Federal Court of Australia

Puma SE v Caterpillar Inc [2022] FCAFC 153

Appeal from:

Caterpillar Inc v Puma SE [2021] FCA 1014

File number(s):

VID 522 of 2021

Judgment of:

NICHOLAS, ROFE AND MCELWAINE JJ

Date of judgment:

9 September 2022

Catchwords:

TRADE MARKSapplication for leave to appeal from a single judge of the Court pursuant to s 195(2) of the Trade Marks Act 1995 (Cth) – whether primary judge erred in finding grounds of opposition pursuant to ss 44 and 60 of the Trade Marks Act 1995 (Cth) were made out – whether trade mark deceptively similar to prior registered mark – whether trade mark likely to deceive or cause confusion – where the primary judge’s judgment affected by error – whether proposed grounds of appeal have merit application for leave dismissed

Legislation:

Trade Marks Act 1995 (Cth) ss 6, 7, 17, 42(b), 44, 52, 57, 60, 195(2)

Cases cited:

Aldi Foods Pty Ltd v Moroccanoil Ltd (2018) 261 FCR 301; [2018] FCAFC 93

Allesch v Maunz (2000) 203 CLR 172; [200] HCA 40

Bauer Consumer Media Ltd v Evergreen Television Pty Ltd (2019) 367 ALR 393; [2019] FCAFC 71

Combe International Ltd v Dr August Wolff GmbH & CoKG Arznemittel (2021) 157 IPR 230; [2021] FCAFC 8

Cooper Engineering Company Pty Ltd v Sigmund Pumps Ltd (1952) 86 CLR 536

In the Matter of an Application by the Pianotist Company Ltd for the Registration of a Trade Mark (1906) 2 RPC 774

Johnson & Johnson v Kalnin (1993) 115 ALR 215

Lomas v Winton Shire Council [2003] AIPC 91-839; [2002] FCAFC 413

MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236

Pfizer Corp v Commissioner of Patents (2006) 155 FCR 578; [2006] FCAFC 190

Qantas Airways Ltd v Edwards (2016) 119 IPR 271; [2016] FCA 729

Re Grundig Trade Mark [1968] RPC 89

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

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

Division:

General Division

Registry:

Victoria

National Practice Area:

Intellectual Property

Sub-area:

Trade Marks

Number of paragraphs:

106

Date of hearing:

24 May 2022

Counsel for the Applicant:

Mr A Fox SC

Solicitor for the Applicant:

Griffith Hack

Counsel for the Respondent:

Mr B Caine QC with Mr L Merrick

Solicitor for the Respondent:

Corrs Chambers Westgarth

ORDERS

VID 522 of 2021

BETWEEN:

PUMA SE

Applicant

AND:

CATERPILLAR INC

Respondent

order made by:

NICHOLAS, ROFE AND MCELWAINE JJ

DATE OF ORDER:

9 September 2022

THE COURT ORDERS THAT:

1.    The applicant’s application for leave to appeal pursuant to s 195(2) of the Trade Marks Act 1995 (Cth) filed on 10 September 2021 is dismissed.

2.    The applicant is to pay the respondent’s costs assessed in a lump sum pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth).

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

REASONS FOR JUDGMENT

THE COURT:

Introduction

1    Puma SE (Puma or the applicant) is a well-known global sportswear corporation which has its headquarters in Germany. It was founded by two brothers in 1924 as the Dassler Brothers Shoe Factory. Initially, it designed and manufactured sport shoes. In 1948, the founders parted company, one brother adopted the mark Puma and in 1949 registered his own company under that name. Puma now has offices, subsidiaries, licensees and an extensive distribution network in over 80 countries.

2    Puma commenced the retail sale of footwear in Australia in 1957 and from 1966 it commenced the sale of a range of apparel products, comprising bags and sports accessories. It is the owner of several well-known registered trade marks including the leaping cat device:

(the leaping cat device.)

3    Historically the business of Puma has focused upon athletic and sports footwear, apparel and sports accessories. Over time, the business has developed to include casual fashion and lifestyle products. It has partnered with specialised suppliers, such as Fossil for watches and cosmetics by Maybelline.

4    On 21 October 2016 (the priority date) Puma filed an Australian trademark application for the word PROCAT in a stylised form. Caterpillar Inc (Caterpillar or the respondent) opposed, unsuccessfully, the application before a delegate of the registrar but was successful upon appeal to a judge of this Court.

5    Caterpillar is a Delaware based corporation that may be traced to a company founded by Benjamin Holt in the USA in 1892 as a manufacturer of steam tractors for agricultural use. In approximately 1904, Benjamin Holt developed an inventive mechanism to propel tractors not by wheels, but by a system of traction propulsion. At that time, he created and registered the Caterpillar trademark.

6    Benjamin Holt merged his business with the C L Best Tractor Co in 1925 and formed the Caterpillar Tractor Co. Caterpillar is now ranked as one of the 100 largest United States corporations by annual turnover. At the priority date, it operated in over 180 countries and had in excess of 95,400 full-time employees of which approximately 22,800 were employed in the Asia-Pacific region, which includes Australia.

7    Caterpillar has sold heavy machinery in Australia since at least the 1920s through Caterpillar dealerships. As at the priority date Caterpillar, or corporations within the group, manufactured, promoted, sold or licensed more than 300 types of vehicles, machinery and equipment.

8    Commencing in approximately 1909, the Caterpillar trademark has been used by Caterpillar and its licensees in relation to heavy equipment, vehicles and machinery. The Caterpillar trademark was first registered in Australia on 13 April 1911 in class 7: machinery, agricultural and horticultural machinery and parts of such machinery.

9    Caterpillar commenced using the CAT brand and word mark in the 1940s and from the 1970s it commenced using the CAT brand in respect of clothing and headgear internationally. It registered the CAT word mark in respect of goods in class 25 in Australia on 1 June 1978, and the CAT device mark on 10 January 1989 in various classes as:

(the CAT device mark)

10    The classes were 25: caps, hats, dust coats, overalls, aprons, gloves, jackets, boots, shoes, earmuffs, scarves, jumpers and T-shirts and class 18: leather and imitation leather goods. As at the priority date, Caterpillar was the owner of over 50 Australian registered trade marks for the CAT word and devices.

11    In the 1980s, Caterpillar established a commercial licensing business for the use of its marks on a wide range of soft goods, not limited to work wear. Under this arrangement, the licensees are responsible for the manufacture, distribution and sale of CAT branded goods. The range of goods includes footwear and bags, apparel, work wear, leisurewear, lifestyle shoes, casual shoes and clothing.

12    It is not in dispute that Puma and Caterpillar have long and extensive commercial histories and each had, at the priority date, significant reputations in the Australian marketplace and overseas with respect to various trade marks used in connexion with a wide variety of goods.

History of the matter

13    On the priority date, Puma sought registration of trade mark application no. 1803303 under Part 4 of the Trade Marks Act 1995 (Cth) (the Act) for the following stylised trade mark:

(the PROCAT mark).

14    Registration is sought in respect of the following classes of goods:

Class 18: Bags made of imitation leather; Bags made of leather; Imitation leather; Leather; Leather cases; Trunks (luggage); Travelling bags; Umbrellas; Parasols; Walking sticks; Purses; Pocket wallets; Key cases; Carrying bags (other than disposable carrier bags); Bags for sports; Pouches (bags); Duffel bags; Rucksacks; School bags; Toilet bags

Class 25: Clothing; Footwear; Headgear for wear

15    Caterpillar opposed registration of the PROCAT mark pursuant to s 52 of the Act on the grounds specified at ss 42(b), 44 and 60. Caterpillar’s opposition relied on each of the following trade marks:

Trade mark no.

Priority date

CAT mark

Class

Registered goods

318732

1 June 1978

CAT

25

Clothing, footwear

502760

10 January 1989

18

Leather and imitation

leather bags, wallets

502762

10 January 1989

25

Clothing footwear, headgear

567670

(series)

10 January 1989

18

Leather and imitation

leather bags, wallets

1246277

13 June 2008

CAT

25

Clothing, footwear and

headgear

(Collectively, the CAT marks)

16    A delegate of the registrar published reasons on 28 June 2019, dismissing each ground of opposition and determined that the application of Puma may proceed to registration: Caterpillar Inc v Puma SE [2019] ATMO 99 (delegate’s decision).

17    In summary, the delegate reasoned on the s 44 grounds of opposition, that the PROCAT mark and the CAT word marks “when taken as a whole” did not “so clearly resemble each other that the use of [the PROCAT mark] is likely to deceive or cause confusion” in either category. In relation to the s 60 grounds, the delegate was not satisfied that as at the priority date the CAT word mark and the CAT logo had acquired a reputation in Australia amongst a significant number of persons in the relevant market such that because of that reputation, use of the PROCAT mark would be likely to deceive or cause confusion.

18    What is now before this Court is an application for leave to appeal from a decision of a judge of this Court who, on 27 August 2021, allowed the appeal by Caterpillar from the delegate’s decision: Caterpillar Inc v Puma SE [2021] FCA 1014; 162 IPR 430 (PJ).

19    The primary judge upheld Caterpillar’s grounds of opposition in relation to ss 44 and 60 of the Act and found it unnecessary to consider the s 42(b) ground. He allowed the appeal, set aside the decision of the delegate, determined that the trade mark application be refused and ordered that Puma pay the costs of the proceeding in this Court and the costs of the opposition proceeding before the delegate.

20    Leave to appeal is required pursuant to s 195(2) of the Act. The application for leave and the appeal were heard together.

21    The applicant contends that the primary judge erred by finding that (1) the PROCAT mark was deceptively similar to the CAT marks and (2) use of the PROCAT mark would be likely to deceive or cause confusion in light of the reputation of the CAT marks.

22    For the reasons that follow, we refuse leave to appeal and dismiss the application.

Application for leave

23    On 10 September 2021, Puma filed an application for leave to appeal the orders of the primary judge as required by s 195(2) of the Act. It relies on the following grounds, as supported by an unsworn affidavit of Emma Kate Mitchell dated 10 September 2021:

1.    In all the circumstances of the case, the decision of the primary judge is attended by sufficient doubt to warrant it being reconsidered by the Full Court.

2.    Substantial injustice will result if leave to appeal is refused supposing the decision to be wrong.

24    Puma submits that in considering the question of leave, rigid rules should not be formulated and each application is to be dealt with in accordance with its own special circumstances, relying on Pfizer Corp v Commissioner of Patents (2006) 155 FCR 578; [2006] FCAFC 190; at [7]- [12], Emmett, Allsop and Greenwood JJ.

25    In its written submissions, Puma identified four factors which it says favour a grant of leave:

Firstly, prior to the decision of the primary judge, Puma’s trade mark application had been accepted for registration following examination under Part 4 of the TM Act (during which s 44 would have been considered), with a delegate of the Registrar subsequently dismissing Caterpillar’s opposition during which both s 44 and s 60 were considered. The primary judge was the first decision-maker to consider that the procat mark ought not be registered. Secondly, if the decision of the primary judge is final, Puma will be denied the protection afforded to a registered trade mark under s TM Act. Thirdly, Puma has registered, and uses, the procat mark in other jurisdictions, such as the United States and Canada, where that mark co-exists with the CAT marks. Fourthly, for the reasons set out below, the decision of the primary judge is attended by sufficient doubt as to warrant the grant of leave.

(Original emphasis, footnotes omitted.)

26    Leave to appeal is opposed by Caterpillar primarily because the proposed grounds of appeal do not demonstrate error on the part of the primary judge.

27    The draft notice of appeal sets out the following grounds (omitting grounds 2(c), 4(a) and 4(b) which were not pressed):

1.    The primary judge erred by finding that the Respondent’s application to register the Trade Mark should be refused.

2.    The primary judge erred by finding (J [115], [135]) that the ground of opposition under section 44 of the Trade Marks Act 1995 (Cth) (TM Act) was established.

Particulars

(a)    The primary judge erred by finding (J [107]) that the Trade Mark was deceptively similar to each of the CAT marks.

(b)    In making the finding referred to in sub-paragraph (a) above, the primary judge erred:

(i)    by ascribing (or finding that consumers would ascribe) a “straightforward meaning” to the Trade Mark (J [109]);

(ii)    by finding that the Trade Mark would have a familiar or identifiable meaning to ordinary Australian consumers, being a professional “cat” or being positive toward “cat” (J [102]);

(iii)    by failing to find that the Trade Mark would be considered by ordinary Australian consumers as a single invented word comprising two syllables;

(iv)    by finding, and to the weight afforded to the finding, that there was a real and tangible risk that a significant number of consumers would be confused as to whether goods labelled with the Trade Mark were connected in the course of trade with CAT branded goods (J [111]).

(v)    by finding, and to the weight afforded to the finding, that consumers would be caused to wonder whether there was a commercial connection between “PROCAT branded goods and Caterpillar” (J [111]);

(vi)    by finding that the “fair and normal use” of the Trade Mark included the mark with a capital “p” and a capital “c”, and in doing so not limiting the question of notional fair and honest use of the Trade Mark in the fancy style applied for (J [113]);

(vii)    by the extent to which weight was afforded to evidence of the Applicant’s use of PROCAT in the USA and Canada when considering the question of notional use of the Trade Mark, which included use of the Trade Mark with a capital “p” and a capital “c” (J [113]).

(d)    Having regard to the evidence at trial, the primary judge ought to have found that, at the priority date of the Trade Mark, consumers would not have been caused to wonder whether the Applicant’s goods came from the same source as the Respondent’s goods.

(e)    The primary judge ought to have found that the Trade Mark was not deceptively similar to any of the CAT marks.

(f)    Further particulars are matters for submissions.

3.    The primary judge ought to have found that the ground of opposition under section 44 of the TM Act was not established.

4.    The primary judge erred by finding (J [130], [135]) that the ground of opposition under section 60 of the TM Act was established.

Particulars

(c)    The primary judge erred by finding (J [126], [129]) that use of the Trade Mark would be likely to cause confusion.

(d)    In finding that use of the Trade Mark would be likely to cause confusion, the primary judge erred by relying on “the same reasons” for upholding the section 44 opposition ground (J [129]).

(e)    The primary judge ought to have found that use of the Trade Mark would not be likely to cause confusion.

(f)    Further particulars are matters for submissions.

5.    The primary judge ought to have found that the ground of opposition under section 60 of the TM Act was not established.

(Original emphasis.)

28    We approach the leave question as follows. There are no rigid rules, dispositive verbal formulae or exhaustive criteria. In cases such as this, where the consequence of upholding the primary judge’s judgment may extinguish any right the applicant may have to obtain registration, the exercise of the discretion requires particular focus on that circumstance: see Lomas v Winton Shire Council [2003] AIPC 91-839; [2002] FCAFC 413 at [15]-[16], Cooper, Kiefel and Emmett JJ. However, if the Court is clearly satisfied that the proposed appeal has no merit, it would ordinarily be appropriate to refuse leave to appeal.

29    This approach differs from cases where an opponent has failed before a delegate and on appeal to a judge of this Court where, generally speaking, it is necessary to demonstrate “a clear prima facie case of error in the decision appealed from”: Bauer Consumer Media Ltd v Evergreen Television Pty Ltd (2019) 367 ALR 393; [2019] FCAFC 71 at [282], Burley J; Greenwood J agreeing.

30    For the appeal to succeed, Puma must demonstrate error be it of fact, law or in the exercise of a particular discretion in the findings or approach of the primary judge: Allesch v Maunz (2000) 203 CLR 172; [200] HCA 40 at [23], Gaudron, McHugh, Gummow and Hayne JJ. The issues of deceptive similarity and likelihood of deception or confusion pursuant to ss 44 and 60 of the Act are ones upon which reasonable minds may differ which, as this Court has recognised, requires more than disagreement with the ultimate findings of the primary judge. Although the passages are extensive, it is useful to set out the correct approach to the draft appeal grounds and in turn the application for leave which a Full Court of this Court summarised in Combe International Ltd v Dr August Wolff GmbH & CoKG Arznemittel (2021) 157 IPR 230; [2021] FCAFC 8, McKerracher, Gleeson and Burley JJ:

12.    The correct approach to the consideration of whether there is error by a primary judge has been addressed in a number of decisions. In Christian v Société Des Produits Nestlé SA (No 2) [2015] FCAFC 153; 327 ALR 630 at [123], the Full Court (Bennett, Katzmann and Davies JJ) said:

The determination of whether a sign used as a trade mark is deceptively similar to a registered trade mark involves an evaluative exercise upon which reasonable minds might differ. An appellate court can only intervene “if it is first shown that [the] assessment was affected by error of law or fact”: Food Channel Network Pty Ltd v Television Food Network GP (2010) 185 FCR 9 at [92]. Questions of judgment, nuance and degree are involved. Moreover, in a case of this kind, absent an error of principle, and unless the appeal court comes to an affirmative conclusion that the decision of the primary judge is wrong, weight should be given to the primary judge’s opinion: S & I Publishing Pty Ltd v Australian Surf Life Saver Pty Ltd (1998) 88 FCR 354 at 361.

13.    Where the process of evaluation by the primary judge has miscarried, the Full Court should carry out its own evaluation: Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83; 251 FCR 379 at [55] (Greenwood, Jagot and Beach JJ); Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93; 261 FCR 301 at [2]- [10] (Allsop CJ (Markovic J agreeing)).

14.    In Aldi Foods Perram J said (Allsop CJ and Markovic J agreeing):

[49] ...[The court] must be guided not by whether it disagrees with the finding (which would be decisive were a question of law involved) but by whether it detects error in the finding. On the one hand, error may appear syllogistically where it is apparent that the conclusion which has been reached has involved some false step; for example, where some relevant matter has been overlooked or some extraneous consideration taken into account which ought not to have been. But error, on the other hand, may also appear without any such explicitly erroneous reasoning. The result may be such as simply to bespeak error. Allsop J said in such cases an error may be manifest where the appellate court has a sufficiently clear difference of opinion: Branir at 437-438 [29].

[50]    There may seem an element of circularity in this, but the sufficiently clear difference of opinion bespeaks not merely that the appellate court has a different view to the trial judge but that the trial judge’s view is wrong even having regard to the advantages enjoyed by the trial judge and even given the subject matter: Branir at 435-436 [24].

See also Homart Pharmaceuticals Pty Ltd v Careline Australia Pty Ltd [2018] FCAFC 105; 264 FCR 422 (Murphy, Gleeson and Markovic JJ) at [35]- [37]; Verrocchi v Direct Chemist Outlet Pty Ltd [2016] FCAFC 104; 247 FCR 570 (Nicholas, Murphy and Beach JJ) at [45]- [47]; Hashtag Burgers Pty Ltd v In-N-Out Burgers, Inc. [2020] FCAFC 235 (Nicholas, Yates and Burley JJ) at [8].

15.    The task of an appellate court in reviewing an evaluative assessment was explained by Allsop J (as his Honour then was) in Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; 117 FCR 424 at [28]- [29] (Drummond and Mansfield JJ agreeing):

[28]    … First, the appeal court must make up its own mind on the facts. Secondly, that task can only be done in the light of, and taking into account and weighing, the judgment appealed from. In this process, the advantages of the trial judge may reside in the credibility of witnesses, in which case departure is only justified in circumstances described in Abalos v Australian Postal Commission (1988) 171 CLR 167; Devries v Australian National Railways Commission (1993) 177 CLR 472 and SRA v Earthline, supra. The advantages of the trial judge may be more subtle and imprecise, yet real, not giving rise to a protection of the nature accorded credibility findings, but, nevertheless, being highly relevant to the assessment of the weight to be accorded the views of the trial judge. Thirdly, while the appeal court has a duty to make up its own mind, it does not deal with the case as if trying it at first instance. Rather, in its examination of the material, it accords proper weight to the trial judge’s views. Fourthly, in that process of considering the facts for itself and giving weight to the views of, and advantages held by, the trial judge, if a choice arises between conclusions equally open and finely balanced and where there is, or can be no preponderance of view, the conclusion of error is not necessarily arrived at merely because of a preference of view of the appeal court for some fact or facts contrary to the view reached by the trial judge.

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

31    We proceed in accordance with that analysis.

The statutory scheme

32    By s 57 of the Act, the registration of a trade mark may be opposed on any of the grounds on which the application for the registration of a trade mark may be rejected.

33    Section 44 (1) of the Act relevantly provides:

(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.

Note 1: For deceptively similar see section 10.

Note 2: For similar goods see subsection 14(1).

(Original emphasis.)

34    Section 10 of the Act provides:

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

(Original emphasis.)

35    Section 60 of the Act provides:

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.

Note: For priority date see section 12.

(Original emphasis.)

Summary Contentions of the Applicant and Reasons of the Primary Judge

36    In the various ways particularised under grounds 2 and 3 of the draft notice of appeal, Puma contends that the primary judge erred by finding that the opposition under section 44 of the Act was established. In formulating the submissions in support of these grounds before us, senior counsel for Puma adopted a more nuanced approach commencing with the proposition that the PROCAT fancy mark is an invented word limited to the particular form, case and spacing that is depicted in the mark (which is to be contrasted with a word mark that comprises the word that is registered despite the form in which it is represented). Viewed in that way, counsel submitted that the primary judge erred in not limiting and restricting the PROCAT mark to its fancy form.

37    The primary judge comprehensively summarised and distilled the principles relevant to the assessment of deceptive similarity at PJ [89]- [96]. Puma does not contend error in that summary. Rather the draft appeal grounds are concerned with the application of those principles and in one limited respect (the surrounding circumstances ground at draft grounds 2(a), 2(b)(i)-(v), 2(d)-(e) and 3) whether his Honour impermissibly narrowed the circumstances to be considered in his examination of the trade context. Accordingly, it is unnecessary to set out his Honour’s summary, save where a proper understanding of the arguments presented to us warrants individual reference to relevant paragraphs of the primary judgment.

38    The primary judge found that the PROCAT mark was deceptively similar to each of the CAT marks by reason of the “combined effect” (PJ [107]) of each of the following findings of fact.

39    First, that the word “cat” comprised “the whole of the CAT word mark and one of the two elements of the CAT device mark (the second element being the triangle under the letter a). The word cat constitutes half the letters of the PROCAT mark and one of its two syllables”: PJ [108].

40    Second, that an ordinary consumer is likely to “read, comprehend and pronounce the PROCAT mark as a combination of two words, being, “pro and cat” at PJ [109]:

…pronounced as a combination of two words “pro” and “cat”, the word “procat” takes on a straightforward meaning. The word “cat” is a simple, well-known word. The syllable “pro” is a commonly used word, abbreviation and syllable in Australian English. As an adjective, it has become a colloquially accepted abbreviation for the word professional. It is also commonly used in its original Latin meaning being “for” (the opposite of against). Thus, pronounced as a combination of two words “pro” and “cat”, the word would have a familiar or identifiable meaning to ordinary Australian consumers, being a professional “cat” or being for or positive toward “cat”.

41    Third, that the relevant trade context “concerns a wide range of apparel, footwear, bags and accessories sold in retail stores and online in the work wear and lifestyle market segments”: PJ [110]. His Honour continued:

The evidence showed, and it is a matter of common experience, that goods in those categories generally have very similar styles across brands. In the case of clothes, there is very little difference in style across brands with respect to shirts, T-shirts, trousers, sporting jumpers or sweatshirts etc. In the case of footwear, there is very little difference in style across brands with respect to work boots, sneakers and other casual shoes. In the case of bags, there is very little difference in style across brands with respect to soft carry bags (duffel bags) or backpacks. The goods are common, everyday purchases which, individually, are modestly priced. The evidence showed that there was overlap in the retail channels used by Puma and Caterpillar, and there is no reason to think that the retail channels would be separate.

42    Fourth, from those findings his Honour concluded at PJ [111]:

In that trading context, in my view there is a real and tangible risk that a significant number of consumers, who were familiar with but had an imperfect recollection of the CAT mark, would be confused as to whether goods labelled with the PROCAT mark were connected in the course of trade with CAT branded goods, as being a “professional” or high performance or otherwise special line of CAT goods. There is a real and not remote risk that the use of the word “pro” in conjunction with the word “cat” in the PROCAT mark, when used on apparel, footwear, bags and accessories, would convey to many consumers that goods branded with the PROCAT mark are professional or high performance goods which are made or endorsed by, or otherwise associated with, Caterpillar. As such, consumers would be caused to wonder whether there is commercial connection between PROCAT branded goods and Caterpillar.

43    The primary judge then turned to and rejected several arguments advanced by Puma to negate the conclusion that the PROCAT mark is deceptive at PJ [113] – [114]:

[113]    First, the fact that Puma has applied to register the PROCAT mark as a fancy mark in lower case with sans-serif font does not limit the trade mark rights granted upon registration to use with a single colour or shade of lettering or indeed to use without any letters being capitalised. As stated above, I consider that the use of the PROCAT mark in Australia in the same manner as in the USA and Canada (as shown in the evidence), whereby the letters “pro” and “cat” have different shades or colours or the word is depicted with a capital “p” and a capital “c”, would constitute a use with alterations which do not substantially affect the identity of the trade mark. In my view, such use would constitute fair and normal use of the mark and, in assessing the likelihood of confusion, it is permissible to contemplate such use. The observations of Jessup J in Delfi referred to above and relied upon by Puma do not require a contrary conclusion. In the cited passage, his Honour cautioned against an approach which envisioned the use of the application trade mark with colours, font or background which replicated features of the prior registered mark. As his Honour observed, the relevant assessment is of the marks themselves. However, it is both permissible and necessary to consider the full parameters of fair and normal use of the applied for mark, because they are the rights granted by registration. As explained by Nicholas J in Vivo (at [114]):

    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 Re Application by Smith Hayden & Coy Ld (1946) 63 RPC 97 at 101; Berlei Hestia at CLR 362; ALR 449 and Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227 at 230–1; 114 ALR 157 at 161–2; 26 IPR 246 at 249–50.

[114]    Second, and relatedly, I do not place any material weight on the fact that the evidence suggests that it has been common for at least some traders to use multiple trade marks or branding elements on and in connection with footwear. In assuming fair and normal use of the applied for mark, the Court ignores the use of other marks or indicia that may distinguish the relevant goods: Saville Perfumery Ltd v June Perfect Ltd (1941) 58 RPC 147 at 174; Wingate at 128-129 and MID at 245. In any event, I accept Caterpillar’s submission that the evidence relied on by Puma in support of this conclusion is insufficient to make any clear finding about the extent of the practice across traders selling footwear, let alone the extent of the practice in respect of apparel, bags and accessories. The pictorial evidence on this issue was largely confined to the branding practices of Puma and Caterpillar in respect of footwear. The evidence of Mr Ors was confined to footwear and was given at the highest level of generality (in response to a question in cross-examination) and was qualified. Mr Ors agreed that, in relation to footwear traders in general, it is “not uncommon” to see multiple marks (such as a house mark, secondary mark and sub-brand) “depending on the style and market segment the trader was going after”. The extent to which the practice was followed in the Australian market, and across different market segments, was not explored with Mr Ors in cross-examination. Mr St Baker gave similar evidence in respect of footwear at a similar level of generality.

44    Thus the primary judge concluded at PJ [115] that the PROCAT mark is deceptively similar to the CAT marks and, as a consequence, registration must be rejected under s 44 of the Act.

The Draft Appeal Grounds and Submissions in Detail

45    It is convenient to adopt the grouping of the draft grounds as arranged and argued by counsel for Puma. The first is an asserted error in the assessment of the PROCAT mark and the assumption of normal and fair use of the mark for all goods covered by the application. Three discrete errors are identified: (1) a failure to limit the PROCAT mark to its fancy form; (2) the search for meaning of the mark when PROCAT is an invented word; and (3) misapplication of s 7 of the Act. These errors are the subject of draft grounds 2(b) (vi)-(vii).

46    The second concerns the finding at PJ [111] of contextual confusion. Broadly, the argument is that the primary judge adopted an unduly narrow approach in his consideration of the surrounding circumstances. This error finds expression variously at draft grounds 2 (a), 2(b)(i)-(v), 2(d)-(e) and 3.

47    The third rests on the contention that if the s 44 grounds are made out, it follows from the finding of the primary judge at PJ [129] (that it is likely that use of the PROCAT mark will cause confusion), that the s 60 ground of opposition must fail. This is draft grounds 4 and 5.

48    Although there is considerable overlap in some of the grounds, which at times were dealt with compendiously in submissions, to maintain coherence in our analysis we proceed by reference to these groupings.

Grounds 2(b)(vi)-(vii)

Puma Submissions

49    Proceeding seriatim, as to the first asserted error, Puma submits that the primary judge erred by failing to confine his consideration of the applied for mark to the “fancy” stylised form sought to be registered by Puma. Instead, the primary judge wrongly considered other forms of representation of the word “PROCAT” which he found would constitute “fair and normal use of the trade mark and, in assessing likelihood of confusion, it is permissible to contemplate such use”: PJ [113].

50    Senior counsel for Puma submits that consideration must be limited to the form depicted in the application and that changes to the form of a fancy mark have the consequence that it ceases to be the same trade mark, which propositions are said to flow from Qantas Airways Ltd v Edwards (2016) 119 IPR 271; [2016] FCA 729 (Qantas) at [75]- [76], Yates J. He further submits that the primary judge erred in considering the evidence (admitted over objection) of overseas online use of ProCat as a trade mark (with a capital P and C) in promotional material describing soccer boots (pictured below), duffel bags and lightweight rucksacks, as an example of normal and fair use of the PROCAT mark.

51    The primary judge at PJ [43] observed “[t]he marketing description of the above football boots in the online website referred to the brand as “ProCat” (with upper case “p” and “c”)”.

52    Senior counsel for Puma also submitted that the primary judge erred in respect of his consideration of the trade context upon which the finding of contextual confusion was based in that he wrongly searched for and ascertained meaning of the invented word which comprises the mark. In more detail the submission in the written case is:

…the Court’s finding that “[procat] would have a familiar or identifiable meaning to ordinary Australian consumers, being a professional cat or being positive toward cat” was based upon the erroneous treatment of notional “normal and fair use” including different representations of the word ‘procat’ such as ‘ProCat’ (PJ [109], [111] and [113]). Even if the procat mark is likely to be pronounced by consumers as two separate syllables ‘pro’ and ‘cat’, that is different from consumers seeing it as a combination of two separate words. Many trade marks are made-up words with no direct meaning which simply serve as the name of a business or product.

(Footnotes omitted.)

53    Whilst it is not argued that the primary judge erred in his determination of how PROCAT is likely to be pronounced, nonetheless it is said his approach was strained in the finding of a “familiar or identifiable meaning of ‘PROCAT’”, which is an invented word. Taking that submission a little further, the contention is that the primary judge failed to identify why consumers would understand the “cat” in a “a professional cat or being positive toward ‘cat’” as a reference to Caterpillar and/or its goods, and, to the extent that contextual confusion was based on other findings as to the CAT marks reputations, such findings amounted to an error given the direct finding that the CAT marks were not “famous or very famous”: PJ [128].

54    Contrary to the findings of the primary judge, it is submitted that the word cat has “other meanings and uses further to being used as a brand by Caterpillar”, including a feline animal, which is consistent with other marks owned by Puma in Australia and overseas, such as its leaping cat device which the primary judge found to be well-known at PJ [31]- [32].

55    Thus, Puma contends that there is no apparent reason why a consumer “would be likely to step from professional cat (if they were to arrive at that point at all) to Caterpillar and/or its goods. That erroneous step was plainly integral to the Court’s finding of deceptive similarity”.

56    As to the third contended error, the submission is that to the extent the primary judge relied on s 7(1) of the Act in his consideration of the normal and fair use of the mark he erred in so doing in that he impermissibly extended the scope of the applicant’s applied for mark. The application of s 7(1), Puma argues, is “retrospective and discretionary” and “may only be applied in relation to actual past uses (ie. ‘has used’)”, and was not intended to apply “automatically in relation to various hypothetical future uses”.

Caterpillar submissions

57    In response to the first, the fancy form error, Caterpillar submits that Puma’s contentions regarding the normal and fair use of the PROCAT mark should be rejected as the primary judge explicitly recognised that the application was for a fancy mark at PJ [44] and [113] and, in making his assessment of the PROCAT mark, had regard to the fancy form. These paragraphs must be read with PJ [109] which is “fulcral” to the reasoning. Senior counsel’s submission continued:

The primary judge found that “the PROCAT mark is likely to be read and pronounced by ordinary Australian consumers in a manner that separates its two syllables, “pro” and “cat””. Critically, the primary judge made this finding “whether the mark is depicted with the lettering of the two syllables “pro” and “cat” depicted with different colour and shading or the use of an upper case “p” and “c” … or whether the mark is depicted with all lettering in the same colour, shading and case” (emphasis added). It is clear from this analysis that the primary judge considered the PROCAT Mark when presented precisely as sought to be registered (all lower case and in a single colour) as well as when presented with insubstantial changes to the identity of the mark (different colours and upper case “P” and “C”). Of course, in this case, the “fancy” form of the mark could not itself have any impact on how consumers would pronounce the PROCAT Mark.

(Original emphasis.)

58    It was also proper for the primary judge to have regard to examples of Puma’s use of the PROCAT mark in overseas markets when considering normal and fair use, given that the PROCAT mark had not been used in Australia. More so, where the examples before the Court involved use of the PROCAT mark “in a manner that conforms with the identity of the PROCAT Mark as set out in the application”.

59    As to Puma’s reliance on Qantas, senior counsel for Caterpillar submitted that it is misconceived as the changes posited to the identity of the mark in that case were “dramatic and in no way comparable to the instances of actual use relied upon in the present case”. In particular, the submission is that the instances relied upon by the primary judge as examples of normal and fair use did not interfere with or distort the PROCAT mark in the manner contemplated in Qantas.

60    In response to the second, the search for meaning of an invented word error, the starting point is acceptance by Puma that Australian consumers would likely pronounce PROCAT as comprising two syllables: pro and cat. From this, as the submission developed, it is inevitable that the PROCAT mark will be pronounced in a way that conveys two distinct words with the consequence that use of the word “pro” in conjunction with cat “would convey to many consumers that goods branded with the PROCAT mark are professional or high performance goods of Caterpillar, endorsed by Caterpillar or associated with Caterpillar in some other way.”

61    As to the third contended error, misapplication of s 7(1) of the Act, counsel submits that there was no error in this reference. It provided at most a supporting basis for admitting evidence of Puma’s actual uses of the PROCAT mark and the notional use relied upon by the primary judge included use of the mark in the form applied for by Puma. Further, the definition of use of a trade mark in s 7(1) is not in terms confined to prior use and extends to hypothetical or notional use for the purposes of s 44 of the Act.

Resolution of grounds 2(b)(vi)-(vii)

62    In our view, the primary judge correctly understood that the application was for a fancy mark depicted in specific lower case sans-serif font and spacing at PJ [44] and [113]. He was also correct to reason that “it is both permissible and necessary to consider the full parameters of fair and normal use of the applied for mark, because they are the rights granted by registration”: PJ [113], which accords with established authority that it is the full extent of the monopoly right, if granted, that is to be considered. His Honour’s summary of the principles to be applied at PJ [90] commenced:

First, the relevant comparison is between the marks themselves. The comparison assumes a normal and fair use of the application trade mark for all goods or services covered by the application: Berlei Hestia Ltd v Bali Co Inc. [1973] HCA 43; (1973) 129 CLR 353 (Berlei) at 362; Wingate Marketing Pty Ltd v Levi Strauss & Co [1994] FCA 1001; (1994) 49 FCR 89 (Wingate) at 127-128 per Gummow J; MID Sydney Pty Ltd v Australian Tourism Co Ltd [1998] FCAFC 1616; (1998) 90 FCR 236 (MID) at 245; Vivo International Corporation Pty Ltd & Anor v Tivo Inc. & Anor [2012] FCAFC 159; 294 ALR 661 (Vivo) at [114] per Nicholas J (with whom Dowsett J agreed).

63    To that summary, we add the following. In Cooper Engineering Company Pty Ltd v Sigmund Pumps Ltd (1952) 86 CLR 536 the Court rejected a challenge to the registrar’s determination that “Rainmaster” was not deceptively similar toRain King” in respect of irrigation equipment for agricultural use. At 538 Dixon, Williams and Kitto JJ approved what Parker J (as Lord Parker was) said in In the Matter of an Application by the Pianotist Company Ltd for the Registration of a Trade Mark (1906) 2 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.

64    In Re Grundig Trade Mark [1968] RPC 89; Cross J found that the assistant comptroller had correctly concluded that use of a mark with a trefoil within a shield was not likely to cause confusion with the shamrock and its association with Ireland. Relevantly at 98 in a passage emphasised by counsel for Caterpillar he said:

Of course, one is not confined to the representation of the mark in the application. One can envisage any part of the mark as being in any colour and in this case one can certainly envisage the trefoil as coloured green as, indeed, the applicants often do colour it. I think one can envisage any changes in the mark as applied for which are so insubstantial that a user of the mark so altered would still rank as a user of the mark for the purposes of the Act.

65    To the same effect see also Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 594-595, Kitto J; Johnson & Johnson v Kalnin (1993) 115 ALR 215 at 218, Gummow J and Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365; [1999] FCA 1020 at [50], French J.

66    Contrary to these authorities, counsel for the applicant is critical of the reasoning of the primary judge at PJ [113], where he considered that other forms of representation of the PROCAT mark could be taken into account and did not confine himself to the fancy form, in lower case with sans-serif font. As framed, the contended error is that “when changes are made to the form of representation of a fancy mark, it ceases to be the same mark. With respect, that submission does not fairly address the reasoning of the primary judge at PJ [113] which we have previously set out, and the emphasis his Honour rightly placed on “normal and fair use”.

67    The error asserted mischaracterises the reasoning of the primary judge in this paragraph. His Honour did not impermissibly step beyond the normal and fair use of the applied for mark. Counsel further submits that this analysis is contrary to Qantas at [75]- [76]. We do not agree. Edwards sought registration of a sign to be printed on T-shirts comprising a stylistic representation of a kangaroo silhouetted and indented against the background of the T-shirt. A delegate of the registrar dismissed the opposition of Qantas pursuant to ss 44 and 60 of the Act as the owner of the well-known kangaroo tail fin mark. Yates J concluded that no ground of opposition was made out and dismissed the appeal. His Honour was concerned, in the part of his judgment relied upon by the present applicant, with expert evidence given by a witness for Qantas (Mr Blanket) in the following context:

73.    Mr Blanket was asked by the appellant’s solicitors to give his opinion, as at 16 April 2010, as to what “ordinary persons in Australia” would be likely to regard as “the visual and other similarities (if any) and/or differences (if any)” on seeing the 1984 kangaroo/tail fin mark used in relation to, amongst other things, advertising, marketing and merchandising services, and the opposed mark used in relation to clothing, footwear, headwear, shirts and T-shirts. Mr Blanket gave an opinion on those matters.

74.    Mr Blanket was then asked to express an opinion as to whether there was “any real tangible risk” of persons being caused to wonder whether clothing, footwear, headwear, shirts and T-shirts bearing the opposed mark came from the same source as the services provided under the 1984 kangaroo/tail fin mark (relevantly advertising, marketing and merchandising services) or vice versa. Mr Blanket said they would. He said there was a high likelihood. His reasons for that opinion were the similarities between the two marks (he said the similarities were stronger than the dissimilarities); consumer awareness of brand extension within the airline and travel industry; the use of “augmented” logos and imagery to make clothing items more fashionable; and consumer awareness that graphic designs of brands can evolve over time.

75.    The use of “augmented” logos and imagery requires further explanation. Mr Blanket said that manufacturers of clothing will add visual appeal to a “standard” logo graphic by enlarging it; adding different colours or graphic images to the logo; and altering part or the whole of the logo design. Mr Blanket said that if consumers were faced with a T-shirt made in the design of the opposed mark, they would be “likely to believe that the kangaroo represented would be from or licensed by Qantas”. By this I understand Mr Blanket to be referring to a purported use of the opposed mark in which the T-shirt element is subordinated to the shape of the goods themselves (as a T-shirt).

68    These passages set out factual conclusions which are not of assistance in resolving the draft grounds of appeal and his Honour did not state a principle which conflicts with those we have set out. That the applicant applied for a fancy form of mark did not limit the scope of the inquiry pursuant to s 44(1) of the Act to that precise form. The question of deceptive similarity is to be resolved notionally on the assumption that the PROCAT mark, if registered, will be used to the full extent of the statutory right of the owner. In answering that question it was clearly open to the primary judge to consider, as examples of normal and fair use, the manner in which the PROCAT mark had been used in the USA and Canada. The differences in shading and colouring, whether or not combined with capital lettering, did not step beyond normal and fair use of the applied for mark and in our view illustrated the likelihood of confusion that his Honour was required to assess having regard to all of the relevant circumstances.

69    A related submission that Puma makes is that the primary judge also erred in that he construed the reference to “a trade mark”, being the applicant’s trade mark in s 44(1) of the Act, as a reference to “the applicant’s trade mark or any trade mark substantially identical thereto when properly construed, the section confines the scope of the inquiry to the particular form depicted in the application. It is further said that the same error was made in the construction of “a trade mark” at s 60. We reject that submission as not materially different to the submissions concerning notional use and for the same reasons.

70    The next submission advanced is that the primary judge misapplied s 7(1) of the Act so as to impermissibly extend the scope of what constitutes fair and normal use of the PROCAT mark for the question of whether that mark is deceptively similar to the CAT mark. Section 7 provides:

Use of trade mark

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

Note: For prescribed court see section 190.

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

(3)    An authorised use of a trade mark by a person (see section 8) is taken, for the purposes of this Act, to be a use of the trade mark by the owner of the trade mark.

(4)    In this Act:

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

(5)    In this Act:

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

(Original Emphasis.)

71    The primary judge referenced this provision at PJ [44] of his reasons when explaining why he ruled against Puma upon its objection to the admissibility of evidence concerning the use of the PROCAT mark on products in the USA and in Canada. Relevantly he said:

Caterpillar submitted that the evidence was relevant as illustrating what would be considered the fair and normal use of the mark, which is relevant to the assessment of deceptive similarity under s 44 of the Act and the likelihood of deception or confusion under s 60 of the Act. I accepted that submission. In my view, the above uses of the PROCAT mark are within the parameters of the fair and normal use of the mark such that, if the mark were registered, the statutory rights would extend to such use. While the PROCAT mark has been applied for in Australia as a “fancy” mark in lower case lettering and sans-serif font (as depicted in paragraph 1 above), the Act contemplates that the owner of a registered mark may use the mark with alterations which do not substantially affect the identity of the trade mark (see, for example, s 7(1)). In my view, the use of the PROCAT mark in Australia in the same manner as in the USA and Canada (as shown in the evidence), whereby the letters “pro” and “cat” have different shades or colours or the word is depicted as a single word but with a capital “p” and a capital “c”, would constitute a use with alterations which do not substantially affect the identity of the trade mark.

72    The difficulty with Puma’s submission that his Honour misapplied s 7(1) of the Act is that his Honour did not apply s 7(1) to s 44. Rather, for the purpose of determining whether the opposed mark is deceptively similar to any of Caterpillar’s registered trademarks, his Honour considered whether use of the mark in the form in which it had been used by Puma overseas might properly be regarded as fair and normal use. In this regard, his Honour was entitled to take into account any potential use of the opposed mark with additions or alterations that did not substantially affect its identity. In referring to s 7(1), we understand his Honour to be recognising that it may be necessary to consider how the opposed mark could be used within the range of normal and fair use in deciding whether the mark is likely to deceive or cause confusion. For the purpose of deciding that question, it was relevant to consider whether deception or confusion would be likely to occur if Puma were to use the mark with additions and alterations not substantially affecting its identity (eg. by the use of capitalised rather than lower case letters). In that context, his Honour’s reference to s 7 was apposite.

73    We also note that the phrase “use of a trade mark” is defined in s 6 of the Act to have “the meaning affected by subsections 7(1), (2) and (3)”. Accordingly, where the phrase “use of a trade mark” appears in a section of the Act, it may be necessary to ask whether its operation is affected by (inter alia) s 7(1). For instance, and of relevance to this case, it may be necessary when applying s 60 to consider whether an opposed mark would be likely to deceive or cause confusion if it were used in a manner that involved additions or alterations that did not substantially affect its identity. Ultimately, the question is whether fair and normal use of the mark would be likely to deceive or cause confusion.

74    For these reasons, there is no merit in proposed grounds 2(b) (vi)-(vii).

Grounds 2(a), 2(b)(i)-(v), 2(d)-(e) and 3

Puma Submissions

75    There is considerable overlap in the framing of the submission that the primary judge erred in the way he assessed likely confusion amongst Australian consumers in the trade context. Building on the previous submission of error in the assessment of notional normal and fair use, Puma contends the primary judge wrongly searched for meaning in an invented word which then caused him to overlook that:

the relevant consumer in this case would be aware that ‘cat’ had other meanings and uses further to being used as a brand by Caterpillar. The obvious meaning the consumers may ascribe to the ‘cat’ element in ‘procat’ (if they would necessarily break the word up and ascribe meanings to its elements) would be the feline animal, which is consistent with the verbal expression of Puma’s well-known leaping cat trade mark.

(Original emphasis.)

76    The primary judge is criticised for his apparent confinement of trade context to a single paragraph at PJ [110], which counsel characterises as “findings of a very generalised nature which do not pay homage to the evidence referenced at PJ [63], [64], [66] and [83].

77    It is emphasised that the PROCAT mark differs significantly from the CAT marks such that there is no apparent reason why consumers would step from professional cat to Caterpillar and or its goods. This was described by counsel as a false step error of the type identified by Perram J in Aldi Foods Pty Ltd v Moroccanoil Ltd (2018) 261 FCR 301; [2018] FCAFC 93 at [49] (Aldi). Allsop CJ and Markovic J each agreed with Perram J.

Caterpillar Submissions

78    The primary submission framed by senior counsel for Caterpillar is that it follows inevitably from acceptance by Puma that the primary judge was correct to reason at PJ [98] and [109] that consumers will likely pronounce PROCAT as two syllables pro and cat, that those consumers will pronounce the mark in a way that conveys the two distinct words which comprise the syllables. On that submission, it matters not that the opposed mark is an invented word: invention does not mask this obvious feature as explained by the primary judge at PJ [39].

79    From that premise the primary judge correctly stated the test to assess deceptive similarity at PJ [91]- [92] and correctly applied it to each of his factual findings at PJ [108]- [111]. Necessarily the primary judge engaged in an evaluative assessment which was open on the evidence. Proceeding in this way, differences identified by Puma between the case and font of the marks do not affect the primary findings of fact and the conclusion of deceptive similarity under s 44 of the Act.

Resolution of grounds 2(a), 2(b)(i)-(v), 2(c)-(e) and 3

80    Puma characterises these as the “connection with Caterpillar grounds” the essence of which is concerned with the analysis of trade context by the primary judge.

81    His Honour extensively summarised the evidence and made factual findings commencing at PJ [15] and concluding at [85] on each of the following topics: (1) the history of the business of Puma, in particular the marketing and sale of its products commencing in 1957; (2) the development and evolution by Puma of its well-known leaping cat trade mark; (3) use of the trade mark PROCAT in the USA and Canada; (4) the history and development of the Caterpillar business from formation as a heavy machinery manufacturing company in the USA in 1892 and subsequent diversification into many business enterprises including, from the 1970’s, diversification to the manufacture and branding of footwear, clothing and related apparel; (5) development and registration of the various forms of Caterpillar trade marks; (6) the licensing arrangements of Caterpillar for use of its trade marks in relation to a range of consumer goods; (7) the marketing and sale of CAT branded goods in Australia; (8) the substantial and valuable reputation acquired by Caterpillar in each of its CAT marks in Australia; and (9) competition between Caterpillar and Puma in relation to the supply of apparel, footwear, bags and accessories in Australia.

82    Puma does not contend in any of its draft appeal grounds that these findings were not open on the evidence. In several respects, the complaints focus upon the weight given by the primary judge to his findings of fact. Other complaints focus upon the evaluative task undertaken by the primary judge in order to address the issue of deceptive similarity. At the outset, the difficulty that Puma faces in so framing the draft appeal grounds is that it must identify specific error of fact or law that infect the evaluation undertaken by the primary judge. As explained above, it is insufficient that reasonable minds might differ upon the outcome of the evaluative assessment that is involved.

83    We do not accept as valid the distinction sought to be drawn by Puma that whilst consumers will likely pronounce PROCAT as comprising two syllables, nonetheless they will appreciate it as a combination of two separate words. In our view, that is a strained and quite unrealistic distinction and the primary judge was correct not to accept it in his reasoning which relevantly at PJ [108]- [109] was:

First, the word “cat” comprises the whole of the CAT word mark and one of the two elements of the CAT device mark (the second element being the triangle under the letter “a”). The word “cat” constitutes half the letters of the PROCAT mark and one of its two syllables.

Second, an ordinary consumer is likely to read, comprehend and pronounce the PROCAT mark as a combination of two words, “pro” and “cat”. Neither party adduced evidence of a linguistics expert in relation to the likely manner of reading, comprehending and pronouncing the PROCAT mark by ordinary English speaking Australian consumers. However, that does not prevent the Court from making findings with respect to that issue, in circumstances where the PROCAT mark comprises a word using letters of the English (Roman) alphabet which will be directed to ordinary Australian consumers of work wear and lifestyle apparel, footwear, bags and accessories: see Companhia Souza Cruz Industria E Comercio v Rothmans of Pall Mall (Australia) Ltd (1998) 41 IPR 497 at 504. Caterpillar submitted, and I accept, that the PROCAT mark is likely to be read and pronounced by ordinary Australian consumers in a manner that separates its two syllables, “pro” and “cat”. It is much less likely that the PROCAT mark would be read and pronounced as a single word such as to rhyme with, or have the same syllabic emphasis as, the words “pocket” or “rocket”. In my view, this would be the case whether the mark is depicted with the lettering of the two syllables “pro” and “cat” depicted with different colour and shading or the use of an upper case “p” and “c” (such as in respect of the football boots and bags offered in the USA and Canada the subject of evidence), or whether the mark is depicted with all lettering in the same colour, shading and case. In so far as the mark is depicted with different styles of lettering of the two syllables “pro” and “cat”, the reader is effectively directed to comprehend and pronounce the two syllables as two separate words. However, even if the mark is depicted with all lettering in the same colour, shading and case, the more natural pronunciation for an ordinary Australian consumer is the same. This is for two related reasons. First, pronounced so as to rhyme with “pocket” or “rocket”, the word “procat” would have no apparent meaning and therefore would be read as an unfamiliar, made-up word. Second and conversely, pronounced as a combination of two words “pro” and “cat”, the word “procat” takes on a straightforward meaning. The word “cat” is a simple, well-known word. The syllable “pro” is a commonly used word, abbreviation and syllable in Australian English. As an adjective, it has become a colloquially accepted abbreviation for the word professional. It is also commonly used in its original Latin meaning being “for” (the opposite of against). Thus, pronounced as a combination of two words “pro” and “cat”, the word would have a familiar or identifiable meaning to ordinary Australian consumers, being a professional “cat” or being for or positive toward “cat”.

84    Those paragraphs do not reveal any error. Each finding was open on the evidence. The analysis is logical, indeed compelling. It is also to be understood with how his Honour dealt with the invented word contentions of Puma. At PJ [39] his Honour reasoned that whilst the opposed mark is an invented word “it is an obvious feature of the mark that it incorporates the word cat and an additional word pro’”. In its ordinary and contextual meaning, as his Honour continued, pro is an abbreviation of the word “professional. We reject the submission of Puma, that consumers of ordinary intelligence and memory would not understand the abbreviation in accordance with that ordinary meaning, as linguistically strained and improbable.

85    The submission of Puma that the primary judge limited his consideration of trade context to a single paragraph at PJ [110] as founding his conclusion that it is likely consumers would associate cat in PROCAT with Caterpillar and or its goods ignores the considerable analysis which precedes it. The finding sought to be impugned is:

Third, the relevant trade context concerns a wide range of apparel, footwear, bags and accessories sold in retail stores and online in the work wear and lifestyle market segments. The evidence showed, and it is a matter of common experience, that goods in those categories generally have very similar styles across brands. In the case of clothes, there is very little difference in style across brands with respect to shirts, T-shirts, trousers, sporting jumpers or sweatshirts etc. In the case of footwear, there is very little difference in style across brands with respect to work boots, sneakers and other casual shoes. In the case of bags, there is very little difference in style across brands with respect to soft carry bags (duffel bags) or backpacks. The goods are common, everyday purchases which, individually, are modestly priced. The evidence showed that there was overlap in the retail channels used by Puma and Caterpillar, and there is no reason to think that the retail channels would be separate.

86    That finding must be read with each of the following findings of fact:

(1)    That in Australia, Puma sells its products through its own retail stores and through third-party retailers in addition to its online presence through its website and websites of various retailers: PJ [30];

(2)    The business of Puma has traditionally been based upon athletic and sports footwear and apparel and sports accessories. Over time, Puma has expanded its range of products particularly to casual fashion and lifestyle products. The range of casual products is sports-inspired which has permitted Puma to develop products in areas outside of the products sold through partners and specialised suppliers: PJ [35];

(3)    Puma has entered into co-branding arrangements with other companies that are commercially important to its business and those arrangements have increased over recent years. As an example, co-branding arrangements exist with Warner Bros: PJ [36];

(4)    As at the priority date, the CAT branded “soft goods” such as apparel, footwear and bags have been sold in Australia by Caterpillars authorised retailers as well as licensees: PJ [60];

(5)    Since 1984, Wolverine has been Caterpillars Australian (and global) footwear licensee through which footwear is offered for sale to retailers comprising work boots and lifestyle shoes: PJ [61];

(6)    Since 2006 Caterpillar has licensed the sale of its Australian and global apparel and accessories business branded as Caterpillar and CAT which includes T-shirts, woven shirts, sweatshirts, vests, jackets and a wide variety of outerwear: PJ [62];

(7)    Since 2011 and as at the priority date, branded goods have been distributed to retailers in Australia comprising such well-known brands as Athletes Foot and Merrell: PJ [63];

(8)    CAT branded goods have been available from approximately 1000 retailers across Australia including such well-known retailers as Myer and David Jones: PJ [64]; and

(9)    Caterpillar owns the domain names for each of the CAT retail websites but allows licensees to manage those websites: PJ [65].

87    At PJ [85], the primary judge accepted evidence from a witness called by Caterpillar that in the footwear and apparel markets in which CAT branded products are sold, Puma is a competitor of Caterpillar.

88    This summary demonstrates that the primary judge did not, contrary to the submission of Puma, confine his analysis of trade context to the findings at PJ [110]. It is elementary that the reasons must be read as a whole. Puma does not submit that each of those findings were not open on the evidence. Whether other findings may have been open to his Honour is not to the point: Puma has not in our view demonstrated error in the trade context findings of fact that were made by the primary judge.

89    For these reasons, we reject the analogy sought to be drawn with the judgment of Perram J in Aldi at [49]. What his Honour was concerned with is the middle ground which often presents on appeals by way of rehearing between errors of law where an “an appellate court is not influenced in its view of the law by the conclusions of the trial judge”: [45] and findings of fact that turn upon the credibility of witnesses: [46]. His Honour at [47] then turned to the grey area in which the amount of deference shown to a trial judges conclusions is a function of the relative advantage enjoyed by the trial judge over the appellate court”, which occurs when the issue is what is the proper inference to be drawn from facts which are either undisputed or established by findings of the primary judge which are not impugned. We previously quoted from [49] of Perram J’s reasons in which he referred to the situation in which the primary judge may have taken a false step on the way to reaching a final conclusion (eg. taking into account an irrelevant consideration).

90    Perram J’s reasoning in Aldi does not assist the applicant’s arguments. There is no “false step in the reasoning of the primary judge. For the reasons we have explained, the primary judge, having correctly identified the relevant legal principles, applied each to the facts found and in doing so did not overlook a relevant matter. Nor did he, take into account an irrelevant matter in his assessment of the trade context and each of the circumstances relevant to the assessment of the hypothetical consumer.

91    An additional submission that Puma makes is that the primary judge erred by failing to consider (or perhaps more elegantly expressed by failing to find) that the hypothetical consumers would understand that “cat had other meanings and uses apart from the CAT marks and that Puma with its leaping cat device is well-known in the marketplace. This submission was developed as the “Chifley” point by reference to MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236, Burchett, Sackville and Lehane JJ (Chifley). That was an infringement proceeding by MID as the owner of an office tower known as “The Chifley Tower” and the proprietor of three registered trade marks each including the words “Chifley Tower.” The respondents were in the business of managing various hotels, some of which were intended to be operated by incorporating the Chifley name, such as “Chifley on the Wharf” at Woolloomooloo in Sydney. The primary judge, Hill J, dismissed the proceeding and the Full Court dismissed the appeal to it. The appeal was primarily concerned with the question whether the respondents were providing services, or services of the same description, in respect of which the trade marks were registered. The Full Court held that the conduct of an hotel business cannot ordinarily be described as property management services within a class 36 – the leasing of office and retail space and building and property management.

92    The Court also considered the question of deceptive similarity and concluded that the proposed branding of the respondents was not deceptively similar to the registered marks. In a passage emphasised by senior counsel for the applicant at 246 the Court said:

In this case, the character of the mark includes, we think, two significant elements. One is that Chifley is familiar not only as the name of a former Prime Minister but, as the evidence shows, also from its use in a number of geographic and other contexts. There are suburbs, districts or places known as Chifley in the Sydney Metropolitan area (such as Chifley Square itself), in Canberra and in Bathurst; Bathurst, particularly, was Ben Chifley's home town and there are a number of places there which are named after him. There is (as has been seen) a Chifley Arcade in Sydney; there is a well-known restaurant called The Chifley in Canberra. The ordinary person whose reaction is in question need not be credited with an encyclopaedic knowledge of everything to which the name Chifley has been applied, but should be credited with a general knowledge that there are several such applications.

93    In oral submissions, counsel developed his submission commencing with the proposition that PROCAT is an invented word. From that step, according to the argument, the word “cat” does not solely reside in Caterpillar in the market place, Puma has been in the market place for decades with its well-known leaping cat device and that in the consideration of the surrounding circumstances it cannot be assumed that the consumer is unaware that the word “cat” is not exclusive to Caterpillar. Counsel was careful to emphasise that this submission did not invite this Court to stray into the territory of reputation in considering deceptive similarity under s 44 of the Act. Rather, the more nuanced point developed in oral submissions focused upon the reasoning of the primary judge at PJ [111]:

In that trading context, in my view there is a real and tangible risk that a significant number of consumers, who were familiar with but had an imperfect recollection of the CAT mark, would be confused as to whether goods labelled with the PROCAT mark were connected in the course of trade with CAT branded goods, as being a “professional” or high performance or otherwise special line of CAT goods. There is a real and not remote risk that the use of the word “pro” in conjunction with the word “cat” in the PROCAT mark, when used on apparel, footwear, bags and accessories, would convey to many consumers that goods branded with the PROCAT mark are professional or high performance goods which are made or endorsed by, or otherwise associated with, Caterpillar. As such, consumers would be caused to wonder whether there is commercial connection between PROCAT branded goods and Caterpillar.

94    The error attributed to the primary judge, as developed in oral submissions, is that his Honour employed an overly broad approach to likelihood of confusion which failed to take account of Puma’s reputation in the leaping cat device in order to found the conclusion that there is a real and not remote risk that consumers would associate the PROCAT mark with goods made, endorsed by or otherwise associated with Caterpillar.

95    In our view, whilst the primary judge found at PJ[31] that the Puma leaping cat device is a well-known trade mark, that does not assist the argument that consumers of the relevant products should be imputed with some degree of knowledge that the word “cat” is not exclusive to Caterpillar and its goods with the consequence that there is no real risk that they would be left in doubt or have cause to wonder whether goods labelled with the PROCAT mark were connected with Caterpillar and its goods. The primary judge correctly summarised the principles to be applied commencing at PJ [90] and concluding at [96] including (with our ellipsis and the omission of selected citations):

90    First, the relevant comparison is between the marks themselves. The comparison assumes a normal and fair use of the application trade mark for all goods or services covered by the application…. A wider inquiry concerning the reputation of the marks, of the kind that might be undertaken in a passing off action or a proceeding in which misleading and deceptive conduct is alleged, is not appropriate… Similarly, the idiosyncratic manner in which the alleged infringer uses the mark (for example, with disclaimers or additions to the mark) is not relevant…. However, in assessing the likelihood of deception or confusion, it is relevant to consider the relevant trade or business, the way in which the particular goods or services are sold and the character of the probable acquirers of the goods or services… As stated by Dodds-Streeton J in Tivo Inc. v Vivo International Corp Pty Ltd [2012] FCA 252 (Tivo) at [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.

91    Second, the test is not a “side-by-side” comparison of the marks. Deceptive similarity is to be assessed by reference to persons who do not have an opportunity to compare the respective marks side-by-side……As stated by Windeyer J in Shell (at 415):

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

92     Third, while the deception or confusion must result from the similarity in the marks, the likelihood of deception or confusion is to be judged not by the degree of similarity alone but by the effect of the similarity in the circumstances: Shell at 416, per Windeyer J. Confusion may arise from two word marks in a number of ways. The confusion might arise because of the textual similarity of the words, or because of the phonetic similarity of the words when pronounced, or there may be conceptual confusion where consumers might think that the product bearing the impugned mark is a variant of, or related to, an existing brand In Australian Woollen Mills, Dixon and McTiernan JJ explained (at 658):

...the marks ought not, of course, to be compared side by side. An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought. The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same. The effect of spoken description must be considered. If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express-their desire to have the goods, then similarities both of sound and of meaning may play an important part.

96    What is clear from those principles is that the hypothetical inquiry, by reference to all of the surrounding circumstances, is necessarily an artificial one as explained by this Court in Chifley at 245:

It is true, in infringement proceedings, that the question to be asked is in one respect at least somewhat artificial: the person who may be caused to wonder is not one who knows of the actual business of the proprietor of the registered mark, the goods it produces or the services it provides, but one who is to be credited with a recollection of the mark in relation to the full range of goods or services to which the registration extends. That degree of artificiality can be justified on the ground that it is necessary in order to provide protection to the proprietor’s statutory monopoly to its full extent.

97    It hardly needs to be said that the circumstances considered in Chifley are very different to the present. Chifley, as the passage emphasised by counsel for the applicant makes clear, is a word that conveys many meanings including the surname of a former Prime Minister and various geographic locations. It is the character of the mark itself which conveyed those meanings. The decision does not support the submission put in this appeal that the primary judge, when considering the hypothetical consumer with knowledge of Puma and its leaping cat device and familiarity with, but imperfect recollection of the CAT marks, erred in his conclusion at PJ [111] that there is a real and tangible risk of confusion.

98    In our view it was open to his Honour, in undertaking the evaluative assessment required, to conclude that consumers would be caused to wonder whether there is a commercial association between PROCAT branded goods and those of Caterpillar even with a knowledge of Puma and its leaping cat device. It may be that some consumers would not be confused, but that is not to the point. His Honour was concerned with the impression of a significant number of hypothetical consumers.

99    His Honour’s conclusion is not undermined by the fact that there are differences, described by senior counsel for the applicant as significant, between the CAT device mark and the PROCAT mark in case and font. The primary judge was careful to set out the form of each device mark in his reasons at [1], [6], [42] and [54] and the applicant does not contend that his Honour overlooked these matters in reaching his ultimate conclusion of deceptive similarity at PJ [111], which must be read with the analysis which commences at PJ [107].

100    Whilst reasonable minds might differ upon the outcome of the hypothetical inquiry, we are not satisfied that the assessment of the primary judge was infected by any material error of fact or law.

101    For these reasons there is no merit in proposed grounds 2(a), 2(b)(i)-(v), 2(d)-(e) or 3.

Grounds 4 and 5

102    Section 60 of the Act provides:

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.

Note: For priority date see section 12.

(Original emphasis.)

103    At PJ [129] the primary judge found that use of the PROCAT mark would be likely to cause confusion because of the reputation of the CAT marks within the meaning of subparagraph (b) of this provision for the same reasons as set out in his analysis of deceptive similarity pursuant to s 44 of the Act.

104    Puma did not advance any submission in addition to its s 44 arguments in support of these draft grounds. It follows from our analysis of the s 44 arguments, that these draft grounds lack merit for the same reasons.

Conclusion

105    As we have concluded that there is no merit in any of the proposed appeal grounds, we refuse leave to appeal pursuant to s 195(2) of the Act and we dismiss the originating application. It was not submitted that costs should not follow the event. In our view this is an appropriate case for the assessment of costs to be undertaken in a lump sum pursuant to rule 40.02 of the Federal Court Rules 2011 (Cth), having regard to the discretionary considerations that are addressed at Part 4 of the Costs Practice Note (GPN-COSTS).

106    Accordingly, we make the following orders:

1.    The applicant’s application for leave to appeal pursuant to s 195(2) of the Trade Marks Act 1995 (Cth) filed on 10 September 2021 is dismissed.

2.    The applicant is to pay the respondent’s costs assessed in a lump sum pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth).

I certify that the preceding one hundred and six (106) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Nicholas, Rofe and McElwaine.

Associate:

Dated:    9 September 2022