Alcon Inc v Bausch & Lomb

AND: BAUSCH & LOMB (AUSTRALIA) PTY LTD (ACN 000 650 251)

Introduction 1 The applicant sues the respondent for infringement of the applicant's registered trade mark number 483823 for the word (or letters) "BSS" in Class 5 for ophthalmic irrigating solution (the applicant's BSS trade mark). The application for registration of the applicant's BSS trade mark in Australia was lodged on 22 March 1988. It was subsequently registered with that date as its priority date. 2 The sole complaint of the applicant is that, in the period from about June 2006 until late September 2008, the respondent supplied and offered to supply ophthalmic irrigating solution under or by reference to the sign "BSS" by supplying and offering to supply 19 ml plastic bottles of its AQSIA™ brand balanced salt solution to ophthalmic surgeons and others in circumstances where the label on those containers took the following form: AQSIA™ BSS 19 ml STERILE CE 1275 BAUSCH & LOMB 4010000 3 Those containers are quite small. Attached to these Reasons for Judgment as Attachment "A" is a colour photocopy of the actual label on the 19 ml container tendered in evidence. The label measures approximately 2 cm down the bottle and 1 cm across the bottle. 4 The respondent admits that it supplied and offered to supply 19 ml plastic bottles of its AQSIA™ brand balanced salt solution to ophthalmic surgeons and others in the period alleged and that the label on those containers was as alleged. However, it denies that it infringed the applicant's BSS trade mark for a number of reasons. 5 The evidence was that the respondent's 19 ml plastic bottles of AQSIA™ brand balanced salt solution were supplied by the respondent in sealed plastic sachets with a transparent front face which permits a person who is in possession of such a sachet to see the bottle and its label. The evidence also established that the sealed plastic sachets were not supplied individually by the respondent in the relevant period but were only supplied by the respondent in a cardboard box or carton containing 12 such sachets. That box measures approximately 24.2 cm in length, 15 cm in height and 9.5 cm in depth (width). The letters "BSS" do not appear anywhere on that box. The trade name AQSIA™ appears prominently on the box in several places. It does so in association with the words "Balanced Salt Solution" and "Balanced Salt Solution for ocular use". The respondent's corporate name also appears prominently on the box. The respondent's trade colours (blue and white) feature prominently on the box. The box bears a barcode with the label "AQSIA Balanced Salt Solution 19 ml". 6 The applicant endeavoured to prove that the sealed plastic sachets containing the 19 ml plastic bottles were supplied by the respondent from time to time on an individual basis. It was suggested that, on occasion, individual sealed plastic sachets were supplied as samples of the product. The applicant failed to prove that any individual sachets were ever supplied or offered for supply in the relevant period. 7 There was some suggestion in the evidence that organisations other than the respondent put together surgical procedure packs which included individual sealed plastic sachets containing 19 ml plastic bottles of the respondent's AQSIA™ brand balanced salt solution. An example of such a third party surgical procedure pack in use at the time of the hearing was tendered. The respondent's sealed plastic sachet containing a 19 ml plastic bottle of AQSIA™ brand balanced salt solution was affixed to the external surface of the surgical procedure pack tendered in evidence. The label on the 19 ml plastic bottle tendered in evidence as part of the surgical procedure pack did not bear the letters "BSS". There was no evidence as to the circumstances in which the individual sealed plastic sachet containing the respondent's product came to be supplied as part of this third party surgical procedure pack. Mr Stamp, who is the Managing Director of the respondent, denied that the respondent authorised this type of repackaging of the plastic sachets containing its 19 ml plastic bottles of AQSIA™ brand balanced salt solution and said that he was not aware of any such practice by others until a few days before he gave evidence. I accept this evidence given by Mr Stamp. 8 I accept the evidence adduced by the respondent that the sealed plastic sachets are generally stored by users of the products in the box in which they are supplied and removed one by one from time to time for use as needed. The sealed plastic sachets are not opened until the solution in the plastic bottles encased therein is required for use. 9 It is common ground that, after the commencement of the present proceedings and a little time before the hearing, the respondent notified the applicant that the letters "BSS" would be removed from the 19 ml plastic bottles of its AQSIA™ brand balanced salt solution then being supplied by it or which might be offered for supply by it in the future. Those letters ceased to appear on those containers before the hearing commenced. 10 Thus, whatever may have been the nature of the respondent's conduct prior to September 2008, that conduct had ceased by that date. There was no evidence to suggest that the respondent intended to use or was threatening to use the letters "BSS" on any of its products in the future. 11 The respondent defends the infringement claim upon two broad bases (as to which see [14] below). It has also brought a Cross-Claim. 12 By its Cross-Claim, the respondent seeks an order that the Register of Trade Marks be rectified by the cancellation of the applicant's BSS trade mark. 13 The hearing before me did not concern the applicant's claim for damages for infringement of its trade mark or its claim in the alternative for an account of profits. These matters were reserved for further consideration in light of these Reasons for Judgment.

The Issues 14 Subject to the matters raised by the Cross-Claim, the issues which arise in the applicant's trade mark infringement claim are: (a) Was the respondent's use of the letters "BSS" on the 19 ml plastic bottles of its AQSIA™ brand balanced salt solution use of those letters as a trade mark within the meaning of s 120(1) of the Trade Marks Act 1995 (Cth) (the Act)? The applicant bears the onus on this issue; and (b) Was the respondent's use of BSS in this way use in good faith to indicate the kind, quality, intended purpose or some other characteristic of its AQSIA™ brand balanced salt solution within the meaning of s 122(1)(b)(i) of the Act so as to amount to a complete defence to the allegation of infringement? The respondent bears the onus on this issue. 15 Provided that it is able to pass through the gateway prescribed by s 234(2) of the Act, the respondent relies upon two grounds in support of its claim that the applicant's BSS trade mark should be cancelled. These are: (a) The mark was not distinctive as at the priority date (ie as at 22 March 1988). This is a ground upon which the registration could have been opposed. This ground involves a consideration of ss 234(2), 88(2)(a), 57 and 41 of the Act; and (b) By the date of the Cross-Claim (6 December 2006), the mark had become generally accepted within the relevant trade in Australia as a sign that describes or is the name of a substance viz "balanced salt solution". This ground requires proof that the mark had become generic by 6 December 2006. This ground involves consideration of ss 234(2), 24 and 87 of the Act. 16 The applicant also relies upon s 89 of the Act should I accept the respondent's contention that the use of BSS had become generic by 6 December 2006. That section gives to the Court a discretion not to cancel a trade mark under s 87 if the registered owner of the trade mark satisfies the Court that the ground relied upon for cancellation does not arise through any act or fault of the registered owner. 17 The respondent tendered a large number of journal articles, several extracts from dictionaries and two extracts from textbooks in support of the defences and grounds for cancellation of the applicant's BSS trade mark upon which it relies. Some of the journal articles were originally published outside Australia. The applicant objected to the tender of most of this material on the ground that the material to which objection was taken could not conceivably be relevant to any issue in the proceedings. At the trial, I admitted all of this material subject to objection and subject to relevance. I deferred finally ruling on the admissibility of this material until publication of these Reasons for Judgment.

The Parties 18 The applicant is a corporation incorporated in Switzerland. In Australia, the business of the applicant is conducted through a wholly owned subsidiary, Alcon Laboratories (Australia) Pty Limited (Alcon Australia). Alcon Australia manufactures and distributes in Australia various products under the direction and with the authority of the applicant. 19 Alcon Australia makes and sells surgical consumable products. At Alcon Australia, a product is considered to be a "consumable product" if it is designed to be used once, and once only. Generally, consumable products are purchased recurrently. 20 Included within the range of products sold in Australia by Alcon Australia are two different types of sterile ophthalmic irrigating solution. One of these products is marketed under the name "BSS® Sterile Irrigating Solution". The other is marketed under the name "BSS® PLUS Sterile Irrigating Solution". I shall refer to these products respectively as BSS and BSS Plus. 21 The respondent is a company incorporated in Australia. The parent company of the respondent is Bausch & Lomb Incorporated, a US corporation. The respondent sells a number of products in Australia including sterile ophthalmic irrigating solution which is also referred to as intraocular and extraocular irrigating solution (which is a sterile physiological saline solution for ophthalmological use). These solutions are used, in particular, by ophthalmic medical practitioners in hospitals, day surgeries and medical consulting rooms.

The Relevant Alcon Products 22 Alcon Australia sells in Australia various surgical consumable products including viscoelastics, drapes, sutures, BSS and BSS Plus. These products can be purchased individually or as part of a package of products marketed under the name "Custom-Pak™ Surgical Procedure Pack" (CP pack). Each CP pack contains a procedure tray and all of the surgical consumer products needed for one surgical procedure. The precise content of each CP pack is tailored to the individual specifications of each surgeon. 23 BSS is supplied in plastic or glass bottles of varying sizes. It is supplied in 15 ml, 30 ml, 250 ml and 500 ml containers. The 15 ml bottles are plastic. Each of those containers bears a label. The information contained on the label varies as between the different sized containers. However, each label contains the following: BSS® STERILE IRRIGATING SOLUTION 24 The outer individual blister pack packaging of the 15 ml containers in which BSS is supplied also contains the following text: A sterile physiological salt solution for extraocular and intraocular irrigation 25 Attached to these Reasons for Judgment and marked "B" is a photograph of the 15 ml plastic bottle in which BSS is usually supplied. The bottle depicted in that photograph is inside its blister pack. Attached to these Reasons and marked "C" is a photograph of the outer label on the back of that blister pack. 26 In the period between about 1987, when BSS was launched in Australia, and 2003, the label on BSS containers included the following: BSS® (BALANCED SALT SOLUTION, ALCON®) 27 That mode of describing the contents of the BSS containers ceased in about 2003. 28 BSS is a standard balanced salt solution. BSS Plus is a balanced salt solution which contains additional ingredients designed to maintain ocular structure and hydration of interocular tissues. 29 Balanced salt solution for human use was developed by the applicant in the 1950s. The first balanced salt solution product that was released in Australia was released here in the late 1980s. That product was the applicant's balanced salt solution, BSS. Prior to the late 1980s, fundamentally different ophthalmic irrigating solutions were used in Australia. These solutions were not described and could not appropriately be described as "balanced salt solutions". 30 A standard balanced salt solution is a glucose free, citrate/acetate buffered balanced electrolyte solution for irrigating the eye. The buffer is designed to balance or preserve the pH of the solution. It contains sodium chloride, potassium chloride, calcium chloride, magnesium chloride, sodium acetate, sodium citrate dihydrate and sodium hydroxide and/or hydrochloric acid for pH (acid/base) adjustment. 31 Solutions for intraocular use must be physiologically compatible in both electrolytes and pH with human eye tissues in order to prevent damage to the corneal epithelium and must also be free of microbiological contamination. 32 BSS Plus comprises the same electrolytes as are contained in a standard balanced salt solution, but in a slightly different mix. It also contains additional substances, glutathione and glucose. The buffer in BSS Plus is sodium bicarbonate which is the human body's natural buffer. Glutathione is one of the body's natural antioxidants and is useful in removing free radicals which may form during ophthalmic surgery. The glucose is added in order to provide the ocular cells with a readily available source of energy. 33 BSS and BSS Plus are marketed by Alcon Australia's Account Managers (Sales Representatives) to ophthalmic surgeons, nurses, pharmacists, purchasing personnel associated with those persons, government purchasing authorities and public hospital purchasing staff. Governments represent a significant portion of the relevant market. In New South Wales, the relevant State government purchasing authority purchases approximately 30-40% of the total sales of BSS and BSS Plus made in that State. These sales efforts by Alcon Australia principally involve personal approaches to the relevant persons by the Alcon representatives who regularly visit those persons. It is the one-on-one contact between individuals that is the main marketing technique employed by Alcon Australia. However, Alcon Australia does provide brochures and promotional material to prospective customers and conducts seminars and conferences in order to promote Alcon products.

The Respondent's Products 34 The respondent is a competitor of the applicant and of Alcon Australia. The product which it supplies which most directly competes with the applicant's BSS product is the respondent's AQSIA™ brand balanced salt solution. This product was introduced into Australia in October 2003. It is an intraocular and extraocular sterile irrigating solution. This type of solution is a sterile physiological saline solution for ophthalmological use. It is used, in particular, by ophthalmic medical practitioners in hospitals, day surgeries and medical consulting rooms. The AQSIA™ brand balanced salt solution broadly comprises the same constituents as are found in the applicant's BSS product. Both products are appropriately described as "balanced salt solutions". 35 AQSIA™ brand balanced salt solution is supplied in 19 ml plastic bottles in the manner described at [2]-[5] above. It is also supplied in a 500 ml plastic bottle and a 500 ml glass bottle. The labels on these two larger containers do not have the letters "BSS" on them. The words "balanced salt solution" appear on the labels of both of these containers. In addition, in both cases, the trade name AQSIA™ is prominently displayed in close proximity to the words "balanced salt solution". 36 The carton or box in which the 19 ml containers of AQSIA™ brand balanced salt solution are supplied are so constructed as to conveniently operate as a dispenser of the sealed plastic sachets in the box. As noted at [5] above, the letters "BSS" do not appear on that box. A Product Information leaflet is also supplied inside that box. The letters "BSS" do not appear in that leaflet. There are several references in that leaflet to the product as "AQSIA™ BALANCED SALT SOLUTION".

Other Balanced Salt Solution Products Supplied in Australia 37 In the period between about 1990 and about 2002, various other balanced salt solution products were introduced into the Australian market. These products were labelled and promoted for sale as "balanced salt solution" or "sterile irrigating solution (balanced salt solution)" or "balanced salt solution for ophthalmic irrigation". "BSS" did not appear in the trade name of any of these products or on the label of the containers in which these products were sold. Some of these products are no longer sold in Australia, having ceased to be marketed here at various times up to about early 2006. 38 The only balanced salt solution product available for sale in Australia at the time of the hearing in these proceedings which was supplied by an entity other than the applicant or the respondent was a product called "Endosol". This product is supplied by Advanced Medical Optics Inc. The Endosol productis described on the label affixed to the containers in which it is sold and in promotional literature as a "Balanced Salt Solution For Ophthalmic Irrigation". Endosol comprises the same constituents as are found in the other two standard balanced salt solution products currently sold in Australia (BSS and AQSIA™).

The Admissibility of the Publications Tendered by the Respondent 39 The respondent read into evidence two affidavits sworn by Sian Helen Stubbs, who is the Regulatory Affairs Manager of the respondent. In pars 2 and 3 of her first affidavit (the affidavit sworn on 31 January 2008), she said: 2. As a result of, amongst other things, my 20 years' experience in Australia, including my 20 years in the field of regulatory affairs concerning a variety of medical and pharmaceutical products both in the ophthalmic and medical area of practice generally, I am aware that various types of salt solutions (which include, for example, calcium, magnesium, potassium, sodium and phosphate in various quantities, depending upon the application concerned) are commonly used/ and have for many years been used, both in Australia and elsewhere, as irrigating solutions. Those solutions are neutral or "balanced" in the sense that the concentration of their ingredients is roughly similar to the natural or other solution in which they are used. Those solutions are, and have, in my experience, been generally referred to for many years (by which I mean throughout my 20 years professional experience and, based upon my reading of scientific and other publications, for perhaps the preceding several decades or more), as "balanced salt solution[s]". As noted, the particular "balance" of the salt solution in question differs in form and make up depending upon its application, however, generally speaking those solutions have a wide range of medical (including ophthalmic) applications. For example, "balanced salt solutions" have commonly been used in ophthalmology as an (external and/or internal) irrigating solution used during eye surgery. Such solutions are also similarly used in other areas of medicine and science.

3. I am also aware through my above described experience that the letters "bss"/"BSS" have been similarly commonly used for many years in Australia … to describe "balanced salt solutions" as generally used in the above areas of medicine and science … 40 Paragraph 2 as quoted is in the form in which the affidavit was sworn. The only portions of par 3 which have been extracted above are those which were allowed into evidence. In par 4 and in subsequent paragraphs of her first affidavit, Ms Stubbs introduced various publications into evidence. These are comprised in Exhibits SS-1 to SS-13 to that affidavit. 41 Included within those exhibits were four journal articles tendered individually (Exhibits SS-1 to SS-4) and four groups of journal articles (Exhibits SS-5 to SS-8). Exhibited to the same affidavit were three groups of excerpts from dictionaries. Finally, Ms Stubbs exhibited two excerpts from textbooks.

The Journal Articles 42 The journal articles tendered by the respondent comprise reports on the methodology and results of scientific experiments, some of which were conducted in respect of the field of ophthalmology and some of which were conducted for purposes unconnected with ophthalmology. 43 The first four journal articles (Exhibits SS-1 to SS-4) were published in the period between 1974 and 1984. Two of those articles were published in Australia and two were published overseas. The two articles which were published overseas were nonetheless held in libraries in Australia. 44 The first overseas article (Exhibit SS-1) was published in the September/October 1974 edition of a US journal called Clinical and Experimental Pharmacology & Physiology. There was no evidence as to the readership of that journal at that time nor was there any evidence as to its circulation then or subsequently. There is mention in that journal article of "Earle's Balanced Salt Solution (BSS)" and "Earle's Balanced Salt Solution (BSS) (Earle, 1943)". For the purposes of the experiment referred to in the article, Earle's Balanced Salt Solution appears to have been used as a suspension medium. The subject matter of the article has nothing to do with ophthalmology or the irrigation of human eye tissues during surgery. After the initial mentions of "Earle's Balanced Salt Solution", the text included several references to "BSS". The letters "BSS" appear only after the initial mentions which I have recorded above. Earle's Balanced Salt Solution was a particular brand of balanced salt solution available in the USA in 1974. 45 The second overseas article (Exhibit SS-2) was published in the July 1976 edition of a US journal called Experimental Cell Research. There was no evidence as to the readership of that journal in July 1976 nor was there any evidence as to its circulation at that time or subsequently. By 2008, a copy of this article was held in 20 libraries in Australia. In the Summary appearing at the front of the article, the following text appears: To test this, explants were incubated in a glucose-containing balanced salt solution (Earle's BSS). 46 Subsequently, in the same article, there are references to "BSS", "the BSS", "Earle's BSS" and "Earle's balanced salt solution". One of the sub-headings under "RESULTS" is: Incubation in balanced salt solution (BSS). 47 The first of the individual journal articles which was published in Australia (Exhibit SS-3) was published in the July 1981 edition of the journal called Pathology. At that time, this was the journal of the Royal College of Pathologists of Australasia. This article has nothing to do with ophthalmology or the irrigation of human eye tissues during surgery. In the Summary appearing at the beginning of the article, the following text appears: … thin slices of normal canine ventricle were incubated under hypoxic conditions at 37°C and physiological pH in balanced salt solution (BSS). 48 There then follows in the balance of the Summary and in the body of the article a number of references to "BSS". There is also one subsequent reference to "… a balanced salt solution (BSS)". 49 The second of the individual journal articles which was published in Australia (Exhibit SS-4) was published in the February 1984 edition of the Australian Journal of Ophthalmology. Under the heading "Intraocular Infusion Fluids", the following appears: During lens aspiration (and vitrectomy) the volume of the eye is maintained by continuous infusion of electrolytes as Ringer's, Hartmann's or balanced salt solution (BSS Alcon) warmed to 37°C which acts as the medium for the transport of soft lens matter. 50 In that article, there is one subsequent reference to "balanced salt solution (BSS Alcon)". The Ringer's and Hartmann's products referred to in the extract from this article quoted at [49] above were not balanced salt solutions, although they were solutions in use in 1984 as sterile irrigating solutions during ophthalmic procedures. 51 The first group of journal articles exhibited to Ms Stubbs' first affidavit (Exhibit SS‑5) comprised 15 articles from the journal called Clinical and Experimental Ophthalmology (formerly known as The Australian and New Zealand Journal of Ophthalmology) which is the journal published on behalf of the Royal Australian and New Zealand College of Ophthalmologists. One journal article in this group was published in 1989, 11 in the period between 2003 and 2006 and three in 2007. 52 The article published in 1989 includes the following: Calcium alginate swabs moistened with balanced salt solution (BSS) were taken from the lower lid margins and conjunctiva as previously described. Separate swabs were transported in 0.3 mL of BSS to the laboratory where the calcium alginate strands were loosened by vortexing with 1.5 ml of Eagle Earl BSS and then dissolved by further vortexing with 1.3 ml of 2.5% sodium metaphosphate pH 7.2 solution. 53 In the subsequent articles, there were similar references to "balanced salt solution (BSS)" as well as some references to "BSS" preceded immediately by a particular reference to a brand name eg "Eagle Earl BSS". Further, there also appeared in these journal articles references to "BSS" on its own, but only after an earlier mention of "balanced salt solution (BSS)". Many of the uses documented in these journal articles were use as a sterile irrigating solution although some involved laboratory use only as a suspension medium or incubation medium. There is no example in this group of journal articles of the use of the letters "BSS" without a prior reference to "balanced salt solution (BSS)". 54 The second group of journal articles exhibited to Ms Stubbs' first affidavit (Exhibit SS-6) comprises 34 articles published in The Journal of Immunology which is a journal published in the USA by the American Association of Immunologists. The period covered by this group of journal articles is 1976 to 2004. None of the tests or experiments documented in these journal articles involved the use of balanced salt solution as a sterile irrigating solution for human eye tissues. Many of them documented experiments carried out in the laboratory only. 55 The use of the expressions "balanced salt solution (BSS)" or similar expressions and the acronym "BSS" in these journal articles was the same as the use in the 15 articles published in the journal called Clinical and Experimental Ophthalmology to which I have referred at [51]-[53] above. That is to say, the acronym BSS never appeared on its own without a prior reference to "balanced salt solution". Often that expression was immediately followed by the letters "BSS" or, on some occasions, immediately preceded by those letters. 56 The next group of journal articles (Exhibit SS-7) comprises 41 articles published in the journal called Investigative Ophthalmology & Visual Science in the period from 1973 to 2006. This journal is the official journal of the Association for Research in Vision and Ophthalmology, which is a professional association operating in the USA. Some of these articles relate to the use of the relevant balanced salt solution for the purpose of irrigating human eye tissues; some concerned the irrigation of animal eye tissues and a number involve no use connected with the irrigation of human eye tissues. The use of the acronym "BSS" in these 41 articles is the same as the use of that acronym in the last two groups of journal articles to which I have referred. Again, the acronym is never used without a prior reference to the expression "balanced salt solution" either in conjunction with the acronym or a particular brand of balanced salt solution or both. 57 The final group of journal articles (Exhibit SS-8) comprise 23 articles from miscellaneous overseas sources, some of which concerned ophthalmology and many of which do not. The period covered by these articles is 1966 to 1998. 58 The picture of usage shown in this group of articles is precisely the same as that shown in the prior three groupings.

The Dictionaries 59 The respondent tendered as Exhibit SS-9 various excerpts from various editions of a publication styled Acronyms, Initialisms, & Abbreviations Dictionary. This publication is published in the USA. The editions tendered in evidence are all found in the State Library of New South Wales. In each edition, "BSS" is shown as an abbreviation or acronym for a number of terms ranging in number from 20 to approximately 60. Nonetheless, included within that group of entries is an entry as follows: BSS … balanced salt solution; or BSS … balanced salt solution [cell incubation medium] 60 An excerpt from the 38th Edition (2007) of the publication styled Reverse Acronyms, Initialisms & Abbreviations Dictionary published by Thompson/Gale in the USA was tendered (Exhibit SS-10). This publication is also found in the State Library of New South Wales. The entry in this document is in the following terms: Balanced salt solution [cell incubation medium] … BSS 61 The respondent also tendered an extract from the 7th Edition (1986) and the 8th Edition (1992) of a publication styled Abbreviations Dictionary by Ralph De Sola published in the USA (Exhibit SS-11). These publications were also found in the State Library of New South Wales. The first of these had the following entry: bss … balanced salt solution … buffered saline solution 62 The 8th Edition had the following entries: bss … balanced salt solution bss … buffered saline solution 63 Each edition shows the acronym "BSS" as referable to many other items eg "basic shaft system".

The Textbooks 64 Excerpts from two textbooks were also tendered as Exhibits SS-12 and SS-13. In each of those textbooks, there is one reference to "balanced salt solution (BSS)". In one case, there are three subsequent references to "BSS".

Other Evidence 65 The respondent also tendered evidence of a general nature which provides some indication in a global sense of the number of occasions in the period 2002-2007 on which various online versions of the published material were searched by someone as well as evidence that many of the publications were held in various libraries throughout Australia. 66 In addition, the respondent established that the journal called Clinical and Experimental Ophthalmology was published nine times a year and was distributed regularly to its members.

Submissions (Admissibility) 67 The respondent submitted that the journal articles, dictionaries and textbook excerpts were all admissible. The applicant maintained its objection to the tender of all of these publications with the exception of the journal article published in Australia in the February 1984 edition of the Australian Journal of Ophthalmology (Exhibit SS-4 to Ms Stubbs' first affidavit) (as to which see [49]-[50] above) and some of the journal articles comprised in Exhibit SS-5 to Ms Stubbs' first affidavit. 68 The applicant objected to the tender of this material on the sole ground that none of it was relevant because even if all of this material were to be accepted, none of it could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceedings (s 55(1) of the Evidence Act 1995 (Cth)). 69 The respondent submitted that the material in respect of which the applicant maintained its objection was probative of the fact that, throughout the period from at least March 1988 to December 2006, persons in the relevant trade in Australia used the letters "BSS" as a descriptive acronym of a substance viz "balanced salt solution". It was said that, if that fact could be established, the respondent would then probably be able to persuade the Court that: (a) As at 6 December 2006, the letters "BSS" did not distinguish the balanced salt solution supplied by the applicant under the name "BSS" from sterile ophthalmic irrigating solutions supplied by others; (b) As at 22 March 1988, the letters "BSS" were not capable of distinguishing the balanced salt solution supplied by the applicant under the name "BSS" from sterile ophthalmic irrigating solutions supplied by others; and (c) By 6 December 2006, the letters "BSS" had become generally accepted within the relevant trade in Australia as being generic or merely descriptive of a substance, namely, "balanced salt solution". 70 If these matters were established, the respondent would very likely be entitled to an order that the applicant's BSS trade mark be cancelled. Some of these matters would also be relevant to the respondent's defence to the applicant's infringement case (in particular, the defence under s 122(1)(b)(i)). 71 The applicant submitted that all of the journal articles originally published overseas, the overseas dictionaries and the excerpts from the two textbooks originally published overseas should all be rejected as not being relevant to distinctiveness as at 6 December 2006 because none of those publications could conceivably be relevant to the Court's determination of that question. The applicant also submitted that, given that a trade mark is a purely territorial concept which is legally operative and effective only within the territory within which it is used and for which it is registered or for which it is to be registered, it was of no moment that, in various publications originally published overseas, there was demonstrated a use of the letters "BSS" which could arguably support the respondent's contention that the letters had become descriptive of "balanced salt solution". In support of its objection, the applicant relied upon the following passage in the judgment of Gibbs J (as he then was) in Burger King Corporation v Registrar of Trade Marks (1973) 128 CLR 417 at 422-423: On the other hand, the evidence that the word has been extensively used in the United States of America and has there become widely known as indicating the goods of the applicant only, is in my opinion in a different situation. On this point counsel for the Registrar referred me to certain authorities whose effect is summed up in the following passage from the judgment of Tomlin J. (as he then was) in Impex Electrical Ltd. v. Weinbaum [(1927) 44 R.P.C. 405, at p. 410], which has been accepted, by this Court as well as in the United Kingdom, as a correct statement of the law (see Re Notox Ltd.'s Application [(1930) 48 R.P.C. 168, at p. 178]; Re Gaines Animal Foods Ltd's Application [(1951) 68 R.P.C. 178, at p. 179]; de Cordova v. Vick Chemical Co. [(1951) 68 R.P.C. 103, at p. 107]; and The Seven Up Co. v. O.T. Ltd. [(1947) 75 C.L.R. 203, at pp. 215, 216]):

"For the purpose of seeing whether the mark is distinctive, it is to the market of this country alone that one has to have regard. For that purpose foreign markets are wholly irrelevant, unless it be shown by evidence that in fact goods have been sold in this country with a foreign mark on them, and that the mark so used has thereby become identified with the manufacturer of the goods."

Those cases are authority for the proposition that in deciding whether a mark is distinctive, user within the jurisdiction only is to be taken into account. However, in the present case the question is a different one, namely, whether evidence of user overseas is admissible on the issue whether a trade mark is capable of becoming distinctive.

Decision on Admissibility 72 I think that these submissions made on behalf of the applicant in support of its objection to all of the overseas material sought to be tendered by the respondent are correct. In my view, it is a long bow for the Court to draw to find that use in the relevant trade in Australia can be established by the availability here of journals, dictionaries and textbooks published overseas which, to some extent, may have been read or looked at by persons participating in that trade. The evidence as to who read this material and when is vague and general. Further, the dictionaries and textbooks can only prove use in the places to which they relate. There was no evidence to suggest that these latter sources related to Australia. For these reasons, I will not admit these overseas materials into evidence for the purpose of establishing that the letters "BSS" did not, as at 6 December 2006, distinguish the applicant's BSS balanced salt solution from sterile ophthalmic irrigating solutions supplied by others within s 234(2) of the Act. 73 Distinctiveness in fact as at 22 March 1988 may be relevant to the respondent's case for cancellation of the applicant's BSS trade mark pursuant to ss 88(1)(a), 88(2)(a), 57 and 41 of the Act. For the same reasons as those advanced for not admitting into evidence the material to which objection was taken for the purpose of establishing lack of distinctiveness as at 6 December 2006, I will not admit that material for the purpose of establishing lack of distinctiveness in fact as at 22 March 1988. 74 A second substantial objection advanced by the applicant to those publications was that they were not connected with the relevant trade. These are the scientific journals which do not relate at all to ophthalmology. The applicant submitted that publications tending to show use which is not use in the relevant trade were not admissible to demonstrate that the particular use had become generally accepted within the relevant trade as a sign that describes or is the name of a substance. The applicant submitted that the relevant principle was that a trade mark loses distinctiveness pursuant to s 87 and s 24 of the Act because persons trading in goods of the relevant kind being actuated by proper motives will think of the registered trade mark and want to use it as a name for an article or substance. It seems to me that, for material to be relevant and admissible on the questions posed for the Court by the respondent's case based upon s 87 and s 24 of the Act, it must be material which is logically capable of demonstrating use in the relevant trade. In the present case, much of the non-ophthalmic scientific material is, as the applicant submitted, without a whole lot more, not capable of establishing use in the relevant trade. In the present case, there is no other evidence which connects this material to the relevant trade. I therefore rule that only those publications which have some arguable connection with the supply of sterile ophthalmic irrigating solutions in Australia and which are otherwise admissible should be admitted into evidence on the question of whether, after registration (ie after 22 March 1988) and by 6 December 2006, the letters "BSS" had become generic or descriptive of "balanced salt solution". 75 This latter category of material may also have some relevance to the respondent's defences to the applicant's infringement case. They will be admitted on that basis as well. 76 For the above reasons, the following documents are admitted into evidence for the purposes stated (and for no other purpose): (a) The journal article which is Vol 12, No 1, February 1984 of Australian Journal of Ophthalmology (formerly Exhibit SS-4 to Ms Stubbs' first affidavit) on the questions of whether, as at 22 March 1988, the letters "BSS" were capable of distinguishing the applicant's BSS balanced salt solution from sterile ophthalmic irrigating solutions supplied by others in Australia and whether those letters subsequently became descriptive of the product known as "balanced salt solution"; and (b) All of the journal articles comprised in Exhibit SS-5 to Ms Stubbs' first affidavit on the same questions. Otherwise, I reject the tender of all of the documents comprised in Exhibits SS-1, SS-2, SS-3 and SS-6 to SS-13 to Ms Stubbs' first affidavit.

The Essence of the Respondent's Case for Cancellation of the Applicant's BSS Trade Mark

The Gateway 77 The applicant's BSS trade mark was registered under the Trade Marks Act 1955 (Cth) (the 1955 Act). Pursuant to s 234(2)(e) of the Act, which is found in Div 2 of Pt 22 of that Act ("Marks Registered under the Repealed Act"), in any legal proceedings the applicant's BSS trade mark is taken to be valid in all respects after a period of seven years from the date of registration (in the present case, therefore, after 22 March 1995) unless it is shown that: … the trade mark did not, at the commencement of the proceedings, distinguish the goods or services of the registered owner in relation to which the trade mark is used from the goods or services of other persons. (See subss (1)(a), (2)(a) and (2)(e) of s 234). There are other exceptions to this presumption but they are not presently relevant. The presumption of validity provided for in s 234 can be displaced in any given case if the requirements of s 234(2)(e) are satisfied. The party seeking to displace that presumption bears the onus of showing that the trade mark owner's goods lack distinctiveness. 78 In the present case, the respondent bears the onus of proving absence of distinctiveness as at the date when it filed its Cross-Claim (ie as at 6 December 2006). 79 Section 234 has been described as a "gateway" opening the way for a challenge to the continued registration of a trade mark. In TGI Friday's Australia Pty Ltd v TGI Friday's Inc (2000) 100 FCR 358 at [32]-[36] (p 364), the Full Court discussed s 234. At [35]-[36], the Court said: 35 Section 234(2) does not of itself authorise rectification of the Register by cancellation of a trade mark or otherwise. Rather, the subsection acts as an impediment to any proceeding alleging invalidity. Any application by Friday's Australia and Big Country for rectification of the Register must be made under s 88 of the 1995 Act.

36 Even if, as Friday's Australia and Big Country contend, s 234(2)(d) or (e) applies in this case, the consequence is only that the conclusive presumption of validity does not arise. Satisfaction of one of the conditions in s 234(2) does not, of itself, constitute a ground under s 88(2) of the 1995 Act for rectification of the Register. Therefore, in addition to agitating the question of renewal, Friday's Australia and Big Country seek to establish grounds within s 88(2) that satisfy s 234. 80 The respondent contended that it discharged its onus of proving that the applicant's BSS trade mark did not, as at 6 December 2006, distinguish the applicant's BSS balanced salt solution from the goods or services of other persons. I shall consider this contention when I come to evaluate the grounds for cancellation of that trade mark relied upon by the respondent. 81 Assuming for the moment that the respondent was able to pass through the s 234 gateway, it then relied upon two grounds in support of its claim that the applicant's BSS trade mark should be removed from the Register.

Ground 1 (Trade Mark Not Distinctive as at Application Date) 82 The respondent submitted that, as at 22 March 1988, the letters "BSS" were used by ophthalmologists, nurses, pharmacists and traders in ophthalmic products in Australia and overseas as an acronym or abbreviation for "balanced salt solution" in connection with sterile eye irrigation products. It also argued that those letters were used as at that date in the same way by persons involved in medical research generally including doctors and other persons undertaking research in Australia and overseas. 83 The respondent went on to contend that, were those submissions to be accepted, the applicant's BSS trade mark should be cancelled pursuant to the provisions of s 88(1)(a) and s 88(2)(a) of the Act. Those provisions authorise the cancellation of a trade mark (including a trade mark registered under the 1955 Act provided s 234(2) is satisfied) if the party seeking cancellation satisfies the Court of the existence of grounds which would have led to successful opposition to the registration of the trade mark had those grounds been raised at the time when the application for registration was made. 84 Subject to an exception which is not presently relevant, s 57 of the Act provides that the registration of a trade mark may be opposed on any of the grounds on which an application for the registration of a trade mark may be rejected under the Act. 85 Section 41(2) deals with the mandatory rejection of an application for registration of a trade mark and is in the following terms: 41 Trade mark not distinguishing applicant's goods or services

(2) An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant's goods or services in respect of which the trade mark is sought to be registered (designated goods or services) from the goods or services of other persons.

Note: For goods of a person and services of a person see section 6. 86 In deciding whether the particular trade mark is capable of distinguishing the designated goods of the applicant from the goods of other persons, s 41(3) requires the Registrar to first of all take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods from the goods of other persons. If the Registrar is unable to decide whether the particular trade mark is capable of distinguishing the applicant's designated goods from those of others (after considering the matter covered by s 41(3)), then the provisions of subs (5) and subs (6) of s 41 apply (see s 41(4)). Those provisions are in the following terms: (5) If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services:

(a) the Registrar is to consider whether, because of the combined effect of the following:

(i) the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;

(ii) the use, or intended use, of the trade mark by the applicant;

the trade mark does or will distinguish the designated goods or services as being those of the applicant; and

(b) if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services - the trade mark is taken to be capable of distinguishing the applicant's goods or services from the goods or services of other persons; and

(c) if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services - the trade mark is taken not to be capable of distinguishing the applicant's goods or services from the goods or services of other persons.

Note 1:For goods of a person and services of a person see section 6.

Note 2:Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).

(6) If the Registrar finds that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply:

(a) if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant - the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;

(b) in any other case - the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.

Note 1:Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:

(a) the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or

(b) the time of production of goods or of the rendering of services.

Note 2:Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8). 87 Those subsections require the Registrar to consider the use or intended use of the trade mark by the applicant and its predecessors, whether the applicant's goods are, in fact, distinguished from the goods of other persons because of the trade mark and any other relevant circumstances. All of these matters must be considered as at the date of the application for registration of the trade mark. In the present case, they must be considered as at 22 March 1988. 88 The respondent argued that: (a) The applicant's BSS trade mark was not to any extent whatsoever inherently adapted to distinguish the applicant's BSS balanced salt solution from balanced salt solutions and sterile irrigating solutions supplied by others; and (b) The applicant would have been unable to establish distinctiveness in fact as at 22 March 1988 had it been required to do so with the consequence that the applicant's BSS trade mark is taken not to be capable of distinguishing its BSS balanced salt solution from the balanced salt solutions and sterile irrigating solutions supplied by others (s 41(5) and s 41(6), esp s 41(6)(b)).

Ground 2 (Loss of Exclusive Right to Use a Trade Mark Which Has Become Descriptive After Registration) 89 This ground is advanced as an alternative to Ground 1. The respondent relies upon s 24 and s 87 of the Act. Those sections are in the following terms: 24 Trade mark consisting of sign that becomes accepted as sign describing article etc.

(1) This section applies if a registered trade mark consists of, or contains, a sign that, after the date of registration of the trade mark, becomes generally accepted within the relevant trade as the sign that describes or is the name of an article, substance or service.

Note: For registered trade mark, sign and date of registration see section 6.

(2) If the trade mark consists of the sign, the registered owner:

(a) does not have any exclusive rights to use, or authorise other persons to use, the trade mark in relation to:

(i) the article or substance or other goods of the same description; or

(ii) the service or other services of the same description; and

(b) is taken to have ceased to have those exclusive rights from and including the day determined by the court under subsection (4).

(3) If the trade mark contains the sign, the registered owner:

(a) does not have any exclusive rights to use, or authorise other persons to use, the sign in relation to:

(i) the article or substance or other goods of the same description; or

(ii) the service or other services of the same description; and

(b) is taken to have ceased to have those exclusive rights from the day determined by the court under subsection (4).

(4) For the purposes of subsections (2) and (3), a prescribed court may determine the day on which a sign first became generally accepted within the relevant trade as the sign that describes or is the name of the article, substance or service.

Note: For prescribed court see section 190. … 87 Amendment or cancellation - loss of exclusive rights to use trade mark

(1) If section 24 or 25 applies in relation to a registered trade mark, a prescribed court may, on the application of an aggrieved person or the Registrar, but subject to subsection (2) and section 89, order that the Register be rectified by:

(a) cancelling the registration of the trade mark; or

(b) removing or amending any entry in the Register relating to the trade mark;

having regard to the effect of section 24 or 25 (as the case may be) on the right of the registered owner of the trade mark to use the trade mark, or any sign that is part of the trade mark, in relation to particular goods or services.

(2) If section 24 or 25 applies in relation to the trade mark because the trade mark contains a sign that:

(a) has become generally accepted within the relevant trade as the sign that describes or is the name of an article, substance or service; or

(i) an article or substance that was formerly exploited under a patent; or

(ii) a service that was formerly provided as a patented process;

the court may decide not to make an order under subsection (1) and allow the trade mark to remain on the Register in respect of:

(c) the article or substance or goods of the same description; or

(d) the service or services of the same description;

subject to any condition or limitation that the court may impose.

Note 1:Sections 24 and 25 provide that the registered owner of a trade mark does not have exclusive rights to use, or to authorise the use of, the trade mark if it consists of, or contains, a sign that:

(a) becomes generally accepted within the relevant trade as the sign that describes or is the name of an article, substance or service; or

(b) is the only commonly known way to describe or identify an article formerly exploited under a patent, or a service formerly provided as a patented process, where the patent has expired more than 2 years ago.

Note 2:For registered trade mark, registered owner and Register see section 6.

Note 3:For prescribed court see section 190. 90 The respondent submitted that the letters "BSS" have become generally accepted within the relevant trade as describing or being the name of a substance viz balanced salt solution within s 24(1). For the purposes of s 24(4), the respondent submitted that the applicant's BSS trade mark became generic on 6 December 2006.

Consideration of the Gateway, Ground 1 and Ground 2 - Should the Applicant's BSS Trade Mark be Cancelled? 91 For the purposes of both s 87 and s 88 of the Act, the applicant conceded that the respondent is "an aggrieved person" and thus has standing to prosecute its Cross-Claim.

The Gateway 92 Section 234(2)(e) is engaged if the party attacking the validity of the particular trade mark satisfies the Court that the applicant's designated goods lack distinctiveness in fact as at the date of the commencement of the relevant proceedings. 93 In the present case, the respondent bears the onus of proving that, as at 6 December 2006, the applicant's BSS trade mark did not distinguish the applicant's BSS balanced salt solution from sterile ophthalmic irrigating solutions supplied by others in Australia. 94 The applicant proved that, as at 6 December 2006: (a) In the Australian Prescription Products Guide published in the period from 1991 to 2006, the only use of the letters "BSS" was in conjunction with the applicant's corporate name. The entries are "BSS (Alcon)" and "BSS Plus (Alcon)". The general format of entries in that guide suggests that the letters "BSS" were intended to signify a trade mark or trade name of a particular product with the manufacturer or supplier identified by the reference in the brackets; (b) Purchasing entities on behalf of State governments generally described the relevant products generically as "balanced salt solution" or "sterile solution for eye irrigation" or "intraocular irrigating solution" as demonstrated by Requests for Tender documents tendered in evidence. With only one exception, when the letters "BSS" appeared in those documents, they were clearly used as a reference to the applicant's BSS balanced salt solution. The exception was in the Request for Tender document for Western Australia circulated in late 2006 which referred to the relevant item in a column headed "Product Description" as "Balanced Salt Irrigation Solution (BSS) For Eyes"; and (c) The practice of staff employed at the Royal Victorian Eye and Ear Hospital was to use the expression "balanced salt solution" to describe the substance or product and only to use "BSS" in a trade mark sense as referring to the applicant's "BSS" balanced salt solution. This practice had obtained for many years, probably going back to at least the late 1980s. 95 In support of its contention that the letters "BSS" did not distinguish the applicant's BSS balanced salt solution from others as at 6 December 2006, for the purposes of s 234(2)(e) of the Act, the respondent relied upon the assertions of Ms Stubbs set out in par 3 of her first affidavit (as to which see [39] and [40] above) and the publications upon which I have now ruled. The respondent called no trade evidence. Mr Stamp did not give evidence on this point. 96 Ms Stubbs had very little knowledge or experience of ophthalmic products before October 2004 when she commenced her employment with the respondent. The assertion which she made in par 3 of her first affidavit was general and not specifically referable to the field of ophthalmology. I do not give that assertion much weight. 97 I have ruled that most of the publications tendered by the respondent directed to the present question are inadmissible. However, some of the journal articles published in Australia were admitted into evidence (Exhibits SS-4 and SS-5 to Ms Stubbs' first affidavit). 98 A fair reading of those journal articles suggests that, when used in those articles, the letters "BSS" were almost always being used by the authors as an editorial abbreviation for "balanced salt solution". This does not prove lack of distinctiveness. The letters "BSS" never appear on their own in those journal articles without a prior reference to "balanced salt solution". The contents of the journal articles are, at best, neutral on the question of whether the letters "BSS" were used descriptively by December 2006. If anything, they tend to suggest that those letters were not used in that way at that time. This is because, in every case, it was necessary to refer to the product by its full name ("balanced salt solution") before the acronym "bss" could sensibly be deployed. The one example of use of the letters "BSS" in government Request for Tender documents is in the same category. 99 Until the respondent began using the letters "BSS" on its 19 ml plastic bottle of AQSIA™ brand balanced salt solution in June 2006, no trader in Australia had manifested a desire to use the letters "BSS" as a generic product name. The evidence before me suggested the contrary - that traders were careful to use their own brand names and trade marks without resort to the letters "BSS". Very often those brand names and trade marks were used in conjunction with the generic name "balanced salt solution". 100 The overseas publications which I have not admitted into evidence do not show a picture which is different from that shown in the journals published in Australia which were admitted into evidence. Indeed, they show the same picture. 101 Had the rejected overseas publications been admitted into evidence, my conclusions on distinctiveness as at 6 December 2006 would not have been different. 102 For these reasons, the respondent has failed to discharge its onus of proving that the applicant's BSS trade mark did not, as at 6 December 2006, distinguish the applicant's BSS balanced salt solution from sterile ophthalmic irrigating solutions supplied by others in Australia. The respondent has not satisfied the requirements of s 234(2)(e) of the Act. The presumption of validity of the applicant's BSS trade mark provided for in s 234 remains in place. The respondent's case for cancellation of the applicant's BSS trade mark fails at the outset because the respondent has not been able successfully to negotiate the gateway of s 234(2) and thus cannot rely upon ss 88, 57, 41, 87 and 24 of the Act in support of its case for cancellation of that trade mark. 103 Should I be wrong in these conclusions, I will now turn to consider the grounds for cancellation of the applicant's BSS trade mark relied upon by the respondent.

Ground 1 (Trade Mark Not Distinctive as at Application Date) 104 At [82]-[88] above, I have explained the way in which the respondent put this ground. 105 Under s 41(2) of the Act, a mandatory ground of rejection of the registration of a trade mark is that the trade mark is not capable of distinguishing the applicant's goods or services in respect of which the trade mark is sought to be registered (defined as "designated goods or services") from the goods or services of other persons. This question must be decided in the present case as at 22 March 1988. It is, of course, retrospectively hypothetical. The first task which the Registrar would have had to undertake in considering this question in respect of the applicant's BSS trade mark would have been to determine the extent to which the applicant's BSS trade mark was inherently adapted to distinguish its BSS balanced salt solution from the goods of other persons as at that date. If, after considering that matter, the Registrar was unable to decide whether the applicant's BSS trade mark was capable of distinguishing its BSS balanced salt solution from the goods of other persons, then the provisions of subs (5) and subs (6) of s 41 would have come into play. 106 It was common ground between the parties that the relevant principle governing inherent adaptability was that stated by Kitto J in Clark Equipment Company v Registrar of Trade Marks (1964) 111 CLR 511 at 514 where, after discussing the well-known observations of Lord Parker of Waddington in Registrar of Trade Marks v W & G Du Cros Ltd [1913] AC 624 at 634-635, his Honour said: … the question whether a mark is adapted to distinguish [must] 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. 107 These remarks of Kitto J were made in respect of the 1955 Act. However, the Full Court of this Court has taken the same approach to the question of inherent adaptability for the purposes of s 41(3) of the Act (see Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks (2002) 122 FCR 494 at [47]-[49] (pp 510-511) (per French J), at [80]-[100] (pp 518-522) (per Lindgren J) and at [145]-[148] (pp 532-533) (per Stone J); and Colorado Group Ltd v Strandbags Group Pty Ltd (2007) 164 FCR 506 at [36] (pp 517-518) (per Gyles J) and at [125] (p 539) (per Allsop J)). 108 The respondent submitted that the question for present purposes was whether other traders might have wanted to use the letters "BSS" as signifying the product known as "balanced salt solution", absent improper motive. This question, so it was submitted, is to be considered absent the registration of the applicant's BSS trade mark and is a largely hypothetical inquiry, although it may be informed by what traders have, in fact, done. 109 There is no doubt that, as at 22 March 1988, other traders in the relevant trade might have wanted to use the words "balanced salt solution" to describe that class of sterile ophthalmic irrigating solutions which broadly comprised the constituents set out at [30] above. Those words are ordinary English words. They constitute the generic name for the relevant product. They are descriptive of the relevant product. 110 Further, the letters "bss" can appropriately be described as an abbreviation for "balanced salt solution". 111 But the present question is: Would the relevant traders want to use the acronym (absent improper motive) as distinct from the full expression, "balanced salt solution"? 112 An anterior question is: Did the letters "bss" have a particular signification which was generally understood as at 22 March 1988 in the relevant trade and was that signification as an acronym for "balanced salt solution"? In other words, were those letters used as a descriptive acronym for "balanced salt solution"? 113 No trader in the relevant trade in Australia (other than the respondent in respect of one container of its AQSIA™ brand of balanced salt solution) has sought to use the letters "bss" in respect of its balanced salt solution product. To the contrary, with the exception of the respondent, all of those traders have respected the applicant's BSS trade mark. 114 Further, all traders have had a perfectly efficacious and acceptable alternative description available to them viz "balanced salt solution". 115 The respondent submitted that: (a) Nothing could be more apt to describe the product known as "balanced salt solution" than the letters "bss"; (b) Assistance in deciding the question is provided by the geographical name cases (see, for example, Clark Equipment Company 111 CLR 511; and Chancellor, Masters and Scholars of the University of Oxford (t/as Oxford University Press) v Registrar of Trade Marks (1990) 24 FCR 1); (c) There was evidence of actual use constituted by the publications tendered by the respondent which demonstrated that persons operating in the relevant trade used the letters "bss" to signify "balanced salt solution" both generically and in a trade mark sense; and (d) A mark constituted by a combination of letters will often not be inherently adapted for trade mark use (see W & G Du Cros Ltd [1913] AC at 635-636). 116 Only one journal article tendered by the respondent was published in Australia prior to 22 March 1988 (Exhibit SS-4 to Ms Stubbs' first affidavit). The only references to "bss" in that article were as follows: "balanced salt solution (BSS Alcon)". This journal article does not support the respondent's case on inherent adaptability of the letters "bss". It supports the contrary position. 117 The general submissions captured in subpar (b) and subpar (d) of [115] above do not assist much in resolving the present question. And, whilst the submission made in subpar (a) might well be correct if the letters "bss" were generally understood as at 22 March 1988 in the relevant trade in Australia as ordinarily descriptively signifying "balanced salt solution", the evidence before me does not support the proposition that they were so understood. Indeed, it is worth noting that the extracts from dictionaries tendered by the respondent, and rejected by me, suggest that, at various times overseas, the letters "bss" could signify all manner of things. 118 It is now clear that, as far as the Registrar of Trade marks is concerned, trade marks consisting of three or more letters are inherently capable of distinguishing the owner's goods from those of others. The mere fact that the trade mark consists of a combination of letters is not sufficient to raise any presumption or bias in favour of a conclusion that such trade marks are not inherently adapted to distinguish the applicant's goods from those of other persons. This approach reflects the difference in language between the relevant provisions of the 1955 Act which required that the trade mark had to be distinctive and s 41 of the Act which requires that it be "capable of distinguishing". 119 In Air Express International (Australia) Pty Ltd v Australian European Insurance (Brokers) Pty Ltd (1999) 49 IPR 435, in dismissing opposition to an application for registration of the letters "AEI" and a logo comprised of those letters in a stylised format, the Deputy Registrar of Trade Marks said (at 439-440): The question of trade marks consisting of three letters has long been an issue for the registrar. Under the old law, the Trade Marks Act 1955 (Cth), where it was a question of whether a trade mark was distinctive, three letter marks were, in the main, treated as not prima facie qualified for registration. This view was in line with Lord Parker's dictum that "initials are even less adapted for trade mark purposes than names": Re W & G du Cros Ltd's Application (1913) 30 RPC 660 at 672. Under the old legislation, it was the registrar's practice, prima facie, to accept three letter marks only if the letters formed a pronounceable word. The test under the new law, however, is not whether the trade mark is distinctive, but whether it is capable of distinguishing. The registrar, to this end, has adopted a new practice based on an assessment of the likelihood of others' needs to use letters, particularly as initials. It is useful for me to quote from the Trade Marks Office Draft Manual of Practice and Procedure at 22.9.

9. Letters Trade marks consisting of one or two letters are prima facie unfit for registration because of a common need for their use in the general market place. The likelihood of other traders needing to use simple unembellished combinations of one or two letters in the form of initials or abbreviations is quite high. One or two letter trade marks, unless represented in a very unusual manner, possess little inherent adaptation to distinguish and can only be registered with significant evidence of use in terms of s 41(5) and (6). There is likely to be less need for use of combinations of three or more letters and such trade marks are prima facie capable of distinguishing. For information on how the courts have treated letter trade marks, see Registrar of Trade Marks v W & G Du Cros Ltd (W & G case) 29 RPC 74 and RPC 653.

9.1 One and two letter trade marks One and two letter trade marks without significant get up are not prima facie registrable.

9.2 Three or more letter trade marks Trade marks consisting of three or more letters are prima facie capable of distinguishing unless they lack inherent adaptation to distinguish because they are well known acronyms or abbreviations used on or in relation to the goods and/or services concerned. The issue of pronunciation is not relevant …

The submission from Mr Condon is that the application trade marks are merely part of the applicant's trade name and he cites Re Application by American Tobacco Co (1996) 35 IPR 98 as support. That case, however, finds that the words "The American Tobacco Company" are generic and are therefore not capable of distinguishing one American tobacco company from another. The AEI trade marks in suite do not suffer from a generic application of that kind. The American Tobacco Co case is therefore not to the point. The evidence of the opposition certainly establishes that there is indeed one other service provider with the same initials. However, I think that a single example is not enough to find that the registrar's practice in relation to three letter marks is not a good one. AEI has not been shown to have any meaning that renders it not capable of distinguishing and I do not agree with Mr Condon that the fact it coincides with the initials of the company name of its owner indicates that it lacks that capacity. In short, I do not think it is likely that many other insurance suppliers and brokers are likely to want to use the initials AEI. I therefore find that, in terms of s 41, there is no ground for rejection. 120 Similar views were expressed by a delegate of the Registrar in HCA Colours Australia Pty Ltd v Holland Colours NV (2003) 59 IPR 507 at 516-517 and in Crooks Michell Peacock Stewart Pty Ltd v Kaiser (t/as Commercial Art & Industrial Design) (1994) 29 IPR 225 at 232. 121 Of course, if the acronym is established as signifying the product whose full name is represented by the acronym and is commonly known in the relevant trade as signifying that product, then the letters would not be inherently adapted to distinguish. Proof of that matter must be undertaken and effected by evidence. It is not simply a matter of guesswork or intuition on the part of the Judge. 122 The respondent has failed to establish that, as at 22 March 1988, the applicant's BSS trade mark was not inherently adapted to distinguish its BSS balanced salt solution from sterile ophthalmic irrigating solutions (including balanced salt solutions) of other persons operating in the relevant trade in Australia. 123 The respondent's case for cancellation of the applicant's BSS trade mark based on Ground 1 fails. 124 Strictly speaking, in light of the conclusions which I have reached concerning inherent adaptability, it is not necessary for me to consider s 41(5) and s 41(6). Those subsections provide, in effect, that the trade mark should be registered if the applicant can establish factual distinctiveness having regard to various facts, matters and circumstances referred to in those subsections. I will, however, briefly state my conclusions in relation to the subject matter of subs (5) and subs (6) of s 41. 125 As at 22 March 1988, the applicant (and Alcon Australia) had used the mark extensively in the promotion, marketing, offering to supply and supply of its BSS balanced salt solution. No other trader had manifested any intention to use those letters in connection with the sale of similar competing products. The letters "BSS" would very likely have operated, in fact, in the relevant trade to distinguish the applicant's BSS balanced salt solution from the goods of others. 126 The respondent bears the onus of showing that the letters BSS did not distinguish the applicant's product from those of others at that time. It has failed to discharge that onus.

Ground 2 (Loss of Exclusive Right to Use a Trade Mark Which Has Become Descriptive After Registration) 127 The question here is: Have the letters "BSS" become generally accepted within the relevant trade as the sign that describes or is the name of an article or substance viz "balanced salt solution"? The question must be answered in respect of the period after 22 March 1988 and as at 6 December 2006. This ground is an alternative to Ground 1. The onus is on the respondent to establish these matters. 128 The evidence does not support the respondent's contention. The trade evidence did not demonstrate generic use; the journal articles did not demonstrate generic use; and the applicant's own use of the letters "BSS" was not generic. 129 Section 24 contemplates that the registered trade mark will be generally accepted as the sign that describes, or is the name of, the relevant article or substance. There must be general acceptance within the relevant trade that the mark is the generic name of the article or substance. Use sometimes by some people will not be enough. Nor will the requirements of the section be satisfied if the mark is only one of two or more generic names for the article or substance. 130 In the present case, the generic name for the particular article or substance is "balanced salt solution". Balanced salt solution is a particular type of sterile ophthalmic irrigating solution with a particular mix of constituents. Whilst "bss" may well be an acronym for "balanced salt solution", it did not become generally accepted within the relevant period as the generic signification of "balanced salt solution" or of the particular type of sterile irrigating solution comprising the constituents of standard balanced salt solution. The most that can be said, on the evidence, is that the letters "BSS" were sometimes used in the relevant period in scientific journal articles as a convenient editorial abbreviation for "balanced salt solution". Such a use does not demonstrate "general acceptance" in the relevant trade that the mark is the generic name. This is especially so in circumstances where the respondent has chosen to base its case on this point almost entirely on the publications which it tendered, most of which were authored and published overseas. The respondent called no doctor, no nurse, no pharmacist, no purchasing officer - indeed, it called no third party participant in the relevant trade. 131 The applicant, on the other hand, called trade evidence. That evidence established: (a) The generic name for the relevant product is "balanced salt solution"; (b) Where there is reference to a proprietary balanced salt solution, the trade uses each supplier's trade mark - AQSIA™ for the respondent's product; Endosol for the Advanced Medical Optics Inc product; and BSS for the applicant's product; and (c) None of the suppliers into Australia of "balanced salt solution" (with the exception of the respondent in respect of the allegedly infringing product) has ever used "BSS" to signify its product. Rather, each of them used the expression "balanced salt solution". 132 The respondent has failed to discharge its onus of proving that the letters "BSS" became generic or descriptive in the period after 22 March 1988 and as at 6 December 2006. The respondent's case based upon s 87 and s 24 of the Act also fails. 133 For the above reasons, I do not need to consider s 89 of the Act. However, I will do so against the possibility that I am wrong in the conclusions which I have reached in respect of Ground 2. 134 Section 89 of the Act is in the following terms: 89 Rectification may not be granted in certain cases if registered owner not at fault etc.

(1) The court may decide not to grant an application for rectification made:

(b) on the ground that the trade mark is liable to deceive or confuse (a ground on which its registration could have been opposed, see paragraph 88(2)(a)); or

(c) on the ground referred to in paragraph 88(2)(c);

if the registered owner of the trade mark satisfies the court that the ground relied on by the applicant has not arisen through any act or fault of the registered owner.

(2) In making a decision under subsection (1), the court:

(a) must also take into account any matter that is prescribed; and

(b) may take into account any other matter that the court considers relevant. 135 The precondition for the availability of the exercise of the discretion authorised by s 89 is that the registered owner "satisfies the court that the ground relied on by the applicant has not arisen through any act or fault of the registered owner". 136 The respondent submitted that, in the present case, the applicant used the letters "BSS" generically and permitted others to do so as well. In support of its contention that the applicant used the letters generically, it pointed to the fact that the applicant habitually used those letters in reasonably close proximity to the words "balanced salt solution". That observation is true. However, a careful consideration of the material relied upon by the respondent in support of this submission reveals that the use by the applicant of the letters "BSS" was clearly a trade mark use intended to signify its own product. The letters were always followed by the usual signification that the letters comprised a registered trade mark (namely ®) and their use was frequently associated with the applicant's corporate name. 137 There is no evidence to support the proposition that the applicant stood by and allowed others to use the letters "BSS" generically. 138 The applicant drew my attention to cl 8.2 of the Trade Mark Regulations 1995 which prescribes certain matters which must be taken into account when the Court is considering exercising of the discretion reposed in it by s 89 (see s 89(2)(a)). The matters prescribed by that regulation which are relevant to the present case are: (a) The extent to which the public interest will be affected if registration of the trade mark is not cancelled; (b) Whether any circumstances that gave rise to the application have ceased to exist; (c) The extent to which the trade mark distinguished the relevant goods and/or services before the circumstances giving rise to the application arose; and (d) Whether there is any order or other remedy, other than an order for rectification, that would be adequate in the circumstances. 139 The applicant submitted that, in the present case, only factors (a) and (c) were relevant. I agree. 140 There is no public interest in cancelling the applicant's BSS trade mark. The applicant submitted that, if the mark is not cancelled, the status quo would remain. In its submission, that meant that the trade would continue to use the expression "balanced salt solution" as the generic name for the relevant product and individual trade marks when referring to particular products, including the applicant's BSS balanced salt solution. The applicant submitted that this was a perfectly satisfactory state of affairs. I also agree with this submission. 141 As far as factor (c) referred to in [138] above is concerned, I have already found that the applicant's BSS trade mark did distinguish its BSS balanced salt solution from sterile ophthalmic irrigating solutions supplied by others as at 22 March 1988. That conclusion is to be weighed in the balance in favour of the applicant when I consider exercising the Court's discretion under s 89 of the Act. 142 If the letters "bss" had become the generic name for balanced salt solution in the period after 22 March 1988 and before 6 December 2006, I would have exercised the discretion reposed in the Court pursuant to s 89 of the Act not to cancel the mark on that ground. If the use of those letters did become generic by that date, it was through no fault of the applicant.

Use as a Trade Mark 143 Section 120(1) of the Act is in the following terms: 120 When is a registered trade mark infringed?

(1) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.

Note 3:In addition, the regulations may provide for the effect of a protected international trade mark: see Part 17A. 144 Sign is defined in s 6 of the Act as follows: sign includes the following or any combination of the following, namely, any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent. 145 In the same section, the expression use of a trade mark is defined in the following way: use of a trade mark has a meaning affected by subsections 7(1), (2) and (3).

use of a trade mark in relation to goods has the meaning given by subsection 7(4). 146 Section 7 of the Act is in the following terms: 7 Use of trade mark

(1) If the Registrar or a prescribed court, having regard to the circumstances of a particular case, thinks fit, the Registrar or the court may decide that a person has used a trade mark if it is established that the person has used the trade mark with additions or alterations that do not substantially affect the identity of the trade mark.

(2) To avoid any doubt, it is stated that, if a trade mark consists of the following, or any combination of the following, namely, any letter, word, name or numeral, any aural representation of the trade mark is, for the purposes of this Act, a use of the trade mark.

(3) An authorised use of a trade mark by a person (see section 8) is taken, for the purposes of this Act, to be a use of the trade mark by the owner of the trade mark.

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 (including second hand goods).

use of a trade mark in relation to services means use of the trade mark in physical or other relation to the services. 147 In s 17 of the Act, a trade mark is defined as follows: 17 What is a trade mark?

A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.

Note: For sign see section 6. 148 For a time, the respondent included the letters "BSS"on the label affixed to its 19 ml bottle of AQSIA™ brand balanced salt solution. That use was upon, or in physical or other relation to, those goods. The letters which appeared on that label are substantially identical to the applicant's BSS trade mark. Those letters were used by the respondent with respect to goods in respect of which the trade mark is registered. Therefore, the sole remaining question for present consideration is whether that particular use was one which is properly characterised as use as a trade mark upon those goods. That means: Was it used, or intended to be used, as a sign to distinguish the respondent's AQSIA™ brand balanced salt solution from other sterile ophthalmic irrigating solutions supplied in Australia? 149 The applicant referred me to the decision of Allsop J (as he then was) in Anheuser-Busch Inc v Budejovický Budvar (2002) 56 IPR 182 at [184]-[192] and submitted that the relevant principles were adequately summarised in those paragraphs of his Honour's judgment. At [184]-[186] (p 227), his Honour said: 184 The notion of trade mark use is now given content by ss 7 and 17 of the TM Act: see [129] above.

185 The task is to examine the way the words are used in their context, including the totality of the packaging, to assess their nature and purpose in order to see whether they are used to distinguish the goods from goods of others: Shell Co above, at 422-5; Mark Foy's Ltd, above at CLR 198-200; IPR 473-5; Johnson & Johnson Aust Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 at 335, 342-5, 347-9; 101 ALR 700 at 710, 717-20, 723-5; 21 IPR 1 at 11-12; 19; 24-5; Pepsico Australia, above at 162-3, 167-9 and 178-82; Musidor BV v Tansing (t/as Apple Music House) (1994) 52 FCR 363 at 376-7; 123 ALR 593 at 605; 29 IPR 203 at 215-6; Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd; (2000) 100 FCR 90 at 100-1; 177 ALR 167 at 175-6; 48 IPR 257 at 265-6 and Aldi Stores, above at [22]-[30] and [54]-[58].

186 The assessment is made from the perspective of what a person looking at the label would see and take from it, as to the purpose and nature of its use: Shell Co, above at 425; Wrigley's (A'sia) Ltd v Life Savers (A'asia) Ltd (1936) 37 SR (NSW) 9 at 16; Aldi Stores, above, at [22]-[24] and [76]. 150 His Honour then made several observations about the label and packaging of the products with which he was dealing in that case. 151 The respondent submitted that its use of the letters "BSS" on the 19 ml plastic bottle of its AQSIA™ brand balanced salt solution was not use of those letters as a trade mark because those letters were not used by the respondent to distinguish its balanced salt solution product from sterile ophthalmic irrigating solutions supplied by others. This was the relevant test, so it was submitted, under s 120(1) of the Act, informed by s 17. 152 The respondent developed this submission by further submitting that its AQSIA™ brand balanced salt solution, when supplied in the 19 ml container, was supplied under or by reference to two other trade marks, namely, "AQSIA™" and "BAUSCH & LOMB". It was submitted that, on the relevant label, the AQSIA™ trade mark was the predominant trade mark. 153 It was also submitted that the use of the letters "BSS" on the relevant label by the respondent was merely a descriptor of the contents of the bottle or an abbreviation of the generic name for the contents of the bottle. It was said that the relevant context which was required to be considered by the Court included the fact that the 19 ml bottle was not sold as an individual item but was only supplied in the sealed box which ultimately was designed to be used and was in fact used as a dispenser of the plastic sachets containing the 19 ml container of the product. The respondent went on to submit that, having regard to the predominant place occupied by its AQSIA™ trade mark and its corporate name on the relevant label, the use of the letters "BSS" on that label was not used to distinguish its AQSIA™ balanced salt solution from sterile ophthalmic irrigating solutions supplied by others. 154 I have already held that, in effect, the letters "BSS" have not been generally used in the relevant trade in Australia at any time as descriptive of balanced salt solution. 155 The following factors are relevant to the present question: (a) The letters "BSS" appear in block white letters in the top section of the label with the royal blue background. The trade mark "AQSIA™" appears in the same part of that label. The letters used to form "AQSIA™" are larger than those used to form "BSS". This part of the label is intended to be separate from and more prominent than the rest of the label. The impression created by the positioning of "AQSIA" and "BSS" is that this part of the label is dealing with branding of the product; (b) The word "sterile" appears immediately underneath the blue backgrounded top part of the label. It is a description, at least to some extent, of the contents of the bottle. (c) The name "BAUSCH & LOMB" appears on the bottom half of the label in block blue letters against a white background; (d) There is no other indication on the bottle or on the plastic sachet as to the contents of the bottle; (e) The sachets are supplied in the cardboard box described at [5] above. That box is a dispenser. Importantly, in a number of places, the words "balanced salt solution" appear on the box but the letters "BSS" do not; (f) The trade mark "AQSIA™" and the corporate name "BAUSCH & LOMB" also appear prominently on the box; (g) The Product Information Leaflet in the box does not mention "BSS" but does refer to "balanced salt solution". (h) The letters "BSS" have brand significance in the relevant trade in Australia. They are known to be the applicant's trade mark. The applicant has a reputation in the product identified by reference to the mark (Alcon BSS). 156 A product may bear more than one trade mark. In the present case, there are at least two - "AQSIA™" and "BAUSCH & LOMB". The respondent has chosen the box in which the sealed sachets containing the 19 ml bottles of its AQSIA™ brand balanced salt solution are supplied as the place where it describes the contents of those bottles. The description of those contents on that box is "balanced salt solution". It was possible and practicable for the respondent to include in the material on the label of the 19 ml bottle the full generic description - "balanced salt solution" - because that is, in fact, precisely what it did when challenged. Why, then, did the respondent use the letters "BSS" on that label? 157 If all that was being done was to describe the contents of the bottle, the full expression "balanced salt solution" would have done nicely. Further, given that the letters "BSS" were not used generically in the relevant period to signify "balanced salt solution", the generic term ("balanced salt solution") would have been the most appropriate way to describe the contents of the bottle, especially given the presence of the other trade marks on the label, "AQSIA™" and "BAUSCH & LOMB". 158 I adopt and apply the following statement made by Allsop J in Anheuser-Busch Inc 56 IPR 182 at [191]: It is not to the point, with respect, to say that because another part of the label (the white section with "Budejovicky Budvar") is the obvious and important "brand", that another part of the label cannot act to distinguish the goods. The "branding function", if that expression is merely used as a synonym for the contents of ss 7 and 17 of the TM Act, can be carried out in different places on packaging, with different degrees of strength and subtlety. Of course, the existence on a label of a clear dominant "brand" is of relevance to the assessment of what would be taken to be the effect of the balance of the label. 159 Having regard to the factors set out in [155] above, I think that the letters "BSS" on the allegedly infringing label are used in a branding role. It does not matter that the respondent may have made it clear on the packaging that the commercial origin of the goods was the respondent, ie a business other than that conducted by the applicant. The letters "BSS" may have been used in this way as an opening shot in a campaign by the respondent designed to demonstrate or generate generic use of the letters "BSS" but, at the time they were used on the relevant label, they were used to distinguish the respondent's goods from those of others, ie to brand them. 160 Subject to the s 122(1)(b)(i) defence relied upon by it, the respondent, therefore, infringed the applicant's BSS trade mark in the manner alleged by the applicant.

The Section 122(1)(b)(i) Defence 161 Section 122(1)(b)(i) of the Act is in the following terms: 122 When is a trade mark not infringed?

(1) In spite of section 120, a person does not infringe a registered trade mark when:

… (b) the person uses a sign in good faith to indicate:

(i) the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or … 162 The respondent contended that: (a) It honestly believed that the letters "BSS" were merely descriptive of "balanced salt solution"; and (b) There was, in the publications which it tendered, significant support for that view so that it has the benefit of s 122(1)(b)(i). 163 In order to establish "good faith", when used in s 122, the respondent must show that it acted honestly and without any ulterior motive (see Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 at 353-354 (per Gummow J)). 164 In June 2005, within two years of the respondent's introduction into the Australian market of its AQSIA™ brand balanced salt solution, the respondent used the letters "BSS" in promotional material for two of its other products. The applicant immediately complained about this. Then, in June 2006, the respondent began to supply its 19 ml plastic bottles of AQSIA™ brand balanced salt solution with the infringing label. It took that course knowing of the existence of the applicant's BSS trade mark, knowing that that mark was registered and knowing that the applicant would not tolerate any attempt by its competitors to use the letters "BSS" generically in order to dilute its registered trade mark. 165 Further, the respondent did not call any evidence at all as to the circumstances in which the decision to use the letters "BSS" on the infringing label was made. Mr Stamp, the respondent's Managing Director, gave evidence at the trial but said nothing about that matter. Ms Stubbs gave no evidence in chief about that matter and answered questions in cross-examination touching upon that matter as follows: Q: This particular product, do you know who approved the specific label that appears on this product?

Q: Were you involved at all in the design and approval of this label?

A: No, I wasn't. 166 If the respondent wished to invoke the defence embodied in s 122(1)(b)(i), it was incumbent upon it to provide to the Court a full and frank explanation as to the circumstances in which the infringing label came to be used with the letters "BSS" on it. The thinking behind the decision to use the letters "BSS", the advice received as to the wisdom of doing so and the motive and purpose in doing so all needed to be revealed by evidence and tested if the respondent was hoping to establish that it engaged in the infringing conduct in good faith and in order to indicate one or more of the matters set out in subs (1)(b)(i) of s 122 of the Act. 167 There has been a deafening silence in the respondent's camp and in its evidentiary case as far as these matters are concerned. 168 For reasons already explained, the publications tendered by the respondent did not support the proposition that the letters "BSS" have been used in the relevant trade as a descriptive acronym for "balanced salt solution". The respondent can gain no comfort from the existence of these publications. 169 The respondent has failed to demonstrate that it used the letters "BSS" on the infringing label in order to indicate the kind, quality, intended purpose or some other characteristic of its AQSIA™ brand balanced salt solution.

Conclusions 170 The applicant has succeeded in proving that the respondent infringed its BSS trade mark by using the letters "BSS" on the label affixed to the 19 ml plastic bottles of its AQSIA™ brand of balanced salt solution, at least in the period from June 2006 to late September 2008. 171 The respondent has failed to establish the pleaded defence which relied upon s 122(1)(b)(i) of the Act. The respondent has also failed in its claim that the applicant's BSS trade mark should be cancelled. 172 I shall make orders to give effect to this result. Costs should follow the event. I certify that the preceding one hundred and seventy-two (172) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster.

Associate: Dated: 12 November 2009 Counsel for the Applicant/Cross-Respondent: Mr A Franklin SC

Solicitor for the Applicant/Cross-Respondent: Middletons

Counsel for the Respondent/Cross-Claimant: Ms S Goddard SC with Ms A Roy

Solicitor for the Respondent/Cross-Claimant: Spruson & Ferguson