FEDERAL COURT OF AUSTRALIA

 TGI Friday’s of Minnesota, Inc v T.G.I. Friday’s Australia Pty Ltd

 [1999] FCA 1575

STATUTES – interpretation – apparently conflicting provisions.

TRADE MARKS – transitional provisions – pending application for registration in Part A accepted under repealed Act – registration of mark more than ten years after filing date of application – whether registration and renewal may be simultaneously effected.

TRADE MARKS – alleged infringing use – whether licensed hotel providing restaurant services.

Trade Marks Act 1995, ss 72(1), 72(3), 75(1), 77, 78, 79, 241(2).

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 applied.

TGI FRIDAY’S OF MINNESOTA, INC v T.G.I. FRIDAY’S AUSTRALIA PTY LIMITED and ANOR

NG 572 of 1997

Whitlam J

Sydney

12 November 1999

THE COURT ORDERS THAT:

1.         The parties bring in short minutes of orders they propose to give effect to the reasons                                                                           for judgment published today.

REASONS FOR JUDGMENT

Introduction

1                     The applicant, TGI Friday’s Minnesota, Inc. (“TGIFM”), was registered as the owner of trade mark no. 438365 (“the registered trade mark”) under the Trade Marks Act 1995 (“the Act”) on 21 July 1997.  On the same day TGIFM commenced this proceeding for infringement of the registered trade mark against the respondents, T.G.I. Friday’s Australia Pty Limited (“Friday’s Australia”) and Big Country Developments Pty Limited (“Big Country”).  TGIFM alleges that its registration as owner had effect from 19 December 1985.

2                     When this proceeding was begun, proceeding NG 678 of 1996 was already pending in the Court.  In that proceeding TGI Friday’s Inc. (“Friday’s Inc”) and TGIFM claimed relief against Friday’s Australia and Big Country for passing-off and for contraventions of ss 52 and 53(c) of the Trade Practices Act 1974 in connexion with the use of the name TGI Friday’s.  Both proceedings were heard together.  In proceeding NG 678 of 1996 I granted the applicants permanent injunctions under s 80(1) of the Trade Practices Act.  On appeal, those orders were set aside and the application in proceeding NG 678 of 1997 was dismissed: [1999] FCA 304.  The background to the dispute between the two camps is set out in the reasons for judgment of the Full Court, and these reasons should be read with those of the Full Court.

3                     In this proceeding Friday’s Australia and Big Country cross-claim against TGIFM for an order of rectification under the Act.  TGIFM’s defence to this cross-claim pleads a presumption of validity provided by the transitional provisions in the Act.  Accordingly, the cross-claimants also seek a declaration that the registered trade mark ceased to have effect on 19 December 1996.  This claim thus raises a threshold issue, which necessitates an examination of the circumstances leading up to the entry of the registered trade mark.

The Registration Process

4                     Friday’s Inc applied, on 19 December 1985, for registration of the trade mark T.G.I. FRIDAY’S in Part A of the Register of Trade Marks kept under the Trade Marks Act 1955 (“the repealed Act”).  The application specified “restaurant services and alcoholic beverage bar services” as the services in respect of which registration was sought.  The application was allocated number 438365.  The acceptance of the application was advertised on 20 October 1988.  Notices of opposition were lodged by Big Country and by Weller Hotels & Taverns Pty Ltd (“Weller”).

5                     Big Country’s opposition was dismissed on 12 November 1991.  Weller’s opposition was determined on 4 November 1994, when Farquhar DR decided to register the trade mark in respect of “restaurant services”.  Both Friday’s Inc and Weller appealed to this Court from her decision.

6                     Meanwhile, by a deed of assignment dated 8 November 1993, Friday’s Inc had assigned to TGIFM “effective as and from October 26, 1993” the benefit of its pending application and the registration to be granted thereon.  Also, on 8 November 1993, TGIFM’s attorney apparently signed on its behalf an application for the recording of the assignment.  The evidence does not indicate when that application was received or lodged at the Trade Marks Office.

7                     The registration of the trade mark was delayed by the pending appeals of Friday’s Inc and Weller.  Those proceedings were eventually settled, and on 10 April 1997 Cooper J made consent orders dismissing both appeals.  On 1 July 1997 a delegate of the Registrar of Trade Marks directed that the trade mark be registered on or before 1 September 1997.

Having regard to the time that had elapsed since Friday’s Inc filed its application for registration on 19 December 1985 and in the light of certain provisions of the Act shortly to be considered, Friday’s Inc lodged on 16 July 1997 an application for renewal of the registration.  On 21 July 1997 the trade mark T.G.I. FRIDAY’S was registered in the name of Friday’s Inc subject to the following condition: “Registration of this trade mark shall give no right to the exclusive use of the letters TGI.”  On 21 July 1997 the registration was also renewed and the assignment to TGIFM was recorded.  The registration of TGIFM as the owner of the trade mark was recorded as having had effect from 1 January 1996.

The Current Effectiveness of Registration

8                     Section 241 of the Act relevantly provides:

“241 (1) This section applies if an application for the registration of a trade mark in Part A or B of the old register was pending immediately before 1 January 1996.

(2) If the application had been accepted under the repealed Act and the acceptance was in force immediately before 1 January 1996, the following provisions apply:

(a)     … the repealed Act … continues to apply in relation to the application;

(b)     if, after dealing with the application in accordance with the repealed Act, the Registrar is required under section 53 of that Act to register the trade mark in the old register – the Registrar is to register the trade mark under Part 7 of this Act

…

(5)    The filing date in respect of the application  is:

(a)   … the day on which the application was lodged with the Trade Marks Office under the repealed Act;…”.

9                     It is common ground that these provisions were applicable in the present case and that the trade mark was registered under Part 7 of the Act.  That Part is headed “Registration of Trade Marks” and is divided into “Division 1 – Initial Registration” and “Division 2 – Renewal of Registration”.

10                  Division 1 contains the following relevant provisions:

“72 (1) … the registration of a trade mark in respect of the goods and/or services in respect of which the trade mark is registered is taken to have had effect from (and including) the filing date in respect of the application for registration.

…

(3) Unless it is earlier cancelled, or the trade mark is earlier removed from the Register, the registration of the trade mark expires 10 years after the filing date in respect of the application for its registration.

73 The registration of a trade mark ceases if:

(a)   the trade mark is removed from the Register under section 78 or Part 9; or

(b)   the registration of the trade mark is cancelled.”

11                  The provisions in Division 2 may be set out in full:

“75 (1) Any person may, within the prescribed period before the registration of a trade mark expires, ask the Registrar to renew the registration.

       (2) The request must:

(a)   be in an approved form; and

(b)   be filed in accordance with the regulations.

76 If, at the beginning of the prescribed period, the Registrar has not received a request for the renewal of the registration of the trade mark, the Registrar must, in accordance with the regulations, notify the registered owner of the trade mark that the renewal is due.

77(1) If a request for the renewal of the registration of a trade mark is made in accordance with section 75, the Registrar must renew the registration for a period of 10 years from the day on which the registration of the trade mark would expire if it were not renewed.

   (2) The Registrar must give notice of the renewal to the registered owner of the trade mark in accordance with the regulations.

78 If the registration of a trade mark is not renewed, then:

(a)        subject to sections 79 and 80, the registration ceases to have effect when it expires; and

(b)        unless the registration is renewed under section 79, the Registrar must remove the trade mark from the Register 12 months after the day on which the registration expired.

79 If, within 12 months after the registration of a trade mark has expired, a person asks the Registrar, in accordance with subsection 75(2), to renew the registration of the trade mark, the Registrar must renew the registration of the trade mark for 10 years from the day on which the registration expired.

80 If:

(a)   the registration of a trade mark (“unrenewed trade mark”) has not been renewed; and

(b)   within 12 months after the registration expired, an application for the registration of a trade mark is made by a person other than the person who was registered as the owner of the unrenewed trade mark;

the unrenewed trade mark is taken to be a registered trade mark for the purpose of the application.”

12                  The period prescribed for the purposes of s 75(1) of the Act is twelve months ending on the day on which the registration of the trade mark expires.

13                  Senior counsel for the respondents relies on the fact that the filing date of the application lodged by Friday’s Inc was 19 December 1985.  He submits that, once the particulars of the trade mark are entered in the Register of Trade Marks, the registration ceases to have effect “as from” 19 December 1995 by virtue of ss 72 and 78 of the Act.  The effect of s 72(3) is said to be that in the present case the registration expired on 19 December 1995.  No request for renewal was made prior to that date or within twelve months thereafter, and it is suggested that, therefore, registration cannot be renewed under ss 77 or 79 of the Act.  The consequences, senior counsel for the respondents submits, are that registration ceased to have effect on 19 December 1995 and that the Registrar is obliged under s 78(b) of the Act to remove the trade mark from the Register.

14                  It seems to be implicit in the submissions on behalf of the respondents that Friday’s Inc could (and, indeed perhaps, should) have protected its position by lodging a request for renewal prior to 19 December 1995.  The Act had, after all, been assented to on 17 October 1995 and all the relevant provisions were to commence on 1 January 1996.  Be that as it may, prior to 19 December 1995 the repealed Act was still in force, and under s 69 of that Act only the registered proprietor of a trade mark could apply for its registration to be renewed.  No course of action was available at that time to Friday’s Inc in respect of any renewal.

15                  Section 241(2) of the Act provides expressly for an applicant, such as Friday’s Inc, whose application was “pending” immediately before 1 January 1996. (See the definition of “pending” in s 11(2) of the Act.)  Such an application is to be dealt with in accordance with the repealed Act up to the point at which, under s 53 of that Act, the Registrar becomes obliged to register the trade mark.  The time for registration is thus governed by s 54 of the repealed Act, upon which the Registrar’s delegate correctly relied on 1 July 1997 in order to extend the time for registration.  By virtue of s 241(2) of the Act, the obligation to register arises under s 53 of the repealed Act.  That obligation is not imposed by s 68(1) of the Act and, accordingly, reg 7.1 of the Trade Marks Regulations 1995 did not apply so as to fix the period beyond which the application of Friday’s Inc would lapse.

16                  It is also significant, so far as the mechanics of registration are concerned, that            s 241(2)(b) does not state that registration is to be effected under s 69 of the Act.  Instead, it requires the Registrar “to register the trade mark under Part 7 of this Act.”  In my opinion, the reference to Part 7, as a whole, is apt to pick up, where necessary, the renewal of registration provided for in Division 2.  This authorizes the simultaneous registration and renewal that appears to have taken place in the present case.

17                  The Act permits the registration of a trade mark for further periods of ten years beyond the initial term of ten years.  The construction of s 72(3) contended for by the respondents would, if correct, at the very moment of registration, deprive Friday’s Inc of that right.  The submission is that the registration ceases to have effect “as from” a date ten years after the filing date.  But this is not the language of s 72(3), which merely states prospectively the initial term of registration.  The phrase “as from” is not used at all.  On the other hand,     s 71(1) does provide that the fact of registration “is taken to have had effect from” an earlier date and, in doing so, fixes the “date of registration” as that expression is defined by s 6 for the purposes of that Act.  This provision has important consequences, but it undoubtedly benefits a registered owner: see s 20(3) of the Act and Hunter Douglas Australia Pty Ltd v Perma Blinds (1970) 122 CLR 49 per Barwick CJ at 61.

18                  There is a certain tension between the language of ss 72(3) and 75(1) and the obligation imposed by s 241(2)(b) in the circumstances of this case.  The correct approach to the construction of apparently conflicting provisions has been recently explained by the majority in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 and 384.  Here s 241 is clearly the dominant provision.  In giving effect to it, the Registrar may be confronted by language in ss 75 and 77 that is not apposite.  In my opinion, the goals of the Act will be achieved by construing Part 7 as permitting the Registrar simultaneously to renew the registration of the trade mark for a period of ten years from the day on which the registration would expire if it were not renewed. The fact that a request for renewal cannot be filed before such a notional day will not, in my view, render the renewal invalid: Project Blue Sky Inc at 390-391.

19                 It follows that, on the threshold issue, the submission on behalf of the respondents is rejected.  It may be that the Registrar erred in recording the assignment to TGIFM as being effective from 1 January 1996.  This would appear to have been done pursuant to s 249 of the Act, even though TGIFM’s application did not relate to an “existing registered mark”: see s 6 of the Act.  In any event, there was no argument on this point and nothing appears to turn on it.

            The Rectification Claim

20                  The respondents’ cross-claim faces the obstacle provided by s 234 of the Act.  Relevantly that section provides:

“234    (1) This section applies in relation to:

…

(b) a registered trade mark:

(i)                 whose application for registration in Part A of the old register had been accepted under the repealed Act and was still pending immediately before          1 January 1996; and

(ii)               that has not at any time on or after that day ceased to be registered.

(2) In any legal proceedings:

…

(b) the original registration under this Act of a trade mark referred to in paragraph (1)(b);

            is taken to be valid in all respects after a period of 7 years from the date of registration of the trade mark unless it is shown that:

(c) the original registration was obtained by fraud; or

(d) the registration of the trade mark would be contrary to section 28 of the repealed Act; or

(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.”

The respondents submit that they are able to pass through the gateways provided by pars (d) and (e) of subs 234(2).

21                  The evidence relied on by the respondents to attack the distinctiveness of the registered trade mark consists, in the main, of examples of the use of the words “Friday” and “Friday’s”, the initials “TGIF” and the phrase “Thank God It’s Friday” in a large variety of commercial settings.  A great deal of effort appears to have gone into combing business directories and the like on this aspect of the respondents’ case.  The relevant material is said to show that the trade mark T.G.I. FRIDAY’S does not distinguish the applicant’s services from those of other persons.

22                  Counsel for the applicant submits, correctly in my opinion, that the respondents’ submission misconceives the effect of par (e) in s 234(2).  At the outset it must be borne in mind that in the present case the application had been accepted for registration in Part A and that the obligation to register arose under s 53 of the repealed Act.  In order to be regarded as distinctive under s 24(1) of the repealed Act, the mark must by virtue of s 26 of that Act be “adapted” to distinguish the restaurant services of Friday’s Inc from those of other persons. (Senior counsel for the respondents did submit, though somewhat faintly, that the mark conveyed a meaning of relaxation at the end of the working week which was apt to describe restaurant services.  However, I think that counsel for the applicant were correct in submitting that such ratiocination may be safely rejected for reasons expressed in Mark Foy’s Ltd v Davies Coop & Co Ltd (1956) 95 CLR 190 by Dixon CJ at 193-195.)

23                  The prescriptive validity provisions in the repealed Act corresponding to s 234 were explained in F.H. Faulding & Co Ltd v Imperial Chemical Industries of Australia and New Zealand Ltd (1965) 112 CLR 537.  Kitto J said (at 555):

“… the question to be asked in order to test whether a word is adapted to distinguish one trader’s goods from the goods of all others is whether the word is one which other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use upon or in connexion with their goods. …”

That test may now, of course, be applied in the case of services.  In the present case the mark has very obviously been inherently adapted for use in connexion with restaurant services, and it is in that sense that loss of distinctiveness must be understood for the purposes of                s 234(2)(e).  There is no suggestion in the evidence of the registered trade mark being used for restaurant services apart from the alleged infringing use by Big Country.

24                  In a case in which every point that possibly can be argued has been taken, the respondents also rely on the assignment by Friday’s Inc to TGIFM in order to disconnect the registered owner from the use of the trade mark.  The proposition that in this way the mark ceased to “distinguish … the services” of the applicant within the meaning of s 234(2)(e) is said to be supported by the decision of McLelland J in Ritz Hotels Ltd v Charles of the Ritz Ltd (1988) 15 NSWLR 158 at 198-201.

25                  McLelland J was concerned with a situation where goods were not distributed by the registered proprietor of the trade mark.  His Honour held that the registered proprietor was thus not “connected in the course of trade” with those goods within the meaning of s 26(1) of the repealed Act and the marks ceased to be distinctive of the registered proprietor’s goods.  Those words are not used in s 41 of the Act.  Section 6 of the Act does, however, define “services of a person” to mean “services dealt with or provided in the course of trade by the person” (emphasis added).  (McLelland J also referred to the use of the highlighted words in the definition of “trade mark” in the repealed Act corresponding to s 17 of the Act.)  His Honour rejected a construction of the expression “goods connected in the course of trade” that found favour with the English Court of Appeal in Revlon Inc v Cripps & Lee Ltd [1980] FSR 85, and said (at 200):

“To say, with Buckley LJ, that the mark had become in effect a “house mark of the whole group”, indicating that the goods originate from the group but not from any particular part of the group, does not seem to me to solve the difficulty, because the group, considered as an entity (as it must be on this approach) is necessarily not the same as any particular company within the group, yet it is a particular company, namely the proprietor of the mark, between which and the relevant goods the mark must, by definition (see s6), indicate a connection in the course of trade: cf the specific provisions in s 35 for the registration of jointly owned marks.  This I think finds emphasis in the use in s 61(1)(c) of the expression “distinctive of the goods … of the registered proprietor”.”

26                  It should be noted that McLelland J observed at the outset  (at 198) that the question whether the mere ability to control the quality of goods, by contract or otherwise, represented sufficient “connection” was unsettled.  His Honour also said (at 201) that the position would be quite different if the registered proprietor of the subject marks had been the company which “in a real and practical sense” represented the group.

27                 The statement in the Ritz Hotel case must be seen in the context of its own particular facts.  The position of authorised users under the Act is not readily accommodated by an overly simplistic application of McLelland J’s view.  The effect of the use of a trade mark by someone other than the registered owner was considered in Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227 by Burchett J at 237-239.  His Honour accepted the idea that a trade mark may be used as a house mark for a group.  There is, of course, no reason why the company in a group controlling the group’s trade marks should be the parent company and the users should be subsidiaries.   In my view, the licence and franchise agreements in place in the present case do, in fact, plainly involve TGIFM in the use of the trade mark.  The challenge under par (e) of s 234(2) is not made out.

28                  The respondents also submit, under par (d) of s 234(2), that the registration of the trade mark would be contrary to s 28(a) of the repealed Act.  In considering whether the use of the mark would be likely to deceive or cause confusion, one may look at the kind of material the respondents wrongly relied on to assert loss of distinctiveness.  However, the evidence of such actual use prior to 19 December 1985 is very slight.  In about October 1984 Weller apparently named a newly renovated bar in a hotel in Brisbane as “Friday’s”.  The evidence stops there, and I am unable to find that the use of the quite distinct name “T.G.I. FRIDAY’S” in connexion with restaurant services would be likely to deceive or cause confusion: Southern Cross Refrigeration Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 608.

29                  It follows that the challenge to the prescriptive validity fails and the cross-claim must be dismissed.

            The Infringement Actions

30                 The applicant alleges infringements of the registered trade mark under subss (1) and (2) of s 120 of the Act.  So far as s 120(2) is concerned, it is arguable whether the bulk of Big Country’s alcohol sales at its licensed premises are services of the same description as the registered services within the meaning of par (c).  However that may be, I accept the submission on behalf of the respondents that the conclusion of the Full Court means that the defence of Big Country under subss 120(2) is made out.  That issue was not, of course, before the Full Court as their Honours pointed out, but the substituted findings on appeal do effectively resolve this issue.

31                 Counsel for the respondents submit that the applicant’s case under s 120(1) of the Act is now implicitly conceded to be confined to the provision of restaurant services by Big Country at the Grey Gums Hotel.  I think that must be so.  The services provided at the Raby Tavern never approximated those of a restaurant.

32                 Contrary to the submissions on behalf of the respondents, I do not accept that the question whether Big Country used the registered trade mark in relation to restaurant services is resolved by what the Full Court said in the first sentence of paragraph 28 of its reasons for judgment.  The Grey Gums Hotel contains what its manager described as a lounge bar known as T.G.I. Friday’s.  The name TGI Friday’s is painted on the gable roof over the porch leading to this area.  Significantly though, this section includes what the manager describes as “a bistro” where lunch and dinner are served.  The menu that is handed to patrons in this section is labelled “TGI Friday’s”.  It bears no other sign or badge describing the establishment.  The mark used is the registered trade mark.  The menu offers a selection of nine entrées and a choice of main meals comprising at least four different cuts of steak done in various ways, six chicken dishes and five veal dishes.  All main meals are served with fresh salad and chips or fresh vegetables.  These dishes do not sound like “light meals”.  The wine list on the menu is extensive.  It includes three sparkling wines, two rieslings, two verdelhos, five chardonnays, two cabernet sauvignons, a shiraz and a cabernet merlot as well as two dry whites and two dry reds plus house wine.  There are table wines sold by the bottle for consumption with meals.  The photographs in exhibit PJG 1 are instructive.  Tables are arranged in groups with four or six chairs each.  Pepper and salt shakers are set on the tables.  The walls are decorated with prints and, in parts of the room, televisions sets are suspended overhead.

33                 Resort to dictionaries is hardly necessary, but the Shorter Oxford English Dictionary, 3^rd ed., describes a restaurant as an establishment where refreshments or meals may be obtained.  No doubt, food writers may wish to argue about whether a particular establishment should be described as a restaurant, a bistro, a brasserie, a cafe, an eating house or a dining room.  In my opinion, it makes no difference.  The Grey Gums Hotel provides restaurant services under the name TGI Fridays.  This is not the mere provision of sandwiches, pies, crisps or other “hand food” which may be consumed standing or perched on a stool in a pub.  This is the provision of substantial a la carte meals.  The meals are not provided as an ancillary service to accommodation.  It is not important that orders may not be taken at the tables and the meals may not be served by waiting staff.  Many restaurants provide self-service buffets.  So do so-called gentlemen’s clubs, particularly in the members’ dining room at lunch time, where the services approximate those of a restaurant except perhaps in the manner of recording consumption and of payment.

           Conclusion

34                 Big Country has flagrantly infringed the registered trade mark at the Grey Gums Hotel.  No question of prior use by Big Country in relation to the registered services arises under s 124 of the Act.  Mr Hesky registered Big Country as the proprietor of a business called “T.G.I. Friday’s Restaurant” at the Grey Gums Hotel, and the evidence shows that Big Country does indeed carry on such a business.  TGIFM is accordingly entitled to an injunction under s 126 of the Act.

35                 I shall stand the matter over to a date to be fixed and direct the parties bring in short minutes of orders they propose to give effect to these reasons.

Associate:

Dated:              12 November 1999