Case: Clark Equipment Co v Registrar of Trade Marks [1964] HCA 55 ; (1964) 111 CLR 511
Outcome: applied
of these chocolate boxes was purchased in May or June 2008, well after the priority date (16 April 2002). This raises a question about the acceptable use of this evidence. It is clear that the relevant date for assessing whether a trade mark is capable of distinguishing the goods for which it is used is the priority date: Austereo [2004] FCA 968 ; 61 IPR 257 at [30] . The parties both accepted that evidence of use by Guylian of the seahorse shape after the priority date is relevant for the purposes of s 41(5) of the Act, because it is open to draw rational inferences from such evidence as to whether the shape in fact had the required capacity to distinguish as at the priority date. That proposition was accepted by Finn J in Austereo , where his Honour referred to Conde Nast Publications Pty Ltd v Taylor (1998) 41 IPR 505 and Burchett J's reference to actual events as being "capable of illuminating the probabilities already inherent in [a prior] situation". Although differing as to the weight such evidence should be given, the parties also appeared to accept more generally that evidence of events taking place after the priority date, whether that be the applicant's use of the mark itself or use of other similar or otherwise relevant shapes by rival traders, may be relevant to whether the seahorse shape is capable of distinguishing Guylian's goods. This was an appropriate course to take. In my view, evidence of what other traders were selling prior to, at or subsequent to the priority date has the ability to rationally affect, albeit with varying degrees of weight, the conclusion one might reach about the extent to which a mark is inherently adapted to distinguish under s 41(3) of the Act. As Kitto J said in Clark Equipment Co v Registrar of Trade Marks [1964] HCA 55 ; (1964) 111 CLR 511 ( Clark ) at 514: [T]he question whether a mark is adapted to distinguish [is to] be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it. In assessing as at the priority date the "likelihood" that other traders will behave in a certain way in the future, evidence of how they have in fact come to behave will be relevant, although close attention should be paid to whether such rival behaviour has been "actuated only by proper motives". In the absence of evidence of improper motive, however, it seems to me logical and appropriate that post priority date events should, where appropriate, be taken into account by decision makers in exercise of the "evaluative judgment" (see French J in Kenman Kandy [2002] FCAFC 273 ; 122 FCR 494 at [47] ) required under s 41(3). In Kenman Kandy , the Full Court in the context of a shape mark recently endorsed the test articulated by Kitto J in Clark 111 CLR at 514, which is set out at [54]: see Kenman Kandy [2002] FCAFC 273 ; 122 FCR 494 at [47] (French J), [146] and [161] (Stone J), and [85] (Lindgren J), but note [87]-[89] (Lindgren J). The application of this test, as French J observed at [49], is "largely a matter of evaluative judgment within the broad principles laid down by [the] authorities". The reference to "likelihood" by Kitto J in Clark was described by Gibbs J in Burger King 128 CLR at 425 as a reference to whether another trader "might", without improper motive, want to use the mark in relation to his or her goods: see also Time Warner Entertainment Company LP v Stepsam Investments Pty Ltd [2003] FCA 1502 ; (2003) 134 FCR 51 at [33] (Wilcox J). The Registrar contends that, unlike the "bug" shape in Kenman Kandy , the seahorse shape is not a concocted or invented shape, but is clearly a representation of a seahorse. It is referred to by Guylian as a seahorse and would not be mistaken for any other animal. Although it has some level of "stylisation or abstraction" (the stockier torso and the backwards curling tail), these relatively minor differences, it said, do not have any significant impact on the ordinary association or signification that the shape establishes in the mind of the observer. The Registrar relied on the observations of Stone J in Kenman Kandy [2002] FCAFC 273 ; 122 FCR 494 who, after referring to Kitto J's statement of the test in Clark , said at [147]: In my opinion it is the absence of these [ordinary] associations and significations that makes a sign inherently adapted to distinguish one trader's goods from those of another. In other words the concept is negative not positive. Applying this "negative" test, said the Registrar, the shape in suit does not lack, but rather quite clearly possesses, an ordinary signification which another trader in chocolates might want to use. When regard is had to the fact that (a) chocolate confectionary is manufactured in a wide variety of novelty shapes, including animals, (b) other manufacturers have been selling chocolates in the shape of sea shells and other marine life since well prior to the priority date (16 April 2002), and (c) other manufacturers are currently selling chocolates in the shape of a seahorse that is the same or very similar to Guylian's, the Court should be satisfied, on the Clark test, that the shape in suit is one that, as at the priority date, other traders might think of and want to use in a manner which would infringe a registered trade mark granted in respect of it. The Registrar also referred to the survey evidence, which indicated that almost a quarter of the respondents who associated the image of the shape with a manufacturer, associated it with someone other than Guylian. On that basis, having regard also to the evidence that others were selling sea shell shaped chocolates as at the priority date, the Registrar asked the Court to infer that similar seahorse shapes were already in fact being sold at the priority date, or that at the very least other traders might have wanted to use a similar seahorse shape as part of a novelty sea shell range. Guylian's submissions The Registrar submits that any trader using a seahorse shape simply to denote a seahorse should, in the absence of evidence to the contrary, be considered to be acting with proper motives for the purposes of the Clark test. The Registrar referred to both Philmac Pty Ltd v Registrar of Trade Marks [2002] FCA 1551 ; (2002) 126 FCR 525 at [51] and [53], where Mansfield J referred to the "concept of a properly motivated trader" as including the use of a mark to denote a meaning that the mark might ordinarily possess, and Clarke 111 CLR at 517, where Kitto J identified an improper motive on the part of a rival trader as a "desire to get for themselves a benefit" from the applicant's reputation. Here, said the Registrar, there was no evidence at all, including any witness evidence, that traders now using a seahorse shape are acting with improper motives, for example to assert a connection between their goods and Guylian. There is also no evidence that Guylian has in any way objected to, or sought to restrain, the use by other traders of any similar seahorse shapes. Resolution These are cases of degree and I must make an evaluative judgment after giving due weight to the assessment made by the Registrar's delegate. The degree of likelihood in this case I think turns very much on the extent to which this particular seahorse shape is distinctive or unique. As Kitto J said in Clark , "[t]he interests of strangers and of the public are ... bound up with the whole question" of whether a mark is inherently adapted to distinguish: see Clark 111 CLR at 514. As best as possible, an assessment should be made as to the ability of other traders to depict a seahorse in a way that would not infringe the mark in suit, if it were registered. In my view, while the shape has some distinctive features, I am satisfied that it is not so unique or imaginative that other traders, using a seahorse shape for its ordinary signification, will be able to avoid potentially infringing the mark if it were registered. Accordingly, I am satisfied that it is to some degree inherently adapted to distinguish, but not sufficiently so to decide the matter under s 41(3), for the following reasons. First, there is a danger that first impressions will be sidelined when an analysis of a shape's individual components or features is undertaken. In this case, the immediate impression one has of the mark in suit is of an ordinary seahorse. I would not expect most ordinary consumers to know that the tails of seahorses do not curl backwards, only forwards. I think most would know that seahorses have a tail and expect that they curl up in some direction. Accepting that the tail and the stocky appearance might, to a studious observer, appear unusual, I consider on balance that the average consumer would see it as a relatively ordinary representation of a seahorse. The possibility for confusion therefore between Guylian's shape and any other seahorse shapes is, I think, a real one. Second, the evidence of other seahorse shapes now on the market tend to confirm rather than deny the likelihood that other traders wishing to depict a seahorse may have some difficulty in avoiding infringement proceedings. Guylian said that the seahorse shapes sold by Royalle and Duc d'O (depicted below and referred to at [53(c)] above) are examples of shapes that would not infringe: Fig. 6 Royalle's seahorse shape. Fig. 7 Duc d'O's seahorse shape. In my view these are not so significantly different from Guylian's shape that there is no room for confusion in the eyes of the public or an infringing of the mark if it were registered. Given the exclusivity of the rights that would be granted to Guylian upon registration, it is difficult to see how other traders will know where to draw the line. Third, this is not a case where the shape in suit is "entirely concocted" and thereby lacks "the associations that would lead to confusion": see Stone J in Kenman Kandy [2002] FCAFC 273 ; 122 FCR 494 at [162] . The shape does have an ordinary association and the association is one that other traders might wish to draw upon. Given the mark sought to be registered is simply the three dimensional shape itself, without any other stipulation as to its use, the application for registration must be assessed on the basis that it would give Guylian a monopoly over that shape as the entire shape of one of its chocolate pieces. There is therefore a higher potential for other traders who wish to use a similar shape to do so in a manner that would infringe that monopoly. In other words, infringement might occur simply by the selling of a similar shaped chocolate, even where the shape does not feature significantly on, for example, the packaging of the product. Related to this is a submission the Registrar made regarding the type of "use" contemplated by the test in Clark . It would be wrong, said the Registrar, to construe the test as being whether or not other traders might wish to use the mark or a similar mark "in an infringing way", in other words as a trade mark for themselves. Instead, the test should be understood as whether other traders might wish to use the mark or one resembling it for the sake of the signification of the mark itself and not necessarily to denote trade origin. However, in Clark Kitto J quite clearly referred to use "in any manner which would infringe a registered trade mark granted in respect of [the relevant word or shape]." I agree with Lindgren J in Kenman Kandy [2002] FCAFC 273 ; 122 FCR 494 at [95] that the Clark test does not go so far that any kind of innocent use at all, including innocent non-trademark use, would necessarily deprive a shape of being inherently adapted to distinguish. However, in a case where the mark is simply the three dimensional shape of the good itself, it is more difficult to see how the distinction made by the Registrar is a relevant one. Both parties proceeded on the basis that simply selling the same or a deceptively similar shaped chocolate would be an infringing use of the mark. It certainly was not suggested that the same shape might be sold by another trader but in some manner that would avoid infringement. Given the scope of the application for registration, the monopoly granted would be over the shape generally and use of the shape as a chocolate would be a manner of use that would be likely to infringe for the purpose of the Clark test. Fourth, while I have taken into account the more recent evidence of similar sea shell and seahorse chocolate products (six years after the priority date), I have done so mainly for the purpose of considering the extent to which other representations of seahorses might be considered "substantially identical with, or deceptively similar to," the seahorse shape (see [79] above). However, in addition, the recent evidence seems to me to lend further support to the view I take that, as at the priority date, other traders might have wished in the future to adopt the same shape or one closely resembling it. I accept that as at 2008 the use by others of the same sea shells and, in some cases the same seahorse, is likely to be attributable to a large extent to the promotion of those shapes by Guylian over a long period of time. However, it seems to me that a tendency for competition in the manufacturing of sea shell/marine creature chocolates was already evident at the priority date. I do not consider that the sale by others in 2008 of similar seahorse shapes can, on the evidence, be considered illegitimately or improperly motivated for the purposes of the Clark test, and therefore disregarded. There is no evidence that the other traders, in selling a seahorse shape, have sought to assert a connection between their chocolates and Guylian. To the contrary, each of the other traders' seahorse shapes is contained in a chocolate box which clearly identifies the relevant manufacturer (eg. Darrell Lea). There is also no evidence that Guylian has in any way protested about these rival sales. I accept that one reason, if not the main reason, that these traders have included a seahorse shape in their range of sea shell chocolates is to compete with Guylian's long standing shape. However, competition should not readily be considered improper, particularly in circumstances where the shape in suit bears an ordinary signification and is not so distinctive as to stand out in the minds of consumers, at least without first educating them to recognise the shape as a trade mark. Accordingly, I am satisfied that, viewed as at the priority date, there is some degree of likelihood that other traders acting with proper motives would want in the future to use the same seahorse shape or one substantially identical or deceptively similar. Accordingly, I am satisfied that the shape is to some extent inherently adapted to distinguish, but not to the degree required by s 41(3). Does or will the seahorse shape distinguish Guylian's goods s 41(5)? Applicable principles As I consider the shape is to some extent inherently adapted to distinguish, then s 41(5) is applicable. Section 41(5) involves a balancing exercise. With a view to deciding whether the mark does or will distinguish the goods as being Guylian's, the Court is required to consider, in combination, two specific matters: (1) the extent to which the mark is inherently adapted to distinguish, and (2) the use, or intended use, of the mark by Guylian (cf. Kitto J's approach in Clark 111 CLR at 513). The Registrar, and on this appeal the Court, must be "satisfied" that the mark does or will distinguish the goods as being Guylian's: pars 41(5)(b) and (c). It is a balancing exercise in that, for example, a mark that is inherently adapted only to a small degree is thereby likely to require greater evidence that it has been (or will be) used in such a way as to distinguish the relevant goods: see, eg, the approaches of Bennett J in Unilever Australia Ltd v Societe Des Produits Nestl&eacute; SA [2006] FCA 782 ; (2006) 154 FCR 165 ( Nestle ) at [57] and Wilcox J in Time Warner Entertainment Company LP v Stepsam Investments Pty Ltd [2003] FCA 1502 ; (2003) 134 FCR 51 at [42] . Section 41(5) permits the registration of trade marks that are not, by their inherent qualities, sufficiently adapted to distinguish, but which have as at the priority date in fact acquired a capability to distinguish the relevant goods: see Austereo [2004] FCA 968 ; 61 IPR 257 ; see also Clark 111 CLR at 515; British Sugar [1996] RPC 281 at 306; Nestle [2006] FCA 782 ; 154 FCR 165 at [29] . In other words, s 41(5) recognises that marks which are insufficiently inherently adapted to distinguish may nevertheless by their use have become distinctive in the minds of consumers so that they will be able to "do the job of distinguishing" the applicant's goods, that is, they will in fact serve as a badge or an indicator of origin. Accordingly, under s 41(5) an applicant relying on use prior to the priority date will need to point to evidence that the mark has been used as a trade mark , so as to have acquired the requisite capability to distinguish the applicant's goods: see, in the context of s 41(6), Woolworths Ltd v BP Plc (No 2) [2006] FCAFC 132 ; (2006) 154 FCR 97 at [72] and [77] ( BP (No 2) ); Ocean Spray [2000] FCA 177 ; 47 IPR 579 at [38] - [41] , in particular [40]. Guylian's submissions