Case: Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein Ltd [1967] HCA 51 ; (1967) 116 CLR 254
Outcome: followed
An overseas manufacturer uses a trade mark in Australia if he " projects " his goods into the course of trade in Australia, by means of sales to Australian retail houses, goods bearing his mark and the goods bearing his mark are displayed or offered for sale or sold in Australia: Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein Ltd [1967] HCA 51 ; (1967) 116 CLR 254 at 271. 108 The period of the alleged non-use is said by Lion Nathan to have been from 7 May 2004 to 8 May 2007. 109 Prior to the acquisition of the trade mark in January 2005 by Gallo Winery , there is no evidence that the then registered owner (Mr Michael Houlihan) exported BAREFOOT wine to Australia or caused it to be sold in Australia. And as from January 2005 to May 2007, there is no evidence that Gallo Winery itself exported BAREFOOT wine to Australia or caused it to be sold or offered for sale in Australia. 134 Reliance is placed by Gallo Winery upon both the decision, and the following observations of Windeyer J, in Estex Clothing Manufacturers Pty Ltd v Ellis &amp; Goldstein Ltd [1967] HCA 51 ; (1967) 116 CLR 254 at 266 7: ... As a proposition of law it is no doubt perfectly correct that the goods when sold and delivered in London no longer belonged to the manufacturer. But when it is said that a trade mark is used to distinguish the goods of one man from those of another, that abbreviated statement obviously does not refer to the goods of the owner of the mark in the sense of goods which he owns or possesses. After the goods have been sold by him his mark may still, using the definition of trade mark in the Act, be used in relation to those goods for the purpose of indicating a connexion in the course of trade between them and him, the registered proprietor of the mark. The manufacturer who sells goods, marked with his mark, to a warehouseman, wholesaler or retailer does not, in my view, thereupon cease to use the mark in respect of those goods. The mark is his property although the goods are not; and the mark is being used by him so long as the goods are in the course of trade and it is indicative of their origin, that is as his products. Goods remain in the course of trade so long as they are upon a market for sale. Only when they are bought for consumption do they cease to be in the course of trade. ... Reliance is also placed upon the commentary on that decision by the authors of Shanahan's Australian Law of Trade Marks and Passing Off (3 rd ed, 2003). 135 The decision of Windeyer J, it may be noted, was affirmed by Barwick CJ, McTiernan, Taylor and Owen JJ. On appeal their Honours relevantly concluded as follows: By the Act a trade mark means "a mark used or proposed to be used in relation to goods for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the goods and a person who has the right, either as proprietor or as registered user, to use the mark, whether with or without an indication of the identity of that person" and "use" in s. 23 must be understood in this context. Its denotation is not limited by any concept of the physical use of a tangible object and we have no doubt that when an overseas manufacturer projects into the course of trade in this country, by means of sales to Australian retail houses, goods bearing his mark and the goods, bearing his mark, are displayed or offered for sale or sold in this country, the use of the mark is that of the manufacturer. Indeed, in this case, the respondent is the only person who has the right to use the mark and the retailer to whom the goods have been sold for re-sale does not, in any relevant sense, use it.: [1967] HCA 51 ; (1967) 116 CLR 254 at 271. Their Honours also went on to conclude: It is conceded that there is a use of the mark in this country by an overseas proprietor where he advertises his mark in this country. Further, it is conceded that there is a use by such a manufacturer of his mark where the property in the goods sold by him by wholesale to traders in this country does not pass until their arrival into Australia. It would, in our view, be an extraordinary result if the maintenance of the Australian trade mark of an overseas manufacturer who is projecting goods of his manufacture on to the Australian market by means of sales to retail houses here can be made to depend upon whether the property in the goods the subject of such sales passes on shipment or upon or after their arrival in Australia.: [1967] HCA 51 ; (1967) 116 CLR 254 at 271 2. See also: Colman W J, Use of a Trade Mark in Australia (1968 1971) 6 Syd LR 52. 136 The commentary on that decision in Shanahan's Australian Law of Trade Marks and Passing Off is as follows: Use through intermediaries [2.175] If a trader uses a sign to distinguish the origin of a product, that sign should continue to do so as the product passes through the hands of others on its way to the ultimate consumer. Each time that the product is "traded" there will be, for the purposes of the 1995 Act, a use of the sign by the first trader to distinguish that trader's dealing with the product. The "ultimate consumer", submits Gallo Winery, was the Australian purchaser. 140 In Estex Clothing the London manufacturer knew that its goods had been sold into Australia. But Gallo Winery contends that the result in that decision would have been the same even had the manufacturer not known to whom the goods were sold or the market into which they were to be sold. So much, contends Gallo Winery , is supported by the reliance placed by Windeyer J on Jackson &amp; Co v Napper (1886) 35 Ch D 162 , 4 RPC 45 at 57 9, a decision which Windeyer J observed " contains much that is instructive ". In a passage commencing at 178, Stirling J observed: The case as to the other five classes of goods rests on different considerations, and raises the question what is meant by the user of a trade-mark in England. Now, in considering that, I do not think I can do better than refer to what Lord Westbury said in McAndrew v. Bassett [4 DJ&amp;S 380] with respect to the essential ingredients of a trade-mark. He says [4 DJ&amp;S 384]: "An element of the right to the property in a trade-mark may be represented as being the fact of the article being in the market as a vendible article, with that stamp or trade-mark, at the time when the defendants imitate it. The essential ingredients for constituting an infringement of that right probably would be found to be no other than these : first, that the mark has been applied by the plaintiffs properly (that is to say), that they have not copied any other person's mark, and that the mark does not involve any false representation ; secondly, that the article so marked is actually a vendible article in the market ; and, thirdly, that the defendants, knowing that to be so, have imitated the mark for the purpose of passing in the market other articles of a similar description." It seems to me, according to that passage from Lord Westbury's judgment, that the trade-mark has been used in England if you find that the articles marked with it have been actually vendible articles in the market in England ; and that is the test which I proceed to apply to the various classes of goods which remain. Gallo Winery's contention is that knowledge or intention on the part of the registered proprietor is not determinative; that which matters is whether its goods, to which its trade mark had been applied, were on the market at all. The trade mark, it is contended, is used in Australia if the product to which the mark is applied is on the Australian market. 141 The decision in Estex Clothing , it is considered, does not support such a contention so widely expressed. 142 Rejected in Estex Clothing was the proposition that the fact that property had passed in the goods outside of Australia was sufficient in itself to establish that there had not been a use of the trade mark in Australia. And, as is correctly submitted by Lion Nathan, if the sale by the retail house of the goods bearing the overseas trader's mark was sufficient on its own to constitute use by the overseas trader, there would have been no reason for the Full Court to have gone on to emphasise the acts of the overseas trader in projecting the goods into the Australian market. 143 In the circumstances of the present proceedings, and leaving intention or knowledge aside, there are no objective criteria comparable to those that existed in Estex Clothing such that it can be concluded that the registered proprietor of the trade mark " projected " its goods into any market other than Germany. 144 Such authorities as have discussed Estex Clothing have not confronted the factual situation where goods have been exported to one country and thereafter arrived in Australia without the knowledge of the registered owner of the trade mark, or without any agreement or understanding being in place whereby the goods exported were to make their way or may make their way into Australian trade, or without any objective criteria such that it could be concluded that goods had been projected into the Australian market. 145 In Estex Clothing the goods exported were being forwarded from England to Australia, and it is not considered that the language employed by their Honours should be construed as contemplating anything beyond what they literally said. By exporting the goods from England into Australia the " overseas manufacturer projects into the course of trade in this country ... goods bearing his mark ". Such other authorities also seem to contemplate that there has to be an export of goods from overseas into Australia. Thus, in Brother Industries Ltd v Dynamic Supplies Pty Ltd [2007] FCA 1490 , 163 FCR 530 , Tamberlin J referred to Estex Clothing and summarised its effect as follows: [42] ... Put another way, where an overseas company has registered a trade mark in Australia for products it exports to the Australian market, then it is that company, when and if it distributes the goods into Australia, which can be said to have "used" its trade mark. See also: Asia Television Ltd v Yau's Entertainment Pty Ltd (No 2) [2000] FCA 838 at [9] , [2000] FCA 838 ; 49 IPR 264 at 268 per Gyles J. 147 Estex Clothing , it is considered, provides no support for a conclusion that the export of wine from the United States into Germany in February 2001 was also the projection in a comparable manner of that wine into the Australian market as it occurred over a year later in July 2002. 148 This conclusion is consistent with the interpretation of Estex Clothing provided by Aickin J in Pioneer Kabushiki Kaisha v Registrar of Trade Marks [1977] HCA 56 ; (1977) 137 CLR 670. His Honour there referred to Estex Clothing and continued (at 688): It was argued that Estex Clothing Manufacturers Pty. Ltd. v. Ellis and Goldstein Ltd. decided that a retailer who sold imported goods bearing an Australian registered trade mark did not use the mark, and that therefore a "distributor" did not use a mark which was already on the goods. In my opinion the Estex Case is not authority for that proposition. It is authority for the proposition that the foreign owner of an Australian mark uses it in Australia when he sells goods for delivery abroad to Australian retailers and those retailers import them into Australia for sale and there sell them. It demonstrates that such a situation does not differ from that where he sells the goods for delivery in Australia to the retailer or where he advertises the goods in Australia. ...