FEDERAL COURT OF AUSTRALIA
Optical 88 Limited v Optical 88 Pty Limited (No 2) [2010] FCA 1380
FEDERAL COURT OF AUSTRALIA
Optical 88 Limited v Optical 88 Pty Limited (No 2) [2010] FCA 1380
CORRIGENDUM
1. In paragraph 99 of the Reasons for Judgment, in the first sentence, the words “Sir Greene MR” should read “Sir Wilfrid Greene MR”.
2. In paragraph 319 of the Reasons for Judgment, in the first sentence, the word “applicants” should read “applicant’s”.
| I certify that the preceding two (2) numbered paragraphs are a true copy of the Corrigendum to the Reasons for Judgment herein of the Honourable Justice Yates. |
Associate:
Dated: 26 May 2011
| IN THE FEDERAL COURT OF AUSTRALIA | |
| Applicant / Cross-Respondent | |
| AND: | OPTICAL 88 PTY LIMITED (ACN 060 355 437) First Respondent / Cross-Claimant ANGUS HAU-SUM LAW Second Respondent LESLEY LOK-YEE LAW Third Respondent |
| DATE OF ORDER: | |
| WHERE MADE: |
THE COURT ORDERS THAT:
1. The parties are to bring in short minutes of order giving effect to these reasons.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court’s website.
| NEW SOUTH WALES DISTRICT REGISTRY | |
| GENERAL DIVISION | NSD 316 of 2008 |
| BETWEEN: | OPTICAL 88 LIMITED Applicant / Cross-Respondent |
| AND: | OPTICAL 88 PTY LIMITED (ACN 060 355 437) First Respondent / Cross-Claimant ANGUS HAU-SUM LAW Second Respondent LESLEY LOK-YEE LAW Third Respondent |
| JUDGE: | YATES J |
| DATE: | 10 december 2010 |
| PLACE: | SYDNEY |
REASONS FOR JUDGMENT
| [1] | |
| [5] | |
| [6] | |
| [34] | |
| [54] | |
| [59] | |
| [59] | |
| [60] | |
| [66] | |
| [68] | |
| [70] | |
| [72] | |
| [74] | |
| [76] | |
| [83] | |
| [87] | |
| [115] | |
| [131] | |
| [149] | |
| [159] | |
| [165] | |
| [173] | |
| [196] | |
| [198] | |
| [198] | |
| [208] | |
| [223] | |
| [233] | |
| [234] | |
| [235] | |
| [236] | |
| [237] | |
| [240] | |
| [248] | |
| [264] | |
| [271] | |
| [282] | |
| [282] | |
| Subsistence and ownership of copyright in the applicant’s logo | [284] |
| [291] | |
| [310] | |
| [319] | |
| [319] | |
| [324] | |
| [343] | |
| [352] | |
| [371] | |
| [374] | |
| [385] | |
| [408] | |
| [420] | |
| [434] | |
1 This proceeding concerns the use in Australia of the name OPTICAL 88 and related trade indicia with respect to the retail supply of optical goods and accessories, and of optometry services.
2 The applicant says that this conduct was engaged in by the first respondent and its directors, the second and third respondents (respectively, Mr and Mrs Law) or one or more of them, or was procured by one or more of them, thereby infringing certain of the applicant’s registered trade marks and its copyright claimed in a particular artistic work (a logo) as well as contravening ss 52 and 53 of the Trade Practices Act 1974 (Cth) (the Trade Practices Act) and constituting passing-off.
3 Although certain factual matters are admitted by each of the respondents, they each deny the infringements that have been pleaded. In relation to trade mark infringement they raise specific defences and, by way of cross-claim, the first respondent seeks removal of two of the applicant’s registered trade marks under the non-use provisions of the Trade Marks Act 1995 (Cth) (the Trade Marks Act). As to the cross-claim for removal, the applicant says that, even if grounds for removal are made out, the registrations should not be removed on discretionary grounds. The respondents also dispute that they or any of them have contravened the Trade Practices Act or engaged in passing-off, as alleged by the applicant.
4 The issues that fall for resolution at the present time do not extend to the determination of pecuniary relief, an order having been made on 25 September 2008 that all other issues in this proceeding be heard separately from, and prior to, any issue of quantum in relation to damages or profits.
5 The primary facts concerning the applicant’s business and the first respondent’s business are not substantially in dispute. However, the conclusions to be drawn from those facts are in dispute. The following account records my findings in relation to the establishment and conduct of those businesses, except where I state otherwise.
6 The applicant was incorporated in Hong Kong on 14 August 1987. It is a member of the Stelux Group of companies of which Stelux Holdings International Limited (Stelux) is the ultimate parent company. The applicant and several other companies in the Stelux Group operate a chain of (what the applicant described as) optical stores in various countries in the Asia Pacific region and also in Canada. For convenience I will refer to this group business as the applicant’s business and to the stores as the applicant’s stores.
7 The applicant’s business is conducted under the name OPTICAL 88. This name is also commonly used in a form in which the word OPTICAL is represented in Chinese characters, a transliteration of which is “an geng” (meaning “optical”). For convenience I will refer to this form as “OPTICAL 88” (in Chinese characters). The applicant also uses a particular logo (a representation of which is shown in Schedule 1 to these reasons) (the applicant’s logo). These trade indicia are used individually and in combination with each other. Sometimes they are used with other trade indicia. These other trade indicia do not assume any particular importance for the purposes of the present proceeding.
8 The stores supply by retail a broad range of optical and eye care products including prescription lenses, contact lenses and solutions, frames for spectacles and sunglasses. These stores also provide a comprehensive range of optical services, including sight-testing, eye examinations and after-sales servicing of spectacles. Eye examinations are conducted by qualified optometrists.
9 The optical products supplied by the applicant include numerous fashion and luxury brands such as Christian Dior, Gucci, Emporio Armani, Calvin Klein, Ray-Ban and Oakley. The applicant also supplies “house” products under brands such as Solvil et Titus, Titus, Cyma, Smash and Delvina. There is no evidence that the applicant supplies products branded with any of the registered trade marks that have been pleaded in this proceeding, although it does supply promotional items (such as spectacles cases and cleaning cloths) bearing various trade indicia of the applicant, including the name OPTICAL 88, the name “OPTICAL 88” (in Chinese characters) and the applicant’s logo, in various combinations and sometimes with other trade indicia (such as the domain name www.optical88.com).
10 I should add, for completeness, that another company in the Stelux Group, City Chain Company Limited, operates a network of retail stores supplying watches. In fact the Stelux Group commenced business in 1963 as a manufacturer of watch components. It expanded into the market for optical goods by acquiring a majority shareholding in the applicant on 4 October 1988. All the issued shares in the applicant are now held by companies within the Stelux Group.
11 In late 1984 a company called Yat Cheong Optical Company Limited opened an optical store in Hong Kong under the name OPTICAL 88. The evidence does not disclose the form in which that name was used or the extent to which it was used at that time. This company is referred to in the evidence as the applicant’s “predecessor in title”. The relationship between the company and the applicant is not described in any greater detail.
12 When the Stelux Group acquired a majority shareholding in the applicant in 1988, the applicant was using the name OPTICAL 88 and the name “OPTICAL 88” (in Chinese characters). The applicant used the name OPTICAL 88 in written documents such as tenancy agreements. It used the name “OPTICAL 88” (in Chinese characters) for its store signage. At that time the applicant also used a logo comprising four overlapping circles in the form of the numerals “88”. Each circle had a dark spot at its centre to represent an eye. Shortly after the acquisition, a new logo (the applicant’s logo) was created and came to be used in the applicant’s business. I will say more about the development of the applicant’s logo later.
13 The Chief Executive Officer of the Stelux Group (Joseph C.C. Wong), who was closely involved in the Stelux Group’s acquisition of its shareholding in the applicant, gave evidence that he decided to retain the name OPTICAL 88 because, at that time, he perceived it to be an “up and coming” brand that was desirable for reasons which included the fact that the word OPTICAL had obvious relevance to the nature of the business; the fact that the numeral “8” represents luck and good fortune in Chinese culture; the fact that the numeral “8” is visually similar to a pair of spectacles when turned sideways; and the fact that OPTICAL 88 was a name that could be easily remembered by consumers.
14 There has been a significant expansion in the number of stores conducting the applicant’s business, although over the period from 1988 to the present time the number of stores has fluctuated, including over localities. When the Stelux Group acquired its majority shareholding in the applicant in 1988 there were 15 to 17 stores operating in Hong Kong (the evidence is not more specific), having expanded from seven stores in 1987 and from five stores in 1986. In 1991 there were 53 stores in Hong Kong. In 1992 the applicant opened a store in Macau. By that time there were 63 stores operating in Hong Kong. In 1993 the number of stores in Hong Kong had reduced to 58 stores. However, in 1997 there were 68 stores in Hong Kong, two in Macau, 16 in Thailand and seven in Singapore. In 2008 there were 83 stores in Hong Kong, four stores in Macau, 21 stores in mainland China, 38 stores in Thailand, 24 stores in Singapore, 23 stores in Malaysia and two stores in Canada. Some of these stores are franchised. The details of these arrangements are not in evidence. At the present time about 50 stores in Hong Kong are conducted by franchisees. The two stores in Canada are also conducted by franchisees.
15 There is a significant body of evidence describing how the stores currently operate. The position is less clear in earlier times, particularly in the period 1992 to 1993, which assumes particular importance in this case. I accept, however, that in that period, the applicant’s business was conducted using the name OPTICAL 88, the name “OPTICAL 88” (in Chinese characters), and the applicant’s logo, on many occasions in combination with each other.
16 Statistics compiled by the Census and Statistics Department in Hong Kong show the numbers of establishments for retail and optical supplies in Hong Kong in various years to be as follows: 1988 (601 establishments); 1991 (733 establishments); 1992 (740 establishments); and 1993 (715 establishments).
17 At the time the Stelux Group acquired its majority shareholding in the applicant in 1988, the applicant itself realised that there was a need to establish the name OPTICAL 88 as a brand. In the words of Mr Wong:
The critical challenge in the first two years in which I operated the Optical 88 business was to establish the Optical 88 name and mark, including the Chinese mark [a reference to “Optical 88” (in Chinese characters)], as a strong brand and household name in Hong Kong, with a distinctive brand image embedded in the public consciousness.
18 Whether, on the evidence before me, it can be said that this marketing objective was achieved as at August 1993, when the first respondent commenced to carry on business in Australia, or at any intervening time, is a matter to which I shall return. It should be noted in this regard, however, that, on the applicant’s own evidence, some optical traders in Hong Kong in the early 1990s began using trading names which included the word OPTICAL with a number, such as OPTICAL 68, OPTICAL 98 and OPTICAL 128. Evidence was also given of an optical business trading as OPTICAL 2000, although it is not clear on the evidence when this business commenced.
19 The applicant did not seek to contend that the adoption by these other businesses of these names, or their use in Hong Kong at that time, was an infringement of its rights or was otherwise unlawful. On the contrary, the applicant saw the existence of these other optical businesses as a reason for it to attempt to project a strong brand image. The applicant’s evidence was that, by the mid 1990s, “most” (but, I infer, not all) of these businesses had ceased trading. There is evidence from its own business records that, as at the end of 1991, the applicant saw OPTICAL 68, OPTICAL SHOP and OPTICAL CENTRE as being its main competitors for the purpose of planning its marketing strategies.
20 The evidence establishes that, at the present time, the stores conducting the applicant’s business are located in retail shopping areas that are subject to high pedestrian traffic. These stores operate in what the applicant describes as a “single integrated network” in which promotional activities, such as exclusive bonus offers and a VIP customer program, enable customers to obtain benefits which can be redeemed across stores. Similarly, frames that are purchased at one store can be replaced or repaired at another store.
21 The evidence also establishes that, at the present time, the stores conducting the applicant’s business prominently display the name OPTICAL 88 on exterior signage. This is mostly done alongside the applicant’s logo. In some cases “OPTICAL 88” (in Chinese characters) appears with the applicant’s logo, or the name OPTICAL 88 is represented by characters in the language spoken in the country in which the store is located. The evidence does not enable me to make any finding as to the relative numbers of stores where OPTICAL 88 is represented in the English language or in another language. In some cases the exterior signage shows OPTICAL 88 represented separately in English and in a foreign language (such as “OPTICAL 88” (in Chinese characters)). In some cases an OPTICAL 88 store is located alongside a City Chain store.
22 The name OPTICAL 88 is also displayed on internal signage and other in-store material as well as on promotional materials such as posters, brochures, calendars and discount coupons. There are examples of the use of OPTICAL 88 in combination with the applicant’s logo and “OPTICAL 88” (in Chinese characters) on sales documentation, such as customer receipts. There are examples of use on stationery (such as business cards) of the corporate name OPTICAL 88 LTD in combination with the applicant’s logo, and sometimes also with Chinese characters and the numerals “88”.
23 Sales figures for the period 1988 to 2008 show annualised turnover (year end 31 March) in foreign currencies (based on country location) that is substantial (by country and cumulatively). As at 31 March 1991, the applicant had a recorded annual turnover in Hong Kong of HKD 207.45 million (approximately AUD 34.3 million). As at 31 March 1993, the applicant had a recorded annual turnover in Hong Kong of HKD 234.29 million (approximately AUD 43 million). It is not possible, however, on the evidence, to make findings as to the relative significance of the applicant’s business in Hong Kong in these particular years.
24 Complete records of expenditure on the marketing and promotion of the applicant’s business have not been retained. There is evidence of the production and broadcasting of television and radio advertising. The applicant says, however, that the majority of marketing expenditure in the period 1990 to 1995 was directed to television advertising. Advertising expenditure during that period was as follows:
at least HKD 1.8 million in 1991 (approximately AUD 298,000);
at least HKD 1.1 million in 1992 (approximately AUD 185,000);
at least HKD 4.47 million in 1993 (approximately AUD 819,000);
at least HKD 6.8 million in 1994 (approximately AUD 1.25 million); and
at least HKD 10 million in 1995 (approximately AUD 1.66 million).
These commercials were generally of 30 second duration, although some were shorter (15 seconds) and some were longer (60 seconds).
25 In 1989 three television commercials were produced using two celebrity actors and a particular cartoon character, all well-known in Hong Kong. In 1990 a series of television commercials, called “Stand By Me”, was produced and broadcast on the Hong Kong television channels TVB Jade and ATV Home, including at least 99 times in the period June to September 1991. In July 1992 two versions of a television commercial, called “Father & Son” were produced. These commercials were broadcast on the two television channels, including 132 times in the period June to December 1993. A further series of television commercials called “See the Truth” was broadcast at least 130 times on the two television channels in the period July to September 1994.
26 At the end of 1993, the applicant’s advertising agency had informed the applicant that it was the category leader in advertising expenditure for August 1993 (with Hong Kong television being the only media used). For the period January to August 1993 the same advertising agency ranked the applicant first in the optical shop category with 48% of total media spending. However it was noted that “the advertising campaign in August heavied up the overall spending of Optical 88 within the category”.
27 The applicant’s business has also been promoted by print advertising in newspapers and magazines. After television advertising, it was said to be the most significant area of marketing expenditure.
28 In April, June and October 1992, full-page advertisements for the “Smash” range of spectacle frames and “Master-Lux” lenses were placed in Hong Kong newspapers and magazines, including Oriental Daily News, Oriental Sunday, Ming Pao, Ming Pao Weekly, Sing Pao, Tin Tin Daily News, Next Magazine, Yuk Long and Yes. These advertisements incorporated the applicant’s logo in combination with the name OPTICAL 88 or “OPTICAL 88” in Chinese characters. Other examples of newspaper and magazine advertisements are in evidence for various dates in July, August, September, October and December 1992. The extent of circulation of the newspapers and magazines carrying these advertisements is not in evidence.
29 In September and October 1993 advertisements were placed in the Oriental Daily News. These advertisements featured the applicant’s logo and also included that logo in combination with the words OPTICAL 88. Once again, the extent of circulation is not in evidence. Evidence was also given of the placement of advertisements for employment opportunities within the applicant’s business in a number of Hong Kong newspapers in the period December 1991 to January 1994 which were said to have included the applicant’s logo, the name OPTICAL 88, and “OPTICAL 88” (in Chinese characters).
30 For completeness I should record that there was evidence of advertising in Hong Kong newspapers and magazines and Singaporean magazines in later years (2004 to 2006) in which the applicant’s logo in combination with “OPTICAL 88” (in Chinese characters) and the applicant’s logo with OPTICAL 88 were used.
31 Finally there was evidence of the fact (but not of the content) of advertising by radio broadcasts in Hong Kong, including in July 1994, on radio stations Commercial Radio 1 and Commercial Radio 2.
32 In December 2001, a website at the domain www.optical88.com was launched. This website displays the applicant’s logo in combination with OPTICAL 88 and “OPTICAL 88” (in Chinese characters).
33 Evidence was also given of miscellaneous promotional and marketing activities such as the distribution of calendars for the 1993 year in Hong Kong stores. The calendars incorporated the applicant’s logo in combination with the name OPTICAL 88. There was evidence of similar activity in subsequent years. Functional accessories and promotional items are also provided from time to time to customers in-store, including glasses cases; lens cloths; bags of various kinds; contact lens cases; pens and erasers. Examples of these were tendered. The evidence does not make clear when these activities were engaged in or the extent of them. The physical exhibits do show, however, that there has been use on such items of the applicant’s logo in combination with the name OPTICAL 88 and in combination with “OPTICAL 88” (in Chinese characters), as well as other trade indicia.
The first respondent’s business
34 Mr Law was born in Hong Kong and migrated to Australia with his family in 1978. He subsequently qualified as an optometrist. Mrs Law was also born in Hong Kong.
35 In November 1984 Mr Law established an optometry practice at Campsie, a suburb in south-western Sydney, New South Wales. He called the practice “Angus Law Optometrists”. He provided eye-sight examinations and sold optical goods such as optical lenses, spectacle frames and sunglasses, and accessories such as contact lens solutions, eye drops, spectacle cases and spectacle chains. His patients and customers were drawn from different parts of Sydney. He developed a significant Asian customer base. His patients and customers included those who had migrated from Hong Kong, mainland China, Malaysia, Singapore, Vietnam and other Asian countries.
36 By 1992 he was considering expanding his practice and business. He contemplated the possibility of entering into franchise arrangements. He decided that it would be a good idea to trade using a corporate vehicle. To that end he began thinking about an appropriate corporate name. He wanted the name to be easily identified by his established Asian patients and customers as well as being “in tune with the traditional thinking of Asians”.
37 Mr Law’s evidence was that he was aware that the numeral “8”, especially the combination “88”, was being used in the names of various businesses in Sydney, such as newsagents, butchers and tobacco stores. He thought that OPTICAL 88 was a good and appropriate name to use. He thought that the word “OPTICAL” was a “precise, descriptive and efficient word” to identify an optometry practice and business, which could be used in combination with a more “catchy” word or words. He thought the numerals “88” were apt because, as a number, it was considered to be propitious in Asian cultures. He believed that his Asian patients and customers would be likely to appreciate the symbolism and significance of the numerals in a business name. Also, the numerals represented, in an abstract way, spectacle frames.
38 On 11 February 1992 he caused the business name OPTICAL 88 to be registered. The evidence does not disclose whether Mr Law in fact used that name on his own account at that time. Certainly neither the applicant nor the respondents sought to rely on any such use, beyond the fact of registration of the name itself as a business name. Some 17 months later, on 30 July 1993, Mr Law caused the first respondent to be registered under its present corporate name. In August 1993 he transferred the practice and business at Campsie to the first respondent, which, since that time, has carried on business using its corporate name and the trading name OPTICAL 88 at Campsie and in other locations to which I will refer.
39 On balance, I find that the first use in trade by one of the respondents of the name OPTICAL 88 was from August 1993 when the first respondent commenced to carry on the business formerly conducted by Mr Law at Campsie.
40 At the time these events took place in 1992 and 1993, Mr Law says that he was unaware of the applicant, its business and the various trade indicia used in its business.
41 Between 1984 and 1992 Mr Law visited Hong Kong on a number of occasions. He read professional and trade literature, attended local and international professional and trade conferences, and read local ethnic newspapers (such as the Australian edition of the Sing Tao Chinese Newspaper, and the Chinese Daily Newspaper) and conversed and socialised with many people who had migrated from Hong Kong to Australia. Mr Law’s evidence was that, despite having done these things, he was unaware of the applicant.
42 Mr Law also travelled to Hong Kong on several occasions between 1993 and 1997. However it was only during the course of his visit in May 1997 that he says he noticed one of the applicant’s stores in the central business district of Hong Kong. He gave this evidence:
I did not have any concern about the similarity between [the first respondent’s] name and the applicant’s name because I presumed that I held the legitimate business name and trading name in Australia. I did not investigate the size of the applicant’s operation in Hong Kong as I had no intention to expand the business into Hong Kong. I was contented that my business in Australia was protected.
43 A significant issue in the case is whether Mr Law’s evidence that he was unaware of the applicant, its business and the various trade indicia used by it in its business until his visit to Hong Kong in May 1997, should be accepted. The applicant submitted that it should not be accepted. It contended that Mr Law was aware of the applicant’s trading name and style in 1992 at the latest and that he deliberately adopted the name OPTICAL 88 and later applied it to the first respondent and its business to take advantage of an association with the applicant’s business that he believed would be perceived by customers or potential customers of the first respondent.
44 In this connection the applicant relied on its claimed reputation in Hong Kong in that period, particularly at the time of visits to Hong Kong by Mr and Mrs Law; on evidence of actual and potential migration and travel from Hong Kong at that time; on the fact that, soon after a visit to Hong Kong in 1992, Mr Law registered the business name OPTICAL 88; and the fact that the first respondent was registered under its corporate name soon after a visit to Hong Kong by Mr Law in 1993. It also submitted that, in order to accept the truthfulness of Mr Law’s evidence, it would be necessary to accept that it was no more than a coincidence that the first respondent trades under the same name as the applicant’s business.
45 The applicant also sought to call in aid the circumstances surrounding the creation of the first respondent’s logo in 2003 (a representation of which is shown in Schedule 2 to these reasons) (the first respondent’s logo) which the applicant contends is an infringing reproduction of its logo. It submitted that those events can and should inform my assessment of Mr Law’s reason and motive for adopting the name OPTICAL 88 as the first respondent’s corporate name and trading style. The difficulty with that submission is that it relates to events occurring some 10 years after the adoption and first use of the name OPTICAL 88 by the first respondent. I am not persuaded that the reason or motive for creating the first respondent’s logo in 2003 can safely or usefully inform the reason or motive for adopting the name OPTICAL 88 ten years before.
46 Mr Law was challenged in cross-examination with the applicant’s contentions in this regard. It was put to him that while he was in Hong Kong in January 1992 he saw OPTICAL 88 stores or OPTICAL 88 advertising and came back and registered the business name because of that awareness. It was put to him that while he was in Hong Kong in May 1993 he saw OPTICAL 88 stores or OPTICAL 88 advertising and, because of that awareness, he came back to Australia and registered the first respondent under its corporate name. It was suggested to Mr Law (at least implicitly) that he was motivated to do these things because OPTICAL 88 was known in Hong Kong and he believed that there would be increased migration from Hong Kong to Australia leading up to the handover of Hong Kong to China in 1997. It was also put to Mr Law that he conducted trade mark searches in Australia in 1992. Mr Law denied having any such awareness as at 1992 or 1993 and being motivated to register the business name or register the first respondent under its corporate name because of any such awareness. He denied having carried out any trade mark searches in Australia at that time.
47 Mrs Law was similarly challenged in cross-examination. It was put to her that in one of her trips to Hong Kong in 1991 or 1992 she first saw an OPTICAL 88 store or OPTICAL 88 advertising and that, at the time of the first respondent’s registration as a company in 1993, she was aware that the name OPTICAL 88 was being used in Hong Kong for a significant and successful business for optical goods. It was put to her that she wanted to get the benefit of the success of the Hong Kong business for the first respondent. She denied each of those allegations.
48 Both Mr and Mrs Law gave their evidence in a considered way. Having observed them as they gave their evidence, I do not doubt the truthfulness of their denials. Moreover, I accept Mr Law’s explanation of why he originally chose the name OPTICAL 88 and how it came to be adopted as the first respondent’s corporate name and trading style in 1993. There is nothing in the evidence that, objectively, compels a different conclusion. Bearing in mind the nature of the trade involved, and the cultural significance of the numeral “8”, I do not think that the name OPTICAL 88 is so unusual as to warrant the conclusion that its derivation could only have come from a knowledge of the applicant’s business in Hong Kong. Indeed, the fact that, at about that time, other businesses in Hong Kong had also been using the word OPTICAL in association with the numeral “8” as trading names shows that there was nothing unique in that combination. Once again, the applicant did not suggest that there was anything untoward in the adoption by these other businesses of these names, or in their use of them in Hong Kong at that time.
49 I also accept as truthful Mr Law’s evidence that he had an awareness that the numeral “8”, especially the combination “88”, was being used in the names of various businesses in Sydney, such as newsagents, butchers and tobacco stores, at the time that he came to consider a new trading name as a step in his plans for the expansion and development of the practice and business which he had established.
50 In early November 1993 the first respondent opened a new shop at Chatswood, a suburb on the North Shore of Sydney.
51 In July 1995 the first respondent opened another new store in Eastwood, a northern suburb of Sydney.
52 The respondents do not dispute that, since August 1993, the first respondent has used the name OPTICAL 88 in conducting its practice and business. It has used the name on store signage; business cards, reminder cards, invoices and other business stationery; spectacle cases and cleaning cloths; plastic shopping bags; loyalty cards and advertising in local Chinese newspapers. Sometimes this use has been in combination with, or in proximity to, “OPTICAL 88” (in Chinese characters) or the first respondent’s logo. Sometimes the name has been used in association with the word “Vision” or “Vision Centre”. I will refer to this use in greater detail later in these reasons.
53 The question that arises is whether these various forms of use constitute the infringements, contraventions or other unlawful conduct of which the applicant complains. Undoubtedly the impugned use is, and has been, in relation to what may be broadly described as the retail sale and supply of optical goods and accessories, and of optometry services.
The applicant’s demands upon the respondents
54 In about mid-2001 the applicant became aware of the first respondent’s business in Australia. However, it took no steps to advance the claims it now makes or otherwise to protect its interests as it now sees them to be. Mr Wong gave as the reason for that inactivity the fact that the applicant’s business in Hong Kong had suffered losses and that he was careful to control the costs being incurred by it. He said that, although he was concerned by the first respondent’s conduct, it was his view that the applicant should not divert its resources in taking legal action against the first respondent. For present purposes I leave to one side the question whether those reasons, if accepted, justified the applicant taking no steps whatsoever at that time to give notice to the respondents of the claims it now makes against them.
55 Mr Wong gave evidence that in 2005 the applicant’s sales turnover had increased and that his attention turned back to the Australian market. In 2006 one of the applicant’s employees visited Australia to assess opportunities for establishing the applicant’s stores in Australia. I will say more about this visit later.
56 Eventually, by letter dated 24 October 2006, the applicant, through its solicitors, gave notice of its claims and made demands upon the respondents. The demands included the giving by the respondents of certain undertakings. Without descending to the detail of the undertakings that were sought, their effect was to require the respondents, within 14 days, to cease all use of the name OPTICAL 88 and the first respondent’s related trade indicia, and to require the first respondent to change its corporate name. By letter dated 17 November 2006, the respondents, through their solicitors, rejected those demands. Correspondence continued between the solicitors until 26 February 2007, when the respondents’ solicitors confirmed the respondents’ rejection of the applicant’s claims and demands. Nothing further appears to have happened until 2 November 2007 when the applicant’s solicitors sent a further letter of demand in which the applicant pressed its demands for undertakings to be given by the respondents. Those demands were again rejected by a letter from the respondents’ solicitors to the applicant’s solicitors dated 25 November 2007.
57 Mr Law’s evidence was that he first became aware that the applicant had Australian registered trade marks shortly after he received the first letter of demand informing the respondents of the claim that the respondents were infringing the applicant’s intellectual property rights. I accept this evidence.
58 Mr Law said that he took immediate steps to protect the first respondent’s position. He did this by arranging for the first respondent to apply to register an Australian trade mark comprising the first respondent’s logo.
The applicant’s registered trade marks
59 The applicant is the registered owner of the following Australian registered trade marks: 520707, 1083966, 1160979, 1160985, 1250545 and 1253320 (the pleaded trade marks). These are either composite marks or device marks. Registered trade marks 1160979 and 1250545 are for the same mark. Similarly, registered trade marks 1160985 and 1253320 are for the same mark. Representations and other brief details of the pleaded trade marks are shown in Schedule 3 to these reasons, which reproduces Annexure 1 to the further amended application (the application) and the further amended statement of claim (the statement of claim). Annexure A to the applicant’s closing submissions also identifies the pleaded trade marks.
60 Registered trade mark 520707 (the ‘707 mark) was registered with effect from 6 October 1989 in respect of the following goods in Class 9:
Optical products; spectacles, sunglasses, contact lenses, frames and cases for the aforesaid goods and all other optical related goods in class 9.
61 The ‘707 mark is a composite mark comprising the applicant’s logo, to the right of which are the name “OPTICAL 88” (in Chinese characters) and the name OPTICAL 88, with “OPTICAL 88” (in Chinese characters) placed above OPTICAL 88.
62 The mark was registered under the Trade Marks Act 1955 (Cth) (the repealed Act) in Part A of the old register, bearing an endorsement and disclaimer pursuant to s 32 of the repealed Act, which currently reads:
Registration of this trade mark shall give no right to the exclusive use of the numerals 88* Registration gives no right to the exclusive use of the word AN GENG which is a transliteration of the Chinese character in the mark which may be translated as OPTICAL* The preceding endorsement(s) were recorded prior to commencement of the Trade Marks Act 1995.*
63 Section 238 of the Trade Marks Act provides that a disclaimer made under s 32 of the repealed Act has effect as a disclaimer made under s 74 of the later Act.
64 Section 74 of the Trade Marks Act provides:
(1) An applicant for the registration of a trade mark, or the registered owner of a registered trade mark, may, by notice in writing given to the Registrar, disclaim any exclusive right to use, or authorise the use of, a specified part of the trade mark.
(2) The disclaimer affects only the rights given by this Act to the registered owner of the trade mark on registration of the trade mark.
(3) The Registrar must, on registering the trade mark or on receiving notice of the disclaimer (whichever is later), enter the particulars of the disclaimer in the Register.
(4) A disclaimer properly made may not be revoked.
65 Section 122(2) of the Trade Marks Act provides that, if a disclaimer has been registered in respect of a part of a registered trade mark, it is not an infringement to use that part of the trade mark.
66 Registered trade mark 1083966 (the ‘966 mark) was registered with effect from 2 November 2005 in respect of the following goods in Class 9:
Optical products, spectacles, glasses, sunglasses, contact lenses, frames for eyeglasses, and cases for the aforesaid goods, spectacle bags.
and the following services in Class 35:
Retail and wholesale services of eyewear, optical products including spectacles, glasses, sunglasses, contact lenses, anti-glare glass cases, contact lens cases, optical frames, lenses, correcting lens (optics), accessories, parts and fittings for glasses, optical apparatus and instruments, cleaning cloths for spectacles, contact lenses care regimen products.
67 The ‘966 mark is a composite mark comprising the applicant’s logo, to the right of which are the name OPTICAL 88 and the name “OPTICAL 88” (in Chinese characters), with OPTICAL 88 placed above “OPTICAL 88” (in Chinese characters).
68 Registered trade mark 1160979 (the ‘979 mark) was registered with effect from 14 February 2007 in respect of the following services in Class 35:
Retail and wholesale services of eyewear, optical products including spectacles, glasses, sunglasses, contact lenses, anti-glare glass cases, contact lens cases, optical frames, lenses, correcting lens (optics), accessories, parts and fittings for glasses, optical apparatus and instruments, cleaning cloths for spectacles, contact lenses care regimen products being services in class 35.
69 The ‘979 mark is a device mark comprising the applicant’s logo.
70 Registered trade mark 1160985 (the ‘985 mark) was also registered with effect from 14 February 2007 in respect of the following services in Class 35:
Retail and wholesale services of eyewear, optical products including spectacles, glasses, sunglasses, contact lenses, anti-glare glass cases, contact lens cases, optical frames, lenses, correcting lens (optics), accessories, parts and fittings for glasses, optical apparatus and instruments, cleaning cloths for spectacles, contact lenses care regimen products being services in class 35.
71 The ‘985 mark is a composite mark comprising the name “OPTICAL 88” (in Chinese characters).
72 Registered trade mark 1250545 (the ‘545 mark) was registered with effect from 9 July 2008 in respect of the following services in Class 44:
Optometric, sight-testing and opticians’ services including services in relation to the prescription and dispensing of optical apparatus and instruments, spectacles, lenses and contact lenses.
73 The ‘545 mark comprises the applicant’s logo. As I have noted, the ‘545 mark is the same as the ‘979 mark. It is, however, registered for different services.
74 Registered trade mark 1253320 (the ‘320 mark) was registered with effect from 24 July 2008 in respect of the following services in Class 44:
Optometric, sight-testing and opticians’ services including services in relation to the prescription and dispensing of optical apparatus and instruments, spectacles, lenses and contact lenses.
75 The ‘320 mark is a composite mark comprising the name “OPTICAL 88” (in Chinese characters). As I have noted, the ‘320 mark is the same as the ‘985 mark. It is, however, registered for different services.
76 The applicant pleaded its case on trade mark infringement in a somewhat complex fashion: see paragraphs 13 to 24 of, and the definitions used in, the statement of claim. Stripped of that complexity, the case that emerged in the course of the applicant’s opening, and subsequently in closing submissions (which is reflected in the broad compass of the pleading on trade mark infringement in the statement of claim), was that the respondents have infringed one or more of the pleaded trade marks by using, as a trade mark, signs that are: (a) deceptively similar to one or more of the pleaded trade marks, and, or alternatively, (b) the same as, or substantially identical with, the ‘979 and ‘985 marks. This was identified as an element of conduct more broadly defined in the statement of claim as “Unauthorised Conduct”.
77 In the statement of claim the applicant did not seek to relate a particular instance or particular instances of alleged infringing use to a particular trade mark. Rather, its approach was to identify a particular suite of trade marks (the pleaded trade marks), on the one hand, and a particular body of alleged instances of infringing use on the other, and to allege that one or more of the trade marks was infringed by one or more instances of the total body of conduct which it had identified.
78 The liability of the respondents was also pleaded on the footing that they were either individual tortfeasors or joint tortfeasors. In the case of Mr and Mrs Law, it was also specifically pleaded that they directed, procured and controlled the first respondent in its acts, and were knowingly concerned in those acts.
79 As pleaded, the applicant’s case encompassed infringement under ss 120(1) and (2) of the Trade Marks Act. The applicant did not plead or advance any case that any of the pleaded trade marks was a “well known” mark for the purposes of s 120(3) of the Trade Marks Act.
80 By relying on s 120(2), the applicant broadened the scope for infringement to goods of the same description as the “registered goods”, services closely related to the “registered goods”, services of the same description as the “registered services” and goods closely related to the “registered services”, as those terms are defined in s 120(2). I do not think that the issue of liability for trade mark infringement in this case turns in any contentious way on the identification of goods or services within the scope of the particular registrations or within the broadened range of goods and services identified in s 120(2) of the Trade Marks Act.
81 It is convenient to note at this juncture that the respondents did not plead, and did not seek to establish, for the purposes of s 120(2), that there were aspects of the particular use of the impugned signs which showed that that use was not likely to deceive or cause confusion. The respondents did, however, dispute a different contention which was that, in contravention of ss 52 and 53 of the Trade Practices Act, they had engaged in conduct that was misleading or deceptive (or likely to mislead or deceive) or had made false representations by using the signs or that, by that use, they had engaged in passing-off.
82 The respondents did raise a number of specific defences to trade mark infringement, particularly as they applied to the first respondent: see paragraph 22 of each amended defence, pleaded in substantially the same terms. I will return to these issues.
83 The alleged infringing use was exemplified in the course of the applicant’s opening and closing submissions by reference to a section called OPL signs in a document entitled Trade Mark Infringement Analysis, which, by way of refinement of the more general allegations pleaded in the statement of claim, identified the following specific instances of use commencing from the dates specified in that document:
(a) The use of the name OPTICAL 88 on store signage (which I will call example A). This use is evident from August 1993 at the Campsie store (where that use has been in association with the words “Vision Centre”) and from July 1995 at the Eastwood store. The use is also evident from November 1993 at the Chatswood store. In that case, the name “OPTICAL 88” (in Chinese Characters) is also used in proximity (but not in close proximity) to the name OPTICAL 88. Contrary to the applicant’s submissions, in that instance I do not see the name OPTICAL 88 and the name “OPTICAL 88” (in Chinese characters) as comprising, in combination, one sign but two separate signs, whose use calls for individual consideration.
(b) The use of the name “OPTICAL 88” (in Chinese characters) on store signage (which I will call example B). Following from my finding above, this use is evident from November 1993 at the Chatswood store.
(c) The use of the name OPTICAL 88 in combination with the name “OPTICAL 88” (in Chinese characters) on store signage (which I will call example C). This use is evident from August 1993 at the Campsie store, where “OPTICAL 88” (in Chinese characters) is placed in close proximity to and above OPTICAL 88. Although appearing to be in separate neon signs, their proximity is such that, contrary to the respondents’ submissions, I would regard this as being the use of one sign, and the relevant sign, for the purpose trade mark comparison. This use is evident from July 1995 at the Eastwood store, where the name OPTICAL 88 and the name “OPTICAL 88” (in Chinese characters) are in close proximity, with “OPTICAL 88” (in Chinese characters) being immediately to the right of OPTICAL 88. Once again, although appearing to be in separate neon signs, their proximity is such that, contrary to the respondents’ submissions, I regard this as being the use of one sign, and the relevant sign, for the purposes of trade mark comparison.
(d) The use of the name OPTICAL 88 in combination with the name “OPTICAL 88” (in Chinese characters) on business cards (which I will call example D). This use is evident from August 1993. In this instance “OPTICAL 88” (in Chinese characters) appears in close proximity to and under OPTICAL 88. Once again, it is the use of one sign, and the relevant sign, for the purpose of trade mark comparison.
(e) The use of the name OPTICAL 88 on stationery in association with the words “Vision Centre” and, in the case of “loyalty cards”, in association with the words “V.I.P. Card”, from August 1993. This use is also evident on promotional literature (a benefit concert program sponsored by the first respondent) in association with the words “Vision” and “VISION CENTRE” in December 1993 and on promotional items (such as spectacle cases and cleaning cloths) in association with the words “VISION CENTRE”, from about 1996 (I will call these, collectively, example E).
(f) The use of the first respondent’s logo on business cards and reminder cards since late 2003 (I will call this example F).
84 This exemplified use and the dates of its commencement were also identified in a separate section of the applicant’s submission documents entitled “Images Chronology”.
85 The applicant relied on another instance of alleged infringing use said to have arisen from the fact of the first respondent’s lodgement of its application to register its logo as a trade mark with the Registrar of Trade Marks on 20 November 2006 (trade mark application 1147926). I am able to deal with this allegation of infringement immediately.
86 In my view the mere lodgement of this application for registration was not the use of a sign (the first respondent’s logo) as a trade mark in relation to goods or services, within the meaning of s 120 of the Trade Marks Act. Use of a trade mark in relation to goods is use of the trade mark upon, or in physical or other relation to, the goods: s 7(4) of the Trade Marks Act. Use of a trade mark in relation to services is use of the trade mark in physical or other relation to the services: s 7(5) of the Trade Marks Act. The lodgement of the trade mark application may have said something about the intended use by the first respondent of its logo as a trade mark in relation to the goods or services for which registration was sought, but it was not a use by the first respondent of its logo as a trade mark in physical or other relation to those goods and services, or upon those goods.
87 Section 120 of the Trade Marks Act conditions infringement on the use of a sign, as a trade mark, that is “substantially identical” with or “deceptively similar” to a registered trade mark.
88 There are three species of infringement: (a) use of the impugned sign in relation to goods or services in respect of which the trade mark is registered (s 120(1)); (b) use of the impugned sign in relation to goods of the same description as the registered goods or of services closely related to the registered goods, or in relation to services of the same description as the registered services or of goods closely related to the registered services (s 120(2)), and (c) use of the impugned sign in relation to “unrelated goods” or “unrelated services” (s 120(3)).
89 However, whatever species of infringement is alleged, the question of trade mark infringement invites, indeed requires, a comparison to be made between the registered trade mark and the sign whose use as a trade mark is impugned.
90 As the text of s 120 makes plain, the comparison is based on two separate tests, “substantial identity” and “deceptive similarity”. It is trite law that the tests are fundamentally different. In this proceeding the applicant placed emphasis on the existence of “deceptive similarity”, relying (as I have already noted) on “substantial identity” only in respect of the alleged infringement of the ‘979 and ‘985 marks.
91 In The Shell Company of Australia Limited v Esso Standard Oil (Australia) Limited (1961) 109 CLR 407 Windeyer J (at 414) said with respect to “substantial identity”:
In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison.
92 In relation to “deceptive similarity”, his Honour said (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 impugned mark].
93 Earlier, in Australian Woollen Mills Limited v F.S. Walton and Company Limited (1937) 58 CLR 641, Dixon and McTiernan JJ (at 658) said with respect to “deceptive similarity”:
In deciding this question, 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. The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected. Potential buyers of goods are not to be credited with any high perception or habitual caution. On the other hand, exceptional carelessness or stupidity may be disregarded. The course of business and the way in which the particular class of goods are sold gives, it may be said, the setting, and the habits and observation of men considered in the mass affords the standard. Evidence of actual cases of deception, if forthcoming, is of great weight.
94 It is to be borne in mind that the essential task is one of trade mark comparison. So much is made clear by s 10 of the Trade Marks Act itself: it is the resemblance between the two marks that must be the cause of the likely deception or confusion. The inquiry for trade mark infringement purposes is thus a relatively limited one. However, in cases of alleged “deceptive similarity”, the context of surrounding circumstances is not to be ignored. As Australian Woollen Mills makes clear, the comparison takes place in a particular context in accordance with a particular standard: “the course of business and the way in which the particular class of goods are sold” gives the setting and “the habits and observation of men considered in the mass” affords the standard in determining whether the impugned mark is, properly judged, “deceptively similar”. In Shell Windeyer J observed (at 416) that, although deceptiveness must result from similarity, the likelihood of deception must be judged not by the degree of similarity alone but by the effect of that similarity in all the circumstances.
95 However, the inquiry into surrounding circumstances should not be confused with the wider inquiry that may be (and is in most cases likely to be) involved in cases of alleged passing-off or alleged misleading or deceptive conduct (for example, in the context of alleged contravention of s 52 of the Trade Practices Act). The boundary between the two types of inquiry is not always easy to discern and does not appear to have been always observed. Moreover, it is necessary, in this regard, to distinguish between the species of infringement created by s 120 of the Trade Marks Act itself.
96 In this connection it is generally recognised that, for the purposes of infringement under s 120(1), consideration of the trade mark owner’s reputation in the registered mark is not relevant, save (perhaps somewhat contentiously) where reputation is a matter of notoriety: see, conveniently, the discussion in CA Henschke & Co v Rosemount Estates Pty Ltd (2000) 52 IPR 42; [2000] FCA 1539 at [45] to [52]. Thus the same test of deceptive similarity must be applied whether the mark is newly registered and unknown or whether it has been prominently displayed on well-known merchandise for many years. If the test is not applied in this fashion a trade mark owner may be deprived of the monopoly conferred by registration under the Trade Marks Act.
97 Recognition of this aspect of infringement under s 120(1), in so far as it concerns the question of deceptive similarity, highlights another aspect of the relevant test for the purposes of s 120(1): intending purchasers are assumed to have knowledge of the mark alleged to have been infringed. Thus consideration of the question of deceptive similarity proceeds from an anterior premise that is hypothetical rather than actual.
98 It is, of course, otherwise when considering infringement under s 120(3) of the Trade Marks Act. In that context actual knowledge of the mark is all important: the mark is well known in Australia and, because the mark is well known, use of the allegedly infringing sign as a trade mark would be likely to be taken as indicating a connection between “unrelated” goods or services (see s 120(3)(b)) and the registered owner of the trade mark. Questions of reputation may also be relevant when considering infringement under s 120(2), if, unlike here, the alleged infringer does seek to rely defensively on the particular manner in which the impugned mark has been used as not leading to a likelihood of deception or confusion.
99 So too it is recognised that, for the purposes of considering infringement under s 120(1), it is beside the point that the alleged infringer has added other material to the impugned trade mark, even if those steps were taken to avoid the likelihood of deception: Saville Perfumery Ltd v June Perfect Ltd (1941) 58 RPC 147 at 161 (Sir Greene MR) and at 174 (Viscount Maugham); Lever Brothers, Port Sunlight Limited v Sunniwite Products Ltd (1949) 66 RPC 84 at 89; Mark Foy’s Ltd v Davies Coop and Co Ltd (1956) 95 CLR 190 at 205; Polaroid Corporation v Sole N Pty Ltd [1981] 1 NSWLR 491 at 495; New South Wales Dairy Corporation v Murray Goulburn Co-Operative Company Limited (1989) 86 ALR 549 at 589; Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227 at 231-232. Considerations of this kind, if raised by an alleged infringer, are relevant when considering infringement under s 120(2) and may be relevant when considering infringement under s 120(3). However, the general position under s 120(1) is that infringement cannot be avoided by, for example, the use of additional matter if the mark itself is taken and used. Once again, if the test is not applied in this fashion a trade mark owner may be deprived of the monopoly conferred by registration.
100 When considering the question of deceptive similarity, each mark must be compared as a whole. This is of particular significance in relation to composite marks and device marks which may consist of a number of elements: Angelides v James Stedman Hendersons Sweets Ltd (1927) 40 CLR 43 at 68. It is necessary to look at all these elements in their context. This will include the size, prominence and stylisation of words and device elements used in the mark and their relationship to each other: Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd (2004) 209 ALR 1; [2004] FCAFC 196 at [91]-[103]; Bavaria NV v Bayerischer Brauerbund eV (2009) 177 FCR 300 at [21]-[22] and [32]. The impression created by the mark, considered as a whole, can only be determined by doing this. However, in this connection, it is recognised that deceptive similarity may be established when an impugned mark uses an “essential” or “distinguishing” feature of the mark as registered. This proposition may be illustrated by reference to the following leading cases.
101 In Saville Perfumery the registered trade mark was a composite mark comprising word and device elements. It was described (at 172) as consisting of the word “June” “printed in a special manner with a bar as a kind of background behind the letters and a garland of flowers depending as an arc from either end of the bar”. The registration was endorsed with a disclaimer of the exclusive right to use the flower device. It was held that the registered trade mark was infringed by the use, as a trade mark, of the word “June” in relation to goods in respect of which the trade mark was registered. Viscount Maugham (with whom Lord Russell of Killowen and Lord Romer agreed), held (at 174-175) that the “distinguishing feature” or “essential feature” of the registered trade mark was the word “June” represented in a special script. It is not clear on the face of the report whether the impugned use of the word “June” employed a stylised rendering of that word, although it is recorded that the word was printed on the accused product in inverted commas: see at 160.
102 Viscount Maugham at 175 said:
The Appellants’ use of the word “June” as a mark on the goods in question so nearly resembles the Respondents’ mark as to be likely to deceive or cause confusion in the minds of purchasers with a normally imperfect recollection of the precise picture representing or containing the registered mark.
103 In de Cordova v Vick Chemical Company (1951) 68 RPC 103 one of the registered trade marks was a composite mark comprising the words “Vicks VapoRub Salve”, a device consisting of a triangle with the words “Vicks Chemical Company” printed on the sides, and other subsidiary words below the triangle. The other registered trade mark comprised the word “VapoRub”. It is, however, the composite mark (identified in the report as Trade Mark 1852) that is of present significance.
104 Lord Radcliffe, in delivering the advice of the Privy Council, said (at 105106):
Their Lordships consider that the Court of Appeal were right in holding that the Appellants had infringed Trade Mark 1852. They have not used the mark itself on the goods that they have sold, but a mark is infringed by another trader if, even without using the whole of it upon or in connection with his goods, he uses one or more of its essential features. The identification of an essential feature depends partly on the Court’s own judgment and partly on the burden of the evidence that is placed before it. A trade mark is undoubtedly a visual device; but it is well-established law that the ascertainment of an essential feature is not to be by ocular test alone. Since words can form part, or indeed the whole, of a mark, it is impossible to exclude consideration of the sound or significance of those words. Thus it has long been accepted that, if a word forming part of a mark has come in trade to be used to identify the goods of the owner of the mark, it is an infringement of the mark itself to use that word as the mark or part of the mark of another trader, for confusion is likely to result. It is sufficient to refer to the words of Lord Cranworth, L.C., in Seixo v. Provezende, (1866) L.R. 1 Ch. 192 at p. 197: “If the goods of a manufacturer have, from the mark or device he has used, become known in the market by a particular name, I think that the adoption by a rival trader of any mark which will cause his goods to bear the same name in the market, may be as much a violation of the rights of that rival as the actual copy of his device.” Decisions of the same effect are to be found in Ford v. Foster (1872) L.R. 7 Ch. 611, Orr Ewing & Coy. v. Johnston & Coy. (1880) 13 Ch. D. 434, Saville Perfumery Ld. v. June Perfect, Ld. (1941) 58 R.P.C. 147. The likelihood of confusion or deception in such cases is not disproved by placing the two marks side by side and demonstrating how small is the chance of error in any customer who places his order for goods with both the marks clearly before him, for orders are not placed, or are often not placed, under such conditions. It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole.
105 Proceeding on that basis the Privy Council held (at 106) that the word “VapoRub” must be treated as an “essential” feature or “a material or substantial element” of Trade Mark 1852 and that it was infringed by the use of the name “Karsote Vapour Rub”. It is to be noted that the addition of the word “Karsote” did not avoid the finding of infringement. This is another illustration of the general proposition that, for the purposes of infringement, it does not avail a defendant to point to other material added to the trade mark to distinguish trade origin.
106 In Crazy Ron’s one of the registered trade marks (identified as “the 1995 mark”) was a composite mark comprising a cartoon character of a man represented comically as a “crazy man” holding a mobile telephone and sitting astride a stylised globe with meridians, bearing the letters “M” and “W”. It included the words CRAZY JOHN upwardly angled at shoulder height to the cartoon character, with the word CRAZY to the left, and the word JOHN to the right, of the cartoon character: see at [18].
107 In allowing an appeal from a finding of infringement of that mark by the use, as a trade mark, of “Crazy Ron” and “Crazy Ron’s”, the Full Court identified as a threshold question whether the primary judge erred in finding that the words CRAZY JOHN constituted an essential element of the 1995 mark for the purposes of undertaking the comparison required by s 120(1) of the Trade Marks Act.
108 The Full Court (at [93]) said:
As the earlier discussion of the authorities shows, the concept of an “essential feature” of a registered trade mark is well-established, notwithstanding that the statutory language does not explicitly incorporate such a concept. Neither party suggested that the case should be decided without reference to the “essential feature” of the 1995 mark. It is, however, worth noting that the court’s duty is ultimately to the statutory language rather than to the complexities brought forth by many years of decisional authority: cf Aktiebolaget Hassle v Alphapharm Pty Ltd (2002) 212 CLR 411 at 446 [87] ; 194 ALR 485 at 508 per McHugh J (dissenting); at CLR 449 [99]; ALR 510–11 per Kirby J (dissenting). While recognising that decisions in other cases cannot resolve the threshold factual question in this case, it is perhaps suggestive that decisions relying on an “essential feature” of a registered mark generally appear to involve much less elaborate marks than the 1995 mark. At all events, they have tended to involve trade marks in which the words said to constitute an essential feature of the mark occupy a much more prominent place than the words “CRAZY JOHN ” in the 1995 mark. Saville and de Cordova provide examples.
109 The Full Court (at [97]) held:
If attention is confined to the 1995 mark itself, it is in our opinion very difficult to characterise the words “CRAZY JOHN” as an essential feature. The words form but part of a composite mark comprising a number of elements. The words themselves are not especially prominent and indeed are subsidiary to the fantasy character, which occupies the dominant position in the overall image. If anything, the words seem to identify the fantasy character, having regard to the deranged look on his face. The words also compete for attention with the letters “MW” which themselves occupy a central position on the stylised globe.
110 Importantly the Full Court went on to caution (at [100]) against a too ready characterisation of words in a complex composite registered trade mark as an “essential feature” of that mark when assessing the question of deceptive similarity. The Full Court remarked that if such a characterisation is made incautiously it may effectively convert a composite mark into “something quite different”.
111 At the end of the day the question of deceptive similarity is one to be resolved in a given case by judicial estimation based on the visual and aural impression created by each mark and on the likely effect to be produced by each mark on the minds of likely customers of the goods and services in the course of the ordinary conduct of affairs: Australian Woollen Mills at 659.
112 The question of the impression of the marks on the minds of likely customers is important because, although they are assumed to have knowledge of the mark alleged to have been infringed, those customers are not to be treated as having perfect recollection of the mark in all its details. Quite to the contrary; in considering the question of deceptive similarity, allowance must be made for imperfect recollection based on impression: Aristoc Ltd v Rysta Ltd [1945] AC 68 at 86; Re Rysta Ltd’s Application (1943) 60 RPC 87 at 108-109.
113 Finally, the test is not one of actual deception or confusion but the likelihood of deception or confusion occurring by reason of the use of the mark. Section 10 of the Trade Marks Act provides that a trade mark is taken to be “deceptively similar” to another trade mark:
… if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.”
114 Although dealing with an opposition to registration, the notion of deception or confusion as elucidated by Kitto J in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1953) 91 CLR 592 at 595 has been regarded as apposite when dealing with the question of deceptive similarity in the context of trade mark infringement:
It is not necessary, in order to find that a trade mark offends against the section, to prove that there is an actual probability of deception leading to a passing-off. While a mere possibility of confusion is not enough - for there must be a real, tangible danger of its occurring (Reckitt & Colman (Australia) Ltd. v. Boden; Sym Choon & Co. Ltd. v. Gordon Choons Nuts Ltd. - 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.
(Footnotes omitted)
115 The parties’ submissions focused on the question of the infringement of the ‘707 mark and the ‘966 mark.
116 In its closing submissions the applicant dealt specifically with infringement of the ‘707 mark and ‘966 mark by reference to the use of signage at the Campsie, Chatswood and Eastwood stores and the use of the first respondent’s business and reminder cards.
117 The applicant, whilst acknowledging the composite nature of each mark (incorporating three elements: the applicant’s logo; the name OPTICAL 88; and the name “OPTICAL 88” (in Chinese characters)), submitted that the dominant element of each mark is OPTICAL 88.
118 This submission was supported, to some extent, by some of the results of a quantitative survey commissioned by the applicant and conducted in July 2009. It will be necessary to make some detailed findings about the survey and its results in dealing with the applicant’s claims based on its alleged reputation. One aspect of that survey is, however, relevant to consideration of the trade mark infringement aspect of this case.
119 Interviewees were shown a card (Picture V) depicting (what the parties accepted to be) the ‘707 mark as store signage on a shop, which they were told was a shop from which glasses and contact lenses were sold and eye-testing was conducted. They were prompted to respond to the following statement: “There’s a sign on the shop. Please tell me anything at all that comes to mind about the sign”. The interviewees gave responses that focused on the numerals “88”, with the idea that they looked like a pair of glasses. These responses were compared with the responses of a separate group of interviewees who had been shown a different card depicting the same store but with the name OPTICAL 88 as the store signage (Picture R). They were given the same information and asked the same question. Dr David Bednall, who was called as an expert for the applicant, expressed this opinion in his report:
When combined across all centres, people seeing picture “V” that incorporated Chinese characters and a logo commented that it looked like a “pair of glasses” or “glasses frames” presumably influenced by the logo above and beyond the impression created by the numbers “88”. Apart from that, there were no differences between responses to pictures “R” and “V” suggesting that the characters and logo made little difference to the response based on the words “Optical 88”.
120 He also expressed this opinion in his report:
The responses to signs R and V were fundamentally not different, indicating that the words “Optical 88” were responsible for the responses, not the Chinese characters or logo contained in the picture (showcard) V…
121 Although the survey design, and thus the opinions based on it, were challenged in a number of respects by the respondents, there was no challenge to this particular aspect of Dr Bednall’s report that would undermine the effect of the opinions I have quoted.
122 This evidence, in so far as it relates to the presence of Chinese characters in the sign used in Picture V, may seem surprising at first blush. It is important to note, however, that the survey was conducted to obtain data from a particular target population: at least 70% of the interviews had to be conducted with Hong Kong-born interviewees, with the rest of the interviewees being drawn from persons born in Macau, Singapore and Thailand. In the end result, 83% of interviewees were born in Hong Kong, 1.1% were born in Macau, 12.2% were born in Singapore and 3.7% were born in Thailand. It can be inferred from Dr Bednall’s evaluation of these particular findings that little significance was placed on the Chinese characters because, for that target population overall, the characters simply signified, in an Australian context, the Chinese equivalent of the word OPTICAL and no more.
123 In this connection the applicant also relied on responses given by Mr Law in cross-examination, to the effect that the crucial element of the first respondent’s “image” is the name OPTICAL 88, with the first respondent’s logo being secondary. This evidence, however, speaks more about the first respondent’s intended marketing emphasis rather than how customers would perceive the applicant’s ‘707 and ‘966 marks.
124 The applicant submitted that the first respondent intentionally adopted the name OPTICAL 88 with a view to deriving advantage from consumers perceiving an association between the first respondent’s business and the applicant’s business. In this connection the applicant relied upon the well-known observation in Australian Woollen Mills by Dixon and McTiernan JJ at 657:
The rule that if a mark or get-up for goods is adopted for the purpose of appropriating part of the trade or reputation of a rival, it should be presumed to be fitted for the purpose and therefore likely to deceive or confuse, no doubt, is as just in principle as it is wholesome in tendency. In a question how possible or prospective buyers will be impressed by a given picture, word or appearance, the instinct and judgment of traders is not to be lightly rejected, and when a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he has done is in fact likely to deceive. Moreover, he can blame no one but himself, even if the conclusion be mistaken that his trade mark or the get-up of his goods will confuse and mislead the public. …
125 I have, however, already rejected the factual foundation for that contention.
126 As to the other pleaded marks, the applicant simply submitted that “the remainder of the applicant’s registered trade marks have the various elements as separate marks” and that “the respondents have used each of these separate elements as trade marks”. No further elaboration was made.
127 In their closing submissions the respondents submitted that each of the ‘707 and ‘966 marks should be considered as a whole. They submitted that the name OPTICAL 88 was descriptive and that it was the applicant’s logo in each of those marks that provided them with “some uniqueness”. They submitted that the separate use of the name OPTICAL 88 and the name “OPTICAL 88” (in Chinese characters) could not infringe either of those marks.
128 They also submitted that, in any event, there was insufficient evidence of the applicant’s reputation or trade mark use in Australia to make it likely that a significant number of people in Australia could be confused. They submitted that it was telling that the applicant had adduced no direct evidence of confusion or deception.
129 The respondents did not advance any submission that the various instances of use relied upon by the applicant did not constitute the use of a “sign” as a trade mark. Similarly they did not advance any submission that the impugned use was not use in relation to goods and services within the scope of the goods and/or services for which each mark was registered; or in relation to goods of the same description as, or services closely related to, the registered goods; or in relation to services of the same description as, or goods closely related to, the registered services.
130 Leaving aside the specific defences raised by the respondents, the essential question in dispute on the issue of trade mark infringement was, at the end of the day, whether a sign that had been used by one or more of the respondents was deceptively similar to (or, where relevant, substantially identical with) one or more of the pleaded trade marks.
131 It is convenient to approach that question initially by reference to the ‘707 and ‘966 marks before considering the same question in relation to the other pleaded marks. To do so reflects the focus of how the parties presented their respective cases. It is also recognises that the ‘707 and ‘966 marks share very similar characteristics – the principal difference being, in terms of graphical representation, the juxtaposition of OPTICAL 88 and “OPTICAL 88” (in Chinese characters) within each mark.
132 It is undoubtedly correct that each mark must be considered as a whole and that due recognition must be given to the fact that each mark is a composite mark comprising the combination of the three elements.
133 In the case of the ‘707 mark (but not the ‘966 mark) the scope of the registration is also affected by the disclaimer. It is important to recognise the extent of that disclaimer and hence the limitation it places on the applicant’s statutory rights with respect to that mark. The disclaimer relates only to the Chinese characters and the numerals “88”, considered separately. It does not disclaim the combination of Chinese characters with the numerals (that is, “OPTICAL 88” (in Chinese characters)). Similarly, it does not disclaim the combination OPTICAL 88. Accordingly, s 122(2) of the Trade Marks Act only operates in relation to the ’707 mark in respect of the use of the Chinese characters alone, and in respect of the use of the numerals “88” alone.
134 I should also record now that, contrary to the respondents’ submissions, I do not regard the name OPTICAL 88 as being descriptive for trade mark purposes. Undoubtedly the word OPTICAL considered in the abstract is descriptive. But when used in the collocation OPTICAL 88 it can be seen to be inherently adapted to distinguish the optical products and optometry services for which the ‘707 and ‘966 marks are registered.
135 My own impression of each mark is that the name OPTICAL 88 is a dominating element to which the other elements are truly secondary. My impression in this regard is influenced by the relative size of the lettering and central positioning of this element, relative to the other elements. It is also influenced by the likely aural use of each mark in the purchasing of goods and services: the spoken description of each mark is, in my view, likely to be, simply, OPTICAL 88.
136 This is not to say that the applicant’s logo as used within those marks lacks significance. Its significance, however, lies in the fact that each mark is one intended to be used in connection with the supply of (what may be broadly described as) optical products. In my estimation, by depicting a spectacle frame, the logo underscores the use of the word OPTICAL in respect of those goods. The circles in the logo are also reminiscent of, and serve to underscore, the numerals “88” in each mark. So viewed, the logo does not, contrary to the respondents’ submissions, provide the marks with “some uniqueness” in the sense of providing an element of distinctiveness that would otherwise be completely lacking from the marks. Rather, the logo is illustrative or supportive of, and thus underscores the primacy of, the collocation OPTICAL 88 as the name within the mark. In short, it plays a role, but a secondary role only, to OPTICAL 88 in the particular combination that is comprised in the ‘707 mark and in the ‘966 mark.
137 My impression of the ‘707 mark and of the ‘966 mark arises independently of, but is supported by, the survey evidence to which I have referred. That evidence shows that, for the target population there under consideration, the name OPTICAL 88 was the real stimulus for the responses that were given – not the Chinese characters or, indeed, the logo shown in Picture V. I would infer, based on that evidence, that the logo and the name “OPTICAL 88” (in Chinese characters) have no particular trade mark signification beyond the signification of the name OPTICAL 88 itself.
138 On this analysis, the ‘707 and ‘966 marks, despite being composite marks, each have an essential or distinguishing characteristic, namely the name OPTICAL 88. To so view each mark does not ignore the mark as a whole. It does recognise that each of the three elements has a different significance and function for trade mark purposes in assessing the overall impression that is likely to be conveyed by each mark, considered as a whole. It is this impression that is carried away by prospective purchasers of the goods and services to be supplied under those marks. Although I bear in mind the caution expressed by the Full Court in Crazy Ron’s about determining essential or distinguishing characteristics when dealing with composite marks (see [110] above), the ‘707 and ‘966 marks do not have the same complexity as the 1995 mark in that case. Moreover the relationship between the name OPTICAL 88 and the other elements in the ‘707 and ‘966 marks is quite different to the relationship that the Full Court found in that case between the name CRAZY JOHN and the dominating cartoon element in the 1995 mark.
139 I now turn to consider, more generally, the question of the surrounding circumstances of the alleged infringing use. The alleged infringing use is in relation to a retail trading activity that involves the promotion and supply of both optical goods and accessories and optometry services from each of the first respondent’s stores. The evidence makes clear that the first respondent’s business has a significant Asian, including Chinese, patient and customer base. The evidence shows that the first respondent’s business is conducted from stores in localities (Campsie, Chatswood and Eastwood) having relatively high concentrations of Asian residents compared to many other localities in suburban Sydney. A significant reason advanced by Mr Law for the adoption of the numerals “88” in the name OPTICAL 88 was that patients and customers drawn from such communities would consider the numerals to be propitious and would appreciate the symbolism of those numerals when used in a business name. It is thus appropriate, in my view, to consider the question of deceptive similarity bearing in mind the background and ethnicity of customers attending or likely to attend the first respondent’s stores from which or in relation to which the alleged infringing conduct is said to have occurred.
140 Bearing these matters in mind, I make the following findings.
141 First, the name OPTICAL 88 on store signage and on stationery such as business cards and loyalty cards, and on promotional literature and promotional items, as exemplified in examples A and E, is the use of a sign, as a trade mark, that is deceptively similar to the ‘707 mark and the ‘966 mark. The use of associated words such as “Vision” or “VISION CENTRE” or “V.I.P. Card”, as shown in the examples, makes no difference to this conclusion. In each case the essential or distinguishing characteristic of the ‘707 mark and ‘966 mark (as I have found it to be) has been taken. In the circumstances I am satisfied that each such use is likely to deceive or cause confusion in the sense that there is a real risk that a number of patients and customers, who are taken to have knowledge of the ‘707 mark and the ‘966 mark, but an imperfect recollection of each of them, would be caused to wonder whether goods or services supplied by one or more of the respondents using the name OPTICAL 88 come from the same source as those taken to be supplied using the ‘707 mark or the ‘966 mark.
142 Secondly, the name “OPTICAL 88” (in Chinese characters) on store signage, as exemplified in example B, is the use of a sign, as a trade mark, that is deceptively similar to the ‘985 mark and ‘320 mark. Indeed it is the use of a sign that is substantially identical with the ‘985 mark and the ‘320 mark. I note, once again, that the applicant has not pleaded the issue of substantial identity as an aspect of the infringement of the ‘320 mark. Nevertheless, I do not ignore the fact of substantial identity when considering the question of deceptive similarity, because closeness or sameness in appearance between the competing marks obviously bears on the question of the likelihood of deception or confusion. In the circumstances I am satisfied that each such use is likely to deceive or cause confusion in the sense that there is a real risk that a number of patients and customers, who are taken to have knowledge of the ‘985 mark and the ‘320 mark, but an imperfect recollection of each of them, would be caused to wonder whether goods or services supplied by one or more of the respondents using the name “OPTICAL 88” (in Chinese characters) come from the same source as those taken to be supplied using the ‘985 mark or the ‘320 mark.
143 For completeness I should make clear my view that the use of the name “OPTICAL 88” (in Chinese characters) as a trade mark is not the use of a sign that is deceptively similar to the ‘707 mark or the ‘966 mark. In each case the essential or distinguishing characteristic of the ‘707 mark and the ‘966 mark is not the name “OPTICAL 88” (in Chinese characters) but the name OPTICAL 88 to which “OPTICAL 88” (in Chinese characters) can be taken to play, in the composite mark considered as a whole, and in an Australian context, a secondary role. Thus use of the name “OPTICAL 88” (in Chinese characters) does not take the essential or distinguishing characteristic of the ‘707 mark or the ‘966 mark (as I have found it to be).
144 Thirdly, the name OPTICAL 88 in combination with the name “OPTICAL 88” (in Chinese characters) on store signage and on business cards as exemplified in examples C and D, is the use of a sign as a trade mark that is deceptively similar to the ‘707 mark and the ‘966 mark. In my view, in each case, the particular juxtaposition of OPTICAL 88 and “OPTICAL 88” (in Chinese characters) is not determinative or critical because, significantly, the essential or distinguishing element of each mark (the name OPTICAL 88) has been taken. I am satisfied that there is a real risk of deception or confusion in the sense I have explained in [141] above.
145 Fourthly, the use exemplified in examples C and D is also the use of a sign, as a trade mark, that is both substantially identical with and deceptively similar to both the ‘985 mark and the ‘320 mark. This is because the exemplified use takes the entirety of the ‘985 mark and the ‘320 mark (the name “OPTICAL 88” (in Chinese characters)). In these examples the use of OPTICAL 88 can be considered to be, for the purposes of trade mark analysis, the use of mere additional matter, which, in my view, would not avoid the consequence of using the name “OPTICAL 88” (in Chinese characters). Once again I note that the applicant has not pleaded the issue of substantial identity as an aspect of the infringement of the ‘320 mark.
146 Fifthly, the use of the first respondent’s logo on business cards and reminder cards as exemplified in example F, is the use of a sign, as a trade mark, that is deceptively similar to the ‘979 mark and the ‘545 mark. Each of those marks comprises the applicant’s logo. I am satisfied that the applicant’s logo and the first respondent’s logo are based on the same idea (a graphical representation reminiscent of both spectacle frames and the numerals “88”) and that the first respondent’s logo is, for trade mark purposes, sufficiently close in appearance to the applicant’s logo to convey that idea in a way that would cause a number of patients and customers, who are taken to have knowledge of the ‘979 mark and the ‘545 mark, but an imperfect recollection of each of them, to wonder whether goods or services supplied by one or more of the respondents using the first respondent’s logo come from the same source as those taken to be supplied using the ‘979 mark or the ‘545 mark. The use of the name OPTICAL 88 as part of the first respondent’s logo can be considered to be, for the purposes of trade mark analysis, the use of mere additional matter that does not alter this conclusion. In my view, however, the first respondent’s logo is not substantially identical to the ‘979 mark. I note that the applicant has not pleaded the issue of substantial identity as an aspect of the infringement of the ‘545 mark.
147 Sixthly, the use of the first respondent’s logo on business cards and reminder cards as exemplified in example F, which, as I have noted, includes the name OPTICAL 88, is the use of a sign, as a trade mark, that is deceptively similar to the ‘707 mark and the ‘966 mark. Once again, this is because the essential or distinguishing characteristic of each of those marks (the name OPTICAL 88) has been taken. I am satisfied that there is a real risk of deception or confusion in the sense I have explained in [141] above. If anything, the risk of deception or confusion will be greater because of the use of the name OPTICAL 88 combined with a device that I have found, for trade mark purposes, to be deceptively similar to an element of the ‘707 mark and ‘966 mark (namely the applicant’s logo).
148 The findings I have made are not based on the existence or otherwise of any reputation in the pleaded trade marks in Australia. As I have explained, even though the respondents submitted that there was insufficient evidence of the applicant’s reputation or trade mark use in Australia to make it likely that a significant number of people in Australia could be confused, that consideration, if it be the fact, would not assist the respondents on this part of the case, although it is a relevant consideration when dealing with the applicant’s claims of contravention of the Trade Practices Act and of passing-off. It also arises when considering whether the respondents have made out the defence based on s 122(1)(fa) of the Trade Marks Act.
149 Before considering the availability of the specific defences raised by the respondents, it is necessary to make findings about whose conduct is in question on the issue of trade mark infringement. An aspect of the applicant’s pleaded case is that all respondents are alleged to be primary infringers. On the other hand the respondents submitted that the alleged infringing use was use by the first respondent alone. This submission is reflected in the specific defences raised by the respondents.
150 I am satisfied that the evidence establishes that the use to which I have referred is and was the first respondent’s use. As I have found, the first use in trade by one of the respondents of the name OPTICAL 88 was from August 1993 when the first respondent commenced to carry on business. There is no evidence that, from that time, there was any activity carried on by the respondents using that name, or related trade indicia, other than in and about the conduct of the first respondent’s business. Thus it is the first respondent that has used the impugned signs as trade marks. I leave aside the question whether Mr and Mrs Law are liable as directors of the first respondent or as persons who have directed and controlled the first respondent in the conduct of its business and affairs, or who have been knowingly concerned in its conduct.
151 The applicant submitted that each of Mr and Mrs Law had admitted direct use of the impugned signs in their defences. These defences are pleaded in substantially the same terms. Paragraph 13 of each defence pleads (amongst other things):
The [second/third] respondent admits that since approximately July 1993 [he/she] has, or has jointly with one or more of the other respondents, done, directed or procured by another respondent of, one or more of the following:
(a) advertised, marketed or promoted;
(b) offered; and/or
(c) provided
the First Respondent’s Services in Australia…
152 In each defence paragraph 14 pleads:
The [second/third] respondent admits that [he/she] intends to, or intends to direct or procure another respondent to:
(a) manufacture;
(b) sell or offer or expose for sale;
(c) provide; and/or
(d) advertise or promote
the First Respondent’s Services in Australia.
153 The reference in each paragraph to “the First Respondent’s Services” is defined to mean “the goods and services sold or provided by the first respondent under or by reference to one or more of the name “OPTICAL 88”, the First Respondent’s Trade Mark and the OPL Logo”. The references to the “First Respondent’s Trade Mark” and the “OPL Logo” are to the first respondent’s logo.
154 In response to an allegation pleaded in the statement of claim that Mr and Mrs Law, or either of them, “have directed, procured, controlled and/or have been directly or indirectly knowingly concerned in the acts of the first respondent”, each made an admission concerning his or her own involvement.
155 It seems to me that, considered in the context of each pleaded defence, Mr and Mrs Law were not admitting that he or she had directly used the impugned signs as trade marks, but that the first respondent had, and that each of them had been involved in that conduct to the extent of directing, procuring, or controlling the first respondent, or of being knowingly concerned in the first respondent’s acts.
156 Even if I were wrong in that conclusion, it is clear that I am not bound to act on admissions where I doubt their correctness: Damberg v Damberg (2001) 52 NSWLR 492 at [160]; Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (2007) 160 FCR 321 at [49]. In so far as each of Mr and Mrs Law may have admitted (contrary to my conclusion) direct use of the impugned signs as trade marks, I have every reason to doubt the correctness of, and decline to accept, any admissions so made, based on the evidence before me of the first respondent’s trading activities and Mr and Mrs Law’s involvement in it.
157 In its written submissions the applicant also relied upon occasional statements by Mr Law in his affidavit evidence about “his” patients, and so on. There is no doubt that some expressions used by Mr Law in his evidence reveal that he probably regarded the first respondent’s business as his own. But, in my view, statements of this kind are, for this purpose, without persuasive significance. It is very clear on reading Mr Law’s affidavits that the first respondent was established to take over and run the business and practice that Mr Law had originally established. I am satisfied that this occurred and that it is the first respondent, not Mr Law, or indeed Mrs Law, that has carried on that business and practice since August 1993 using the name OPTICAL 88 and the other trade indicia about which the applicant complains.
158 The respondents say that, by operation of various provisions of the Trade Marks Act, there has been no infringement of the pleaded trade marks because:
(a) the use in question has been a use by the first respondent of its own name in good faith: s 122(1)(a)(i);
(b) the first respondent has continuously used the impugned signs from a date before registration of the applicant’s trade marks, other than the ‘707 mark: s 124(1); and/or
(c) the first respondent would obtain registration of its logo as a trade mark in its name: s 122(1)(fa).
159 In spite of s 120 of the Trade Marks Act, a person does not infringe a registered trade mark when the person uses in good faith the person’s name: s 122(1)(a)(i).
160 The applicant accepted that this defence covers use by the first respondent of the words OPTICAL 88 as a name notwithstanding the absence of the first respondent’s corporate designation (i.e. Pty Limited): Parker-Knoll Ltd v Knoll International Ltd [1962] RPC 265 at 275; Wellness Pty Ltd v Pro Bio Living Waters Pty Ltd (2004) 61 IPR 242; [2004] FCA 438 at [43].
161 The applicant submitted, however, that the defence was not available in this case because the name OPTICAL 88 had not been used in good faith. In this connection use in “good faith” is taken to mean “honest” use: see Baume & Co Ltd v A H Moore Ltd [1958] RPC 226 at 235 in relation to the corresponding defence in s 8 of the Trade Marks Act 1938 (UK) with respect to “bona fide” use; Parker-Knoll at 275.
162 The applicant repeated its submissions concerning the circumstances in which Mr Law chose the name OPTICAL 88 as the first respondent’s corporate name and as the trading name for the business. I have already dealt with that matter and rejected the factual foundation for the applicant’s submission.
163 I am satisfied in all the circumstances that the first respondent’s use of the name OPTICAL 88 as a trade mark was a use in good faith of its name. I would add that a use in good faith, for the purposes of s 122(1)(a) of the Trade Marks Act, does not cease to be in good faith when the likelihood of deception is brought to the notice of an alleged infringer: Parker-Knoll Ltd v Knoll International Ltd [1961] RPC 346 at 363 (Upjohn LJ); Hy-Line Chicks Pty Ltd v Swifte (1966) 115 CLR 159 at 161 and 164. The applicant did not seek to submit otherwise.
164 In my view, therefore, the first respondent’s use in good faith of its name is not an infringement of the pleaded trade marks. Specifically, the first respondent has not infringed the ‘707 mark or the ‘966 mark by the various instances of use of the name OPTICAL 88 identified in examples A, C, D, E and F. It makes no difference that the first respondent has used its name in association with additional matter (such as, for example, “Vision Centre” or “Vision” or “V.I.P Card”) or other indicia (such as the name “OPTICAL 88” (in Chinese characters) or the first respondent’s logo). This is because, in each case, infringement only arises by use of the name OPTICAL 88 (the first respondent’s name). Absent the use of that name, there would be no infringement of these marks in these instances. The defence bites when the use of the person’s name is the reason for the finding of infringement (provided the use has been in good faith).
165 Section 124 of the Trade Marks Act provides:
(1) A person does not infringe a registered trade mark by using an unregistered trade mark that is substantially identical with, or deceptively similar to, the registered trade mark in relation to:
(a) goods similar to goods (registered goods) in respect of which the trade mark is registered; or
(b) services closely related to registered goods; or
(c) services similar to services (registered services) in respect of which the trade mark is registered; or
(d) goods closely related to registered services;
if the person, or the person and the person's predecessor in title, have continuously used in the course of trade the unregistered trade mark in relation to those goods or services from a time before:
(e) the date of registration of the registered trade mark; or
(f) the registered owner of the registered trade mark, or a predecessor in title, or a person who was a registered user of the trade mark under the repealed Act, first used the trade mark;
whichever is earlier.
(2) If the unregistered trade mark has continuously been used only in a particular area of Australia, subsection (1) applies only to the use of the trade mark by the person in that area.
166 The applicant submitted that this defence was not available in respect of infringement of the ‘707 mark because, on any view of the evidence, the impugned use did not take place from a time before the date of registration of the ‘707 mark, which was 6 October 1989. The respondents did not contend otherwise.
167 I should add that the applicant did not contend that, in relation to any of the pleaded trade marks, any date earlier than their respective dates of registration was relied on. Certainly no evidence of first use (in Australia) was tendered by the applicant in relation to any of the pleaded trade marks.
168 Although in its written submissions the applicant submitted that the respondents had not specified the particular renditions of names and marks that were said to have been continuously used, or the date on which continuous use of each was said to have begun, the applicant did accept, in the section called OPL signs of its document entitled Trade Mark Infringement Analysis, and in its Images Chronology also forming part of its submission documents, that, subject to one exception, the examples of the infringing use on which it relied commenced in the period from about August 1993 to late 2003. There was some doubling up in the OPL signs section of the document in relation to signage at the first respondent’s Chatswood store and Eastwood store. It is plain from this document, however, and confirmed by the applicant’s Images Chronology, that the applicant accepted that the exemplified signs were in use from 9 November 1993 (in the case of the Chatswood store) and from 31 July 1995 (in the case of the Eastwood store). The one exception was the alleged infringement arising from the fact of the first respondent’s lodgement of trade mark application 1147926 on 20 November 2006. I have already found, however, that this did not constitute relevant trade mark use and, hence, could not have been infringing use for the purposes of s 120 of the Trade Marks Act.
169 Mr Law gave evidence of the first respondent’s use of the signs which are alleged to infringe the pleaded trade marks. The effect of this evidence, which I accept, is that the alleged infringing use has been continuous from the dates of commencement of that use, with the exception of the use of the name OPTICAL 88 in combination with “OPTICAL 88” (in Chinese characters) on business cards. The evidence indicates that this lastmentioned use ceased after the first respondent’s logo commenced to be used on business cards, reminder cards and other items of commercial stationery in 2003. Furthermore, in the case of alleged infringing use involving stationery (including business cards, reminder cards, invoices and letterhead) and promotional items (such as spectacles cases, cleaning cloths, plastic shopping bags and loyalty cards), such use has been in relation to the first respondent’s business as conducted from each of the three premises.
170 Therefore, leaving aside the ‘707 mark, and rejecting the alleged use constituted by the making of the first respondent’s trade mark application, all other examples of alleged infringing use took place or commenced before the dates of registration of the pleaded trade marks.
171 In so far as the first respondent’s use took place before the dates of registration of the other pleaded trade marks, that use could not infringe those marks. In so far as the first respondent’s use has taken place after the date of registration of those other pleaded trade marks, I am satisfied on the evidence that, in each case, the first respondent’s use has been continuous from before the relevant date of registration such as to attract the protection of s 124 of the Trade Marks Act. Specifically:
(a) the use of the name OPTICAL 88 on store signage (example A) has been continuous use of that name as a trade mark by the first respondent in relation to the retailing and supply of optical goods and accessories and of optometry services from before the date of registration of the ‘966 mark;
(b) the use of the name “OPTICAL 88” (in Chinese characters) on store signage (example B) has been continuous use of that name as a trade mark by the first respondent in relation to the retailing and supply of optical goods and accessories and of optometry services from before the date of registration of the ‘985 mark and the ‘320 mark;
(c) the use of the name OPTICAL 88 in combination with the name “OPTICAL 88” (in Chinese characters) on store signage (example C) has been continuous use of that sign as a trade mark by the first respondent in relation to the retailing and supply of optical goods and accessories and of optometry services from before the date of registration of the ‘966 mark, the ‘985 mark and the ‘320 mark;
(d) the use of the name OPTICAL 88 on stationary and promotional items (such as spectacle cases and cleaning cloths) (example E) has been continuous use of that name as a trade mark by the first respondent in relation to the retailing and supply of optical goods and accessories and of optometry services, as well as in relation to goods themselves, from before the date of registration of the ‘966 mark; and
(e) the use of the first respondent’s logo on business and reminder cards (example F) has been continuous use of that sign as a trade mark by the first respondent in relation to the retailing and supply of optical goods and accessories and of optometry services from before the date of registration of the ‘966 mark, the ‘979 mark and the ‘545 mark.
172 It follows, therefore, that the pleaded trade marks (other than the ‘707 mark) have not been infringed by that use because of the operation of s 124 of the Trade Marks Act.
173 In spite of s 120 of the Trade Marks Act, a person does not infringe a registered trade mark when the person uses a trade mark that is substantially identical with or deceptively similar to the registered trade mark and the Court is of the opinion that the person would obtain registration of the allegedly infringing mark in that person’s name if that person were to apply for it: s 122(1)(fa).
174 Although the respondents pleaded this defence generally, in submissions it was confined to the use of the first respondent’s logo. As I have noted, the first respondent lodged trade mark application 1147926 for the registration of that logo as a trade mark on 20 November 2006. The respondents submitted that this would be the relevant date for considering the application of the defence. The applicant did not dispute this proposition; nor did it debate it.
175 There is much to be said for the view that, if an actual trade mark application has been made, the defence should be considered as at the date of making that application. However, s 122(1)(fa), in terms, poses the question hypothetically, indicating that consideration of the application of the defence should be made as at some other date, presumably the date when the defence is first raised.
176 In my view it is not necessary to determine this question because it would make little difference on the evidence whether the application of this specific defence is considered as at 20 November 2006 or as at the time the respondents first filed their defences on 23 April 2008.
177 Section 44 of the Trade Marks Act provides for the rejection of an application for registration of a trade mark that is substantially identical with or deceptively similar to a trade mark that is already registered or whose registration is being sought with, in either case, an earlier priority date than the application whose rejection is under consideration. There are, however, exceptions to this.
178 Subsections 44(3) and (4) relevantly provide:
(3) If the Registrar … is satisfied:
(a) that there has been honest concurrent use of the 2 trade marks; or
(b) that, because of other circumstances, it is proper to do so;
the Registrar may accept the application for the registration of the applicant’s trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant’s trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area.
(4) If the Registrar … is satisfied that the applicant, or the applicant and the predecessor in title of the applicant, have continuously used the applicant’s trade mark for a period:
(a) beginning before the priority date for the registration of the other trade mark in respect of:
(i) the similar goods or closely related services; or
(ii) the similar services or closely related goods; and
(b) ending on the priority date for the registration of the applicant’s trade mark;
the Registrar may not reject the application because of the existence of the other trade mark.
179 Although the applicant’s submissions were directed to the presence of the ‘707 mark on the Register, in fact both the ‘707 mark and the ‘966 marks have earlier priority dates (6 October 1989 and 2 November 2005, respectively) than the first respondent’s application (20 November 2006) or any date that might apply as a priority date in relation to a hypothetical application for registration of the first respondent’s logo as a trade mark.
180 In the present case I have found that the first respondent’s logo is deceptively similar to the each of those marks. It follows that each of those marks would be a bar to registration of the first respondent’s logo as a trade mark, unless the provisions of s 44(3) or s 44(4) were to apply.
181 Section 44(4) cannot assist the first respondent because it cannot establish use of the first respondent’s logo as a trade mark before the priority date of the ‘707 mark (6 October 1989) even though it can establish use of the first respondent’s logo as a trade mark before the priority date of the ‘966 mark (2 November 2005). It follows that, for practical purposes, s 44(3) alone falls for consideration.
182 Factors that are relevant to the consideration of the application of s 44(3) include: the honesty of the concurrent use; the extent of the use in terms of time, geographic area and volume of sales; the degree of confusion likely to ensue between the marks in question; whether any instances of confusion have been proved; and the relevant inconvenience that would ensue to the parties if registration were to be permitted: see McCormick & Co Inc v McCormick (2000) 51 IPR 102; [2000] FCA 1335 at [30] and the cases there cited.
183 These issues were not addressed in any detail by the respondents in evidence. Beyond evidence of the location at which and general manner in which the first respondent carries on business, the evidence does not address the extent, volume or value of sales involved in the first respondent’s business at any particular time or at all. Notwithstanding this, the respondents submitted that the most important factor is the “honesty” of the alleged concurrent use. They relied on the circumstances in which the name OPTICAL 88 was adopted as the first respondent’s corporate name and as the trading name for its business. They also submitted that the likelihood of confusion is a relevant but not determinative factor. They pointed to the length of time that the first respondent had been operating its business under the name OPTICAL 88 and the fact that the applicant does not conduct business in Australia. They pointed to the fact that, over the period of time that the first respondent has been carrying on business under the name OPTICAL 88, no identified instance of confusion has been shown. They also pointed to the fact that s 44(3)(b) refers to “other circumstances” in which it would be proper, beyond “honest concurrent use”, to accept an application for registration notwithstanding the provisions of ss 44(1) and (2).
184 In my view there are some factors, such as the circumstances in which the name OPTICAL 88 came to be adopted and used, and the length of time over which the first respondent has carried on its business under that name without interruption, which would point to s 44(3) being invoked on the basis of “honest concurrent use” or “other circumstances”, at least with the imposition of a territorial restriction to the areas in which the first respondent does carry on business. However, as the applicant pointed out, recourse alone to s 44(3) (the availability of which it disputed in any event), will not avail the respondents if, for other reasons, the posited application for registration would not succeed.
185 In this connection the applicant relied on, amongst other provisions, s 60 of the Trade Marks Act which 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.
186 The applicant submitted that objection to registration based on s 60 disposes of any suggestion that the first respondent’s logo could be registered as a trade mark in reliance on s 44(3).
187 There is, in my view, considerable force in the applicant’s submission. In McCormick Kenny J examined the interplay between s 44(3) and s 60, and concluded (at [96]) that s 44(3) does not provide an exception to s 60.
188 As I have found, the name OPTICAL 88 is the essential or distinguishing characteristic of the ‘707 mark and the ‘966 mark. The applicant submitted that the ‘707 mark had acquired a reputation in Australia which, by dint of s 60, would defeat an application for registration of a trade mark using that name. For this purpose the applicant relied on the results of the survey it had commissioned for use in this proceeding. In this context the reference to the ‘707 mark by the applicant could only mean the name OPTICAL 88.
189 It will be necessary for me to give detailed consideration to the survey when dealing with the applicant’s claims based on contravention of the Trade Practices Act and for passing-off. In that context questions will arise as to when conduct falls to be assessed for the purposes of those causes of action, and what is necessary to be shown in that regard by the applicant. Suffice it to say for present purposes that the matters that arise for consideration and assessment in that context are not the same as the matters that arise for consideration and assessment in the present context. This is because the tests for determining contravention of the Trade Practices Act and for determining passing-off are not the tests for determining the registrability of a trade mark under the provisions of the Trade Marks Act.
190 The reliability and utility of the survey for the purposes of determining the claims for contravention of the Trade Practices Act and passing-off were strongly challenged by the respondents. Nevertheless, I am satisfied that the survey does provide reliable information about awareness, as at July 2009, of the name OPTICAL 88 and the source of that awareness where recollection is based on relatively recent events. To take an example, it was accepted by the respondents’ expert Mr McCallum, in circumstances which I will later explain, that the data showed that, of the responses given, 48.7% of interviewees identified Hong Kong and its environs as a source of awareness of the name OPTICAL 88 in relation to optical shops. Barring the possibility of undisclosed error, this source of awareness could only have been the applicant’s stores. I should add that, barring the possibility of undisclosed error, 40.8% of interviewees also identified Sydney as a source of awareness of the name OPTICAL 88. However, what is important for present purposes is the awareness of the Hong Kong source. I say this because s 60 does not operate only where an exclusive reputation is demonstrated. Section 60, arguably, will operate when there are conflicting reputations. It is sufficient for s 60 purposes that, before the priority date for the opposed application, another mark has a reputation and, because of that reputation, use of the opposed mark would be likely to deceive or cause confusion. It is beside the point that, at the time of making the opposed application, it can be shown that the opposed mark has its own reputation.
191 Whilst that data set shows awareness as at July 2009, it does provide some indication of the existence of a reputation in the name OPTICAL 88 as having a Hong Kong source (and, in particular, the applicant’s stores) that, taken with other data provided by the survey, points to the real possibility of an extant reputation as at either 23 April 2008 (when defences were originally filed) or as at 20 November 2006 (when the first respondent filed its trade mark application), that, arguably, would be sufficient to defeat an application for registration of the first respondent’s logo as a trade mark based on the application of s 60.
192 I should add that, in the context of the applicant’s copyright claim, Mr Law gave evidence about the circumstances in which the first respondent came to adopt its own logo. That evidence (which I will describe in more detail later) showed that, as at late 2003, Mr Law did consider the possibility that the adoption of a similar logo might cause confusion between the first respondent’s business in Sydney and the applicant’s business in Hong Kong. Thus the respondents’ own evidence admits of at least the possibility that, from late 2003, the first respondent and the applicant could have conflicting reputations in Australia.
193 It is, of course, for the respondents to make good their grounds of defence. Although there is a presumption of registrability at the time of examination (Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 at [24]), s 60 provides a ground of opposition to registration post-acceptance of a trade mark application. Bearing in mind the low threshold for deception or confusion for the purpose of considering the registrability of trade marks (Southern Cross Refrigerating at 595), I am not satisfied that, on the evidence, the respondents have discharged the burden they have assumed of establishing that the first respondent would obtain registration of its logo as a trade mark at a relevant time, because of the presence, within that logo, of the name OPTICAL 88.
194 I am conscious of the fact that trade mark application 1147926 is pending before the Registrar. Nothing I have said about the respondents’ failure to establish, on balance, the defence based on s 122(1)(fa) of the Trade Marks Act in the context of trade mark infringement proceedings determines the fate of that application before the Registrar, which will need to be considered on its own merits on the material before the Registrar and on the basis of the submissions then made.
195 For completeness I should also record that, in its application, the applicant sought declarations that use of the mark the subject of trade mark application 1147926 would be likely to deceive or cause confusion within the meaning of s 43 of the Trade Marks Act and would be contrary to law within the meaning of s 42 of the Trade Marks Act. The applicant also sought an order that trade mark application 1147926 be withdrawn. However, in closing oral submissions, the applicant made clear that it did not press its application for that relief. I have, accordingly, made no findings on those matters.
Conclusions on specific defences
196 Although the respondents have not made out the defence based on s 122(1)(fa) of the Trade Marks Act, I am satisfied that they have made out the defences based on s 122(1)(a)(i) and s 124.
197 The defence based on s 124 alone would cover all examples of alleged infringing use with respect to the pleaded trade marks, other than the ‘707 mark. The examples of alleged infringing use would only constitute an infringement of the ‘707 mark because of the use of the name OPTICAL 88. In these examples, however, I have found that the use has been a use in good faith of the first respondent’s name. Because of s 122(1)(a)(i), such use could not be an infringement of the ‘707 mark. It follows that the respondents have established defences that cover all examples of alleged infringing use on which the applicant relies. In the end result, therefore, the applicant’s case on trade mark infringement does not succeed.
The pleaded case
198 By its cross-claim the first respondent seeks removal of the ‘707 mark for non-use under s 92(4)(b) of the Trade Marks Act. In addition the first respondent seeks removal of the ‘966 mark under s 92(4)(a) of the Trade Marks Act. The first respondent seeks removal of the challenged marks in relation to all the goods or services for which they are registered.
199 Section 92(4) of the Trade Marks Act provides as follows:
An application under subsection (1) or (3) (non-use application) may be made on either or both of the following grounds, and on no other grounds:
(a) that, on the day on which the application for the registration of the trade mark was filed, the applicant for registration had no intention in good faith:
(i) to use the trade mark in Australia; or
(ii) to authorise the use of the trade mark in Australia; or
(iii) to assign the trade mark to a body corporate for use by the body corporate in Australia;
in relation to the goods and/or services to which the non-use application relates and that the registered owner:
(iv) has not used the trade mark in Australia; or
(v) has not used the trade mark in good faith in Australia;
in relation to those goods and/or services at any time before the period of one month ending on the day on which the non-use application is filed;
(b) that the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non-use application is filed, and, at no time during that period, the person who was then the registered owner:
(i) used the trade mark in Australia; or
(ii) used the trade mark in good faith in Australia;
in relation to the goods and/or services to which the application relates.
200 The cross-claim is based on, and pleaded, an application for removal that was made to the Registrar of Trade Marks on 23 November 2007. The application was subsequently referred to this Court by the exercise of the power in s 94 of the Trade Marks Act, which provides as follows:
If:
(a) an application has been made to the Registrar under subsection 92(1); and
(b) the Registrar is of the opinion that the matter should be decided by a prescribed court;
the Registrar may refer the matter to such a court and the court may hear and determine the matter as if an application had been made to it under subsection 92(3).
201 The parties treated the cross-claim as rising no higher than the application for removal that was made before the Registrar and referred to this Court for determination.
202 In so far as the application is based on s 92(4)(b), the relevant period of alleged non-use is 23 October 2004 to 22 October 2007 (the first relevant period).
203 In so far as the application is based on s 92(4)(a), the relevant period of alleged non-use is before 23 October 2007. This really requires a consideration of the period from 2 November 2005 (the date of registration of the ‘966 mark) to 23 October 2007 (the second relevant period).
204 The onus falls on the opponent to the removal application (in this case, the applicant in the proceeding) to rebut the allegations that have been made: see s 100(1). It is, of course, the opponent who will know what use, if any, it has made of the mark the subject of the removal application. The opponent cannot be heard to complain of what might be found to be deficiencies in proof of the use that is relied on in order to rebut the allegation of non-use, when it has the means at its disposal to show precisely how, when and where the challenged mark was used. The applicant for removal (the first respondent in this proceeding) bears no risk in that regard and, as s 100(1) recognises, is entitled to stand squarely behind the allegations that are made to actuate s 92(4)(a) and s 92(4)(b). The same considerations apply in relation to an allegation that an application for registration was filed without an intention in good faith to use in Australia the trade mark the subject of that application. Thus it is the opponent (the applicant in this proceeding) who must make good the case, in all its dimensions, for a challenged mark to remain on the Register.
205 In the present case, the following issue arises in relation to the ‘707 mark for the purposes of the application made under s 92(4)(b): has the applicant rebutted the allegation that the mark has not at any time during the first relevant period been used, or been used in good faith, in Australia, by the applicant in relation to the goods to which the removal application relates?
206 For the purposes of the application made under s 92(4)(a) with respect to the ‘966 mark, the following issues arise: (a) has the applicant rebutted the allegation that, on the day on which the application for registration of the ‘966 mark was filed (2 November 2005), the applicant had no intention in good faith to use the mark in Australia or to authorise the use of the mark in Australia or to assign the trade mark to a body corporate for use by the body corporate in Australia? and (b) has the applicant rebutted the allegation that the ‘966 mark has not at any time in the second relevant period been used or been used in good faith, in Australia, in relation to the goods and services in relation to which the removal application relates?
207 An opponent can rebut the allegation of non-use by establishing use of the mark itself, or of the mark with additions or alterations not substantially affecting its identity: s 100(2)(a) and s 100(3)(a).
Relevant legal principles
208 In Estex Clothing Manufacturers Pty Limited v Ellis and Goldstein Limited (1966) 116 CLR 254 at 267, when dealing with an application under s 23(1)(b) of the repealed Act for removal of two trade marks registered for certain items of women’s clothing, Windeyer J observed that the concepts on which such applications turn are “economic, commercial, business concepts concerning the marking and marketing of goods”.
209 Although his Honour’s observation was made at a time when the trade mark legislation in Australia did not provide for the registration of trade marks in respect of services, like considerations no doubt inform the question whether a trade mark is or has been used in relation to services.
210 Here the ‘707 mark is registered only in respect of certain goods. The ‘966 mark is registered in respect of both goods and services. As I have noted, the first respondent seeks removal of both marks in respect of all the goods or services for which each is registered.
211 The High Court has recently considered the question of trade mark use of a mark registered in respect of goods in the context of a removal application brought under s 92(4)(b) of the Trade Marks Act: see E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 265 ALR 645; [2010] HCA 15. The High Court’s consideration in that case included a number of earlier cases in the High Court and in this Court which have established a body of principles by reference to which removal applications generally fall to be considered.
212 In Gallo the plurality approved the observations of the Full Court of this Court in Coca-Cola Co v All-Fect Distributors Ltd (1999) 96 FCR 107 at 115 concerning use of a trade mark as a “badge of origin”. At [19] in that case, Black CJ, Sundberg and Finkelstein JJ said:
Use “as a trade mark” is use of the mark as a “badge of origin” in the sense that it indicates a connection in the course of trade between goods and the person who applies the mark to the goods ... That is the concept embodied in the definition of “trade mark” in s 17 – a sign used to distinguish goods dealt with in the course of trade by a person from goods so dealt with by someone else.
213 A significant issue arising in removal cases is whether a putative use of a trade mark is a use in the course of trade. In the example of marks registered for goods, the cases establish that goods remain in the course of trade whilst they are upon the market for sale, but not after they have been bought for consumption: Estex at 266-267.
214 In Rothmans Ltd v W D & H O Wills (Australia) Ltd (1955) 92 CLR 131 consumers in Australia placed mail orders in the United States of America for the supply of cigarettes which happened to bear the plaintiff’s registered trade mark. The supplier was not the plaintiff and had no interest in the registered trade mark. In dealing with a removal application brought under s 72 of the Trade Marks Act 1905 (Cth), Fullagar J held at (137) that the use of the registered trade mark on the goods supplied in response to these orders was not a use of the trade mark in Australia. His Honour found that the sale of the goods had taken place in the United States of America and that nobody had “used” the trade mark in any relevant sense in Australia. In that connection his Honour distinguished the position in Re Trade Mark “Yanx”; Ex parte Amalgamated Tobacco Corporation Ltd (1951) 82 CLR 199 in which Williams J had held that there had been a use of the trade mark “Yanx” in Australia where goods bearing that mark had been supplied by a company in England in response to an order placed from Australia by a New South Wales company. The significant point of distinction in that case was that there had been an actual offering of goods for sale under the mark in Australia by the owner of that mark. In that case Williams J at 204-205 said:
On principle and as a matter of common sense, however, it would seem that a mark is used as a trade mark in Australia if it is used here to designate the goods of a particular trader which are offered for sale in Australia under that mark whether the goods themselves are actually in Australia or not. The goods are put upon the Australian market whether they are in Australia awaiting delivery upon sale or they may have to be imported for delivery after sale. They are in either case actually a vendible article in the Australian market…
215 On the other hand, in Rothmans, Fullagar J concluded that the mere entry into Australia of goods bearing the challenged mark, without more, could not be a use, or at least a bona fide use, of the mark by its proprietor. In distinguishing Yanx and a similar case before the United Kingdom Registrar, Fullagar J at 138-139 said:
In each case there was, or could be said to have been, an offering of goods under the relevant trade mark in the relevant territory. Here there was no such thing. It seems to me that the only relevant things that were done in Australia were the writing and posting of a letter ordering goods under the trade mark from the owner of the trade mark in the United States. I would not think that a mark is “used” in Australia in any relevant sense when all that happens is that a person in Australia orders good direct from the proprietor of the mark in another country for the use of himself or of himself and his friends.
216 On appeal (WD & HO Wills (Australia) Ltd v Rothmans Ltd (1956) 94 CLR 182) the Full Court of the High Court (at 191-192) affirmed Fullagar J’s decision, holding that there was no offering for sale or selling of the cigarettes in Australia, either directly or indirectly.
217 In Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) 120 ALR 495, Gummow J (when in this Court) considered the question of trade mark use with respect to services in the context of establishing proprietorship in opposition to registration proceedings brought on appeal from a decision of the Registrar of Trade Marks made under the repealed Act. His Honour’s observations in that case are apposite when considering the notion of trade mark use in relation to so-called service marks in the context of a removal action under s 92 of the Trade Marks Act. After noting the observations of Windeyer J in Estex to which I have referred, Gummow J (at 509) said:
This, like many of the other authorities, was concerned with user in relation to goods, rather than services. In adapting what was said by Windeyer J to user of a service mark, it has to be remembered that whilst the same may be true of contracts for supply of future or unascertained goods, a service will not exist before its supply. Thus, the use of a trade mark in relation to services may readily be understood as a use in and about the soliciting and conclusion of contracts for the supply thereafter of services.
218 After considering a number of the authorities, his Honour then turned to consider the trading arrangements involved in the case before him. Those arrangements involved the provision of passenger cruise services on routes outside Australian territorial waters. However, the provider of those services (Carnival), who claimed to be the true proprietor in Australia of the marks whose registration was opposed, had appointed general sales agents in Australia who were obliged to accept reservations from travel agents in Australia and pass them on to Carnival. Payment for the cruise services was to be received by Carnival in Miami before the departure date of the cruise in question. After considering the detail of these arrangements, his Honour (at 511) said:
… The effect of the procedures was that the general agent brought about a contract made by it on behalf of its principal, Carnival, with the local agent on behalf of the passengers. The evidence indicates that in many cases, in the interval between the initial inquiry and the conclusion of the contract, there might be a number of communications on such matters as the location of available cabins.
Thus, whilst the course of trade involved the provision of the services contracted for by steps taken outside Australia (ie the cruise itself) crucial integers in that course of trade took place in Australia. The trade commenced with the various steps taken to encourage inquiries from prospective customers and advanced with the placing and acceptance of bookings. In relation to that course of trade, the marks FUN SHIP and FUN SHIPS were used so as to indicate the connection between Carnival and the services to be provided by means of its cruises, and to distinguish Carnival cruises from those operated by other traders…
219 Thus the fact that the services were to be provided, and even consumed, outside Australia did not mean that there had been no use of the trade mark “in physical or other relation to” those services on the facts of the case. The use of the challenged mark in relation to the offering of the services in Australia was sufficient to constitute trade mark use in that particular case.
220 In Gallo the respondent contended that it was a necessary condition to establish use in Australia of a mark registered in respect of goods that the manufacturer knowingly project his goods into the course of trade in Australia: see at [49]. The High Court rejected that contention. After noting that it is a commonplace of contemporary international trade that goods may be in the course of trade across national boundaries prior to their consumption, the plurality (at [52]) said:
An overseas manufacturer who has registered a trade mark in Australia and who himself (or through an authorised user) places the trade mark on goods which are then sold to a trader overseas can be said to be a user of the trade mark when those same goods, to which the trade mark is affixed, are in the course of trade, that is, are offered for sale and sold in Australia. This is because the trade mark remains the trade mark of the registered owner (through an authorised user if there is one) whilst the goods are in the course of trade before they are bought for consumption. As affirmed by Gummow J in Wingate Marketing Pty Ltd v Levi Strauss & Co, “whilst a trade mark remains on goods, it functions as an indicator of the person who attached or authorised the initial use of the mark”. During the trading period, the trade mark functions as an indicator of the origin of the goods, irrespective of the location of the first sale.
221 There is another matter. In seeking to rebut the allegation of non-use in relation to the goods or services to which the removal application relates, it is not sufficient to show use in relation to similar goods or closely related services, or similar services or closely related goods, although such use will be relevant to the exercise of the discretion if a case for removal is otherwise made out: see s 101(4). This may raise difficult questions of characterisation. There is a suggestion in the literature that use of a mark in relation to retail services for goods is use equally in relation to the goods themselves. In my view that simply does not follow. Whether it be the case or not is a question of mixed fact and law having regard to the particular circumstances of the case. In dealing with the case of a retailer who sells goods of various manufacturers under the trade marks of those manufacturers, the authors of Shanahan’s Australian Law of Trade Marks and Passing Off (4th Edition) at 63 cite Angoves Pty Ltd v Johnson (1982) 43 ALR 349 as authority for the proposition that, in such a case, the use of a retailer’s mark on invoices, advertisements and shopping bags is a use of the trade mark “in physical or other relation to goods” within the meaning of s 7(4) of the Trade Marks Act. Angoves is not authority for that proposition. Indeed, in that case the question of trade mark use in relation to goods appears to have been conceded at trial: see 353, 361 and 368. It is perhaps sufficient for me to say that there is no principle of general application in Australian trade mark law that use of a mark in relation to retail services for goods is use in relation to the goods themselves.
222 I now turn to consider the transactions on which the applicant relies to rebut the allegation that the ‘707 mark and the ‘966 mark have not been used in Australia.
The transactions relied upon by the applicant
223 The applicant relied upon four categories of transaction (identified by the letters A, B, C and D), covering in total 50 transactions, to rebut the allegations of non-use made with respect to each mark. The applicant tendered copies of business records to prove the transactions. The tender was extensive.
224 The applicant adduced evidence in relation to the practice of some of the applicant’s stores in dealing with overseas orders to purchase goods. These stores were at (a) 36 Sai Yeung Choi Street (Ground Floor), Mongkok in Kowloon; (b) 610 Nathan Road, Mongkok in Kowloon; (c) 17 Cameron Road, Tsim Sha Tsui in Kowloon; and (d) Flat A, 8-14 Yee Wo Street in Causeway Bay in Hong Kong. I accept this evidence as establishing the practice at these stores during the first relevant period and the second relevant period.
225 The evidence established that, as a matter of practice for these stores, orders are processed after funds (representing the quoted purchase price) are deposited in one of the applicant’s bank accounts. Once the goods are ready, they are checked and packed at the store at which the order is placed. One of the applicant’s glasses cases and cleaning cloths may be provided, although in relation to the transactions on which the applicant relied in this part of the case, the evidence does not show whether this was done invariably, except in the case of transactions at the Cameron Road store where the practice was to enclose one of the applicant’s cleaning cloths when glasses were supplied, whether or not the manufacturer of the glasses or the lenses also supplied a cloth. According to the evidence, the practice in the other stores is only to provide one of the applicant’s cleaning cloths if the manufacturer of the goods does not provide one. Sales documents are prepared, including a deposit sales memo (a receipt) and a cash coupon and/or a bonus coupon (usually both). These sales documents are packed with the goods. The packed goods are then dispatched to the customer by post. The evidence shows that this practice is also adopted at these stores when goods are purchased in person for subsequent delivery overseas by mail.
226 This evidence was not challenged. The evidence was, however, limited to these stores: Administrative Exhibit 3, rulings 14 and 19. This last point is of some importance because, in relation to at least one of the transactions relied on by the applicant at one of its other stores, it would seem that the customer was given the cash coupon at the time of purchase at the store, even though the goods in respect of which the coupon was issued were later dispatched by post to Australia by the applicant: Mow transaction, 12 April 2007 – 17 April 2007. I would add that there is nothing on the face of the business records that were tendered that would enable me to infer whether they were handed to a customer in person at the store at the time of purchase or packed with goods dispatched by post to Australia.
227 Bonus coupons are issued by the applicant as part of a rewards program which allows recipients to redeem the points for goods from the applicant’s stores when a certain number of points is accumulated. Bonus coupon points expire one year from the date of the transaction in respect of which the bonus coupon is issued.
228 Cash coupons entitle the recipient to receive a discount on his or her next purchase from one of the applicant’s stores. The value of the cash coupon is a percentage of the sales value of the customer’s immediately preceding transaction with the applicant. Cash coupons expire six months from the date of the transaction in respect of which they are issued.
229 Plainly bonus coupons and cash coupons are promotional items, intended to encourage repeat purchases from the applicant’s stores, whether those purchases be made in person or distantly, including from another country.
230 In relation to all transactions occurring before the second half of 2008, there is evidence that a particular mark was printed on deposit memos, deposit sales memos, cash coupons and bonus coupons. This mark is very similar to the ‘707 mark save that “OPTICAL 88” (in Chinese characters) is represented in larger font relative to OPTICAL 88 and is separated from OPTICAL 88 by a horizontal line. For convenience, I will refer to this as “the modified ‘707 mark”. A representation of the modified ‘707 mark is shown in Schedule 4 to these reasons.
231 Some of the bonus coupons and cash coupons in evidence in relation to the transactions on which the applicant relied were printed with a different mark. The different mark comprised the applicant’s logo and the words OPTICAL 88 which were placed immediately to the right of the logo. However, the evidence established that the appearance of this sign (rather than the modified ‘707 mark) was an artefact of the reprinting of the bonus coupons and the cash coupons for the purpose of obtaining documents to be used as evidence in this proceeding. The applicant adduced evidence that, in the second half of 2008, changes were made in the printing of its sales documents that resulted in documents bearing this different mark when reprinted. I am satisfied on the evidence that the original documents forming part of the transactions on which the applicant relied, whether they be deposit sales memos, bonus coupons or cash coupons, were printed, originally, with the modified ‘707 mark.
232 The applicant accepted that its best case was in respect of the category A transactions dealing with the purchase or repair of goods by the placement of orders from Australia. There were four such transactions. I will refer to these, respectively, as the Pitt transaction, the Bagnall transaction, the Krause transaction and the Walters transaction. Of these, the applicant proffered the Pitt transaction as its best example. I will deal with each of the category A transactions first, before turning to the remaining categories.
233 While in Hong Kong in July 2007, Mr Pitt purchased prescription sunglasses, spectacle frames and prescription lenses from the applicant’s Cameron Road store in Kowloon in a series of transactions arranged so that he could take advantage of cash coupons issued in respect of each transaction. He took delivery of these goods from the store the next day. As a result of these transactions he was left with a cash coupon entitling him to a discount of HKD 237 on his next purchase from one of the applicant’s stores. Later, when in Australia, he decided to purchase another pair of frames and lenses from the applicant’s Cameron Road store. He wrote to Mr Lung (the Branch Manager of the store) enclosing an order and the cash coupon he had taken with him from his last purchase. On its receipt, Mr Lung referred the letter to the applicant’s Customer Service Department which corresponded by email with Mr Pitt, providing a quotation and banking details to allow funds for the purchase of the goods to be transferred to a branch of the applicant’s bank in Hong Kong. Mr Pitt transferred the required funds to the applicant’s bank. On receipt of these funds, Mr Pitt’s order was processed. When the goods were ready, they were packed by Mr Lung and dispatched by post to Australia on about 17 October 2007. Based on the evidence of the practice at the Cameron Road store at the time, I am satisfied that the goods were packed with a cleaning cloth and a sales deposit memo as well as a bonus coupon for 2365 points and a cash coupon for HKD 237. Reprinted copies of the bonus coupon and the cash coupon are in evidence. However, an example of the cleaning cloth supplied from this store at that time is not in evidence. I would infer, however, that such cloths were the same as the cleaning cloth that was tendered as a representative example of the applicant’s cleaning cloths supplied as a promotional item. That example does not bear the ‘707 mark, the modified ‘707 mark or the ‘966 mark. It does, however, bear another mark to which I will make further reference.
234 Whilst in Hong Kong in August 2006 Ms Bagnall purchased one pair of sunglasses, one pair of spectacle frames and prescription lenses from the applicant’s Nathan Road store in Kowloon in a series of transactions arranged so that she could take advantage of cash coupons issued in respect of each transaction. She took delivery of these goods at the Nathan Road store. As a result of these transactions she was left with a bonus coupon and cash coupon, entitling her to a discount of HKD 54 on her next purchase from one of the applicant’s stores. On her return to Australia, Ms Bagnall decided to buy a pair of sunglasses from the applicant for her sister. She telephoned a Mr Wong at the applicant’s Nathan Road store to place the order. In late August 2006 she transferred funds to a branch of the applicant’s bank in Hong Kong. On receipt of the funds the applicant then processed the order. The evidence does not make clear whether Ms Bagnall used the cash coupon. The goods were prepared, packed and dispatched to Australia on or about 11 September 2006. Based on the evidence of the practice at the Nathan Road store at the time, I am satisfied that the goods were packed with a sales deposit memo as well as a bonus coupon for 1,868 points and a cash coupon for HKD 187. Reprinted copies of the bonus coupon and the cash coupon were in evidence.
235 Whilst in Hong Kong in April 2006 Ms Krause purchased a pair of reading glasses from the applicant’s Causeway Bay store. These goods were dispatched by post to her address in Australia. Based on the evidence of the practice at the Causeway Bay store at the time, I am satisfied that the goods were packed with a sales deposit memo as well as a bonus coupon for 1869 points and a cash coupon for HKD 187. Reprinted copies of the bonus coupon and cash coupon relating to this purchase were in evidence. Some months later the glasses required repair. She returned them to the applicant’s Causeway Bay store and transferred funds to a branch of the applicant’s bank in Hong Kong to pay for the repairs. The evidence does not make clear whether she used the cash coupon for this transaction. After the goods were repaired the applicant dispatched them by post to Australia on or about 28 August 2006. Ms Krause gave evidence that she received a package containing the glasses. She also gave evidence that she recalled that the package also contained a receipt or a similar record with English and Chinese writing on it. She did not retain a copy. Based on this evidence, and the evidence of the practice at the Causeway Bay store at the time, I am satisfied that the goods were packed with a deposit sales memo as well as a bonus coupon for 288 points and cash coupon for HKD 29. Reprinted copies of the bonus coupon and the cash coupon were in evidence.
236 In April 2006 Ms Walters purchased a pair of reading glasses from the applicant’s Causeway Bay store. The glasses were made overnight and delivered the next day to her hotel. I infer that she was personally given a deposit sales memo, cash coupon and bonus coupon at the time of her purchase. Reprinted copies of the cash coupon and bonus coupon were in evidence. Back in Australia, Ms Walters damaged these glasses. She wrote to a Mr Wong at the Causeway Bay store enclosing her glasses for repair. She subsequently transferred funds to a branch of the applicant’s bank in Hong Kong to pay for the repairs. The evidence does not make clear whether Ms Walters used a cash coupon for this transaction. After the goods had been repaired they were dispatched by post to Australia on or about 19 December 2006. Ms Walters gave evidence that she received the package containing the glasses. She also gave evidence that she recalled that the package contained a receipt or similar record. She did not retain a copy. Based on this evidence, and the evidence of the practice at the Causeway Bay store at the time, I am satisfied that the goods were packed with a deposit sales memo as well as a bonus coupon for 540 points and a cash coupon for HKD 54. Reprinted copies of the bonus coupon and the cash coupon were in evidence.
237 The applicant characterised the category B transactions as ones where a customer from Australia made purchases from the applicant’s stores on repeated occasions at different times using a cash coupon from a previous occasion to achieve a discount on the price of the goods, in circumstances where, although the customer attended the store in person, the goods were subsequently dispatched by post to Australia by the applicant. The applicant submitted that these goods were dispatched with a deposit sales memo and a bonus coupon and/or cash coupon. The applicant relied on three such transactions. However, none of the transactions was conducted at one of the stores that I have identified. It is clear that, in each case, the customer attended the store to make the purchase. None of these purchasers gave evidence and no evidence was given of the transactions beyond the tender of copies of the business records supporting them (including reprinted copies of the bonus coupons and cash coupons). Whilst I am satisfied that the goods were dispatched to Australia by post, I am unable to conclude that they were accompanied by a deposit sales memo, bonus coupon or cash coupon. It is equally likely that, in each case, these documents were handed to the customer at point of sale, as they would be in the normal run of transactions. There is evidence that, after the first relevant period and the second relevant period, one of the customers (Mr Chew) did make a purchase from one of the identified stores, where the goods were dispatched by post to Australia. Based on the evidence of the practice at that store, I am satisfied that, in respect of that transaction, the goods were accompanied by a deposit sales memo, bonus coupon and cash coupon when they were dispatched to Australia. That transaction, however, could only be relevant to the question of discretion, should the evidence not establish trade mark use in the relevant periods.
238 The applicant characterised the category C transactions as ones where a customer from Australia made purchases from the applicant’s stores on repeated occasions at different times, in circumstances where, although the customer attended the store in person, the goods were subsequently dispatched by post to Australia. The applicant relied on 11 such transactions and submitted that, in each case, the goods were dispatched to Australia with a deposit sales memo, bonus coupon and/or cash coupon. None of the purchasers gave evidence and no evidence was given of the transactions beyond the tender of copies of the business records supporting them (including reprinted copies of the bonus coupons and cash coupons). Of these transactions, only one (Mr Jewell) involved a sale from one of the identified stores (Causeway Bay). Based on the evidence of the practice at that store, I am prepared to find that, in respect of that transaction, the goods were dispatched by post to Australia on or about 4 November 2006, accompanied by a deposit sales memo, bonus coupon and cash coupon.
239 The applicant characterised the category D transactions as ones where a customer from Australia purchased goods from one of the applicant’s stores, in circumstances where, although the customer attended the store in person, the goods were subsequently dispatched by post to Australia. The applicant relied on 32 such transactions and submitted that, in each case, the goods were dispatched to Australia with a deposit sales memo, bonus coupon and cash coupon. All the transactions were supported by the tender of copies of business records (including reprinted copies of the bonus coupons and the cash coupons), but only one purchaser, Ms Sinclair, gave evidence. Ms Sinclair’s purchase was conducted at one of the identified stores. Based on her evidence, and the evidence of the practice at that store, I am satisfied that, in respect of that transaction, the goods were accompanied by a deposit sales memo, bonus coupon and cash coupon when they were dispatched to Australia on or about 15 May 2006, with one of the applicant’s cleaning cloths. The cleaning cloth was tendered. It does not bear the ‘707 mark, the modified ‘707 mark or the ‘966 mark. It does, however, bear another mark to which I will make further reference. There are two other category D transactions (Mr Linsdell and Mr Hollis) which took place at one of the identified stores (Causeway Bay). I am satisfied that, in respect of those transactions, the goods were similarly accompanied by a deposit sales memo, bonus coupon and cash coupon when they were dispatched to Australia on or about 8 September 2006 and 5 October 2007, respectively.
The parties’ submissions
240 The first respondent submitted that the applicant conducts its business through a network of physical stores, none of which are located in Australia. It submitted that there had been no offer of goods or services by the applicant in Australia: it is necessary for a customer to communicate with one of the applicant’s overseas stores. Thus, in the case of an overseas order, the customer submits an order to the store, the order is processed at the store, the sale occurs at the store, and then the goods are dispatched from the store to Australia. The first respondent pointed to the fact that there are no sales channels in Australia through which the applicant’s goods are sold. The first respondent submitted that the transactions in the present case are analogous to the ordering of cigarettes by Australian residents in Rothmans.
241 As to the applicant’s cash coupons, the first respondent submitted that these did not represent an existing intention to offer or supply goods and were of no effect until a customer submitted his or her order to one of the applicant’s stores overseas. The first respondent submitted that they were no more than a form of incentive to encourage recipients to consider entering into further transactions with the applicant.
242 The first respondent submitted that, in any event, there had been no use of the ‘966 mark on those coupons or any other document relating to the transactions on which the applicant relied.
243 Finally, the first respondent submitted that where a removal application relates to all of the goods or services for which the trade mark is registered (as is the case here), the registration can only be preserved for those goods and services for which use can be shown: McHattan v Australian Specialised Vehicle Systems Pty Ltd (1996) 34 IPR 537 at 544. Whilst the first respondent’s primary position was that no such use had taken place (and that the ‘707 and ‘966 marks should be removed in respect of all goods and services for which they are registered), it submitted that, alternatively, the applicant’s use has been very limited and concerned only the sale and repair of spectacles and sunglasses. It submitted, therefore, that the marks should be removed in respect of all other goods and services, if not otherwise removed in their entirety.
244 The applicant relied upon the 50 transactions occurring during the first relevant period and the second relevant period as establishing use of the ‘707 and the ‘966 marks (or of each of those marks with additions or alternations not substantially affecting their identity) that was sufficient to rebut the allegations of non-use made by the first respondent.
245 The applicant did not dispute the proposition that if the entire course of trade is outside Australia then trade mark use in Australia cannot be shown. However it submitted, correspondingly, that it is not necessary for the whole course of trade to occur in Australia, and that it is sufficient if certain integers do. The applicant emphasised that the relevant case authorities on removal applications had tended to focus on market considerations specific to each case and that the same approach was necessary in this case. Ultimately, the applicant submitted that, in each case, there is one unvarnished question: has the applicant used its trade mark in Australia?
246 The applicant submitted that, in the case of each challenged mark, that question should be answered in the affirmative. It submitted that there was clear use of the trade marks when the applicant provided quotations or accepted orders from customers in Australia and agreed to supply goods to them for delivery in Australia (Ward Group Pty Ltd v Brodie & Stone Plc (2005) 143 FCR 479 at [44]); when it included a cash coupon bearing the trade mark in packages sent to Australia; and when an Australian customer used a cash coupon to buy further goods.
247 The applicant acknowledged that the use of the coupons was central to its case on trade mark use because they represented an invitation to the holder of the coupon to deal with the respondent again. It relied on the Pitt transaction as the clearest example, where Mr Pitt initiated his order from Australia, received and accepted a quotation and posted his cash coupon to the applicant from Australia. It submitted that the category B transactions were of similar import.
Consideration
248 The mode of use on which the applicant essentially relies is the use of the modified ‘707 mark on the deposit sales memos, bonus coupons and cash coupons. I leave to one side, for the moment, the supply of the applicant’s cleaning cloth in the transaction concerning Ms Sinclair (of which there is direct physical evidence) and my finding of the supply of a cleaning cloth in the transaction concerning Mr Pitt (based on the practice of the applicant’s Cameron Road store but in respect of which there is no physical evidence).
249 In my view the supply of these documents to a customer at point of sale at one of the applicant’s stores could not be a use of the modified ‘707 mark in Australia, even if the customer is a person ordinarily resident in Australia.
250 Similarly, the bringing of these documents into Australia by such a customer would not constitute a use of the modified ‘707 mark by the applicant itself. The bringing of such documents into Australia would be no more than the serendipitous act of the customer.
251 However, in my view, the sending of the bonus coupons and cash coupons to a customer resident in Australia as an incident of trade between the applicant (from one of its overseas stores) and that customer (in Australia), is of a different character and, in my view, is of determinative significance for the purposes of the removal application.
252 Both the bonus coupon and the cash coupon are and were part of the applicant’s marketing and promotional activities, no doubt intended to foster and encourage the recipients of those coupons to make additional purchases from the applicant. In the case of the cash coupon, the incentive for the recipient is to buy goods and services more cheaply through the obtaining of a discount from the applicant’s offered price upon presentation of the coupon. In the case of the bonus coupon, the incentive for the recipient is to buy goods or services from the applicant so as to accumulate points with the ultimate view of obtaining a bonus gift. In each case the applicant is and was encouraging its customers to continue to deal with it. By sending the cash coupons and bonus coupons to customers in Australia, the applicant was not only seeking to foster and encourage further purchases from these customers, but was also signifying its preparedness to do so on a “mail order” basis. Although the goods or services were to be supplied from one of the applicant’s stores, it was not necessary for the customer to attend in person. The applicant was just as happy to service their requirements distantly. There is, in my view, no doubt that the use of the modified ‘707 mark on the bonus coupons and cash coupons was to distinguish the applicant from other retailers, including those in Australia, and to seek to attract custom away from other retailers, including those in Australia, by offering incentives to customers, in the form of these coupons, to purchase their optical goods and related services from the applicant. The applicant’s optical goods covered a broad range of goods. Having regard to the goods identified in the voluminous business records that have been tendered, I am satisfied that the goods offered by retail by the applicant from its stores covered the range of goods identified in the registrations for the ‘707 mark and the ‘966 mark.
253 It follows, in my view, that the sending of the bonus coupons and cash coupons to Australia was an incident of a trading activity between Australia and places outside Australia involving the applicant and its customers and constituted a use in Australia by the applicant of the modified ‘707 mark for the purposes of that trade. Although the evidence only establishes a relatively small number of transactions (the four category A transactions, one category C transaction and three category D transactions), I am satisfied that this establishes use in good faith in Australia of the modified ‘707 mark in the first relevant period and in the second relevant period.
254 However, that use was in relation to the provision of the applicant’s services as a retail supplier of optical goods and of repair services for optical goods. The use was not a use of the modified ‘707 mark on or in physical or other relation to goods: see s 7(4). There is no evidence that any of the relevant transactions involved goods branded with the modified ‘707 mark (or, indeed, the ‘707 and ‘966 marks themselves). More generally, there is no evidence that the applicant itself supplies or has supplied goods branded with the modified ‘707 mark, the ‘707 mark or the ‘966 mark. The business records tendered in relation to the transactions on which the applicant relied make clear that many of the goods supplied by the applicant were projected into the course of trade by others using trade marks applied by others. Some of these trade marks are identifiable as very well-known fashion and luxury brands. It was those marks that functioned as the badge of origin for those goods. Those goods passed through the hands of the applicant in the course of trade, but in no true sense was the applicant the source or origin of those goods. The applicant was no more than the source or origin of particular retail services involved in the down-stream supply of those goods. The business records also show the use by the applicant of its separate “house” brands in relation to goods. In those instances it was those house brands that functioned as the badge of origin of those goods. In each case the use of the modified ‘707 mark was in physical or other relation to its retail services, but nothing more.
255 Both the applicant and the first respondent treated the use of the modified ‘707 mark as if it were the ‘707 mark itself. The modified ‘707 mark is plainly not the ‘707 mark. However, as I have noted, the allegation that a trade mark has not been used at a relevant time can be rebutted by establishing that it has been used with additions or alterations not substantially affecting its identity.
256 Is the modified ‘707 mark a use of the ‘707 mark with additions or alterations not substantially affecting its identity? In order for that question to be answered affirmatively it is necessary to find that a total impression of similarity emerges from a comparison between the two marks: Carnival at 391; Shell at 414. In my view a total impression of similarity does emerge from a comparison of the modified ‘707 mark with the ‘707 mark itself. I therefore find that, by using the modified ‘707 mark, the applicant used the ‘707 mark with additions or alterations not substantially affecting its identity. However, the ‘707 mark is registered only for goods, not services.
257 It is also necessary to consider whether the use of the modified ‘707 mark can be considered to be a use of the ‘966 mark with additions or alterations not substantially affecting the identity of that mark. The applicant submitted that this question should be answered in the affirmative; the first respondent submitted that it should be answered in the negative.
258 Although the ‘966 mark differs from the ‘707 mark, principally in the juxtaposition of OPTICAL 88 and “OPTICAL 88” (in Chinese characters), which constitutes an additional difference for present purposes between the ‘966 mark and the modified ‘707 mark, I am of the view that, when the modified ‘707 mark is compared with the ‘966 mark, a total impression of similarity still emerges between the two. I therefore find that the use by the applicant of the modified ‘707 mark was a use of the ‘966 mark with additions or alterations not substantially affecting its identity.
259 Before turning to consider other relevant issues I should record that my finding of trade mark use in Australia by means of the bonus coupons and cash coupons does not make it necessary for me to decide whether, in the absence of those coupons, use of the modified ‘707 mark on the deposit sales memos would constitute relevant trade mark use. If I am wrong in finding trade mark use with respect to the bonus coupons and cash coupons then use of the modified ‘707 mark on the deposit sales memos could be in no better position. On the other hand, if I am correct in my findings with respect to use of the modified ‘707 mark on the bonus coupons and cash coupons then a similar finding in relation to the deposit sales memos would only constitute an additional finding of no practical significance. The function of the bonus coupons and cash coupons, as I have described it, has had an important bearing on my consideration of the question of trade mark use in Australia. I would not necessarily see the deposit sales memos as having the same function. If the use of the modified ‘707 mark on deposit sales memos had fallen to be considered as the only evidence of trade mark use, then other issues may well have arisen for consideration on that question. As it is not necessary for me to explore these issues, I decline to do so. I should add that neither the applicant nor the first respondent sought to address me on the position where the only use of the modified ‘707 mark was on deposit sales memos.
260 Similarly it is not necessary for me to address whether the decision of Merkel J in Ward Group at [44] with respect to implicit trade mark use applies analogically to the present case, at least in relation to the Pitt transaction which is the only transaction where the evidence makes clear that a cash coupon was used to purchase goods distantly from Australia in a mail order transaction.
261 I turn now to the question of the cleaning cloths. As I have noted, the cleaning cloth supplied to Ms Sinclair is in evidence. It bears a mark comprising the applicant’s logo, the name “OPTICAL 88” (in Chinese characters) and the name OPTICAL 88 arranged in an order in which the applicant’s logo is centred but placed above the other elements. The name “OPTICAL 88” (in Chinese characters) is in large script and occupies a central position in the composite mark. The name OPTICAL 88, in smaller script, is placed below and is separated from “OPTICAL 88” (in Chinese characters) by a horizontal line. Although displaying elements of the modified ‘707 mark, the impression created is quite different because of the change in position of the applicant’s logo, which imparts a different orientation to the mark. This different orientation gives a sense of triangularity that also underscores the centrality and prominence of the name “OPTICAL 88” (in Chinese characters). When compared with the ‘707 mark, a substantial impression of identity does not arise. Similarly, when compared with the ‘966 mark, a substantial impression of identity does not arise. Therefore, the supply of the cleaning cloth to Ms Sinclair does not instance a use of the ‘707 mark (with additions or alterations not substantially affecting its identity) or of the ‘966 mark (with additions or alterations not affecting its identity). I would add that the mark on the cleaning cloth supplied to Ms Sinclair is the same as the mark appearing on the example tendered as being representative of cleaning cloths supplied by the applicant as a promotional item.
262 In summary, I find that the applicant has rebutted the allegation that the ‘966 mark has not, at any time during the second relevant period, been used, or been used in good faith, by the applicant in relation to retail services for the goods identified in the ‘966 registration. However, I find that the applicant has not rebutted the allegation that:
(a) The ‘707 mark has not, at any time during the first relevant period, been used, or been used in good faith, by the applicant in relation to the goods in respect of which it is registered;
(b) The ‘966 mark has not, at any time during the second relevant period, been used, or been used in good faith, by the applicant in relation to the goods in respect of which it is registered;
(c) The ‘966 mark has not, at any time during the second relevant period, been used, or been used in good faith, by the applicant in relation to wholesale services for the goods identified in the ‘966 registration.
263 In the case of the ‘966 mark it now becomes necessary to turn to the issue of whether the applicant has rebutted the allegation that, on the day on which the application for registration of the ‘966 mark was filed (2 November 2005), it had no intention in good faith to use the mark in Australia or to authorise the use of the mark in Australia or to assign the trade mark to a body corporate for use by the body corporate in Australia.
264 I am not satisfied that the applicant has rebutted the allegation that, on the day on which the application for the registration of the ‘966 mark was filed (2 November 2005), it had no intention to use or to authorise the use of the ‘966 mark or to assign the ‘966 mark to a body corporate for use by it in Australia, in relation to the goods for which it is registered or in relation to wholesale services for the goods identified in the ‘966 registration.
265 The applicant’s evidence in chief on this issue was sparse and concerned an instruction given some time in 2005 by Mr Wong to the applicant’s Operations Manager, Daniel Lai, and also given some time in 2006 to the applicant’s General Manager, Kenny Chan, to travel to Australia to assess the opportunities for establishing the applicant’s stores in Australia, including possibly by way of franchise. In the end result it seems that only Mr Lai visited Sydney in February 2006. It seems at least possible that on his visit at that time he took photographs of the first respondent’s store. The evidence is unclear. The evidence is also unclear as to whether photographs of other optical shops were taken at that time or in November 2006 on a staff “bonus trip” to Sydney to reward employees for their efforts for the 2005 calendar year.
266 Mr Wong was cross-examined on evidence about the possible expansion of the applicant’s retailing business to Australia. Neither Mr Lai nor Mr Chan gave evidence. I would understand Mr Wong’s evidence, in so far as he referred to the possibility of franchising, as speaking of an activity involving wholesaling. However I am not satisfied that the possibility of franchising in Australia referred to by Mr Wong was anything more than a speculative possibility.
267 I am not satisfied that the visit in 2006 by Mr Lai was anything more than a preliminary recognisance mission to attempt to gain some rudimentary knowledge about retail activities in Australia and perhaps also to gauge, first-hand, the activities of the first respondent of which the applicant had been aware since 2001. There is no evidence of work of any real substance being carried out by Mr Lai during or as a result of this visit to Australia. Mr Wong’s evidence in cross-examination made clear that much more work would be necessary before making a decision to commit to expanding into a new market. There is no documentation in evidence of any expansion plans by the applicant concerning Australia, whether as at 2 November 2005 or at any other time. In none of Stelux’s Annual Reports between 1989 and 2005 is there any reference to an intention to expand the applicant’s stores into Australia, although these reports do refer to the applicant’s expansion plans with respect to other overseas markets. Mr Wong accepted that any intention that the applicant had to expand into Australia has risen no higher than a general intention to expand at some future but unascertained time.
268 Taking the evidence as a whole, and particularly the evidence given by Mr Wong in cross-examination, I am not satisfied that the applicant’s intention, such as it was at 2 November 2005, was anything more than “an uncertain or indeterminate possibility” (see Re Ducker’s Trade Mark (1928) 45 RPC 397 at 402) that the applicant might commence to operate stores in Australia. Even then the possibility of wholesaling (for example, through franchising in Australia) was, as I have noted, wholly speculative. Moreover, in light of the great variety of OPTICAL 88 trade indicia used by the applicant, no evidence was given as to what specific trade marks the applicant might use for that purpose.
269 The evidence did not really deal with the applicant’s intention to use the ‘966 mark in Australia in relation to the goods for which it is registered. There is no evidence that the applicant did in fact use the ‘966 mark in relation to goods at any time. In cross-examination Mr Wong referred to the fact that at some point in time (precisely when was not made clear) the respondent was looking at acquiring a manufacturing factory for frames and also the possibility of entering into a joint venture with a Japanese company for the manufacture of lenses. However, no attempt was made to relate this evidence to trade mark use, let alone use of the ‘966 mark in Australia or anywhere else.
270 In the face of an application to remove the ‘966 mark for non-use, the applicant’s evidence of an intention, as at 2 November 2005, to use that mark in Australia, or to authorise its use in Australia or to assign the mark for use in Australia, was singularly lacking in any persuasive force.
271 If at the end of proceedings relating to an opposed application the Court is satisfied that the grounds on which the application was made have been established, the Court may order the Registrar to remove the trade mark from the Register in respect of any or all of the goods and/or services to which the application relates: s 101(2) of the Trade Marks Act.
272 If satisfied that it is reasonable to do so, the Court may decide that a challenged mark should not be removed from the Register even if the grounds on which the application was made have been established: s 101(3) of the Trade Marks Act. Relevant considerations in the exercise of that discretion will include whether the mark has been used in respect of similar goods or closely related services, or similar services or closely related goods: s 101(4); ss 14(1) and (2).
273 In E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2008) 77 IPR 69; [2008] FCA 934 Flick J at [193]-[213] considered the principles that should inform the exercise of the discretion conferred by s 101(3). In light of his Honour’s analysis in that case, it is not necessary for me to set out a detailed discussion of those principles. I would note, however, that as Flick J observed (at [198]), the discretion conferred by s 101(3) is unlike the discretion involved in, say, removal actions formerly brought under s 23 of the repealed Act (see also Lander J in Kowa Company Ltd v N V Organon (2005) 223 ALR 27; [2005] FCA 1282 at [97]-[98]). Significantly, the discretion under s 101(3) is not conditioned on the need to establish “exceptional circumstances” before the discretion can be exercised favourably to the trade mark owner. However, as s 101(3) makes clear, the Court (or the Registrar, as the case might be) may only decide that the trade mark should not be removed from the Register “if satisfied that it is reasonable to do so”. This requires, in my view, the Court (or the Registrar) to be positively satisfied of that condition. In my view it is the opponent for removal who bears the burden of persuasion on that issue.
274 In reliance on the various factors referred to by Falconer J in Re Hermes Trade Mark [1982] RPC 425 as relevant considerations to be taken into account in the exercise of such a discretion, the applicant submitted, firstly, that it had not abandoned the ‘707 mark or the ‘966 mark. In this connection the applicant referred to the visit by Mr Lai in 2006. However, that visit had nothing to do with use of the ‘707 mark of the ‘966 mark as such but was, as I have found, no more than a preliminary recognisance mission to attempt to gain some rudimentary knowledge about retail activities in Australia at a time when the opening of stores by the applicant was no more than an uncertain or indeterminate possibility. In any event, the applicant’s own evidence was that it does not even now use the modified ‘707 mark (at least on deposit memos, deposit sales memos, bonus coupons or cash coupons).
275 Secondly, the applicant submitted that each of the challenged marks enjoyed a reputation in Australia which, even if insufficient to establish passing-off (an issue to which I shall come), shows that “relevant consumers” associate the marks with the applicant’s business. However, as I will come to discuss, that evidence shows an awareness at the present time of the name OPTICAL 88 and discloses certain different sources of awareness, including, it would seem, from the first respondent’s business activities. The evidence says nothing specifically about the ‘707 mark or the ‘966 mark independently of the name OPTICAL 88.
276 Thirdly, the applicant submitted that there have been sales to Australian consumers under the marks after the first relevant period and the second relevant period. This, however, is no more than a repetition of the use that has been found to have occurred in the first relevant period and the second relevant period. This submission does not engage the fact that there has been no use of the marks in respect of the goods for which they are registered or, in the case of the ‘966 mark, wholesaling services.
277 Fourthly, the applicant submitted that the first respondent, through Mr Law, commenced its trading without conducting a trade mark search. This is true but, of itself, of little overall significance.
278 Finally, the applicant submitted that the public interest favoured each mark remaining on the Register because it, and not the first respondent, is recognised by the public as the source of OPTICAL 88 goods. Conversely, the applicant submitted, the first respondent will not be materially disadvantaged because it will have the benefit of s 127 of the Trade Marks Act and will be protected against the applicant’s claim for damages or for an account of profits.
279 The applicant’s first proposition is a contentious matter to which it will be necessary for me to return when dealing with its claims based on contravention of the Trade Practices Act and passing-off. I note, however, that the survey on which it relied showed that, just as a significant percentage of interviewees showed an awareness of Hong Kong as a source of the use of the name OPTICAL 88, so too did a significant percentage show an awareness of Sydney as a source of the use of that name. As I have explained, arguably this will not matter when considering the s 60 ground of opposition. However, when reputation is advanced as a discretionary consideration favouring the retention of a mark that has not been used for particular goods or services, the existence of a competing reputation in relation to similar goods or closely related services, or similar services or closely related goods, should not be ignored.
280 As to the applicant’s second proposition, s 127 will only be of benefit to the respondents in respect of pecuniary relief for so long as the applicant decides not to use those marks in Australia. The respondents should not be left at the mercy of the applicant’s forensic decisions in this regard.
281 I am not persuaded that these matters, individually or collectively, show that it is reasonable for the ‘707 mark or the ‘966 mark (to the extent that it is registered for goods and particular wholesale services) to remain on the Register. The focus of the applicant’s submissions essentially relate to the applicant’s retailing activities which are not covered by the registration of the ‘707 mark but which are covered by the registration of the ‘966 mark and for which use has been shown. I take into account the fact that, in undertaking its retailing activities, there is no evidence that the applicant uses the ‘707 mark or the ‘966 mark on optical goods themselves either in Australia or anywhere else. As I have noted, the evidence indicates that the applicant supplies goods branded by their manufacturers with their own brands or with one of the applicant’s “house” brands. The promotional items in evidence show that the applicant uses various OPTICAL 88 trade indicia, but not the ‘707 mark or the ‘966 mark. The applicant’s sales documents (including deposit sales memos, bonus coupons and cash coupons) do not even now use the modified ‘707 mark, but a different mark. I do not leave out of consideration that use of the ‘707 mark and the ‘966 mark (by medium of the modified ‘707 mark) has been demonstrated in relation to retailing services relating to optical goods and accessories. But this fact, considered in all the circumstances, does not stand as a reason of any real significance for exercising the discretion in favour of the applicant, particularly when the modified ‘707 mark demonstrating that use is itself no longer so used.
The pleaded case
282 The applicant pleaded that its logo was an original artistic work in which copyright subsisted in Australia and that it was the owner of that copyright. It pleaded that the first respondent, without its licence, had reproduced or authorised the reproduction in material form of the applicant’s logo. It also pleaded that Mr and Mrs Law, without its licence, separately or jointly with each other, or with the first respondent, reproduced or authorised the reproduction in material form of the applicant’s logo. Its particularised acts of reproduction included use of the first respondent’s logo on business cards and reminder cards (which were alleged to have been created or commissioned by the respondents or a combination of one or more of them). Its particularised acts of infringement also included the filing by the first respondent of trade mark application 1147926 for its own logo (which was alleged to have been authorised by Mr and Mrs Law or to be an act in which they were knowingly concerned).
283 I should record one matter of detail. It is clear on the evidence that the first respondent’s logo includes the words OPTICAL 88. However, in its statement of claim, the applicant effectively defined the first respondent’s logo as not including those words. By doing so, I have assumed that the applicant wishes to draw attention to that part of the first respondent’s logo that does not include the words OPTICAL 88. In the present context I take the applicant to be alleging that it is that part of the first respondent’s logo that reproduces, or reproduces a substantial part of, the applicant’s logo and thereby infringes the applicant’s copyright in the artistic work that comprises its logo.
Subsistence and ownership of copyright in the applicant’s logo
284 As I have recorded earlier, prior to the Stelux Group acquiring its majority shareholding in the applicant in 1988, the applicant had adopted a logo comprising four overlapping circles somewhat resembling the numerals “88”. Each circle had a dark spot at its centre. Viewed in the context of its use in the applicant’s business, the overall impression thus created was one of four eyes arranged to represent the numerals “88”.
285 Shortly thereafter Mr Wong, in his capacity as a director of the applicant, designed the applicant’s logo. Mr Wong gave evidence that in undertaking this work, he drew upon a logo used by City Chain, which comprises two stylised clock faces which overlap to resemble the initials “CC” (thus signifying the name of that business and the product it sells). Mr Wong’s evidence was that, acting on this concept, he sought to design a logo for the applicant’s business which incorporated a stylised spectacle frame and a pair of stylised lenses (thus signifying the nature of the goods sold by the applicant) arranged to resemble the numerals “88” (thus signifying the name of the applicant’s business).
286 Mr Wong originally drew the applicant’s logo by hand and then submitted his drawing to the Stelux Group’s advertising department for the production of artwork. Mr Wong’s evidence was that, under his direction, the applicant’s logo has been combined with other trade indicia to signify the applicant and the applicant’s corporate name (written in English and in Chinese characters).
287 On 12 February 2008, Mr Wong and Mengiwa Property Investment Limited (formerly Stelux Holdings Limited) assigned, by deed, their respective rights and interests (such as then existed) in the applicant’s logo to the applicant. Mr Wong was an employee of Stelux Holdings Limited when he created the applicant’s logo.
288 The respondents put in issue the subsistence of copyright in the applicant’s logo as an original artistic work and the applicant’s ownership of that copyright.
289 Principally, the respondents contested whether the applicant’s logo was an original artistic work. They submitted that, in drawing the applicant’s logo, Mr Wong relied on the elements of, and the concept behind, the applicant’s original logo that was in use in 1988. That may be so. There are, however, significant differences, both conceptual and artistic, between the applicant’s logo and the logo that was in use in 1988. I am also satisfied that Mr Wong equally relied on the concept behind the logo adopted by City Chain as a sister business in the Stelux Group. I am satisfied that the applicant’s logo is an original work for copyright purposes. There was no challenge by the respondents to the existence of the relevant connecting factors required for the subsistence of copyright under the Copyright Act 1968 (Cth): see ss 32 and 184.
290 There was no significant challenge by the respondents to the applicant’s ownership of that copyright, should it subsist. It is not necessary to go beyond the existence of the Deed of Assignment entered into on 12 February 2008. The assignment in that Deed was expressed to be effective nunc pro tunc from the date that the applicant’s logo was created. The assignment also included an assignment of the right to bring action and of the right to relief for copyright infringement of the applicant’s logo. In light of this evidence I am satisfied that the applicant is the owner of the copyright in the applicant’s logo and that it has the right to sue for infringement of that copyright in this proceeding.
The making and use of the first respondent’s logo
291 Mr Law gave evidence that, in late 2003 (some 10 years after the first respondent commenced carrying on business), Victor Lam (a patient and family friend who was also a graphic artist) discussed the benefit of a logo being used in the conduct of the first respondent’s business. Mr Law said he asked Mr Lam to develop some ideas and to present them for his further consideration. Mr Law’s evidence was that he raised with Mr Lam the fact that the applicant was conducting an optical business in Hong Kong under the name OPTICAL 88 and that he wanted to make sure that the logo to be developed and adopted by the first respondent would not resemble the “branding” used in the applicant’s business.
292 Mr Law gave this evidence in paragraph 41 of his affidavit sworn on 23 November 2009.
I remember wanting to alert Mr Lam about the applicant’s business and branding because I did not want to go through the time and expense of developing a logo to distinguish the Company’s business only to find that it caused confusion between the Company’s business and the applicant’s business.
293 This statement is significant because, as I have already recorded, it stands as evidence that, as of late 2003, Mr Law did consider the possibility that the adoption of a similar logo might cause confusion between the first respondent’s business in Sydney and the applicant’s business in Hong Kong. Mr Law gave evidence that he asked Mr Lam to search the Internet to collect samples of the applicant’s “signage” for reference.
294 Mr Lam gave evidence which was not entirely consistent with the evidence given by Mr Law on this subject. Overall, it does not seem to me that the differences, where they exist, are of much significance in dealing with the issue of copyright infringement raised by the applicant.
295 Mr Lam gave evidence that, in about August 2003, Mr Law asked him to produce a logo for use on a business card. His evidence confirmed that Mr Law told him that there was “another optical company in Hong Kong” and that the design of the logo should not be the same as the one used by OPTICAL 88 in Hong Kong. Significantly, Mr Lam said that, when Mr Law gave him these instructions, he (Mr Lam) recalled having seen the name OPTICAL 88 on a store in Hong Kong on a visit in 1995.
296 For the next one to two weeks Mr Lam carried out research to assist him developing designs that would be appropriate to fulfil the commission he had been given. Mr Lam gave evidence of the steps that he undertook at that time. One of the steps was visiting the home page of the applicant’s website. This was plainly in accordance with the instruction he had been given by Mr Law. I am satisfied, however, that Mr Lam’s research was not confined to that one step but extended to a range of steps and considerations to which he deposed, including considering the many different shapes that could be made using the numeral “8”. In that connection Mr Lam gave evidence that he focussed on the repetition of the numeral “8” and the contrast it had with the word OPTICAL, because he believed that persons looking at the business name OPTICAL 88 would focus on the numerals “88”. I should say here that I do not find anything remarkable about this evidence, given that the starting point for Mr Lam was the name of the first respondent’s business. As it turns out, Mr Lam’s belief at that time appears to have been soundly based in light of the subsequent findings of the survey and opinions expressed by Dr Bednall to which I have previously referred when dealing with the question of trade mark infringement.
297 Mr Lam said that, in the course of doing this work, he came to develop four separate design concepts revolving around different themes which came to be identified with the expressions “hip hop look”, “corporate look”, “abstract look” and “eyeball look”.
298 Mr Lam’s initial design concepts focussed on eyes and the numeral “88”, not spectacles, and were directed to the themes to which I have referred.
299 In about October or November 2003 Mr Lam presented the four design concepts to Mr Law, who expressed a preference for the “abstract look” and “eyeball look”.
300 Mr Lam gave the following evidence in his affidavit in relation to his initial development of the “abstract look” concept:
The “Abstract Look” utilised a eurostile typeface. The flatness and evenness of the typeface was used by me because I considered that it helped give a logo a corporate look without necessarily been [sic] as conservative as the ordinary or typical corporate look tends to be.
In terms of the logo, I wanted to break apart the number “88” in different parts and use abstract shapes to represent the number. I analysed the number “88” and determined the elements within it, namely four circles, and considered how I could use those elements in an abstract way while still keeping it in a bounded form that people would still recognise as “88”. Initially, I did so by using white internal dots to balance the logo. One of the problems I had with this logo was that I could not find any typeface that worked with the “feel” of the logo. So instead I took apart the “empty” part of the logo, and the “line” part of the logo into 2 separate elements so that it is still the number 88 but if you look closely it consists of geometric shapes and lines.
301 Following his presentation to Mr Law, Mr Lam developed this concept by using dots in different configurations. He also applied different open sections to his initial design “to see if the logo could keep its meaning and shape”.
302 Mr Lam gave the following evidence in relation to his initial development of the “eyeball look” concept:
The “Eyeball Look” was intended by me to blend in the “88” and eyes together to create a unique logo. Being an optical company, the eyes seemed to me to be the most important element, even more so than the glasses being worn; I considered this design accorded with that order of significance.
303 Following his presentation to Mr Law, Mr Lam developed this concept by focussing on the numerals “88”. He said that he “wanted to avoid having them appear to be on top of each other” or otherwise presented in a confusing manner. His further work, therefore, involved playing around with the positioning of the numerals.
304 Mr Law said that once he had settled on a logo he intended to incorporate it into the operation of the first respondent’s business, particularly its marketing material. He was, however, delayed in this ambition. Nevertheless the first respondent’s logo was used on business cards and customer reminder cards. I find that this had occurred no later than November 2003.
305 Mr Law was cross-examined on this aspect of the case. His oral evidence was not always consistent with his affidavit evidence. Significantly, in cross-examination, he initially denied, contrary to his affidavit evidence, that he asked Mr Lam to check the applicant’s website, although he later appeared to accept that what he had stated in his affidavit was correct. He was challenged on his reason for asking Mr Lam to investigate the applicant’s logo on its website. He rejected the suggestion that he wanted Mr Lam to “go as close as possible, but not too close to” the applicant’s logo.
306 Mr Lam was also cross-examined. He, like Mr Law, was questioned on a number of documents tendered by the respondents to show the sequence of the developmental work undertaken by Mr Lam in accordance with Mr Law’s instructions. It emerged from Mr Lam’s cross-examination that, when the four design concepts were first shown to Mr Law, he (Mr Law) was concerned that the “abstract look” might be similar to the applicant’s logo. However Mr Lam told Mr Law that the designs were “very different”.
307 Mr Lam was challenged with the proposition that the design ultimately chosen by Mr Law for the first respondent’s logo was in fact a design that was the closest to the applicant’s logo that had been prepared by Mr Lam. However Mr Lam rejected that proposition.
308 In re-examination he explained the difference, as he saw it, between the applicant’s logo and the first respondent’s logo. To him the applicant’s logo was essentially a pair of glasses whereas the first respondent’s logo was a particular rendering (which he described as “a more geometric representation”) of the numerals “88” that was “a complete object by itself”. He saw this as a very abstract rendering of the numerals because they were broken up “into shapes and lines that combine and [are] melted together to create something different”. He suggested that, without the name OPTICAL 88 being shown in conjunction with the design, some people would not even recognise it as a rendering of the numerals.
309 Certainly what emerges from the evidence with clarity is that, in designing the first respondent’s logo, Mr Lam considered the applicant’s logo and did so as part of his initial research. It is also clear that Mr Law instructed Mr Lam to have regard to the applicant’s logo, although the motive for doing this was a matter of contention between the parties.
Consideration
310 At the end of the day, the only question that arises is whether the first respondent’s logo is a reproduction of the applicant’s logo or of a substantial part of it: ss 14(1), 31(1)(a) and 36 of the Copyright Act. This involves a comparison of the two works and the formation of a judgment based on the eye as to the degree of resemblance between the two. The degree of resemblance must be such that, to the eye, the first respondent’s logo reproduces, or reproduces a substantial part of, the applicant’s logo.
311 In Designers Guild Ltd v Russell Williams (Textiles) Ltd [2001] 1 All ER 700, Lord Hoffmann observed (at 706):
Generally speaking, in cases of artistic copyright, the more abstract and simple the copied idea, the less likely it is to constitute a substantial part. Originality, in the sense of the contribution of the author’s skill and labour, tends to lie in the detail with which the basic idea is presented.
312 Here each logo is a working of the numerals “88”. Conceptually, this idea is unsurprising. It is a component part – indeed, an important part – of the name OPTICAL 88. I doubt that the concept of developing a logo in which those numerals played a prominent part was inspired by the applicant’s logo. But even if it was, that circumstance, by itself, would not give rise to copyright infringement. The taking of an idea or concept is not an infringement of copyright without the resulting work being a reproduction, or a reproduction of a substantial part, of the artistic work itself expressed in material form.
313 In my view the rendering of the numerals “88” in the applicant’s logo and the first respondent’s logo is quite different. The applicant’s logo quite definitely shows a spectacle frame. The fact that the other two circular elements show a pair of lenses is not readily apparent to my eye without the benefit of Mr Wong’s explanation of his artistic concept. Seen in the context of the name OPTICAL 88, one can appreciate that the complete but separate circles used for the spectacle frames and the lenses function also to represent the numerals “88”. However, the name OPTICAL 88 is not part of the applicant’s logo. Absent Mr Wong’s explanation and the context provided by use of the name OPTICAL 88 in conjunction with the applicant’s logo, what one sees in the applicant’s logo is four separate circular elements, two of which are bridged to form spectacle frames. These elements are set on a square background.
314 The first respondent’s logo, in execution, bears the artistic concepts to which Mr Lam referred. The numerals “88” are taken and then reworked. The shape is broken (opened) at one part; in other parts the lines are connected as if fused, forming a complex geometric shape. This is quite different, conceptually and visually, to the more sparse use of the separate four circular elements in the applicant’s logo. The presence of the name OPTICAL 88 in the first respondent’s logo prompts the viewer to consider that this complex shape is a working of the numerals “88”. Added to this are the smaller circular elements (described by Mr Lam as “internal dots”) which were said to have been provided for balance so that people would recognise the shape as the numerals “88”. The first respondent’s logo is generally used without any background device. On writing paper a coloured background is used which is slightly rectangular, covering the shape and the name OPTICAL 88 placed beneath it.
315 In light of the way in which the applicant has defined the first respondent’s logo, I have given particular attention to the rendering of the numerals “88” in the first respondent’s logo.
316 In my view the first respondent’s logo is not a reproduction of, or a reproduction of a substantial part of, the applicant’s logo. It follows that the making and reproduction on business cards and customer reminder cards and the like of the first respondent’s logo, without the applicant’s authority, is not an infringement of the applicant’s copyright in its logo.
317 I would add that my finding of deceptive similarity with respect to the use of the first respondent’s logo as a trade mark (compared to the ‘979 mark and the ‘545 mark) does not compel a different conclusion. The test for determining deceptive similarity in the context of trade mark infringement involves an analysis that is quite different to the analysis involved in determining whether there has been an infringing reproduction for copyright purposes. The two tests should not be confused. In particular, one test should not be incautiously applied as a proxy for the other.
318 My finding on the question of copyright infringement does not involve a consideration of the motives which may have actuated Mr Law’s decision to obtain a logo for the first respondent or his choice of logo from the options presented for his consideration by Mr Lam. However, in light of the matters put to him in cross-examination, and in fairness to him, I wish to make it clear that I am not satisfied on the evidence that Mr Law acted with any improper motive in these matters.
trade practices act claims and passing-off
The pleaded case
319 The applicants pleaded case with respect to passing-off and contravention of the Trade Practices Act coincided with its pleaded case with respect to trade mark infringement, in that it centred on the alleged “Unauthorised Conduct”: see [76].
320 The context for this conduct was alleged to be the applicant’s reputation in what it described as “the Optical 88 Branding”, meaning the name OPTICAL 88, the name “OPTICAL 88” (in Chinese characters), the applicant’s logo, its pleaded registered trade marks, and combinations of these indicia. This reputation was alleged to be a reputation in Australia or, alternatively, a reputation in the Sydney metropolitan area (including particularly the suburbs of Campsie, Chatswood and Eastwood) that existed in the form of an association of the OPTICAL 88 Branding with the applicant in respect of the goods and services for which the pleaded registered trade marks were registered, as well as goods and services of the same description, and closely related goods and services.
321 The applicant pleaded that, by engaging in the Unauthorised Conduct, the respondents (or a combination of one or more of them) have passed-off goods and services as being provided by the applicant, as being associated with the applicant or its goods or services, or as having the endorsement, approval or sponsorship of the applicant, when in fact they are not and do not. The applicant also pleaded that the respondents have passed-off themselves as being associated with the applicant or its goods and services, or as having the endorsement, approval or sponsorship of the applicant, when in fact they are not and do not. The applicant also pleaded that Mr and Mrs Law, or one of them, directed, procured and controlled the first respondent and/or had been directly or indirectly knowingly concerned in its acts.
322 The applicant’s pleaded case with respect to contravention of the Trade Practices Act proceeded on the same lines as its pleaded case with respect to passing-off, save that the allegations were made specifically against the first respondent. The applicant pleaded that, by its conduct, the first respondent engaged in conduct that was misleading or deceptive or likely to mislead or deceive (in contravention of s 52 of the Trade Practices Act) or constituted the making of false representations (in contravention of s 53 of the Trade Practices Act). The applicant did not identify which paragraph or paragraphs of s 53 had been contravened. The applicant pleaded that Mr and Mrs Law, or one of them, aided, abetted, counselled or procured the first respondent’s contraventions or had been, directly or indirectly, knowingly concerned in or party to those contraventions.
323 It is convenient to consider, first, the Trade Practices Act claims by reference to the allegation of contravention of s 52.
Relevant legal principles
324 The conduct in issue in the present case is conduct directed to a section of the public at large, being retail purchasers of optical goods and accessories and of optometry services of the kind supplied by the first respondent.
325 In dealing with conduct of that kind, the High Court in Campomar Sociedad, Limitada v Nike International Limited (2000) 202 CLR 45 at [102]-[103] spoke of the necessity to isolate a representative member of the class of prospective purchasers who can be described as “ordinary” or “reasonable” and to whom objectively-derived characteristics can be attributed. Such a person would not, for example, fail to take reasonable care of his or her own interests.
326 It is against the standard of that person that one considers whether, and if so why, misconception has arisen or is likely to arise in the respects that are alleged to give rise to the contravention.
327 The parties did not dispute this general principle. They were at issue, however, as to the time at which the perceptions or reactions of such a person should be considered.
328 The respondents submitted that the relevant date was the same as for passing-off, namely the date of commencement of the impugned conduct: Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd (1980) 32 ALR 387 at 397; Thai World Import & Export Co Ltd v Shuey Shing Pty Ltd (1989) 17 IPR 289 at 302-303; Health World Ltd v Shin-Sun Australia Pty Ltd (2008) 75 IPR 478; [2008] FCA 100 at [76]; Sydney Markets Ltd v Sydney Flower Market Pty Ltd [2002] FCA 124 at [103]; Anheuser-Busch Inc v Budejovicky Budvar (2002) 56 IPR 182; [2002] FCA 390 at [237]; Mobileworld Communications Pty Ltd v Q & Q Global Enterprise (2003) 61 IPR 98; [2003] FCA 1404 at [124]; Hansen Beverage Co v Bickfords (Australia) Pty Ltd (2008) 75 IPR 505; [2008] FCA 406 at [52]; Nature’s Blend Pty Ltd v Nestle Australia Ltd (2010) 86 IPR 1; [2010] FCA 198 at [12]-[13].
329 The applicant, on the other hand, submitted that this was a general but not absolute rule. It pointed to the observations of Gummow J (when in this Court) in Thai World concerning the position of a claimant, in proceedings for passing-off and contravention of ss 52 and 53 of the Trade Practices Act, who, after the commencement of the impugned conduct, ceased its own operations to the extent that it allowed its own reputation (and hence goodwill) in a particular trade indicium to be lost. His Honour said (at 302):
But these authorities proceed on the footing that the complainant’s trade under the mark in question continues thereafter, the point being that the complainant’s goodwill is not to be taken as eroded by the wrongful trading of the other party in the period before the institution of and the resolution of proceedings between them. The complainant cannot preserve its position in this way if, in the meantime, it allows its own trade to fall away. It must be a question of fact and degree at what point of time a trader, who ceases the relevant operations, should be treated as no longer having the benefit of the goodwill that accrued therefrom: Ad-Lib Club Ltd v Granville [1972] RPC 673 at 677. When this point has been reached the question will not merely be one of the effect of delay upon entitlement of the plaintiff to equitable relief. If the plaintiff has relinquished its trading goodwill, it has lost that which underpinned its standing to complain of passing off and of contravention of s 52 of the TP Act: see the approach taken by Wilberforce J in Norman Kark Publications Ltd v Odhams Press Ltd [1962] RPC 163, especially at 176, which is to be preferred to that of Hudson J in Ballarat Products Ltd v Farmers Smallgoods Co Pty Ltd [1957] VR 104. This is of major significance in assessing the claim of Thai World in the present litigation concerning the mung beans sold in blue packets.
330 In that case the complainant (Thai World) claimed a reputation in a particular product in blue packaging which it had ceased to use at about the time of the introduction of the impugned goods in 1984. At about that time Thai World commenced using alternative packaging in a different colour (green). At a later time (in 1988) Thai World re-introduced the product in its original blue packaging.
331 His Honour made the following finding (at 303):
In the light of the evidence, I also accept that any goodwill and reputation in Victoria and South Australia in relation to the marking and get-up of the Thai World blue packet had faded some time before 1988. That desuetude is the result of the switch by Thai World to the green packet coupled with Thai World’s delay with knowledge, in pursuing any rights it may have had upon becoming aware (some time between 1984 and 1985) of sales of the Sun World blue packet. Thai World took a decision at that time to do nothing because, as Mr Kimson put it, the quantity and the money involved were not then very great, but that was a significant omission on Thai World’s part. To adapt what was said by Deane and Fitzgerald JJ in Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 204, the consequence of this loss of reputation is that when in 1988 the Thai World blue packet was reintroduced into Victoria and South Australia in some numbers, any likelihood of deception could not properly be seen as the result of conduct of Shuey Shing in continuing its by then well established trade in the Sun World blue packet. The cause of any such likely deception would not be any conduct for which Shuey Shing was responsible; rather it would be the re-entry upon the market of the Thai World blue packet: cf Parkdale Custombuilt Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 199, per Gibbs CJ; 42 ALR 1.
332 In the present case, the applicant sought to advance what it submitted was an obverse proposition: if a complainant “reinforces” its reputation, such that, between the date of commencement of the impugned conduct and the commencement of proceedings, its reputation is “stronger”, it is entitled to rely on that “stronger” reputation in the proceedings for the purpose of establishing that a contravention has occurred as alleged.
333 In my view the applicant’s proposition cannot be derived (or even discerned) from the proposition discussed by Gummow J in Thai World. If, in the present case, the applicant can establish that, as at the date of commencement of the impugned conduct (August 1993), it had a sufficient reputation to sustain its claim that the first respondent has contravened s 52 of the Trade Practices Act, it does not need to rely on any intervening strengthening of that reputation in the period before the commencement of proceedings, although any strengthening of its reputation may be a matter that is relevant to the question of relief: Nature’s Blend at [13]. If, on the other hand, the applicant cannot establish that, as at the date of commencement of the impugned conduct, it had a sufficient reputation to sustain its claim, I cannot see how any after-acquired reputation can assist it in the face of what would otherwise have been the legitimate commencement and continued conduct of the first respondent’s business.
334 For the purposes of this aspect of the applicant’s claims, I propose to consider the first respondent’s impugned conduct at the time it commenced in August 1993. In my view this approach accords with both principle and established authority.
335 The parties were also at issue on the question of the extent of the applicant’s reputation that was required at the relevant time in order to establish a contravention of s 52 of the Trade Practices Act.
336 The applicant submitted that it was sufficient for it to establish that a not insignificant number of the relevant class of purchasers would be, or would be likely to be, misled or deceived. On the other hand the respondents submitted that it was necessary for the applicant to establish that a substantial number of the relevant class of purchasers would be, or would be likely to be, misled or deceived. In the context of passing-off, a similarly expressed test is used although, in that context, one uses that test to determine the existence of goodwill, as a form of property, in respect of which questions of damage or injury are addressed.
337 At first instance in Hansen Beverage Middleton J was confronted with a similar debate. His Honour noted Full Court authorities of this Court which had adopted the approach that, in order to establish a contravention of s 52 of the Trade Practices Act based on conduct falling to be assessed in light of another’s pre-existing reputation in the market place, an applicant must prove that a “significant” or “substantial” number of persons within the relevant market would be, or would be likely to be, misled or deceived: see 10th Cantanae Pty Ltd v Shoshana Pty Ltd (1987) 79 ALR 299; National Exchange Pty Ltd v Australian Securities and Investments Commission (2004) 61 IPR 420; [2004] FCAFC 90; see also Siddons Pty Ltd v The Stanley Works Pty Ltd (1991) 29 FCR 14 at 20 (Wilcox and Heerey JJ) and at 23 (Burchett J); Pacific Dunlop Ltd v Hogan (1989) 23 FCR 553 at 581 (Beaumont J). I observe that, in Thai World, Gummow J (at 303) referred to a “sufficiently substantial number of persons”.
338 In Hansen Beverage Middleton J also noted (at [42]) the first instance observation of Hill J in ConAgra Inc v McCain Foods (Aust) Pty Ltd (1991) 101 ALR 461 at 488 that it may well be that the threshold for establishing a contravention of s 52 is lower than that for passing-off. His Honour also noted the observations of French J (when in this Court) on appeal in ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 381 to the effect that it cannot be concluded that conduct is misleading or deceptive if the extent of the reputation relied on to establish that conduct is “commercially irrelevant having regard to the number of people who know of it”.
339 In the end, Middleton J (at [44]) approached the operation of s 52 of the Trade Practices Act in this regard as requiring that a significant or substantial number of persons would be, or would be likely to be, misled or deceived. In doing so, however, his Honour said that he was inclined to the view that the difference between the two stated approaches (“significant” or “substantial” v “not insignificant”) was a matter of expression and not one of quantitative substance.
340 On appeal (Hansen Beverage Company v Bickfords (Australia) Pty Ltd (2008) 171 FCR 579) Tamberlin J at [44] noted that s 52 of the Trade Practices Act imposes no requirement that any particular reputation must be established before a contravention of s 52 can be established. His Honour expressed the test in terms of “a not insignificant number of persons” but used that expression interchangeably with “a significant number of persons”: see at [46]-[47]. Finkelstein J (at [55]) noted the debate on this issue and referred to his own view expressed in Australian Securities and Investments Commission v National Exchange Pty Ltd (2003) 202 ALR 24; [2003] FCA 955 and .au Domain Administration Ltd v Domain Names Australia Pty Ltd (2004) 207 ALR 521; [2004] FCA 424 to the effect that there was no warrant for imposing a requirement that, in a case such as the present, significant members of the public must be misled by the impugned conduct before there can be a contravention of s 52 of the Trade Practices Act. His Honour also noted, however, that on appeal (National Exchange Pty Ltd at 439-440), the Full Court (per Jacobson and Bennett JJ) did not agree. Siopis J in Hansen Beverage at [66] expressed the view that the question should be whether a not insignificant number of persons in the Australian community, in fact, or by inference, have been misled or are likely to be misled. His Honour (at [71]) considered that expressing the question in this way was more consistent with the language of s 52. Nevertheless, his Honour concluded (at [72]) that it cannot be said that the Full Court decisions were plainly wrong and for that reason should not be followed.
341 I would not understand the Full Court decision in Hansen Beverage to have overruled the prevailing line of authority that expresses the relevant test in terms of a “significant” or “substantial” number of persons who would be, or who would be likely to be, misled or deceived. However, I share, with respect, Middleton J’s view that any perceived difference in approach is really a matter of expression and not of quantitative substance.
342 The issue is one of the characterisation of conduct, not the reactions of consumers or others to that conduct: per French J in ConAgra at 380. By positing a threshold requirement of a “significant” or “substantial” number of relevant purchasers, all that is meant (to borrow Gummow J’s words in Thai World) is that a “sufficiently” substantial number of relevant purchasers would be, or would be likely to be, misled or deceived by the conduct, such as to justify it bearing the statutory characterisation of “conduct that is misleading or deceptive or is likely to mislead or deceive”. The task of characterisation is plainly one to be undertaken with the object of the Trade Practices Act in mind, namely “to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection”: s 2. While commercially irrelevant conduct may not bear the statutory characterisation, none of the cases suggest, by whatever formulation is adopted as a test for the purpose of s 52, that commercially relevant conduct is to be ignored. With that understanding in mind, the assessment of the nature and extent of the conduct that is required to bear the statutory characterisation is a matter of judicial estimation having regard to all the facts and circumstances of the case. The Trade Practices Act sets no more definite or precise normative standard.
343 The applicant relied on five strands of evidence to establish that it had a reputation in Australia in the name OPTICAL 88 that was sufficient to establish that the first respondent’s conduct contravened s 52 of the Trade Practices Act.
344 First, the applicant relied on evidence of its trading and promotional activities in Hong Kong as a step along the path to establishing a reputation in Australia. I have already discussed the evidence concerning the establishment and conduct of the applicant’s business.
345 Secondly, the applicant relied on evidence of the publication (electronically and in paper form) of Chinese language newspapers and magazines in Australia which may have carried advertising relating to the applicant’s business, especially in Hong Kong. This evidence found expression principally through an affidavit by Ms Armstrong, a paralegal clerk employed by the applicant’s solicitors, who carried out various searches and made various inquiries (including of libraries and newsagencies) in 2008.
346 Without intending any criticism whatsoever of Ms Armstrong (who no doubt carried out the task she was directed to do), a number of deficiencies were exposed in this body of evidence in the course of her cross-examination. No advertisement was tendered as one that had been published in Australia relating to the applicant or its business. Ms Armstrong did not acquaint herself with any of the applicant’s advertisements or the dates on which they may have been published, before undertaking her work. With respect to the websites she visited, she did not seek to determine how long they had been in existence. Specifically, she did not seek to determine whether the websites were available in the period 1988 to 1993. She did not seek to determine whether the contents of any publications on a website were the same as the contents of any corresponding print publication. In undertaking her enquiries of libraries and newsagents, she did not seek to ascertain which editions of publications had, in fact, been held or were available for sale.
347 In my view this evidence was of no probative value beyond establishing that, in 2008, certain newspaper and magazine titles published in Hong Kong were also available in Australia, and that certain websites relating to those titled publications could be accessed in Australia. That evidence does not assist the applicant in proving the existence of a reputation in Australia as at August 1993.
348 Thirdly, the applicant relied on sales to consumers resident in Australia. The documentary evidence of these sales, however, was limited to the period October 2004 to October 2007. Plainly that evidence does not assist the applicant to prove the existence of a reputation in Australia as at August 1993. The existence and extent of the applicant’s sales to consumers resident in Australia as at or before August 1993 is simply not revealed in the evidence.
349 Fourthly, the applicant relied on evidence of migration patterns and demography.
350 Fifthly, the applicant relied on survey evidence.
351 I now turn to consider these last two strands of evidence.
Migration patterns and demography
352 The applicant adduced a body of evidence specifically about migration patterns from Hong Kong to Australia. The evidence was sourced, principally, in a report prepared by Professor Graeme Hugo for the purposes of this proceeding. At the time of his report, Professor Hugo held the position of Professor in the Department of Geographical and Environmental Studies at the University of Adelaide.
353 The respondents objected to this report but, ultimately, the parties were able to resolve between themselves all evidentiary objections, and a redacted version of the original report was, by agreement, tendered. Professor Hugo was not cross-examined. No contrary evidence on the matters deposed to by him was tendered by the respondents. This body of evidence thus stands unchallenged.
354 Professor Hugo’s report was based on the academic literature touching this subject and data obtained from various sources, including the Australian Bureau of Statistics (ABS), the Bureau of Immigration, Multicultural and Population Research, and other Australian governmental sources. Professor Hugo referred to the fact that Australia has one of the most comprehensive and accurate international migration data sets of any country in the world. The following findings are based on Professor Hugo’s report as admitted into evidence.
355 Since the 1950s there has been an increase in the permanent settlement of Asians in Australia. The pattern of migration shows that this has occurred in waves in which particular Asian birth places reflect the dominant groups of permanent settler arrivals at particular times.
356 The data show that the flow of settler immigrants from Hong Kong increased steadily from a low base in the 1970s and grew rapidly in the late 1980s, peaking in the early 1990s. In 1991-1992 Hong Kong was the largest source of migration to Australia. This has been attributed, principally, to the decision of the United Kingdom Government in 1983 to return Hong Kong to China in 1997. The data show, however, that there was a significant fall in the level of migration from Hong Kong in 1992-1993, and especially 1993-1994. Thereafter there was a small increase in the mid 1990s as 1997 approached, with a subsequent decline. This reduction has been so great that there has been a net migration loss to Hong Kong from Australia in more recent times: those leaving Australia permanently to live in Hong Kong have outnumbered those moving from Hong Kong to Australia. The data show that, in 2007-2008, Hong Kong was ranked as the 27th largest source of migration to Australia.
357 The pattern of migration from Hong Kong to Australia (as well as from Hong Kong to other countries such as Canada, the United States of America and New Zealand) in the 1980s and 1990s reflects (what came to be known as) “astronauting”: entry to Australia was on the basis of permanent settlement with, typically, the male head of the household returning temporarily to Hong Kong to maintain a business activity there, and then commuting between Hong Kong and Australia, with the rest of the family remaining in Australia. However, it is difficult to establish what proportion of Hong Kong settlers to Australia were “astronauts”. A 1993 Canadian study found that 11% of respondent families had “astronaut” parents and 13% of respondents indicated that they may return to Hong Kong in the future. Be that as it may, in Australia skilled migrant immigration in fact outnumbered family immigration significantly. For example, in 1990-1991 there were more than 21 skilled Hong Kong migrants for every family settler arrival. Skilled migrants continue to be the largest visa category in relation to permanent settlement in Australia from Hong Kong.
358 The major migration pattern at the present time is for Hong Kong residents (mainly skilled workers) to arrive on temporary visas and then to seek, and take-up, permanent resident status. However, in the mid 1980s, long term (greater than one year) temporary migration from Hong Kong was a contributing factor to migration from Hong Kong to Australia. The data show that there was a sharp upturn in long term (temporary) migration from Hong Kong in the mid 1980s around the same time as there was an upturn in permanent migration from Hong Kong to Australia. However, unlike settler arrivals in the 1990s, there was a continuation in growth in long term (temporary) migrants throughout that decade. Student migration has been a factor. In 1992, 18.5% of overseas students arriving in Australia were from Hong Kong (representing 9,721 students). In 1993 the proportion was 14.9% (representing 12,633 students). Since that time the proportion has been declining (although, as a general trend, total student numbers have been rising).
359 The evidence was that most Hong Kong-born people in Australia have made temporary moves out of Australia since arriving here. The literature suggests that this population group exhibit “hyper mobility”. The data show that, of those residents who settled in Australia prior to 1998 and made trips out of Australia in the period 1998 to 2006 (79,565 residents), 80% made 5 or more trips. Of those who settled permanently in Australia in the period 1998 to 2006 and made trips out of Australia in the same period, 54% made five or more trips. In each case the data do not indicate the place of destination outside Australia. I would assume, however, that for a significant number of those trips, the destination was Hong Kong. Correspondingly, of the total number of Hong Kong visitors to Australia in the same period (123,502 visitors), 84% had visited Australia 5 times or more.
360 Hong Kong-born residents have a spatial distribution that differs from that of the total Australian population. The main features of distribution of the Hong Kong-born are: concentration in New South Wales; concentration in major cities; and concentration in particular suburbs.
361 In 1991, 55.2% of Hong Kong-born residents were resident in New South Wales (compared with 34.2% of the total Australian population). In 2006, 53.4% of Hong Kong-born residents were resident in New South Wales (compared with 33% of the total population).
362 In 2006, the two largest communities of Hong Kong-born residents were Sydney (54% of the Australian community of Hong Kong-born) and Melbourne (23.6% of that community).
363 The distribution of Hong Kong-born within Sydney has varied over time. For example, in 1986 there was a strong pattern of concentration in the inner and middle suburbs of the eastern part of the Sydney Statistical Division, with a strong representation in the higher socio-economic status suburbs. This was said to reflect the fact that many migrants from Hong Kong had come to Australia as entrepreneurs or highly skilled persons likely to be in a higher income bracket. The distribution was also said to reflect the fact that the majority of the Hong Kong-born in Sydney at that time were students who tended to live in the inner suburbs to be close to major universities.
364 However, by 1991 a concentration in the northern suburbs of Sydney had begun to emerge as the predominant pattern of distribution in Sydney of Hong Kong-born residents. This distribution was said to reflect the fact that, by 1991, an influx of business people and professionals had begun and was about to peak. It was said that they were financially able to, and did, purchase housing in the higher status suburbs of the North Shore.
365 The data show that, in 1991, 2.8% of the total population in the local government area of Willoughby City Council were Hong Kong-born (representing 1,407 residents), 2.3% of the total population in the local government area of Ryde Municipal Council were Hong Kong-born (representing 2,069 residents), and 1.3% of the total population in the local government area of Canterbury Municipal Council were Hong Kong-born (representing 1,586 residents). The applicant drew particular attention to these local government areas because Chatswood, Eastwood and Campsie (where the first respondent’s business operates) are located, respectively, in these local government areas.
366 This data is illuminating because, although the evidence shows peak migration flows from Hong Kong in the early 1990s, and an emerging concentration of the Hong Kong-born in Sydney’s suburban North Shore at about this time, the Hong Kong-born population in the areas to which the applicant drew attention was, nevertheless, small, numerically and proportionally, compared to the balance of residents in those areas.
367 In the 2006 population census, Sydney continued to dominate the list of the largest communities of Hong Kong-born people at the community level. The largest numbers were in Ryde (2,674 residents), Ku-ring-gai (2,542 residents), Hornsby South (2,476 residents), Willoughby (2,345 residents), Hurstville (2,224 residents) and Randwick (2,045 residents). Because it is of relevance to the present case, I should add that the 2006 census also showed that Canterbury had 1,156 Hong Kong-born residents.
368 The data also show that, as at 1991, 41.8% of Hong Kong-born residents arrived in Australia before 1986, with 57% arriving between 1986 and 1991. (I note that 1.2% did not state when they arrived). As at 2006, 77.8% of Hong Kong-born residents arrived in Australia before 2001, with 18.6% arriving between 2001 and 2006. (I note that 3.6% did not state when they arrived). The evidence does not include data that is more regionalised. However, I would see this data as giving a broad indication of the likely pattern of arrival with respect to Hong Kong-born residents in Sydney as at 1991 and 2006, respectively.
369 Unfortunately the data are not specific to the 1993 calendar year. The data with respect to 1991 constitutes, on the evidence, the best source of information relating to the relevant migration patterns and demography as at the critical date of August 1993. In these circumstances, I have taken the data as at 1991 to be broadly indicative of the position in 1993.
370 The data is of significance when considering the question of the existence and extent of the reputation claimed by the applicant in the Sydney metropolitan area, particularly those localities to which the applicant drew attention, in so far as that reputation is said to be derived from an awareness of the applicant’s business and promotional activities in Hong Kong in the period up to August 1993. The data is also of significance when considering what was revealed by the survey conducted by the applicant in July 2009.
371 In 2008 the applicant’s solicitors commissioned Dr Bednall to design a survey to investigate consumer responses to pictures of an optical shop.
372 Dr Bednall is an Associate Professor at the School of Management and Marketing at Deacon University and provides consultancy services in relation to consumer and market research projects. He is a Qualified Practising Market Researcher of the Australian Market and Social Research Society, a registered psychologist for the State of Victoria and a practising academic. His specialist expertise in market research and consumer behaviour derives from his undergraduate and graduate studies, his academic career, his publications, and his experience in the consumer and market research industry. There was no challenge by the respondents to his expertise.
373 In August 2008 Dr Bednall conducted a series of qualitative interviews in Chatswood, Sydney. This was a preliminary study aimed at understanding the reactions of people from a Hong Kong or Malaysian background, who were born outside Australia, to a photograph of one of the applicant’s stores. It was also aimed at testing a draft questionnaire for a quantitative survey. I have already discussed some features of the quantitative survey that was conducted in July 2009 when dealing with some aspects of the applicant’s case on trade mark infringement. In order to understand the results of the survey, it is necessary to note a number of the survey’s features, albeit at the risk of some minor repetition of the matters I have already discussed.
The survey methodology and its implementation
374 The quantitative survey designed by Dr Bednall had the following significant features.
375 First, shopping centres were selected as suitable locations for data collection. Dr Bednall specified that the survey should be conducted in two groups of shopping centres. The first comprised shopping locations in Sydney that contained the first respondent’s stores (Campsie, Chatswood and Eastwood), but not within sight of those stores. The second group comprised shopping locations where the first respondent did not conduct business (Hornsby, Randwick and Ryde). These locations were chosen because they were likely to have above average concentrations of residents born in Hong Kong and other countries where the applicant’s stores are located. The survey was designed so that there would be 180 interviews in each group, with a minimum of 30 in each location. There were quotas for males and for females in each of three age groups (16-24, 25-44, 45 and over). These age groups were based on ABS estimates of the population of Hong Kong-born people living in Sydney.
376 Secondly, Dr Bednall specified that the relevant population of interest should be people resident in Sydney who were born in Hong Kong, Macau, Singapore or Thailand, who were aged 16 years and over and wore contact lenses or spectacles. The bulk of the interviewees were to come from Hong Kong. Dr Bednall’s rationale was that, if interviewees were to have any familiarity with the applicant’s stores, then they were likely to have migrated from Hong Kong and Macau and, to a lesser extent, Singapore or Thailand.
377 As I have earlier recorded, in the end result, 83% of interviewees were born in Hong Kong, 1.1% were born in Macau, 12.2% were born in Singapore and 3.7% were born in Thailand.
378 Thirdly, as the major focus of the survey was on people from the countries I have identified, who may be relatively recent arrivals in Australia, Dr Bednall considered it to be preferable that interviewees be given the option of being interviewed in either Cantonese or English. It followed that interviewers had to be fluent speakers of Cantonese and English and be able to write answers in either Chinese or English. In the end result, 57% of interviews were conducted in Cantonese and 43% in English.
379 Fourthly, the stimulus materials comprised “generic” pictures of an optical shop in black and white. The shop design did not match any particular optical shops in Australia or elsewhere. Three versions of the one picture were used. One version (Picture Q) was the generic optical shop with no branding on the front hoarding. The second version (Picture R) was the generic optical shop with the words OPTICAL 88 on the hoarding. The third version (Picture V) was the generic optical shop with branding comprising (what the parties accepted to be) the ‘707 mark on the hoarding. Each interviewee only saw one of the pictures and was questioned about that picture.
380 Fifthly, the survey questions were open-ended questions, as opposed to pre-coded or closed questions that would elicit a “yes” or “no” response. It followed that interviewees’ answers, as expressed by them (open-ended responses), were recorded. Dr Bednall specified that the open-ended responses to the survey questions should be “coded” independently to avoid any possibility of biasing the coding process by suggesting what issues were important. “Coding” involves the grouping or categorising of perceived similar responses against a “code frame”.
381 The methodology originally proposed for the survey was provided to the respondents’ solicitors for comment. A number of comments and criticisms were made. These resulted only in some changes to the sample quotas. A number of issues thus remained between the parties. These were the focus of evidence from the respondents through Mr David McCallum, a market researcher having some 30 years experience in market research, including as Managing Director of Global Customised Research, AC Nielson and Managing Director of Asia Pacific Customised Research, AC Nielson. There was no challenge by the applicant to Mr McCallum’s expertise.
382 Other design changes were made as a result of advice given by Roy Morgan Research, which was commissioned by the applicant to manage and conduct the survey and to code the data. It is not necessary to go into the detail of those changes or the reasons for them. Roy Morgan Research recruited, trained and supervised interviewers for the survey in the six centres. A survey contractor was also engaged by Dr Bednall to act as an independent observer to ensure that the basic survey requirements were being implemented.
383 Dr Bednall gave evidence that, because of the small numbers of Hong Kong and other qualified people, relative to the Sydney population, the survey had to be conducted over many days in the six centres. For this reason, a screening question was included to ensure that an interviewee was only questioned once, even if that person had made multiple trips to one or more of the centres. The survey field work was carried out over the period 11 to 26 July 2009. Over 9,164 people were approached and out of these 1,576 agreed to be interviewed. However, most of these did not qualify for interview and were, therefore, “screened out” by the screening question process. Of the 525 qualified people, 460 gave complete interviews.
384 The data obtained from the survey was then statistically analysed by Dr Bednall. I will deal with some of the more pertinent findings for present purposes.
385 When interviewees who were shown Picture R or Picture V were asked (question 4) whether they remembered seeing any shop or shops using the sign shown in the pictures (that is, the name OPTICAL 88 or the ‘707 mark) 59% or more said “yes”: see Table 5 of Dr Bednall’s 2009 Report (Dr Bednall’s Report). Interviewees who said “no” or “don’t know” were then prompted to respond again by the following question (question 5): “Just to check, do you remember seeing any shop or shops anywhere using this sign, including in any suburb or country?” The respondents criticised this question as leading to an answer suggesting the possibility of use of the sign overseas. The question increased the “yes” answer by about 7% overall: see Table 6 of Dr Bednall’s Report.
386 Those who answered “yes” to question 4 or question 5 were then asked to state where the shop or shops were (question 6). Interviewees were permitted to give multiple locations. The interviewees gave a variety of answers, some giving locations both in and outside Australia. No interviewee responded with more than four locations. Mr McCallum criticised Dr Bednall’s presentation of the responses that were given in Table 8 of his report because of an inconsistent aggregation of responses and a reduction in the sample base on which percentages had been calculated. Mr McCallum re-expressed the data in his own version of Table 8. He accepted that his re-expressed results, considered as having been done in relation to “a general commercial sample”, were “reasonably robust”. Mr McCallum’s re-expression of the data showed that, of the responses given, 48.7% of interviewees identified Hong Kong and its environs and 40.8% of interviewees identified Sydney, as locations where they had seen the sign in either Picture R or Picture V. Of the latter responses, 24.6% of interviewees gave a location that was either Campsie, Eastwood or Chatswood, and 17.8% of interviewees gave another Sydney location. It is important to note that all of these responses, in relation to both Hong Kong and Sydney (and, indeed, other locations) were based on the knowledge of interviewees as at the date the survey was conducted, namely July 2009.
387 However, interviewees were subsequently asked about when they first saw the shop at each location they had identified, using the sign in either Picture R or Picture V. The responses yielded a range of periods, from responses to the effect of “last year” up to responses to the effect of “20 or more years ago”. Of the responses recorded in Table 10 of Dr Bednall’s Report, over 70% said that they had first seen such use in the last 16 years (that is, at a time which can be taken to be after the commencement of business by the first respondent).
388 Mr McCallum criticised the presentation of this data in Table 10 and the conclusions that could be derived from it, particularly as reflected in the results presented in Table 11 of Dr Bednall’s Report.
389 First, Mr McCallum identified (what Dr Bednall accepted to be) a significant coding error: a number of interviewees had indicated their first awareness to have been “in the 1990s”, but their responses had been incorrectly coded as an awareness of “20 years or more”. Because of the imprecise nature of these responses, there was no way in which they could be allocated correctly to any one group of responses (except to say that, as a minimum, they should be classified as 10 years ago). Significantly, it could not be said whether the awareness of these interviewees arose before or after August 1993. What can be said, however, is that the error is likely to have reduced (by some measure) the number of people expressing an awareness of the signs 16 or more years ago. Mr McCallum examined the responses of this latter group (comprising 27 interviewees) and identified other coding errors affecting the presentation of data in Table 11 of Dr Bednall’s Report (to which I will shortly refer), which Mr McCallum said was not, as a result, reliable. The data showed that 15 of the interviewees came to Australia in 1994 or later (that is, after the commencement of business by the first respondent).
390 Secondly, Mr McCallum called into question, more generally, the reliability of the responses given by interviewees of when they first saw the sign in Picture R or Picture V. Mr McCallum commented on the fact that, when given such a task, interviewees will often turn to timeframes used in day-to-day intercourse (for example, a week ago, a month ago, a year ago, 5 years ago, 10 years ago, and so on). They will not generally give a specific year, unless it represents a main event in their lives. In this connection Mr McCallum noted a spike in the responses to this question corresponding with the handover of Hong Kong in 1997. Mr McCallum saw this problem of recall being compounded because the survey relied on responses that were too open-ended to be sufficiently meaningful (such as, for example, the reference to “the 1990s” referred to above).
391 Dr Bednall accepted that estimates of time are subject to errors of estimation and that the information that comes from these answers should be treated cautiously. However he argued that, for this sample, somewhat better recall might be expected from interviewees because of their memory of when they migrated to Australia or had made trips back to places of their birth, which would act as a reference point for them when giving answers.
392 In Table 11 of his Report, Dr Bednall represented the data to show the location by time when an interviewee first saw a shop having the sign in Picture R or Picture V. Dr Bednall concluded that, in the case of the Hong Kong and other Asian shops that had been nominated, the majority of the estimates (excluding certain “other responses”) were for 10 years or more whereas, in the case of Australian locations that had been nominated, the majority of the time estimates were for three years or less (excluding certain “other responses”).
393 In relation to the Hong Kong locations, Dr Bednall recorded that 11.4% of interviewees had expressed a first awareness of such a location in the last 20 years or more. As I have noted, Mr McCallum called into question the reliability of the data presented in Table 11 because of the coding errors he had identified. His analysis of the interviewees’ individual records led him to conclude that the figure of 11.4% referred to by Dr Bednall should in fact be 5.2%. Dr Bednall did not comment on this recalculation, other than to accept the initial significant coding error to which I have referred. Thus it can be accepted that Dr Bednall’s 11.4% figure, as reported in Table 11, is inaccurate. Taking Mr McCallum’s recalculation, Table 11 indicates that (excluding certain “other responses”) a clear majority of interviewees (58.5%) who recalled seeing a shop in Hong Kong with the sign in Picture R or Picture V said that they first recalled seeing such a shop in the last 16 years (that is, after the first respondent commenced business), with 8.5% saying they first recalled seeing such a shop prior to that time. Of course what remains in question is the reliability, in any event, of that recollection given the lengthy period of time involved.
394 There were a large number of other criticisms made about the survey methodology and results. It is not necessary for me to deal with all of these. I will however, note two additional criticisms that were significant for present purposes.
395 First, the respondents submitted that the survey failed to meet its objectives in that it could not reliably establish that the applicant had a reputation in Australia or that a member of the public would be likely to confuse the first respondent’s business for the applicant’s business, or otherwise consider the businesses to be affiliated with or related to each other.
396 The applicant accepted that it had initially informed the respondents that the purpose of the survey was to measure the reputation of the applicant’s branding elements in relation to optical shops at relevant times, but that it was plain that the survey did not measure the applicant’s reputation (or, perhaps more specifically, the nature and extent of any reputation the applicant had) or show any confusion between the two businesses. Rather, the applicant submitted that the survey was limited to measuring no more than awareness or recognition of the two signs shown in Picture R and Picture V. However, in that regard, the applicant submitted that the survey showed that, at the time it was conducted in July 2009, a very significant number of the “population of interest” recognised the signs as signs seen on shops in Hong Kong. Thus, the applicant submitted, the signs had a “secondary meaning” at the present time. I will return to this matter when considering, more generally, the parties’ submissions on this topic. It is sufficient to highlight for present purposes that the critical question is the existence, nature and extent of the applicant’s reputation in Australia as at August 1993.
397 Another significant criticism related to the sample used for the survey. Although the respondents accepted that interviewing predominantly people of Hong Kong origin was not, of itself, unreasonable, they submitted that the sample was deficient because it included those aged between 16 to 24 years of age. Dr Bednall acknowledged that over 20% of those interviewed were in this age group.
398 Mr McCallum gave evidence that, in commercial market research, it was not common to ask interviewees questions on topics that took place during the distant past, especially in early childhood, due to the degree of difficulty in the task and the relatively high risk of incorrect recall. His evidence was that, on the assumption that awareness as at July 1993 should have been tested (I have taken the relevant date to be August 1993, but I do not think anything turns on Mr McCallum’s assumption in relation to the preceding month of July), persons under the age of 16 years at that date (or under 32 years of age at the time the survey was conducted in July 2009) should not have been interviewed, because it was unlikely that such persons would be in a position to reliably recall the stimulus material that had been presented for their consideration (namely, the signs in Picture R and Picture V).
399 Dr Bednall was cross-examined on this topic, as follows:
Question: Reflecting on 1992 or 1993 being a relevant date in this proceeding, if you had your way again, would you really have maintained, as an age group that constituted just over 20% of the sample, an age group where the minimum age was 16?
Answer: If I were instructed to focus on people who were of a certain age in 1992, then quite obviously, I would have designed this differently, yes.
400 Dr Bednall later accepted that, realistically, the minimum age of any person to be interviewed in the survey should have been “something like 25”, if testing awareness as at 1992 or 1993 was a relevant consideration in the proceeding.
401 In my view this criticism of the survey and the reliability of its results is well-founded if the results are to be used for any purpose other than for showing awareness of the signs in Picture R and Picture V at the time the survey was conducted in July 2009.
402 Whilst acknowledging that he did not, as part of his analysis of the survey data, focus on answers relating to recognition of the signs in Picture R and Picture V in or before 1993, Dr Bednall accepted in cross-examination that it was possible to use the data to examine responses as to awareness at particular dates. Dr Bednall agreed that it was possible, for example, to do this using the sign in Picture V and 2003 as the date of reported first awareness of that sign.
403 Encouraged by this answer, the respondents undertook such an analysis in their closing submissions, in which they isolated from the 460 interviewees those who claimed to have seen the sign in Picture V; then isolated the interviewees further by reference to their responses to question 19 (when they first arrived in Australia) and questions 4 and 5 (recognition of shops using the sign); then removed interviewees who arrived after 2003 and who did not recognise the sign (thus leaving those who had arrived in Australia before 2003 and recognised the sign); and then sorted the data by the location at which interviewees said they first saw the sign.
404 The applicant, in its closing submissions in reply, criticised that analysis, submitting that there was no evidence that such an analysis would yield a statistically useful result that could be extrapolated to the relevant population of interest. The applicant also submitted that, unless such an exercise is undertaken by an expert, and opened up to criticism by an expert, it cannot be useful because of the need for expert judgment in classifying the data.
405 Whilst it does not seem to me that the exercise actually undertaken by the respondents (focussing as it does on the year 2003) addresses the relevant time for considering the existence and extent of the applicant’s reputation in Australia, it does direct attention to the fact (which the applicant accepted in submissions) that the survey did not attempt to measure the applicant’s reputation at any particular time before the dates on which the interviews were actually conducted. This, in my view, serves to underscore the limited utility of the survey.
406 In summary:
(a) The survey does not measure whether and, if so, to what extent, members of the chosen population of interest were misled or deceived by the first respondent’s conduct in one or more of the ways alleged by the applicant.
(b) The survey does not measure awareness of the signs shown in Picture R (the name OPTICAL 88) and Picture V (accepted to be the ‘707 mark) as at August 1993 by persons who were resident in Sydney on or before that date. Table 16 in Dr Bednall’s report shows that only 41% (approximately) of interviewees first came to live in Australia in or before 1993. It follows that a clear majority of the responses on which Tables 10 and 11 are based were given by interviewees who were not resident in Australia in or before 1993.
(c) The survey only sought to measure recognition by members of the chosen population of interest as at July 2009 of the signs shown in the pictures.
(d) The survey results, as presented, contain coding errors which affect the reliability of parts of those results.
(e) The survey results, as presented, include a significant proportion of responses (approximately 20%) from those in the 16 to 24 years age group as at July 2009 (who would have been aged 8 years or less as at August 1993).
(f) In so far as the survey results show the date of first awareness of the signs shown in the pictures, those results need to be treated cautiously because of possible errors of time estimation and because of the lack of specificity of a number of the responses that were given. In any event, the reliability of those results, as presented, is affected by each of the matters in (d) and (e). For those reasons, I do not regard the results as presented in Tables 10 and 11 of Dr Bednall’s Report as reliable. I accept Mr McCallum’s criticisms of them.
407 Finally, it should be noted that the population of interest in the survey (people resident in Sydney who were born in Hong Kong, Macau, Singapore or Thailand, who were aged 16 years and over and who wore contact lenses or spectacles) does not correlate with the population of Hong Kong-born residents in the data discussed by Professor Hugo. Moreover, as at August 1993 the applicant’s stores were only operating in Hong Kong with one store in Macau. The expansion of that business to other countries (such as Singapore and Thailand) did not take place until later.
The parties’ submissions on the facts
408 The applicant submitted that, whilst it has not operated retail stores in Australia, it has had, since 1993, an established reputation in Australia.
409 The applicant submitted that it had a strong and long-standing reputation in Hong Kong (and elsewhere) in the OPTICAL 88 Branding. In that connection the applicant pointed to the evidence of its business as at August 1993 in terms of the number of shops, annual turnover, advertising expenditure and advertising activities. It identified its principal case as being that, because of a unique pattern of migration and other trade between (in particular) Hong Kong and Australia, there is and always has been an important population in Sydney of Australian residents who migrated from Hong Kong after the applicant’s reputation was established, including those who returned there frequently, including to shop. It submitted that the applicant’s activities in Hong Kong had taught customers for optical goods and services in Hong Kong to recognise these names and marks, and that the customers then moved to Australia in “exceptionally large numbers”.
410 Although based on the so-called OPTICAL 88 Branding, the focus of the applicant’s case was in fact the name OPTICAL 88 as the brand of a chain of retail optical shops in Hong Kong. It submitted that the survey it had carried out established that, as at 2009, the name OPTICAL 88 had a secondary meaning: “a significant proportion of Australian residents who had migrated from Hong Kong (etc) recognised the name OPTICAL 88 and associated it with a chain of optical shops in Hong Kong or (a much lesser extent) the other south-east Asian countries in which the Applicant operates”. Once again, it is to be borne in mind that, as at August 1993, the applicant’s stores were only operating in Hong Kong with one store in Macau.
411 The applicant then submitted that this provided “powerful evidence” of a secondary meaning at “earlier dates”. In short, the applicant submitted that, by having regard to the survey results as at 2009 and, in particular, the level of awareness of the applicant’s business established by the survey as at that date, I should make “a qualitative judgment” about the extent of that awareness as at August 1993 taking into account differences between August 1993 and 2009 in the source of awareness “including the number of shops, the lesser cumulative effect of advertising and word of mouth etc”. It submitted that this was a “routine process”.
412 I should say at the outset that I accept the applicant’s submission to the extent, but only to the extent, that it is necessary for me to form a judgment – which would be aptly described as a qualitative or, perhaps more precisely, an evaluative judgment – about the extent of the applicant’s reputation in Australia as at August 1993. That judgment is one to be based on the objective evidence bearing on that issue, including what the survey results can show about that question. The weight to be given to the survey results as part of that evaluation is another matter. However, it would not be correct to undertake that evaluation by the essentially tendentious approach advocated by the applicant which takes as its starting point the very fact that the applicant wishes to establish as at August 1993, namely that the name OPTICAL 88 had a secondary meaning in Australia (and, in particular, in Sydney) associated exclusively with the applicant and its business in Hong Kong and Macau.
413 The true question – which informs the correct approach – is: what inferences can be drawn, and what conclusions can be made, about the applicant’s reputation in Australia (specifically in those places from which the first respondent was carrying on business) as at August 1993, having regard to (amongst other things) its business and promotional activities in Hong Kong and the movement of Hong Kong-born people to Australia – the two factors which the applicant submitted produced the results recorded in the survey.
414 The applicant also advanced a slightly different submission. It submitted that a survey conducted in 1993 would have produced broadly similar results to the survey conducted in 2009. This submission was based on the hypothesis that there was (what the applicant submitted to be) “a continuum”: in 1993 the population in Sydney of Hong Kong-born people was “already substantial” and “similar to that today” and in 1993 (it submitted) the applicant’s reputation in Hong Kong was broadly similar to that today, accepting that the cumulative impact of sales and advertising in 1993 would have been less.
415 The obvious difficulty with that submission is the applicant’s hypothesis that there is “a continuum”. The applicant’s acceptance that the cumulative impact of its sales and advertising would be different over the sixteen year period between 1993 and 2009 shows that the hypothesis is hardly likely be to correct as a matter of fact. Ultimately its submission simply begs the question of the existence, nature and extent of the applicant’s reputation in Australia, and specifically in Sydney, as at August 1993.
416 In its submissions the applicant also relied on evidence as to the development and significant growth of its overseas business after 1993. This reliance seems to have been in furtherance of the proposition that the applicant sought to draw from the decision in Thai World. For the reasons I have given rejecting the applicant’s proposition, I do not see this evidence as being relevant to the question of the existence, nature and extent of the applicant’s reputation in Australia, and specifically in Sydney, as at August 1993.
417 The respondents submitted that the applicant’s evidence concerning its business and marketing in the period up to and including 1993 was sparse, particularly as to the context in which those activities took place. They submitted that, although evidence had been given about the size and earnings of the applicant’s business, and the extent of its marketing activities through television commercials, print advertising and other promotional activities (which, the respondents submitted, were somewhat limited in extent), the relevant significance of those matters, such as they were, in terms of the Hong Kong economy, was unknown because of the absence of “further and appropriate” contextual evidence. In a related context, the respondents’ written submissions adverted to the “crowded, cramped and visually riotous environment” of Hong Kong.
418 The respondents submitted that the evidence of the availability of foreign (Hong Kong) publications in Australia should be given little weight; that the evidence of Hong Kong immigration to Australia (as the principal vector by which the applicant’s reputation was allegedly exported to Australia) was of limited utility because of its generality; that the applicant’s survey was deficient and its underlying methodology inappropriate; and that its post-August 1993 evidence was irrelevant to the question of establishing the applicant’s claimed reputation in Australia.
419 The respondents’ submissions pointed to the absence of direct testimonial evidence to support the applicant’s claimed reputation as at August 1993. They submitted that, whilst proof of actual deception is not required to establish contraventions of ss 52 and 53 of the Trade Practices Act, or passing-off, it was nevertheless significant that no evidence had been adduced to show even confusion between the first respondent’s business and the applicant’s business based on the use by the first respondent of its impugned trade indicia. In this connection the respondents also submitted that, in reality, the operation of the respective parties’ businesses, as made plain from the presentation of their stores, is so markedly different that it is inconceivable that, beyond possible temporary confusion, an intending purchaser would be, or would be likely to be, misled or deceived as the applicant had alleged, unless that person was careless.
Consideration
420 It may be accepted that, as at August 1993, and by Australian standards, the applicant was conducting a significant business in Hong Kong, operating 58 stores as well as one store in Macau. That business was generating significant revenue (approximately AUD 43 million for the year ended March 1993). The business had been promoted and supported by television advertising that had been broadcast in the period June to September 1991 and June to December 1993, and it would seem earlier, featuring well-known celebrity actors and a particular cartoon character, and also by print advertising. There is evidence of the applicant’s own assessment that, as at November 1991, its stores had achieved a wide distribution into premium locations, and key shopping and residential areas, when compared with its major competitors OPTICAL SHOP, OPTICAL CENTRE and OPTICAL 68.
421 However, a broad understanding of Australian economic life and conditions would not be an appropriate frame of reference in which to consider and make evaluative judgments about the strength, nature and extent of the applicant’s reputation in Hong Kong at that time. Nevertheless, the evidence enables me to find, as I do, that the name OPTICAL 88, as the brand of a chain of retail optical shops in Hong Kong, must have been known to a significant number of consumers of optical goods and accessories and of optometry services in Hong Kong as at August 1993. What the evidence does not show is how pervasive that knowledge was within that population.
422 The applicant’s own evidence was that, in the period immediately following the acquisition by the Stelux Group of a majority shareholding in the applicant in 1988, it perceived the need to establish the OPTICAL 88 name as a strong brand and household name in Hong Kong. It saw this as being particularly important during the early 1990s when faced with competition from optical traders in Hong Kong with very similar names like OPTICAL 68, OPTICAL 98 and OPTICAL 128. There is, however, very little evidence about the activities of the applicant’s competitors or the overall economic setting in which the applicant carried on its business and promotional activities. According to Mr Wong’s evidence, from the late 1980s and early 1990s the applicant was seeking to obtain a strong brand image and become a household name. But the evidence, such as it is, does not enable me to conclude that, by August 1993, it had achieved that objective.
423 While these activities were in progress, Australia was experiencing its peak migration from Hong Kong. That migration exhibited a concentration in New South Wales, with an emerging concentration in the northern suburbs of Sydney. However, as I have observed, that population as at 1991 was, relatively speaking, numerically and proportionally small. I have no reason to think that the position was significantly different as at August 1993.
424 The applicant did not adduce direct evidence from any person resident in Sydney as at August 1993 who professed to have knowledge or an awareness of the applicant’s business in Hong Kong or Macau at that time. The applicant did not seek, by its survey, to analyse the question of the awareness of the name OPTICAL 88 as at August 1993 by members of the chosen population of interest who were resident in Sydney in or before August 1993.
425 As I have stated, I do not regard the survey results with respect to first awareness of the signs shown in Picture R and Picture V (Tables 10 and 11 of Dr Bednall’s Report) to be reliable. In any event, as I have also noted, a clear majority of the interviewees who gave responses were not even resident in Australia in or before 1993.
426 I am really left to make an evaluative judgment about the existence and extent of the applicant’s reputation in Australia, and in particular in Sydney, based on the evidence of its activities in Hong Kong and Macau in the period up to August 1993 and the evidence of migration from Hong Kong to Australia, taking from the survey results whatever broad assistance they can provide.
427 In that connection, if I were to regard the results presented in Table 11 of Dr Bednall’s report as providing some useful information, it would be necessary, in my view, to take account of the adjustments made by Mr McCallum for coding errors. So adjusted, Table 11 would indicate that 5.2% of interviewees stated that they had an awareness of seeing the signs in Picture R and Picture V in Hong Kong in the last 20 years or more. To this could be added a further 3.3% who stated that they had an awareness of those signs in Hong Kong in the last 19 years (but longer than 16 years ago). I would need to discount this 8.5% (5.2% plus 3.3%) in an evaluative sense to take account of the real possibility of time estimation errors (including the fact that about 20% of interviewees were aged 8 years or less as at August 1993) and that only about 41% of all interviewees (of whatever age) were first resident in Sydney in or before 1993. It would then be necessary to apply this resulting, evaluatively small, percentage figure to a population which, on the available data, was itself numerically small at the relevant time, particularly in the locations of interest which were relied on as showing concentrations of Hong Kong-born residents.
428 Proceeding on this basis, I am not satisfied on the evidence that, when the first respondent commenced to carry on business under the name OPTICAL 88 in August 1993, it could be said that a significant or substantial number of persons (in the sense I have explained) in Australia, and in particular in Sydney, were aware of the name OPTICAL 88 as the brand of a chain of retail optical shops in Hong Kong and Macau. It is certainly possible that some were. For example, it is possible that some within the migrant population discussed by Professor Hugo may have been customers of the applicant’s stores or have been exposed to the applicant’s television and print advertising before August 1993. It is possible that a number of other persons resident in Australia (and, in particular, in Sydney) who visited Hong Kong for travel or business in the period up to August 1993 may have been customers of, or may have seen, one of the applicant’s stores or been exposed to its advertising. It is not possible, however, to be any more definite about those matters.
429 On balance, the migration and demographic data, considered in light of the information that can be usefully drawn from the survey, does not support the applicant’s submission that it had an established reputation in Australia in August 1993 of any significance. At most the evidence would indicate the possibility that a very small number of people resident in Sydney in or before August 1993 may have seen or heard of the applicant’s stores in Hong Kong or Macau. Even for those people it does not follow that they were, or were likely to have been, misled or deceived in the ways alleged by the applicant as at August 1993. Awareness of the existence of a business under a particular name in another country is one thing. It is another thing to translate that awareness into a state of belief that a business operating under the same name locally is the same as, or connected with, the foreign business and thereby to be misled or deceived in the sense required by s 52 of the Trade Practices Act. Some may make that assumption. Others will simply acknowledge that the same name is being used locally without attributing any association between the two businesses.
430 The applicant did not seek to adduce any evidence from any consumer that he or she was misled or deceived in any of the ways it alleged. Whilst I acknowledge that such evidence is not necessary, and, indeed, may have been difficult to obtain as it related to circumstances as at August 1993, its absence is noteworthy given the fact that it was a feature of the applicant’s case that its reputation at the present time could be taken into account in assessing whether the first respondent’s conduct was or is misleading or deceptive or likely to mislead or deceive. No direct evidence was adduced that, as at the present time, any consumer thought that the first respondent’s stores were the applicant’s stores or were in any way associated in trade with the applicant or its stores.
431 In all the circumstances I find that the adoption and use of the name OPTICAL 88 by the first respondent in August 1993, and its use thereafter by the first respondent in the operation of its Campsie, Chatswood and Eastwood stores, was not conduct in trade or commerce that is or was misleading or deceptive or likely to mislead or deceive in the ways alleged by the applicant. It follows, in my view, that the applicant’s claim based on contravention of s 52 of the Trade Practices Act does not succeed.
432 I have noted that the applicant’s claim based on contravention of s 53 of the Trade Practices Act has not been articulated by reference to the specific paragraphs of that provision. However, I would not understand the applicant’s case based on contravention of that provision to rise any higher than its case based on contravention of s 52. It follows, therefore, that the applicant’s case based on s 53 of the Trade Practices Act does not succeed.
433 Similarly, the applicant’s case based on passing-off was not pleaded or put in any way that could succeed if its case on contravention of s 52 of the Trade Practices Act did not succeed. The conduct pleaded was based on the same alleged pre-existing reputation. It follows from my findings above that the applicant’s case based on passing-off does not succeed.
434 I have found that the applicant’s claims of trade mark infringement and copyright infringement, and its claims based on contravention of the Trade Practices Act and for passing-off do not succeed.
435 The conclusions to which I have come make it unnecessary for me to determine the question of Mr and Mrs Law’s liability as joint tortfeasors with the first respondent on the various bases that were pleaded. My conclusions also mean that any further substantive hearing is unnecessary and that final orders in the applicant’s application can now be made.
436 I have found that the first respondent’s cross-claim for removal of the ‘707 mark succeeds and that its claim for removal of the ‘966 mark succeeds in part. Final orders in the cross-claim can now be made.
437 The only order that I make at the present time is that the parties are to bring in short minutes of order giving effect to these reasons.
438 I will hear the parties on the question of costs.
| I certify that the preceding four hundred and thirty-eight (438) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates. |
Associate:
Applicant's Registered Trade Marks
| Registration No. | Trade Mark | Class | |
| (a) | 520707 |
| 9: Optical products; spectacles, sunglasses, contact lenses, frames and cases for the aforesaid goods and all other optical related goods in class 9 |
| (b) | 1083966 |
| 9: Optical products, spectacles, glasses, sunglasses, contact lenses, frames for eyeglasses, and cases for the aforesaid goods, spectacle bags; and 35: Retail and wholesale services of eyewear, optical products including spectacles, glasses, sunglasses, contact lenses, anti-glare glass cases, contact lens cases, optical frames, lenses, correcting lens (optics), accessories, parts and fittings for glasses, optical apparatus and instruments, cleaning cloths for spectacles, contact lenses care regimen products |
| (c) | 1160979 |
| 35: Retail and wholesale services of eyewear, optical products including spectacles, glasses, sunglasses, contact lenses, anti-glare glass cases, contact lens cases, optical frames, lenses, correcting lens (optics), accessories, parts and fittings for glasses, optical apparatus and instruments, cleaning cloths for spectacles, contact lenses care regimen products being services in class 35 |
| (d) | 1160985 |
| 35: Retail and wholesale services of eyewear, optical products including spectacles, glasses, sunglasses, contact lenses, anti-glare glass cases, contact lens cases, optical frames, lenses, correcting lens (optics), accessories, parts and fittings for glasses, optical apparatus and instruments, cleaning cloths for spectacles, contact lenses care regimen products being services in class 35 |
| (e) | 1250545 |
| 44: Optometric, sight-testing and opticians' services including services in relation to the prescription and dispensing of optical apparatus and instruments, spectacles, lenses and contact lenses. |
| (f) | 1253320 |
| 44: Optometric, sight-testing and opticians' services including services in relation to the prescription and dispensing of optical apparatus and instruments, spectacles, lenses and contact lenses. |
