Case: Johnson &amp; Johnson Australia Pty Limited v Sterling Pharmaceuticals Pty Limited (1991) 30 FCR 326
Outcome: cited
Section 120 of the Act expressly incorporates the notion previously implied ( The Shell Company of Australia Limited v Esso Standard Oil (Australia) Limited (supra)) in both s 58(1) and s 62(1) of the Trade Marks Act 1955 (Cth) ('the 1955 Act') that infringing use of a mark is limited to use ' as a trade mark '. Use as a trade mark is use of the mark as a badge of origin in the sense that use indicates a connection in the course of trade between goods and the person who applies the mark to the goods. ( Coca-Cola v All-Fect (supra); Johnson &amp; Johnson Australia Pty Limited v Sterling Pharmaceuticals Pty Limited (1991) 30 FCR 326 at 341 per Lockhart J and 351 per Gummow J). The registered owner of the trade mark has, subject to Part 3 of the Act, the exclusive rights to use the trade mark (and authorise others to use the trade mark) in relation to goods in respect of which the trade mark is registered (s 20(1))). Section 120(1) provides relevantly, that a person infringes a registered trade mark if the person uses, as a trade mark, a sign that is substantially identical with the trade mark in relation to goods in respect of which the trade mark is registered. A trade mark is a sign used or intended to be used, to distinguish goods dealt with or provided in the course of trade by a person from goods so dealt with or provided by any other person (s 17) and a sign includes a shape (s 6). Section 7(4) provides that use of a trade mark in relation to goods means use of the trade mark upon or in physical or other relation to the goods. Accordingly, has the respondent used, as a trade mark, the three dimensional sign in relation to goods by importation, sale and promotion of articles, embodying the shape, to distinguish those goods in the course of trade from the goods of others? 61 The answer to that question requires examination of the purpose and nature of the impugned use, the relevant context, the way the trade mark has been adopted or applied in relation to goods and the use of brochures, catalogues and advertisements ( Johnson &amp; Johnson v Sterling at 347). A part of that contextual analysis involves an assessment of whether use of the trade mark might be illustrative or descriptive of the goods rather than use as a trade mark. In that context, the extent to which a three dimensional shape for the goods or a part of the goods serves function is an important element in the determination of whether use is distinctive of commercial origin or illustrative or descriptive of the embodied shape of the goods. Use of the trade mark must be demonstrated to be use that serves the primary function of a trade mark ( Johnson &amp; Johnson v Sterling at 348 and 349; Christodolou v Disney Enterprises Inc [2005] FCA 1401 ; (2005) 66 IPR 595). A word trade mark that contains a descriptive element may nevertheless still serve as a badge of origin as language does not necessarily convey only one idea ( Johnson &amp; Johnson v Sterling ) although the descriptive element may make it difficult to demonstrate that the words serve the primary function of distinguishing the goods. ( Wellness Pty Ltd v Pro-Bio Living Waters Pty Ltd (2004) 61 IPR 242 per Bennett J [29]). 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.