FEDERAL COURT OF AUSTRALIA
Community First Credit Union Limited v Bendigo and Adelaide Bank Limited [2019] FCA 1553
ORDERS
THE COURT ORDERS THAT:
1. Subject to Orders 2 and 3, on or before 4 October 2019 the parties are to endeavour to agree the appropriate form of orders to be made reflecting the conclusions expressed in these reasons, and to provide a copy of those draft orders to the Associate to Markovic J.
2. If no agreement is reached, on or before 11 October 2019 the parties are to notify the Court of the orders for which they each contend and to each provide written submissions, not exceeding three pages in length, explaining why those orders should be made.
3. If agreement cannot be reached pursuant to Order 1, the proceeding will be listed before Markovic J on 17 October 2019 at 9.30 am. The respondent is granted leave to appear by video conference facility at that time.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ORDERS
NSD 1389 of 2017 | ||
BETWEEN: | COMMUNITY FIRST CREDIT UNION LIMITED Applicant | |
AND: | BENDIGO AND ADELAIDE BANK LIMITED First Respondent | |
REGISTRAR OF TRADE MARKS Second Respondent | ||
JUDGE: | markovic j |
DATE OF ORDER: | 20 september 2019 |
THE COURT ORDERS THAT:
1. Subject to Orders 2 and 3, on or before 4 October 2019 the parties are to endeavour to agree the appropriate form of orders to be made reflecting the conclusions expressed in these reasons, and to provide a copy of those draft orders to the Associate to Markovic J.
2. If no agreement is reached, on or before 11 October 2019 the parties are to notify the Court of the orders for which they each contend and to each provide written submissions, not exceeding three pages in length, explaining why those orders should be made.
3. If agreement cannot be reached pursuant to Order 1, the proceeding will be listed before Markovic J on 17 October 2019 at 9.30 am. The first respondent is granted leave to appear by video conference facility at that time.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
MARKOVIC J:
1 Community First Credit Union Limited (CFCU), the appellant and applicant respectively in the two proceedings before the Court described at [7] below, owns trade mark registration no. 776512 for the words COMMUNITY FIRST with a priority date of 23 October 1998 and registered in class 36 for “insurance and financial services; services of credit unions; banking services; real estate financial services” (Community First Registered Mark).
2 Bendigo and Adelaide Bank Limited (Bendigo), the respondent and first respondent respectively in the two proceedings, is the owner of trade mark registration no. 784796 for (Bendigo Device Mark) and trade mark registration no. 887023 for the words COMMUNITY BANK (Bendigo Word Mark) (collectively Bendigo Community Marks). Both trade marks are registered in class 36 in respect of the following services, which I will refer to in these reasons as the Services:
Financial services including banking services, capital investments, financial management and valuation, financing loans, mortgage banking and saving bank services; insurance services including accident insurance, fire insurance, health insurance, life insurance and insurance underwriting; hire-purchase financing services; lease financing services; financing for leasing and hire-purchase of machines and motor vehicles; leasing and rental of farms; leasing and rental of real estate; leasing and rental of houses and apartments; leasing and rental of office buildings; leasing and rental of flats; hire purchase finance services in relation to machines and vehicles.
3 The Bendigo Device Mark has a priority date of 8 February 1999 and the Bendigo Word Mark has a priority date of 24 August 2001 (collectively the Priority Dates).
4 On 1 March 2013 CFCU lodged two trade mark applications: application no. 1541620 for COMMUNITY FIRST BANK; and application no. 1541594 for COMMUNITY FIRST MUTUAL BANK (collectively CFCU Marks). Both applications are for certain services in class 36 including “financial services” and “personal banking services”.
5 On 27 April 2015 Bendigo opposed the registration of the CFCU Marks under ss 42(b), 44, 58A, 59 and 60 of the Trade Marks Act 1995 (Cth) (TM Act).
6 On 21 July 2017 a delegate of the Registrar of Trade Marks (Registrar) upheld Bendigo’s opposition and, with reference to the Bendigo Word Mark, applied s 44(2) of the TM Act and found that CFCU did not establish honest concurrent use under s 44(3) or continuous prior use under s 44(4) of the TM Act. The applications for registration of the CFCU Marks were thus rejected.
7 There are now two proceedings before the Court: an application by CFCU pursuant to s 88(1) of the TM Act seeking orders that the Register of Trade Marks (Register) be rectified by cancelling and removing the Bendigo Community Marks and for orders pursuant to s 97 or s 101 of the TM Act that the Bendigo Community Marks be removed from the Register (Rectification Proceeding); and an appeal brought by CFCU pursuant to s 56 of the TM Act against the Registrar’s decision (Appeal Proceeding).
8 The two proceedings were heard together. By orders made on 4 October 2017 in each of the Appeal Proceeding and the Rectification Proceeding, evidence in each proceeding is to be evidence in the other.
9 CFCU read the evidence of 10 witnesses and Bendigo read the evidence of 11 witnesses. CFCU and Bendigo also tendered a joint report prepared by their respective experts Timothy Aman and Barry Taylor. The reports of each of Mr Aman and Mr Taylor were not read but the Court was invited to have regard to them in the event that anything in the joint report required clarification. Given the significant volume of evidence, it is convenient to set out a high-level summary of the areas covered by each witness. Before doing so, I note two things.
10 First, given its volume, I do not intend to set out or address in these reasons all of the evidence relied on by the parties. A good deal of that evidence went to use of the trade marks. I will refer to that evidence in summary form where relevant. On the other hand, some of the evidence played an insignificant role in the proceedings and did not feature in the parties’ submissions or did so in a way that was of little significance to the matters in issue. To the extent that the parties relied on evidence of that nature it was of no assistance and I do not propose to refer to it.
11 Secondly, I generally found those witnesses who gave evidence before me to be reliable. Save where I note it to be the case, I found them to be thoughtful and frank in their responses to questions and to be genuine in their attempts to assist the Court.
12 Joce Tancevski is the CEO of CFCU. Mr Tancevski gives evidence about the history and business of CFCU; CFCU’s use, marketing and promotion of the “Community First” brand; CFCU’s use of “Community First” without “Credit Union”; CFCU’s applications for the CFCU Marks; and CFCU’s intention to apply to the Australian Prudential and Regulatory Authority (APRA) for use of the word “bank” or “mutual bank” in its corporate name. Mr Tancevski was cross-examined.
13 Shannon Elizabeth Platt is a partner of Sparke Helmore, the solicitors for CFCU. Ms Platt swore two affidavits:
(1) in her first affidavit Ms Platt puts into evidence the results of research undertaken by members of her team at her request: Australian trade mark searches for third party trade marks containing the words “community bank” and/or “community banking”; requests to IP Australia for access to information in relation to particular trade marks; and searches of the online Hansard report of the proceedings of the Australian Parliament and other parliamentary records for instances of use of the words “community bank” and “community banking”. Ms Platt also puts into evidence documents produced by Pan Macmillan Australia Pty Ltd, the publisher of the Macquarie Dictionary, produced in answer to a subpoena; documents annexed to the affidavit of William Gerard Conlan sworn on 18 December 2018 and filed in the Rectification Proceeding (which was not read into evidence by Bendigo); a photo of and a website printout for the Cannonvale & Proserpine Community Bank Branch of Bendigo Bank; and an interview and article relating to Bendigo; and
(2) in her second affidavit Ms Platt puts into evidence documents produced in answer to a subpoena issued to G&C Mutual Bank Ltd (G&C Mutual).
Ms Platt was not cross-examined.
14 Molly Jeanne Flowers is a paralegal in the employ of CFCU’s solicitors. Ms Flowers gives evidence about her visit to the Pyrmont Community Bank Branch of Bendigo Bank in October 2017. Ms Flowers was not cross-examined.
15 Vienna Sophia Aroha Jones is a solicitor in the employ of CFCU’s solicitors. Ms Jones affirmed two affidavits in which she gives evidence about her visit in October 2017 to the Pyrmont Community Bank Branch of Bendigo Bank and her visits in August and November 2018 to the Rozelle Community Bank Branch of Bendigo Bank. Ms Jones was not cross-examined.
16 Myrna Taouil is a solicitor in the employ of CFCU’s solicitors. Ms Taouil has sworn two affidavits:
(1) in her first affidavit Ms Taouil puts into evidence the results of the following searches that she undertook in November 2018: a search of the Australian Trade Marks Register for trade marks that contain the words “community” and “bank”; and Google searches for “community bank”, “community banks Australia” and “community banking”; and
(2) in her second affidavit Ms Taouil gives evidence of a request she made of her brother-in-law in October 2018 to visit and take photos of the Bendigo Bank Community Bank Stadium at Diamond Creek and puts into evidence the photos provided to her in response to that request and a Google Maps search for 75/77 Main Hurstbridge Road Diamond Creek VIC 3089.
Ms Taouil was not cross-examined.
17 Michael John Lawrence is the chief executive officer (CEO) of the Customer Owned Banking Association Limited (COBA). Mr Lawrence, who was called as an expert, affirmed two affidavits:
(1) in his first affidavit Mr Lawrence gives evidence about his understanding of the meaning of the terms “community bank” and “community banking” in Australia, the desire of other traders to use the term “community bank” and Bendigo’s use of the term “community bank”; and
(2) in his second affidavit Mr Lawrence responds to issues raised in relation to his evidence by Associate Professor Malcolm John Abbott, an expert called by Bendigo.
Mr Lawrence was cross-examined.
18 Melina Morrison is the CEO of the Business Council of Co-operatives and Mutuals Ltd (BCCM). Ms Morrison was called as an expert. She affirmed two affidavits:
(1) in her first affidavit Ms Morrison gives evidence about what in her opinion “community bank” means and her understanding of the banking model used by Bendigo for its community bank branches; and
(2) in her second affidavit Ms Morrison responds to evidence given by Bendigo’s expert, Associate Professor Abbott.
Ms Morrison was cross-examined.
19 David Andrew Taylor is the CEO and a director of G&C Mutual. Mr Taylor was also called as an expert. Mr Taylor gives evidence about G&C Mutual’s history, its trade mark applications for “Australian Community Bank”, his understanding of the meaning of “community bank” and “community banking” and the use of “community bank” by Bendigo. Mr Taylor was cross-examined.
20 Paul Joseph Martin is an adjunct associate professor of finance at the University of Sydney. He was called as an expert. Associate Professor Martin gives evidence about the different types of banking and financial institutions in Australia; the history of banks and credit unions in Australia; and why credit unions want to become banks. Associate Professor Martin was cross-examined.
21 Marianne Robinson is a special counsel in the employ of CFCU’s solicitors with expertise in the financial services industry. Ms Robinson gives evidence of the position as at 1 March 2013 and presently in relation to:
(1) the requirements under the Banking Act 1959 (Cth) (Banking Act) for eligibility to use the term “bank”;
(2) APRA published guidelines for eligibility and the process of obtaining authorisation from APRA to use the term “bank”; and
(3) the extent, if any, to which those requirements differ for an entity wishing to use the term “mutual bank”.
Ms Robinson was not cross-examined.
22 Robert George Hunt was the managing director and CEO of Bendigo until 2009. Mr Hunt gives evidence about the creation and structure of Bendigo’s franchise distribution model; the operation of a franchise bank branch; the selection of “community bank” as the brand for the franchise business operations; the use of the Bendigo Word Mark, including by franchisees; and marketing and advertising by franchisees. Mr Hunt was cross-examined.
23 Julie Ruth Eastham is a branch manager of the Bendigo East Gosford & Districts Community Bank Branch. Ms Eastham gives evidence about her visit in June 2018 to the CFCU Lending, Investments and Insurance Centre at Erina Fair, Erina and puts into evidence photographs she took and marketing and promotional material she obtained during that visit. Ms Eastham was cross-examined.
24 Claudia Lucchiti is a branch operation manager employed by Balmain Rozelle Financial Services Ltd. She gives evidence of conversations she had with Ms Lindsay in September 2018 about the Bendigo Balmain Rozelle Community Bank Branch’s signage. Ms Lucchiti was not cross-examined.
25 Daniel John Holland is the senior stream lead new customers of Bendigo. Mr Holland affirmed two affidavits:
(1) in his first affidavit Mr Holland gives evidence about marketing and branding guidelines; processes for Bendigo’s franchisees; and marketing activities undertaken by Bendigo and offered to its franchisees; and
(2) in his second affidavit Mr Holland gives evidence about Bendigo’s marketing activities featuring the Bendigo Word Mark including putting into evidence copies of videos from Bendigo’s YouTube channel and copies of the Victorian Amateur Football League Association Magazine which include advertisements featuring the Bendigo Word Mark.
Mr Holland was not cross-examined.
26 William Gerard Conlan is Bendigo’s company secretary. Mr Conlan affirmed two affidavits:
(1) in his first affidavit Mr Conlan gives evidence about Bendigo’s corporate history and its business; Bendigo’s franchise banking model and the operation of franchise bank branches from 2009 onwards; the use by franchisees of the Bendigo Word Mark and Bendigo’s intellectual property; and print media about Bendigo’s franchise banking model and sponsorship arrangements undertaken by franchisees; and
(2) in his second affidavit Mr Conlan puts into evidence lists of authorised deposit-taking institutions (ADIs) as at 2000, 2012 and 2018; a list of the members of COBA as at October 2018; COBA’s submission to the Review of Reforms for Cooperatives, Mutuals and Member-Owned Firms; Australian Securities and Investment Commission (ASIC) current and historical company name extracts and business name extracts for Australian member-owned banks; ASIC’s Regulatory Guide 147 Mutuality – Financial Institutions; APRA’s Guidelines: Implementation of section 66 of the Banking Act 1959 dated August 2015 (2015 Guidelines); COBA’s submission to APRA (provided under its former name ABACUS-Australian Mutuals Limited); extracts from the 2001 (Federation) edition of the Macquarie Dictionary and the 1999 and 7th editions of the Australian Oxford Dictionary; and a search of the Australian Trade Marks Register online tool for pending and registered third party marks that contain the word “bank” in class 36.
Mr Conlan was not cross-examined.
27 Allan Keith Rutter is senior manager of customer operational and performance reporting at Bendigo. Mr Rutter affirmed three affidavits:
(1) in his first affidavit Mr Rutter gives evidence of the number of Bendigo’s community bank branches and undertakes an analysis as at 30 June 2013 of whether those branches operated in areas where there were no other competitor retail bank branches, the number of customers of those branches, the number of staff employed by the branches, the amount of capital raised and total shareholders, business generated by the branches and dividends paid to shareholders of the companies operating the branches. Mr Rutter also calculates Bendigo’s total spend on marketing in the period 2005 to 2016 via its funding of the “Marketing Central” platform to which all franchisees have access;
(2) in his second affidavit Mr Rutter gives evidence about calculations that he made to calculate the proximity of Bendigo’s community bank branches to CFCU branches; and
(3) in his third affidavit Mr Rutter puts into evidence the entirety of a document referred to in one of his earlier affidavits.
Mr Rutter was not cross-examined.
28 Mark James Miller is Bendigo’s solicitor. Mr Miller has sworn two affidavits:
(1) in his first affidavit Mr Miller puts into evidence documents relating to parliamentary inquiries undertaken from the late 1990s and various submissions received by those inquiries; submissions made by BCCM including to the Senate Economics Reference Committee; various submissions made by COBA; the results of searches undertaken on his instructions for publicly available statements by credit unions, building societies and other non-bank ADIs as to why they changed to bank status or wanted to use the word “bank” as part of their trading name, and of mutual banks’, credit unions’ and building societies’ webpages with reference to their “about us” pages; and copies of extracts from annual reports and constitutions of various credit unions and mutuals; and
(2) in his second affidavit Mr Miller puts certain documents into evidence and gives evidence that, based on his review of APRA’s points of presence data, CFCU had six branches operating in parts of NSW in 2001 and 11 branches operating in parts of NSW in 2013.
Mr Miller was not cross-examined.
29 Zoe Caitlin Lindsay is a solicitor in the employ of Bendigo. Ms Lindsay swore two affidavits:
(1) in her first affidavit Ms Lindsay puts into evidence an application made by Bendigo pursuant to the Freedom of Information Act 1982 (Cth) for copies of documents relating to CFCU’s applications to register the CFCU Marks and the response to that application; and
(2) in her second affidavit Ms Lindsay gives evidence about Facebook searches she undertook for various community bank branches and puts into evidence the results of those searches; the photographs she printed after visiting the Facebook pages of certain branches to locate sponsorship and community contributions referred to by particular Bendigo community bank branches; screenshots of the results of her Google Maps “street view” searches of several of Bendigo’s community bank branches including the Rozelle branch; and a video from the Bendigo Oak Flats & Shellharbour Community Bank Branch’s Facebook page.
Ms Lindsay was not cross-examined.
30 Natalie Rose Williams is a trade mark attorney and a director of Switch Legal Pty Ltd which has been engaged by Bendigo to assist with the proceedings. Ms Williams gives evidence of her visit in October 2018 to the Community Bank Stadium and the Community Bank Branch at Diamond Creek and puts into evidence the photos she took at that time. Ms Williams was cross-examined.
31 John Stephen Worthington is an adjunct professor of marketing at Swinburne University. Professor Worthington was retained as an expert and gives evidence about his understanding of “community bank” in Australia and Bendigo’s franchise operations, marketing of financial services, the use of the word “bank” in marketing to consumers and the impact of the addition of the word “bank” in the mark “Community First Bank” as opposed to “Community First Credit Union”. Professor Worthington was cross-examined.
32 Malcolm John Abbott has been an associate professor of economics at Swinburne University of Technology since 2008. He also holds the positions of Associate Colleague PROPHE Research Centre, State University of New York at Albany; Associate Researcher, Centre for Research and International Education, Auckland; and Member of the Board of Management, the Pines Learning Centre, Melbourne. Associate Professor Abbott holds a Bachelor of Economics with Honours and a Masters of Economics from La Trobe University and a PhD in Economics from the University of Melbourne. He is an economist whose main fields of work have been in the development of financial markets in the energy sector (natural gas and electricity) and the manner in which pricing and access to network infrastructure is regulated by government agencies. In the 1990s and early 2000s Associate Professor Abbott was involved in researching and writing about the structures and organisational frameworks of financial institutions in Australia.
33 Associate Professor Abbott gives evidence about his understanding of the term “community bank” in Australia and refers to papers he co-authored in the 1990s and 2001. Associate Professor Abbott was cross-examined.
2.3 Joint report of Messrs Aman and Taylor
34 Mr Aman is an audit and advisory partner of BDO East Coast Practice. Mr Aman was retained by CFCU as an expert to provide an opinion as to whether, in relation to each of the Bendigo community bank branches for which an annual report is available, that branch was operating at a profit or loss after tax; is solvent or insolvent; and is generating positive cash flow. Mr Taylor is the head of the restructuring and risk advisory division of HLB Mann Judd Sydney. Mr Taylor was retained by Bendigo as an expert to respond to Mr Aman’s report. Mr Aman prepared two reports and Mr Taylor prepared one report.
35 Messrs Aman and Taylor ultimately prepared a joint report which was tendered in evidence and in which they provided their opinions on the financial viability of 16 specified Bendigo community bank franchise companies.
2.4 Evidence of Ms Morrison and Messrs Taylor and Lawrence
36 Before proceeding further it is convenient to address an issue raised by Bendigo about the evidence of Ms Morrison and Messrs Taylor and Lawrence. As set out above, their evidence principally addresses the meaning of “community bank” and the desire of other traders to use that term.
37 CFCU called each of Ms Morrison and Messrs Taylor and Lawrence as experts. Bendigo submitted that there were significant issues with the independence of each of Ms Morrison and Messrs Taylor and Lawrence and that CFCU had failed to attend to proper compliance by each of them with the Court’s Expert Witness Code of Conduct, such that I would either reject their written evidence entirely or give it very little weight and that I would treat with caution any evidence given by them in cross-examination against Bendigo’s interests.
38 In order to address this issue it is of assistance to set out each of these witnesses’ backgrounds and some of the matters which became apparent in the course of their cross-examination.
39 Ms Morrison has been the CEO of the BCCM since July 2013. Prior to that her roles in the cooperatives and mutuals sector included:
(1) from 2001 to 2012, working as an associate for Sommerson Communications, a communications firm specialising in media, advocacy, public awareness campaigns and project management predominantly for cooperatives and cooperative research bodies. Ms Morrison’s roles included developing digital communication campaigns to promote the benefits of cooperative organisations and member-owned businesses;
(2) from about 2006 to 2012, Ms Morrison was a writer for and then the editor of the flagship publication of the International Co-operative Alliance, one of the organisations for which she provided services at Sommerson Communications. She co-wrote the global message platform for the Blueprint for a Co-operative Decade, a plan prepared for the United Nations General Assembly on the principles of cooperatives and how the goal of sustainability of cooperatives might be achieved;
(3) from about July 2009 to July 2013, Ms Morrison was a founding director of Social Business Australia which advocated for increased recognition of the added value of member-based business in the national economy. In that role, Ms Morrison was a founding member of the committee formed to drive the Australian sector’s involvement in the United Nations International Year of Co-operatives 2012 (IYC 2012); and
(4) from about March 2010 to July 2013, Ms Morrison headed the National Steering Committee and Secretariat (NSC) that oversaw the national campaign to raise awareness of the contribution of cooperative businesses to the Australian economy as part of IYC 2012. NSC was incorporated in 2011 as IYC 2012 Secretariat Limited and subsequently changed its name to BCCM.
40 The BCCM is a national body which represents businesses that ascribe to the cooperative and mutual model of enterprise in Australia. Ms Morrison explained that cooperatives and mutuals are member-owned businesses, as distinct from being owned by investor shareholders, and are referred to as cooperative and mutual enterprises (CME). The BCCM’s board comprises chief executives from its membership, including bank businesses.
41 The BCCM unites cooperative and mutual businesses across all industry sectors in which member-owned businesses operate in the Australian economy. Its membership represents a range of industries including banking and finance, superannuation, health, housing, motoring and agriculture. The objectives of the BCCM as set out in its constitution are to:
(1) demonstrate the values of cooperatives and mutuals by promoting and extending the cooperative and mutuals business model for the benefit of society and the economy, and for the broader community;
(2) recognise the unique role and contribution of cooperatives and mutuals to society, the economy and the community; and
(3) engage in activities and provide information to better inform Australians about the benefits of cooperatives and mutuals.
42 As at 21 August 2018 the BCCM had in excess of 45 full members and 20 associate members. Only enterprises that ascribe to the cooperative or mutual legal structure or have cooperative or mutual constitutions can be admitted as full members. More than 50% of the BCCM’s members, including CFCU, are member-owned firms operating in the banking and finance (including insurance) sector. CFCU was one of the BCCM’s founding members.
43 In her role as CEO of the BCCM, Ms Morrison has instigated and overseen a number of projects for the promotion and recognition of CME businesses in Australia including:
(1) in March 2018 the submissions of the BCCM to the Treasury in response to its final report of the Review into Open Banking in Australia released in December 2017;
(2) in August 2016 as a member of the advisory group for the implementation of the Senate’s $14.9 million two-year Farm Cooperatives and Collaboration Pilot Program aimed at educating Australian farmers about the benefits of cooperative and mutual businesses;
(3) in March 2015 as advocate on behalf of the BCCM for the Australian Senate to conduct an inquiry into the role, importance and overall performance of cooperative, mutual and member-owned firms in the Australian economy. The final report was published on 17 March 2016; and
(4) from 2014 to 2017 coordinating the BCCM’s annual publication, the National Economy Report, which reports on the latest research on the economic and social contribution of Australia’s cooperative, mutual and member-owned firms.
44 In cross-examination senior counsel for Bendigo explored Ms Morrison’s role as an advocate for the CME sector. Ms Morrison’s evidence was that she advocated equally across all industry sectors in which cooperatives and mutuals operate and that she acts in the interests of all members collectively. Ms Morrison described her role as an advocate on behalf of all members to create awareness in the community of the economic benefit of CMEs in the Australian economy.
45 Relevantly, Mr Tancevski, CFCU’s CEO, gave evidence in cross-examination that at some point he had discussed the meaning of “community bank” with Ms Morrison. Although not entirely clear, it seems that in the period six to nine months prior to the hearing Mr Tancevski had a short conversation with Ms Morrison at an airport. Mr Tancevski was “jumping on a plane” and said that any discussion about the meaning of “community bank” would have been “in passing”. Mr Tancevski gave the following evidence about the substance of the conversation:
Q: And what did you say to her about the meaning of “community bank”?
A: Community bank, the description we used to it, member owned, community focused.
Q: That’s what you told her, “member owned, community focused”?
A: That has been my line for many years, yes.
Q: That’s your line. Now, what did she say to you about the meaning of “community bank”?
A: I can’t recall [Ms Morrison] describing it any different terms.
Q: So she agreed with your description?
A: To my knowledge, yes.
46 Ms Morrison said that she would have discussed the meaning of “community bank” with Mr Tancevski at some stage but could not recall a specific conversation. She did recall meeting Mr Tancevski at an airport and whilst she accepted that it was possible that she discussed the meaning of “community bank” at the time, she could not recall the content of their conversation. Ms Morrison said that she had been very mindful not to discuss the proceedings with Mr Tancevski or anyone else.
47 Mr Taylor has been CEO and a director of G&C Mutual since 2010. He has over 29 years’ experience in the banking and finance industry. Prior to taking on his current role, his positions included:
(1) from 1980 to 1990, various academic and advisory positions including lecturing in Australian political economy and acting as an economic adviser;
(2) from 1990 to 2001, executive general manager of Cuscal Limited (formerly Credit Union Services Corporation (Australia) Limited) (Cuscal) and a director of a number of the subsidiaries of the Cuscal group;
(3) from 1992 to 1997, member of the Australian Payment System Council;
(4) from 1998 to about March 2001, director of the Australian Payments Clearing Association;
(5) from 2001 to 2010, managing director of Finance Industry Consulting Services Pty Ltd; and
(6) from 2008 to 2010, non-executive director of G&C Mutual.
48 In cross-examination it became clear that in 2014, when G&C Mutual was attempting to register a trade mark which included the words “community bank”, Mr Taylor was aware of and had been involved in discussions with, among others, Mr Tancevski on two to three occasions which covered, among other things, G&C Mutual’s concern about Bendigo’s asserted monopoly in the term and whether it would be useful for COBA to facilitate a process to obtain collective views from those with concerns about the issue. Mr Taylor also gave evidence about the proposal to raise a “fighting fund” from members of the “G8”, being the eight largest mutual banks or credit unions which were shareholders in Cuscal at the time. The purpose of the “fighting fund” was to obtain registration of the term “community bank” in connection with the businesses being run by the G8 and not to prevent Bendigo from using the term.
49 Mr Taylor candidly informed the Court that prior to swearing his affidavit he read the Court’s Expert Evidence Practice Note (GPN-EXPT) and that he “alerted [his] counsel” that he was not able to satisfy its terms. Mr Taylor informed the Court that he had raised the matter prior to the hearing as something that needed to be clarified and that he had made it very clear that he is not impartial.
50 Notwithstanding this evidence, Mr Taylor did not accept that his evidence that “there are no matters of significance which I regard as relevant which has been withheld” and that, other than sitting on the board of Transaction Solutions Limited with Mr Tancevski, he has had no other involvement with CFCU for at least the past 10 years, was wrong. It was Mr Taylor’s view that his affidavit covered the matters about which he was asked and that in the period, which I understand to be a reference to the past 10 years, he had not had any formal dealings with CFCU.
51 Mr Lawrence has been the CEO of COBA since 4 December 2017. He has over 30 years’ experience in the banking and finance industry including:
(1) from 1984 to 2006 with the National Australia Bank Limited where he commenced as a graduate and had various roles including as account manager corporate banking, manager state credit bureau, relationship manager business banking, area manager retail banking, regional business manager, head of personal financial services, regional manager and general manager third party business;
(2) in 2007 with Westpac Banking Corporation as head of customer solutions and integration;
(3) from 2007 to 2015 as managing director of AMP Bank Limited;
(4) from 2008 to 2015 as a non-executive director of the Australian Banking Association (ABA) during which time Mike Hirst, the former managing director of Bendigo, was also a member of the ABA board; and
(5) from 2015 to 2017 providing banking and financial consultancy services to various Australian companies.
52 COBA is the industry advocate for the customer-owned banking sector in Australia made up of credit unions, mutuals and building societies. It advocates for its members before various stakeholders and provides advisory and support services, such as fraud and financial crimes services. As CEO of COBA, Mr Lawrence’s duties include managing, overseeing and implementing COBA’s strategic goals and operations.
53 CFCU is a member of COBA. The chair of CFCU has been a member of the COBA board since 2015, a matter which only became apparent during Mr Lawrence’s cross-examination.
54 In cross-examination it also became apparent that Mr Lawrence had met with Mr Tancevski in about August 2018. His memorandum to the COBA board dated 10 August 2018 included as an item that was covered in that meeting:
Discussed at length the legal issue with Bendigo & Adelaide Bank and the use of the term “Community Bank.”
55 Mr Lawrence said that during his meeting with Mr Tancevski he discussed the meaning of the term “community bank” and spoke about the structural difference between a customer-owned bank and a listed bank. While Mr Lawrence could not recall Mr Tancevski’s response, he could not recall Mr Tancevski disagreeing with what he said. Mr Lawrence said that this meeting was disclosed in his affidavit, albeit not in terms, where he described his only involvement with CFCU being in the context of professional members’ meetings, which he said was the nature of his meeting with Mr Tancevski.
56 Mr Lawrence accepted that his role requires him to act as industry advocate on behalf of COBA’s members, including CFCU, but did not accept that because of that he could not be impartial as an expert because his role is as an advocate for the industry.
57 Ms Morrison and Mr Lawrence can be dealt with together. Their respective roles require them to act as industry advocates: in the case of Ms Morrison, to raise awareness of the CME structure and its contribution to the Australian economy across all industries; and, in the case of Mr Lawrence, to act as an advocate for the customer-owned banks that are members of COBA. Bendigo contended that this undermined their independence.
58 Bendigo suggested that, given their roles as advocates, they cannot be impartial which is contrary to the requirements of the Expert Witness Code of Conduct. I do not accept that to be so. That their roles require them to act as industry advocates does not mean that their opinions expressed in this Court are as advocates for CFCU. They each have particular expertise in their respective areas. In the case of Ms Morrison that is the CME sector generally. Her opinion is based on that expertise. In the case of Mr Lawrence it is in the area of banking. His opinion is based on that expertise. Each of Ms Morrison and Mr Lawrence were frank in their responses to questions and endeavoured to assist the Court.
59 It is also apparent that at some stage prior to giving evidence each of Ms Morrison and Mr Lawrence had discussed an aspect of the proceeding with Mr Tancevski. It was unfortunate that these matters only became apparent in cross-examination.
60 In the case of Ms Morrison she had little recollection of the content of her discussion, which might explain why it was not included in her affidavit. It is apparent that the discussion was brief and that the meeting was a chance one in an airport, and was not planned. I do not think that this one brief interaction undermines Ms Morrison’s role as an expert nor her evidence to the point that I would reject it completely or give it little weight as Bendigo contends I should.
61 In the case of Mr Lawrence the discussion about the proceeding was in the course of his role as CEO of COBA. I accept his evidence that in referring to “professional members’ meetings” he believed he was disclosing that, in that capacity, he had had interactions with CFCU. I also accept that Mr Lawrence clearly felt that the meeting was undertaken in the ordinary course of his duties. However, the content of one of those meetings, which touched upon the proceeding, was not disclosed by Mr Lawrence in his affidavit. The better course would have been for Mr Lawrence to absent himself from any meeting with Mr Tancevski during the currency of the proceeding. That did not happen.
62 I accept that what occurred was a single meeting which canvassed a number of topics, one of which was this proceeding. That said, it took place in close proximity to the date that Mr Lawrence affirmed his affidavit. Ultimately while I do not think the fact of the meeting and the failure to disclose it means that I would give no weight to Mr Lawrence’s evidence, it undermines to a significant degree the impartiality of his evidence and it follows that I would give less weight to his evidence.
63 Mr Taylor is in a different category. As noted above he candidly accepted that he is not impartial. He cannot be relied on as an independent expert. That said, his evidence covers two broad categories: first, his opinion about the meaning of “community bank”; and secondly, G&C Mutual’s own application to register a trade mark including the words “community bank”, which CFCU relies on as evidence of the desire of other traders to use the term “community bank”.
64 CFCU submitted that I would nonetheless receive Mr Taylor’s evidence (and that of Ms Morrison and Mr Lawrence in the event that I formed the view that they were not independent experts) pursuant to s 219 of the TM Act. That section provides that in any proceeding relating to a trade mark, evidence is admissible of the usage of the trade concerned and of any relevant trade mark, trade name or get-up legitimately used by other persons. In The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 in considering s 66 of the Trade Marks Act 1955 (Cth) (1955 Act), the predecessor to s 219, Windeyer J said that “all questions concerning trade marks must be considered against the background of the usages in the particular trade”, as recognised by s 66 of the 1955 Act: at 410.
65 In giving evidence about G&C Mutual’s attempts to register a trade mark with “community bank” in it, Mr Taylor gives evidence of usage of the term “community bank” in the financial services industry. In my opinion his evidence on that issue should be allowed pursuant to s 219 of the TM Act as evidence of usage of the trade. I do not think Mr Taylor’s evidence about the meaning of the term “community bank” is in the same category. It is not evidence of usage but of his opinion, offered as an expert given his experience in the sector, of the meaning of the term and I would give no weight to that evidence.
66 Before proceeding further, it is useful to set out some background matters which are common to both proceedings and which I did not understand to be in dispute.
67 CFCU was established in 1959 as a credit union for employees of the Sydney Water Board under the name “Sydney Water Board Officers Co-operative Ltd”. Since its establishment CFCU has changed its name a number of times to reflect its changing membership: in 1974 it changed its name to “S.W.B Family Credit Union Limited”; in 1983 it changed its name to “SWB Community Credit Union Ltd”; and on or about 6 September 1993 it took on its current name, “Community First Credit Union Limited”. It has traded under that name and by reference to “Community First” since that time.
68 Over time CFCU has merged with 15 other credit unions as follows:
in 1974 with Sterlac Credit Union;
in 1975 with each of Trans Australian Airline Credit Union and Glass Containers Credit Union;
in 1981 with Martin Well Credit Union;
in 1984 with AMOCO Employees Credit Union;
in 1986 with Wool Broker and Trustees Staff Credit Union;
in 1990 with Muniff Credit Union;
in 1999 with Manchester Unity Credit Union;
in 2000 with Grand United Credit Union;
in 2006 with each of Dana Employees Credit Union and Elcom Credit Union;
in 2008 with each of Croatian Community Credit Union and Hibernian Credit Union;
in 2015 with Northern Beaches Credit Union; and
in 2018 with CAPE Credit Union.
69 Since its establishment in 1959 CFCU has been a member-owned institution run for the benefit of its members and not for external shareholder profit. Each CFCU customer is a member of, and has one equal share and one vote in, CFCU; there are no external non-member shareholders; CFCU does not pay a dividend to any shareholder; and the benefit of any profits CFCU makes is returned to members, including through lower fees and competitive lending and deposit rates.
70 CFCU provides its banking and financial services:
(1) in person through its bricks and mortar branches referred to as “financial services stores”. There are currently 15 financial services stores in the Greater Sydney and Central Coast regions; and
(2) online through its website, its “Community First Mobile Banking” application and third party applications such as Apple Pay, Android/Google Pay and Samsung Pay.
71 According to CFCU’s Annual Report 2018, as at 30 June 2018 CFCU:
(1) achieved more than $1b in assets under management;
(2) managed over $814m in loans and advances to members and over $966m in deposits from members;
(3) achieved a total income of over $45m;
(4) had approximately 57,933 members with 6,331 new members joining in that financial year; and
(5) had approximately 164 staff.
72 The Annual Report 2018 shows CFCU’s history of total income, assets and members since the 2014 financial year. Mr Tancevski has collated these figures as follows:
73 Bendigo is one of Australia’s largest banks and has been providing banking and financial services for approximately 160 years:
(1) it was established in August 1858 as Bendigo Land and Building Society;
(2) in 1865 it restructured and changed its name to Bendigo Mutual Permanent Land and Building Society;
(3) in 1876 it was incorporated in Victoria under the Building Societies Act 1874;
(4) in 1979 Bendigo Building Society was created when Bendigo Mutual Permanent Land and Building Society merged with Bendigo and Eaglehawk Star Permanent Society;
(5) in 1991 Bendigo acquired Sandhurst Trustees and changed its name to Bendigo Sandhurst Mutual Permanent Land and Building Society;
(6) in February 1993 Bendigo listed on the Australian Stock Exchange (ASX);
(7) in 1995 it converted from a building society to a bank and all of its banking business was transferred from Bendigo Sandhurst Mutual Permanent Land and Building Society to the newly incorporated Bendigo Bank Limited;
(8) in November 2007 it merged with Adelaide Bank Limited; and
(9) in January 2008 it changed its name to its current name, Bendigo and Adelaide Bank Limited.
74 Bendigo is ranked in the top 100 ASX listed companies. As at June 2018 it had 7,482 staff and around 100,000 shareholders and as at 30 June 2017 it had 1.6 million customers throughout Australia.
3.1.2.1 Bendigo’s trade mark applications using the words “community” and “bank”
75 In addition to the Bendigo Community Marks and the mark referred to at [135] (which I refer to in these reasons as the Bendigo Composite Mark), since October 1997 Bendigo has applied to register the following trade marks:
(1) on 21 October 1997:
(a) trade mark no. 746685 for COMMUNITY BANK in class 36. That application was not accepted and lapsed on 11 May 1999 (First Community Bank Trade Mark Application); and
(b) trade mark no. 746686 for COMMUNITY BANK BRANCH in class 36 (Community Bank Branch Trade Mark Application). On 11 February 1998 an adverse report was issued and the application lapsed on 17 June 1999;
(2) in December 2003 trade mark no. 981605 for “Community Banking” in class 36. Cuscal, CFCU and Heritage Building Society lodged notices of opposition to that application and on 13 February 2006 the application was withdrawn;
(3) on 19 January 2011 trade mark no. 1404733 for:
for goods and services in class 16 (bank cards) and class 36. On 25 April 2011 an adverse report was issued in relation to that application and on 16 August 2012 it lapsed;
(4) on 28 March 2011 trade mark no. 1414961 for “CommunityPos” for goods and services in class 9 (apparatus for decoding (reading) encoded cards). That application was accepted for registration;
(5) on 2 December 2013:
(a) trade mark no. 1593641 for “Community Super” in class 36. That application was accepted and the trade mark registered with a priority date of 2 December 2013; and
(b) trade mark no. 1594507 for “Bendigo Community Super” in class 36. That application was accepted and the trade mark registered with a priority date of 2 December 2013;
(6) on 22 April 2014:
(a) trade mark no. 1618421 for “Building SuperCommunities” in class 36. That application was accepted and the trade mark registered in class 36 with a priority date of 22 April 2014; and
(b) trade mark no. 1618426 for “Building Super Communities” in class 36. That application was accepted and the trade mark registered with a priority date of 22 April 2014;
(7) on 26 April 2016 trade mark no. 1766884 for COMMUNITY TELCO in class 35 (telecommunications-related billing services) and class 38 (telecommunication services). That application was accepted and the trade mark registered with a priority date of 26 April 2016; and
(8) in August 2017 trade mark no. 1869637 for COMMUNITY BANK in class 36. On 18 December 2017 an adverse report was issued. That application was, according to the evidence before me, still pending as at the date of the hearing.
76 Ms Williams was cross-examined in relation to a number of these applications. Ms Williams was not aware of Bendigo having any trade mark strategy around dominating the use of the word “community” but was of the understanding that “community bank” was in “[Bendigo’s] DNA” and that Bendigo wished to protect that mark and the other marks it had registered. When asked what she meant by the proposition that “community bank is in their DNA”, Ms Williams responded as follows:
Well, they’ve been using Community Bank since 1998 from the material and Bendigo Bank’s brand was only in existence from the 1st of – sorry, 1 July 1995, so therefore the marks are roughly only three years apart and they’ve always used Community Bank heavily, in my understanding.
3.2 Regulation of credit unions and use of the term “bank”
77 The change in the regulatory framework for credit unions and their ability to use the term “bank” is a matter which is of relevance to both the Rectification Proceeding and the Appeal Proceeding. This was explained by Associate Professor Martin and Ms Robinson, whose evidence I summarise below.
78 In Australia there are three main types of banking and financial institution including, relevantly, ADIs comprising banks, building societies and credit unions. As a result of recommendations in the Financial System Inquiry: Final Report published in March 1997 (Wallis Report), the term ADI was created to refer to all deposit taking institutions authorised to accept deposits under the new regulatory structure.
79 According to Associate Professor Martin, the Wallis Report led to major changes to the financial regulatory framework including creating a new financial regulator to supervise financial intuitions and introducing reforms allowing large credit unions and building societies to use the term “bank” in their name, to promote competition in the financial system, drive down costs and drive up service standards.
80 Since 1999 ADIs have been regulated by APRA and have been authorised under the Banking Act to accept deposits from the public. Prior to 1999 banks were regulated by the Reserve Bank of Australia (RBA) and building societies and credit unions were regulated by the Australian Financial Institutions Commission (AFIC), a central regulator coordinating the state-based regulatory regimes.
81 On 20 September 2000, APRA issued a set of harmonised prudential standards for all ADIs which meant the regulatory framework for banks, building societies and credit unions were fully aligned.
82 With respect to the use of names, Ms Robinson explains that:
(1) ASIC is the regulator for registration of business and company names;
(2) section 24 of the Business Names Registration Act 2011 (Cth) requires ASIC to register a business name of an entity if it is satisfied that the name is available to an entity and does not include a restricted word or expression or, if the word or expression is restricted unless a condition is satisfied, the entity satisfies that condition. The Minister has power to determine if a word or expression is restricted, or restricted in relation to a specified class or business unless a condition (if one is specified in the determination) is met; and
(3) the Business Names Registration (Availability of Names) Determination 2012 (2012 Determination) sets out the words which are restricted and so require either ministerial or other authorised consent before ASIC will register a business name including any one of those words. The 2012 Determination includes the following restricted words which require the consent of APRA before ASIC will register a name including one of them:
(a) ADI;
(b) bank;
(c) banker;
(d) banking; and
(e) credit union.
83 Section 66 of the Banking Act concerns use of restricted words or expressions in connection with a financial business. While it has been amended, its effect has at all relevant times been to prohibit a person in Australia from using a restricted word or expression in relation to a financial business without APRA’s consent and to permit APRA to issue a consent to a particular person or a class of persons for the use or assumption of a restricted word or expression.
84 On 19 May 2000 APRA issued a class consent pursuant to s 66(1)(d) and s 66(2)(a) of the Banking Act titled Consent to Use Restricted Expressions – Class Consent: Building Societies and Credit Unions and Trustees of Superannuation Entities (2000 Consent). By the 2000 Consent APRA granted certain classes of entity the right to use certain restricted words. The 2000 Consent was specific to each type of institution named in it. In relation to building societies and credit unions it permitted those entities, among other things, to “use the expression banking in relation to [their] banking activities”.
85 According to Ms Robinson, the 2000 Consent meant that a credit union did not have to apply to APRA to be entitled to use the restricted terms set out therein because it was a statutory exception which allowed all ADIs listed on the APRA website under the heading “Credit Unions” to use those restricted terms.
86 In Ms Robinson’s opinion, CFCU comes within the 2000 Consent because since before 19 May 2000 (the date of the 2000 Consent) it has been an ADI operating as a credit union and as such has been listed on the APRA website under the heading “Credit Unions”.
87 In January 2006 APRA published Guidelines: Implementation of Section 66 of the Banking Act 1959 (2006 Guidelines) which included:
9. Authorised deposit-taking institutions (ADIs) listed on the APRA web site as banks have been given an unrestricted consent to use the words ‘bank’, ‘banker’ or ‘banking’. This allows the ADI to use the word bank:
• in its company name or trading names; or
• to describe or to advertise its business.
…
18. ADIs listed on the APRA web site as credit unions or as building societies may use the word ‘banking’ in relation to their banking activities.
19. A body corporate that is related to a building society or credit union may use the word ‘banking’ in relation to the banking activities of the building society or credit union if the word is not used in a misleading or deceptive way.
This consent came into effect by the instrument dated 19 May 2000.
…
21. A body corporate that is related to a credit union may use the expressions ‘credit union’, ‘credit society’ and ‘credit co-operative’ in relation to the financial business carried on by the credit union if the expressions are not used in a misleading way.
This consent is made under the instrument dated 19 May 2000.
88 In April 2008 APRA published ADI Authorisation Guidelines (2008 Guidelines) which were expressed to apply to prospective applicants seeking an authority to carry on banking business in Australia under the Banking Act. The 2008 Guidelines included:
Use of restricted words and expressions
8. The granting of an authority to carry on banking business gives the successful applicant the right to use the expression ‘authorised deposit-taking institution’ or ‘ADI’ in relation to its business. The authority does not automatically entitle the ADI to call itself a ‘bank’. Applicants should note section 66 of the Act which restricts the use of certain words or expressions without explicit APRA consent (refer to section 66 Guidelines available on the APRA website: www.apra.gov.au).
9. An applicant wishing to use any of the restricted words or expressions on authorisation should apply concurrently to APRA for a section 66 consent.
Trading names
10. An ADI that wishes to use a trading name, other than its registered company name, may seek to use a restricted expression in that trading name. APRA will not ordinarily object to this where the ADI would otherwise be permitted to use that expression (e.g. where an ADI that is a bank wishes to use the term ‘bank’ in its trading name). If the restricted expression to be used in the trading name is not one that the ADI would ordinarily be permitted to use (e.g. where the ADI is a bank and wishes to use the term ‘credit union’ in the trading name), APRA will need to consider on a case-by-case basis whether such use could be misleading.
…
Capital
15. APRA will assess the adequacy of start-up capital for an applicant on a case-by-case basis based on the scale, nature and complexity of the operations as proposed in the business plan. Applicants proposing to operate as banks must have a minimum of $50 million in Tier 1 capital. Otherwise, no set amount of capital is required for an authority to carry on banking business. Foreign ADls are not required to maintain endowed capital in Australia.
89 In December 2010 the Commonwealth Government announced that where an ADI operating as a credit union or building society holds at least $50m in Tier 1 capital, and wishes to operate as a bank, the ADI may apply to APRA for consent to unconditionally use the restricted words “bank” and “banking” in connection with its business.
90 In 2015 APRA published further guidelines on the implementation of s 66 of the Banking Act. The 2015 Guidelines relevantly provide that where an ADI wishes to operate as a bank the ADI must hold at least $50m in Tier 1 capital and that APRA will, unless there are special circumstances, grant an ADI that wishes to operate as a bank and that holds at least $50m in Tier 1 capital an individual consent to use or assume the expressions “bank”, “banker” and “banking” on an unrestricted basis. Unrestricted consent allows the ADI to use those expressions in its company name, trading or business names and internet domain name and to describe or advertise its business.
91 In circumstances where the ADI has previously operated as a credit union, APRA will impose transitional conditions upon the grant of its consent to use the expressions “bank”, “banker” and “banking”. Relevantly, under the heading “Credit unions and building societies seeking to operate as a bank” the 2015 Guidelines provide:
40. Where an ADI operating as a credit union or building society holds at least $50 million in Tier 1 capital, and wishes to operate as a bank, the ADI may apply to APRA for consent to unconditionally use the restricted words or expressions ‘bank’, ‘banker’ and ‘banking’. APRA will consider such applications on a case-by-case basis.
41. APRA’s policy is that an ADI cannot simultaneously:
• operate as a bank with unrestricted consent to use the restricted expressions ‘bank’, ‘banker’ and ‘banking’; and
• operate as a credit union or building society entitled to the benefit of the Credit Union and Building Society Consent.
42. Accordingly, where an ADI operating as a credit union or building society wishes to operate as a bank, and use the restricted words or expressions ‘bank’, ‘banker’ and ‘banking’ under section 66 of the Banking Act on an unrestricted basis, the ADI will not be permitted to continue to use the expressions ‘credit union’, ‘credit society’, ‘credit cooperative’ or ‘building society’ (as relevant).
43. Further, an ADI that was previously a credit union or building society and that now operates as a bank will be required to take appropriate steps to ensure that members, depositors, other customers and the general public are clearly aware that it is now operating as a bank. APRA may, for instance, grant unrestricted consent to use the restricted expressions ‘bank’, ‘banker’ and ‘banking’ on the condition that the ADI use the word ‘bank’ in its corporate, trading or business name for a finite period.
92 In 2018 APRA published the Guidelines: Restricted Words under the Banking Act 1959 dated 20 August 2018 (2018 Guidelines). Chapter 3 of the 2018 Guidelines states that there is no restriction on an ADI using the terms “bank”, “banker” and “banking” except where APRA has made a determination under s 66A of the Banking Act.
3.3 CFCU’s intention to become a bank
93 CFCU is authorised by APRA to conduct banking services and is on APRA’s register of ADIs.
94 As noted above, in December 2010 the Australian Government announced that an ADI that holds at least $50 m in Tier 1 capital may apply to APRA to operate as a bank or mutual bank. According to Mr Tancevski, CFCU met this capital requirement as at December 2010 and continues to do so.
95 In 2011 CFCU surveyed its members for their opinion on whether it should change from being a credit union to become a bank or mutual bank. The Chairman’s Report included in CFCU’s Annual Report 2012 relevantly included:
Our decision around becoming a Mutual Bank
Late last year, the Board asked for your opinion on whether Community First should become a Mutual Bank. On behalf of the Board, I would like to thank all those Members who provided their feedback and who exercised their right as a Member to actively participate in the future direction of the credit union.
I am really pleased to say that Community First received an overwhelming response from our Members, which helped guide the Board and management in our deliberations. While it was clear from the research findings that Members were largely supportive of the mutual bank concept, the Board concluded that there was no significant advantage at this time in becoming a bank and accordingly, the credit union “suffix” will continue in the near term.
96 Mr Tancevski’s evidence, which I accept, is that CFCU intends to change its status from a credit union to a bank or mutual bank and that it has always been its intention to continue to use the Community First Registered Mark if and when it becomes a bank or mutual bank. CFCU has used the Community First Registered Mark for a period of 25 years and has invested in building awareness of that mark with various stakeholders (see [463]-[468] below). Thus its members, consumers and the general public associate services that CFCU provides with the Community First Registered Mark.
97 As noted at [4] above, on 1 March 2013 CFCU applied for registration of the CFCU Marks to ensure that it was prepared to become a bank or mutual bank having regard to its current branding with the Community First Registered Mark. IP Australia accepted the CFCU Marks for registration in January 2015 but, on or about 25 May 2015, it notified CFCU that it proposed to revoke acceptance of the CFCU Marks because CFCU did not have APRA’s consent to include the restricted word “bank” in the marks.
98 By letter dated 30 June 2015 CFCU sought APRA’s guidance on whether it would have any objection to it registering a trade mark that includes the word “bank”. That letter included:
As discussed on the phone, Community First is considering the option to convert from a “credit union” to a “Bank” at some future point. This transition is likely to occur in the next three years and is regularly reviewed by the Board based on current market opportunities.
However, as a defensive strategy, the Board has resolved to try and reserve a number of trademarks with IP Australia which at least prevent other parties from “squatting” our brand and trade names, APRA would be aware that other institutions have already encroached on the Community Banking model in this country and sought to trademark a variety of names, descriptors and common terms.
Therefore, Community First has approached IP Australia to reserve the names:
• Community First Bank
• Community First Mutual Bank
In this case, the word “Bank” would be used to highlight the change from one form of Approved Deposit Taking Institution, a “credit union”, to a “Bank”.
Please accept our apologies for creating any unnecessary confusion in not approaching APRA earlier but our simplistic view was that there would be no point in approaching APRA to become a Bank without a name or firm commitment to proceed at this time?
IP Australia originally approved the trademark(s) but has since rescinded its decision, subject to an upcoming hearing, based on the Section 66 rules in the Banking Act (1959) referring to “restricted words”, specifically the use of the word “Bank” after the name “Community First”?
At the upcoming hearing, Community First Credit Union proposes to highlight to IP Australia that Community First meets the requirements of the Banking Act to become a “Bank”, subject to APRA approval, and already meets the preliminary requirements of the Act to lodge an application.
Accordingly, Community First seeks APRA’s guidance on whether the regulator (APRA) would have any objection to Community First registering a trademark with IP Australia that included the name “Bank”?
This guidance will be used to counter IP Australia’s view that APRA would object to the use of a “restricted word” Bank in the proposed trade-marks?
Your earliest guidance is appreciated and please contact me if you require any further information. …
(emphasis in original.)
99 By letter dated 24 July 2015 APRA confirmed that it had no objection to CFCU registering the CFCU Marks and noted that its position was “taken on the understanding that none of the [CFCU Marks] should be used for any commercial purpose until APRA has consented to their use under section 66 of the [Banking Act]”.
100 On 29 October 2015 a delegate of the Registrar refused to revoke acceptance of the applications to register the CFCU Marks.
101 According to Mr Tancevski at all times since 1 March 2013 CFCU has met the criteria prescribed by APRA for use of the word “bank” or “mutual bank” in its corporate name or trade marks. But, in order for CFCU to become a bank or mutual bank it will need to apply to APRA for approval of its intended change in its corporate name to “bank” or “mutual bank”, and at the same time it will need to inform APRA of its proposed new corporate name, either “Community First Bank” or “Community First Mutual Bank”.
102 In Mr Tancevski’s experience APRA usually takes about 6 to 12 months to approve a corporate name change because the process requires an applicant to prove to APRA that it will continue to meet all prudential standards following the name change.
103 Mr Tancevski is of the view that it is only after these proceedings are resolved that CFCU could apply to APRA for approval of its proposed name change. He recognises that, while it would be possible for CFCU to apply to APRA for approval of the alternative corporate names “Community First Bank” and “Community First Mutual Bank”, it is unlikely that APRA would consider the applications until these proceedings, which would be disclosed to APRA as part of CFCU’s application, are resolved. Mr Tancevski also points out that, as the words “credit union” are restricted words under the Banking Act, he anticipates that CFCU will not be able to describe itself as a credit union after APRA approves it to be a bank or mutual bank.
104 I turn then to first consider the Rectification Proceeding followed by the Appeal Proceeding.
4. the rectification proceeding
105 CFCU seeks rectification of the Register by cancellation or removal of each of the Bendigo Community Marks pursuant to s 88(1) of the TM Act and orders pursuant to s 97 or s 101 of the TM Act requiring the Registrar to remove the Bendigo Community Marks from the Register.
106 Section 88(1) of the TM Act provides that the Court may, on the application of an aggrieved person, order that the Register be rectified by, among other things, cancelling the registration of a trade mark or removing an entry wrongly made or remaining on the Register. The exercise of the power in s 88(1) is subject to s 88(2) and s 89.
107 Section 88(2) provides that an application can only be made on the grounds set out therein. CFCU relies on the grounds in subs 88(2)(a) and (c) which respectively provide that an application can be made on any of the grounds on which registration of the trade mark could have been opposed under the TM Act; or, 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. As to the latter, the application for rectification was filed with the Court on 14 August 2017 (see [375] below).
108 For the purposes of s 88(2)(a), the grounds on which CFCU says it could have relied to oppose the registration of the Bendigo Community Marks are those in ss 41, 42(b), 43, 44 and 59 of the TM Act. In the context of an application under s 88(1), the question of whether any of those grounds would have been available to CFCU to oppose the Bendigo Community Marks is to be determined as at the date of registration of each of the Bendigo Community Marks, namely 8 February 1999 and 24 August 2001 (which are also the Priority Dates): see Unilever Australia Ltd v Karounos (2001) 113 FCR 322 at [13].
109 Section 89 relevantly provides:
(1) The court may decide not to grant an application for rectification made:
…
(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.
110 It was common ground that CFCU is an “aggrieved person” for the purposes of s 88(1) of the TM Act. It was also common ground that CFCU bears the onus of establishing each of the grounds it relies on under s 88 of the TM Act: see Yarra Valley Dairy Pty Ltd v Lemnos Foods Pty Ltd (2010) 191 FCR 297 at [39]-[41].
111 CFCU also relies on s 92(4) of the TM Act as a basis on which it says the Bendigo Community Marks should be removed for non-use. That subsection provides:
(4) An application under subsection (1) or (3) (non‑use application) may be made on either or both of the following grounds, and on no other grounds:
(a) that, on the day on which the application for the registration of the trade mark was filed, the applicant for registration had no intention in good faith:
(i) to use the trade mark in Australia; or
(ii) to authorise the use of the trade mark in Australia; or
(iii) to assign the trade mark to a body corporate for use by the body corporate in Australia;
in relation to the goods and/or services to which the non‑use application relates and that the registered owner:
(iv) has not used the trade mark in Australia; or
(v) has not used the trade mark in good faith in Australia;
in relation to those goods and/or services at any time before the period of one month ending on the day on which the non‑use application is filed;
(b) that the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non‑use application is filed, and, at no time during that period, the person who was then the registered owner:
(i) used the trade mark in Australia; or
(ii) used the trade mark in good faith in Australia;
in relation to the goods and/or services to which the application relates.
(notes omitted.)
112 I will consider each of the grounds upon which CFCU relies in support of its application for rectification of the Register in turn.
4.1 Sections 88(2)(a) and 41 of the TM Act – lack of distinctiveness
113 CFCU’s principal focus, of the grounds raised by it under s 88(2)(a), was s 41 of the TM Act. CFCU contends that it was a ground of opposition it could have relied on to oppose the registration of the Bendigo Community Marks.
114 In summary, CFCU contends that as at the Priority Dates neither the Bendigo Device Mark nor the Bendigo Word Mark were to any extent inherently adapted to distinguish the Services from the goods and services of other persons.
115 In the alternative, CFCU contends that if as at 8 February 1999 and 24 August 2001 respectively the Bendigo Device Mark and Bendigo Word Mark were to some extent inherently adapted to distinguish the Services from the goods and services of other persons, those trade marks did not and would not distinguish the Services as being those of Bendigo having regard to, among other things, the combined effect of the extent to which those marks were each inherently adapted to distinguish the Services and the lack of use by Bendigo of the Bendigo Device Mark and the Bendigo Word Mark.
116 It was common ground that s 41 of the TM Act as it existed prior to the enactment of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) (IPL Amendment Act), which repealed s 41 and inserted a substitute, applies in this case. At the time of the Priority Dates, s 41 provided:
41 Trade mark not distinguishing applicant’s goods or services
(1) For the purposes of this section, the use of a trade mark by a predecessor in title of an applicant for the registration of the trade mark is taken to be a use of the trade mark by the applicant.
(2) An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered (designated goods or services) from the goods or services of other persons.
(3) In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons.
(4) Then, if the Registrar is still unable to decide the question, the following provisions apply.
(5) If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services:
(a) the Registrar is to consider whether, because of the combined effect of the following:
(i) the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;
(ii) the use, or intended use, of the trade mark by the applicant;
(iii) any other circumstances;
the trade mark does or will distinguish the designated goods or services as being those of the applicant; and
(b) if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons; and
(c) if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken not to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons.
(6) If the Registrar finds that the trade mark is not inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply:
(a) if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant—the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;
(b) in any other case—the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.
(notes omitted.)
117 The accepted approach to s 41 of the TM Act prior to its amendment by the IPL Amendment Act is as set out in Blount Inc v Registrar of Trade Marks (1998) 83 FCR 50 at 56. There Branson J observed that subss 41(3) to (6) are “designed to control the process by which the Registrar is to reach a conclusion as to whether the trade mark for which registration is sought is capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered”. If it is not so capable, the trade mark must be rejected pursuant to s 41(2) of the TM Act. Her Honour continued:
… Subsection (3) requires the Registrar first to “take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons”. Having taken such matter into account, it is theoretically open to the Registrar to conclude:
(a) that the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons and capable, on that basis alone, of so distinguishing the designated goods or services; or
(b) that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; or
(c) that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, but there is uncertainty, on that basis alone, that the trade mark is actually capable of so distinguishing the designated goods or services.
118 As Her Honour went on to explain, if conclusion (a) is reached, the application for registration of the trade mark will be accepted; if conclusion (b) is reached, then s 41(6) comes into play and if the applicant can establish that, because of the extent to which it has used the trade mark before the filing date of the application, the trade mark does distinguish the designated goods or services as being those of the applicant, the Registrar will accept the application, but if the applicant fails to establish that to be the case, the Registrar must reject the application pursuant to s 41(2); and if conclusion (c) is reached, s 41(5) operates such that if the Registrar is satisfied of the matters listed in subs 41(5)(a)(i), (ii) and (iii), the application will be accepted but if the Registrar is not so satisfied the application must be rejected.
4.1.1 Section 41(3) - inherently adapted to distinguish
119 In deciding whether or not a trade mark is capable of distinguishing, in this case, the Services from the services of others, the first question to be considered is the extent to which the trade mark is inherently adapted to distinguish the Services from those of others. In order to succeed on this ground, CFCU must establish that the Bendigo Community Marks were not capable of distinguishing Bendigo’s Services from the services of others as at the dates of their registration (which are also the Priority Dates).
120 In Clark Equipment Company v Registrar of Trade Marks (1964) 111 CLR 511 (Clark Equipment) at 514 Kitto J articulated the test for assessing inherent capacity to distinguish as follows:
… whether a mark is adapted to distinguish [is to] be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess – will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.
That test was endorsed in Cantarella Bros Pty Ltd v Modena Trading Pty Ltd (2014) 254 CLR 337 (Cantarella) at [26] (per French CJ, Hayne, Crennan and Kiefel JJ).
121 Cantarella concerned two marks in the Italian language, ORO and CINQUE STELLE. The Court was concerned with the question of whether those marks were “inherently adapted to distinguish” Cantarella’s goods within the meaning of s 41(3) of the TM Act. At [57] French CJ, Hayne, Crennan and Kiefel JJ referred to Clark Equipment and endorsed Kitto J’s explanation of why directly descriptive words, like the geographical name in issue in Clark Equipment, are not prima facie suitable for the grant of a monopoly, namely because their use as a trade mark “will rarely eclipse” their ordinary signification; such a word is “not inherently, ie in its own nature, adapted to distinguish the applicant’s goods”; and traders may legitimately wish to use such words in connection with their goods because they are inherently adapted to be used in reference to those goods. Their Honours said that Kitto J’s elaboration of the principle, derived from Lord Parker’s speech in Registrar of Trade Marks v W & G Du Cros Ltd [1913] AC 624, “applies with as much force to directly descriptive words as it does to words which are, according to their ordinary signification, geographical names”.
122 At [59] and [71] French CJ, Hayne, Crennan and Kiefel JJ observed that determining whether a trade mark is inherently adapted to distinguish requires consideration of the ordinary signification of the words proposed as trade marks to persons in Australia who may purchase, consume or trade in the goods (or services) to which the trade mark is to be applied. At [59] their Honours said in relation to the rights of other traders:
It is the “ordinary signification” of the word, in Australia, to persons who will purchase, consume or trade in the goods which permits a conclusion to be drawn as to whether the word contains a “direct reference” to the relevant goods (prima facie not registrable) or makes a “covert and skilful allusion” to the relevant goods (prima facie registrable). When the “other traders” test from Du Cros is applied to a word (other than a geographical name or a surname), the test refers to the legitimate desire of other traders to use a word which is directly descriptive in respect of the same or similar goods. The test does not encompass the desire of other traders to use words which in relation to the goods are allusive or metaphorical. In relation to a word mark, English or foreign, “inherent adaption to distinguish” requires examination of the word itself, in the context of its proposed application to particular goods in Australia.
123 At [71] their Honours said:
As shown by the authorities in this Court, the consideration of the “ordinary signification” of any word or words (English or foreign) which constitute a trade mark is crucial, whether (as here) a trade mark consisting of such a word or words is alleged not to be registrable because it is not an invented word and it has “direct” reference to the character and quality of goods, or because it is a laudatory epithet or a geographical name, or because it is a surname, or because it has lost its distinctiveness, or because it never had the requisite distinctiveness to start with. Once the “ordinary signification” of a word, English or foreign, is established an inquiry can then be made into whether other traders might legitimately need to use the word in respect of their goods. If a foreign word contains an allusive reference to the relevant goods it is prima facie qualified for the grant of a monopoly. However, if the foreign word is understood by the target audience as having a directly descriptive meaning in relation to the relevant goods, then prima facie the proprietor is not entitled to a monopoly of it. Speaking generally, words which are prima facie entitled to a monopoly secured by registration are inherently adapted to distinguish.
(footnotes omitted.)
124 In Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd (2017) 345 ALR 205; [2017] FCAFC 56 (Accor) at [236] a Full Court of this Court (Greenwood, Besanko and Katzmann JJ) summarised the principles to be applied in determining whether a trade mark is capable of distinguishing an applicant’s goods or services in respect of which the mark is registered from the goods or services of other persons including relevantly that:
(6) In determining whether a word is (or words are) inherently adapted to distinguish the goods or services of an applicant, the question is to be examined from the point of view of the “possible impairment” of the rights of “honest traders” and from the “point of view of the public”: Cantarella at [59].
(7) In determining whether a word contains (or words contain) a “direct reference” to the relevant goods or services (and thus prima facie not registrable as a trade mark) or whether the word (or words) makes a “covert and skilful allusion” to the relevant goods or services (and thus prima facie registrable as a trade mark), the “ordinary signification” of the word or words to persons who will purchase, consume or trade in the goods or services, must be considered: Cantarella at [59].
(8) Where the question is whether there are other traders who may legitimately want to use or apply a word or words in connection with their goods or services (other than a geographical name or a surname), the test refers to the “legitimate desire of other traders to use a word which is directly descriptive in respect of the same or similar goods”: Cantarella at [59].
(9) Consistent with the proposition at (7), the test described at (8) does not encompass the desire of other traders to use a word or words which in relation to the goods or services are “allusive or metaphorical”: Cantarella at [59].
125 In this part of its case, CFCU relies on what they say is the ordinary meaning of the words “community bank”, namely, a bank situated in a particular community or locality including a bank providing services for the people of a particular community or locality.
4.1.1.2.1 The development of Bendigo’s community bank model
126 Both parties relied on evidence given by Mr Hunt, Bendigo’s CEO and managing director until 2009 who was responsible for the development of Bendigo’s franchise banking model. I set out Mr Hunt’s evidence, insofar as it is relevant to the question of whether the Bendigo Community Marks are inherently adapted to distinguish the Services from services of others, below.
127 It is informative to start by understanding the development of the community bank franchise concept. In that regard, Mr Hunt explained that following Bendigo’s conversion to a bank in 1995, he thought that it needed to develop and implement a strategy that would establish a clear point of difference to its competitors and a unique value proposition for customers and communities. Mr Hunt believed that Bendigo needed to strike a balance between assisting individuals and communities to prosper and creating a secure, sustainable, long-term and valuable business. He formed the view that Bendigo’s success as a bank would be linked to the success of its customers and communities.
128 That view was informed by what was occurring in the banking industry in Australia during the early to mid-1990s. Mr Hunt explained, and it was apparent from the evidence before me, that at the time a substantial number of bank branches in rural and suburban parts of Australia had closed. Mr Hunt observed that the closure of bank branches during the 1990s had serious economic implications for towns and communities and that people in areas where bank branches had closed had to secure alternative bank services to support their needs. As a result people started to purchase their everyday necessities from the location of their nearest bank, rather than from the area where they lived and worked. This, in turn, reduced income for businesses in those areas where branches had closed and caused businesses to experience financial hardship, with some ceasing to trade altogether.
129 In about 1997 Mr Hunt formed the view that, as a result of branch rationalisation, there was an opportunity for Bendigo to implement a new bank branch strategy. He spent a considerable part of 1997 considering what type of sustainable banking strategy and model Bendigo should adopt and, in doing so, looked at a number of operating models in Europe and the United States of America (US), such as cooperative banks, friendly societies and locally based models, but did not think that any of those models would address Bendigo’s objectives. This was because they used a traditional distribution (branching) method, a structure that Mr Hunt believed would not secure the level of change required, either within Bendigo or at the local level, if Bendigo was to create a sustainable solution.
130 Mr Hunt turned his attention to the issue of capital retention in regional Australia and communities more generally. He was of the opinion that most communities export capital, have little capacity or influence to attract the capital necessary for them to prosper, both socially and economically, and that the inability of people and businesses to attract and retain capital at a local level ultimately resulted in poor social and economic outcomes. Thus Mr Hunt thought that Bendigo’s participation should be at the local level so as to develop and implement better capital flows and retention strategies.
131 In selecting an appropriate new banking model Mr Hunt collaborated with people and businesses affected by branch closures in order to understand what would be required for Bendigo to implement an economically sound and sustainable model for itself, customers, businesses and communities.
132 By 1997 Bendigo had a strong connection to regional Australia. The combination of that connection and the closure of multiple bank branches, especially in rural areas, led Mr Hunt to create what he described as a “unique value proposition for [Bendigo’s] customers and communities”, namely a collaborative franchise banking model which used a local collaborative buying base. Mr Hunt said that the franchise banking model that he developed and which was adopted by Bendigo was new to Australia.
133 In early 1997 Bendigo set up a franchising working group led by Mr Hunt to work through financial models and the feasibility of a new franchise banking model. Mr Hunt described the franchise banking model that he developed as embodying the disciplines and accountabilities of a shareholder ownership model and the incentives implicit in cooperative models. In developing the franchise banking model, Mr Hunt’s main objective was to:
(1) secure branch banking services for participating towns, whether rural, suburban or metropolitan;
(2) assist people, local businesses and communities to better manage and retain locally generated capital and share in the potential growth of the local area;
(3) promote investment through stimulating commercial activity, creating local employment opportunities and increasing the confidence of local businesses; and
(4) expand Bendigo’s operations across Australia, provide a new revenue stream and extend Bendigo’s service delivery points without the capital costs required by the traditional branch expansion approach.
134 Throughout 1997 Mr Hunt updated Bendigo’s board on his investigations:
(1) at the Bendigo board meeting held on 25 August 1997, Mr Hunt reported that the franchising working group had significantly progressed the financial models and feasibility for both the community banking and franchise proposals. The minutes of that meeting record that it was agreed that management should proceed with the proposal and commence to open a pilot site;
(2) Mr Hunt explained that in the initial stages there were two models discussed: first, community banking where the franchisee is a company formed by the local community; and secondly, the full franchise model with either an internal bank owned or external franchisee;
(3) at the Bendigo board meeting held on 22 September 1997, Mr Hunt reported that he had been pursuing the community bank option with a development group in the Wimmera region and that he was reasonably confident in establishing support to test the approach. The minutes record that Mr Hunt informed the meeting that the “reaction from business people who are likely to have the capacity to unite the public about this concept has been extremely positive” and that “if he can enthuse the communities, there is little doubt we will be able to substantially improve the Bank’s retail deposit holdings, profitability and confirm our position as a community Bank”; and
(4) at the Bendigo board meeting held on 27 October 1997, Mr Hunt reported that the plan was to announce the broad concept of community banking in the Wimmera region on 31 October 1997. At that meeting the board agreed in relation to the topic “Franchising Proposal” that:
… the Executive pursue the establishment of up to four pilots, two community bank and two standard franchises, subject to the Board receiving the following documentation:
- a signed financial statement setting out the impact on the Bendigo balance sheet and P & L and the likely balance sheet and profit and loss for the two types of franchise operations,
- a brief statement of how the legal, operational and marketing aspects will be handled,
- confirmation that the legal documentation includes appropriate warranties and protections for the Bank and the necessary insurance cover to protect normal banking activities,
- future criteria for selection of pilot sites.
It was agreed that this material is to be sent to the Board prior to committing to set up any individual franchise.
The Board also acknowledged that the treatment of costs incurred to date may change depending on the success of the pilots and the likely expansion of the programs. The Board also commented on the need to do this without adding to our staff compliment until such time as the success of the pilots is determined.
The paper that went to the 27 October 1997 board meeting on the topic of franchising noted that the financial models developed highlighted that franchising the bank’s services offered a viable and attractive means of broadening its delivery network. The prime benefits were said to include:
The model allows us to promote via both full franchisee (typified by Colonial Bank) and community banks. The community banks offer a major competitive edge as they allow us to “return banking services to the bush”. We believe this will provide significant kudos and a competitive edge to the Group, particularly given our regional base.
135 In the meantime, on 21 October 1997 Bendigo:
(1) applied for registration of trade mark no. 746687 for:
which was accepted for registration on 28 February 1998 in class 36 (Bendigo Composite Mark);
(2) filed the First Community Bank Trade Mark Application (see [75(1)(a)] above); and
(3) filed the Community Bank Branch Trade Mark Application (see [75(1)(b)] above).
136 I pause here to note that the evidence of the application for registration of the Bendigo Composite Mark and its subsequent registration and of the lapsed applications for registration of the other marks referred to in (2) and (3) of the preceding paragraph did not form part of Mr Hunt’s evidence nor indeed any of the voluminous evidence relied on by Bendigo. Their existence was brought to Mr Hunt’s attention during cross-examination. Surprisingly, and despite his involvement in the franchise banking model and Bendigo’s correspondence with the RBA, set out below, Mr Hunt could not recall seeing the Bendigo Composite Mark. He said that as managing director he would have directed that steps be taken to protect Bendigo’s proposed investment and that which it was going to ask the community to make.
137 As part of the process of developing the franchise banking model Mr Hunt liaised with the RBA to ensure that Bendigo’s new proposed franchise banking model would meet all regulatory requirements. Bendigo’s letter dated 28 October 1997 addressed to Les Austin, Assistant Governor Financial Institutions, RBA, included:
… For some time now we have been developing a model which attempts to secure banking services in some of the larger country centres which are being disenfranchised or under-serviced by the banking sector.
Utilising our experience in running agencies, we have now developed a concept which might enable a community to own and operate a branch (thus securing local banking services) - with Bendigo Bank providing all of the implementation, training, and support necessary to facilitate that banking service for their district.
Staff, although employed by the licensee (community entity), would be contracted to be bound by the rules and regulations of the Bank, and all systems and controls of a normal banking operation would he adhered to. All credit decisions emanating from this operation would be controlled by Bendigo Bank. …
The brand of the licensed branch would be Bendigo Bank - with the local community bank acknowledged on the window and promotional literature: eg
…
There is little doubt that once a district loses its bank the impact on local businesses and consumers is dramatic. Needing to travel to bank, even loyal locals’ spending habits change substantially and this accelerates the demise of the town. If the community were to own the licensed branch, we feel there would be a far greater loyalty and support derived - thus sustaining the likelihood of an economic operation.
I attach some information about our concept, and would appreciate your views prior to significantly progressing discussions in country regions. Providing there is substantial local community support, our current modelling shows these operations can be economic for both the licensee and the Bank.
…
Although we have held discussions with a number of regional groups, we would appreciate the Reserve Bank’s opinion as to whether you see any problems for us in progressing this concept. In the meantime, we will continue to talk to a number of communities about the concept but will not finalise our position on structure until we have received input from yourselves, our legal advisors and any potential licensees.
…
138 The depiction of the “licensed branch” branding proposed by Bendigo to the RBA at the time incorporated the Bendigo Composite Mark with the addition of the name of the region or town. Mr Hunt agreed that the Bendigo Composite Mark was one way of achieving the link between a community bank branch and Bendigo as required by the RBA (in relation to which see [139]-[141] below) and by Bendigo.
139 By letter dated 10 December 1997 the RBA responded to Bendigo’s letter of 28 October 1997. The RBA’s letter included:
Your letter raised a number of issues, and we have set out our responses below:
1. confirmation that there will be no objection to the use by Bendigo Bank of the names “Community Branch” and “Community Bank”, including the registration of these names as trade marks
Section 66 of the Banking Act 1959 prohibits the use of the word bank (or related words) in relation to a financial business which is carried on by someone other than an authorised bank. Bendigo Bank is, of course, so authorised. Provided it is clear that all business done in the branch is conducted for the account of Bendigo Bank and depositors are aware that their protection under the Banking Act is dependent upon the assets of Bendigo Bank, we see no difficulty with use of the above names. All stationery and signage would need to show “Community Bank - a Division of Bendigo Bank Ltd”.
2. confirmation that the attached structure whereby a locally managed entity acquires from Bendigo Bank management rights and enters into a management relationship with a wholly owned Bendigo Bank subsidiary and that subsidiary writes business on behalf of Bendigo Bank Limited is in no way in breach of any of the Reserve Bank requirements
At this stage, the details of ownership and remuneration of the management companies which are to run the branches, have not been provided to us but we have no difficulty, in principle, with arrangements of the type which appear to be envisaged. Crucial to this judgement is the information supplied by Bendigo Bank that the customers will be banking with it and that the Bendigo Bank Community Branch and Manager are no more than management companies which are, in effect, franchisor and franchisee. The use of the word ‘‘bank” in the registered names of the subsidiaries would not be permitted as they are not authorised banks.
…
4. the terms of that agreement that must be put in place between Bendigo Bank Limited and its subsidiary;
The Reserve Bank does not have any specific requirements in mind for the relationship between Bendigo Bank and its subsidiary; its main interest would be in the relationship between the subsidiary and the franchisee. The Reserve Bank would see it as important that Bendigo Bank be in a position to control all aspects of the business being conducted on its behalf. …
140 On 6 April 1998 Bendigo sent a further letter to the RBA in relation to the “use and registration of trading names” for its “Bendigo Bank Community Bank/Franchising Project”, in particular the proposed branch at Rupanyup/Minyip. That letter included:
Trading Name
We propose to use the trading name “Rupanyup/Minyip Community Bank Branch of Bendigo Bank”. The trade name would primarily be displayed on signs at the branch and on letterhead. We will be arranging to register the business name in the near future. A copy the proposed format of the trade name accompanies this letter.
Trade Mark
To protect its naming rights, Bendigo Bank intends to register the following trade mark - “Community Bank Branch” and will instruct our solicitors Jerrard & Stuk to proceed with the application once we have received approval from the Reserve Bank on its use. The trade mark registration would be owned by Bendigo Bank Limited.
…
As noted, we are seeking the Reserve Bank’s approval for the registration of the above trade mark. The Reserve Bank has previously confirmed that it has no objection to the use by Bendigo Bank of the names “Community Bank” and “Community Branch” including the registration of these as trade marks.
The accompanying proposed format was as follows:
141 On 15 April 1998 the RBA responded to Bendigo indicating that it had “no objection to the registration of the trademark ‘Community Bank Branch’ nor its use in the format proposed. Any other use of the trademark, similarly, would need to make clear the relationship with Bendigo Bank”.
142 APRA had similar requirements to the RBA in that it required Bendigo to ensure that its marketing material, including that featuring the Bendigo Word Mark, clearly disclosed that Bendigo was the issuer of the banking and financial products and services offered. By way of example Mr Hunt referred to a flyer dated 21 February 2003 relating to Bendigo’s new “red MasterCard” which he initially described as being “co-branded” with the Bendigo Word Mark and the “B Bendigo Bank” (B Bendigo Mark). The flyer included:
And:
However, in cross-examination, Mr Hunt agreed that the branding on the flyer (depicted above) was not co-branding but a unitary brand corresponding to the Bendigo Composite Mark.
143 In June 1998 Bendigo opened its first community bank branch in Rupanyup/Minyip.
144 Bendigo’s franchise banking model changed slightly in its early years. The model in place from June 1998 to July 1999 gave local people the opportunity to set up a locally-owned company to operate and manage a Bendigo branch (Franchise Bank Branch). Those wishing to invest in the locally-owned company raised the start-up capital required to enter into a franchise relationship with a wholly-owned subsidiary of Bendigo by depositing money into a pledged investment with Bendigo. Subject to the capital target being met a locally-owned company was incorporated which was granted the right to manage and operate a Franchise Bank Branch under a franchise deed and management deed. The locally-owned company engaged a management company pursuant to the franchise deed and management deed to manage the franchised operation on its behalf.
145 In July 1999 Bendigo changed its franchise banking model slightly. From that time, subject to establishing viability, a locally-owned company (Franchise Company) was established to operate and manage a Franchise Bank Branch. The Franchise Company raised the start-up capital required to enter into a franchise relationship with Bendigo by offering shares to the public under a prospectus; investors in the Franchise Company became its shareholders; and the Franchise Company was granted the right to manage and operate a Franchise Bank Branch under a franchise agreement.
146 Under the franchise agreement Bendigo as franchisor provided the banking infrastructure and coverage of its banking authority and the investors/shareholders in the Franchise Company shared in the profits of that company via dividends. Mr Hunt explained that while there were several changes to the form of the franchise agreement over the years the fundamental principles that underpinned Bendigo’s franchise banking model have not materially changed since its development in 1997.
147 Before a franchise agreement was signed, those interested in establishing a Franchise Bank Branch in their local area had to establish a steering committee. It was the steering committee’s role to conduct an awareness campaign to educate people, businesses and, where necessary, local councils about Bendigo’s franchise banking model. If there was sufficient interest in a Franchise Bank Branch and a feasibility study, commissioned by the steering committee with the assistance of Bendigo, found that the Franchise Bank Branch was likely to be viable, the steering committee prepared a business plan. Upon approval of the business plan by Bendigo, the steering committee incorporated a public company limited by shares to be the Franchise Company and the franchise agreement was signed by the Franchise Company. Following the signing of the franchise agreement, the prospectus and capital raising campaign would be launched at a public meeting. The activities associated with raising capital were significant and, according to Mr Hunt, required an extensive awareness campaign to be conducted across the local region of the proposed Franchise Bank Branch.
148 The franchise agreement between Bendigo and the Franchise Company established the relationship between Bendigo as franchisor and the Franchise Company as franchisee. It put in place the controls and parameters within which a Franchise Company was required to operate, including granting the Franchise Company a right to use Bendigo’s intellectual property and required marketing and sales techniques and systems. A Franchise Company and its employees were required to comply with all of Bendigo’s operations and corporate manuals and the Franchise Company was required to manage operational risk.
149 According to Mr Hunt, the right to use Bendigo’s intellectual property under the franchise agreement included the right to use the Bendigo Word Mark and the “B Bendigo Bank trade mark”. However, neither of the Bendigo Community Marks were identified as one of Bendigo’s trade marks in the two franchise agreements referred to by Mr Hunt in his affidavit, which were dated 1998 and 2001 respectively, but were included as such in later versions of the franchise agreements dated 2005 and 2013. Bendigo provided the Franchise Companies with guidelines on, among other things, how to use the Bendigo Word Mark. For example:
• a document titled “Proofreading guidelines” included:
Use of ‘Community Bank®’
• The term ‘Community Bank’ is bold and must be followed by ® (superscripted registered (R) symbol) ie. Community Bank®. It must be followed by the words branch, project, concept, model, etc.
• On Fastart the superscripted registered (R) symbol can be inserted after ‘Community Bank’ by typing (R) immediately after ‘Community Bank’ eg Community Bank(R)
• The term ‘Community Banking’ is never used, replace with Community Bank® branch, project, concept, model, etc.
• The term ‘Branch’ only starts with capital B when included in the full name of the branch ie. Fern Tree Gully Community Bank® Branch. Otherwise it is ‘branch’
• The word ‘the’ does not precede <Town Name> Community Bank® Branch ie. “Community grants were distributed by Fern Tree Gully Community Bank® Branch…”
• a document titled “Communicating your message” dated July 2006 included under the heading “Registration of Community Bank®”:
In 2003, Bendigo Bank was granted Australian Trademark Registration for the term ‘Community Bank®’. The trademark is clear recognition of the unique nature of Bendigo Bank’s Community Bank® model and its success to date. Trademark recognition is a way in which we can protect the value and intellectual property that has been established to date.
It is important that whenever you write the term ‘Community Bank®’, that it is accompanied by the registration mark (which is superscripted) and it is in bold. Nine times out of 10, newsrooms will remove the registration mark - they are under no obligation to use it. However, every piece of communication coming from Bendigo Bank and Community Bank® Companies should always use this format when using the wording ‘Community Bank®’.
150 In about 2005 Bendigo engaged a third party service provider to provide a template-based solution for its common marketing and promotional collateral called Marketing Central (formerly called “FastArt”). Franchise Companies had access to Marking Central. Bendigo designed templates for marketing and promotional material to be used through Marketing Central and franchisees could select the style of artwork or advertisement required. Mr Hunt explained that by this controlled process of selection it was Bendigo’s intention to achieve uniformity in the appearance of advertising and in the use of trade marks, including the Bendigo Word Mark. The process worked in the following way:
(1) after selecting artwork the Franchise Company would complete the relevant fields within that artwork or advertisement;
(2) once the relevant fields were complete the Franchise Company could then review the artwork. At this stage the artwork was a proof only and contained a watermark;
(3) once happy with the proof the Franchise Company could submit it for approval by the relevant department at Bendigo; and
(4) the proof artwork could only be used by the Franchise Company after receiving Bendigo’s approval. If it was not approved the watermark would not be removed from the artwork and the Franchise Company would not be authorised to publish the draft.
151 Where a Franchise Company did not use Marketing Central for its marketing and promotional material it was required to brief its allocated marketing representative at Bendigo who, in turn, would brief the work into Bendigo’s design studio for approval. If the brief was approved by Bendigo’s design studio, the material was either sent directly to the requesting Franchise Company for printing or Bendigo’s design studio would arrange for the material to be printed by one of its suppliers.
152 To the best of Mr Hunt’s knowledge, Bendigo’s franchise banking model was the first of its kind in Australia and different to the models offered by Australian banks, building societies and credit unions. Mr Hunt wanted to create a brand which could be used in connection with Bendigo’s new franchise banking model and which would:
(1) differentiate Bendigo’s new proposed service offering from the way in which banking and financial services were provided at the time;
(2) set Bendigo apart from the banking and financial institutions that were closing branches across Australia; and
(3) differentiate the banking and financial services provided through Bendigo’s existing standard corporate branches from its new franchise banking model.
153 Mr Hunt said that in overseeing the implementation of the new franchise banking model, he created what he understood to be original and previously unused terms namely, “community bank” and “community banking”. But as he conceded in cross-examination, that could only be so in Australia given the existence of community banks in the US.
154 Mr Hunt had referred to the US model of community banking in public presentations he gave over the years. For example, on 29 April 1998 Mr Hunt gave evidence to the Standing Committee on Financial Institutions and Public Administration in relation to regional banking services about the development of Bendigo’s franchise banking model. After presenting the model, Mr Hunt was asked if there were any examples around the world that were similar to the Bendigo model. Mr Hunt responded:
We were not able to find something that was precisely matched with this. There are community banks in the United States that grew from community needs, just like the Bendigo Building Society grew from community needs and a gathering together to address those needs. There are certain structures around but they are not precisely like this, nor are they as involving as we have found this project.
155 Mr Hunt was cross-examined about that answer and a speech he gave to the Trans Tasman Business Circle in 2008 about the development of Bendigo’s franchise model where he also referred to Bendigo looking at community banks in the US. The following exchange took place:
Q: And it’s your evidence that the Bendigo model is a slightly different model to the community bank model in the US, without - I’m not asking you to describe the model yet but …?
A: Well, it is…
Q: I will do…
A: …substantially different in that it changes the level of risk, responsibility and reward between the-the-the- the various stakeholders.
Q: Yes. And the US model of community bank that you looked at were generally understood to be two things: so they were small banks; is that correct?
A: In the main, yes.
Q: And they were owned and operated or managed in their local community?
A: They were targeted - serving a range of community needs. That’s right.
Q: And that’s indeed how they’re described, community banks?
A: That - yes. That’s true.
Q: Now, in both your speech to the business – Trans - Tasman Business Circle and in your evidence to the Parliament, you used the - when you used the expression community banks in the United States, you were intending to refer to that United States model with the attributes that we just mentioned?
A: Well not specifically because the key element was that all of the banks that I looked at - looked at or looked through were effectively what I termed supply side economic models, that is, they were models that were set up to provide products to a range of communities or - or community. And it was my view that we needed to look at a different approach in terms of the engagement with the buying public or the community of buyers that would enable us to more clearly satisfy the sustainability elements.
Q: Okay. And is - both in your speech to the business group - circle and in your evidence before Parliament, you call the United States model that you looked at community banks but you don’t use that expression in your affidavit. Is there any reason for that?
A: No. No, not really. There were no community banks in this country. I was - I was - I guess I was referring to them as models that were referring to themselves as community banks in the States, but there were no such organisations here in the sense of banking a whole community.
Q: And the reason – one of the reasons why you didn’t do that, Mr Hunt, if I may suggest, is because it’s your evidence that you, in effect, coined the term community bank, isn’t it?
A: I - in my view, the community bank terminology was used throughout the development in the sense that the community banking model or a community bank in our development but it was the development of a more sustainable way of banking for each of those communities that - that was my focus.
Q: Right?
A: And—and to the extent to which the use of that though the development then became the obvious brand for this alternative approach in Australia because it needed to differentiate itself from other providers, it needed to change that risk, reward and responsibility balance, and it needed to engage community as owners and buyers from their local enterprise or branch.
156 A copy of the prospectus for Elwood Community Financial Services Limited dated July 1999 (Elwood Prospectus) was in evidence as an example of a prospectus used to raise capital by a Franchise Company. It included at “3.2 Community Banking Project”:
Bendigo Bank developed its Community Bank project in response to the continuing closure of bank branches across Australia, and the subsequent effects on disenfranchised communities.
Community Bank is a means by which communities with the will and enthusiasm can enhance their future prospects by securing a conduit to the finance system.
…
The Community Bank project does this by providing communities with the opportunity to manage a community-owned branch of Bendigo Bank. It supposes that ownership of this management right provides local residents and businesses with a powerful incentive to conduct their financial affairs through their own local bank branch, thereby maximising revenue potential for the local enterprise.
157 Mr Hunt was cross-examined about the use of the word “community” in this part of the Elwood Prospectus. The following exchange took place:
Q: Again, all these uses of “community” describe or, sorry, are used in its natural or ordinary meaning?
A: And it’s a wide-ranging meaning.
Q: But it means in these cases the community of the area to which this is addressed?
A: The way this is termed, yes. That’s what it’s describing.
Mr Hunt later sought to explain that what he meant when he said that the word “community” has a wide-ranging meaning was that it was a word used to describe many things: the community of a place, of members and of people connected to a common purpose.
158 Included in the Elwood Prospectus at “3.8 Community Interest” was:
A significant amount of work and public consultation has been undertaken in relation to the feasibility of establishing the Elwood community bank branch of Bendigo Bank.
A group of interested community members was briefed by Bendigo Bank on 24 November, 1998 in relation to the proposal to establish Elwood community branch, and a committee formed to evaluate the proposal. A preliminary public meeting was held to discuss the community bank concept and the steps required to establish a community bank branch of Bendigo Bank at Elwood. As a result of a meeting held on 22 December, 1998, the committee engaged an independent consultant, Robert Moyle and Associates Pty Ltd, to conduct a feasibility study in relation to the proposal.
159 Mr Hunt was also cross-examined about this part of the Elwood Prospectus. The following exchange took place:
Q: In all of these cases, the meaning of “community” is the same, isn’t it? It means the local community in Elwood?
A: Yes, it does. And at this stage, “community bank” as a brand - as a clear statement of style to serve the community - hadn’t really been formed, in the sense that it was only a small number of branches. There’s now well over 300, and - so the concept—
Q: Yes?
A: … of “community bank” has taken on a different view, in my - in my view.
Q: Well, in respect of each branch, “the community” refers to the particular community of that geographical location, doesn’t it?
A: “Community” is a descriptive word.
160 CFCU relies on parts of Mr Hunt’s oral evidence where it contends that Mr Hunt conceded that the words “community” and “community bank” are descriptive. Without setting them all out these include:
(1) in relation to questions about the “early days” when the franchise banking model was conceived:
Q: And it’s that lateral [sic] alternative, that is, where the franchisees company formed from the people within the community that you have called community bank?
A: That’s right. …
(2) in relation to the managing director’s update given to the 27 October 1997 board meeting:
Q: And I think you’ve used “community bank” and “community banking” from time to time in these papers and elsewhere?
A: Yes, that’s right. And even prior to that there was a terminology that had grown in many organisations-you know, the whole idea of sort of, like, generally banking - various communities, or the Australian community, for that matter.
And:
Q: … And what you called “community bank” in this section is, we see at the top of that page - was to describe the option we discussed earlier, where the franchisee was a company formed by people in the local community?
A: That’s right. And this - this is early days, in the sense of trying to flesh out what was a reasonable approach to protect all parties, really.
(3) in relation to the meaning of “community bank”:
Q: And the correct way is the way you put it at the bottom of paragraph 35 of your affidavit, that it’s – it’s a banking model in which local people had an opportunity to set up a locally-owned company to operate and manage a bank branch. That’s the correct way to describe your franchise model, isn’t it?
A: Well, that’s right. That’s right, in terms of the branch itself, but it is - overall, it’s the model that actually enables them to gain banking back in their community, and gain sufficient benefit, which is displayed elsewhere, that goes back to the community from everyday thing called banking.
(4) in relation to a document titled “marketing guide” for 2005/2006 which was provided to Franchise Companies:
Q: … That reflects a concern, doesn’t it, that the term “Community Bank Branch” and “community banking” have descriptive meanings?
A: I think it reflects the variety of usage. I mean, I think by this stage we had seen, through the gestation period, you know, there were many and varied ways of describing it, as we’ve seen in the documentation presented, and this was a way of actually trying to bring that into – put that in shape and have it consistently utilised across the network.
Q: And I think you’ve agreed that terms like – a term like “community banking” is a natural way to describe the franchise concept?
A: It was the term that I used at the start of the development, and it was the term that most – given that it was not in use in Australia, it was the term that clearly defined a different model of bank in that community, and it enabled them – the local town to describe itself as – as being the owner of that right to operate that Community Bank Branch, and it clearly protected Bendigo as the banker, the three elements of the – you know, the brand that has become consistent.
(5) in relation to use by other traders:
Q: … It’s the case, isn’t it, that from time to time other traders have decided that they want to use the words “community bank” or “community banking” in relation to their businesses?
A: Other traders? You’re referring to other organisations?
Q: Other organisations that you’re aware of?
A: I think I said yesterday that there have been many and varied people using the term of “serving community”, “community banking”, etcetera; that, over the course of – including Bendigo – you know, Bendigo Building Society, as it was in the early days, and even in the early days of Bendigo Bank. There was the general term of “serving the community” or “community banking”. It was only when this completely different business model, and a different approach of connecting with the community as investors, as well as people – for specific purposes of providing a branch – that those terms came together as a brand, in my view.
(6) in relation to the report of the Parliamentary Inquiry into the Level of Banking and Financial Services in Rural, Regional and Remote Areas of Australia (Parliamentary Inquiry) published in 2004 (Parliamentary Inquiry Report), of which Chapter 8 was titled “Credit Unions, Building Societies and Community Banks”:
Q: And then by December 2001, as we see in the following paragraph, there was at least another version of the Heritage Building Society model of a community bank insofar as the parliament inquiry refers to it set up by December 2001 in Nanango Shire Council – Nanango Shire, sorry?
A: Well, it couldn’t have been a community bank in the sense that Heritage wasn’t a bank, but, you know, could have been banking in a community, yes.
Q: Or community banking?
A: That’s what I’m saying. It could have been banking in a community.
4.1.1.2.2 Use by other traders
161 Evidence of use and desire to use by other traders is also relevant to the resolution of the issue of whether the Bendigo Community Marks are inherently adapted to distinguish the Services from the services of others. As at the Priority Dates that evidence was somewhat limited.
162 Chapter 8 of the Parliamentary Inquiry Report includes a section titled “Community Banks”. Relevantly, at [8.68]-[8.69]:
8.68 A number of communities faced with reduced banking services have considered establishing a community bank. This model of banking has gained ground steadily in Australia and earned widespread acceptance.
8.69 Many submissions expressed support for the creation of community banks. They appreciate that a community bank reflects the priorities of members of the local district and brings additional benefits to a community. The Edenhope and District Community Bank Steering Committee saw the establishment of a community bank as the solution to its financial services problem and pointed out that half of the profits of the bank are returned as community dividends. It stated that ‘no wonder community banks are opening up throughout the country at a rapid pace.’ Indeed, a key to the success of community banks is their close connection with local residents in that they use local investment to establish market share quickly and create customer loyalty.
(footnotes omitted.)
163 That chapter of the Parliamentary Inquiry Report also describes two community bank models: the Bendigo Bank model and the Heritage Building Society model. As to the latter, at [8.74]-[8.78] the report included:
8.74 … The genesis of this model sprang from an active and enthusiastic community group in the small town of Crows Nest north of Toowoomba that was determined to see better banking and financial services in their district. The town has a population of approximately 2,000 with a catchment area taking this figure to 6,000. This group, the Progressive Community Crow’s Nest Ltd, (PCCN) explored many options but finally entered a partnership arrangement with Heritage Building Society. Mr Howard Littleton from the PCCN explained:
The Heritage community banking model we settled on made the most sense to our community. It was a great deal less expensive to start, (less than half the cost of the other main community banking model) and, once the doors were open, more money stayed here.
8.75 They needed an initial outlay of $60,000 but decided to set a goal of raising $100,000. The group started a company which allowed them to raise the money. Membership was $10 which entitled a member to contribute to the capital of the company by depositing money with the company of between $100 and $5,000. Members were asked to keep the money with the bank for three years but in hardship conditions the money would be returned.
8.76 From the very beginning the company was keen to generate broad community support and placed a limit on the contribution at $5,000. Pensioners and children are among its members.
8.77 After exploring many options, the company approached the Heritage Building Society with a proposal. They presented the Society with a wish list of requirements they regarded as important such as sensible trading hours. The company also placed a high priority on the employment of a senior manager-someone in the community, who understood the full range of people’s needs from residential through to commercial and business banking activities and would make himself available to the community.
8.78 Following further negotiation, the company entered a joint venture with the Heritage Building Society. The branch has performed better than anticipated with the $100,000 outlay recouped and the branch now making profits. The PCCN has announced the first distribution from its share of the community branch profits in the form of community grants totalling $46,000 to a number of local community projects. The initiators of the scheme cannot understand why more communities have not taken a similar route.
(footnotes omitted.)
164 The Crows Nest Community Branch of the Heritage Building Society was established in 1999. In December 2001, several months after the Priority Dates, the Nanango Shire Council adopted the Heritage Building Society community banking model and opened a branch. There was evidence of the following additional branches which were opened at some point: Forest Lake Community Branch; Highfields Community Branch; Karalee Community Branch; Milmerran Community Branch; and Palmwoods Community Branch.
165 Apart from CFCU, as at late 1999 and 2000 there were two financial institutions that incorporated the word “community” into their names: Bananacoast Community Credit Union Ltd and The Broken Hill Community Credit Union Ltd. On 24 November 1999 Reliance Credit Union Ltd applied to register “Your Community Banking Provider” as a trade mark in class 36. That application lapsed on 7 November 2001. Muslim Community Co-operative Australia Ltd was also in existence.
166 There was significantly more evidence of use and a desire by other traders to use the words “community” and “community bank” after the Priority Dates, such use and desire increasing over time. There was evidence of the following use and desire to use by traders:
(1) on 20 May 2003 Heritage Bank Limited (formerly Heritage Building Society) registered “Heritage Community Branch” as a trade mark in class 36;
(2) from 8 August 2003 to 11 November 2009 registration of the business name “Community Alliance Credit Union”, from 8 April 2004 registration of “Community Alliance Credit Union Limited” as an entity name, and from 7 March 2006 registration of the business name “Shoalhaven Community Credit Union”;
(3) from 19 May 2006 registration of “Community CPS Australia Limited” as an entity name, and from 1 September 2008 and 23 July 2009 respectively registration of the business names “United Community” and “Companion Community”; and
(4) from 31 January 2007 registration of “Community Mutual Credit Union” and “Community Credit Union” as business names, from 18 April 2007 registration of “Community One Credit Union” and “Community Mutual” as business names, from 17 August 2009 registration of “Community Mutual Group” as a business name, and from 1 May 2012 registration of “Community Mutual Ltd” as an entity name.
167 As at May 2018 the following applications for registration of a trade mark, dated after the Priority Dates, incorporating the words “community bank” or “community banking” were identified via a search of the Australian Trade Mark Search online tool:
168 In addition, on 11 October 2018 Woolworths Employees’ Credit Union Limited lodged an application with IP Australia for registration of the words WOOLWORTHS COMMUNITY BANK as a trade mark in class 36.
169 On 9 November 2018, Google searches using the words “community bank”, “community banks Australia” and “community banking” were undertaken. Relevantly, those searches revealed that:
(1) the website for the Southern Cross Credit Union includes use of the term “community banking” where for example it says that in 2016 it is “celebrating 50 years of community banking”;
(2) the website for Beyond Bank refers to its “Community Banking Specialists” and its “Community Banking Products”;
(3) the website for Bank of Queensland refers to “Community Banking Solutions” and “community bank accounts for not for profit organisations”;
(4) the website for Westpac refers to “community banking products”; and
(5) the website for the Warwick Credit Union refers to “competitive community banking”.
170 CFCU also relied on the evidence of Ms Morrison and Messrs Taylor and Lawrence to establish the desire of other traders to use the words “community bank”.
171 It is useful to start with Mr Taylor’s evidence in this regard given, as is apparent from the table at [167] above, that G&C Mutual attempted to register a trade mark incorporating the words “community bank” in 2014. On that topic Mr Taylor gave the following evidence.
172 By way of background, G&C Mutual was founded in 1959 and is a member-owned financial institution specialising in providing banking services to government employees and regional communities in New South Wales and Victoria. From its inception in 1959 until 2014, G&C Mutual changed its name several times, including:
(1) on 2 January 2002 from “SGE The Service Credit Union Ltd” to “SGE Credit Union Limited”;
(2) on 1 December 2014 from “SGE Credit Union Limited” to “SGE Mutual Limited” trading as G&C Mutual Bank; and
(3) on 1 September 2016 from “SGE Mutual Limited” to its current name, “G&C Mutual Bank Limited”.
173 In about 2013 the board of G&C Mutual decided to change its name and branding. As part of this process the board conducted a “have your say” campaign by which it invited members to suggest a new name or provide comments on a potential new name. The G&C Mutual Annual Report 2014 included a section on the search for a suitable name and noted that “the name Australian Community Bank also received strong support from members”. Mr Taylor said that the board expressed a preference for the name “Australian Community Bank” because it met its criteria for selecting a name that sends a message to members and the public that G&C Mutual is a community focussed and member-owned banking organisation that exists to serve the interests of its members as distinct from the interests of external shareholders.
174 G&C Mutual also submitted 15 names to APRA, 10 of which APRA rejected. Of the five names that were approved by APRA, three included the word “community”.
175 Following the consultation process the name “Australian Community Bank” was selected by the board.
176 In 2014 G&C Mutual filed three applications to register the new name and brand “Australian Community Bank” with IP Australia. Relevantly:
(1) the first such application was filed on 25 February 2014 and was to register the words “Australian Community Bank” in class 36 (G&C First Application). On 29 April 2014 IP Australia issued an examination report in which it raised objections to the G&C First Application under s 41(4) and s 44 of the TM Act. The examiner considered the mark to be descriptive because it “indicates that your services are ones provided by an AUSTRALIAN based BANK owned by or operated for the benefit of a COMMUNITY” (s 41(4)) and that the mark closely resembled the Bendigo Community Marks (s 44). After receiving the report G&C Mutual decided to pursue trade mark registration for a representation of the “Australian Community Bank” brand that also included a visual device and/or slogan;
(2) on 7 July 2014 G&C Mutual lodged a request with IP Australia to withdraw the G&C First Application and lodged two new applications to register two composite marks (G&C Composite Marks) as follows:
(3) G&C Mutual received a letter from Bendigo demanding that it withdraw the application for, and cease use of, the G&C Composite Marks. After receipt of Bendigo’s letter, G&C Mutual decided temporarily to abandon the G&C Composite Marks and select a different name to avoid further delays and costly legal disputes that would prejudice its corporate strategy. Accordingly, the board resolved to adopt the name “G&C Mutual Bank” commencing on 1 December 2014. The inclusion of the letters “G” and “C” was designed to capture and reinforce G&C Mutual’s commitment to serving the needs of government employees (hence the use of “G”) and local communities whether joined by geography, employment or other commonalities (hence the use of “C”).
177 Despite its adoption of the name “G&C Mutual Bank”, given the preference of customers and the board for “Australian Community Bank” G&C Mutual continued to prosecute the G&C Composite Marks in the hope that a resolution could be achieved. In that regard, the following occurred:
(1) on 1 October 2014 IP Australia issued an examination report for the G&C Composite Marks in which the examiner again raised an objection under s 44 of the TM Act on the basis that the examiner considered that the G&C Composite Marks closely resembled the Bendigo Community Marks;
(2) on 22 January 2015 G&C Mutual lodged a response to the examiner’s report, which included:
1.5 … the [G&C Composite Marks] are neither substantially identical with, nor deceptively similar to, the [Bendigo Community Marks].
1.6 In addition, we submit that the words cited as a barrier to registration of the [G&C Composite Marks], namely COMMUNITY BANK, comprise a purely descriptive term. As such ... no one trader should have a monopoly in that term on its own.
…
1.17 It is submitted that the ordinary signification of the term COMMUNITY BANK is a bank which is owned by or operated for the benefit of a community. Hence it is apparent that the term directly describes the services in respect of which the [Bendigo Community Marks] are registered, for example, “financial services including banking services”.
(3) on 3 February 2015 IP Australia sent a notification of acceptance to G&C Mutual for the G&C Composite Marks informing G&C Mutual that the G&C Composite Marks had been accepted for registration;
(4) on or about 14 April 2015 G&C Mutual was notified by IP Australia that on 7 April 2015 Bendigo had filed a notice of intention to oppose the G&C Composite Marks;
(5) on 22 April 2015 G&C Mutual received a notification of proposal to revoke acceptance in relation to the G&C Composite Marks on the basis that “[t]he examiner was in error in withdrawing these two cited [Bendigo Community Marks] at the second report”; and
(6) after receiving the notice of proposal to revoke acceptance and the notification of Bendigo’s intention to oppose, G&C Mutual decided to permanently abandon the G&C Composite Marks to avoid incurring further costs.
178 There were a number of important aspects to Mr Taylor’s oral evidence which highlighted that G&C Mutual was not actuated by a desire to trade off any reputation Bendigo had acquired in the term “community bank” in its attempts to use “Australian Community Bank” as its name going forward.
179 First, Mr Taylor accepted as fair that G&C Mutual had no reputation in the term “community bank” as at the time it made the First Application and when it subsequently applied for the G&C Composite Marks. Until G&C Mutual applied to use the term “bank” it could not use the term “community bank”. However, Mr Taylor was clearly of the opinion that G&C Mutual had a reputation in “community banking”.
180 Secondly, Mr Taylor was emphatic in rejecting the proposition that, in making the G&C First Application and applying for registration of the G&C Composite Marks, G&C Mutual would be obtaining an advantage from Bendigo’s reputation in the Bendigo Word Mark. As Mr Taylor explained, at no stage did G&C Mutual suggest that Bendigo should not be able to use the term “community bank”. It was content for Bendigo to continue to do so, usually preceded by something else. G&C Mutual was trying to come up with a name that could co-exist with Bendigo’s use of the term “community bank” but that would be differentiated by other stylised features, positioning and branding which is why it applied for the G&C Composite Marks.
181 Thirdly and, in a similar vein, Mr Taylor denied that G&C Mutual preferred “Australian Community Bank” as a new name because it had connotation or association with Bendigo’s successful community bank operation. He said that there would be no point in G&C Mutual trying to associate itself with the Bendigo brand.
182 In cross-examination Mr Taylor gave evidence about G&C Mutual’s discussions in 2014 with other credit unions in relation to Bendigo’s “claimed ownership of the terms community bank and community banking”. Those discussions were referred to in a letter from Mr Taylor to the directors of G&C Mutual, sent after their 15 February board meeting, in the following terms:
Given that Bendigo’s claimed ownership of the terms ‘Community Bank’ and ‘Community Banking’ is a threat to other Credit Unions, we have held discussions on this matter over the past 2 weeks with several of the larger Credit Unions (including Community Mutual, Community First, People’s Choice, Select and Maritime). Although nothing has yet been formalised, all CUs noted above have expressed in principle support for making a financial contribution to cover costs we incur from the anticipated Bendigo legal action. I have also spoken to 2 COBA Directors and we will be meeting with their Management prior to the April Board seeking a COBA financial contribution in support of our legal defence.
183 At that time, Mr Taylor had a discussion with Mr Tancevski, the CEO of CFCU. According to Mr Taylor, in the context of CFCU’s application for the CFCU Marks, Mr Tancevski contacted him to inquire about what was happening to G&C Mutual’s applications for its trade marks. G&C Mutual was unaware of the applications for the CFCU Marks before the time of this conversation. Mr Taylor said that his conversation with Mr Tancevski covered G&C Mutual’s proposal to lodge applications for slightly varied marks, its concern about Bendigo’s asserted monopoly and whether it would be useful for COBA to facilitate a process to collect the views of those credit unions who had an interest in the issue.
184 In an email dated 1 April 2014 from Mr Taylor to Peter Evers, the then CEO of People’s Choice Credit Union, which Mr Taylor described as one of the largest mutuals with an interest in the issue of the use of “community bank”, Mr Taylor provided a summary of what occurred following G&C Mutual’s registration of trade marks containing the phrase “community bank” to enable Mr Evers to brief the “G8”. The “G8” was a group of the eight largest mutual banks or credit unions at that time who were shareholders of Cuscal. Mr Taylor’s email included:
SGE therefore intends to pursue its right to use the phrase ‘community bank’, and in doing so we are hopeful that we can clear the air once and for all on this issue. We are however mindful that this could become a costly legal exercise and are hoping to garner support for our mutual colleagues (both individually and via COBA) to help support and fund a legal defence against Bendigo.
We would appreciate any initial feedback members of the G8 may have on this matter, but will also be looking to write shortly to each of the G8 members (as well as other ADIs) with an outline of a proposed framework for a collective ‘fighting fund’ to help manage this important industry issue. I will also be holding further discussions with COBA to determine the best structure for their support.
185 Mr Taylor said that the purpose of the “collective fighting fund” referred to in his email was to obtain registration of the words “community bank” in connection with the businesses being run by the G8 and not to prevent Bendigo from being able to use that term. As I have already observed, Mr Taylor was firm in his evidence that he had no objection to Bendigo using the term “community bank”.
186 At some time after April 2014 but before June 2014 G&C Mutual and COBA signed a document titled “Common Interest Privilege Undertaking” (Undertaking). Mr Taylor said that 17 other organisations entered into the arrangements the subject of the Undertaking. Mr Taylor described the common interest between the parties as the ability then or some time in the future to use the words “community” and “bank” together in their names and of understanding the impediments to doing so, which involved Bendigo. The intention of the Undertaking was to maintain legal professional privilege in any communication to which that privilege may attach that was exchanged between the signatories about, in broad terms, issues arising from the Bendigo Community Marks.
187 Ms Morrison gave some background evidence about the structure and regulation of CMEs. It is useful to set that evidence out here. Ms Morrison explained that CMEs are owned and controlled by members and operate for their benefit. The cooperative and mutual sector is regulated by a mix of state and federal laws and most cooperatives are incorporated under state and territory laws, while mutuals are regulated under the Corporations Act 2001 (Cth) (Corporations Act) as unlisted public companies limited by shares, guarantee or shares and guarantee. The effect of the way in which CMEs are structured and regulated is that they are owned and controlled by their members/customers and operate for the benefit of their members/customers and the community, of which the members/customers are a part.
188 In her work Ms Morrison has been called upon to identify the differences between CME and other business models. One of the ways in which Ms Morrison describes the CME business model is that credit unions, mutual banks and building societies “make money to bank the community” as opposed to “doing banking to make money”.
189 By the phrase “bank the community” Ms Morrison means that banking CMEs have a business model that allows them to make a surplus in order to provide banking services and products that are sustainable, affordable and socially responsible to their members/customers. The customer is at the centre of the business model. The customer focus goes to the heart of the founding story of every mutual financial institution, which starts with the community coming together to solve a shared issue or problem, such as lack of access to affordable lending for housing, personal loans or other debt. Ms Morrison said that this is the reason for the formation of most building societies and credit unions, which are the original peer-to-peer lending structure. The CME (as a financial institution) is there solely for the community that collectively owns the bank, it returns all of its profit to its members and does not have any third-party stakeholders (ie shareholders) who are not also members/customers.
190 As the CME sector is community-owned and not shareholder-owned, in Ms Morrison’s view it is impossible to describe CMEs in the banking sector without using the words “community bank”. Ms Morrison says that there is an even greater imperative to do so now given that credit unions are permitted to describe themselves as banks following recent amendments to the Banking Act.
191 In cross-examination Ms Morrison was asked whether credit unions need to use the word “community” as part of their title. While she found that a difficult question to answer in the case of all credit unions, she expressed the view that those credit unions who have had a historic relationship to the word “community” in their names, because they are member-owned, may find it difficult to change their name upon becoming a bank. Ms Morrison also emphasised that in her experience credit unions need to talk about “banking the community” and providing “community banking services” in the operation of their businesses. Ms Morrison accepted that there were many instances where credit unions do not use the word “community” in their names, but said that it was impossible to describe CMEs in the banking sector without using the words “community bank” because what they do is bank the community.
192 Ms Morrison is of the opinion that community banks have been operating in Australia since building societies and credit unions were formed because those organisations operate as community financial institutions. Ms Morrison accepted that they were restricted from using the word “bank” in their title prior to 2011 but nonetheless described their practices of lending and providing other financial services to their communities as banking practices.
193 Mr Lawrence also commented on whether in his opinion banking and financial institutions wish to call themselves “community bank”. He said that as CEO of COBA he frequently consults with its members and, as a result, he is aware that it is important to members of COBA that they are able to describe themselves as community banks that offer community banking. The purpose of this is to set themselves apart from traditional banks and inform their customers and potential customers that 100% of their profits go back to customers. It is in this way that the COBA membership distinguishes itself from traditional banks.
194 Mr Lawrence has heard COBA members referring to themselves as “community banks”. He did not accept that if COBA members were to adopt the term “community bank” they would have the advantage of any reputation that Bendigo has established in that term. This is because COBA members are already in the community, customer-owned banks are understood by the community and some members, albeit not the majority, already have community in their name: CFCU, Community Alliance, Broken Hill Community Credit Union and Bananacoast Community Credit Union.
4.1.1.3 The parties’ submissions
195 CFCU submitted that the term “community bank” as used by Bendigo bears its natural and ordinary signification to consumers of banking services in Australia, namely a bank situated in a particular community or locality including a bank providing banking services for the people of a particular community or locality; “community” has its ordinary meaning and includes the local people or any group within society, whether defined by geographical location or by similar characteristics; and “bank” also has its ordinary signification being a financial establishment, including a deposit taking institution. CFCU submitted that, given those significations, the Bendigo Word Mark was not at its priority date to any extent inherently capable of distinguishing Bendigo’s services and should have been rejected under s 41(3) of the TM Act.
196 CFCU further submitted, in the context of Bendigo’s use, that the words “community bank” directly describe the locality in which Bendigo’s bank branch operates. For example, Rupanyup/Minyip Community Bank Branch of Bendigo describes Bendigo’s branch that serves the community in those towns in the Wimmera region in Victoria. CFCU contended that if, as Bendigo claims, the words “community bank” also signify some sort of local management in the running of the branch, this does not take the words from their ordinary signification as Bendigo is drawing on part of the range of descriptive meanings conveyed by the phrase. CFCU contended that all of the range of meanings of “community bank” share a cognate sense.
197 CFCU said that the term “community bank” was not used by Bendigo to convey any meaning by “covert or skillful allusion to the character or quality of the goods” but that the sense is direct and the words have their ordinary signification, which is descriptive. It contended that the term “community bank” had not acquired any distinctiveness as at the Priority Dates. CFCU also contended that it was not possible for Bendigo to use “community bank” without showing the required connection with Bendigo and that each Bendigo community bank branch had consistent signage comprising all of the elements of the Bendigo Composite Mark.
198 Bendigo submitted that the Bendigo Community Marks are capable of distinguishing its services and that the marks were correctly accepted for registration pursuant to s 41 of the TM Act. Bendigo relies on the evidence of Mr Hunt and his description of the strategy to develop a new bank branch concept commencing in 1997. It further submitted that when it adopted the Bendigo Community Marks in 1997 there was no other ADI in Australia using the term “community bank” and it was unique to Bendigo. Bendigo contended that, from the perspective of consumers and traders, when it combined the words “community” and “bank” and started using the combined term in 1998, it had no direct meaning and that the term “community”, while having a descriptive element, has a wide range of meanings. Bendigo submitted that this case is in stark contrast to the situation in Bohemia Crystal Pty Ltd v Host Corporation Pty Ltd (2018) 354 ALR 353; [2018] FCA 235 (Bohemia Crystal) where “Bohemia” was a long established descriptor for glass products.
199 Bendigo submitted that, in opening its case CFCU stated that its evidence shows that the term “community bank” has a meaning within the mutual sector that is a bank owned by its members. Bendigo further submitted that CFCU’s case had an obvious and irreconcilable tension to it: on the one hand CFCU was contending in all of its evidence that the term “community bank” had a number of very specific, albeit different, meanings relating to the ownership of an organisation and mutual structure; and, on the other hand, it attacked Bendigo’s evidence on the basis that its use of “community bank” was purely descriptive. Bendigo submitted that ultimately, with so many alleged meanings of the term “community bank” being thrust upon the Court by CFCU, there was clearly no “ordinary signification” of the term “community bank” and “that the clear meaning of the term is that the Community Bank Trade Marks serve to distinguish the financial services offered by [Bendigo]”.
200 Bendigo also submitted that CFCU provided no evidence of other traders using the term or legitimately desiring to use the term “community bank” as at the Priority Dates and that the later actions of traders could in no sense be determinative of the principle issue of whether the Bendigo Community Marks were capable of distinguishing as at 1999 and 2001, relying on Sports Warehouse Inc v Fry Consulting Pty Ltd (2010) 186 FCR 519 (Sports Warehouse) at [102].
201 Bendigo noted that CFCU’s evidence from actual traders came from the CEO of CFCU, Mr Tancevski and the CEO of G&C Mutual, Mr Taylor. It submitted that CFCU’s obvious motivation in seeking removal of the Bendigo Community Trade Marks from the Register was to allow CFCU to use and register the CFCU Marks and to seek a monopoly in its own trade mark consisting of a combination of words including “community” and “bank”. Bendigo said that there was no proper explanation given as to how CFCU’s claimed monopoly was to work with other mutuals claiming rights in the words “community” and “bank” and that the Registrar has not been told anything about CFCU’s apparent concession that there are potentially a number of trade mark owners for marks with “community” and “bank” and its apparent decision to not challenge any such third party usage.
202 Bendigo noted that the only other evidence of the activities of traders was by reference to Heritage Building Society using “community banking”, and that its use was after Bendigo had launched its community bank and shared its concept with Heritage. Bendigo noted that, after a three to four year inquiry into banking in Australia, the only entity identified in the Parliamentary Inquiry Report as using the word “community”, apart from Bendigo using “community bank”, was Heritage Building Society and it did not use the word “bank” because it was not a bank.
4.1.1.4.1 What is the ordinary signification of “community bank”?
203 CFCU contends that the words “community bank” are descriptive and not inherently adapted to distinguish. Resolution of whether that is so first requires consideration of the ordinary signification of those words.
204 In my opinion as at the Priority Dates the term “community bank” had an ordinary signification or meaning that was directly descriptive of the Services and was not a “covert or skillful allusion to the character or quality” of the Services. My reasons follow.
205 CFCU did not rely on any evidence as to the ordinary signification of the term “community bank”. But none is needed. As CFCU contended in this part of its case, the words “community” and “bank” have their ordinary signification namely, in the case of “community”, the local people or people gathered or brought together by some commonality and, in the case of “bank”, a financial establishment or institution. Those asserted meanings are reinforced by the dictionary definition of the word “community”. The Macquarie Dictionary (Federation Edition, 2001), an excerpt from which was tendered in evidence by Bendigo, defines community to mean, amongst other things “a social group of any size whose members reside in a specific locality, share government, and have a cultural and historical heritage” or “similar character; agreement; identity”.
206 When used in combination the words “community” and “bank” convey the meaning of the provision of financial services to a group of people brought together by a common feature, for example geography, occupation or workplace. The use of these terms in conjunction is not so unique as to alter the meanings that “community” and “bank” possess individually.
207 There is no covert or skilful allusion to the Services provided by Bendigo. The combined words are directly descriptive of the Services offered, namely the provision of financial services to a community of people defined by geography.
208 There is no doubt that, via the franchise banking model, Mr Hunt developed Bendigo’s community banking model commencing in 1997, addressing both the needs of regional Australian communities faced with bank branch closures and Bendigo’s business imperatives. He described the model as embodying the disciplines and accountabilities of a shareholder model of ownership with the incentives implicit in a cooperative model. The franchise banking model promulgated by Bendigo seemed to be the first of its kind in Australia. Mr Hunt believed that he was using terms, namely “community bank” and “community banking”, which were original and previously unused in Australia to describe the concept.
209 But uniqueness of the franchising model and Mr Hunt’s belief about the originality in Australia of the words to describe the model and its branches is not to the point.
210 The model was described to the RBA in 1997 as one where a community would be able to own and operate a branch and the brand would be “Bendigo Bank - with the local community bank acknowledged on the window and promotional literature”. That was the signage that the RBA authorised. That is, signage that clearly indicated that the relevant community bank was a part of or connected with Bendigo. Bendigo’s own literature at the time described a “community bank” as a means by which a community can “enhance [its] future prospects by securing a conduit to the finance system” and the “community bank project” as one which provides communities with the opportunity to manage a community-owned branch of Bendigo and which supposes that “ownership of this management right provides local residents and businesses with a powerful incentive to conduct their financial affairs through their own local bank branch”. As Mr Hunt agreed, it describes a bank branch that is centred around a local community tied by geography or location and was developed to reflect “a more sustainable way of banking for each of those communities” (see [155] above).
211 The way in which Bendigo in fact used the term “community bank” is also telling in the sense that it described the provision of financial services to a local community. As at the Priority Dates that term was not used on its own. Rather, as required by the RBA, it was incorporated into a composite phrase. A photograph of the Rupanyup/Minyip Community Bank Branch appearing in an article in the Sunday Herald Sun on 5 July 1998 reporting on the opening of that branch shows the signage as follows:
(highlighting in original.)
212 Mr Hunt’s evidence was that during the time he was employed at Bendigo the external branch signage for all Bendigo community bank branches was as appears in the following examples:
And:
This signage reflects the requirements of the RBA.
4.1.1.4.2 Is it likely that other traders would wish to use the Bendigo Community Marks?
213 Having determined the ordinary signification of the words “community bank” the next question is, having regard to the traders in and consumers of the Services, whether, at the Priority Dates, other traders might, without any improper motive, wish to use those words in connection with their services “for the sake of the signification the words ordinarily possess” or put another way, because the words are directly descriptive of the same or similar services. That is to be considered from the point of view of the “possible impairment” of the rights of “honest traders” and from the point of view of the public. Where the question is whether there are other traders who may legitimately wish to use a word which is descriptive in connection with the same or similar services, the test refers to the “legitimate desire of other traders to use a word which is directly descriptive in respect of the same or similar goods”: Accor at [236(6) and (8)].
214 In this case, the question to be addressed is the likelihood that other traders will think of the words “community bank” and wish to use them in connection with similar services in any manner that could infringe the Bendigo Community Marks.
215 As I have already observed, there was limited evidence of use by other traders of the words “community bank” or of a desire to use those words as at the Priority Dates. The relevant evidence is set out at [162]-[165] above.
216 In 1999 Heritage Building Society established its community banking model with its first branch opening in Crows Nest, Toowoomba. In its submissions to the Parliamentary Inquiry, Heritage Building Society noted that it was the largest ADI on the Darling Downs with 32 branches, community branches and mini branches. It described the Crows Nest branch as a “community banking facility” and noted that in 2001 a “community branch” had been established at Nanango, and that a new community branch at Highfields was in the early stages of development. That is, although not a bank at the time, Heritage had established a model for community banking and was a trader who as at the Priority Dates was providing community banking services.
217 There was also, as set out above, evidence that other providers of banking services had incorporated the word “community” into their names and of one attempt to register the trade mark “Your Community Banking Provider”.
218 I turn then to consider the evidence of use after the Priority Dates. In that regard, while lack of distinctiveness is to be assessed as at the Priority Dates, evidence of use after the Priority Dates is admissible: see Austereo Pty Ltd v DMG Radio (Australia) Pty Ltd (2004) 209 ALR 93; [2004] FCA 968 at [30]-[32]. As noted above, Bendigo submitted that the later actions of traders could in no way be determinative of the principle issue of whether the Bendigo Community Marks were capable of distinguishing as at the Priority Dates. Bendigo relied on Sports Warehouse at [102] where Kenny J said:
Under s 41(3), the Court is required to assess, as at the lodgment date, the likelihood that other traders would want, in the ordinary course of their businesses and without improper motive, to use the same mark, or some mark closely resembling it, upon or in connection with their own services. If there were no evidence to show that traders had used the word “warehouse” in combination with other words to indicate the goods they are selling, the case for Sports Warehouse would have been improved. The fact that there was some (later) usage is relevant to assessing the probability that, as at the lodgment date, other traders would want to use the mark, or something like it. I accept, however, that this evidence can be given only limited weight and can be in no sense decisive of the principal issue. Insofar as it can “rationally affect” one’s conclusion about the extent to which a mark is inherently adapted to distinguish under s 41(3), it tends to indicate that there was, at the lodgment date, some likelihood that other traders would want to use the mark in the ordinary course of their businesses and with no improper motive and, therefore, to diminish one’s estimation of the extent to which the applicant’s mark was inherently adapted to distinguish the designated services.
219 In Chocolaterie Guylian NV v Registrar of Trade Marks (2009) 180 FCR 60 (Chocolaterie Guylian) at [54] Sundberg J said:
Each of these chocolate boxes was purchased in May or June 2008, well after the priority date (16 April 2002). This raises a question about the acceptable use of this evidence. It is clear that the relevant date for assessing whether a trade mark is capable of distinguishing the goods for which it is used is the priority date: Austereo 209 ALR 93 at [30]. The parties both accepted that evidence of use by Guylian of the seahorse shape after the priority date is relevant for the purposes of s 41(5) of the Act, because it is open to draw rational inferences from such evidence as to whether the shape in fact had the required capacity to distinguish as at the priority date. That proposition was accepted by Finn J in Austereo, where his Honour referred to Conde Nast Publications Pty Ltd v Taylor (1998) 41 IPR 505 and Burchett J’s reference to actual events as being “capable of illuminating the probabilities already inherent in [a prior] situation”. Although differing as to the weight such evidence should be given, the parties also appeared to accept more generally that evidence of events taking place after the priority date, whether that be the applicant’s use of the mark itself or use of other similar or otherwise relevant shapes by rival traders, may be relevant to whether the seahorse shape is capable of distinguishing Guylian’s goods. This was an appropriate course to take. In my view, evidence of what other traders were selling prior to, at or subsequent to the priority date has the ability to rationally affect, albeit with varying degrees of weight, the conclusion one might reach about the extent to which a mark is inherently adapted to distinguish under s 41(3) of the Act. …
In assessing as at the priority date the “likelihood” that other traders will behave in a certain way in the future, evidence of how they have in fact come to behave will be relevant, although close attention should be paid to whether such rival behaviour has been “actuated only by proper motives”. In the absence of evidence of improper motive, however, it seems to me logical and appropriate that post priority date events should, where appropriate, be taken into account by decision-makers in exercise of the “evaluative judgment” (see French J in Kenman Kandy 122 FCR 494 at [47]) required under s 41(3).
(emphasis added.)
To like effect see Morrocanoil Israel Ltd v Aldi Foods Pty Ltd [2017] FCA 823 at [253] (which aspect was not overturned on appeal).
220 In other words, evidence of how traders have behaved after the priority date is relevant to the question of assessing, at the priority date, the likelihood that other traders will behave in a certain way in the future and to assessing the probability that, as at that date, other traders would wish to use the mark. However, the weight to be given to such evidence will vary and may not be decisive of the ultimate question that is, whether as at the priority date it is likely that other traders would want, in the ordinary course of their businesses and without improper motive, to use the same or a similar mark in connection with their own services.
221 The evidence of use and desire to use the term “community bank” by other traders after the Priority Dates is set out at [166]-[170] above. It includes evidence of numerous attempts by other traders to register trade marks including the words “community” and “bank” used conjunctively or separately and the term “community banking”. Only a handful of those have been successful in achieving registration. They are, putting aside any stylisation, “The Capricornian community owned banking”, “banking on community”, “G&C Mutual Bank banking on your community” “COMMBANK Community Hub” and “police bank community united”. In addition there is evidence of use by other traders of the terms “community bank” and “community banking” in describing their services.
222 Bendigo is critical of CFCU’s reliance on the evidence of Mr Tancevski and Mr Taylor as evidence of other traders’ desire to use the term “community bank”. That criticism is unfounded.
223 CFCU does not expressly rely on CFCU’s application for the CFCU Marks and its desire to use those marks in this part of its case. However, to the extent it does I do not accept that CFCU’s desire to use the CFCU Marks is actuated by improper motive.
224 Bendigo places reliance on Mr Tancevski’s evidence in cross-examination about arrangements to form what Mr Tancevski described as “a coalition of the willing”. The invitation to join the group came from Mr Taylor of G&C Mutual who in about 2014 or 2015 informed Mr Tancevski that G&C Mutual wished to try to get recognition of use of the term “community bank” for the sector. CFCU signed up and made a financial contribution to the group. In doing so, Mr Tancevski understood that CFCU was assisting G&C Mutual in the ability to use the term “community bank” in its trade marks going forward. At the time Mr Taylor informed Mr Tancevski that Bendigo claimed ownership in that term. Mr Tancevski explained that he wished to assist G&C Mutual in use of the term “community bank” so that CFCU could at some point in the future make similar use of the term in its name.
225 There was no evidence that the so called “coalition of the willing” was motivated by an improper purpose. The group so formed, with CFCU as a part of it, did not wish to take advantage of Bendigo’s reputation in its community bank branches or to prevent Bendigo from using the term “community bank”. Those traders wished to be able to use the term “community bank” in association with their existing trade names, some of which already incorporated the word “community”.
226 In relation to the CFCU Marks, Mr Tancevski candidly said that CFCU wished to have a monopoly in “Community First Bank” if it was able to register that trade mark, but did not say that he wished to preclude others from registering similar marks. To the contrary he said that CFCU would not object to the registration of “Australian Community Bank” as a trade mark by G&C Mutual or to any other credit union using the term “community bank” as part of their name. Similarly, by using the words “community” and “bank” in its name and, if able to do so, obtaining registration of the CFCU Marks, CFCU does not necessarily wish to stop Bendigo from using the Bendigo Word Mark.
227 Mr Tancevski explained that CFCU would like to move forward and register the CFCU Marks but, if it is unable to do so, it must take steps to remove the blockages. Mr Tancevski gave the following evidence in cross examination:
Q: Is it the point that you want to stop Bendigo Bank from using the trademark Community Bank. Is that what you want to do?
A: No, sir. Our view would be we would like to register our name, but in the absence of any opportunity to register our name and move forward, we have to then seek recourse to the blockages present to us today.
Q: Now, so is the point that you don’t – you don’t seek – you don’t wish to have Bendigo Bank cease to use its Community Bank trademark?
A: It would be our preferred position but not as a guaranteed outcome.
Mr Tancevski noted that CFCU wishes to be able to register as a bank without that process being stalled. It seeks to have Bendigo cease using the Bendigo Word Mark to enable it to do that. That is, so long as the Bendigo Community Marks remain on the Register, CFCU cannot progress its application to become a bank because it wishes to use the name or names the subject of the CFCU Marks.
228 By seeking to use the words “community” and “bank” as part of the CFCU Marks or otherwise, CFCU wishes to progress its business objective of converting from a credit union to a bank. Part of that process will be to change its name from its current name “Community First Credit Union” to a name that will signify its change in status to a bank. That is its motive in wishing to use “Community First Bank” or “Community First Mutual Bank”. That seems to me to be a logical change in name upon a change of status, particularly given the use of the name “Community First Credit Union” and the reputation that CFCU has in that name (as to which see [463] below). There is no improper motive on the part of CFCU in wishing to use the names the subject of the CFCU Marks. While, if able to register those marks, CFCU would have a monopoly in those names, it does not propose to prevent other traders, including Bendigo, from using the term “community bank” or the words “community” and “bank” in connection with their businesses.
229 Mr Taylor gave evidence about the desire of G&C Mutual to register “Australian Community Bank” as a trade mark and to register the G&C Composite Marks. I accept that Mr Taylor’s evidence shows, on the part of G&C Mutual, a genuine desire to use the term “community bank”. Contrary to Bendigo’s submission, G&C Mutual is not actuated by improper motive. That Mr Taylor accepted he was not impartial, and thus could not provide evidence as an expert, does not taint his evidence about the way in which G&C sought to identify a name going forward, the steps it took to register a trade mark for that name and why it wished to use that name. Mr Taylor’s evidence was that G&C Mutual did not wish to trade on Bendigo’s reputation in the term “community bank” nor to prevent Bendigo from using that term in connection with its services. G&C Mutual was looking for a way for its branding to co-exist with that of Bendigo.
230 Insofar as Mr Taylor’s discussions with other mutuals and the so called “coalition of the willing” developed by G&C Mutual in association with COBA are concerned, I accept Mr Taylor’s unchallenged evidence that the objective of these discussions and arrangements was not to prevent Bendigo from being able to use the term “community bank”. As CFCU submitted these discussions and the Undertaking, signed by a number of credit unions and mutuals, are evidence of a desire by other traders to describe the services they offer by reference to the term “community bank” and do not establish any intention on the part of other traders to trade off any reputation that Bendigo may have in that term.
231 Ms Morrison and Mr Lawrence do not give direct evidence of a desire by particular traders to use the term “community bank” but, in light of their respective roles, they are and have been able to provide evidence of a general desire on the part of industry participants to use that term and its aptness for use by the stakeholders and members of their respective organisations. To that extent, although it does not carry to same weight as the evidence of the desire of particular traders to use the terms “community bank”, I find their evidence to be persuasive.
232 I accept Ms Morrison’s evidence that “community bank” is an apt description of CMEs operating in the banking sector given that they are owned by community members, operate for the benefit of those members and provide banking services to communities. I also accept Ms Morrison’s evidence that it would follow that a credit union which has “community” in its name, upon becoming a bank, would wish to retain that word in its name. Mr Lawrence’s evidence is similar in nature. He understands from his discussions with COBA members that they wish to be able to call themselves community banks because to do so sets them apart from traditional banks and signifies their structure. He does not believe that in describing themselves as community banks COBA members would be trading off any reputation Bendigo has in that term given that they are well established in the community.
233 The ordinary signification of the term “community bank” is a provider of banking services or financial institution that serves a particular community, whether defined by geography, workplace, trade or other feature. It is directly descriptive of the Services. Further, the evidence establishes that other traders, not actuated by improper motive, might, and indeed did as at the Priority Dates, legitimately desire to use those words for their ordinary signification.
234 In those circumstances in my opinion, as at the Priority Dates, the words “community bank” and thus the Bendigo Community Marks were not inherently adapted to distinguish the Services from the services of others pursuant to s 41(3) of the TM Act.
4.1.2 Section 41(5) – trade marks to some extent inherently adapted to distinguish the Services
235 Section 41(5) of the TM Act permits registration of a trade mark that is not sufficiently inherently adapted to distinguish but that has, at the priority date, in fact acquired some capability to distinguish the relevant goods and services. That is, s 41(5) recognises that trade marks which are insufficiently adapted to distinguish may nevertheless have become distinctive in the minds of consumers so that they will be able “do the job of distinguishing” the applicant’s goods or services: see Sports Warehouse at [111]; Chocolaterie Guylian at [84].
236 Given my finding that the Bendigo Community Marks were not at the Priority Dates to any extent inherently adapted to distinguish the Services, s 41(5) has no application here.
4.1.3 Section 41(6) – factual distinctiveness
237 It is however necessary to consider s 41(6) of the TM Act. That section relevantly provides that if the Bendigo Community Marks are not to any extent inherently adapted to distinguish the Services from the services of other persons then, because of the extent to which Bendigo used the Bendigo Community Marks before the filing date of each application, they should be taken to be capable of distinguishing the Services from the services of others.
238 Section 41(6) focuses on use of the relevant marks as trade marks as at the filing date for the applications for registration of those marks and not on subsequent use. That is, it focuses attention on the extent to which Bendigo used the Bendigo Community Marks up to the Priority Dates. In Woolworths Ltd v BP plc (No 2) (2006) 154 FCR 97 (Woolworths) at [77] and [79] a Full Court of this Court said in relation s 41(6):
77 Whether or not there has been use as a trade mark involves an understanding from an objective viewpoint of the purpose and nature of the use, considered in its context in the relevant trade. How the mark has been used may not involve a single or clear idea or message. The mark may be used for a number of purposes, or to a number of ends, but there will be use as a trade mark if one aspect of the use is to distinguish the goods or services provided by a person in the course of trade from the goods or services provided by any other persons, that is to say it must distinguish them in the sense of indicating origin: see Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1961) 109 CLR 407 at 422-425; the Caplets case; Musidor BV v Tansing (1994) 52 FCR 363; Coca-Cola Co v All-Fect Distributors Ltd (1999) 96 FCR 107 at [19]-[20]; Sports Break Travel Pty Ltd v P & O Holidays Ltd (2000) 50 IPR 51 at [14]; Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd (2000) 100 FCR 90 at [12]; Aldi Stores Ltd Partnership v Frito-Lay Trading Co GmbH (2001) 190 ALR 185 at [22]-[23] and [76].
…
79 Before examining the evidence, it is important to appreciate that it is the use of the trade mark, as a trade mark, before the application date that determines what can be registered. The trade mark that is the subject of the application must conform with the trade mark that was used before the relevant filing date, because it is the extent to which that prior use has distinguished the designated goods or services as being those of the applicant which must be assessed. It is only where the extent of that prior use has had the consequence that the trade mark does distinguish the applicant’s designated goods or services from those of other persons that the trade mark is “taken to be capable” of so distinguishing the applicant’s goods or services: s 41(6)(a). If the prior use has not had that consequence, the trade mark is taken not to be capable of distinguishing the applicant’s goods or services and the application for registration must be rejected: s 41(2) and (6)(b). Under s 41(6), there is no wider inquiry into the capacity or adaptability of the mark to distinguish the applicant’s goods or services.
239 In Bohemia Crystal at [176], after referring to the decision in Woolworths, Burley J observed:
In this context, the correlation between use and distinctiveness requires careful consideration. In British Sugar plc v James Robertson & Sons Ltd [1996] RPC 281 at 302 Justice Jacobs explained:
There is an unspoken and illogical assumption that “use equals distinctiveness”. The illogicality can be seen from an example; no matter how much use a manufacturer made of the word “Soap” as a purported trade mark for soap the word would not be distinctive of his goods.
240 In Samuel Taylor Pty Ltd v Registrar of Trade Marks (1959) 102 CLR 650 at 657 the High Court stated that where there has been use during the, in that case, “protracted pendency” of the application for registration of the marks in relation to the relevant services, not alone “but only as part of a combination of words … it is difficult to see how the critical words could have acquired a distinctiveness of their own”.
241 The parties did not make any submissions as to who bore the onus of establishing that, because of the use of the Bendigo Community Marks prior to the Priority Dates, they distinguish the Services from those of others. However, implicit in the way in which the case was conducted, I infer the parties’ approach to be that, although it is for CFCU to establish a ground of opposition for the purposes of s 88(2)(a) and the TM Act, when it comes to s 41(6) it is Bendigo that must establish prior use. As Burley J recognised in Bohemia Crystal, that onus “would make sense, given that the owner of a trade mark has conferred upon it valuable monopoly rights that it ought to be in a position to defend” and practically, it is likely to be the only party able to adduce evidence of use prior to the filing date: at [172].
242 I turn then to consider the evidence of use of the Bendigo Community Marks prior to the filing dates of the applications for those marks, namely 8 February 1999 for the Bendigo Device Mark and 24 August 2001 for the Bendigo Word Mark (the Priority Dates).
4.1.3.1 The evidence of use by Bendigo
243 Bendigo relied on a “book of usage” in which it identified all of the references to which it said the Court might wish to have regard in relation to its use of the Bendigo Community Marks (Usage Book). Bendigo informed me that the evidence to which it wished me to have regard with respect to the use of the Bendigo Community Marks (both before and after the Priority Dates) was confined to the material referenced in the Usage Book and any additional material referred to in its submissions.
244 The Usage Book includes material commencing in 1998 and up to October 2018 in which there is reference to the term “community bank”. I note that some of this material, which is included below, includes highlighting which was present on the material at the time of its tender. In summary, the material in the Usage Book dated up to 24 August 2001 (the filing date of the Bendigo Work Mark) comprises and makes reference to the following:
(1) for 1998, approximately 38 newspaper articles, one flyer announcing the “Community Bank opening” at Rupanyup and Minyip and a print advertisement for the opening of the “Lang Lang Community Bank Branch of Bendigo Bank”. The material for 1998 also includes a printout from the “Henty & District Community Bank Branch” Facebook page showing internal branch signage. However, I am unable to infer that this signage dates from 1998 given that the Facebook printout is dated 9 June 2018.
By way of example:
(a) the newspaper articles published at that time included:
(i)
(ii)
(b) the flyer for the opening of the “Community Bank” in Rupanyup and Minyip is as follows:
(2) for 1999, approximately 42 newspaper articles, three print advertisements in relation to the opening of various community bank branches and an example of branch signage:
(a) two of the announcements for the opening of a branch were in a similar format. One example of such an announcement is as follows:
(b) an example of an article published in The Area News on 22 January 1999 is as follows:
(3) for 2000, approximately 36 newspaper articles, one media release, one print advertisement for the opening of a branch, in substantially the same form as the example set out at (2) above, and one example of branch signage:
(a) the example of branch signage is as follows:
(b) an example of an article published in that period is as follows:
(4) for 2001, approximately 15 newspaper articles including, by way of example, the following:
(a)
(b)
(5) other materials listed in the Usage Book which, insofar as they are dated in the period up to the relevant dates, comprised:
(a) the Elwood Prospectus for the raising of funds for the “establishment and operation of a Community Branch of Bendigo Bank” ( see [156] above). It refers to the “Elwood Community Branch of Bendigo Bank” and “Elwood Community Branch - Bendigo Bank” ;
(b) Mr Hunt’s evidence about sponsorships provided by local franchisees, which relevantly included:
(i) sponsorship of the Henley Sailing Club by the local franchisee in 2001 and subsequently in 2003, 2007 and 2008 years. A photograph of the signage at the Henley Sailing Club was in evidence, but Mr Hunt was unaware of the date on which it was taken. A handwritten note appearing on the photograph suggests that the sign was erected in 2011, on the 100th birthday of the club; and
(ii) sponsorship of the Upwey Tecoma football and netball clubs by the local franchisee in 2000 and 2002-2009. Photographs of the signage which were in evidence are part of a “DRCBG external sign audit of sponsored clubs – May 2012” and I would infer were taken as part of an audit in 2012;
(c) marketing and promotional material published by local franchisees which was provided to Bendigo by those franchisees at about the dates shown in the publications and which relevantly included:
(i) an advertisement published in The Gazette on 7 October 1998, which Mr Hunt described as promoting the banking and financial services of Bendigo. It appeared as follows:
(ii) a newsletter dated 15 December 2000 in relation to the recently opened Bendigo Community Bank Branch at East Gosford. Mr Hunt said that, in most cases, newsletters of this type are sent by the franchisees to their shareholders. The newsletter was headed:
(iii) a flyer from March 2001 which promoted a free seminar at Bendigo’s Bayswater Community Bank Branch which appeared as follows:
(iv) newsletters of the franchisees in Rupanyup/Minyip and Virginia & Districts dated 5 February 2001 and 19 January 2001 respectively. The headers of the newsletters were, save for the reference to the locality of the branch, the same as for the newsletter for East Gosford depicted at (ii) above.
245 Mr Hunt put into evidence a bundle of press material for the period 1998 to 2008 featuring articles on Bendigo’s community bank franchise banking model which were collected by Bendigo or provided to it by franchisees from time to time. Much of this material was included in or referenced in the Usage Book. In total there were approximately 270 articles and/or media items in evidence of which approximately 150 related to the period from 1998 to August 2001. From that material, in addition to that already set out above, Bendigo highlighted the following in its submissions:
(1) an article appearing in The Buloke Times published on 29 May 1998 titled “Assessing the Viability of a Community Bank”;
(2) an article published on 10 June 1998 titled “Community bank for Toora?”;
(3) an article appearing in The Area News published on 2 October 1998 titled “Green light for bank plan”;
(4) an article appearing in the Coly-Point Observer published on 7 October 1998 titled “Green light for Coleambally community bank survey”;
(5) an article appearing in the Upper Yarra Guardian Mail published on 13 October 1998 titled “Move for Warburton community bank”; and
(6) an article appearing in the Sunday Herald Sun published on 18 October 1998 titled “Upwey’s bank is up and running” (see [246] below).
246 Mr Hunt was cross-examined about a number of the newspaper articles published in the period from 1998 to August 2001. He agreed that the content of those articles was not controlled by Bendigo and that they included a number of different types of use of the term “community bank” including descriptive uses referring to “community bank” without capitalisation or any other formatting and no reference to Bendigo. Mr Hunt also agreed that at times the journalists misunderstood the Bendigo community bank franchise banking model, and described it as a community-owned bank as opposed to a community-owned branch. The articles to which Mr Hunt was taken included:
(1)
(2)
247 Bendigo also relied on data about the extent of and level of business generated by the community bank franchise business as evidence of use of the Bendigo Community Marks.
248 In terms of growth of the community bank franchise business, in the period 1998 to August 2001 Bendigo opened 47 community bank branches:
(1) five branches in 1998;
(2) 14 in 1999;
(3) 14 in 2000; and
(4) 14 in 2001 up to 13 August 2001.
249 Mr Rutter gave evidence about, among other things, the level of business generated by Bendigo’s community bank franchise business in the period leading up to the application dates for the Bendigo Community Marks. Mr Rutter has been employed by Bendigo since 1999 and since 2016 has held the role of senior manager of customer operational and performance reporting. The customer operational and performance reporting team provides performance reporting to Bendigo, including in relation to its community bank branches. Mr Rutter and his team have access to various databases from which Mr Rutter extracted performance data for the purpose of these proceedings.
250 That data included:
(1) total business generated by community banks including customer loans, deposit accounts and other business relating to specialised product accounts such as margin lending, superannuation, managed funds and debtor finance as well as referrals to other Bendigo group branded products; and
(2) total marketing and development fund contributions made by Bendigo to its community bank branches. Mr Rutter explained that Bendigo may make discretionary financial contributions to companies operating a community bank branch for the purpose of assisting them with local marketing and development activities. Those payments are described for accounting purposes as “Market Development Fund” (MDF) payments.
251 Relevantly, the figures extracted by Mr Rutter for the period up to the relevant dates include:
As at | Community bank branches - total business (rounded to nearest million) | Income paid by Bendigo to community bank branches (rounded) |
30 June 1999 | $111 million | $322,000 |
30 June 2000 | $355 million | $2.4 million |
30 June 2001 | $802 million | $6.8 million |
I have not reproduced the MDF payments made by Bendigo for each year as Mr Rutter claims those figures are confidential. However, I note that while those amounts increased over the three year period, by a significant percentage year-on-year, they can only be described as modest when compared to the total business written in each year.
4.1.3.2 The parties’ submissions
252 CFCU submitted that the majority of Bendigo’s uses at the relevant dates were of the Bendigo Composite Mark, which could not be relied on to prove separate use of either the Bendigo Device Mark or the Bendigo Word Mark and that some of the uses relied on by Bendigo are not uses in relation to the Services. CFCU further submitted that material relied on by Bendigo which post-dates the relevant dates cannot confer factual distinctiveness as at those dates.
253 CFCU contended that, insofar as the informal uses before the relevant dates include newspaper articles, upon analysis many of those are simply descriptive uses of the term “community bank”, as Mr Hunt readily agreed. It pointed out that many uses of the term “community bank” are not in capitals; even where capitalised, the context is descriptive; all of the articles make explicit the connection with Bendigo; and many include photographs of the signage.
254 Bendigo submitted that its early use of the term “community bank” was evolving, including throughout the period that it was liaising with the RBA, and that each of the Bendigo Device Mark and the Bendigo Work Mark were applied for and used after it had a number of branches. It submitted that there were a number of trade marks in use, the Bendigo Bank marks which identified the banking services and the Bendigo Community Marks which identified the branches for, or in which, the banking services were conducted.
255 Bendigo further submitted that reliance on Mr Hunt’s evidence on trade mark usage must be approached with the understanding that he is not a trade mark lawyer and had no role in the filing of trade marks nor intimate knowledge of the applications made. Bendigo contended that, rather, the matter should be decided on the objective presentation of the trade marks from a perspective which accords with the TM Act, fortified by Mr Hunt’s evidence about the corporate history of usage. It submitted that it was clear that, upon a full review of Mr Hunt’s evidence, his comments about the Bendigo Composite Mark and its use by Bendigo were limited to his understanding of the developmental stages of the community bank concept and that Mr Hunt remained convinced that the brand had evolved and that there were other ways to distinguish the brand. Bendigo noted that it was never put to Mr Hunt that there had been no use by it of the Bendigo Device Mark or the Bendigo Word Mark and that he was not challenged on issues about usage as at 2001, the Priority Date of the Bendigo Word Mark.
256 Bendigo submitted that its use of the Bendigo Community Marks stands in stark contrast to the use made of the marks described in Colorado Group Ltd v Strandbags Group Pty Ltd (2007) 164 FCR 506 at [110] and in Bohemia Crystal at [227]-[229], and that this case was more akin to the position described in Accor at [215]-[225] and the treatment in that case of the marks “Cairns Harbour Lights” and “Harbour Lights” when used in combination with the words “The Sebel”. In that regard, Bendigo noted that the Bendigo Community Marks are not used with the same proximity to the “Bendigo Bank” mark as the marks considered in Accor. Bendigo submitted that, even if the Court was to accept that the words “community bank” formed part of a composite mark, a sign may be registrable as a trade mark even though it is used together with another trade mark, citing Alcon v Bausch & Lomb (Australia) Pty Ltd (2009) 83 IPR 210; [2009] FCA 1299
257 The issue for consideration is whether Bendigo used the Bendigo Community Marks as trade marks prior to the relevant dates such that they became capable of distinguishing the Services. If so Bendigo is entitled to their registration.
258 In my opinion the evidence relied on by Bendigo and set out above does not establish use by Bendigo of the words “community bank” up to August 2001 as a trade mark. That is so for the following reasons.
259 The lack of evidence of use of the Bendigo Device Mark prior to February 1999 did not appear to be in dispute. To the extent that it was in use, no evidence of such use was before me.
260 The parties’ focus was on the Bendigo Word Mark. Insofar as that mark is concerned, I am not satisfied that Bendigo’s use of the term “community bank” before August 2001 would have appeared to consumers of the Services as possessing the character of a brand. Where Bendigo or its franchisees used those words, in almost all cases they were used in conjunction with the B Bendigo Mark or in close proximity to it. Critically, in my opinion, in most cases what was presented and used was the Bendigo Composite Mark, and not the Bendigo Word Mark as a trade mark. Even if that was not so, the presence of the B Bendigo Mark or Bendigo branding on the vast majority of the material makes it difficult to conclude that “community bank” had become distinctive of the Services on its own by August 2001.
261 Mr Hunt gave evidence about use of the Bendigo Community Marks prior to the dates of the applications for their registration. He said that the B Bendigo Mark often appeared with the Bendigo Word Mark, the use of the two marks was to establish and reinforce the connection between Bendigo’s banking services and the Bendigo Word Mark in consumers’ minds and this was done for marketing reasons and to meet the RBA’s requirements.
262 Mr Hunt also said that when the first community bank branch opened in 1998 he believed that “community bank” was an unknown financial institution and brand and that in order to explain and reinforce the relationship with Bendigo he decided that the B Bendigo Mark should, at least initially, feature with the Bendigo Word Mark. Mr Hunt acknowledged that the RBA required that there be a connection with Bendigo, as set out in the correspondence referred to at [137]-[141] above.
263 In cross-examination, Mr Hunt accepted that the RBA required clarity about the relationship between Bendigo and the franchise branches. He also accepted that the depiction of the way in which the community bank branches would be branded, which was provided to the RBA in October 1997, included all of the elements of the Bendigo Composite Mark, but insisted that at the time the branding was at a conceptual level and that Bendigo was trying to work up the model. While Mr Hunt accepted that the Bendigo Composite Mark achieves the link between the community bank branch and Bendigo as required by both the RBA and Bendigo, he thought there were other ways of achieving that link which “are more widely used”. He referred to refinement of the branding as the project progressed and gained momentum.
264 Bendigo submitted that I would treat Mr Hunt’s evidence about trade mark usage on the understanding that he is not a trade mark lawyer and had no role in the filing of trade marks nor intimate knowledge of the applications made. I accept that Mr Hunt is not a trade mark lawyer and thus does not have an understanding of the applicable principles relating to questions of use and that, as managing director, Mr Hunt’s knowledge about registration of various trade marks was at a high level. However, the community banking franchise model was conceived by Mr Hunt after detailed consideration and research and was brought by him to the Bendigo board for its consideration. Mr Hunt was intimately involved in the project and was keen to protect Bendigo’s investment. To that extent he had considerable knowledge about the way in which the model would work, negotiations with the regulator and how it could and would be presented to relevant consumers.
265 While there may have been “refinement” and “evolution” of the branding since 1998, it is difficult to accept that, having informed the RBA that it would represent the community bank branches in a particular way and having received the RBA’s acceptance of that form of representation, Bendigo would then move away from it. That it applied for and successfully registered the Bendigo Composite Mark, which met the RBA’s requirements, suggests that it intended to brand the community bank branches as agreed with the RBA.
266 Indeed, Mr Hunt agreed that it was the Bendigo Composite Mark that was predominantly used in connection with the community bank branches. That evidence was not surprising. As Mr Hunt said there was a need to reinforce the connection between the franchised branches and Bendigo as the provider of the services given regulatory requirements and to “reinforce” the relationship between the branches and Bendigo. But, in my opinion, it was more than reinforcement. As at 1998, as acknowledged by Mr Hunt, “community bank” had no reputation as a brand. It was only when used in combination with the Bendigo Bank name that consumers could identify the source of the Services.
267 A review of the articles relied on by Bendigo, some of which are extracted in these reasons, shows that the authors of the articles often used the term “community bank” not in its capitalised form but as a descriptor, as Mr Hunt agreed; the term was also used in conjunction with “Bendigo”, for example “Bendigo Community Bank” branch or branches; and the articles included photographs which showed the B Bendigo Mark and/or the signage at a particular branch which was in the form of the Bendigo Composite Mark. As Mr Hunt accepted, Bendigo had no control over the content of these articles. The articles taken as a whole do not establish use of the Bendigo Word Mark as a trade mark so as to distinguish the Services as at the Priority Dates. At best the articles show that from time to time the author would use the capitalised term “Community Bank” as opposed to the descriptor “community bank” when referring to a branch. But there was no consistency in use nor could it be said that as time passed there was more use of “Community Bank”, independent of reference to Bendigo, when referring to the franchised branches.
268 Bendigo also relies on the number of branches opened prior to August 2001and the volume of business generated, the income paid by it to its community bank branches and the MDF payments made by it as evidence of use. There is no doubt that the community banking franchise concept was popular and that in the period up to August 2001 there was growth in the number of branches and considerable growth in the volume of banking business that was written at the branches. However, this of itself does not evidence use of “community bank” in the relevant sense. It is evidence of the popularity of the concept, its viability and the investment made by Bendigo at least in relation to its MDF contributions.
269 Bendigo relies on the decision in Accor. It contends that this case is analogous to the situation that arose there and that the Full Court’s treatment of the issue in that case would equally apply here. The facts of that case are complicated but, relevantly, in 2009 Cairns Harbour Lights Pty Ltd (CHL), a property developer, had obtained registration of the trade marks “Harbour Lights” and “Cairns Harbour Lights” for services in class 36 and class 43. CHL had developed a residential apartment complex in Cairns known as “Harbour Lights” or “Cairns Harbour Lights” which comprised residential apartments and a retail section. The residential part of the development comprised two community titles schemes referred to as the “Residential Scheme” and the “Managed Scheme”. In December 2004, CHL caused the body corporate for each of the Residential Scheme and the Managed Scheme to enter into agreements with Mirvac Hotels Pty Ltd (Mirvac) pursuant to which Mirvac was granted exclusive rights to provide on-site letting and other services. In addition CHL entered into agreements with Mirvac by which it appointed Mirvac to manage the two schemes, including to provide the “Services”, on completion of construction. In 2010 CHL and Mirvac entered into a trade marks licence pursuant to which Mirvac was granted a licence to use the “Harbour Lights” and “Cairns Harbour Lights” trade marks in the provision of the “Services”. In 2012 there was a change in shareholding in Mirvac and it changed its name to Accor Australia & New Zealand Hospitality Pty Ltd (Accor). The third respondent to the appeal, Ms Bradnam, operated a business involving short and long-term letting and sales of apartments in the Residential Scheme and the Managed Scheme. She registered a number of domain names in connection with that business which included the words “Cairns” and “Harbour Lights”. Ms Bradnam subsequently sold her business to the first respondent to the appeal, Liv Pty Ltd (Liv).
270 At first instance the respondents, by cross-claim, sought rectification of the Register under s 88 of the TM Act by cancellation of the trade marks registered by CHL on a number of bases, including by reliance on s 41, because the trade marks were not capable of distinguishing the services of CHL or Accor from the services of others, and on s 58 of the TM Act, because CHL was not the owner of the trade marks. The respondents were successful in having the Register rectified by cancellation of the “Cairns Harbour Lights” trade mark and amended in relation to the “Harbour Lights” trade mark so as to remove certain services within class 36 and class 43 from its registration. That decision was appealed to a Full Court of this Court.
271 Among other issues, the Full Court considered the question of whether CHL owned the trade marks at the date of the application. Bendigo relies on the findings of the Full Court at [215]-[225], where the Full Court considered, in the context of the ownership issue, the use of the trade marks by CHL. In doing so, one of the issues that arose concerned an advertisement dated 17 December 2005 which incorporated the following image:
272 The Full Court considered whether use of this image was use of a mark substantially identical to the trade mark “Harbour Lights”. At [221]-[222] the Full Court noted that the primary judge answered that question in the negative, concluding that the words “The Sebel Harbour Lights” is a single sign to be viewed as a single phrase with the “The Sebel” adding distinctiveness to the phrase which represented a substantially different trade mark to “Harbour Lights” or “Cairns Harbour Lights”. At [223] the Full Court noted that the advertisement contained a number of features as follows:
…First, the advertisement displayed “HARBOUR LIGHTS” in another place within the advertisement although in a different format (which we consider not to be a composite mark). Nevertheless, the viewer is drawn to the words “HARBOUR LIGHTS” as a cognitive cue in the advertisement by other means as well. Second, the format adopted at [215] of these reasons separates out the words “THE SEBEL” and underneath those words, the words “HARBOUR LIGHTS” appear. In the format adopted, “HARBOUR LIGHTS” is another cognitive cue. Again, the viewer’s attention is drawn to the mark “HARBOUR LIGHTS” although, at this point in the advertisement, it is positioned in association with the hotel operator’s own trade mark “THE SEBEL”. The presentation of the two marks (as described by the primary judge at [124] and [125], although in the context of the May 2005 brochure), “THE SEBEL” and “HARBOUR LIGHTS” in that way is not simply a single continuous phrase of text or a composite or compound expression relevantly analogous to a substantial lack of identicality found in the comparison between words such as “Funship” and “Sitmar’s Funship” or “Funship” and “Fairstar The Funship”. Third, the advertisement also contains a reference to the words “Cairns Harbour Lights Pty Ltd” as the name of the developer not “The Sebel Cairns Harbour Lights Pty Ltd”.
273 At [225] their Honours concluded that in the context of the advertisement overall they would not consider the presence of the mark “The Sebel” as conveying use of a trade mark which is not substantially identical to the mark “Harbour Lights” and that the advertisement uses the words of the trade mark. The Full Court said that the use of the mark “The Sebel” immediately above the words “Harbour Lights” simply tells the viewer that there is relationship between the developer and an accommodation operator described by reference to that operator’s trade mark.
274 Bendigo’s point is that use of the B Bendigo Mark with “community bank” in the examples of use before the Court is, by analogy, not use of a different mark or the Bendigo Composite Mark but use of the Bendigo Word Mark, and that the inclusion of the B Bendigo Mark simply tells the consumer that there is a relationship between the community bank and Bendigo. However, in the context of the case before me I do not accept that is so. The use of the B Bendigo Mark with “community bank” was not confined to use in connection with a single branch as seemed to be the case in Accor, which was concerned with the use in relation to the Harbour Lights complex only. That combination appeared on almost all material published by Bendigo that is in evidence before me and all branch signage. Further, as set out at [263] above, the combination of Bendigo Bank and “Community Bank” was required by the RBA and was the subject of a different trade mark registered by Bendigo at the relevant time: the Bendigo Composite Mark.
275 I accept that from time to time “Community Bank” was used independently in the sense that there was no reference to Bendigo or it was in a form that did not constitute use of the Bendigo Composite Mark despite the presence of the B Bendigo Mark. An example of the former is the article at [244(4)] titled “Dick Smith to help us celebrate”. That article, published in 2001, reports that “well known Australian Dick Smith has accepted an invitation to officially open the Boorowa Community Bank on Saturday 12 May”. The article then discusses Mr Smith’s career and achievements. It makes no reference to Bendigo. An example of the latter is the flyer for the opening of the “Community Bank[s]” at Rupanyup and Minyip (see [244(1)] above).
276 However, having regard to the totality of the evidence, those uses are not sufficient to establish use of the Bendigo Community Marks as trade marks. Those uses do not distinguish the Services from the services of other traders in that they are not of themselves sufficient to indicate the origin of the Services in Bendigo. This is because even while there is purported use of the Bendigo Word Mark as a trade mark, in the vast majority of cases there is reference to Bendigo, or use of the B Bendigo Mark or “Bendigo Bank” in close proximity to that former mark. It is unlikely, if not impossible, that a typical consumer exposed only to the Bendigo Word Mark before August 2001, in isolation of the indicia of Bendigo that typically accompanied the mark, would be caused to associate the Services with Bendigo.
277 Finally, Bendigo submitted that there was a certain unreality about challenges made almost 20 years after registration which raise issues about evidence of use at and around the time of registration and which is necessarily limited by access to documents and limitations on recollections. It said that the absence of challenge over such a long period should weigh in its favour.
278 There was no evidence before me that Bendigo had difficulty in obtaining evidence of use prior to the relevant dates. In fact, given the nascent stage of the community banking franchise business, there was a relatively large amount of material. To the extent Bendigo submits that material was limited, that is explained by the relatively short period in issue, 1998 to August 2001, and by the fact that the concept and new business was in its infancy. I accept that memories may fade over time but Bendigo relied principally on Mr Hunt to give evidence of use over this period. Despite the passing of time Mr Hunt was able to explain in great detail the project and how it developed and to discuss the areas in which the initial branches were opened and how in his view the term “community bank” was used. There is no reason why the absence of challenge over a 20 year period should or would count in Bendigo’s favour on this issue.
279 Bendigo has not satisfied me that, because of the extent to which it used the Bendigo Device Mark or the Bendigo Word Mark before the relevant filings dates, they do distinguish the Services as being those of Bendigo. Thus s 41(6)(b) of the TM Act applies such that neither the Bendigo Device Mark or the Bendigo Word Mark is taken to be capable of distinguishing the Services from those of others.
4.1.4 Conclusion on ss 88(1)(a), 88(2)(a) and 41
280 It follows that the Bendigo Community Marks were not capable of distinguishing the Services from the services of others as required by s 41(2) of the TM Act as at the Priority Dates. Given the conclusion and subject to the exercise of my discretion under s 88(1) and the operation of s 89 (in relation to which see [385]-[403] below), it is not strictly necessary for me to consider the balance of the grounds raised by CFCU for the purposes of s 88(2)(a). However, I do so for completeness.
4.2 Sections 88(1)(a), 88(2)(a) and 43 of the TM Act – connotation
281 CFCU next relied on s 43 of the TM Act as a basis on which it could have opposed the Bendigo Community Marks as at the Priority Dates.
282 Section 43 of the TM Act provides:
Trade mark likely to deceive or cause confusion
An application for the registration of a trade mark in respect of particular goods or services must be rejected if, because of some connotation that the trade mark or a sign contained in the trade mark has, the use of the trade mark in relation to those goods or services would be likely to deceive or cause confusion.
283 As with its case under s 42(b) of the TM Act (which I address commencing at [333] below), CFCU puts its case under s 43 in the alternative to its primary case under s 41 of the TM Act. It contends that as at 8 February 1999 and 24 August 2001 the words “community bank” in the Bendigo Device Mark and the Bendigo Word Mark connoted:
(1) the ordinary English meaning of each of the words “community” and “bank” and of the phrase “community bank” and the signification that those words bore as a matter of ordinary language; and/or
(2) that the person offering the Services pursuant to the Bendigo Device Mark or the Bendigo Word Mark, as applicable, is a bank which is owned and managed locally and which serves the needs of the local community.
284 As a result of the connotations set out in the preceding paragraph CFCU contends that use by Bendigo, or any of its franchisees, of the Bendigo Device Mark and the Bendigo Word Mark in relation to the Services as at 8 February 1999 and 24 August 2001 respectively was likely to deceive or cause confusion within the meaning of s 43 of the TM Act because Bendigo was not a “community bank”, as defined, at those times.
285 In relation to the meaning of “community bank”, in [22P]-[22S] and relevantly [23] (for the Bendigo Device Mark) and [51B] (for the Bendigo Word Mark) of its further amended statement of claim (FASOC), CFCU contends that:
22P In about 1997, [Bendigo] set about to develop and implement a new banking strategy because of the significant increase in bank branch closures that were occurring at that time, including in suburban, rural and regional areas of Australia.
22Q [Bendigo] established a franchise banking model where:
(a) Local people have the opportunity to set up a locally owned company to operate a bank branch of [Bendigo];
(b) The locally owned company raises the start-up capital required to enter into the franchise relationship with [Bendigo] by offering shares to the public in the company (not Bendigo);
(c) People who invest in the locally owned company become shareholders in the locally owned company; and
(d) The locally owned company is granted the right to manage and operate a bank branch of [Bendigo].
22R The words of the [Bendigo Device Mark] are comprised of the words “community” and “bank”, which as at each of 8 February 1999 and 24 August 2001 possessed their ordinary English meaning and signification.
22S As at each of 8 February 1999 and 24 August 2001, the words “community bank” combined had the meaning a bank which is owned and managed locally and which serves the needs of the local community.
Particulars
(a) Macquarie Dictionary definition.
(b) Further particulars may be provided.
23 By reason of the facts, matters and circumstances pleaded in paragraphs 22P to 22S, as at 8 February 1999, it was understood by consumers and the general public that a community bank was:
(a) a bank authorised by the regulatory authority that is a customer-owned institution not an investor owned institution;
(b) where the customer-owned institution is 100% owned by its customer members;
(c) where profits go to and are shared by the local community owners and not to a large banking institution that is independent of both the local institution and the local community owners;
(d) where losses are shared by, the institution, and thereby the local community owners; and/or
(e) an institution that exists solely to serve its customers/members and not to maximise returns to shareholders.
286 Paragraph 51B of the FASOC is substantially in the same terms as [23] of the FASOC save that it contends that the general public and consumers had the pleaded understanding of the term “community bank” as at the priority date for the Bendigo Word Mark, 24 August 2001.
287 In Primary Health Care Limited v Commonwealth of Australia [2017] FCAFC 174 (Primary Health Care) at [14] Greenwood J identified two questions to be considered under s 43: first, “whether the trade mark, sought to be registered, has ‘some connotation’” and therefore engages s 43; and secondly, if s 43 is engaged “whether ‘because of [that connotation]’, use of the trade mark, in relation to the relevant goods or services, in a forward-looking way, ‘would be likely to deceive or cause confusion’”.
288 At [103] of Primary Health Care Katzmann J said:
There was no dispute that “connotation” signifies a secondary meaning: see Pfizer Products Inc v Karam (2006) 219 FCR 585 at [53]. A “connotation” in the proposed trade mark must be identified before the section is engaged: McCorquodale v Masterson [2004] FCA 1247; (2004) 63 IPR 582 at [25] (Kenny J) citing T.G.I. Friday’s Australia Pty Ltd v TGI Friday’s Inc (2000) 100 FCR 358 at 365.
289 At [113] Katzmann J observed that s 43 is “concerned with whether the mark the subject of the application (or a sign contained in the mark) connotes something other than a connection in the course of trade between the relevant goods or services and the person who applied (or intended to apply) it to those goods or services”.
290 In Pfizer Products Inc v Karam (2006) 219 FCR 585 at [53] Gyles J said:
“Connotation” is a secondary meaning implied by the mark. The likelihood of deception or confusion must flow from the secondary meaning inherent in the mark itself. It is apparent that the underlying purpose of s 43 is a similar purpose to that lying behind ss 52, 53 and 55 of the Trade Practices Act 1974 (Cth). It is to prevent the public being deceived or confused as to the nature of the goods offered by reason of a secondary meaning connoted by the mark in question, rather than, for example, deception by reason of similarity with other marks (TGI Friday’s Australia Pty Ltd v TGI Friday’s Inc (2000) 100 FCR 358 at [43]; McCorquodale v Masterson at [25]-[26]). …
291 Sections 43 is directed to the mark itself. That is, it is concerned with whether the mark in question, and not some other mark, will deceive or cause any confusion: see Winton Shire Council v Lomas (2002) 119 FCR 416 at [19] (this point was not overturned on appeal: Lomas v Winton Shire Council [2002] FCAFC 413).
292 There was a degree of commonality between the evidence relied on for the purposes of this ground and that used to establish a ground of objection under s 42(b) of the TM Act (addressed below from [333]). It is thus useful to set out the totality of the evidence relied on by the parties for the purposes of both grounds.
293 CFCU relies on the definition of “community bank” found in the 2003 edition of the Macquarie ABC Dictionary and, as a secondary source, its meaning based on evidence given by Ms Morrison and Messrs Taylor and Lawrence.
294 The 2003 edition of the Macquarie ABC Dictionary included the following definition of “community bank”:
community bank
/’-- bæŋk/
noun a bank which is owned and managed locally and which serves the needs of the local community.
Usage (econ): This kind of banking entity existed in the past and has recently re-emerged. It is argued that this is in response to bank mergers and a public perception of lack of community concern on the part of the major banks, as shown in the closing down of local bank branches especially in rural areas. An example in Australia is the Bendigo Bank in Victoria, which, in 1998, began a system where a local community can own and operate a community branch of the bank.
295 CFCU served a subpoena on Pan Macmillan Australia Pty Ltd (Pan Macmillan), the publishers of the Macquarie Dictionary, in which it sought production of:
1. All documents that include the term “community bank”.
2. All documents that comprise the research conducted for the purposes of considering whether or not to include the term “community bank” in the Macquarie Dictionary.
3. All documents regarding the inclusion of “community bank” in the Macquarie Dictionary.
4. All documents that comprise the research regarding the etymology of the term “community bank”.
5. All documents that record the date on which the term “community bank” was first included in the Macquarie Dictionary.
6. All documents that comprise the research undertaken to establish that the term “community bank” was in general usage in Australian English before its inclusion in the Macquarie Dictionary.
7. All documents that record that the term “community bank” has general currency in other varieties of English other than Australian English.
8. A copy of the in-house computer notebook for each entry of the term “community bank”.
(emphasis in original.)
296 Documents produced in answer to that subpoena were in evidence. They included a summary of the material produced by Pan Macmillan which I infer was prepared by Pan Macmillan. In relation to categories 2, 3, 4 and 6, as set out above, the summary indicated that any notes concerning research conducted into the term “community bank”, its etymology and general usage prior to its first inclusion in the Macquarie Dictionary had not been retained.
297 An email dated 14 September 2005 from Victoria Morgan, assistant editor, Macquarie Dictionary to S McKinnon at FB Rice explained that:
Data and citations regarding the term ‘community bank’ have been collected over the past few years but it was not added to our database until February 2003. It first appeared in one of our print publications, Macquarie ABC Dictionary, which was published in October 2003.
298 Pan Macmillan produced correspondence between it and Allens Arthur Robinson, who were at that time the solicitors for Bendigo, commencing in January 2006. In their initial letter dated 20 January 2006, those solicitors noted that Bendigo was the registered owner of the Bendigo Word Mark and that “community bank” had appeared in the Macquarie ABC Dictionary in October 2003 and was to appear in the fourth edition of the Macquarie Dictionary with a publication date of October 2005. The letter continued:
Our client is seriously concerned about any reference in any of your publications to the term ‘community bank’ in a context which might suggest this is a generic term free for all to use when in fact COMMUNITY BANK is a registered trade mark of Bendigo Bank Limited. Accordingly, our client has the exclusive right to use the COMMUNITY BANK trade mark and to authorise other persons to use it in relation to the services covered by the registration.
In view of the above, please confirm that you will take immediate steps to delete any reference to the term ‘community bank’ from any of your future publications or at least properly acknowledge its status as a registered trade mark of our client.
299 On 29 March 2006 Susan Butler, publisher, Macquarie Dictionary, responded to Allens Arthur Robinson’s letter of 20 January 2006 in the following terms:
We had a meeting of the Editorial Committee of the Macquarie Dictionary yesterday at which the issue of the status of the term community bank was discussed.
The difficulty is that we can find many instances (in newspaper reports, for example) of community bank used generically, even though the discussion then usually winds around to Bendigo Bank as the principal exponent in Australia.
We also find community banking, a term which is not trademarked. A derived form like this is an indicator to a linguist of a form which has an independent life in Australian English, so it is doubly significant.
In addition there is the fact that, to the best of our knowledge, there is no other generic term. Can I point to the example of Coca Cola, which, faced with the possibility that their trademark might enter into generic use, cultivated the use of the generic term cola drink.
You might like to suggest a similar alternative to community bank?
(emphasis in original.)
300 On 13 April 2006 Allens Arthur Robinson responded to Ms Butler’s letter. It is not necessary to set out that response in any detail. Among other things, the response took issue with the statement that the editorial committee could find many instances of generic use of the term “community bank”, noting that it was a matter for a court to determine whether a registered trade mark is generic, and requested that immediate steps be taken to “acknowledge the status of Community Bank® as a trade mark of our client, Bendigo Bank Limited, if you include this trade mark in any future publication”.
301 By email dated 26 June 2006 Ms Butler responded to Allens Arthur Robinson’s letter of 13 April 2006. In that email she relevantly said:
Just to clarify what the dictionary does and doesn’t do - we do not decide that something is a generic term and no longer a trademark. What we do is observe the currency of use of a term in the language community as a generic, whether or not this has been legally decided. It is the dictionary’s task to record the words used by a community. It is your task to fight legal battles to defend trademark status.
We do acknowledge the use of the term as a trademark in the etymology field - what lies between the square brackets at the end of the entry.
We agree that that etymology is not given in the 4th edition but will be from now on. The acknowledgement of the origin of a word is not to be taken as a legal injunction - the dictionary is not the place to turn to for definitive information about the legal standing of a trademark. But as etymological information of some significance it should be there and will be from now on.
(emphasis added.)
302 While as observed at [296] above, Pan Macmillan had not retained any of its research notes into the etymology and currency of use of the term “community bank” or in relation to its inclusion in the 2003 edition of the Macquarie ABC Dictionary, Ms Butler’s response suggests that at least by 2003 the term had some currency of use in the community such that it was included in the dictionary in 2003.
303 Another source of meaning of “community bank” relied on by CFCU was evidence of Ms Morrison and Messrs Taylor and Lawrence.
304 Ms Morrison explained that when she uses the terms customer-owned, member-owned and community-owned she means the same thing. In Ms Morrison’s opinion, which she says she has held since about 2001, the words “community bank” describe a type of bank that is different to an investor-owned bank, and where:
(1) the members have democratic rights in the governance of the community bank, usually in the form of “one member one vote”, as opposed to proportional to shareholding. Ms Morrison described this as an overriding governance test to be met for any banking institution to properly describe itself as a “community bank”, which she called the democratic test. She noted that governance participation by members may include the right to vote at an AGM and/or stand for the board of the bank and the right to benefit in the surplus, by reinvestment of profit, in the form of lower service charges and better products;
(2) it is 100% customer, not investor, owned; and
(3) 100% of surplus funds are distributed back to members and the community (of which the members/customers are a part). By way of example Ms Morrison referred to the surplus being used to support community organisations and community issues through donations, sponsorship and partnerships, reinvestment in products and services, lower interest rates for customers/members and other benefits for customers/members.
305 While Ms Morrison was unable to locate any material which defined the term “community bank” or supported her definition of it when looking for materials about cooperatives and mutuals, she found articles that supported the definition of cooperatives and mutuals as community-owned organisations.
306 Ms Morrison claimed that “community banking” is a descriptive term and that any financial institution that is banking the community or delivering banking services to a community should be able to describe itself as banking the community or providing a community bank, including Bendigo, if it is banking the community. Ms Morrison also stated that there was more than one descriptor for mutuals that wished to become banks and that any of customer-owned bank, member-owned bank or community bank was apt to describe them.
307 Despite the conclusion I have reached about whether Mr Taylor’s evidence can be accepted on this issue (see [65] above) I set it out for completeness given CFCU’s reliance on it, but have not taken it into account in addressing this ground.
308 To Mr Taylor’s knowledge the meaning of the terms “community bank” and “community banking” have remained the same for at least the past 30 years in Australia. Mr Taylor’s understanding of the meaning of those terms is as follows:
(1) he understands the term “community bank” to mean a bank:
(a) that is entirely owned by its customers, who are individuals and members of the community served by the bank, whether that community is defined by geography, employment or other commonality;
(b) where the benefit of surplus funds flows back to members, including by way of reinvestment in the bank’s services and/or lower cost products; and
(c) where all of the customers of the bank are required under its constitution to be owners of the bank; and
(2) he understands the term “community banking” to mean the model of banking employed by a community bank as described above.
309 While I would give less weight to his evidence, in Mr Lawrence’s opinion the term “community bank” means a bank or financial institution where 100% of the profits go back to the customers in the form of at least the following:
(1) investment in improved services and service delivery;
(2) the funding of product innovation for use by customers; and
(3) the offering of more competitive rates to customers compared to traditional banks in the form of cheaper interest rates on loans and increased interest rates for deposits.
Mr Lawrence agreed that these are the attributes of a customer-owned bank.
310 In Mr Lawrence’s experience customer-owned banks, being credit unions, building societies and mutual banks, have an ownership structure by which the members are the owners, with one member having one vote. He contrasted this with shareholders whose right to vote is based on the number of shares held and who receive a dividend on their investment. Mr Lawrence understands that a customer-owned bank is structurally different to a traditional institutional bank where the vast majority of profits go to shareholders, who are not necessarily customers, and where the primary driver is to generate profit for the shareholders who own the bank.
311 In cross-examination, Mr Lawrence agreed that Bendigo should be entitled to continue to use the term “community bank” for its community bank branches but that it should not have an exclusive right to do so.
312 It is also appropriate to set out the evidence of Associate Professor Abbott who, relevantly, was asked by Bendigo to explain what he understands the term “community bank” to mean in Australia and to consider and comment on the views expressed by each of Ms Morrison and Mr Lawrence in that regard.
313 According to Associate Professor Abbott the term “community bank” was not known or used in Australia until it was first used by Bendigo in the late 1990s. At that time, Associate Professor Abbott was involved with his co-author, Di Thomson, in researching the structures and organisational frameworks of financial institutions in Australia. He and Ms Thomson researched and wrote about mutual financial institutions, their history and their future within the deregulated financial sector in Australia.
314 In 2000 Associate Professor Abbott and Ms Thomson produced a paper titled “Community Banking in Australia” ((2000) 7(3) Agenda 207). Associate Professor Abbott refers to this paper as the Bendigo Paper and for ease I will do the same. Associate Professor Abbott described the Bendigo Paper as one which looked at the dissatisfaction with Australia’s major banks and customers’ anger about the closure of bank branches in both rural and suburban centres. It focussed, in particular, on Bendigo’s business model operating under the community bank model, and its purpose was to analyse the legal, regulatory and economic implications of Bendigo’s franchise community branches so as to understand the role that they may possibly play in the Australian financial system and determine if franchise banking had a future in Australia. In the Bendigo Paper the authors wrote that Bendigo had pioneered the “community banking” concept and that “[c]ommunity bank branches differ from credit unions and from orthodox bank branches in that they do not directly retail financial services, but are franchisees of the services of another financial institution”.
315 Associate Professor Abbott first wrote about Bendigo’s community bank branches in another paper he co-authored with Ms Thomson titled “Is There a Future for Mutual Deposit Taking Institutions in Australia?” ((1999) 18(2) Economic Society of Australia 1). He explained that the purpose of that paper was to explore the rationale for the existence of mutual form organisational structures in Australia. Section 5 of the paper was titled “Alternative Strategies”. There the authors referred to the Bendigo community bank model observing that the “future of mutuality has been strengthened with the formation and growth of the community banking concept pioneered by Bendigo Bank, itself a former building society”. The authors described community banking as follows:
… Community banking is a variant on mutual financial institutions, but unlike credit unions a community bank operates as a franchisee of banking services from an established bank. A community bank originates when a steering committee, usually formed by local businesses, approaches Bendigo Bank with a business plan to set up a bank. Once that has been approved the steering committee ratifies selection of a Board, which then forms the banking entity and determines its organisational structure. At this stage community banks can either organise as co-operative financial institutions or companies limited by guarantee. Community members pledge seed money ($200,000 to $250,000) to purchase the franchise to start the bank, while in return the Bendigo Bank provides the banking infrastructure and support in the form of staff training, administration, legal checks, credit assessments and marketing of the new entity. In addition Bendigo Bank provides the bank licence, a full range of banking products and services and all back office banking functions. The Bank and the community members split the revenue 50/50, with the community’s share meeting all operating costs and paying a “dividend” to initial capital contributors. Eventually as profitability increases the option will exist for the repaying of initial pledge money if desired by the contributors, or for further profits to be used in supporting local projects. Bendigo bank has expressed the view that each community bank is able to make whatever decisions best suits their community but favour the latter choice. The community bank, in this case, would retain community ownership but with financial incentives to ensure ongoing active support and monitoring of the bank by its “owners”. If the pledge monies of contributors are fully repaid, then the community bank becomes totally community owned. These new hybrid organisations are franchisees, agents of Bendigo Bank, but also have specific aspects of mutuality. They have been operating less than a year, but to date are right on target for meeting their goal of reaching break-even point by the end of the first year of operation. Currently there are five community banks operating with plans for more to become operational during 1999. The immediate future for community banking, as an alternative form of banking, appears strong, as there has been interest expressed by major banks (ANZ and Westpac) and the state governments of Queensland and Western Australia to provide banking service to-remote and small “bonded” communities.
(footnotes omitted.)
316 As noted above, Associate Professor Abbott was asked to comment on the evidence of Ms Morrison and Mr Lawrence. He responded expressly to Ms Morrison’s evidence. In summary, Associate Professor Abbott:
(1) agreed with Ms Morrison that CMEs are owned and controlled by members and operate for the members’ benefit, but disagreed with Ms Morrison’s opinion that every credit union, building society and mutual bank in Australia can be described as a community bank because of its legal structure. In Associate Professor Abbott’s opinion, credit unions, building societies and mutual banks exist to benefit their members, being people with a common bond or interest. By reference to the Bendigo Paper, he noted that credit unions arose in order to encourage thrift among a group of people with a common bond, such as religion, occupation or location, who were brought together through that common bond. He said that the driver was that the credit union was there to benefit the members of the bonded group but that the group could have come together for any reason provided there was some mutual interest. Associate Professor Abbott noted that given that a member-owned financial institution’s focus is on benefitting members, he did not think that the term “community bank” describes anything about the mutual structure of financial institutions;
(2) contrasted those institutions with community bank branches, which he described as a socioeconomic business model by which a commercial bank and a local group partner bring a full range of banking services to historically underserved areas. Unlike credit unions, building societies and cooperatives, the benefits of this partnership extend beyond the interests of the members to the whole community, which is broader than just the members, because the profits of the locally-owned company that operate and manage a community bank branch are distributed for the purposes of community development;
(3) stated that he is unsure why Ms Morrison has held a view since 2001 that the words “community bank” mean a cooperative or mutual bank. He said that when he was working on research papers in the late 1990s and early 2000s he did not see any references to “community bank” in Australia other than as used by Bendigo and saw no evidence of any cooperative or mutual bank using the term “community bank” to describe their structure, business or service offering;
(4) opined that Ms Morrison’s statement that a community bank is a bank that is solely owned by its customers ignores the history of community bank branches and their origins. In Associate Professor Abbott’s opinion, Bendigo created the term when it created its franchising banking distribution model, community bank branches were new in that they offered full banking services by means of a listed banking institution partnering with a company owned by local people who wanted to help the local area, and the concept had nothing to do with customer ownership and everything to do with bringing benefits to the local area; and
(5) disagreed with Ms Morrison’s statement that “it is impossible to describe CMEs in the banking sector without using the words ‘community bank’”. Associate Professor Abbott said that in the course of preparing his articles he did not see any references to “community bank” to describe or name a CME, nor had he seen any other academic paper that refers to CMEs as community banks or as having used the term “community bank” to describe a mutual structure. Associate Professor Abbott observed that when he wrote about mutual structures in the late 1990s and early 2000s, while noting similarities between the franchise banking distribution model and that of a mutual structure, he and Ms Thomson specifically noted that the structures were different.
317 Relevantly Ms Morrison responded to Associate Professor Abbott’s criticisms noting that she considers that Bendigo’s banking model is more aptly discussed as “a type of franchise operation” which she distinguishes from community banking.
318 In relation to confusion, CFCU relies on the newspaper articles annexed to Mr Hunt’s affidavit which were published in the period before 2001 (see [245] above) and Mr Hunt’s evidence in cross-examination about some of these articles that use of the term “community-owned” demonstrated a misapprehension on the part of the author as to the way in which the franchise model operated. By way of example, CFCU referred to the article titled “Community owned bank a Coly option” (see [246] above) and Mr Hunt’s evidence about that article which was as follows:
Q: So looking at the one on page 799, “Community-owned bank, a Coly option”. Do you see that?
A: Yes.
Q: Of course you’ve agreed with me earlier, it’s not a community-owned bank?
A: Mmm.
Q: There’s some misunderstanding on the part of the person potentially writing this article?
A: Yes.
Q: And then it begins:
A community bank could be the answer to Coleambally’s lack of banking services-
etcetera. And, again, it’s used in an entirely descriptive way. You agree?
A: I agree.
Q: And…?
A: I mean, there’s a variety of uses of descriptors that describe it from their perspective what they were doing. I mean, in some ways that reinforces what they were doing. They were looking at…
Q: There’s…?
A: securing a banking service.
Q: Yes?
A: And, you know, securing a bank in their – in their eyes.
Q: Yes. There’s always a number of ways one can look at these things, but so perhaps, again, at page 803 I think you see the same confusion, probably by the same person. This looks to be the same paper?
A: Yes.
Q: “Community to discuss a bank of their own.” That’s certainly not directly true, but it is true if they’re talking about a branch of their own?
Q: Yes, that’s right. Securing – to them the branch is the bank.
4.2.3 The parties’ submissions
319 In support of its case under s 43 of the TM Act (and s 42) CFCU relies on a narrower meaning of “community bank” than it does in support of its case under s 41 of the TM Act but says that the narrower meaning is encompassed by the broader meaning.
320 CFCU submitted that the words “community bank” in each of the Bendigo Community Marks bears, among at least a section of the public, the connotation of a bank that is owned and managed locally and which serves the needs of the local community. It contended that the connotation is inherent in each mark because the words “community bank”, as the definition in the 2003 edition of the Macquarie ABC Dictionary demonstrates, has a particular meaning, being a bank that is owned and managed locally and which serves the needs of the local community. CFCU submitted that the inclusion of the definition in a dictionary by 2003 reflects usage over a longer period.
321 Relying on the evidence of Ms Morrison and Messrs Taylor and Lawrence (set out at [303]-[311] above) CFCU submitted that the term “community bank” within the financial sector connotes a bank, such as a mutual bank, a credit union or building society, where the customers/members are the owners, each member has only one vote and, historically, the members come from a shared community of interest. It contended that this meaning was in clear contrast to the larger banks, which are listed entities with shareholders who are not necessarily members of the bank and whose shareholding is not subject to such limitations.
322 CFCU further submitted that Bendigo is a major listed bank with obligations to its shareholders; its franchise model offers the shareholders of small proprietary companies the opportunity to manage a Bendigo branch; and unlike entities that have the structure of a mutual bank or credit union, Bendigo does not offer the benefits of ownership to the broader community in which each franchisee’s branch operates. CFCU contended that by its use of the Bendigo Community Marks, Bendigo positions itself in contradistinction to the big institutional banks by invoking the concept of a locally-owned bank or financial body such as a bank or cooperative within the mutual banking sector, when it is in fact no such thing. CFCU submitted that, by contrast, the Bendigo model does not return all its profits to the local communities but ultimately serves the interests of its shareholders and those of the franchisee companies. CFCU submitted that accordingly use of the Bendigo Community Marks is likely to confuse or deceive because of this connotation inherent in each of them.
323 CFCU, noting that a connotation for the purpose of s 43 of the TM Act may include any secondary meaning, relies on the meaning set out at [23] of its FASOC as the relevant secondary meaning (see [285] above). To that end CFCU submitted that use of the words “community bank” in relation to financial services of the type provided by Bendigo, including by its franchisees, is a representation that the services are provided by: a bank that is customer-owned; a bank whose profits are returned to the local community; or a bank that serves the interests of its customers/members rather than those of its shareholders. It contended that this was the antithesis of the structure of the major banks in Australia, including Bendigo, which are owned by shareholders and serve the interests of those shareholders. CFCU noted that there is no requirement in the franchise agreements between Bendigo and its franchisees for any contribution to be made to the franchisees, who are wholly dependent upon achieving their mandated level of profitability, and that the financial experts, Messrs Aman and Taylor, were not able to determine the financial viability of some of the franchises independently of financial support by Bendigo.
324 Bendigo submitted that CFCU has not made clear why use of the words “community bank”, adopting the definitions as pleaded, would be likely to deceive or cause confusion, which it said is fatal to CFCU’s case. It also contended that, having regard to [27Q(a)] and [54R(a)] of the FASOC it is clear, with reference to its analysis in relation to s 41 of the TM Act, that there was no ordinary signification of the words “community bank” as at 1999 or 2001, save for meaning financial services provided by Bendigo under the Bendigo Community Marks. In the same vein, Bendigo submitted that the evidence does not establish that the ordinary signification is the meaning attributed to the words in [27Q(b)] and [54R(b)] of the FASOC. It submitted that this case sits in stark contrast to the findings of the primary judge in Primary Health Care, although it does not explain why that is so.
325 Bendigo submitted that even with regard to the less tortuous meaning attributed by the Macquarie ABC Dictionary (as compared with the complex meaning in [23] of the FASOC) it is clear from APRA’s Guidelines: Use of Words Under Sections 66 or 66A of the Banking Act, which, according to Bendigo was dated 10 December 2000, that for an ADI to be listed as a bank, the ADI was required to hold $50m in Tier 1 capital or be a branch of a foreign bank. It also noted that mutual ownership of banks was not approved until 2010 with the first such entity, Bankmecu, not commencing until 2011. In other words, it said the Macquarie ABC Dictionary definition has no proper application having regard to the inability of financial institutions with mutual structures to use the term “bank” at the relevant time.
326 This part of CFCU’s case was difficult to follow. In order to establish that it could have relied on s 43 of the TM Act at the time of registration of the Bendigo Community Marks, CFCU contended that there were several different available connotations of the term “community bank”. The first issue to determine is whether CFCU has established that the Bendigo Community Marks had any of those meanings or connotations.
327 The first asserted connotation relies on the definition included in the 2003 edition of the Macquarie ABC Dictionary. There is no evidence about the currency of use of “community bank” prior to that date, its etymology or how the definition came to be so included. At its highest, the evidence establishes that it was in use as at 2003, and was included accordingly. The date from which it was in use is unknown. CFCU says that I would infer that it was in use at least as at 2001, the priority date for the Bendigo Word Mark, because use would not be an “overnight” or proximate concept. While I accept that I could infer that a word or term would have been used over a period before its inclusion in a dictionary, there was no evidence before me of the period of use of the term “community bank” prior to its inclusion in the 2003 edition of the Macquarie ABC Dictionary, let alone evidence of usual practice as to the ordinary or likely period of use prior to a word or term being included in a dictionary. In those circumstances I am not able to conclude that the meaning of “community bank” included in the 2003 edition of the Macquarie ABC Dictionary was an available meaning or connotation as at August 2001, the priority date of the Bendigo Word Mark. The same necessarily follows for February 1999, the priority date of the Bendigo Device Mark.
328 The second asserted connotation relies on the evidence of Ms Morrison and Messrs Lawrence and Taylor to establish what CFCU says are the disjunctive meanings contended for at [23] of the FASOC. Assuming that they are disjunctive, I do not think their evidence establishes any or all of those meanings as at the Priority Dates.
329 As set out at [39] above, Ms Morrison started working in the cooperative and mutual sector in 2001. Hence the identification of 2001 as the time from which she says she understood the term “community bank” to have the meaning she ascribes to it. But Ms Morrison’s evidence needs to be considered against the background of her early experience in the sector, which was in a communications role writing about the sector generally. It is thus difficult to see how Ms Morrison could hold a concluded view about the meaning of such a particular term as “community bank” as at 2001 as opposed to more general views about the structure of CMEs. Ms Morrison was unable to point to anything she had written at the time or to any literature from that time that she relied on to come to her view about the meaning of “community bank”. That is probably not surprising given that Associate Professor Abbott, who was writing at the time, said the term was not used by any entity other than Bendigo.
330 That is not to say that I do not accept Ms Morrison’s evidence. I have no doubt that as a result of her experience over the years and her more recent role as CEO of the BCCM, where she advocates for and interacts with a range of businesses, including credit unions, who ascribe to the mutual structure, she has formed those views. Rather, because I do not accept that she could have held that view about meaning as at 2001, I do not accept that based on Ms Morrison’s evidence CFCU can establish that the term “community bank” had the meaning she ascribes to it as at the Priority Dates.
331 I do not think that Mr Lawrence’s evidence on which, for the reasons set out at [62] above, I place less weight, takes the matter any further. First, Mr Lawrence’s evidence of the meaning of “community bank” was admitted on the basis that it was limited to his understanding; and secondly, he does not say from when he held his view about the meaning he ascribes to the term “community bank”.
332 Thus as CFCU has not established that the Bendigo Community Marks have “some connotation”, s 43 of the TM Act is not engaged. It is therefore not necessary for me to consider whether use of the Bendigo Community Marks in relation to the Services would be likely to deceive or cause confusion. It follows that CFCU has not established that it could have relied on s 43 as a ground of opposition for the purposes of s 88(2)(a) of the TM Act.
4.3 Sections 88(1)(a), 88(2)(a) and 42(b) of the TM Act – contrary to law
333 CFCU also relies on s 42(b) of the TM Act in the alternative. That section provides that an application for the registration of a trade mark must be rejected if its use would be contrary to law. CFCU says that use of the Bendigo Community Marks would be contrary to law in that they would have been contrary to the misleading and deceptive conduct provisions of the consumer law in operation at the time, being s 52 of the Trade Practices Act 1974 (Cth) (TPA). CFCU did not press the alternative pleaded allegation that the representation was false in contravention of subs 53(c) and/or (d) of the TPA.
334 In this part of its case CFCU contends that as at the Priority Dates the words “community bank” had the same meanings as it relies on for the purpose of establishing a ground of opposition under s 43 of the TM Act, being the meanings set out in [23] of the FASOC (see [285] above).
335 CFCU alleges that as at the Priority Dates Bendigo was not a “community bank” as those words were understood by consumers and the general public because Bendigo’s franchisees were not authorised by the regulatory authority independently of Bendigo; Bendigo’s franchisees’ profits went to Bendigo, a national banking institution independent of its franchisees; and Bendigo’s franchisees existed solely to maximise profits for Bendigo and not to benefit the local community or community owners.
336 CFCU says that accordingly use by Bendigo of the Bendigo Community Marks in relation to the Services in trade or commerce in connection with the supply or possible supply of the Services expressly and/or impliedly represented that Bendigo was a community bank; those representations were false because Bendigo is not a community bank; and, in the circumstances, use by Bendigo of the Bendigo Community Marks as at the Priority Dates was conduct in contravention of s 52(1) of the TPA, as then in force.
337 The question of whether use would be contrary to law is to be considered as at the Priority Dates. It is for CFCU to establish, on the balance of probabilities, that, relevantly, s 52(1) of the TPA, would be contravened by use of the trade mark(s): see Primary Health Care at [410]-[411].
338 In light of my findings in relation to s 43 of the TM Act, this ground can be dealt with briefly. As CFCU relies on the same meanings of “community bank” in this part of its case, my findings that it has failed to establish those meanings as available connotations as at the Priority Dates must apply equally here. It follows that CFCU cannot make out this ground of opposition.
4.4 Sections 88(1)(a), 88(2)(a) and 44 of the TM Act – prior registration
339 CFCU contends that s 44(2) of the TM Act provides a further basis upon which registration of the Bendigo Community Marks could have been opposed. That section relevantly provides:
44 Identical etc. trade marks
(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
…; 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.
340 The prior mark on which CFCU relies for the purposes of s 44 is the Community First Registered Mark with a priority date of 23 October 1998.
341 There was no dispute between the parties that the Community First Registered Mark has a priority date that predates the Priority Dates and that the Services for which the Bendigo Community Marks are registered are closely related to the services for which the Community First Registered Mark is registered. CFCU accepts that the Bendigo Community Marks and the Community First Registered Mark are not substantially identical. Thus the only issue between the parties is whether the Bendigo Community Marks are deceptively similar to the Community First Registered Mark.
342 Section 10 of the TM Act provides that a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.
343 In Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 (Registrar v Woolworths) at [50] French J (with whom Tamberlin J agreed) in considering s 44 of the TM Act relevantly said:
In Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd at 594-595, which concerned the 1905 Act, Kitto J set out a number of propositions which have frequently been quoted and applied to the 1955 Act. The essential elements of those propositions continue to apply to the issue of deceptive similarity under the 1995 Act. Applied also to service marks and absent the imposition of an onus upon the applicant they may be restated 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.
(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.
In respect of the last proposition, Mason J observed in Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353 at 362:
“the 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.”
344 In Mars Australia Pty Ltd v Sweet Rewards Pty Ltd (2009) 81 IPR 354; [2009] FCA 606 in the context of an action for infringement of the applicant’s trade marks, Perram J considered deceptive similarity. At [95] his Honour summarised the applicable principles as set out by a Full Court of this Court in Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd (2004) 209 ALR 1; [2004] FCAFC 196 as follows:
In this area it is impermissible to take into account any matter added to the respondent’s mark or any differences in get-up. The marks must be understood in their entirety. Both parties placed reliance upon the reasons given by Lord Radcliffe in De Cordova v Vick Chemical Co (1951) IB IPR 496 at 448-9; 68 RPC 103 at 105-6. I will not set them out. Lord Radcliffe’s reasons were examined by a Full Court of this Court in Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd (2004) 209 ALR 1; 61 IPR 212; (2004) AIPC 92-015; [2004] FCAFC 196 at [84] (Crazy Ron’s). For present purposes Crazy Ron’s establishes a number of principles:
1. The question of deceptive similarity is not to be judged by a side by side comparison. Instead what is involved is a comparison, on the one hand, of the impression based on recollection of an applicant’s mark that persons of ordinary intelligence would have and the impression such persons would get from the respondent’s mark: at [73]. In that regard it is important to consider the “idea of the mark”: at [74].
2. In assessing deceptive similarity, questions of aural impression may be important: at [75]. …
3. The risk of deception must be tangible but it is enough if an ordinary person entertains a reasonable doubt: at [76].
4. Allowance must be made for imperfect recollections in considering whether a mark so nearly resembles another mark that it is likely to cause confusion or deception: at [77]-[78].
5. That principle extends even to marks which are not just invented words. 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: at [79].
345 CFCU submitted that there could “be little doubt” that the Bendigo Word Mark, COMMUNITY BANK, is deceptively similar to the Community First Registered Mark, COMMUNITY FIRST, when those marks are used in relation to banking and financial services. It contended that on a proper comparison of the marks, taken as a whole, they look alike, sound alike and are conceptually the same. As to the latter, CFCU submitted that, by the word “community” each conveys similarity or identity of interest and that inclusion of the word “first” merely serves to amplify the importance of the shared interest. It further submitted that in circumstances where registration is sought in relation to banking, financial and like services, the term “bank” does not add any distinction. CFCU said that similar observations may be made of the Bendigo Device Mark, observing that the addition of the highly stylised and silent “B” symbol does little to alter the overwhelmingly similar impression conveyed by the word “community”.
346 Bendigo in turn submitted that there could “be little doubt” that the Bendigo Community Marks are not deceptively similar to the Community First Registered Mark. It submitted that the Bendigo Community Marks do not include the word “first” and that the evidence overwhelmingly shows that the addition to its marks of the word “bank” is significant. Bendigo said that if the addition of the word “bank” did little to differentiate the marks one would have to ask why CFCU wished to register the CFCU Marks and make use of the word “bank”, since it already owns the Community First Registered Mark.
347 Bendigo contended that CFCU has never previously sought to challenge the Bendigo Community Marks or usage and that the suggestion now made, whether directed to the Priority Dates, or the date of the present application, that the marks are contrary to s 44, being a claim made for the first time after nearly 20 years of registration and usage, should be rejected.
348 In my opinion the Bendigo Community Marks are not deceptively similar to the Community First Registered Mark when those marks are used in relation to banking and financial services. That is, assuming use by CFCU of the Community First Registered Mark for the services covered by its registration, I am not satisfied that there is a reasonable likelihood of confusion on the part of ordinary people arising from use by Bendigo of the Bendigo Community Marks in relation to the Services.
349 The impression based on recollection of the Community First Registered Mark when compared with the Bendigo Word Mark would not be one that would lead to confusion. The Community First Registered Mark and the Bendigo Community Marks have the word “community” in common but that is not sufficient to give rise to a risk of deception. In each case the second word, “bank” in the case of the Bendigo Community Marks and “first” in the case of the Community First Registered Mark, are different and add sufficient distinction to the word “community” so as to leave a different impression.
350 I do not accept CFCU’s submission that the word “first” in its mark merely serves to amplify the importance of the similarity of identity of interest conveyed by the word “community”. The word “first” acts to differentiate the Community First Registered Mark. It adds distinction and meaning going beyond emphasising the importance of similarity of interest and conveys the impression of prioritising its community ie its members and customers. Similarly, insofar as the Bendigo Word Mark is concerned, I accept that the word “bank” acts as a differentiator. The term has a clear meaning and leaves a different impression to the word “first”.
351 Bendigo also relied on the evidence of Professor Worthington who has researched and published on the marketing of financial services both in Australia and other countries. One of the questions posed to Professor Worthington for his consideration was whether the use of the term “bank” is significant for marketing to consumers and whether it conveyed a particular message to consumers. Professor Worthington, whose evidence was not challenged on this issue, answered the first part of the question positively, expressing his opinion that the term “bank” is a significant one for marketing to consumers. Among other things, Professor Worthington said that it was vital that consumers felt that they could trust their financial services provider and be willing to commit their business to it, and that in his opinion a financial institution that uses the word “bank” has an advantage because of consumers’ views about what a bank actually represents.
352 Professor Worthington gave reasons for his opinion including that, particularly following the global financial crisis in 2008, an organisation which uses the word “bank” as part of its brand will be regarded by consumers as one that can be trusted, compared to other organisations which do not have the word “bank” in their brand; and, given the significance of the word “bank”, its addition has a substantial impact on the identity of the organisation and its brand and thus its use is significant from a marketing perspective to consumers.
353 Professor Worthington also said that the term “bank” has significance in marketing to consumers because consumers understand what a bank does, which is not always the case with a non-bank financial institution. Professor Worthington referred to a submission made by COBA in July 2015 to the Senate inquiry into cooperative, mutual and member-owned firms in which COBA noted that “[m]any large customer-owned banking institutions with Tier 1 well in excess of this threshold have nevertheless not re-branded as banks. However, the option to rebrand has typically been driven by growth strategies and the view that the term ‘bank’ is better understood by consumers, than the terms ‘credit union’ or ‘building society’”.
354 Professor Worthington’s evidence reinforces my opinion that the word “bank” in the Bendigo Word Mark is of significance and makes it distinctive.
355 Nor is there sufficient aural similarity between the Bendigo Word Mark on the one hand and the Community First Registered Mark on the other to cause me to come to a different conclusion. While they have the word “community” in common they are, when heard, sufficiently differentiated by the second word “bank” in the case of the Bendigo Word Mark and “first” in the case of the Community First Registered Mark. These are words which could not be confused one for the other when heard.
356 It follows that CFCU has not established that it could rely on s 44 as a basis upon which registration of the Bendigo Word Mark could have been opposed for the purposes of s 88(2)(a) and s 88(1)(a) of the TM Act. My findings in relation to the Bendigo Word Mark apply equally to the Bendigo Device Mark and thus CFCU has not established that it could rely on s 44 of the TM Act in relation to that mark.
4.5 Sections 88(1)(a), 88(2)(a) and 59 of the TM Act – no intention to use
357 The final ground upon which CFCU relies for the purposes of s 88(2)(a) of the TM Act as a ground on which it could have opposed registration of the Bendigo Community Marks is s 59(a), which provides that the registration of a trade mark may be opposed on the ground that the applicant does not intend to use, or authorise the use of, the trade mark in Australia in relation to the goods or services specified in the application.
358 CFCU contends that as at the Priority Dates Bendigo had no intention to use each of the Bendigo Community Marks and it has not used or authorised their use since, but has used a mark with alterations or additions that substantially affect the identity of the Bendigo Community Marks.
359 As with the other grounds of opposition, CFCU bears the onus of establishing that Bendigo did not intend to use or authorise the use of the Bendigo Community Marks in Australia in relation to the Services. However, once an opponent, in this case CFCU, has made out a prima facie case that there was a lack of intention to use a mark, the onus shifts to the applicant to establish that intention: see Food Channel Network Pty Ltd v Television Food Network GP (2010) 185 FCR 9 at [72] (Food Channel). The filing of an application for registration of a mark is prima facie evidence of an intention to use that mark: see Food Channel at [72].
360 The intention to use a trade mark is to be assessed at the date the application for registration is filed. However, evidence relating to use or non-use after that date may be relevant in drawing inferences as to the issue of intention at the date of application: see Food Channel at [74].
361 In Food Channel at [67], in considering the issue of ownership under s 58 of the TM Act, a Full Court of this Court (Keane CJ, Stone and Jagot JJ) said the following about establishing an intention to use a trade mark:
Section 27(1)(b) of the Act requires that the applicant use or intend to use, or authorise use or intend to authorise use of, the trade mark. The time at which this intention must exist is the date of application (in this case 28 August 2003). Only a very low threshold has been set with regard to intention to use in that the very act of making the application is, without more, sufficient to establish the requisite intention. In Aston v Harlee Manufacturing Company (1960) 103 CLR 391 Fullagar J said (at 401):
There is another element mentioned by Dixon J in the Shell Co.’s Case, which is stated as essential to the proprietorship of an unused trade mark. That element is the intention of the applicant for registration to use it upon or in connexion with goods. As to this I need only say that I do not regard his Honour as meaning that an applicant is required, in order to obtain registration, to establish affirmatively that he intends to use it. There is nothing in the Act or the Regulations which requires him to state such an intention at the time of application, and the making of the application itself is, I think, to be regarded as prima facie evidence of intention to use. I cannot think that the Registrar is called upon to institute an inquiry as to the intention of any applicant, and I think that, on an opposition or on a motion to expunge, the burden must rest on the opponent or the person aggrieved, of proving the absence of intention.
(footnote omitted.)
4.5.2 The parties’ submissions
362 CFCU submitted that this ground is alone made out by the correspondence between Bendigo and the RBA set out at [137]-[141] above. It contended that, in short, the words “community bank” could not be used without showing a connection to Bendigo.
363 CFCU further submitted that the Bendigo Composite Mark and Mr Hunt’s evidence generally shows that it was the Bendigo Composite Mark that Bendigo intended to use and that the material adduced by Bendigo to show the use of the Bendigo Community Marks in connection with its “community bank branches” supports its submission that the Bendigo Community Marks had no and have no independent signification as trade marks. In that regard, CFCU contended that the operative signs that function as trade marks are the words “Bendigo Bank” and, to a lesser extent the “B” device, which were the dominant cognitive queues. CFCU submitted that the evidence adduced by Bendigo demonstrates that it had no intention to use either of the Bendigo Community Marks as at the Priority Dates for each of the marks.
364 Bendigo submitted that it was never put to Mr Hunt that it had no intention to use either of the Bendigo Community Marks as at the Priority Dates. It contended that the filing of an application for registration of a mark is prima facie evidence of an intention to use that mark and referred to its submissions in relation to the s 41 ground on usage in fact (see [243]-[251] above).
365 Bendigo submitted that CFCU’s focus on its use of the “Bendigo” mark or its “B” device mark on branch facades and marketing material ignores well-established law that there may be use of a particular trade mark despite other marks appearing on a product or in relation to the provision of services. It said that the fact that the “Bendigo” or “B” device appears on marketing material and on the facade of its community bank branches does no more than simply tell the consumer that there is a relationship between the services badged as “community bank” in the advertisement or provided in the physical location and Bendigo, which was also consistent with the RBA’s requirements.
366 Bendigo said that “community bank” communicates a special feature of the branch, that it is community-owned and run for the benefit of the community, utilising the banking resources of Bendigo. Accordingly, it observed that the usage of “Elwood Branch - Bendigo Bank”, for example operates very differently from a trade mark perspective to “Elwood Community Bank Branch - Bendigo Bank”.
367 Bendigo further submitted that CFCU’s argument also ignores the fact that there is use by Bendigo of the Bendigo Community Marks without any reference to “Bendigo” or the “B” device or that there are instances of use where it is abundantly obvious that the Bendigo Community Marks are a separate mark.
368 As set out above, CFCU bears the onus of establishing prima facie the asserted lack of intention to use the Bendigo Community Marks on the part of Bendigo. There is no evidence of use of the Bendigo Device Mark prior to its filing date (see [259] above). There was some limited use of the Bendigo Word Mark prior to its filing date. However, I have found that it was not used as a trade mark for the purposes of s 41(6) of the TM Act. But the inquiry under s 41(6), being one of use of the relevant trade mark prior to the filing date of its application for registration, is different to the inquiry under s 59. The threshold to establish an intention must necessarily be lower given that all that is required is an “intention” as opposed to actual use.
369 CFCU relies on the correspondence between Bendigo and the RBA, set out at [137]-[141] above, to establish that Bendigo had no intention to use the Bendigo Community Marks as at their respective application dates.
370 That correspondence sets out the requirements of the RBA in relation to use of “community bank” and “community branch” by Bendigo. In particular the RBA required that it be clear to consumers that all business done in the branch was conducted for the account of Bendigo and indicated that use of those terms would need to make the relationship with Bendigo clear. APRA had similar requirements. In other words, the term “community bank” could not be used without reference to the provider of the banking services: Bendigo. In my opinion that alone cannot evidence an intention, which has a subjective element, not to use the Bendigo Community Marks. It does no more than set out the RBA’s requirements for how those marks were to be used.
371 CFCU also relies on the existence of the Bendigo Composite Mark and Mr Hunt’s evidence “generally” to demonstrate that it was the Bendigo Composite Mark that Bendigo intended to use and that the Bendigo Community Marks had no independent signification as trade marks. There is no doubt that, as I have found in connection with s 41(6) of the TM Act, the Bendigo Composite Mark was the mark predominantly used by Bendigo. That, of itself, is not determinative of Bendigo’s intent.
372 Bendigo’s applications for registration of each of the Bendigo Community Marks are in each case prima facie evidence of Bendigo’s intention to use those marks. It was not put to Mr Hunt that as at the dates of the applications for the Bendigo Community Marks, Bendigo had no intention of using those marks. Indeed, as I have discussed at [275] above and as the evidence discloses, there was some use, albeit not in a trade mark sense, of “community bank”. An intention to use the marks could be held despite the regulatory requirements around use of “community bank”.
373 I do not think that CFCU has discharged its onus of establishing a prima facie case in this respect and I am not satisfied that the evidence and matters it relies on demonstrate that Bendigo had no intention to use the marks. Thus CFCU has not made out its reliance on s 59 as a basis upon which registration of the Bendigo Community Marks could have been opposed for the purposes of s 88(1)(a) and s 88(2)(a) TM Act.
4.6 Section 88(2)(c) of the TM Act – likely to deceive or cause confusion
374 CFCU also seeks removal of the Bendigo Community Marks under s 88(2)(c) of the TM Act. That section provides that an application for rectification of the Register can be made where, 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. The section focuses attention on a circumstance existing as at the date of the application for rectification as opposed to those existing as at the Priority Date.
375 The application commencing the Rectification Proceeding was lodged electronically at 7.24 pm on Friday, 11 August 2017. Pursuant to r 2.25(3) of the Federal Court Rules 2011 (Cth), a document is taken to be filed on the next business day for the Registry when the whole of that document was received after 4.30 pm. Accordingly the application is taken to have been filed on 14 August 2017, making this the relevant time for the purposes of s 88(2)(c). CFCU contends that as at the relevant date the words “community bank” possessed their ordinary English meaning and signification, being a bank that is owned and managed locally and which serves the needs of the local community, which is the definition included in the third edition of the Macquarie ABC Dictionary. It said that as a result the use of the Bendigo Community Marks has become deceptive or confusing for the same reasons it raises in support of its contentions that the Bendigo Community Marks could have been opposed under s 42(b) and s 43 of the TM Act as at the Priority Dates.
376 In support of its contention that “community bank” had its ordinary signification, being its dictionary definition, CFCU relied on the letter dated 29 March 2006 from Ms Butler, the publisher of the Macquarie Dictionary to Bendigo’s then lawyers set out at [299] above. It also relied on an email dated 7 December 2017 from Victoria, an employee of the publisher of the Macquarie Dictionary, who, in response to a query from Ms Williams of Switch Legal on behalf of Bendigo requesting confirmation of the exact date that “community bank” was included in the dictionary, said:
The date I am giving you is fairly irrelevant because it is just the date it was keyed into the database. Before entries are keyed there is often a lengthy draft/investigation process. It also doesn’t indicate when it may have come to our intention for inclusion as a generic term.
Keying date: 3rd February 2003
377 Bendigo observed that CFCU’s arguments about the meaning of “community bank” whether as at the Priority Dates or as at August 2017 proceed on the assumption that consumers and the general public understood the structure of a mutual organisation. It submitted that the evidence overwhelmingly established that even in more recent times the customer-owned banking sector was not well understood by the public. In that regard it noted that the Independent Facilitator Review: Report on Reforms for Cooperatives, Mutuals and Member-owned Firms published in July 2017 (also known as the Hammond Report), having received submissions from organisations such as the BCCM, concluded that there was a lack of legal definition of mutual enterprise in the Corporations Act, which contributed to the widespread lack of recognition and understanding of the cooperative and mutual form.
378 Bendigo submitted that Ms Morrison was taken to the BCCM submission to the Senate Economics References Committee dated June 2015 and agreed with the sentiment expressed in that submission that the sector was not well understood.
379 Bendigo contended that, despite Ms Morrison’s affidavit evidence, she seemed content that Bendigo’s use of the term “community bank” was appropriate so long as Bendigo was giving back to the community. Bendigo also observed that Mr Lawrence accepted that the size of Bendigo’s community bank network suggested some degree of success and that it had a reputation in its community banks; and that, despite Mr Lawrence’s affidavit evidence that once it had listed on the ASX in 1995 Bendigo lost its right to describe itself as a “community bank”, Mr Lawrence said in his oral evidence that he was content for Bendigo to continue to use the name “community bank” for its branches.
380 Bendigo submitted that, on the evidence, there was simply no basis for the Court to find that use of the Bendigo Community Marks as at August 2017 is likely to deceive or cause confusion. Bendigo said that it was clear from the evidence that the “G8” or “coalition of the willing” seek the removal of the Bendigo Community Marks because the mutual sector has been freed up to use the term “bank” and wants unfettered rights to trade using a mark that Bendigo has been using, unchallenged for 20 years. It contended that this was not a basis upon which the Court ought to apply s 88(2)(c) of the TM Act.
381 CFCU relies entirely on what it contends the ordinary signification of the term “community bank” to be as at August 2017 to make out its case. That is, it says that because as at 2017 “community bank” had the meaning set out in the 2003 edition of the Macquarie ABC Dictionary, use of the Bendigo Community Marks is likely to deceive or cause confusion.
382 In making this case, CFCU says that the meaning of “community bank” had not changed. Despite the lack of clarity, as I understand its case CFCU contends that “community bank” had the meanings it ascribed to it throughout the proceeding but that by August 2017 the term “community bank” had as its ordinary signification the narrower meaning included in the Macquarie ABC Dictionary. That is, “a bank owned and managed locally and which serves the needs of the local community”.
383 CFCU asserted that to be the case without taking me to any evidence and in the context of evidence of other meanings. In those circumstances, even accepting that the definition in the Macquarie ABC Dictionary is an available definition, I am unable to say that it is the only definition available and, indeed, CFCU does not say it is, or that it is the ordinary signification of the term.
384 Accordingly, the foundation relied on by CFCU for this ground is not established and the ground is not made out.
385 Section 89 arises for consideration in circumstances where a mark is liable to deceive or confuse either pursuant to a ground on which its registration could have been approved under s 88(2)(a) or to s 88(2)(c). As CFCU has not made out its ground of opposition under s 44 or its case relying on s 88(2)(c) of the TM Act, the discretion under s 89 does not arise for consideration.
4.8 Exercising the discretion under s 88(1) of the TM Act
386 As set out at [106] above, s 88(1) of the TM Act provides that, subject to subs (2) and s 89 (see [385] above), a court may rectify the Register by, among other things, cancelling the registration of a trade mark or removing the trade mark from the Register. The exercise of the power in s 88(1) is discretionary and includes within it a discretion to decline to make an order for rectification: see Bohemia Crystal at [243].
387 As I have come to the view that the Bendigo Community Marks could have been successfully opposed under s 41 of the TM Act, it falls to me to determine whether in the exercise of my discretion an order should be made for rectification of the Register by cancelling or removing the Bendigo Community Marks from the Register as sought by CFCU.
388 CFCU submitted that I should exercise my discretion to order that the Register be rectified by cancelling the registration of the Bendigo Community Marks or otherwise removing them from the Register. On the other hand, Bendigo contends that there is sufficient reason not to order the cancellation of the Bendigo Community Marks.
389 In Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd (2018) 259 FCR 514 (Anchorage) at [146] a Full Court of this Court (Nicholas, Yates and Beach JJ) held that “unless s 89 [of the TM Act] is engaged, the discretion under s 88(1) is at large, constrained only by the general scope and objects of the Act”. At [158] their Honours said that in deciding whether to exercise the discretion under s 88(1) the correct approach is to ask:
…whether sufficient reason appears not to order the cancellation of a registered mark once the statutory discretion to make such an order has been enlivened. If the evidence does not disclose sufficient reason not to cancel the mark then it should be cancelled. In the ordinary course of events, it will be for the party that resists the cancellation of the registered mark to persuade the court that there is a sufficient reason not to order its cancellation.
390 At [163] the Full Court noted that there was a public interest in ensuring that trade mark registrations are only made in favour of applicants who are entitled to obtain them and that the TM Act offers various facilities for “ensuring that the Register is pure in the sense that no mark is to be registered unless valid, and no registration of a mark is to continue if it is not valid”, quoting Health World Ltd v Shin-Sun Australia Pty Ltd (2010) 240 CLR 590 at [27].
391 CFCU submitted that the evidence did not disclose sufficient reason not to cancel the Bendigo Community Marks and therefore they should be cancelled. It further submitted that the evidence of the many trade mark applications made by Bendigo shows the extent to which Bendigo would go to prevent other traders from using the word “community” with respect to the Services. It said that Bendigo’s conduct in registering and applying to register so many versions of “community” marks is antithetical to the policy and purposes of the TM Act.
392 Bendigo submitted that there is sufficient reason not to order cancellation of the Bendigo Community Marks. It noted that the Bendigo Device Mark has been registered since 1999 and the Bendigo Word Mark has been registered since 2001; neither of the Bendigo Community Marks were opposed by third parties, despite CFCU’s contention that the term “community bank” is the natural and necessary term to describe mutual banks or other ADIs with a mutual structure; and that, until August 2017 when CFCU commenced the Rectification Proceeding, the marks were unchallenged. Bendigo noted that, in the meantime, it has expanded its franchise banking distribution model under and by reference to the Bendigo Community Marks to the point at which, as at June 2017, there were 316 branches in operation; by August 2017 individual shareholders had made substantial investments in franchise bank branches operating under and by reference to the Bendigo Community Marks; and millions of dollars in sponsorship and grants had been distributed under and by reference to those marks.
393 Bendigo submitted that importantly the consistent evidence of the CFCU witnesses in cross-examination was that they do not have an issue with the continued use by Bendigo of the Bendigo Community Marks. In those circumstances, Bendigo submitted that the Court ought to exercise the general discretion under s 88 of the TM Act and not cancel the Bendigo Community Marks.
394 As noted above, the statutory discretion to cancel or remove the Bendigo Community Marks has been enlivened. Having considered the matters raised by Bendigo and the evidence relied on by it, in my opinion the evidence does not disclose sufficient reason not to cancel the Bendigo Community Marks.
395 As noted by the Full Court in Anchorage, there is a public interest in ensuring that trade mark registrations are only made in favour of parties who are entitled to obtain them and that the purity of the Register be maintained such that a mark that is not valid should not be registered and registration of a mark that is found not to be valid, as is the case with the Bendigo Community Marks, should not be maintained.
396 I have found that the Bendigo Community Marks are not capable of distinguishing the Services from those of other traders. Registered trade mark rights ought not to accrue in respect of trade marks that, according to their ordinary signification, are for words that other traders may desire to use unless by the relevant dates they have achieved factual distinctiveness pursuant to s 41(6) of the TM Act: see Bohemia Crystal at [246]. On that basis the Bendigo Community Marks ought not to remain on the Register. Bendigo has not satisfied me that I should exercise my discretion to decline to make such an order. My reasons for reaching that conclusion follow.
397 First, that there has been no opposition to registration of the Bendigo Community Marks for some 20 years is not a persuasive factor. There may be many reasons why such an application was not made earlier, including a disinclination to pursue hard fought litigation in the nature of these proceedings, as was the case for G&C Mutual.
398 Secondly, Bendigo points to the fact that in the period following registration of the Bendigo Community Marks it has grown a business with over 300 Bendigo community bank branches and there has been significant investment on the part of Bendigo and its franchisees in the franchise business (see [415] below). It contends that the business was built by reference to the Bendigo Community Marks. But Bendigo is required to use and to the extent it has used the Bendigo Community Marks, in particular the Bendigo Word Mark, it has done so in conjunction with signage or markings that signify to consumers that it is the provider of the banking services in the Bendigo community bank branches. In most instances it is the Bendigo Composite Mark that has been used for this purpose. Bendigo has not demonstrated that it is by reference to use of the Bendigo Community Marks alone that it has built the Bendigo community bank franchise business.
399 In any event, Bendigo is the registered proprietor of the Bendigo Composite Mark with a priority date of 21 October 1997. This was the mark in use as at the dates of application for the Bendigo Community Marks (see [135] above) and the evidence demonstrated that since that time Bendigo has used that mark extensively. There is no application to remove that mark from the Register. Bendigo will be able to continue to use the Bendigo Composite Mark which meets the requirements of the regulator.
400 Thirdly, that CFCU’s witnesses accepted in cross-examination that Bendigo should be able to continue to use the term “community bank” does not justify a mark that is not valid remaining on the Register. But the evidence of those witnesses should nonetheless be seen in context:
(1) Ms Morrison gave the following evidence:
Q: So the shareholders of Bendigo Bank: they’re a community too, aren’t they?
A: They are members of the community and they’re a – they – they can be described as a – as a community of shareholders – as listed shareholders. I can’t
Q: Community of owners?
A: Yes, a community of owners.
Q: All right?
A: I think that community – community banking is – is – is a – is a very descriptive term.
Q: So it’s proper for Bendigo to use the term “community bank”, isn’t it?
A: I think any financial institution that is banking the community or delivering banking services to a community should be able to describe – describe itself as – as – as banking the community, as providing a community bank, including cooperative and mutual banks.
Q: Yes. And Bendigo?
A: Bendigo should be able to describe its – use it – use it – use a descriptor of community banking if it’s banking the community.
Q: I see. Banking the community is a descriptor, is it?
A: I think it’s a descriptive – it’s a – it’s a general descriptive term. I – whether it is apt for some institutions to call themselves community banks is another issue.
Q: All right. But it’s nevertheless appropriate in the case where there’s owners who are members of the community and where the bank provides services to a community; is that right?
A: I think it’s apt. It could be used – it – the – the – the need or the opportunity to not be able to describe that’s what you’re doing would seem to be counterintuitive if you are a – if you are a financial institution that is banking the community.
(2) Mr Lawrence’s evidence was that he thought that Bendigo should not have a monopoly on the term “community bank”, that it as well as COBA’s members should be able to use that term, Bendigo should be entitled to use the term “community bank” for its community branches and that Bendigo should have a continuing right but not an exclusive right to do so; and
(3) Mr Tancevski’s evidence was that in making its application for the CFCU Marks, CFCU does not necessarily wish to see Bendigo stop using “community bank” but would like to register the CFCU Marks and “move forward”, and consequently has to “seek recourse to the blockages present to [CFCU] today”. Mr Tancevski gave the following further evidence:
Q: Now, so is the point that you don’t – you don’t seek – you don’t wish to have Bendigo Bank cease to use its Community Bank trademark?
A: It would be our preferred position but not as a guaranteed outcome.
Q: So a preferred position in the sense that that would then allow you to secure registration for Community First Bank; is that the point?
A: No, or at least register –sorry, at least go through the bank application process without this process blocking us.
Q: So that process is stalled?
A: Absolutely.
Q: And do you – right. And just to clarify your answer, Mr Tancevski, you – are you or are you not seeking to have Bendigo Bank cease to use the trademark Community Bank?
A: Yes.
Q: You are asking to have Bendigo cease to use the trademark Community Bank?
A: Yes.
Q: You are?
A: Because it stops us doing it, yes.
Q: And by that, you mean that Bendigo Bank should change the name of its entire community bank branch structure?
A: No, sir. I’m not asking that.
Q: You don’t want that?
A: It’s not obligatory in our model, no.
Q: So Bendigo can continue to use the Community Bank as a name of its banking system, can it?
A: Just for clarity, sir, if I may. Are we – are we opposed to Bendigo Community Bank continuing its operation? Not in any manner.
401 Ms Morrison and Messrs Lawrence and Tancevski accepted that Bendigo should be able to use the term “community bank” but not exclusively. Ms Morrison said that she thought the term was descriptive and that Bendigo could use it provided it was “banking the community” or giving back to the community. Messrs Lawrence and Tancevski’s evidence was that exclusive use currently enjoyed by Bendigo should not be permitted given the nature of the term and, in the case of Mr Tancevski, because it acted as a blockage. In any event, the removal of the Bendigo Community Marks from the Register will not preclude Bendigo from using the term “community bank”, particularly as it retains ownership of the Bendigo Composite Mark.
402 Finally, CFCU raised as a further reason against the exercise of my discretion to refuse to cancel the registration of the Bendigo Community Marks the many trade mark applications made by Bendigo commencing in October 1997 which are set out at [75] above. CFCU said that these applications showed the extent to which Bendigo would go to prevent other traders using the word “community” in connection with services in class 36. For so long as the Bendigo Community Marks have been registered it has sought to maintain a monopoly in the use of the words “community bank”.
403 Bendigo has taken steps to register a relatively large number of trade marks incorporating the words “community” and/or “bank”. Based on that it could be said, as was found to be the case in Bohemia Crystal, that Bendigo has used the Register to prevent competitors from using the term “community bank” in association with their services. If that is so, such conduct would be antithetical to the policy and purposes of the TM Act: see Bohemia Crystal at [256]. However, given my lack of satisfaction based on the matters raised by Bendigo, it is not necessary for me to determine whether in fact Bendigo has been using the Register in this way.
4.9 Section 92(4) of the TM Act – non-use
404 Section 92 provides an independent ground on which CFCU says the Bendigo Community Marks should be removed for non-use. Given the conclusion I have reached in relation to CFCU’s reliance on s 88(1) of the TM Act, it is not necessary for me to consider this alternate ground.
405 In the Appeal Proceeding CFCU appeals from the decision of a delegate of the Registrar. The delegate found that Bendigo had made out its ground of opposition pursuant to s 44(2) of the TM Act and that CFCU had not established honest concurrent use pursuant to s 44(3)(a) of the TM Act, “other circumstances” pursuant to s 44(3)(b) of the TM Act or prior use of the CFCU Marks pursuant to s 44(4) of the TM Act.
406 CFCU seeks orders that registration of each of the CFCU Marks be allowed. It alleges that the delegate erred in finding that the ground of opposition pursuant to s 44(2) of the TM Act was established in relation to the CFCU Marks because each of those marks was deceptively similar to the Bendigo Word Mark; in finding that use of the CFCU Marks would likely give rise to a real risk of confusion; by finding that CFCU did not establish honest concurrent use of the CFCU Marks; by failing to consider if there were “other circumstances” pursuant to s 44(3)(b) of the TM Act that made it proper to register the CFCU Marks; and by finding that CFCU did not establish prior use of the CFCU Marks.
407 The appeal is by way of rehearing of Bendigo’s opposition to registration of the CFCU Marks. In its statement of grounds and particulars Bendigo relies on ss 42(b), 44, 58A, 59 and 60 of the TM Act. As the opponent, Bendigo bears the onus of establishing a ground of opposition on the balance of probabilities: see Registrar v Woolworths at [32] and [45].
408 I turn to consider each of Bendigo’s grounds. Relevantly, Bendigo’s opposition to registration of the CFCU Marks on each of the grounds specified in [407] above is made only by reference to the Bendigo Word Mark.
5.1 Section 60 of the TM Act – reputation
409 It is convenient to commence with consideration of Bendigo’s opposition to registration of the CFCU Marks based on s 60 of the TM Act which provides that:
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, had 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.
410 In order to establish this ground of opposition Bendigo must show that as at the priority dates of the CFCU Marks, 1 March 2013, the Bendigo Word Mark had acquired a reputation in Australia amongst the public generally such that use of the CFCU Marks would be likely to deceive or cause confusion.
411 In McCormick & Co Inc v McCormick (2000) 51 IPR 102; [2000] FCA 1335 (McCormick) at [81] Kenny J considered the intended meaning of the word “reputation” as used in s 60. After referring to the definition in the Macquarie Dictionary, her Honour opined that the word “reputation” as used in s 60 is “apt to refer to ‘the recognition of the [marks] by the public generally’”. At [82]-[83] her Honour said:
82 Does the evidence establish that in Australia before 9 March 1992 the McCormick & Co marks were recognised by the public generally and, because of that, the use by Mary McCormick of her marks would be likely to cause the public confusion, as for example, by the public’s mistakenly attributing a business connection between the two or attributing her product to the company?
83 I accept, as counsel for Mary McCormick said, that this is not an issue that attracts s 144 of the Evidence Act 1995 (Cth). Whether the McCormick marks have a reputation in Australia is not a matter “that is not reasonably open to question”. In ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 343; 23 IPR 193 at 234 Lockhart J said:
[R]eputation within the jurisdiction 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 …
412 After referring to the evidence relied on by McCormick & Co to establish its reputation, Kenny J continued 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: see, eg, Isuzu-General Motors Australia Ltd v Jackeroo World Pty Ltd (1999) 47 IPR 198; Marks & Spencer Plc v Effem Foods Pty Ltd (2000) AIPC 91-560; Photo Disc Inc v Gibson (1998) 42 IPR 473; and RS Components Ltd v Holophane Corp (1999) 46 IPR 451. This court has followed this approach as well, acknowledging that public awareness of and regard for a mark tends to correlate with appreciation of the products with which that mark is associated, as evidenced by sales volume, among other things. Thus, in Toddler Kindy Gymbaroo Pty Ltd v Gymboree Pty Ltd (2001) 51 IPR 1, Moore J accepted at [94] that the applicant had established a reputation for the purposes of s 60 solely on the basis of use and promotion of the relevant mark. Another example of this approach is Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd (1997) 38 IPR 495 (Nettlefold), in which Heerey J relied upon the public visibility of the applicant’s marks over approximately two decades as well as a $100,000 promotional campaign in finding that a reputation for the purposes of s 28 of the 1955 Act existed.
413 Once reputation is established, s 60 of the TM Act directs attention to whether, because of that reputation, the use of the marks sought to be registered would be likely to deceive or cause confusion. The likelihood of deception or confusion must be real and tangible: see Southern Cross Refrigerating Co v Toowomba Foundry Pty Ltd (1954) 91 CLR 592 at 595. It is sufficient if consumers would have cause to wonder if the services provided in association with the use of the mark the subject of the application were being provided by the same person as the owner of the mark in which the reputation had been established: see Insight Radiology Pty Ltd v Insight Clinical Imaging Pty Ltd (2016) 122 IPR 232; [2016] FCA 1406 at [76].
414 A significant amount of the evidence relied on by Bendigo in the proceedings went to the question of whether Bendigo had established a reputation in the Bendigo Word Mark by the priority date of the CFCU Marks, 1 March 2013. In particular Bendigo relied on evidence given by Messrs Hunt, Conlan, Holland and Rutter and Ms Lindsay. Given its volume it is not practical nor indeed possible to set that evidence out in detail in these reasons. In its written submissions Bendigo referred to parts of that evidence which it said provided examples of the significant marketing and promotional activities undertaken. I set out that evidence, including some of the examples of advertising and other media mentions, below.
415 It is convenient to start with Mr Hunt who, as I observed above, gave evidence about the development of Bendigo’s franchise bank concept and activities undertaken in the period from 1998 to 2009, when he ceased working for Bendigo. One of the matters touched upon by Mr Hunt was the events that took place at the time of the opening of a new Bendigo community bank branch. There would usually be a launch party hosted by the Franchise Company and Bendigo’s public relations staff would liaise with local media and assist in the preparation of an event notification in the lead up to the opening of the branch. Bendigo would issue a media release the day before the official opening of the branch and usually arrange for it be published in the local media. In relation to those events:
(1) copies of advertisements published in local and regional newspapers and promotional material promoting the launch parties for the opening of Bendigo community bank branches, and press media articles discussing those launches, were in evidence. Mr Hunt said that those advertisements were consistent with how the launch parties were promoted across Bendigo’s community bank branch network during his time at Bendigo. An example of one such advertisement in relation to the opening of the Goomalling & Districts branch is included at [244(2)] above. A later example published in The Manly Daily on 12 June 2002 in relation to the opening of the Harbord branch appears below (highlighting in original):
(2) Mr Hunt noted that on some occasions Bendigo and/or the relevant Franchise Company asked celebrities with ties to a particular area to open a branch. An example of the publicity surrounding such an event from 2001 is included at [244(4)] above. A newspaper clipping reporting on the opening of the Wentworth and District Community Branch of the Bendigo Bank in March 1999, attended by Ray Martin, appears below (highlighting in original):
(3) Mr Hunt also provided several examples of Bendigo’s media releases for the opening of a branch including, by way of example, a release dated 9 June 2005 titled “Branching out: Bendigo opens number 300” which was in the following terms:
Bendigo Bank tomorrow notches twin milestones with the opening of the North Ryde Community Bank® branch in Sydney.
North Ryde is the Victorian-based bank’s 300th branch, a four-fold expansion in just 10 years.
And it is Community Bank® branch number 150, meaning that locally owned and operated community branches now comprise half of Bendigo Bank’s network.
“These are significant numbers in anyone’s terms,” said managing director Rob Hunt.
“Three hundred full-service branches means we now complement our reputation for customer-focussed service with a significant branch presence.
“Our ATM network, too, now exceeds 300 and we have an excellent, customer friendly internet and phone banking system, so Bendigo is becoming increasingly competitive and attractive to customers on all fronts. In the coming months we will sign up our millionth customer.
“These numbers signal that we have the potential to become a meaningful force in retail banking.”
Mr Hunt said expanding Bendigo’s distribution network had been a key aim when the company converted from a building society to bank in 1995.
“Our research then showed that customers felt the current banking system was focussed on its own objectives rather than those of customers or individual communities.
“Certainly we knew that our success was inextricably linked to the success of our customers and communities, so if we could assist the development and success of each community we would secure our own future success.
“We set out to establish a clear point of difference and unique value proposition for customers and communities around Australia and that is reflected in our growth.
“At bank conversion we had 74 branches, and all but two of them in Victoria. Today, half our branches are interstate and this trend is continuing.
“And to have half the network owned by local communities demonstrates the strength of the demand for Bendigo’s customer and community focused approach to banking.
“New communities continue to be attracted to our style of banking and we expect our network to continue to grow by around 30 branches per year for the foreseeable future.”
Mr Hunt said two-thirds of Bendigo’s branches were less than five years old, signalling the company’s strong prospects for continued performance improvement. “Most of those branches are growing very strongly and will continue to increase their contribution as their businesses mature.
“The prospects for our business are excellent as long as we continue to focus on producing good outcomes for our customers and communities.”
416 Mr Hunt put into evidence approximately 270 articles reporting on Bendigo’s community bank franchise banking model for the period 1998 to 2008. He highlighted 106 of those articles which were published in the period 1998 to 2008. Examples of those articles are included at [244(1)] and [246] above. Examples of articles published on later dates include an article published in the Sunraysia Daily on 12 December 2005 and an article published in the Hobart Mercury on 16 February 2006 as follows (highlighting in original):
And:
417 Another matter touched upon by Mr Hunt and relied on by Bendigo concerned sponsorships. Mr Hunt explained that the Franchise Companies sponsored thousands of groups and organisations across Australia while he was employed by Bendigo and that those sponsorship arrangements accounted for a large part of the Franchise Companies’ advertising and promotion and, through that advertising, the promotion of Bendigo. Bendigo published guidelines for sponsorship by Franchise Companies which addressed the type of sponsorships that Bendigo considered to be inappropriate, provided recommendations and information on the evaluation of sponsorship, sponsorship review formula, tax requirements and financial assessments table, and required that all sponsorship activity be reported to the “Community Bank State Support Centre” so that a sponsorship database could be maintained. Franchise Companies were required to report all community contributions, including sponsorships, to Bendigo every six months. That data was recorded by the Franchise Companies in a sponsorship spreadsheet which was then shared with and consolidated into one spreadsheet by Bendigo.
418 Mr Hunt provided a number of examples of sponsorships undertaken by Franchise Companies and the associated signage. They included:
(1) sponsorship of the Henley Sailing Club by the local Franchise Company in 2001, 2003, 2007 and 2008. A photo of the signage, taken on a date which could not be identified by Mr Hunt but which I infer above at [244(5)] was taken in or after 2011, appears as follows:
(2) sponsorship by the local Franchise Company of the Warrandyte Football Club from 2006 to 2008. The signage appearing on the fence of an oval, and on a football jumper, was as follows:
And:
(3) sponsorship by the local Franchise Company of the Upwey Townships Group Inc’s annual billy cart race in 2008. A photo of the banner for that event appears as follows:
419 As explained by Mr Hunt at [150]-[151] above, in about 2005 Bendigo retained a third party provider to provide a template-based solution for its common marketing and promotional material called Marketing Central. Examples of the marketing templates that were made available to Franchise Companies through Marketing Central as at January 2005 included:
(1)
(2)
(3)
420 From mid-2008 Bendigo ran a national campaign called the “U campaign” aimed at emphasising the benefits of banking with Bendigo to consumers. The campaign consisted of a number of slogans including “I bank with [name of town] Community Bank branch. Do U?”, “That’s U in the middle” and “It starts with U”. Bendigo also used the “U campaign” to promote its $40m in contributions made by way of grants and sponsorships. Bendigo prepared a suite of material for the campaign which it made available to all Franchise Companies through the Marketing Central platform. Examples of the advertisements and flyers which were published or caused to be published by Bendigo between 2008 and 2009 as part of the “U campaign” included:
(1)
(2)
421 Mr Conlan gave evidence about Bendigo’s franchise model for the period commencing from 2009. He put into evidence a bundle of press material comprising approximately 170 articles published in the period 2011 to 2013. In doing so, Mr Conlan highlighted nine articles from that material including, by way of example, articles published in the Braidwood Times on 11 May 2011 titled “Our community bank in the limelight” and in the South Coast Register on 6 January 2012 titled “Community bank expands board” which appear as follows (highlighting in original):
(1)
(2)
422 Mr Conlan also gave evidence about the continued reporting of sponsorship activities by Franchise Companies to, and the collation of relevant sponsorship data by, Bendigo. Mr Conlan put into evidence sponsorship material comprising photos of signs, printouts from the internet and video content. By way of example that material included:
(1) the local Franchise Company contributed monies towards the development and building of a new multipurpose stadium in Diamond Creek and was granted naming rights over the stadium. Photos of the exterior and interior of the stadium show:
(2) in 2011 a 22-seat bus was purchased and donated on behalf of the local Franchise Company to the community health centre in Galston. The bus appears as follows:
423 Bendigo also relied on evidence given by Mr Holland, Bendigo’s senior stream lead - new customers, who gave evidence about marketing and branding guidelines and activities. Mr Holland referred to the guidelines that Bendigo provided to the Franchise Companies on, among other things, how to use the Bendigo Word Mark (as described by Mr Hunt at [149] above) and described specific marketing campaigns undertaken by Bendigo.
424 From about 2007 to 31 December 2014 Bendigo ran a nationwide club rewards program which was made available to all Franchise Companies. The program provided local clubs and groups with a financial reward when they brought new business to a community bank branch. The program was supported by an advertising campaign titled “Bank with us and your club benefits”. Examples of the campaign material for that program included:
(1)
(2)
425 In 2011 Bendigo conducted an advertising campaign using the “It starts with U” slogan. Previously Bendigo had conducted the “U campaign” (see [420] above). The “It starts with U” campaign was aimed at highlighting the competitive banking and financial services Bendigo offered through its community bank branches. The campaign included television commercials and Bendigo structured the campaign in a way that allowed its Franchise Companies to produce and personalise their own television commercials. According to Mr Holland:
(1) 117 commercials were screened on Channel 7 between March 2011 and May 2011;
(2) 127 commercials were screened in the ACT on Channel WIN between November 2012 and February 2013;
(3) commercials were screened five times a day at two large cinema complexes between January and June 2012 and October 2012 to March 2013 in Logan, Queensland (QLD);
(4) 1308 commercials were screened in Darwin on channels 1, 10 and 11 between 1 April and 31 July 2012;
(5) four 15-second television commercials were screened in Western Australia (WA) approximately 240 times on the Seven Network through GWN7 from about June to September 2012; and
(6) three 30-second commercials were screened in WA approximately 637 times across channel 7, 7Mate, 9, SBS, 10 and GEM between May 2011 and 8 May 2012.
426 I was provided with copies of some of the commercials referred to in each of the preceding subparagraphs. Three of the commercials that were screened on Chanel 7 between March and May 2011 for Freemantle, Gingin and York respectively, and one of the commercials screened at the cinema complex in Logan, QLD, were similar in nature and each involved an individual describing his or her banking relationship with a local “community bank”, what it had achieved personally for him or her and how banking with that community bank branch also benefitted the local community. Each advertisement concluded with the following depiction of the “It starts with U” slogan, adapted to the relevant state or community bank branch:
427 One commercial, screened in the ACT between November 2012 and February 2013, described the contribution of community bank branches to the local community, and concluded with the following:
428 I was also provided with four of the commercials shown in WA from June to September 2012 and one shown in Darwin between April and July 2012. Each of these commercials shows one or more community members who are described in the narrative as people who bank with a particular “community bank branch” that has supported the local community. Each commercial concludes with a depiction of the “It starts with U” slogan, similar to that set out in the preceding paragraph, and includes an image of those community members holding a poster with the B Bendigo Mark accompanied by the narrative “so think about the flip side when you choose where to bank”. For example, the following appeared in the Darwin commercial:
429 In early 2013 Bendigo conducted an advertising campaign to highlight the benefits of obtaining Bendigo’s banking and financial services through its community bank branches using the slogan “believe in your bank”. Mr Holland explained that the “believe in your bank” commercials were designed by Bendigo to make the connection between a customer’s banking and local outcomes and that Bendigo intended the commercials to reinforce that Bendigo “does more than just an average bank”, is more than just about “money” and gives the “power” back to individuals to decide where their money goes when banking with it. The campaign included two television commercials and was supported by radio, outdoor and press advertising. The television commercials were aired on channels 9 and 10 in Victoria in February and March 2013 and from March to April 2013 in cinemas across Melbourne and regional Victoria. It was estimated that they reached over one million viewers when aired on TV and approximately 220,000 viewers when aired in cinemas. Mr Holland put into evidence examples of the campaign material and a copy of the marketing campaign guide which was made available to the Franchise Companies. The campaign material included:
430 Bendigo also relied on extracts from the Facebook pages of various community banks. Between 6 and 7 September 2018 Ms Lindsay carried out searches in relation to Bendigo’s community bank branches on the Facebook website by entering the search term for a specific location of a branch and the words “community bank branch”. Ms Lindsay put into evidence copies of the first page of each of the pages she located for each search. By way of example, the results of Ms Lindsay’s searches included:
431 On about 6 September 2018 Ms Lindsay also conducted Google Maps “street view” searches for several community bank branches by visiting the Google Maps website and searching for the street address of various branches. The results of her searches show pictures of the façades of some of Bendigo’s community bank branches including, by way of example:
(1) Elmore Community Bank Branch:
(2) Inglewood & Districts Community Bank Branch:
(3) East Gosford & Districts Community Bank Branch:
(4) Sarina Community Bank Branch:
432 Mr Rutter provided evidence about the size of Bendigo’s community bank business and network including, to the extent that Bendigo does not claim confidentiality in the information, that as at 30 June 2013:
(1) community bank branches made up approximately 59% of Bendigo’s total retail branch network and approximately 5% of all retail bank branches across Australia;
(2) approximately 32% of Bendigo’s community bank branches operated in postcodes for which there were no other competitor retail bank branches;
(3) the community bank branch network had 640,159 customers out of Bendigo’s 1,416,266 total customers at the time; and
(4) Bendigo had made discretionary financial contributions in the 2013 financial year to Franchise Companies.
433 Mr Rutter gave evidence on a confidential basis about the number of shareholders across all Franchise Companies, total business generated across all Bendigo community bank branches, total staff employed in Bendigo’s community bank branches as at 30 June 2013 and the total discretionary financial contributions made by Bendigo in the 2013 financial year to Franchise Companies for marketing and development activities. Not surprisingly the value of business written and the number of shareholders and staff was significant.
5.1.1.6 Professor Worthington’s evidence
434 Also relevant to this question is Professor Worthington’s evidence. Professor Worthington was asked if he was “familiar with COMMUNITY BANK in Australia” and whether it was something he was familiar with because of his professional capacity, by reason of which he needs to know and understand banking and financial institution structures. In answering that question he was asked to describe his “knowledge and understanding of Community Bank in Australia”.
435 In that context, Professor Worthington opined that the reputation of the Bendigo Word Mark is underpinned by two “key building blocks”: Bendigo’s reputation and its high-level scores for customer satisfaction. As to the former, Professor Worthington said that Bendigo has a reputation for providing good value to its customers through competitive banking and financial products and services and personalised face-to-face customer service, and provided evidence for that view. As to the latter, Professor Worthington noted that Bendigo Bank’s position in the financial services market is in a group of middle-sized providers, located between the nationwide “Big Four” banks and a wide range of smaller, often more localised providers and that its customer satisfaction rating, based on research conducted by Roy Morgan, was much higher than the average result of the “Big Four” Australian banks.
436 In cross-examination, Professor Worthington agreed that it was the presence of the Bendigo branding elements that gave trust and other related attributes to the reputation of the community banks because Bendigo offers the banking licence and its approach and value comes through in the community bank branches. Professor Worthington also agreed that as a matter of branding one cannot ignore the importance of cognitive cues of a mark like Bendigo Bank in the context it is used, that people look for safe havens and to trust financial institutions, and that Bendigo would appear to be offering that kind of safe haven by its presence. Professor Worthington said that the Bendigo Word Mark is underpinned by the building blocks of Bendigo’s reputation.
437 Bendigo submitted that, having regard to the evidence that it relies on, there is little doubt that the Bendigo Word Mark had a substantial reputation when CFCU sought to register the CFCU Marks on 1 March 2013.
438 However, despite the very large volume of evidence relied on by Bendigo, in my opinion it has not established that the Bendigo Word Mark had acquired a reputation in Australia prior to 1 March 2013. My reasons for reaching that conclusion follow.
439 As set out above, “reputation” refers to recognition of the Bendigo Word Mark by the public generally. Reputation must be proved by evidence, which can include advertisements and articles. Reputation can also be inferred from a high volume of sales, advertising expenditure and other evidence without any direct evidence of consumer appreciation of the mark: see McCormick at [83] (set out at [411] above). Bendigo’s evidence encompasses all of these categories. Notwithstanding this it has failed to establish, on the balance of probabilities, that the Bendigo Word Mark had a reputation in that it was recognised by the public generally prior to 1 March 2013.
440 In the material relied on by Bendigo in almost all cases the Bendigo Word Mark appears with the B Bendigo Mark or the Bendigo Bank mark and is rarely, if ever, used on its own. This is particularly so in material generated by Bendigo. On one view that is not surprising. It reflects the structure of the community bank business. That is, a branch that is owned and operated by a Franchise Company with the banking products and services provided by Bendigo. It also meets the requirements of the RBA, and later APRA, that the relationship between Bendigo and its community bank branches be clear and that Bendigo’s marketing material clearly disclose that Bendigo was the issuer of the banking and financial products and services offered at its community bank branches (see [139]-[142] above).
441 Two things follow from that observation. First, in some cases it appears the use relied on by Bendigo to establish reputation in the Bendigo Word Mark is use of the Bendigo Composite Mark. For example, the marketing templates appearing at [419] above. In my opinion, this constitutes use of the Bendigo Composite Mark despite the placement of the “B Bendigo Bank” phrase after the reference to “Community Bank Branch”. True it is that in some of those examples there is also use of the Bendigo Word Mark alone but the focus of the material and the part to which the eye is drawn, often because of a larger font size and the use of colour, is where there is combined reference to the relevant community bank branch and the B Bendigo Mark. That is, the Bendigo Composite Mark dominates the material. Further, even where the Bendigo Word Mark appears alone, absent any of Bendigo’s other marks, it is rarely, if ever entirely stripped of other indicia of Bendigo such as the identifiable Bendigo colours: maroon and yellow.
442 Secondly, even where there is use of the Bendigo Word Mark, it is in combination with the B Bendigo Mark or the Bendigo Bank mark and other indicia of Bendigo, for example at [420] above in relation to the “U campaign”. In those circumstances, the dominant cognitive cue in the material is the B Bendigo Mark or Bendigo Bank mark, rather than the Bendigo Word Mark.
443 Undoubtedly, Bendigo had a reputation in the Bendigo Composite Mark, the B Bendigo Mark and the Bendigo Bank mark prior to 1 March 2013. Because of the way in which Bendigo used the Bendigo Word Mark, either as an aspect of the Bendigo Composite Mark or in combination with the B Bendigo Mark or Bendigo Bank mark, I cannot be satisfied based on Bendigo’s evidence that it also had a reputation in that mark prior to 1 March 2013.
444 The evidence of the number of community bank branches, volume of business generated at those branches, staff numbers and so on cannot be ignored. The community bank branch concept has grown and, based on the volume of business, has clearly been a success. However, those numbers of themselves do not establish reputation in the Bendigo Word Mark. Given that Bendigo supplies the banking and financial products and services for the community bank branches and is closely associated with each of the branches, including in the representation of the branch, both at the branch itself and on marketing material issued by the branches, those indicia of success cannot be disentangled from the reputation Bendigo has in the Bendigo Bank mark, B Bendigo Mark and Bendigo Composite Mark.
445 Professor Worthington’s evidence would support that conclusion. He was of the opinion that the reputation in the Bendigo Word Mark was underpinned by Bendigo’s own reputation and its high-level scores for customer satisfaction. Critically he said that it was the presence of Bendigo’s branding elements that provided the trust and safe haven sought after by consumers of banking services.
446 Before leaving this topic it is necessary to say something about the newspaper articles relied on by Bendigo, some of which referred to “community banks” or a particular “Community Bank” without reference to Bendigo, for example the article at [421(2)] above. However, those articles alone are not sufficient to establish reputation in the Bendigo Word Mark. Many of the articles used “community bank” descriptively, and there were only relatively few instances where “community banks” or “Community Bank” appeared without reference to Bendigo. In other articles, while the author might use or refer to “Community Bank” there was also usually a reference to Bendigo.
447 Given that Bendigo has failed to establish that it had a reputation amongst the general Australian public in the Bendigo Word Mark prior to 1 March 2013. It follows that I do not need to consider whether use of the CFCU Marks would be likely to deceive or cause confusion under s 60(b) of the TM Act. Bendigo cannot make out its ground of opposition relying on s 60 of the TM Act.
5.2 Section 44 of the TM Act – deceptive similarity
448 In order to establish a ground of opposition under s 44(2) of the TM Act (set out at [339] above), Bendigo must show that as at the priority date for the CFCU Marks, the Bendigo Word Mark was substantially identical or deceptively similar to the CFCU Marks and that it was registered in respect of similar services. Bendigo contended that the CFCU Marks are at least deceptively similar to the Bendigo Word Mark. It did not pursue a case that the CFCU Marks are substantially identical to the Bendigo Word Mark.
449 As noted at [342] above, s 10 of the TM Act provides that a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion. A summary of the principles relating to the consideration of whether a trade mark is deceptively similar to another is set out at [343]-[344].
450 Bendigo submitted that the words “community” and “bank” are key features of both its and the CFCU Marks and are critical to the overall net impression; it had a very substantial nationwide reputation associated with its use of “community bank” at the priority date of the CFCU Marks; overall differences between the Bendigo Word Mark and the CFCU Marks are minimal and there are phonetic similarities; due to consumers’ lack of understanding of the term “mutual” in the context of a company structure, little, if any, attention would be given to the word “mutual” in CFCU’s COMMUNITY FIRST MUTUAL BANK mark; the services claimed under the Bendigo Word Mark and the CFCU Marks are similar; people generally require banking and insurance to manage their day-to-day lives and thus the kind of customers who obtain Bendigo’s and CFCU’s services are the same, being a broad class of consumers; and the channels through which Bendigo and CFCU offer and provide their services importantly include primarily bank branches and over the telephone. Having regard to those factors Bendigo submitted that there ought to be no doubt that the CFCU Marks are likely to deceive or cause confusion.
451 CFCU submitted that in determining whether the CFCU Marks are deceptively similar to the Bendigo Word Mark regard should properly be had to the “essential feature” of each mark in question and that, in identifying the essential feature, the Court could properly disregard those elements of a mark that are descriptive or in common use in the relevant trade. That being so, CFCU’s primary submission was that COMMUNITY FIRST BANK is not substantially identical or deceptively similar to the Bendigo Word Mark because the presence of the words “Community First” makes a difference when the marks are compared.
452 There was no dispute between the parties that the Bendigo Word Mark has a priority date that predates the priority dates for the CFCU Marks and that the Services are closely related to the services for which the CFCU Marks are sought to be registered.
453 The question for the Court is whether the CFCU Marks are deceptively similar to the Bendigo Word Mark or, put another way, whether there is a real tangible danger of deception or confusion occurring by reason of use of the CFCU Marks: Registrar v Woolworths at [50] (see [343] above). That is not to be judged by a side-by-side comparison of the marks in question. Rather, in determining that question I am required to consider all of the surrounding circumstances, including the circumstances in which the CFCU Marks would be used, the circumstances in which the services will be bought and sold and the character of the probable acquirers of the goods or services. Having considered those matters, in my opinion there is no real, tangible danger of deception or confusion occurring from use of the CFCU Marks. They are not deceptively similar to the Bendigo Word Mark. My reasons for reaching that conclusion follow.
454 First, a common feature of both the Bendigo Word Mark and the CFCU Marks is the inclusion of the words “community” and “bank”. The issue is whether the additional words that appear in the CFCU Marks are sufficiently distinctive to remove the danger of deception or confusion. In the case of the COMMUNITY FIRST BANK mark it is the word “first” and in the case of the COMMUNITY FIRST MUTUAL BANK it is two words, “first” and “mutual”. I do not accept, as Bendigo submitted, that the differences in the marks resulting from inclusion of those the additional words is minimal. Their inclusion in the CFCU Marks renders them both visually and aurally different to the Bendigo Word Mark.
455 Secondly, people of ordinary intelligence and memory who see the COMMUNITY FIRST MUTUAL BANK mark are likely to recall that it includes not only “community first” but also “mutual”, all ordinary English words. Contrary to Bendigo’s submission, a consumer’s purported lack of understanding of the term “mutual” does not mean that little attention would be given to that word and that it would not add distinction to the mark. Even accepting that the class of consumers who would acquire the products and services is broad, there is no evidence that people in that class would not understand the term “mutual” and even if that were so, it does not mean that they would give little attention to it. It, along with the word “first”, is an additional word in the COMMUNITY FIRST MUTUAL BANK mark, separating “community” and “bank”, and in that way provides additional points of differentiation between that mark and the Bendigo Word Mark.
456 Thirdly, people of ordinary intelligence and memory who see the COMMUNITY FIRST BANK mark are likely to recall the words “community first”, which are ordinary English words. In addition the word “first” separates “community” and “bank”, differentiating the mark from the Bendigo Word Mark.
457 Fourthly, the essential feature of each of the CFCU Marks are the words COMMUNITY FIRST in the COMMUNITY FIRST BANK mark and COMMUNITY FIRST MUTUAL in the COMMUNITY FIRST MUTUAL BANK mark. It is those words that make the CFCU Marks sufficiently different to the Bendigo Word Mark, COMMUNITY BANK. The word “bank”, which is common to the CFCU Marks and the Bendigo Word Bank is, as I have already found, a differentiator (see [350]-[355] above), but is also descriptive and could not be said to be an essential feature nor make up the dominant cognitive cue in the marks as it denotes the nature of the organisation.
458 Fifthly, the word “community” which is common to the CFCU Marks and the Bendigo Word Mark is not so distinctive that its use by CFCU would cause confusion that could not be dispelled by the inclusion of the additional words “first” and “first mutual”. “Community” is not a made up word or a word that lends a particularly unique or unexpected colour to the word “bank”. As I have already observed, the contrary is the case.
459 Finally, I accept that the range of people who might obtain services from each of CFCU and Bendigo are the same and that, as people generally require baking and insurance services to manage their day-to-day lives, the relevant class is broad and likely made up of both sophisticated and less sophisticated consumers. However, given the very nature of the services, banking and financial services and products, I do not accept that there would be any real likelihood of deception or confusion. A degree of care would be taken by even less sophisticated consumers when acquiring those types of services. Further, given that such services are acquired, at least on the first occasion, through store fronts, any confusion that might have existed would be dispelled at the point of sale. Banking services and products are not acquired in a haphazard or summary way or in a vacuum. They require the completion and provision of information by both the customer and provider of the services alike. In the case of the banking services and products provided through Bendigo’s community bank branches, it would be apparent that they are provided by Bendigo, while those offered under the CFCU Marks would be provided by CFCU.
5.2.2 Sections 44(3) and (4) of the TM Act
460 If I am wrong about that and one or both of the CFCU Marks are deceptively similar to the Bendigo Word Mark, those marks would not be registered. However, if that was the case, regard would have to be had to subs 44(3) and (4) of the TM Act. Given my conclusions above I do not need to address the application of those subsections but for completeness I do so below. Subsections 44(3) and (4) provide:
(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.
461 The first issue to consider is whether CFCU has engaged in honest concurrent use of the CFCU marks pursuant to s 44(3)(a) of the TM Act as it contends it has. In McCormick at [30]-[32] Kenny J, in considering whether there had been honest concurrent use of the trade marks in issue, said the following about s 44(3):
30 Section 44(3) gives the Registrar a discretion to accept an application that would otherwise be rejected under s 44(1) in the case of honest concurrent use or other circumstances making it proper to do so. The authorities establish that the principal criteria for determining whether registration should be permitted pursuant to s 44(3) include:
(1) the honesty of the concurrent use;
(2) the extent of the use in terms of time, geographic area and volume of sales;
(3) the degree of confusion likely to ensue between the marks in question;
(4) whether any instances of confusion have been proved; and
(5) the relevant inconvenience that would ensue to the parties if registration were to be permitted.
See Re Alex Pirie & Sons Ltd’s Application (1932) 49 RPC 195; (1933) 50 RPC 147 at 159-60; Re John Fitton & Co Ltd’s Application (1949) 66 RPC 110 at 112; and Stingray Surf Co Pty Ltd v Lister (1997) 37 IPR 306 at 310-11. These factors are not necessarily exhaustive of the matters to be considered, but they are a useful guide: see Re Electrix Ltd’s Application [1957] RPC 369 at 379.
The honesty of the use
31 The rights of the parties are to be determined as at the date of the application for registration - in this case, 9 March 1992: Southern Cross at 594-5; Re Simac SpA Macchine Alimentari’s Application (1987) 10 IPR 81 at 90-1 (Simac); Aromas Pty Ltd v Aroma Coffee & Tea Co Pty Ltd (1997) 40 IPR 75 at 86 (Aromas); and Trepper v Miss Selfridge Ltd (1991) 23 IPR 335 at 346.
32 The honesty of concurrent use refers to “commercial honesty, which differs not from common honesty”: see In Re Parkington & Co Ltd’s Application (1946) 63 RPC 171 at 182. In that case, Romer J said at 181-2:
[T]he circumstances which attend the adoption of a trade mark in the first instance are of considerable importance when one comes to consider whether the use of that mark has or has not been a honest user.
…
462 Here CFCU relies on the Community First Registered Mark to establish that there has been honest concurrent use of the CFCU Marks. It contends that its use of the Community First Registered Mark constitutes use of the CFCU Marks shorn of their descriptive elements “bank” and “mutual bank” in respect of banking services since 1993, which is a time before the priority date of the Bendigo Word Mark. It submits that this constitutes use because it does not substantially affect the identity of the trade marks.
463 Mr Tancevski gave evidence about CFCU’s use of the Community First Registered Mark.
464 According to Mr Tancevski, CFCU chose to present and has consistently presented the words “Community First” as the most prominent part of its brand and the words “Credit Union” in a less prominent style as follows:
465 Mr Tancevski said that CFCU has used and continues to use the Community First Registered Mark alone without the addition of the words “credit union” and uses “Community First” and “Community First Credit Union” interchangeably in its marketing material. An example of this can be found on CFCU’s website which, on the page headed “About us”, includes:
It all comes back to our Members
Community First Credit Union Limited is a financially sound and well managed financial institution that has been in operation since 1959. We are a mutual organisation, which means that we are Member owned and are run for the benefit of our Members, not for external shareholder profit.
As a mutual organisation Community First is not required to make large profits to pay dividends on shares. We deliver value to our Members as owners through superior service, an extensive range of products, lower fees and competitive interest rates.
…
Read about Community First’s 50 year journey via our ebook here (/sites/default/files/cf02850thannebook finalsp2.pdf) >
Community First today
Today, Community First Credit Union Limited is the largest community based credit union operating throughout the Sydney and Central Coast region with 15 Financial Services Stores. We aim to continue to be an integral part of the communities in which our Members live and work.
466 Mr Tancevski gave more detailed evidence about the use by CFCU of the Community First Registered Mark since 1993 and the building of its reputation in that mark that resulted. He gave the following examples of use of the Community First Registered Mark:
(1) signage at each of CFCU’s financial services stores features the Community First Registered Mark. For example:
(2) CFCU’s website is branded with the Community First Registered Mark in the form appearing in [464] above, subject to date of publication, and in its domain name www.communityfirst.com.au, which has been used by CFCU for its website since at least 2001, and in the website’s header and footer;
(3) since at least 2013 CFCU has offered a mobile banking application known as “Community First Mobile Banking”;
(4) since at least 1994 CFCU has published and distributed a newsletter to its members titled “Focus”. Copies of the newsletter from the period 1994 to 2009, when it was produced in hardcopy, and printouts from the period 2015 to 2018 downloaded from CFCU’s website were in evidence before me. They were branded with and displayed the Community First Registered Mark simpliciter and/or in the form appearing in [464] above, subject to the date of publication; and
(5) CFCU uses its Community First Registered Mark on brochures and product material.
467 According to Mr Tancevski, CFCU has also built its reputation in the Community First Registered Mark through its support of local community groups and initiatives including:
(1) in the late 1990s CFCU sponsored younger members of the community to attend youth camps;
(2) in 2001 CFCU established the “Community First Partnership Program” by which it provides funding to local clubs who, in turn, promote its products to their members;
(3) in March 2001 CFCU became a Greater Western Sydney Ambassador, a program which brought together a variety of businesses to promote the Greater Western Sydney region to the rest of Australia;
(4) in 2004 CFCU was awarded a Prime Minister’s award for excellence in community business partnerships for its partnership with Chaos TV in relation to a program aimed at improving financial literacy in young people;
(5) in 2009, in partnership with the McGrath Foundation, CFCU launched the “McGrath Pink Visa” credit card. For each McGrath Pink Visa credit card issued CFCU donates $20, half of the annual card fee, to the McGrath Foundation for each year that the card is held; and
(6) in late 2013 CFCU launched the McGrath Pink Visa debit card. For each Pink Visa debit card issued CFCU donates $1, half of the monthly card fee, to the McGrath Foundation for each month that the card is held. CFCU continues to offer the McGrath Pink Visa credit and debit cards and as at June 2018 had, through these initiatives, raised over $673,000 for the McGrath Foundation.
468 CFCU’s advertising, promotion and communication costs included in its annual reports for the financial years 2009 up to and including financial year 2018 were:
469 A threshold issue arises as to whether use of the Community First Registered Mark constitutes concurrent use of the CFCU Marks.
470 Section 7(1) of the TM Act provides that:
If the Registrar or a prescribed court, having regard to the circumstances of a particular case, thinks fit, the Registrar or the court may decide that a person has used a trade mark if it is established that the person has used the trade mark with additions or alterations that do not substantially affect the identity of the trade mark.
(notes omitted.)
471 CFCU submitted that its use of the Community First Registered Mark is use of the CFCU Marks for the purposes of s 7(1) because it is use with an alteration that does not substantially affect the identity of the marks, which identity principally resides in the term “community first”.
472 The evidence establishes that CFCU uses the Community First Registered Mark on its own and more commonly with the addition of the words “credit union”. However, when one compares the CFCU Marks with the Community First Registered Mark there notable differences. First, the CFCU Marks include the words “bank” and “mutual bank”. Contrary to CFCU’s submission, those additions substantially affect the identity of the marks. While the words are descriptive and are not the key cognitive cues in the marks, they convey a different type of organisation. Professor Worthington expressed the view that the addition of the word “bank” in the name of a financial services provider is an advantage. It conveys that it is more trustworthy and the conversion from credit union to bank, and with it the change in branding, positively alters consumer perception of the trustworthiness, safety and security of an organisation. Secondly, when compared with the stylised version of the Community First Registered Mark (see [464] above), the CFCU Marks do not include the star device or the words “credit union”.
473 In light of those differences I do not accept that the use of the Community First Registered Mark constitutes use of the CFCU Marks for the purpose of s 7(1) of the TM Act. Accordingly, CFCU cannot establish honest concurrent use under s 44(3) of the TM Act. My conclusion on whether there has been use of the CFCU Marks also affects CFCU’s ability to rely on s 44(4) of the TM Act.
474 That then leaves the issue of whether, because of other circumstances, it would be proper to accept the application for registration of the CFCU Marks pursuant to s 44(3)(b). The other circumstances relied on by CFCU are that since 1993 it has continuously traded under the name “Community First Credit Union Limited” and under and by reference to “Community First”. The evidence establishes this to be so, although since 2006 the stylised representation of the Community First Registered Mark does not include the word “limited”. That is, even accepting that use of the Community First Registered Mark is not use of the CFCU Marks, there has been continuous use of and trading by reference to the term “Community First”. Of course the evidence establishes that, despite an intention or desire to do so, CFCU could not trade by reference to or use the CFCU Marks without APRA approval. That factor, in my opinion, constitutes an “other circumstance” for the purpose of s 44(3)(b). When that is combined with the evidence of use of the Community First Registered Mark it makes for a compelling reason to find that there were “other circumstances” present for the purposes of s 44(3)(b) such that the CFCU marks should be accepted for registration.
5.3 Section 58A of the TM Act – first use
475 Bendigo also relies on s 58A of the TM Act as a ground of opposition to registration of the CFCU Marks on the basis that CFCU is not the first user of the CFCU Marks. Section 58A of the TM Act provides:
(1) This section applies to a trade mark (section 44 trade mark) the application for registration of which has been accepted because of:
(a) subsection 44(4); or
(b) a similar provision of the regulations made for the purposes of Part 17A.
(2) The registration of the section 44 trade mark may be opposed on the ground that the owner of the substantially identical or deceptively similar trade mark (similar trade mark) or the predecessor in title:
(a) first used the similar trade mark in respect of:
(i) similar goods or closely related services; or
(ii) similar services or closely related goods;
before the owner of the section 44 trade mark or the predecessor in title in relation to the section 44 trade mark first used the section 44 trade mark; and
(b) has continuously used the similar trade mark in respect of those goods or services since that first use.
(notes omitted.)
476 CFCU’s applications for the CFCU Marks were accepted by the Registrar with an endorsement under s 44(4) of the TM Act.
477 The authors of Shanahan’s Australian Law of Trade Marks and Passing Off (M Davison and I Horak, 6th ed, Law Book Co, 2016) describe the precise meaning of s 58A as ambiguous: at [50.2240]. I was given little assistance by the parties on the operation of s 58A and my own research only identified two decisions of this Court which have considered the section.
478 In Millennium & Copthorne International Ltd v Kingsgate Hotel Group Pty Ltd (2012) 97 IPR 183; [2012] FCA 1022 (Millenium & Copthorne) at [10] Jacobson J described the interaction between s 44(4) and s 58A of the TM Act as follows:
Where a trade mark is accepted for registration with an endorsement under s 44(4), a person may oppose the registration of the mark under s 58A of the Act on the ground that the owner of the earlier mark (described in the subsection as the similar trade mark) first used the similar trade mark in respect of similar or closely related services before the owner of the trade mark endorsed under s 44(4), or its predecessor in title. The owner of the prior registered mark must have used the similar trade mark continuously since its first use.
479 Despite having decided the threshold question under s 58A of the TM Act adversely to the respondent, that is, whether the trade mark was deceptively similar to the earlier mark, Jacobson J went on to consider the remaining questions under s 58A(2) of the TM Act. They were whether the respondent (or the appellant), or their predecessors in title, first used the “similar trade mark” in respect of similar or closely related services; and whether the first user has continuously used the similar trade mark in respect of those services since that date. At [60]-[62] his Honour made the following observations about s 58A:
60 Section 58A is a relatively new ground of opposition. The explanatory memorandum to the Trade Marks Amendment Bill 2006 (Cth) stated that the new s 58A was needed to enable the owner of a trade mark that is deceptively similar to another trade mark to oppose its registration on the basis of “absolute first use”: see Davidson, M et al, Shanahan’s Australian Law of Trade Marks and Passing Off (4th Ed, Lawbook Co, 2008) at [50.2215], p 379.
61 The Explanatory Memorandum went on to say that, as the law stood before the amendment, the owner of the earlier registered trade mark had no basis upon which to oppose registration of a mark accepted under s 44(4) even where the earlier registered owner’s use pre-dated that of the accepted application.
62 The object of s 58A therefore appears to be to overcome the effect of the principle that states that in a case of disputed claims to proprietorship nothing less than substantial identity between the two marks will suffice: see Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) 120 ALR 495 at 513; 31 IPR 375 per Gummow J.
480 Caesarstone Ltd v Ceramiche Caesar SpA (No 2) (2018) 133 IPR 417; [2018] FCA 1096 concerned two appeals and a rectification proceeding. Section 58A was raised as a ground of opposition. One of the submissions made by the respondent was that if Caesarstone established any entitlement to rely on the exception under s 44(4), by reason of its alleged prior use since 2001, then it relied upon its continuous use of its mark between 1988 and the priority date of the first disputed trade mark to establish the ground of opposition under s 58A. Caesarstone submitted that if the Court determined that the relevant marks were not deceptively similar then strictly there was no need to deal with, among others, s 58A. At [737] Robertson J said the following about the purpose of s 58A:
The purpose of the provision is to allow consideration to be given, in the context of a party succeeding under s 44(4), to the circumstance that the owner of the earlier trade mark may have used its trade mark before applying for trade mark registration. The mischief was that, in the absence of this provision, it was not possible to oppose registration of a trade mark accepted under s 44(4) even where the registered owner’s pre-registration use predated that of the applicant’s use so accepted. See generally cl 4.9 of the Explanatory Memorandum to the Trade Marks Amendment Bill 2006. I accept the submission on behalf of Caesarstone that s 58A is limited in this way and the operation of s 44(3) is not excluded by s 58A.
481 Here CFCU has not succeeded under s 44(4) of the TM Act. Rather I have found that the CFCU Marks and the Bendigo Word Mark are not deceptively similar. In other words what Jacobson J described as the threshold question in Millenium & Copthorne has been decided adversely to Bendigo. It follows that this ground of opposition does not arise for consideration.
5.4 Section 42(b) of the TM Act – contrary to law
482 As set out at [333] above, s 42(b) of the TM Act provides that an application for registration of a trade mark must be rejected if its use would be contrary to law. Bendigo relies on two grounds within its s 42(b) opposition, namely that the use of CFCU Marks would be a breach of s 66 of the Banking Act and/or a breach of s 18 and s 29 of the Australian Consumer Law (ACL) being Sch 2 to the Competition and Consumer Act 2010 (Cth).
483 The relevant date for assessing whether use would be contrary to law is the priority date for the trade mark the subject of the application for registration, although looking forward to prospective conduct after registration was effected: see Time Warner Entertainment Co LP v Stepsam Investments Pty Ltd (2003) 134 FCR 51 at [47]. For the purpose of Bendigo’s opposition the relevant date is therefore the priority date for the CFCU Marks, 1 March 2013.
484 In Primary Health Care at [411] Rangiah J (Greenwood J at [2] and Katzman J at [78] agreeing) held that:
Section 42(b) of the TMA requires that the use of a trade mark “would be” contrary to law. It is not enough for a party opposing registration to show that s 18 of the ACL or s 52 of the TPA might be contravened. The opponent must prove, on the balance of probabilities, that the provision would be contravened by use of the trade mark.
485 In Health World Ltd v Shin-Sun Australia Pty Ltd (2005) 64 IPR 495; [2005] FCA 5 at [44], in considering a ground of opposition under s 42(b) of the TM Act, Cooper J said:
A contravention of the [Trade Practices Act 1974 (Cth)] would be sufficient to satisfy the contravention of law requirement of s 42(b) of the Act: CI Kasei v PGM Group Pty Ltd (2002) 57 IPR 267 at 269. The decision whether or not the use of the mark would be a contravention is a hypothetical question because it relates to future use: Kasei at 270. However the test requires that use “would”, not merely “could”, be contrary to law: Advantage Rent-A-Car Inc v Advantage Car Rental Pty Ltd (2001) 52 IPR 24; [2001] FCA 683 at [28].
486 Relevantly, in C I Kasei Co Ltd v PGM Group Pty Ltd (2002) 57 IPR 267 at 270 the hearing officer observed that:
The determination remains hypothetical because the relevant decision-maker is not being asked to make a determination that there has been a breach of the relevant law. He or she is making no award or order under that other law. Rather, the decision-maker is determining whether future use of the trade mark would breach that law. By definition, such an assessment can only ever be hypothetical.
(emphasis in original.)
487 In considering a ground of opposition under s 42(b) of the TM Act, in Virgin International Pty Ltd v Virgin Enterprises Ltd (2010) 87 IPR 440; [2010] ATMO 38 (Virgin International) at [40]-[42] the hearing officer said:
[40] Given the Act allows a trader to obtain a trade mark registration on the basis of intention to use rather than actual use, of course, many traders apply to register their trade mark(s) before finalising their business arrangements, including, as in the present case, before obtaining the necessary regulatory approval to deal in the goods intended to be supplied under the trade mark in question. Thus there are several decisions where an applicant in this position has in effect been given the benefit of any doubt, as far as s 42(b) of the Act is concerned, that it will in fact obtain the necessary approval, or licence, or permission, as the case may be, before actual use commences.
[41] In Nicholas van den Berg v Brian Hamilton [2007] ATMO 31 (5 June 2007), for example, the applicant sought to register his mark in relation to, inter alia, the services “sale of recreational and leisure equipment and vehicles, excluding air tools, parts and accessories”. The opponent established the applicant was “not registered or licensed to carry out the sale of recreational vehicles in the State of Western Australia” as at the relevant priority date and thus use of the mark in Western Australia for this purpose at that time would have been contrary to the Western Australian Motor Dealers Act 1973 (WA) (the MVDA). It was not alleged the applicant had in fact used its mark in this manner, merely that, if it had, such use would in principle have been contrary to law. In dismissing the opponent’s ground based on s 42(b) of the Act, however, the hearing officer concerned said:
Additionally, there is nothing before me that would prevent the applicant seeking a motor vehicle dealers licence that would enable it to sell vehicles to the general public in the future. As a business decision, any trade mark owner may decide to obtain trade mark registration before making an application to comply with the MVDA - with an intention to acquire both registrations before the sales operation would begin.
[42] Similarly, in New South Wales Lotteries Commission v Novamedia BV (2001) 52 IPR 638; (2001) AIPC 91-747, a case cited by Mr Yates, the applicant was seeking to register its mark for services including “the organisation of lotteries”. The hearing officer accepted that use of the mark in NSW for such services as at the relevant priority date would have been in breach of NSW legislation which required persons organising lotteries to hold appropriate licences. Again, it was not alleged such illegality had actually occurred, since there was no evidence that the applicant had in fact used the mark in suit while unlicensed. In these circumstances the hearing officer concerned concluded:
It is possible that, if the use of the trade marks was not licensed or authorised under the provisions of [the relevant NSW legislation], such use could be contrary to law in NSW I do not accept, however, that it shows that the use of the trade marks in question here would, of necessity, be contrary to law. As Mr Munday said, a trade mark owner may seek a licence subsequent to the grant of its trade mark registration. I would also presume that it could license the use of its trade marks, under the provisions of ss 7 and 8 of the Trade Marks Act 1995, to one of the entities which is already authorised, entitled or licensed to conduct lotteries in NSW There may be other ways in which it could make entirely lawful arrangements for the use of its trade marks in NSW, and in other parts of Australia.
(emphasis in original.)
5.4.1 Would use of the CFCU Marks have contravened s 66 of the Banking Act as at 1 March 2013?
488 Bendigo contended that use of the CFCU Marks at the time the applications for their registration were made would have contravened s 66 of the Banking Act because:
(1) at the time the applications were made, the 2006 Guidelines were in effect. Those guidelines provided that ADIs listed on the APRA website as banks had been given unrestricted consent to use the words “bank”, “banker” or “banking” and that ADIs listed on the APRA website as credit unions or building societies were entitled to use the word “banking” in relation to their banking activities in accordance with an APRA consent dated 19 May 2000 but were not permitted to use the term “bank”;
(2) APRA published further guidelines on the implementation of s 66 of the Banking Act, including the 2015 Guidelines which provide that an ADI wishing to operate as a bank must hold at least $50m in Tier 1 capital and that, unless special circumstances exist, APRA would grant such an ADI an individual consent to use or assume the expression “bank”, “banker” and “banking” on an unrestricted basis, including in its company name;
(3) as at 1 March 2013 CFCU had not sought or obtained APRA consent to use the word “bank” as part of its corporate name or otherwise, and when opposition to registration was lodged by Bendigo CFCU had not sought or obtained APRA consent to use the word “bank”;
(4) Mr Tancevski wrote to APRA about its trade mark application on 30 June 2015 seeking its “guidance on whether the regulator…would have any objection to Community First registering a trademark with IP Australia that included the name ‘Bank’” and stating that CFCU met the requirements of the Banking Act subject to APRA approval;
(5) on 24 July 2015, three months after Bendigo had filed its opposition to the CFCU Marks, APRA replied stating that it did not object to CFCU registering the CFCU Marks “on the understanding that none of the CFCU Proposed Names should be used for any commercial purpose until APRA has consented to their uses under section 66 of the Banking Act”. In an outline of submission for the Trade Marks Office, CFCU said that it did not have APRA’s approval to use the restricted word “bank” at the time of the application and when the CFCU Marks were accepted for registration by IP Australia; and
(6) Mr Tancevski knew when he applied for the CFCU Marks that CFCU was still subject to APRA approval in relation to use of the word “bank”. Mr Taylor indicated that the path to approvals with APRA required to move to the banking name was quite involved. Associate Professor Martin indicated that APRA retains a discretion to approve the adoption of the name “bank”, it does not disclose its processes for making a determination and he could not comment on how APRA would exercise its discretion even if an ADI had $50m in Tier 1 capital.
489 Bendigo submitted that it was clear that as at 1 March 2013 when the CFCU Marks were sought to be registered their use would have been contrary to s 66 of the Banking Act because CFCU had not obtained APRA’s consent at the relevant time and this remained the position when Bendigo lodged its opposition and when APRA provided its letter in July 2015. Bendigo further submitted that the fact that APRA changed its policy in 2018, over five years since CFCU lodged its applications for registration of the CFCU Marks, ought not alter the fact that as at 1 March 2013 use of the CFCU Marks would be contrary to law pursuant to s 42(b) of the TM Act.
490 As at 1 March 2013, s 66 of the Banking Act relevantly provided:
(1) A person is guilty of an offence if:
(a) the person carries on a financial business, whether or not in Australia; and
(b) the person assumes or uses, in Australia, a restricted word or expression in relation to that financial business; and
(c) neither subsection (1AB) nor subsection (1AC) allows that assumption or use of that word or expression; and
(d) APRA did not consent to that assumption or use of that word or expression; and
(e) there is no determination in force under section 11 that this subsection does not apply to the person.
…
(1AC) It is not an offence against subsection (1) for an ADI to assume or use the word banking in referring to the fact that it has been granted an authority under this Act.
…
(4) In this section:
(a) a reference to a restricted word or expression is a reference to:
(i) the word bank, banker or banking; or
(ii) the expression building society, credit union or credit society; or
(iii) any other word or expression specified in a determination in force under subsection (5); or
(iv) any other word or expression (whether or not in English) that is of like import to a word or expression covered by any of the previous subparagraphs; and
(b) a reference to a word or expression being assumed or used includes a reference to the word or expression being assumed or used:
(i) as part of another word or expression; or
(ii) in combination with other words, letters or other symbols; and
(c) a reference to a financial business is a reference to a business that:
(i) consists of, or includes, the provision of financial services; or
(ii) relates, in whole or in part, to the provision of financial services.
(notes omitted.)
491 Mr Tancevski’s evidence about CFCU’s applications for registration of the CFCU Marks and its liaison with APRA is set out at [94]-[101] above. There was no dispute and, indeed Mr Tancevski was entirely candid in his evidence that, as at 1 March 2013, CFCU did not have APRA’s approval to use the term “bank” in its name. CFCU did not approach APRA until after IP Australia had notified it of its intention to revoke acceptance of the CFCU Marks because CFCU did not have APRA’s consent to include the restricted word “bank” in the marks.
492 In my opinion, Bendigo’s submissions take too narrow an approach. The reality faced by CFCU was that it could not use the term “bank” until it was granted approval to do so by APRA. To do otherwise would put it in breach of s 66 of the Banking Act. Similarly, once approval was given under s 66 of the Banking Act to use the term “bank” in its name, it could no longer use the term “credit union” in its name: see [103] above. Thus it was inevitable that there would be a period between CFCU obtaining registration of the CFCU Marks and obtaining APRA consent to use the word “bank” in its name. However, it does not follow that as at 1 March 2013 use of the CFCU Marks would be contrary to s 66 of the Banking Act.
493 The evidence established that:
(1) from as early as 2011 CFCU sought its members’ views on a change of status from credit union to bank;
(2) CFCU in fact intends to convert to a bank;
(3) at all times since 1 March 2013 CFCU has met the relevant APRA criteria to apply for use of the words “bank” or “mutual bank” in its corporate name or trade marks;
(4) without a trade mark application CFCU cannot move forward and apply to APRA for approval because, upon making any such application, APRA would ask for its intended name and whether CFCU owned the trade mark or business name; and
(5) APRA is unlikely to consider any application by CFCU for approval to use “Community First Bank” or “Community First Mutual Bank” as corporate names while these proceedings are on foot.
494 These matters are relevant to my consideration of the question of CFCU’s conduct after registration and whether it would be acting in contravention of s 66 of the Banking Act. Those matters lead me to readily infer that, upon achieving registration, CFCU would apply for APRA’s consent to use the restricted word “bank” and thus either of the CFCU Marks as its corporate name.
495 As has been recognised, the question of use in the context of s 42(b) of the TM Act is a hypothetical one that relates to future use. That future use must be considered in context. In that regard, the position here is analogous to that before the hearing officer in Van den Berg v Hamilton [2007] ATMO 31 and New South Wales Lotteries Commission v Novamedia BV (2001) 52 IPR 638, quoted in Virgin International at [487] above. That is, while use of the CFCU Marks would be contrary to s 66 of the Banking Act as at 1 March 2013, I would infer that, upon obtaining registration, CFCU not only could but would apply to APRA for the necessary approvals under the Banking Act prior to using those marks. Relevantly, s 27(1) of the TM Act permits a person to apply for registration of a trade mark in respect of goods or services if the person claims to be the owner of the trade mark and the person is using or intends to use the trademark in relation to the goods and/or services. That is, the fact that CFCU intends to use the CFCU Marks but must obtain the necessary approval from APRA before being permitted to use those marks should not be erected as a barrier to their registration.
496 CFCU did not use the CFCU Marks before 1 March 2013 nor has it used them since that date. It is aware of the requirements of s 66 of the Banking Act and there is no evidence that it would use them contrary to that section. Further, there is no evidence that CFCU would not obtain the necessary approvals from APRA or that APRA would withhold its consent. In the context of questions about whether an organisation that was able to raise the required Tier 1 capital would still retain sufficient profitability to receive APRA’s approval under s 66 of the Banking Act, Associate Professor Martin said that an organisation can apply to use the word “bank” if it has $50m Tier 1 capital and that, to his knowledge, beyond that APRA has not published its processes for making a determination, which is a matter for APRA’s discretion. Associate Professor Martin’s evidence does not cast any doubt on CFCU’s ability to obtain approval. It simply recognises the reality that APRA is ultimately responsible for providing its approval and retains a discretion in that regard.
497 Bendigo has failed to establish, on the balance of probabilities, that s 66 of the Banking Act would be contravened by CFCU’s use of the CFCU Marks and thus has not made out its opposition under s 42(b) of the TM Act on that basis.
5.4.2 Would use of the CFCU Marks have contravened s 18 and s 29 of the ACL as at 1 March 2013?
498 In the alternative, Bendigo contends that use of the CFCU Marks would contravene s 18 and s 29 of the ACL on the basis that such use is likely to mislead or deceive consumers. In its statement of grounds and particulars Bendigo said that use of the CFCU Marks without consent under s 66 of the Banking Act is likely to mislead or deceive contrary to s 18 and s 29 of the ACL. In oral submissions Bendigo contended that use of the CFCU Marks suggests a misleading representation, connection, association or sponsorship in circumstances where it had no reputation for operating a bank, as opposed to Bendigo which had what it described as an “overwhelming trade presence”.
499 Section 18 of the ACL provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
500 Section 29 prohibits false or misleading representations about goods or services and provides:
(1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:
(a) make a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use; or
(b) make a false or misleading representation that services are of a particular standard, quality, value or grade; or
(c) make a false or misleading representation that goods are new; or
(d) make a false or misleading representation that a particular person has agreed to acquire goods or services; or
(e) make a false or misleading representation that purports to be a testimonial by any person relating to goods or services; or
(f) make a false or misleading representation concerning:
(i) a testimonial by any person; or
(ii) a representation that purports to be such a testimonial;
relating to goods or services; or
(g) make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; or
(h) make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation; or
(i) make a false or misleading representation with respect to the price of goods or services; or
(j) make a false or misleading representation concerning the availability of facilities for the repair of goods or of spare parts for goods; or
(k) make a false or misleading representation concerning the place of origin of goods; or
(l) make a false or misleading representation concerning the need for any goods or services; or
(m) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3?2); or
(n) make a false or misleading representation concerning a requirement to pay for a contractual right that:
(i) is wholly or partly equivalent to any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3?2); and
(ii) a person has under a law of the Commonwealth, a State or a Territory (other than an unwritten law).
Bendigo does not specify which subsection of s 29(1) it contends that CFCU’s use of the CFCU Marks would contravene.
501 In Primary Health Care at [413]-[418] Rangiah J summarised the principles in relation to s 18 of the ACL as follows:
413 The question of whether conduct is misleading or deceptive or likely to mislead or deceive must be considered by reference to the class of consumers likely to be affected by the conduct: Parkdale Custom Built Furniture Proprietary Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 199, 209.
414 No conduct can mislead or deceive unless the person to whom the representation is made labours under some erroneous assumption: Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 200. It must be determined what misconceptions or deceptions alleged to arise are properly to be attributed to ordinary and reasonable members of the classes of prospective consumers: Campomar Sociedad, Limitada v Nike International Limited (2000) 202 CLR 45 at [105].
415 The question is whether a not insignificant number of reasonable persons within the class are likely to be misled or deceived by the conduct, whether in fact or by inference: Hansen Beverage Company v Bickfords (Australia) Pty Ltd (2008) 171 FCR 579 at [46], [66]; ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 380-381; Bodum v DKSH Australia Pty Ltd (2011) 280 ALR 639 at [205].
416 Conduct is misleading or deceptive or likely to mislead or deceive if it has a tendency to lead into error: there must be a sufficient causal link between the conduct and error on the part of the person exposed to the conduct: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at [39].
417 The question of what is the natural and ordinary meaning conveyed by a publication or conduct is to be ascertained by the Court applying an objective test of what ordinary or reasonable consumers in the relevant class would understand as the meaning: Bodum at [203]; Parkdale v Puxu at 199, 204-5.
418 The representations relied on by the opponent for the purposes of s 42(b) of the TMA must be representations that will be made by the appellant by using the trade marks as trade marks, that is to distinguish the appellant’s goods or services from those provided by another trader.
(emphasis in original.)
502 Although s 29 of the ACL uses the term “false or misleading”, as opposed to “misleading or deceptive” as used in s 18, there is no meaningful difference: see Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd (2014) 317 ALR 73; [2014] FCA 634 at [40].
503 To establish its ground of opposition under s 42(b) of the TM Act on this basis Bendigo must satisfy the Court that there is a “real or not remote chance or possibility” of engaging in conduct that is misleading or deceiving regardless of whether it is less or more than 50%: S & I Publishing Pty Ltd v Australian Surf Life Saver Pty Ltd (1998) 88 FCR 354 at 362. Bendigo contended that in determining whether conduct is misleading or deceptive or likely to mislead or deceive, a court needs to identify the relevant section of the public by reference to whom the effect of CFCU’s conduct is to be assessed. It submitted that, within the relevant section of the public, CFCU’s conduct is to be considered by reference to all who come within it “including the astute and the gullible, the intelligent and the not so intelligent, the well educated as well as the poorly educated”: Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 202.
504 Bendigo acknowledged that the test for misleading or deceptive conduct involves more than establishing that people would be “caused to wonder” if CFCU were to offer financial services under and by reference to the CFCU Marks. But it contended that, given the overwhelming evidence of reputation it enjoys in the Bendigo Word Mark, use of the CFCU Marks is likely to mislead or deceive contrary to s 18 and s 29 of the ACL. Bendigo referred to and relied on the same evidence as relied on in support of its s 60 ground of opposition and submitted that this ground of opposition ought also to succeed.
505 To the extent that by this ground Bendigo seeks to establish that use of the CFCU Marks would be contrary to s 18 or s 29 of the ACL because consumers would be misled into believing that the services were being offered by Bendigo, my findings at [453]-[459] above that the CFCU Marks are not deceptively similar to the Bendigo Word Mark apply with more force here given the higher threshold.
506 To the extent that by this ground Bendigo seeks to establish that use of the CFCU Marks would be contrary to s 18 or s 29 of the ACL because consumers would believe that CFCU was a bank, I repeat the matters set out at [492]-[496] above. It is clear that CFCU would not in fact use the CFCU marks until APRA had given its approval for it to do so. CFCU’s conduct would only be in breach of s 18 and/or s 29 of the ACL if it used the CFCU Marks absent that approval.
507 Bendigo has not made out its ground of opposition relying on s 42(b) of the TM Act.
5.5 Section 59 of the TM Act – no intention to use
508 Section 59(a) of TM Act provides that the registration of a trade mark may be opposed on the ground that the applicant does not intend to use, or authorise the use of, the trade mark in Australia in relation to the goods or services specified in the application. A summary of the principles applicable to s 59 of the TM Act are set out at [359]-[361] above.
509 Bendigo contended that as at 1 March 2013 CFCU did not have an intention to use the CFCU Marks but that the applications for those marks were filed as a preliminary and preparatory step to reserving a name. Bendigo referred to CFCU’s letter dated 30 June 2015 to APRA concerning the filing of the CFCU Marks in which Mr Tancevski said that CFCU was “considering the option to convert from a ‘credit union’ to a ‘Bank’ at some future point”, that “as a defensive strategy” the board had resolved to try and “reserve a number of trademarks with IP Australia which at least prevent other parties from ‘squatting’ our brand and trade names”. Relying on that letter Bendigo submitted that CFCU clearly had no intention of using the CFCU Marks as at June 2015 but was “bookmarking” them.
510 Bendigo further submitted that CFCU seemingly does not have an intention to use the CFCU Marks as trade marks, in the sense of obtaining and maintaining exclusive rights in relation to them, given its intention to allow use of similar marks by other mutual organisations.
511 As set out at [359] above the filing of an application for registration of a trade mark is prima facie evidence of intention to use the mark: see Aston v Harlee Manufacturing Co (1960) 103 CLR 391 (Aston) at 401; Food Channel at [72]. In Aston at 401 Fullagar J also said the following about the “intention” evidenced by the filing of an application:
Again, I do not think that “intention” in this connexion ought to be regarded as meaning an intention to use immediately or within any limited time. A manufacturer of (say) confectionery would, I should suppose, be entitled to register three trade marks in relation to confectionery, though he intended only to use two of them and had not made up his mind as to which two he would use. If he in fact does not use any of them for the period specified in s. 72, the unused mark or marks may be expunged under that section. On the other hand, a manufacturer of confectionery, who had no intention of ever manufacturing motor cars, might be held disentitled to register a mark in relation to motor cars …
512 Here the fact of filing of the applications for the CFCU Marks is prima facie evidence of CFCU’s intention to use those marks. It is not displaced by the terms of Mr Tancevski’s letter dated 30 June 2015 to APRA, the text of which is set out at [98] above. That letter was sent after IP Australia notified CFCU of its intention to revoke acceptance of the CFCU Marks because CFCU did not have APRA’s consent to use the word “bank” in its name. The letter notes that CFCU was considering “the option to convert to from a ‘credit union’ to a ‘Bank’” and that the transition was “likely to occur in the next three years”. Given the uncertainty around the name, the need for APRA approval and the need to engage with its stakeholders it is not surprising that this letter was expressed in somewhat guarded terms.
513 In any event, there was sufficient evidence to support CFCU’s intention to use the CFCU Marks:
(1) at all times prior to and after the filing of the applications for registration of the CFCU Marks, CFCU met the minimum capital requirements set down by APRA;
(2) at all times CFCU has offered relevant services in class 36;
(3) in 2011 CFCU surveyed its members for their opinion on whether it should convert to a bank;
(4) as set out at [95] above, it was reported in CFCU’s Annual Report 2012 that there was an overwhelming response to the survey and that members were largely supportive of the mutual bank concept, although the board could see no significant advantage in converting at that time;
(5) Mr Tancevski’s evidence was that CFCU intends to change its status from a credit union to a bank; and
(6) CFCU has not abandoned that intention.
514 That the applications were filed in 2013 and there has been no use of the CFCU Marks prior to or since that time is hardly surprising given the need for APRA approval to use the term “bank”. As Mr Tancevski explained, until such time as the current dispute is resolved there is no point in CFCU approaching APRA for approval as it will want to know the name CFCU proposes to adopt. That is another reason that would explain the somewhat tentative tone of Mr Tancevski’s 30 June 2015 letter.
515 Bendigo’s submission that CFCU does not have an intention to use the CFCU Marks as trade marks, in the sense of obtaining and maintaining exclusive rights in relation to them, given its intention to allow use of similar marks by other mutual organisations, does not take the matter any further. That Mr Tancevski gave evidence in cross-examination that CFCU would not object to another credit union using the term “community bank” in their name does not establish that CFCU has no intention to use the CFCU Marks as trade marks. Mr Tancevski said that CFCU wishes to have exclusive use of “community first bank” and thus of the CFCU Marks if registered.
516 Finally in its statement of grounds and particulars at [14] Bendigo said in relation to its ground relying on s 59 of the TM Act that:
The CFB Trade Marks were accepted under the provisions of subsection 44(4). In addition to filing its alleged evidence of prior use with the Trade Marks Office, the Appellant also submitted that it has a substantial reputation in its Community First trade mark and that the “addition of the words CREDIT UNION, BANK or MUTUAL BANK are merely additions of known descriptive words indicating the nature of services provided by or a structure of the Appellant and do not dilute the distinctiveness of the Appellant’s lead or home trade mark and brand ‘COMMUNITY FIRST’.” Accordingly, the Appellant by its submission, has acknowledged that the trade mark it intends to use is Community First. Accordingly, the Appellant admits that it has no intention to use either of the CFS Trade Marks as a trade mark.
(emphasis in original.)
517 Bendigo did not make any submissions in support of this contention. To the extent it is still pressed it should be rejected. CFCU’s acknowledgment that the words “bank” and “mutual bank” are descriptive does not constitute an admission that CFCU does not intend to use the CFCU Marks and that it only intends to use the Community First Registered Mark. There is no basis for any finding to that effect. In any event, as submitted by CFCU a trade mark can include a descriptive component but still be distinctive because of other elements in the mark.
518 For those reasons Bendigo has failed to make out its ground of opposition based on s 59 of the TM Act.
519 For the reasons set out above CFCU has been successful both in the Rectification Proceeding and the Appeal Proceeding. The parties did not address me on costs. However, given my conclusions it follows that, in the absence of the parties having brought any relevant matter to my attention, CFCU should have its costs of both proceedings.
520 I will make orders requiring the parties to attempt to agree on the appropriate form of orders to be made reflecting my reasons and the conclusions set out above and, if they can agree, to submit the draft orders to my Associate within 14 days.
521 If the parties cannot agree on the form of orders, within 21 days of the date of these reasons each party is to provide its proposed orders in draft form to give effect to these reasons together with a submission, not exceeding three pages in length, explaining why those orders should be made. In the event that the parties cannot agree on a form of orders the proceedings will be listed before me on 17 October 2019 at 9.30 am.
I certify that the preceding five hundred and twenty-one (521) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Markovic. |
Associate: