no issue that the use of the phrases was relevantly other than use as a trade mark.’

51                  Earlier in the judgment, the primary Judge made this comment about the 1995 Mark:

‘Looking at that mark, as it strikes the eye and fixes in the recollection (Saville Perfumery Ltd v June Perfect Ltd (1941) 58 RPC 147, 162), one of the essential features of the mark is the phrase “Crazy John”.  This essentiality comes from the prominence of the words and their reinforcement by the deranged look on the face of the man sitting astride the globe.’

His Honour had also found that the reputation of Crazy Ron’s at all times prior to 2003 was modest and largely restricted to the Gold Coast area of south-eastern Queensland, although there was a ‘transient’ reputation in Adelaide.

52                  His Honour set out what he regarded as important aspects of the legal principles and what he took from the evidence, as follows:

‘(a)      the nature of the goods (identical, relatively low value consumer items) and how they will be sold (often through attention seeking advertisements);

 (b)      the fact that here the marks will be used both in written form and in sound form in a way to attract attention by reference to the “craziness” of the seller;

 (c)       the fact that the phrase will quite possibly be said loudly or indistinctly in promoting the business;

 (d)      the fact of the similarity of the words – but one consonant being different and a soft consonant, found at the point of the connection of the two words;

 (e)       the fact of the difficulty in hearing any difference between the two when said quickly or loudly and if the senses are otherwise being cluttered by noise and distraction in an advertisement for identical goods;

 (f)       the fact that precise and sustained attention and concentration is often not to be expected of viewer or listener.  In many circumstances the reader or viewer will be bombarded by attention grabbing use of language the phrase identifying the brand of the business in question.’

53                  His Honour continued as follows:

‘Important also in this case is that there is direct evidence of people confusing, and indeed mistaking, one shop for another after hearing or seeing the other’s advertising.  I should be clear about my use of this evidence.  Even if this evidence had not been led I would have concluded that the use of “Crazy Ron’s” and “Crazy Ron” would in all the circumstances be likely to create in the minds of a not insignificant number of people a significant degree of confusion about which trade source was connected with what they were hearing or seeing – Crazy John or Crazy Ron or whether the trade source was the same, and that consumers would likely be led into error.

The actual evidence revealed people thinking one was the other – delivery orders confused by couriers, Mrs Houseman associating what she heard on the “Crazy Ron” television advertisement with the name “Crazy John”, some thinking “Crazy Ron’s” was part of “Crazy John’s”.

The [appellants’] submissions attempted to deal with this evidence by emphasising that the cause of the confusion was not explained.  A distinction was drawn in their submissions between misunderstanding and confusion.  Some of the evidence was equivocal – the evidence of the directions given in the shopping malls to the wrong shop was not compelling.  However, the evidence of Mrs Houseman, notwithstanding the criticisms of it, indicates how the sound of “Crazy Ron’s” said loudly, quickly and in the context of a busy, almost raucous, advertisement while a recipient of the information was otherwise busy, can be associated then, and over time, with the recollection of “Crazy John’s”.  This is likely, it seems to me, because of the virtual absence of aural distinction when either is uttered in this way.

Ms Cutts spoke to a customer who made the brand association between “Crazy John’s” and “Crazy Ron’s”.  Some customers on the telephone were adamant that the stores that they had heard advertised as “Crazy Ron’s” stores were “Crazy John” stores.  This was not through visiting the stores but taking from the aural message in the “Crazy Ron” advertisement something they recalled from “Crazy John’s” reputation.  (The reverse could occur also.)

The infringement of the second mark is perhaps clearer than the first, but only because the first is a composite mark with a number of features.  As I have already said, “Crazy John” is an essential element of the first mark.  I think the confusion as to trade source will arise in respect of the first and the second marks.’

Trade Practices Act and Passing Off Claims

54                  The primary Judge found that the use by the appellants of the name ‘Crazy Ron’s’ in stores outside south-eastern Queensland was likely to mislead or deceive the relevant class of people.  However, while there may have been misleading and deceptive conduct in south-eastern Queensland in 1996 and 1997, the respondents had moved out of the area and in the meantime the appellants had established a reputation.  Thus their use of ‘Crazy Ron’s’ or ‘Crazy Ron’ in that area would not be likely to mislead or deceive.  Hence his Honour was not prepared to grant an injunction under the TP Act in respect of that area.

SUBMISSIONS

THE APPELLANTS’ contentions

Infringement of the Marks

55                  The appellants submitted that the primary Judge had erred in finding that one of the ‘essential features’ of the 1995 Mark was the phrase ‘Crazy John’ and that the phrase ‘Crazy John’s’ was an essential feature of the 1999 Mark.  Mr Ireland criticised the judgment for failing to distinguish clearly between the two Marks.  He submitted that the respondents’ case on the 1995 Mark was ‘hopeless’ because of the complicated visual nature of the Mark.  Mr Ireland acknowledged that the respondents’ case on the 1999 Mark was at least ‘debatable’, but he contended that his Honour should not have regarded the words ‘Crazy John’s’ as an essential feature of the 1999 Mark independently of the haphazard printing of the words.

56                  Mr Ireland pointed out that his Honour had not made explicit findings as to the appellants’ infringing conduct.  However, Mr Ireland said it was implicit in the reasoning that his Honour had focussed on the aural use of the phrase ‘Crazy Ron’s’ by the appellants.  This was so notwithstanding that the evidence also showed that the appellants had used their name in print advertising with the word ‘CRAZY’ printed haphazardly and the ‘O’ in ‘RON’S’ showing Mr Bakir’s torso and head, with a somewhat odd smile or grimace on his face.

57                  It was an error, so Mr Ireland argued, for his Honour to emphasise the phonetic similarity between the words ‘John’ and ‘Ron’ in considering whether the 1995 Mark had been infringed.  This attributed to a subordinate feature of the 1995 Mark (the word ‘JOHN’) an exclusivity which the registration itself denied.  Although Mr Ireland accepted that a trade mark in written or representational form in some circumstances might be infringed by aural use of the words in the mark, this could not be the case with the 1995 Mark, at least where the use simply consisted of the use of the words ‘Crazy John’.

58                  Mr Ireland submitted that his Honour’s conclusion that the appellants had infringed the 1999 Mark was based on the possibility that the name ‘Crazy John’s’ would be heard indistinctly.  This, so he argued, was not a proper basis to assess infringement.  It went beyond the notion of imperfect recollection for the appellants to be ‘penalised’ if the 1999 Mark were imperfectly recalled as ‘Crazy Ron’s’.  The competing marks should be considered in their natural and normal pronunciation, although Mr Ireland accepted that it was necessary to keep in mind the possibility that a word might be slurred or a name abbreviated.  However, due weight had to be given to the effect of a strong syllable or consonant in a trade mark.  The accused mark involved the use of a quite different name in conjunction with the word ‘Crazy’, which was adjectival in each case.

Registration of the 1999 Mark

59                  The appellants submitted that, regardless of whether the original form of application for the 1999 Mark included MW Aust’s name as the applicant in error, there was no power under the TM Act to alter the application to substitute Crazy John as the applicant.  Mr Ireland argued that the power in s 65(5) to make ‘[a]n amendment…to any other particular specified in the application’ does not extend to substituting a different applicant.  He pointed out that an application for a trade mark is a public act and registration of a trade mark affects the public generally.  These considerations suggested that s 65(5) is not intended to permit the substitution of a new applicant part way through the registration process.  Furthermore, the fact that ss 106 and 107 of the TM Act provide for the assignment of a trade mark registration of which is being sought, suggests that the power to amend in s 65(5) is not intended to encompass the substitution of a new applicant.

60                  In the alternative, the appellants challenged his Honour’s finding that Crazy John Pty Ltd was always intended to be the owner of the 1999 Mark and that it therefore was the owner of the Mark.  Mr Ireland submitted that the evidence showed that the substitution of Crazy John Pty Ltd for MW Aust was in consequence of a reorganisation of the group in 1999 and did not reflect a pre-existing intention that Crazy John Pty Ltd should be the repository of the intellectual property of the group. 

61                  Mr Ireland further submitted that even if Crazy John Pty Ltd was the owner, his Honour erred in finding that it satisfied s 27(1)(b)(ii) of the TM Act because there was no evidence that Crazy John Pty Ltd intended to authorise MW Aust to use the 1999 Mark at the date of the application.  This submission assumed that Crazy John Pty Ltd could satisfy s 27(1)(b)(ii) only if the relevant intention existed at the time the original application was filed.

THE RESPONDENTS’ contentions

Infringement of the Marks

62                  The respondents submitted that the primary Judge had correctly applied well established principles of trade mark law.  In particular, he had held that the taking of an ‘essential element or integer’ of a trade mark can constitute infringement of the mark itself and that oral use of a trade mark can constitute infringement.  His Honour had correctly concluded that if an alleged infringer uses words that are deceptively similar to an essential element or integer of the trade mark, infringement will be made out.

63                  Mr Shavin contended that his Honour was entitled to find that the words ‘Crazy John’  were part of the 1995 Mark and formed one of its essential elements.  That finding was in no way affected by the disclaimer imposed as a contention of registration of the 1995 Mark.  The primary Judge was right to consider that the central idea conveyed by the 1995 Mark was the name ‘Crazy John’.  His Honour was also right to take into account the risk that some consumers would take away an imperfect recollection of the words ‘Crazy John’ and thus would be likely to be deceived by the oral use of similar names ‘Crazy Ron’ and ‘Crazy Ron’s’.

64                  Mr Shavin emphasised that the appellate Court should give particular respect and weight to the impressions of the primary Judge.  Error was not to be imputed where matters of impression are involved, so he argued, simply because the appellate Court may have taken a view different from that of the primary Judge.

65                  The respondents submitted that the case for infringement of the 1999 mark was a fortiori that for the 1995 Mark.  Mr Shavin said that the appellants’ arguments impermissibly invited the Court to compare the two marks side by side, rather than by reference to a consumer with an imperfect recollection of the 1999 Mark.  Mrs Houseman had given evidence of actual confusion arising from her having seen the 1999 Mark reproduced on the field at a rugby league game and his Honour had correctly given substantial weight to that evidence.  Indeed, so Mr Shavin argued, the appellants’ argument amounted to an attempt to turn the doctrine of imperfect recollection on its head, by asserting that an infringer should not be ‘penalised’ just because consumers might imperfectly recollect a mark to which the infringer’s is deceptively similar.

66                  Mr Shavin further submitted that it was appropriate for the primary Judge to have taken into account the finding that the appellants had chosen to re-badge existing stores in Sydney and Melbourne in order to obtain the benefit of the respondents’ advertising under the name ‘Crazy John’s’.  This finding was based on an assessment of witnesses who had been cross-examined and whose demeanour the primary Judge had observed.

Registration of the 1999 Mark

67                  The respondents submitted that the primary Judge’s finding that the naming of MW Aust as the applicant for the 1999 Mark was an innocent error depended on his Honour’s assessment of the witnesses and should be accepted on appeal.  When the mistake was corrected, by substituting Crazy John Pty Ltd as the applicant, the application was amended to become factually true. 

68                  Mr Shavin contended that the Registrar had power to alter the identity of the applicant  under s 65(5) of the TM Act.  Mr Shavin acknowledged that s 65(5) of the TM Act, in terms,authorises only an ‘amendment to any other particular’.  However, he argued that the substitution of one applicant for another, at least where it had always been intended that the former should be the applicant, could be described as an amendment to the particular specifying the name of the applicant.  Mr Shavin pointed out that the other sub-sections in s 65 authorised changes to particulars, including a change to the type of registration (s 65(4)).  Changing the name of the applicant, he said, was no different.

69                  The respondents also contended that Crazy John Pty Ltd satisfied the requirements of s 27(1)(a) of the TM Act, since it was a person who, while the application was proceeding and at the time of the grant, claimed to be and (on the primary Judge’s findings) was the owner of the 1999 Mark.  By contrast, MW Aust could never have become validly registered as the proprietor of the 1999 Mark, because it at all times was merely a licensee of the Mark.  Moreover, the primary Judge had correctly found that Crazy John Pty Ltd had intended to use the 1999 Mark by licensing it.

70                  Mr Shavin argued that if the Court was of the view that the appellants had made out the grounds for cancellation of the registration of the 1999 Mark, relief should be refused on discretionary grounds.  He pointed out that s 88(1) of the TM Act confers a discretion on the Court to make a cancellation order if the grounds are made out.  Mr Shavin submitted that it would be a ‘travesty’, given the primary Judge’s factual findings, to deny the respondents the benefit of the 1999 Mark because of a technical error.

REASONING ON INFRINGEMENT

INFRINGEMENT OF THE 1995 MARK

71                  Mr Shavin put forward a number of propositions that, so he submitted, amply supported the primary Judge’s finding that the appellants had infringed the 1995 Mark.  The propositions were these:

(i)                  An examination of the 1995 Mark indicates that one essential feature of the Mark is the phrase ‘Crazy John’.  In making this judgment, the Court is not confined to an ocular test alone, but can consider the sound of the words that form part of the 1995 Mark.

(ii)                In determining whether the appellants’ use of the expressions ‘Crazy Ron’ or ‘Crazy John’s’ is deceptively similar to the 1995 Mark (TM Act, s 120(1)), it is permissible to take into account the aural use of those expressions in connection with the appellants’ goods or services.  In this connection, evidence that consumers have actually been misled by the aural similarity of the 1995 Mark and the marks used by the appellants may be important.

(iii)               If due to consumers’ imperfect recollection of an essential element of the 1995 Mark, there is a risk that the appellants’ aural use of their marks (‘Crazy Ron’ and ‘Crazy Ron’s’) will be confused with an essential element of the 1995 Mark (‘Crazy John’), the risk supports a finding that the appellants use of their marks is likely to deceive or cause confusion (TM Act, s 10).

(iv)              The question of whether the use of the appellants’ marks is likely to deceive or cause confusion is ultimately a matter of impression. 

Legal Principles

72                  The general principles governing a trade mark infringement claim were not substantially in dispute between the parties.  For the most part, the argument concentrated on the application of these principles to the facts.  Nonetheless, it is important to recall the principles.

73                  First, as the primary Judge pointed out, the question of deceptive similarity of marks, unlike substantial identity, is not to be judged by a side by side comparison.  As Windeyer J said at first instance in Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407, at 415:

‘On the question of deceptive similarity a different comparison  must be made from that which is necessary when substantial identity is in question.  The marks are not now to be looked at side by side.  The issue is not abstract similarity, but deceptive similarity.  Therefore the comparison is the familiar one of trade mark law.  It is between, on the one hand, the impression based on recollection of the plaintiff’s mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions that such persons would get from the defendant’s television exhibitions.’

See, too, CA Henschke & Co v Rosemount Estates Pty Ltd (2000) 52 IPR 42, at 61, per curiam.

74                  In assessing the impression created by the mark, it is important to consider ‘the idea of the mark’, that is ‘the idea which the mark will naturally suggest to the mind of one who sees it’: Jafferjee v Scarlett (1937) 57 CLR 115, at 121, per Latham CJ (with whom McTiernan J agreed).  As Latham CJ observed in Jafferjee (at 122):

‘it is very important to remember that the purchasers in that market will not ordinarily have an opportunity of comparing the two marks side by side.  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.  They therefore will not be in the same position as that in which the court finds itself when it is endeavouring to determine whether or not they are likely to be deceived….  Such purchasers have not had the opportunity or the occasion to make a precise comparison of the two marks.  They will be guided, so far as they are influenced by trade marks at all, by a general recollection or impression of the mark which they have seen.’

75                  Secondly, the question of deceptive similarity involves factual issues in respect of which similarities of sound may be important.  Dixon and McTiernan JJ explained the approach to be taken in Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641, at 658, as follows:

‘But, in the end, it becomes a question of fact for the court to decide whether in fact there is such a reasonable probability of deception or confusion that the use of the new mark and title should be restrained.

In deciding this question, the marks ought not, of course, to be compared side by side.  An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought.  The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same.  The effect of spoken description must be considered.  If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, then similarities both of sound and of meaning may play an important part.  The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected.  Potential buyers of goods are not to be credited with any high perception or habitual caution.  On the other hand, exceptional carelessness or stupidity may be disregarded.  The course of business and the way in which the particular class of goods are sold gives, it may be said, the setting, and the habits and observation of men considered in the mass affords the standard.  Evidence of actual cases of deception, if forthcoming, is of great weight.’

Later their Honours observed (at 659) that the question is:

‘never susceptible of much discussion.  It depends on a combination of visual impression and judicial estimation of the effect likely to be produced in the course of the ordinary conduct of affairs.’

76                  Thirdly, it is necessary to show a tangible danger of deception or confusion, although it is enough if an ordinary person entertains a reasonable doubt: Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, at 594-595, per Kitto J; Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365, at 382, per French J (Tamberlin J agreeing).

77                  Fourthly, as is implicit in the passage quoted above from Australian Woollen Mills, the Court must make allowance for the imperfect recollection a person may have of the registered trade mark in determining whether another mark so nearly resembles the registered mark that it is likely to deceive or cause confusion.  For example, in Aristoc Ltd v Rysta Ltd [1945] AC 68, the House of Lords held that the respondents were not entitled to register ‘Rysta’ as a trade mark in respect of stockings in the face of the appellants’ ‘Aristocrat’ registered mark for the same goods. Viscount Maugham (with whom Lords Thankerton and Wright agreed) adopted (at 86) the reasoning in the dissenting judgment of Luxmoore LJ in the Court of Appeal: Rysta Ltd’s Application (1943) 60 RPC 87.  Luxmoore LJ said (at 108-109):

‘The answer to the question whether the sound of one word resembles too nearly the sound of another so as bring the former within the limits of s 12 of the Trade Marks Act, 1938, must nearly always depend on first impression, for obviously a person who is familiar with both words will neither be deceived nor confused.  It is the person who only knows the one word, and has perhaps an imperfect recollection of it, who is likely to be deceived or confused.  Little assistance, therefore, is to be obtained from a meticulous comparison of the two words, letter by letter and syllable by syllable, pronounced with the clarity to be expected from a teacher of elocution.  The court must be careful to make allowance for imperfect recollection and the effect of careless pronunciation and speech on the part not only of the person seeking to buy under the trade description, but also of the shop assistance ministering to that person’s wants.’

Viscount Maugham accepted Luxmoore LJ’s view that there was a tendency to slur a word beginning with ‘a’ and that the similarity between the pronunciation of ‘Rysta’ and ‘Ristoc’ was fairly obvious.  Aristoc v Rysta thus recognises that the concept of imperfect recollection may be applied to the pronunciation of a particular word included in a trade mark. 

78                  Aristoc v Rysta was applied by the High Court in Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353.  The proprietor of the trade mark ‘BERLEI’, registered in respect of clothing, succeeded in expunging from the register the trade mark ‘BALI-BRA’, registered in respect of brassieres.  Mason J (with whom Stephen J agreed) held that the use of ‘BALI-BRA’ ‘would be likely to deceive or cause confusion’ within the meaning of s 28(a) of the Trade Marks Act 1955 (Cth).  His Honour considered (at 362) that the strength of the proprietor’s case lay in the finding that the two marks were phonetically alike, one being pronounced ‘Burley’ and the other ‘Barley’.  Mason J accepted that the likelihood of confusion arising from phonetic similarity was reduced because the evidence showed that brassieres were usually bought after inspection or a fitting.  But, his Honour said (at 362):

‘that risk is not eliminated.  No doubt orders are sometimes placed by telephone.  And in considering the likely reaction of a customer it is important to take into account, not the person whose knowledge of the two marks and the goods sold under them enables her to distinguish between them, but the person who lacks that knowledge.  As Luxmoore LJ said in Rysta Ltd’s Application…

                        “It is the person who only knows the one word, and has perhaps an imperfect recollection of it, who is likely to be deceived or confused”.’

See, too, a decision of the House of Lords to the same effect on similar facts in Berlei (UK) Ltd v Bali Brassiere Co Inc [1969] 2 All ER 813.

79                  Fifthly, the authorities also recognise that the concept of imperfect recollection may be applied to trade marks other than those consisting simply of an invented word (as in Aristoc v Rysta and Berlei v Bali).  If a registered trade mark includes words which can be regarded as an essential feature of the mark, another mark that incorporates those words may well infringe the registered trade mark.  The other mark may also infringe if there is a tangible danger of deception or confusion by reason of consumers retaining an imperfect recollection of the words constituting an essential feature of the registered mark.

80                  These principles are illustrated by Saville Perfumery Ltd v June Perfect Ltd (1941) 58 RPC 147, a decision strongly relied on by the respondents in the present case.  In Saville, the infringement action was brought by the proprietor of a trade mark consisting of the word ‘June’ printed in a special manner.  The word appeared with a bar as a background behind the letters.  The word ‘June’ therefore occupied a prominent position in the mark.  A relatively small garland of flowers joined the ends of the bar in the form of an arc.  (The report of the case does not reproduce the mark, but Mr Shavin helpfully provided the Court with a copy of the mark itself.)  The appellant’s trade mark was registered in respect of perfumery, including toilet articles and had been extensively used and advertised.  The respondent sold toilet articles under the name ‘June’.  Not surprisingly, it was found that some members of the public asked for the respondent’s preparation by the name ‘June’. 

81                  Viscount Maugham (with whom Lord Russell of Killowen and Lord Romer agreed) said that it was manifest from an inspection of the respondent’s mark that the distinguishing feature was the word ‘June’ in a special script.  It was that essential feature that the appellant had used as a mark for goods of the class for which the respondent’s mark was registered.  That use was one which (at 175) was:

‘likely to deceive or cause confusion in the minds of purchasers with a normally imperfect recollection of the precise picture representing or containing the registered mark’.

This passage suggests that the notion of imperfect recollection is based on the assumption that consumers will see the registered mark itself.

82                  The primary Judge in the present case supported his finding that the phrase ‘Crazy John’ was one of the essential features of the 1995 Mark by citing observations of Greene MR in the Court of Appeal in Saville.  His Lordship there said (at 162) that in deciding whether a feature is a distinguishing feature of a mark, not only ocular examination but evidence of what happens in practice in a particular trade is relevant.  He was persuaded by evidence that it was by the word ‘June’ that

‘traders and members of the public who see the mark on the goods which they purchase describe the Appellants’ goods.’ (Emphasis added.)

Greene MR continued (at 162):

‘Now the question of resemblance and the likelihood of deception are to be considered by reference not only to the whole mark, but also to its distinguishing features’.

83                  Saville was applied by the Privy Council in de Cordova v Vick Chemical Co (1951) 68 RPC 103, an appeal from Jamaica.  The Privy Council held that registered trade marks containing the word ‘VapoRub’ had been infringed by the importation and use of an ointment bearing on the jar the trade name ‘Karsote Vapour Rub’.  The first of the registered marks (No 1852) consisted of the words ‘Vicks VapoRub Salve’ and a triangle with the words ‘Vicks Chemical Company’ printed on the sides and other subsidiary words below the triangle.  The second registered mark consisted of the single word ‘VapoRub’.

84                  Lord Radcliffe emphasised (at 105-106) that the infringer had used one of the ‘essential features’ of the registered trade marks:

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

Since the evidence showed that ‘VapoRub’ was commonly used by members of the public to mean ‘Vicks VapoRub’, Lord Radcliffe considered that ‘VapoRub’ had to be treated as an essential feature of Mark 1852.  See also Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227 (Burchett J). 

85                  Reference should also be made to the decision of a Full Court of this Court in Henschke v Rosemount.  Henschke was the proprietor of the trade mark ‘HILL OF GRACE’, registered in respect of wine and spirits.  It sought to restrain Rosemount from using a mark ‘HILL OF GOLD’ in connection with the sale of wines.  The infringement suit failed at first instance and Henschke appealed.

86                  On appeal, Henschke argued that the high reputation of Hill of Grace was important on the question of trade mark infringement under s 120(1) of the TM Act.  The Full Court (at 61-62) accepted that the likelihood of deception must be judged against the relevant circumstances.  These include the usages of the particular trade, the characteristics of consumers of the relevant products and the ways in which wines are marketed.  However, their Honours pointed out that the test of deceptive similarity must be applied whether the mark of which infringement is alleged has been newly registered and is therefore almost unknown, or has been prominently displayed on merchandise for many years.  The Court said (at 62 [44]):

‘[e]ssentially what is required is a comparison between the mark of the registered owner and that of the alleged infringer.  A wider inquiry of the kind that might be undertaken in a passing off action, or in a proceeding in which contravention of Pt V of the TP Act is alleged, is not appropriate.’

87                  Their Honours quoted with approval a passage from the judgment of Gummow J in New South Wales Dairy Corporation v Murray Goulburn Co-operative Co Ltd (1989) 86 ALR 549, not affected by the appeal proceedings, as follows (at 589):

‘In determining whether “MOO” is deceptively similar to “MOOVE”, the impression based on recollection (which may be imperfect) of the mark MOOVE that persons of ordinary intelligence and memory would have, is compared with the impression such persons would get from “MOO”; the deceptiveness flows not only from the degree of similarity itself between the marks, but also from the effect of that similarity considered in relation to the circumstances of the goods, the prospective purchasers and the market covered by the monopoly attached to the registered trade mark: Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd (1953) 109 CLR 407 at 414-5; Polaroid Corp v Sole N Pty Ltd [1981] 1 NSWLR 491 at 498.  The latter case is also authority (at 497) for the proposition that the essential comparison in an infringement suit remains one between the marks involved, and that the court is not looking to the totality of the conduct of the defendant in the same way as in a passing off suit.’

88                  The Court in Henschke v Rosemount observed (at 62-63 [45]) that, consistently with the nature of the test of deceptive similarity as interpreted in the authorities, including Saville:

‘[i]t is not easy to see what relevance the reputation an applicant may have in a particular mark (even the “icon status” of that mark) has in an action for infringement brought in reliance on s 120(1) of the TM Act… Nor, with certain exceptions to which we shall come, were we directed to a course of authority in which, where there has been a question of infringement by use of a deceptively similar mark, the reputation of the plaintiff in the mark allegedly infringed has been taken into account.  Indeed, the course of authority has been quite to the contrary.  The search has concentrated on such matters as ascertaining the essential element of a mark, the impression taken away by one who looks at it, and how it sounds when pronounced…’

89                  Their Honours analysed the advice of Lord Radcliffe in de Cordova, since the decision had been invoked to support the proposition that reputation evidence can be taken into account in an infringement suit under s 120(1) of the TM Act.  They considered (at 63 [46]) that de Cordova stood for the principle that the Court should take into account the significance of a particular word or phrase among traders or consumers in a particular market:

‘[i]f among those persons particular words have come to mean exclusively the goods of a proprietor of a registered mark, the registered mark being or including those words or a “fancy word” composed of them and, when pronounced, sounding virtually the same, then use by another trade of those words in relation to goods in the class for which the mark is registered will infringe because, necessarily in the circumstances, use of the words by that trader is likely to cause confusion.’

90                  The Court in Henschke v Rosemount also considered the decision of another Full Court in Registrar of Trade Marks v Woolworths Ltd.  In Registrar v Woolworths, the majority (French and Tamberlin JJ) concluded that the word ‘Woolworths’ was so well known that it was the element of the allegedly infringing mark (‘WOOLWORTHS Metro’) most likely to be recalled.  The Court in Henschke v Rosemount thought that Registrar v Woolworths stood for this proposition (at 66 [52]):

‘in assessing the nature of a consumer’s imperfect recollection of a mark, the fact that the mark, or perhaps an important element of it, is notoriously so ubiquitous and of such long standing that consumers generally must be taken to be familiar with it and with its use in relation to particular goods or services is a relevant consideration.’

Any wider proposition was inconsistent with established authority.  See, too, Aldi Stores Ltd Partnership v Frito-Lay Trading Company GmbH (2001) 190 ALR 185, at 217 [155], per Lindgren J.

The Facts

91                  Determining whether the appellants infringed the 1995 Mark by the use of the expression ‘Crazy Ron’s’ raises what are essentially factual questions.  The authorities, although they articulate the principles governing deceptive similarity, cannot resolve the factual issues.

92                  The threshold factual question in the present case is whether, as the respondents argued, the primary Judge erred in finding that the words ‘CRAZY JOHN’ constituted an essential element of the 1995 Mark for the purposes of undertaking the comparison implicitly required by s 120(1) of the TM Act.

93                  As the earlier discussion of the authorities shows, the concept of an ‘essential feature’ of a registered trade mark is well-established, notwithstanding that the statutory language does not explicitly incorporate such a concept.  Neither party suggested that the case should be decided without reference to the ‘essential feature’ of the 1995 Mark. It is, however, worth noting that the Court’s duty is ultimately to the statutory language rather than to the complexities brought forth by many years of decisional authority: cf Aktiebolaget Hassle v Alphapharm Pty Ltd (2002) 212 CLR 411, at 446 [87], per McHugh J (dissenting); at 449 [99], per Kirby J (dissenting).  While recognising that decisions in other cases cannot resolve the threshold factual question in this case, it is perhaps suggestive that decisions relying on an ‘essential feature’ of a registered mark generally appear to involve much less elaborate marks than the 1995 Mark.  At all events, they have tended to involve trade marks in which the words said to constitute an essential feature of the mark occupy a much more prominent place than the words ‘CRAZY JOHN’ in the 1995 Mark.  Saville and de Cordova provide examples.

94                  It is important to appreciate that the primary Judge found that the words ‘CRAZY JOHN’ formed an essential feature of the 1995 Mark on the basis of an inspection of the Mark itself.  His Honour made the finding because of the prominence of the words and their reinforcement by the ‘deranged look’ of the man sitting astride the globe.  His Honour placed no reliance on any particular usage or understanding of the words ‘Crazy John’ among consumers and traders in the mobile telephone market.  The respondents did not suggest on the appeal that there was evidence of any such usage that should have been taken into account.  Nor did they argue that the words ‘Crazy John’ were so well-known that consumers generally should be taken to have become familiar with them in relation to mobile telephones.

95                  It is not essential in an infringement case for the proprietor alleging infringement to adduce evidence that individual consumers have seen the registered trade mark and taken away an ‘imperfect recollection’ of it.  Nonetheless, it is of some significance that there was no evidence (or at least none to which the Court’s attention was directed) that any consumer had formed a particular impression of the 1995 Mark by virtue of having seen it.  Mrs Houseman, on whose evidence the primary Judge placed weight on the question of deceptive similarity, had seen the 1999 Mark reproduced on a football field.  But it appears that she had never seen the 1995 Mark, although she had a vague memory of seeing a ‘crazy character in a crazy hat’ doing something on a television show.  In short, there was no evidence that any particular consumer had seen the 1995 Mark and thereby acquired an imperfect recollection of the 1995 Mark itself, or of any particular feature of it.

96                  When one turns to the 1995 Mark itself, it becomes apparent that, as Mr Ireland submitted, it has a combination of features.  These include the following:

(ii)                the likeness of an identifiable and relatively large fantasy cartoon character holding a mobile telephone;

(iii)               a representation of that character astride a stylised globe bearing the initials MW (referring to the name ‘Mobileworld Communications’); and

(iv)              the name ‘CRAZY JOHN’, in haphazard but not especially large block letters, apparently being the name given to the fantasy character.

97                  If attention is confined to the 1995 Mark itself, it is in our opinion very difficult to characterise the words ‘CRAZY JOHN’ as an essential feature.  The words form but part of a composite mark comprising a number of elements.  The words themselves are not especially prominent and indeed are subsidiary to the fantasy character, which occupies the dominant position in the overall image.  If anything, the words seem to identify the fantasy character, having regard to the deranged look on his face.  The words also compete for attention with the letters ‘MW’ which themselves occupy a central position on the stylised globe.

98                  The primary Judge concluded, in essence, that the ‘idea’ of the 1995 Mark, or the impression that would be created by it, is the phrase ‘CRAZY JOHN’.  However, in our view, the idea or impression that an ordinary purchaser would take from the 1995 Mark involves much more than that phrase.  The dominant idea conveyed by the Mark to a casual observer is of the fantasy cartoon character sitting astride the stylised globe.  The point is perhaps illustrated by Mr Darrer’s description in his 12 November 1999 letter to the Trade Marks Office of the 1995 Mark as:

‘the trademark “CRAZY JOHN” with graphics of a man atop a globe holding a mobile phone’.

A prospective customer endeavouring to recall the 1995 Mark is likely to describe it in similar terms.

99                  We might have reached a different conclusion if there had been a finding, for example, that the words ‘CRAZY JOHN’ had been ‘notoriously so ubiquitous and of such long standing that consumers must be taken to be familiar with it and its use in relation to particular goods’: cf Henschke v Rosemount, at 66.  But there was no such finding and we were not asked to make one.  Similarly, the position might be different if there had been evidence from consumers who had actually seen the 1995 Mark.  But in the absence of such findings or evidence, we do not think that the primary Judge’s finding that ‘CRAZY JOHN’ is an essential element of the 1995 Mark can stand.

100               We make two additional comments.  First, although everything depends on the particular circumstances of the case, some caution needs to be exercised before characterising words in a complex composite registered trade mark as an ‘essential feature’ of that mark in assessing the question of deceptive similarity.  If such a characterisation is made too readily, it effectively converts a composite mark into something quite different.  On the respondents’ approach in the present case, for example, there was no need for them to have registered the 1999 Mark, since in practice it conferred no greater protection than one of the ‘essential elements’ of the 1995 Mark.

101               Secondly, we recognise that the authorities have said that the question of deceptive similarity is in the end a matter of impression and that the occasion for interference with a factual finding on that question will arise only if there is a clear error: Murray Goulburn Co-operative Co Ltd v New South Wales Dairy Corp (1990) 24 FCR 370, at 377, per curiam.  The legal rationale for this approach in the context of an analogous area (copyright) was discussed by Weinberg J in Eagle Homes Pty Ltd v Austec Homes Pty Ltd (1997) 87 FCR 415, at 440-443 ([113]-[125]).  However, the resolution threshold question in relation to the 1995 Mark, as we have explained, largely depends on a question of characterisation of the ‘essential feature’ of the 1995 Mark based on an examination of the 1995 Mark itself.  In this respect, the appellate Court is not at a significant disadvantage compared with the primary Judge.  Thus, while some deference should be paid to his Honour’s finding, the appellate Court should be prepared to overturn it if convinced that the characterisation is erroneous.  (We note that in Murray Goulburn itself, the matter of ‘impression’ depended on the content of television advertisements, the pronunciation of words in those advertisements and evidence (albeit weak) of confusion among consumers.)

102               If it is necessary to identify a specific error in the approach of the primary Judge, we think it lies in the failure to take into account the fact that the 1995 Mark is a composite mark of which the words ‘CRAZY JOHN’ are but one of several prominent elements.  His Honour obviously appreciated, as he said, that the 1995 Mark ‘is a composite mark with a number of features’.  But, with respect, the judgment does not address the significance of that fact in deciding whether the words ‘CRAZY JOHN’ constituted an essential feature of the 1995 Mark.  The additional features of the 1995 Mark are significant points of dissimilarity from the allegedly infringing mark and need to be given due weight in determining the nature of a consumer’s ‘imperfect recollection’ of the 1995 Mark.

103               The primary Judge’s conclusion that the appellant’s mark was deceptively similar to the 1995 Mark rested on the finding that the phrase ‘CRAZY JOHN’ constituted an essential element of the 1995 Mark. Since that finding cannot stand, it follows that the finding of deceptive similarity must also be set aside.

INFRINGEMENT OF THE 1999 MARK

104               The 1999 Mark consists only of the words ‘CRAZY JOHN’S’, printed in haphazard block letters.  The respondents therefore do not encounter the same difficulty in identifying an essential feature of the 1999 Mark as arises in relation to the 1995 Mark.

105               Mr Ireland acknowledged that the appellants’ challenge to the primary Judge’s finding that they had infringed the 1999 Mark was considerably weaker than the challenge to the finding of infringement of the 1995 Mark.  In our view, it was open to the primary Judge to take account of the matters identified in the judgment (at [52] above), in particular the similarities in the pronunciation of the expressions ‘CRAZY JOHN’S’ and ‘CRAZY RON’S’ and the difficulty in discerning the differences between the two when said quickly or loudly or in a cluttered or noisy environment.  There was ample evidence supporting the primary Judge’s findings, including evidence of actual confusion among consumers.

106               Mr Ireland accepted that an aural comparison between the registered and accused marks was appropriate, and that it was necessary to take into account the possibility that a word might be slurred or a name abbreviated.  However, so he argued, due weight should be given to any strong syllable in a trade mark, such as the ‘J’ in ‘CRAZY JOHN’S’.

107               The primary Judge’s findings rest on an assessment of the evidence as a whole and can be said to involve matters of impression in the sense used in Murray Goulburn v NSW Dairy Corp.  Although Mr Ireland sought to minimise the significance of Mrs Houseman’s evidence, it was clearly open to his Honour to rely on it as he did (see [53] above).  As was said in Aristoc v Rysta, at 86, it is appropriate to take into account the likelihood of careless pronunciation and speech on the part of consumers and the alleged infringers.

108               The challenge to the finding of infringement of the 1999 Mark fails.  This conclusion makes it necessary to consider the attack on the validity of the 1999 Mark. 

REASONING ON VALIDITY OF THE 1999 MARK

109               Under s 88 of the TM Act, an application for rectification of the Register, by cancelling registration of a trade mark, may be made, relevantly, only on a ground on which registration of the trade mark could have been opposed under Division 2 of Part 5 of the TM Act.  By its further amended cross claim, filed pursuant to leave granted during the course of the hearing of the appeal, Crazy Ron Communications sought to impugn the validity of the 1999 Mark on the basis of grounds referred to in ss 58, 59 and 62 of the TM Act, namely:

• the applicant was not the owner of the 1999 Mark (s 58);
• the applicant had not intended to use the 1999 Mark or to authorise another person to use the 1999 Mark and did not intend to assign the 1999 Mark to a body or corporation to be constituted with a view to the use by the body corporate of the trade mark (s 59);

·        the application was amended contrary to the TM Act (s 62).

Sections 58, 59 and 62 are within Division 2 of Part 5 of the TM Act. 

PROVISIONS OF THE TM ACT RELEVANT TO GROUNDS OF INVALIDITY

110               Under s 17 of the TM Act, a trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by another person.  Under s 6, ‘sign’ includes the following or any combination of the following:

‘any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent.’

111               Under s 27(1) of the TM Act, a person may apply for the registration of a trade mark if the person claims to be the owner of the trade mark and one of the following applies:

(i)                  the person is using or intends to use the trade mark;

(ii)        the person has authorised or intends to authorise another person to use the trade mark;

(iii)       the person intends to assign the trade mark to a body corporate with a view to the use by the body corporate of the trade mark.

112               Section s 27(2) provides that an application must be in accordance with the regulations and be filed, together with any prescribed document, in accordance with the regulations.  Under s 27(3), without limiting the particulars that may be included in an application, the application must include a representation of the trade mark and must specify the goods and/or services in respect of which it is sought to register the trade mark.  Regulation 4.2(1) of the Trade Mark Regulations 1995 (Cth), requires that an application must, inter alia, specify the name of the applicant and contain sufficient information to enable the Registrar to contact the applicant.  If an application does not meet the requirement that the applicant’s name be specified, the Registrar must give the applicant written notice of the requirement (reg 4.2(2)).  If the applicant meets the requirement within a period of two months from the date of the notice, the application is taken to be filed on the day the requirement is met (reg 4.2(3)).  If, however, the requirement is not met within that period, the application is taken not to have been filed (reg 4.2(4)).  There appear to be no other provisions relating to particulars of an application. 

113               Section s 30 of the TM Act provides that the Registrar must publish the particulars of the application in accordance with the regulations.  Regulation 4.7 requires the Registrar to publish the following particulars of an application:

(a)        the number allocated to the application in the Trade Marks Office;

(b)        the applicant’s name;

(c)        the date of filing the application;

(d)        particulars of the initial application, where the application is a divisional application;

(e)        particulars of any claim for a right of priority for the application;

(f)         the class number or numbers for the goods or services in respect of which the registration is sought.

114               Section 63(1) provides that the Registrar may, at the written request of the applicant, amend an application for the registration of a trade mark in accordance with s 64 or s 65.  There is no authority given to the Registrar to amend an application other than pursuant to s 63.  Whether s 64 or s 65 is the relevant provision depends upon whether the particulars of the application have been published under s 30.  Section 64 permits an amendment to correct a clerical error or an obvious mistake provided, inter alia, the particulars of the application have not yet been published under s 30.  Where the particulars of the application have been published under s 30, however, the application may only be amended as provided in s 65 (s 65(1)).  Sections 64 and 65 therefore appear to be mutually exclusive.

115               In the present case, s 65 applied because particulars of the application were published on 9 September 1999.  Under s 65(1), if the particulars of an application have been published under s 30, the application may be amended as provided in that section.  Sections 65(2), (3) and (4) provide that three different kinds of amendment may be made, as follows:

·        to the representation of the trade mark, so long as the amendment does not substantially affect the identity of the trade mark (65(2));

·        to correct a mistake of fact or an error in the classification of any goods or services specified in the application (65(3)); and

·        to change the type of registration sought in the application: the section gives as an example of such a change the amendment of an application for registration of a trade mark as a certification trade mark to an application for registration of a trade mark as a collective trade mark (s 65(4)).

Under s 65(5), an amendment may be made to any other particular specified in the application, unless the amendment would have the effect of extending the rights that the applicant would have under the registration if it were granted. 

116               Each of these kinds of amendments involves an amendment of the application, although it is not entirely clear that each necessarily involves an amendment of a particular specified in the application.  However, the matters that may be amended pursuant to ss 65(2) and 65(3) clearly correspond with the matters referred to in s 27(3) that must be included in an application.  The reference to those matters in s 27(3), together with the use of the expression ‘any other particular’ in s 65(5), indicates that they are regarded by s 65 as particulars specified in the application.

the scope of section 65(5)

117               The question whether s 65(5) authorises the substitution of one person for another person in an application must be considered in the light of the scheme of the TM Act concerning an application for and assignment of a trade mark.  Section 27(1) of the TM Act contemplates that an application be made by a person.  Section 27(2) and reg 4.2(1) require the name of the applicant to be specified in the application.  Under s 6, the term ‘applicant’, in relation to an application, means the person in whose name the application is for the time being proceeding.  There is no definition of the term ‘application’. 

118               The concept that an application is made by a person is preserved throughout the TM Act.  Thus, under s 212, an application required or permitted under the TM Act to be made by a person may be made, on behalf of that person, by another person.  Section 214(1) then provides that a person who has filed an application may, in accordance with the regulations, withdraw it at any time while it is still being considered by the Registrar.  Regulation 21.9(1) provides that for the purposes of s 214 a person who has filed an application may withdraw the application by giving notice in writing of the withdrawal to the Registrar.  Thus, if an application for registration of a trade mark is made in the name of the ‘wrong’ company within a group, s 214(1) of the TM Act authorises that company to withdraw the application, clearing the way for a fresh application by the ‘correct’ applicant.

119               Part 10 of the TM Act (ss 106-111) deals with assignment and transmission of trade marks.  Section 106(1) provides that a registered trade mark, or a trade mark whose registration is being sought, may be assigned or transmitted in accordance with s 106.  Under s 107(1), if a trade mark whose registration is being sought is assigned or transmitted, either the applicant for registration, or the person to whom it has been assigned or transmitted, must apply to the Registrar for the assignment or transmission to be recorded.  Under s 107(2) the application must be filed in accordance with the regulations.  Section 108(2) provides that, on and after the day on which the Registrar records the particulars of the assignment or transmission, the person to whom the trade mark has been assigned or transmitted is taken, for the purposes of the TM Act, to be the applicant for the registration of the trade mark. 

120               Section 216(1) of the Act provides that, if there is a change in the name of a person who has filed an application, the person must notify the registrar in writing of the change.  That refers to a change in the name of a given person. It does not refer to  a change in the identity of the person who is named as the applicant. 

121               Section 217(1) provides that, if an applicant for the registration of a trade mark dies before registration is granted on the application, his or her legal representative may proceed with the application.  This provision  is a recognition of the fact that a legal personal representative succeeds to the property and rights of the deceased. 

122               Thus, the regime of the TM Act provides for substitution of one person for another person where a trade mark whose registration is being sought is assigned or transmitted.  Under s 107 there must be an application to the Registrar for the assignment or transmission to be recorded.  Where there is a change in the name of a person who has filed an application, the person must notify the Registrar of the change pursuant to s 216(1).  When an applicant dies the legal personal representative may continue as applicant (s 217(1)).

123               The statutory regime described above indicates that a particular person may cease to be an applicant for registration of a trade mark by reason of the following circumstances, but only by reason of those circumstances:

• assignment or transmission of an unregistered trade mark (ss 106(1), 108(2));
• withdrawal of the application (s 214(1)); or

·        the death of the applicant (s 217(1)).

Further, a change in the name of an applicant must be notified to the Registrar. 

124               The statutory and regulatory regime also contemplates that, in order for an application for registration of a trade mark to be taken to be filed the application must specify the name of the applicant (s 27(2), reg 4.2(1)(d)).  If it does not, the Registrar is obliged to give the applicant written notice of the requirement.  The date of filing is taken to be the date the requirement is met (reg 4.2(3)) and if it is not met, the application is taken not to have been filed (reg 4.2(4)).

125               It may well be, although it is not necessary to decide, that a mistake in the spelling of the name of an applicant could be amended pursuant to s 65(5).  Such an amendment perhaps might properly be characterised as an ‘amendment to any other particular specified in the application’ within the meaning of s 65(5) of the TM Act.  However, we do not think that s 65(5) is intended to permit the substitution of one person for another as an applicant simply because the first person ‘mistakenly’ applied for registration of a trade mark, whatever may have been the error or misunderstanding that led to the mistake.  Section 65(5) should not be construed as permitting to be done by mere amendment of an application what should be done by withdrawal of the application and filing of another application.  That is to say, the provision does not authorise the substitution of one person for another person as the applicant for registration. 

126               We should add that if the respondents’ argument were correct, s 65(5) of the TM Act would authorise an amendment changing the applicant’s identity as from the date the application was filed.  This would be so notwithstanding that the statutory scheme permits rectification of a failure to ‘specify the name of the applicant’ only on the basis that the application is taken to be filed as from the date the failure is rectified.  Thus if s 65(5) allows a change of identity of the applicant by reason of a ‘mistake’ in the application, the substituted applicant would be in a better position than an applicant whose name was not fully recorded in the original application.  We do not think that this was the legislative intention.

127               It follows that the appellants have made out one of the grounds on which the registration of the 1999 Mark could have been opposed under Div 2 Part 5 of the TM Act, namely that the application was amended contrary to the TM Act (s 62(a)).  The amendment purporting to substitute Crazy John Pty Ltd for MW Aust as the applicant for the 1999 Mark was not authorised by the TM Act.

SECTION 27 AND SECTIONS 58 AND 59

128               In the light of the findings made by the primary Judge, it is tolerably clear that, while the application was still on foot and at the time of grant, Crazy John Pty Ltd claimed to be, and was the owner of, the 1999 Mark.  Crazy John Pty Ltd intended to use the 1999 Mark by licensing it.  There was material upon which his Honour could conclude that Crazy John was the owner of the 1999 Mark and intended to authorise another member of the group to use it.  The grounds of invalidity referred to in ss 58 and 59 are not made out. 

 RELIEF

129               This conclusion does not necessarily mean that the relief sought in the cross-claim should be granted.  The respondents submitted that the discretion conferred by s 88(1) of the TM Act should be exercised against the grant of relief to the first appellant.  In this respect, it appears that the respondents were correct in submitting that the power conferred by s 88(1) to cancel registration of a trade mark involves the exercise of a discretion: Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45, at 80-81 [87], per curiam; Shanahan’s Australian Law of Trade Marks and Passing Off (3^rd ed, 2003), [14.220]. 

130               In our view, the circumstances are such as to justify the making of an order cancelling the registration of the 1999 Mark.  The insertion of the name of MW Aust in the form of application was not a mere clerical mistake, in the sense that, by accident, some person wrote the wrong name.  The insertion of that name was a conscious act.  Mr Darrer intended, when he signed the form, that it be made in the name of MW Aust, the party that had instructed him to make the application and to whom he rendered his fees.  There was no suggestion that a ‘mistake’ had been made until well after the application had been lodged.

131               Clearly, in the light of the fresh instructions received on 9 November 1999, the appropriate course would have been to withdraw the application and re-lodge the application as amended, one of the alternatives covered in the letter of 9 November 1999 that Mr Darrer ‘scripted’.  That amended application, however, would have been a fresh application, taking effect from the date of its lodgement. 

132               The ground established by the first appellant is not a mere technicality.  To allow the amendment to stand would involve, in effect, treating the amendment as the withdrawal of one application and substitution of another application on the basis that the second application had been lodged at the same time as the first application.  That would have the impermissible consequence of backdating the second application.  It must be remembered that the date of filing of an application is of significance not only to the applicant, but to the public at large.  In particular, the registration of a trade mark takes effect from the filing date (s 72(1)) and the claim for priority of a trade mark registration of which has also been sought in a Convention country may be affected by the date of the application for registration in Australia (ss 29, 72(2)).

133               In our opinion, the first appellant has made good its claim for cancellation of the registration of the 1999 Mark. 

CONCLUSION

134               The result of the appeal is that the appellants have succeeded in their claim for an order cancelling the registration of the 1999 Mark.  The respondents’ action for infringement of the 1999 Mark must therefore fail.  The appellants have also succeeded on the question of infringement of the 1995 mark.  Agreement was reached between the parties on the form of the modification to the orders made pursuant to ss 80 and 87 of the TP Act. 

135               The following orders should be made:

1.                  The appeal be allowed.

2.                  Order 1 made by the primary Judge on 4 December 2003 dismissing the cross claim be set aside. 

3.                  In lieu of the order referred to in the previous paragraph, an order be made pursuant to s 88(1) of the TM Act rectifying the Register of Trade Marks by cancelling the registration of Trade Mark No 803950 in classes 35 and 38.

4.         Order 1 made by the primary Judge on 23 December 2003, dealing with infringement of the Marks, be set aside.

136               The appellants have largely succeeded on the appeal.  However, the appeal concerned only relatively minor issues dealt with at the trial.  It remains true that the respondents were substantially successful at the trial.  In these circumstances, Order 4 made on 4 December 2003 and Order 8 made on 23 December 2003, which deal with costs of the proceeding, should be vacated.  In lieu of those orders, there should be an order that the respondents (the appellants in this Court) pay 70 per cent of the applicants’ costs of the proceeding at first instance, including the cross claim.  The respondents to the appeal should pay the appellants’ costs of the appeal. 

Associate:

Dated:              6 August 2004