FEDERAL COURT OF AUSTRALIA

Vivo International Corporation Pty Ltd v Tivo Inc [2012] FCAFC 159

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The appellants pay the respondents’ costs of the appeal to be taxed unless earlier agreed.

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

REASONS FOR JUDGMENT

KEANE CJ:

1    TiVo Inc is the registered owner of all the trade marks of the TiVo group of companies, including the Australian Registered Trade Mark No 813297 for the word “TIVO” (the TiVo trade mark). The TiVo trade mark was registered on 18 July 2000 for a period of ten years commencing from 10 November 1999 in respect of, among other things, the following goods and services:

(a)    class 9: computer hardware and software including computer hardware, software and peripherals for personalised, interactive television programming; televisions; television peripheral remote controls; communication devices, including, transmitters, receivers and controls, and software for use therewith, and accompanying manuals sold as a unit;…

(c)    class 38: subscription television services; transmission of cable television and interactive audio and video services; personalised and interactive television transmission services; …

2    The second respondent, TiVo Brands LLC is owned and controlled by the first respondent, TiVo Inc. I will refer to the respondents collectively as “TiVo”.

3    On 18 February 2008, the second appellant, Fabio Grassia, lodged an application to register a trade mark for the word “Vivo” on behalf of the first appellant, Vivo International Corporation Pty Ltd. The application was accepted; and on 24 April 2009, Australian Registered Trade Mark No 1223930 (the Vivo trade mark) was registered in respect of goods and services in the following classes:

(a)     class 9: apparatus for use in audio visual communication; and

(b)    class 38: transmission of data by audio-visual apparatus.

4    For convenience, I will refer to both appellants as “Vivo”.

5    TiVo brought an action against Vivo seeking the cancellation of the Vivo trade mark and to restrain Vivo from using the Vivo trade mark on the basis that it is deceptively similar to the TiVo trade mark.

6    The learned primary judge held that the Vivo trade mark should be cancelled and removed from the Register pursuant to s 88(2)(a) and (c) of the Trade Marks Act 1995 (Cth) (the Act). Further, her Honour restrained Vivo from using the Vivo trade mark: TiVo Inc v Vivo International Corporation Pty Ltd [2012] FCA 252 (Reasons).

7    On appeal to this Court, Vivo contends that the primary judge erred in her consideration of the issue of deceptive similarity in two principal respects: first, in her assessment of the significance of the aural similarity between the TiVo and Vivo names; and secondly, in her consideration of the likelihood of deception or confusion in the circumstances of the retail sale of audio-visual products.

8    In order to deal with Vivo’s contentions it will be necessary to refer in some detail to the uncontroversial facts of the case as well as to the evidence and the disputed findings of the primary judge. Before I turn to these matters of fact, however, I should set out the legislative framework within which the issues of fact arose for determination.

THE LEGISLATIVE FRAMEWORK

9    Section 88 of the Act provides relevantly as follows:

88  Amendment or cancellation—other specified grounds

(1)  Subject to subsection (2)…a prescribed court may, on the application of an aggrieved person or the Registrar, order that the Register be rectified by:

(a)     cancelling the registration of a trade mark; …

(2)    An application may be made on any of the following grounds, and on no other grounds:

(a)    any of the grounds on which the registration of the trade mark could have been opposed under this Act;…

(c)    because of the circumstances applying at the time when the application for rectification is filed, the use of the trade mark is likely to deceive or cause confusion;…

10    Section 88(2)(a) of the Act refers to the grounds under which the registration could have been opposed under ss 44 and 60 of the Act. These provisions are relevantly as follows:

44  Identical etc. trade marks

 (1)    Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of goods (applicant’s goods) must be rejected if:

     (a)    the applicant’s trade mark is substantially identical with, or deceptively similar to:

(i) a trade mark registered by another person in respect of similar goods or closely related services; or

(ii)  a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and

(b)    the priority date for the registration of the applicant’s trade mark in respect of the applicant’s goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.…

(3)    If the Registrar in either case is satisfied:

(a)    that there has been honest concurrent use of the 2 trade marks; or

      (b) …

the Registrar may accept the application for the registration of the applicant’s trade mark subject to any conditions or limitations that the Registrar thinks fit to impose…

60  Trade mark similar to trade mark that has acquired a reputation in Australia

 The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

(a)    another trade mark had, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and

(b)    because of the reputation of that other trade mark, the use of the first-mentioned trade mark would be likely to deceive or cause confusion.

11    Section 44 is elucidated relevantly by reference to two other sections of the Act. First, s 10 of the Act states that “a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion”. Secondly, section 14 of the Act provides a definition of similar goods and similar services as follows:

14 Definition of similar goods and similar services

(1)    For the purposes of this Act, goods are similar to other goods:

(a)    if they are the same as the other goods; or

(b)    if they are of the same description as that of the other goods.

(2)    For the purposes of this Act, services are similar to other services:

(a)    if they are the same as the other services; or

(b)    if they are of the same description as that of the other services.

12    Section 120 of the Act is relevant to TiVo’s claim to an injunction to restrain Vivo from infringing the TiVo trade mark by continuing to use the Vivo trade mark. It provides relevantly as follows:

120 When is a registered trade mark infringed?

(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…

UNCONTROVERSIAL FACTUAL BACKGROUND

13    The summary of the facts which follows is taken from the Reasons of the primary judge. This factual background is not controversial. It provides necessary context for an understanding of her Honour’s resolution of the issues which were in dispute between the parties.

TiVo in the United States

14    Some aspects of the history of the TiVo trade mark in the United States is relevant. From 1998 until 2008, TiVo advertised and promoted the sale of their products in the United States through brochures and other point-of-sale material, at trade shows, in print and online media, on television, on its website and through press releases. TiVo sold a “personal television service”, which included a digital video recorder (DVR), remote control and broadcast centre. TiVo also sold a variety of related products, including remote controls, hard drives, wireless adapters, antennas, cables, wireless modem jacks, modem splitter cables, wireless radio frequency remote control extenders, HDMI switches, USB phone line adaptors, associated software products and support services.

15    Tivo’s principal product was the DVR which had a number of features not available in other similar devices. These included the ability simultaneously to record multiple television broadcasts, recording television programs selected by reference to genres, key words or preferences generated in accordance with the consumer’s past viewing records. TiVo achieved a substantial number of sales of these products in the United States.

16    On 4 August 1997, TiVo Inc (as it is now known) was incorporated as Teleword Inc. On 29 May 1998, TiVo applied to register “TIVO” as a trade mark and on 21 July 1999, Teleword Inc. changed its name to TiVo Inc. The TiVo trade mark was registered on 23 January 2001. The following year TiVo entered into an exclusive vendor agreement with Best Buy Co Inc for the distribution of its DVR and related products and services in the United States. On 22 March 2005, the second respondent was incorporated as a wholly owned subsidiary of TiVo Inc.

TiVo in Australia

17    On 10 November 1999, TiVo filed an application to register “TIVO” as a trade mark in Australia. On 18 July 2000 the mark was accepted for registration. It was not until late July 2008, that TiVo commenced supplying goods using the TiVo trade mark in Australia. Nevertheless, between 1999 and the Australian launch, TiVo and its products and services were exposed in newspaper articles, television programs, magazines, movies, internet chat rooms and other media in Australia. During this time, some Australians who had learnt of the TiVo device acquired one and modified it for use in Australia. This generated the development of a small but active community of TiVo enthusiasts in Australia. For example, in July 2000, Andrew Tridgell, a computer programmer from Canberra, acquired a US TiVo DVR. In January 2001, he delivered a presentation titled “Inside the mind of… TiVo” at a technology conference in Sydney and presented the same paper in Canberra in June 2001. Similarly, in July 2002, Warren Toomey created an online “ozTiVo” mailing list for Australians interested in TiVo, and in June 2003, created an associated online “wiki” at www.ozTiVo.net.

18    On 19 March 2007, TiVo Inc entered into a “Strategic Alliance Agreement” with Seven Network (Operations) Limited and HTS, inter alia, appointing HTS the exclusive distributor of the TiVo products in Australia and New Zealand and an authorised user of the TiVo trade mark in Australia.

19    On 27 July 2008, HTS commenced selling the TiVo DVR in Australia. The launch of the DVR in Australia was advertised by Harvey Norman stores in print media and in-store, and on Channel 7 television.

20    Since the launch, HTS has promoted the TiVo DVR on television, radio, in magazines, online and via email newsletters and has achieved sales, the number of which was contained in a confidential exhibit at trial. The TiVo DVR was initially sold only through Harvey Norman stores. The outlets for TiVo DVRs subsequently expanded: they now include Dick Smith (which commenced selling the device in October 2008 and conducted a television advertising campaign in May 2009), JB Hi-Fi, Myer, Clive Peeters, RT Edwards and Radio Rentals.

21    At the time of the launch of the TiVo DVR in Australia, its retail price was $699. While a considerable number of units were sold, TiVo was disappointed with the sales: they were substantially fewer than those of Vivo units. On 19 January 2011, the licensing and distribution arrangement between TiVo, Seven Network and HTS became non-exclusive.

Vivo

22    On 7 May 1999, Vivo International Corporation Pty Ltd (as it is now known) was incorporated under its original name, Natcomp. Mr Grassia, its directing mind and will, had earlier established an information technology direct marketing and selling business.

23    In 2002, Mr Grassia was involved in litigation in which Microsoft alleged the sale of counterfeit Microsoft products by Mr Grassia or his interests. This litigation was settled without admission of liability by Mr Grassia upon the payment of $200,000 in legal costs and submission to an injunction.

24    In 2004, Mr Grassia ceased operating his information technology business as it was no longer profitable. He commenced work in an unrelated field. In May 2006, he established a business importing audio visual products, which he initially sold under the names of the relevant manufacturers. Soon he decided to create his own brand.

THE EVIDENCE AT TRIAL

The provenance of the Vivo trade mark

25    Mr Grassia gave evidence that he had conducted a successful business importing and distributing consumer electronic and audiovisual products for more than twenty years. From 1987 to 2004, he read widely on the field of IT in order to ascertain openings for niche products and new markets. He agreed that he had read the PC Week magazine, The Sydney Morning Herald, The Sunday Telegraph, PC Magazine Australia and the technical and business sections of the daily press for references to deals or products that were promoted or introduced around the world. Indeed, Mr Grassia himself advertised in these sections of the newspaper. Prior to 18 February 2008, 630 articles mentioning TiVo were published in mainstream Australian print media.

26    Mr Grassia’s evidence was that in May 2006, he and his wife began to discuss Italian-sounding names for his brand. On or about 29 May 2006, Mr Grassia informed his graphic designer, Mr Khaled, that he had selected the name “Vivo”. Mr Khaled expressed concern that the name could already be in use, but Mr Grassia confirmed that Vivo was his choice. Mr Grassia gave evidence that he considered the alternative name “Vinci” in June 2006, but within the month, he decided on “Vivo”.

27    On 14 May 2007, Mr Grassia adopted a logo with a curved stripe at the top of the word Vivo, which has remained unchanged since.

28    On 18 February 2008, Mr Grassia filed an application to register the Vivo trade mark in Australia. The trade mark appears below. The application was accepted, and the Vivo trade mark was registered on 24 April 2009. Natcomp did not change its name to Vivo International Corporation Pty Ltd until 21 May 2009.

Deployment of the Vivo trade mark

29    From late 2006, Mr Grassia investigated the manufacture of televisions in China and subsequently began to oversee the manufacture of products, including televisions, in factories in China and Taiwan. From around June 2007, Natcomp (as it was still known) began to import, promote, distribute, sell and offer for sale in Australia, the first electronic home entertainment products under the name “Vivo”. These included Vivo-branded televisions and related electronic products.

30    In August 2007, Mr Grassia reached an agreement with the owner of a Chinese factory which provided for the exclusive use of two of the factory’s five production lines to manufacture Vivo televisions.

31    Between 1 July 2007 and 18 February 2008, approximately 3,210 Vivo-branded products were sold in Australia, valued at about $1 million. They were sold at about 100 WOW Sight and Sound and Strathfield stores and in a national network of between 200 and 300 independent retail stores. The sales figures for that period are provided below.

32    In April, May, June and July 2008, the Vivo brand was advertised in the Appliance Retailer magazine. In April and May 2008, articles about the Vivo brand were published on www.current.com.au and www.smarthouse.com.au.

33    In August 2008, Dick Smith commenced selling Vivo-branded products. Dick Smith thereafter promoted the Vivo brand in print and television advertisements, on its website and in its catalogues regularly distributed across Australia, and became its leading retailer. Over seven million Dick Smith catalogues have advertised Vivo products and, as the principal retailer of Vivo products, Dick Smith has sold around 120,000 products valued at over $50 million.

34    According to Mr Grassia, he first became aware of the TiVo brand in around August 2008.

35    In May, June, July, August, September and November 2009, advertisements for the Vivo brand appeared in the Appliance Retailer magazine, and, at around the same time, other media exposed the Vivo brand, such as the Australian Personal Computer magazine and the website www.current.com.au.

36    At the end of 2009, Mr Grassia decided to revise the Vivo product range to focus primarily on televisions and to remove products such as HDMI cables and digital photo frames from that range.

37    In 2010, Vivo commenced a marketing strategy aimed at consumers. This strategy included a new website and more advertisements in the Appliance Retailer magazine. Between March and June 2011, Vivo conducted a television advertising campaign for the Vivo brand in New South Wales, Queensland and Victoria. In the 2010/2011 financial year, sales of Vivo marked products totalled 120,000 units valued at over $37 million.

38    The total sales of Vivo products since 2006 comprise about 260,000 units valued at over $87 million. About 90% of the sales were televisions. The balance of Vivo sales related to other products as follows: 4% comprised computer monitors, 3.5% comprised portable DVD players, 1.18% comprised digital photo frames, 0.9% comprised digital set top boxes, 0.75% comprised home theatre systems and 0.18% comprised remote controls.

39    Prior to TiVo’s commencement of proceedings, Vivo products were advertised nationally on television, print, online and in store by retailers including Dick Smith, WOW Sight and Sound, Strathfield, Bi-Rite Electrical and about 200 independent retailers.

Evidence as to confusion between the two trade marks

40    There was evidence of confusion between the products on the part of retailers. In around October 2010, Peter Simons, Sales Manager of HTS for Australia and New Zealand, visited the Menai Central Dick Smith store and introduced himself as “Peter from TiVo”, to which the manager replied in effect, “Oh, you’re from Vivo?”.

41    At around the same time, Mr Simons visited the Dick Smith store at the Macarthur Shopping Centre and again introduced himself as “Peter from TiVo”, to which the sales person replied in effect, “You must be from Vivo”. When corrected, the salesperson replied, in effect, “Aren’t they the same?” or “Isn’t it the same thing?”.

the findings of the primary judge

42    TiVo’s case was that it could have successfully opposed the registration of the Vivo trade mark under s 44 and then s 60 of the Act. At trial, it was not disputed that the rights of the parties under these provisions were to be determined as at the date of Vivo’s trade mark application, that is 18 February 2008.

Section 44 of the Act

43    TiVo submitted that the Vivo trade mark was deceptively similar to the TiVo trade mark registered in respect of similar goods or closely related services, or similar services or closely related goods. Further, TiVo submitted that Vivo had not established honest concurrent use of the TiVo and Vivo trade marks for the purposes of s 44(3)(a).

44    The primary judge held that the Vivo trade mark was deceptively similar to the TiVo mark in the sense that the Vivo mark was likely to cause confusion as to the source of the marked goods. Her Honour’s findings in this regard are summarised at Reasons [188]:

Given the very considerable aural similarity between the marks, allowing for an imperfect recollection of one and the first impression produced by use of the other, the effect of careless pronunciation by the customer and sales assistant, the environment and likely circumstances of sale, the broad class of consumers and the wide spectrum of their pre-purchase “research”, the evidence of actual confusion, and Mr Grassia’s adoption of the Vivo trade mark knowing of and intending to benefit from the reputation of the TiVo trade mark, I am satisfied that the TiVo and Vivo trade marks are deceptively similar.

45    In making this finding, the primary judge found it significant that the two words had a striking aural similarity. The primary judge noted the prominence of the “-IVO” component common to both marks: it comprised almost the entirety of the aural experience of each trade mark. This prominence was compounded by the possibility of careless pronunciation, cursory reading, imprecise articulation and imperfect recollection.

46    Her Honour considered that the likelihood of confusion was increased by the similarity of the product and the environment in which they were purchased. This view was supported by the evidence of actual confusion among retailers. While there was no evidence of confusion among customers as opposed to sales staff, the primary judge concluded that if sales staff, who were likely to be trained or at least better informed than ordinary customers were confused by the two trade marks, it was likely that customers would also be confused by the two.

47    Her Honour also found that Mr Grassia was aware of, and adopted, the Vivo mark intending to benefit from association with TiVo. This finding was decisive against Vivo’s contention that, for the purposes of s 44(3)(a) of the Act, its use of its trade mark concurrently with the TiVo trade mark had been honest. It is also apparent that her Honour went further and relied upon her finding that Mr Grassia deliberately adopted the Vivo mark to benefit from TiVo’s reputation to resolve the issue of deceptive similarity against Vivo. In this regard, it would seem that her Honour may have overlooked a concession made by Senior Counsel for TiVo that it was not advancing that contention. I will return to this circumstance in more detail in due course.

Infringement under s 120(2) of the Act

48    The primary judge concluded at [227] that the trade marks were registered in respect of similar goods and in relation to similar services or closely related goods.

49    The TiVo and Vivo trade marks are both registered in relation to specified goods in classes 9 and 38. The fact that the goods are of the same categorical description is not, of itself, decisive but, as the primary judge stated, it “tends to indicate that the goods are of the same description” [194].

50    Her Honour found that the “evidence established that the relevant goods in respect of which the TiVo and Vivo marks are registered are similar in nature, manufacturing, origin and purpose. They are made available to consumers in the same broad range of retail stores and sold within the same product categories where (in Dick Smith stores at least), they are physically placed in close mutual proximity” [206]. There was also evidence given by witnesses who were expert or experienced in the study, supply or marketing of such goods and regarded the goods in respect of the TiVo and Vivo trade marks are registered as belonging to the same category.

51    The primary judge did not accept Mr Grassia’s evidence that he had not heard of TiVo when he selected the name Vivo and that he selected the Vivo name while ignorant of TiVo, after searching for an Italian word or a word with Italian connotations that was “short, simple, easy to pronounce, marketable and easy to remember” to reflect his family’s Italian heritage. The primary judge did not find it credible that Mr Grassia, while consistently keeping abreast in the print media and websites of new products to import, remained wholly ignorant of the TiVo name and product, when these were repeatedly mentioned in publications he read and on websites he visited.

52    The primary judge concluded at Reasons [293] and [294]:

In my opinion, Mr Grassia’s account of how he came to select Vivo and his denial of any knowledge of TiVo were untruthful. Vivo bore the burden of establishing honest concurrent use, which it did not discharge. To the contrary, I was satisfied to the requisite standard that, as TiVo submitted, Mr Grassia, being well aware of the use of the word TiVo for an innovative product and intending to secure associated advantages, selected Vivo as a word as close as possible to TiVo, distinguished only by a different initial letter. While the evidence does not permit me to determine whether Mr Grassia believed that the use of Vivo would or would probably infringe, he did not conduct or commission an adequate search. In my opinion, Mr Grassia’s account of his motivations and the selection process was a self-serving reconstruction, and his denial of awareness of and intention closely to approximate the word TiVo was false.

In the circumstances, I am satisfied that honest concurrent use is not made out.

53    The primary judge went on to say at [299]:

TiVo (as discussed below) had acquired a reputation in Australia prior to 18 February 2008; the Vivo trade mark was adopted with knowledge of, and to obtain the benefit of, the TiVo trade mark’s reputation; Vivo did not undertake an adequate search, seek professional advice or take reasonable precautions in relation to its adoption of the Vivo trade mark; Vivo did not conduct significant direct advertising to establish goodwill prior to the priority date; there is evidence of post-priority date confusion amongst sales staff; and TiVo’s post-priority date sales (while fewer in number and of less total value than the Vivo’s sales) are nevertheless considerable, particularly given the relative expense and nature of the item; in my opinion, the discretion under s 44(3)(b) should not be exercised to permit concurrent use.

Section 60 of the Act

54    TiVo submitted that it could have successfully opposed the registration of the Vivo trade mark pursuant to s 60 of the Act, as the TiVo trade mark had acquired a reputation in Australia before the priority date for the registration of the Vivo trade mark in respect of the relevant goods and services and, because of the reputation of the TiVo trade mark, the use of the Vivo trade mark would be likely to deceive or cause confusion.

55    Although TiVo’s application to register the TiVo trade mark was lodged on 10 November 1999, and the trade mark was registered in Australia on 18 July 2000, TiVo did not officially launch its business or supply or market any products in Australia until late July 2008. By that date, Vivo had already been marketing products in Australia for about 18 months from early 2007, under the unregistered Vivo trade mark, and from 24 April 2009, under the registered Vivo trade mark. It was also relevant that the TiVo DVR had been in use in Australia long before July 2008 by a group of enthusiasts who had modified the devices.

56    The primary judge noted at [309] that:

[Section] 60 does not require a reputation amongst any particular proportion or number of the Australian population, the authorities indicate that a “significant” or “substantial” number of people or potential customers is required.

57    Reputation for the purposes of s 60 may be established in a number of ways, which include a high volume of sales, direct advertising, use and promotion. The primary judge also noted at [336]:

The authorities … recognise that even in the absence of sales or use, a mark may acquire a reputation in Australia by the means of direct preliminary marketing, direct advertising, indirect advertising, exposure in radio, film, newspapers and magazines or television, or because the mark has a reputation in another country which can be shown to have extended to Australia.

58    The primary judge found that, because of the relatively small number of users and their level of sophistication which would preclude any real danger of confusion between the products, reputation within this group of enthusiasts alone would be insufficient to establish the reputation required by s 60. TiVo was, however, able to rely on the use and reputation of the mark among the early users group in conjunction with the large volume of references to TiVo in newspapers, magazines, websites, films and television programs published in Australia prior to 18 February 2008.

59    In this regard, there was evidence of the publication of 630 articles in the Australian media, five major films screened in Australia (three of which were broadcast on television), 19 episodes of television programs broadcast in Australia and 42,100 web pages published on Australian websites all of which contained referenced to TiVo prior to 18 February 2008. In particular, TiVo relied on 170 of the 630 articles mentioning the TiVo DVR which provided an in depth explanation of its function.

60    The primary judge concluded at [440]-[441] that:

… Allowing, however, that many of the articles, websites, programmes and films contained only passing references to the TiVo trade mark and product, their total volume was great, and the subset which made detailed reference to TiVo was also very considerable. About 170 articles made substantial reference to TiVo. The treatment of TiVo in the particular television programmes described above, although relatively brief, was highly descriptive. While I am not persuaded that reputation in this context requires a favourable estimation, the fanciful or humorous presentation was, in my view, likely to expose TiVo’s advantages and in that sense fix it favourably in the mind. The cumulative circulation of references, descriptions and expositions of TiVo in the various media increasingly over the course of the decade amounted to a total exposure on an enormous scale. Although diverse and not direct advertising, the references and exposures, in some instances at least, may have been more effective in creating a reputation.

As TiVo submitted, some articles incorporated cross-reference to treatment of TiVo in other media. While the exposure may have entirely eluded some members of the public, it is probable that considerable numbers saw references in various media on more than one occasion and a significant number imbibed or acquired a recognition of the TiVo trade mark….

Amendment or cancellation under s 88(2)(c)

61    Section 88(2)(c) of the Act provides that an application may be made on the grounds that because of the circumstances applying at the time when the application for rectification is filed, the use of the trade mark is likely to deceive or cause confusion. In considering a cancellation under s 88(2)(c) of the Act, the Court must consider the circumstances applying at the date of filing the application for rectification, in this case, 14 January 2011.

62    TiVo submitted that as at 14 January 2011, Vivo’s use of the Vivo trade mark more closely approximated TiVo’s key products, as it had by that date introduced the Vivo digital set top boxes, portable DVD players, digital photo frames and remote controls, rendering the circumstances more likely to deceive or confuse.

63    The primary judge concluded in relation to this point at [449]:

In my opinion, Vivo’s introduction of “converging” new products after the priority date, combined with factors existing prior to the priority date, constitute circumstances by reason of which use of the Vivo trade mark was likely to deceive or confuse as at 14[January] 2011.

64    The primary judge held that the Vivo trade mark should be removed from the Register.

Removal from the register

65    Vivo submitted that in that event, its use of the Vivo trade mark in relation to home theatre systems, computer monitors, digital photo frames or portable DVD players would not infringe the TiVo trade mark because such goods were not (in contrast to televisions, remote controls and set top boxes) goods in respect of which the TiVo trade mark is registered, goods of the same description, or goods closely related to the services in respect of which TiVo is registered.

66    The primary judge rejected this submission, referring to her prior discussion in relation to s 44 and her Honour’s finding that there was a real likelihood that such use in relation to home theatre systems, computer monitors, digital photo frames or portable DVD players would deceive or cause confusion.

THE ARGUMENTS ON APPEAL

Vivo’s contentions

67    Vivo contends that the primary judge erred in comparing the aural similarity between the latter parts of the trade marks and thus failing to compare the marks as a whole. Vivo argues that her Honour failed to note the visual differences between the two trade marks and to deal with the evidence of Dr Felicity Cox, a phonetician, that the Vivo trade mark and the TiVo trade mark would be perceived auditorily as different words by ordinary Australians. Dr Cox’s evidence is said to have been unchallenged and uncontradicted.

68    Vivo argues that the primary judge based her conclusion on the issue of deceptive similarity solely on the likely first impression of consumers as to the sound of the marks despite the evidence that the products in question were “high involvement” products likely to be purchased only after the exercise of particular care and attention by consumers. In this regard, Vivo also argues that the primary judge applied the wrong test to the determination of deceptive similarity or confusion in that her Honour addressed the impression which the mark was likely to make on members of the public rather than upon the tribunal of fact.

69    Vivo also challenges the primary judge’s findings that actual confusion between the two trade marks had occurred. Vivo contends that there was no basis for the primary judge to conclude that Mr Simons’ evidence was “accurate and reliable”, or to draw an inference pursuant to the rule in Jones v Dunkel (1959) 101 CLR 298, on the basis of Vivo’s decision not to press many objections to Mr Simons’ evidence or to cross-examine Mr Simons. Vivo relies on the evidence of Professor Lukas and Mr Maidana, which the primary judge did not reject, in support of the proposition that consumers were unlikely to be confused or deceived by the Vivo trade mark.

70    Vivo also contends that there was insufficient evidence to support her Honour’s finding that Mr Grassia adopted the trade mark knowing of, and intending to benefit from, the reputation of the TiVo trade mark.

TiVo’s contentions

71    TiVo emphasises the constraints within which appellate courts must perform their functions. In this regard, it is said that an appellate court ought not interfere with a trial judge’s finding involving “jury questions” such as deceptive similarity unless persuaded that the primary judge’s findings are “erroneous in principle, or plainly and obviously wrong” or if there is a “sufficiently clear difference of opinion”. A finding of fact by a trial judge, based on the credibility of a witness observed in cross-examination, is not to be set aside because an appellate court thinks that the probabilities of the case are against – even strongly against – that finding of fact.

72    TiVo contends that the primary judge did indeed compare the trade marks as a whole, and specifically made allowances for careless pronunciation, cursory reading and imprecise articulation, and bore in mind the environment in which the goods would be advertised and purchased. In relation to Dr Cox’s evidence, it is said that her Honour was correct to eschew Dr Cox’s “meticulous” letter by letter comparison of the two trade marks.

73    TiVo also contends that the primary judge was entitled to regard the evidence of Mr Simons as reconcilable with the evidence of Professor Lukas and Mr Maidana.

CONSIDERATION

The likelihood of confusion

74    It is readily apparent from the Reasons of the primary judge that the absence of visual similarity between the two trade marks did not escape her Honour’s attention. Notably, the primary judge did -

not think the marks deceptively similar on a visual comparison, as they include a visually different initial letter and, as Vivo is a device mark, are differently represented. Nevertheless, [according to the primary judge] in the context and circumstances of sale, the difference in appearance would not preclude the likelihood of confusion, as… in a substantial proportion of cases, the aural effect and impression of the mark are likely to be of greater significance that the visual effect and impression [171].

75    The broad assertion by Vivo that the primary judge failed to deal with Dr Cox’s evidence is simply wrong. Her Honour gave fair, careful and conscientious consideration of this aspect of Vivo’s case. The following passages from her Honour’s Reasons make this point:

136    Professor Cox, a phonetician currently employed as a senior lecturer in the Centre for Language Sciences in the Department of Linguistics at Macquarie University, is an authority on the phonetic characteristics of Australian English. Professor Cox deposed that TiVo and Vivo commenced with two contrasting consonant speech sounds, the difference between which was “highly functional in English” and would be “pronounced differently and would be auditorily perceived as different words by ordinary Australians”. “T” and “V” were differently articulated, and their place of articulation and voicing features also differed. Further, the “acoustic percept of each word… would be easily differentiated and produced by listeners and speakers”.

137    Dr Cox also observed that Vivo, although used relatively infrequently, was a real foreign word, used in English in the context of a Latin scientific phrase, an Italian musical direction and as an acronym in communication technology. In contrast, TiVo was clearly a non-word. Dr Cox deposed that where one word has a meaning and another does not, it is relevant to the impression they create, and they will be more readily distinguished than two words with apparent meaning.

138    Dr Cox considered it highly probable that both TiVo and Vivo would be pronounced with the stress on the first syllable, and although there were several possibilities, it was more probable that Vivo would be pronounced “vee” and “voh” and TiVo would be pronounced “tee” and “voh”.

…

162    Save for the different commencing letter, which is pronounced differently in English, according to Dr Cox’s evidence, ordinary Australians would probably pronounce the identical components of each word (the “-IVO” element) in the same way as “ee” and “voh”. Thus, each word consists of two syllables, the second of which is identical, while the first is distinguished in spelling and aurally (in the most probable pronunciation) only by a single initial consonant.

…

169    Nor, in my view, did the evidence establish that Vivo had any meaning which, as an aide memoire, would materially reduce the likelihood of confusion amongst consumers. While TiVo is a non word and Vivo has some uses as a word in English, Dr Cox did not contend that Vivo was itself an English word. The uses she instanced were, as she acknowledged, relatively infrequent, and in my view, relatively esoteric. There was nothing to suggest that the Latin, musical or acronym usage was sufficiently widespread within the broad class of purchasers of audio visual products to accord it much weight.

76    It is apparent that the primary judge did appreciate that Dr Cox’s evidence established that “TiVo” and “Vivo” were phonetically different. Her Honour’s view was that though the words are pronounced differently, it is significant that similar sounds characterise their pronunciation.

77    It must be emphasised that the issue is not whether the marks were substantially identical, but whether they were apt to cause confusion. In this regard, as has been repeatedly said in the authorities the issue is not whether consumers might think that the trade marks are the same, but whether a number of persons will be caused to “wonder whether it might not be the case that the two products or closely related products and services come from the same source … [or to] wonder or be left in doubt about whether the two sets of products … come from the same source.” See Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 at [50].

78    I would reject Vivo’s argument that the primary judge’s approach was flawed in principle. The authorities make it clear that is the likely effect of the use of the new mark in the market place which must be considered by the court: See Aristoc Ltd v Rysta Ltd (1945) AC 68 at 86; Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353 at 362.

79    As Dixon and McTiernan JJ said in Australian Woollen Mills Ltd v F.S. Walton & Co Ltd (1937) 58 CLR 641 (Australian Woollen Mills) at 658, it is a question of fact “whether in fact there is such a reasonable probability of deception or confusion that the use of the new mark and title should be restrained”. Their Honours went on to explain that, in resolving that question:

The effect of spoken description must be considered. If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, then similarities both of sound and of meaning may play an important part…Potential buyers of goods are not to be credited with any high perception or habitual caution. On the other hand, exceptional carelessness or stupidity may be disregarded”.

80    Her Honour concluded that the significant phonetic similarity was likely to cause confusion. I am satisfied that this similarity is sufficient to give rise to a “real danger of confusion” on the part of customers: See Berlei Hestia Industries v Bali Co Inc (1973) 129 CLR 35 at 362.

81    The phonetic similarity of the two marks, notwithstanding the different consonants with which each mark begins, is significant. Thus, in Wingate Marketing Pty Ltd v Levi Strauss (1994) 49 FCR 89 the Full Court of the Federal Court upheld the trial judge’s view that the trade mark “Revise” resembled “Levi’s” sufficiently to cause confusion by reason of the tendency of many persons to pronounce “Revise” to rhyme with “Levi’s”.

82    Similarly, in NSW Dairy Corporation v Murray Goulburn Co-operative Co Ltd (1990) 171 CLR 363 the High Court accepted that the trade marks “MOO” and “MOOVE” were deceptively similar.

83    As to the evidence of Mr Simons, her Honour said at Reasons [182]-[183]:

182    The incidents to which Mr Simons deposed were not, as Vivo contended, a “one off example”, and the significant number of instances occurring within a relatively short time are not plausibly explicable as a result of mishearing. Indeed, in one incident, the staff member, on having his attention drawn to the different names, queried whether they related to the same thing.

183    While Vivo submitted that Mr Simons’ evidence was vague and Mr Maidana’s testimony must therefore be preferred, it did not press many of its detailed objections to Mr Simons’ evidence, did not cross examine Mr Simons and ultimately failed to call as a witness Mr Khan, a manager of Dick Smith’s Menai store, whose affidavit challenging Mr Simons’ evidence was filed. In such circumstances, as TiVo submitted, it may be inferred that Mr Simons’ evidence was accurate and reliable and, pursuant to the rule in Jones v Dunkel (1959) 101 CLR 298, that Mr Khan’s evidence would not have assisted Vivo’s case.

84    The learned primary judge did not overlook the evidence of Professor Lukas and Mr Maidana on which Vivo relied in relation to the setting in which sales would be likely to occur. In this regard, her Honour said at Reasons [172]-[179]:

172    The marks should not be considered in isolation. The setting and surrounding circumstances of the comparison are relevant and include how and where the product will be sold, advertised, displayed, and promoted, how knowledge of the mark may be conveyed to consumers, and how consumers are likely to approach a purchase.

173    The Vivo and TiVo products are sold through the same channels and, as discussed below, I have concluded that they are goods of the same description.

174    The evidence established that televisions and DVRs are currently the most expensive items in the wide range of audio visual products covered by the respective registrations, and that audio visual goods tend to be expensive consumer items. The likelihood of deception and confusion must nevertheless be considered across the whole range of products legitimately within the scope of the registration, and in the light of the environment and surrounding circumstances of purchase.

175    The evidence that many, if not all consumers exercise a degree of care and conduct “research” of some kind, together with the relative expense of the products, would appear to reduce the likelihood of confusion. The class of audio visual product consumers is, however, very broad, and the types and levels of preliminary inquiry adopted vary widely. While some customers, prior to making a purchase, have already researched, compared and become clearly aware of and remember either or both of the TiVo and Vivo brands, and may specifically request one or the other, Mr Maidana deposed that only a minority of customers requested any particular brand of product. Professor Lukas did not estimate what proportions of consumers engaged in the different modes of preliminary investigation to which he deposed, but made clear that the “research” of a number of consumers took the form of discussions, which could be with sales people, family or friends.

176    The evidence established that in a significant number of cases, TiVo and Vivo products or marks would be identified, requested or ordered by reference to the sound of the marks. Preliminary dialogue commonly initiates the sale process. In Mr Maidana’s experience, about 80% of customers for a television or a DVR request the product by reference to features other than the brand, and, on arrival at the store, engage in and are significantly influenced by discussions with sales assistants. In the course of those discussions, oral reference to products and marks is likely. Customers may orally refer to or request products under one of the two marks on the basis of an imperfectly recollected or careless pronunciation, while, in other cases, the sales assistant, having inquired about the customer’s needs, may (with imperfect pronunciation) refer to either one of the marks, against the customer’s imperfect recollection of the other (compare Anheuser-Busch Inc v Budejovicky Budvar, Narodni Podnik & Ors (2002) 56 IPR 182, where the visual effect was of greater significance because the beverages sold under the marks in question were frequently on display proximate to each other in refrigerators or shelves to be picked up by customers themselves, or written on restaurant liquor lists and thus seen before being orally requested).

177    There was no comprehensive evidence of how sales would be conducted in stores other than Dick Smith, or whether the process of sale for items other than televisions and DVRs would differ significantly, but it was not contended that the Dick Smith process of sale, in which the great majority of customers initially engage in discussion with, and are influenced by, sales staff was atypical. Nevertheless, while Dick Smith stores carry both TiVo and Vivo products, store them in the same department and provide sales staff training about products, such practices, which may tend to reduce the likelihood of confusion, may not apply in all retail stores.

178    While Mr Maidana deposed that some customers specifically request a TiVo or a Vivo product, and Professor Lukas deposed to their likely approach to a purchase, such customers are the minority. Moreover, the customer, who must be considered in this context, is not the particularly well informed person who has conducted careful comparative research on both products and already knows of both marks, or even of one mark with perfect recollection. Rather, it is necessary to consider the first impression of a consumer who has an imperfect recollection of only one mark and who does not know of the other.

179    In my opinion, allowing for imperfect recollection, careless pronunciation, the range of goods (and services) covered by the registrations, and the context and circumstances of promotion, advertising and sale, the visual differences between the marks are not sufficiently compelling to overcome the impact of the strong aural similarity in the purchasing environment.

85    Her Honour held that the evidence of Mr Simons and Mr Maidana were not irreconcilable at Reasons [184]-[186]:

184    Further, there was no necessary inconsistency between the evidence of Messrs Simons and Maidana. Mr Maidana, an impressive and conscientious witness, had not encountered any customer confusion in the Fountain Gate Dick Smith store, in which he extensively trained staff and restricted untrained staff from selling televisions. Nevertheless, the absence of confusion at a particular store or stores does not exclude its occurrence at other stores or retail outlets, where, for example, staff training and supervision may not be implemented as effectively. Further, as TiVo submitted, Mr Maidana’s evidence was, as he stated, in the context of the present practice, whereby TiVo mainly sells expensive DVRs and Vivo principally sells inexpensive televisions (which would tend to reduce the potential for confusion), as opposed to goods across the entire notional scope of the registration. Mr Maidana advanced the very different nature of the TiVo and Vivo products currently available for purchase as a principal, albeit not the sole, reason for the absence of confusion.

185    Mr Grassia, who also deposed that he knew of no instance of confusion, did not depose to “hands on” experience in retail sales of TiVo and Vivo products, and, as stated below, I did not find him a credible witness. Nevertheless, Mr Grassia confirmed the important role of the sales person, deposing that:

In my experience, in consumer electronics the salesperson on the shop floor has a significant influence on the products the consumer ultimately chooses to buy…

186    Although there was no evidence of confusion amongst consumers as opposed to sales staff, the difficulty of obtaining evidence of confusion is well recognised. The instances of confusion amongst employees in some (although not all) Dick Smith stores in relation to TiVo and Vivo, despite the significant current differences in price and products sold, and the staff training, support the conclusion that ordinary consumers would, as at 18 February 2008, be likely to be confused. Sales assistants are likely to be trained or at least better informed than ordinary consumers. A significant number of instances of confusion amongst sales staff, who play a significant role in influencing many consumers’ purchases, nevertheless occurred.

The significance of Mr Grassia’s dishonesty

86    In Australian Woollen Mills at 657, Dixon and McTiernan JJ said:

The rule that if a mark or get-up for goods is adopted for the purpose of appropriating part of the trade or reputation of a rival, it should be presumed to be fitted for the purpose and therefore likely to deceive or confuse, no doubt, is as just in principle as it is wholesome in tendency. In a question how possible or prospective buyers will be impressed by a given picture, word or appearance, the instinct and judgment of traders is not lightly to be rejected, and when a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he had done is in fact likely to deceive.”.

87    As I have noted, the primary judge formed a distinctly adverse view of Mr Grassia’s credibility in rejecting his claim of honest concurrent use. Her Honour went further at Reasons [187]:

A further circumstance which strongly supports the conclusion that the marks are deceptively similar is my finding, discussed below, that Mr Grassia was aware of and adopted the Vivo mark due to his awareness of TiVo. As established in Australian Woollen Mills and subsequent authority, a finding that a mark was adopted in order to appropriate the reputation of another gives rise to a species of evidentiary presumption, and the appropriator’s assessment of the likelihood of confusion is in the nature of expert evidence on the subject.

88    In the course of the trial, Senior Counsel for TiVo expressly acknowledged that TiVo was not urging the application of this presumption of fact as part of its case. TiVo expressly confined its case in this regard to the proposition that Mr Grassia’s evidence could not be used to establish Vivo’s honest concurrent use of the Vivo trade mark. TiVo was bound by the way in which its case was conducted: University of Wollongong v Metwally (No 2) (1985) 60 ALR 68 at 71.

89    Accordingly, I am respectfully of the opinion that it was not open to the primary judge to apply the presumption of fact discussed in Australian Woollen Mills to support her finding as to the likelihood of confusion. Having concluded that her Honour erred in applying that presumption of fact, I must now reach my own conclusion on the likelihood of confusion.

Conclusion on the likelihood of confusion

90    In Australian Woollen Mills at 659, Dixon and McTiernan JJ observed that this issue “is a question never susceptible of much discussion”. See also Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 at [49]; Shell Co of Australia v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407 at 415; Crazy Ron’s Communications Pty Limited v Mobileworld Communications Pty Ltd (2004) 209 ALR 1 at [77].

91    If the evidence of Mr Simons was honestly given, it establishes that those engaged in selling the kind of products in question do tend to confuse TiVo with Vivo as a matter of aural impression. As Dixon and McTiernan JJ said in Australian Woollen Mills at 658, “[e]vidence of actual cases of deception, if forthcoming, is of great weight”.

92    It is not fairly open to this Court to conclude that Mr Simons’ evidence was not honestly given: it was not suggested to him that his account of his discussions with sales staff was untrue. It was not necessary for her Honour to rely upon Jones v Dunkel to accept Mr Simons’ evidence.

93    In my opinion, it is a reasonable inference, and the inference that I draw, that, if sales staff are confused, there is a reasonable probability of confusion on the part of consumers: See Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 49 FCR 89 at 130C.

Infringement

94    In Australian Woollen Mills at 658 Dixon and McTiernan JJ said:

The course of business and the way in which the particular class of goods are sold gives, it may be said, the setting, and the habits and observations of men considered in the mass affords the standard”.

See also Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 594-595; Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 at [50].

95    I have considered whether the factual differences relating to the business setting in which the issue of likely confusion arose for the purpose of deciding the issues under s 44 of the Act and the business setting in which the issue of confusion may arise in the future is significant for the resolution of TiVo’s claim to relief in reliance upon s 120 of the Act.

96    In the circumstances of the relevant business setting which obtained before TiVo products were available in Australia to be displayed on the showroom floor in proximity to Vivo branded products, the impression created aurally could not have been balanced by the availability of the goods and trade marks for visual inspection. The question which arises is whether any confusion caused by the similarity in sound of Vivo and TiVo is likely to be dispelled by the sight of the trade marks on the goods and the difference in prices between Vivo and TiVo branded goods.

97    It may be accepted that TiVo’s case of the likelihood of confusion was stronger when the setting of retail sales did not allow a visual comparison of the goods and trade marks. In such a setting there was greater scope for confusion of the TiVo and Vivo brands. TiVo and Vivo are not ordinary descriptive words, and their aural significance was greater as a result where no visual comparison was possible: See Pfizer Products Inc v Karam (2006) 237 ALR 787 at [42].

98    That having been said, the resolution of this issue remains a matter of impression. It is important to stress that the question is whether ordinary people may be led to wonder as to whether goods bearing the TiVo and Vivo trade marks have the same source. As has been noted more than once in the authorities, the words “deceptively similar” mean that it is no answer to a claim of infringement that the defendant’s use of the mark is, in all the circumstances of the case, not deceptive, if the mark itself is deceptively similar. See Marc A Hammond Pty Ltd v Papa Carmina Pty Ltd (1976) 2 NSWR 124 at 127; Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 49 FCR 89 at 125.

99    In my respectful opinion, ordinary people interested in buying goods of the kind in question might well make such a connection before the point of sale and that a connection so made would not be dispelled by seeing the goods displayed on a retailer’s showroom floor. The differences in visual appearance of the trade marks and prices of the goods might be discounted subliminally as a mere indication that the two brands belong to one family of which the TiVo product represents the luxury end of the range and the Vivo product the economy end of the range.

100    In the upshot, I am persuaded that an injunction is necessary to prevent ongoing infringement.

conclusion and orders

101    In my respectful opinion, the decision of the primary judge has not been shown to be wrong.

102    I would dismiss the appeal.

103    I would order that the appellants pay the respondents’ costs of the appeal to be taxed unless earlier agreed.

Associate:

Dated:    14 November 2012

REASONS FOR JUDGMENT

DOWSETT J:

104    For the reasons given by Nicholas J, I agree with the proposed orders.

Associate:

Dated:    14 November 2012

REASONS FOR JUDGMENT

Nicholas J:

BACKGROUND

105    I have had the advantage of reading the draft reasons of the Chief Justice. I gratefully adopt his Honour’s account of the background to the appeal, the relevant statutory provisions and the primary judge’s findings and conclusions. I shall adopt the same definitions as his Honour.

106    On appeal, Vivo did not challenge the primary judge’s rejection of its defence based upon honest concurrent use. That being so, the central issue in the appeal concerns the registrability of the Vivo trade mark including, in particular, whether the application for the Vivo trade mark should have been rejected in accordance with s 44(1) of the Act because it was deceptively similar to the TiVo trade mark as at the date of application. It is common ground that if the application should have been rejected on that basis then the primary judge was correct to order the cancellation of the Vivo trade mark. If the cancellation of the Vivo trade mark is upheld, Vivo not only loses its exclusive rights as owner of the Vivo trade mark conferred by the Act, it also loses the benefit of the defence under s 122(1)(e) of the Act. Section 122(1)(e) provides that a registered trade mark is not infringed by a person who exercises a right to use a trade mark given to the person under the Act.

APPROACH ON APPEAL

107    The primary judge’s finding that the Vivo trade mark was deceptively similar to the TiVo trade mark was based upon phonetic rather than visual similarity. Her Honour did not accept that visually the Vivo trade mark was deceptively similar to the TiVo trade mark. In this regard, her Honour was influenced by the presence of the device that forms part of the Vivo trade mark, an element of the Vivo trade mark not present in the TiVo trade mark. TiVo did not suggest that her Honour was in error in failing to find that there was a real danger of confusion based upon the appearance of the marks. It follows that if the primary judge’s finding of deceptive similarity is to be sustained on appeal, it can only be on the basis that the Vivo trade mark was deceptively similar to the TiVo trade mark because of phonetic similarity.

108    It is for the appellants to establish that the primary judge’s conclusion of deceptive similarity was wrong. Ordinarily, the primary judge’s conclusion on such an issue would carry significant weight unless it was affected by factual or legal error. However, in this case the primary judge’s conclusion that the Vivo trade mark was deceptively similar to the TiVo trade mark was affected by error.

109    A finding that a trader has adopted a trade mark with the intention of taking advantage of the reputation attaching to another trader’s trade mark is usually of considerable significance in an infringement proceeding: Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641 at 657. In the present case, the primary judge made such a finding which was relied upon by her Honour in support of her conclusion that the Vivo trade mark was deceptively similar to the TiVo trade mark.

110    During the hearing of the appeal, TiVo accepted that it never sought a finding of intention from the primary judge and that it disclaimed any positive case that it was Mr Grassia’s intention to take advantage of any reputation attaching to the TiVo trade mark. TiVo made its position clear while resisting an application Vivo made to the primary judge for leave to call evidence from Mr Grassia’s wife.

111    It does not follow that the intention was not relevant to issues that the primary judge was required to decide. Mr Grassia’s intentions were clearly relevant to honest concurrent use. But since honest concurrent use is not in issue in the appeal, the question of intention is no longer relevant either. All of this leads to a somewhat unusual state of affairs in which the central issue arising in the appeal must be decided afresh, but without regard to the primary judge’s findings on the question of intention, and without regard to the visual similarities between the TiVo and Vivo trade marks.

SECTION 44(1)

112    The only question in this appeal arising under s 44(1) of the Act is whether the Vivo trade mark was deceptively similar to the TiVo trade mark as at 18 February 2008. It was on that date that the application to register the Vivo trade mark was filed. By that time the TiVo trade mark, which was applied for on 10 November 1999, was already registered.

113    In Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd (1952) 86 CLR 536 at 538, the High Court (Dixon, Williams and Kitto JJ), when explaining why the mark RAINMASTER was not deceptively similar to RAIN KING, approved the following statement of Lord Parker (then Parker J) in In the Matter of an Application by the Pianotist Company Ltd for the Registration of a Trade Mark (1906) 23 RPC 774 at 777:

You must take the two words. You must judge of them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks. If, considering all those circumstances, you come to the conclusion that there will be a confusion—that is to say, not necessarily that one man will be injured and the other will gain illicit benefit, but that there will be a confusion in the mind of the public which will lead to confusion in the goods—then you may refuse the registration, or rather you must refuse the registration in that case.

114    The present case concerns not two word marks, but a word mark and a composite word and device mark. Nevertheless, the same test is to be applied. Of particular importance to this case is the need to consider what is likely to happen if each of the trade marks is used in a normal way on its owner’s goods. The authorities make clear that “normal use” in this context means normal and fair use for all goods or services covered by the trade mark registration or trade mark application in question. Hence, it is the statutory rights of use that are to be compared rather than any actual use, and in considering whether an application for a mark should be rejected under s 44(1) because it is deceptively similar to an existing registered trade mark, it is necessary to have regard to all legitimate uses to which each mark might be put by its owner: see In the Matter of an Application by Smith Hayden & Coy Ld (1946) 63 RPC 97 at 101; Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353 at 362; and Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Limited (1993) 42 FCR 227 at 230-231.

115    In deciding whether to refuse the registration of a trade mark because it is deceptively similar to another mark with an earlier priority date, there are various other principles that must be borne in mind. First, it is not necessary to show that a use of the mark has or will result in confusion; a mark may be deceptively similar to another mark if there is “a real, tangible danger” of confusion occurring. Secondly, a mark may be deceptively similar to another mark if its use causes people to wonder whether it might not be the case that the products to which the marks are applied come from the same source. Thirdly, a mark may be deceptively similar to another mark even if its use might not result in any deception or confusion that induces a sale or persists until the moment of sale. Fourthly, allowance must be made for the “imperfect recollection” of a trade mark by people of ordinary memory and intelligence especially those who know one mark but do not know the other. See Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 595; Australian Woollen Mills Ltd v FS Walton & Co Ltd at 658; and Berlei Hestia Industries Ltd v Bali Co at 362.

EVIDENCE

116    For the reasons previously explained, it is necessary to reconsider the issue of deceptive similarity afresh. For this purpose, I have had regard to the evidence of Dr Cox, Mr Simons, Mr Maidana and Professor Lukas. Each of these witnesses’ evidence in chief was given in affidavit form. I have also drawn on a key factual finding made by the primary judge (at para [176]) that was not affected by the error to which I have referred.

Dr Cox’s evidence

117    Dr Cox is an expert phonetician. The substance of Dr Cox’s opinion was that “Vivo” and “TiVo” would be pronounced differently and would be auditorily perceived as different words by ordinary Australians. In Dr Cox’s opinion, “Vivo” and “TiVo” would most likely be pronounced as “vee + voh” and “tee + voh” respectively. It was highly probable, according to Dr Cox, that each would be pronounced with a stressed first syllable.

Mr Maidana’s evidence

118    Mr Maidana is a store manager of a Dick Smith store at the Fountain Gate shopping centre in Narre Warren. By the time he made his affidavit in August 2011, Mr Maidana had been employed by Dick Smith as a salesman and store manager for about 10 years. He had previously worked in Dick Smith stores at Frankston, Knox City, Nunawading, Cranbourne, Dandenong and Chadstone. He held various sales positions in those stores. He became a store manager in August 2009 when he was transferred to the Cranbourne store.

119    From August 2009 until November 2010, Mr Maidana worked at the Cranbourne store. In the following Christmas/New Year period he worked as store manager first at Chadstone and then at Nunawading. He was appointed store manager of Dandenong in March 2011. He took up his current position as store manager of the Fountain Gate store at Narre Warren in July 2011.

120    Mr Maidana gave evidence that he had never witnessed customers confusing Vivo products and TiVo products. He also said:

Based upon my experiences in the audio-visual industry, I believe that the chance of customers being confused between the TiVo and Vivo products is very minimal. This is partly because the products sold by TiVo and Vivo are so different, but also because I believe the brand names look and sound sufficiently different that customers are unlikely to draw a connection between them.

In my experience, customers pay close attention to the brand names of the audio-visual products they are buying, and are careful to ensure that they have a product that satisfies their needs at the price they want to pay. I think it is highly unlikely that any customer would purchase such a product without identifying the brand they were buying.

Professor Lukas’ evidence

121    At the trial, Vivo relied upon the evidence of Professor Lukas who is an expert in the fields of marketing and consumer behaviour. He expressed the opinion that the majority of consumers who purchase audio-visual products are motivated to make a careful purchase decision, and will therefore exhibit a high level of involvement in the purchasing process. He said that he would expect most purchasers of audio-visual products to spend more time and effort on the purchasing process, to be more attentive to products and brands, to visit more stores before making their purchases, and to make detailed comparisons between different products and brands. He referred to academic literature suggesting that a consumer’s memory of products and brands is enhanced whenever there was a high level of involvement in the purchasing process.

122    Professor Lukas said that consumer purchases of TiVo products (DVRs, also known as PVRs, with associated software) would be high-involvement purchases. It followed, according to Professor Lukas, that consumers purchasing TiVo products would be likely to engage in some or all of the following activities:

    searching for relevant product and brand information;

    paying attention to the product under consideration;

    evaluating alternatives in some detail;

    perceiving differences between the TiVo brand and other brands in a product class;

    deciding to what extent TiVo is their favourite or preferred brand; and

    making a careful purchase decision.

Professor Lukas said that the same was true of Vivo products (which he identified as televisions, portable DVD players, digital set top boxes, digital photo frames and computer monitors).

Mr Simons’ evidence

123    Between 1990 and 2010, Mr Simons was a Harvey Norman franchisee operating in the “computers and communications” section of various Harvey Norman stores. He joined HTS in 2010 as Sales Manager for Australia and New Zealand. He was not cross-examined.

124    Mr Simons gave evidence that he regularly visited the stores of retailers to whom HTS supplied TiVo PVRs. His affidavit, made in July 2011, indicated that he commenced working for HTS in May 2010. Mr Simons said that he first became aware of Vivo in or around July or August 2010 when he first noticed a Vivo branded television for sale in a Dick Smith store. I infer that this was about the time that he commenced visiting Dick Smith stores as Sales Manager for HTS. Thus, by the time Mr Simons made his affidavit, he had been working for HTS for about 14 months and had been aware of Vivo branded televisions for about 12 months.

125    Mr Simons gave evidence of two particular occasions when he had conversations with members of the sales staff at the Dick Smith store in Menai and the Dick Smith store in the Macarthur Shopping Centre at Campbelltown. In the case of the Dick Smith store in Menai, Mr Simons said that in or around October 2010 he entered the store and spoke with a store manager whose name he could not remember. He said that he introduced himself as “Peter from TiVo”. He said that the store manager responded by saying words to the effect, “Oh, you’re from Vivo”, to which Mr Simons responded, “No, I am Peter from TiVo. TiVo make the TiVo PVR.” Mr Simons’ affidavit does not say what, if anything, the store manager then said in answer but that he took Mr Simons to a section of the store where a Vivo branded television and a TiVo PVR were operating. The Vivo television was showing a TiVo promotional recording which was being played on a TiVo PVR.

126    The second occasion, also in or around October 2010, occurred at the Dick Smith store in Campbelltown. Mr Simons’ evidence of his conversation at this store was as follows:

During that visit, I spoke with a member of the sales staff at that store (whose name I cannot recall), whom I had not met before, and again introduced myself by stating words to the effect of “Hi, I’m Peter from TiVo”. The sales person responded by saying words to the effect of “You must be from Vivo”. From this statement, I immediately got the impression that this person either misheard me or thought that there was some connection between TiVo and Vivo. I replied with words to the effect that “No, I am from TiVo”. The sales person responded with the words to the effect that “Aren’t they the same?” or “Isn’t it the same thing?”.

127    Mr Simons gave evidence (apparently without objection) that his encounters with staff at the Dick Smith stores in Menai and Campbelltown were typical of other occasions at other retail stores where he had similar conversations with staff at those stores. Mr Simons said that there were approximately six other occasions since October 2010 when he had such conversations. Thus, there was evidence of a total of eight occurrences of what TiVo characterised as actual confusion between about October 2010 and July 2011 when Mr Simons’ affidavit was sworn.

Assessment of Dr Cox’s evidence

128    TiVo did not challenge Dr Cox’s evidence but submitted that her evidence should not be given any weight. It was submitted that the following observations of Luxmoore LJ in In the Matter of Application by Rysta Ltd (1943) 60 RPC 87 at 108 were applicable to Dr Cox’s evidence:

It is the person who only knows the one word and has perhaps an imperfect recollection of it who is likely to be deceived or confused. Little assistance, therefore, is to be obtained from a meticulous comparison of the two words letter by letter and syllable by syllable pronounced with the clarity to be expected from a teacher of elocution.

See also Aristoc Ltd v Rysta Ltd [1945] AC 68 at 85-86 per Viscount Maugham.

129    I do not accept that Dr Cox’s evidence should not be given weight. Her evidence is significant because it suggests that people familiar with both the TiVo trade mark and the Vivo trade mark are not likely to be deceived or confused as a result of their phonetic similarity. In my view, Dr Cox’s evidence provides clear support for the view that people familiar with both marks would pronounce them differently and that a person familiar with both marks would not find it difficult to distinguish between them when both were being used in conversation. Importantly, however, Dr Cox’s evidence does not make any allowance for the effects of imperfect recollection.

Assessment of Mr Maidana’s evidence

130    The primary judge made several points about Mr Maidana’s evidence. First, her Honour said that the absence of confusion at a particular store, where staff training and supervision might be better, does not exclude its occurrence at other stores. In particular, her Honour said that there was no necessary inconsistency between the evidence of Mr Maidana and Mr Simons. Secondly, her Honour said that Mr Maidana’s evidence was based upon his involvement with specific products which consisted of inexpensive Vivo televisions, and expensive TiVo DVRs.

131    The first of the points made by her Honour is not so significant in light of the view I have taken of Mr Simons’ evidence which is discussed below. Of course, it remains true to say that the fact that Mr Maidana had not encountered confusion at the Dick Smith stores at which he worked does not mean that confusion might not have occurred at other stores. On the other hand, apart from Mr Simons’ evidence, there was nothing to suggest that Mr Maidana’s experience in selling TiVo DVRs and Vivo televisions would have been very different to that of other people working in Dick Smith stores.

132    The second of the points made by the primary judge is particularly significant in this case. Whether or not the Vivo trade mark was deceptively similar to the TiVo trade mark should be tested by asking whether there would have been a likelihood of confusion if both TiVo and Vivo were applying their trade marks to (for example) televisions, which might or might not be sold at similar prices, and which might or might not be offered for sale through the same retail outlets. When the question is approached in this way, the significance of Mr Maidana’s evidence is considerably diminished.

Assessment of Professor Lukas’ evidence

133    Professor Lukas’ evidence suggests that most consumers purchasing audio-visual products are likely to display a higher level of involvement in the purchase process than might be true of many other types of products. This is plainly correct. Beyond that, however, it becomes difficult to generalise. Professor Lukas did not say that in his opinion consumers were likely to engage in all of the six activities enumerated in his report. His opinion was that consumers purchasing such products would be likely to engage in some or all of those activities. Nor did he give an opinion that all, or even most, consumers would search for product information or pay close attention to differences between brands before making their purchase decision.

134    I accept that many consumers are likely to evaluate audio-visual products in considerable detail prior to making their purchase decision, and that this would include paying close attention to brands. But there would also be a significant number of consumers who do not do so, and for whom a particular brand name may have only limited significance, perhaps as a name that they had seen or heard mentioned in advertising to which they may have been exposed.

135    Professor Lukas’ evidence suggests that, for the majority of consumers, the level of consumer involvement in the purchase of audio-visual products is usually high. However, the generality of this evidence imposes significant limitations upon its usefulness in this case, especially when the TiVo trade mark registration covers not only DVRs, but a diverse range of audio-visual products which would, in the case of televisions, include cheap, portable models as well as highly sophisticated and expensive models employing the latest technology.

Assessment of Mr Simons’ evidence

136    TiVo placed considerable reliance upon the evidence of Mr Simons which, it submitted, should be given “great weight”. In oral submissions Senior Counsel for TiVo put his submission in relation to this evidence in this way:

We say that there are two marks. The only distinguishing feature is the first consonant. We say that the people who ought to know the difference are the people who are confused and the time of the confusion, of course, is when they had both products but they were confused. They thought one was the other. If they think that, in a non-pressured environment, then how do they deal with the consumer? If a consumer says, “Is this the same as the Tivo I’ve read about”, they’re going to say, “Aren’t they the same thing?” Isn’t there a good prospect of that? And the answer, we say, is yes there is.

137    It is well established that evidence of actual confusion may be highly persuasive. But as with other evidence, in assessing what weight should be given to it, the Court must evaluate the quality of the evidence by reference to its internal features, the other evidence and the Court’s own knowledge of human affairs. In Australian Woollen Mills Ltd v FS Walton & Co Ltd at 658, upon observing that “[e]vidence of actual cases of deception, if forthcoming, is of great weight”, Dixon and McTiernan JJ went on to dismiss evidence from a few people who mistook a newspaper advertisement of the respondent for an advertisement of the appellant on the basis that it “amounted … to very little.”

138    There is little point speculating about why Mr Simons was not cross-examined. But it is important to remember that he gave evidence of what staff at various Dick Smith stores said and did in response to him introducing himself as “Peter from TiVo”. He might have been cross-examined with a view to eliciting more about what those people said and did, but he could not give direct evidence of their state of mind or their reasons for responding to him in the way they did. Nevertheless, the usual consequences follow from the failure to cross-examine Mr Simons: first, it was not open to Vivo to submit that Mr Simons’ affidavit evidence was untruthful; secondly, Mr Simons’ affidavit evidence was not contradicted or qualified by any other evidence, including, in particular, oral evidence that might have been elicited from him in cross-examination.

139    A court is not bound to accept evidence that has not been the subject of cross-examination. In Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 at 588-589, Samuels JA (with whom Meagher JA agreed) rejected the view that evidence unchallenged by cross-examination must be accepted unless it was inherently improbable. In his Honour’s view, a court may decide not to accept such evidence whether or not it is inherently improbable though it may, of course, be wrong, unreasonable or perverse not to accept such evidence in a given case. Samuels JA’s views were endorsed by Kirby A-CJ (as his Honour then was) in Elkington v Shell Australia Ltd (1993) 32 NSWLR 11 at 17.

140    It is clear from Mr Simons’ account of his conversation with the member of the sales staff at the Dick Smith store at Campbelltown that this person thought there was some connection between TiVo and Vivo even after Mr Simons had made it clear that he was from TiVo rather than Vivo.

141    The position is a little less clear in the case of Mr Simons’ conversation with the store manager at the Dick Smith store at Menai. However, Mr Simons’ evidence suggests that the manager with whom he spoke also thought there was some connection between TiVo and Vivo even though he was familiar with both trade marks and the products to which they were applied.

142    I do not consider Mr Simons’ account of his conversations at the Dick Smith stores to be evidence of confusion occurring as a result of differences in pronunciation, slurring, mishearing or imperfect recollection. None of these possibilities explain why the confusion referred to in Mr Simons’ evidence occurred. How then is his evidence to be explained?

143    I have difficulty understanding why a sales person who was familiar with the products he or she was selling would think that the TiVo products and the Vivo products were the same or that they came from the same source unless he or she mistook one mark for the other. It seems to me extremely unlikely that sales staff who were mindful of the differences (both visually and aurally) between the two marks would believe that goods marked with one mark came from the same source as goods marked with the other. Nor do I think that sales staff would be caused to wonder whether or not the goods came from the same source in such circumstances.

144    This brings me to the relevance of Mr Simons’ evidence to this appeal. As I have mentioned, TiVo did not challenge the primary judge’s rejection of its case based upon any visual similarity between the marks, but sought only to uphold the primary judge’s finding of deceptive similarity on the basis of their strong aural similarity. It follows, in my view, that TiVo must be taken to accept that use of the Vivo mark in a normal and fair manner on audio-visual equipment would not of itself give rise to any tangible risk of confusion except in circumstances where sales staff and customers also used the mark orally, which was something that the primary judge found (at para [176]) occurred in a significant number of cases.

145    There may be situations in which a mark may be found to be deceptively similar to another mark even though the differences between them would be readily apparent to the consumer: see, for example, the trade marks in issue in In the Matter of John Fitton & Co Limited’s Application (1949) 66 RPC 110 (JESTS and EASYJESTS) (UK Reg.); Tonka Corporation v Chong (1994) 29 IPR 253 (MONOPOLY and MUSICOPOLY) (Reg.); Telstra Corporation Ltd v Yellownet Corporation (1999) 44 IPR 415 (YELLOW PAGES and YELLOWNET) (Reg.); and Caterpillar Inc v Amco (Vic) Pty Ltd (2000) 49 IPR 407 (CAT and LANDCAT) (Reg.).

146    In Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Limited (1993) 42 FCR 227 (POLO and POLO CLUB) Burchett J held (at 230) that POLO CLUB was deceptively similar to POLO because (inter alia) “someone who knew of a ‘Polo’ product, upon seeing a similar product selling under the name ‘Polo Club’ would be quite likely to think it was a particular version of the product which could be described as the Club version.” Similarly, in Pfizer Products Inv v Karam (2006) 237 ALR 787 (VIAGRA and HERBAGRA) Gyles J held that the mark HERBAGRA was deceptively similar to the mark VIAGRA because a substantial number of members of the public would think products bearing the former mark were a “herbal version” of VIAGRA: see para [38] of Gyles J’s reasons.

147    While I can readily understand why consumers might think there is an association between products marked POLO and those marked POLO CLUB, or products marked HERBAGRA and those marked VIAGRA, it is much more difficult to see why a consumer would understand there to be such an association between the two marks in issue in the present case.

148    The primary judge appreciated that the confusion described in Mr Simons’ evidence was “not plausibly explicable as a result of mishearing” (at para [182]). Even so, her Honour’s decision on the issue of deceptive similarity was not based upon contextual confusion of the type to which I have referred, but phonetic similarity and the impact of careless pronunciation and imperfect recollection. As the primary judge said (at para [179]):

In my opinion, allowing for imperfect recollection, careless pronunciation, the range of goods (and services) covered by the registrations, and the context and circumstances of promotion, advertising and sale, the visual differences between the marks are not sufficiently compelling to overcome the impact of the strong aural similarity in the purchasing environment.

149    In oral submissions Senior Counsel for TiVo argued that manufacturers sometimes use more than one trade mark. In the course of explaining why Mr Simons’ evidence should not be regarded as inherently improbable Senior Counsel then said:

They might use multiple related trademarks. They might be regarded as so close that they have to come from the same source. It’s not inherently improbable.

150    In my opinion, the present case is quite unlike the “contextual confusion” cases to which I have referred. Where marks have been refused registration on account of “contextual confusion” in the past, the mark in question has usually incorporated the whole of a registered mark or some distinctive component of the registered mark which has been coupled with some additional descriptive element, all of which will suggest that the marks are related in some way, even though they are perceived to be different. I do not think a person who was mindful of the difference between the marks in issue in this case would think, or wonder whether, the marks (and therefore the goods to which they are applied) were related.

151    Mr Simons’ evidence suggests to me that there was some other factor at work that may explain why the Dick Smith staff with whom he spoke may have thought that the TiVo and Vivo products were from the same source. In the absence of evidence from the sales staff concerned or other evidence that might explain why they thought as they did, I am not persuaded that Mr Simons’ evidence should be given any significant weight.

WAS THE VIVO TRADE MARK DECEPTIVELY SIMILAR TO THE TIVO TRADE MARK?

152    The question whether the application for registration of the Vivo trade mark should have been rejected in accordance with the requirements of s 44(1) of the Act raises a number of considerations.

153    As previously explained, the question must be addressed on the footing that the primary judge’s finding of deceptive similarity was based upon phonetic similarity and that her Honour’s rejection of TiVo’s case based upon visual similarity was not challenged on appeal. This creates an element of complexity in what some might otherwise regard as a relatively straightforward case. The way in which the appeal has been conducted has prevented me from concluding that the Vivo trade mark is deceptively similar to the TiVo trade mark based upon a visual comparison of the marks.

154    The Vivo trade mark is a composite word and device mark. The word “Vivo” is the dominant element of the mark. I doubt that the device that forms part of the mark would make any lasting impression on the mind of most consumers. Consumers who wish to refer to Vivo products in written or oral communications will almost certainly do so using only the word component of the mark.

155    The present case is unlike those involving goods usually sold over the telephone or from behind a counter where there is often a heightened risk of confusion stemming from aural similarity. Nevertheless, the primary judge’s finding (at para [176]) that in a significant number of cases both TiVo products and Vivo products would be identified, requested or ordered orally is of considerable importance in this case.

156    In my view, the risk of confusion is most apparent if it is assumed that TiVo applies its mark not only to DVRs but also to televisions and other goods covered by the TiVo trade mark registration, which may or may not be expensive when compared to the Vivo branded products, and which may or may not be sold in the same retail outlets.

157    There is another matter I consider particularly relevant in this case. The word “TiVo” is an invented word without any ordinary meaning. The word “Vivo” may have an ordinary meaning, but it is not a meaning that would be likely to enter most consumers’ minds when shopping for audio-visual products. I think most consumers would regard Vivo as an invented word. In those circumstances, it cannot be said that either word conveys any distinctive meaning or impression of its own that might diminish the effects of imperfect recollection.

158    In my opinion there was, as at 18 February 2008, a real danger that consumers who might know of the TiVo trade mark because they had seen products to which it had been applied, or because they had seen or heard advertising which made reference to it, would confuse it with the Vivo trade mark in the course of spoken communications with sales staff engaged in selling audio-visual products.

159    My decision on the s 44(1) point turns not on any risk that the two marks might be confused as being related, but on the basis that they exhibit a strong phonetic similarity, and that consumers of ordinary memory and intelligence who had an imperfect recollection of one or other of the marks might not appreciate that the brand name referred to in the course of discussions taking place prior to sale was different to that which the consumer had previously seen or heard.

160    Accordingly, I am satisfied that the primary judge was correct to order the cancellation of the Vivo trade mark given the combined effect of s 88(1)(a), s 88(2)(a) and s 44(1) of the Act because, in my opinion, the Vivo trade mark was deceptively similar to the TiVo trade mark as at 18 February 2008.

Section 88(2)(c)

161    It follows that TiVo was also entitled to an order for the cancellation of the Vivo trade mark pursuant to s 88(1)(a) of the Act upon the grounds provided for s 88(2)(c). There was nothing about the circumstances existing at the time TiVo filed its application for rectification of the Register to suggest that the risk of confusion at that date was materially different (ie. reduced) when compared to the risk of confusion at the time Vivo applied for registration of the Vivo trade mark.

Section 60

162    The appeal against the primary judge’s findings concerning s 60 of the Act raises for consideration a large volume of evidence to which we were not taken during the hearing of the appeal and which was not reproduced fully in the appeal books. In view of my conclusions in relation to ss 44(1), 88(2)(a) and 88(2)(c) of the Act, it is not necessary for me to consider the application of s 60 of the Act to the circumstances of this case.

SECTION 120

163    It was not in issue on appeal that the products sold by Vivo by reference to the Vivo trade mark included goods the same as those covered by TiVo’s trade mark registration (televisions, computer monitors, digital set top boxes) and other goods which are of the same description (portable DVD players and digital photo frames): see s 120(1) and s 120(2)(a) of the Act.

164    With the cancellation of the Vivo trade mark, Vivo loses the benefit of the defence that it has enjoyed under s 122(1)(e) of the Act. The primary judge therefore granted TiVo what is, in substance, a quia timet injunction restraining Vivo from infringing the TiVo trade mark. On appeal, it was not suggested that there was any discretionary reason why such an injunction should not have been granted.

165    In my opinion it was appropriate to grant such an injunction in the circumstances of this case. Once it is concluded that the Vivo trade mark is deceptively similar to the TiVo trade mark, it follows, subject only to the cancellation of the Vivo trade mark, that it would be an infringement of the TiVo trade mark for Vivo to use the Vivo trade mark in relation to its own products without the permission of TiVo.

166    I therefore agree that the appeal should be dismissed with costs.

Associate:

Dated:        14 November 2012