Campomar Sociedad, Limitada v Nike International Limited & Anor S42/1999 [1999] HCATrans 480 (12 November 1999)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S41 of 1999

B e t w e e n -

CAMPOMAR SOCIEDAD, LIMITADA

First Appellant

NIKE COSMETICS SA

Second Appellant

and

NIKE INTERNATIONAL LIMITED

First Respondent

NIKE AUSTRALIA PTY LTD

Second Respondent

Office of the Registry

Sydney No S42 of 1999

B e t w e e n -

CAMPOMAR SOCIEDAD, LIMITADA

Appellant

and

NIKE INTERNATIONAL LIMITED

First Respondent

NIKE AUSTRALIA PTY LTD

Second Respondent

GLEESON CJ

GAUDRON J

McHUGH J

GUMMOW J

KIRBY J

HAYNE J

CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 12 NOVEMBER 1999, AT 10.15 AM

(Continued from 11/11/99)

Copyright in the High Court of Australia

GLEESON CJ: Yes, Mr Catterns.

MR CATTERNS: May it please the Court. Your Honours, may I deal with a few matters raised by your Honours yesterday afternoon first. First, may we, with apologies, correct an answer we gave to your Honour the Chief Justice at transcript page 31 when your Honour asked whether we had attempted to justify before his Honour Justice Sheppard the use of the word "Nike Sport" fragrance. I am sorry, your Honour, I had forgotten that at trial we did. We did not threaten to continue to use it but we wanted, I think the phrase was used, "a clearance" with respect to both. So we argued that the conduct that we had engaged in for the limited period was not misleading.

Then, in answer to some questions raised by his Honour Justice Kirby about the international framework, if I might put it shortly, your Honours, may we just refer your Honours to the Paris Convention for the Protection of Industrial Property to which Australia acceded in 1925 and we have been a party to the latest version, the Stockholm Act since - - -

KIRBY J: Was that a convention of 1883 or 1885 or something of that kind?

MR CATTERNS: I think so, your Honour.

KIRBY J: That is one between the King of Italy and the King of Serbia and various other places.

MR CATTERNS: I do not think that one, your Honour - yes, your Honour, 20 March 1883.

KIRBY J: Yes.

MR CATTERNS: Yes. The reason we - - -

KIRBY J: Queen Victoria came very - she only came in about two years later.

MR CATTERNS: Well, your Honour, and we ourselves in 1925.

KIRBY J: Three Australian colonies were members of it before Federation.

MR CATTERNS: I defer to your Honour on that one.

KIRBY J: It is all referred to in the Union Label Case, which we were looking at for another purpose recently.

MR CATTERNS: Yes I can see why. Your Honours, they are in volume 2 of Professor Lahore's book on Patents Trade Marks and Related Rights behind the tab "International Conventions" and where there is also what is called the TRIPs Agreement, the agreement on trade-related aspects of intellectual property rights and, your Honours, we submit that what can be derived from those - there are no particular provisions relating to the continuing operation of section 28 or not, or anything like it that we can see, your Honours, but the two policies that we have made submissions to the Court about are there, namely, first of all, protection of peoples property. The Paris Convention sets up a union for the protection of intellectual property, but matters of public interest and protection of the public from confusion are also very clearly there, including, for example, in Article 5 of the Paris Convention.

Your Honours, in relation to the other matter raised by his Honour about how this concept is of continuing operation or later removal for having become deceptive has been applied in other countries, including those in our region - I am sorry, overnight we have not been able to answer that, but we have agreed, if it is convenient to the Court, to give your Honours a joint, non-argumentative answer to that within about a week, if that is convenient.

GLEESON CJ: Thank you.

MR CATTERNS: We will do the work and check it with our friends so that it is not contentious, your Honours. Then, your Honours, in answer to some matters raised by his Honour Justice Gummow in relation to section 58(3), with respect, there seemed to us to be some difficulties in the construction of section 58(3) and our friends have given us Delphic hints that they may have a better understanding than ours, of which we look forward to hearing.

We have submitted yesterday that there is really a package of provisions, 28, 33, 34 and 58, which does allow registration of the same or deceptively similar marks, particularly in cases of honest concurrent user, and under 58 they have exclusive rights against the world but not against each other. But his Honour Justice Gummow pointed out that the "goods" of 58(3) are broader than those for which you have a right to sue in 58(1). We would point out that the words in 58(3) include:

rights of exclusive use.....are not.....acquired by any 1 of those persons as against any other of those persons by registration of the trade marks -

So, your Honours, we see it is a defence against trade mark infringement; it is clearly not a defence against passing off or, as Shanahan says, a fortiori section 52. So, for present purposes that is the short answer, but it still requires some sort of an explanation because, as his Honour pointed out, it seems to provide a defence to that which is not an infringement.

The history is this, your Honours, to put it shortly. We have given your Honours a bundle which I do not think we need to take the time to go to. In the 1905 Act section 25 was the equivalent to the current 33. Section 28 was the equivalent to our 34, and old section 50 was the equivalent of our 58. There was a proviso to section 50 which is the equivalent to our 58(3) and all of these were limited to the same goods. The change between the two Acts, between the 1905 and the 1955 Acts, was to broaden the idea of concurrent use to goods of the same description. First, the prohibition in section 33 to goods of the same description, the permission in section 34 to other goods, which are presumably goods of the same description or perhaps a little broader, and it seems to us to us but subject to anything our friends have to say, that as 33 and 34 were amended to make them broader to extend the classes of goods, 58(3), the old proviso, was also amended to make it broad without a thought that it was providing a defence for that which was not an infringement.

Your Honours, we may be wrong and there is another reason, but we cannot find it. There is a reference in Mr Shanahan's book, several references, "Australian Law of Trade Marks and Passing Off", Second Edition, at pages 40, 240, 332 and 351 to 352.

His Honour Justice Gummow mentions the section and its breadth, the subject of the present submission, at first instance, in New South Wales Dairy Corporation at [1989] FCA 124; (1989) 86 ALR 549, at 560.

GUMMOW J: It did not matter in that case, though.

MR CATTERNS: It did not, your Honour, and as your Honour notes it is a bit - - -

GUMMOW J: It does here, though.

MR CATTERNS: Well, only this far, your Honour. We submit that - I will not belabour it - but our submission is that, in short, the rights given by 58 do not give us a defence on passing off or section 52. I am sorry, your Honours, that is the best we can do on that.

Then, your Honours, we thought it would not assist the Court greatly for us to go through in much detail the judgments in the New South Wales Dairy Corporation as even in the detail I had started to do with his Honour Justice Mason, because - we have given your Honours references to the pages.

We have attempted to meet the substance of the reasoning in detail and merely to note them on the way through does not seem to us to be helpful. May I just give your Honours a few quick references without needing to take your Honours to it. As to the question of whether section 28(a) had a continuing operation, as we were taking your Honours to his Honour the Chief Justice, his Honour's conclusion was that it did have a continuing operation at pages 382 to 383 with earlier reasoning. His Honour Justice Brennan agreed with the Chief Justice at 389.

His Honour Justice Deane disagreed and held there was no continuing operation. His Honour's conclusion is at 398 to 399. In summary his Honour pointed to the prima facie construction that we have. His Honour said that the public policy considerations not having a misleading mark on the register were modified by the availability of other remedies such as passing off and so on, referring to the same case that his Honour the Chief Justice had, and his Honour also dealt with the question of the removal of "used or" that our friends have raised and your Honour Justice Kirby raised with me. His Honour deals with that at 397. His Honour then points to the fact that the alternative construction, that is the one for a continuing operation, leads to the necessity to confine section 28(a) in an artificial way, namely, by requirement of blameworthy conduct. His Honour says that at 398 to 399. Their Honours Justices Dawson and Toohey held that there was a continuing operation. Their Honours' conclusion is at 402 to 403. Their Honours base that, in particular, on section 61 and 22(1) wrongly remaining, which we have made submissions about.

Your Honour, Justice Gaudron answered the question on the basis that the case was fought and said if there was a continuing operation then it must be confined by the blameworthy conduct - this is 414 - but her Honour said that that assumption, that there is a continuing operation, does not appear "to be well founded. It is contrary to the" plain words - that is not her Honour's exact words - of section 28 and creates a number of further difficulties, including the very one of construction that one needs to go through to get blameworthy conduct.

Finally, your Honours, penultimately actually, your Honours, his Honour Justice McHugh also said there was no continuing operation or that his Honour's present inclination was that at 426, referring to the plain words of the section at 418; dealing with the argument on section 61(1) offends at 418 to 419; section 22 at 419 to 421, including the answer, we submit, to the fact that there was no predecessor of section 56(3). His Honour deals with that at 421; the question of the removal of the words "used or" his Honour deals with at 421 to 422 and his Honour analyses the cases at 422 to 425.

I said "penultimately" because his Honour Justice Gummow dealt with this in the following way in first instance in 86 ALR. His Honour, I think it is right to say, regarded himself as bound and, again, I do not think his Honour needed to go to the issue, with respect, because it appears to have been accepted. I stand subject to correction, but, as we read his Honour's reasons, it seemed to have been accepted at that stage, as in the High Court, that there was a continuing operation, accepted by the respondent and that was, no doubt, on the basis of the Bali v Berlei Case and GE. So, your Honours, we respectfully submit there is no continuing operation to section 28.

GAUDRON J: And I suppose you are say, if you read 58(3) as permitting actions for passing off or breach of section 52, there is simply no need for it, for 28 to have a continuing operation? I mean, there are other remedies.

MR CATTERNS: Yes, your Honour, as his Honour Justice Deane.

GLEESON CJ: That raises the question of the relationship between different aspects of the case.

MR CATTERNS: Yes, your Honour.

GLEESON CJ: Is it the position that even if the Trade Practices Act and passing off aspects of the matter are such as to warrant relief of the kind granted by Justice Sheppard, you nevertheless see some utility in retaining your registered trade mark?

MR CATTERNS: Yes, your Honour.

GLEESON CJ: Against, perhaps, the possibility that something might happen in relation to the business of the respondent that would alter the situation?

MR CATTERNS: Yes, your Honour, and also because - this might lead to something in relation to the form of orders which his Honour Justice Sackville discusses at some length - the order was restrained as against the use of Nike simpliciter, whereas we had submitted that the proper order was an order restraining us from selling the goods in a particular packaging. We were going to hand up a copy in a minute of the physical goods so, if your Honours thought it was worth having a looking at. Your Honour, two things: either the order would be limited in a conventional way to the particular conduct we had engaged in, which would be the Nike Sports plus the Nike simpliciter in the packaging which is exhibit so-and-so.

Alternatively, if the order were not varied and there was still an order made under section 80 of the Trade Practices Act restraining us from using Nike simpliciter, under that Act, as your Honours know, under section 80 we have the right to come back if circumstances change - - -

GLEESON CJ: That is what I wanted to understand.

MR CATTERNS: Yes, your Honour.

GLEESON CJ: So that we have to deal with the section 28 argument, even if otherwise we thought that the passing off or Trade Practices Act aspects of the case warranted an order of the width made by Justice Sheppard.

MR CATTERNS: In our respectful submission, yes, your Honour.

GLEESON CJ: Thank you. Could I then ask you a question in relation to this matter of Nike simpliciter. I am sorry to keep harping on this, but I will explain to you what is troubling me about it, Mr Catterns, so that you can deal with it. As I understand it, in the forefront of your argument in the Full Court was the proposition that Justice Sheppard had really not given proper consideration to the case stripped of the sport representation. You put an argument that his findings of fact were all related to the actual marketing you had engaged in using the sport concept and that he had not made findings of fact which sustained the wide orders that he made.

MR CATTERNS: Yes, your Honour.

GLEESON CJ: As I understand it, the Full Court rejected that and they said in truth Justice Sheppard intended to make and did make findings of fact about the conduct of your client being misleading and deceptive, even absent the word "Sport". You then put an alternative argument that if he had made that finding, it was wrong, and that was rejected. Does that not leave you with some rather awkward concurrent findings of fact in relation to the Trade Practices Act passing off aspects of the case? Have you not now got concurrent findings of fact against you, first of all, that there is a likelihood of misleading and deception, even if you do not use the word "Sport" and second, that that is precisely what your client intended when it registered its trade mark and commenced marketing in Australia?

MR CATTERNS: Well, your Honour, first, we do not seek to challenge the primary findings of fact but, secondly, we do submit that particularly if there is an error in the reasoning process, we are entitled to challenge those and including an ultimate finding, and so far as the intention goes, a finding of intention does not conclude the case, with respect - - -

GLEESON CJ: Well, you are not confronted just with a finding; you are now confronted, are you not, with concurrent findings on those issues, a matter that may be of some significance in this Court?

MR CATTERNS: Your Honour, it is true, of course - I cannot deny the way that your Honour has characterised the findings of the majority in the Full Court, but, your Honours, in a sense, there are three matters on which there are concurrent findings: first, our friends had a reputation and that reputation - - -

GUMMOW J: At what date? You have to think about a date.

MR CATTERNS: At the date of the commencement of the proceedings or at the date of the commencement of the wrongful conduct by the - - -

GUMMOW J: Which is how long before the commencement of proceedings?

MR CATTERNS: Very short, your Honour. With respect, the relevant date point is near enough to the commencement of the proceedings.

GUMMOW J: What date is that?

CALLINAN J: It is 7 June 1993, is it not? Page 1034.

MR CATTERNS: Thank you, your Honour.

CALLINAN J: I think those are the findings at first instance that are against you with respect to your clients' intention.

MR CATTERNS: Yes. So, your Honours, the first finding, which we do not challenge, is that our friends had a reputation in athletic footwear and clothing at that date.

GLEESON CJ: Well, actually earlier on that finding. I was speaking more of your clients' conduct in trying to exploit Nike International's brand, but it would have to be common ground that the reputation existed in 1986, otherwise your client would not have written to Nike International.

MR CATTERNS: Your Honour, I respectfully would not agree with that completely. The reason it is dangerous for me to agree is if our friends go back to the date of registration of the mark, they want to say that a reputation on footwear somehow spreads into perfumes at the date of the registration of the mark. They had a world-wide reputation of the sort, but the findings are not as narrow as that, we would submit. But so far as the section 52 cases goes, the concurrent findings his Honour the Chief Justice referred to is that they had a reputation in athletic shoes and clothing, or accessories. Secondly, your Honours, there are findings against us of actual confusion apparently that relate to - - -

GLEESON CJ: Not limited to the use of the word of the word "Sport", that is the point. That was the principal thrust of your attack on the judgment of Justice Sheppard, and it was rejected by the Full Court on the basis that Justice Sheppard found, and rightly found, that the confusion did not depend only on the use of the word "Sport".

MR CATTERNS: Yes, your Honour. I accept that for the moment. With respect, your Honour is right. Indeed, I was going to answer something your Honour had put to us about whether there was a change so far as a pharmacist's shelves goes. If I could come back to that in a second, your Honour.

That is two aspects. There is a finding of a reputation; there is a finding in actual confusion. Then there is a finding of intention to take advantage of the broad reputation. Your Honours, the short answer to your Honour the Chief Justice's question is, that does not give you a section 52 case. In many cases it will get there but then there has to be a missing link. Something has to happen in a consumer's mind, because intention is not sufficient - is neither necessary nor sufficient. Something has to happen in a consumer's mind which moves our friends' reputation in footwear in some way to draw the conclusion that in a completely different area of commerce - things you can buy in shops - but a different class of goods, the use of the word "Nike" on its own will lead people into error. The way that is done is by some process of reasoning that whereby the meaning of the word "Nike" so far as shoes goes is somehow applied to us.

Your Honours, that goes through this idea of brand extension, and consumers' awareness of brand extension, and where Mr Blanket says there will be an emotional feeling of energy and sexy and sport and youth, and there is some steps postulated in a consumer's mind where by they end up with a feeling that this is Nike, the shoe company's perfume, or somehow licensed by them.

HAYNE J: Mr Catterns, is this not to introduce notions of reason and logic to a field which by hypothesis excludes reason and logic. Confusion and deception are fields in which reason and logic at least do not figure largely, are they not?

MR CATTERNS: Your Honour, we respectfully agree with that and, indeed, I was going to just now give a reference to, long ago, what Sir Owen Dixon said in the Mark Foy's v Davies Coop Case [1956] HCA 41; (1956) 95 CLR 190. I do not need to take your Honours to it. That was the "Tub Happy" Case, and not precisely on this question, but his Honour says, with respect, what your Honour has put to me that it is a mistake to think that that is how people work. Indeed, as his Honour went on to say, the words "tub happy" merely convey "a gladsome carelessness a propos of the tub".

Now, your Honours, we submit here that the word "Nike" merely conveys sexy sporting energy. It is our friends who have to take the further step somehow in the reasoning of saying, "Well, somebody will move from sexy to think this product is endorsed by or sold by the footwear company.

GLEESON CJ: What was your clients' reasoning? They decided, according to the findings, to take a free ride on the reputation of Nike. Otherwise they would not have come to Australia. What was the process of reasoning they went through when they decided it would be good for their business to begin to market their product in Australia?

MR CATTERNS: Your Honour, Mr Ruiz's evidence was that perceived advantages in an association with the footwear company because of its reputation - "synergy"is the word I used yesterday - and he was cross-examined on those letters. He readily said that he saw an advantage, but he also said he saw an advantage in his own name; and, your Honour, he did not agree that he saw an advantage that people would draw the last step that they need to be misled.

CALLINAN J: Mr Catterns, Mr Mosch had written a letter in which he said that - Mosch on behalf of your client:

"our" main aim has been to position a high quality product in the selective perfumery market, "with the image of a brand renowned the world over in the field of sports."

That is at page 1034.

MR CATTERNS: Yes, your Honour.

CALLINAN J: That seems to have been beyond dispute, that was their aim, which seems to contradict what you have just told the Chief Justice.

MR CATTERNS: Well, your Honour, the trouble with that, though, they were letters tendered after the witness had finished to which we objected, as his Honour notes it over those pages, and they were not put to Mr - - -

CALLINAN J: But they were business records, they were admissible on that account.

MR CATTERNS: Yes, your Honour, but they were not put to Mr Corrales as having contradicted what I have just put, your Honour.

CALLINAN J: I understand that, but they were still admissible.

MR CATTERNS: They were, your Honour, and - - -

CALLINAN J: Once they are admissible, the judge can given what weight to them he thinks appropriate. He took into the account the fact that Mr Ruiz was not cross-examined, I think.

MR CATTERNS: Yes, but, your Honours - - -

HAYNE J: But is your argument, Mr Catterns, in this respect, Nike equals sexy, et cetera, and the consumer somehow engages in a process of reasoning which goes, "Nike to this concept sexy, et cetera, therefore I will buy", rather than a process of reasoning or recognition which goes, "Nike equals the company I have seen pushing shoes"?

MR CATTERNS: Well, your Honour, certainly the former rather than the latter, but we do not accept that they even go through that first process and that is why - and, again, I do not want to belabour this, your Honours - but in many cases intention does not carry the day. No amount of intention can cause passing off or section 52 to go over the line.

GUMMOW J: There was evidence of actual confusion, though, was there not?

MR CATTERNS: Yes, there was, your Honour.

GLEESON CJ: Expressed in terms that disregarded the word "sport". Even without the word "sport", there is a connection between soap and perfume and sport, is there not, via sweat?

MR CATTERNS: Yes, your Honour, I accept that, with respect. For example, at 1003 in volume 5 - - -

GAUDRON J: Does it not, at the end, come down to a causation problem?

MR CATTERNS: That is our submission, your Honour, yes.

GAUDRON J: At least for the purposes of section 52.

MR CATTERNS: Yes, your Honour.

GAUDRON J: On which one view is that the real cause was the aggressive advertising of Nike to get a reputation outside its field.

HAYNE J: It is all Michael Jordan's fault, Mr Catterns.

GAUDRON J: Is that the way you put it though?

MR CATTERNS: Yes, and your Honours remembers that is the way Justice Lehane put it. He said, "But we want to take advantage of it".

CALLINAN J: I wonder about this proposition, Mr Catterns: taking into account brand extension, that is what interests me. Say a company is marketing in a very, very small area and it is producing only one product but it is a very famous product and it is known all over the world. To what extent may it then prevent anybody else developing and selling other products without any connection with that at all? The Chief Justice has suggested to you that there is a connection here, but assume the case of no connection at all. Does it mean because a person has been so successful in promoting a name that nobody, for no other purpose and with respect to no other product at any time, can use that name once it has been registered, even if it gets it registered?

MR CATTERNS: Even absent registrations because - - -

CALLINAN J: Yes, absent registration even.

MR CATTERNS: That was the evidence of one of those pharmacists upon whom his Honour Justice Sheppard made his conclusion. He said that even if it was pet food - so, let us narrow our friend's reputation down to shoes alone, which is not true, their reputation is more, I accept - but they have got a reputation in that such that they get a monopoly in the passing off or section 52 sense, on the use of the word "Nike" the name of the Greek goddess in relation to pet food.

CALLINAN J: I suppose the argument is, "Well, why don't you find your own name and do the same sorts of things with your own name?"

McHUGH J: It need not even be a name, it may be the shape of a product. Take the Childrens' Television Workshop Case. There you have got the Muppets on television. They got injunctions restraining Woolworths from selling Muppet-type dolls, did they not?

MR CATTERNS: Yes, your Honour.

HAYNE J: But the key lies in 52 not being concerned with motive or anything of that kind, is it not?

MR CATTERNS: That is our submission, yes, your Honour.

HAYNE J: But, if - - -

MR CATTERNS: It is just an objective question.

HAYNE J: It matters not whether you intend to. It matters not what causes the consumer to be confused. Whether it is the advertising that Nike the shoe company has done, if consumers are confused, thou shalt not.

MR CATTERNS: With respect, that is not what the Court held in the Hornsby Building Information Centre Case.

GLEESON CJ: The intention might not get you home but it is not irrelevant, is it?

MR CATTERNS: No, I - - -

GLEESON CJ: Indeed, as I think someone has pointed out, it can be very good expert evidence.

MR CATTERNS: I did yesterday, your Honour.

GLEESON CJ: Yes.

MR CATTERNS: The High Court said that in the Australian Woollen Mills Case, "a reliable and expert opinion". But, nevertheless, even in that case, your Honour, 2:1 not.

GLEESON CJ: But the correspondence that Justice Callinan has referred to and the communications between your client - and let us assume they are experts in marketing - your clients and Nike constitute evidence of what they thought was likely to happen.

MR CATTERNS: I cannot and never have denied that, your Honour.

GLEESON CJ: They are likely to have been right. What percentage, do you think, of the Australian population would know that Nike is the name of a Greek goddess?

MR CATTERNS: Again, it is by no means coextensive with those who know our friends reputation, your Honour. I fully accept that. Your Honours, it is a matter that has to be proved, including by inference and inferences can be drawn from the intention, but it cannot go all the way, as it did not in the Australian Woollen Mill Case.

GLEESON CJ: It could even be suggested that most members of the Australian public would be amazed to think that anybody would choose "Nike" as the name for a perfume, unless it had some association with this company.

MR CATTERNS: Well, your Honour, that has got to be proved, with respect.

GLEESON CJ: It is like if somebody started manufacturing Reebok perfume.

MR CATTERNS: Well, your Honour, there are other elements. For a start, all they have sold is shoes and clothing; secondly, in most cases, but not in all, they got their mark up in a particular way, which is with the capital letters NIKE on a slant and this tick-looking crescent underneath it which is called a "swoosh", which we often see without even the use of the word "Nike" and they are very closely related to each other, so the - - -

GLEESON CJ: Well, we hear it. The Michael Jordan advertisement has got a noise like a "swoosh" in it.

MR CATTERNS: Yes, your Honour.

GLEESON CJ: That is very closely associated with the Nike image.

MR CATTERNS: Yes. Yes, your Honour, but we do not use that, of course, and if I may answer his Honour Justice Callinan's question. It is our name. Our company has been trading in Spain for decades. It bought out its competitor, which had been trading under the name "Nike" since the 1920s, with registrations around the world beginning in the 1940s, including in the United States in the 1960s, and he put a deal saying, "I have got a market in the area of perfumes, including in the critical market, the US. Let's do a deal. I see synergies." And he got the telex back that his Honour Justice Callinan took me to yesterday, which - one of the big reasons we lost apropos, if I may say so, your Honour, the concurrent findings of fact, is that his Honour Justice Sheppard construed the veto in the last paragraph of that telex in a way that what was telling us not to use "Nike" at all, not just saying, "Do not use `Nike' in a misleading way. Do not do some additional act," which is how we read it.

CALLINAN J: It looked a bit like a green light to me, I must say, but then I think your client altered its logo, did it not, or altered the shape of the trade mark?

MR CATTERNS: Your Honour, we gave up the old writing that had been on the Vigoroso Doncel, for example, which is at 1042, which is very old-fashioned typeface.

CALLINAN J: It has become fashionable again, actually, old-fashioned typeface.

MR CATTERNS: Well, he gave evidence about that and there is no finding that he was not telling the truth about that. He thought it was a more modern typeface that he went to.

CALLINAN J: You see there is a Polo brand too, is there not?

GLEESON CJ: That is right.

MR CATTERNS: Yes, your Honour, there is. I have lost the trade mark case relating to that and my learned friend won it, but, your Honours, in the end, with respect, picking up on what his Honour Justice Hayne put to us - - -

GUMMOW J: In the end point one, a lesson of Moorgate Tobacco is one should not get too excited perhaps when there is two international corporations wrestling these things out in a global setting. The question is, there being no general law of unfair competition in Australia and no general tort, the question is one that involves competing interests at various levels, proprietary interest, competition interests, consumer interests, and then there is various regimes in the law which strike different balances. The Trade Marks Act seems to strike one, passing off and section 52 perhaps strike another. The question is how does it fall in the particular case.

MR CATTERNS: Yes, your Honour.

GUMMOW J: But how do you then meet with respect to section 52 what Justice Hayne puts to you, there being evidence of confusion here? It may be the confusion is a result of your opponents spending themselves into that position by advertising, even though in a way their advertising is creating a false impression, namely, that they sell these goods in any other area, which is not the fact.

MR CATTERNS: Well, your Honour, then, the question is: should we be restrained?

GUMMOW J: Well, that is right.

MR CATTERNS: We have not cross-claimed, needless to say, but we respectfully submit that the way section 52 works, and those words "mislead and deceive" is not to say there is confusion.

GUMMOW J: But why is that not enough from the way section 52 strikes at - - -

GLEESON CJ: Especially since we are litigating this case in Australia and not in North Africa or Spain.

MR CATTERNS: Yes, your Honour, but the question is whether, we, our conduct, is misleading the public, and when one sees the people who say, "Well, I think that Nike" - to the extent - they are the ones who rationalise it, who go through a process. It is our friends' argument, based on the evidence of these pharmacists and Mr Blanket, that people go through this process in their mind, and they do that by imposing some idea that Nike has a monopoly.

GUMMOW J: Which is not the fact and will only become the fact if they can use section 52 to shut other people out.

MR CATTERNS: Yes, your Honour, and that is why this Court has said in the two cases of this kind that have come before it, in the Hornsby Case and the Parkdale v Puxu Case- they are the only two passing off type cases, I think, that the Court has dealt with. In each case there was evidence of actual confusion. As their Honours say, there is a necessity to find out why it occurred and if it be the case, as we submit, and indeed as his Honour Justice Lehane said, it is caused by their marketing, then the fact that we seek to take advantage of it in the way that has been held does not move us from being somebody who one might criticise, as his Honour Justice Sheppard did for this awareness - does not move us into the person who causes it.

GLEESON CJ: When you say you seek to take advantage of it, what exactly do you mean by "it"?

MR CATTERNS: Your Honours, I should use the words of his Honour Justice Lehane at page 74, I think. Perhaps if I could begin at page 72, and this is on the blameworthy conduct point, but it is relevant. Page 72 point 15. The use of our marks:

has become likely to deceive or cause confusion principally because, no doubt through vigorous and successful promotion, the respondents have acquired a reputation in the name "Nike" which extends beyond the boundaries of the categories of goods -

Then his Honour goes on at some time, including at page 73 - - -

GUMMOW J: What is meant by "a reputation in the name `Nike' which extends beyond the boundaries"?

MR CATTERNS: Well, your Honour, that is a crucial question.

GUMMOW J: I know.

MR CATTERNS: Does it mean the word "Nike" signifies the goods of the applicant beyond the boundaries of its actual goods. Now, the only evidence about that - well, there are two types of evidence. One was the act of the pharmacists, who said they gave this evidence on the basis of an assumption that Nike had a trade mark and the other evidence was Mr Blanket, and his extension of the reputation was into the area of emotional responses, not any misleading conclusion that there was an association.

GLEESON CJ: I do not want to keep nagging about this point, but this is part of the problem about the way the case was conducted and about the point at which this concept of Sport was jettisoned. The case was conducted at first instance, as I understand it, for your side, on the basis that they were defending the use of the word "Nike" in connection with the word "Sport".

MR CATTERNS: Your Honour, we defended it as the past conduct and made it clear that we did not intend to do that for the future.

GLEESON CJ: Yes, but a lot of the evidence that went in and that grounded the findings of fact did not discriminate between Nike with Sport and Nike without Sport.

MR CATTERNS: May I go further, your Honour; virtually all of it related to Nike with Sport, but I accept not all.

GLEESON CJ: Then one of the principal issues that arose in the appellate court, in the Full Court, was whether or not Justice Sheppard's finding of fact, based as they were in large part upon evidence that did not discriminate, applied to and could be sustained in relation to Nike without Sport, and it was held that they could.

MR CATTERNS: Yes, your Honour. That is what I am attempting to meet, as your Honour raised in the very beginning this morning.

GLEESON CJ: But in that part of the case in which you were seeking to justify your conduct in relation to Nike with Sport, you are unquestionably in an area where you are trying to trade off Nike's reputation.

MR CATTERNS: Yes, your Honour, I accept that.

GLEESON CJ: For Sport.

MR CATTERNS: Yes, your Honour, I accept that. Indeed, at one time, to be candid, our company name had the word `Sport" in it - stopped also - and that was on some of the products. So that was a transitional thing.

CALLINAN J: Mr Catterns, just taking up what the Chief Justice said, the difficulty was actually adverted to by Justice Sheppard and that is summarised at page 53 in volume 1, the volume that contains the judgments of the Full Court. It appears that right at the outset Justice Sheppard referred to the problem about what he was being asked to decide with respect to the absence of Sport.

MR CATTERNS: Yes, your Honour.

CALLINAN J: So you must have been alerted to the difficulty right at the beginning that your proof, as it were, would have to go to both matters, with and without Sport, that is.

MR CATTERNS: We respectfully put it the other way, I think.

CALLINAN J: That became the issue, in any event, and there would be obviously some evidentiary onuses on you as well as on Mr Jackson - - -

MR CATTERNS: The way we attempted to run it was to reduce the weight of that evidence that was in particular of confusion by saying it was largely directed to the combined - of course it was not just the word "Sport" - impact of the word "Nike" plus the word "Sport".

GLEESON CJ: But the way the case is being argued now in this Court has in some respects become fairly well removed from the way in which the problem originally arose and the way in which the case was conducted at first instance.

MR CATTERNS: Your Honour, I respectfully agree with the first part of what your Honour has put and not the second part. The case was conducted at first instance - and if I may say this with respect - judgment was delivered a year after the case, and that is perhaps what, if I may say so with respect, led to the problem that caused us to appeal on the ground of what his Honour did and did not find. But we argued very fair and square, and at the forefront of our submissions, about Nike simpliciter, and it was to our advantage, we submit, that most of our friends' evidence was in relation to the word "Nike" plus "Sport", as it had to be because that was the only conduct that we had engaged in from which they could get some evidence of actual confusion.

Of course, Mr Blanket, who was giving opinion evidence, talked about the word "Nike", but the actual pharmacists - as your Honours know, when we are in these section 52 cases and you get lucky with a bit of confusion, your receptionist gets a wrong order or two or three people send something to the wrong address or something like that, all of these are derived from the conduct that the respondent has done in the period before you write the letter of demand or get the interlocutory injunction or the matter comes on for trial.

GLEESON CJ: There was evidence in the present case, was there not, that people actually placed orders with the respondent to try and get their hands on your client's products?

MR CATTERNS: There was one, I think; one instance of that, your Honour. So that person was misled or confused, your Honour. But, as the High Court says in the Parkdale v Puxu Case, it is necessary to inquire why that happens. One does not just say QED, respondent's fault. What is the cause of it? In the Hornsby Case it is quite analogous, we would respectfully submit - - -

GUMMOW J: You might if you were dealing with it at an interlocutory injunction level.

MR CATTERNS: I beg your pardon, your Honour?

GUMMOW J: You might cut a few corners if you were dealing with it at an interlocutory injunction level.

MR CATTERNS: Yes, your Honour. Our friends did the best they could at finding these particular instances, two or three of which were people were - one of whom was the mother of somebody who worked for Nike, one of whom worked for the company that owned Adidas, or distributed Adidas, so, they are not of much weight. The pharmacists were cross-examined and said that the reason they were misled was because of these assumptions about Nike footwear having this total monopoly in the case of the pet food man.

GUMMOW J: I think at the end of the day you have got to face up to the attack made on the unwarranted assumption doctrine that Mr Jackson puts.

MR CATTERNS: Yes, your Honour. I respectfully submit I do and this is my answer - - -

GUMMOW J: Otherwise with that, without the existence of such doctrine, I would have thought you were in trouble under section 52.

MR CATTERNS: Yes. We have always regarded that that was a crucial - - -

GUMMOW J: You are just beating around the bush, otherwise.

MR CATTERNS: I am happy to face that right now, if I may, your Honours. First, we accept that the idea of erroneous assumption is not a sub-law of section 52 or passing off, just as common field of activity and so on is not, but - - -

GAUDRON J: Is it a negative test of causation in that context?

MR CATTERNS: That is how we see it, your Honour.

GAUDRON J: It is clear section 52 does require some. Is there authority to that effect that there has to be some causation?

MR CATTERNS: We say, yes, Parkdale v Puxu, McWilliam's and Hornsby.

GUMMOW J: But Parkdale may be just authority for the proposition that the learned Judges in that case in this Court were not impulse buyers.

MR CATTERNS: His Honour Justice Lockhart always tried to fight back.

GUMMOW J: You would not get them rushing into a store to buy a sofa without pulling it to pieces, on my reckoning of judges.

MR CATTERNS: Perhaps their Honours were not impulse buyers of that sort of furniture, your Honour. It was the Post and Rail style which was fashionable in the 70s at my economic level but not by me.

GUMMOW J: Yes.

MR CATTERNS: The idea of this erroneous assumption which is really a matter of causation and logic, we submit, came up in the "BIG MAC" Case and we will not weary your Honours by going to that in detail.

GUMMOW J: Does it come up in Taco Bell as well?

MR CATTERNS: We see that counsel on both sides of the argument are here. It did not, your Honour, but there is a passage in Taco Bell 42 ALR 200 where their Honours Justices Deane and Fitzgerald say, "Well, really something goes wrong in any reasoning process where somebody has been misled. If your Honours are going to 42 ALR perhaps I could do this, but before I take your Honours to it - if your Honour the Chief Justice does not think this is cheeky, one might wonder why the Bondi company changed its name to Taco Bell.

GLEESON CJ: I will tell you why. Because, it was owned by a company by a man who called himself "Taco Bill" and when they bought Taco Bell's business he said, "Make sure you change the name" so they changed it in the minimum possible way and they, according to the evidence, had never heard of Taco Bell.

MR CATTERNS: And, therefore they duly succeeded. But, before I go to this, the passage I am about to take your Honours to in Taco Bell is the one that is used against the erroneous assumption doctrine of McWilliam's. The problem with it is this: on the same day the same judges said something which is right in line with the erroneous assumption doctrine in the Lego Case and a few months later in the Parkdale v Puxu Case it was approved by the High Court. Taco Bell is at 42 and, with respect, your Honour the Chief Justice has given the facts well enough, and there was an American company of that name. But, your Honours, the passage that is used against erroneous assumption, skipping straight to it, is at 200, line 22:

In truth, of course, no conduct can mislead or deceive unless the representee labours under some erroneous assumption.

Their Honours, we do not see, are rejecting it giving the examples down there, your Honour, the ranges of them:

The nature of the erroneous assumption which must be made before conduct can mislead or deceive will be a relevant, and sometimes decisive, factor in determining the factual question whether conduct should properly be categorized as misleading.....Beyond that, generalizations are themselves liable to be misleading or deceptive.

Their Honours go on. But, your Honours, in the same volume in Lego Australia v Paul's Merchants whose facts bear a close resemblance to these, leaving aside the question of intention which is only of an evidentiary value, at page 344, your Honours, Lego the plastic bricks sued Lego plastic irrigation. They succeeded in England but, your Honours, their Honours at 351, the same Justices on the same day, go on and say at line 30:

"...evidence that some person has in fact formed an erroneous conclusion is admissible and may be persuasive but is not essential. Such evidence does not itself conclusively establish that conduct is misleading -

and we would apply that to the thin evidence in this case, your Honours. Then, your Honours, there is a quotation from Hornsby at line 42:

it is necessary to inquire why proven misconception has arisen -

and, your Honours, that is my answer to your Honour Justice Hayne, with respect. Their Honours say, at the bottom of the page, which I think makes good what I had submitted, that is this question that, I think, Justice Gaudron asked me, "Is there authority?", that it does need to be caused and I would submit that is clear from the quotation from Hornsby at the bottom of the page.

GUMMOW J: The words "because of"?

MR CATTERNS: Yes, your Honour.

GAUDRON J: Yes, but I wonder, as a matter of plain construction of section 52 I would have thought you could read it either way.

MR CATTERNS: I would submit not, your Honour.

GAUDRON J: I am wondering if there was - - -

MR CATTERNS: There is no judgment that I am aware of where a court has gone to the words "mislead and deceived", I do not believe. Perhaps, as I say it I think an echo comes into my mind and say from the words themselves - it may be in Taco Bell where their Honours say the words are, on any view, tautologous.

GAUDRON J: Yes, that does not help. The fact that they are tautologous does not help with this question.

MR CATTERNS: No.

GAUDRON J: I mean, on one view it might require a balancing of causal factors to say which is the principal one or it might just simply mean people were misled. How that came about is irrelevant.

GUMMOW J: Yes, if you take by analogy fraudulent misrepresentation, the body of law there as to how material is and whether it was one factor, it is enough that it was one reason you did it and so on and so forth. That does not seem to get itself into section 52 learning somehow. I do not know why.

MR CATTERNS: That is right, your Honour.

GUMMOW J: Through the words "mislead or deceive" and what, in fact, they mean.

MR CATTERNS: Your Honour, I submit there are these cases, including the passage I have just drawn attention to from Hornsby which, of course, was fed by the whole discourse of passing off law.

HAYNE J: But the language of Hornsby is to be understood, is it not, as explaining or addressing the question of what to do with evidence that there has been misleading or deception?

MR CATTERNS: People have been misled or deceived.

HAYNE J: Just so. Then it becomes relevant to inquire why were they misled or deceived.

MR CATTERNS: That is right, your Honour.

HAYNE J: Whereas, if you begin at the other end of the process at section 52 itself, all that the words "misleading or deceptive or is likely to mislead or deceive" are doing is describing conduct. They are classifying conduct and, if you pause there, where is the causation the question raised, causation of what in relation to what?

MR CATTERNS: In the word your Honour used, with respect, "conduct", conduct that is misleading means your conduct - - -

HAYNE J: "Or is likely to".

MR CATTERNS: Yes, "or likely".

HAYNE J: Compound conception, therefore, no need to prove actual misleading or deception.

MR CATTERNS: Yes, your Honour, that is right, with respect, of course, your Honour, and section 80 makes it very clear that injunctions can be granted, whether or not anybody has actually been misled and so on.

GLEESON CJ: But section 52 does not just describe conduct; it proscribes it.

MR CATTERNS: Yes, of course, your Honour. So your conduct must not mislead or be likely to mislead.

GLEESON CJ: Yes. This is in the context of something that the Act says is a contravention.

MR CATTERNS: Yes, your Honour, and I respectfully submit that in those words "conduct that is misleading" means that the person whose conduct is being looked at, that conduct has caused people to be misled or be likely to be misled, et cetera, and, your Honours, that - - -

GUMMOW J: I am sorry to interrupt you, but part of the trouble, I think, is that too many of these cases, of passing off cases, where section 52 operates in so many areas.

MR CATTERNS: That is right, your Honour, including false representation about the quality of the motor car you are about to buy.

GUMMOW J: Or a prospectus, all sorts of things.

MR CATTERNS: Yes, your Honour.

GLEESON CJ: Defamation law, until it was cut back in relation to so-called information providers.

MR CATTERNS: Yes, but, your Honours, nevertheless in each of those cases and, for example, as their Honours Justices Deane and Fitzgerald say in Taco Bell, I think, it is not misleading unless it conveys a misrepresentation and, of course, that could be by silence and so on. Now, that is why, in so far as we are in the type of a name case or - - -

GAUDRON J: Well, is that not really the analogy you are looking for here, not in relation to Nike Sport because I do not understand you to argue that that is outside 52, but in relation to other matters? Is not, in relation to possible other uses, your silence really - it must be said to be misleading, your failure to put up, "We are not in any way related to Nike and Malcolm Johnston," or whoever it is?

MR CATTERNS: Your Honour is ahead of me.

HAYNE J: A well-known player in the NBA and I expect you to know who he is, Mr Catterns.

MR CATTERNS: Was not the word "jockey" used with respect to him, your Honour?

GAUDRON J: So what are the tests with silence in relation to 52? But is not that where you must come to?

MR CATTERNS: Well, I think, your Honour, there is also our positive act though. It is not just our silence. It is our physical act that - - -

GAUDRON J: No, but is that not the area of legal discourse we have to come to to find out, to understand - - -

GUMMOW J: Is that not right, you see?

GAUDRON J: - - - what relief should or should not have been granted in this case?

GUMMOW J: It is really because you say, "If I put on a disclaimer, I would be okay".

MR CATTERNS: Or something a little more, with respect, sophisticated in marketing terms.

GUMMOW J: Yes.

MR CATTERNS: The old passing off injunctions, of course, used to say "without clearly distinguishing", but the courts have deprecated disclaimers in cases like this and because they may convey the opposite impression and.....explanations is what is said in an early passing off case to the extent to which people read disclaimers and so on.

But, your Honours, in part it is our silence and in part it is our positive act, but we do that the words in section 52 imply or state some concept of causation, but my conduct is likely to mislead her. It is not because the section 52 jurisprudence has been informed by the passing off jurisprudence, which requires a misrepresentation; it is because it is the only logical way of approaching that sort of thing. The passing off law came to the same point as section 52 on this, and that is what we, to put it shortly, get out of his Honour Justice Stephen's remarks in the Hornsby Case.

GLEESON CJ: It is not only a question of misleading the consumer, is it? It is also a question perhaps of misleading the person who is going to give this product shelf space.

MR CATTERNS: Yes, your Honour, certainly; anybody up the chain, I accept that completely. Your Honours, if I could just finish, if your Honours do not mind, the last couple of passages in Lego, which is why we submit that it is unlikely that their Honours Justices Deane and Fitzgerald were intending to deliver the coup de grace in the Taco Bell Case. At the top of the next page.

GAUDRON J: Which page?

MR CATTERNS: At the top of page 352, your Honour. This is really our submission in this case:

The fact that companies may and sometimes do expand the range of products which they produce cannot of itself warrant a conclusion that a particular company has done so.

You cannot confine it to plastic, which is one of the big arguments in that case. And so on, your Honours, going a little further:

The appellant's toys have a wide reputation by reference to the name "Lego", but that reputation is related specifically to that particular product.

And that is the finding of his Honour Justice Sheppard. Athletic and footwear apparel or accessories -

different in nature, appearance and function.

Then his Honour Justice McGregor was right -

That conduct viewed objectively, cannot properly be seen as involving or conveying any representation to the effect that the manufacturer of the irrigation equipment was connected with the manufacturer of the plastic building blocks. Any members of the public who were confused or under a misconception in that regard were so confused or under such a misconception as a result of an unwarranted assumption which they themselves made.

Now, your Honours, there have been two attacks on erroneous assumption: first is reliance on their Honours Justices Deane and Fitzgerald in Taco Bell, which I respectfully submit is not made good for two reasons. First, this judgment, same day; second, Parkdale v Puxu - we give your Honours the references; I will not take your Honours to them - which expressly approve and apply what is said in McWilliam's. Then, your Honours, there is a second attack on it, and that has been based, as one reads the cases, on remarks of his Honour Justice Gummow in the Shoshana Case, Sue Smith - and his Honour looks at me with surprise - and Hogan v Pacific Dunlop Ltd.

GLEESON CJ: But if you find that a trader deliberately sets out to create the circumstances that give rise to the unwarranted assumption and deliberately sets out to take advantage of it, what is the problem of causation?

MR CATTERNS: But, your Honour, that is not the fact here; we did not set out to create the erroneous assumption.

GLEESON CJ: I thought one of the concurrent findings of fact was that your client intended that this confusion would occur.

MR CATTERNS: To take advantage of it, your Honour, but we did not create - - -

GLEESON CJ:- - - intended that it would occur and came to Australia because they wanted to take advantage of it.

MR CATTERNS: Your Honour, the findings are at page 1033 and following - - -

CALLINAN J: But it is at page 1034, I would have thought that in the finding of the kind that the Chief Justice has said was made, was in fact made at first instance. I cannot read Mr Mosh's letter any other way. To use:

the image of a brand renowned the world over in the field of sports - - -

MR CATTERNS: But, your Honour, let us accept that - I cannot challenge that finding now. But, your Honour, with respect, that is something less than what his Honour the Chief Justice - - -

CALLINAN J: Is that not an intent expression or an intention to exploit the Nike International brand because it is "renowned the world over in the field of sport"? How else can you understand that?

MR CATTERNS: Your Honour, I accept that. I cannot challenge finding.

McHUGH J: Well, what about the finding at page 31 in the judgment of Justice Sackville at line 10:

This was not a case where those who were misled deceived themselves. They made an assumption because they were intended by Campomar to make it.

MR CATTERNS: Well, your Honour, with respect, that is a non sequitur. They did not make an assumption because they were intended. Intention does not create it. That just does not follow, with respect, as a matter of logic.

CALLINAN J: Probably shorthand for saying, "as a result of the implementation of the intention".

MR CATTERNS: Or - but, your Honour, our assumption is a different one, and the findings are the other way, for example, the passages I have taken your Honours to about Justice Lehane, the cause of the assumption - first of all one needs to identify the assumption. The assumption is that the well-known Nike Footwear Company has diversified into - - -

GUMMOW J: Well, the first assumption is one intended by your opponents by their advertising.

MR CATTERNS: Yes, they and the world.

GAUDRON J: And then if you are looking at it jurisprudentially, you get into the sort of question that is posed in the estoppel area.

MR CATTERNS: Yes, your Honour.

GAUDRON J: Should you have taken action to dispel the assumption? Someone has to make a value judgment about that. It seemed to me if you should have and you did not, 52 bites.

MR CATTERNS: But only if somehow or other you have caused this, not merely sat back and enjoyed it.

GAUDRON J: I not too sure about that when you look at the terms "misleading" and "deceptive".

GLEESON CJ: If you look at it in marketing terms, somebody might say Nike would be a terrible name for a perfume, unless - - -

MR CATTERNS: That is true, of course, your Honour, but the two facts against that here are, first of all, it does have at least to a section of the community, a useful connotation, namely relating to the Goddess of Victory - - -

KIRBY J: That would not be .01 percent of the community.

MR CATTERNS: Well, your Honour, I will grant that, with respect. But, secondly, and the merit of being one that has a heritage of 70 years, a predecessor in title, and us for 10 years at the relevant time. But, your Honours, the erroneous assumption - there is not finding that we created the erroneous assumption that we are relying namely that our friends have the monopoly, that is, the assumption that people like that pharmacist made had nothing to do with us. He saw the word "Nike" or "Nike Sports" and drew a conclusion because he erroneously assumed, as we put it, that our friends had the - - -

GAUDRON J: But you knew that that was a likely assumption.

MR CATTERNS: Yes, your Honour, and there are dozens of section 52 and passing off cases where people - - -

GAUDRON J: Yes, if you know it is a likely assumption and you do nothing to dispel it, why is that not false and misleading conduct?

MR CATTERNS: It all depends on what caused it, your Honour.

GAUDRON J: Why, when you look at section 52, if you know that that is an assumption that will be made?

HAYNE J: If the opera singer, Joan Sutherland, of experience six months and a voice that is of a unique kind, advertises a concert, "Joan Sutherland sings", leave aside the difficulty about corporations, does she not engage in misleading and deceptive conduct by putting out that advertisement, nothing more said?

MR CATTERNS: Yes, your Honour. That is what their Honours said in Hornsby.

HAYNE J: Where lies the difference between that example and this?

MR CATTERNS: I think I really need to work my way through that via the Hornsby Case, your Honour, if I may. May I come back to that when I go to Hornsby.

The question that your Honour Justice Gaudron has been putting to me in a way relates to the two judgments of his Honour Justice Gummow in the Hogan Case and the Sue Smith Case, the Shoshana Case, where his Honour said, to put it shortly, that the doctrine of erroneous assumption was unlikely to have an operation in the area where there was fraud or intention. As we say in our written submissions, with respect, those remarks would have to be qualified by the full treatment by his Honour in the Full Court in the Conagra Case to which we give a reference, the Healthy Choice Case, where fraud was not enough without proof of reputation, because if the American company had not established a reputation in Australia the chain of causation that comes from somebody's reputation did not get off the ground.

So, your Honours, I really am just repeating myself. Our submission is that the intention does not get you there, and one has to look at what is the cause. So what happens is - and I cannot put it any better than has just been put in the Lego Case. Our friends rely on a mental process whereby people draw this rather commercial conclusion rather than us tapping into a generalised feeling of well-being and sportiness.

GUMMOW J: But in the Lego Case there was no finding as to what the Israeli company had in mind.

MR CATTERNS: There was no finding of intention, your Honour.

GUMMOW J: No.

MR CATTERNS: It was an established company trading under its own name, that is so, your Honour.

I think it is probably simplest just to go to the Hornsby Case 140 CLR 217 quickly, if your Honours do not mind. Your Honours know they were the two named Sydney Building Information Centre and Hornsby Building Information Centre. There was some evidence of actual confusion. There was a question in the case whether the Court restrained conduct at the behest of competitors such as this; it was in the early days of section 52. Your Honours, at page 222 the order was given in the broadest of terms and without reasons by the - - -

GUMMOW J: It was an interlocutory order, was it not?

MR CATTERNS: Yes, your Honour. In broad terms and without reasons restraining the use of the words "Building Information Centre", which was a broader order than had been sought by the applicant. At page 222 that is noted at about point 6 on the page. Then his Honour discusses the question about competitors availing themselves of the section, long now settled.

Then, at the beginning of 226 there is a discussion about the novelty that the passing off action has been conferred on the Court in this way. Then, at 228 his Honour Justice Stephen, in a passage quoted time and again, says:

in s. 52 (1) nothing turns, I think, upon the intent of the Hornsby Centre. In the tort of passing off the defendant's absence of intention to deceive will not provide him with a defence.....Section 52 (1) creates no offence, it only prescribes a course of conduct deviation from which may result in an order of the Court.....involving no questions of intent -

Since then, of course, it has been made clear that the passing off law, that is of reliable and expert opinion, applies, as it must. Your Honours might recall that that was the very question that the Privy Council considered in the Pub Squash Case and it was argued that his Honour Justice Powell, at first instance, had not given enough weight to the evidence of intention.

GLEESON CJ: The first sentence in that paragraph is a little too broad.

MR CATTERNS: In that sense, at least, your Honour. Then there is the passage that is picked up in Lego:

it becomes of particular importance to identify the respect in which there is said to be any misleading or deception.

Just stopping there, assuming our friends establish a broad reputation in Australia, "We are people who live in Spain who have in a legitimate way acquired another business, bought out our competitor and we have the word `Nike'. We see Australia and we think we would like to trade in Australia." The consequences of our friend's case is they may not come here because being intelligent business people they are aware that they would get an advantage. So, the perception of advantage stops, now, anybody either from Australia or within Australia, ever using this word "Nike" with respect to any product on the view that our friends would put forward.

Assuming they have their eyes open to any extent, a finding will follow of the kind made by his Honour Justice Sheppard, and our friends get a pure, perfect monopoly that stops anybody using that word "Nike" with respect to any product.

GLEESON CJ: I just do not see that. That was the point of the sweat reference earlier. The connection between sport and soap and perfume products, in marketing terms, is not difficult to see. The connection with pet food is.

MR CATTERNS: Well, your Honour, fair enough, with respect, and with respect to anything that is a possible, logical brand extension and there is a pretty wide spectrum from umbrellas to - and so on.

CALLINAN J: You would not immediately associate sunglasses with a Porsche motor car, but, that is an extension that has occurred.

MR CATTERNS: That is right, your Honour. Does that mean that nobody can use the word "Bentley" with respect to shampoo? I will not weary your Honours with examples, but that is the consequence - - -

McHUGH J: I am not sure. Suppose you saw an advertisement for Colgate Sparkling New Drink, I would associate with Colgate-Palmolive. I might be wrong. That would be me - - -

KIRBY J: Bentley Car Shampoo you might well say - - -

MR CATTERNS: Again, that is an example like his Honour the Chief Justice's. There is a factual question of the closeness and it is well settled. For example.....the same description as a phrase used in the Trade Marks Act.

McHUGH J: If you take somebody like Pacific Dunlop, everything from tyres to tennis racquets, shoes, condoms and pacemakers, so - - -

MR CATTERNS: Yes. But as my friend points out, that is what they do. Here our friends do not do that and wrote to us saying they will not do that or not interested in doing it. They are not bound to that forever, no doubt, but, the effect of this is, of course anybody who dares to - I did not mean to say that - enter the market will have their eyes open, to some extent, and all the pejorative things that have been said can be said about it but in the end that does not answer the question of whether it is misleading.

GUMMOW J: Does anything turn in this case upon section 4(2) of the Trade Practices Act?

MR CATTERNS: Your Honour, my learned junior drew my attention to that.

GUMMOW J: Section 4(2)(a).

MR CATTERNS: Your Honour, when my friend turned to me a moment ago I thought not much because it is fairly clear that engaging in conduct includes doing or refusing to do any acts.

GUMMOW J: It says "refusing", not "failing".

MR CATTERNS: Yes, it does, your Honour.

HAYNE J: The reference to "refusing" includes reference to "refraining (otherwise than inadvertently)", et cetera.

GUMMOW J: Yes, paragraph (c).

MR CATTERNS: But, your Honours, if I could just go quickly back to Hornsby and finish that. At the bottom of 228 their Honours say:

it is necessary to inquire why this misconception has arisen -

and then his Honour says this:

leads one to examine the name of the Sydney Centre.

Having chosen those:

descriptive words.....it cannot, as it acknowledges, claim any monopoly in the descriptive words -

Then at the middle of 229:

There is a price to be paid for the advantages flowing from the possession of an eloquently descriptive trade name.....its very descriptiveness ensures that it is not distinctive of any particular business and hence its application to other like businesses will not ordinarily mislead the public -

quoting from the Westminster Case. Then, your Honours, at 230, back on causation, about point 3:

Any deception which does arise stems not so much from the Hornsby Centre's use of the descriptive words as from the fact that the Sydney Centre initially chose descriptive words.....In consequence -

I submit, a language of causation -

members of the public have come to associate its particular business with that type of activity. Evidence of confusion in the minds of members of the public is not evidence that the use of the Hornsby Centre's name is itself misleading or deceptive but rather that its intrusion into the field originally occupied exclusively by the Sydney Centre has, naturally enough, caused a degree of confusion -

and, your Honours, at 231, again there are phrases reminiscent of this case, fourth line:

There was evidence before the Industrial Court about the antecedents and activities of the Hornsby Centre from which it could have concluded that those concerned with that Centre's activities were intent to benefit from the good repute -

That is not wrongdoing in the particular case. A little bit further on there is a further discussion about monopoly.

Your Honours, I skipped over the passage relating to Joan Sutherland at 227 just to draw attention to that. The way his Honour Justice Stephen deals with that, your Honour, is not because it is applying - it is conveying to others something more than the literal meaning which the words spelt out but, your Honours, we are submitting here that we convey Nike and it is our friend's conduct that has so diffused the use of the word "Nike" as to give rise to that erroneous assumption.

Your Honours, I think really we have dealt with most of the matters we can in response to the matters raised by your Honours on that. May I just give your Honours quickly the references to a few of the findings. The findings of reputation which are in the narrow terms I have mentioned are at 985 and 987. His Honour's discussion at 990 to 993 includes the evidence of the various telexes - the correspondence which his Honour Justice Callinan took me to yesterday. That correspondence, your Honours, is at 553 to 573,which is a slightly fuller set than the kit in volume 3 that your Honour referred me to at 227. That is volume 4, 553 to 573.

Mr Ruiz's cross-examination, which is the only cross-examination on the question of intention, is at 84 to 93 approximately in volume 2 and his Honour's initial finding about Trade Practices contravention is at 1003 where your Honours will see at the top of page 1003 in volume 5 a paraphrase, in effect, a quotation from Mr Blanket's paragraph 10, which refers to "a highly desirable set of `emotional responses'" and we submit which is something short of having been misled. That is at lines 15 to 20. His Honour finds:

Mr Blanket's analysis helpful because it tends to summarise the effect of the direct evidence -

and then, your Honours, his Honour's holding on this page is:

no question but that many persons seeing the NIKE cosmetic products, particularly products entitled "NIKE Sports Fragrance", on pharmacy shelves -

and then this answers something your Honour the Chief Justice asked yesterday -

whether in the vicinity of similar products or not, would immediately associate the product with Nike International in some way.

And that is where his Honour holds that that would be misleading. His Honour then went on to consider whether there was an accessory liability under 75(b) due to an error which his Honour corrected in the supplementary judgment and then, your Honours, the findings against us on intention are at 1031 to 1035 and, your Honours, we respectfully submit that it is no higher than, for example, following the Mr Mosch document that your Honour Justice Callinan took me to at 1035 line 37:

Campomar, through Mr Ruiz, was well aware of the benefit -

I think that is the high point - - -

CALLINAN J: Mr Catterns, in any of the judgments anywhere is there any attempt to reconcile what was pleaded at page 27 in paragraph 8 and paragraph 9 on page 28 the final telex at page 227? I will tell you why I ask you this and it is a question I will ask Mr Jackson. I read page 227 at present as a complete disavowal of any interest in perfume.

MR CATTERNS: Yes, your Honour.

CALLINAN J: At the moment I think it is a little difficult to read it any other way.

MR CATTERNS: We respectfully agree so far, your Honour.

CALLINAN J: But at page 27 Mr Jackson's client pleads brand extension, paragraph (a), and makes specific reference to perfume.

MR CATTERNS: Yes, your Honour.

CALLINAN J: And I find it very difficult to reconcile that with the telex at page 227. Is there anything anywhere in the judgments that explains or reconciles those two matters?

MR CATTERNS: Your Honour, that is the heart of our case and I will take your Honour to our defence on that, because they pleaded what is called a secondary meaning, the jargon; they pleaded that, because of their reputation in footwear - - -

CALLINAN J: It goes a bit further than that, it seems to me; they are saying, by clear implication in the pleading, "We are entitled, at any time, to go into brand extension by going into perfume, and we are entitled to hold anybody out of perfume for that reason", but yet, at page 227, in that final telex, they seem to be saying, "We are not the slightest bit interested in perfume."

MR CATTERNS: Your Honour, I think in fairness to our friends, their position is not, they do not really plead that they want to get into shoes, they merely plead that "We are entitled to hold anybody up in perfumes."

CALLINAN J: Well that is the way I put it the second time - - -

MR CATTERNS: Entitled to hold them out.

CALLINAN J: Yes.

MR CATTERNS: Yes, that is how they pleaded, your Honour.

CALLINAN J: But yet they are saying, at page 227, "We are not interested in perfume; it is not part of our image. If you do perfume, do not imply in any way that we are sponsoring you or it is our product."

MR CATTERNS: That is right, your Honour, and further, nobody suggested from the company, "Well, that was what we thought in 1986, but now we are dying to get into perfume." As far as I am aware, that is a continuing position. So, the way they pleaded is to say, "By our activities, the use of the word "Nike" signifies - - -"

CALLINAN J: "We can hold anybody out of perfume - - -"

MR CATTERNS: And indeed any - - -

CALLINAN J: Well, just focus on perfume at the moment. "We can hold anybody out of perfume", but yet they seem to me, at page 227, have explicitly disavowed any interest in perfume.

MR CATTERNS: Precisely, your Honour; that is the brand extension case. Now, your Honour, there is a concept in trade mark law of famous marks, where you are protected to a certain extent, against people trading on your reputation, but it goes no further than section 52; it has really been brought in really to comply with our obligations into the TRIPs Agreement and our section 52 does it anyway, but the question has got to be why are they entitled to do what your Honour just said? They say, "Well our reputation has gone so far that people will think that." Well, our response to that is, if we, otherwise legitimately, but aware of that, set up here under the name "Nike", it is not our fault, and that is really our case, your Honour.

CALLINAN J: There was litigation pending at some stage in the United States between the parties, is that right? I thought I saw some evidence about that.

MR CATTERNS: Yes, your Honour, I think there had been some in Hong Kong too. I am not sure about - I think it was the United Kingdom, your Honour, and perhaps Hong Kong.

CALLINAN J: Was there any evidence of that litigations conclusion?

MR CATTERNS: There was evidence that we had settled in the United Kingdom, I think, your Honour.

GUMMOW J: Did you plead an estoppel based on - - -

MR CATTERNS: Yes, we did, your Honour.

CALLINAN J: Was it dealt with, the estoppel?

MR CATTERNS: Yes, it was, your Honour.

CALLINAN J: Where was that? I have missed it.

GUMMOW J: Justice Sackville deals with it, does he not?

MR CATTERNS: Yes he does, your Honour.

CALLINAN J: Did Justice Sheppard deal with it?

MR CATTERNS: Yes, he did, your Honour.

GLEESON CJ: It is dealt with on pages 47 and 48 of volume 1.

MR CATTERNS: Thank you, your Honour. Yes, your Honour. We also relied on a conversation and his Honour's answer is - - -

GUMMOW J: But did the primary judge deal with it?

MR CATTERNS: I think, your Honour, I am told - I have forgotten, your Honour - in his Honour's supplementary judgment.

KIRBY J: I thought that was only to do with section 52.

CALLINAN J: That is a very narrow reading, I would have thought, of the letter, with all due respect to Justice Sackville. That is Justice Sackville at page 48?

MR CATTERNS: Yes, your Honour.

CALLINAN J: This letter cautioned your company "not to suggest or imply that any "Nike" products" were sponsored or approved by Nike, Inc. If we leave out "Sport", where is the implication of approval or sponsorship by Nike?

MR CATTERNS: Our friends say by the use of the word "Nike". That is what we say - something is missing in that, and that is where their brand extension is what supplies the missing ingredient.

CALLINAN J: Where does Justice Sheppard deal with the estoppel on it? I do not think you have a ground of appeal on estoppel.

MR CATTERNS: No, we do not, your Honour. We do not think his Honour did.

CALLINAN J: I would like to see where his Honour did. His Honour did not deal with the section 52 matter until it was drawn to his attention and that was the subject of his supplementary judgment, was it not?

MR CATTERNS: His Honour did not deal with direct contravention as opposed to accessory contravention.

CALLINAN J: Does Justice Sheppard deal with estoppel?

MR CATTERNS: Your Honour, there is some transcript at a later stage about following the supplementary reasons in volume 5 at 1057. There was a discussion of his Honour's not dealing with the estoppel. It is rather procedurally up in the air, I suppose. At 1057 and at the top of 1058 says:

I did not feel there was much in estoppel - - -

CALLINAN J: Is that the way he dealt with that? Is that the full extent of it?

GUMMOW J: This is after judgment, is it not?

MR CATTERNS: I believe so, your Honour.

GUMMOW J: This is on 20 August 1996.

CALLINAN J: Two weeks almost, I think, after - - -

MR CATTERNS: Yes, your Honour. That is the way his Honour dealt with it, and then his Honour dealt - that conversation occurred, or that submission - - -

GLEESON CJ: Bearing in mind that the only activity that your clients had engaged in was activity that associated the word "Sport" with the word "Nike", what was the acting to detriment or change of position that would have been involved in support of an estoppel argument?

MR CATTERNS: It was entering the Australian market, your Honour.

GLEESON CJ: But you entered the Australian market and sold, and only sold, a product associating the word "Sport" with the word "Nike".

MR CATTERNS: That is true, your Honour, yes.

GUMMOW J: It would not be a permanent estoppel either, would it? It could be one that could be withdrawn on notice.

MR CATTERNS: Quite likely, your Honours, and as his Honour Justice Callinan pointed out, we have not raised it on this appeal. We did raise it before their Honours, including the way his Honour dealt with it at first instance. We dealt with that in the appeal before their Honours in the Full Court and had not sought to agitate it here. But, with respect, we can rely on those matters in the way we do, on the section 52 case.

HAYNE J: Could I take you back one moment to causation and 52 and just put to you a distinction. If 52 requires a causal link, it is a causal link between conduct and consequence, namely, misleading or deceptive, or likely to mislead or deceive. Would you accept that?

MR CATTERNS: Yes, your Honour, I think so.

HAYNE J: The second step is: what is the conduct in question? Would you accept that the conduct in question is the use of the name?

MR CATTERNS: By us?

HAYNE J: By you.

MR CATTERNS: Yes, your Honour.

HAYNE J: Does it follow that why use of the name would mislead or deceive is not to the point if you have decided that conduct, namely, use of the name, would mislead or deceive?

MR CATTERNS: If the Court decides?

HAYNE J: Yes.

MR CATTERNS: Your Honour, no, it does not, because if my - perhaps I misunderstand your Honour but, in my submission, the conduct is the conduct that has to mislead or deceive.

HAYNE J: Just so, and if the relevant conduct is use of the name, if you conclude that use of the name would mislead or deceive, cadit quaestio.

MR CATTERNS: Yes, your Honour, so that is the question.

HAYNE J: Again, further into, well, would it mislead because Nike has established worldwide reputation or for other reasons is not to the point.

MR CATTERNS: But, your Honour, we say it is necessary to work out why the people were misled, Parkdale and McWilliam's, and it is not my conduct which has led to them being misled, it is the brand extension as - - -

HAYNE J: And that is the debate we have had.

MR CATTERNS: Yes, your Honour, and that is what is - - -

HAYNE J: Yes, well, I do not seek to take you back.

MR CATTERNS: Your Honour, reminding your Honours finally, that that is what his Honour Justice Lehane says at 74:

Thus, if the appellants' conduct has not given rise to -

it, picking up what his Honour had said two pages earlier where - - -

HAYNE J: But then the concurrent findings of fact seem, at least at first blush, to me to present you with a considerable hurdle over which you must pass, but these are matters, I think, that we have debated.

MR CATTERNS: Yes, your Honour, thank you. But, your Honours, as we submit - this is in conclusion on this point, but, your Honour, it relates to both blameworthy conduct and section 52. The authorities that we set out in our written submissions on blameworthy conduct require a causal nexus, particularly in the Trade Mark Case, leaving aside section 52. As his Honour Justice Gummow says at first instance in Moo and Moove, there has to be a necessary relation, an immediate relation. Lord Diplock in the passage that is picked up in the judgment in the High Court in the case says "resulted in" and we submit that is what one gets from reading their Honours Justices Dawson and Toohey in the passages we cite.

GAUDRON J: Yes, but it does not tell you what sort of cause you are looking for. If it is, in fact, sufficient, why is that not - if it is a sufficient cause, why is that not a sufficient cause for the purposes of section 52? If but for this there would have been no misleading and deceiving, or could not have been any misleading or deceiving, why is that not sufficient cause for section 52? Why do you import tortious or common law notions of causation?

HAYNE J: Or notions of responsibility or fault, which seem to me to be lurking at least in the background of your submissions?

MR CATTERNS: Well, your Honour, I accept I have to eschew that. I must confine myself to causation. We submit that if - it is consistent with the reasoning in those other cases, that if the - - -

GAUDRON J: Justice Stephen did not think so. He seemed to treat it as irrelevant.

MR CATTERNS: The intention?

GAUDRON J: Well, not simply intention, he said, "Why read things into it?"

MR CATTERNS: Yes, but his Honour approached it and said, on one view, the acts that caused people to be misled was the use by them of the name "Hornsby" or "Nike", but something else caused it, namely the fact that the centre, the plaintiff, had picked descriptive words, or here the fact that the plaintiff has spread their mark so wide in the way it pleaded - that is precisely analogous. We respectfully submit your Honours would need to move away from the reasoning process in Puxu and Hornsby to down us here on this. There may be many other ways that finer minds can think of, your Honours, but that is the way we put it.

But, your Honours, on the section 28 blameworthy conduct point which is the point I am - apart from obeying myself here, my instructions, I was going to conclude on is - that is a different question in this respect. We put to one side the short period of misleading conduct.

GLEESON CJ: If this had been a case in which all that had happened is that your clients had begun to market in Australia a perfume under the name, "Nike, the Famous Spanish Perfume", this might be a hard case.

MR CATTERNS: Your Honour, I see the distinction but so far as the trade mark case goes, against us, if section 28 has a continuing operation, we are now looking at the date that the proceedings commenced or the date that Justice Sheppard considered it. Our mark is likely to deceive or cause confusion, and that is the mark. It is not, "Is the respondent guilty of misleading conduct?" It is, "Is the mark?" Now, there is no possibility that the cause of that is our activity and their Honours do not say so. They say, "But you are happy to take advantage of it." But the one thing that is for sure is we did not cause the mark to become likely to deceive or cause confusion.

In that context, our tiny piece of conduct was irrelevant. That is why to some extent the trade mark case is different. We did not make the mark likely to deceive or cause confusion. They did in the way pleaded. It is because of their activities that the word "Nike" has come to signify, in all of these classes, in our particular classes, in the field of soaps and perfumes. Now, your Honours, that is why, although one gets into the section 52 issues and misleading us in causation in some ways, so far as the use of the mark goes, we have not caused that. It has not resulted from any blameworthy act of ours and it is not a blameworthy act for us to say, "Well, I will take advantage of that," because, as his Honour Justice Lehane accepted, there are plenty of ways that we can use the mark that will not be deceptive.

GUMMOW J: You mentioned that the Chief Justice opposed orders or draft orders, did you, in relation to permissible use?

MR CATTERNS: We had not put any forward, your Honour, but we would respectfully - - -

GUMMOW J: Well, what orders would you seek here if you are - the orders could be quite difficult if you had some measure of success.

MR CATTERNS: Your Honour, our submission is that if we were to win on the trade mark and lose on the section 52 case, the form of the order should be restraining us from the conduct that we undertook, which is by reference to specific exhibits, both types of the Nike product.

GAUDRON J: Although the findings might well go to the point under 52, if all things go against you, that it is misleading unless there is a disclaimer or something that makes it apparent.

MR CATTERNS: Yes. Well, they might, your Honour, but, with respect, the old cases which do use "without clearly distinguishing", your Honour, can see what difficulties of ambiguity and so on occur with that.

GAUDRON J: Well, I know there are but, for example, if you wanted to sell this in an elaborate bottle as perfume for a goddess or something like that in the up-market range, there might be no possibility of - - -

MR CATTERNS: Well, that is what we submit, your Honour, but that is why we would respectfully embrace a disclaimer or "without clearly distinguishing" as a fall back, but we would submit that a better form of order would be an injunction which restrained us from engaging in both the two types of conduct that we did engage in.

KIRBY J: What sort of disclaimer - - -

GAUDRON J: Yes, but we are not in the traditional equitable injunction area here either, are we?

MR CATTERNS: No, your Honour.

GAUDRON J: And the terms of 52 would think that what was authorised was an injunction with respect to any conduct that would fall under the description.

MR CATTERNS: Yes, your Honour, but the fear would be merely an injunction to obey the law, which we - - -

GAUDRON J: No, I am not suggesting that one would simply paraphrase the terms of the section. I am saying you would say from use of the name Nike and then specify the deception.

MR CATTERNS: Without clearly distinguishing?

GAUDRON J: Yes.

MR CATTERNS: Well, your Honour, that is an approach of great antiquity which has not, I do not think - - -

GLEESON CJ: Did not the orders take the form they did because there was a finding against you of fact that what you actually did was likely to mislead or deceive and, in addition, what you said you would propose to do if you had the opportunity to do it was also likely to mislead or deceive and the problem is that your client has never exhibited any interest in doing anything that is not misleading or deceptive?

MR CATTERNS: Your Honour, yes, we tendered exhibit 1 which was Nike simpliciter and that was held to be misleading. That is the answer to your Honour's question, I think.

KIRBY J: What sort of disclaimer is possible in this case? I suppose you could print on the bottle on the packeting "There is no connection with Nike International Inc" or something but if you put, as well as that, a little tick - "We are not the same as little tick" then you have really gone out of the frying pan into the fire. All you can do is remove "Sport", use a different typeface, present a different logo of some kind.

MR CATTERNS: Yes, your Honour, and, of course, it is undesirable for the Court to be in the position of framing what one can do. That is why the phrases such as "without clearly distinguishing" have been used but that is why our primary submission is that one ought to be restrained from the conduct that we did engage in.

GUMMOW J: The orders made by Justice Sheppard, they are still in force, I suppose.

MR CATTERNS: Yes, your Honour.

GUMMOW J: They are at 1062 in volume 5, are they?

MR CATTERNS: Yes, your Honour.

GUMMOW J: 1(a) on page 1063 would stop you using the trade mark at all.

MR CATTERNS: It would, your Honour, yes. That is right and that is why we submit it is too broad.

GUMMOW J: I mean, that is on the hypothesis, of course, of order 3 which expunges the mark.

MR CATTERNS: Yes, your Honour.

GUMMOW J: That is why it is done that way at that stage. I understand that.

MR CATTERNS: Yes, and we would submit that if the mark were to survive, a modified form of order would be appropriate.

GUMMOW J: What do we do? Do we try and sort all this out or send it back for someone else to do it?

MR CATTERNS: Your Honours, we would not be troubling the Court with an argument about short minutes of order, I would imagine. If your Honours were with us but held that an appropriately qualified injunction might be appropriate, then that could be remitted and dealt with.

GUMMOW J: You would not be able to deal with it until you got the reasons probably.

MR CATTERNS: No, your Honour.

GUMMOW J: And if we do not do it, the court to which it is sent may get a little vexed by trying to work out the degree to which we have guided them in a particular and specific direction or not guided them in a particular and specific direction and so on.

MR CATTERNS: Yes, your Honour. I meant, of course, if this were a matter before a single Judge we would do it by means of a short argument, having proffered rival short minutes of order.

GUMMOW J: That is the problem we get into here.

KIRBY J: During the proceedings below there was no resiling, was there, by the respondent from the assertion that it was not interesting in marketing perfume?

MR CATTERNS: I do not believe so, your Honour. My friends might correct me if I am wrong on that.

KIRBY J: So they do not want you to do it. They do not want you to use your trade mark, though you have had it for 40 years and 70 years with a predecessor, but they do not want to do it themselves.

MR CATTERNS: I am subject to correction but I do not believe there was any evidence of an intention to use it with respect to perfume.

HAYNE J: Mr Catterns, you have referred a couple of times to exhibit 1 as being what was then intended. Can you just give me a page to the exhibit to which you are referring? I just need a page number or reference. I cannot pick it up.

MR CATTERNS: Your Honour, the physical exhibits are with the Court because they were physical bottles.

HAYNE J: Then when you refer to what you had at trial said you were proposing to do, what is it you are referring to? Where can I find it or look at it?

MR CATTERNS: The physical exhibit, exhibit 1, which we tendered in opening at trial to say, "This is what we are proposing to do".

GLEESON CJ: Thank you.

GUMMOW J: And, the exhibits have been sent here?

GAUDRON J: Yes.

MR CATTERNS: Yes, your Honours. Our friends wanted us to hand these up if your Honours want to have a look at them - one example of each, if your Honours think that is - - -

GLEESON CJ: Yes, all right. Thank you very much.

GAUDRON J: Mr Catterns, I am sorry, I have just one question which I hope you can deal with briefly in a sentence or two. Assume in respect of section 52 that it does require a direct causal connection. What is the difference between that and blameworthy conduct, if we have ever got to deal with blameworthy conduct?

MR CATTERNS: Your Honour, the answer is this: the causal connection in the section 52 case is between people being misled by looking at the goods on the shelves and it has been held that we have engaged in misleading conduct in that respect by marketing the goods but in the section 28 case, on the hypothesis that it is a continuing operation, the question is: is the mark liable "to deceive or cause confusion" in all of its uses - any normal and fair use - as at the date of the hearing or at the date of application, and did we cause that.

GAUDRON J: Well, the question is "blameworthy conduct". What do you understand that notion to import over and above doing something which directly leads to confusion?

MR CATTERNS: Because it is a different thing. You have had to have had some acts which have resulted in, caused, your mark to be misleading.

GAUDRON J: Yes. I am assuming that is what is required by section 52 for the purposes of this question. Is there any difference between that and the notion of blameworthy conduct that came in in the Dairy Corporation Case?

MR CATTERNS: Yes, because the question is: have we caused this mark to be misleading? Ignore the Nike Sports thing for a second. Have we caused it to be misleading? The answer is "No" because we have not traded at all, your Honour.

GAUDRON J: That is not quite the question that I am asking you. I am not asking you to relate it to the facts, I am asking if you propound some legal difference between false and misleading conduct which involves direct and, if you like, intentional misleading conduct - well, it involves intentional conduct which directly misleads - and the notion of disentitling conduct for the purposes of the continuing operation of 28(3) of the Act.

MR CATTERNS: Your Honour, I do submit there is a difference.

GAUDRON J: Yes.

MR CATTERNS: The trade mark one relates to whether your conduct has had an impact upon the mark itself as to whether its use has been misleading. The section 52 case is, "Has your acts out in the market-place been misleading?"

GAUDRON J: Yes, thank you.

GLEESON CJ: Are you sure this is what you told the Court you were proposing to do?

MR CATTERNS: No, your Honour, I handed up the wrong one.

GLEESON CJ: Yes.

MR CATTERNS: That was one of the earlier ones. There is one there with Nike - - -

GLEESON CJ: Sport Cosmetic.

MR CATTERNS: Yes, that was one of them that were an interim product.

GLEESON CJ: Yes, well, let us get rid of that one.

MR CATTERNS: That was in evidence as one of our - - -

KIRBY J: That was an exhibit, was it not, because that was the subject of the proceedings, I suppose.

GLEESON CJ: Yes. This one is Nike Sport fragrance. That is also - - -

MR CATTERNS: That is one of the ones that we were - our friends wanted us to hand that up, too, your Honour. That is the Nike Sports fragrance about which - - -

GLEESON CJ: Which is the one or ones that you said you were proposing to do?

MR CATTERNS: The other one of the ones your Honour has.

GLEESON CJ: Just that one?

MR CATTERNS: Yes, your Honour.

GLEESON CJ: The one that says "Nike Eau de Toilette, Washington, USA"?

MR CATTERNS: Exactly, yes, your Honour. I am sorry, in my flurry I handed the wrong - - -

CALLINAN J: Mr Catterns, counsel for Mr Jackson's client tendered some of their products. Have we got any examples of those so we can make a comparison. There is even a leotard tendered, as I remember.

KIRBY J: Yes, we must see that.

MR CATTERNS: The Federal Court, if I may say so, lost some exhibits, the leotard included, I think.

KIRBY J: Did it have the little tick all over it?

KIRBY J: They do have a tick all over it.

MR CATTERNS: Many of the exhibits had ticks on them; I do not remember if the leotard did, your Honour.

CALLINAN J: Because, for myself, I do not know what it really looks like, what the Nike - - -

KIRBY J: I am not sure what a leotard is.

MR CATTERNS: Your Honour, I will check that over lunch, rather than take time now, but I believe that a number of the exhibits are with the Court.

CALLINAN J: I would like to see a typical Nike international product however it is presented.

MR CATTERNS: Yes, your Honour. May I draw attention to that after lunch rather than take your Honours' time now?

GLEESON CJ: Yes, thank you, Mr Catterns.

KIRBY J: There are some Nike products of the respondent that do not have the tick.

MR CATTERNS: That is right, your Honour.

KIRBY J: The tick is not a universal phenomenon.

MR CATTERNS: It is very common, but not universal.

GUMMOW J: Now, Mr Catterns, do not slide away yet.

MR CATTERNS: I thought I was being pushed.

GUMMOW J: I have got to be very clear in my mind what the present injunctive state is.

MR CATTERNS: Yes, your Honour.

GUMMOW J: Now, at page 1062 there is two injunctions, then at page 1065, the first of them seems to have been stayed until there was a notice of appeal - there was one obviously - and the stay was to continue until the disposal of that appeal.

MR CATTERNS: Yes.

GUMMOW J: So that appeal is the appeal to the Full Court, that is disposed of. Does that mean the injunction is now in force?

MR CATTERNS: Your Honour, our mark has been crossed off the register.

GUMMOW J: I am talking about Order 1 on page 1062.

MR CATTERNS: Your Honour, I believe that the order - the stay was of the Order 1 expungement.

GUMMOW J: Is the expungement.

MR CATTERNS: Yes.

GUMMOW J: So you have been expunged, have you?

MR CATTERNS: Yes, your Honour. Now, your Honour, that gives rise - - -

GUMMOW J: Well, what can we do about that?

MR CATTERNS: Your Honour, that is our problem, we submit, and your Honour might remember in other cases, in patent cases, sometimes there has been a stay obtained of an order revoked and sometimes there has not, and there is a question whether or not the court, but it would not be the High Court, has the power to order rectification to put it back on again, in light of this Court's decision. We submit, there is no doubt about it; there is no difficulty; it will be able to be restored.

GUMMOW J: Well, you would need a mandatory order of some sort and you have to join the Registrar.

MR CATTERNS: We have sought a mandatory order, but we have not joined the Registrar, but, your Honour - - -

GLEESON CJ: I thought you said a moment ago that you would seek the mandatory order somewhere else.

MR CATTERNS: Well, I myself had thought that that was the convenient thing to do, your Honour, yes.

GUMMOW J: And this Order 5 on page 1063, is that complied with?

MR CATTERNS: I cannot remember. Nobody remembers, your Honour, because it was such a tiny part of the case and there has been no further procedural - - -

GUMMOW J: It might be, but it is an order of the court and I am not going to interfere with it unless I know what is going on.

MR CATTERNS: I apologise, your Honour. May I inquire about that over lunch?

GUMMOW J: You have got a phalanx of advisers in a large legal firm and this is the sort of thing you are meant to know about.

MR CATTERNS: Yes, your Honour. May I inquire about that over luncheon and inform the Court?

GUMMOW J: Very well.

GLEESON CJ: Yes, thank you, Mr Catterns.

MR CATTERNS: May it please the Court.

GLEESON CJ: Yes, Mr Jackson.

MR JACKSON: Thank you, your Honours. Your Honours, if I could deal with the point that was raised by your Honour Justice Gummow a moment ago, we do not believe that order has been complied with yet, Order 5.

GUMMOW J: The striking off, the expungement?

MR JACKSON: No, I am sorry, your Honour.

McHUGH J: Order 5.

MR JACKSON: The delivery up of the information. Your Honours, could I deal with four introductory matters, as it were. The fourth of them, if I might say so, concerns the document at page 227 your Honour Justice Callinan was adverting to earlier, but may I come to that in due course. The first of them, your Honour, concerns the form of the orders and your Honours will have seen that none of our learned friend's written submissions relate to a possible form of order if the Court thought it appropriate to do so and, your Honours, the reason why that is, in our submission, is because the form of order actually made by the primary judge and the form of order that was not interfered with by the majority in the Full Court, was one in relation to which there was no disagreement.

May I seek to make that out by going first to what was said in the Full Court in volume 1. First of all, at page 75 in the last paragraph of Justice Lehane's reasons, where his Honour said:

There was no suggestion that, if we were to reach the result, on the substance of the case, which I favour, the trial judge's orders should be varied in any way.

What is meant by "the substance of the case" really related, of course, to the use of the word "Nike", to put it shortly. One sees that reflected also at page 35, under the heading at about line 25, using the figures in the right-hand side:

The attack by the appellants on the breadth of orders made by the primary Judge rests on an assumption -

which our side did not challenge, and your Honours will see the assumption there set out. So, your Honours, the case having failed on that issue, there was no suggestion that the orders that were made by the primary judge were inappropriate.

GAUDRON J: That may be so, but that does not include the matter, does it?

MR JACKSON: No, your Honour, but - - -

GAUDRON J: Particularly when it comes to injunctions under section 52.

MR JACKSON: No, your Honour, I accept that. May I say one more thing before replying further to what your Honour has just put to me, and it is this: when one looked at the - in these cases, your Honours, I say so with respect, of course, sometimes the parties really know what is the appropriate order, and when one goes to what happened before the primary judge what one sees, and could I take your Honours to volume 5 at page 1059. Your Honours will see about line 15, again using the figures on the right-hand side of the page, that the second judgment that was given by his Honour was then delivered. It came then to the question of the orders. Your Honours will see at line 20, Mr Nicholas saying for our side:

subject to the question of a stay then, of expungement of the orders that ought to be made as set out in the short minutes of order.

which he had handed up. Your Honours will then see in the next few lines, counsel for the appellants was asked what she said about that, and she said:

excepting the timing in paragraph 4 and that we do seek a stay in relation to the expungement.....we consent.

Then, if your Honours read on, what one sees is that some more time was sought. Then there was some discussion about the stay. On the next page, page 1060, between lines 10 and 15, his Honour said:

HIS HONOUR: But I have reached the conclusion that I should permanently restrain your clients. Ought I really to say that?

MS BAIRD: Your Honour, our concern is in relation to the expungement once that goes through the process.

HIS HONOUR: I would be quite happy to stay the expungement.

MR NICHOLAS: That is not opposed.

Your Honours, if one reads through the remainder of what took place, which goes on to the next page, there does not seem to have been any debate about the appropriateness of the orders, and one sees a certain freshness in the argument that is made in relation to that question now.

CALLINAN J: I do not know, Mr Jackson, at page 1058, his Honour Justice Sheppard has already said, at lines 5 to 15, that he was against the appellants here on the section 52 and passing off claims.

MR JACKSON: Yes.

CALLINAN J: So, these orders are no more than a consequence of his findings in those respects, are they not?

MR JACKSON: No, your Honour. I am sorry, I did not mean to create the impression that I was saying that the orders were orders made by consent in the full sense of debarring there being any attack on the underlying reasoning. What I am seeking to say, your Honour, is the narrower point and that is, assuming that we were otherwise successful on the substance of the proceedings, that it is not a case where the Court should endeavour to mould orders different in form from those that were the subject of the two parts of the material to which I referred.

GLEESON CJ: Well, the simple explanation of the approach taken by counsel may be that her clients had no practical intention of doing anything in Australia that did not fall within what the judge held would be likely to mislead and deceive.

MR JACKSON: Well, indeed, your Honour.

GLEESON CJ: "Nike" does not sound like a great name for a perfume if you have got to put on it that it has got no association with the American company.

MR JACKSON: Indeed, your Honour, and all I am seeking to say about it, your Honours, is that, if the point that is reached in the case is that on the substance of the case our side is successful, then it is not a case where it would be appropriate for the Court itself to get into the field of endeavouring to alter the orders that were made.

GUMMOW J: No, but suppose the position changes here and suppose that the mark was put back on the register.

MR JACKSON: Well, your Honour, obviously that alters some of the orders. It would not really affect the situation in relation to the passing off and section 52 orders.

CALLINAN J: And the reference to substance of the case may be no more than a reference to the point that occupied most of the time. I do not know whether - - -

MR JACKSON: I think that was my expression, your Honour.

CALLINAN J: Yes. Well, quite. Thank you, Mr Jackson.

GUMMOW J: I am not sure about that, Mr Jackson, because it may be that the mark can be used without contravening section 52. One would have to know what the particular example was put forward which was said not to.

MR JACKSON: Well, your Honour, could I just say in relation to that that we are agreeable people, but unless one knows what proposition is being advanced in relation to the case, it is very difficult to respond in any particular useful way and so, your Honours, what we would seek to say in relation to this is that if it be that some order is sought other than one that simply excises other orders or simply reverses them, then, your Honours, it would be appropriate for our learned friends to notify us and indicate what they want.

GUMMOW J: Seek a variation. They would have to come back and seek a variation when they had a specific proposal for use which they said did not contravene.

MR JACKSON: If bullfighting were to start in Australia and become fashionable, they might be able to deal with it for underarm deodorant for bullfighters for all one knows, but perhaps there may be some fields. Your Honours, I said I was going to say three things by way of introduction. May I move to the second one and it is this, that it is clear, of course, your Honours, that the fact that a person has a registered trade mark does not mean that the person may, in using the trade mark, engage in conduct which is misleading or deceptive or which amounts to passing off and, as was observed yesterday, your Honours, Chief Justice Mason in the New South Wales Dairy Corporation Case 171 CLR at the bottom of page 382 and the top of page 383 had referred to two instances in that regard. Your Honours, it is the last few lines of page 382 to the top of page 383. I do not intend to go to those cases.

But, your Honours, this, too, is such a case and, in our submission, it is a very ordinary case of passing off or section 52 case, where someone, who happens to have a trade mark, puts out goods that fall within the trade mark classification in a way which is designed to use not its reputation, but a reputation which we have acquired and, your Honours, the trade mark issues, in our submission, are relevant ultimately really only to the orders for expungement with the possible qualification that your Honour Justice Gummow mentioned as to the alteration of another order.

Your Honours, this case, of course, was not one where we were suing - we could not - for infringement of trade mark. It is simply a case where we were suing, apart from expungement, for section 52 and passing off and your Honours, that brings me to the next point.

KIRBY J: Could I just ask you in relation to the stay that was provided against the expungement, when was that lifted?

MR JACKSON: Your Honour, it expired, I think, with the order of the Full Court.

KIRBY J: I see. So no further stay was sought from this Court and the act of expungement has occurred?

MR JACKSON: The act of expungement has occurred. It is a matter of interest to those in the field, I gather, whether one needs to have the registrar as a party to, whether this Court's order reversing that is effective without the registrar being a party to it.

KIRBY J: At the very end, would you deal with the cost implications if you were to lose on that point but win on the section 52 point?

MR JACKSON: Yes, your Honour, of course. Your Honours, that brings me to the next point or what I had been saying a moment ago. It brings me to the third point I wish to make and that was the submission I made was that the appellants were seeking to make use of a reputation which we had acquired. Now, your Honours, it is perfectly true, of course, we did not sell perfume. We do not sell perfume but it has been established for many years in this general area, if I can put it for the moment, of the law that successful companies can have reputations going beyond the particular products which they sell and also, that for others to seek to appropriate that reputation, albeit in a different area, gives rise to potential causes of action in the person possessing the reputation.

Now, your Honours, a very early case, a relatively early case in that regard relates to the name "The Eastman Kodak Company", a company which makes, of course, cameras or at the time made cameras and things of that order but a manufacturer of bicycles sought to appropriate the name "Kodak" and I will give your Honours a reference to that in a moment. The issue, speaking a little more generally, was adverted to by your Honour Justice Gummow in two cases in the Federal Court which contain the reference to the Kodak Case. The first of them is Hogan v Pacific Dunlop Ltd (1988) 83 ALR 403 at 427. Now, your Honours, I wanted to refer particularly to the bottom of page 427, the last few lines where his Honour said:

However, that is not to say that there must be a "common field of activity"; the fame of the plaintiff may be such that the public will draw an association between the plaintiff and the defendant's goods or services even though the plaintiff does not market goods or supply services of the same description -

and the English Lego Case is referred to.

Likewise, the public may assume that the plaintiff for reward gave an approval to or was otherwise commercially connected with the plaintiff's goods or services, when this is not the case -

and your Honours will see then a reference, in the next paragraph, to the fact that that possibility gave rise to the "defensive trade marks" provisions in "Part D of the Register". Then your Honour quoted from Mr Shanahan in his work, about line 17:

"Part D of the Register is intended for the more adequate protection of marks that have been used to such an extent for certain goods or services that their unauthorised use for quite different goods or services would be likely to mislead the public. The classic example of such a mark is KODAK the owners of which were able to restrain the sale of `kodak cycles' by means of a passing off action.

Your Honours will then see, your Honour referred about line 26 to:8

The comparative antiquity of the Kodak case -

Could I go back, your Honours, to the preceding page, page 427 and your Honour then referred at about line 8 to some observations of Lord Justice Goff and, your Honours, I do not want to read them out but could I refer your Honours particularly to the passage commencing at about line 8 going down to about line 49 where the consequences of appropriation of the name of A by B are discussed.

Your Honours, the other case I was going to advert to was the decision called 10th Cantanae Pty Limited v Shoshana Pty Limited (1987) 79 ALR 299. The particular passage I wanted to go to was at page 324. Now your Honours will see, commencing at about line 33, the paragraph commencing there, your Honour referred to - - -

GUMMOW J: This is a dissenting judgment, is it not?

MR JACKSON: Yes, your Honour. I do not know whether the particular passage I am going to refer to is one that departs from what has been said and, your Honour, the part I was going to refer to particularly is in the paragraph commencing about line 33, where your Honour referred to the Lego company, having succeeded in that case in England, where, of course, the products were quite different products, of course, and your Honour said:

No doubt the evidence in the English litigation was different from that in the Australian litigation. Nevertheless, these cases do serve to illustrate a significant difference between the operation of s 52 and passing off. It is, as I have indicated, not necessarily a defence to a claim for passing off that the defendant does not occupy a "common field of activity" with the plaintiff. The question is whether the reputation and goodwill of the plaintiff extends beyond fields of immediate endeavour and entitles it to protection against misappropriation by defendants who seek to dig a pit in advance of any future entry -

and so on. Then your Honour discussed the "erroneous preconception" cases, going onto the top of the next page to about line 7. Your Honours, the point that I seek to make is simply that there is nothing really very new in circumstances being circumstances like this, where one company, and, no matter how enthusiastically one describes its advertising or simply its success, the measures it has had in establishing a significant reputation for itself, it does not mean that others can take advantage of that reputation, albeit in a different field. So the present case is one of that general class.

Your Honour, I will come to the evidence in little more detail later but may I say that there was very clear evidence that our Nike had a reputation far beyond the goods actually sold. Could I go, your Honours, simply to three passages in the oral evidence of three persons who were persons who were deceived by it. Your Honours will see those in volume 2, page 61. The witness's name, I think, is described as Dinnall, I think it should be Winnall, your Honour. But your Honours will see, if one goes to line 14, she was asked:

What led you to the assumption?---Well, it looked like a NIKE product. I mean it looked similar to the type face and the name is fairly synonymous with the sporting company and I was aware that either - companies either licensed their name for other companies to make products like that or - I just assumed it, I just assumed that it would be NIKE's.

If your Honours look at about line 39 on the same page, there is a reference to an assumption that people would have trade marks covering related areas. But, your Honours, the first passage is the one I particularly wanted to refer to.

The second is at page 64 in the evidence of Mr Winnett, and if one looks at the top of the page, your Honours will see that he was asked about his affidavit, and then the second question and answer on the page:

Why did you assume that?

and he said:

Because of the name.

Then if one goes to bottom of the same page, about line 50, using the figures on the right:

Having seen the name NIKE and knowing of NIKE sportswear, et cetera, being available and a well known brand and that Adidas as a sportswear company at that stage I assumed had allowed their name to be used to market a range of cosmetics, skin care, men's fragrances, et cetera, that NIKE was prepared to do and was pursuing the same sort of marketing strategy to tap into a market that had at this point of time or that point of time not being totally saturated; meaning that NIKE was going to cash in on their name by extending their line of product from sportswear, footwear, to sports skin products and fragrances.

And then, your Honours, Ms Rock - - -

KIRBY J: Did you ever resile in the evidence from the statement that you were not interested in perfumes?

MR JACKSON: We do not do it, your Honour, we do not do it. I am sorry, we did not - - -

KIRBY J: But you also indicated in that letter that you had no interest in doing it.

MR JACKSON: We have not done it, your Honour, and we do not have a present intention to do it, and we do not resile from it.

KIRBY J: But you want to stop the appellants from doing it in Australia?

MR JACKSON: No, no, your Honour, we want to - - -

KIRBY J: Even though they have owned the mark for a very long time, even before you came on the scene, as I understand it?

MR JACKSON: No, your Honour, we have had our mark here for a lot longer than that.

KIRBY J: No, but when was your company first established ever?

MR JACKSON: Your Honour, I cannot give you the exact date without checking, but I think our first trade mark in Australia is 1975 or something of that kind or a little earlier.

KIRBY J: Internationally, does it go back 70 years?

MR JACKSON: No, your Honour.

McHUGH J: There is evidence that you were engaged in an extensive advertising campaign in 1974 internationally.

MR JACKSON: Yes, your Honour, you will see some of the material is - your Honour, I will not go through it in detail - but your Honour will see it attached to our written submissions where we have set out the material in support of our notice of contention. Your Honour, I will endeavour to give you a more precise date a little later, if I may.

CALLINAN J: I see that your witness Winnett said that they sell "Prestige" in Hastings Street in Noosa.

MR JACKSON: Your Honour, that would come as a great shock to hear that. The third reference I wish to give is from Ms Rock's evidence and your Honours will see at page 66, about line 42, she was asked:

Had you thought about whether or not that fragrance had anything to do with the footwear company before you had your discussion with her?---Yes, when it was offered to us, NIKE automatically brings up NIKE sportswear.

Then she was asked why that brought that up automatically, and she said:

The name, NIKE.

And do you have an impression that the NIKE sportswear company has an exclusive right to use that name?---I sort of presume it does, I mean an international company like NIKE usually, that's it.

At the top of the next page, about line 5:

When you say business laws, I mean I was just presented with a product with NIKE the name on it, so NIKE sells -

I suspect it should be "the product" but:

a product.

Now, I do not intend to go through the evidence. May I give your Honours a document which summarises where one will find the evidence of the individual witnesses. When I say individual witnesses I mean who dealt with this issue - the lay evidence, as it were.

GLEESON CJ: Thank you.

MR JACKSON: To put it shortly, there was ample evidence from those persons to justify the finding that appears in volume 5 at page 1031, about line 46 where his Honour said:

The evidence to which I referred earlier establishes plainly enough that the marketing of the Campomar products led to confusion amongst customers or potential customers and members of the staff of pharmacies where the Campomar products were displayed.

Then, on the top of the next page his Honour referred to:

reasons explained by Mr Blanket in his evidence -

Could I just say that Mr Blanket appeared to receive something of a bagging, if I could so describe it, yesterday. May I seek to say something about his evidence in just a moment, your Honours.

GUMMOW J: The product referred to here is exhibit 1, is it, that these people in the schedule saw on the shelves? What exhibit is it?

MR JACKSON: Exhibit 1 is the new product, the new product that they wanted to market after they stopped - - -

GUMMOW J: That they have not marketed?

MR JACKSON: Yes.

GUMMOW J: Yes. So, what exhibit number is the product we are talking about here?

MR JACKSON: I will give an answer to that, if I may, after lunch.

GUMMOW J: Yes.

GLEESON CJ: We will adjourn until 2 pm, Mr Jackson.

AT 12.46 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.03 PM:

GLEESON CJ: Mr Jackson, I am just going to hand back some fragrance. This is not from me to you; it is a return of some exhibits to the Bar table.

MR JACKSON: I understand that, your Honour. Could I say, whilst in the fragrance department, that this bundle contains a replication, if I can put it, of exhibit 1, that is, the material which was proposed to be put on market but does not contain - or none of them contains the Sport notification. The other bundle contains actual exhibits. The other bundle contains two actual exhibits which were used at the trial as being the same as the various ones that were seen by persons in pharmacies and so on.

I do not know that we are doing too well in the leotard department but that seems to have disappeared. However, there is a bundle of brochures which indicate the range which we had. I will give your Honours a reference to them a little later if I may. Could I come back then to some questions I was asked just before lunch relating to our position in terms of how long the company has been going, and so on.

Now, your Honours, our reputation through direct selling and advertising in Australia goes back, on the evidence, to, at least, May 1979. That is actual selling in Australia. I say at least May 1979. You will see that from the affidavit of Raelene Boyle, a well-known athletic figure, who also worked as the Australian distributor for Nike products, at that stage, and could I give your Honours the reference where that will be found: volume 3, pages 291 to 294. That is in Australia. In the United States, the reputation goes back well before that to 1972, at least. Could I in that regard refer your Honours to the affidavit of Mr Lloyd Farris in volume 3, at pages 295 to 302.

Your Honours, I do not intend to go through it at this point, but may I say however that we would invite your Honours to note its contents when your Honours come to consider the matter the subject of our notice of contention, that is, the reputation of Nike, as at the time of the original registration of the marks of the appellants, because in any event, whatever be the fate of section 28, seek to have their original registration set aside on the ground that it was then deceptive and, your Honours, I would invite your Honours to - - -

GUMMOW J: Well, will we try that? What are we going to do about that?

MR JACKSON: Your Honours, in our submission, that is a matter - could I first go back one stage. It was not, of course, dealt with by the Full Court because the Full Court thought they did not need to do so. It is, however, a matter that the - - -

GUMMOW J: It was not dealt with by the trial judge either, was it?

MR JACKSON: No, your Honour, he did not, but, again, the need to deal with the issue is one which would arise if the Court were otherwise against us on the expungement issue.

GUMMOW J: I know, that is why I am - - -

MR JACKSON: Yes, and, your Honour, it is an issue, in our submission, the Court would need to decide.

GAUDRON J: But there are no factual findings?

MR JACKSON: No, your Honour, no.

GAUDRON J: And the evidence does not seem to go - some of the evidence which might support a finding, say, under 28 if it has that operation, or section 72 refers to the time at or about when the proceedings were commenced.

MR JACKSON: Some does.

GAUDRON J: Certainly Mr Blanket seems to say that.

MR JACKSON: Yes, your Honour, I think it is right to say that he was speaking of at about that time.

GAUDRON J: There is no one who says that there was confusion at that time?

MR JACKSON: Well, what your Honour puts to me, I think, is right in the sense there is no one who says there was confusion at that stage because, of course, they were not in the market.

GAUDRON J: That is right.

MR JACKSON: But, your Honour, what I am going to say is that there is material which deals with the position as at 1986, and on that material the correct finding to make is that if there had been - is that the registration at that point was of a mark which was capable of giving rise to confusion. I am not using the exact words of section 28, but I intend to take your Honours to it.

May I come back to that while I deal with the question of the notice of contention. It is, however, a matter with which the Court, in our submission, does have to deal. Your Honours, the last thing I wanted to say in relation to this aspect, and that is that there is an affidavit at volume 3, pages 288 to 289 - - -

CALLINAN J: I hope it is more accurate than what appears at page 300 in the reference you just gave us, Mr Jackson, in which Ian Botham was described as the famous Australian cricket player.

MR JACKSON: Yes, I am reminded the witness was not cross-examined, your Honour. Your Honour, from time to time memories fade, even of the great, and there are inaccuracies, but, your Honours, what I was going to say was that, finally in answer to your Honour's question earlier, at page 288 you see an affidavit of Mr Thomas Niebergall and he put, at page 289, paragraph 5, Nike Inc was incorporated in the United States in 1969 and became Nike by that name in 1978. Mr Farris, your Honour, if I may just go back to what your Honour Justice Callinan said, is not, I think, from a cricketing country, from a major cricketing country.

Your Honours, could I come back then to what I was going to deal with just before lunch. There was some references yesterday to Mr Blanket's evidence and Mr Blanket, of course, was not a person whose only qualifications were those of an academic, and I do not mean that in any adversely critical fashion, because he had been and was himself in business and your Honours will see that from his affidavit at page 499 of volume 3 - - -

KIRBY J: So he was not an academic after all. He was a businessman.

MR JACKSON: He was both, your Honour, both, as so many are these days. He had been, as your Honours will see from page 500 - he referred to the fact that he was a director of a marketing, advertising and promotional consulting company and, your Honours, I will not go through the detail of it. Your Honours will see in paragraph 2 he was a man of some considerable experience in relation to marketing and markets and in both hands-on and hands-off capacities. Your Honours will see also, if one looks very briefly at his affidavit, that he does describe in paragraph 3 between lines 45 and 50 the fact that:

the practice of brand extension has become very widespread.

He discussed in paragraph 4 what he meant by that concept and your Honours will see references to, for example, Dunlop, the tyre manufacturer, going well beyond that area; Reebok and Carla Zampatti. Now, importantly, your Honours, in one sense in paragraph 5 he said that it often involved the adaptation of the full brand name and he referred to the names there set out and your Honours will see paragraph 7 at page 502:

Many fragrances.....are the result of brand extensions.

He discusses that in relation to sporting things in paragraph 8 and in paragraph 10 to which your Honours have already been referred, he discusses the fact that:

The brand name NIKE is an extremely well known brand name which has been heavily advertised.....It is well adapted for use in relation to personal care products -

and so on. He referred, your Honours, in paragraph 11 to the other form of brand extension and that was by licensing. So that, your Honours, the position which obtains in relation to his evidence is that he showed how the market worked and the types of things that there were to protect.

May I come from that, your Honours, to what really is the fourth introductory - if I could still use that word - feature I wanted to mention and that concerns the letter to which your Honour Justice Callinan drew attention which is at volume 2, pages 227 to 228. If I could perhaps go to page 228 where it appears in a fuller form but perhaps less legibly. What the letter says is that we did not wish to participate in the perfume and the cosmetic market with them:

we do not want to participate in your project -

we recognised that they had a trade mark registration in the stated area but we urged caution on that. We said, if you do use your trade mark do not suggest or imply that you have a connection with us. One of the reasons for saying that, whilst we do not want to be in the area, is that there is some concept of brand identification and a brand identification which could easily have the result that persons using their own trade mark could, by the manner of their use of it, infringe rights which we would otherwise have or claim to be us.

KIRBY J: Could I just ask there, in relation to that second paragraph, assume that the appellants had in Australia sought to market exhibit A without the Sport. Now, just reading your letter one, would have thought that there could not have been objection to that because they were not saying, "Steady on. Don't you dare attempt to market your product anywhere under the name Nike" and if they had not added "Sport" would you have had any objection within the terms of that letter?

CALLINAN J: Could I just add to what Justice Kirby has drawn your attention to. The earlier statement in the letter:

we do not believe perfume and cosmetic products are part of this company's image.

That may reinforce what may be implicit in what his Honour has suggested to you, I think.

MR JACKSON: Your Honour, it would depend on, in a sense, the get-up, as it were. We said - - -

KIRBY J: But inherent in that letter, one would think, is that using the word "Nike" on perfume, which is not consistent with Nike America's image, Nike Australia, could not be objected to, because (a) they have had the trade mark for an awful long time; and (b) it is not part of the image projection of Nike, the respondent; and (c) they do not want to be associated with it; (d) they do not tell them "Don't do it".

CALLINAN J: Which is consistent with all of your evidence which seems to dwell upon all the sporting aspects of your product and the endorsement by sports people and the like.

MR JACKSON: Could I say that what one sees in relation to it is that we recognise that they have a trade mark which they can use in the area and that the trade mark is the name. However, we also say we do not have as part of our image, part of our marketing image - we do not market the perfume. But, if I can just go back to what I said a moment ago, we do have the caveat, and the caveat comes about not because just of the word "Sports" that is one method of putting themselves into our area, even on a narrow view, but also because of the way in which it is likely to be dealt with.

In that regard, if one looks at the products one can see that it is very likely that just because of their name the word "Nike" used. With our very substantial reputation, they are likely to be put in a situation where they are in fact seeking to obtain some advantage from our use. If I could just say, for example, that one sees in the pharmacy the natural reaction is to put them next to things like Adidas.

CALLINAN J: Let me accept that for the moment, Mr Jackson. Why did not your client say that? What you have just put seems to me to be quite different from what your client wrote. That may not be at all decisive of the case, and I am not suggesting that it necessarily would be, but it is a factor that is obviously enough worrying me.

MR JACKSON: If your Honour will bear in mind that what is being put to us is a proposal for, in effect, a joint venture.

CALLINAN J: Yes, but if you had not gone on to say "we do not believe perfume and cosmetic products are part of our image", which seems to me to be an implication that "we are not interested in, and do not care what happens with respect to perfume because it is not part of our business, it is not part of our image".

MR JACKSON: The expression "part of our image" is one that is perfectly capable of referring to the way in which we currently see ourselves selling things. It is right to say we do not sell perfume, nor have we licensed people to sell perfume - - -

GLEESON CJ: Mr Jackson, does not the content of this letter have to be understood against the law relating to threats in the trade mark area?

MR JACKSON: There is - I have just forgotten the number of the provision. I am conscious of the provision your Honour is referring to. Yes, one is liable for making threats.

GLEESON CJ: I had thought that people who were responding to this kind of proposal would have to express themselves fairly cautiously because of the statutory provisions relating to the consequences of making groundless threats of proceedings for infringement.

MR JACKSON: Well, your Honour will see that we made no such threat except to say, "We caution you if you do use it" - your Honour, we are not saying in this document to go ahead and do it; what we are saying is, "If you do it, you have to be careful not to suggest or imply that we sponsor it or we approve it".

KIRBY J: Well, that is not really an accurate presentation of that letter because, if your big concern was not to be engaged in any threatening conduct, all you had to do is say, "We note your letter, we're not interested", and then you would have to go onto the warning in the end. But, instead, you gratuitously add:

we do not believe that perfume and -

so-and-so, and you acknowledge in the second paragraph that they have a right to market a product by the name "Nike", so long as they do not do it in a particular way.

MR JACKSON: No, your Honour, we did not quite say that, with respect. What we said at the second paragraph was:

we understand you have registered the name "NIKE" in the class covering "Perfume and Essences" -

then we went on to give the caution. Your Honour, it is hardly a surprising thing if someone is offered a joint venture and they do not want to be in it, to say, "We don't want to be in the joint venture because that's not part of what we're doing". Now, that is really - - -

KIRBY J: It just seems different in kind, and maybe I am not understanding it clearly enough, for a party with a product to move into your market, which you built up by spending a lot of effort and money and, as it were, tried to cash in on you, but that is not this case. This is a case of a product which goes back with the appellants to 1940 and with their predecessors to the 1920s, and that it is an established product - their big mistake was adding the word "Sport", but they now want to take that out, and the question is whether or not you are not just using market power to bully them out of it, when in this letter you acknowledged you did not really have a right to do that.

MR JACKSON: Your Honour, with respect, that really does not reflect the way in which the primary judge's findings of fact are made. In terms of bullying them out, the position was in Australia - one is in the end talking about Australia. In Australia we had some trade marks ourselves in relation to Nike. We also had a very significant reputation which we are entitled to have and to have protected.

KIRBY J: That is true, but the world is a global market now and they had a trade mark, an established product, and they wanted to come in to get one other market in the global market.

MR JACKSON: Not just one, your Honour; one or two others and we have our differences in those places too.

KIRBY J: Very well, that proves the point, quite.

MR JACKSON: But what the Court has to look at here is, global or not, this was - we were talking about in the case, Australia, and, so far as a trade mark was concerned, a trade mark in Australia and a usage in Australia, where we had a reputation already, and seven years after this they come in. Your Honour, one is not talking about the letter today and the business Australia-wide; it is the seven years difference.

KIRBY J: Yes, but you have an established market in other types of products, sporting products, shoe wear, boots and things of that kind, sporting things, and you are not really into the soft and seductive world of perfumery.

MR JACKSON: Your Honour, that puts it, with respect, immensely elegantly, but we were not just selling boots; certainly we sell boots, shoes, all sorts of things. You will see from some of the material we sell clothing, all this sort of thing, and blazers and many, many items.

McHUGH J: Well, the front page of today's Herald has Cathy Freeman there with a Nike sign on her.

MR JACKSON: Of course, but the fact of the matter is that we, like, if one likes to say, Coca-Cola, or any of the companies that achieve success and, your Honour, without expressing a view one way or another about that, we achieve success. What we achieve by doing that is a reputation and if you have a situation where people are seeking to take advantage of your reputation without there being some justification for it, then that is a situation where one is entitled to rely on the law.

Now, your Honours, the only shade in this case that takes it away from the most common old garden, section 52 or a passing off case, is the fact that they had a trade mark; nothing more, nothing less.

KIRBY J: Well, a trade mark for a product which they had been marketing since the 1920s or their predecessors. I think that is the feature that is - - -

MR JACKSON: Well, a trade mark they had been marketing in other places. The trade mark does not get them around the world, your Honour.

KIRBY J: Yes, but, I mean, we do have to look at our Act, but we have to look at it in the context of a world which has radically changed. There is a global market out there and we are told we have to get into. That is what people do.

MR JACKSON: Well, your Honour, assuming that is right, we say we are in it, we are there and the part of the globe we are talking about, we are there first. We are there first. They push in. We are not trying to push them out of having as much Nike cosmetics as they like to sell in Spain or any other place, but this is here and we are here first, but do not push in.

KIRBY J: And you are here with your shoes, not with perfume.

MR JACKSON: Your Honour, not just shoes, with respect.

KIRBY J: Yes.

MR JACKSON: Our learned friend keeps saying that. He is putting the boot in but it is more than the boot.

KIRBY J: Sporting. I am merely quoting you are not interested perfume, which is what your letter said.

MR JACKSON: Well, your Honour, what we said we do not believe they are part of the image, yes, but they seek to take our image and put it on their perfumes.

HAYNE J: And shoes are not small, are they, Mr Jackson, where you sell $1.2 billion worth of Air Jordan products in the period 1988 to 1994? It is a lot of shoes.

MR JACKSON: Well, I am glad your Honour has reminded me of that for another reason, but, your Honours, we are a large company. The business of America is business someone said I think once. Your Honours, could I just go on to say that if one looks at paragraph 8 of the statement of claim in volume 2 at page 27, we are not saying in that that we were going into the perfume market. What we were saying is what is in paragraph 8 and 9 and in paragraph 9 that:

the practice of brand extension has been well known to the general public or a substantial number thereof.

That being either to manufacture or to license it and in those circumstances it is essentially going on to say it is hardly surprising if the public knows of those things, that the inference might be drawn that we are in the market, although, in fact, we were not. Now, your Honours, could I just say that there was, of course, a considerable body of evidence which entitled the primary judge to find that we did have an established reputation of the kind which their conduct was likely to appropriate and also, your Honours, to find that their conduct was intended to appropriate that reputation. May I come back to the relevance of that in just a moment?

Before doing so, could I just refer to a point that was raised by your Honour Justice Kirby a little earlier today, namely, the fact that we did not ourselves manufacture perfume. Maybe we will some day. Who knows? But, your Honours, one of the matters that is allowed by the Act is for there to be registration of marks by persons in our position, that is as defensive trade marks, Part XII.

CALLINAN J: Yes. I was going to ask you, that is section 93, is it not?

MR JACKSON: Yes, your Honour, yes.

CALLINAN J: Yes, and there was nothing to stop your client from making an application for registration of the defensive trade mark.

MR JACKSON: Except for their registration.

CALLINAN J: Except for their registration.

MR JACKSON: Yes.

CALLINAN J: Yes.

MR JACKSON: So, your Honours, the Act accepts a situation where there - - -

CALLINAN J: I am sorry to interrupt. I do apologise, Mr Jackson. Before 1986 would there have been anything to have prevented your client from making a section 93 application?

MR JACKSON: I do not think so, your Honour, no.

CALLINAN J: And, of course, before 1986 your contention is, or in respect of the period before that, section 96, you had already established this worldwide notoriety, and I do not mean notoriety in a pejorative sense.

MR JACKSON: Yes. Well, I mean, we were not as big as we are now, but we were - - -

CALLINAN J: But you would have been fully protected if you had got a defensive registration under section 93 in 1985, for example, and your client did not do that?

MR JACKSON: We did not do it, no, your Honour, no. No we did not do it, your Honour, but that does not mean we do not have the rights we have in relation to - - -

CALLINAN J: You may not have other rights. It may not be insignificant though. It may be the way in which you viewed - it may help to help construe the letter at page 228, the fact that you had not.

MR JACKSON: Well, your Honour, bear in mind that that letter is speaking about a proposal to deal, in effect, with the world, as it were, not particularly talking about Australia.

CALLINAN J: Yes.

MR JACKSON: Now, your Honours, could I come then to what I was going to say a moment ago, and that is that this is not the case where the conduct was simply misleading in fact - although that seems to be all that is necessary to show in relation to section 52 - but, your Honours, the judge found and there was ample evidence to support it, in our submission, that it was intended to achieve that result, and that is a relevant matter in showing, first of all, whether it was likely to be misleading and, of course, if one speaks of some element of causation, what was the cause of any actual misleading.

Your Honours, in relation to the relevance of intention, could I give your Honours two references. The first is to Conagra Inc v McCain Foods (Aust) Pty Ltd [1992] FCA 159; (1992) 33 FCR 302, in particular at page 345. Justice Lockhart in the second new paragraph on the page, his Honour said:

Evidence of fraud is still tendered in passing-off cases because evidence that the defendant had a fraudulent intent may assist in establishing the requisite misrepresentation, as the court "will not be astute to find the defendant has failed in his nefarious design" -

and his Honour refers to various cases in that regard.

Could I refer also, your Honours, to passages from, at first instance, and on appeal in Telmak Teleproducts (Australia) Pty Ltd v Coles Myer Ltd, 84 ALR 437. I am sorry, I have to give your Honours copies of this, I am afraid. Your Honours, these are extracts from the case, we have not given your Honours the full volumes; but, in particular, at first instance your Honour Justice Gummow, 84 ALR 437 at page 444. Now, your Honours, at the bottom of that page your Honour said:

As a qualification to these principles, it is then said in the authorities that the court nevertheless will incline in favour of finding that, whilst not identical to that of the plaintiff, the defendant's name or mark is sufficiently close so to trespass upon the rights of the plaintiff, if the defendant has acted to take advantage for itself of the plaintiff's goodwill. Such a case was -

and your Honour went on to deal with that, and your Honour said on page 445, about line 20 that:

Mere proof of fraudulent intent cannot of itself be enough.

Could I refer also to the case on appeal[1989] FCA 272; , 89 ALR 48 at page 65 where Justices Wilcox and Einfeld said at about line 4:

if it appears that a rival trader has deliberately copied the name, the natural inference is that this course was thought to be commercially advantageous.

CALLINAN J: That is not your case because they had the name.

MR JACKSON: Yes, I am sorry, your Honour. I was not talking just about name but about get-up and so on, too.

CALLINAN J: Yes. I mean, your opponents did have the name.

MR JACKSON: Quite, your Honour.

CALLINAN J: They had it for decades.

MR JACKSON: They did, your Honour. They had it and they had used it in a relatively small part of the world, and used it in a different kind of get-up in the script. Now, in relation to the Judges' findings - your Honours have, I think, been taken to those and I will not take your Honours to them again. They start at page 1035 and follow on from there in relation to the question of - - -

KIRBY J: Why cannot Spain move into the big global market? Why must it always be the United States' corporations. We all know that in the field of perfumery some European countries: France, Italy and so on, have moved into perfumes and here is Spain trying to get a little bit of the market with an established trade mark.

MR JACKSON: Well, it will be some other country. I will not name any particular country, but, they do quite well with Spanish sherry, things of that kind, and they are not - - -

KIRBY J: But that is ancient thing. That goes back to Armada. We are talking about the last decade of the 20th century.

MR JACKSON: If one simply talks about wine, you have a variety of Spanish-based wines that are sold around the world, some good, some not so hot. If you take Australia wines exactly the same thing happens, Australia sells them to other countries - little Australia - 18 or 19 million people. The same with Spain. And why, one might ask - - -

KIRBY J: They just want to come down here and sell their perfume.

MR JACKSON: Why, one might ask did the Germans appropriate the name "Mercedes" for the car? Why did not the Spanish use it themselves?

KIRBY J: It was Mrs Benz, was it not?

MR JACKSON: Yes, it was, but the name "Mercedes" is Spanish, of course, it came from there. If they have something good to sell they can sell it to the world. Maybe the perfume is absolutely wonderful. Maybe it would be absolutely the best thing to have after walking or running but do not do it without - you know, please. That is the way things go.

Could I simply seek to say that this case, in our submission, to put it shortly, was a classic example of one trader trying to piggyback on our reputation and as is made plain from the reasons of the judges below it was not just a case of the use of the word "Sports" whether on the packaging or as part of the name of the company. That that is so, your Honour, appears - if I can give your Honours two passages, one in volume 5 at page 1038 - - -

KIRBY J: Mr Jackson, what is the case closest to this where a trader with an established mark and a long history of production in a particular part of the world moves into another country and thereby faces the allegation that it is piggybacking on a global player? Is there anything like this at all?

MR JACKSON: Your Honour, there are. I would have to think about it to give your Honour an answer, but may I do so and take some advice from those more knowledgeable in the particular field?

KIRBY J: Yes, thank you. If you would do that. Because, that is the point that seems in my mind, and I may be mistaken, that distinguishes this case from those that I have been looking at that here is a company with an established name, an establish market, an established product of longstanding, a registered trade mark seeks to sell its product in this country. Principles of freedom, including freedom of economic activity, would tend to say they should be able to do it.

MR JACKSON: Yes, and principles of freedom, your Honour, equally, we would say, here are we, a trader for quite some years, in Australia for quite some years, got a registered trade mark in respect of our goods and we find someone coming in and intending to and succeeding in passing off their goods as ours.

KIRBY J: I will not go over it again but in a particular area of activity, you, and disclaiming interest in their particular area of activity.

MR JACKSON: Could I just add one thing: disclaiming interest in the area of activity by saying do not put it around, or put your stuff around in such a way that people will think we are. I was going to page 1038 and your Honours will see at the bottom of that page about line 50 that his Honour said:

The Nike name used in connection with products marketed by Nike International was so well known.....that it was almost certain that numbers of persons.....would be led to believe that such products marketed under the Nike name were marketed either by Nike International itself or with its authority.

If one goes to what was said by Justice Lehane in volume 1 at page 58 about line 25, your Honours will see that in the passage that goes from line 24 to about line 50 or to the bottom of the page, it was clear that his Honour was aware of the fact that he was dealing not just with the Sports range, but also with those that did not have that in it. Your Honours will see at page 58 line 25, his Honour was referring to a reminder:

in clear terms, of the distinction between the products which had been distributed in 1993 and the new line.

That exchange is one which appears in volume 5 at page 1058. Your Honours will see about line 35 on that page there is a reference to page 193 of the transcript. That is not part of the material in the books before the Court. Could I give your Honours copies of that page. I am happy to give them to your Honours now or if your Honours would prefer me simply to give them to the Court officer to give your Honours later. What it says is that it was made clear that the new range was in issue as well as the earlier range.

KIRBY J: Can I ask was there any evidence, or can we be properly told, as to whether any proceedings have begun in any other country by your client to restrain the activities of - - -

MR JACKSON: There was the United Kingdom, certainly, and those were the proceedings that I think were settled. There is some material about this in - and also, in Hong Kong there was some issue arising about it. Whether proceedings have started I am not sure. Perhaps if I could give your Honours a note identifying the passages in the transcript. I do not think it goes beyond what I have just said.

Could I go then to our written submissions, and in particular to page 10 of those. At pages 10 and following we deal with the question of erroneous assumption, and could we just say initially that traders of course trade in a market and, in a sense, have to take the market as it is. The people in the market have attitudes, expectations, beliefs, brought about by their own experiences and those experiences of course include not just the use of products but the knowledge of the availability of products and of players in the marketplace, brought about by such things as advertising.

Your Honours, people who are the potential customers for goods know that companies are likely to increase the range of products, sometimes decrease it, and also to license them to other manufacturers and, your Honours, they know - when I say "they" I mean people who are going to sell into a market - know that their conduct will take place in relation to people of that kind and, your Honours, if people will be misled by one's conduct, then that conduct, in our submission - people in a market in those circumstances will be misled by what is done. That conduct, in our submission, is conduct which is misleading and it is also, your Honours, if it is intended to be misleading, conduct which is deceptive in the stronger sense of the term used in, for example, section 52.

Now, your Honours, if I could go then to our written submissions, in particular to paragraph 27 on page 11. Your Honours, what we seek to submit in the first place is that the question really does not arise in the particular case or the erroneous assumption question does not really arise in the particular case because the cases in which there has been a reference to the notion are those which concern activities which are not intended to capitalise upon the reputations of other traders, then, your Honours, there must be some difficulty in applying an erroneous assumption notion of any kind when the erroneous assumption is brought about or acted upon by someone in the marketplace with the intention to effect a result by the use of it because, your Honours, if there be the erroneous assumption, it is part of the market or part of the characteristics of the market in relation to which a person is endeavouring to sell and if a person acts upon that, then whether one treats the issue as one of causation or whatever, that is to take one of the characteristics of the market and to engage in conduct which is misleading because of reliance upon that fact.

Your Honours, in paragraphs 28 and 29 we deal with two of the cases that are discussed in the area. What we would seek to adopt is what is said in paragraph 29 particularly in the reference in the fourth line to the observations of Justices Deane and Fitzgerald in the Taco Case that it is a mistake to regard McWilliams and as authority for the proposition that an erroneous assumption of fact will necessarily break the causal connection between the respondent's conduct and the relevant misconception. It may be the circumstance that gives the conduct the relevant quality. Your Honours, what we would seek to say then is what is in paragraph 30 and that is that the assumption made by the consumers in the particular case was one which was both reasonable and predictable and one which was known to be such. It was the assumption they wanted the consumers to make.

Your Honours, I do not really think I wanted to add to what we have in our written submissions in relation to this topic. May I invite your Honours to note in due course what we have said going up to paragraph 35.

Your Honours, that then takes me to the trade marks issues and they affect essentially the orders for expungement and could I go, first, to the question whether section 28 has a continuing operation.

GLEESON CJ: How does the current trade mark legislation deal with this issue?

MR JACKSON: It is section 88, I think, your Honour. Your Honour will see from section 88(1) allows:

a prescribed court may.....order that the Register be rectified by:

that there be the removal of a mark as section 88(1)(b):

remaining on the Register.

The application may be made on the grounds set out in subsection (2). Your Honours will see, for example, section 88(2)(a), one can apply on:

any of the grounds on which the registration of the trade mark could have been opposed under Division 2 of Part 5.

And that takes one back to section 34. Section 39 is the commencing provision of the:

Grounds for rejecting an application

Your Honours will see, for example, some particularly specified ones in relation to section 39.

HAYNE J: Is that not Division 2, Part 4 that you are taking us to, Mr Jackson? Should we not be at section 57 and following?

MR JACKSON: Sorry, I have managed to confuse myself in dealing with that. Your Honour, I accept that I went there too quickly. Section 57 takes one back to what I was looking at a moment ago, except for - - -

HAYNE J: Snakes and ladders, it is Commonwealth drafting.

MR JACKSON: Section 57 says it:

may be opposed on any of the grounds on which an application for the registration of a trade mark may be rejected under Division 2 of Part 4 -

and your Honours will then see that there are various sections including, for example, sections 42 and 43 and, your Honours will then see, if I can go back to section 88(2)(c), that the application may be made on the ground that:

because of the circumstances applying at the time when the application for rectification is filed, the use of the trade mark is likely to deceive or cause confusion for a reason other than one for which:

(i) the application.....could have been rejected under section 43 or 44; or

(ii) the registration of the trade mark could have been opposed under section 60.

And your Honours will also see in paragraph (e):

the entry was made, or has been previously amended, as a result of fraud -

et cetera. So, your Honours, that seems to carry with it the situation that one is looking at the situation as at the time when the matter is being dealt with.

GLEESON CJ: So under this current legislation you can have a trade mark expunged on the ground that if the current circumstances were in existence at the time of the registration, it would not have been registered?

MR JACKSON: Yes, your Honour, and there is a limitation on the discretion, section 89(1).

GLEESON CJ: Yes. That seems to bring in the notion of blameworthiness.

MR JACKSON: Yes.

GLEESON CJ: The current statute appears to reflect the view of the law taken by the majority in relation to the earlier statute.

MR JACKSON: Yes, your Honour, that is our submission. Could I also say, if I could just perhaps, by staying with the current statute, go to the transitional provisions, this case is one which is atypical because it is a case to which section 250 of that Act applies, and it is a case to which section 250 applies because the proceedings were commenced before 1 January 1996. What that means is that the proceedings go ahead under the 1955 Act.

KIRBY J: Is not that against you in the sense that the Parliament has taken pains to insert provisions which remove, at the very least, the doubt or make clear what a number of judges have not thought to be clear.

MR JACKSON: What your Honour has knocked down, with respect, is not quite what I was going to say.

KIRBY J: I am sure.

MR JACKSON: What I was going to say was this, that if the Court is in a situation where a question arises whether the Court should or should not take a different view from the view which was adopted by, as we have submitted, the majority in the New South Wales Dairy Case, then a relevant consideration, we would submit, is that in the Act that followed not so many years after that, appears to have adopted also in its transitional provisions - and I have not quite come to them all yet - a view which reflects the view that the majority took in that case. What I mean by that, your Honour, is that so far as cases started before 1 January 1996 are concerned, the Parliament, we would submit, treated the New South Wales Dairy Case as being the law. Hardly surprising.

So far as cases under the 1955 Act are concerned, but that were commenced after 1 January 1996, the position which obtains is that dealt with by section 234. If one goes to section 234, your Honours will see from subsection (1) which sets out its ambit of operation that it applies in relation to marks that either were registered before "1 January 1996" or where the application had been accepted or would be accepted for that date.

Now, your Honours, one then goes on to the operative part of it, subsection (2) which, in effect, reflects section 61 of the 1955 Act and your Honours will see that it provides that:

In any legal proceedings;

(a) the original registration under the repealed Act of a trade mark -

to which that section applies -

is taken to be valid in all respects after a period of 7 years from the date of registration of the trade mark unless it is shown that:

like section 61(1)(a) -

(c) the original registration was obtained by fraud; or

(d) the registration of the trade mark would be contrary to section 28 of the repealed Act -

Now, your Honours, if one goes to section 61 of the 1955 Act which is the provision which it mirrors, the expression there used is:

that the trade mark offends against the provisions of section 28 -

Now, your Honours, I will come in a moment to the point in time at which that is operating, but if one looks at the terms of section 234(2)(b), what we would submit is that the language used by it - not decisive, of course - does suggest that Parliament adopted the view taken by the majority in the earlier case as being the correct view. All we would seek to say about it, your Honours, in that regard is, no doubt as the judgments in that case indicate, the issue is one on which two, maybe three or four views are open but in that case the majority clearly took a particular view and that is the view, in our submission, from which the Court should not lightly depart. Your Honours, one can hardly say that there are very many cases, apart from this, that are likely to be affected by it.

Could I come then back, your Honours, to the 1955 Act itself, and in that regard one starts from section 22 and if one goes to the terms of section 22(1)(b) your Honours will see that it refers specifically to the expungement of entries which fall into two classes, one of them is those "wrongly made in" and those wrongly "remaining in the Register" and the expression "remaining in", in our submission, involves, we would submit, in the context, the underlying assumption, the entry may have been correctly made in the first place.

Your Honours, in fact, the immediately succeeding provision of section 22, namely section 22(2), does refer to one such type of case, that is a case where the Court can make an order for expunging the registration of a trade mark if there has been a contravention of a condition or limitation in relation to the trade mark. There are other provisions of the Act which contemplate there may be the expungement of an entry in the register for a variety of reasons. For example, the terms of section 23 contemplate there may be removal of a trade mark for non-user, that is section 23(1). I will come back to that a little later.

One sees also the terms of section 32(1)(b), a provision which deals with the situation where a decision has to be made whether a trade mark shall or shall not remain on the register; and your Honours will see, if I could go to 32(1)(b):

If a trade mark:

(b) contains matter which is common to the trade or is otherwise not distinctive;

the Registrar or a prescribed court, in deciding whether the trade mark shall be registered or shall remain upon the Register, may, in his or its discretion, require -

et cetera, and, your Honours, that is clearly dealing with the situation after the trade mark is in being.

Your Honours, if one goes too to section 56, section 56, of course, is the provision which deals with trade marks which are expressed in generic terms, but the terms of section 56(1) clearly involve, in our submission, the underlying assumption that a trade mark, were it not for the succeeding provisions of the section, might become invalid after the registration of it by reason of events after the time of registration. In other words, your Honours, the conception underlying the section, in our submission, is that supervening events may result in invalidity. If one goes to sections 60 and 61, the terms of those provisions - I said 60 and 61, 60 on the one hand and 61(1)(c) on the other, those provisions make it clear that that time of commencement of proceedings is the time at which the issue of distinctiveness is to be considered.

Now, could I go back from those provisions to section 28 itself. If one goes to the terms of section 28 itself, what your Honours will see is that it uses the words "shall not be registered as a trade mark", and the words "be registered" are, in our submission, perfectly capable of having a continuing operation, that is, they are perfectly capable of referring to the situation as at the time of the original registration or as at any time during registration. They are capable of expressing the notion that a trade mark which possesses or does not posses, as they case may be, a characteristic of the kind there referred to is not to be on the register of trade marks. Your Honours, that the provision is capable of doing so was referred to in the New South Wales Dairy Corporation Case 171 CLR. Could I give your Honours two references: your Honour Justice McHugh at page 418 and Justices Dawson and Toohey at page 403, about point 1 on that page.

We would invite your Honours to note also that Part IV of the Act is speaking - and if your Honours look at the heading of Part IV, it is dealing with registrable trade marks, what is registrable, what is capable of being on the register. If one is looking to see - - -

GUMMOW J: Put on the register, that is the question.

MR JACKSON: May I seek to answer it now by saying - - -

GUMMOW J: One must not glide over it.

MR JACKSON: Can I say two things: the first is, one looks at Part IV and sees the heading to which I have just referred. In seeking to answer the question your Honour was just putting to me, can I say two things: the first is that in Part IV is to be found, of course, the provision to which I referred a moment ago, section 32. Section 32 is speaking of the question whether a trade mark shall be registered or shall remain in the register. In speaking about it remaining on the register it is dealing with a situation after the original registration. So, there is not quite the complete symmetry one might expect to see if the heading, for example, of Part IV, were given the narrower meaning.

Of course, if one is looking for going on the register, and talking about headings, one goes to Part V, and Part V is the one headed "APPLICATIONS FOR REGISTRATION". If one is looking to see what is the effect of registration, is not to Part IV or Part V really, that one goes, but to Part VII which has the heading commencing section 53, the heading is Part VII "REGISTRATION AND EFFECT OF REGISTRATION". Now, your Honours, headings only go so far, of course. What we would seek to say is that the heading of Part IV is not decisive of the issue.

It is in Part VII dealing with the effect of registration that one finds section 56, and section 56 is the provision to which I referred earlier. It is a provision which, in our submission, as section 56(1) indicates, clearly contemplates that there can be supervening events which affect validity. That is apparent enough, in our submission, from the terms of section 56(1). If one looks at section 56(3), it provides:

If the trade mark consists solely of that word -

that is the word that has become generic, that "shall be deemed" to be - and your Honours will see the last few lines of (3):

deemed for the purposes of section 22 to be an entry wrongly remaining in the Register.

If I could go then to sections 58 to 61, and your Honours I must say I feel a little verballed by our learned friends in relation to the explanation of section 58, but could I just seek to say this about section 58(3). We would submit it is correct, as our learned friends suggest, that section 58(3) is concerned only with infringement of trade marks, not dealing with other causes of action. It deals with, perhaps amongst others, at least a scenario of this kind.

If one first of all - and I give two instances: if one were to assume a registration for dairy products consisting of the word "Moo", and another registration for dairy products consisting of the word "Moove", as in the earlier case, the Moo proprietor and the Moove proprietor could sue persons other than themselves for use of either mark when used in connection with milk and milk products. And, your Honours, that is, in a sense, the same goods scenario, the same specification of goods, a subset of the same class.

If one, on the other hand, assumed a Moo registration for milk and cheese, and a Moove registration for milk and yoghurt on the other hand, as distinct from milk and cheese, then what we would say is that section 58(3) would enable the Moove proprietor to sell milk without infringing the Moo registration.

GUMMOW J: What is the other registration?

MR JACKSON: One is milk and cheese and one is milk and yoghurt.

GUMMOW J: I do not understand.

MR JACKSON: It does not really go all that far, that is what I am seeking to make.....but what one does see about section 58(3) is that it really, in our submission, does not in the end touch this case, if I can put it that way. Could I go then first to section 58(1). It:

gives the registered proprietor of the trade mark -

Your Honours will see the words if the registration is "valid" or see the words "if valid", the exclusive right to its use as there referred to and section 59 then says that:

In legal proceedings relating to a registered trade mark (including applications under section 22), the original registration of the trade mark.....deemed to be valid unless the contrary is shown.

So that the original registration is deemed to be valid in an application for removal unless one shows the contrary. Now, section 60 then deals with removal from the register and invalidity of the original registration under section 24. Section 24 - perhaps I should take your Honours back to it - is a provision that sets out the qualifications for registration and it has to be read with section 28 which deals with a number of disqualifications. Now, what one sees in section 60 is that one cannot attack on a section 24 basis unless one proves that at the commencement of the proceedings it was not distinctive of the goods and services of the registered proprietor. That is, in a sense, a threshold requirement.

When one goes to section 61 it further limits the bases of attack because your Honours will see that it prevents there being attack under section 24 or pursuant to section 24 because it says:

the original registration.....taken to be valid.

But attack on the basis of non-compliance with section 28 remains, and your Honours will note the change in language between section 61(1)(a) and section 61(1)(b). One sees the words "original registration was obtained", a use of the past tense, and one sees the present tense in "trade mark offends" in section 61(1)(b). That was referred to by Lord Diplock in the General Electric Case (1972) 1WLR 729 at page 749 where his Lordship said - and if I could just take your Honours to letter G. After setting out the equivalent provisions he said:

The contrast between this language and the corresponding language of the first exception "unless such original registration was obtained by fraud", and in particular the change of noun from "original registration" to "trade mark" -

as your Honours will see in 61(1)(a) and (b):

and the change in tense of the verb from past to present, is a clear indication that the draftsman assumed that the words in section 11 "It shall not be lawful to register" imposed a prohibition upon a trade mark's remaining on the register as well as upon its original entry in the register.

CALLINAN J: Mr Jackson, does section 49 have to be taken into account? That is a section that deals with the opposing of registration three months after it has been advertised. I am wondering whether that suggests that really you should give it a present tense at the time of registration construction rather than a continuing one. In other words, if the scheme of the Act looks to some degree of finality.

MR JACKSON: Your Honour, I would accept immediately that what it does do is provide an opportunity for people to oppose, but the practical consequence of not opposing is that the burden of proof is reversed because a person seeking to be on the register and not there has to show that they comply with the provisions of the Act to get there. The burden lies on them. On the other hand, having been registered, you then have section 59 coming into play - - -

CALLINAN J: Well, I do not know whether that is right because the opposition is three months after acceptance, so presumably, prima facie, they have satisfied the requirement of registration because by that stage the register has accepted - the registrar has accepted, the application and then it is for some other person to oppose it, if possible. I would have thought the onus under section 49 would be upon the opponent.

MR JACKSON: Well, your Honour, with respect, what has happened is that, I suppose if one had to have an analogy, it is like the position of probate in common form and probate in solemn form. If someone opposes it, it might have been a case that would easily go through in common form but the burden of proof lies on a person propounding the will if it is probate in solemn form, and, your Honour, what one has is that the application has been accepted by the registrar but then under section 50 there is the determination to be made by the registrar whether the registrar will refuse to register it or not and your Honour will then see that under section 59 you then have, in our submission, the reverse, the position where the burden of proof has changed.

McHUGH J: In relation to section 61 you have drawn attention to the difference between "was obtained" in paragraph (a) and the use of "offends" in paragraph (b), but what do you say about the terms of paragraph (c) "was not, at the commencement of the proceedings, distinctive of the goods or services"?

MR JACKSON: Well, your Honour, paragraph (c), your Honour, ties up with section 24.

McHUGH J: Yes.

MR JACKSON: And, in particular, 24(1)(e), but the result of the closing down of the ability to the successive closing down by 59, 60 and 61 of the ability to challenge, means that one could not utilise section 24 or a contravention of section 24 and what is done by section 61(1)(c) is to release part of section 24 but say it has to be at the time when the proceedings are instituted.

McHUGH J: Well, that may be but does not (c) tend to indicate that Parliament has specifically directed its attention to what was the position as at the date of the commencement of proceedings?

MR JACKSON: Well, your Honour, the reason why it specifies that and I suppose specifies it also in section 60 where section 24 is specifically mentioned is to indicate that the test there being applied is different from that adverted to in section 24 and section 24 can only refer, of course, to the situation as at the time of the original application. Your Honour, I do not suggest it is easy but that is, in our submission, what the explanation is.

Your Honours, could I then say, I referred a moment ago to what was said by Lord Diplock, what he said in that case was not, with respect, entirely new, because he had said the same in the Court of Appeal in an earlier case and that was referred to by Chief Justice Barwick in Berlei Hestia Industries Ltd v Bali Co Inc [1973] HCA 43; (1973) 129 CLR 353 at page 356.

GUMMOW J: I think it did not matter.....mark was bad at all times.

MR JACKSON: Yes, your Honour, I accept that. What I was going to say was your Honours will see that Chief Justice Barwick said at about three quarters of the way down the page:

I would be of the same mind as Lord Diplock -

had been in the Court of Appeal.

McHUGH J: In the Court of Appeal, Lord Denning had taken the opposite view to Lord Diplock and Lord Justice Salmon, I think, was of the view that he was not convinced that what Justice Eve had said in one of the earlier cases was wrong.

MR JACKSON: Yes.

KIRBY J: I see this as reversing Justice Windeyer; is that on this point?

GLEESON CJ: No, Chief Justice Barwick said Justice Windeyer took the same view.

MR JACKSON: Yes, that is immediately following the quotation on page 356:

Windeyer J favoured the same construction.

His Honour went on to say it did not matter much. The differences that your Honour Justice McHugh adverted to in the Court of Appeal in the Berlei Case really, in our submission, support the proposition that we were advancing a little earlier, that the earlier case in this Court adopted one of the possible views of the provision and there is not really sufficient reason for the Court to adopt a different view, particularly where all that is concerned is a very limited range of cases.

Your Honours, I think I have dealt effectively with paragraphs 7 and 8 of our written submissions, which are dealing with this topic, but could I go then to paragraph 9 of our written submissions.

KIRBY J: Could I just make clear in my own mind - in paragraph 3 of your submissions you say that there is a majority view, but is it your submission that there is a holding of the court on this point, because that does affect the way in which one has to approach the matter?

MR JACKSON: Your Honour, I cannot say that the court decided the point as a matter of decision of the court. The court arrived at a view on the issue which, I suppose, it may strictly not have been necessary for it to do, because the case appears to have been based on an assumption. Your Honour, I do not know that I can advance it beyond that, but at the same time the proposition I was advancing a moment ago, in our submission, still remains, that - - -

McHUGH J: Yes, what you have got going in your favour is that you have got the dicta of Chief Justice Barwick and Justice Mason in Berlei. That dicta had been followed in the HTX Case and in Osland by the Full Court of the Federal Court; you have got a majority of the Court in Moo, taking that view of it, and some of the text writers have regarded the matter as settled at the time of Moo; plus the House of Lords decision on comparable, but different legislation. So there is a considerable trend of authority in favour of the view that you put.

MR JACKSON: Yes. Your Honour, I appreciate, this is not an overruling case, in the strict sense, but similar considerations are involved in such cases are germane. We have referred in paragraph 12 of our written submissions, if I could just interpolate your Honour Justice Kirby, to where the various reasons are, but what we also say there is that really, if one looks at the arguments today and the arguments that were in that case, and they are recorded in the reasons, your Honours, what is new, with respect? The arguments that were advanced then appear to be similar to those advanced now.

KIRBY J: This is where the amendment of the Act may also be of some relevance that it is really something on which the Court by a majority has passed and one should not really lightly reopen the matter, given it has no future application.

MR JACKSON: We refer to that, your Honours, in paragraph 13 in relation to the transitional provisions and I have referred in passing in oral argument to section 88. Your Honours, we would submit, as we seek to do in paragraph 9 of our written submissions on page 5, that there are policy considerations which support an interpretation of section 28 in the sense in which we advance it and a mark which has become likely to deceive or cause confusion does, we would submit, lack an essential characteristic of a registrable trade mark being something to denote the trade source of goods or services.

Your Honours, as we submitted earlier the trade marks legislation does operate in a context where, from an early point, it has been recognised that the reputation of one trader may extend beyond the field actually used and thus give rise to the capacity for deception by others and I took your Honours to some cases earlier. But, your Honours, what we would seek to say also is that the Act does, in our submission, contemplate that there will be trade marks which are actually used and that that is so is made apparent by the provisions of section 23 and this is one of the policies of the Act that there will not be trade marks which just sit there and are not used except in those specific cases referred to by the Act.

If one looks at section 23, for example, your Honours will see that section 23(1) allows a court to:

order a trade mark to be removed.....on the ground.....

(b) that, up to 1 month before the date of the application -

for three years before that -

there was no use in good faith of the trade mark.....by the registered proprietor - - -

McHUGH J: Yes, I know, but your paragraph 9 of your submissions does not really apply to the non-user.

MR JACKSON: No, I am sorry. I was going on from there. Your Honour, I should say that our submission about policy at paragraph 9 and a little bit on from that as well, I was going to add another thing, as it were, that is to say, part of the policy of the Act is that trade marks will actually be used and that is apparent from section 23. I refer to the principal provision of it. Could I refer also to subsection (4) which allows a reason for not removing a trade mark that is not being used.

CALLINAN J: Would that not apply - in this case, registration is in a category though, is it not, so that there is no doubt that the appellants in this Court were using the trade marks in this category.

MR JACKSON: Yes. They did use it.

CALLINAN J: Yes, they did use it in the category and your clients never sought to use it in this category, never sought registration in this category.

MR JACKSON: Indeed. Your Honour, I am not dealing with this. I am dealing with the facts of the particular case.

CALLINAN J: No, but I am looking at the underlying policy, you see.

MR JACKSON: Your Honour, what I am seeking to say, though, is that the policy of the Act is that there will not, in effect, be dormant trade marks. The trade marks will be used and they will be used to do the things that they are for, that is to denote the goods or services, in some cases, of the proprietors of them because not to do that, of course, allows situations to obtain where trade marks not being used are ones where reputations of other people grow and difficulty comes about in the use of them.

So, our submission is, your Honours, that section 28 is a provision which does have the continuing operation. Your Honours, in our submission, it is clear that on the findings made by the primary judge and upheld by the majority in the Full Court, the use of the trade mark Nike by the appellants was likely to deceive and cause confusion in terms of section 28(a).

GAUDRON J: And what do you say about blameworthy conduct? Is that exactly the same test as the 72 test?

MR JACKSON: I am sorry, your Honour.

GAUDRON J: Blameworthy conduct? You say if we find for you - do you accept that there has to be blameworthy conduct if we give it a continuing effect?

MR JACKSON: Well, I say two things about it, your Honour. The first is: no. But that is where we seek leave to amend our notice of contention to do that, raise that issue. The second is: if there is, it was established.

GAUDRON J: And do you say it differs in any relevant respect from breach of section 52?

MR JACKSON: Your Honour, I was - a new aspect into the case.....May I put it this way, your Honour: assuming that there is a need to show blameworthy conduct, then it would be difficult, in our submission, to say that conduct which - first of all, if I could go to section 28 of the Trade Marks Act first, that conduct which involved the use of the mark in circumstances where it was "likely to deceive or cause confusion" was conduct which was significantly different from section 52 conduct. However, it may well be that other forms of use of the trade mark would be things that would be conduct that would fall within the blameworthy description but would not fall within section 52. Perhaps it may be, your Honours, that various forms of conduct that would fall within section 52 that involved some incidental use of the trade mark would not be blameworthy conduct which could be attributable sufficiently to the trade mark. Perhaps that is leaving a vast category or potentially large category, but there would have to be, one would think, some connection with the trade mark. It is not, for example, like criminals forfeiting the car they have used for an offence that does not have much to do with cars, although the car was used in the crime.

CALLINAN J: Mr Jackson, I would have thought you could draw a lot of inferences to support either view of the sort of conduct or conduct on either view that is either infringing section 52 or blameworthy in some other sense from page 786, which is part of the marketing program for the United Kingdom, but I do not see why inferences could not be drawn. There seems to be the most blatant attempt, I would have thought, to use Nike international sporting image. Volume 4 on page 786:

non-elitist - accessible to the amateur sportsperson as well as the professional.

MR JACKSON: Yes, your Honour.

CALLINAN J: And then refers to your client's extensive advertising.

MR JACKSON: Yes, your Honour.

CALLINAN J: It is the strongest document of any I have looked at. It seems to be very strong.

MR JACKSON: Yes. Your Honour, one imagines they are not talking about Nike perfume in the first line where it speaks of "household name".

CALLINAN J: No, it was for the United Kingdom but I do not think that matters. It still seems to be evidentiary in the general intention, I would have thought.

MR JACKSON: Indeed, your Honour, and I adopt that, if I may, with respect. Your Honour, the short fact is, in our submission, that - may I deal with this first on the assumption there is a need to demonstrate blameworthy conduct. What we would seek to say, your Honours, is that this is a case where it is manifest that there was conduct of that kind and, your Honours, all the conduct to which the primary judge has referred is conduct which falls within that category. I was going to take your Honours in just a moment to some of the correspondence and I will endeavour to do so very briefly. So far as the need for there to be blameworthy or disentitling conduct is concerned, this is an issue in respect of which we seek leave to amend our notice of contention as per paragraph 18 of our written - - -

GLEESON CJ: Is that opposed, Mr Catterns?

MR CATTERNS: Yes, it is, your Honour, on the ground that the matter has been - that has been the subject of a holding by the Court.

GLEESON CJ: We would hear argument from either side on it, and deal in due course with whether leave will be granted if necessary.

MR CATTERNS: Yes, your Honour. May I say there are no procedural objections, if I may call it that.

GLEESON CJ: Thank you. Yes, Mr Jackson.

MR JACKSON: Your Honours, an appropriate form of draft amended notice of contention, we will leave with the Court, but it involves what we have set out in paragraph 18 of our written submissions and, your Honours, what we would seek to say in relation to that is that we would refer to the observations of your Honour Justice McHugh in the New South Wales Dairy Case 171 CLR at the bottom of page 430.

GLEESON CJ: How long do you expect to require for the remainder of your argument, Mr Jackson?

MR JACKSON: Your Honour, I will endeavour to finish in 10 minutes.

GLEESON CJ: Thank you, yes.

MR JACKSON: Where your Honour said that, "if s. 28", fourth last line, was :

to have a continuing operation, it must be because its purpose is to protect the public in respect of marks which have been registered as well as those which seek registration. On that hypothesis, any requirement of blameworthy conduct.....appears to be contrary to its essential purpose.

We would refer also to what was said by your Honour Justice Gummow at first instance in the same case in [1989] FCA 124; 86 ALR 549 at page 576, and your Honour said at the bottom of that page:

Further, inactivity by registered proprietors may imperil the registrations themselves. Section 56 plainly proceeds on this basis.....Why should not s 28 produce a comparable result where a registered mark becomes likely to deceive or cause confusion?

If your Honours will excuse me just a moment, I suspect I may have given a slightly incorrect reference there. It was referred to in paragraph 20 of our written submissions.

Your Honours, as we submitted earlier, the policy of the Act is that trade marks of the present kind should be used and the position of an innocent purchaser could be dealt with by the discretion of the court under section 22, and the discretion, of course, extends to such matters as conditions as your Honours will see from section 22(1)(c); and, your Honours, one notes, too, section 32(1) to which I earlier made reference. If I could just summarise what we would seek to say about that. First, it is not necessary for there to be such a matter shown; and secondly, if it is, they have amply demonstrated in the present case.

Could I come, then, your Honours, to our notice of contention which deals with the existing ground. We deal with, your Honours, in our written submissions at page 13, paragraph 36. The terms of the notice of contention are set out at the top of page 14, and that is that we contend that as at 29 August 1996, the use of the trade mark was a mark which would then be likely to deceive or cause confusion and it should be expunged, and a similar notice of contention as referred to in paragraph 37 is in the other proceeding in relation to the other trade mark.

GUMMOW J: Now, is this an issue before Mr Justice Sheppard? Is this an issue at trial?

MR JACKSON: Yes, yes. Now, your Honours will see that the circumstances in which this issue arises - perhaps I could just say it was one that the Full Court did not need to deal with because the order for expungement was late anyway.

GUMMOW J: Yes, pity they did not, particularly when Justice Burchett had gone to deal with it.

MR JACKSON: Yes, could I say, as your Honours will see in paragraph 38, the issue arises if the Court takes the view that section 28 does not have the continuing operation or, secondly, that it arises if that continuing operation is qualified by a requirement of blameworthy or disentitling conduct and that requirement has not been satisfied.

GUMMOW J: But there is a further problem. We would have to exercise a discretion perhaps under section 22 as well.

MR JACKSON: I think that is correct.

GUMMOW J: It is not a very attractive prospect. Why would we not send it back for the Federal Court to finish what it should have set out to finish?

MR JACKSON: The reason really is that this is an issue on which we rely in order to resist the order that the appellant seeks be made by this Court. The circumstances - and your Honours, if one looks, for example, at the - I think I have the name almost right - Empire Star Case in the Court which deals with reliance on matters such as notices of contention and other grounds, we would submit (a) we are entitled to rely on it in the Court; but (b) it is a matter with which the Court should deal in order to arrive at the correct result. It is rather difficult, with respect, for the Court to leave the appeal, as it were, in limbo.

GUMMOW J: It would have to go back.

MR JACKSON: It is difficult, with respect, to see precisely what the order would be.

GUMMOW J: The real question is whether there has to be a new trial.

HAYNE J: But are you saying the question is whether it is appeal allowed, appeal dismissed?

MR JACKSON: Yes, your Honour.

HAYNE J: "What is the first order that would be made if it were to be sent back?" is the question you are raising, is it?

MR JACKSON: Yes; your Honour, we are seeking to maintain the order but maintain the order, in a sense, on a different basis.

GUMMOW J: Yes, we could make a declaration as to the position on one footing and, as to the rest of it, it would have to go back.

MR JACKSON: I do not doubt the Court's capacity to make an order which would have the result that the matter went back to the court. However, it is an issue which, in our submission, is a relatively brief one, and it is one in relation to which the material is all before the Court and we would submit it is appropriate for the Court to deal with it. Your Honour, I cannot take it further than that but may I proceed to develop it just a little.

We have set out in paragraph 39 of our written submissions what is the appropriate test to be applied, and the test adopted by Justice Kitto in the Southern Cross Refrigerating Co Case was adopted by the Court on appeal from his Honour in that case. We refer in paragraph 40 to the course taken below. We then set out, as we say in paragraph 41, a summary of some of the reputation evidence upon which we would rely in support of the proposition. I do not intend to go through what is in the schedule that is attached to our written submission. I do not intend to go through it orally.

HAYNE J: Is it any part of the logic that you say we should follow in this respect to form a view about likelihood of brand extension in 1986? Does that bear upon likelihood of deception or confusion in 1986?

MR JACKSON: It does. What I mean by that is this: one is really looking simply at two - - -

HAYNE J: But if that is right, does that not invite us to make a finding for the first time about the effect of - is it Mr Blanket's evidence, the expert?

MR JACKSON: Yes.

HAYNE J: In relation to 1986. Is that something we could reasonably do, founded only on the paper?

MR JACKSON: The answer is yes, your Honour. Could I just say that Mr Blanket's evidence was - and I do not place it at the forefront of our case - all I am saying about it is that he spoke really about the Blanket extension as a concept which had been in being for quite some years. It is obvious from his material that he was speaking about something that would be the situation if one looked at 1986 or if one looked at 1993 or whenever one looked at it, in relevant times. Although he does not descend to the detail of particular times, he makes it clear he is speaking of a period that will include those.

CALLINAN J: I do not think he was really contradicted, either, Mr Jackson, I think.

GAUDRON J: But does it not depend on the extent of your reputation as a matter of fact in 1986?

MR JACKSON: Yes, your Honour, and that is what I am coming to now.

HAYNE J: And the extent of Michael Jordan's reputation when he entered the NBA in 1985. There is evidence that he entered the NBA Rookie of the Year in 1985, I think, is there not?

MR JACKSON: Yes, your Honour.

McHUGH J: It is in Mr Farris' affidavit that Michael Jordan - - -

MR JACKSON: Yes, your Honour, I appreciate that and can I endeavour to summarise what we would invite your Honours to look at. Can I just conclude answering your Honour Justice Hayne. First of all, in relation to Mr Blanket's evidence, it covers a period. Secondly, there is evidence showing what the position was as at 1985 or 1986. Now, in that regard, the first thing is that we have extracted in the annexure to our summary of argument pieces of evidence that are germane to it. Could I refer for immediate purposes to two only and they are those that appear on page 17 of our written submissions. First of all, about halfway down the page we have extracted some evidence from that of Mr Stewart who was the advertising manager for A-Mart sports stores in Queensland at the relevant time and one of the things he said was that the:

trade mark `NIKE' and NIKE products were very well known by the company's customers and the general public -

by the beginning of 1986. Similarly, if one goes to the next witness, whose evidence is referred to on the same page and the third entry, she speaks of the situation that by 1981 - she refers to Nike footwear and then goes on to say:

the brand name NIKE was widely recognised in the industry and by the public.

Now, I will not go through the other parts that are set out there. If one goes, however, also to the affidavit of Mr Farris to which your Honour Justice McHugh referred a moment ago, one sees, and your Honours may recall that when I referred to it earlier I said I would invite your Honours to look at in relation to this topic. It sets out the things that have been done to establish its reputation by that time. If one looks also at the correspondence which took place around 1985, one sees that there was an awareness of the extent of the reputation of Nike at that point. Could I, in that regard, take your Honours to volume 4 and at page 552 - 553 is the translation. At page 553 you will see Mr Ruiz writing to us saying about line 30:

We are aware of the nature and awareness level of products bearing the NIKE trademark and sincerely believe -

et cetera.

GUMMOW J: If all this is right, Mr Jackson, this case could have been over in half a day.

MR JACKSON: I am sorry, your Honour?

GUMMOW J: If what you are saying is right, this case could have been decided on a simple and direct basis on the trade mark issue without getting into any of this other complexity about section 60 and 61 and so on.

MR JACKSON: Your Honour, I would not disagree with that proposition.

GUMMOW J: Well, I just wonder why there was not a full frontal attack at the trial using these weapons. Maybe they were not thought to be so strong; that is my suspicion you see.

MR JACKSON: Your Honour, there are always two views on these things and your Honour there is always a question, I suppose, whether to adopt the Montgomery plan for the invasion of Germany or the Eisenhower plan, many fronts or one single - - -

CALLINAN J: Mr Jackson, my impression is that the case was really litigated upon the basis that really in a sense turned out to be a false basis and that was that the selling was going to be as a sports fragrance because nearly all the evidence, indeed, I think it is almost possible to say that all of the evidence, apart from Mr Blanket's evidence is presented on that basis.

MR JACKSON: Your Honour, could I just say this about that. Of course, the products that we had seen were ones that either had "Sports" in the name of them or "Sports" as the name of the manufacturer.

CALLINAN J: Quite, but that "Sport" was your concern is really also, I would have thought - the inference of that is supported by the fact that your clients never sought to move under sections 49 or 93 of the Act. They never sought to oppose registration in this category and they never sought broad registration under section 93. There is no evidence explaining why they did not do any of that, is there?

MR JACKSON: No, your Honour.

CALLINAN J: I mean, it only goes so far but put with other things it reinforces my impression of what the issue was in the trial, really.

MR JACKSON: Your Honour, at the start of the trial, in effect, our learned friends said, "We're not just talking about these ones. We want the clean bill of health for the other ones as well."

CALLINAN J: "We also want a decision on products that do not refer to sport".

MR JACKSON: Yes, quia timet was used, and so what your Honour Justice Gummow put to me is right but the case was more messy than that, as things eventuated.

GAUDRON J: What is the effect of a notice of contention? I am sorry to ask this but I am sitting here thinking if a firm view could not be reached in this Court with respect to your notice of contention, which seems to be a possibility, the notice of intention would not allow you to have the matter sent back, would it?

MR JACKSON: No.

GAUDRON J: And if you could not reach a view the notice of contention would just have to be dismissed?

MR JACKSON: We lose, yes.

GAUDRON J: You are talking about a factual conclusion, in essence, here where you are asking a Court of Appeal - - -

GUMMOW J: The ultimate Court of Appeal where there has been no finding at trial.

GAUDRON J: Yes, no findings anywhere and in which the evidence is - - -

McHUGH J: It goes beyond that, does it not? You are really asking us as a matter of law to make the finding for you.

MR JACKSON: I am asking your Honours to make it. I am asking the Court to arrive at a conclusion which involves mixed fact and law in the end - some fact, some law. But having said all that, if I might say with great respect, so what. I mean, one does have a situation where, under the terms of the Court's rules and the Court's practice, if a party seeks to maintain the judgment of the court below without seeking to vary the order but to do so on a ground that either was wrongly decided or not decided when it should have been decided below, the Court's rules provide that it is entitled to do so. The Empire Shipping Line Case, to which I referred earlier, is one in which they were specifically adverted to by the Court and so held.

Now, your Honours, as a matter of justice, with respect, if a party is in a situation where an issue has not been dealt with by the court below but would decide the case in its favour, then it is one that the Court should deal with. If we fail on the burden of proof, so be it, but we should not fail on the basis that it is simply inconvenient. I say that with respect, your Honours.

Could I just say that I was going to refer the Court to a few other pieces of correspondence. May I do so as briefly as I can in this regard. If one goes to page 554 in the same book, volume 4, one sees that there is a reply from Nike of 24 September seeking further information about the company. There is then a response at pages 558 and 559. Could I go particularly to page 558 to about line 30 on the page and your Honours will see what was being said by Mr Ruiz was:

In the last decade, with the variety of advertising media available, sport has seen an impressive rise. Any product related to sport has a new available market.

Your Honours, our case, if I might interpolate, has always been, that the use of the name "Nike", in Australia, on their products, establishes the relationship to sport, because our name is famous in the world of sport, and that is true whether or not one uses the term "Sport" on the product; the name alone specifies a business which is famous in the world of sport.

Your Honours, if I could go then to page 563, one sees between lines 40 and 45 the penultimate paragraph, which explains the existence of the new product. They said they:

specialise in the manufacture and sales of mass market products which could damage the new line.

So, your Honours, this is not quite the old well-respected manufacturer producing the same thing and putting it in a different country; it is a - - -

McHUGH J: Is it page 563?

MR JACKSON: Yes, your Honour; page 563, between lines 40 and 45.

GLEESON CJ: What they seem to be saying is they are proposing to go up-market.

MR JACKSON: Up-market, yes, your Honour, and up-market with different products. Now at the top of page 564, the first paragraph, it is apparent from that, your Honours, that Mr Ruiz knows the market and what are the "current trends" and, your Honours, the third last paragraph on page 564, between lines 30 and 35:

It has taken me five years to buy this company owning the registered trade mark "NIKE". This company was our main and virtually sole competitor.

And, your Honours, what one sees is that, whilst it may have taken five years to buy it, as soon as the marks were acquired, they sought to entice us into a joint venture and the plans for the marks involved packaging and positioning very different from that of the predecessor. After we expressed a lack of interest, they went ahead anyway.

Your Honours, at page 570, under the heading "Merchandising", between lines 20 and 25, item 4, I think it was adverted to earlier:

We believe that we have developed a product which is really good, now with a quality of design and brand image which truly meets the sportive line we were looking for.

And the top of page 571, talking about "The Market Place":

Since the communication of my ideas, the following brands have come onto the market place with similar propositions.

Your Honours, one looks at:

Lacoste

Puma

Slazanger

Adidas

Fila

And, your Honours, if one goes then to "Business Proposals" on the same page, about line 23:

There is no doubt that the brand NIKE, without the logo of your company, loses strength and even possibly its sporting image. However, since we are talking about fragrance products, the name, the scent and the design are the most important elements.

Nevertheless, your company's promotional capabilities are important and these could propel.....providing image, prestige and benefit in any country.

Your Honours, could I refer to, without taking your Honours to, page 745 in volume 4, the letter from Mr Mosch, and the top paragraph of that letter:

with the image of a brand renowned the world over in the field of sports.

Your Honours, the last of those letters is 1993, but the earlier letters, of course, referred to a situation prior to the registration.

Your Honours, our submission is that the case is one that did fall within the terms of section 28(a) at the relevant time and that the order should have been made that had been expunged. Could I finally, your Honours, refer to our written submissions, paragraphs 22 to 24. I am sorry, your Honours. I do not think I need refer to those. Your Honours, those are the submissions we wish to make.

GLEESON CJ: Thank you, Mr Jackson. Yes, Mr Catterns.

MR CATTERNS: Your Honours, as to the form of orders, with respect, our friend is right, that we accepted before his Honour Justice Sheppard the form propounded by our friends but, as his Honour Justice Gummow pointed out, that was when we had lost on both grounds and we would respectfully submit that if we were successful in part of the case, such as on the trade mark, it would be appropriate to mould an order.

GLEESON CJ: What do you say about the notice of contention?

MR CATTERNS: Your Honour, we submit that that has been the subject of a holding in the Full Court in the New South Wales Dairy Corporation Case, and our friends should not have leave. In our written submissions we cite the passages - - -

GUMMOW J: That is the second part of the notice of contention.

MR CATTERNS: I beg your pardon, your Honour?

GUMMOW J: That is leave to amend the notice of contention.

MR CATTERNS: I beg your pardon. I am sorry, your Honour.

GLEESON CJ: The matter that Mr Jackson has just been on.

MR CATTERNS: I do apologise, your Honour. Your Honour, our friends' reputation in 1986 is vastly weaker than it was held to be in 1994. The only finding in the case in relation to that is a finding of his Honour Justice Burchett at pages 16 to 17 where his Honour said it would not be right to make the finding that our friends - he was sitting on appeal, your Honours, but it would not be right to make the finding that our friends seek, partly because of the narrowness of their reputation, particularly in 1986, and also, I think, because of an inference his Honour drew from their failure to oppose us.

On that, your Honours, their sales then were on a limited class of products. There was a sentence that our friends can rely on in relation to brand extension, as our friend seems to accept in answer to your Honour Justice Hayne. He has to have the plain brand extension step in the reasoning. There is a sentence in Mr Blanket's affidavit at page 500 where he says brand extension has been known for, I think, 20 years. So that is the only sentence they have got on that. In short, your Honours, they have to prove all the elements of a very slim section 52 case eight years earlier without the benefit of actual confusion, without the benefit of any evidence as to intention.

Indeed, we applied for the mark two months after the letter that his Honour Justice Callinan has drawn to all our attention, that was the June letter. In particular, your Honours, the nature of the advertising up to 1986 was extremely limited, picking the two people our friend went to in the schedule to their submissions at pages 250 to 2 and also at pages 240 to 287, we can see that they are shoe ads, very clear shoe ads.

KIRBY J: But the nature of your advertising was zero, and that letter of 7 June, which is at 745 Mr Jackson last came to, is a very clear indication that you were coming into this market to piggyback on the advertising on which Nike had spent an enormous amount building up an international reputation.

MR CATTERNS: Is your Honour referring to the 1993 matter?

KIRBY J: The last letter that was referred to.

MR CATTERNS: Yes, your Honour, but I have made my submissions, I think, in great detail about the intention point before, your Honour. Our friends' sales then, and their reputation then, was limited to footwear, apparel, socks and bags. The letters our friends just went to are no admission about a reputation in Australia. So, I am sorry I misunderstood your Honour's question. That is properly saying the notice of contention.

One other matter on the forms of orders, if I may, your Honours, go back to that. We did seek a mandatory order at page 80 seeking restoration. We have been in communication with the trade marks office. We do not press that order now. We are of the opinion that if we win in the mark, the orders expunging the mark are set aside, then the registrar will restore it. Our friends, I think, are of a different opinion. We do not propose to trouble the Court with resolving that matter at first instance.

GUMMOW J: It would seem to follow from section 22(6) that the registrar take steps to give effect to court orders.

MR CATTERNS: That would be our submission, your Honour, but there may be a contrary view. Your Honour knows that is why there is a practice developed of getting stays in some cases including patent cases, but we will not trouble the Court with that now.

As to section 52, we are very much broadly at issue. Perhaps if I could just use as a trigger some questions his Honour Justice Hayne put to me in the chain of reasoning, where the first question your Honour puts to me is, "Well, it is held that the use of the word `Nike' is likely to mislead". It is hard for me to get out of that when your Honour starts with that premise because I say, "No, but I refer to their misleading conduct and erroneous assumption." So, really, I have to attack the premise. What I should say is, no, the first step in all of this is that our friends have set the scene that they plead, which is that the use of the word "Nike" signifies or is likely to signify to consumers, in respect of goods including perfumes which they have no interest in, then, and that is the Act that causes the confusion.

His Honour Justice Kirby asked what is the closest case. The case is not exactly the same because they lacked a trade mark, but the Lego Case, your Honour, because there is a trader trading overseas who came here and collided with a powerful reputation in a different field. Of course, there are no findings of intention in that case, but that is a factual matter, not a legal distinction.

Your Honours, again, we are broadly at issue in relation to the construction of section 28 and its continuing operation. Our friends refer to the words "be registered" and make a submission which is a matter of grammar. In certain contexts, of course, that can apply to something staying registered, I deliberately used the word "staying". The words that the Act used when it covers a concept such as that is "remain". Section 22 says "remaining in the register", section 32 says, "shall remain", and section 56 says, "remaining".

Your Honours, we do submit that this is a point of continuing importance. It was a closely thought thing in the Full Court in the New South Wales Dairy Corporation Case and we have given various submissions about that. In our written submissions, paragraph 28, we point out that the answer to this question still has a life, not just in relation to cases of which there may well be very few - - -

GUMMOW J: Because of section 234 of the new Act?

MR CATTERNS: Yes, your Honour, where construction of 28 remains alive with respect to all the important marks that we have heard of until 1995, Coca-Cola, McWilliam's, all of those marks are protected by section 234. If 234 has a continuing operation - - -

GUMMOW J: That is to say protected in qualification of the regime otherwise applying under Division 8, Part 2 in sections 87 and 88.

MR CATTERNS: Precisely, your Honour, so we submit it is a matter still of importance because if there is a continuing operation, six Justices have held, with very different degrees of reluctance, I accept, that you need blameworthy conduct, and therefore, we submit, in construing 28 for the purposes of 234, blameworthy conduct will be there. If not the whole thing falls away. A small point, your Honours: the marketing program your Honour Justice Callinan drew attention to at 786 was not our document on the face of it, it was somebody who wrote to us - - -

GUMMOW J: It was a draft.

MR CATTERNS: By somebody in England, not put to Mr Corrales and one of the documents the subject of the objection.

Your Honours, so far as our learned friends' leave to amend their notice of contention goes, our objection is a substantive one which is that the Full Court has held, and it was the ratio of the case, that there was a need for blameworthy conduct. Two of their Honours, Justices Deane and Gaudron, did so with reluctance, and perhaps his Honour Justice Deane took it as being necessary for the purposes of providing a ratio because his Honour went on to hold it was present, in any event.

But, your Honours, we have set out in our written submissions the passages in their Honours' reasons in which that has been held. Also, of course, it was so held in the GE Case. It follows from the need to have from the interpretation of a continuing operation although, with respect, the matters pointed out by his Honour Justice McHugh are forceful against it, but the resolution of the problem is to hold against the continuing operation, we would respectfully submit. May it please the Court.

GLEESON CJ: Thank you, Mr Catterns.

MR JACKSON: May I mention two brief matters. One is the best we can do in relation to products is in this exhibit in the case, exhibit LMM3. It sets out our catalogues with our products at relevant times in it. The second thing is your Honour Justice Kirby asked about costs. It would be very difficult to make a submission about it, your Honour, until one sees what the result is, with respect. We would be happy to do that at that point, if that is convenient.

GLEESON CJ: No. You can say now against possible terms of contingencies what you want to say about that or you can put in written submissions on the subject of costs at the time you give us this further agreed document the two of you are coming up with.

MR JACKSON: Certainly, your Honour. I am perfectly happy to do that.

GLEESON CJ: Are both sides happy to do that?

MR CATTERNS: Thank you, your Honour, yes.

GLEESON CJ: Very well, then, we will reserve our decision in this matter and adjourn.

AT 4.11 PM THE MATTER WAS ADJOURNED