Case: Re Bali Brassiere Co Inc Registered Trade Mark: An Application by v Berlei Limited [1968] HCA 72 ; (1968) 118 CLR 128
Outcome: cited
The respondent says the 1995 Act by introducing the notion of a 'shape' within the definition of 'sign' in s 6 of the Act and thus within the definition of a 'trade mark' in s 17 of the Act as a ' sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person ' did not bring about the radical change of providing that a registered trade mark would have the effect of restricting access to functional features or innovations. The respondent says the trade mark law of this country recognises a continuing fundamental distinction between a shape, whether expressed in part or the entirety of the goods the subject of the registration, that has an element of 'functional significance' and a shape which bears no functional significance. The respondent says, consistent with observations in Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks [2002] FCAFC 273 ; (2002) 122 FCR 494, were the 1995 Act to enable a registered trade mark to give the owner a monopoly over functional features (and thus suit for infringement of such a registered trade mark) it would indeed have made a radical change to trade mark law and nothing in the Act or in the discussions that preceded it suggest that such a result was intended. Therefore, it follows, it is said, that in the context of contended infringement, once the evidence demonstrates that the shape serves some functional significance, use of the shape (the trade mark) cannot be use as a trade mark. In such a case, it is said the shape adopted in the respondent's goods and consequential use of the shape in brochures and advertising material does not differentiate or distinguish the goods as a badge of origin of the user as a purveyor of those goods but serves to identify (distinguish) the content or features of the goods themselves. In other words, the respondent uses the shape to say in trade 'these are the goods that I sell' not 'know me as the seller or purveyor of these goods by this shape' (although, for trade mark use purposes, the seller need not be specifically identified). 64 Having regard to Smith Kline and French Laboratories (Aust) Ltd v Registrar of Trade Marks [1967] HCA 42 ; (1967) 116 CLR 628 at 639-640 and an acceptance of the proposition put by Lehane J at first instance in Koninklijke Philips Electronics NV &amp; Anor v Remington Products Australia Pty Ltd [1999] FCA 816 ; (1999) 91 FCR 167 that the 1995 Act's introduction of shape signs (although intended to effect the result that a shape trade mark would find embodiment in goods or a part of goods), did not bring about a radical change of long accepted principle concerning functional use, Burchett J concluded that there has been no abandonment of the idea that goods have an existence, as goods , and a shape trade mark has an existence in relation to goods. As a result, the shape of goods (or of a part of goods) embodied by reason of the nature of the goods or a technical or functional result to be achieved by the goods could not distinguish the goods of one trade source from similar goods of another. [15]. The shape might distinguish or differentiate the goods as goods but not the trade source. Dealing in goods of that shape is thus use of the goods not use of the shape of those goods as a trade mark. Burchett J observed at [16]: The special cases where a shape of the goods may be a mark are cases falling within, not without, the principle he expounded [Windeyer J in Smith Kline]. For they are cases where the shape that is a mark is 'extra', added to the inherent form of the particular goods as something distinct which can denote origin. The goods can still be seen as having, in Windeyer J's words, 'an existence independently of the mark' which is imposed upon them. 105 Section 122(1) of the Act like s 64(1) of the 1955 Act, assumes infringing conduct on the part of the respondent that is excused when the person uses a sign in good faith to indicate one or more of the identified characteristics. Section 64(1)(b) contemplated use in good faith by a person 'of a description of the character or quality of his goods' whereas s 122(1)(b)(i) concerns use in good faith to indicate a broader range of characteristics. The essential concern going to good faith in s 122(1) is that the use be honest. Something less than fraudulent intention in the common law sense will suffice to prevent use being in good faith ( Johnson &amp; Johnson v Sterling (supra), per Gummow J at p 356). There must be however, identified conduct on the part of the respondent that demonstrates use of the sign in circumstances where Mr Hastie has engaged in conscious and deliberate acts to undermine the registered owner or the integrity of the trade mark. Has the respondent sought to undermine the trade mark by the 'assiduous efforts of an infringer? ( Johnson &amp; Johnson v Sterling per Gummow J at p 355 adopting the phrase used by Windeyer J in Re Bali Brassiere Co Inc Registered Trade Mark: An Application by v Berlei Limited [1968] HCA 72 ; (1968) 118 CLR 128 at 133). A conscious decision to try and render generic, a trade mark which on advice from reputable patent and trade mark attorneys would be infringed by use is an example ( Sterling Pharmaceuticals Pty Ltd v Johnson &amp; Johnson Australia Pty Ltd (1990) 96 ALR 277 at 311 per Hill J). In that case, the decision by Johnson &amp; Johnson to use the trade mark was made with 'full knowledge' of the registration with advice that use would constitute infringement of the mark; and in circumstances where use was part of an international strategy to undermine the mark by rendering it generic. Since those ulterior motives subsisted, the use was found not to be honest. In this case, Mr Hastie had worked with and had been responsible for manufacturing S shaped wire droppers since 1978. He knew of the licence agreement between National Nail and Cyclone and knew that the improved dropper was the subject of a patent in New Zealand. He knew that royalties had been paid under the licence until the expiry of the prolongation period of the patent in New Zealand in 1986. Before entering the New Zealand market in 1996, Mr Hastie sought advice as to the patent position in that country. He understood that any patent had expired for the S shaped dropper. He assumed that there was no patent protection for it in Australia. He sought advice in 1996 from patent attorneys and he says he at least asked about the position in Australia. There is no independent written advice to Mr Hastie going to the position in Australia. I accept that Mr Hastie assumed in 2003 that there was no patent on foot in Australia but that he did not seek advice in 2003 as to the intellectual property position in Australia concerning the S dropper.