The present case is an appeal from the decision of Markovic J in PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd [2020] FCA 1078. Her Honour had held that an owner of trade mark (whether registered or not) in using the mark through authorised use, cannot be found liable for infringement under s 120 of the Trade Marks Act 1995 (Cth)(“TMA”). The case at first instance was summarised here.

PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd [2021] FCAFC 128

Federal Court of Australia (Full Court)

Judges: JAGOT, NICHOLAS AND BURLEY JJ

Decision Date: 29 July 2021

Appeal from: PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd [2020] FCA 1078

We discuss some of the grounds of appeal in the present case.

Liability for Infringement Threshold Appeal  

PDP contended that the primary judge had erred in not finding Grasshopper liable for trade mark infringement under s 120 of the Trade Marks Act 1995 (Cth) for authorising the use of the New Wicked Mark in relation to Wicked dipping sauces and Wicked Waffle Dippers (“Infringing Products”). PDP submitted that since authorised use of the New Wicked Mark by the Valentine Companies constituted use by the Grasshopper under s 7(3) of the TMA and there is nothing is ss 7, 8, 120 that limits the concept of authorised use of the registered mark, the owner, Grasshopper should be liable for trade mark infringement.

PDP further argued that the concept of authorised use/authorised user cannot be a “one-way” street where the trade mark owner benefits from authorised use but is immune from trade mark infringement from that use. PDP also drew parallels with the construction from the Copyright Act in support of its contention.

There was no dispute over the use of the New Wicked Mark being under the control of Grasshopper and hence deemed as authorised use. However, the primary judge recognised the distinction between the provision made for infringement under s 120 and authorised use in ss 7 and 8 of the TMA. Insofar as s 120 is concerned, “use” is being referred to as “use as a trade mark” by a “person”. s 120 made no reference to s 7(3) of the TMA. As such, one cannot infer the use under s 7(3) may be applied and hence taken to be use by the owner. 

Citing Unilever Australia Limited v PB Foods Ltd^[1], the primary judge referred to the interlocutory decision by Moore J and reasoned that there was no authority or provision under the TMA that infringing use by an authorised user rendered the owner liable for contravention of s 120. 

The Full Court agreed with the conclusion of the primary judge. The Full Court first added that the construction of s 120 suggested a more “personal nature” and the language used did not suggest use by one person will constitute infringement by another person. Rather, it emphasised the action of the person who used a sign in a particular way[65]. Secondly, the Full Court reasoned that not every reference to “use” was intended to incorporate the definition of authorised use by an authorised user in s 8 of the TMA. Currently, there is no express provision to s 120 as to the subject of use under ss 7(3) and 8 of the TMA. The Full Court refuted PDP’s argument in that the Copyright Act makes explicit provision for infringement acts by authorisation which the TMA did not. The appeal was consequently dismissed.

Deceptive Similarity Appeal

Besides the threshold for liability for infringement, PDP challenged the findings of the primary judge, contending that the primary judge had erred in her assessment of not finding deceptive similarities between the New Wicked Mark and the Wicked Sister Marks. PDP particularised the grounds of contentions including the finding that the primary judge had inappropriately taken a side-by-side approach in her assessment and not finding “Wicked” as the prominent feature in the Wicked Sister Marks.

The Full Court noted the primary judge had not just taken into account the visual, aural and conceptual similarities but the imperfect recollection of ordinary consumers with ordinary intelligence in her assessment of deceptive similarities between the marks as well. The primary judge was unpersuaded that the essential feature of the WS Device Marks was the stylised “Wicked” word. Her Honour took the view the comparison should be made between Grasshopper’s “WICKED” mark against “Wicked Sister FINE FOODS”, although the words “Wicked Sister” took prominence over “FINE FOODS” (since “FINE FOODS” were featured in significantly smaller fonts. It was held that what remained memorable for consumers would be “Wicked” for New Wicked Mark and “Wicked Sister” for WS Device Marks after their respective encounters, taking into the imperfect recollection of consumers in relation to the goods covered. The Full Court agreed with the primary judge’s approach.

In assessing the likelihood of confusion, the Full Court took the view that the primary judge was open to making findings of a side-by-side comparison of the two marks given that the competing products could be on display in the refrigerated section of the supermarket. Consumers could view the products with the associated trade marks and consequently make their purchase decisions. In relation to evidence adduced by the three trade witnesses, the Full Court agreed with the primary judge that the witnesses did not meet the requisite threshold of being purely hypothetical shoppers as all three were in some ways “associated” with PDP. The evidence was given little or no weight in tipping the likelihood of confusion in PDP’s favour. 

The ground of appeal was accordingly dismissed. 

ACL, Passing Off Ground of Appeal

In its final ground of appeal, PDP contended that primary judge had erred in not finding Grasshopper had contravened ss 18 and 29 of the ACL and engaged in passing off conduct with the sale of the Infringing Products bearing the New Wicked Mark in its get-up. Notably, PDP also contended that the primary judge had erred in not finding an extensive and valuable goodwill and reputation in relation to Wicked Sister Marks and placing little or no weight on the evidence of actual confusion given by the three trade witnesses.

The test is whether a not insignificant number of ordinary persons with the relevant segment of the market will be misled or deceived. 

The primary judge held the New Wicked Mark and WS Device Marks were not sufficiently similar or were too dissimilar for a not insignificant number of consumers to be misled or deceived. The products were also different in nature. The Infringing Products were shelf stable and not diary based while the Wicked Sister Products were refrigerated diary desserts made from premium ingredients. It was also found that the products were placed in different sections of supermarkets.

However it was found that Wicked dipping sauces were sometimes found in the refrigerated fresh produce area with fresh berries. The Wicked Sister Products were found in the diary aisle of the supermarket. The packaging of the products were found to be materially different;- Wicked dipping sauces were sold in single tubs with a brown lid bearing the New Wicked Mark and the Wicked waffle dippers sold in a foil pack bearing the New Wicked Mark while the Wicked Sister Products were largely sold in twin packs wrapped in a cardboard.

PDP did not make submissions in support of passing off claims over and above their ACL claims.

The exercise became academic after the Full Court held there was no error on the primary judge’s approach in assessing marks similarity and likelihood of confusion. There was no dispute that the relevant date for assessing reputation was when the impugned conduct commenced in 2014. 

The Full Court held the primary judge did not err and upheld her finding for a lack of established reputation due to:

• Lack of evidence of the packaging in which Wicked Sister Products were sold prior to 2015
• Lack of breakdown of figures provided

The primary judge found Grasshopper had established reputation in the WICKED mark after eleven years of trading. The differences between the Wicked Tail Mark and the New Wicked Mark were not such that consumers would fail to recognise they emanate from the same source. The get-up did not change materially after the New Wicked Mark was introduced.

The Full Court had upheld the primary judge’s decision on the marks similarity and there was no real and tangible danger of likelihood of confusion and accordingly dismissed the appeal for the claim of ACL and passing off.

Key Takeways

The Full Court upheld the findings of the primary judge insofar as the threshold issue of infringement is concerned that in authorising use, the owner of a trade mark cannot be found liable for trade mark infringement under s 120 of the TMA. 

Disclaimer: The above is provided to assist in the understanding of the decision by the Federal Court of Australia (Full Court). 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.

^[1] [2000] FCA 798