FEDERAL COURT OF AUSTRALIA

Optical 88 Limited v Optical 88 Pty Limited [2011] FCAFC 130

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The appellant pay the respondents’ costs of the appeal as agreed or taxed.

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

REASONS FOR JUDGMENT

THE APPEAL

1        The appeal is against the primary judge’s decision to dismiss the appellant’s claims of trade mark and copyright infringement and to require two of the trade marks said to found the alleged trade mark infringements to be removed from the Register of Trade Marks (the Register). The appeal does not extend to the primary judge’s decision to dismiss the appellant’s further claims against the respondents for contravention of the Trade Practices Act 1974 (Cth) and passing-off.

2        The appellant is a company incorporated in Hong Kong. The appellant runs a chain of optical stores in the Asia-Pacific region under the business name “Optical 88”. The appellant is the registered owner of a number of registered trade marks in Australia, including registered trade marks 520707 (the ‘707 mark) and 1083966 (the ‘966 mark). The ‘707 mark was registered with effect from 6 October 1989 with respect to goods in class 9 (in substance, optical goods). The ‘966 mark was registered with effect from 2 November 2005 with respect to goods in class 9 and also services in class 35 (in substance, optical services). Both marks were composite marks including the appellant’s logo, the name “Optical 88” in Chinese characters, and the name “Optical 88”.

3        The first respondent is a company incorporated in Australia on 30 July 1993 (that is, after registration of the ‘707 mark and before registration of the ‘966 mark). The second respondent, Mr Law, is an optometrist. In August 1993, Mr Law transferred his existing optometry practice and business to the first respondent. Since that time the first respondent has carried on its business in Australia trading under the name “Optical 88”. Mr Law is a director and manages the business of the first respondent. The third respondent, Mrs Law, is married to Mr Law and is also a director of the first respondent.

4        The notice of appeal contends that, in deciding against the appellant on its claims of trade mark infringement of the ‘707 mark and the ‘966 mark and infringement of the copyright in the logo, as well as in favour of the respondents in respect of removal of the ‘707 mark (in whole) and the ‘966 mark (for goods) from the Register, the primary judge erred on 21 grounds. However, the parties have agreed that the 21 grounds of appeal may be grouped into seven classes in respect of the trade mark claims and a single class in respect of the copyright claims. The relevant classes (as clarified through oral submissions) are as follows:

Trade mark claims

(1)    The primary judge should have found that the ‘707 mark and the ‘966 mark had been used in Australia in relation to goods and not merely in relation to services within the meaning of s 92(4)(b) of the Trade Marks Act 1995 (Cth) (the Trade Marks Act), with the consequence that no ground had been established for removal of those marks from the Register in respect of goods under s 101(2) of the Act.

(2)    The primary judge should have found that each of the second and third respondents, Mr and Mrs Law, was personally liable for infringement of the ‘707 mark and the ‘966 mark.

(3)    (a)    The primary judge should have found that the use of certain signs in the course of the first respondent’s business did not constitute the use in good faith of the first respondent’s name within the meaning of the exception to infringement provided for in s 122(1)(a)(i) of the Trade Marks Act.

(b)    The appellant should be given leave to argue in the appeal that, having regard to the primary judge’s findings, continued use of those signs in the course of the first respondent’s business would not constitute the use in good faith of the first respondent’s name within the meaning of the exception to infringement provided for in s 122(1)(a)(i) of the Trade Marks Act.

(4)    The primary judge should have found that, the first respondent having infringed the ‘707 mark and the ‘966 mark as well as copyright in the logo, the second and third respondents were liable as accessories.

(5)    The primary judge should have found that the appellant had proved that, at the time it applied for registration of the ‘966 mark, it intended to use the ‘966 mark in Australia in good faith within the meaning of s 92(4)(a)(i) of the Trade Marks Act, with the consequence that no ground had been established for removal of that mark from the Register as required by s 101(2) of the Act.

(6)    If any ground for the removal from the Register of either the ‘707 mark or the ‘966 mark had been established then, nevertheless, the primary judge erred in the exercise of his discretion under s 101(3) of the Trade Marks Act by failing to decide that the marks should not be removed from the Register.

(7)    By reason of these errors the primary judge did not decide, as he should have done, that the respondents not only infringed the ‘707 mark and the ‘966 mark in respect of goods under s 120(1) of the Trade Marks Act but also infringed those marks in relation to services that are closely related to those goods under s 120(2)(b) of that Act.

Copyright claim

(8)    The primary judge should have found that the respondents reproduced the whole or a substantial part of the appellant’s logo in contravention of the Copyright Act 1968 (Cth).

5        Before dealing with these issues it should be recorded that the appellant does not challenge the primary judge’s principal findings of fact. However, the inferences which should be drawn from those findings are in dispute. The comprehensive nature and clarity of the primary judge’s findings make it unnecessary to record the facts in any greater detail than that provided above. Instead, it is possible to deal with the appeal on an issue-by-issue basis and to identify the relevant facts, as found by the primary judge, in the context of each issue requiring resolution.

TRADE MARK CLAIMS

Issue (1)    Use in relation to goods

Primary judge’s reasons

6        At [223]-[239] of his reasons, the primary judge identified the transactions on which the appellant relied to establish use of the ‘707 mark and the ‘966 mark (or, more precisely, use of those marks with additions or alterations that did not substantially affect their identity as provided for in s 7(1) of the Trade Marks Act, which the primary judge referred to as “modified” marks: see [256]-[258]). The appellant does not challenge any aspect of this description. In respect of the transaction described as the “best example” both in the primary judge’s reasons (at [232]) and by the appellant in this appeal – referred to as the Pitt transaction – the essential facts as found by the primary judge are as follows:

(1)    The “original documents forming part of the transactions on which the applicant relied, whether they be deposit sales memos, bonus coupons or cash coupons, were printed, originally, with the modified ‘707 mark” (at [231]).

(2)    By “using the modified ‘707 mark, the applicant used the ‘707 mark with additions or alterations not substantially affecting its identity” (at [256]).

(3)    Further, the “use by the applicant of the modified ‘707 mark was a use of the ‘966 mark with additions or alterations not substantially affecting its identity” (at [258]).

(4)    As to the Pitt transaction (at [233]):

While in Hong Kong in July 2007, Mr Pitt purchased prescription sunglasses, spectacle frames and prescription lenses from the applicant’s Cameron Road store in Kowloon in a series of transactions arranged so that he could take advantage of cash coupons issued in respect of each transaction. He took delivery of these goods from the store the next day. As a result of these transactions he was left with a cash coupon entitling him to a discount of HKD 237 on his next purchase from one of the applicant’s stores. Later, when in Australia, he decided to purchase another pair of frames and lenses from the applicant’s Cameron Road store. He wrote to Mr Lung (the Branch Manager of the store) enclosing an order and the cash coupon he had taken with him from his last purchase. On its receipt, Mr Lung referred the letter to the applicant’s Customer Service Department which corresponded by email with Mr Pitt, providing a quotation and banking details to allow funds for the purchase of the goods to be transferred to a branch of the applicant’s bank in Hong Kong. Mr Pitt transferred the required funds to the applicant’s bank. On receipt of these funds, Mr Pitt’s order was processed. When the goods were ready, they were packed by Mr Lung and dispatched by post to Australia on about 17 October 2007. Based on the evidence of the practice at the Cameron Road store at the time, I am satisfied that the goods were packed with a cleaning cloth and a sales deposit memo as well as a bonus coupon for 2365 points and a cash coupon for HKD 237. Reprinted copies of the bonus coupon and the cash coupon are in evidence. However, an example of the cleaning cloth supplied from this store at that time is not in evidence. I would infer, however, that such cloths were the same as the cleaning cloth that was tendered as a representative example of the applicant’s cleaning cloths supplied as a promotional item. That example does not bear the ‘707 mark, the modified ‘707 mark or the ‘966 mark. It does, however, bear another mark to which I will make further reference.

7        In respect of the mark on the cleaning cloth which the primary judge found had been sent to Mr Pitt, his Honour explained as follows (at [261]):

I turn now to the question of the cleaning cloths. As I have noted, the cleaning cloth supplied to Ms Sinclair is in evidence. It bears a mark comprising the applicant’s logo, the name “OPTICAL 88” (in Chinese characters) and the name OPTICAL 88 arranged in an order in which the applicant’s logo is centred but placed above the other elements. The name “OPTICAL 88” (in Chinese characters) is in large script and occupies a central position in the composite mark. The name OPTICAL 88, in smaller script, is placed below and is separated from “OPTICAL 88” (in Chinese characters) by a horizontal line. Although displaying elements of the modified ‘707 mark, the impression created is quite different because of the change in position of the applicant’s logo, which imparts a different orientation to the mark. This different orientation gives a sense of triangularity that also underscores the centrality and prominence of the name “OPTICAL 88” (in Chinese characters). When compared with the ‘707 mark, a substantial impression of identity does not arise. Similarly, when compared with the ‘966 mark, a substantial impression of identity does not arise. Therefore, the supply of the cleaning cloth to Ms Sinclair does not instance a use of the ‘707 mark (with additions or alterations not substantially affecting its identity) or of the ‘966 mark (with additions or alterations not affecting its identity). I would add that the mark on the cleaning cloth supplied to Ms Sinclair is the same as the mark appearing on the example tendered as being representative of cleaning cloths supplied by the applicant as a promotional item.

8        The primary judge’s conclusions in respect of the mark on the cleaning cloth are in dispute. The appellant contends that that the primary judge should have found that the alterations and additions to the mark on the cleaning cloth did not substantially affect the identity of the ‘707 mark, with the consequence that the use of the mark on the cleaning cloth also constituted a use of the ‘707 mark as provided for in s 7(1) of the Trade Marks Act. Section 7(1) is in these terms:

If the Registrar or a prescribed court, having regard to the circumstances of a particular case, thinks fit, the Registrar or the court may decide that a person has used a trade mark if it is established that the person has used the trade mark with additions or alterations that do not substantially affect the identity of the trade mark.

9        The argument about the cleaning cloth, however, is secondary to the appellant’s principal contention that the primary judge’s reasoning in respect of the significance of the use of the marks on the documents associated with the Pitt transaction miscarried.

10        In contrast to Mr Pitt’s dealings with the appellant in Hong Kong, the primary judge was satisfied that “the sending of the bonus coupons and cash coupons to Australia was an incident of a trading activity between Australia and places outside Australia involving the applicant and its customers and constituted a use in Australia by the applicant of the modified ‘707 mark for the purposes of that trade” (at [253]). At [221] the primary judge observed that:

There is another matter. In seeking to rebut the allegation of non-use in relation to the goods or services to which the removal application relates, it is not sufficient to show use in relation to similar goods or closely related services, or similar services or closely related goods, although such use will be relevant to the exercise of the discretion if a case for removal is otherwise made out: see s 101(4). This may raise difficult questions of characterisation. There is a suggestion in the literature that use of a mark in relation to retail services for goods is use equally in relation to the goods themselves. In my view that simply does not follow. Whether it be the case or not is a question of mixed fact and law having regard to the particular circumstances of the case. In dealing with the case of a retailer who sells goods of various manufacturers under the trade marks of those manufacturers, the authors of Shanahan’s Australian Law of Trade Marks and Passing Off (4th Edition) at 63 cite Angoves Pty Ltd v Johnson (1982) 43 ALR 349 as authority for the proposition that, in such a case, the use of a retailer’s mark on invoices, advertisements and shopping bags is a use of the trade mark “in physical or other relation to goods” within the meaning of s 7(4) of the Trade Marks Act. Angoves is not authority for that proposition. Indeed, in that case the question of trade mark use in relation to goods appears to have been conceded at trial: see 353, 361 and 368. It is perhaps sufficient for me to say that there is no principle of general application in Australian trade mark law that use of a mark in relation to retail services for goods is use in relation to the goods themselves.

11        At [254], the primary judge considered the use of the documents associated with the Pitt transaction and concluded as follows:

However, that use was in relation to the provision of the applicant’s services as a retail supplier of optical goods and of repair services for optical goods. The use was not a use of the modified ‘707 mark on or in physical or other relation to goods: see s 7(4). There is no evidence that any of the relevant transactions involved goods branded with the modified ‘707 mark (or, indeed, the ‘707 and ‘966 marks themselves). More generally, there is no evidence that the applicant itself supplies or has supplied goods branded with the modified ‘707 mark, the ‘707 mark or the ‘966 mark. The business records tendered in relation to the transactions on which the applicant relied make clear that many of the goods supplied by the applicant were projected into the course of trade by others using trade marks applied by others. Some of these trade marks are identifiable as very well-known fashion and luxury brands. It was those marks that functioned as the badge of origin for those goods. Those goods passed through the hands of the applicant in the course of trade, but in no true sense was the applicant the source or origin of those goods. The applicant was no more than the source or origin of particular retail services involved in the down-stream supply of those goods. The business records also show the use by the applicant of its separate “house” brands in relation to goods. In those instances it was those house brands that functioned as the badge of origin of those goods. In each case the use of the modified ‘707 mark was in physical or other relation to its retail services, but nothing more.

12        As such, the primary judge concluded that neither the ‘707 mark nor the ‘966 mark, at any time during the relevant periods, had been used or used in good faith by the appellant in relation to the goods in respect of which each mark was registered. As a consequence, each mark was liable to be removed from the Register in relation to goods pursuant to ss 92(4)(b) and 101(2) of the Trade Marks Act.

Appellant’s submissions

13        The appellant submitted that the primary judge erred in characterising the use of the modified ‘707 mark on the documents associated with the Pitt transaction as use in relation to services and not goods. The appellant accepted that the question was one of characterisation of the use (as the primary judge said at [221]). The appellant also accepted that the primary judge’s observations about Angoves Pty Ltd v Johnson (1982) 43 ALR 349 at [221] were correct. According to the appellant, however, when the primary judge came to characterise the particular uses of the modified ‘707 mark on the documents associated with the Pitt transaction (at [254]), he focused on that part of the definition of “use of a trade mark in relation to goods” in s 7(4) of the Trade Marks Act which refers to use “upon, or in physical… relation to, the goods”. The definition in s 7(4), however, is not so confined. The section provides that:

In this Act:

“use of a trade mark in relation to goods” means use of the trade mark upon, or in physical or other relation to, the goods (including second-hand goods).

14        The appellant submitted that the primary judge should have found that the mark used on documents associated with the Pitt transaction had been used in “other relation to” the goods. This conclusion would have been consistent with the reasoning in Thunderbird Products Corporation v Thunderbird Marine Products Pty Ltd (1974) 131 CLR 592; [1974] HCA 51 (Thunderbird), in which Jacobs J held that the use of the trade mark “Thunderbird” on correspondence, an invoice and shipping documents constituted use of the mark in relation to a boat despite the fact that the mark did not appear on the boat itself (at 600-601). Instead of applying the statutory test, according to the appellant, the primary judge at [254] substituted a test of identifying “the badge of origin” of the goods. In so doing, moreover, the primary judge was said to have assumed that a single badge of origin only is permitted when it is clear from the terms of s 17 of the Trade Marks Act that more than one trade mark can be used in relation to the same goods to distinguish those goods from other goods in the market (s 17 defines a trade mark as “a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person”).

15        The appellant submitted further that the primary judge mischaracterised the goods. The goods were not merely the frames of the spectacles. Thus, the appellant was not merely selling the frames (that is, providing a retail service of selling another’s goods). The goods were the spectacles as a whole in their case with the cleaning cloth. The appellant was thus “responsible for the goods in question” (adopting the language used in Shanahan’s Australian Law of Trade Marks and Passing Off (4th Edition) at 63). The evidence disclosed that the appellant “create[s] custom lenses in accordance with the prescription; fit[s] the lenses to frames selected by the customer from [the appellant’s] range if appropriate; and fit[s] the… spectacles to the customer”. As such, the appellant submitted that “[w]hile some of the marks used physically on the frames were marks of third parties, they were not marks in physical or other relation to the spectacles as a whole” (emphasis in original). Rather, by the cash coupons and bonus coupons the appellant was identified as the origin of and as responsible for the final vended product (the spectacles) as a whole.

Discussion

16        When [254] of the primary judge’s reasons is read in the context of his earlier factual findings, it is apparent that the paragraph does not disclose any of the errors identified by the appellant.

17        It was common ground between the parties that whether the modified ‘707 mark had been used in relation to goods and/or services involved a question of characterisation. It was not the appellant’s case that the modified ‘707 mark had been used in relation to goods and not services. The appellant acknowledged that it had used the ‘707 mark in relation to services in each of the transactions on which it relied, including the Pitt transaction. The appellant contended that, in the transactions (the best example of which was the Pitt transaction), it used the modified ‘707 mark in relation to both services and goods. In this regard, s 7(4) of the Trade Marks Act has been set out above. Section 7(5) is the equivalent provision in respect of services and is in these terms:

In this Act:

“use of a trade mark in relation to services” means use of the trade mark in physical or other relation to the services.

18        It was also common ground that, consistent with Thunderbird, a trade mark may be used in relation to goods without the mark appearing on the goods themselves.

19        The facts which the primary judge found (and which are not challenged in the appeal) included that: – (i) the appellant’s stores “suppl[ied] by retail a broad range of optical and eye care products including prescription lenses, contact lenses and solutions, frames for spectacles and sunglasses” and “provide[d] a comprehensive range of optical services, including sight-testing, eye examinations and after-sales servicing of spectacles” (at [8]), (ii) the products the appellant supplied included “numerous fashion and luxury brands such as Christian Dior, Gucci, Emporio Armani, Calvin Klein, Ray-Ban and Oakley” (at [9]), (iii) the appellant “also supplie[d] ‘house’ products under brands such as Solvil et Titus, Titus, Cyma, Smash and Delvina” (at [9]), and (iv) the appellant did not supply any “products branded with any of the registered trade marks” in issue in this matter, although it did supply “promotional items (such as spectacles cases and cleaning cloths) bearing various trade indicia” (at [9]). The primary judge also described the Pitt transaction at [233] in terms which the appellant accepted to be accurate. The description reflects the evidence. Mr Pitt wrote to the appellant in June 2007 requesting “another pair of the prescription glasses you made for me in August” and enclosed the discount voucher he had obtained as part of his earlier purchase in Hong Kong. The appellant processed the transaction and despatched the spectacles (involving Armani frames and prescription lenses) to Mr Pitt with a receipt, cash coupon and bonus coupon. The documents bore the ‘707 mark (as modified).

20        It may be accepted that the goods in the Pitt transaction constituted the spectacles as a whole, being the Armani frames to which prescription lenses customised to Mr Pitt’s requirements had been fitted. It may be accepted also that the appellant “created” the goods, at least in the sense that it arranged for the preparation of the prescription lenses and fitted them to the frames. This, however, is an incomplete description of the Pitt transaction. The evidence also discloses that Mr Pitt’s order was processed in accordance with the standard procedures for the appellant’s Cameron Road store, as summarised by the primary judge at [254]. In this factual context, the use of the modified ‘707 mark on the documents associated with the transaction should not be characterised as use in “other relation” to the goods. Rather, those uses functioned to distinguish the appellant’s services from the services of others. As the respondent submitted, the receipt was in consideration of the entire retail service which the appellant provided to Mr Pitt. The bonus and cash coupons were promotional items intended to encourage further sales; that is, further use of the appellant’s retail services.

21        The primary judge’s reasons disclose his appreciation that the task was one of characterisation constituting, as he correctly said, “a question of mixed fact and law having regard to the particular circumstances of the case” (at [221]). The primary judge’s reasons (at [221] and [254]) also disclose his appreciation of the difficult questions that might be involved in characterising a particular use as a use in relation to goods and/or services. Having regard to the entire factual context of the Pitt transaction, the primary judge’s conclusion that the use of the modified ‘707 mark on the associated documents was a use in relation to the appellant’s provisions of “services as a retail supplier of optical goods” (at [254]) is sound. Contrary to the appellant’s submissions, the reasons at [254] do not disclose any disregard of the statutory test. The primary judge cited the applicable statutory test in terms. Nor do the reasons disclose any substitution of an alternative impermissible test for the statutory test. The primary judge appreciated that the mark may be used in “other relation” to goods and not merely in physical relation to goods. This is the point of his observations at [221] which underpin the reasons at [254]. It follows that the primary judge also was not distracted by any purported requirement that the mark or, indeed, a single mark appear on the goods. The primary judge referred to the fact that the appellant had not placed the ‘707 mark (modified or otherwise) on the goods provided to Mr Pitt. In the overall factual context, where the evidence showed both that the appellant had placed other trade marks on goods (the Solvil et Titus, Titus, Cyma, Smash and Delvina marks) and sold goods bearing the trade marks of others (including spectacles with frames by Christian Dior, Gucci, Emporio Armani, Calvin Klein, Ray-Ban and Oakley), this fact was material to the characterisation of the use of the modified ‘707 mark on the documents associated with the Pitt transaction.

22        It also cannot be said that the primary judge incorrectly characterised the goods. The primary judge did say at [254] that the “goods passed through the hands of the [appellant] in the course of trade, but in no true sense was the [appellant] the source or origin of those goods”; rather, the appellant “was no more than the source or origin of particular retail services involved in the down-stream supply of those goods.” In so saying, however, the primary judge recognised that the goods were the spectacles as a whole, consisting of the Armani frame and the prescription lenses. So much is apparent from his description of the transaction (at [233]). The primary judge’s point at [254] is that the appellant’s activities, characterised as a whole, resulted in it being the source of the retail services involved in providing the goods to Mr Pitt and not the source of the goods themselves. Even if the appellant could be said to be the source of the complete spectacles in the sense for which the appellant contended, it would not follow that the use of the modified ‘707 mark on the documents associated with the transaction was a use in “other relation” to the goods in distinction from a use in “other relation” to the appellant’s retail services as a whole.

23        For these reasons the primary judge’s conclusion that the appellant, by the transactions on which it relied, had proved use of the modified ‘707 mark (and hence the ‘707 mark and the ‘966 mark) in relation to services and not goods, is the proper characterisation of the use having regard to all of the relevant circumstances.

24        The cleaning cloth which the primary judge inferred had been included as part of the Pitt transaction raises other issues for consideration. The primary judge’s conclusions about the cleaning cloth at [261] of his reasons are set out above. In summary, the primary judge considered that the use of the mark on the cleaning cloth was not a use of either the ‘707 mark or the ‘966 mark (with additions or alterations not substantially affecting the identity of each mark) because “a substantial impression of identity” did not arise on consideration of the marks.

25        It has been said that an appellate court will not interfere with a trial judge’s finding involving matters of degree and impression unless persuaded that the trial judge’s finding is “erroneous in principle, or plainly and obviously wrong” (Metricon Homes Pty Ltd v Barrett Property Group Pty Ltd (2008) 248 ALR 364; [2008] FCAFC 46 (Metricon Homes) at [20]).

26        The rationale for this approach is the relative disadvantage of an appellate court in assessing matters of degree and impression as compared to a trial judge. Moreover, where questions of degree and impression are involved, appellate restraint counters individual predilections and thus enhances consistent and predictable outcomes which are important values in judicial decision-making.

27        Some disquiet, however, has been expressed about the stringency of the “plainly and obviously wrong” formula. Elsewhere, the test for appellate intervention has been expressed in language arguably suggesting a lower threshold for appellate intervention. In Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833 (Branir), Allsop J (with Drummond and Mansfield JJ agreeing) said that a “sufficiently clear difference of opinion” may be enough to set aside the trial judge’s decision (at [29]) (see also Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354; [2002] FCAFC 157 (Sydneywide Distributors) at [53]-[54] (Weinberg and Dowsett JJ) and EMI Songs Australia Pty Limited v Larrikin Music Publishing Pty Limited (2011) 191 FCR 444; [2011] FCAFC 47 at [260] (Nicholas J)). In a similar vein, the Full Court in SAP Australia Pty Ltd v Sapient Australia Pty Ltd (1999) 169 ALR 1; [1999] FCA 1821 (SAP Australia) said that the Court could give effect “to its own conclusion where it is definitely a contrary view to that taken by the primary judge” (at [38]). Whether any of these constructions answers the task of this appellate Court will be briefly considered.

28        This Court hears appeals by way of rehearing (Minister for Immigration and Multicultural Affaris v Jia Legeng (2001) 205 CLR 507; [2001] HCA 17 at [75] (Gleeson CJ and Gummow J); Cabal v United Mexican States (2001) 108 FCR 311; [2001] FCA 427 at [222]; see generally Branir at [11]-[23] (Allsop J)). Appeals by way of rehearing are not limited to questions of law. Questions of fact may be determined, including errors of factual inference (see, eg, Lithgow City Council v Jackson [2011] HCA 36 at [104] (Crennan J)). Generally, no fresh evidence is heard (though this Court has discretion to permit this), so the appeal “is conducted on the transcript of the evidence taken at trial” (Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9 (Warren) at 537 (Gibbs ACJ, Jacobs and Murphy JJ); Federal Court Act 1976 (Cth) s 27).

29        That appeals are by way of rehearing gives rise to a certain tension. There is a danger – especially in intellectual property cases where much turns on findings of fact – that without proper restraint, appeals would be treated as an opportunity to “put the dice into the box for another throw”: see reference in SAP Australia (at [37]). As Brennan J (as he then was) observed in S W Hart & Co Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466; [1985] HCA 59 (SW Hart) at 491, where factual findings are reasonably open, an appellate court is not justified in setting those findings aside because the Court differs from the trial judge’s view of those facts. By contrast, the Court also has a duty to reach its own conclusions on factual matters, and “not shrink from giving effect” to them (Warren at 551 (Gibbs ACJ, Jacobs and Murphy JJ); Branir at [28] (Allsop J)). An appellate court cannot find that a particular conclusion was correct simply because it was open to the trial judge (Windsor Smith Pty Ltd v Dr Martens Australia Pty Ltd (2000) 49 IPR 286; [2000] FCA 756 (Windsor Smith) at [15]).

30        There is another perceived tension, again of particular relevance to intellectual property cases. A trial judge is often considered to be in a better position to assess matters of degree and impression. The trial judge’s “findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance… of which time and language do not permit exact expression…” (Biogen v Medeva plc [1997] RPC 1 at 45; [1996] UKHL 18 at [54] (Lord Hoffmann)). The detail in the evidence at trial may not be reproduced on appeal. An appellate court ought, therefore, give particular respect and weight to the trial judge’s decision (Eagle Homes Pty Ltd v Austec Homes Pty Ltd (1999) 87 FCR 415; [1999] FCA 138 at [114]-[115] (Weinberg J) (Eagle Homes)). Other decisions have emphasised that where the primary facts are not in dispute (for example, the composition of a trade mark), an appellate court may be in as good a position as the trial judge to draw conclusions as to ultimate facts (for example, whether there is infringement of a trade mark): General Electric Co (of USA) v General Electric Co Ltd [1972] 1 WLR 729 at 738; [1972] 2 All ER 507 at 515 (Lord Diplock); Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 at 387; [1992] FCA 624 at [139] (Gummow J with Black CJ and Lockhart J agreeing). So what is essentially a “jury question” for the trial judge “does not cease to be a jury question on appeal before a plurality of judges” (Bodum v DKSH Australia Pty Ltd [2011] FCAFC 98 at [70] (Greenwood J, with Tracey J agreeing)).

31        The various formulations of the ‘tests’, to some extent, attempt to balance the competing factors already outlined. While the phrase “plainly or obviously wrong” might be thought to place greater emphasis on the importance of the trial judge’s decision, the true position is, that the deference to be had to the trial judge’s decision varies from case to case. It involves a consideration of all of the factors outlined above. The weight to be given to each factor will vary depending on the advantage that the trial judge has vis-à-vis the evidence and whether the evidence clearly discloses primary facts or not.

32        After reviewing the authorities, we doubt whether there is really a difference of substance between the use of the phrases “plainly or obviously wrong” and “sufficiently clear difference of opinion”. Two points can be made in this regard. First, at best, the difference between the two phrases is largely semantic. “Plainly or obviously wrong” expresses a conclusion about the challenged finding. “Sufficiently clear difference of opinion” describes the required quality of the appellate court’s reasoning. Although Allsop J in Branir ultimately settled on the phrase “sufficiently clear difference of opinion”, “plainly or obviously wrong” also attempts to encapsulate the principles outlined above. In Metricon Homes, Allsop J’s decision was cited with approval before the Court settled on the use of “plainly or obviously wrong” (Metricon Homes at [19]-[20]). “Plainly or obviously wrong” was adopted from Weinberg J’s decision in Eagle Homes (at [119]). Later, however, in Sydneywide Distributors, Weinberg J (with Dowsett J) “gratefully” adopted the observations of Allsop J in Branir, including the phrase “sufficiently clear difference of opinion”. Their Honours did not mention Eagle Homes. Arguably, Weinberg and Dowsett JJ did not think it necessary to distinguish between the two.

33        The second point is that the task of this appellate Court is a complex one. It cannot be captured by brief ‘sound-bites’ such as “plainly or obviously wrong” or “sufficiently clear difference of opinion”. It is an approach which requires consideration of several principles, not just one. This approach is best explained by Allsop J in Branir at [28]-[29]:

28     […] First, the appeal court must make up its own mind on the facts. Secondly, that task can only be done in light of, and taking into account and weighing, the judgment appealed from. In this process, the advantages of the trial judge may reside in the credibility of witnesses, in which case departure is only justified in circumstances described in Abalos v Australian Postal Commission (1988) 171 CLR 167; Devries v Australian National Railways Commission (1933) 177 CLR 472 and SRA v Earthline [State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) (1999) 160 ALR 588; [1999] HCA 3]. The advantages of the trial judge may be more subtle and imprecise, yet real, not giving rise to a protection of the nature accorded credibility findings, but, nevertheless, being highly relevant to the assessment of the weight to be accorded the views of the trial judge. Thirdly, while the appeal court has a duty to make up its own mind, it does not deal with the case as if trying it at first instance. Rather, in its examination of the material, it accords proper weight to the trial judge’s views. Fourthly, in that process of considering the facts for itself and giving weight to the views of, and advantages held by, the trial judge, if a choice arises between conclusions equally open and finely balanced and where there is, or can be no preponderance of view, the conclusion of error is not necessarily arrived at merely because of a preference of view of the appeal court for some fact or facts contrary to the view reached by the trial judge.

29    The degree of tolerance for any such divergence in any particular case will often be a product of the perceived advantage enjoyed by the trial judge. Sometimes, where matters of impression and judgment are concerned, giving “full weight” or “particular weight” to the views of the trial judge might be seen to shade into a degree of tolerance for a divergence of views [various authorities]… However, as Hill J said in Commissioner of Taxation (Cth) v Chubb Australia Ltd (1995) 56 FCR 557 at 573 “giving full weight” to the view appealed from should not be taken too far. The appeal court must come to the view that the trial judge was wrong to interfere. Even if the question is one of impression or judgment, a sufficiently clear difference of opinion may necessitate that conclusion.

34        Consistent and predictable judicial decision-making is not discouraged by either phrase. If one phrase were more appropriate to describe the role of the appellate court than the other, “sufficiently clear difference of opinion” both reflects the nature of an appeal by way of rehearing and conveys the appellate court’s duty to come to its own conclusion, whilst at the same time giving due respect and weight to the trial judge’s findings.

35        The appellant has not identified any error of principle in its challenge to the primary judge’s finding at [261] about the mark on the cleaning cloth. Nor has it explained why this Court on appeal, mindful of the considerations discussed above, should disturb the primary judge’s factual finding in this regard.

36        This is the ‘707 mark:

37        This is the ‘966 mark:

38        This is the mark on the cleaning cloth:

39        Nothing in this case would support appellate intervention in respect of the decision the primary judge reached about the ‘707 mark, the ‘966 mark and the mark on the cleaning cloth.

Issue (2)    Personal liability of second and third respondents

Primary judge’s reasons

40        The primary judge considered the question of infringement of the ‘707 mark and ‘966 mark at [76]-[148]. In so doing, he noted that the case as pleaded in the statement of claim “did not seek to relate a particular instance or particular instances of alleged infringing use to a particular trade mark”, but that its approach was rather “to identify a particular suite of trade marks (the pleaded trade marks), on the one hand, and a particular body of alleged instances of infringing use on the other, and to allege that one or more of the trade marks was infringed by one or more instances of the total body of conduct which it had identified” (at [77]). He also noted (at [78]) that:

The liability of the respondents was also pleaded on the footing that they were either individual tortfeasors or joint tortfeasors. In the case of Mr and Mrs Law, it was also specifically pleaded that they directed, procured and controlled the first respondent in its acts, and were knowingly concerned in those acts.

41        The primary judge also recorded that the appellant’s infringement case was based on ss 120(1) and (2) of the Trade Marks Act, which are in these terms:

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

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

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

(b)    services that are closely related to registered goods; or

(c)    services of the same description as that of services (registered services) in respect of which the trade mark is registered; or

(d)    goods that are closely related to registered services.

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

42        The primary judge identified the alleged infringing uses at [83] (designating the classes of use as examples A-F) and the relevant legal principles at [87]-[114]. Having considered the competing submissions (at [115]-[130]), the primary judge determined the issues of infringement at [131]-[148]. He concluded that: – (i) “the ‘707 and ‘966 marks, despite being composite marks, each have an essential or distinguishing characteristic, namely the name OPTICAL 88” (at [138]), (ii) “the name OPTICAL 88 on store signage and on stationery such as business cards and loyalty cards, and on promotional literature and promotional items, as exemplified in examples A and E, is the use of a sign, as a trade mark, that is deceptively similar to the ‘707 mark and the ‘966 mark” (at [141]), (iii) “the name OPTICAL 88 in combination with the name ‘OPTICAL 88’ (in Chinese characters) on store signage and on business cards as exemplified in examples C and D, is the use of a sign as a trade mark that is deceptively similar to the ‘707 mark and the ‘966 mark” (at [144]), and (iv) “the use of the first respondent’s logo on business cards and reminder cards as exemplified in example F, which, as I have noted, includes the name OPTICAL 88, is the use of a sign, as a trade mark, that is deceptively similar to the ‘707 mark and the ‘966 mark” (at [147]).

43        The primary judge then considered the question of the personal liability of the second and third respondents for the infringements (at [149]-[158]), including by reference to certain admissions in each of their defences. As noted, the second respondent (Mr Law) is an optometrist and is a director and manages the business of the first respondent. The third respondent (Mrs Law) is married to the second respondent and is a director of the first respondent.

44        The primary judge concluded (at [150]) that:

the use to which I have referred is and was the first respondent’s use. As I have found, the first use in trade by one of the respondents of the name OPTICAL 88 was from August 1993 when the first respondent commenced to carry on business. There is no evidence that, from that time, there was any activity carried on by the respondents using that name, or related trade indicia, other than in and about the conduct of the first respondent’s business. Thus it is the first respondent that has used the impugned signs as trade marks.

45        As to the admissions in the defences, the primary judge concluded as follows (at [155]):

It seems to me that, considered in the context of each pleaded defence, Mr and Mrs Law were not admitting that he or she [sic] had directly used the impugned signs as trade marks, but that the first respondent had, and that each of them had been involved in that conduct to the extent of directing, procuring, or controlling the first respondent, or of being knowingly concerned in the first respondent’s acts.

46        He also said (at [156]) that:

Even if I were wrong in that conclusion, it is clear that I am not bound to act on admissions where I doubt their correctness: Damberg v Damberg (2001) 52 NSWLR 492 at [160]; Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (2007) 160 FCR 321 at [49]. In so far as each of Mr and Mrs Law may have admitted (contrary to my conclusion) direct use of the impugned signs as trade marks, I have every reason to doubt the correctness of, and decline to accept, any admissions so made, based on the evidence before me of the first respondent’s trading activities and Mr and Mrs Law’s involvement in it.

Appellant’s submissions

47        The appellant submitted that the primary judge should have acted on the admissions in the defences as they “plainly say that Mr and Mrs Law provided the first Respondent’s Services”. The appellant also contended that, had the admissions not been made, it would have adduced additional evidence including a business name search in the second respondent’s name and documents showing the professional regulations to which optometrists are subject. According to the appellant, the primary judge did not take into account the relevance of the professional nature of the optometry services which the second respondent provided in his capacity as an optometrist. The appellant further contended that the evidence disclosed that the second respondent personally provided the services (a submission supported by a table showing the second respondent’s various references to “my” practice and business and the like). Finally, the appellant submitted that it had every reason to assume that the primary judge would rely on the admissions given his earlier decision refusing the third respondent leave to withdraw them – a decision made in part on the basis that, if the admissions had not been made, the appellant would have “sought discovery and given consideration to other interlocutory steps to assist in the proof of that aspect of its case” (Optical 88 Limited v Optical 88 Pty Limited [2010] FCA 310 at [42]).

Discussion

48        The primary judge’s earlier decision does not assist the appellant. When his reasons for judgment in that matter are read as a whole it is apparent that the primary judge, consistent with his ultimate view about the content of the admissions, assumed that the admissions concerned only the accessorial liability of the second and third respondents in their capacities as directors of and persons knowingly concerned in the conduct of the first respondent. So much is apparent from the primary judge’s observation at [41] of the earlier judgment that the third respondent’s statements about her “workaday” roles in the “first respondent” were not inconsistent with her capacity as a director of the first respondent or her capacity to procure the first respondent to undertake infringing activities. There is no basis in the earlier judgment for any assumption by the appellant that the admissions extended beyond admissions of the second and third respondent’s liability as accessories if the first respondent were otherwise liable for any infringements. For the same reason, the primary judge’s acceptance in his earlier judgment that but for the admissions the appellant would have adduced further evidence relates only to the proof of accessorial liability, not personal liability, on the part of the second and third respondents.

49        For these reasons, the appellant’s case on this point depends on the content of the admissions and the evidence of personal liability upon which the appellant relied. Insofar as the case depended on the content of the admissions, the primary judge’s analysis is compelling. It is not necessary to have regard to the various versions of the statement of claim to reach this conclusion. As the primary judge noted (at [153]), each of the defences defined the “First Respondent’s Services” to mean “the goods and services sold or provided by the first respondent under or by reference to one or more of the name ‘OPTICAL 88’, the First Respondent’s Trade Mark and the OPL Logo” (the references to the “First Respondent’s Trade Mark” and the “OPL Logo” are to the first respondent’s logo). The admissions in paragraphs 13 and 14 of the defences must be read in the context of this definition. As the primary judge said (at [151]), these paragraphs of the defences are in substantially the same terms and are as follows:

13    The [second/third] respondent admits that since approximately July 1993 [he/she] has, or has jointly with one or more of the other respondents, done, directed or procured by another respondent of [sic], one or more of the following:

(a)    advertised, marketed or promoted;

(b)    offered; and/or

(c)    provided

the First Respondent’s Services in Australia…

14    The [second/third] respondent admits that [he/she] intends to, or intends to direct or procure another respondent to:

(a)    manufacture;

(b)    sell or offer or expose for sale;

(c)    provide; and/or

(d)    advertise or promote

the First Respondent’s Services in Australia.

50        When the definition of the “First Respondent’s Services” is taken into account it is apparent, as the primary judge found at [155], that neither the second nor the third respondent was:

admitting that he or she had directly used the impugned signs as trade marks, but that the first respondent had, and that each of them had been involved in that conduct to the extent of directing, procuring, or controlling the first respondent, or of being knowingly concerned in the first respondent’s acts.

51        It is also apparent that this conclusion accorded with the evidence. Nothing in the second respondent’s use of personal pronouns to describe the first respondent’s practice and business contradicted the essence of his evidence, as accepted by the primary judge. The second respondent established an optometry business but transferred it to the first respondent in 1993. Since that time, the business has been conducted as that of the first respondent (at [38]-[39]). The first respondent has opened new shops (at [50]-[51]). The first respondent has used the name Optical 88 in conducting its business (at [52]). The first respondent applied for registration of a trade mark comprising the first respondent’s logo (at [58]). In the context of the evidence as a whole, the primary judge’s conclusion (at [157]) that “it is the first respondent, not Mr Law, or indeed Mrs Law, that has carried on that business and practice since August 1993 using the name OPTICAL 88 and the other trade indicia about which the applicant complains” is unassailable.

52        As the respondents submitted, there is no instance in the evidence supporting any inference that the second respondent was carrying out any activity other than in his capacity as a director and manager of the first respondent. The evidence does not support a conclusion that the second respondent made the infringements of the first respondent his own (Sporte Leisure Pty Ltd v Paul’s International Pty Ltd (No 3) (2010) 88 IPR 242; [2010] FCA 1162 at [113], but see the entire discussion at [108]-[116] and the cases cited therein). Accordingly, this is not a case in which the acts of the second respondent were other than corporate acts (see, by contrast, Houghton v Arms (2006) 225 CLR 553; [2006] HCA 59).

53        This result, as the respondents submitted, reflects the structure of the legislation. By s 120(1) and (2) of the Trade Marks Act, the person who infringes the trade mark is the person who “uses” the mark in the specified circumstances. In the case of a corporation, the use of the mark will be by the corporation even though that use is achieved through the corporation’s human agents. Under s 122 there are defences. The defences are available to the person using the trade mark in the nominated circumstances. One of the defences, use in good faith of a person’s name (s 122(1)(a)(i)), would make little sense if the relevant use (and thus the relevant name) could be a use by the corporation’s human agent rather than the corporation itself. In such a case, if the trade mark is the corporation’s name, the corporation would have the benefit of the defence but the human agent of the corporation would not. In other words, the legislative scheme is inconsistent with the imposition of personal liability for trade mark infringement on agents of corporations unless the agent has somehow made the use his or her own by acting other than in the capacity of agent.

54        For these reasons, the appellant has not established any error by the primary judge in rejecting the appellant’s claims of personal liability on the part of the second and third respondents for the trade mark infringements of the first respondent. The primary judge was thus correct to consider the availability of defences (including the use of its own name in good faith defence) for the first respondent only.

Issue (3)(a)    Defence of use of name

Primary judge’s reasons

55        As noted, there are two aspects to issue (3): one which was put to and rejected by the primary judge, and one which was not put to the primary judge at all and thus requires the grant of leave to be raised in the appeal. In respect of the first aspect, which was argued before the primary judge, the relevant defence is contained in s 122(1)(a)(i) of the Trade Marks Act, which provides as follows:

(1)    In spite of section 120, a person does not infringe a registered trade mark when:

(a)    the person uses in good faith:

(i)    the person’s name or the name of the person’s place of business; or

(ii)    …

56        The primary judge noted (at [160]) that the appellant accepted that the first respondent’s use of the words “OPTICAL 88” without the additional words “Pty Ltd” nevertheless constituted a use of the first respondent’s name (Parker-Knoll Ltd v Knoll International Ltd (No 2) [1962] RPC 265 (Parker-Knoll) at 275; Wellness Pty Ltd v Pro Bio Living Waters Pty Ltd (2004) 61 IPR 242; [2004] FCA 438 at [43]). The appellant contended at first instance, however, that this was not a use in good faith – a contention which the primary judge rejected (at [161]-[163]) and against which there is no appeal. The primary judge continued (at [164]):

In my view, therefore, the first respondent’s use in good faith of its name is not an infringement of the pleaded trade marks. Specifically, the first respondent has not infringed the ‘707 mark or the ‘966 mark by the various instances of use of the name OPTICAL 88 identified in examples A, C, D, E and F. It makes no difference that the first respondent has used its name in association with additional matter (such as, for example, “Vision Centre” or “Vision” or “V.I.P Card”) or other indicia (such as the name “OPTICAL 88” (in Chinese characters) or the first respondent’s logo). This is because, in each case, infringement only arises by use of the name OPTICAL 88 (the first respondent’s name). Absent the use of that name, there would be no infringement of these marks in these instances. The defence bites when the use of the person’s name is the reason for the finding of infringement (provided the use has been in good faith).

57        The appellant contended that, in so concluding, the primary judge erred. In order to understand the appellant’s submissions in support it is necessary to explain the content of examples A, C, D, E and F. This the primary judge did so at [83] of his reasons as set out below:

(a)    The use of the name OPTICAL 88 on store signage (which I will call example A). This use is evident from August 1993 at the Campsie store (where that use has been in association with the words “Vision Centre”) and from July 1995 at the Eastwood store. The use is also evident from November 1993 at the Chatswood store. In that case, the name “OPTICAL 88” (in Chinese [c]haracters) is also used in proximity (but not in close proximity) to the name OPTICAL 88. Contrary to the applicant’s submissions, in that instance I do not see the name OPTICAL 88 and the name “OPTICAL 88” (in Chinese characters) as comprising, in combination, one sign but two separate signs, whose use calls for individual consideration.

…

(c)    The use of the name OPTICAL 88 in combination with the name “OPTICAL 88” (in Chinese characters) on store signage (which I will call example C). This use is evident from August 1993 at the Campsie store, where “OPTICAL 88” (in Chinese characters) is placed in close proximity to and above OPTICAL 88. Although appearing to be in separate neon signs, their proximity is such that, contrary to the respondents’ submissions, I would regard this as being the use of one sign, and the relevant sign, for the purpose [of] trade mark comparison. This use is evident from July 1995 at the Eastwood store, where the name OPTICAL 88 and the name “OPTICAL 88” (in Chinese characters) are in close proximity, with “OPTICAL 88” (in Chinese characters) being immediately to the right of OPTICAL 88. Once again, although appearing to be in separate neon signs, their proximity is such that, contrary to the respondents’ submissions, I regard this as being the use of one sign, and the relevant sign, for the purposes of trade mark comparison.

(d)    The use of the name OPTICAL 88 in combination with the name “OPTICAL 88” (in Chinese characters) on business cards (which I will call example D). This use is evident from August 1993. In this instance “OPTICAL 88” (in Chinese characters) appears in close proximity to and under OPTICAL 88. Once again, it is the use of one sign, and the relevant sign, for the purpose of trade mark comparison.

(e)    The use of the name OPTICAL 88 on stationery in association with the words “Vision Centre” and, in the case of “loyalty cards”, in association with the words “V.I.P. Card”, from August 1993. This use is also evident on promotional literature (a benefit concert program sponsored by the first respondent) in association with the words “Vision” and “VISION CENTRE” in December 1993 and on promotional items (such as spectacle cases and cleaning cloths) in association with the words “VISION CENTRE”, from about 1996 (I will call these, collectively, example E).

(f)    The use of the first respondent’s logo on business cards and reminder cards since late 2003 (I will call this example F).

58        The primary judge found each of these uses infringed the appellant’s ‘707 and ‘966 trade marks (at [141], [144], and [147]). In summary, he found as follows:

141    First, the name OPTICAL 88 on store signage and on stationery such as business cards and loyalty cards, and on promotional literature and promotional items, as exemplified in examples A and E, is the use of a sign, as a trade mark, that is deceptively similar to the ‘707 mark and the ‘966 mark. The use of associated words such as “Vision” or “VISION CENTRE” or “V.I.P. Card”, as shown in the examples, makes no difference to this conclusion. In each case the essential or distinguishing characteristic of the ‘707 mark and ‘966 mark (as I have found it to be [that is, as found at [135], simply “OPTICAL 88”]) has been taken. In the circumstances I am satisfied that each such use is likely to deceive or cause confusion in the sense that there is a real risk that a number of patients and customers, who are taken to have knowledge of the ‘707 mark and the ‘966 mark, but an imperfect recollection of each of them, would be caused to wonder whether goods or services supplied by one or more of the respondents using the name OPTICAL 88 come from the same source as those taken to be supplied using the ‘707 mark or the ‘966 mark.

…

144    Thirdly, the name OPTICAL 88 in combination with the name “OPTICAL 88” (in Chinese characters) on store signage and on business cards as exemplified in examples C and D, is the use of a sign as a trade mark that is deceptively similar to the ‘707 mark and the ‘966 mark. In my view, in each case, the particular juxtaposition of OPTICAL 88 and “OPTICAL 88” (in Chinese characters) is not determinative or critical because, significantly, the essential or distinguishing element of each mark (the name OPTICAL 88) has been taken. I am satisfied that there is a real risk of deception or confusion in the sense I have explained in [141] above.

…

147    Sixthly, the use of the first respondent’s logo on business cards and reminder cards as exemplified in example F, which, as I have noted, includes the name OPTICAL 88, is the use of a sign, as a trade mark, that is deceptively similar to the ‘707 mark and the ‘966 mark. Once again, this is because the essential or distinguishing characteristic of each of those marks (the name OPTICAL 88) has been taken. I am satisfied that there is a real risk of deception or confusion in the sense I have explained in [141] above. If anything, the risk of deception or confusion will be greater because of the use of the name OPTICAL 88 combined with a device that I have found, for trade mark purposes, to be deceptively similar to an element of the ‘707 mark and ‘966 mark (namely the applicant’s logo).

Appellant’s submissions

59        The appellant submitted that while the defence in s 122(1)(a)(i) of the Trade Marks Act covers the use of the name of the first respondent, “OPTICAL 88 Pty Limited” (or “OPTICAL 88”, based on the cases cited above), it did not cover the use of “OPTICAL 88 as part of a discrete sign which incorporates additional elements” (citing RJ Reuter Co v Mulhens [1954] Ch 50 (Reuter) at 83). According to the appellant, this must follow from s 17 of the Trade Marks Act which defines a trade mark as “a sign used, or intended to be used, to distinguish goods or services…”. Hence, the totality of the sign must be considered. If the totality of the sign is not the person’s name, the defence is not engaged.

60        On this basis, the appellant identified numerous instances within examples A, C, D, E and F in which the primary judge had identified the relevant sign (at [83]) in circumstances where the sign as a whole was not a use of the first respondent’s name, including: – (i) the store signage at Campsie of “Optical 88 Vision Centre 9787 3621” (with “88” in stylised logo form) and of Chinese characters and “88”, (ii) use on business cards of Chinese characters and “88”, (iii) use on stationery of “Optical 88 Vision Centre”, (iv) use on loyalty cards of “Optical 88 V.I.P. Card”, (v) use on a concert program of “Optical 88 Vision” and “Optical 88 Vision Centre”, (vi) use on store signage at Eastwood of Chinese characters and “88”, (vii) use on shopping bags, cleaning cloths and spectacle cases of “Optical 88 Vision Centre” in stylised logo form, (viii) use on business and reminder cards of the first respondent’s logo, and (ix) use on store stamps at Campsie and Chatswood of “Optical 88 Vision Centre”. The appellant submitted that none of these uses was of the first respondent’s name. The sign in each instance might include the name but was not a use of the name, with the result that the defence in s 122(1)(a)(i) was not available.

Discussion

61        The defence in s 122(1)(a)(i) of the Trade Marks Act must be construed in the context of the statute as a whole. It is true that s 17 defines a trade mark as a “sign” used to distinguish the goods and services of one person in the course of trade from the goods and services of others. Section 120, moreover, defines infringement as occurring when a person uses “as a trade mark a sign that is substantially identical with, or deceptively similar to” a registered trade mark. In other words, infringement occurs when a person uses a sign to distinguish that person’s goods and services in the course of trade from the goods and services of others and the sign is substantially identical with, or deceptively similar to, a registered trade mark. The defence in s 122(1)(a)(i) is that, “in spite of section 120”, a person does not infringe a registered trade mark when the person uses in good faith the person’s own name. In other words, when a person uses a sign to distinguish that person’s goods and services in the course of trade from the goods and services of others, and the sign is substantially identical with or deceptively similar to a registered trade mark, such use will not constitute infringement if it is a use in good faith of the person’s name. Construed in context, as the primary judge said at [164], “the defence bites when the use of the person’s name is the reason for the finding of infringement”. Consideration of earlier decisions confirms this approach.

62        In Reuter, the trade mark was for “4711 Eau de Cologne” where the figures “4711” appeared within a scroll next to a bell. In fact, the place of business of the defendant company was No. 4711 Koln am Ehein, in Cologne. The defendant contended that the use of the figures “4711” within a scroll and next to a bell identical to that of the registered trade mark for 4711 Eau de Cologne was a use in good faith by the defendant of the company’s name or place of business. The UK Court of Appeal rejected the defence. Although “4711” was the defendant’s place of business, the representation of that place by “embellishment of the scroll and bell” was not within the protection of the defence (at 83). The fact that the additional material (the scroll and bell) were part of the registered trade mark appears to have dictated this outcome.

63        In Baume & Co Ltd v AH Moore Ltd (No 1) [1958] Ch 907 (Baume), use of the name “Baume & Mercier, Geneva” was held to infringe the trade mark “Baume”. Romer LJ described the object of the equivalent defence in the UK legislation as ensuring that the use of a person’s own name “should be protected, provided that the user was bona fide” (at 920-921).

64        Parker-Knoll, as noted above, is authority for the proposition that a company uses its name even if it omits the word “Ltd” or “Limited” from the use. Hence, the House of Lords varied an injunction so as to permit the defendant to use in good faith “Knoll International” without the accompanying “Ltd”.

65        In Smith & Nephew Plastics (Australia) Pty Ltd v Sweetheart Holding Corporation (1987) 8 IPR 285 (Sweetheart), the registered trade mark was “Sweetheart”. King J in the Supreme Court of Victoria held (at 290-291) that “Sweetheart” alone was not the name of the company “Sweetheart Plastics Inc”. Nor was “Sweetheart cup division of Maryland Cup Corp” the name of the company Sweetheart Holding Corp (formerly Maryland Cup Corp).

66        Properly analysed, these decisions do not support the appellant’s submission that the defence in s 122(1)(a)(1) is not available merely because the uses extend beyond the first respondent’s name. In Reuter, the defence was not available because the use included the scroll and bell which were essential characteristics of the registered trade mark for “4711 Eau de Cologne”. That is to say, the additional material did not of itself mean the use was outside the protection of the section. It was critical that the additional material was part of the registered trade mark which had been infringed. In Sweetheart, the problem was that the registered trade mark was the single word “Sweetheart”. The names of the relevant companies included but were not limited to that word. The contraction of their names to “Sweetheart” either alone or as part of a phrase “Sweetheart cup division of Maryland Cup Corp” could not be characterised as the use of the names Sweetheart Plastics Inc or Sweetheart Holding Corp.

67        The uses in examples A, C, D, E and F each involve the first respondent’s name, Optical 88, with additional material. Insofar as the additional material comprises words and forms that were not part of the appellant’s registered trade marks, the decisions summarised above provide the appellant with no assistance. As the primary judge said, the additional material is not the reason for the infringement. Its inclusion in the various signs does not take the infringing part (the use of the first respondent’s name) outside the scope of the defence afforded by s 122(1)(a)(i). Insofar as the additional material comprises the first respondent’s logo Reuter provides some support for the appellant’s argument. Nevertheless, there are distinguishing features.

68        In the present case the primary judge found (and the appellant does not challenge) that the dominating element of the ‘707 and ‘966 trade marks is the name “Optical 88”, with the role of the other elements, including the logo, playing a “secondary role only” (at [136]). These conclusions led the primary judge to find that the “essential or distinguishing characteristic” of each of these marks was the name “Optical 88” (at [138]). In this context, the primary judge’s finding – that the use by the first respondent of its logo was additional material in that but for the use of the first respondent’s name no infringement would arise in example F – is sound. In other words, in example F (which involved the ‘707 mark and the ‘966 mark, being composite marks including the name “Optical 88”, the Chinese characters and the logo), infringement arises by reason of the first respondent’s use of the name “Optical 88” and not the first respondent’s logo. This is despite the fact that, in respect of other registered trade marks of the appellant (the so-called ‘979 mark and ‘545 mark, which comprise the appellant’s logo alone), the primary judge held that the use of the first respondent’s logo itself gave rise to infringement of those marks (at [146]). It is apparent from comparing the primary judge’s reasoning in these paragraphs that he was careful to distinguish between the various registered trade marks and the various uses said to infringe those marks.

69        In this appeal, the primary judge’s finding that the essential or distinguishing feature of the ‘707 mark and the ‘966 mark is the name “Optical 88” (at [138]) is not challenged. Nor is the primary judge’s finding (at [136]) that, as it appears within the ‘707 mark and the ‘966 mark, the appellant’s logo is a secondary feature only. It is those findings which caused the primary judge to conclude that, in each of examples A, C, D, E and F, it is the use of the name “Optical 88” which gives rise to infringement and not the presence of the additional material (at [164]). On the unchallenged findings of the primary judge, the use of first respondent’s logo in example F was thus different from the presentation of the address “4711” within the scroll and next to the bell distinctive of the registered “4711 Eau de Cologne” trade mark in Reuter.

70        For these reasons, the primary judge’s conclusion (at [164]) that the defence in s 122(1)(a)(i) of the Trade Marks Act protects the first respondent’s uses at set out in examples A, C, D, E and F does not disclose error.

Issue (3)(b)    Future use of name

Submissions

71        As noted, the argument founding issue (3)(b) was not put to the primary judge. Indeed, the primary judge recorded this fact at [163] where this was said:

I am satisfied in all the circumstances that the first respondent’s use of the name OPTICAL 88 as a trade mark was a use in good faith of its name. I would add that a use in good faith, for the purposes of s 122(1)(a) of the Trade Marks Act, does not cease to be in good faith when the likelihood of deception is brought to the notice of an alleged infringer: Parker-Knoll Ltd v Knoll International Ltd [1961] RPC 346 at 363 (Upjohn LJ); Hy-Line Chicks Pty Ltd v Swifte (1966) 115 CLR 159 at 161 and 164. The applicant did not seek to submit otherwise.

72        As part of this appeal the appellant sought leave to submit otherwise. According to the appellant, as a result of the primary judge’s findings at [192]-[193] and [292]-[293] the first respondent’s continued use of the name “Optical 88” would no longer be in good faith after the date of the judgment. At [192]-[193], the primary judge found that the respondents had not established the defence in s 122(1)(fa) of the Trade Marks Act (namely, that the person would obtain registration of the trade mark in the person’s name if the person were to apply for it) as the first respondent’s name is deceptively similar to that of the appellant. At [292]-[293], the primary judge referred to evidence which disclosed that the second respondent, Mr Law, had considered the possibility from late 2003 that there might be confusion between the first respondent’s business and the appellant’s business. The appellant submitted that, in the face of findings that the use of the first respondent’s name would give rise to the potential for confusion, the first respondent could no longer claim that future uses of its name would be uses in good faith. From the appellant’s point of view, the issue could not involve any need for further evidence and thus leave should be granted for it to be raised in the appeal.

73        The respondents objected to the grant of leave. The findings of the primary judge could not give rise to any necessary or unavoidable conclusion that no future use of the first respondent’s name could be a use in good faith. Mr Law had given evidence. Nothing was put to him about either his future intentions or his state of mind in regard to his future intentions. In these circumstances, the respondents contended that leave should be denied.

Discussion

74        The circumstances are not appropriate for the grant of leave to raise this new point on appeal. As the respondents submitted, the point was available to be taken before the primary judge. If it had been taken, evidence could have been adduced from the second respondent about the use of the first respondent’s name in the future. As the point was not taken, no such evidence was adduced. Moreover, it does not follow from the primary judge’s findings about the potential for confusion that any future use by the first respondent of its name would necessarily be other than in good faith. The decisions on which the appellant relied do not support this conclusion.

75        In Baume at 921, Romer LJ described the good faith requirement as involving an “honest use” without any intention to deceive. According to Romer LJ:

The mere fact in itself that a trader is using his own name which too closely resembles a registered trade name of which he is aware, does not prevent the user from being “bona fide”, provided that the trader honestly thought that no confusion would arise, and if he had no intention of wrongfully diverting business to himself by using the name.

76        In Anheuser-Busch Inc v Budejovicky Budvar (2002) 56 IPR 182; [2002] FCA 390 (Anheuser-Busch), Allsop J held that the use of the name in question was not in good faith. No one had deposed to a belief that that no confusion would arise (at [216]). The respondent knew of the likely existence of its rival’s reputation in the territory (at [216]). In those circumstances, although the use was not consciously dishonest, it was not a use in good faith.

77        In the present case, the primary judge found that the first respondent’s use of the name “Optical 88” commenced without knowledge of the appellant’s business (at [57]). The use of this name continued without the respondents having any awareness of the appellant’s business from August 1993 until May 1997 when the second respondent, Mr Law, saw one of the appellant’s shops in Hong Kong (at [42]). The use of this name continued thereafter without the appellant taking any step against the respondents until October 2006 (despite the appellant being aware of the first respondent’s business from about mid-2001) (at [54] and [56]). In other words, the first respondent’s use of its own name in Australia continued in good faith from August 1993 until 10 December 2010 (the date the primary judge gave reasons for judgment). The only change in circumstances on which the appellant relied is the delivery of the primary judge’s reasons, and specifically the findings about the potential for confusion as a result of which the appellant said any future use can no longer be in good faith.

78        It should be apparent from this description that Baume and Anheuser-Busch do not involve circumstances analogous to the present case. Indeed, the appellant did not identify any case involving analogous circumstances. There is force in the respondents’ submission that there is good reason for this. As the respondents put it:

It is, with respect, hardly surprising that there is no authority on a point so lacking in merit. Logically stated, the appellant’s argument is that a defence under s 122(1)(a) will necessarily fail upon its being successfully deployed.

79        In any event, what the cases do disclose is that the question of good faith is essentially one of fact. There cannot be any doubt that the second respondent, Mr Law, could have given evidence potentially relevant to the future intentions of the first respondent and the state of mind which might be attributed to the first respondent about the potential for confusion in the future. Mr Law was not given the opportunity to provide any such evidence because, as the primary judge noted at [163], the issue was not raised. Without evidence, the question of good faith in respect of future use of the first respondent’s name cannot and should not be answered. Leave should not be granted to raise this new point in the appeal.

Issue (4)    Liability as accessories

80        In light of the above finding that the primary judge was correct to conclude that the first respondent had not infringed the ‘707 mark or the ‘966 mark because of the operation of the defence in s 122(1)(a)(i) of the Trade Marks Act, issue (4), involving the liability of the second and third respondents as accessories, does not arise. Given his conclusions the primary judge also did not determine this issue.

81        Insofar as it might be necessary to say more, the respondents conceded that, if the first respondent had been liable for infringement, the second respondent, Mr Law, would have been liable as an accessory. They contended, however, that the third respondent, Mrs Law, should not be found liable as an accessory despite the admissions in paras 13 and 14 of her defence (as recorded above). The appellant contended that both the second and third respondents should have been found liable as accessories.

82        The respondents’ position properly reflects the evidence and the relevant principles. The evidence establishes that, although a director of the first respondent, Mrs Law had no real involvement in the management of the first respondent’s affairs; in fact, she had played only a minimal role in providing some basic administrative services to the first respondent, and had not done even this for some 10 years prior the trial. In these circumstances it would be wrong to act on the admissions in Mrs Law’s defence on the same principled basis identified by the primary judge at [156] of his reasons.

Issue (5)     Intention to use ‘966 mark

Primary judge’s reasons

83        The primary judge recorded the first respondent’s case for removal of the ‘966 mark under s 92(4)(a) of the Trade Marks Act at [198]-[207] of his reasons. Section 92(4)(a) provides as follows:

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

(a)    that, on the day on which the application for the registration of the trade mark was filed, the applicant for registration had no intention in good faith:

(i)    to use the trade mark in Australia; or

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

(iii)    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 to which the non-use application relates and that the registered owner:

(iv)    has not used the trade mark in Australia; or

(v)    has not used the trade mark in good faith in Australia;

in relation to those goods and/or services at any time before the period of one month ending on the day on which the non-use application is filed;

[…]

84        After identifying the relevant legal principles at [208]-[222], the primary judge found at [264] that the appellant had not “rebutted the allegation that, on the day on which the application for the registration of the ‘966 mark was filed (2 November 2005), it had no intention to use or to authorise the use of the ‘966 mark or to assign the ‘966 mark to a body corporate for use by it in Australia, in relation to the goods for which it is registered or in relation to wholesale services for the goods identified in the ‘966 registration.” The primary judge described the appellant’s evidence on this issue as “sparse” (at [265]). He thus considered (at [268]) that:

Taking the evidence as a whole, and particularly the evidence given by Mr Wong in cross-examination, I am not satisfied that the applicant’s intention, such as it was at 2 November 2005, was anything more than “an uncertain or indeterminate possibility” (see Re Ducker’s Trade Mark (1928) 45 RPC 397 at 402) that the applicant might commence to operate stores in Australia. Even then the possibility of wholesaling (for example, through franchising in Australia) was, as I have noted, wholly speculative. Moreover, in light of the great variety of OPTICAL 88 trade indicia used by the applicant, no evidence was given as to what specific trade marks the applicant might use for that purpose.

Appellant’s submissions

85        The appellant submitted that the primary judge’s conclusions mischaracterised the evidence and elevated the test of intention to use to one requiring actual use. The appellant also submitted that the primary judge’s conclusions indicated that he had overlooked the evidence at [118] of Mr Wong’s affidavit, in which he stated in terms that at the time of the application for registration of the ‘966 mark on 2 November 2005 the appellant intended to use the mark the subject of the application for registration. On the basis of this evidence, taken with the making of the application and the other evidence available, the appellant submitted that the primary judge was in error not to find that the appellant had rebutted the allegation of a lack of intention to use the ‘966 mark in Australia.

Discussion

86        The appellant’s submissions do not withstand scrutiny. The first answer is that the primary judge heard the whole of the evidence, including that of Mr Wong, and thus enjoyed a distinct advantage in respect of the determination of this issue as compared to the appellate court. The reasoning in [25]-[34] thus applies. The second answer is that it is apparent from the primary judge’s reasons that he was aware not only of Mr Wong’s affidavit evidence but also of the evidence that emerged during Mr Wong’s cross-examination. In cross-examination Mr Wong gave the following evidence (for example):

Q    …in no annual report between 1989 and 2006 has there been any reference to an intention to expand Optical 88 stores into Australia?

A    There is no mention of Australia in any of the annual report during that time…

Q     …I suggest to you that there has been no mention in the annual reports of an intention on the part of Optical 88 to expand into the Australian market is because any intention that Optical 88 had to expand into Australia has risen no higher than a general intention to expand at some future, but unascertained, time.

A    I agree.

87        In the face of this evidence, it cannot be said that Mr Wong was not tested on his evidence at [118] of his affidavit. In short, his evidence at [118] was qualified by his answers to questions in cross-examination to such an extent that the primary judge’s conclusion of a lack of intention to use the ‘966 mark at the time of registration is not amenable to challenge on appeal. As the primary judge found, the evidence about franchising the appellant’s stores in Australia was nothing more than a “speculative possibility” (at [266]). The appellant’s intention, such as it was, had “risen no higher than a general intention to expand at some future but unascertained time” (at [267]). As such, the appellant’s intention was a mere “uncertain or indeterminate possibility” (at [268]).

88        Contrary to the appellant’s submissions, the primary judge’s reasons do not disclose any error of principle or fact. It may be accepted that the making of the application is itself prima facie evidence of an intention to use the mark (Aston v Harlee Manufacturing Company (1960) 103 CLR 391 (Aston v Harlee) at 401). Nor is it necessary that the applicant’s intention be to use the mark “immediately or within any limited time” (Aston v Harlee at 401). Nothing in Aston v Harlee suggests, however, that “general intention” to use the mark “at some future but unascertained time” might suffice. Mr Wong’s own evidence was inconsistent with the existence of any intention to use the ‘966 mark in Australia at the time of the application for registration. For this reason, the primary judge’s finding that the ‘966 mark should be removed from the Register in relation to services pursuant to ss 92(4)(a) and 101(2) must stand.

Issue (6)     Discretion

Primary judge’s reasons

89        The primary judge considered the questions arising under s 101(3) of the Trade Marks Act at [271]-[281] of his reasons. Section 101(3) and (4) provide as follows:

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

(4)    Without limiting the matters the Registrar may take into account in deciding under subsection (3) not to remove a trade mark from the Register, the Registrar may take into account whether the trade mark has been used by its registered owner in respect of:

(a)    similar goods or closely related services; or

(b)    similar services or closely related goods;

to those to which the application relates.

90        In the present case, the grounds for removal of the ‘707 mark and the ‘966 mark (to the extent to which it is related to goods and particular wholesale services) had been established (that is, non-use of the ‘707 mark with respect to goods and lack of intention to use the ‘966 mark in Australia at the time the application for registration was made). The primary judge was not persuaded that it was reasonable for the trade marks to remain on the Register. His reasons included: – (i) “the [appellant’s] own evidence was that it does not even now use the modified ‘707 mark (at least on deposit memos, deposit sales memos, bonus coupons or cash coupons)” (at [274]), (ii) “the evidence shows an awareness at the present time of the name OPTICAL 88 and discloses certain different sources of awareness, including, it would seem, from the first respondent’s business activities”, but “says nothing specifically about the ‘707 mark or the ‘966 mark independently of the name OPTICAL 88” (at [275]), (iii) “sales to Australian consumers under the marks… [are] no more than a repetition of the use that has been found to have occurred in the first relevant period and the second relevant period”, and submissions based on these sales “[do] not engage the fact that there has been no use of the marks in respect of the goods for which they are registered or, in the case of the ‘966 mark, wholesaling services” (at [276]), (iv) the fact that “the first respondent, through Mr Law, commenced its trading without conducting a trade mark search” is “true but, of itself, of little overall significance” (at [277]), and (v) “when reputation is advanced as a discretionary consideration favouring the retention of a mark that has not been used for particular goods or services, the existence of a competing reputation in relation to similar goods or closely related services, or similar services or closely related goods, should not be ignored” (at [279]).

91        These factors led the primary judge to his conclusion (at [281]) that:

I am not persuaded that these matters, individually or collectively, show that it is reasonable for the ‘707 mark or the ‘966 mark (to the extent that it is registered for goods and particular wholesale services) to remain on the Register. The focus of the applicant’s submissions essentially relate to the applicant’s retailing activities which are not covered by the registration of the ‘707 mark but which are covered by the registration of the ‘966 mark and for which use has been shown. I take into account the fact that, in undertaking its retailing activities, there is no evidence that the applicant uses the ‘707 mark or the ‘966 mark on optical goods themselves either in Australia or anywhere else. As I have noted, the evidence indicates that the applicant supplies goods branded by their manufacturers with their own brands or with one of the applicant’s “house” brands. The promotional items in evidence show that the applicant uses various OPTICAL 88 trade indicia, but not the ‘707 mark or the ‘966 mark. The applicant’s sales documents (including deposit sales memos, bonus coupons and cash coupons) do not even now use the modified ‘707 mark, but a different mark. I do not leave out of consideration that use of the ‘707 mark and the ‘966 mark (by medium of the modified ‘707 mark) has been demonstrated in relation to retailing services relating to optical goods and accessories. But this fact, considered in all the circumstances, does not stand as a reason of any real significance for exercising the discretion in favour of the applicant, particularly when the modified ‘707 mark demonstrating that use is itself no longer so used.

Appellant’s submissions

92        The appellant submitted that, in declining to exercise his discretion under s 101(3) and (4), the primary judge erred in the sense required to warrant appellate intervention. The relevant principles are set out in House v The King (1936) 55 CLR 499 (at 504-505):

The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he [or she] allows extraneous or irrelevant matters to guide or affect him [or her], if he [or she] mistakes the facts, if he [or she] does not take into account some material consideration, then his [or her] determination should be reviewed and the appellate court may exercise its own discretion in substitution for his [or hers] if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his [or her] order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.

93        According to the appellant, the primary judge failed to consider relevant matters including: – (i) the nature of the finished goods (being the spectacles as a whole), (ii) the use of the mark on the cleaning cloths featuring aspects of the ‘707 mark and the ‘966 mark, (iii) the use of the modified ‘707 mark and the ‘966 mark on the appellant’s documents for more than two decades in many countries, (iv) the fact that the appellant’s use and registration of the marks preceded the respondents’ adoption and use of their equivalent marks, (v) the fact that the first respondent’s reputation was local and not national, and was built in the face of the appellant’s prior registration, (vi) the fact that 48.7% of survey interviewees identified Hong Kong and its environs as locations where they had seen either OPTICAL 88 or the ‘707 mark, and (vii) the primary judge’s view that OPTICAL 88 is the dominant element of the ‘707 mark and the ‘966 mark.

94        The appellant submitted further that the primary judge, at [279], wrongly required the appellant’s reputation to be exclusive. It also contended that the primary judge had failed to consider the first four factors identified in E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2008) 77 IPR 69; [2008] FCA 934 (Gallo) at [202] (citing Hermes Trade Mark [1982] RPC 425 (Hermes)) as relevant to the exercise of the discretion – namely that “there had been no abandonment of the trade mark; the registered proprietors still had a residual reputation in the mark; there had been sales by the registered proprietors… since the relevant period ended; [and] the applicants for removal had entered the market without having taken steps to ascertain from the Register whether anyone had a right to exclude their use of the mark”. The appellant also observed that even if (as found above) the primary judge was correct to conclude that the ‘707 mark and ‘966 mark had not been used in Australia in relation to goods, the marks had nevertheless been used for closely related services; the appellant was unaware of any case in which trade marks having a reputation had been required to be removed from the Register.

Discussion

95        The primary difficulty for the appellant on this ground is that, as the respondents submitted, the appellant’s contentions when analysed do not rise above an assertion that the primary judge ought to have given greater weight to factors supporting the exercise of discretion in the appellant’s favour. The attribution of weight, however, was a matter for the primary judge and is not within the scope of appellate review of discretionary decisions.

96        The appellant’s contention that the primary judge required the appellant to enjoy an exclusive reputation (at [279]) is unpersuasive. At [279] the primary judge merely identified that “when reputation is advanced as a discretionary consideration favouring the retention of a mark that has not been used for particular goods or services, the existence of a competing reputation in relation to similar goods or closely related services, or similar services or closely related goods, should not be ignored.” In so doing, moreover, the primary judge accepted the relevance of the appellant’s reputation. The point being made was that the first respondent’s reputation was also relevant.

97        In terms of the first four factors recorded in Gallo at [202] – (i) no abandonment of the mark, (ii) registered proprietors still having a residual reputation in the mark, (iii) sales by the registered proprietors since the relevant period ended, and (iv) applicant for removal having entered the market without having taken steps to ascertain from the Register whether anyone had a right to exclude their use of the mark – two answers are apparent. First, it cannot be accepted that the primary judge failed to consider these matters. The primary judge referred to Gallo at [273], and made specific reference to the principles relating to the exercise of discretion at [193]-[213] of Gallo (which includes the factors from Hermes set out at [202]). Further, at [274] of his reasons the primary judge expressly referred to the factors in Hermes and the submissions put by the appellant in relation to each factor. The primary judge then dealt with each factor in terms at [274]-[277]. In the face of the primary judge’s reasons, the appellant’s contention of any failure of consideration is unfounded. Second, it is not apparent from the scope, object and purpose of s 101(3) that these matters must (as opposed to may, in an appropriate case) be taken into account. In the present case the primary judge had to (and did) deal with these matters because the appellant had raised them as principal reasons in support of an exercise of its discretion in its favour. But that is different from a conclusion that each of the Hermes factors is a mandatory relevant consideration in every case so that any failure of consideration is sufficient to invalidate the exercise of the discretion.

98        The same two answers deal with the appellant’s other submissions about failures of consideration. First, the primary judge was aware of each of the matters which the appellant identified. They form part of the basic factual foundation of the primary judge’s reasons as set out at [5]-[74] thereof. In the face of the reasons as a whole, the suggestion that the primary judge failed to consider, for example, that the goods in question were spectacles, or that the first respondent’s reputation was local not national, is untenable. Second, the appellant has not explained why each of these factors would constitute a mandatory relevant consideration in the exercise of the discretion given by s 101(3) of the Trade Marks Act. There is also a third answer to this aspect of the appellant’s case – that, as the respondents pointed out, it is in truth nothing more than a complaint about the weight given by the primary judge to various relevant considerations.

99        For these reasons, the appellant’s challenge to the primary judge’s exercise of discretion under s 101(3) of the Trade Marks Act must fail.

Issue (7)     Closely related services

100        The appellant contended that if it succeeded in relation to issue (1) above (use of the ‘707 mark and the ‘966 mark in relation to goods) and any issue in respect of the liability of the respondents, then the relief to which it would be entitled should extend to uses in relation to services that are closely related to the goods (relying on s 120(2)(b) of the Trade Marks Act). The respondents conceded that, if the conditions of liability were satisfied, such relief would follow. For the reasons given, the appellant has not succeeded either in relation to issue (1) or in respect of the liability of the respondents. Accordingly, issue (7) does not arise.

COPYRIGHT CLAIM

Issue (8)    Reproduction of appellant’s logo

Primary judge’s reasons

101        The primary judge summarised the appellant’s case at [282]-[283] of his reasons. The appellant contended that its logo was an original artistic work in which copyright subsisted in Australia; that the copyright was owned by the appellant; and that the first respondent, without the appellant’s licence, had reproduced or authorised the reproduction of that logo (in the form of the first respondent’s logo).

102        The appellant’s logo is set out below:

103        The first respondent’s logo is as follows:

104        The primary judge was satisfied that the appellant’s logo was an original artistic work in which copyright subsists in Australia, being copyright owned by the appellant (at [284]-[290]). The primary judge described the process by which the first respondent’s logo came into existence at [291]-[309]. The primary judge found the existence of a causal connection between the creation of the first respondent’s logo and that of the appellant (at [309]) as follows:

Certainly what emerges from the evidence with clarity is that, in designing the first respondent’s logo, Mr Lam considered the applicant’s logo and did so as part of his initial research. It is also clear that Mr Law instructed Mr Lam to have regard to the applicant’s logo, although the motive for doing this was a matter of contention between the parties.

105        Mr Law’s motive was in contention because on the respondents’ case his instruction to Mr Lam, the designer of the first respondent’s logo, was to ensure that the first respondent’s logo did not resemble the appellant’s logo (of which he was aware at the relevant time) (at [291]). On the appellant’s case, Mr Law’s instruction to Mr Lam was to “go as close as possible, but not too close to” the appellant’s logo (at [305]) – a suggestion Mr Law rejected in cross-examination.

106        The primary judge set out his consideration of the copyright issue at [310]-[318]. He concluded (at [316]) that the first respondent’s logo was not a reproduction of, or a reproduction of a substantial part of, the appellant’s logo.

Appellant’s submissions

107        The appellant submitted that the primary judge operated on a false premise in that he compared the appellant’s logo with the whole of the first respondent’s logo. The appellant, however, identified the infringing work as the first respondent’s logo excluding the words “Optical 88”, which are located below the logo. The appellant also said that the primary judge impermissibly mixed two separate questions: first, whether there was sufficient visual similarity to warrant an inference of copying; and second, whether the part of the appellant’s work which had been copied was a substantial part of the work. The appellant submitted further that the primary judge’s reasons disclose an incorrect focus. At [314] of his reasons, the primary judge listed the differences between the two works. According to the appellant, this emphasis on what was not taken from the appellant’s logo was at the expense of what was taken (citing in support Spectravest v Aperknit [1988] FSR 161 at 170). The appellant submitted that this approach “elides… the question of whether the logos are objectively similar [with] the question whether they convey the same subjective meaning or impression to the viewer”. In support of this submission the appellant noted that the primary judge’s use of the designer’s subjective intention at [314] showed that he had “moved away from the proper question of objective visual similarity”.

108        The appellant acknowledged that objective similarity involved a matter of impression, but submitted that the appellate court should form a different opinion from that of the primary judge (Elwood Clothing Pty Ltd v Cotton On Clothing Pty Ltd (2008) 172 FCR 580; [2008] FCAFC 197 (Elwood Clothing) at [84] and Windsor Smith at [15]-[16]). As the appellant put it, given the admitted use by the second respondent, Mr Law, of the appellant’s logo in the design of the first respondent’s logo, the degree of visual similarity between the two is such as to support a finding of reproduction of a substantial part of the appellant’s copyright work.

Discussion

109        The appellant’s first point may be dismissed immediately. The primary judge was aware that the appellant had identified the infringing work as the first respondent’s logo excluding the words “Optical 88”. At [283] he said:

I should record one matter of detail. It is clear on the evidence that the first respondent’s logo includes the words OPTICAL 88. However, in its statement of claim, the applicant effectively defined the first respondent’s logo as not including those words. By doing so, I have assumed that the applicant wishes to draw attention to that part of the first respondent’s logo that does not include the words OPTICAL 88. In the present context I take the applicant to be alleging that it is that part of the first respondent’s logo that reproduces, or reproduces a substantial part of, the applicant’s logo and thereby infringes the applicant’s copyright in the artistic work that comprises its logo.

110        Contrary to the appellant’s submissions, the primary judge did not overlook this fact when he came to consider the question of reproduction. In referring to the words “Optical 88” at [314], the primary judge was explaining how he saw the first respondent’s logo with the words as prompting a consideration that the shape of the alleged infringing work is a working of the numerals “88”. It is not apparent why this reference is said to have been impermissible or to have otherwise infected the primary judge’s reasoning. The first respondent’s logo includes the words “Optical 88”. It is not viewed, objectively or otherwise, other than with those words. No error is demonstrated by this reference at [314] of the primary judge’s reasons.

111        It is also not apparent that the primary judge mixed the question of visual similarity with that of reproduction of a substantial part of the appellant’s work. In this regard the appellant’s submissions were difficult to follow. At one point it was said that any reference to substantial part was irrelevant and showed some error because the whole of the appellant’s work was taken. Subsequently, it was said that a substantial part was taken. In any event, the primary judge identified the correct question at [310] of his reasons in these terms:

At the end of the day, the only question that arises is whether the first respondent’s logo is a reproduction of the applicant’s logo or of a substantial part of it: ss 14(1), 31(1)(a) and 36 of the Copyright Act. This involves a comparison of the two works and the formation of a judgment based on the eye as to the degree of resemblance between the two. The degree of resemblance must be such that, to the eye, the first respondent’s logo reproduces, or reproduces a substantial part of, the applicant’s logo.

112        The subsequent reference at [311] to Designers Guild Ltd v Russell Williams (Textiles) Ltd [2001] 1 All ER 700 does not suggest any confusion in the primary judge’s mind. Insofar as it might be said that a proper consideration should deal first with causal connection and second with reproduction of a substantial part, the primary judge’s reasons reflect that approach. He accepted the existence of causal connection at [309]. His subsequent consideration is of the essential question whether the first respondent’s logo reproduces a substantial part of the appellant’s logo. The approach is orthodox (SW Hart at 472).

113        Nor do the primary judge’s reasons disclose any impermissible elision between objective similarity and subjective impression as the appellant contended. The references to the evidence of Mr Lam, the designer of the first respondent’s logo, at [314] do not give weight to his subjective intention. They are used by the primary judge to explain the complex shape which in fact is depicted in the first respondent’s logo. Further, the primary judge’s reasoning does not focus impermissibly on what was not taken rather than what was taken from the appellant’s work. The primary judge’s descriptions at [313]-[314] disclose his conclusion that the two works are different. An argument to a similar effect, it should be noted, was rejected in Collier Constructions Pty Ltd v Foskett Pty Ltd (1991) 20 IPR 666 at 671.

114        Insofar as the appellant submitted that the decisions in Elwood Clothing and Windsor Smith proposed an approach to appellate review different from that discussed in [25]-[34] above, those considerations apply. It is also apparent that in Elwood Clothing at [84] the Full Court considered that the trial judge in that matter had erred in principle. No such error is apparent in the present case. The primary judge’s conclusion that the first respondent’s logo did not reproduce a substantial part of the appellant’s logo should not be disturbed on appeal. In any event, examination of the appellant’s logo and the first respondent’s logo (even without any regard to the words “Optical 88”) demonstrates the validity of the primary judge’s conclusions. As the primary judge said, the two designs may well be informed by the same idea, but ideas are not protected by copyright (at [312]). The material form in which the idea (of the resemblance between spectacles and the numerals “88”) has been expressed in the two logos is different. The primary judge’s conclusion was thus not only open, but also was preferable on the evidence.

115        For these reasons, the appellant’s case on the copyright issue cannot be sustained.

CONCLUSION

116        The appellant has not established any of its arguments on appeal. It follows that the appeal should be dismissed with costs.

Associate:

Dated:    17 October 2011