FEDERAL COURT OF AUSTRALIA

Australian Postal Corporation v Digital Post Australia Pty Ltd (No 2) [2012] FCA 862

THE COURT ORDERS THAT:

1.    The application is dismissed.

2.    The applicant pay the respondents’ costs of the application.

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

REASONS FOR JUDGMENT

introduction

1    On 27 March 2012, the applicant, Australian Postal Corporation (“Australia Post”) filed an application in the Court seeking relief in respect of the alleged infringement of its registered trade mark AUSTRALIA POST by the first respondent, Digital Post Australia Pty Ltd (“DPA”) and others. The application also alleged that DPA and the other respondents contravened ss 18, 29(1)(a), 29(1)(g) and 29(1)(h) of the Australian Consumer Law (“the ACL”) being Schedule 2 to the Competition and Consumer Act 2010 (Cth) (“the CCA”). Australia Post further alleged that the respondents have passed off DPA’s proposed service as a service of, or associated with, authorised or approved by Australia Post.

2    On 4 April 2012, Middleton J ordered that the issue of the quantum of any pecuniary relief be determined separately from, and subsequent to, the determination of all other issues in the proceeding. On the same day, his Honour dismissed an application by Australia Post for interlocutory orders which sought to restrain DPA from, in effect, marketing its service by reference to the name “Digital Post Australia” or representing that DPA’s service is an official postal service or one authorised or approved by Australia Post. The issue of balance of convenience was an important consideration in Middleton J’s judgment. See Australian Postal Corporation v Digital Post Australia Pty Ltd [2012] FCA 372 at [15] where his Honour said:

To require DPA to alter its marketing and the way in which it has promoted itself to this point in time would inflict upon it a harm that is unnecessary insofar as the market place is concerned and DPA’s business. I am mindful that, at present, all DPA is doing is seeking potential customers’ expressions of interest. It is not otherwise carrying on the business that it proposes to undertake at the middle or the end of this year.

BACKGROUND

(i)    Australia Post

3    The Australian Postal Commission was established in 1975 under the Postal Services Act 1975 (Cth). The Commission adopted the trading name “Australia Post”. Previously, the Postmaster-General’s Department of the Commonwealth conducted post office business in Australia; see Re Australian Postal and Telecommunications Union, New South Wales Branch (1975) 25 FLR 90 at 91 per Joske J in the Australian Industrial Court.

4    Australia Post is a body corporate pursuant to the provisions of the Australian Postal Corporation Act 1989 (Cth) (“the Postal Act”). Under the Postal Act, Australia Post has, as its principal function, the supply of postal services within Australia and between Australia and places outside Australia. Its functions include the carrying on of any business or activity incidental to that principal function. Australia Post has the ability, in connection with the performance of its functions, to supply electronic mail and/or bill payment services. It has the exclusive right to carry letters and issue postage stamps within Australia, excluding the carriage of letters solely by electromagnetic or other non-physical means.

5    Since 30 August 1995, Australia Post has been the registered owner of trade mark no 759014 for AUSTRALIA POST in respect of, amongst other things, mail delivery services, electronic mail delivery services and electronic mail communications services, including email, facsimile services and telegraph services.

6    From 11 August 2009, Australia Post has been the registered owner of trade mark no 1314374 for AUSTRALIA POST in respect of, amongst other things, financial services including banking agency services, funds transfer services, credit services, billing services and bill payment services including by telephone and internet.

7    From 25 August 2009, Australia Post has been the registered owner of trade mark no 1317044 for AUSTRALIA POST in respect of, amongst other things, telecommunications and postal communications services, electronic mail and electronic communications services, computer-based and computer-aided communications and the transmission of information, data, documents, text, messages, images and sound, including electronic transmission of publications and online forms.

8    Australia Post has engaged in advertising, marketing and promotional activities in respect of its operations. Its name has been used in connection with the following range of places, products, activities and events:

    post offices and retail outlets;

    street post boxes;

    delivery vehicles, bags and uniforms of delivery personnel;

    letters and parcel products;

    multimedia advertising;

    sporting and community events;

    the internet, including the official Australia Post website and mobile smartphone application.

9    It is undisputed that Australia Post is among the oldest and best known brands in Australia. Australia Post has developed an iconic reputation in its name in respect of the delivery of physical mail. Australia Post has also offered products and services to the public by reference to the Express Post and POSTbillpay trade marks.

10    Apart from its core functions of letter and parcel delivery, Australia Post has offered the following services:

    Intelpost – a public facsimile service which, in 1988, became “FaxPost”;

    Imagegram – an addition to the Interpost service introduced in 1985 allowing consumers to send an image by facsimile to an Australia Post centre;

    E-Post – a text messaging service introduced by Australia Post in 1985 which provided for instantaneous communication (replaced by FaxPost in October 1993);

    Lettergram ComputerLink – which facilitated the sending of Lettergram messages from personal computers;

    EDI Post – which allowed business customers to send bulk mail electronically to Australia Post for printing, processing and delivery (this service is now known as eLetter Solutions); and

    KeyPost – a certification authority service.

11    In April 2010, Australia Post announced its “Future Ready” business renewal strategy. As part of that strategy, in December 2011 the Board of Australia Post approved the launch of an online mail delivery and bill payment service known as a “digital mail box”. This service was launched on 26 March 2012 under the name AUSTRALIA POST DIGITAL MAILBOX. Australia Post has promoted its digital mail box service to the public in widespread advertising in newspapers, on its website, facebook page and twitter feed, through direct mail, in post offices and on its YouTube channel. The advertising calls on interested persons to register their interest in the use of the service.

(ii)    What is “Digital Post”?

12    Digital postal mail involves the delivery of what would otherwise be hard copy mail to a digital post box in electronic form, accessible by the addressee through the internet. Rather than receiving a letter in a physical mail box, the addressee receives an electronic version of the letter which is stored in the addressee’s designated secure digital post box.

13    Digital mail differs from email. Significantly, digital mail technology enables addressees to control the mail they receive. That is, a sender cannot post a letter to a digital mail box without first being authorised to do so by the owner of that mail box. Further, since mail is sent to a digital mailbox in an electronic form, it can carry embedded links which the addressee can follow to linked websites. This allows for bill payment, voting and similar activities online.

14    The terms “digital postal mail”, “digital post”, “digital mail” and “digital post service” are generically used to refer to this type of service.

(iii)    DPA

15    DPA is a joint venture between the second respondent (“Computershare”), the third respondent (“Salmat”) and an American corporation called Zumbox Inc (“Zumbox”). DPA was incorporated on 1 September 2011, under the name “ACN 152 998 715 Pty Ltd”. It is a trading corporation within the meaning of the CCA.

16    Zumbox currently uses digital post technology in its business in the United States, under the name “Digital Postal Mail”. DPA desires to use that technology in Australia. Computershare and Salmat are trading corporations under the CCA. Computershare wholly owns a company which owns 40 per cent of the shares in DPA. A wholly owned subsidiary of Salmat (“Salmat Business Force Pty Limited”) wholly owns a company which owns another 40 per cent of the shares in DPA.

17    Mr David Hynes is the Chairman of DPA. He is also the Managing Director of Computershare Communication Services Pty Ltd, a wholly owned subsidiary of Computershare. DPA’s Board of Directors otherwise comprises executives from Computershare, Salmat and Zumbox.

(iv)    DPA’s engagement of marketing consultants

18    In June 2011, Mr Hynes instructed Mr Simon Hughes of Salmat to engage marketing consultants to assist with the marketing and branding of the proposed new digital mail service to be provided by the joint venture. The project was code named “Project Bumblebee”. On 1 July 2011, the firm Arnold Furnace was invited to submit a proposal for a marketing strategy for Project Bumblebee. Ms Angela Laxton, a marketing strategist then employed by Arnold Furnace, was provided with a preliminary brief entitled “Digital Mailbox” and later with a supplementary brief.

19    Arnold Furnace undertook some research and investigated the attitudes of consumers to email and online security. On 19 July 2011, representatives from Arnold Furnace including Ms Laxton presented their preliminary findings to Mr Hynes and Mr Hughes. The presentation was called “Salmat Digital Post Box”. A number of brand name ideas were considered at the meeting.

20    On the incorporation of the company on 1 September 2011, Mr Hughes was seconded from Salmat to become Head of Operations and Finance at DPA.

21    On 12 September 2011, Ms Laxton gave a further presentation to Mr Hynes and Mr Hughes called: “Creating a highly effective brand for Salmat/ComputerShare DPM”. Ms Laxton recommended the appointment of a market research agency to conduct research in relation to a suitable brand name for the new operation.

22    On 20 September 2011, Arnold Furnace was formally appointed as the company’s marketing adviser.

(v)    The adoption of the name “DIGITAL POST AUSTRALIA”

23    On 7 October 2011, the name of the company known as ACN 152 998 715 Pty Ltd (which ultimately became DPA) was formally changed to DPM Australia Pty Ltd. This occurred after Mr Hughes suggested that a “working name” of DPM Australia be adopted. DPM is an acronym for Digital Postal Mail.

24    On 13 October 2011, Ms Laxton recommended the appointment of GfK Bluemoon, a market research company, to undertake qualitative and quantitative consumer research concerning branding for what became DPA. GfK Bluemoon hosted qualitative research discussion groups in late October 2011. On 11 November 2011, representatives of GfK Bluemoon presented the results of this research to a group which included Mr Hynes, Mr Hughes and Ms Laxton. Among the findings highlighted by GfK Bluemoon were that the concept of digital post should be branded “as functionally as possible” and that “a more abstract name could feel too new and unstable”.

25    On 23 November 2011, at the request of Mr Hughes, Arnold Furnace presented a shortlist of eight potential brand names to the Board of Directors. According to Mr Hughes, some names were rejected because they sounded “too much like a government service”. Others were thought to be too abstract for a product which had never been marketed in Australia before. In its presentation, Arnold Furnace described the name “Digital Post Australia” as:

Very utilitarian and therefore trustworthy. Having ‘Australia’ in the name adds to this trustworthiness, instantly providing scale – it’s a nationwide service, but it may also play to the patriots out there.

The Board unanimously agreed upon “Digital Post Australia” as its preferred name.

26     The task of obtaining legal advice with regard to the four most popular brand names was given to Mr Hughes. Ultimately, Mr Hughes sought legal advice from Middletons regarding proposed names including “Digital Post Australia”. On 12 December 2011, he received advice from Mr Cameron Abbott of Middletons which included the following:

You have asked us to determine whether the Proposed Marks could be successfully registered as trade marks. You are also concerned regarding Australia Post threatening proceedings on the basis that the Proposed Marks may be too close to its name…

We do not consider that the trade marks AUSTRALIA POST or AUSPOST would prevent registration of any of the Proposed Marks. This may not prevent Australia Post making allegations of infringement or seeking to prevent the registration of the chosen Proposed Mark, however it is our opinion that it should not ultimately succeed.

27    On 22 December 2011, GfK Bluemoon gave a presentation regarding the quantitative research undertaken by it for Project Bumblebee. On 18 January 2012, the Board formally resolved to operate under the name “Digital Post Australia” and to change its corporate name to “Digital Post Australia Pty Ltd”. The change of name occurred on 3 February 2012.

28    On 9 February 2012, DPA purchased the domain name www.digitalpost.com.au (“the DPA website”) and also registered the domain name www.digitalpostaustralia.com.au.

29    By 23 February 2012, the Board of DPA had decided to make a public announcement regarding the proposed new service. The launch of DPA’s service was scheduled for 8 March 2012.

30    On 24 February 2012, Mr Hynes received an invitation to an Australia Post event, which was to take place on 26 March 2012. That event is referred to at [35] below.

(vi)    Launch of DPA’s digital mail service

31    On 14 March 2012, DPA announced its service to the public under the name “Digital Post Australia” and issued a press release. The DPA website started to operate and the domain name www.digitalpostaustralia.com.au redirected users to the DPA website. On the same day, Computershare and Salmat issued announcements concerning the DPA joint venture.

32    On 15 March 2012, King & Wood Mallesons sent a cease and desist letter to DPA, with copies to Computershare, Salmat and the directors of DPA concerning the use of the name “Digital Post Australia” as a brand. Later that day, DPA added a disclaimer to the DPA website stating:

Digital Post Australia is a joint venture between Computershare, Salmat and Zumbox and is not an Australia Post business.

33    On 16 March 2012, Australia Post applied to register the following as trade marks in various classes:

    AUSTRALIA POST DIGITAL

    AUSTRALIA POST DIGITAL MAILBOX

    DIGITAL AUSTRALIA POST

34    Also on 16 March 2012, DPA applied to register as a trade mark in three of the same classes as were relevant to Australia Post’s applications:

    DIGITAL POST AUSTRALIA

35    On 26 March 2012, Australia Post launched its digital mail service under the name AUSTRALIA POST DIGITAL MAILBOX.

36    On 27 March 2012, Australia Post commenced this proceeding. At the interlocutory hearing before Middleton J on 4 April 2012, DPA undertook to place a more prominent disclaimer on the home page of its website to state “[t]his is not an Australia Post business” until the trial of the action or further order. I understand the reference to the trial to be a reference to the determination of the trial or further order.

ALLEGED TRADE MARK INFRINGEMENT

(i)    The legislative context

37    Section 120(1) of the Trade Marks Act 1995 (Cth) (“the TM Act”) provides:

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 the goods or services in respect of which the trade mark is registered.

38    Section 10 of the TM Act provides:

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

(ii)    “Use as a trade mark”

39    It is not in contest that the adoption of the name DIGITAL POST AUSTRALIA for DPA’s service is “use as a trade mark”. The same applies to DPA’s domain names.

(iii)    “Substantially identical”

40    Australia Post has not pressed any claim that the trade mark DIGITAL POST AUSTRALIA is “substantially identical” to the trade mark AUSTRALIA POST.

(iv)    “Deceptively similar”

41    The primary issue for determination on the trade mark infringement aspect of this proceeding is whether the trade mark DIGITAL POST AUSTRALIA is “deceptively similar” to the trade mark AUSTRALIA POST. As guided by s 10 of the TM Act, the Court will consider that deceptive similarity exists if DIGITAL POST AUSTRALIA so nearly resembles AUSTRALIA POST that it is likely to deceive or cause confusion.

42    In Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 595, Kitto J said, with reference to the then applicable legislation:

It is not necessary, in order to find that a trade mark offends against the section, to prove that there is an actual probability of deception leading to a passing-off. While a mere possibility of confusion is not enough – for there must be a real, tangible danger of its occurring…it is sufficient if the result of the user of the mark will be that a number of persons will be caused to wonder whether it might not be the case that the two products come from the same source. It is enough if the ordinary person entertains a reasonable doubt… In considering the probability of deception, all the surrounding circumstances have to be taken into consideration. (This includes the circumstances in which the marks will be used, the circumstances in which the goods will be bought and sold, and the character of the probable purchasers of the goods).

See also the reasons of the Full Bench of the High Court at 608, dismissing an appeal from the judgment of Kitto J.

43    Whether one mark so resembles another that it is likely to deceive or cause confusion was also discussed by the High Court in Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd (1952) 86 CLR 536 at 538. There, the High Court quoted with approval the following passage from the judgment of Lord Parker in In the Matter of an Application by the Pianotist Company Ltd for the Registration of a Trade Mark (1906) 23 RPC 774 at 777:

You must take the two words. You must judge of them, both by their look and by their sound. You must consider the goods to which they are applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks. If considering all those circumstances, you come to the conclusion that there will be a confusion…in the mind of the public…you must refuse the registration in that case.

44    Earlier, in Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641 at 658, Dixon and McTiernan JJ said:

…in the end, it becomes a question of fact for the court to decide whether in fact there is such a reasonable probability of deception or confusion that the use of the new mark and title should be restrained.

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…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…the setting, and the habits and observation of men considered in the mass affords the standard…

45    Importantly, their Honours observed at 659 that:

The main issue in the present case is a question never susceptible of much discussion. 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.

46    Windeyer J discussed the concept of deceptive similarity in Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 415 and said that the comparison is:

…between, on the one hand, the impression based on recollection of the plaintiff’s mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions such persons would get from the defendant’s [use of its marks].

His Honour stressed that the marks in question are remembered by “general impressions” rather than by any photographic recollection.

47    In Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 at [50], French J (as his Honour then was), with whom Tamberlin J agreed, set out a number of propositions relevant to the question of deceptive similarity, based on the judgment of Kitto J in Southern Cross cited at [42] above. His Honour restated the principles as follows:

(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.

48    In Tivo Inc v Vivo International Corporation Pty Ltd [2012] FCA 252 at [94], Dodds-Streeton J helpfully restated the principles governing questions of deceptive similarity. At [102] her Honour observed that it is necessary to compare both trade marks visually and aurally and that the test is whether there is a real risk that the use of the impugned mark:

will cause a significant number of ordinary persons to wonder or to entertain a reasonable doubt…as to whether the respondents’ products came 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”.

49    Further at [105], her Honour said:

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.

AUSTRALIA POST’S CONTENTIONS ON DECEPTIVE SIMILARITY IN SUMMary

50    Australia Post submits that there is a real risk that consumers will be deceived or confused by the use of the name DIGITAL POST AUSTRALIA, because they will have cause to wonder whether DPA is a service of Australia Post or is otherwise related to Australia Post. It says that so much follows from the use of the words “Post” and “Australia” adjacent to one another in relation to the name of DPA’s digital mail service. It claims that confusion is even more likely, because the word “post” is very strongly associated with Australia Post’s mail delivery services and brand extensions such as “Express Post”, “Parcel Post” and “POSTbillpay”.

51    Australia Post contends that consumers may be “perplexed” or “mixed up” about the relationship between Australia Post and the digital postal service offered by DPA under the name DIGITAL POST AUSTRALIA. For example, it suggests that consumers might wonder if DPA is Australia Post or is a sub-brand or brand extension of Australia Post. Australia Post relies on the results of two surveys which it says support a conclusion that many consumers confronted with the name DIGITAL POST AUSTRALIA would be caused to wonder about or to assume some sort of association with Australia Post. It also relies on the evidence of a marketing expert, Dr Stephen Downes, about the likely reactions of consumers to the name DIGITAL POST AUSTRALIA and says that the surveys provide empirical support for the opinions expressed by Dr Downes.

52    Australia Post argues that the “surrounding circumstances” which the Court is entitled to take into account for the purpose of assessing allegations of trade mark infringement are limited to general matters relevant to the context in which the marks will be encountered, such as the characteristics of consumers of the services in question. It submits that differences specific to the parties, such as differences in the services offered by the parties, the font or colour in which their marks are presented, or the fact that the marks usually appear with additional material such as a logo or disclaimer, are irrelevant to that inquiry.

dpa’s SUBMISSIONS on deceptive SIMILARITY in summary

53    In response to Australia Post’s allegations of trade mark infringement, DPA submits that the mark DIGITAL POST AUSTRALIA is visually and aurally distinct from AUSTRALIA POST. DPA says that there is a tendency in modern English expression to place greater emphasis on the opening word of a series of words and that the inclusion of the first word “DIGITAL” and the different order of the words “AUSTRALIA” and “POST” in DPA’s name alleviate any prospect of deceptive similarity. It contends that having the word “DIGITAL” before the word “POST” acts as an important qualifier of the concept of “post”.

54    Apart from linguistic differences between the marks, DPA submits that the surrounding circumstances, taken either individually or together, remove any doubt as to whether DIGITAL POST AUSTRALIA is deceptively similar to AUSTRALIA POST. DPA stresses the importance of the class of consumer likely to use its digital mail services, being persons who are interested in receiving banking mail and bills online. In DPA’s submission, such consumers will be particularly scrupulous about the use of the internet to receive information, store documents and pay bills. Prospective subscribers to a digital post service would therefore have a heightened awareness of any differences between the marks, by reason of care in consideration of the selection of a digital mail service.

55    DPA further contends that the AUSTRALIA POST mark is so ubiquitous and well known in the Australian community that it is extremely unlikely that consumers will remember it imperfectly. In this context, DPA argues, it is extremely unlikely that consumers interested in receiving their mail online via a digital post service will be “caused to wonder” whether the services offered by DPA under the mark DIGITAL POST AUSTRALIA are associated with Australia Post.

conclusion on deceptive similarity

56    Having compared the two marks visually and aurally and considered the relevant surrounding circumstances, I do not consider that there is a real, tangible danger of deception or confusion occurring as a consequence of DPA adopting the mark DIGITAL POST AUSTRALIA. I do not believe that the ordinary consumer might be caused to wonder whether the digital mail services proposed to be operated by DPA come from the same source as the digital mail services proposed to be offered by Australia Post. The ordinary consumer would not entertain a reasonable doubt about the matter.

57    The addition of the prefix “DIGITAL” and the different order of the words “POST” and “AUSTRALIA” in DPA’s mark are sufficient to avoid deception or confusion. The marks are visually and aurally distinct. They also convey different ideas to the consumer. The case of Health World Ltd v Shin-Sun Australia Pty Ltd (2005) 64 IPR 495 is instructive in this context. In that matter, Cooper J considered whether the marks HEALTHPLUS and INNER HEALTH PLUS were deceptively similar. As in this case, a descriptive word (“INNER”) had been added to prefix another existing two word mark (“HEALTH PLUS”). His Honour considered that the addition of the first word resulted in a substantial difference in meaning between the two marks. His Honour held there was no deceptive similarity even though the order of the second two words was not reversed. Jacobson J compared the marks again in Health World Ltd v Shin Sun Australia Pty Ltd (2008) 75 IPR 478 at [138] and found that:

the impression that the person of ordinary intelligence and memory would have of the Inner Health Plus mark is that of the dominant name and phrase, Inner Health…No such impression is created by the look or appearance of the trade mark HealthPlus…[which] is concerned with general health and well-being.

Similarly in this case, the essential element of DPA’s mark is the composite phrase “Digital Post” which conveys the idea of mail delivered in a digital form. The phrase “POST AUSTRALIA” which reverses “AUSTRALIA POST” in DPA’s mark would convey little meaning to the ordinary consumer in the absence of the preceding word.

58     The lack of deceptive similarity in the present case is even more apparent when one considers the surrounding circumstances which the Court must take into account. As Windeyer J said in Shell at 416:

the deceptiveness that is contemplated must result from similarity; but the likelihood of deception must be judged not by the degree of similarity alone, but by the effect of that similarity in all the circumstances [emphasis added].

Dodds-Streeton J also emphasised the relevance of surrounding circumstances to the issue of deceptive similarity in Tivo Inc v Vivo International Corporation Pty Ltd [2012] FCA 252. At [172], her Honour said:

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.

59    The trade marks will be used in connection with digital mail services. Australia Post has a statutory monopoly over the delivery of letters and parcels. It is not yet associated in the minds of potential customers with the provision of digital mail. The potential audience for digital mail services is likely to be technologically competent and internet savvy. Members of that class will almost certainly be careful and astute in their selection of a digital mail service. Even in the context of a trade mark dispute concerning gourmet cheese, Middleton J in Yarra Valley Dairy Pty Ltd v Lemnos Foods Pty Ltd & Another (2010) 191 FCR 297 considered at [278] that consumers were likely to:

at least take some care in choosing the product they intend to purchase. The consumer of this type of product is likely to be astute as to the characteristics of the product, and discerning in his or her purchasing habits.

It is difficult to imagine that anyone who is competent with computer technology will have any doubt that Digital Post Australia is separate and distinct from Australia Post. Although the name AUSTRALIA POST is entirely descriptive of its mail delivery services, it has become distinctive and iconic though extensive and prolonged use. In such circumstances, potential consumers of digital post services will perceive and pay attention to even slight changes to the mark. I find that the mark DIGITAL POST AUSTRALIA is not deceptively similar to the mark AUSTRALIA POST.

IS THE ABOVE CONCLUSION ALTERED BY EXPERT EVIDENCE?

60    Australia Post acknowledges that the issue of deceptive similarity is one for the Court. However, it submits that the Court may inform its analysis by reference to the evidence of Dr Downes, a marketing expert. Dr Downes gave evidence that consumers would regard the word “POST” as the dominant feature of DIGITAL POST AUSTRALIA and that consumers might consider that Australia Post had entered into a business using a new name, as it had with Express Post and POSTbillpay.

61    The evidence of Dr Downes does not alter my conclusion on deceptive similarity. The focus of his analysis was on consumers generally. In considering the relevant surrounding circumstances, the Court’s focus must be on the intended customers for digital mail services. I do not consider relevant those consumers who have no experience of the internet and who would have no interest in acquiring a digital mail service. The relevant consumer would not struggle to distinguish DPA’s service from that of Australia Post, given the nature of the service and the likely effect of marketing or branding. This is especially so, given Australia Post is one of the best known brands in Australia and consistently uses elements of its Masterbrand to promote its products and services.

is the conclusion on deceptive similarity affected by survey evidence?

62    Australia Post commissioned two consumer surveys in which respondents were asked questions about what would come to mind if they saw or heard of “Digital Post Australia”. Various responses ensued. They were said by Australia Post to provide evidence of actual confusion when consumers were first confronted with the trade mark DIGITAL POST AUSTRALIA. Australia Post submitted that the surveys should be given significant weight in the Court’s determination on the issue of deceptive similarity.

63    Australia Post relied on the evidence of Mr Dimitrios Casdas, the manager of the survey company which administered the first survey. Mr Casdas gave evidence about the appropriateness of the sample size and about the value of the survey.

64    As with the evidence of Dr Downes, the major problem with the Court’s use of the surveys to inform its consideration of the issue of deceptive similarity is that the class of survey respondents was not confined to potential users of the proposed digital mail service. The respondents were at large. I place no weight on the survey evidence. It does not assist me to determine what is, in any event, a matter for the Court.

the domain names

65    For the same reasons as those discussed above, the Court does not consider that the domain names adopted by DPA involve it in any breach of s 120 of the TM Act.

the ‘GOOD FAITH’ DEFENCES

66    Having regard to the Court’s finding on deceptive similarity, it is not necessary to consider DPA’s defences based on the exceptions in sub-sections (1)(a)(i) and (1)(b)(i) of s 122 of the TM Act. However, for completeness, the Court will briefly set out its views on the defences raised by DPA.

67    Section 122(1) of the TM Act provides an exception to s 120 where a person uses, in good faith, the person’s name or the name of the person’s place of business. It also provides an exception where a person uses a sign, in good faith, to indicate:

The kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services…

68    DPA submits that its name was chosen after months of careful consultation and testing of alternative names. It says that the name DIGITAL POST AUSTRALIA was chosen because it is a functional name which would inform potential customers of its offering a digital post service in Australia.

69    DPA points to Mr Hynes’s evidence that the name was chosen without any desire to be associated with Australia Post or to “leverage” any of its brands. I accept that evidence. I also accept the evidence of Mr Hynes that the name was chosen because it was descriptive of the service proposed to be offered. The name was based on consumer research which suggested that any brand name adopted by DPA should be functional, practical, descriptive and not abstract.

70    Mr Hynes gave evidence that he considered DPA to be a utility, in the sense that it will provide a service. Contrary to the submissions of Australia Post, I do not accept that the evidence reveals unequivocally that the name “Digital Post Australia” was chosen to give the impression that DPA is associated with the government. Some confusion is apparent in the evidence about the differing meanings given to the word “utility” ranging from a government service (as on the Monopoly game board) to a service of any kind.

71    The Court accepts that DPA has used its own name in good faith and has used that name to indicate the intended purpose of the service it seeks to introduce, being the provision of a digital mail service in Australia. It was not a name chosen by the people behind DPA to benefit from Australia Post’s iconic reputation. In any event, that reputation is most strongly identified with Australia Post’s mail and parcel delivery service as distinct from any potential digital mail service.

australian consumer law

72    Australia Post contends that, having regard to the strength of its reputation built up by use of its trade marks and other trade indicia, as well as its historical statutory monopoly in mail delivery services in Australia, the conduct of the respondents in adopting the name DIGITAL POST AUSTRALIA for its service is likely to cause consumers to be misled or deceived into thinking that DPA is an official postal service or a service of or associated with Australia Post.

73    Australia Post says that the respondents have breached s 18 of the ACL. That section prohibits corporations from engaging in conduct, in trade or commerce, that is misleading or deceptive or likely to mislead or deceive. Australia Post also relies on s 29(1)(a), (g) and (h) of the ACL. These provisions prohibit, in connection with the possible supply of goods and services, conduct which includes:

    making a false or misleading representation that goods have a particular standard, quality, value…or have had a particular history or particular previous use;

    making a false or misleading representation that services have…performance characteristics; and

    making a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation.

74    The essence of Australia Post’s contentions about breaches of the ACL by the respondents is that their conduct amounts to a false or misleading representation of association with the reputation of Australia Post. Whether the impugned conduct conveys the making of a representation is a question of fact to be determined having regard to all the circumstances within which the conduct occurred. In other words, the respondents’ conduct must be taken as a whole and in context. The effect must be on reasonable members of the public or a section of the public, such as potential users of the services. Potential users are not to be credited with any high perception or habitual caution, but exceptional carelessness or stupidity may be disregarded. The question is whether or not a not insignificant number of persons within the relevant section of the public would be misled or be likely to be misled by reason of the impugned conduct; see Peter Bodum A/S and Others v DKSH Australia Pty Ltd (2011) 280 ALR 639 at [203]-[209] per Greenwood J with Tracey J agreeing at [272].

75    Taken as a whole, and in context, I do not consider that such an allegation can be made out. It is important to note that the service proposed to be offered by DPA is not yet in operation. It is also significant that Australia Post does not currently offer a digital mail service, although both entities intend to operate such a service in the near future. The important point, for current purposes, is that Australia Post has no existing reputation in a digital mail service. While Australia Post has operated some non-traditional services, such as Fax Post and eLetter, it does not operate a digital post service currently. Australia Post is most strongly associated, in the minds of the public, with physical mail services. As a consequence, members of the public would not be misled into thinking that the digital mail service offered by DPA was the digital mail service, or any service of Australia Post.

76    Further, DPA does not use the logo or Masterbrand features of Australia Post or elements of them. The dominant colour of the Australia Post logo is red, while DPA’s logo is blue. The evidence of Mr John Moore (General Manager of Marketing and Customer Experience at Australia Post) is that the Australia Post logo appears on all external communications of Australia Post. The result is that the Australia Post marks are never used in isolation but always with elements of the Australia Post Masterbrand. It would run counter to what consumers would ordinarily expect, for Australia Post to launch a new business without using the key features of its Masterbrand, and to do so using very different branding features. On its website, DPA prominently displays a disclaimer saying that its service is not a service of Australia Post or associated with Australia Post. Moreover, the Australia Post brand is so well known and iconic that it would be difficult for consumers to genuinely confuse it with the brand of DPA, unless they were exceedingly careless.

77    The names AUSTRALIA POST and DIGITAL POST AUSTRALIA are both descriptive of the services being provided. When descriptive trade marks are being compared, it will be difficult to establish breach of s 18 of the ACL and the like provisions in s 29 of the ACL; see Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre (1978) 140 CLR 216 at 229 per Stephen J.

78    The existence of any confusion in the minds of members of the broader public will not necessarily mean that misleading and deceptive conduct has occurred. The important issue is whether such confusion was caused by any misleading or deceptive conduct of the respondents. There is no cogent evidence that this is the case.

79    The use of DPA’s domain names is unlikely to mislead or deceive consumers, because Australia Post has always used domain names including the word “auspost”. The domain names adopted by DPA do not use the word “auspost”. The likelihood of DPA’s domain names misleading a member of the public into believing they have an association with Australia Post is negligible.

80    There was no intention on the part of DPA and the other respondents to “cash in” on the reputation of Australia Post. On the contrary, DPA intends to offer a service which has, as yet, not been offered by Australia Post.

81    The claims based on the ACL are without merit and must be dismissed.

passing off

82    The parties did not contend that, in the event the ACL claims were dismissed, there was any likelihood of the claim under the tort of passing off succeeding. That aspect of the application is also dismissed.

conclusion

83    As none of the claims contained in the application have succeeded, the proceeding is dismissed with costs.

Associate:

Dated:    17 August 2012