FEDERAL COURT OF AUSTRALIA
Tivo Inc v Vivo International Corporation Pty Ltd [2012] FCA 252
VICTORIA DISTRICT REGISTRY | |
GENERAL DIVISION | VID 25 of 2011 |
BETWEEN: | TIVO INC. First Applicant TIVO BRANDS, LLC. Second Applicant VIVO INTERNATIONAL CORPORATION PTY LTD (ACN 087 480 171) Cross-Claimant
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AND: | VIVO INTERNATIONAL CORPORATION PTY LTD (ACN 087 480 171) First Respondent FABIO GRASSIA Second Respondent TIVO BRANDS, LLC. Cross-Respondent
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JUDGE: | DODDS-STREETON J |
DATE: | 19 MARCH 2012 |
PLACE: | MELBOURNE |
REASONS FOR JUDGMENT
Introduction
1 The principal issue for determination in this proceeding is whether the respondents’ registered trade mark “VIVO” should be removed from the Register because it was, as at the priority date, deceptively similar to the applicants’ registered trade mark “TIVO” and, or alternatively, was likely to deceive or cause confusion by reason of the latter’s reputation in Australia.
2 The second applicant, TiVo Brands LLC, a company incorporated in Delaware on 22 March 2005, and ultimately owned and controlled by the first applicant, TiVo Inc, a publicly listed company which was incorporated in Delaware on 4 August 1997, is the registered owner of all the trade marks of the TiVo group of companies, including the Australian Registered Trade Mark No 813297 for the word “TIVO” (“the TiVo trade mark”). An application to register the TiVo trade mark in Australia was lodged on 10 November 1999. The TiVo trade mark was registered on 18 July 2000 for a period of ten years commencing from 10 November 1999 in respect of goods and services as follows:
(a) class 9: computer hardware and software including computer hardware, software and peripherals for personalised, interactive television programming; televisions; television peripheral remote controls; communication devices, including, transmitters, receivers and controls, and software for use therewith, and accompanying manuals sold as a unit;
(b) class 35: the promotion and sale of goods and services for others;
(c) class 38: subscription television services; transmission of cable television and interactive audio and video services; personalised and interactive television transmission services; and
(d) class 41: entertainment services, namely, personalised and interactive entertainment services; online guide to personalised and interactive television programming.
3 Unless the context otherwise indicates, I shall refer to the first applicant and second applicant collectively as “TiVo”.
4 On 18 February 2008, the second respondent, Fabio Grassia, on behalf of the first respondent, Vivo International Corporation Pty Ltd, a company he controlled (which was then known as Natcomp International Corporation Pty Ltd (“Natcomp”)), lodged an application to register the following device mark:
(“the Vivo trade mark”)
5 The application was accepted and the Vivo trade mark was registered on 24 April 2009 as Australian Registered Trade Mark No 1223930 in respect of goods and services in the following classes:
(a) class 9: apparatus for use in audio visual communication; and
(b) class 38: transmission of data by audio-visual apparatus.
6 Unless the context otherwise indicates, I shall refer to the first respondent and the second respondent collectively as “Vivo”.
Issues for determination
7 The proceeding raises the following issues for determination:
(1) Should the Vivo trade mark be removed from the Register or its registration cancelled under s 88(2)(a) of the Trade Marks Act 1995 (Cth) (“the Act”), because its registration could have been successfully opposed under s 44(1) and (2) of the Act as being deceptively similar to the TiVo trade mark, and neither honest concurrent use under s 44(3)(a) nor other circumstances under s 44(3)(b) could be established?
(2) Further or alternatively, should the Vivo trade mark be removed from the Register or its registration cancelled under s 88(2)(a) of the Act, because its registration could have been successfully opposed under s 60, as the TiVo trade mark had acquired, before the priority date of the Vivo trade mark, a reputation in Australia, which was such that use of the Vivo trade mark would be likely to deceive or cause confusion?
(3) Further or alternatively, should the Vivo trade mark be removed from the Register or its registration cancelled under s 88(2)(c) of the Act, because the circumstances applying as at 14 January 2011 (the date of TiVo’s application for rectification) were such that the use of the Vivo trade mark was likely to deceive or cause confusion, due to the circumstances as at 18 February 2008, and additionally, the increasing convergence between the goods sold under the Vivo and TiVo trade marks which had occurred since that time?
(4) If the Vivo trade mark should otherwise be removed from the Register pursuant to s 88(2)(a) or (c), or both, are there discretionary factors which justify the maintenance of its registration?
(5) Are there grounds for removal of the TiVo trade mark from the Register under s 92(3) of the Act in respect of televisions in class 9, because there has been no good faith use in relation to televisions within the specified three year period; and, if so, should the court exercise its statutory discretion under s 101(3) of the Act in favour of maintaining the registration?
(6) Further or alternatively, should the Vivo trade mark be removed from the Register pursuant to s 92(4)(b) of the Act in respect of all services in class 38, on the ground that on 18 February 2008, Vivo had no intention to use the Vivo trade mark in Australia in relation to those services, and had not in fact made good faith use of the Vivo trade mark in relation to those services prior to the commencement of the proceeding? If so, should the court exercise its discretion under s 101(3) of the Act in favour of maintaining the registration?
(7) Has Vivo infringed the TiVo trade mark by its sales of televisions, set top boxes, remote controls, computer monitors, portable DVD players, digital photo frames and home theatre systems?
(8) If Vivo has infringed, is Mr Grassia liable as a joint tortfeasor for Vivo’s infringement?
Witnesses and evidence
8 TiVo read and tendered the following affidavits:
(1) Affidavit of Joshua Danovitz, TiVo’s Vice President and General Manager, dated 12 July 2011.
(2) Affidavit of Joshua Danovitz dated 30 July 2011.
(3) Affidavit of Peter Bernard Simons, the Sales Manager – Australia and New Zealand for Hybrid Television Services (ANZ) Pty Ltd (“HTS”), dated 13 July 2011.
(4) Affidavit of Roberta Lynn Minicola, the Chief Executive Officer of HTS, dated 15 July 2011.
(5) Affidavit of Warren Keith Toomey, a technology enthusiast and the co-founder of OzTiVo, dated 11 July 2011.
(6) Affidavit of Ally Akbarzadeh, solicitor for TiVo, dated 11 July 2011.
(7) Affidavit of Ally Akbarzadeh dated 13 July 2011.
(8) Affidavit of Ally Akbarzadeh dated 1 August 2011.
(9) Affidavit of Ally Akbarzadeh dated 31 August 2011.
(10) Affidavit of Mark Alister Newstead, a technical auditor and consultant to OzTAM, dated 11 July 2011 (subject to the court’s ruling on admissibility, discussed below).
(11) Affidavit of Mark Alister Newstead dated 31 August 2011 (subject to the court’s ruling on admissibility, discussed below).
(12) Affidavit of Paul Dovas, the Chief Executive Officer of the Audit Bureau of Circulations, dated 12 July 2011.
(13) Affidavit of Lori Flekser, the General Manager of the Motion Picture Distributor Association of Australia, dated 19 July 2011.
9 Of the above, only Mr Danovitz was cross-examined.
10 Vivo read and tendered the following affidavits:
(1) Affidavit of Fabio Michael Grassia, the second respondent and the director of Vivo, dated 11 August 2011.
(2) Affidavit of Pablo Maidana, the manager of Dick Smith Electronics Pty Ltd’s Fountain Gate store, dated 12 August 2011.
(3) Affidavit of Gregory Alan Hirsch, the Merchandise Manager of Dick Smith Electronics Pty Ltd, dated 12 August 2011.
(4) Affidavit of Danielle Cavill, solicitor for Vivo, dated 8 July 2011.
(5) Affidavit of Danielle Cavill dated 16 August 2011.
(6) Affidavit of Bryan Anthony Lukas, a Professor of Marketing and Area Head in the Department of Management and Marketing at the University of Melbourne, dated 28 July 2011.
(7) Affidavit of Felicity Margot Cox, a Senior Lecturer and phonetician at Macquarie University, dated 28 July 2011.
11 Of the above, only Mr Grassia and Mr Maidana were cross-examined.
12 TiVo also relied on the following:
(a) outline of opening submissions dated 24 August 2011;
(b) outline of submissions in reply to cross-claim dated 2 September 2011;
(c) outline of closing submissions dated 9 September 2011; and
(d) submissions on admissibility of Mr Newstead’s evidence dated 7 September 2011.
13 Vivo also relied on the following:
(a) outline of opening submissions dated 31 August 2011;
(b) outline of closing submissions dated 8 September 2011; and
(c) submission on the evidence of Mark Alister Newstead dated 5 September 2011.
Fast Track
14 Although the proceeding was filed in Fast Track, approximately 20 affidavits, voluminous written submissions, approximately 30 court books and volumes of exhibits and five volumes of authorities were filed. Uncertainty initially attended the adequacy of the time allocated for trial, which was the maximum permitted for Fast Track. Whatever its original scope, the proceeding was ultimately beyond that appropriate for Fast Track.
TiVo’S claims
15 In this proceeding, by a Fast Track application dated 14 January 2011, TiVo seeks an injunction restraining Vivo from infringing the TiVo trade mark by the use of the word “Vivo” or the Vivo trade mark.
16 As the Vivo trade mark is registered and, by s 122(1)(e) of the Act, the exercise of rights given by a registered mark is a defence to infringement, the Vivo trade mark’s registration would be a defence should infringement of the TiVo trade mark be otherwise established.
17 TiVo accordingly seeks that the registration of the Vivo trade mark be cancelled or that the Vivo trade mark be removed from the Register pursuant to s 88(2)(a) of the Act, on the grounds that its registration could have been opposed under s 44 as it was deceptively similar to the TiVo trade mark, and under s 60, as TiVo’s reputation in Australia was such that use of the Vivo trade mark would be likely to deceive or cause confusion. TiVo also seeks that the Vivo trade mark be removed under s 88(2)(c), because, as at the date of TiVo’s application for rectification, the use of the Vivo trade mark was likely to deceive and confuse on the added basis of the convergence of the goods sold under the marks. TiVo also seeks removal of the Vivo trade mark under s 92(3) in respect of services in class 38 on the grounds of non-use. TiVo contended that honest concurrent use was not established and other discretionary considerations did not apply or justify the exercise of the discretion in Vivo’s favour.
Vivo’s cross-claim
18 Vivo, by a Fast Track cross-claim dated 9 March 2011, sought that the TiVo trade mark be removed from the Register in respect of televisions on the ground of non-use.
Background facts
19 Set out below is a brief chronological summary of key background facts, many of which are discussed in greater detail in relation to the particular claims.
20 On 4 August 1997, the first applicant was incorporated (as Teleworld Inc).
21 On 21 March 1999, TiVo launched a “personal television service” in the United States, including a digital video recorder (“DVR”), remote control and broadcast centre. TiVo’s principal product was its DVR (also known as a personal video recorder (“PVR”)). When introduced, the TiVo DVR had a number of desirable novel features and functions which were unavailable in other such devices. In particular, the TiVo DVR was capable of recording multiple television broadcasts simultaneously, recording television programs selected by reference to favourite genres or key words, and, based on the consumer’s past viewing record, “recommending” television programs and movies.
22 TiVo also sold remote controls, hard drives, wireless adapters, antennas, cables, wireless modem jacks, modem spitter cables, wireless radio frequency remote control extenders, HDMI switches, USB phone line adaptors and associated software products, together with support services.
23 On 7 May 1999, the first respondent was incorporated (under its original name, Natcomp). It was controlled by the second respondent, Fabio Grassia, who, with a background in electrical engineering, in 1987 had established an “IT” direct marketing and selling business. In 1992 Natcomp became involved in importing computer products into Australia. Thereafter, it imported computer monitors and accessories.
24 On 29 May 1998, TiVo applied to register “TIVO” as a trade mark in the United States.
25 On 21 July 1999, the first applicant changed its name to TiVo Inc.
26 Between 1998 and 2008, TiVo in the United States, advertised and promoted its DVR and related products and services through brochures and other point-of-sale material, at trade shows, in print and online media, on television, on its website and through press releases. It is not disputed that TiVo achieved substantial sales in the United States.
27 On 10 November 1999, TiVo filed an application to register “TIVO” as a trade mark in Australia. On 18 July 2000 it was accepted for registration. Prior to late July 2008, however, TiVo did not supply goods or services or use the TiVo trade mark in Australia. Nevertheless, between 1999 and the Australian launch, TiVo and its products and services received exposure in newspaper articles, television programs, magazines, movies, Internet chat rooms and other media in Australia. This is discussed in detail below.
28 Although TiVo did not supply its media device in Australia prior to July 2008, some Australians who had learnt of the TiVo device acquired one and modified it for use in Australia. In July 2000, Andrew Tridgell, a computer programmer from Canberra, acquired a TiVo DVR. The TiVo DVR sold in the United States would not function in Australia without significant modification, and it also required local electronic program guide (“EPG”) information.
29 In October 2000, the TiVo DVR was launched in the United Kingdom.
30 On 23 January 2001, the TiVo trade mark was registered in the United States.
31 In January 2001 Mr Tridgell delivered a presentation titled “Inside the mind of… TiVo” at a technology conference in Sydney, and presented the same paper in Canberra in June 2001. In July 2001, another Australian, Bryan Burgess, purchased two TiVo DVRs on eBay.
32 Other Australians also acquired TiVo DVRs at various times prior to its official Australian launch in 2008 (see below).
33 Between September 2001 and December 2003, Warren Toomey, a technology enthusiast and academic, developed software to create EPG data and a “service emulator”, which enabled Australians to use all of the features of the TiVo DVR in Australia prior to its official launch.
34 In 2002, Mr Grassia was involved in litigation in which Microsoft alleged the sale of counterfeit Microsoft products by Mr Grassia or his interests, which settled without admission of liability upon the payment of $200,000 in legal costs and submission to an injunction.
35 On 3 March 2002, TiVo entered into an exclusive vendor agreement with Best Buy Co Inc for the distribution of its DVR and related products and services in the United States.
36 In July 2002, Mr Toomey created an online “oztivo” mailing list for Australian TiVo enthusiasts and, in June 2003, created an associated online “wiki” at www.oztivo.net.
37 In 2004, Mr Grassia terminated his IT business due to concerns over its relatively low profit margins and moved into the luxury boat business for the next 18 months to two years.
38 On 22 March 2005, the second applicant was incorporated as a wholly owned subsidiary of TiVo.
39 In May 2006, Mr Grassia terminated his boat business and established a business importing audio visual products, which he initially sold under the names of the relevant manufacturers. Shortly thereafter, he decided to introduce his own brand.
40 Mr Grassia deposed that in May 2006, he and his wife began to discuss possible Italian-sounding names for the brand.
41 On or about 29 May 2006, Mr Grassia informed his graphic designer, Mr Khaled, that he had selected the name “Vivo”. Although Mr Khaled expressed concern that the name could already be in use, Mr Grassia confirmed that Vivo was his choice. Mr Grassia deposed that he nevertheless considered the alternative name “Vinci” for much of June 2006, but by the end of June 2006, finally decided on “Vivo”. This is discussed in detail below.
42 On 28 November 2006, TiVo entered into a distribution arrangement with Cablevision S.A. for the supply and distribution of the TiVo DVR and related products and services in Mexico. (Between 2006 and 2010, TiVo entered a number of distribution arrangements or strategic alliance agreements with other entities for supply and distribution of the TiVo products, including the TiVo DVR, software and services, in various countries, including Canada, Spain, Norway, Denmark, Sweden and Finland).
43 From around late 2006, in order to locate products to import, Mr Grassia investigated the manufacture of televisions in China and subsequently began to oversee the manufacture of products, including televisions, in factories in China and Taiwan.
44 In 2007, Vivo (initially known as Natcomp), with only three employees including Mr Grassia, began selling Vivo products.
45 From around June 2007, Vivo began to import, promote, distribute, sell and offer for sale in Australia, the first electronic home entertainment products under the name “Vivo”, including Vivo-branded televisions and related electronic products. By 30 June 2007, approximately 658 Vivo-branded products had been sold in Australia. The Vivo products were then, and are still, principally manufactured in factories in China under, inter alia, joint ventures between Chinese manufacturers and a related entity of Vivo.
46 On 19 March 2007, TiVo Inc, prior to the supply of TiVo products in Australia, entered into a “Strategic Alliance Agreement” with Seven Network (Operations) Limited and HTS, inter alia, appointing HTS the exclusive distributor of the TiVo products in Australia and New Zealand and an authorised user of the TiVo trade mark in Australia.
47 In early May 2007, Mr Grassia engaged a graphic designer, Ms Stathakis, to prepare a logo for the Vivo brand. On 14 May 2007, Mr Grassia settled on a logo with a curved stripe at the top of the word Vivo, which has remained unchanged since that time.
48 Between 1 July 2007 and 18 February 2008, approximately 3,210 Vivo-branded products were sold in Australia, valued at about $1 million as follows:
PRODUCT | UNITS SOLD | VALUE |
Plasma televisions | 299 | $136,513 |
LCD televisions | 704 | $323,313 |
LCD monitors | 1,100 | $195,305 |
Portable DVD players | 1,765 | $349,755 |
TOTAL | 3,868 | $1,004,886 |
49 The Vivo products were sold during the relevant period at about 100 Strathfield stores, WOW Sight and Sound stores and in a national network of between 200 and 300 independent retail stores.
50 In around August 2007, Mr Grassia agreed with the owner of a factory in China to purchase exclusive use of two of the factory’s five production lines to manufacture Vivo televisions.
51 In October and November 2007, Vivo was advertised in a weekly Chinese language magazine and, in January 2008, in a newsletter sent to Vivo resellers.
52 On 18 February 2008, Mr Grassia filed an application to register the Vivo trade mark in Australia.
53 In April, May, June and July 2008, the Vivo brand was advertised in the Appliance Retailer magazine. In April and May 2008, articles about the Vivo brand were published on www.current.com.au and www.smarthouse.com.au.
54 On 27 July 2008, HTS commenced selling the TiVo DVR in Australia. The launch of the DVR in Australia was advertised by Harvey Norman stores in print media and in-store, and on Channel 7 television. Since the launch, HTS has promoted the TiVo DVR on television, radio, in magazines, online and via email newsletters and has achieved sales, the number of which is contained in a confidential exhibit. While a considerable number of units were sold, TiVo was disappointed with the sales, which were substantially fewer than those of Vivo units.
55 In August 2008, Dick Smith commenced selling Vivo-branded products.
56 Dick Smith thereafter promoted the Vivo brand in print and television advertisements, on its website and in its catalogues regularly distributed across Australia, and became its leading retailer. Over seven million Dick Smith catalogues have advertised Vivo products and, as the principal retailer of Vivo products, Dick Smith has sold around 120,000 products valued at over $50 million.
57 In around August 2008, according to his affidavit, Mr Grassia first became aware of the TiVo brand. This is discussed in detail below.
58 TiVo’s arrangements for the TiVo DVR in Australia differed somewhat from those applicable in the United States, as Australian users were not required to pay for associated services such as the EPG, but were entitled to them on payment of a total amount at the outset. Unlike other DVRs then available, the TiVo DVR required an Internet connection in order to access the services, including, most importantly, the EPG.
59 The TiVo DVR was initially sold only through Harvey Norman stores. The channels for TiVo DVRs subsequently expanded and now include Dick Smith (which commenced selling the device in October 2008), JB Hi-Fi, Myer, Clive Peeters, RT Edwards and Radio Rentals. At the time of the launch of the TiVo DVR in Australia, its retail price was $699.
60 Apart from the DVR, TiVo offers “peripherals” for sale in Australia, including remote controls, a wireless adaptor and a Western Digital external hard drive.
61 Between 2008 and 2011, Vivo products have been advertised in catalogues published by its major resellers, Dick Smith television advertisements, print advertising in various newspapers, and in-store, online and outdoor advertising by its resellers.
62 On 24 April 2009, the Vivo trade mark was entered on the Register of Trade Marks with effect from 18 February 2008.
63 On 21 May 2009, Mr Grassia changed the first respondent’s name from Natcomp to Vivo International Corporation Pty Ltd.
64 In May 2009, Dick Smith conducted a television advertising campaign for the TiVo DVR.
65 In May, June, July, August, September and November 2009, advertisements for the Vivo brand appeared in the Appliance Retailer magazine, and, at around the same time, other media exposed the Vivo brand, such as the Australian Personal Computer magazine and the website www.current.com.au.
66 At the end of 2009, Mr Grassia decided to revise the Vivo product range to focus primarily on televisions and to remove products such as HDMI cables and digital photo frames.
67 In 2010, Vivo commenced a marketing strategy aimed at consumers, which included a new website and more advertisements in the Appliance Retailer magazine.
68 In around October 2010, Peter Simons, Sales Manager of HTS for Australia and New Zealand, visited the Menai Central Dick Smith store and introduced himself as “Peter from TiVo”, to which the manager replied in effect, “Oh, you’re from Vivo?”. At around the same time, Mr Simons visited the Dick Smith store at the Macarthur Shopping Centre and again introduced himself as “Peter from TiVo”, to which the sales person replied in effect, “You must be from Vivo”. When corrected, the salesperson replied, in effect, “Aren’t they the same?” or “Isn’t it the same thing?”. (This is discussed in detail below).
69 On 14 January 2011, TiVo issued the present proceeding against Vivo.
70 On 19 January 2011, the licensing and distribution arrangement between TiVo, Seven Network and HTS became non-exclusive.
71 Between March and June 2011, Vivo conducted a television advertising campaign for the Vivo brand in New South Wales, Queensland and Victoria.
72 In the 2010/2011 financial year, sales of Vivo marked products totalled 120,000 units valued at over $37 million.
73 The total sales of Vivo products since 2006 comprise about 260,000 units valued at over $87 million. About 90% of the sales were televisions. The balance of Vivo sales related to other products as follows: 4% comprised computer monitors, 3.5% comprised portable DVD players, 1.18% comprised digital photo frames, 0.9% comprised digital set top boxes, 0.75% comprised home theatre systems and 0.18% comprised remote controls.
74 Vivo products are advertised nationally on television, print, online and in store by retailers including Dick Smith, WOW Sight and Sound, Strathfield, Bi-Rite Electrical and about 200 independent retailers.
75 On 31 July 2011, TiVo commenced selling televisions in the United States.
Whether the Vivo trade mark should be removed or its registration cancelled under s 88(2)(a) of the Act on grounds on which registration could have been opposed
76 Section 88 of the Act relevantly provides:
Amendment or cancellation—other specified grounds
(1) Subject to subsection (2) and section 89, a prescribed court may, on the application of an aggrieved person or the Registrar, order that the Register be rectified by:
(a) cancelling the registration of a trade mark; or
(b) removing or amending an entry wrongly made or remaining on the Register; or
(c) entering any condition or limitation affecting the registration of a trade mark that ought to be entered.
(2) An application may be made on any of the following grounds, and on no other grounds:
(a) any of the grounds on which the registration of the trade mark could have been opposed under this Act;
(b) an amendment of the application for the registration of the trade mark was obtained as a result of fraud, false suggestion or misrepresentation;
(c) because of the circumstances applying at the time when the application for rectification is filed, the use of the trade mark is likely to deceive or cause confusion;
(e) if the application is in respect of an entry in the Register—the entry was made, or has been previously amended, as a result of fraud, false suggestion or misrepresentation.
77 The grounds of cancellation under s 88(2)(a) of the Act incorporate the grounds under which the registration could have been opposed under ss 44 or 60 of the Act, which TiVo alleged were made out.
78 It was common ground that, until the conflicting lines of authority on the standard of proof for applications under ss 44 and 60 of the Act were resolved by a Full Court, they should be determined on the conventional balance of probabilities in accordance with the approach of Gyles J in Clinique Laboratories Inc v Luxury Skincare Brands Pty Ltd (2003) 61 IPR 130 and Pfizer Products Inc v Karam (2006) 237 ALR 787 (“Pfizer Products”) and Sundberg J in Chocolaterie Guylian NV v Registrar of Trade Marks (2009) 180 FCR 60 (“Guylian”).
Opposition under s 44 of the Act
Whether Vivo trade mark substantially identical with or deceptively similar to TiVo trade mark
79 Section 44 of the Act relevantly provides:
Identical etc. trade marks
(1) Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of goods (applicant’s goods) must be rejected if:
(a) the applicant’s trade mark is substantially identical with, or deceptively similar to:
(i) a trade mark registered by another person in respect of similar goods or closely related services; or
(ii) a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and
(b) the priority date for the registration of the applicant’s trade mark in respect of the applicant’s goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.
(2) Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of services (applicant’s services) must be rejected if:
(a) it is substantially identical with, or deceptively similar to:
(i) a trade mark registered by another person in respect of similar services or closely related goods; or
(ii) a trade mark whose registration in respect of similar services or closely related goods is being sought by another person; and
(b) the priority date for the registration of the applicant’s trade mark in respect of the applicant’s services is not earlier than the priority date for the registration of the other trade mark in respect of the similar services or closely related goods.
(3) If the Registrar in either case 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 in either case 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.
80 Section 10 of the Act defines “deceptively similar” as follows:
For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.
81 TiVo did not allege that the Vivo trade mark was substantially identical to the TiVo trade mark, but submitted that the requirements of ss 44(1) and (2) of the Act were satisfied, because it was deceptively similar to the TiVo trade mark registered in respect of similar goods or closely related services, or similar services or closely related goods, and the priority date of the Vivo trade mark was not earlier than the priority date for the registration of the TiVo trade mark.
82 TiVo further contended that Vivo had not established honest concurrent use of the TiVo and Vivo trade marks within the meaning of s 44(3)(a) of the Act, “other circumstances” within the meaning of s 44(3)(b), which would permit the Registrar to accept the registration of the Vivo trade mark notwithstanding the deceptive similarity, or other discretionary factors which would deny TiVo relief.
83 By the combined effect of the definitions of “priority date”, “filing date”, “date of registration” and s 72 of the Act, the priority date of the Vivo trade mark is the date on which the Vivo application was filed, that is, 18 February 2008, which is not earlier than the priority date for the registration of the TiVo trade mark.
84 In order to determine under s 44 whether a trade mark is deceptively similar to another trade mark which is already registered, it is necessary first to assess and consider the marks, and secondly, to determine whether the registration is in respect of similar goods or closely related services or similar services or closely related goods.
85 TiVo submitted that the Vivo trade mark’s incorporation of the essential and distinguishing “-IVO” component of the TiVo mark, which was both visually and aurally identical, was, in the context of fair and normal use permitted by Vivo’s registration, likely to deceive or confuse. It submitted, in reliance on Frigiking Trade Mark [1973] RPC 739 (“Frigiking”), that the inherent distinctiveness of the part common to both marks was most significant, and in the present case, the relevant part “-IVO” lacked any inherent distinctiveness.
86 TiVo contended that Dr Cox’s comparative analysis of the marks (discussed below at [136] to [138]) was a striking example of the meticulous, letter by letter and syllable by syllable comparison which the authorities held to be inappropriate.
87 TiVo, while conceding that each case turned on all the circumstances, relied, inter alia, on the following instances in which marks were held to be deceptively similar:
(a) STARR PARTNERS and STAR REALTY (Full Federal Court), Starr Partners Pty Ltd v Dev Prem Pty Ltd (2007) 71 IPR 459 per Lindgren, Emmett and Finkelstein JJ;
(b) BAREFOOT and BAREFOOT RADLER (Full Federal Court), E & J Gallo Winery v Lion Nathan (2009) 175 FCR 386 at [75];
(c) BAND-AID and BAND>>IT, Johnson & Johnson v Kalnin (1993) 26 IPR 435 (“Johnson & Johnson”) at 439 (Gummow J);
(d) LIQUID ENGINEERING and LIQUIDENG FARM SUPPLIES, Edwards v Liquid Engineering 2003 Pty Ltd (2008) 77 IPR 115 (Gordon J); finding of deceptive similarity not challenged on appeal: (2009) 175 FCR 26 (Tamberlin, Sundberg and Besanko JJ);
(e) HUGGIES and HUGGIE MUMMY, Kimberly-Clark Worldwide, Inc v Goulimis (2008) 78 IPR 612 (Jagot J); and
(f) BBQ KING and CHATSWOOD BBQ KING, Anakin Pty Ltd v Chatswood BBQ King Pty Ltd (2008) 250 ALR 620 (Branson J).
88 TiVo also submitted that Mr Simons’ evidence of actual confusion amongst sales assistants or managers at Dick Smith stores (discussed in further detail below) strongly supported its case, as the evidence indicated that approximately 80% of television purchasers and most audio visual product purchasers are influenced by sales persons in their choice of product.
89 Vivo disputed that there was any real tangible danger that a number of persons would have been caused to wonder whether products sold under the two marks came from the same source. It submitted that the differences in appearance, sound and meaning of the TiVo and Vivo trade marks, together with the surrounding circumstances, excluded the likelihood of confusion.
90 Vivo submitted that the trade marks differed in appearance, as the words “TiVo” and “Vivo” commence with a different letter and the two letters “v” used in Vivo created a different impression, accelerated by the curved shape of the device and the coloured dot on the letter “i” in Vivo, whereas the TiVo word mark was visually dominated by the letter “T”, which stood apart from the other letters.
91 Vivo also submitted that the words “Vivo” and “TiVo” were aurally very different, as their respective commencing “V” and “T” represented contrasting consonant speech sounds in English and differed on the three fundamental articulatory features distinctive of sound. Vivo submitted, in that context, that the first syllable of a trade mark was usually the most important feature for distinguishing sound, as there was a tendency in English to slur the termination of words, and accordingly, in a number of cases, marks with similar structures (such as “Tiolube” and “Priolube”, and “Strada” and “Prada” – see paragraphs [124] to [131]) had been distinguished on the basis of the first syllable.
92 Vivo submitted that while TiVo had no meaning, Vivo was, in contrast, a real word, capable of conveying an idea, which reduced the likelihood of confusion.
93 Vivo submitted that the circumstances of purchase also militated against confusion, as the relevant products were “high involvement” and likely to be bought by less hurried, more discerning customers. The evidence of confusion given by Mr Simons was in store managers or assistants, rather than customers, and might have been due to mishearing. Further, actual confusion was not dispositive and Mr Simons’ evidence, as a “one off” example, should be accorded little weight. In contrast, both Mr Maidana and Mr Grassia had experienced no confusion, although both Vivo televisions and TiVo DVRs had been offered for sale in Dick Smith stores since October 2008.
Principles governing deceptive similarity
94 The principles governing the determination of whether a trade mark is substantially identical with or deceptively similar to a trade mark registered by another person under s 44 of the Act were not in dispute. Subject to a minor exception, discussed below, it was not disputed that the rights of the parties under ss 44 and 60 of the Act were to be determined as at the date of Vivo’s trade mark application, that is, 18 February 2008. (Section 60 expressly refers to the priority date, and a like approach has been applied in the context of ss 44, 44(3)(a) and 44(3)(b) of the Act).
95 In Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 (“Woolworths”), French J (with whom Tamberlin J agreed) noted that despite the legislative change which removed the onus to establish registrability formerly imposed on the applicant, the essentials of deceptive similarity had remained constant, and earlier case law, such as Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641 (“Australian Woollen Mills”), remained an authoritative guide to the construction of ss 10 and 44 of the Act.
96 French J stated at [49]:
The judgment of the likelihood of deception or confusion is a very practical one and what has long been accepted as the proper approach to making that judgment was set out in Australian Woollen Mills Ltd. It requires assessment of the effect of the challenged mark upon the minds of potential customers. Impression or recollection taken away from the point at which the challenged mark is observed will be the basis of any belief about a connection between the new and the old marks. The effect of spoken description must be considered. What confusion or deception may be expected is to be based upon the behaviour of ordinary people. As potential buyers of goods they are not to be credited with high perception or habitual caution. Exceptional carelessness or stupidity may be disregarded. The question ultimately is not susceptible of much discussion (at 659):
“It depends on a combination of visual impression and judicial estimation of the effect likely to be produced in the course of the ordinary conduct of affairs.”
97 French J also restated the classical propositions enunciated in relation to the 1905 Act by Kitto J in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 (“Southern Cross”) at 594–5, to accord with the 1995 Act (which extended to service marks and removed the onus upon the applicant), as follows (at [50]):
(i) To show that a trade mark is deceptively similar to another it is necessary to show a real tangible danger of deception or confusion occurring. A mere possibility is not sufficient.
(ii) A trade mark is likely to cause confusion if the result of its use will be that a number of persons are caused to wonder whether it might not be the case that the two products or closely related products and services come from the same source. It is enough if the ordinary person entertains a reasonable doubt.
It may be interpolated that this is another way of expressing the proposition that the trade mark is likely to cause confusion if there is a real likelihood that some people will wonder or be left in doubt about whether the two sets of products or the products and services in question come from the same source.
(iii) In considering whether there is a likelihood of deception or confusion all surrounding circumstances have to be taken into consideration. These include the circumstances in which the marks will be used, the circumstances in which the goods or services will be bought and sold and the character of the probable acquirers of the goods and services.
(iv) The rights of the parties are to be determined as at the date of the application.
(v) The question of deceptive similarity must be considered in respect of all goods or services coming within the specification in the application and in respect of which registration is desired, not only in respect of those goods or services on which it is proposed to immediately use the mark. The question is not limited to whether a particular use will give rise to deception or confusion. It must be based upon what the applicant can do if registration is obtained.
98 In contrast to the side-by-side comparison used to determine whether marks are substantially identical, the “familiar comparison of trade mark law” in the context of deceptive similarity is, as Windeyer J stated in Shell Co of Australia v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407 at 415:
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 impression that such persons would get from the defendant’s [use of its marks].
99 In Woolworths at [43], French J referred to Kitto J’s statement in Southern Cross at 594 to 595 that in determining whether a mark is “likely to deceive or cause confusion”:
The use of the word "likely" in this context does not import a requirement that it be more probable than not that the mark has that effect. The probability of deception or confusion must be finite and non-trivial. There must be a "real tangible danger of its occurring".
100 In Crazy Ron's Communications Pty Limited v Mobileworld Communications Pty Limited (2004) 209 ALR 1 (“Crazy Ron’s”) at [77], the Full Federal Court reiterated the House of Lords’ unanimous approval in Aristoc Ltd v Rysta Ltd [1945] AC 68 (“Aristoc”) at 86 of Luxmoore LJ’s recognition in Re Rysta Ltd’s Application [1943] 1 All ER 400 at 407 that the court must allow for consumers who know only of one of the marks and have an “imperfect recollection” of it when encountering the other trade mark, and that accordingly:
[l]ittle assistance… is to be obtained from a meticulous comparison of words, letter by letter, and syllable by syllable, pronounced with the clarity to be expected from a teacher of elocution. The court must be careful to make allowance for imperfect recollection and the effect of careless pronunciation and speech on the part not only of the person seeking to buy under the trade description, but also of the shop assistant ministering to that person’s wants.
101 In Re Pianotist Co Ltd’s Application (1906) 23 RPC 774 (“Re Pianotist”) (endorsed by the High Court in Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd (1952) 86 CLR 536 at 538), Lord Parker stated at 777:
You must take the two words. You must judge of them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks. If, considering all those circumstances, you come to conclusion that there will be confusion—that is to say, not necessarily that one man will be injured and the other will gain illicit benefit, but that there will be a confusion in the mind of the public which will lead to confusion in the goods—then you may refuse the registration, or rather you must refuse the registration in that case.
102 It is necessary to compare the trade marks both visually and aurally. The test is not whether customers might think that the marks are the same, but rather whether there is a real risk that the respondents’ use of the Vivo trade mark will cause a significant number of ordinary persons to wonder or to entertain a reasonable doubt (see Crazy Ron’s at [76]; Southern Cross at 595; Woolworths at 382) as to whether the respondents’ products come from the same source as those of the applicants. It is sufficient to “cause confusion” if the minds of the purchasing public are merely “perplexed” or “mixed up” (see Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1979] RPC 410 at 423, as cited by Black CJ in Coca-Cola Company v All-Fect Distributors Ltd (1999) 96 FCR 107 at [39]).
103 When assessing the visual impression created by the mark, one must consider “the idea which the mark will naturally suggest to the mind of one who sees it” (Jaferjee v Scarlett (1937) 57 CLR 115 at 121, per Latham CJ (McTiernan J agreeing)). Unlike the court, consumers will be influenced by “a general recollection or impression of the mark which they have seen” (per Latham CJ at 122).
104 Aural similarities may also be important. In Australian Woollen Mills, the majority stated at 658:
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.
105 It is well established that trade marks may be deceptively similar for the purposes of ss 44(1) and (2) of the Act even if confusion is unlikely to persist up to the point of, and contribute to, inducing sale.
106 Although both TiVo and Vivo produce and market, and have registered their respective trade marks in relation to, a variety of products, TiVo has, since July 2008 in Australia, principally marketed a DVR which is priced at the more expensive end of the market, while Vivo has, from mid-2007 up to and including the present, principally marketed televisions which are priced at the cheaper end of the market.
107 While Vivo relied on the historical and current differences in the uses of the marks, the question of deceptive similarity must nevertheless be considered as at the priority date and in relation to the legitimate notional scope of the registration, by reference to the use that could properly be made of the Vivo trade mark in the future, rather than Vivo’s past usage of the trade mark.
108 As Mason J observed in Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353 (“Berlei Hestia”) at 362, where the appellant sold mass produced, inexpensive brassieres while, in contrast, the respondent sold expensive, specialty line brassieres:
[T]he question whether there is a likelihood of confusion is to be answered, not by reference to the manner in which the respondent has used its mark in the past, but by reference to the use to which it can properly put the mark. The issue is whether that use would give rise to a real danger of confusion.
109 In Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45, the High Court reiterated at [72] that:
The question whether there was a likelihood of confusion was not to be answered by reference to the manner in which the applicant for registration had used its mark in the past. Rather, regard was to be had to the use to which, within the ambit of the registration, the applicant could properly put the mark if the application were to be granted… Thus, if registration were sought in respect of particular goods and there would be a likelihood of deception if the mark were used upon such goods marketed as expensive products, it was no answer that the applicant proposed to use the mark only upon goods to be sold as inexpensively produced items.
110 In the present case, despite Vivo’s present and historically limited use of the Vivo trade mark, its registration in respect of apparatus for use in audio visual communication and transmission of data by audio visual apparatus entitles Vivo to use the Vivo trade mark not only on low cost televisions and the items it currently supplies, but in relation to goods across the entire broad scope of its registration at any price range or level. Vivo’s registration also entitles it to use the Vivo trade mark in relation to the specified services in class 38.
111 As discussed below, I consider that Vivo’s audio visual apparatus are goods similar to the goods in respect of which TiVo is registered. Vivo could use its mark in relation to an expensive DVR, just as TiVo could use its mark in relation to an inexpensive television.
Case law - deceptively similar marks
112 In Aristoc, Viscount Maugham agreed with Luxmoore LJ’s view that the court must make allowance for imperfect recollection, and that (at 86) “[t]he tendency to slur a word beginning with ‘a’ is, generally speaking, very common”, and held that the similarity between “Aristoc” and “Rysta” for stockings was such that taking “the effect of careless and slurred pronunciation, imperfect recollection, and the limitation of the knowledge of the customer and the shop assistant to one only of the marks, that being the one of which the other is ignorant”, the two words were likely to deceive and cause confusion.
113 Lord Macmillan also stated at 99 that:
the proposed trade mark “Rysta” ought not to be registered because it so nearly resembles, phonetically, the appellants’ trade mark “Aristoc” as to be likely to cause confusion.
114 Lord Simonds stated (at 104) that a comparison of the two words syllable by syllable would serve to emphasise differences rather than similarities, and the truer test was of a hypothetical sales assistant:
… who has heard of “Rysta” stockings but not of “Aristoc” stockings, being asked by a customer whether she has any “Aristoc” stockings… It is easy, perhaps, to exaggerate the risk of careless pronunciation, but it may at least be said that the standard of ordinary speech is not the precise articulation of the perfect announcer and that the inquiry for one article or the other will not be made in the quiet atmosphere of the studio.
115 In Shell Company of Australia Ltd v Rohm and Haas Co (1949) 78 CLR 601, Williams J held that the marks “Dithane” and “Ditrene”, if used in respect of the same goods, so nearly resembled one another as to be likely to deceive, as “[t]he prefix of both words is the same and the suffix very similar. To the eye and ear of [a person who only knows the one word and has perhaps imperfect recollection of it] there would be a marked resemblance between the two words in appearance and pronunciation” (at 605).
116 In Berlei Hestia, in which the High Court held that Berlei and Bali-Bra trade marks were deceptively similar in relation to brassieres, Mason J noted the phonetic similarity of the respective pronunciations “Burley” and “Barley” (at 362).
117 In Pfizer Products, Gyles J stated that but for the considerable existing reputation of the mark VIAGRA, the mark HERBAGRA would not be deceptively similar, as although both marks had a common suffix with no relevant meaning or connotation, there was evidence that such marks were not uncommon for goods sold in chemist shops, and although some would wonder whether the goods had the same source, others would wonder if they had the same characteristics or a common ingredient (at [51]).
118 His Honour nevertheless noted (albeit in the context of s 60), that although the marks did not look alike, one could not underestimate “the impact of the aural similarity between the words by virtue of the suffix “-AGRA””, which formed “a clear link between the marks which is not explained in any way as “AGRA” has no relevant meaning. To see invented words such as this is to invite attention to the sound as well as the sight… In any event, the sound is used in discussion about the product for sale, ordering the product for sale, and so on” (at [42]).
119 In Protiviti Inc v Probiti Pty Ltd [2005] FCA 1114, Heerey J considered the marks “Protiviti” and “Probiti” quite similar, as they commenced with the same syllable “Pro” and (at [22] at [23]):
[i]mportantly they both end with the letter “i” pronounced “ee”. This is an unusual ending for words in the English language. The internal consonants “v” in the one word and “b” in the other can often be confused. It is a matter of common experience that people looking at a word often do not read it carefully. If they have in mind an earlier word they can mistakenly leap to the conclusion that the word they are looking at, if it has some similarity, is the one that they had in mind. This is particularly so when the opening syllables are the same.
This is the more so when both words are invented words and the person reading or hearing them does not have reference to a tangible thing to fasten one meaning in his or her mind compared with another.
120 In Wingate Marketing Pty Ltd and Another v Levi Strauss & Co and Another (1994) 28 IPR 193, the Full Court held that the mark “Revise” closely resembled “LEVI’S” both visually and aurally, as the evidence suggested that many consumers and persons pronounced “Revise” to rhyme with “LEVI’S” (at 232). Further, “Revise” was chosen as a rather clever play on “LEVI’S”, with the possibility that consumers might associate it with “LEVI’S”.
121 In NEC Corporation v Punch Video (S) Pte Ltd (2005) 67 IPR 17, Branson J, despite an initial disinclination, concluded that the marks NEC and NECVOX were deceptively similar, because (noting the relevant observations in Woolworths), she rejected the applicant’s account of independently devising the challenged mark.
122 In Frigiking, Whitford J accepted that where a distinctive mark or a highly distinctive part of a mark was used with an addition or substitution, consumers might think that the new mark indicated the same source of origin as the old mark.
123 Whitford J thought that the inherent distinctiveness of the part common to both marks was relevant. His Lordship found the word “King” incorporated in the mark “Frigiking” was not a highly distinctive word, and unless it bore a secondary meaning of special distinctiveness, people would not be likely to believe that there was a connection between the marks FRIGIKING and THERMO-KING.
124 In Unichema Chemicals Ltd v Tiozide Co Inc (1993) 26 IPR 624 (“Unichema”), the Senior Examiner considered that the mark TIOLUBE, in respect of a lubricant to coat surfaces, was not deceptively similar to PRIOLUBE, in respect of lubricants and chemical products for use in industry.
125 The Senior Examiner referred to Australian Woollen Mills and Re Pianotist at 777. He noted that any class of customers of the relevant goods would exercise a degree of care, either because they knew the serious consequences of applying the wrong product or from caution in relation to such products (at 628).
126 Although both words were invented and neither prefix had a readily described meaning as an aide memoire for the consumer, the Senior Examiner found that the prefixes PRIO and TIO looked and sounded quite different. He considered that the care with which the first syllable was pronounced would fix itself in the mind, the differing number of consonants in the prefix would also act as an aide memoire and the similarity of the prefix PRIO to the word PRIOR would further separate the marks (at 628).
127 In Prefel SA v Merchant Corporation Pty Ltd (2001) 52 IPR 227 (“Prefel”), the Senior Examiner held that the trade mark STRADA in respect of men’s and women’s clothing was not deceptively similar to PRADA, which was registered in a range of classes of overlapping goods.
128 The Senior Examiner found that the visual impression created by each mark was not deceptively similar. As the word PRADA was in stylised form and the letters ST and P were unlike in appearance, the buying public was unlikely to retain a similar visual impression of each mark (at 236).
129 The Senior Examiner, in reliance on London Lubricants (1920) Ltd’s Application (1925) 42 RPC 264 at 279, considered that there was a tendency in English to slur the termination of words and to accentuate the beginning of a word in comparison, so that the first syllable of a word was, as a rule, the most important for the purpose of distinction (at 236-237).
130 The Senior Examiner noted that although the marks had a common suffix “RADA”, the stress was likely to be placed on the initial elements ST and P, which in normal English pronunciation were most unalike aurally, as the former produced a checked sibilatory sound while the latter produced a plosive or breathed sound, which was unlikely to give rise to confusion (at 237).
131 The Senior Examiner considered that the goods (clothing) were unlikely to be ordered over the telephone or over the counter by the spoken words, and although not limited to high cost items, would be sold in a manner that would afford the purchaser the opportunity for careful inspection and comparison with other similar goods, so that the visual impact of the respective marks was likely to be of considerable importance. Further, while some goods might be ordered by the spoken word, the marks had sufficient aural differences to render confusion unlikely.
132 In VB Distributors v Matsushita Electrical Industrial Co Ltd (1999) 53 IPR 466 (“VB Distributors”)¸ Hammond J found that the trade mark PALSONIC, with a logo of three stars in relation to televisions, VCRs, audio equipment and other appliances, was not deceptively similar to the trade mark PANASONIC.
133 His Honour found that the marks were not similar visually and the phonetic differences, even when slurring, were very marked, as the pronunciation of “pal” was a very powerful sound and produced a distinctively different sound (at [60]).
134 His Honour also took into account that the trade marks were applied to relatively “big ticket” items, in which consumers typically took close interest, and purchased on a “one off” basis (at [62]). Moreover, an incident of alleged apparent confusion was not, on analysis, established (at [69]-[71]).
The evidence –deceptively similar
135 Vivo relied, in this context, on the evidence of Professor Cox, Mr Maidana and Professor Lukas.
136 Professor Cox, a phonetician currently employed as a senior lecturer in the Centre for Language Sciences in the Department of Linguistics at Macquarie University, is an authority on the phonetic characteristics of Australian English. Professor Cox deposed that TiVo and Vivo commenced with two contrasting consonant speech sounds, the difference between which was “highly functional in English” and would be “pronounced differently and would be auditorily perceived as different words by ordinary Australians”. “T” and “V” were differently articulated, and their place of articulation and voicing features also differed. Further, the “acoustic percept of each word… would be easily differentiated and produced by listeners and speakers”.
137 Dr Cox also observed that Vivo, although used relatively infrequently, was a real foreign word, used in English in the context of a Latin scientific phrase, an Italian musical direction and as an acronym in communication technology. In contrast, TiVo was clearly a non-word. Dr Cox deposed that where one word has a meaning and another does not, it is relevant to the impression they create, and they will be more readily distinguished than two words with apparent meaning.
138 Dr Cox considered it highly probable that both TiVo and Vivo would be pronounced with the stress on the first syllable, and although there were several possibilities, it was more probable that Vivo would be pronounced “vee” and “voh” and TiVo would be pronounced “tee” and “voh”.
139 Professor Lukas, Professor of Marketing and Area Head of the marketing discipline in the Department of Management and Marketing at the University of Melbourne, who is a frequently cited Australian marketing academic, deposed that while on some occasions the level of consumer involvement in the purchase of an audio visual product was low (as some consumers simply will not care much about the audio visual product to be purchased), it was usually high, because the product was important to lifestyle, and its purchase (which was not easily reversible) could involve a high level of financial commitment. With high involvement purchases, memory was enhanced, consumers were motivated to visit more than one store, to spend more time on purchases and to make a careful purchase decision.
140 Professor Lukas considered that in deciding to buy an audio visual product, a consumer would consider the desired features, would rate them in order of importance and would consider a set of alternative audio visual products with each alternative rated according to relevant criteria.
141 Professor Lukas deposed that purchasers typically engaged in some research for audio visual products by one or more means of conversing with sales assistants or with family or friends about the advantages and disadvantages of “a focal object and viable alternatives” or by visiting more than one store to compare product ranges and prices, by studying sales brochures and by visiting websites.
142 Professor Lukas considered that customers could obtain product information in the retail environment from the nature of the merchandise on offer (which would affect their ability to compare) and the nature of services offered, as if the sales persons were highly trained, it was more likely that customers would make an informed purchase. Customers could have high information needs in relation to “high involvement” audio visual products, which many customers found complex and neither easy to operate or evaluate. Professor Lukas considered that the sales person’s role in the purchase process of audio visual products was therefore highly important.
143 Professor Lukas considered a TiVo DVR to be a high involvement audio visual product purchase and that customers seeking to purchase a TiVo product would, in addition to the usual forms of research described above, engage in some or all of the following:
(1) search for relevant product and brand information;
(2) pay attention to the product under consideration;
(3) evaluate alternatives in some detail;
(4) remember the Tivo brand;
(5) remember alterative [sic] product brands;
(6) perceive differences between the Tivo brand and other brands in a product class;
(7) decide to what extent Tivo is their favourite or preferred brand; and
(8) make a careful purchase decision.
144 Professor Lukas considered that the same factors would apply equally to someone seeking to purchase a Vivo product.
145 Pablo Maidana, a store manager and sales person at Dick Smith’s Fountain Gate store, had about 10 years experience in selling audio visual products to customers at Dick Smith stores in various locations across Melbourne. In March 2011, Mr Maidana was promoted to store manager at Dick Smith’s Fountain Gate “Powerhouse” store (which is a larger Dick Smith store selling a broader range of consumer products), having previously acted as store manager in other Dick Smith stores. His role included the supervision of staff and ensuring that they complied with staff training, which included instruction about products on sale.
146 Mr Maidana deposed that although most television purchasers now conducted research on the Internet, shopped around, compared product range and prices and had more product knowledge than previously, the vast majority still consulted and were influenced by sales persons.
147 Mr Maidana deposed:
Generally speaking, however, once the customer had decided to buy, the purchase of a television is still one that in almost every case involves speaking to a salesperson about the product, in order to find out the features of the product and discuss its advantages and disadvantages over other, comparable products, or see what the best deal on the product is available. Our salespeople will speak to almost all customers who come into the store, to find out what products they are interested in and assist them to purchase the right product for them.
148 Mr Maidana deposed that customers spoke to a sales person, who, in 80% of cases, had some influence on purchase decisions, while about 20% of customers were not influenced by sales persons.
149 Mr Maidana deposed that in his experience, customers coming to the store to purchase a television generally sought a particular type or size of television, a particular deal they had seen in the Dick Smith catalogue or (in 20% of the cases) a particular brand.
150 Mr Maidana deposed that nevertheless, in the majority of cases:
… customers enter the store looking for a new television but without knowing exactly what they want, other than that they want a good quality television at the lowest price. They will come into the store saying something like: “my old TV has broken down” or “I am looking to upgrade my TV”. They will then look to the salesperson to show them what’s available to suit their needs.
151 Mr Maidana deposed that he trained his staff to enter into dialogue with customers to establish which television would best suit their needs. He generally restricted staff from selling televisions until they had sufficient technical knowledge. Mr Maidana himself usually showed customers the cheapest model first, which was often a Vivo product.
152 Mr Maidana deposed that a PVR or a DVD recorder was likely to be the second-most expensive product after a television, and, due to the constantly changing nature of the technology, customers tended to approach the purchase of a PVR or DVD recorder in much the same way as the purchase of a television.
153 In Mr Maidana’s experience, most customers needed a significant amount of guidance in their purchase of a PVR, “owing to the need to explain the function of the product to the customers and compare the different types of product available on the market”.
154 Mr Maidana estimated that over 40% of customers who purchased a TiVo PVR came specifically to buy that product, as they had seen it advertised or promoted on television. The remainder simply wished to buy a PVR or DVR and decided that a TiVo was right for them.
155 Mr Maidana had never experienced any customers expressing confusion between the TiVo and Vivo products. He deposed:
In particular, I have never had customers ask about TiVo when I show them Vivo (or vice versa), or express anything which makes me think they believe Vivo products are produced by or have any sort of association with TiVo.
Based upon my experience in the audio-visual industry, I believe that the chance of customers being confused between the TiVo and Vivo products is very minimal. This is partly because the products sold by TiVo and Vivo are so different, but also because I believe the brand names look and sound sufficiently different that customers are unlikely to draw a connection between them.
156 TiVo relied on the evidence of Mr Simons, a Sales Manager for Australia and New Zealand of TiVo’s Australian distributor, HTS, of instances of confusion. Mr Simons deposed to a number of conversations he had with management and sales staff of Dick Smith stores in New South Wales during October 2010.
157 In around October 2010, as part of his regular visits to retailers supplying TiVo products, Mr Simons attended the Menai Central Dick Smith store in Menai, New South Wales. When he introduced himself to the store manager as “Peter from TiVo”, the manager replied, in effect, “Oh, you’re from Vivo?”. Mr Simons believed that the manager assumed that he was a representative of Vivo. Mr Simons gained the impression that the store manager was confused about the connection between TiVo and Vivo, and replied, in effect, “No, I am Peter from TiVo. TiVo make the Tivo PVR”.
158 At around the same time, Mr Simons also visited the Dick Smith store in the Macarthur Shopping Centre in Campbelltown, New South Wales. He spoke with a member of the sales staff and again introduced himself by stating words to the effect of “Hi, I am Peter from TiVo”. The sales person replied, in effect, “You must be from Vivo”. Mr Simons gained the impression that the sales person either misheard him or thought that there was some connection between TiVo and Vivo. He replied with words to the effect of “No, I am from TiVo”. The sales person replied, in effect, “Aren’t they the same?” or “Isn’t it the same thing?”.
159 Mr Simons deposed that the instances at the Dick Smith stores in Menai and Campbelltown were typical of other occasions at other retail stores where he had similar conversations with staff of those stores and, from those conversations, he had understood that they had assumed that he was a representative of Vivo, rather than a representative of TiVo. Mr Simons estimated that, in addition to the two occasions mentioned above at Menai and Campbelltown, there were approximately six other such instances around October 2010.
Discussion – deceptively similar
160 The TiVo and Vivo trade marks are not substantially identical. The words “TiVo” and “Vivo” are neither visually or aurally identical because each word begins with a different letter. While the marks have visual similarity because they consist of words with the same number (four) of letters, three of which are the same, visually the TiVo and Vivo trade marks are differentiated by the initial letters and further, by the depiction of the word “Vivo” with a curved shape and a blue dot above the “i” in the Vivo device mark, whereas TiVo is simply a word mark.
161 In my opinion, however, the TiVo and Vivo trade marks are deceptively similar.
162 Save for the different commencing letter, which is pronounced differently in English, according to Dr Cox’s evidence, ordinary Australians would probably pronounce the identical components of each word (the “-IVO” element) in the same way as “ee” and “voh”. Thus, each word consists of two syllables, the second of which is identical, while the first is distinguished in spelling and aurally (in the most probable pronunciation) only by a single initial consonant.
163 The cases are not entirely consistent in relation to whether, and if so, which parts of words are more likely to be slurred, emphasised or misheard, and much appears to depend on the particular circumstances of, and the evidence led in, individual cases.
164 In Aristoc, Viscount Maughan considered that a first letter (if an “a”) was more likely to be slurred. In Unichema, the Senior Examiner considered that the first syllable would be pronounced with more care and would be more likely to be fixed in the mind. In Prefel, the Senior Examiner considered that the first syllable of a word would generally be the most important for the purposes of distinction.
165 The authorities consistently recognise, however, that as a matter of common experience, people often do not read words carefully and do not pronounce them distinctly.
166 In the present case, there was no expert evidence that people tend to pronounce initial syllables more carefully or distinctly and indeed, the marks at issue do not commence with different syllables but only with different consonants. While Dr Cox’s uncontradicted evidence was that “T” and “V” would be pronounced quite differently, there was nothing to suggest that ordinary speakers would place particular emphasis on the initial consonant of each of the words or articulate it with particular care relative to other parts of the word.
167 “-IVO”, the component common to both marks, appears dominant as it comprises almost the entirety of each mark. It is not descriptive of the relevant goods and services for which the marks are registered. It has no apparent meaning and the substantial common element of the marks is thus distinctive, thus, as Gyles J observed in Pfizer Products, inviting attention to sound as well as sight. It is identically spelt and probably identically pronounced, and the impact of the aural similarity of the distinctive, dominant component is likely to be very strong, particularly when allowance is made for careless pronunciation, cursory reading and imprecise articulation in the context of imperfect recollection.
168 In contrast to Pfizer Products, there was no evidence that audio visual products are commonly supplied under trade marks which are identical save for a single commencing letter, which could reduce the likelihood of confusion. While Vivo relied on the registration of five marks incorporating “IVO” in class 9 (NVIVO, RIVO, AQIVO, EVOKE VIVO and ACTIVO), the marks were either registered in respect of goods unknown or goods other than audio visual and (save for a single mark) had two added consonants, added syllables or added words.
169 Nor, in my view, did the evidence establish that Vivo had any meaning which, as an aide memoire, would materially reduce the likelihood of confusion amongst consumers. While TiVo is a non-word and Vivo has some uses as a word in English, Dr Cox did not contend that Vivo was itself an English word. The uses she instanced were, as she acknowledged, relatively infrequent, and in my view, relatively esoteric. There was nothing to suggest that the Latin, musical or acronym usage was sufficiently widespread within the broad class of purchasers of audio visual products to accord it much weight.
170 In my opinion, the identical two syllable “ee voh” termination of each mark, which has no meaning and is distinctive, rather than descriptive, of the goods and services within the scope of registration, creates a marked aural similarity, which is not displaced by the different initial consonants or any heightened likelihood of distinction on recollection due to the meaning of the word “Vivo” as a foreign word or acronym.
171 While the identical letters “-ivo” in each mark creates some visual similarity, I do not think the marks deceptively similar on a visual comparison, as they include a visually different initial letter and, as Vivo is a device mark, are differently represented. Nevertheless, in the context and circumstances of sale, the difference in appearance would not preclude the likelihood of confusion, as in my view, in a substantial proportion of cases, the aural effect and impression of the mark are likely to be of greater significance that the visual effect and impression.
172 The marks should not be considered in isolation. The setting and surrounding circumstances of the comparison are relevant and include how and where the product will be sold, advertised, displayed, and promoted, how knowledge of the mark may be conveyed to consumers, and how consumers are likely to approach a purchase.
173 The Vivo and TiVo products are sold through the same channels and, as discussed below, I have concluded that they are goods of the same description.
174 The evidence established that televisions and DVRs are currently the most expensive items in the wide range of audio visual products covered by the respective registrations, and that audio visual goods tend to be expensive consumer items. The likelihood of deception and confusion must nevertheless be considered across the whole range of products legitimately within the scope of the registration, and in the light of the environment and surrounding circumstances of purchase.
175 The evidence that many, if not all consumers exercise a degree of care and conduct “research” of some kind, together with the relative expense of the products, would appear to reduce the likelihood of confusion. The class of audio visual product consumers is, however, very broad, and the types and levels of preliminary inquiry adopted vary widely. While some customers, prior to making a purchase, have already researched, compared and become clearly aware of and remember either or both of the TiVo and Vivo brands, and may specifically request one or the other, Mr Maidana deposed that only a minority of customers requested any particular brand of product. Professor Lukas did not estimate what proportions of consumers engaged in the different modes of preliminary investigation to which he deposed, but made clear that the “research” of a number of consumers took the form of discussions, which could be with sales people, family or friends.
176 The evidence established that in a significant number of cases, TiVo and Vivo products or marks would be identified, requested or ordered by reference to the sound of the marks. Preliminary dialogue commonly initiates the sale process. In Mr Maidana’s experience, about 80% of customers for a television or a DVR request the product by reference to features other than the brand, and, on arrival at the store, engage in and are significantly influenced by discussions with sales assistants. In the course of those discussions, oral reference to products and marks is likely. Customers may orally refer to or request products under one of the two marks on the basis of an imperfectly recollected or careless pronunciation, while, in other cases, the sales assistant, having inquired about the customer’s needs, may (with imperfect pronunciation) refer to either one of the marks, against the customer’s imperfect recollection of the other (compare Anheuser-Busch Inc v Budejovicky Budvar, Narodni Podnik & Ors (2002) 56 IPR 182, where the visual effect was of greater significance because the beverages sold under the marks in question were frequently on display proximate to each other in refrigerators or shelves to be picked up by customers themselves, or written on restaurant liquor lists and thus seen before being orally requested).
177 There was no comprehensive evidence of how sales would be conducted in stores other than Dick Smith, or whether the process of sale for items other than televisions and DVRs would differ significantly, but it was not contended that the Dick Smith process of sale, in which the great majority of customers initially engage in discussion with, and are influenced by, sales staff was atypical. Nevertheless, while Dick Smith stores carry both TiVo and Vivo products, store them in the same department and provide sales staff training about products, such practices, which may tend to reduce the likelihood of confusion, may not apply in all retail stores.
178 While Mr Maidana deposed that some customers specifically request a TiVo or a Vivo product, and Professor Lukas deposed to their likely approach to a purchase, such customers are the minority. Moreover, the customer, who must be considered in this context, is not the particularly well-informed person who has conducted careful comparative research on both products and already knows of both marks, or even of one mark with perfect recollection. Rather, it is necessary to consider the first impression of a consumer who has an imperfect recollection of only one mark and who does not know of the other.
179 In my opinion, allowing for imperfect recollection, careless pronunciation, the range of goods (and services) covered by the registrations, and the context and circumstances of promotion, advertising and sale, the visual differences between the marks are not sufficiently compelling to overcome the impact of the strong aural similarity in the purchasing environment.
180 The evidence of actual confusion in this case also strongly supports the conclusion that the marks are deceptively similar.
181 Mr Simons gave unchallenged evidence that managers and sales staff at other Dick Smith stores appeared, on about eight occasions in the course of a single month, to confuse TiVo with Vivo.
182 The incidents to which Mr Simons deposed were not, as Vivo contended, a “one off example”, and the significant number of instances occurring within a relatively short time are not plausibly explicable as a result of mishearing. Indeed, in one incident, the staff member, on having his attention drawn to the different names, queried whether they related to the same thing.
183 While Vivo submitted that Mr Simons’ evidence was vague and Mr Maidana’s testimony must therefore be preferred, it did not press many of its detailed objections to Mr Simons’ evidence, did not cross-examine Mr Simons and ultimately failed to call as a witness Mr Khan, a manager of Dick Smith’s Menai store, whose affidavit challenging Mr Simons’ evidence was filed. In such circumstances, as TiVo submitted, it may be inferred that Mr Simons’ evidence was accurate and reliable and, pursuant to the rule in Jones v Dunkel (1959) 101 CLR 298, that Mr Khan’s evidence would not have assisted Vivo’s case.
184 Further, there was no necessary inconsistency between the evidence of Messrs Simons and Maidana. Mr Maidana, an impressive and conscientious witness, had not encountered any customer confusion in the Fountain Gate Dick Smith store, in which he extensively trained staff and restricted untrained staff from selling televisions. Nevertheless, the absence of confusion at a particular store or stores does not exclude its occurrence at other stores or retail outlets, where, for example, staff training and supervision may not be implemented as effectively. Further, as TiVo submitted, Mr Maidana’s evidence was, as he stated, in the context of the present practice, whereby TiVo mainly sells expensive DVRs and Vivo principally sells inexpensive televisions (which would tend to reduce the potential for confusion), as opposed to goods across the entire notional scope of the registration. Mr Maidana advanced the very different nature of the TiVo and Vivo products currently available for purchase as a principal, albeit not the sole, reason for the absence of confusion.
185 Mr Grassia, who also deposed that he knew of no instance of confusion, did not depose to “hands on” experience in retail sales of TiVo and Vivo products, and, as stated below, I did not find him a credible witness. Nevertheless, Mr Grassia confirmed the important role of the sales person, deposing that:
In my experience, in consumer electronics the salesperson on the shop floor has a significant influence on the products the consumer ultimately chooses to buy…
186 Although there was no evidence of confusion amongst consumers as opposed to sales staff, the difficulty of obtaining evidence of confusion is well-recognised. The instances of confusion amongst employees in some (although not all) Dick Smith stores in relation to TiVo and Vivo, despite the significant current differences in price and products sold, and the staff training, support the conclusion that ordinary consumers would, as at 18 February 2008, be likely to be confused. Sales assistants are likely to be trained or at least better informed than ordinary consumers. A significant number of instances of confusion amongst sales staff, who play a significant role in influencing many consumers’ purchases, nevertheless occurred.
187 A further circumstance which strongly supports the conclusion that the marks are deceptively similar is my finding, discussed below, that Mr Grassia was aware of and adopted the Vivo mark due to his awareness of TiVo. As established in Australian Woollen Mills and subsequent authority, a finding that a mark was adopted in order to appropriate the reputation of another gives rise to a species of evidentiary presumption, and the appropriator’s assessment of the likelihood of confusion is in the nature of expert evidence on the subject.
188 Given the very considerable aural similarity between the marks, allowing for an imperfect recollection of one and the first impression produced by use of the other, the effect of careless pronunciation by the customer and sales assistant, the environment and likely circumstances of sale, the broad class of consumers and the wide spectrum of their pre-purchase “research”, the evidence of actual confusion, and Mr Grassia’s adoption of the Vivo trade mark knowing of and intending to benefit from the reputation of the TiVo trade mark, I am satisfied that the TiVo and Vivo trade marks are deceptively similar.
Whether similar goods
189 It is a precondition of successful opposition under ss 44(1) or (2) that the impugned trade mark is deceptively similar to a mark registered in respect of similar goods or closely related services, or similar services or closely related goods.
190 In the present case, it is first necessary to determine whether the goods for which the TiVo trade mark is registered in class 9 are similar to the goods in respect of which the Vivo trade mark is registered in class 9.
191 Section 14 of the Act defines similar goods as follows:
14 Definition of similar goods and similar services
(1) For the purposes of this Act, goods are similar to other goods:
(a) if they are the same as the other goods; or
(b) if they are of the same description as that of the other goods.
(2) For the purposes of this Act, services are similar to other services:
(a) if they are the same as the other services; or
(b) if they are of the same description as that of the other services.
192 Whether goods and services are of the same description is essentially a matter of fact, in determining which the following matters, while not the only considerations, are particularly important.
(a) the nature of the goods and services, including their origin and characteristics;
(b) the uses made of the goods and services, including their purpose; and
(c) the trade channels through which the goods and services are sold, which may include consideration of whether the goods being compared are produced by the same manufacturer or distributed through the same channels; whether they are sold in the same shops; whether they are sold to the same sort of customers; and whether those engaged in the manufacture and distribution of the goods are considered as belonging to the same trade.
(see McCormick & Co Inc v McCormick (2000) 51 IPR 102 (“McCormick”), per Kenny J (at [18])).
193 In Southern Cross at 606-7, the High Court stated that:
Romer J [in In re Jellinek’s Application (1946) 63 RPC 59] thought it necessary to look beyond the nature of the goods in question and to compare not only their respective uses but also to examine the trade channels through which the commodities in question were bought and sold. Shortly after the decision in Jellinek's case … the Assistant-Comptroller elaborated on the observations of Romer J in the following manner:
“In arriving at a decision upon this issue the reported cases show that I have to take account of a number of factors, including in particular the nature and characteristics of the goods, their origin, their purpose, whether they are usually produced by one and the same manufacturer or distributed by the same wholesale houses, whether they are sold in the same shops over the same counters during the same seasons and to the same class or classes of customers, and whether by those engaged in their manufacture and distribution they are regarded as belonging to the same trade. In the case of Jellinek's Application… Romer J classified these various factors under three heads, viz, the nature of the goods, the uses thereof, and the trade channels through which they are bought and sold. No single consideration is conclusive in itself, and it has further been emphasised that the classifications contained in the schedules to the Trade Marks Rules are not a decisive criterion as to whether or not two sets of goods are ‘of the same description’: In re an Application by John Crowther & Sons (Milnsbridge) Ltd (1948) 65 RPC 369 at 372.”
Much the same considerations are evident in the observation of Dixon J (as he then was) in Reckitt & Colman (Aust) Ltd v Boden (1945) 70 CLR 84 when he said:
“What forms the same description of goods must be discovered from a consideration of the course of trade or business. One factor is the use to which the two sets of goods are put. Another is whether they are commonly dealt with in the same course of trade or business. In the present case, the goods are quite different, their uses are widely separated and they are not commonly sold in the same kinds of shops or departments”: (1945) 70 CLR 84 at 94.
194 In the present case, the TiVo and Vivo trade marks are both registered in relation to specified goods in classes 9 and 38 respectively, which, while it tends to indicate that the goods are of the same description, is not decisive. The TiVo and Vivo class 9 goods are, however, differently described.
195 The TiVo goods are generally described as “computer hardware and software” followed by an inclusive list of computer hardware and software for personalised interactive television programming, television and television peripheral remote controls, communication devices including transmitters, receivers and controls, and software for use therewith and accompanying manuals sold as a unit. In contrast, the Vivo class 9 goods are broadly described as apparatus for audio-visual communications.
196 Vivo conceded that televisions, remote controls and digital set top boxes are goods in class 9 in respect of which the TiVo trade mark is registered, but denied that the other goods sold under the Vivo trade mark (digital photo frames, portable DVD players, home theatre systems, and computer monitors) are of the same description as goods in respect of which TiVo is registered, or are closely related to services in respect of which TiVo is registered. (This question is also relevant to the allegation of infringement, which is discussed below).
197 Vivo submitted that although Vivo home theatre systems and computer monitors could be used in conjunction with goods and services in respect of which the TiVo trade mark was registered, the relevant Vivo goods (like the goods at issue in Hills Industries Limited v Bitek Pty Ltd (2011) 90 IPR 337 (“Hills Industries”)) had a very different function from that of the TiVo media device (and the associated services). Further, the TiVo DVR was not substitutable with Vivo home theatre systems, computer monitors, digital photo frames or portable DVD players.
198 Vivo also submitted that there was a fundamental difference in the nature of the relevant Vivo goods and that of the TiVo goods, because the TiVo media device was “a sophisticated computer”, while the Vivo products were all used solely for audio visual display.
199 It does not follow that because some goods in respect of which Vivo is registered have a different function from a particular item within the scope of TiVo’s registration, the goods in respect of which each mark is registered are not similar or of the same description.
200 There are, moreover, significant distinctions between Hills Industries, on which Vivo particularly relied, and the present case. Vivo’s submission also placed undue weight on substitutability, or use as alternatives, in the context of an inquiry where no one factor is decisive, and other considerations are typically more important.
201 In Hills Industries, Lander J concluded that the respondent’s television installation accessories (including external television antennas which excluded set top boxes) were not similar to, or of the same description as, the class 9 goods in respect of which the applicant’s trade mark was registered (namely, digital and electronic products including televisions, video players, DVD players, decoders and cameras), although some such goods (especially televisions, television antennas and television installation accessories) were interdependent on each other for their functionality (at [138] to [140]).
202 Lander J also found a fundamental difference between the nature of the applicant’s goods (which were digital and electronic and provided the display to consumers) and that of the respondent’s goods (which allowed the brown goods to function by providing varying types of support) (at [110]). A similar dichotomy between the TiVo and Vivo goods at issue in this case cannot be sustained on that basis.
203 In Hills Industries, (in contrast to the TiVo and Vivo goods, which are both sold through the same trade channels to the same class of consumers), the respondent’s goods and the applicant’s goods were sold through different channels, to different classes of consumers. About 90% of the respondent’s products were sold to professional installers, while the remaining 10% were sold to wholesalers, appearing, if at all, as a sideline in retail stores (at [126]). In contrast, the applicant’s goods were marketed at the retail level and by direct advertising.
204 In Hills Industries, Lander J rejected the proposition that the applicant’s and respondent’s goods were similar because the applicant’s goods could not properly function without the respondent’s goods. His Honour did not consider that functional interdependence, or the capacity to use the goods in conjunction, necessarily rendered goods similar or of the same description. On the other hand, his Honour recognised that the common use of goods as alternatives or substitutes for each other would render confusion amongst consumers more likely, and may have indicated a different conclusion (at [114]).
205 Hills Industries is not authority for the proposition that particular goods in respect of which a trade mark is registered cannot be of the same description as goods in respect of which another trade mark is registered unless the former goods can be substituted or used as alternatives for all of the latter goods. Further, while Lander J did not consider that the need and/or capacity to use goods in conjunction sufficed to establish similarity, nor did his Honour treat them as indicia of dissimilarity. Rather, Lander J considered all relevant circumstances, including, importantly, the different supply channels, classes of consumers and purposes of the goods.
206 In the present case, the evidence established that the relevant goods in respect of which the TiVo and Vivo marks are registered are similar in nature, manufacturing, origin and purpose. They are made available to consumers in the same broad range of retail stores and sold within the same product categories where (in Dick Smith stores at least), they are physically placed in close mutual proximity. While some of the products sold under the Vivo trade mark, such as home theatres or computer monitors, are not interchangeable or substitutable with the TiVo DVR, the latter is but one of the goods in relation to which the TiVo trade mark is registered, and clearly some products within the Vivo registration would be interchangeable with some products within the TiVo registration. The TiVo DVR can be used in conjunction with some products, such as televisions, within the Vivo registration, and vice versa, which, while not decisive, supports their similarity. The Vivo trade mark can itself be applied to DVRs, which are within the scope of both the registrations. TiVo’s registration includes computer hardware, televisions and communication devices, which are interchangeable with, or alternatives to, some Vivo products. Interchangeability or the capacity to use particular goods within the registration of one trade mark as an alternative for particular goods within the registration of the other is, in any event, only one relevant factor in determining whether goods are similar.
207 It is also highly relevant that witnesses who were expert or very experienced in the study, supply or marketing of such goods classified the goods in respect of which the TiVo and Vivo trade marks are registered as belonging to the same category.
208 Mr Simons, who was not cross-examined, deposed to significant experience in the distribution and sale of electronic home entertainment goods in Australia. He described the types of goods specified in the TiVo trade mark registration and the Vivo trade mark registration as belonging to the category of “audio-visual” or “AV” goods of the electronic home entertainment goods category, or “brown goods” (as opposed to white goods which included refrigerators, microwaves and washing machines).
209 Mr Simons deposed that such goods (including televisions, DVRs, set top boxes, remote controls, DVD players and DVD burners) had the same primary purpose of entertainment. Audio visual goods are typically purchased and used primarily for entertainment purposes (although not exclusively) to watch movies, television programmes, listen to audio, browse the web and interact with others.
210 According to Mr Simons’ uncontradicted evidence, the products were typically produced by the same consumer electronics manufacturers. He deposed:
The main, or leading (in terms of sales), brands within this category of consumer goods include TiVo, Panasonic, Sony, LG, Topfield and Strong. Topfield and Strong only manufacture set-top boxes, whereas the other manufacturers also manufacture other electronic home entertainment goods, such as televisions, amplifiers, speakers, set-top boxes (either with hard disk drives incorporated or DVD burners), DVD players, Blu-ray players, home theatre systems and hifi systems.
211 Mr Simons further deposed:
[T]he TiVo PVR (and PVRs in general) falls within the broad category of "electrical goods", and more particularly with the audio-visual category of goods, often referred to within the industry as "brown goods". The audio-visual category of goods is an extremely wide category of goods, and encompasses all electrical (and some non-electrical) products which have some audio or visual component to them, or which are used in connection with goods which have some audio or visual component to them. For example, in relation to televisions, it encompasses goods used in connection with being able to use a television such as PVRs, set top boxes, remote controls, DVD players and DVD burners.
212 Mr Simons deposed that the audio visual category includes goods such as televisions, stereos, hi-fi systems, mobile phones, portable media players, some digital cameras, DVD players, DVD burners, Blu-ray players, set top boxes, computer gaming products and consoles, streaming media devices, HDMI and AV cables and remote controls.
213 Mr Simons deposed that all the above goods “have some audio-visual aspect to their communication function that is they can either record, playback or produce an audio or video signal or both, or otherwise facilitate that communication.” Further, the majority performed some kind of transmitter or receiver function in order to transmit data.
214 Mr Simons deposed that typically audio visual products were sold in retail stores which sold brown goods or were classified as audio visual or IT retailers. The stores differed widely in size, ranging from small to large, or department stores, and could be independent, chain or franchise stores, such as Harvey Norman, Dick Smith and JB Hi-Fi.
215 Mr Maidana deposed that all of the TiVo and Vivo products supplied by Dick Smith are sold within the same product category and in the same area at Dick Smith. He deposed that Dick Smith stores typically arranged televisions along the back wall, with the DVD players, DVRs, PVRs, HD tuners and other set-top boxes arranged in gondoliers along the aisle leading to the televisions. The grouping of those goods together in the entertainment section enabled customers conveniently to consider and purchase different combinations. A customer seeking a new television or a DVD player could, following discussion with a sales person, ultimately choose a television and integrate one or both of those devices. Similarly a person looking at a television that integrates a set-top box and DVD player may also consider a television without such devices and the possibility of acquiring a standalone device at some other time. Mr Maidana estimated that a DVR was purchased at the same time as a television less than 20% of the time and was sometimes purchased after a television.
216 Mr Grassia also acknowledged in cross-examination that IT products, consumer electronics and audio visual products all belonged to the same group. He testified that “consumer electronics, audio visual, IT products, to me is all sort of one group”. In affirming that the statement on Vivo’s website that he had “lived and breathed audio visual and consumer electronic products for 25 years” was accurate, Mr Grassia implicitly conceded that the computer monitors and IT products he sold prior to 2004 belonged to the same category as the current Vivo products.
217 Professor Lukas, whose expert evidence as a Professor of Marketing and Area Head of the marketing discipline in the Department of Management and Marketing at the University of Melbourne was unchallenged, also classified the TiVo and Vivo products as within the same “audio visual” category. He stated:
I understand audio-visual products to be the products referred to in the letter of instructions provide [sic] to me by Polczynski Lawyers, dated 12 July, 2011: digital video recorders, televisions, portable DVD players, digital set-top boxes, digital photo frames and computer monitors.
…
I consider Vivo products (televisions, portable DVD players, digital set-top boxes, digital photo frames and computer monitors) to be audio-visual products.
218 Further, the evidence in this case established that the functions of individual products within the scope of the registrations are progressively converging, as there is a consistent tendency for the incorporation of functions originally performed by different devices into a single unit.
219 Although Vivo initially marketed and still currently principally markets televisions, its use of the trade mark progressively extended to digital set-top boxes, portable DVD players, digital photo frames and remote controls, thus confirming that such goods are “apparatus for use in audio-visual communication” within the legitimate scope of its registration.
220 In cross-examination, Mr Maidana confirmed that advances in transmission technology for televisions were catered for by functions which were initially achieved by a separate device to be used in conjunction with televisions, but ultimately incorporated into a single television unit.
221 The introduction of digital transmission was initially addressed by a set top box to be used in conjunction with existing analogue televisions, but digital televisions had an in-built tuner for receiving digital transmissions, and became progressively cheaper, obviating the need for two devices. The introduction of high definition transmission also initially required the use of a set top box with the television, but again, the tuner was subsequently built into the television.
222 Mr Maidana confirmed that while Vivo initially supplied high definition set top boxes for digital televisions, some televisions now incorporated DVD players, whilst other DVD players were still sold separately from a television.
223 Mr Maidana confirmed that customers frequently arrived at the Dick Smith store seeking a new television or DVD player, but could not decide whether to buy a unit which integrated both items. The same was true of digital tuners and high definition digital tuners. Mr Maidana considered that a television incorporating a PVR was the next logical step.
224 On the basis of his experience, Mr Simons also considered that the category of audio visual products could expand to include personal computers, tablet computers and smart phones.
225 The converging functionality of the relevant products, which are tending to become consolidated in one unit, blurs the previously clear cut distinction between, and separate identity of, the goods, thus reinforcing the conclusion that the TiVo and Vivo trade marks are registered in relation to similar goods.
226 Vivo’s submission that the Vivo and TiVo goods were of a fundamentally different nature, because Vivo goods were all used solely for audio visual display while the TiVo media device was a sophisticated computer, was largely based on comparison of the goods which are and have been supplied under the respective marks, and gave insufficient weight to the notional scope of registration and progressive convergence. Whether the goods are similar is to be determined by reference to those in respect of which the marks are registered, rather than the goods that are supplied at any particular time. Professor Lukas made clear that he did not distinguish between computer monitors, DVRs or televisions, regarding them all as audio visual goods. Further, the increasing convergence of functions renders an absolute functional dichotomy between goods for audio visual display and sophisticated computers untenable.
227 Therefore, in my view, the TiVo and Vivo trade marks were registered in respect of similar goods and there was no basis on which to exclude home theatre systems, computer monitors, digital photo frames or portable DVD players.
Similar services or closely related goods
228 Further, the Vivo trade mark is, in my opinion, registered in relation to services which are similar to services or closely related to goods in respect of which the TiVo trade mark is registered.
229 In Caterpillar Loader Hire (Holdings) Pty Ltd v Caterpillar Tractor Co (1983) 48 ALR 511, in an early judicial consideration of service marks, Lockhart J recognised that “[c]onfusion is more likely to arise where services protected by service marks necessarily involve the use or sale of goods or where the services (for example, consultancy services) involve goods but can be provided either with or without the sale or promotion of goods” (at 522).
230 More recently, in Woolworths, French J discussed the concept of similar goods and closely related services. In Woolworths, it was alleged that the “WOOLWORTHS metro” trade mark, to be registered for services, was deceptively similar to marks most of which were registered in relation to goods. The principal focus in Woolworths was thus s 44(2) of the Act.
231 In Woolworths, French J thought that the logic of s 44(2) suggested that determination whether goods are closely related to the services in question was logically antecedent to the determination of whether the trade mark in respect of the services was deceptively similar to that in respect of the goods, and noted that although the primary judge treated the questions as conceptually distinct, he accepted that they could not be addressed in isolation from each other (at [39]). French J noted that the term “closely related”, while not defined in the Act, recognised “that goods and services are different things. There will be classes of goods which are similar to each other… [b]ut the word “similar” does not apply as between goods and services” (at [37]).
232 His Honour accepted that “closely related” was a term of wider import than “similar”, which could apply between competing services as well as between goods and services, although the range of closely related relationships between goods and services was limited by the requirement that the marks attached to them be substantially identical or deceptively similar (at [38]).
233 His Honour considered that the function of the service with respect to the goods would frequently define the relationship, so that “[s]ervices which provide for the installation, operation, maintenance or repair of goods are likely to be treated as closely related to them. Television repair services in this sense are closely related to television sets as a class of goods.” (at [38]).
234 French J recognised that s 10 of the Act defined “deceptively similar” solely in terms of the degree of resemblance between the marks and when it was likely to cause confusion, but stated that the definition must, in the context of s 44, be applied to the case of “closely related” goods and services (at [39]).
235 His Honour stated at [40]:
In the end there is one practical judgment to be made. Whether any resemblance between different trade marks for goods and services renders them deceptively similar will depend upon the nature and degree of that resemblance and the closeness of the relationship between the services and the goods in question. It will not always be necessary to dissect that judgment into discrete and independent conclusions about the resemblance of marks and the relationship of goods and services.
236 While the principal emphasis in the present case was on the question of similarity of the goods, I am satisfied that, as TiVo submitted, the services in respect of which Vivo is registered are, in the requisite sense, similar to the services or closely related to the goods in respect of which TiVo is registered.
Conclusion
237 In my opinion, the requirements of ss 44(1) and (2) are fulfilled. The registration of the Vivo trade mark should therefore be cancelled, subject to the exercise of the court’s discretion to the contrary, whether on the basis of honest concurrent use, other circumstances under s 44(3) of the Act, or otherwise.
Whether honest concurrent use
238 The requirement to reject an application to register a trade mark because it is substantially identical with or deceptively similar to an earlier trade mark under s 44(1) and (2) is subject to the court’s discretion under s 44(3) to permit registration where honest concurrent use of the two marks or “other circumstances” are established, or continuous use is established under s 44(4).
239 In McCormick, Kenny J found a material difference between ss 44 and 60, as her Honour held that s 60 was not subject to s 44(3) of the Act and s 44(3) did not provide an exception to s 60 (at [93]).
240 The discretion under s 44(3) and (4) is predicated on recognition that some circumstances such as honest concurrent use may, as a matter of policy, justify registration and outweigh the goal of avoiding the likelihood of consumer confusion.
241 There is some overlap between ss 44(1), (2) and (3), as a likelihood that consumers will be deceived or confused must be established under s 44(1) or (2) before the issue of honest concurrent use will arise, but the likelihood of confusion is also usually considered in relation to the exercise of the discretion.
242 Further, whether the applicant adopted the trade mark in order to derive a benefit from the reputation of the cited mark is relevant to whether the applicant’s trade mark is deceptively similar, because such motivation is like “expert evidence” of that tendency, and is also central to the honesty of the concurrent use.
243 Lord Tomlin’s non-exhaustive statement of characteristic considerations relevant to a determination of honest concurrent use under s 44(3)(a) in Re Alex Pirie & Sons Ltd’s Application (1933) 50 RPC 147 at 159-160 and the Assistant Controller in Re John Fitton & Co Ltd’s Application (1949) 66 RPC 110 at 112 were summarised by Kenny J in McCormick at [30] as follows:
(a) the honesty of the concurrent use;
(b) the extent of the use in terms of time, geographic area and volume of sales;
(c) the degree of confusion likely to ensue between the marks in question;
(d) whether any instances of confusion have been proved; and
(e) the relevant inconvenience that would ensue to the parties if registration were to be permitted.
244 The date for the purposes of s 44(3)(a) is the date of the application, in this case 18 February 2008. In Hills Industries, Lander J held that evidence of honest concurrent use after the priority date was not relevant to an application under s 44(3)(a). While acknowledging some contrary decisions of delegates, and obiter of Hammond J in VB Distributors and Carr J in PB Foods v Malanda Dairy Foods Ltd (1999) 47 IPR 47 (“PB Foods”), Lander J nevertheless concluded at [163] and [164]:
In my opinion, evidence of concurrent use after the priority date is not relevant in regard to an application under s 44(3)(a). Section 44(3)(a) is only engaged if a finding has been made under s 44(1). It is agreed that the evidence relevant to an opposition under s 44(1) for the registration of a trade mark is evidence prior to the priority date. It would be most unusual if, having determined that the applicant’s trade mark was deceptively similar to the trade mark registered by another person in respect of similar goods at a particular time, the registrar or the court, as in this case, is entitled to exercise its discretion in favour of the applicant having regard to use of that mark at a different time.
It seems to me that s 44(3)(a), which allows the exercise of discretion if there has been an honest concurrent use of the two trade marks, is speaking of the same time as s 44(1), that is, before the priority date. Such a conclusion is consistent with Southern Cross and the assumption made by Kenny J in McCormick at [30]–[31] who when addressing s 44(3)(a) and citing decisions of the registrar said that the rights of the parties are to be determined as at the date of the application for registration.
245 As recognised in Conde Nast Publications Pty Ltd v Taylor (1998) 41 IPR 505 at 509, Johnson & Johnson at 439, McCormick, Guylian and like authority, evidence of events after the priority date may be admitted to illuminate the likelihood of confusion as at the priority date. In the present case, both TiVo and Vivo sought to rely on evidence of confusion or an absence thereof after the priority date for that purpose.
246 Honesty in this context has been held to mean “commercial honesty”. Relevant authorities have taken into account a number of factors in determining whether the applicant adopted the trade mark without knowing of the earlier mark or in the honest belief that no confusion would arise or business be diverted by use of the name. They include:
(a) whether the words which make up the trade mark are common, everyday words. If they are, it is more likely that the use will be found to be honest than would be the case if the words are “invented” or are not such as to be obviously attractive to other traders;
(b) the subsequent conduct of the applicant;
(c) the likelihood of confusion;
(d) the applicant’s knowledge of the opponent’s mark; and
(e) whether the adoption of the mark, and the continued use of it, was surreptitious.
247 Honest concurrent use requires use of the mark as a trade mark (see McCormick). While a substantial period of use is unnecessary (see PB Foods), longer use may fortify an application under s 44(3)(a). The duration of use should not be considered in isolation from its volume and real commercial value.
248 Vivo submitted that:
(a) The Vivo trade mark was adopted honestly and without awareness of either the TiVo trade mark or TiVo products.
(b) The Vivo trade mark was used in Australia for about eight months prior to Vivo’s application for registration, during which time there was no use of the TiVo trade mark by or on behalf of TiVo.
(c) There was only a small likelihood of confusion, as the marks had co-existed since TiVo’s entry into the market with no evidence of confusion.
(d) As at 18 February 2008, when it applied for registration of the Vivo trade mark, Vivo would suffer far greater inconvenience than TiVo, because it had been in the market for over a year and had sold goods worth over $1 million, while TiVo, in contrast, had not been in the market at all.
(e) There were “other circumstances” which rendered it proper for the court to decline to remove the Vivo trade mark, because in addition to the above, a considerably greater volume of Vivo products had been sold (over three times as many) since TiVo entered the Australian market.
249 While the applicant’s knowledge of an existing mark does not necessarily denote dishonesty, or exclude a reasonable belief that adoption of the trade mark would not cause confusion, an applicant bears the burden of establishing honest concurrent use.
Mr Grassia’s evidence
250 In the present case, Mr Grassia, the founder, effective owner and managing director of Vivo, deposed in detail to his establishment of the Vivo business, the development of the brand and the decision to adopt and register the Vivo trade mark.
251 Mr Grassia maintained that in May 2006, when he decided on the name Vivo for his new brand of audio visual products, he had not heard of the TiVo brand name or of TiVo products.
252 Mr Grassia, was, in my view, an unreliable, self-serving and unconscientious witness. His various accounts of the selection of the name Vivo were remarkably inconsistent. The account in his affidavit differed, in material aspects, from his testimony in cross-examination, which was itself highly internally inconsistent. Mr Grassia also claimed a clear and absolute recollection of relatively unlikely matters (such as which articles he had seen prior to May 2006) where it appeared to serve his case, while professing an inability to recall other matters of apparently greater significance.
253 In his affidavit, Mr Grassia deposed that he independently selected the Vivo name while ignorant of TiVo, after searching for an Italian word or a word with Italian connotations that was “short, simple, easy to pronounce, marketable and easy to remember” to reflect his family’s Italian heritage.
254 Mr Grassia deposed that he and his wife consulted a small Italian-English dictionary seeking a suitable Italian word to use for televisions, monitors and the like, after which his wife wrote down the following list of 17 possible names:
255 Mr Grassia deposed that he asked a graphic designer, Mohamad Khaled, for ideas for an appropriate name for an LCD monitor or other similar audio visual products. Mr Grassia’s affidavit did not expressly state that he contacted Mr Khaled after the preparation of the list, but his account of contact with Mr Khaled followed that of the preparation of the list. Mr Khaled, by email on 22 May 2006, responded with a list of names, which did not include Vivo or any similar name.
256 The email exchange between Mr Grassia and Mohamad Khaled on 22 May 2006, was as follows:
“mohamad, what name would you call a LCD monitor?”
Mr Khaled replied:
“OK Now I get what you wanted. Some names I came up with below: [A list of names followed]”.
Mr Grassia replied:
“i thought of Veloce italian meaning fast”
Mr Khaled replied:
“How about (imagine). Like the song. Copyright though”
257 On about 29 May 2006, Mr Grassia notified Mr Khaled by email that he had decided on “Vivo” and asked him to design a logo for the new brand incorporating part of the existing Natcomp logo.
258 An email exchange then occurred as follows:
Mr Khaled stated:
“Hi Fabio
Have you received the other two files for your logo.
I will work on Vivo logo for you today. I think this name is alreday [sic] in use.
Just check of its availibility [sic] with the trade registry. This my advice.”
Mr Grassia replied:
“yes ireceived [sic], i checked with google there is no product here called vivo.”
Mr Khaled replied:
“GO TO GOOD [sic] AND CLICK IMAGE AND THEN TYPE THE WORD VIVO, YOU WILL SEE A LOT OF PRODUCTS CALLED VIVO FROM UNDERWARE [sic] TO BICYCLES.
not in Australia though, but products that came to Australia…
Be careful mate. Get something genuine and fansy [sic]. This is my advice. Can you say in Italian (vivre)? In French means live.”
Mr Grassia replied:
“i don’t want french because Italian is what sells at the moment, italian design etc”
Mr Khaled replied:
“I know what you want. Can you think of something unique for your product, that reflect the design and the feeling of being Italian. It seems vivo being used by other product manufacturers which may conflict or affect your product marketing… [A list of suggested names followed].
Mr Grassia replied:
“stick with Vivi [sic] trust me i am going to register the name today”.
259 Mr Khaled later that day sent an attachment with 10 variations of the Vivo graphic logo.
260 Mr Grassia deposed that Mr Khaled’s email nevertheless got him thinking, so on 1 June 2006, he emailed him stating that “the name i chose is Vinci, meaning win in italain [sic].”
261 Mr Khaled suggested “Pivio”. Mr Grassia replied “no because the name is not only for LCD monitors but maybe for other products as well”.
262 On about 2 June 2006, Mr Khaled forwarded about 10 Vinci graphic logos, but on 4 June 2006, Mr Grassia asked him to make them more like his Vivo graphic design. After receiving the revised logos, Mr Grassia requested more, which he received on 19 June 2006.
263 Mr Grassia deposed:
34. By the end of June 2006, I had decided that, notwithstanding the reservations expressed by Mohammad, the name for the new brand should be “Vivo”, not “Vinci”. I ultimately decided upon the word “Vivo” over “Vinci” because it was a more memorable word and had a more suitable meaning in Italian for televisions: alive and bright. Although it does mean “win”, the word “Vinci” in Italian also has connotations of “to defeat” or “to overcome”, and I did not believe that it was a suitable word to associate with our new brand.
35. At the time I made this decision, I was not aware of the brand known as “Tivo”, and nor was I aware of its products. In deciding upon possible names, I remember that I reviewed several sales catalogues for consumer electronics retailers including Dick Smith, Harvey Norman, and Retravision, and looked at the other audio-visual brands being advertised. I did not see anything looking or sounding similar to Vivo.
36. I also searched for the word “Vivo” in the search engine Google, and found no mention of Vivo for any similar products in Australia. I recall that to do this search, I entered the words “Vivo” together with “audio visual” and “Vivo” together with “television”. I did not see any products that were similar to the products I was planning to sell under the Vivo name.
37. I also visited the IP Australia website and searched its trade mark database. I recall that I entered the word “vivo” into the search box, to search across both “exact words” and “part words” using “vivo”. I reviewed the search results and did not consider there to be trade marks using the word “vivo” that were similar to the types of products I was interested in selling. Accordingly, I decided to proceed with that name.
264 Mr Grassia deposed that at the beginning of May 2007, he approached Suzie Stathakis, a graphic designer, to prepare a logo for the new brand. He discussed the “message of simplicity and authority” he thought lacking in Mr Khaled’s logos, and on 8 May 2007, received from Ms Stathakis seven graphic logos all accompanied by a curved stripe.
265 In cross-examination, in contrast to the account in his affidavit, Mr Grassia stated that he and his wife discussed a number of Italian words, but ultimately drew up a list almost exclusively commencing with “V”, “because we narrowed it down to Vinci”. He did not recall whether any words not starting with V were written down at any stage. Despite Mr Grassia’s oral testimony that the word “Vinci” inspired the list, “Vinci” did not appear in the list and was not mentioned in his affidavit as inspiring it. Mr Grassia did not satisfactorily explain those omissions.
266 In cross-examination, Mr Grassia conceded that, contrary to the assertion in his affidavit that his wife wrote the words on the list, he and his wife each wrote about half of the words. He believed that he wrote the words on the left hand side. Mr Grassia identified various words written by himself and by his wife, expressed uncertainty as to some words and in some cases was unable to recall. He repeatedly declined to concede that, as was undeniable, his admissions rendered his account in the affidavit inaccurate.
267 At one point in cross-examination, Mr Grassia conceded that despite his earlier evidence to the contrary, he first thought of using “Vinci” only after his discussion with Mr Khaled. When it was put to him that his earlier account was a lie, Mr Grassia replied “No no Vinci could have been one of the names, your Honour, that was on the list, but we just didn’t write it on the list”. When asked which version of events was truthful, Mr Grassia replied that he and his wife decided on Vinci after Mr Khaled raised concerns, but thought of Vinci prior to that point, without really focussing on it.
268 Ultimately, Mr Grassia did not present any consistent, coherent or credible account of when he first thought of “Vinci”. He appeared to depart from his earlier testimony that, because he had decided on “Vinci”, he then considered other words commencing with V, and instead stated that he looked at words starting with V because “we’re Italian, we’ve got many Italian words… which will suit products… and V was particularly attractive to my wife and I”.
269 Some words on the list, such as “Vivolution”, were not derived from the Italian dictionary. The list also contained words, including “Vivolution”, depicted with a curved stripe above. It was not disputed that advertisements for “TiVo the Revolution” were published in print media in July 2008 and television advertisements were aired no earlier than August 2008, of which examples were exhibited.
270 Mr Grassia also conceded that the curved stripe appeared in sketches he received from Suzie Stathakis in May 2007, although he deposed that the list was drawn in May 2006.
271 The inclusion of the word “Vivolution” and the curved stripe used by Ms Stathakis thus suggested that the handwritten list was drawn after May 2006. Mr Grassia conceded that he was unsure whether the word “Vivolution” was added to the list later. He nevertheless denied that the word “Vivolution” was inspired by his knowledge of the TiVo Tivolution trade mark or the TiVo Revolution.
272 In cross-examination, Mr Grassia conceded that he had not discussed a curved stripe with Mr Khaled, but at another point, stated that he was unable to recall.
273 Having testified that he was dissatisfied with Mr Khaled’s sketches made contemporaneously with the list of words, and that the curved stripe introduced in Ms Stathakis’ sketches prepared in May 2007 appealed to him, Mr Grassia initially denied that the list was created after May 2007.
274 Ultimately, however, Mr Grassia conceded that he could not recall whether the list was produced after May 2007.
275 Mr Grassia nevertheless denied that he had heard of “Tivolution” or had seen the advertising for TiVo the Revolution at any stage. The Vivo website, however, contained the similar slogan “Vivo the Revolution”. While unable to suggest any “revolutionary” characteristic of Vivo products, Mr Grassia denied any personal involvement in the creation of the slogan on the Vivo website, stating that it was “done in China”. While Vivo contended that it referred to “a new AV revolution” in its advertising in April 2008, the references to “Vivo the Revolution” appeared in Vivo’s advertising in July 2008, contemporaneously with the “TiVo the Revolution” advertising. Further, an article entitled “Get Set for the Tivo-lution” was published in “Adnews” in May 2004. Mr Grassia’s denial of any relationship between the TiVo and Vivo slogans was, in the circumstances, implausible.
276 Mr Grassia stated that he did not seek professional advice about using the word Vivo after Mr Khaled had expressed concern on three occasions, as he did his own research. Mr Grassia had, however, the experience of involvement in intellectual property litigation brought by Microsoft over the alleged sale of counterfeit Microsoft products, which was settled without admission of liability in 2002 on payment of $200,000 in costs and submission to an injunction by Mr Grassia or his interests.
277 Despite informing Mr Khaled on 29 May 2006 that he would register Vivo “today”, Mr Grassia did not do so for over 18 months. Given Mr Khaled’s caveats, Vivo’s planned business, Mr Grassia’s experience with intellectual property litigation and the significance of the decision, Vivo’s prolonged failure to conduct an adequate search or seek professional advice about the adoption of “Vivo” (which would have disclosed the registration of the TiVo trade mark) was not, contrary to Vivo’s submission, plausibly explained by a desire to avoid expense.
278 Mr Grassia also maintained that he had not heard of TiVo when he selected the name Vivo, or indeed at the time of the application to register the Vivo trade mark. Mr Grassia deposed that he had conducted a successful business importing and distributing consumer electronic and audio visual products for more than 20 years, first importing computer monitors between 1980 and 2004 and after an 18 month interval, returning to the IT industry to tap the growing market for affordable audio visual televisions in the switchover from analogue to digital.
279 Mr Grassia acknowledged that from 1987 to 2004, he read as much as he could of what was published in the IT field, in order to ascertain openings for niche products and new markets. He agreed that he had read the PC Week magazine, The Sydney Morning Herald, The Sunday Telegraph, PC Magazine Australia and the technical and business sections of the daily press for reference to deals or products that were promoted or introduced around the world. Indeed Mr Grassia advertised in such newspaper sections.
280 Mr Grassia also, during the relevant period, visited websites related to IT products.
281 Mr Grassia’s assertion that his reading concentrated on local matters was at odds with his acknowledged search for products to import, and his affirmation of the claim on the Vivo website that for the past 25 years he had “lived and breathed” audio visual and consumer electronic products. He acknowledged that televisions and consumer electronics, audio visual and IT products were “all sort of one group”. Mr Grassia acknowledged that he kept himself up to date with innovations and trends and, particularly from around 2000, looked at the burgeoning information about that general product category, electronic computer and entertainment products.
282 Prior to 18 February 2008, 630 articles mentioning TiVo were published in mainstream Australian print media. It was not disputed that, by June 2006, 293 articles mentioning TiVo had been published, of which 90 contained more than a passing reference to TiVo and educated consumers about the TiVo DVR. Mr Danovitz’ evidence that TiVo had won a number of awards for “outstanding” or “best” products and was a household name in the United States was unchallenged. It was thus not credible that Mr Grassia, while consistently keeping abreast in the print media and websites of new products to import, should have remained wholly ignorant of the TiVo name and product, which were repeatedly mentioned in articles published in publications he read and on websites he visited.
283 Mr Grassia’s denial that he saw, or became aware, of a single article relating to the launch of TiVo in Australia in newspapers he read, such as The Sydney Morning Herald and The Australian, or which were published on websites he acknowledged reading, was unconvincing.
284 His testimony in cross-examination was as follows:
But you lived and breathed audio visual and consumer electronic products for 25 years?
Correct.
And this is an audio visual consumer electronic product isn’t it?
Correct.
And you say that the launch of a new product was not something that attracted your attention?
Absolutely not.
285 Mr Grassia displayed an unconscientious and unimpressive approach to significant questions in cross-examination.
286 When taken to an exhibit containing articles prior to the Vivo priority date about, or mentioning, TiVo published in Australian newspapers (many of which he took or read), Mr Grassia was requested to read the index and flick through the articles, including from The Australian, The Sydney Morning Herald, The Daily Telegraph and The Sunday Telegraph, to confirm if he had ever seen any of the articles.
287 Mr Grassia immediately, without appearing to consult the index, stated that he had never read any of the articles. When invited to look through the index and the volumes at greater leisure, while the court adjourned for that purpose, Mr Grassia declined. I was not persuaded that Mr Grassia attended to and observed the index or the articles in the exhibit or made any bona fide attempt to consider and accurately respond to the question. I do not accept his denial of having seen a single one of the relevant publications between 1999 and February 2008 or his denial that he was aware of TiVo in May 2006.
288 Mr Grassia acknowledged that he watched television but denied watching programmes such as “Sex and the City” or “Boston Legal”, in which the TiVo DVR was mentioned. He stated that he did not go to the movies often, and thus did not view any films incorporating a reference to TiVo. Mr Grassia also denied that he was aware of any of the publicity about the May 2007 Channel 7 agreement to launch TiVo devices in Australia or had heard of the TiVo device, seen it on television, or read any material relating to it.
289 As stated above, Mr Grassia’s account of the process of selection of Vivo was also unconvincing.
290 Vivo submitted that it was entitled to the favourable exercise of the discretion under s 44(3) of the Act unless the court were satisfied to Briginshaw standards that Mr Grassia adopted the name Vivo intending to take the benefit of the name TiVo.
291 Section 140 of the Evidence Act 1995 (Cth) (“Evidence Act”) requires the court in civil proceedings to apply the civil standard of proof on the balance of probabilities. Section 140(2) of the Evidence Act provides:
(2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:
(a) the nature of the cause of action or defence; and
(b) the nature of the subject-matter of the proceeding; and
(c) the gravity of the matters alleged.
292 In CEPU v ACCC (2007) 162 FCR 466, the Full Court stated at [30] to [32]:
The mandatory considerations which s 140(2) specifies reflect a legislative intention that a court must be mindful of the forensic context in forming an opinion as to its satisfaction about matters in evidence. Ordinarily, the more serious the consequences of what is contested in the litigation, the more a court will have regard to the strength and weakness of evidence before it in coming to a conclusion.
Even though he spoke of the common law position, Dixon J's classic discussion in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-363 of how the civil standard of proof operates appositely expresses the considerations which s 140(2) of the Evidence Act now requires a court to take into account. Dixon J emphasised that when the law requires proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. He pointed out that a mere mechanical comparison of probabilities independent of any belief in its reality, cannot justify the finding of a fact. But he recognised that (Briginshaw 60 CLR at 361-362):
No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters "reasonable satisfaction" should not be produced by inexact proofs, indefinite testimony, or indirect inferences. Everyone must feel that, when, for instance, the issue is on which of two dates an admitted occurrence took place, a satisfactory conclusion may be reached on materials of a kind that would not satisfy any sound and prudent judgment if the question was whether some act had been done involving grave moral delinquency.
Dixon J also pointed out that the standard of persuasion, whether one is applying the relevant standard of proof on the balance of probabilities or beyond reasonable doubt, is always whether the affirmative of the allegation has been made out to the reasonable satisfaction of the tribunal. He said that the nature of the issue necessarily affected the process by which reasonable satisfaction was attained. And, so, he concluded that in a civil proceeding, when a question arose whether a crime had been committed, the standard of persuasion was the same as upon other civil issues. But he added, weight must be given to the presumption of innocence and exactness of proof must be expected (Briginshaw 60 CLR at 362-363).
293 Ultimately, while it was unnecessary to determine the precise date on which the list of names was created, the evidence does not establish that it was contemporaneous, or wholly contemporaneous, with Mr Grassia’s choice in May (or June) 2006 of the word Vivo, and therefore, as Vivo submitted, supported his testimony. Mr Grassia ultimately conceded that he could not recall whether the list was produced after May 2007. In my opinion, Mr Grassia’s account of how he came to select Vivo and his denial of any knowledge of TiVo were untruthful. Vivo bore the burden of establishing honest concurrent use, which it did not discharge. To the contrary, I was satisfied to the requisite standard that, as TiVo submitted, Mr Grassia, being well aware of the use of the word TiVo for an innovative product and intending to secure associated advantages, selected Vivo as a word as close as possible to TiVo, distinguished only by a different initial letter. While the evidence does not permit me to determine whether Mr Grassia believed that the use of Vivo would or would probably infringe, he did not conduct or commission an adequate search. In my opinion, Mr Grassia’s account of his motivations and the selection process was a self-serving reconstruction, and his denial of awareness of and intention closely to approximate the word TiVo was false.
294 In the circumstances, I am satisfied that honest concurrent use is not made out.
Whether “other circumstances” pursuant to s 44(3)(b)
295 In Hills Industries, Lander J considered that, on the better view, for the purposes of the exercise of discretion under s 44(3)(b), only those circumstances prevailing prior to the priority date were relevant. His Honour acknowledged the absence of an express statement to that effect, but stated at [177] that on balance:
s 44 in general assumes an inquiry as at the priority date and as was said in Southern Cross at CLR 595; ALR 118; IPR 468, “the rights of the parties are to be determined as at the date of the application”.
296 Vivo queried the correctness of that view and submitted that if, to the contrary, post-priority date conduct could be considered under s 44(3)(b), it was entitled to rely on, as in VB Distributors, TiVo’s preceding non-use of the TiVo trade mark, Vivo’s considerably greater sales, and the concurrent use of the Vivo and TiVo trade marks up to the present time without difficulty or confusion.
297 In my opinion, there was force in Lander J’s recognition that s 44 generally assumes (in accordance with the balance of binding authority, including in Southern Cross (per Kitto J) and Woolworths) an inquiry as at that date.
298 In contrast, Hammond J’s contrary view in the New Zealand decision of VB Distributors was obiter, his Honour was not bound by Australian decisions and the facts were very different from those of the present case, as the marks in VB Distributors were not sufficiently similar to cause confusion and a decade of concurrent usage had occurred without difficulty.
299 If, contrary to Hills Industries, post-priority date matters may properly be considered under s 44(3)(b), in circumstances where the marks are deceptively similar; TiVo (as discussed below) had acquired a reputation in Australia prior to 18 February 2008; the Vivo trade mark was adopted with knowledge of, and to obtain the benefit of, the TiVo trade mark’s reputation; Vivo did not undertake an adequate search, seek professional advice or take reasonable precautions in relation to its adoption of the Vivo trade mark; Vivo did not conduct significant direct advertising to establish goodwill prior to the priority date; there is evidence of post-priority date confusion amongst sales staff; and TiVo’s post-priority date sales (while fewer in number and of less total value than the Vivo’s sales) are nevertheless considerable, particularly given the relative expense and nature of the item; in my opinion, the discretion under s 44(3)(b) should not be exercised to permit concurrent use.
Opposition under s 60 of the Act
Whether use of Vivo trade mark likely to deceive or cause confusion due to TiVo trade mark’s reputation in Australia
300 TiVo further or alternatively submitted that it could also have successfully opposed the registration of the Vivo trade mark pursuant to s 60 of the Act, as the TiVo trade mark had acquired a reputation in Australia before the priority date for the registration of the Vivo trade mark in respect of the relevant goods and services and, because of the reputation of the TiVo trade mark, the use of the Vivo trade mark would be likely to deceive or cause confusion.
301 Although the application to register the TiVo trade mark was lodged on 10 November 1999 and the trade mark was registered in Australia on 18 July 2000, it is not disputed that TiVo did not officially launch its business or supply or market any products in Australia until late July 2008, by which date, Vivo had already been marketing products in Australia for about 18 months from early 2007, under the unregistered Vivo trade mark, and, from 24 April 2009, under the registered Vivo trade mark.
302 TiVo contends that although it had not supplied or marketed, or directly advertised products in Australia prior to July 2008, it had nevertheless already established a “significant and substantial” reputation in Australia well prior to the priority date of the Vivo trade mark, by its exposure in a “wealth of publicity”, comprising a large volume of print media (including mainstream national newspapers circulated in all Australian states and in technical journals), films and television programs shown in Australia (some of which included passing references while others contained detailed expositions of the TiVo DVR), and through the importation, modification and use of TiVo DVRs in Australia by a group of enthusiasts.
303 TiVo submitted:
151. The Applicants’ TIVO personal television service was a first-of-its kind device in the world, revolutionising the way people watch television. Consequently, there was significant hype surrounding the launch of the Applicants' revolutionary TIVO personal television service (which included the provision of TIVO DVRs and other TIVO Products to customers). Such hype, and the substantial (and extent of) advertising and marketing undertaken by the Applicants in promoting that service, resulted in the Applicants developing a substantial and exclusive reputation for providing electronic home entertainment products under and by reference to the name TIVO. This substantial reputation existed in Australia well before 18 February 2008, demonstrated by the:
(a) recognition and exposure of TIVO in mainstream media; and
(b) permeation of TIVO in popular culture;
(c) early adoption and use of TIVO DVRs and other TIVO Products by Australians as early as July 2000;
(d) creation of an online group of TIVO enthusiasts in Australia in around July 2002 and participants in that group by enthusiastic consumers.
304 Section 60 of the Act provides:
Trade mark similar to trade mark that has acquired a reputation in Australia
The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:
(a) another trade mark had, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and
(b) because of the reputation of that other trade mark, the use of the first-mentioned trade mark would be likely to deceive or cause confusion.
305 The reported judicial consideration of s 60 in its present form, as amended by the Trade Marks Amendment Act 2006 (Cth), is relatively sparse. The amendment removed a requirement that the mark enjoying the reputation be substantially identical with or similar to the application mark.
306 Nevertheless, Gyles J’s observations in Pfizer Products on the relationship between ss 44 and 60 remain valid. His Honour noted “the obvious overlap” between the provisions and stated at [27]:
What is the difference between ss 44 and 60? In the present case, the marks are not substantially identical, therefore, the issue is deceptive similarity. Section 60 depends upon the opponent’s mark having acquired a reputation in Australia by virtue of which the use of the trade mark applied for would be likely to deceive or cause confusion because of the deceptive similarity between them. Section 44(1) refers to deceptive similarity between the applicant’s mark and a mark registered by another person in respect of similar goods. In other words, the comparison is between mark and mark, not between mark and reputation.
307 In McCormick, Kenny J stated at [94]:
Under s 60, the new inquiry centres on the reputation of the earlier mark. That reputation is critical to the opposition under s 60.
308 The focus of s 60 is protection of reputation in a trade mark, irrespective of whether it is registered. The opponent bears the onus of establishing that another trade mark, whether registered or not, has acquired a reputation in Australia, such that use of the opposed mark would be likely to deceive or cause confusion.
309 While, as TiVo submitted, s 60 does not require a reputation amongst any particular proportion or number of the Australian population, the authorities indicate that a “significant” or “substantial” number of people or potential customers is required.
310 In McCormick, Kenny J stated at [81]:
What is intended by the word “reputation” in s 60? The word is defined in The Macquarie Dictionary as follows:
reputation … 1. the estimation in which a person or thing is held, esp. by the community or the public generally; repute … 2. favourable repute; good name … 3. A favourable and publicly recognised name or standing for merit, achievement, etc … 4. The estimation or name of being, having done, etc, something specified.
Compare The Oxford English Dictionary. In s 60, the word is, I think, apt to refer to “the recognition of the McCormick & Co marks by the public generally”.
311 In Austin, Nichols and Co Inc v Lodestar Anstalt [2012] FCAFC 8 (“Austin”), the Full Court recently reiterated (citing McCormick) that “‘Reputation’ in this context means the recognition of the mark by the public generally”. In Renaud Cointreau v Cordon Bleu International Ltd (2001) 193 ALR 657 (“Renaud Cointreau”), the Full Federal Court (Moore, Tamberlin and Goldberg JJ) stated (at [75]) that reputation in s 28(a) of the Trade Marks Act 1955 (Cth) required a reputation of which a considerable number of people would be aware.
312 In Le Cordon Bleu BV v Cordon Bleu International Ltee (2000) 50 IPR 1 (“Le Cordon Bleu”), the primary judge found that although a French mark had a reputation amongst a small group of food industry professionals, the goods in respect of which registration was sought for the opposed Canadian mark were foodstuffs sold in supermarkets, delicatessens, milk bars and other retail outlets, so the relevant market was virtually the entire Australian population from teenage years onwards. The professional group had sophisticated knowledge of Paris and London cookery schools using the name “Cordon Bleu”, yet his Honour stated that “this very characteristic [made] them untypical of consumers as a whole” and it was not possible to extrapolate their knowledge to the Australian population at large (at [91]). The use of the Canadian mark was thus not likely to cause a significant group of potential purchasers in Australia to be caused to wonder whether the Canadian product was associated with the French mark.
313 The primary judge observed that “what is ‘significant’ or ‘substantial’ will depend on the nature of the goods or services in question. For some highly specialised products, awareness among a few thousand or even less, might be sufficient” (at [91]).
314 On appeal, the Full Court in Renaud Cointreau upheld the primary judge’s approach and observed (at [75]) that:
his Honour correctly stated the test as being whether the reputation [of the mark] is one of which a significant number of people would be aware.
…
[The] small sophisticated group of food industry professionals… could not be said to be a significant or substantial number of potential customers for the Canadian product. It was well open to his Honour to conclude that it is insufficient to show that a small sophisticated elite group of quality conscious enthusiasts are unaware [sic] of the reputation. We can see no error in principle in the approach of his Honour in finding that it is insufficient to establish reputation in a significant number of potential purchasers in Australia to show that such a group might be led to wonder whether the Canadian pâté is associated with the French school.
315 In Hansen Beverage Company v Bickfords (Australia) Pty Ltd (2008) 171 FCR 579 (“Hansen”), in the analogous, albeit distinct, context of a claim under s 52 of the Trade Practices Act 1974 (Cth), the Full Court held that it was not necessary for that purpose to prove reputation amongst a substantial proportion or substantial number of persons within a targeted class.
316 In Hansen, the Full Court held that the primary judge had erred in requiring, for the purposes of s 52 of the Trade Practices Act 1974 (Cth), a reputation among a substantial proportion or number of persons within the broader targeted class of young adult males, and in selecting the relevant class of persons by reference to advertising goals.
317 Tamberlin J (with whom Siopis J agreed) observed that there was no foundation in the language of s 52 requiring a reputation “among any particular class or group of persons (particularly as defined by advertising objectives) before a breach of that provision can be made out” (at [46]). The correct question was, Tamberlin J said, “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” (at [46]). The primary judge, however, erroneously considered that a reputation amongst members of the class of extreme sports enthusiasts was insufficient, because that group was not targeted for advertising.
318 Finkelstein J, in a separate judgment, reiterated his previously expressed view that it should not be necessary to establish that a substantial or significant proportion of persons within the relevant market were likely to be misled or deceived (at [55]).
319 Finkelstein J observed that passing off required a significant proportion of persons within the relevant market to be misled and that the trial judge erred in conflating the target market with the relevant market, which, in the particular case, was narrower. The extreme sports enthusiasts were a relevant market (at [59]).
320 TiVo submitted that there was no material distinction between the reputation required for the purposes of s 60 of the Act and s 52 of the Trade Practices Act 1974 (Cth). Accordingly, just as Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 (“Conagra”) (which concerned the latter provision) was applied in relation to s 60, including by Kenny J in McCormick, the reasoning in Hansen likewise applied in that context.
321 It was, however, unclear whether the Full Court’s apparent endorsement in Renaud Cointreau of the reasoning of the primary judge (who contemplated that what is significant or substantial may depend on the nature of the product) is entirely consistent with Hansen, including Tamberlin J’s requirement in Hansen, in relation to s 52 of the Trade Practices Act 1974 (Cth), of a not insignificant number of persons in the Australian community who were or were likely to be misled, or Finkelstein J’s more liberal approach.
322 As the parties did not refer in their submissions to Renaud Cointreau, any potential inconsistencies were not explored, and the Full Court in Austin, citing McCormick, did not discuss the meaning of the reputation question in detail.
323 It is unnecessary to resolve any uncertainty for the purposes of this case, because, for reasons set out below, I consider that on any view, the requirements for reputation under s 60 were satisfied.
324 I observe, in that context, that the requirement under s 60 that the reputation be such as to cause a likelihood of deception or confusion appears implicitly, at least, to require its existence amongst members of the public sufficient, or with characteristics apt to achieve that effect in a particular case. If, for example, the mark’s reputation is confined to a narrow group of sophisticated users, as in Renaud Cointreau, but the class of consumers of the relevant goods is wide, it may be difficult to show a likelihood that the reputation is such that the use of the opposed mark will cause confusion, either because only a minimal number of persons might be confused, or because the character of the group is such that confusion is, in any event, unlikely. On the other hand, if the trade mark in question were used in relation to goods or services commonly consumed only by specialised groups, it would be inappropriate to require a reputation amongst a substantial number of members of the Australian public generally.
325 The cases recognise a number of ways in which, for the purposes of s 60, reputation may be established.
326 While a high volume of sales does not necessarily establish that a significant number of people recognised the marks, as distinct from the products, as Kenny J observed in McCormick at [86]:
In practice, it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions, without any direct evidence of consumer appreciation of the mark, as opposed to the product.
327 In McCormick, Kenny J accepted that the sales and advertising over 30 years were of such magnitude that reputation was established, despite other deficiencies in the evidence, such as a lack of consumer surveys or in relation to the effect of marketing, or the connection between the international reputation of the mark with the Australian reputation (at [87] and [88]).
328 TiVo also referred to a number of decisions of delegates of the Registrar of Trade Marks in submitting that they endorsed a lower threshold for establishing reputation under s 60 than that urged by Vivo (Haw Par Corporation Limited v The Thai Enterprises Limited (2004) 63 IPR 666; Podravka Prehrambena Industrija DD v Przedsiebiorstwo Produkcyjno Handlowe “Prymat” Ryszard Lechowski (2004) 64 IPR 414; South Cone Inc v Reg Barton Spencer [2007] ATMO 43; American Power Conversion v Tecom Resources Pty Ltd [2004] ATMO 58; Men’s Gallery Pty Ltd v Platinum 253 Pty Ltd (2008) 78 IPR 71; Vitasoy International Holdings Ltd v Green Spot Company Limited [2008] ATMO 45). Although the question of reputation was not analysed in great detail, the delegate in each case concluded that reputation was established, predominantly on the basis of significant sales and advertising expenditure. In contrast to the present case, the cases involved direct (rather than indirect) advertising, but on a basis less extensive than that of the exposure of the TiVo trade mark in mainstream newspapers, television programmes, films and websites.
329 In Pfizer Products, Gyles J described the evidence on the reputation of the VIAGRA mark at [29] as follows:
Silverstein dealt with the history, advertising and promotion of the product, advertising expenditure, sales of the product, trade mark registrations and, in relation to the reputation of VIAGRA, attached a representative sample of articles mentioning the product which have appeared in various United States publications with international circulations from newspapers, magazines and medical publications. Glover dealt with the history of VIAGRA, advertising of the product in Australia, the sales of the product bearing the trade mark in Australia, Australian trade mark protection and the reputation of VIAGRA. A good deal of material was produced in relation to reputation including market research, radio transcripts, media reports covering print and electronic media and the internet. Evidence also establishes that Pfizer is the only owner of a trade mark registration class 5 for a mark containing the “-AGRA” suffix. The product in relation to which Pfizer uses the trade mark was the first oral treatment for erectile dysfunction, both in Australia and internationally. “VIAGRA” is an invented word. The product was launched in Australia in September 1998.
330 His Honour did not consider that the reputation was limited to a particular medical treatment for a particular medical condition available only on prescription from pharmacies (at [31]).
331 Gyles J rejected the contention that the fame of VIAGRA would help to distinguish the marks, and thought that instead it would “cause HERBAGRA to strike a chord with the consumer as to a link with VIAGRA” (at [43]).
332 Nevertheless, sales, use or direct advertising in Australia are not prerequisites to establishing reputation.
333 In Toddler Kindy Gymbaroo Pty Ltd v Gymboree Pty Ltd (2000) 100 FCR 166, Moore J found reputation solely on the basis of use and promotion. In Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd (1997) 38 IPR 495, Heerey J relied on public visibility over two decades and significant expenditure on advertising.
334 In Conagra, Lockhart J stated that (at 343):
reputation within [Australia] may be proved by a variety of means including advertisements on television or radio, or in magazines and newspapers within the forum. It may be established by showing constant travel of people between other countries and the forum, and that people within the forum (whether residents there or persons simply visiting there from other countries) are exposed to the goods of the overseas owner.
335 His Honour noted that due to the effect of modern mass media advertising through television, radio, newspapers and magazines which reach people in many different countries and the international mobility of the world population, “[g]oods and services are often preceded by their reputation abroad. They may not be physically present in the market of a particular country, but are well known there because of the sophistication of communications which are increasingly less limited by national boundaries, and the frequent travel of residents of many countries for reasons of business, pleasure or study” (at 342).
336 The authorities therefore recognise that even in the absence of sales or use, a mark may acquire a reputation in Australia by the means of direct preliminary marketing, direct advertising, indirect advertising, exposure in radio, film, newspapers and magazines or television, or because the mark has a reputation in another country which can be shown to have extended to Australia.
337 The requirement that the use of the opposed mark is likely to deceive or cause confusion is not tantamount to a requirement that it will more probably than not have that effect, but there must be “a real tangible danger”, not merely a trivial prospect.
338 The question is whether TiVo had acquired a reputation in its mark in Australia amongst a significant number of people as at 18 February 2008 (the priority date of the Vivo trade mark), by reason of which there was a real tangible danger that the use of the Vivo trade mark would be likely to deceive or confuse.
339 According to the unchallenged evidence of Mr Danovitz, TiVo was well established in the United States and enjoyed a substantial reputation there due to its significant advertising, marketing and promotion since 1998 of the TiVo products and services, which because the TiVo DVR was, at the time of its introduction, a novel device with unprecedented capacities, received a very large measure of unsolicited promotion. As Mr Danovitz testified, TiVo won a number of awards, including:
(a) on 1 October 2005, a number two ranking in the “10 Best Products in the Last Decade” by CNET News; and
(b) in 2006, an Emmy Award for “Outstanding Innovation and Achievement in Advanced Media Technology” and a ranking in the “PC World 2006 World Class Awards”.
340 In the United States, the TiVo brand had become a household name and part of global “pop culture”, with significant hype surrounding the launch of the TiVo personal television service, which, as the first such device in the world, revolutionised television viewing.
341 TiVo’s prominent reputation in the United States or other parts of the world would not avail without some nexus with Australia. In accordance with Lockhart J’s observations in Conagra, TiVo may have acquired some reputation in Australia prior to 18 February 2008 by means of travel between the United States and Australia, but it is difficult to attribute weight to that prospect in the absence of evidence.
342 While TiVo only launched its DVR in Australia about six months after the priority date, on 27 July 2008, the TiVo DVR had been used in Australia long before that date by a group of enthusiasts who had modified the devices.
343 TiVo relied, inter alia, on the reputation acquired by TiVo in Australia prior to 18 February 2008 amongst that group.
Use by group of enthusiasts
344 Warren Toomey, a technology hobbyist and Assistant Professor in the School of Information Technology at Bond University, deposed to the adoption of TiVo DVRs by Australians from July 2002, together with the establishment of an online group. Mr Toomey became aware of the TiVo DVR in early 2001 through contact with other technology enthusiasts, who had seen a presentation concerning TiVo by Andrew Tridgell (a programmer) at a conference in Sydney.
345 Mr Toomey deposed that prior to its launch in Australia in 2008, the TiVo DVR could be purchased from eBay and, once there was sufficient demand (from approximately mid-2005 onwards), local businesses started importing and selling the device.
346 Mr Tridgell had acquired a TiVo DVR from the United States in 2000 and had made modifications to the device so that it would operate successfully in Australia. In August 2001, Mr Toomey acquired a TiVo DVR from his friend, Bryan Burgess, who had purchased two DVRs from eBay.
347 Mr Toomey stated that prior to the Australian launch of the TiVo DVR, it was necessary to modify the device to make it work in Australia, by installing an Australian television tuner, modifying the system software to control the tuner, and providing an EPG. An EPG provided data to the DVR about the programming schedule for all television broadcasts (such as the date, time, name and channel of the program). Without such data, the device would be unable to record programs by name, which is one of the key advantages of a DVR.
348 In July 2001, given the growing interest in TiVo DVRs in Australia, Mr Toomey established an “oztivo” mailing list in July 2002, which shared resources and information on how to acquire and modify the TiVo DVR for use in Australia. The OzTiVo community communicated via three e-mail mailing lists and web-based forums. The community, inter alia, developed and maintained software enabling the use of TiVo DVRs in Australia, and developed and maintained a “wiki” reference guide concerning the acquisition, modification and use of the device. The mailing list generated a membership of around 650 in October 2005 (which had reduced to around 400 in June 2011).
349 Mr Toomey developed software in September 2001, and updated it in June 2003 to create EPG data. In December 2003, he set up a TiVo “service emulator”, which automated the downloading of EPG data so that users could avoid manual downloading. Mr Toomey estimated that over 98% of TiVo DVRs set up in Australia using his software also retrieved EPG data from his service emulator.
350 Mr Toomey deposed that he originally obtained the guide data for TiVo DVRs from websites such as www.yourtv.com.au. After June 2004, when he was served with a cease and desist notice, he developed a new user-edited system in which, inter alia, EPG data was manually added by a community of users.
351 Mr Toomey deposed that, at its peak on 2 October 2007, there were 1,207 active DVRs accessing his service emulator, which, by 14 January 2011, had declined to 518, probably due to the official launch of the TiVo DVR in Australia.
352 Before he was contacted in relation to the proceeding, Mr Toomey had not heard of Vivo, but when made aware of it, immediately perceived a “strong similarity” between the TiVo and Vivo brand names.
353 In summary, the evidence established that from about 2000, a group of early users purchased TiVo DVRs abroad and modified them for Australian use, from July 2002 an online mailing list in Australia was established which by October 2005 had 650 members, by mid-2005, there were dedicated businesses in Australia to import, sell and modify TiVo DVRs, and by 2 October 2007, 1,207 people accessed the EPG data for Australian users, thus indicating that there were at least that many machines and users in Australia.
354 The TiVo trade mark had acquired a reputation in Australia within the group, which the group’s activities further promoted. Due to the use, activities and network of the modified TiVo DVRs by the group of enthusiasts, the reputation of the TiVo trade mark probably reached an audience beyond the group. Nevertheless, as Vivo submitted, the group’s number was small relative to the class of consumers, and awareness of the TiVo mark could not be extrapolated to the population at large.
355 If, however, s 60 requires, in accordance with Renaud Cointreau, a reputation amongst a number of persons which is significant or substantial in relation to the potential consumers of the relevant goods, TiVo’s reputation within the group of about 1,300 enthusiasts would be unlikely to satisfy that criterion, as according to Professor Lukas, almost all adult and adolescent Australians who can pay for audio visual products are consumers of such goods. More fundamentally, the reputation within the enthusiast group would not, in my view, be a reputation by reason of which use of the Vivo trade mark would be likely to confuse. Clearly, all members of the group not only knew of TiVo, but had gone to considerable lengths to obtain, modify and use a TiVo DVR. By definition, they were sophisticated, discerning and highly aware users, who (despite Mr Toomey’s observations that the Vivo name was similar) would be unlikely to be confused by use of the Vivo mark. In contrast to the food industry experts in Renaud Cointreau, whose specialist knowledge of the reputation rendered them liable to confusion by use of the opposed mark, in the present case, the specialist knowledge of the enthusiasts’ group would, in my view, tend to exclude confusion. There would not be a real and tangible danger that due to any reputation of TiVo within the small sophisticated group, the use of the Vivo trade mark across its range of registration would cause a significant number of people to wonder whether the Vivo and TiVo products or services had an association or the same origin.
356 Nevertheless, TiVo relied on the use and reputation of the mark among the early users group not in isolation, but in conjunction with the very large volume of mentions of, and references to, TiVo in newspapers, magazines, websites, films and television programs prior to 18 February 2008.
Whether reputation acquired in Australia through articles, websites, television programs and films
357 Mr Akbarzadeh, a lawyer for TiVo, deposed to his review of articles, websites, television programs and films containing references to the TiVo DVR.
358 Mr Akbarzadeh exhibited a list of 638 articles in Australian media sources containing the word “TiVo” before 18 February 2008 (subsequently, in his affidavit of 29 August 2011, corrected to 630 articles). Based on data compiled by the Audit Bureau of Circulations, Mr Akbarzadeh determined that a total of 86,657,713 copies of newspapers and magazines featuring at least one reference to TiVo were sold prior to 18 February 2008. (In his affidavit of 29 August 2011, he corrected this figure to 85,767,034).
359 Mr Akbarzadeh identified five films screened in Australian cinemas prior to 18 February 2008 which contained references to TiVo: Click; Scary Movie 3; Bee Movie; The Break-Up; and Oceans 13. Based on the affidavit of Lori Flekser, he deposed that the films generated revenue of between $8.2 million and $15.1 million in Australian cinema ticket sales.
360 Mr Akbarzadeh deposed to 19 episodes of television programs and broadcasts of three of the above films on television, in which TiVo was mentioned prior to 18 February 2008 (increased to 20 episodes in his affidavit of 29 August 2011). Based on the affidavit of Mark Newstead (discussed below), Mr Akbarzadeh deposed that there were 25,252,821 total estimated viewers for Australian television broadcasts referring to the TiVo DVR on or prior to 18 February 2008. (In his affidavit of 29 August 2011, he corrected that figure to 24,192,000).
361 Mr Akbarzadeh deposed to 42,100 web pages containing the term “TiVo” published on Australian websites on or before 18 February 2008. He also deposed to 276 articles with references to TiVo on online news service provider websites prior to 18 February 2008, namely Gizmodo.com.au, CNET.com.au, ZDnet.com.au and the Google News Archive.
362 Paul Dovas is the Chief Executive Officer of the Audit Bureau of Circulations (“ABC”), which audits a range of publications, such as magazines and newspapers, and provides circulation data to advertisers, marketers and media buyers. The audit process is conducted by an approved auditor, such as a large accounting firm, which verifies the accuracy of publishers’ circulation claims.
363 Mr Dovas deposed that “typically” all of the major publications in Australia are members and must submit circulation data for auditing on a regular basis, thus enabling verification to its advertisers of the average number of copies per issue that qualify as “average net paid sales”, calculated in accordance with a formula set out in the ABC Rules for Auditing.
364 Mr Dovas exhibited tables setting out the average net paid sales for 37 publications at the end date of each defined audit period between 1 January 1999 and 31 March 2011, including for The Australian, the Australian Financial Review, The Sunday Telegraph, The Age, the Herald Sun and Australian PC World magazine.
365 The unchallenged evidence of Mr Dovas and Mr Akbarzadeh established that the above publications in which the relevant articles appeared had wide circulation prior to 18 February 2008.
366 The earliest article appearing in an Australian publication and mentioning TiVo, entitled “Smart VCR makes channel surfing easier”, was published in The Australian newspaper on 12 January 1999, of which 130,000 copies were circulated in Australia. Seventeen articles mentioning TiVo appeared in Australian publications in 1999. Subsequently, the number of articles appearing in print media increased significantly. Over 90 articles were published in print media in Australia in 2005.
367 As TiVo submitted, between June 2006 and June 2007, there were 111 published articles which made reference to TiVo, of which 56 made more than merely a passing reference and educated readers about the TiVo product.
368 By 18 February 2008, the number had increased to a total of 630 articles published in mainstream newspapers or popular publications referring to TiVo, of which 170 made more than a passing reference, and were published in over 85,000,000 mainstream newspapers or magazines, including The Australian, the Sydney Morning Herald, The Age, The Courier Mail, B&T Weekly Magazine, The Australian Financial Review and The Herald Sun, reaching a broad cross-section of the community.
369 TiVo relied particularly on the sub-set 170 articles that mentioned the TiVo DVR with some explanation of its function. While conceding that the balance of 460 articles merely contained passing references to TiVo, it contended that they would consolidate TiVo’s reputation in those readers who had already been exposed and excite curiosity in those who had not yet been exposed.
370 The content of the 170 articles (approximately) in Exhibit A10 is indicated by their headlines, which include “Smart VCR makes channel surfing easier” (12 January 1999), “The terror of TiVo” (29 November 2000), “TV without the ads – Commercial Break” (18 January 2001), “The culture – Hi I’m TiVo and I know all about you (1 March 2003), “Get set for the TiVo-lution” (7 May 2004), “Fast Forward to an ad-free future” (4 November 2004), “New Era for TV fans” (10 March 2005), “One Device to Rule the Roost” (6 July 2006), “Pause Live TV on the way” (31 May 2007), “Viewers set to get technology to skip ads” (31 May 2007), “Drama a plenty on Foxtel” (16 June 2007), and “Cunning set top box to outfox Foxtel” (16 June 2007). I consider that persons reading such articles would gain understanding of the TiVo product and an estimation of its advantages and its novel features. Further, as TiVo contended, the large volume of other articles which made passing references to TiVo would, at least, tend to consolidate or add to the awareness of those who already had some understanding and could provoke other readers to seek or consider a more detailed exposition.
371 TiVo also relied on the broadcasting prior to the priority date of a large number of popular free to air and subscription television programmes in Australia which mentioned “TiVo”. TiVo particularly emphasised the following programmes, as they did not contain mere references but explained the function of the TiVo DVR to the viewer:
(a) How I Met Your Mother;
(b) Sex and the City;
(c) The King of Queens;
(d) Family Guy; and
(e) Mind of the Married Man.
372 The evidence of Mark Newstead established that the above programmes had audience numbers ranging from 137,000 (for the episode of “Mind of the Married Man” entitled “The Cream of the Crop”) to 1,138,000 (for the episode of “How I Met Your Mother” entitled “Monday Night Football”).
373 I viewed extracts of each of the above programmes in which TiVo was mentioned. In the episode of the television programme “How I Met Your Mother” entitled “Monday Night Football”, a character comically invokes his TiVo DVR as if in prayer, stating:
Almighty TiVo, we thank you for all the gifts you have given us. The power to freeze live TV to go take a leak is nothing short of god-like. Let's not forget fast forwarding through commercials. It seems greedy to ask anything more from you, oh Magic Box. But if you malfunction and miss the Superbowl, we will destroy you in the alley with baseball bats. Amen.
374 The above episode of “How I Met Your Mother” conveyed an explanation of many of the TiVo DVR’s functions. It was first broadcast on television in Australia on free-to-air Network 7 on Thursday, 17 May 2007 at 7:33pm, obviously a prime evening viewing time.
375 According to the OzTAM ratings to which Mr Newstead deposed, the episode attracted over 1.1 million viewers in Australia before 18 February 2008 (including repeats on other channels).
376 In the episode of the television programme “Sex and the City” entitled “Great Sexpectations”, TiVo was mentioned frequently throughout the episode, and had a role in the plot. The TiVo DVR’s menu screen was depicted in several scenes and its operation was explained in the character’s dialogue.
377 The episode was broadcast on Channel W, a subscription television service, on Tuesday, 7 December 2004 in the evening at 8:02pm. According to the OzTAM ratings evidence of Mr Newstead, the episode attracted 488,000 viewers in Australia before 18 February 2008 (including repeats on other channels).
378 The episode of the television programme “The King of Queens” entitled “Mammary Lane” involved characters obtaining a TiVo DVR and demonstrating it to his friend. The character subsequently exclaimed “Oh my God! My TiVo thinks I’m gay!” in response to the TiVo DVR’s automatic recording of particular television programmes to reflect his viewing preferences based on the programmes he had previously recorded.
379 The episode was first broadcast on free-to-air Channel 9 on Thursday, 1 January 2004 at 7:59pm, again, a prime evening viewing time. The OzTAM ratings evidence of Mr Newstead shows that the episode attracted 587,000 viewers in Australia before 18 February 2008 (including repeats on other channels).
380 In the episode of the television programme “Family Guy” entitled “Bango was his name-o”, a character visited an electronics department store to inquire about purchasing a video cassette recorder or “VCR”. The sales assistant responded:
A VCR? Let me show you something, it's called TiVo, it always records what you are watching so you can re-watch anything you miss.
381 During the episode, TiVo was mentioned by the sales assistant and the TiVo trade mark was visually depicted in a TiVo display in the electronics department store.
382 The above episode was first broadcast on free-to-air Network 7 on Thursday, 31 August 2006 at 10:36pm. The OzTAM ratings evidence of Mr Newstead indicates that the episode attracted 968,000 viewers in Australia before 18 February 2008 (including repeats on other channels).
383 In the episode of the television programme “The Mind of the Married Man” entitled “The Cream of the Crop”, a character discussing his TiVo DVR told his colleagues that his TiVo DVR assumed that he was homosexual based on the programmes he had recorded. TiVo was frequently mentioned in the episode, including as follows:
Character 1: "My TiVo thinks I'm gay"
Character 2: "What's TiVo?"
Character 1: "It's a device that records television shows which you pick, and based on what you pick it records other shows that it thinks you'll like. You record Star Trek and TiVo assumes you like that kind of thing and then when you're not at home it records X-Files.”
384 The TiVo trade mark was also depicted in a number of scenes of the episode.
385 The episode was first broadcast on free-to-air Channel 9 on Thursday, 17 February 2005 at 1:53am. The OzTAM ratings evidence of Mr Newstead indicates that the episode attracted 137,000 viewers in Australia before 18 February 2008 (including repeats on other channels).
386 It was not disputed that before 18 February 2008, numerous other programmes were broadcast in Australia on both free-to-air and subscription television services and referred to TiVo in either the dialogue of the characters, or visually depicted the TiVo trade mark, or both. In the episode of the television programme “The Simpsons” entitled “Papa’s Got a Brand New Badge”, a character explained that he was unwilling to risk his life to protect the lead character because “Arr! I've got a TiVo full of unwatched [programmes]”. Mr Newstead’s evidence demonstrated that the episode attracted 7,095,000 viewers in Australia before 18 February 2008 (including repeats).
387 In the episode of the television programme “House” entitled “Love Hurts”, a character stated:
Don’t have a TiVo on this thing! Can’t Rewind! Shut up!
388 Mr Newstead’s evidence demonstrated that the above episode attracted over 2.7 million viewers in Australia before 18 February 2008 (including repeats).
389 Further, the above programmes were repeated, and I accept that the repeats would be likely to reinforce recognition of TiVo in the minds of repeat viewers and maximise the possibility of establishing TiVo’s reputation in new viewers.
Admissibility of Newstead evidence
390 TiVo relied on the evidence of Mr Newstead, Technical Auditor and consultant engaged by OzTAM Pty Limited (“OzTAM”), to establish by OzTAM rating that the programmes, which were often repeated, were popular or reached a wide audience.
391 In his affidavit sworn on 11 July 2011, Mr Newstead described the collection of viewership information by OzTAM, a company established by Australian commercial television broadcasters as an official source of television ratings in Sydney and Melbourne.
392 Mr Newstead described how OzTAM gathered its data from a sample of over 3,000 homes in Australia (the panel), some of which subscribe to subscription television. He deposed that using a meter system, people in the homes register their presence when in a room where a television is on. The viewing records produced by the meter system are uploaded to a central computer server at Nielsen Television Audience Measurement (“Nielsen TAM”) and processed by a software program called “Pollux” to produce a ratings report for the previous 24 hour period. Mr Newstead deposed that before the report is released to OzTAM, a Nielsen TAM employee verifies the figures to ensure they meet OzTAM’s technical specifications and composition and sample number targets for each reporting market, and rectifies any deficiencies (by, for example, conducting a supplementary check or re-run of the data).
393 Mr Newstead deposed that the panel is determined by a selection process derived from an annual telephone survey of approximately 30,000 households, conducted by a subcontractor of Nielsen TAM. The survey is used to obtain household characteristic data, such as household size, presence of children and the number of working television sets. The survey respondents are placed in a sample pool and categorised according to their household characteristics. Such households then form part of the sample of homes in which Nielsen TAM installs the meters for the purposes described above.
394 Mr Newstead deposed that Nielsen TAM constantly reviews the panel by contacting homes to enquire about any unusual changes to the household’s viewership patterns, using Pollux reports to detect changes to regular reporting patterns in the home, and encouraging panel participants to report any changes in their circumstances. If Nielsen TAM determines that a home should no longer form part of the panel, it selects a replacement home from the sample pool possessing the same household characteristics as its predecessor.
395 Mr Newstead deposed that he undertakes a formal audit review of Nielsen TAM’s reports on a continuous basis, measuring their performance against key performance levels. His findings are published as an auditor’s report, which is provided to stakeholders (including Nielsen TAM and OzTAM) and reviewed by the OzTAM board.
396 Mr Newstead stated that as a consequence of OzTAM’s data collection process described above, and having regard to the size of the sample group, in his opinion the sample is “statistically representative”. That is, the viewing activities recorded from the sample are “valid estimates of the viewing audience in the markets and their component populations”.
397 Mr Newstead stated that, from the sample, the approximate number of people in the entire population viewing a television programme can be reliably estimated using standard statistical methods. The sample proportions are weighted against population statistics derived from the Australian Bureau of Statistics (“ABS”).
398 Mr Newstead provided an example of an episode from a television series. He deposed that the number of panel households that reported watching the episode can be calculated, and, using ABS population statistics, an estimate of programme viewers can be confidently determined.
399 Vivo submitted that Mr Newstead’s evidence was inadmissible under s 79 of the Evidence Act, as it failed to set out the process of reasoning by which the opinion was reached and the facts on which it was based. Further, the court should not exercise its discretion to admit the evidence under s 190(3) of the Evidence Act.
400 Section 79 of the Evidence Act relevantly provides:
79 Exception: opinions based on specialised knowledge
(1) If a person has specialised knowledge based on the person’s training, study or experience, the opinion rule does not apply to evidence of an opinion of that person that is wholly or substantially based on that knowledge.
401 Section 190(3) of the Evidence Act provides:
(3) In a civil proceeding, the court may order that any one or more of the provisions mentioned in subsection (1) do not apply in relation to evidence if:
(a) the matter to which the evidence relates is not genuinely in dispute; or
(b) the application of those provisions would cause or involve unnecessary expense or delay.
402 Vivo relied on the decision of Middleton J in Hansen Beverage Co v Bickfords (Australia) Pty Ltd (2008) 75 IPR 505 (“Hansen Beverage”) to support its submission that Mr Newstead’s evidence was inadmissible. In Hansen Beverage, the applicant tendered an affidavit of Geoff Alford, whose company was a consultant to and statistical auditor of OzTAM. Mr Alford gave evidence in relation to the “collection of data and its combination with demographic information” for the purposes of estimating television ratings.
403 Mr Alford exhibited three data extracts purchased by the applicant’s solicitors from OzTAM. The data was collected from a minimum sample of 3,035 homes in Sydney, Melbourne, Adelaide and Perth, using a meter system whereby householders press a button when in a room where a television is on.
404 Middleton J held (at [125]-[126]) that the data was hearsay as it involved representations by persons (through the pressing of a button) that they were in the room when the television was operating. Such persons were not giving the evidence themselves, but the purpose of the data was to prove the estimated audience sizes for particular programs.
405 Middleton J, applying Roach v Page (No 15) [2003] NSWSC 939, held that the three exhibits did not form part of the business records of OzTAM for the purposes of s 69 of the Evidence Act, as they were the very documents the OzTAM business provided as part of the product of its business to third parties, and were purchased by the applicant for the purposes of the proceeding (at [137]-[138]).
406 Middleton J held that Mr Alford’s opinion was inadmissible without reliance on s 79 of the Evidence Act, which it did not sufficiently set out the process of reasoning to satisfy. While Mr Alford purported to give evidence as to the processing, checking for quality and validating the use of the data in the final television ratings database, he gave no evidence as to who did this, how the statistical methods were adopted, or the nature of the demographic information referred to by him (at [141]).
407 Nor did Middleton J consider that he should exercise his discretion under s 190(3) of the Evidence Act to admit Mr Alford’s evidence, which was required to validate the statistical approach. The number of viewers of the television shows had been in contention since the beginning of the proceeding, and was an important issue in establishing the exposure of the relevant mark to young male adults and other customers in Australia. The applicant, having had ample opportunity to comply with the Evidence Act, failed to do so, and his Honour was not satisfied as to the probative value of the opinion evidence (at [149]-[150]).
408 Middleton J observed at [111] that had the evidence been admitted, it would not have altered his conclusion, as the quality of the exposure in the relevant television programs was poor, and would not have produced the asserted level of awareness of the marks. Middleton J considered that the potential customer (other than perhaps some of the extreme sports enthusiasts) would only have observed occasional fleeting and background references to the applicant’s brand, which made up a relatively small part of each television programme, and were shown among many other words, names and brands (at [97]).
409 Vivo submitted that, as in Hansen Beverage, in this case, Mr Newstead failed to explain how the processing, checking for quality and validating the use of the data in the final television database was undertaken, who undertook it and what methodology or sources were used. Instead Mr Newstead sourced data from the OzTAM database without explaining how the audience figures extrapolated from the data were calculated, which standard statistical methods were employed, which population statistics regularly available from the ABS were utilised or how the sample proportions were weighted to project population potentials.
410 As such, Vivo submitted that consistently with Middleton J’s approach in Hansen Beverage, the court should not exercise its discretion under s 190(3) of the Evidence Act to admit Mr Newstead’s non-compliant evidence.
411 Vivo also relied, in that context, on the dissenting judgment of Heydon J in Dasreef Pty Ltd v Hawchar (2011) 277 ALR 611 (“Dasreef”), in which the High Court considered an award of compensation to the respondent for silicosis, although an expert witness admitted that he could give only a “ballpark” estimate as to the degree of exposure, which the judge used to calculate a numerical exposure that failed a statutorily imposed standard. Heydon J considered that s 79 of the Evidence Act should be construed to comply with a number of common law rules, including the basis rule, the assumption identification rule and the statement of reasoning rule.
412 The majority in Dasreef did not, however, adopt Heydon J’s analysis, but stated at [32]:
To be admissible under s 79(1) the evidence that is tendered must satisfy two criteria. The first is that the witness who gives the evidence “has specialised knowledge based on the person’s training, study or experience”; the second is that the opinion expressed in evidence by the witness “is wholly or substantially based on that knowledge”. The complaint which Dasreef made at trial, on appeal to the Court of Appeal and on appeal to this court was that Dr Basden did not express an opinion about the numerical or quantitative level of exposure to respirable silica encountered by Mr Hawchar in working for Dasreef that was an opinion based on any specialised knowledge Dr Basden had that was based on his training, study or experience.
413 The majority further stated (at [37]) that admissibility of expert evidence under the Evidence Act ordinarily required an explanation of how the field of specialised knowledge in which he is expert, and on which his opinion is wholly or substantially based, applies to the facts assumed or observed so as to produce the opinion.
414 The majority noted that in many and perhaps most cases, this requirement could be met easily and simply (at [37]), and its analysis did not seek to introduce a “basis rule” (whether or not that rule formed part of the common law) to exclude opinion evidence unless the factual bases upon which the opinion is proffered were supported by other evidence.
415 The affidavit of Mr Alford was not set out in the reasons for judgment in Hansen Beverage and a detailed comparison with the Newstead affidavit is not possible.
416 In my opinion, however, the criticisms expressed by Middleton J in relation to the Alford affidavit do not apply to Mr Newstead’s affidavit.
417 In apparent contrast to Mr Alford’s evidence, Mr Newstead explained in some detail the processing, checking and validating of data. Unlike the Alford affidavit, as TiVo submitted, Mr Newstead set out:
(a) the collection, polling and processing of the viewing records by a central computer server at Nielsen Television Audience Measurement (Nielsen TAM);
(b) the use of a Pollux software programme to process the results of the viewing records to produce the report base of daily ratings for the previous 24 hour period;
(c) the daily verification of the report produced by Nielsen TAM by a senior Nielsen TAM employee;
(d) where the employee identifies a deficiency in the daily report standards (eg a pre-determined number of homes not reporting due to the failure of a particular home’s records to be included in the overnight uploads) the issue is resolved by the employee by, for example, conducting a supplementary check or re-run of the data to release the daily viewing records.
418 Mr Newstead explained the number of sample homes, protocols for their selection and maintenance, and his role in overseeing the audit of the data collection process, and illustrated the method of calculation by use of a specific example.
419 In my opinion, the factual foundation of Mr Newstead’s opinion was sufficiently set out to a reasonable level, given the nature of the subject matter and context, and in adequate detail to provide a basis for effective challenge in cross-examination. The assumptions were identified and the reasoning sufficiently exposed. Therefore, despite the apparently very similar, if not identical, subject matter and purpose of the affidavits of Messrs Alford and Newstead, in my opinion, Mr Newstead’s affidavit is admissible under s 79 of the Evidence Act.
420 If, contrary to the above, Mr Newstead’s affidavit is not, on a proper analysis, admissible, in my opinion, the discretion under s 190(3) of the Evidence Act should be exercised. There was, as stated above, considerable factual foundation in appropriate detail.
421 Further, as TiVo submitted, the Newstead affidavit arose in a materially different context from that of Hansen Beverage, as the references to the relevant product in Hansen Beverage were found to be incidental, isolated, fleeting or minor and, as Middleton J observed, the evidence was genuinely in contest. In this case, there was no evidence or submission to contradict the factual substance or methodology of Mr Newstead’s evidence. A huge volume of publications, films and television programs referring to TiVo, some in great detail, were in evidence without objection, and Mr Newstead’s evidence merely related to the likely audience of the television programs.
422 TiVo submitted:
3. Nonetheless, in the present case, the Applicants accept the conclusions of Middleton J at [120]-[138] that the source data contained in such Oztam reports is hearsay and not subject to the business records exception.
…
9. For these reasons, the matter to which the evidence relates is not genuinely in dispute and the evidence is thus admissible under s 190(3)(a) EA, before one even considers s 190(3)(b) EA.
10. In this way, the objection is truly a technical one only, and the Court should be mindful of the overarching purpose of the civil and practice and procedure provisions of the Court, including the Fast Track List directions, to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible: see s 37M of the Federal Court of Australia Act 1976.
11. That overarching purpose is defeated if the ultimate result of the Respondents’ objection is that a party seeking to prove un-contradicted television audience ratings figures is regularly required to call evidence from numerous witnesses providing ever more detail about the process and the software by which television ratings information, commercially used generally in the community, is collected.
12. As set out below, the context in which the affidavit of Mr Newstead arises for consideration in the present case is relevantly different to the context in which Mr Alford’s affidavit arose in Hansen. Further, a comparison of the actual content of Mr Newstead’s affidavit with the criticisms by Middleton J of Mr Alford’s affidavit shows that it contains more detail than that of Mr Alford’s affidavit, and relevantly addresses the key deficiencies identified by Middleton J in Mr Alford’s affidavit.
423 Therefore, in my opinion, Mr Newstead’s evidence was admissible and was unchallenged.
Other evidence
424 TiVo also relied on five films released in the cinema in Australia before 18 February 2008 which referred to TiVo, three of which achieved “number 1” position in the box office.
425 Lori Flekser is the general manager of the Motion Picture Distributor Association of Australia (“MPDAA”), which collects and distributes film exhibition information, including box office admission, revenue and release dates, primarily in order to document the box office performance of films released in Australia.
426 Ms Flekser deposed that film distributors collect box office revenue figures daily from cinemas for their films and send the data to the MPDAA, which then produces reports of the revenue figures.
427 Ms Flekser set out a table in her affidavit revealing the accumulated revenue figures for the following films: Scary Movie 3; Harold & Kumar Escape from Guantanamo Bay; Click; Tropic Thunder; Bee Movie; Untraceable; The Breakup; and Ocean’s 13, together with their relative ranking at the end of their first week of cinematic release in Australia. Four films were ranked 1, two films were ranked 2, one film was ranked 6 and one film was ranked 8. Each generated revenue between approximately $1 million and $15 million.
428 As TiVo submitted:
184. TIVO was referenced in a number of extremely popular films screened in Australian cinemas before 18 February 2008.
185. Of the five films cinematically released in Australia before 18 February 2008 in which TIVO is mentioned, three of those films were number one at the box office at the end of their first week of cinematic release.
186. For example, in the hugely popular children’s film Bee Movie, an animated film produced by DreamWorks Animation and staring the voice of a number of Hollywood celebrities, the lead character, Barry B. Benson (voiced by Jerry Seinfeld), remarks: “TiVo. You can just freeze live TV? That’s insane”.
187. Bee Movie was cinematically released in Australia on 6 December 2007, was number one at the box office at the end of its first week of cinematic release, and received a total of AUD$15,126,885 from box office admissions alone.
188. In another film which was number one at the box office in its first week of release, Click, there is a scene where the central character played by Adam Sandler is shown holding a TIVO remote.
Adam Sandler’s character: “I am freaking out. This thing is broken. It fast forwarding on its own.”
Christopher Walken’s character: “It’s not a malfunction, it’s a feature. Its using its memory to execute your preferences.”
Adam Sandler’s character: “It remembers stuff about me?”
Christopher Walken’s character: “It’s an advanced piece of technology by TiVo. You can call it “mevo”.”
429 TiVo also relied on articles in online news services and publications on technology and consumer electronics, published prior to 18 February 2008 in Australia, in Gizmodo (120 articles), Cnet (27 articles) and ZD net (83 articles).
Hansen Beverage
430 While it is well established that reputation may be established by direct advertising, courts have differed over the weight to be accorded indirect advertising.
431 The question arose in Hansen Beverage, discussed above in relation to the admissibility of evidence. Hansen Beverage principally concerned allegations under s 52 of the Trade Practices Act 1974 (Cth). Both parties in the present case relied on Hansen Beverage.
432 In Hansen Beverage, the applicant, which had developed, marketed and distributed an energy drink sold under the mark “MONSTER ENERGY” on a very significant scale in the United States and many other countries, had become the second highest selling energy drink in the world. It had made no sales or direct promotions in Australia (although it could be obtained on eBay), but had a strategy of rendering its target demographic (males between 18 and 30) familiar with the product by laying a foundation prior to the product launch.
433 When the respondent sought to register MONSTER ENERGY in Australia and launched its own energy drink under the mark, the applicant alleged passing off and misleading and deceptive conduct. At issue, however, was whether the applicant had a sufficient reputation in Australia in relation to energy drinks for the respondent’s use of the mark to convey a misrepresentation of origin or association.
434 Middleton J concluded that a sufficient reputation was not established. The target market for the drink was all 18 to 30 year old males. Some extreme sports enthusiasts were exposed to isolated and fleeting references, and the applicant’s indirect advertising strategies exposed logos on clothing, signage and incidental depictions. Middleton J found that as extreme sports enthusiasts comprised only a small proportion of the large targeted demographic group, even if some had seen the relevant material, it could not be inferred that all young male adults would have the same awareness (at [75]-[76]).
435 His Honour considered that in the absence of direct advertising or sales, it was not possible to extrapolate how many young males would recognise some association. The indirect advertising was described as “occasional fleeting and background references” (at [97]), which would not have sufficient impact to create an association.
436 On appeal, Finkelstein J considered that the primary judge was unduly wary of indirect advertising, which could properly be accorded greater weight.
437 Finkelstein J stated at [61] to [64]:
The judge’s caution is, I think, misplaced. Billions of dollars are spent on advertising. The object is to obtain brand recognition. The purpose is to influence consumer decision-making. Advertising does this by attempting direct persuasion, providing information to influence a choice between alternatives and making known what the alternatives are.
The most obvious form of advertising, and the easiest form of advertising to understand, is the direct message. But the advertising industry has now moved away from primarily relying on direct advertising. The belief is, and the belief is likely to be correct, that indirect communication sometimes expresses a point with more impact. The idea is that an advertisement should not be a lecture; it achieves its object sufficiently if it imports the desired information. Advertisements can do this by providing information verbally or visually. And an advertisement will have effect although the consumer is not aware someone is trying to communicate a message.
There are a plethora of examples of indirect advertising and it is a key topic of discussion in advertising literature. Indirect advertising of the kind with which everyone is familiar is the sponsorship of sports. Many people in many countries place great value upon entertainment, competition and accomplishment, all of which are seen in the sporting arena. Brand names and logos appear around sporting arenas, on the clothing worn by sportsmen and women and on the equipment sportsmen and women use. This form of advertising is seen by many thousands of fans who attend sporting events and, in the case of popular sports, by hundreds of thousands of people if the event is broadcast on television. There are numerous studies that show that this type of indirect advertisement is far more effective at eliciting a consumer recall response than a direct television commercial.
In my opinion the judge was entitled to infer that the indirect brand advertising employed by Hansen (and, for that matter, Bickfords) can establish reputation as well as, if not better than, direct advertising. After all, everyone knows that James Bond drives an Aston Martin, Janis Joplin wanted to own a Mercedes Benz and Audrey Hepburn had breakfast at Tiffany’s.
438 In my opinion, Finkelstein J’s observations, while dicta, are persuasive. There is no compelling dichotomy between direct and indirect advertising in the present context, and the latter form may be equally or more effective. It is necessary to consider the extent, quality, sources, context and likely impact of the exposure of the mark, whatever its particular form and nature.
Conclusion - reputation
439 Vivo submitted that the publications, television programs, websites and films on which TiVo relied did not suffice to establish reputation, as some exhibited extracts could not be evaluated in the context of the article as a whole, and a number of the articles contained only a passing reference to TiVo or a reference some way into the body of the article. Many articles did not refer to TiVo in the headline or otherwise highlight it. Some articles appeared in specialist sections of the relevant publication or their placement in the newspaper was unknown. Similarly, in some of the television programmes, the reference to TiVo was fleeting or very short relative to the total length of the programme and, if in an extract, its impact could not be assessed in context. In a number of the films, TiVo was mentioned only once. Vivo also submitted that some of the references in the television programmes were distasteful and would not engender a favourable estimation of TiVo.
440 As Vivo correctly contended, there was no survey evidence demonstrating levels of recognition of TiVo at the priority date. There was no expert evidence on the impact of relatively short references in films or programmes, or the probable absorption of a variety of types and levels of reference over time. No evidence was led of the number of persons likely to have seen repeated references to TiVo in any one or more of the various media, and if so, within what time span they would have been likely to have been viewed. Clearly, the references were not of uniform character, quantity or quality but assumed diverse forms in different media over time. Allowing, however, that many of the articles, websites, programmes and films contained only passing references to the TiVo trade mark and product, their total volume was great, and the subset which made detailed reference to TiVo was also very considerable. About 170 articles made substantial reference to TiVo. The treatment of TiVo in the particular television programmes described above, although relatively brief, was highly descriptive. While I am not persuaded that reputation in this context requires a favourable estimation, the fanciful or humorous presentation was, in my view, likely to expose TiVo’s advantages and in that sense fix it favourably in the mind. The cumulative circulation of references, descriptions and expositions of TiVo in the various media increasingly over the course of the decade amounted to a total exposure on an enormous scale. Although diverse and not direct advertising, the references and exposures, in some instances at least, may have been more effective in creating a reputation.
441 As TiVo submitted, some articles incorporated cross-reference to treatment of TiVo in other media. While the exposure may have entirely eluded some members of the public, it is probable that considerable numbers saw references in various media on more than one occasion and a significant number imbibed or acquired a recognition of the TiVo trade mark. The vast volume and the character of the exposure was in no way comparable to the isolated and fleeting exposures the subject of Hansen Beverage. Rather, it was so extensive and significant as to constitute, consistently with the approach in McCormick, notwithstanding the absence of consumer surveys or expert evidence in relation to its impact, a sufficient basis, fortified by the users group’s activities, to infer awareness, knowledge and (if it be necessary) favourable estimation of the TiVo trade mark and the TiVo product in a significant number of members of the public.
442 The early users’ group, while not numerically large relative to the sales of potential consumers, was not inconsiderable and demonstrated that despite the absence of actual sales and direct advertising, TiVo’s United States reputation had penetrated sufficiently to lead to use despite practical impediments, together with a communications network. As stated above, a reputation confined to the group alone would not, however, be such that use of the Vivo trade mark would be likely to cause confusion.
443 The group and its activities nevertheless fortify my conclusion that, on the balance of probabilities, the TiVo trade mark prior to 18 February 2008 acquired a reputation in Australia amongst a significant number of persons who were potential consumers, by reason of which reputation (albeit acquired in relation to the DVR), the use of the Vivo trade mark for the goods in respect of which it was registered was likely (for reasons stated in relation to the claims under s 44 of the Act) to deceive or confuse.
Whether the registration of the Vivo trade mark should be cancelled pursuant to s 88(2)(c) of the Act
444 Section 88(2)(c) of the Act provides that an application may be made on the grounds that:
because of the circumstances applying at the time when the application for rectification is filed, the use of the trade mark is likely to deceive or cause confusion.
445 In contrast to cancellation under s 88(2)(a), in which the rights of the parties are to be determined as at the priority date (in this case, 18 February 2008), in cancellation under s 88(2)(c), the court considers the circumstances applying at the date of filing of the application for rectification (in this case, 14 January 2011) in determining whether the use of the challenged trade mark is likely to deceive or cause confusion.
446 TiVo, alternatively or supplementary to its principal claims based on ss 44 and 60 of the Act, submitted that as at 14 January 2011, Vivo’s use of the Vivo trade mark more closely approximated TiVo’s key products, as it had by that date introduced the Vivo digital set top boxes, portable DVD players, digital photo frames and remote controls.
447 TiVo relied particularly on Mr Grassia’s evidence to that effect at paragraph 170 of his affidavit, where he deposed:
An approximate breakdown of Vivo’s total sales from 2007 to 30 June 2011 by type of product is set out below.
PRODUCT | NO. UNITS SOLD YE June 07 | NO. UNITS SOLD YE June 08 | NO. UNITS SOLD YE June 09 | NO. UNITS SOLD YE June 10 | NO. UNITS SOLD YE June 11 | TOTAL |
Plasma televisions | 2 | 417 | 7,943 | 33,789 | 21,613 | 63,764 |
LCD televisions | - | 712 | 32,331 | 47,023 | 80,422 | 160,488 |
LED televisions | - | - | - | 1 | 10,217 | 10,218 |
Portable DVD players | - | 2,035 | 5,335 | 1,743 | -84 | 9,029 |
LCD monitors | 656 | 585 | 251 | 468 | 7 | 1,967 |
Digital set-top boxes | - | 37 | 399 | 1,919 | 2 | 2,357 |
Digital photo frames | - | 970 | 2,114 | - | - | 3,084 |
Remote controls | - | - | - | 375 | 99 | 474 |
5.1 Home Theatre | - | - | - | - | 1,951 | 1,951 |
LED monitor | - | - | - | 7 | 8,526 | 8,533 |
TOTAL | 658 | 4,756 | 48,373 | 85,325 | 122,753 | 261,865 |
448 Vivo denied that the circumstances applying at 14 February 2011 were such that use of Vivo was likely to deceive or confuse, reiterating its submissions that TiVo had not acquired a sufficient reputation in Australia as at the priority date or 14 February 2011, had provided limited and inadequate evidence of the extent and nature of its advertising, had disappointing sales by January 2011, and that any reputation of TiVo was inextricably linked to a single product (the DVR). Vivo also relied on the visual and aural differences between the marks and the alleged lack of evidence of confusion in Dick Smith stores despite large sales of each product.
449 Those matters, and the evidence in relation to convergence, have been considered above. In my opinion, Vivo’s introduction of “converging” new products after the priority date, combined with factors existing prior to the priority date, constitute circumstances by reason of which use of the Vivo trade mark was likely to deceive or confuse as at 14 February 2011.
Other discretions
450 Vivo also relied on the discretions conferred by ss 88 and 89 of the Act, submitting, in that context, that the court should consider all relevant circumstances, apparently including post-priority date matters.
451 Vivo reiterated that the court should exercise its discretion in Vivo’s favour due to its honest use of the Vivo trade mark prior to the use of the TiVo trade mark in Australia, the absence of evidence of confusion arising from post-priority date concurrent use, or (if there were a likelihood of confusion) because, pursuant to s 89, it had not arisen through any fault or act of Vivo.
452 Section 89 of the Act provides:
89 Rectification may not be granted in certain cases if registered owner not at fault etc.
(1) The court may decide not to grant an application for rectification made:
(a) under section 87; or
(b) on the ground that the trade mark is liable to deceive or confuse (a ground on which its registration could have been opposed, see paragraph 88(2)(a)); or
(c) on the ground referred to in paragraph 88(2)(c);
if the registered owner of the trade mark satisfies the court that the ground relied on by the applicant has not arisen through any act or fault of the registered owner.
(2) In making a decision under subsection (1), the court:
(a) must also take into account any matter that is prescribed; and
(b may take into account any other matter that the court considers relevant.
453 In Crazy Ron’s, the Full Court held that the power to cancel registration conferred by s 88(1) involves the exercise of a discretion. (See, for a contrary view, EOS Australia Pty Ltd v Expo Tomei Pty Ltd (1998) 42 IPR 277 at 287 and Anakin Pty Ltd v Chatswood BBQ King Pty Ltd (2008) 250 ALR 620, where Branson J held that the word “may” in s 88(1) did not create a true discretion, and Health World Ltd v Shin-Sun Australia Pty Ltd (2008) 75 IPR 478 (“Health World”), where Jacobson J, at [204], recognised the force in that view, as s 88(1) is subject to s 89, which confers a discretion, to be exercised in limited circumstances).
454 Section 88(2)(a) states that an application may be made on any of the grounds on which registration could have been opposed, thus directing the discretion to circumstances existing at that time. In my opinion, on the better view, the exercise of the power (and discretions) to cancel the registration of the Vivo trade mark on either of the grounds for which it could have been opposed under ss 44 or 60 under s 88(2)(a) requires a determination of the parties’ rights as at the date of the relevant trade mark application (in this case, 18 February 2008).
455 That approach has been applied in a number of authorities, including in Melhero Pty Ltd & Anor v Club X and Others (1997) 37 IPR 151, Crazy Ron’s and Health World. It is, as TiVo submitted, consistent with the preservation of the earlier mark in the absence of the proprietor’s blameworthy conduct, while the exercise of the discretion on the basis of post-priority date matters would tend to encourage swamping. No decision in which post-filing date facts were taken into account to exercise a discretion against cancellation under either ss 44 or 60 by way of s 88(1)(a) of the Act was identified.
456 On the other hand, the exercise of the power to cancel the registration of the Vivo trade mark under s 88(2)(c) of the Act, because (due to the circumstances applying at the time when the application for rectification is filed) the use of the trade mark is likely to deceive or cause confusion, necessarily requires a determination as at that date (see Jacobson J in Health World and Hill J in Unilever Australia Ltd v Karounos (2001) 113 FCR 322).
457 While post-filing date matters may thus be taken into account under s 88(2)(c), I have also found that the registration of the Vivo trade mark should be cancelled under s 88(2)(a), and, in any event, for reasons stated above, the post-priority date matters alleged by Vivo were either not established or did not justify the exercise of the discretion in its favour.
458 More particularly, as I have found that Vivo selected the Vivo trade mark and sought registration of that mark without conducting an adequate search, the conditions of s 89(1) are not satisfied.
Vivo’s Cross-Claim – Whether registration of TiVo trade mark should be cancelled under s 92(4)(b) of the act in respect of televisions
459 By cross-claim dated 9 March 2011, Vivo sought that the TiVo trade mark be removed from the Register in respect of “televisions” in class 9 on the ground of non-use.
460 Section 92 of the Act relevantly provides:
(1) Subject to subsection (3), a person may apply to the Registrar to have a trade mark that is or may be registered removed from the Register.
(2) The application:
(a) must be in accordance with the regulations; and
(b) may be made in respect of any or all of the goods and/or services in respect of which the trade mark may be, or is, registered.
(3) An application may not be made to the Registrar under subsection (1) if an action concerning the trade mark is pending in a prescribed court, but the person may apply to the court for an order directing the Registrar to remove the trade mark from the Register.
(4) An application under subsection (1)… (non-use application) may be made on either or both of the following grounds, and on no other grounds:
…
(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…
461 The removal of a trade mark for non-use under s 92(4) is subject to a discretion conferred by s 101 of the Act, which relevantly provides:
…
(3) If satisfied that it is reasonable to do so, the Registrar or the court may decide that the trade mark should not be removed from the Register even if the grounds on which the application was made have been established.
(4) Without limiting the matters the Registrar may take into account in deciding under subsection (3) not to remove a trade mark from the Register, the Registrar may take into account whether the trade mark has been used by its registered owner in respect of:
(a) similar goods or closely related services; or
(b) similar services or closely related goods;
to those to which the application relates.
462 TiVo conceded that Vivo had established grounds for removal under s 92(4)(b) of the Act, because it had not, during the continuous three year period referred to in s 92(4)(b), used the TiVo trade mark in respect of televisions. It sought, however, to invoke the discretion under s 101(3), particularly on the basis of, as contemplated by s 101(4), TiVo’s use of its trade mark in respect of goods which are similar or closely related to televisions (ie DVRs and remote controls) and services which are closely related to televisions (ie EPGs, software updates and access to the CASPA on-demand media services), and in reliance on additional circumstances identified by Flick J in E&J Gallo Winery v Lion Nathan Australia Pty Ltd (2008) 77 IPR 69 (“E&J Gallo”).
463 An applicant to remove a trade mark for non-use is entitled to have the mark removed “unless sufficient reason appears for leaving it there” (see Re Carl Zeiss Pty Ltd’s Application (1969) 122 CLR 1 at 11). However, the respondent is not required to demonstrate “exceptional circumstances” in order to enliven the discretion in s 101(3) to retain the registration (see E&J Gallo at [198]).
464 In Austin, the Full Court (Jacobson, Yates and Katzmann JJ) recently considered s 101(3). Their Honours stated at [28]:
The question to be asked is whether it was reasonable not to remove the trade mark from the Register, although the trade mark had not been used during the statutory period.
465 Their Honours noted that s 101(3) was expressed in the present tense and the position must be assessed at the time the discretion is to be exercised (at [41]).
466 In E&J Gallo at [210], Flick J described the exercise of the discretion in s 101(3) as follows:
Although the “guiding principle behind the discretion is public interest, particularly in the integrity of the register” (Kowa Co Ltd v Organon (2005) 223 ALR 27…), the private commercial interests of both Gallo Winery and Lion Nathan remain matters which may be taken into account when exercising the discretion. Trade mark law, it has been recognised, is more complex than is suggested by the proposition that the supreme — or, at least — a predominant interest is the maintenance of the integrity of the register: Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45… Speaking of the 1955 Act, Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ there pointed out the balance struck by the legislation between various interests. Both the interests of the consuming public and the interests of traders have to be recognised. Their Honours observed that (at [42]):
[42] … the Australian legislation has manifested from time to time a varying accommodation of commercial and the consuming public’s interests. There is the interest of consumers in recognising a trade mark as a badge of origin of goods or services and in avoiding deception or confusion as to that origin. There is the interest of traders, both in protecting their goodwill through the creation of a statutory species of property protected by the action against infringement, and in turning this property to valuable account by licensing or assignment. The provisions of the 1955 Act with respect to defensive registrations and certification marks were recognitions that the interests of the owners of registered trade marks may go beyond that of indicating trade origin. In Yale Electric Corporation v Robertson (1928) 26 F 2d 972 at 973, Judge Learned Hand said of this interest:
“that one merchant shall not divert customers from another by representing what he sells as emanating from the second. This has been, and perhaps even more now is, the whole Law and the Prophets on the subject, though it assumes many guises.”
In this decade, legislation in the United States, the United Kingdom, and now in Australia to varying degrees has extended the infringement action to restrain activities which are likely adversely to affect the interests of the owner of a “famous” or “well-known” trade mark by the “dilution” of its distinctive qualities or of its value to the owner.
467 In Austin, the Full Court affirmed that Flick J’s view that while public interest, particularly in the integrity of the Register, was the guiding principle behind the discretion, the private commercial interests of parties could be taken into account and the interests of both consumers and traders must be recognised (at [33]-[34]).
468 In E&J Gallo, Flick J identified (at [202]) the following factors additional to that in s 101(4) which, while not exhaustive, were also relevant to the exercise of the discretion: whether there has been no abandonment of the trade mark; whether the registered proprietor still had a residual reputation in the mark; whether there had been sales by the registered proprietor in relation to the goods for which removal was sought since the relevant period ended; whether the applicants for removal had entered the market without having taken steps to ascertain from the Register whether anyone had a right to exclude their use of the mark; and whether the registered proprietors were aware of the applicants’ sales under the mark.
469 In Austin, the Full Court confirmed that the discretion under s 101(3) was limited only by the statutory purposes and “whether the removal of the [relevant mark] would lead to deception or confusion… was plainly a relevant consideration to be taken into account” (at [31]). The Full Court also recognised that evidence showing a lack of deception or confusion should the mark remain on the Register was relevant to the exercise of the discretion, but it was not erroneous to find that circumstance an insufficient justification for its retention.
470 In Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227 at 240, Burchett J considered s 23(2) of the then Trade Marks Act 1955 (Cth), which allowed the court to refuse an application to remove a trade mark registration for non-use in relation to any goods, if there had been good faith use of the trade mark in respect of goods of the same description. His Honour observed that, given the goal of the provision, if the sale of the different goods by unrelated companies was likely to lead to confusion, the goods should be seen as “of the same description”. Burchett J stated (at 240):
[The object of s 23(2)] seems plainly to be the avoidance of confusion and deception in the market place, which would be likely to arise should a mark become available for us by two or more different companies, which are unrelated, upon goods of the same description. From that point of view, the expression “goods of the same description” is generally to be understood in such a sense that, if two different items are held not to fall within the expression, their sale under the same mark by different companies is not likely to lead to confusion or deception.
471 Prior to the insertion in 2006 of s 101(4) (which expressly permits consideration of the trade mark owner’s use of the mark on goods which are similar to those specified in the registration), Drummond J, in McHattan v Australian Specialised Vehicle Systems Pty Ltd (1996) 34 IPR 537, recognised that fragmented ownership of the same or a very similar mark in respect of very similar goods could lead to confusion. Fine distinctions between the goods which should remain or be removed could, in the context of applications for removal for non-use, erode the value of trade mark registration. His Honour stated:
[T]here is a real question as to the proper interpretation to be placed on the expression “any or all of the goods ... in respect of which the trade mark ... is registered” in s 92(1): if that provision is construed to permit fine distinctions to be drawn between two items, eg, between a sedan motor car and a utility motor car or the sort of distinction implicit in the second of the respondents’ non-use applications, viz that between armoured military vehicles of greater than eight tonnes and smaller armoured military vehicles, the value of trade mark registration under the new Act is potentially capable of very great erosion.
472 Drummond J’s interpretation of s 101 was endorsed by Finn J in CA Henschke & Co v Rosemount Estates Pty Ltd (1999) 47 IPR 63 at [169].
473 In Pioneer Computers Australia Pty Ltd v Pioneer KK (2009) 176 FCR 300 (“Pioneer Computers”), Bennett J (at [173]) endorsed the proposition in Magnavox (Aust) Pty Ltd’s Trade Mark (1964) 34 AOJP 2075 at 2078 that:
the rights arising from the registration of a trade mark should not be confined to the stage of technological development of goods specified when the mark was registered.
474 Her Honour stated that s 101(4) “has particular relevance in the case of goods that are at the forefront of technological change” (at [173]).
475 In Pioneer Computers, the applicant had registered the trade mark PIONEER in, inter alia, class 9 in respect of “[a]ll goods in this class but excluding all weighing apparatus and instruments in this class”. The other registration specified a long list of goods in class 9 (which includes compact disc players, music equipment, telephones, televisions and audio equipment).
476 The respondent was well known for a range of consumer electronics products (including hi-fi systems, car audio systems, home theatre systems, DVD players and recorders, plasma display units and commercial electronic products). It had, during the relevant period, used the trade mark PIONEER on only some peripheral computer devices (namely, optical disc drives and jukeboxes), but had not established use on any of the other goods subject to the removal application (viz computer peripheral devices, computer keyboards, computer memories, printers for use with computers, data processing apparatus, CD-ROM disc drives, computer software, computer operating programs and computer game programs).
477 Bennett J held that, given the rate of change and advances, the general term “computer peripheral devices” appropriately described the respondent’s range of goods in the areas of computer and optical technology. Her Honour found that “computer peripheral devices” were included in the registered goods apparently as a “catch-all” expression to encompass goods yet to be developed which were yet to be specifically described (at [106]). Bennett J stated at [143]:
[F]or reasons which follow, I have come to the view that there is sufficient convergence between consumer electronic products and computer products such that, even though no use has been established during the relevant period across the entire category of computer peripherals or on any of the other removal goods, the public would still associate the name “Pioneer” and the PIONEER mark used in connection with the removal goods with Pioneer KK [the respondent].
478 Bennett J noted that the convergence of technologies, the development of computer peripherals and audio-visual devices that contained computer software and programs (together with the fact that many well known manufacturers sold computers and audio visual equipment separately and in multi-media centres under the same trade mark) had resulted in, and was likely to give rise to, confusion in the members of the public if the relevant goods were sold by companies other than the respondent by reference to the trade mark. The same analysis applied to both computer peripheral devices and the other relevant goods.
479 While the respondent had no intention to manufacture or sell computers under the PIONEER mark, and in the past computers had been reasonably considered separate from the respondent’s audio-visual devices and the optical drives in computer peripheral devices, Bennett J recognised that interconnectivity and interoperability between computers and consumer electronic products had contributed to the convergence of the technologies and had blurred the distinction between them.
480 Bennett J therefore exercised the discretion under s 101(3) to retain the registration in respect of certain goods, subject to various undertakings.
481 In Hills Industries, Lander J distinguished Pioneer Computers, as the use by the applicant for removal of DIGITEK in relation to “TV installation accessories” would not be likely to cause deception or confusion. Lander J found that the trade mark owner had, during the relevant period, used its mark in respect of televisions, PVRs and remote controls. His Honour nevertheless permitted removal of TV installation accessories from the registration of the DGTEC trade mark for “digital and electronic products including televisions, video players, DVD players, CD players, decoders and cameras”.
482 TiVo submitted that in the present case, retention of its registration in respect of televisions was principally justified by the likelihood of confusion should an unrelated company sell a TiVo-branded television next to TiVo’s DVR, just as consumers would, for example, be likely to think a Sony DVR or Sony remote control emanated from the same source as a Sony television.
483 TiVo also submitted that the following additional factors favoured its retention of registration in respect of televisions:
(a) TiVo had not abandoned the TiVo trade mark, which it used extensively in the United States and elsewhere during the relevant period on products including DVRs and remote controls;
(b) TiVo had a reputation in the TiVo trade mark, as established by the evidence in support of its allegations under s 60 of the Act, discussed above;
(c) As of 31 July 2011, TiVo, together with Best Buy, commenced sale of a high definition television integrating TiVo’s “user interface” in the United States, which it also planned to sell in Australia within one to two years. While TiVo had, at this stage, no specific plan to sell televisions with the TiVo name on it, its sales figures demonstrated an increasing focus on selling hardware and TiVo regarded televisions as an opportunity and an important part of the company’s strategy.
(d) Vivo had entered the market without taking sufficient steps to ascertain whether anyone had a right to exclude its use of the mark. Mr Grassia merely conducted a search for the word “vivo” in Google and the IP Australia trade mark database.
484 Vivo submitted that Mr Danovitz’ evidence established that TiVo was likely in future to make its services available through licensing other companies rather than supplying its products directly to consumers. A distinction was likely to develop between, on the one hand, manufacturers of hardware platforms (including televisions) and, on the other hand, broadcasters and service developers, in which the televisions would continue to be branded as products of the manufacturer, as TiVo’s recently launched television was in fact branded “Insignia” (albeit using TiVo services), thus clearly delineating the manufacturer of the hardware.
485 Vivo also submitted that Mr Danovitz’ testimony demonstrated no firm plan for TiVo to manufacture televisions in the future.
486 TiVo relied on Mr Danovitz’ evidence regarding the “convergence” of home entertainment products. Mr Danovitz deposed:
TiVo’s technology will be deployed on an increasing number of platforms in the future. Television is only one such platform. The TiVo brand will be used on and in connection with all these devices, where there has been a convergence of home entertainment goods. When I use to [sic] the term “convergence”, I mean the combining of functionality of two or more devices into one device. For example, traditionally the Internet has only been accessible on computers. However, in recent years, the Internet can now be accessed from a host of devices, such as smartphones and televisions (an example of which is the TiVo connected television). The historical distinction between devices such as home entertainment products is therefore fast becoming irrelevant.
487 In cross-examination, Mr Danovitz conceded that while it was “definitely a possibility” that TiVo would itself manufacture televisions, the TiVo business was “moving an emphasis away from” selling its own boxes directly to consumers, towards working with distributors. Mr Danovitz stated that TiVo did not manufacturer anything itself but had a contract with a Mexican manufacturer.
488 While Mr Danovitz conceded that there was no specific plan to start deploying a television bearing a TiVo name, he stated that it was a prospect within the next five years, and as the new television incorporated a high performing chip, it represented an opportunity in markets without high uptake of satellite or pay television.
489 Vivo submitted that the discretion under s 101(3) should not be exercised in TiVo’s favour, as in contrast to Pioneer Computers, brand extension and convergence of digital technology did not justify the preservation of TiVo’s registration in respect of televisions. The present case was more analogous to Hills Industries, where an argument based on alleged convergence failed and preservation of TiVo’s registration in respect of televisions was unnecessary to protect against a likelihood of deception and confusion.
490 To the contrary, in Vivo’s submission, the evidence established a significant difference between the functions of, on the one hand, ordinary televisions, and, on the other hand, the sophisticated interactive programming function of the TiVo DVR and its associated services, notwithstanding the use of televisions and DVRs in conjunction with each other and their sale through the same electronics retailers.
491 In the present case, I am satisfied that, as discussed in detail above, TiVo has, by using the TiVo trade mark in respect of DVRs and remote controls, used it in respect of goods which are relevantly similar to, or of the same description as, televisions.
492 Further, the use of the TiVo trade mark in respect of, as deposed by Ms Minicola, the provision of the EPG software updates to expand or improve performance of software already installed or provided with the TiVo DVR, and giving access to an on-demand media service by broadband connection, is use in relation to services which are closely related to televisions, in the broad sense endorsed by French J in Woolworths.
493 It is unnecessary to repeat in full in this context the discussion at [206] to [227] above, but on the basis of nature, origin and trade channels, televisions are similar goods to the other goods and services in relation to which TiVo is registered, and for reasons stated above, I accept that the progressive convergence of disparate functions and their consolidation within a single device or unit has eroded any absolute dichotomy between sophisticated computers and products used solely for audio visual purposes. I am thus satisfied, as discussed above, that the sale of televisions (which could include DVD functions) under the TiVo mark by a company unrelated to TiVo, concurrently with sales by TiVo of DVRs and remote controls under its TiVo trade mark, would be likely to lead to confusion, and consumers would be likely to think that the relevant products emanated from the same company. That circumstance weighs heavily in favour of declining to remove the TiVo trade mark in relation to televisions.
494 A number of other considerations fortify that conclusion.
495 It was not contended that TiVo has abandoned the trade mark, in which it clearly maintains a reputation.
496 Since the three year period ended, TiVo has sold televisions in the United States, being the Insignia integrated television incorporating the TiVo interface, commencing on 31 July 2011. While the television marketed in the United States was supplied under the Insignia brand and the direction of TiVo’s business is moving towards licensing, TiVo continues to sell hardware, and as Mr Danovitz testified, there is a prospect, if not a firm plan, that TiVo will manufacture televisions.
497 I am satisfied that Vivo entered the market without taking adequate steps to ascertain whether any party had a right to prevent its use of the mark. Mr Grassia was, in my view, aware of TiVo when adopting the Vivo trade mark and commencing to trade thereunder, and failed to take appropriate precautions or obtain a professional search or advice.
498 While TiVo has not used the TiVo trade mark for the requisite period, the excision of televisions from TiVo’s registration would, particularly in the context of converging functionality, create a potential for fragmented ownership of deceptively similar goods, with a concomitant likelihood of confusion.
499 In all the above circumstances, it is reasonable not to cancel the registration of the TiVo trade mark in respect of televisions notwithstanding non-use during the statutory period. The discretion should be exercised to retain the registration of the TiVo trade mark in respect of televisions. In my opinion, the cross-claim should be dismissed.
Whether registration of the Vivo trade mark should be cancelled under s 92(4)(b) of the Act in respect of services
500 TiVo relied on non-use pursuant to s 92(4)(b) of the Act as an additional alternative basis for the cancellation of the Vivo trade mark in relation to services. TiVo submitted:
227. The Respondents’ evidence does not demonstrate any intention by the First Respondent, as at 18 February 2008, to use or authorise the use of the VIVO Trade Mark in Australia, or to assign that trade mark to a body corporate for use in Australia, in respect of the class 38 services specified in the VIVO Trade Mark Registration, that is, transmission of data by audio-visual apparatus.
228. The Respondents’ evidence does not demonstrate any subsequent use of the VIVO Trade Mark in respect of those services from 18 February 2008 until one month before the issue of this proceeding.
229. In the circumstances, the VIVO Trade Mark Registration ought to be removed under s 92(4)(a) of the TMA in respect of those class 38 services of transmission of data by audio-visual apparatus.
501 Vivo acknowledged that it has not used the Vivo trade mark in respect of the services in class 38. Nor was there any evidence that it intended to do so. Vivo nevertheless prayed in aid the court’s discretion pursuant to s 101(3), on the same basis on which TiVo (as discussed above) invoked it in respect of televisions, namely, the convergence of digital technology. Vivo relied particularly on Mr Grassia’s evidence that Vivo intended to launch an Internet connected smart television within the next three months, which would probably (as indicated by an article in The Sydney Morning Herald dated 13 September 2010 exhibited to Mr Akbarzadeh’s affidavit) include the provision of services involving the transmission of data by audio visual services. Vivo submitted that convergence thus strongly supported preservation of its registration in relation to data transmission services.
502 While much of the reasoning against the removal of televisions from TiVo’s registration would equally favour the retention of the relevant services within Vivo’s registration were it otherwise to be maintained, as I have found that the Vivo trade mark should be removed from the Register on a number of different grounds, the issue of non-use is overtaken and the exercise of the discretion would be futile.
503 It follows that the Vivo trade mark should be removed from the Register in respect of the specified services in class 38 on the additional basis of non-use pursuant to s 92(4)(a).
504 Further, to the extent that they are relevant, the considerations prescribed by reg 8.2 of the Trade Marks Regulations 1995 (Cth) do not assist Vivo.
505 The public interest will be negatively affected, as contemplated by reg 8.2(a), if the Vivo trade mark registration is not cancelled, given the evidence of actual confusion, the prior registration of the TiVo trade mark, and the public interest in maintaining the integrity of the Register.
506 The circumstances which gave rise to the application for cancellation have not ceased to exist, as contemplated by reg 8.2(b), being Vivo’s selection, registration and use of the Vivo trade mark.
507 Reg 8.2(c) is not relevant to the present case, as it relates to a trade mark’s loss of distinctiveness since registration, rather than a likelihood of confusion between trade marks.
508 No apparent alternative remedy, as contemplated by reg 8.2(d), would be adequate in this case, as cancellation is necessary to ensure the integrity of the Register, to remove the defence to infringement of the TiVo trade mark under s 122(1)(e) and to enable the court to enjoin Vivo’s use of the Vivo trade mark.
509 The court is entitled under s 89(2)(b) to take into account other matters it considers relevant. As discussed above, while in my opinion, relevant matters in relation to the claims under ss 44 or 60 exclude post-priority date events or conduct, the consideration of such matters in the present case would not justify the exercise of the discretion against cancellation under either ss 88(1) or 89(1) of the Act.
Infringement
510 Section 120 of the Act relevantly provides:
(1) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.
(2) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to:
(a) goods of the same description as that of goods (registered goods) in respect of which the trade mark is registered; or
(b) services that are closely related to registered goods; or
(c) services of the same description as that of services (registered services) in respect of which the trade mark is registered; or
(d) goods that are closely related to registered services.
However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion.
511 Section 122 of the Act relevantly provides:
When is a trade mark not infringed?
(1) In spite of section 120, a person does not infringe a registered trade mark when:
…
(e) the person exercises a right to use a trade mark given to the person under this Act; or
512 Vivo is currently the registered proprietor of the Vivo trade mark, which it has used in relation to the goods it supplies, and has the rights conferred by s 20 of the Act, including the exclusive rights to use or to authorise use of the mark in respect of the relevant goods.
513 Irrespective of whether Vivo’s use of the Vivo trade mark would otherwise infringe the TiVo trade mark pursuant to s 120(2) of the Act, as s 122(1)(e) of the Act provides that “in spite of section 120, a person does not infringe a registered trade mark when… the person exercises a right to use a trade mark given to the person under this Act”, Vivo’s use of the Vivo trade mark in respect of the goods in relation to which it is registered cannot infringe while its registration is maintained.
514 It is thus only upon removal of the Vivo trade mark from the Register that infringement could be made out. Accordingly, in this proceeding, TiVo sought an injunction pursuant to s 126(a) of the Act should removal of the Vivo trade mark from the Register be ordered. It did not seek damages or an account of profits.
515 For the reasons discussed in detail above, I have concluded that the Vivo trade mark should be removed from the Register pursuant to the grounds in ss 44, 60 and 88(2) of the Act. Vivo nevertheless submitted that in the event of such a finding, its use of the Vivo trade mark in relation to home theatre systems, computer monitors, digital photo frames or portable DVD players would not infringe the TiVo trade mark because such goods were not (in contrast to televisions, remote controls and set top boxes) goods in respect of which the TiVo trade mark is registered, goods of the same description, or goods closely related to the services in respect of which TiVo is registered.
516 Vivo reiterated, in that context, its alleged fundamental distinction between the sophisticated computer constituted by the branded TiVo DVR and the Vivo products used solely for audio visual display, and its submissions on the lack of substitutability between the TiVo DVR and the relevant Vivo products.
517 For the reasons discussed in detail above, I have concluded that the relevant Vivo goods are goods within the scope of the TiVo registration, and goods of the same description as the TiVo goods.
518 I am also satisfied, broadly for the reasons stated in relation to the application under s 44 of the Act, that (taking account of all the surrounding circumstances and Vivo’s actual, rather than notional, use of the Vivo trade mark, including its sale primarily of low cost televisions and different packaging), there is a real, tangible danger and likelihood that such use in relation to home theatre systems, computer monitors, digital photo frames or portable DVD players would be likely to deceive or cause confusion. I refer to and repeat my discussion in relation to s 44, including the significance of Mr Simons’ unchallenged evidence indicating a number of instances of actual confusion amongst Dick Smith sales staff in New South Wales stores within the course of a single month.
519 It follows that, in my opinion, use of the Vivo trade mark upon its removal from the Register in respect of the specified Vivo-branded goods would infringe the TiVo trade mark.
Accessorial liability
520 Tivo submitted that Mr Grassia was a joint tortfeasor with accessorial liability for Vivo’s infringement in circumstances where:
270. As well as being the chief executive officer, managing director and the sole registered director, secretary and shareholder of the First Respondent since 11 May 1999, the Second Respondent is described by the First Respondent’s website as the “visionary” behind the company who “personally manages” the range of products imported by it. His evidence makes clear that he was personally and instrumentally involved in each key decision to use the VIVO trade mark on the various products imported and sold by the First Respondent.
271. In the circumstances, the Second Respondent has
(a) directed or procured the infringing conduct of the First Respondent;
(b) was involved in invading the Applicants’ rights;
(c) had a close involvement in the infringing acts of the First Respondent;
(d) made the First Respondent’s tort his own; and/or
(e) used the First Respondent as an instrument of his own wrong.
521 TiVo submitted that Mr Grassia directed or procured Vivo’s infringing conduct, as he was “personally and instrumentally involved” in each key decision to use the Vivo trade mark.
522 Vivo submitted that Mr Grassia, although the managing director, sole shareholder and the person responsible for the adoption of the Vivo trade mark, acted solely as an agent, employee and representative of Vivo, and adopted the Vivo trade mark without awareness of the TiVo trade mark in the reasonable belief that the sale of goods under the Vivo trade mark did not infringe any rights of TiVo.
523 A degree of artificiality attends the determination of this issue as, for the reasons stated above, while the Vivo trade mark remains registered, there will be no finding of infringement, in the absence of which the question of accessorial liability is moot.
524 The parties directed no oral argument and only minimal written submissions at the question of accessorial liability, but both principally relied on Keller v LED Technologies Pty Ltd (2010) 185 FCR 449 (“Keller”) in which, at first instance, two directors were held liable as joint tortfeasors for their companies’ infringement of another party’s registered designs for combination rear lights for motor vehicles. The primary judge found that:
At the time of the “relevant events”, Mr Keller and Mr Armstrong were directors of [the companies] together with Mr Armstrong acting also as Chairman. Mr Keller’s evidence was that he, together with Mr Armstrong, “is the boss” of [the companies]. In relation to Version 1 lamps, the “relevant events” included, but were not limited to, the conception and design of the infringing Condor lights at a time when at least Mr Keller was aware of the existence of the Designs, discussions with manufacturers about the manufacture of those lights and the subsequent importation and sale of them in Australia. In addition, Mr Keller designed and conceived the Version 2 and 3 lights and arranged for their manufacture and importation into Australia. Moreover, Mr Armstrong was the nominated signatory for all applications for CRNs [Component Registration Numbers] and the addressee for all correspondence from DOTARS [the Department of Transport and Regional Services] relating to CRNs. In addition, he was involved in photometric testing of Condor LED lights and knew what Mr Keller was doing in relation to the Condor Products.
525 On appeal, the majority (Emmett and Jessup JJ), in separate judgments, held that neither director was liable as a joint tortfeasor, while Besanko J (dissenting) held that Mr Keller only was liable.
526 Emmett J stated at [83]-[84]:
A company cannot act other than through a natural person. In considering whether a natural person is a joint tortfeasor with a company, it is necessary to show something more than that the company acted through that person. Where a person is acting in the capacity of a director, the person will not be liable for the act of the company unless it can be shown that, in so acting, the director was doing something more than acting as a director. The person must do something that makes him or her, in addition to the company, an invader of the victim’s rights (see O’Brien v Dawson (1942) 66 CLR 18 at 32-33). The mere fact that a company is small and that the director has control over its affairs is not, of itself, sufficient to make the director a joint tortfeasor with the company (see C Evans & Sons Ltd v Spriteband Ltd [1985] 1 WLR 317 at 329).
…
Infringement by a principal actor, of course, is an objective matter. For a director of a company to be held to be invading the rights of a victim of the company, by reason of the actions committed in the capacity of a director, there must be some mental element involved. Thus, in circumstances where a director can be shown to be making use of a corporation or company as an instrument whereby infringement is perpetrated, such that the director can be seen to be hiding behind the corporate veil, it may be thought that the director is going beyond actions performed merely in the capacity as director. If a company is merely the alter ego of a director, such that there is no real difference between the mind of the officer and the mind of the company, there may well be circumstances where it will be appropriate to conclude that the officer is invading the rights of a victim of the company.
527 Emmett J noted that Mr Armstrong had no involvement in the day-to-day running and operation of the companies, and while aware of the other party’s registered designs, there was no evidence to support a conclusion that he set out to infringe its monopoly or had any reason to believe that the sale of the companies’ products constituted infringement (at [85]-[86]). His Honour concluded (at [88]) that while Mr Keller’s involvement was greater than Mr Armstrong’s:
the findings do not support the conclusion that Mr Keller intended and procured that infringement would take place or shared a common design that infringement should take place. Mr Keller was not effectively standing apart from [the companies], directing or procuring them as separate entities. The findings would not support the conclusion that Mr Keller was using [the companies] as the instrument of his own conduct. What he did was done in the service of [the companies] and not in his own personal capacity. There is no dimension to the role of Mr Keller that was separate from the good faith discharge of his duties to the service of [the companies]. In those circumstances, he would not be held to be personally liable for the infringements of [the companies].
528 Jessup J noted at [399] that “the state of the law as to the liability of a director for the torts of his or her company is unclear”. After an extensive analysis of the applicable authorities, his Honour stated at [404]-[405]:
For a director to be liable because he or she directs or procures his or her company to commit a wrong, the context must be such that the director is effectively standing apart from the company and directing or procuring it as a separate entity. There must be a sense in which the director is using the company as an instrument of his or her own wrong…
I agree substantially with so much of the judgments of Le Dain J in Mentmore Manufacturing, of Nourse J in White Horse and of Beazley J in Milpurrurru as make it a requirement of liability that the director should make the tort his or her own… [I]n a situation in which the company role and the personal role of the director may be blurred, the formula does highlight the crucial distinction between acts which are done for and in the service of the company and acts which, in addition, are done in the director’s own personal capacity — a “non-company capacity” as it were.
529 Jessup J considered that a director should not be liable for acts done “in what he or she, in good faith, reasonably perceives to be the interests of the company”. In such circumstances, the acts of the director should be seen as the “means by which the company itself acts”, rather than the director “directing or procuring the company” to act, or participating in a joint enterprise (at [406]).
530 His Honour concluded that the directors were not liable as joint tortfeasors, as, on his preferred approach to the applicable authorities, the facts relied on by the primary judge could not sustain a finding of personal liability.
531 In Sporte Leisure Pty Ltd v Paul’s International Pty Ltd (2010) 88 IPR 242 (“Sporte Leisure”), on which Vivo also relied, Nicholas J analysed the decision in Keller and stated (at [118]):
I think the authorities demonstrate that something more will usually be required if a director is to be held liable as a joint tortfeasor than a simple finding that he or she, while acting in that capacity, caused or directed his or her company to perform acts which are later held to be infringing acts. The extent of the director’s personal involvement in the commission of the infringing acts is no doubt critical. But his or her state of mind is itself an important aspect of that involvement. That does not mean that knowledge that the relevant acts are infringing is a prerequisite to liability. The authorities are clear in holding that it is not. Even so, a finding that a director who held an honest belief that the acts which he or she directed or procured were not unlawful is a significant consideration telling against the director’s liability.
532 In Sporte Leisure, Nicholas J concluded that while the director in that case was closely involved in the company’s infringing acts, and directed and procured his company to perform them, his actions were done in his capacity as a director, and at a time when he “genuinely believed that the infringing products imported and sold by [the company] were “genuine” goods…” (at [117]). He was thus not liable as a joint tortfeasor.
533 As stated above, I have rejected Mr Grassia’s testimony that he was, at the time of selecting the name “Vivo”, unaware of the TiVo name and products, together with his account of how he came to adopt “Vivo”. I also rejected his explanation of the failure to seek professional advice in relation to the adoption of the name “Vivo”.
534 Mr Grassia was also the sole controller and shareholder of Vivo who, despite the attested input of his wife, was primarily instrumental in the adoption of the name “Vivo”. In my opinion, in selecting the name Vivo, Mr Grassia was inspired by the TiVo trade mark and intended to obtain an advantage or spin-off benefits for his company. The evidence does not establish that Mr Grassia held an honest belief that the adoption of “Vivo” would not infringe TiVo’s rights. Nevertheless, the evidence does not establish that the company was merely the alter ego of Mr Grassia, which he employed as a shelter or personal instrument of his own wrong by standing apart and directing or procuring it to adopt the Vivo name. No dimension of Mr Grassia’s role appears materially separate from that of the company. Thus, although Mr Grassia had a key role in adopting and maintaining use of the Vivo mark, accessorial liability for any infringement could not, in my view, be established.
535 I observe that as Vivo has not, at this stage, been found to have infringed, any accessorial liability of Mr Grassia for infringement could logically arise only in future, following the removal of the Vivo trade mark from the Register. The relevance of Mr Grassia’s earlier conduct in relation to Vivo’s adoption of the mark to any accessorial role in future infringement by Vivo was unclear.
Conclusion
536 In my opinion, the registration of the Vivo trade mark should be cancelled and the Vivo trade mark removed from the Register pursuant to s 88(2)(a) and (c) of the Act.
537 The registration of the TiVo trade mark should be permitted to remain on the Register pursuant to the discretion in s 101(3) of the Act.
538 I shall invite submissions in relation to the form of orders and relief reflecting these reasons.
I certify that the preceding five hundred and thirty-eight (538) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dodds-Streeton. |
Associate:
