JBS Australia Pty Limited v Australian Meat Group Pty Ltd [2019] HCATrans 105 (17 May 2019)

Last Updated: 23 May 2019

[2019] HCATrans 105

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Brisbane No B68 of 2018

B e t w e e n -

JBS AUSTRALIA PTY LIMITED (ACN 011 062 338)

Applicant

and

AUSTRALIAN MEAT GROUP PTY LTD (ACN 168 396 316)

Respondent

Application for special leave to appeal

BELL J
KEANE J

TRANSCRIPT OF PROCEEDINGS

FROM SYDNEY BY VIDEO LINK TO BRISBANE

ON FRIDAY, 17 MAY 2019, AT 9.52 AM

Copyright in the High Court of Australia
MR D.S. SHAVIN, QC: May it please the Court, I appear for the applicant with my learned friend, MS C.I. CUNLIFFE. (instructed by Bennett & Philp Lawyers)

MR B.N. CAINE, QC: If it please the Court, I appear for the respondent with my learned friend, MR P.J.T. CREIGHTONSELVAY. (instructed by Holding Redlich)

BELL J: Gentlemen, the link is remaining open to Brisbane since I understand there are persons with an interest in the application.

MR SHAVIN: Thank you, your Honour.

BELL J: Yes, Mr Shavin.

MR SHAVIN: If the Court please, the issue posed by this application is whether, in considering the issue of the relevance of evidence of reputation to deceptive similarity in the context of determining a question of infringement of a trade mark under section 120(1) of the Act, the Court is precluded from taking into account the effect of any reputation in the mark may have on the imperfect recollection of that mark by a consumer, and if reputation is relevant, whether, as suggested by the court below, any such reputation can be considered only if it is likely to diminish rather than increase the likelihood of deception.

BELL J: That is because it has been recognised in some cases that the notorious ubiquity of a mark such as Woolworths might lessen the likelihood of a consumer, even with an imperfect memory, being deceived. Is that the essence of it?

MR SHAVIN: That is the essence of it, but if one looks at Woolworths, Justice Branson who was in dissent said at paragraph 100 that if contrary to her view one took any notice of reputation, then she thought it might in fact enhance the prospect of deception, and thus one finds on the cases a real mixture.

KEANE J: That is putting it a little high, is it not? Is it not really that Justice Branson actually thought it was irrelevant, that reputation is entirely irrelevant, but essayed the view that if that view was not right then it might tend to point towards confusion, that view being a view contrary to the view consistently taken by the majorities in the Federal Court or by the Federal Court, including cases on which Justice Branson sat, that it is in truth irrelevant.

MR SHAVIN: May I respond to that in two ways, your Honour – or three ways. First, I am sorry, I thought I had indicated that her primary view was not relevant. But in paragraph 100 she did say a factor tending to increase rather than diminish the risk of deception, so that her view was that if she was wrong and reputation was relevant, it could be a factor that tended to increase rather than diminish the risk of deception. Secondly, as we have noted in our outline and which I can take the Court to briefly, in fact when one looks at the Full Courts, contrary to the very succinct reference at paragraph 41 by the court below, a number of the courts, including particularly the Full Court in Crazy Ron’s, took the view that in fact reputation was relevant.

The question as to whether it is notorious or not, my friend has advised me this morning that that issue in paragraph 22 of our friend’s outline is not being pressed. So it is accepted, for the purpose at least of today - and my friend is not seeking to estop himself at any other point – but for the purpose of today our friends accept that our reputation was at the level of being notorious.

BELL J: I understood that the primary judge found that the reputation, though strong was not, as his Honour put it I think, within Mars, and that was a reference to the notion of notorious ubiquity.

MR SHAVIN: I think that if I might put it this way, our friends are seeking to take out of debate what is the precise meaning of “notorious”.

BELL J: I see.

MR SHAVIN: In Woolworths if one looks at Justice Tamberlin at paragraph 106, he does not use the word “notorious”, and it will be our respectful submission that when Justice French used the word he was not creating a test but simply reflecting the evidence that was before the court in that case.

BELL J: If one puts the catchphrase to one side, the point being made in Woolworths and Mars and perhaps Henschke was acknowledgement of the possibility that a mark that is very widely recognised might not have the tendency to deceive that one less well recognised might. Your contention is reputation can equally bear the other way enhancing the likelihood of deception. For my part, I have difficulty seeing quite how his Honour linked the strong reputation he accepted your client had in its mark with the enhanced risk of deception.

MR SHAVIN: Because the facts before his Honour showed that you had two marks which his Honour compared and he thought with an imperfect recollection of our mark, the existing mark, in the minds of a consumer seeing our friend’s mark, there was a nontrivial prospect that they would be deceived or confused as to whether that mark was our mark and whether the goods to which it was applied were our goods.

BELL J: What does a reasonably strong reputation have to say about that factual conclusion?

MR SHAVIN: It goes to what is the perception in the minds of the consumer. Any mark can be enforced from the day it is registered, but a mark that has acquired a strong reputation in a specialised market – Idameneo talks of a specialised market – then in those circumstances a mark which is similar - not substantially identical - but deceptively similar, may in the minds of the consumer have an enhanced risk of deception, given their existing knowledge.

Now, it is not the passingoff test. It is looking at the surrounding circumstances of the type referred to by Justice Gummow in Murray Goulburn at first instance which we have set out in paragraph 8 in our reply. What, in our submission, occurs is that if you look at section 120(1) and you look at section 10, what one is required to do – and this is consistent with all of the authorities perhaps other than the court below – is to take into account all of the circumstances of the market, the way the goods are presented and, in our respectful submission, the position of the consumers in the market looking at the allegedly infringing mark. They look at that mark with an imperfect recollection of the registered mark, and that is clear. It has been established for many decades.

Thus, if they have an imperfect recollection of our mark, the strength of the reputation in that imperfectly recalled mark may well be relevant to the extent to which the use of their mark is likely to deceive or cause confusion. It is in that context, in our respectful submission, that you find a long line of Full Courts that have accepted that relevance, and Crazy Ron’s is a prime example. We refer to Crazy Ron’s because the court below at paragraph 41 sought to find comfort in it. The Court may recall that at paragraph 41 below, at 125 and 126 of the application book, said:

This is how we understand cases in this Court have reconciled Woolworths in the jurisprudence -

The court refers to Aldi Stores and the Court will recall that in our outline we note that the only reference to Henschke was a simple citation; no discussion. Then in Crazy Ron’s – and the court below refers to it – in fact at paragraphs 88 to 90 and again at 99 the Full Court, having looked at Henschke, concluded at 99:

We might have reached a different conclusion if there had been a finding, for example, that the words ‘CRAZY JOHN’ had been ‘notoriously so ubiquitous and of such long standing that consumers must be taken to be familiar with it and its use in relation to particular goods -

Now, in our respectful submission, what is plain is that the Full Court there was prepared to countenance placing some consideration of and relevance to the question of reputation, and one finds that too at paragraph 89 where in discussion of de Cordova the Full Court in Crazy Ron’s, referring to the discussion in Henschke:

Their Honours analysed the advice of Lord Radcliffe in de Cordova, since the decision had been invoked to support the proposition that reputation evidence can be taken into account in an infringement suit under s 120(1) of the TM Act. They considered (at 63 [46]) that de Cordova stood for the principle that the Court should take into account the significance of a particular word or phrase among traders or consumers in a particular market:

‘[i]f among those persons particular words have come to mean exclusively the goods of a proprietor of a registered mark, the registered mark being or including those words or a “fancy word” composed of them and, when pronounced, sounding virtually the same . . . in relation to goods in the class for which the mark is registered will infringe because, necessarily in the circumstances, use of the words by that trader is likely to cause confusion.’

So what we find is in de Cordova Privy Council said, yes, it can be relevant. This was acknowledged in Henschke. It is cited in Crazy Ron’s. Crazy Ron’s in paragraph 90 then continued:

The Court in Henschke v Rosemount also considered the decision of another Full Court in Registrar of Trade Marks v Woolworths Ltd. In Registrar v Woolworths, the majority (French and Tamberlin JJ) concluded that the word ‘Woolworths’ was so well known that it was the element of the allegedly infringing mark (‘WOOLWORTHS Metro’) most likely to be recalled.

Of course Justice French in Woolworths prefaced the substantive part of paragraph 61 by saying:

The primary judge’s reference to the familiarity of the word “WOOLWORTHS” in Australia was appropriate.

So Justice French, as he then was, countenanced the relevance of reputation.

KEANE J: He countenanced that on the basis that it pointed the other way. It pointed against confusion.

MR SHAVIN: But he did not say that that was the only basis and, in our respectful submission

KEANE J: But it was the basis on which it was used.

MR SHAVIN: In that case, but it was not the test that he identified. Justice Perram in Mars at first instance clearly thought that it could go either way. Justice Branson, who was on Henschke, as I said, in Woolworths at paragraph 100 said:

I accept the submission of the Registrar that, if it is appropriate to have regard to the wide recognition accorded to the word “Woolworths” in Australia, that recognition is a factor tending to increase, rather than diminish, the risk of confusion.

In our respectful submission, there is nothing to be found in section 120(1) or in section 10, which is the definitions section, which would make the relevance of reputation asymmetric, that it will be in the facts of each case. If the reputation is overwhelming, in what we might call a Maltesers sense then, yes, the overwhelming character of the reputation may well mean that it will only diminish the prospect of confusion. But if the reputation is, as the primary judge found here, not as high as Maltesers but nevertheless strong in relevant markets, that may mean that your consumer with an imperfect recollection of that registered mark, but having a recollection enhanced by a strong reputation, may have risk of confusion enhanced.

KEANE J: Mr Shavin, we are getting a long way from the language of section 120 if we are going to be requiring courts to determine just how notorious or just how ubiquitous, what degree of reputation is required, because at one point it points against confusion and at some other point it points towards confusion. Only intellectual property lawyers could love this kind of exercise.

MR SHAVIN: Your Honour, if you put it in a very practical commercial sense, if you asked any commercial man, “I have trade mark; it’s been used for 30 years. It has a really strong reputation. Someone takes another mark and it’s similar but you ignore the reputation in my mark in considering whether the use of the allegedly infringing mark is likely to deceive or cause confusion”, in our respectful submission that businessman would say the law is an ass because it is plain to any person in business that if you have a mark that has been around for 30 or 40 years and it has a strong reputation it will have an impact on the minds of consumers and, in our respectful submission, that is consistent

KEANE J: In such a case, the law provides a remedy. It is called the action in passing off.

MR SHAVIN: But, your Honour, you are entitled to have the benefit of that in assessing, in our respectful submission, a mark that is registered and it develops in layers, so that if in fact you have an overwhelming reputation and you want to look not at the same or similar goods but at unrelated goods, you go to subsection (3). So, in our respectful submission, what the Act does enable here is that it is not looking simply at whether the marks are similar or substantially identical; it is looking at the effect.

The effect is the effect on the minds of consumers. Is it likely to deceive or cause confusion? If you are looking, as we say the statute requires the court to do, at whether the use of a sign is likely to be deceptively or confusingly similar to a registered mark, the court must in those circumstances look at all the surrounding circumstances.

BELL J: Mr Shavin, looking at all the surrounding circumstances, accepting the strong reputation of your client’s mark, if one goes to the respondent’s submissions at application book 164, paragraph 24, can you explain to me – I am having some difficulty understanding how that strong reputation bears relevantly on the Full Court’s findings set out in paragraphs (a) to (d).

MR SHAVIN: Could I take the Court to the Full Court at application book page 130 and paragraphs 68 to 70 initially. In these three introductory paragraphs the court below identifies that the question of reputation was the question that in their opinion caused the primary judge to go astray, so that in paragraph 68 in the sentence starting three lines from the foot of the page:

This led his Honour to conclude that, for the purpose of trade mark comparison, a strong reputation existed in the AMH word mark . . . and that this reputation should be taken into account –

In paragraph 69:

Secondly, and relatedly, his Honour’s focus on the reputation in the AMH acronym shifted attention –

In paragraph 70 in the third line the sentence:

The point is that, when the influence of the substantial reputation in the AMH acronym is removed, the task of trade mark comparison, for the purpose –

et cetera. Then if I could take the Court to paragraph 75, so when one is looking at each of the issues, in each case it is the question of reputation that the court identifies as in their view having caused the primary judge to err, so that six lines from the bottom of the paragraph does the Court see at about line 34, “The only reason to suppose”?

BELL J: Yes.

MR SHAVIN:

The only reason to suppose the possibility of confusion is the assumption that a reputation exists in the AMH device mark by virtue of the letters –

Could I take the Court to paragraph 77 on the following page, the last sentence of the penultimate line:

Once again, the primary judge’s contrary conclusion was grounded o the substantial reputation he found to exist in the AMH acronym.

If I could take the Court to paragraph 78 in the secondlast sentence:

Thirdly, the primary judge’s contrary conclusion was, once again, grounded on the substantial reputation he found to exist in the AMH acronym.

Finally, at paragraph 88 in the last sentence:

This error was the product of his Honour’s reliance on the strong reputation he found in the AMH acronym.

So that in each instance, in our respectful submission, the distinction the Full Court drew between their approach and the conclusions of Justice Greenwood at first instance

KEANE J: On the basis, though, that his Honour had used this notion of a substantial reputation to, as it were, overcome the conclusion that would otherwise have followed from the other matters that the Full Court referred to.

MR SHAVIN: But that, in our respectful submission, is the correct way to look at the other circumstances. When you look at the analysis of the principles of the primary judge which can be found starting at page 72 at paragraph 220 of the primary judge’s reasons – I notice the light, your Honours - but between paragraph 220 on page 72 and paragraph 234
on page 76, in our respectful submission, Justice Greenwood has carefully considered the relevant authorities and set up the principles and then taken those principles and applied them to the evidence, remembering of course that before him the point taken by our friends below was not advanced, and it was accepted at first instance that reputation was relevant.

But his Honour has nevertheless carefully considered the authorities in this Court and in Full Courts, as one would expect of an experienced judge such as Justice Greenwood, reached his conclusions and considered, in our respectful submission, correctly, that in applying the test under section 120, taking into account the definition in section 10, part of the circumstances that will determine whether the use by AMG of their sign was likely to deceive or cause confusion was looking at how a consumer would see their mark, having regard to the strong reputation in the specialist markets, dealt with in Idameneo, with which they were confronted.

It is in that context, in our respectful submission, that it is wrong and inconsistent with a number of Full Courts of the Federal Court to say, first, “You may not take into account reputation at all”, and, secondly, “If you do, you can only take it into account against the rights of the registered proprietor of the mark”, rather than looking in fact at the impact of the reputation on consumers. I see the red light.

BELL J: I think we have the argument, yes.

MR SHAVIN: May it please the Court.

BELL J: Yes, thank you. Mr Caine.

MR CAINE: If the Court pleases. The respondent contends that leave should be refused for three reasons. The first reason is that the error that lies at the heart of the applicant’s appeal is that the Full Court below misapplied Henschke. Our contention is that Henschke was correctly decided and the Full Court below did not misapply it and therefore the decision is not attended with sufficient doubt to warrant the grant of leave.

The second point is that the decision below is not attended with sufficient doubt to warrant the grant of leave because, even if the reputation of the AMG marks, as the applicant contends, should be weighed in the balance in the inquiry under section 120(1), this would not result in a different outcome on appeal to that reached by the Full Court below. That is to say, if you take reputation into account it would not result in a finding that the AMH marks, the applicant’s marks, are deceptively similar to my client’s marks – or it should be vice versa.

In light of the exchange that fell from your Honours and my learned friend, could I start with the second point and take the Court to the facts which we say lead to the conclusion that even if reputation were weighed in the balance, on our facts our friends could not succeed.

As the Court has heard, the primary judge found that the AMH marks had a strong reputation. There were two marks: what is described as a word mark, which is the acronym “AMH”; and a device mark, which is the AMH acronym in an accompanying device. Both were found to have a strong reputation.

What the Full Court in this case did was to adopt an entirely orthodox approach to the question of construction, that is, it followed the traditional approach of looking at the marks against a particular backdrop or setting, and I will take the Court to that. Then it considered the relevant comparison against applying, as it were, the doctrine of imperfect recollection and it reached certain conclusions that were that there were substantial differences in the resemblance of the marks.

Can I take the Court first of all to paragraph 61 at application book 129. The Court begins, quite properly, by determining what the setting in which the notional transaction will take place is. The Court would observe at 61(a) the conclusion is that the:

buyers . . . are discerning and are likely to bring an inquiring mind to the relevant transactions –

In (b):

the nature of the relationship and the value and volume of the goods purchased . . . would be likely to cause such a buyer to bring an inquiring mind to the transaction –

(c) deals again with discernment, and (d) says that the two acronyms:

would each be pronounced as a “string of letter names” with the respective last letters “H” and “G” differentiating each initialism (the respondent accepted at trial that “H” and “G” are “phonetically and visually dissimilar”) –

So that is the setting that Justice Gummow was taking about in the Moo/Moove Case as legitimate background circumstances. If we come forward to paragraph 73 at application book 132, the Court will see at about line 33 that the Full Court in making the statutory comparison allowed for the possibility of imperfect recollection, and then they made a series of conclusions. I will not take your Honours at any length to the personality of the marks, but I note

KEANE J: Mr Caine, is the short point that you are making that to the extent that what is put against you is this notion that people tend to see what they expect to see and that the relevance of the reputation is in relation to that psychological phenomenon, the matters that you have taken us to show that the Full Court approached the matter on the basis that the differences are such that that possible pop-psychological theory had no scope for operation in this case?

MR CAINE: Yes, your Honour. Can I take you to the passage that my learned friend drew attention to I think at application book 133. At the tail end of that paragraph at about line 34:

The only reason to suppose the possibility of confusion is the assumption that a reputation exists in the AMH device mark –

They are talking here about the device marks, and I will come to the acronym in a moment:

by virtue of the letters “AMH” which, when carried over by consumers to the AMG solid mark

another device mark:

is sufficient to overbear their cognition of other features of the AMG solid mark including, importantly, the name “Australian Meat Group”. Once again, this consideration is relevant to a case based on passing off, but not to a case on alleged infringement under s 120(1) –

So what the court is there saying – and it was not by any means clear how the trial judge deployed reputation – but what the Full Court is saying is that, to the extent that his Honour deployed it, it had the effect of subordinating certain features and by cognitively overbearing based on accrued reputation.

If we go first of all to the AMH word mark, in circumstances where a person comes to consider the letters “AMH” against “AMG” where the letters “AMH” are notorious, that is, they have a substantial reputation - a very substantial reputation on our friend’s submissions and the judge’s findings – the comparison is almost akin to a sidebyside comparison that one would do when you are trying to determine substantial identity. At least you have a very heightened awareness of all of the features of the registered mark.

So in the notional comparison, even small differences are something that the consumer would notice, and we say that applied to both the word mark and the device marks - and the word mark is the closest case - the device marks are worlds apart, we would say, and the court found, that the role of reputation, even if taken into account, is only to make the notional consumer more acutely aware of the differences and therefore not be confused or deceived. So we say, even on our friend’s own case, weighing reputation properly in the balance would not lead to a conclusion that is contrary to that reached by the court below. I can go back to the first point, if I might, if the Court wishes to hear about the statutory scene.

BELL J: I think

MR CAINE: Thank you, your Honour

BELL J: Yes, Mr Shavin.

MR SHAVIN: If the Court pleases, the primary judge at paragraph 279, for example, at subparagraphs (8) and (9) and following, in our respectful submission dealt carefully with each of the factual matters and the issue of discernment to which our friends have referred and dealt with it, in our respectful submission, in a cogent fashion entirely consistent with those paragraphs of Crazy Ron’s to which I took the Court.

What is being suggested is that there is something new and unusual in what the primary judge did. What is new and unusual is the unequivocal statement in paragraph 41 of the court below suggesting that Woolworths unequivocally stated that you can never take account of reputation as being something likely to enhance rather than only diminish the risk of deception or confusion.

That goes beyond the words of Justice French. It certainly goes beyond the words of Justice Tamberlin, and if one takes into account reputation at all is completely contrary to the considered view of Justice Branson at paragraph 100. This, in our respectful submission, is a critical issue to all cases of infringement of a mark which it is said is deceptively similar where the registered mark has reputation.

It is a core issue. It is plainly of general application. One can see that from the number of Full Courts that have dealt with the issue and, in our respectful submission, it is attended with sufficient doubt in the unequivocal way in which the court below sought to deal with it at paragraph 41 to justify this matter being considered fully and properly by the grant of special leave.

BELL J: Thank you, Mr Shavin.

In our view, there are insufficient prospects that any appeal would succeed to warrant the grant of special leave. Special leave is refused with costs.

AT 10.25 AM THE MATTER WAS CONCLUDED