The Federal Court of Australia, in PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd [2020] FCA 1078, confirmed the finding that an owner of trade mark (whether registered or not) in using the mark through authorised use, cannot be found liable for trade mark infringement under s 120 of the Trade Marks Act 1995 (Cth)(“TMA”).

Federal Court of Australia

Judge: MARKOVIC J  

Date of Judgment: 30 July 2020

The applicants, PDP Capital Pty Ltd (“PDP Capital”) and PDP Fine Foods Pty Ltd (“PDP Fine Foods”) (collectively known as “PDP”) manufacture and sells a variety of diary based desserts in Australia under the brand “WICKED SISTER”.

PDP Fine Foods, owner of registered trade mark 1240821 (priority date: 29 May 2008) for “” (“First WS Device Mark”) for goods in classes 29 and 30(“Registered First WS Goods”). 

PDP Capital is the owner of registered trade mark 1751267 for “” (“Second WS Device Mark”) and 1751266 for “WICKED SISTER” (“WS Word Mark”) for goods in classes 29 and 30 (“Later Registered WS Goods”) filed on 9 Feb 2016. Collectively the marks by PDP Capital are known as Later Registered WS Marks.

Grasshopper Ventures Pty Ltd (“Grasshopper”) is an intellectual property holding company and in involved in sale and distribution of dipping sauces and other shelf stable products through authorised use of the brand “WICKED” by its distributors and licensees.

Grasshopper owns registered trade mark 1042646 (priority date: 18 February 2005) for “” (“Registered Wicked Tail Mark”) for goods in class 30 including dips, chocolate dips.

In recent years, Grasshopper filed a number of trade mark applications for “” (“New Wicked Mark”) in various goods in class 30, the earliest being 19 March 2015, but the applications either lapsed or were pending examinations and oppositions. 

PDP took Grasshopper to Court for alleged trade mark infringements against the use of the New Wicked Mark, misleading and deceptive and passing off conduct. PDP sought to remove the Registered Wicked Tail Mark for non-use.

Marks and Goods Similarity Assessment

Contrary to PDP’s contentions, the Court did not find the New Wicked Mark and Wicked Sister Marks visually or aurally similar and neither “Wicked” or “Sister” took prominence over the other. The Court took the view the ordinary person with normal intelligence and memory when encountered with the WICKED SISTER Marks would likely remember the two words WICKED and SISTER (impression). The Court also found surrounding circumstances such as the product placements in supermarkets and nature of the products did not meet the threshold for confusion to take place. The Court was satisfied that the New Wicked Mark and Wicked Sister Marks were not deceptively similar and consequently not substantially identical as well.

The Court took considered, inter alia, the nature of goods and found the infringing goods (being Wicked dipping sauces and Wicked waffles dippers) were not the same or goods of the same description as the Registered First WS Goods. However, the infringing goods were found to be the same as the Later Registered WS Goods being dipping sauces and bakery products being claimed by the PDP Capital in class 30.

Grasshopper’s Cross Claim

Grasshopper cross-claimed by seeking to remove the First Registered WS Device Mark through non-use and contended that Later Registered Marks ought not to have been registered under s 58 (applicant not owner of the mark) and for the lack of intention to use/authorise use under s 92(4)(a).

The Court did not find PDP’s use of the Registered First WS Device Mark on the First Non-Use Goods during the First Non-Use Period and ordered the removal for the impugned goods.

Grasshopper advanced arguments that the Later Registered Marks by PDP Capital were substantially identical or deceptively similar to Registered First WS Device Mark by PDP Fine Foods. PDP countered by citing ‘unity of purpose’ (as in trident seafood) in having Mr. Polly as the common director and shareholder and thus common ‘element’ in management and control for both PDP entities. PDP Fine Foods also provided authorisation to use the Later Registered Marks through a letter of consent. Grasshopper argued that there’s no ‘control’ or ‘authorised use’ exception to s 58 of the TMA. The Court ultimately held the ground of s 58 was made out for Later Registered Marks for the Common Categories (goods that were common to Registered First WS Device Mark and the Later Registered WS Marks). However the Court took the view that because of the ‘unity of purpose’ in control and management, there is little risk of confusion and did not cancel the Later Registered Marks.

PDP Claim of Trade Mark Infringement

PDP claimed that Grasshopper, in authorising use of the New Wicked Mark was liable for trade mark infringement within s 120 of the TMA. Insofar as the use of a trade mark was concerned, the provision under s 7(3) of the TMA where the authorised use of a trade mark by a person, for the purposes of this Act (i.e. TMA) is taken to use by the owner of the trade mark. His Honour was taken to the decision in Unilever Australia Limited v PB Foods Ltd [2000] FCA 798 (“Unilever v PB”). In Unilever v PB, the Court found there was sufficient material to support, prima facie, that the use of the infringing trade marks by PB was authorised by Cadbury (Unilever made application to join Cadbury as a respondent). Cadbury submitted use by PB did not constitute use by it for the purpose of 120 even if it had authorised use. Justice Moore, agreeing with PB’s submissions, did not find any provision within the TMA (apart from s 7) that would support the proposition that infringing use by an authorised user constituted use by Cadbury and would render Cadbury liable for contravention under s 120. 

Justice Markovic did not see the need to depart from the reasoning in Unilever v PB and held, insofar as the New Wicked Mark was concerned, the authorised use by Grasshopper to Valentine Companies did not render the owner liable for infringement under s 120 of the TMA.

PDP Claims of ACL and Passing Off Conduct

Grasshopper denied engaging in conduct that contravened ss 18 and 29 of the ACL. The test is whether a not insignificant number within the relevant class of consumers have been misled or deceived or are likely to have been misled or deceived by Grasshopper’s conduct. Even though his Honour inferred Grasshopper might have been ‘knowingly concerned’; on balance, his Honour was not persuaded that the claims of ACL and passing off were made out for following reasons:

• Wicked Marks and WS Marks were not deceptively similar
• Nature of the products are different – unlike Grasshopper’s, PDP goods were diary based and needed refrigeration
• Competing products were often placed in different parts of the supermarket mitigating likely confusion
• Wicked dipping sauces were sold in single tubs while Wicked Sister products for most parts were sold in twin packs in a cardboard package

Evidence demonstrated that Grasshopper commenced using the New Wicked Mark in 2014 and Wicked Sisters Mark had not established the reputation and goodwill threshold at that time. His Honour also found evidence from Ms Medley and Messrs Brebbia and Masluk offered little assistance and were of ‘limited utility’. Accordingly, his Honour held that PDP’s claims of misleading and deceptive and passing off conduct by the Grasshopper were not made out.

Claims in Wicked Tail Mark

PDP sought to remove Wicked Tail Mark or amend the mark by removing “chocolate, white chocolate, caramel and vanilla flavoured dipping sauces” with effect from its priority date. The Court found no use insofar as savoury dips were concerned during the relevant period and ordered its removal. The Court however, was satisfied that the remaining goods should be maintained.

Key Takeaway

The current case further confirms the finding that an owner of the mark (whether registered or not) in using the mark through authorised use, cannot be found liable for infringement within s 120 of the TMA.

PDP appealed shortly after and the summary of the appeal at Federal Court of Australia (Full Court) can be found here.

Disclaimer: The above is provided to assist in the understanding of the decision by the Federal Court of Australia. It should not be relied upon as legal advice. Any errors or omissions are the author’s. For queries related to the article, please contact the author here.