FEDERAL COURT OF AUSTRALIA

Bugatti GmbH v Shine Forever Men Pty Ltd [2013] FCA 1116

Citation:

Bugatti GmbH v Shine Forever Men Pty Ltd [2013] FCA 1116

Parties:

BUGATTI GMBH v SHINE FOREVER MEN PTY LTD (ACN 146 565 335)

File number:

VID 263 of 2012

Judge:

TRACEY J

Date of judgment:

31 October 2013

Catchwords:

TRADE MARKS – whether infringement – whether respondent “used” the marks – whether trade mark deceptively similar – whether infringement qualified by s 122 of the Trade Marks Act 1995 (Cth)

Legislation:

Trade Marks Act 1995 (Cth) ss 7, 10, 120, 122, 123

Cases cited:

Crazy Ron’s Communications Pty Ltd v Mobile World Communications Pty Ltd (2004) 209 ALR 1 applied

E & J Gallo Winery v Lion Nathan Pty Ltd (2009) 175 FCR 386 applied

E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 discussed

Edwards v Liquid Engineering 2003 Pty Ltd (2008) 77 IPR 116 – cited Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein (1967) 116 CLR 254discussed

Paul’s Retail Pty Ltd v Sporte Leisure Pty Ltd (2012) 202 FCR 286discussed

Pioneer Kabushiki Kaisha v Registrar of Trademarks (1977) 137 CLR 670 discussed

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

Re An Application by Rysta Ltd, Re The Opposition of Aristoc Ltd (1943) 60 RPC 87 – cited

Registrar of Trade Marks v Woolworths Limited (1993) 93 FCR 365 – discussed

Saville Perfumery Limited v June Perfect Limited [1941] 58 RPC 147 – cited

Vivo International Corporation Pty Ltd v Tivo Inc (2012) 294 ALR 661– cited

Date of hearing:

26 and 27 November 2012 and 5 February 2013

Date of last submissions:

1 January 2013

Place:

Melbourne

Division:

GENERAL DIVISION

Category:

Catchwords

Number of paragraphs:

57

Counsel for the Applicant:

Mr E J C Heerey

Solicitor for the Applicant:

Davies Collison Cave Law Pty Ltd

Solicitor for the Respondent:

Mr M Revah appeared for the Respondent (by leave)

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 263 of 2012

BETWEEN:

BUGATTI GMBH

Applicant

AND:

SHINE FOREVER MEN PTY LTD (ACN 146 565 335)

Respondent

JUDGE:

TRACEY J

DATE OF ORDER:

31 OCTOBER 2013

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.    The proceeding be listed for directions on 15 November 2013 at 9:30 am.

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

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 263 of 2012

BETWEEN:

BUGATTI GMBH

Applicant

AND:

SHINE FOREVER MEN PTY LTD (ACN 146 565 335)

Respondent

JUDGE:

TRACEY J

DATE:

31 OCTOBER 2013

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

1    The applicant owns a series of trade mark registrations in Australia for the word “BUGATTI”. The respondent (“Shine Forever”) has, since 2010, imported and sold a range of men’s clothing and accessories under or by reference to the trade marks Bugatchi Uomo and BUGATCHI.

2    The applicant contends that Shine Forever has infringed its registered trade marks by marketing clothing and accessories using the marks BUGATCHI or BUGATCHI UOMO, thereby contravening s 120(1) of the Trade Marks Act 1995 (Cth) (“the Act”).

3    Shine Forever concedes that it has imported and sold products in Australia which bear the trade mark BUGATCHI UOMO. It also acknowledges that it operated a retail outlet in Melbourne which was named BUGATCHI UOMO.

4    The parties are agreed that three issues arise for determination. They are:

(a)    Whether or not Shine Forever has “used” BUGATCHI UOMO as a trade mark;

(b)    If so, whether or not the trade mark BUGATCHI UOMO is “deceptively similar” to the trade mark BUGATTI within the meaning of s 120(1) of the Act; and

(c)    If so, whether or not Shine Forever has a defence under ss 122(1)(f) and/or 122(1)(fa) of the Act.

5    The applicant tendered uncontested evidence, which I accept, that Shine Forever has also imported and sold products using the mark BUGATCHI. Shine Forever has not denied doing so. As a result I accept the applicant’s submission that issues (a) and (b) should be broadened to cover the BUGATCHI mark.

BACKGROUND

6    The applicant filed its first application for registration of the BUGATTI trade mark in 1978 in Germany. The range of products marketed under this mark expanded within Germany and then into other parts of Europe.

7    The applicant received its first orders for BUGATTI branded products to be delivered in Australia in 1995. Since then it has progressively expanded the number of its retail outlets in Australia.

8    As its Australian business increased so too did the range of products which bore the BUGATTI mark. As a result the applicant progressively extended the range of products covered by its registered trade marks. At relevant times the applicant owned the following Australian registered trade marks:

(a)    Mark No. 503207 for the word BUGATTI, in class 25 of the Register of Trade Marks in respect of clothing, excluding boots, shoes and slippers registered on 18 January 1989;

(b)    Mark No. 1054553 for the word BUGATTI, in class 25 of the Register of Trade Marks in respect of outer clothing registered on 17 February 2005; and

(c)    Mark No. 1151896 for the word BUGATTI in respect of the following:

(i)    in class 18 of the Register of Trade Marks in respect of leather and imitation of leather, and goods made of these materials (included in class 18); trunks, travelling bags and handbags, briefcases; wallets; umbrellas, parasols and walking sticks; animal skins, hides; leather shoulder straps; bags of all kinds of this class;

(ii)    in class 24 of the Register of Trade Marks in respect of textiles and textile goods, including household linen, bed and table covers; bedding; blankets, curtains; draped linen; eiderdowns, fabric; fabric of imitation animal skins; fabric for boots and shoes; tablecloths; table napkins of textiles; towels; wall hanging of textiles;

(iii)    in class 35 of the Register of Trade Marks in respect of retailing, wholesaling and online selling services; retailing; wholesaling and online selling of clothing, footwear and headgear; retailing, wholesaling and online selling leather and imitations of leather, and goods made from these materials; retailing, wholesaling and online selling of trunks, travelling bags, handbags, briefcases, textiles, textile goods, household linen, bedding, table covers, umbrellas, parasols and walking sticks, wallets, leather shoulder straps, bags of all kinds, tablecloths, table napkins of textiles, towels and wall hangings of textiles,

was registered on 13 December 2006.

9    The BUGATCHI UOMO trade mark is owned by Bugatchi Uomo Apparel Inc (“BUA”). The mark was first devised in Canada and has been used since 1976. Clothing and accessories bearing the mark were first sold in Australia in 1991. The range of products substantially overlaps that covered by the applicant’s registered marks. The pricing of the BUGATCHI UOMO products is sufficiently high to place them in the “luxury” category.

10    Shine Forever was incorporated on 28 September 2010. It describes itself as BUA’s “distributor” in Australia.

11    In 2010 BUA applied to register BUGATCHI UOMO as a trade mark in Australia. The application was accepted by the Registrar of Trade Marks on 14 September 2010. The registration was opposed by the applicant and its objection remains to be resolved.

12    On 11 October 2011 Shine Forever registered, under Victorian legislation, the business name BUGATCHI in relation to the conduct of the business of importing, wholesaling and retailing menswear and accessories.

LEGISLATION

13    The Act, relevantly provides that:

“10    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.

120(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.

122(1)    In spite of s 120, a person does not infringe a registered trade mark when:

(f)    the court is of the opinion that the person would obtain registration of the trade mark in his or her name if the person were to apply for it; or

(fa)    both:

(i)    the person uses a trade mark that is substantially identical with, or deceptively similar to, the first-mentioned trade mark; and

(ii)    the court is of the opinion that the person would obtain registration of the substantially identical or deceptively similar trade mark in his or her name if the person were to apply for it;

123(1)    In spite of s 120, a person who uses a registered trade mark in relation to goods that are similar to goods in respect of which the trade mark is registered does not infringe the trade mark if the trade mark has been applied to, or in relation to, the goods, by, or with the consent of, the registered owner of the trade mark.”

HAS SHINE FOREVER “USED” BUGATCHI OR BUGATCHI UOMO AS A TRADE MARK?

14    Shine Forever contended that it is not the owner of these trade marks. The mark is used with the consent of and under the direction of BUA. Accordingly, so Shine Forever argued, it does not “use” the marks in Australia; BUA does.

15    Shine Forever stressed that it is BUA which designs and supplies the clothing which is marketed with the BUGATCHI UOMO mark. It is BUA which selects the fabrics and materials and which exercises quality control over the goods. BUA applies the trade mark to the clothing overseas before it is imported to Australia.

16    Shine Forever placed particular reliance on the High Court’s decisions in Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein (1967) 116 CLR 254. At first instance Windeyer J said (at 267) that:

“The manufacturer who sells goods, marked with his mark, to a warehouseman, wholesaler or retailer does not, in my view, thereupon cease to use the mark in respect of those goods. The mark is his property although the goods are not; and the mark is being used by him so long as the goods are in the course of trade and it is indicative of their origin, that is as his products.”

17    An appeal from his Honour’s decision was dismissed. In the course of its judgment the Full Court said (at 271) that:

…when an overseas manufacturer projects into the course of trade in this country, by means of sales to Australian retail houses, goods bearing his mark and the goods, bearing his mark, are displayed or offered for sale or sold in this country, the use of the mark is that of the manufacturer.”

18    Shine Forever also sought to support its argument by reference to s 7(3) of the Act which provides that “[a]n authorised use of a trade mark by a person is taken, for the purposes of this Act, to be a use of the trade mark by the owner of the trade mark.”

19    Shine Forever’s reliance on Estex Clothing ignores subsequent authority in which Estex Clothing has been distinguished and explained. In Pioneer Kabushiki Kaisha v Registrar of Trade Marks (1977) 137 CLR 670 at 688 Aickin J held that:

“It was argued that Estex Clothing … decided that a retailer who sold imported goods bearing an Australian registered trade mark did not use the mark, and that therefore ‘distributor’ did not use a mark which was already on the goods. In my opinion the Estex case is not authority for that proposition … It was not necessary in that case to consider whether the retailer also used the mark because the only relevant question was whether the registered proprietor himself had used the mark in Australia. There is no doubt that if the retailer had on the same basis imported goods other than those of the registered proprietor but bearing its mark, he would have used the mark by infringing it. This is established by W.D. & H.O. Wills (Australia) Ltd. v Rothmans Ltd. (1955) 92 CLR 131 (Fullagar J); (1956) 94 CLR 182 (Full Court), where it was held that the only trade in the goods took place in the United States of America, because the importer was a consumer, not a trader. However, in its joint judgment the court observed at 188: ‘If a purchaser instead of smoking the cigarettes had attempted to resell the packets he would of course have used the trade mark and would have been liable to be sued for infringement under s. 53 of the Trade Marks Act.’ Thus if Pioneer Australia had done no more than import the goods and sell them by retail it would have used the mark, but in fact it did much more as the evidence referred to above demonstrates. This argument reflects the same misconception as to what constitutes use of a mark as underlies many of the submissions.”

20    In E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2009) 175 FCR 386 at 403-4 a Full Court of this Court followed Aickin J’s reasoning when rejecting a submission that an importer did not use a trade mark “because only the original proprietor uses the mark”. As the Full Court recently noted in Paul’s Retail Pty Ltd v Sporte Leisure Pty Ltd (2012) 202 FCR 286 at 295, the effect of what was said in Gallo “was that an importer of goods who sells in Australia goods to which the mark has been applied overseas uses the mark as a trade mark within the meaning of s 120.”

21    Although the Full Court’s decision in Gallo was overruled on other grounds by the High Court, the High Court did not find it necessary to deal with this issue: see E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 at [53]. More recently, another Full Court of this Court has held that:

“The approach for which Paul’s wishes to contend would require us to find that the observations made by Aickin J in Pioneer are wrong and ought not to be followed. It is true that his Honour was sitting at first instance. But we do not see that it is appropriate for an intermediate court of appeal to depart from the views expressed by Aickin J particularly where those views were apparently endorsed by the Full Court in Gallo at [59] and not disapproved by the High Court.”

See Paul’s Retail at 295.

22    The construction favoured in the more recent decisions is further supported by the legislative context. Section 123 of the Act provides that a person will not contravene s 120 if that person uses, in Australia, a registered trade mark “if the trade mark has been applied to … the goods by … the registered owner of the trade mark.” As the Full Court observed in Paul’s Retail (at 296) “s 123 marks out an exception to what would otherwise be the operation of the infringement provisions of the Act.”

23    Shine Forever did not seek to deny that it had sold clothing and accessories in Australia which bore the trade mark BUGATCHI UOMO. It imported the goods and marketed them through a retail outlet named BUGATCHI UOMO. In doing so it “used” the marks.

DECEPTIVE SIMILARITY

24    The applicant submitted that the marks BUGATCHI and BUGATCHI UOMO were deceptively similar to its registered trade mark, BUGATTI. The use, by Shine Forever, of the disputed marks thereby contravened s 120(1) of the Act. The applicant contended that the impugned marks so nearly resembled its mark that their use was likely to deceive or cause confusion: see s 10.

25    For the most part the evidence called by the applicant in support of its case related to the establishment and use of the BUGATTI mark both in Australia and overseas. It also explained the circumstances in which it became aware of Shine Forever’s use of the BUGATTI and BUGATCHI UOMO marks in Australia and elsewhere. Most of this material was uncontentious.

26    The applicant sought to establish actual confusion in the market place. For this purpose it called Ms Louise Boudrie. Ms Boudrie appeared under subpoena. She manages a menswear store in Geelong. She has traded in BUGATTI products since July 2011. She had also sought to place an order for BUGATCHI UOMO products in December 2011 but her order had not been filled because Shine Forever was not prepared to extend credit to the company through which she conducted her business.

27    In July 2012 a private investigator had attended her store and asked her whether she stocked BUGATCHI UOMO products. She thought that he had said BUGATTI and responded with words to the effect that she had placed an order for BUGATTI products which she expected would be arriving shortly.

Guiding principles

28    The principles which guide the application of s 120(1), when read in conjunction with s 10, are well established. The parties accepted the principles but were divided as to the conclusion to which their application led.

29    The principles were conveniently collected in the reasons of the Full Court in Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd (2004) 209 ALR 1 at 17-19:

“[73]    First, as the primary judge pointed out, the question of deceptive similarity of marks, unlike substantial identity, is not to be judged by a side-by-side comparison. As Windeyer J said at first instance in Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407 at 415:

‘On the question of deceptive similarity a different comparison must be made from that which is necessary when substantial identity is in question. The marks are not now to be looked at side by side. The issue is not abstract similarity, but deceptive similarity. Therefore the comparison is the familiar one of trade mark law. It is between, on the one hand, the impression based on recollection of the plaintiff’s mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions that such persons would get from the defendant’s television exhibitions.’

See, too, CA Henschke & Co v Rosemount Estates Pty Ltd (2000) 52 IPR 42 at 61, per curiam.

[74]    In assessing the impression created by the mark, it is important to consider ‘the idea of the mark’, that is ‘the idea which the mark will naturally suggest to the mind of one who sees it’: Jafferjee v Scarlett (1937) 57 CLR 115 at 121, per Latham CJ (with whom McTiernan J agreed). As Latham CJ observed in Jafferjee (at 122):

‘it is very important to remember that the purchasers in that market will not ordinarily have an opportunity of comparing the two marks side by side. They will compare the actual mark which they see upon goods which are offered to them with the memory of the other mark, which they will retain in a more or less distinct form. They therefore will not be in the same position as that in which the court finds itself when it is endeavouring to determine whether or not they are likely to be deceived… Such purchasers have not had the opportunity or the occasion to make a precise comparison of the two marks. They will be guided, so far as they are influenced by trade marks at all, by a general recollection or impression of the mark which they have seen.’

[75]    Second, the question of deceptive similarity involves factual issues in respect of which similarities of sound may be important. Dixon and McTiernan JJ explained the approach to be taken in Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641, at 658, as follows:

‘But, 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 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.’

Later their Honours observed (at 659) that the question is:

‘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.’

[76]    Third, it is necessary to show a tangible danger of deception or confusion, although it is enough if an ordinary person entertains a reasonable doubt: Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 594-5, per Kitto J; Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 at 382, per French J (Tamberlin J agreeing).

[77]    Fourth, as is implicit in the passage quoted above from Australian Woollen Mills, the court must make allowance for the imperfect recollection a person may have of the registered trade mark in determining whether another mark so nearly resembles the registered mark that it is likely to deceive or cause confusion. For example, in Aristoc Ltd v Rysta Ltd [1945] AC 68 the House of Lords held that the respondents were not entitled to register ‘Rysta’ as a trade mark in respect of stockings in the face of the appellants’ ‘Aristocrat’ registered mark for the same goods. Viscount Maugham (with whom Lords Thankerton and Wright agreed) adopted (at 86) the reasoning in the dissenting judgment of Luxmoore LJ in the Court of Appeal: Re Rysta Ltd’s Application (1943) 60 RPC 87. Luxmoore LJ said (at 108-109):

‘The answer to the question whether the sound of one word resembles too nearly the sound of another so as bring the former within the limits of the Trade Marks Act 1938, s 12, must nearly always depend on first impression, for obviously a person who is familiar with both words will neither be deceived nor confused. It is the person who only knows the one word, and has perhaps an imperfect recollection of it who is likely to be deceived or confused. Little assistance, therefore, is to be obtained from a meticulous comparison of the two 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 assistance ministering to that person’s wants.’

Viscount Maugham accepted Luxmoore LJ’s view that there was a tendency to slur a word beginning with ‘a’ and that the similarity between the pronunciation of ‘Rysta’ and ‘Ristoc’ was fairly obvious. Aristoc v Rysta thus recognises that the concept of imperfect recollection may be applied to the pronunciation of a particular word included in a trade mark.

[78]    Aristoc v Rysta was applied by the High Court in Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353. The proprietor of the trade mark ‘BERLEI’, registered in respect of clothing, succeeded in expunging from the register the trade mark ‘BALI-BRA’, registered in respect of brassieres. Mason J (with whom Stephen J agreed) held that the use of ‘BALI-BRA’ ‘would be likely to deceive or cause confusion’ within the meaning of s 28(a) of the Trade Marks Act 1955 (Cth). His Honour considered (at 362) that the strength of the proprietor’s case lay in the finding that the two marks were phonetically alike, one being pronounced ‘Burley’ and the other ‘Barley’. Mason J accepted that the likelihood of confusion arising from phonetic similarity was reduced because the evidence showed that brassieres were usually bought after inspection or a fitting. But, his Honour said (at 362):

‘that risk is not eliminated. No doubt orders are sometimes placed by telephone. And in considering the likely reaction of a customer it is important to take into account, not the person whose knowledge of the two marks and the goods sold under them enables her to distinguish between them, but the person who lacks that knowledge. As Luxmoore LJ said in Rysta Ltd’s Application

    “It is the person who only knows the one word, and has perhaps an imperfect recollection of it, who is likely to be deceived or confused”.’

See, too, a decision of the House of Lords to the same effect on similar facts in Berlei (UK) Ltd v Bali Brassiere Co Inc [1969] 2 All ER 812.

[79]    Fifth, the authorities also recognise that the concept of imperfect recollection may be applied to trade marks other than those consisting simply of an invented word (as in Aristoc v Rysta and Berlei v Bali). If a registered trade mark includes words which can be regarded as an essential feature of the mark, another mark that incorporates those words may well infringe the registered trade mark. The other mark may also infringe if there is a tangible danger of deception or confusion by reason of consumers retaining an imperfect recollection of the words constituting an essential feature of the registered mark.” (Original emphasis).

Consideration

30    Shine Forever submitted that, when visual, aural and conceptual comparisons were made between the BUGATTI and BUGATCHI UOMO marks, they were shown to be sufficiently distinct such that the BUGATCHI UOMO mark posed no real threat of causing deception or confusion.

31    Shine Forever contended that the visual comparison was to be made between the BUGATTI and BUGATCHI UOMO marks even though it had registered the business name BUGATCHI under Victorian legislation, the BUGATCHI UOMO mark was used in full on products and associated material.

32    The two marks appear as follows:

33    Shine Forever pointed to what it contended were obvious points of visual differentiation between the two marks. These points were:

    the different lengths of the marks;

    one mark has seven letters and the other 12;

    one has two words and the other one;

    the double TT in BUGATTI; and

    the “CHI” part of the BUGATCHI UOMO mark which finds no counterpart in the BUGATTI mark.

34    Some of these points of distinction were also relied on by Shine Forever in relation to an aural comparison of the marks. It sought to rely on the following points of difference:

    difference in pronunciation of BUGATTI and BUGATCHI with particular emphasis on the final syllables “TTI” and “CHI”;

    the different number of syllables in each mark; and

    the different number of words in the two marks.

35    Shine Forever submitted that these differences in pronunciation, intonation, rhythm and length were such as to prevent a perception of aural similarity arising. Alternatively, it submitted that, to the extent that some similarities may be found to exist, they were not material. The pronunciation of the marks, it was said, played little part in the marketing of the products. Shine Forever emphasised that the high cost apparel and accessories sold under the BUGATCHI UOMO mark were, normally, examined by customers in retail stores where verbal identification of the product name was not required.

36    It also sought to derive assistance from what it described as a “conceptual” comparison between the marks. Neither mark used words from the English language. They were conceptually distinct. BUGATTI was a family name of Italian origin and BUGATCHI is an invented word which has no ordinary meaning. UOMO is the Italian word for “men” but, it was argued, this would not generally be known to Australian consumers.

37    Shine Forever contended that when the forgoing factors are considered, individually and collectively, “the overall impression of consumers would not be one of similarity” and that no real and tangible danger of deception was created.

38    The Court is called on, in cases such as the present, to undertake a visual and aural comparison of the two marks with a view to determining whether the introduction of the impugned mark gave rise to a “real and tangible” risk of confusion being caused in the minds of the potential purchasers of the products bearing the mark. Such confusion can arise even if the marks are found not to be substantially identical: see Vivo International Corporation Pty Ltd v Tivo Inc (2012) 294 ALR 661 at 674 (per Keane CJ). It is for this reason that little, if any, assistance will be gained “from a meticulous comparison of the two words, letter by letter and syllable by syllable, pronounced with the clarity to be expected from a teacher of elocution”: see Rysta Limited, above at [29] (per Luxmore LJ). The aural and visual distinctions which Shine Forever seeks to draw, in large part invite the making of just such a meticulous comparison.

39    The authorities provide many illustrations of the lack of utility of such an approach. The addition of words or syllables will not, for example, protect a mark from an adverse finding if its use would be apt to cause confusion: see, for example, Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227; Edwards v Liquid Engineering 2003 Pty Ltd (2008) 77 IPR 115. Similarly, words used in marks may be phonetically different but have the potential to confuse customers if “similar sounds characterise their pronunciation” see: Vivo International at 674.

40    Although the two marks presently being compared are not identical there are similarities in a number of respects. They share the same first two syllables in the first word. The third syllable of the first words (“TI” and “CHI”) bear a close visual and aural similarity.

41    The word “BUGATTI” constitutes an essential feature of the applicant’s mark. Given the material similarity between the first two words, the addition of the Italian word “UOMO” in the impugned mark will not serve to dissolve any confusion which might otherwise arise.

42    The test requires an assessment of the response of the hypothetical customer with an imperfect recollection of the applicant’s mark when confronted with the challenged mark.

43    The BUGATCHI and BUGATCHI UOMO marks are being used by Shine Forever on and in relation to the same type of goods which BUGATTI markets under its mark. The “idea” which would be conjured up in the consumers mind is that of a European (and, perhaps, more specifically, Italian) fashion brand.

44    In my view the visual and aural similarity between the two marks is such as to cause consumers (to paraphrase the words of French CJ in Registrar of Trade Marks v Woolworths Limited (1999) 93 FCR 365 at 382) to wonder whether it might not be the case that the products bearing the marks or closely related products come from the same source or to wonder or be left in doubt about whether the two sets of products come from the same source. As a result there was a real danger of the creation of the confusion which the legislation is designed to obviate.

45    It was not in dispute that an applicant is able to succeed in a proceeding, brought under s 120(1) of the Act, without proving actual confusion in the market place: see Saville Perfumery Limited v June Perfect Limited [1941] 58 RPC 147 at 174. Such evidence may, nonetheless, be highly persuasive if accepted: see Vivo International at 686 (per Nicholas J). Ms Boudrie’s evidence, which was confirmed on this point by the private investigator, lends some support to the applicant’s contention that the similarities in the marks are liable to give rise to some misunderstandings based on pronunciation. Her evidence did not support the applicant’s claim to the extent that it was founded on the potential for visual confusion. Overall, I found Ms Boudrie’s evidence to be of minimal assistance.

46    I am, therefore, satisfied that the applicant has established that Shine Forever used marks which were deceptively similar to its registered trade mark in relation to goods in respect of which the trade mark was registered.

DEFENCES UNDER S 122(f) AND (fa) OF THE ACT

47    Defences under these provisions were set up by Shine Forever in its fast track response in which it contended that:

“25A    In further response to paragraph 25, the Respondent says that if any of the Respondent’s Marks are found to be deceptively similar to any of the Applicant’s Marks, the Respondent’s conduct does not constitute trade mark infringement by reason of the use in Australia of the Respondent’s Marks and the operation of s 122(1)(f) and/or (fa) of the Trade Marks Act 1995 (Cth).”

48    When the applicant sought clarification of the defence, Shine Forever confirmed that it was the person which it was contended was entitled to registration of the BUGATCHI UOMO trade mark and who could, therefore, plead the defences provided for by s 122(1)(f) and (fa).

49    At trial Shine Forever, without seeking to amend its “pleadings”, argued that the relevant “person” for the purposes of s 122(1)(f) and (fa) was BUA.

50    When, in its final submissions, the applicant objected to Shine Forever being permitted to depart from its pleaded case, Shine Forever contended that, although at the time at which it had clarified the meaning of paragraph 25A of its fast track response it had been represented by a solicitor, its case at trial had been argued by a “director” who was not a lawyer. He was not aware of the need to apply to amend the defence.

51    Once the issue had been raised and Shine Forever became aware of the procedural requirement, no application was made. Rather, the director (who appeared for Shine Forever by leave) sought to develop an argument that BUA (as user of the impugned marks in Australia) was entitled to rely on these defences.

52    Shine Forever proceeded to develop an argument that, as the user of the BUGATCHI and BUGATCHI UOMO’s trade marks, BUA was entitled to rely on the two pleaded defences.

53    Had it been alleged, in a proceeding in which BUA was a respondent, that BUA had contravened s 120(1) of the Act by using the impugned marks, the arguments advanced by the director may have had a bearing on the outcome of the proceeding. They could not avail Shine Forever, which steadfastly denied using the marks, in the present proceeding.

54    Like s 123, s 122 operates as a qualification or exception to s 120(1). It provides a defence to “a person” who may otherwise contravene s 120(1) by infringing a registered trade mark. The “person” which is alleged, in the present proceeding, to have contravened s 120(1) is Shine Forever. It is, therefore, the “person” referred to in the prefatory words of s 122(1). The various references, in paragraphs (f) and (fa), to “the person” plainly refer to the person against whom infringement of s 120(1) is alleged and who seeks to invoke one or more of the defences available under s 122(1). In this case that person is Shine Forever, not BUA.

55    As Shine Forever did not seek to contend that it had defences under paragraphs (f) and (fa), these provisions do not assist it.

CONCLUSION

56    Prior to trial I ordered that issues of liability were to be determined prior to and separately from issues relating to relief. The applicant has foreshadowed that it will seek injunctive relief, damages or an account of profits plus interest and costs.

57    I will, accordingly, list the matter for directions on 15 November 2013 with a view to facilitating the prompt hearing of the remaining issues.

I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey.

Associate:

Dated:    31 October 2013