FEDERAL COURT OF AUSTRALIA

TRADE MARKS – “Chifley Tower” – infringement – whether use in relation to services in respect of which trade mark is registered – whether hotel management falls within ordinary meaning of “property management services” – whether use in relation to services of the same description as services in respect of which trade mark is registered – relevance of overall character or description of services involved – whether signs proposed to be used are deceptively similar to registered trade mark – whether hypothetical ordinary person would be caused to wonder or entertain a reasonable doubt about whether services came from the same source – real tangible danger of confusion – cross‑appeal to cancel registrations – capacity to distinguish services in respect of which they are registered – geographical name – whether other persons trading in services of the relevant kind, being actuated by proper motives, would wish to use that name in connection with their services – internal misrepresentation – whether mark suggested false connection between proprietor’s services and building.

Trade Marks Act 1995 (Cth), ss 6, 10, 41, 43, 44, 57, 88(2)(a), 120, 122(1)(a)(i), 234(2)

Trade Marks Act 1955 (Cth), ss 24, 26, 33(2), 36(1A)

Trade Marks Regulations 1958, Sch 4, Pt II

Trade Marks Regulations 1995, Sch 1, Pt 2

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

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

Re J Lyons & Co Ltd’s Application [1959] RPC 120, applied

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

Polaroid Corporation v Sole N Pty Ltd [1981] 1 NSWLR 491, referred to

Mark Foy’s v Davies Co‑op & Co Ltd (1956) 95 CLR 190, referred to

Marc A Hammond Pty Ltd v Papa Carmine Pty Ltd [1976] 2 NSWLR 124, referred to

NSW Dairy Corporation v Murray Goulburn Co‑operative Co Ltd (1989) 14 IPR 26, cited

Advanced Hair Studio of America Pty Ltd v Registrar of Trade Marks (1988) 12 IPR 1, cited

Chancellor, Masters and Scholars of the University of Oxford v Registrar of Trade Marks (1990) 24 FCR 1, cited

Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511, applied

FH Faulding & Co Pty Ltd v Imperial Chemical Industries of Australia and New Zealand Ltd (1965) 112 CLR 537, cited

Registrar of Trade Marks v W & G Du Cros Ltd [1913] AC 624, cited

MID SYDNEY PTY LTD  v THE AUSTRALIAN TOURISM COMPANY LIMITED AND THE INTERNATIONAL COLLEGE OF TOURISM AND HOTEL MANAGEMENT PTY LTD AND TOURAUST CORPORATION PTY LIMITED AND TOURAUST HOTELS PTY LIMITED

NG 274 of 1998

THE AUSTRALIAN TOURISM COMPANY LIMITED AND THE INTERNATIONAL COLLEGE OF TOURISM AND HOTEL MANAGEMENT PTY LTD AND TOURAUST CORPORATION PTY LIMITED AND TOURAUST HOTELS PTY LIMITED v MID SYDNEY PTY LTD

NG 275 of 1998

BURCHETT, SACKVILLE AND LEHANE JJ

SYDNEY

18 DECEMER 1998

ON APPEAL FROM A SINGLE JUDGE OF

THE FEDERAL COURT OF AUSTRALIA

THE COURT ORDERS THAT:

1.         The appeal be dismissed.

2.         The appellant pay the respondents’ costs of the appeal.

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

ON APPEAL FROM A SINGLE JUDGE OF

THE FEDERAL COURT OF AUSTRALIA

THE COURT ORDERS THAT:

1.         The cross-appeal be dismissed.

2.         The cross-appellants pay the cross-respondent’s costs of the cross-appeal.

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

ON APPEAL FROM A SINGLE JUDGE OF

THE FEDERAL COURT OF AUSTRALIA

NG 274  of   1998

NG 275  of   1998

REASONS FOR JUDGMENT

THE COURT:

Background:  decision under appeal

The appellant (MID) is the owner of a property known as The Chifley Tower.  It is situated in Chifley Square, Sydney and  has frontages to Elizabeth, Bent and Phillip Streets.  The Chifley Tower is a large, modern and impressive office building consisting of 42 storeys, excluding the basement car park.  Its tenants are substantial corporations and firms.  It incorporates also, on Level 41, a well‑known restaurant.   Three floors are given over to restaurants and shops of a standard appropriate to their association with The Chifley Tower.  The three floors are known as the “Chifley Plaza”. 

MID is the proprietor of three registered trademarks.  The first of them, the registration date of which is 12 June 1990, comprises the words “Chifley Tower”: it is registered in respect of services in class 36, described as “property management services, retail and office leasing services”.  The registration date of the other marks is 7 January 1992.  Each comprises a device, which may be a stylised representation of the upper portion of The Chifley Tower; beneath the device appears:

THE

CHIFLEY

TOWER

One of those marks is registered for services in class 36 described as “leasing of office and retail space; building and property management”.  The other is registered in respect of services in class 37, described as “construction repair and building maintenance services”.  Class 36 includes “Insurance; financial affairs; monetary affairs; real estate affairs”; Class 37 includes “Building construction; repair; installation services”: Trade Marks Regulations 1958, Sch 4, Pt II; Trade Marks Regulations 1995, Sch 1, Pt 2.

The respondents are connected (the precise connection is somewhat complex and fortunately does not matter for the purposes of this appeal) with a number of hotels both existing and proposed.  The existing hotels, which are located in five Australian capital cities, have hitherto operated under the name “Country Comfort”.  It is intended that a number of the existing and proposed hotels will be given a name which includes the word “Chifley”.  Those hotels will, it is intended, be operated or managed by one of the third respondents, or possibly a company associated with them, under management contracts with the owners or lessees of the hotels.  I shall use the name “Touraust” to refer indiscriminately to each manager so appointed.  Touraust will receive remuneration including an interest in the profits of the hotel business.  It will be licensed by one of the other respondents to use the name “Chifley” in connection with the operation or management of each of the hotels.  One of the proposed hotels, intended to be called “Chifley on the Wharf”, is in the course of construction on the Finger Wharf at Woolloomooloo, Sydney.

MID sought, in the proceeding under appeal, relief in respect of the use, or proposed use, of the name “Chifley” by the respondents in connection with hotel related services.  Relief was sought on the footing of infringement of the registered marks, passing off and conduct infringing s 52 of the Trade Practices Act 1974 (Cth).  The respondents by cross‑claim sought rectification of the Register of Trade Marks by cancelling the registration of MID’s marks.  Hill J, the primary judge, dismissed with costs both the application and the cross‑claim.  MID appeals from the decision, in so far as his Honour dismissed the claims based on infringement of the registered marks; there is no appeal from dismissal of the claims based on passing off and conduct infringing s 52.  The respondents cross‑appeal from his Honour’s decision to refuse rectification of the Register.

The Appeal: Infringement

Section 120 of the Trade Marks Act 1995 (Cth) (the Act) provides the relevant test:

“(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 … 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)        …; or

            (b)        …; or

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

            (d)        … .

            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.”

The word “Chifley” is a “sign” as defined in s 6 of the Act.  Touraust accepts that its use (or intended use) of that sign (or signs incorporating that word) in connection with the hotels which it is to manage will constitute use of it as a trade mark, that is use in relation to services for the purpose of denoting trade origin.  MID asserts that signs incorporating the word “Chifley”, as proposed to be used by Touraust, are deceptively similar to MID’s registered marks and that Touraust’s use of them is (or will be) use in relation to services in respect of which MID’s marks are registered or services of the same description as that of services for which the marks are registered.

(a)        “Services in respect of which the trade mark is registered” or “Services of the same description”?

His Honour commenced his reasoning on this aspect of the case by noting MID’s submission, which was that Touraust, in performing agreements to manage hotels using the name “Chifley”, was using the mark in respect of property management and retail and office leasing services.  His Honour observed that the “[s]uperficial attractiveness of [MID’s] submission” lay in the fact that Touraust manages hotels for persons who own the real estate.  MID said that this meant Touraust was in the business of “property management”, as those words were used in its registration.

The substance of his Honour’s reasoning appears in the following paragraphs:

“Some assistance in understanding what the third respondent proposes to do and the sense in which the word “management” is used in connection with managing a hotel can be obtained from the management agreement proposed for the “Chifley on the Wharf Hotel”.  The draft is confidential and I refrain from doing more than referring to provisions which are uncontroversial.  Under the agreement, the third respondent is to be the sole and exclusive manager of the hotel for a term set out in the agreement.  The manager’s obligation is to operate the hotel subject to the terms of the agreement.  Put in another way, the hotel business is to be conducted by the so‑called manager who employs staff, operates in accordance with an agreed budget and becomes entitled to be paid a fee which is dependent upon results.  The role of the third respondent is not one of property management at all.  It is in the business of running a hotel which is a particular form of business rather than managing a particular form of property.  In my view, to the extent that the use of the word “Chifley” in connection with a hotel by the third respondent is the use of a sign that is substantially identical with or deceptively similar to the applicant’s registered mark “Chifley Tower”, the use by the third respondent is not a use in relation to the services in respect of which the applicant’s mark is registered.  It follows, in my view, that there can be no infringement, either in respect of the proposed use of the word “Chifley” in the context of the “Chifley on the Wharf” or for that matter in respect of the re‑badging of the Country Comfort hotels in capital cities.  Insofar as the applicant relies upon s 120(2)(c), the services offered by the respondents are not services of the same description either.

In these circumstances it is not necessary to consider whether the third respondent might avail itself of the defence contained in the last part of s 120(2) (namely demonstrating that using the sign was not likely to deceive or cause confusion).”

MID submitted that the primary judge erred by considering first the nature of Touraust’s business and, having ascertained it, by then asking whether that business was the providing of services in relation to which MID’s marks are registered.  The correct approach, MID submitted, was, first, by construing the registrations to identify the services for which the marks are registered and, secondly, to ask whether Touraust uses (or threatens to use) signs incorporating the word “Chifley” in respect of those services: that is, we take it, any of the categories of services for which the marks are registered.

We do not think that the criticism of his Honour’s approach is well-founded.  That approach was dictated by the way in which MID framed its submissions.  The emphasis in the reasoning on the conduct of the hotel business reflected the terms of MID’s submissions.  In any event, we are content to address the issues identified by MID.

It is common ground that the only registered mark which need be considered is the first registered, that is the one comprising only the words “Chifley Tower” and not including the device.  If Touraust’s use does not infringe that mark, a fortiori it does not infringe the others.  The question then is whether Touraust’s use is in relation to services in respect of which that mark is registered: that is, services falling within the description “property management services, retail and office leasing services”.

Senior counsel for MID concentrated, in argument, on “property management services”.  His submission was that there was no evidence that the words had, for present purposes, any meaning other than their ordinary meaning, that is management services in respect of property generally.  In particular, there was no limitation as to particular kinds of property for which property management services might be provided.  Accordingly, so the submission in its broadest form went, if one found, in relation to any property, that a person provided services properly described as management services, that person should be taken as providing “property management services”.  

Senior counsel relied also (as to the services in respect of which MID’s mark is registered) on evidence by Mr PC Garnett, a witness called by Touraust.  Mr Garnett was a senior property manager of a firm of commercial real estate advisers whose responsibilities included the management of five office buildings.  One of those buildings was at 5 Elizabeth Street, Sydney incorporating office space, an arcade called (coincidentally) Chifley Arcade and a restaurant.  Mr Garnett described his services for the building owner as including supervising the collection of income relating to the building, payment of expenditure relating to the building, the engaging of cleaning contractors, making arrangements for repairs, refurbishments and maintenance and dealing with leasing matters, including renewals, assignments, rent reviews and, in relation to vacant space, locating lessees for small areas and contracting out the leasing of larger areas.

It could hardly be said that there is anything surprising about Mr Garnett’s evidence.  The activities which he described are, we think, the principal activities which fall within the ordinary understanding of “property management services”.  The next step in the argument took a broad form and a narrower form.  In its broad form, it was to the effect that an hotel is property; one who manages an hotel for its owner or lessee is managing property and thus providing property management services.  In its narrower form, on which senior counsel concentrated, it was to the effect that a number of the particular services which the manager of an hotel will perform, and which on the evidence would be provided by Touraust, are services of the same general character as those described by Mr Garnett and that, whatever might be the case with property of other kinds, hotel management was predominantly property management.  Thus, the manager will receive and account for income and will pay outgoings; the manager will attend to maintenance, repairs and refurbishment; likewise, the manager will be responsible for arranging for the occupation of rooms by guests and if, for example, retail shops are included within the hotel, for making arrangements with tenants.  It follows, the argument ran, that the business or activities of the manager of an hotel include, as a necessary and substantial part of them, services among those in respect of which the trade mark was registered.

In our view, neither the broad nor the narrower submission should be accepted.  The answer to the broad submission is, we think, simply that one who conducts or manages a business on property of another is not for that reason alone to be regarded, within the ordinary meaning of the words, as providing property management services.  It makes no difference that the property is designed or adapted specifically for the purpose of the particular business or that the conduct of the business includes, as incidental to it, the doing of a number of things of a kind which might be done by a property manager in relation to property under its management.  The conduct of an hotel business includes  the accommodation of guests, the  operation of restaurants and bars (including compliance with the liquor licensing law) and the provision of conference and business facilities and of other services normally offered by hoteliers.  These activities cannot ordinarily be described as “property management services”.  To elaborate on what might be thought an obvious proposition about the ordinary use of language is often not profitable.  But the ordinary meaning of property management services – and this is supported by Mr Garnett’s evidence about his own business activities – would not encompass the occupation of a property under contract with, or licence or lease from, its owner or lessee in order to manage a business, for the benefit of both the manager and the owner or lessee, conducted on that property.

That is so, we think, if the property is adapted for use as a service station and a manager is contracted to operate the property as a service station; similarly (as was suggested by Sackville J during the course of argument) where the property concerned is a sports stadium; similarly where the property is an hotel.  Senior counsel for MID suggested that there was a line to be drawn between businesses conducted for a fee by a manager on another’s property, which might be regarded as substantially, or as akin to, a business of providing property management services and businesses of other kinds.  Senior counsel was prepared to accept that the operation of a service station by a manager would not ordinarily be described as the provision of property management services; the answer was not clear, as we understood his submissions, in relation to a sports stadium.  On the other hand, an hotel business was said to fall on the other side of the line, so as properly to be regarded as involving the provision by the manager of property management services.  But we cannot accept that that is so: in each case the manager is, under contract with the owner or lessee, conducting on the property a business for which the property is adapted.  In each case the manager is not managing the property; it is managing the business conducted from the property.  In the ordinary use of language the two concepts are, we think, quite distinct.

It was suggested that, if a manager provided services falling within the description “property management services”, those services did not lose that character because they formed part of an overall business having features other than the provision of property management services.  Certainly it is true that a provider of property management services is no less such a provider because it provides, in the course of its business, other services as well.  But where, in this case, services are performed which are incidental to the conduct of the hotel business, it is not correct, in our view, to conclude that Touraust is using the word “Chifley” (or a sign incorporating it) in relation to property management services.  If Touraust arranges tenancies for retail shops within an hotel and collects rent, it does not thereby provide property management services: those activities are not to be characterised as the provision of a separate service in relation to the property but simply as an integral, if relatively minor, part of operating the hotel.  Nor, we think, does it help to identify a number of discrete aspects of the hotel business which, if carried on in other circumstances, might be characterised as the provision of property management services.  In this context, each will take its character from the overall nature of the business which Touraust intends to conduct.

Are, then, services to be provided by Touraust services of the same description as that of services in respect of which MID’s mark is registered (s 120(2)(c))?  That expression in the context of services seems to have received no reported judicial consideration.  This is partly because the statutory protection for trade marks used in relation to goods  has been extended to trade marks in relation to services only relatively recently: see F J Smith, “The Trade Marks Amendment Act 1978” (1979) 53 ALJ 118.  It is also a consequence of the fact that s 120(2)(c) of the Act had no precise equivalent in the Trade Marks Act 1955 (Cth) (“TM Act 1955”), although the expression “services of the same description as [services in respect of which the trade mark is registered]” was used in the earlier legislation: see TM Act 1955, ss 33(2), 36(1A).  The question whether two sets of goods are “of the same description” has, however, been considered in a number of decisions.  Thus, for example, in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 606 the High Court said this:

“There may be many matters to be considered apart from inherent character of the goods in respect of which the application is made and some indication of what matters are relevant to this inquiry was given by Romer J in In Re Jellinek’s Application [(1946) 63 RPC 59].  Romer J thought it necessary to look beyond the nature of the goods in question and to compare not only their respective uses but also to examine the trade channels through which the commodities in question were bought and sold.  Shortly after the decision in Jellinek’s case the Assistant‑Comptroller elaborated on the observations of Romer J in the following manner:  ‘In arriving at a decision upon this issue the reported cases show that I have to take account of a number of factors, including in particular the nature and characteristics of the goods, their origin, their purpose, whether they are usually produced by one and the same manufacturer or distributed by the same wholesale houses, whether they are sold in the same shops over the same counters during the same seasons and to the same class or classes of customers, and whether by those engaged in their manufacture or distribution they are regarded as belonging to the same trade …’.  ”

Similarly (in a passage cited by Burchett J in Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227 at 240) Lord Evershed MR said in Re J Lyons & Co Ltd’s Application [1959] RPC 120 at 128:

“In all cases of this kind regard will be had to such matters as the nature and composition of the goods, to their respective uses and functions, and to the trade channels through which respectively they are marketed or sold; and in different cases … one (but not always the same one) of these characteristics may have greater significance or emphasis than the others.  The matter falls to be judged … ‘in a business sense’; and this is to my mind made clear by considering the legislative background against which the problem has to be judged.  By the Trade Marks legislation Parliament has provided that a registered proprietor of a mark, to be used by him in the course of his trade, has a monopoly right to that mark as an indication of the trade source or origin of the goods … .  The question whether goods are or not goods of the same description must therefore (I think) be one to be answered in the context of that purpose; and having regard to that context, the cases cited … lend some support to the view that the phrase ‘goods of the same description’ ought not to be given too restrictive a construction – not, at all events, so as to be limited to goods substantially analogous in kind, or commonly used as mere substitutes or alternatives the one for the other.”

We accept that these principles, subject to any necessary modification, apply in relation to services.  But they do not advance MID’s argument. 

For reasons that have already been given, the services involved in managing an hotel have different characteristics than property management services.  If, as we have held, particular incidental services take their character from the whole, the position is not altered by the fact that managing an hotel may involve the performance of incidental services akin to those carried out by property managers.

This conclusion is reinforced if, as Southern Cross suggests, the proper approach is that attention should be directed to the “trade channels” through which the services are provided.  It is not difficult to infer that hotel management is a specialised undertaking, ordinarily carried out by different entities than those involved in providing property management services, such as real estate agents or shopping centre managers.  Partly for this reason, it is difficult to regard hotel managers as being engaged in the same trade or industry as those providing property management services.

It follows, in our view, that the appeal in relation to the alleged infringement must in any event fail.

(b)        Deceptive similarity

We heard argument also, however, on the question whether the sign or signs, proposed to be used by Touraust (for example, “The Chifley” and “Chifley on the Wharf”) are deceptively similar to the registered mark (“Chifley Tower”) and it is appropriate to deal briefly with that aspect of the case. 

The expression “deceptively similar” is defined in s 10 of the Act:

“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.”

That phrase is familiar as describing a ground of refusal of registration: the phrase itself appears (in the context of the question whether the use of a trade mark in relation to particular goods or services will be likely to deceive or cause confusion) in s 43 of the Act and the defined term “deceptively similar” is used, in relation to a mark registration of which is sought, in s 44.

About some aspects of the question to be answered there can be no doubt.  First, what is to be compared with Touraust’s mark is the impression based on recollection of MID’s mark that persons of ordinary intelligence and memory would have: The Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 415.  Secondly, deceptive similarity is not to be considered having regard only to MID’s actual use of its mark but rather to the extent of its statutory monopoly, that is, having regard to the full extent of the services in respect of which the mark is registered.  That proposition was applied, for example, by Kearney J in Polaroid Corporation v Sole N Pty Ltd [1981] 1 NSWLR 491 at 498:

“The deceptiveness, I consider, flows not only from the degree of similarity itself, but also from its effect considered in relation to the circumstances of the goods, the prospective purchasers and the market covered by the plaintiffs’ monopoly.”

Thirdly, it is irrelevant that Touraust may, by means other than its use of the mark, make it clear that there is no connection between its business and that of MID: Mark Foy’s v Davies Co‑op & Co Ltd (1956) 95 CLR 190 (the “Tub Happy case”) at 205.

In general terms, no doubt, it is true that the comparison is between marks, not between uses of marks and that Wootten J correctly stated the law in Marc A Hammond Pty Ltd v Papa Carmine Pty Ltd [1976] 2 NSWLR 124 at 127  when he said this:

“Hence it is no answer … that the defendant’s use of the mark is in all the circumstances not deceptive, if the mark itself is deceptively similar.”

In our view, however, it does not follow that the actual use to be made by Touraust of a mark such as “Chifley on the Wharf” or “The Chifley” is irrelevant.

The test of deceptive similarity is well established.  It was stated by Kitto J in Southern Cross (an appeal from a decision in opposition proceedings), at 595, as follows:

“It is not necessary … to prove that there is an actual probability of deception leading to a passing‑off.  While the mere possibility of confusion is not enough – for there must be a real, tangible danger of its occurring … – it is sufficient if the result of the user of the mark will be that a number of persons will be caused to wonder whether it might not be the case that the two products come from the same source.  It is enough if the ordinary person entertains a reasonable doubt.”

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. 

There are, however, cases, of which this is one, in which it is appropriate to take into account the use, or proposed use, by the alleged infringer and also the character of the registered mark itself.  It is significant that, immediately following the passage which we have cited, Kitto J in his judgment in Southern Cross continued: “In considering the probability of deception, all the surrounding circumstances have to be taken into consideration”.  And in New South Wales Dairy Corporation v Murray Goulburn Co‑operative Co Ltd (1989) 14 IPR 26 at 67 Gummow J, having considered a number of the principles to which we have referred, said (in a passage the authority of which is not affected by the decisions on appeal):

“The same case [sc Polaroid] is also authority for the proposition that it will not be appropriate for a defendant to urge that the products of the plaintiff are in a more expensive range than those of the defendant, or that they are sold to a category of customer which differs from that attracted to the goods of the defendant if the ambit of the registration encompasses all these goods.  I would not wish to say anything to throw doubt on the correctness of that proposition.  Nevertheless, I am able to decide the present case on the footing that in determining the issue of deceptive similarity in the context of infringement it is permissible to have regard to the actual user by the alleged infringer, even though where the issue of deceptive similarity arises under s 28 (and thus goes not to infringement but to grant of registration or expungement of registration) one considers all goods coming within the specification, not only those on which there is use or proposed use: … ”

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. 

The other element is the word “Tower”.  Even to those who do not know the particular building in Sydney, that word in current usage suggests a substantial building, probably an office block.  It was said in argument, correctly, that the registered proprietor of the mark “Chifley Tower” could provide services within the registration not only in or from the particular building, but anywhere in Australia.  But that does not conclude the present question, which is, in substance, whether the hypothetical ordinary person, seeing Touraust’s use of its intended signs, would be caused to wonder or entertain a reasonable doubt about whether services provided by the manager of hotels called “The Chifley” might come from the same source as services provided by a company which offered, under the name “Chifley Tower”, services within the full range of those for which that mark is registered.  The hypothetical observer should not be supposed to be likely to analyse with precision the nature of the individual services likely to be performed by the manager of an hotel.  Given the aspects of the registered mark to which we have referred and the specific character of Touraust’s activities this, we think, is a case of mere possibility, rather than real, tangible danger of confusion. 

Thus, in our view, the primary judge was right in holding that the signs proposed to be used by Touraust are not deceptively similar to MID’s registered mark.  We reach that conclusion, of course, bearing in mind that the question arises only if Touraust is to use its signs in relation to services in respect of which MID’s mark is registered or services of the same description: that is, on the assumption (contrary to our earlier conclusions) that Touraust’s intended use of its signs is in respect of one of those categories of services.

Cross Appeal:  Should MID’s registrations be cancelled?

The registration of all three of MID’s marks was attacked on three bases: lack of capacity to distinguish the services in respect of which they are registered, internal misrepresentation (that is, it is said that because of a connotation that the trade marks have, their use in relation to the services would be likely to deceive or cause confusion) and deceptive similarity arising from pre-existing uses by other businesses of names which included the word “Chifley”.   The third of those grounds was maintained only defensively; that is, it was relied upon only should the Court find that Touraust’s signs were deceptively similar to MID’s marks.   Having regard to indications given by the Court at the conclusion of MID’s argument in support of the appeal, no argument was submitted in support of that ground and it is unnecessary to consider it.  

Argument concentrated on the first ground.   That ground relied on s 41(2) of the Act, by way of s 88(2)(a) and s 57 (which provides that an application for cancellation of registration can be made on a ground of opposition to registration, including that stated in s 41(2)).

Section 41, insofar as relevant, provides as follows:

“41(2)An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered (designated goods or services) from the goods or services of other persons.

(3)   In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons.

(4)   Then, if the Registrar is still unable to decide the question, the following provisions apply.

(5)   …

(6)   If the Registrar finds that the trade mark is not inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply:

(a)        if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does not distinguish the designated goods or services as being those of the applicant – the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;

(b)        in any other case – the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.”

Section 41 differs in form somewhat from its immediate predecessor, s 26 of the TM Act 1955.  It is also the case that the Act contains no equivalent to s 24(1)(d) of the TM Act 1955, which provided:

“24(1)A trade mark is registrable in Part A of the Register if it contains or consists of ‑

…

(d)        a word not having direct reference to the character or quality of the goods or services in respect of which registration is sought and not being, according to its ordinary meaning, a geographical name or a surname ….”

Nonetheless, s 41 incorporates concepts well-recognised in the earlier law.

In the case of the first registered of the three marks, the “word only” mark no. 535916, there is a threshold test.   That mark was registered, immediately before 1 January 1996, in Part A of the old register and seven years had elapsed from the date of registration at the time when Touraust’s cross-claim was instituted.  In those circumstances, s 234(2) of the Act has the consequence that the mark is to be taken as valid in all respects unless it is shown, relevantly, that:

“(e)     The trade mark did not, at the commencement of the proceedings, distinguish the goods or services of the registered owner in relation to which the trade mark is used from the goods or services of other persons.”

It was submitted on behalf of Touraust, and MID did not dispute, that if the s 41(2) ground were made out, the threshold test under s 234(2)(e) was necessarily satisfied.   That seems to us to be correct.

The trial judge rejected Touraust’s cross-claim on the following grounds:

“Some assistance is to be obtained from cases such as Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 where the question arose whether a mark was adapted or capable of becoming adapted to distinguish particular goods. In that case, the mark was the word ‘Michigan’, a geographical name and it was held that such a name could hardly ever be adapted to distinguish the goods of one person from the goods of another, as Kitto J points out at 516.  Some words can never acquire distinctiveness so as to justify registration among which are the names of large and important industrial towns or districts.  Other marks are inherently incapable of distinguishing the goods of a person from the goods of another – even after long use; cf F H Faulding & Co Limited v Imperial Chemical Industries of Australia and New Zealand Limited (1965) 112 CLR 537.

In principle, there is no reason why the words ‘Chifley Tower’ could not be used to distinguish the services of the applicant in the field of property management from the services of others.  The applicant did provide services to its tenants and did use the marks ‘Chifley Tower’ with or without logo.”

On the appeal, Touraust argued that the mark “CHIFLEY TOWER”, with or without a logo, was incapable of distinguishing property management services supplied in connection with the Chifley Tower building.  It submitted that a mark which has a direct reference to the character or quality of the services in respect of which it is sought to be registered has no capacity to distinguish those services.  Section 24(1) of the TM Act 1955 dealt with the matter expressly, but this was merely an example of the general category of marks having no capacity to distinguish the trader’s goods or services in respect of which the mark is sought to be registered.  In this respect it was like the “HAIRFUSION” case: Advanced Hair Studio of America Pty Ltd v Registrar of Trade Marks (1988) 12 IPR 1.  Touraust also argued that “Chifley Tower” is simply a geographical name, incapable of distinguishing services which are or are likely to be produced at that place.  In this respect it was like the “Oxford University Press” case: Chancellor, Masters and Scholars of the University of Oxford v Registrar of Trade Marks (1990) 24 FCR 1.  Other persons, trading in services of the relevant kind and being actuated only by proper motives, would think of the expression and want to use it in connection with similar services.

There was no dispute between the parties that the principles to be applied to the question of capacity to distinguish were those formulated by Kitto J in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511.  These principles have been applied, in relation to descriptive marks, for instance in FH Faulding & Co Pty Ltd v Imperial Chemical Industries of Australia and New Zealand Ltd (1965) 112 CLR 537 and Advanced Hair Studio: see also the “Tub Happy case”.  They have been applied, in relation to geographical marks, in Clark Equipment itself and in Oxford University Press.

In Clark Equipment, Kitto J held that the word “Michigan” was incapable of becoming adapted to distinguish the applicant’s earth-moving and like equipment.  His Honour quoted (at 514) from the speech of Lord Parker of Waddington in Registrar of Trade Marks v W & G Du Cros Ltd [1913] AC 624 at 635.

“The applicant’s chance of success in this respect [i.e. in distinguishing his goods by means of the mark, apart from the effects of registration] must, I think, largely depend upon whether other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connexion with their own goods.  It is apparent from the history of trade marks in this country that both the Legislature and the Courts have always shown a natural disinclination to allow any person to obtain by registration under the Trade Marks Act a monopoly in what others may legitimately desire to use.”

Kitto J then continued (at 514-515):

“The interests of strangers and of the public are thus bound up with the whole question …; but to say this is not to treat the question as depending upon some vague notion of public policy: it is to insist that the question whether a mark is adapted to distinguish be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess – will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.  

The fact that this is the test is the basic reason for the frequent refusal … to register as a trade mark a word of prima facie geographical signification.   It is well settled that a geographical name, when used as a trade mark for a particular category of goods, may be saved by the nature of the goods or by some other circumstance from carrying its prima facie geographical signification, and that for that reason it may be held to be adapted to distinguish the applicant’s goods.   Where that is so it is because to an honest competitor the idea of using that name in relation to such goods or in such circumstances would simply not occur… .   This is the case, for example, where the word as applied to the relevant goods is in effect a fancy name, such as “North Pole” in connexion with bananas … or where by reason of user or other circumstances it has come to possess, when used in respect of the relevant goods, a distinctiveness in fact which eclipses its primary signification. …  But the probability that some competitor, without impropriety, may want to use the name of a place on his goods must ordinarily increase in proportion to the likelihood that goods of the relevant kind will in fact emanate from that place.   A descriptive word is in like case: the more apt a word is to describe the goods, the less inherently apt it is to distinguish them as the goods of a particular manufacturer. …

The consequence is that the name of a place or of an area, whether it be a district or county, a state or a country, can hardly ever be adapted to distinguish one person’s goods from the goods of others when used simpliciter or with no addition save a description or designation of the goods, if goods of the kind are produced at the place or in the area or if it is reasonable to suppose that such goods may in the future be produced there.   In such a case, the name is plainly not inherently, i.e. in its own nature, adapted to distinguish the applicant’s goods; there is necessarily great difficulty in proving that by reason of use or other circumstances it does in fact distinguish his goods; and even where that difficulty is overcome there remains the virtual if not complete impossibility of satisfying the Registrar or the Court that the effect of granting registration will not be to deny the word to a person who is likely to want to use it, legitimately, in connexion with his goods for the sake of the geographical reference which it is inherently adapted to make. [Authorities cited by his Honour] show … that there is a category of words which are so adapted for descriptive purposes that no amount of acquired distinctiveness can justify their registration, and that among such words are the names of large and important industrial towns or districts, and also of smaller towns or districts if they are a seat of manufacture of the goods for which registration is sought.”  (Emphasis added.)

Touraust placed particular reliance on the bolded words.

In reality, Touraust’s submissions about character or quality and about the geographical reference do not represent separate arguments: the point of putting the matter either way is that the words “Chifley Tower” denote a connection with The Chifley Tower, so that others providing similar services and having a connection with The Chifley Tower (particularly, tenants of areas within The Chifley Tower) might properly wish to use the name in relation to their services.  The evidence showed, it was said, that “The Chifley Tower” formed part of the stated or advertised address of tenants of offices within the building and that the building, as a very large office tower, was one in which a great number of firms carried on businesses of providing services of various kinds.

We rather doubt that any indication is to be found in the judgment of Kitto J in Clark Equipment that he would have regarded a large privately owned office building as analogous to a large and important industrial town or district or to a smaller town or district which is a seat of manufacture of goods of a particular kind.   To say that is not conclusively to answer Touraust’s submission.  But it does suggest that it may not be so simple a matter as to say that, as in a large town, so in a large office building, there will be found numerous traders who may wish to describe their goods or services by reference to their place of business.  

MID acquired a building approaching completion and chose a name for it; at about the same time MID applied for the first of its registered marks in relation to property management services intending, no doubt, to provide those services, principally if not exclusively, in relation to the building.  The Chifley Tower is not part of the common heritage in the sense that a town, suburb or municipality is.   Chifley Plaza perhaps might answer that description, but the registered trade mark does not incorporate that expression.  There is no public policy against MID restricting those who have come to occupy space within its building as to the way in which they use its name in connection with goods they produce or services they provide.   That being so, it is not easy to see, in our view, why any separate public policy, of the kind identified by Kitto J, should apply so as to deprive the name selected by MID of a capacity to distinguish, in circumstances where there could be no legitimate reason for persons other than those carrying on business within The Chifley Tower to use its name in connection with their goods or services.

As to traders operating from The Chifley Tower itself, they would not infringe MID’s registered trade mark if they used the name “Chifley Tower” in good faith as the name of their place of business: see s 122(1)(a)(i) of the Act.  Moreover, it cannot be said that it is likely that a trader operating from The Chifley Tower will, without impropriety, wish to use the name “Chifley Tower” in relation to property management services (other than as the trader’s place of business).  The position is different from that of a town, suburb or municipality, since it could reasonably be expected that traders might wish to use the names of those geographic locations in connection with their services.

It follows that this attack on MID’s registration fails.

The “internal misrepresentation” argument was based on the proposition that although there was no evidence that MID had ever used its marks in respect of services offered from or in connection with a building other than The Chifley Tower, the registration in connection with property management services permitted the use of the marks in connection with services provided at or from other locations.   In the case of services thus provided, the mark connoted a falsehood, that is, a connection of a particular kind between The Chifley Tower and the services provided by the proprietor of the marks.   On behalf of Touraust, it was submitted that there was no evidence that the marks bore any such connotation and, in the absence of such evidence, there was no basis to attribute such a connotation to them.   In our view, the marks at most suggest a connection of some kind between the proprietor and the building, and there is such a connection: the proprietor of the marks owns the building.   In our view, senior counsel for Touraust was correct in submitting that there is nothing about the mark which necessarily suggests that the services will be provided at or necessarily from (whatever precisely that means) the building.   Accordingly that ground of attack fails also.

Conclusion

For those reasons we would dismiss both the appeal and the cross-appeal, in each case with costs.

Associate:

Dated:              18 December 1998