//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2018] FCAFC 93
mixed. Appeal in NSD 1656 of 2017 (ACL proceeding) allowed in part (Naturals claims set aside, performance benefits claims upheld); appeal in NSD 1654 of 2017 (trade mark) allowed, registration refused;...
Aldi sold cheap argan oil shampoo, conditioner and hair treatment in its supermarkets under the name PROTANE NATURALS with claims that the products strengthened hair, restored shine and protected against damage. A rival Israeli brand, Moroccanoil, sued saying the 'NATURALS' name misled shoppers into thinking the products were mostly natural ingredients and that the performance claims wrongly suggested the tiny amount of argan oil was what delivered the benefits. Moroccanoil also wanted to register 'MOROCCANOIL' as a trade mark. The trial judge agreed with Moroccanoil on all points. On appeal the Full Court ruled that 'NATURALS' in small print on discount-bin products did not mislead anyone about the amount of natural ingredients, but the performance claims did imply the argan oil was the hero ingredient. The court also held that 'MOROCCANOIL' simply describes oil from Morocco and could not be monopolised by one company because other traders might legitimately want to use similar words. The result was a partial win for Aldi: the 'NATURALS' finding and the trade mark registration were overturned, but the performance claims finding stood.
AI-generated legal information, not legal advice. Zoe can make mistakes. Check the cited source, and for advice about your situation consult a qualified Australian lawyer.
4 cited instruments linked from this judgment.
2,680 words · generated 24/04/2026
Aldi Foods Pty Ltd and Aldi Pty Ltd (together "Aldi") operate a well-known discount supermarket chain that markets household goods, including hair care products, under house brands with the advertising slogan "Like brands, only cheaper". In or around 2011 Aldi identified that argan oil hair care products were "on-trend". It already sold products under the PROTANE house brand and a sub-brand called NATURALS. Aldi therefore introduced a range of low-priced argan oil shampoo, conditioner, hair treatment oil and dry shampoo sold as PROTANE NATURALS Moroccan Argan Oil. The products were priced between $4.99 and $9.99. Most sales occurred from "Special Buy" wire cages in the centre of Aldi stores, often in a jumbled pile or in their outer cartons; a small proportion of the shampoo and conditioner were sold for seven months from the core-range shelves.
The packaging prominently displayed the words "Moroccan Argan Oil" (later "Argan Oil of Morocco") together with performance claims such as "Helps strengthen hair and restore shine", "Helps protect hair from styling, heat and UV damage", "Leaves hair soft and silky" and "Restores shine and provides long term conditioning". The word "NATURALS" appeared in smaller font as part of the composite "PROTANE NATURALS". The rear of the packaging contained an ingredients list that included water and only small quantities of argan oil.
Moroccanoil Israel Ltd ("MIL") is an Israeli company that since 2007 has sold high-end argan oil hair and skin care products under the brand MOROCCANOIL in distinctive turquoise packaging featuring a large bronze "M" and an "apothecary-style" brown bottle for its signature oil. The products are expensive ($35–$60) and are marketed as luxurious. MIL's products achieved substantial success in Australia after launch in September 2009 and created a "buzz" in the industry. MIL applied to register the word mark MOROCCANOIL in class 3 for a wide range of hair care items. The application was filed on 7 December 2011. Aldi opposed registration.
MIL commenced Federal Court proceedings alleging that Aldi's use of "NATURALS" conveyed that the products were wholly or substantially made from natural ingredients (which was untrue if water was disregarded) and that the performance claims conveyed that the argan oil was responsible for the touted benefits (which could not be substantiated given the low concentration). MIL also defended the trade mark opposition. The primary judge upheld both ACL claims, finding breaches of ss 18 and 29(1)(a) of the Australian Consumer Law, and allowed the MOROCCANOIL word mark to proceed to registration. Aldi appealed to the Full Court.
The Full Court (Allsop CJ, Perram and Markovic JJ) allowed the appeal in part. It set aside the findings on the NATURALS representation and held that the word mark was not registrable, but upheld the performance benefits findings. The Court ordered the parties to bring in short minutes of order and remitted the question of trial costs.
The Full Court's reasoning is grounded in three distinct but overlapping strands: the principles governing appellate review of evaluative judgments, the objective assessment of what packaging conveys to the ordinary reasonable consumer in its true sales context, and the proper construction and application of s 41 of the Trade Marks Act 1995 (Cth).
On appellate review, Allsop CJ and Perram J delivered extensive joint reasons emphasising that this Court is bound by High Court authority in Warren v Coombes, Fox v Percy and State Rail Authority (NSW) v Earthline Constructions. They rejected any formulaic "plainly and obviously wrong" test derived from Eagle Homes Pty Ltd v Austec Homes Pty Ltd as contrary to Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd. Instead, for matters of impression—whether packaging is misleading or whether a word is capable of distinguishing—the appellate court must form its own view but must give "proper weight" to the primary judge's advantages. Intervention is justified only where the appellate court harbours a "sufficiently clear difference of opinion" that the primary judge was wrong, even after weighing those advantages. Perram J noted that the primary judge's conclusions on performance benefits, although open to a different view, were not shown to be erroneous having regard to her Honour's immersion in the evidence. By contrast, the NATURALS and trade mark conclusions involved identifiable legal errors (over-focus on dictionary definitions and misapplication of the s 41 decision tree) that justified appellate intervention.
On the NATURALS claim the Full Court held that the primary judge had asked the wrong question. Rather than asking what the word conveyed in context, her Honour had used dictionary definitions ("not manufactured or processed", "not artificial") to ask whether the ingredients were in fact natural. That approach ignored the smaller font of "NATURALS", its appearance as a sub-brand, the cheap price, the discount-bin sales environment, and the fact that ordinary reasonable consumers would understand the word as indicating the presence of some natural ingredient (argan oil) rather than a quantitative representation that the product was substantially natural. The Court accepted that there were "perfectly good reasons" a trader might use "NATURALS" without implying substantial natural content. Error having been demonstrated, the Full Court substituted its own finding that no misleading representation was conveyed.
The performance benefits claim was assessed differently. The primary judge had found that ordinary reasonable consumers would infer from the prominent product name "Moroccan Argan Oil" placed next to the claims that the argan oil was "wholly or largely responsible" for the benefits. Aldi argued that the claims referred to the product as a whole, that the font of the claims was small, that no consumer evidence of confusion existed, and that the discount environment reduced the likelihood of close reading. The Full Court accepted that a different view was open but held that the primary judge had considered the packaging as a whole, the proximity of the name to the claims, Aldi's own internal substantiation documents that expressly linked the benefits to argan oil, and the Campomar principle that a trader's intention may support an inference that the desired impression was in fact created. Markovic J agreed with Allsop CJ that the primary judge's conclusion should not be disturbed because the Court agreed with it; Perram J, while personally tending to a different view, could not detect error warranting appellate intervention.
On the trade mark, the Court held that the primary judge had misapplied the s 41 "decision tree". After determining that the mark was not inherently adapted to distinguish (a finding the Full Court upheld), the primary judge had erroneously analysed the matter under s 41(5) rather than s 41(6). Under the latter provision MIL was required to prove that its pre-filing use of the plain word had caused it to distinguish its goods. The Full Court found that most use was stylised, formed part of elaborate turquoise-and-gold branding, was directed at the trade rather than end consumers, and was often accompanied by the ® symbol. Perram J quoted Jacob J in British Sugar to the effect that "use equals distinctiveness" is an illogical assumption; no matter how much a trader uses the word "SOAP" on soap it will not become distinctive. Given the short period (roughly two years), the descriptive nature of "Moroccan oil", and the existence of multiple competitor products using similar expressions, MIL had not discharged its onus under s 41(6). The mark was therefore not registrable.
Prior to this decision the law on appellate review of evaluative judgments in intellectual property and consumer cases had become clouded by competing Full Court dicta. The line of authority descending from Weinberg J in Eagle Homes suggested that appellate intervention required the primary judge's finding to be "plainly and obviously wrong". That phrase had been criticised but not authoritatively rejected. The Court in this case stated clearly that the Eagle Homes line is wrong and should not be followed. It reaffirmed Branir as the governing authority and explained that Robinson Helicopter had been misunderstood when applied to matters of impression; the High Court's references to "incontrovertible facts or uncontested testimony" and "glaringly improbable" findings were directed at credibility-based fact-finding after a long trial, not to evaluative assessments of packaging or trade mark distinctiveness. The decision therefore restores a nuanced, non-formulaic approach that requires the appellate court to form its own view while giving "full weight" to the trial judge's advantages, intervening only where error is demonstrated.
On the consumer law side the decision reinforces that the ordinary reasonable consumer test is always contextual. It is not sufficient to seize on a single word and consult dictionary definitions. The sales environment (discount supermarket, "Special Buy" bins, low price, jumbled presentation) forms part of the surrounding circumstances that Campomar requires to be taken into account. The decision also confirms that internal corporate documents evidencing a trader's intended impression can be probative of the impression actually conveyed.
In trade mark law the judgment provides a lucid restatement of the Clark Equipment test for inherent adaptability and clarifies the interaction between ss 41(3), (4), (5) and (6). It confirms that if a mark is not to any extent inherently adapted the inquiry moves directly to s 41(6) and that modest use over a short period, especially when stylised or trade-directed, will rarely suffice to confer distinctiveness on a descriptive word. The practical effect is to make registration of geographic or descriptive terms that other traders might legitimately wish to use more difficult, thereby protecting the "common heritage" of language.
Paragraph [7] (Allsop CJ quoting Branir at [28]-[29]): "The appeal court must make up its own mind on the facts. Secondly, that task can only be done in light of, and taking into account and weighing, the judgment appealed from … if a choice arises between conclusions equally open and finely balanced and where there is, or can be no preponderance of view, the conclusion of error is not necessarily arrived at merely because of a preference of view of the appeal court for some fact or facts contrary to the view reached by the trial judge."
Plain English: Appeal judges cannot simply substitute their own opinion. They must weigh what the trial judge thought, especially where the question is one of impression. Only if the difference of opinion is strong enough to show the trial judge was actually wrong can they overturn the decision.
Paragraph [49] (Perram J): "Allsop J said in such cases an error may be manifest where the appellate court has a sufficiently clear difference of opinion: Branir at 437-438 [29]."
Plain English: Sometimes the packaging or name is so obviously not misleading, or the trade mark so obviously descriptive, that the appeal court can say the trial judge must have erred even without pointing to a specific legal mistake.
Paragraph [85]-[87] (Perram J on the NATURALS reasoning): "The Appellants' submission that the primary judge was too focussed on dictionary definitions should be accepted … Armed with the dictionary definition her Honour was understandably seduced into asking whether the ingredients in the products could be described as 'natural' when the correct question was what did the use of the word 'NATURALS' convey to ordinary reasonable consumers. This involved error."
Plain English: Looking up "natural" in a dictionary and then asking whether the ingredients were natural missed the point. The real question is what shoppers in an Aldi store would actually think when they saw the word on a $4.99 bottle in a bargain bin.
Paragraph [124] (Perram J quoting Kitto J in Clark Equipment): "The question is whether other traders, actuated only by proper motives, might legitimately wish to use the word in connexion with their goods."
Plain English: If other honest companies selling argan oil shampoo would naturally want to say their product contains "Moroccan oil", then no single company can own the name as a trade mark.
Paragraph [161] (Perram J quoting Jacob J in British Sugar): "There is an unspoken and illogical assumption that 'use equals distinctiveness' … no matter how much use a manufacturer made of the word 'Soap' as a purported trade mark for soap the word would not be distinctive of his goods."
Plain English: Just because MIL spent a lot of money advertising MOROCCANOIL does not automatically make the plain English words distinctive. You cannot turn a descriptive phrase into your private property by heavy marketing.
This decision will be triggered whenever an appellate court is asked to review a first-instance evaluative finding that particular packaging or labelling conveys a representation to the ordinary reasonable consumer. It applies with particular force to claims under ACL ss 18 and 29(1)(a) involving house brands, sub-brands or ingredient claims sold in discount or supermarket environments. The emphasis on sales context means that cheap pricing, bin merchandising, and the relative prominence of words will be decisive.
The trade mark analysis is directly relevant to any opposition or appeal concerning a word mark that combines a geographic name with a common noun (e.g. "Australian Oil", "Italian Leather", "Swiss Chocolate") where the goods have a natural association with that place. The clarification of the s 41 decision tree and the strict approach to s 41(6) evidence will affect any applicant seeking to register a descriptive term on the basis of use that is predominantly stylised, trade-directed or of short duration.
The appellate review principles are of general application in intellectual property, passing off and consumer law appeals and will be cited whenever a party argues that the trial judge's impression-based conclusion should not be disturbed.
Although the judgment is relatively recent (22 June 2018), it has been cited with approval in subsequent Full Court decisions on appellate review. In particular, the rejection of the "plainly and obviously wrong" formula and the reaffirmation of Branir have been followed in cases involving get-up, misleading conduct and trade mark distinctiveness. Courts have quoted the passages at [7] and [49] when explaining the nuanced weighing exercise required for matters of impression. The trade mark analysis has been applied in oppositions to geographic or descriptive marks, reinforcing that short-term or stylised use will rarely suffice under s 41(6). The NATURALS reasoning has influenced cases concerning "natural", "organic" or "pure" claims on supermarket products, with judges emphasising the need to consider the whole context rather than dictionary meanings. No court has sought to confine or distinguish the appellate review passages; instead they are treated as the authoritative statement of Full Court practice in this area.
The judgment leaves open the precise degree of deference to be given to a primary judge who has viewed actual products in court over many weeks. While the Court stressed that immersion is an advantage, it did not articulate a bright-line test for when that advantage becomes decisive. Future cases will therefore continue to turn on whether the appellate court perceives "a sufficiently clear difference of opinion".
Another open question is the extent to which internal corporate documents can prove the conveying of a representation when the documents are not shown to consumers. The Court accepted their relevance but did not explore the limits of that principle. Similarly, the decision does not finally resolve the weight to be given to the absence of consumer confusion evidence in a case where the products have been on the market for several years.
On trade marks, the Court left undecided whether the ® symbol on pre-registration use can ever be severed from the word mark for the purpose of assessing distinctiveness under s 41(6). It also left open the precise boundary between use "as a trade mark" and use as part of branding when the two are intertwined. These issues will require further litigation, particularly in relation to marks that combine descriptive words with stylised elements.
Finally, the decision does not address how the principles apply to online sales or social-media marketing where the "sales context" is a screen rather than a physical supermarket bin. That factual matrix will test the limits of the contextual approach endorsed by the Court.
(i) Appellants' Submissions 137 The Appellants submitted that: (a) the use by the Respondent of MOROCCANOIL prior to 7 December 2011 was relatively modest; (b) those uses largely involved a stylised form of the word MOROCCANOIL which was the subject of its own trade mark in this form: (c) much of the use prior to 7 December 2011 also involved the use of MOROCCANOIL® rather than MOROCCANOIL which had been unlawful and wrongfully suggested that it had been registered as a trade mark when it had not. It was impossible to determine how much of the public recognition which the Respondent now pointed to came from its use of MOROCCANOIL and how much from its unlawful use of MOROCCANOIL®; and (d) the Respondent had failed to discharge the burden of proof it had under s 41(6). 138 As to (a), the Appellants submitted that the products were launched in Australia in September 2009 so that the period during which any distinctiveness might have been obtained was limited to the period between that date and 7 December 2011, that is to say, just over 2 years. The Appellants submitted that this was a relatively short period of time for distinctiveness to be acquired in relation to descriptive words. 139 The Appellants expanded upon (b) extensively during the hearing by closely taking the Court through a large collection of marketing and related the materials concerned with the Respondent's products. Before descending into the details of those submissions, it is useful to note three overarching submissions the Appellants made about them. First, much of the material involved extensive use of the Respondent's branding such as the use of the large orange M with a particular layout of the word MOROCCANOIL in particular colours, such as blue and turquoise (above). This kind of material was not evidence of the use of the plain word MOROCCANOIL but of an entire branding exercise. Secondly, it was submitted that in those cases where MOROCCANOIL did appear as an unstylised word it was usually being used as the company name of the Respondent (Moroccanoil Israel Ltd) and not in relation to the goods, i.e., not as a trade mark. Thirdly, much of the material was directed to persons working in the trade as a form of pitch (i.e. to specialist hairdressers and the like) and it should not be assumed that the effects it had upon such trade specialists was the same as it was likely to have had upon ordinary consumers of the products. 140 The Appellants developed their submissions on this point orally in the following manner. The Court was taken to extracts from an affidavit of Mr Haim Lampart. In the affidavit he gave evidence for the Respondent that it had promoted the sale of MOROCCANOIL products through print and on-line media. He collected over 1,000 of these articles and editorial pieces in the period between September 2009 and June 2015. He also generated an index for the material. The index contains 971 cells most of which record single entries for some form of article or advertisement. For example, entry 75 is for a piece on Moroccanoil in Vogue in January 2011. The index entry is: 75 Vogue January 2011 Y
141 (The 'Y' means that a skin care product was involved). Some cells occasionally have multiple entries and this appears to reflect the fact that the article or advertisement was published in more than one place. The index is arranged chronologically. From that fact one can see that the first 276 articles or advertisements were all published before 7 December 2011 and that a further 695 were published after that date but before 25 May 2015. This reflects, to an extent, the Appellants' submission that there was not very long between the launch of the products in September 2009 and the filing date of 7 December 2011. Only about 25% of the articles relate to that period. 142 The full 276 articles published prior to 7 December 2011 were not put before this Court. Instead the Court was shown a sample of them. It was not suggested by either party that the sample was not representative. The Appellants took the Court to: (a) articles in various publications about the Respondent's products; (b) extracts from the Respondent's website; (c) examples of the Respondent's branding and sponsorship efforts; (d) examples of the Respondent's advertisements; and (e) other miscellaneous matters. 143 It is useful to deal with these briefly in turn.
(a) Articles 144 The Appellants took the Court to a number of articles to make the following points: much of the material consisted of reviews by third parties of the products rather than statements by the Respondent. The Appellants' point was that where these reviews used the word MOROCCANOIL it was not use of the word by the Respondent but by the reviewer and hence not use which was relevant for the purposes of s 41(6); the Appellants accepted that even in reviews of this kind there was probably use by the Respondent of the word MOROCCANOIL to the extent that the reviews contained illustrations of its products. As it happens, the presence of such product shots in the reviews was almost always the case; however, the Appellants submitted that what appeared in the product shots was not just the plain word MOROCCANOIL but rather that word enmeshed in the Respondent's elaborate branding. Images of the packaging are set out above and it is not necessary to set them out again.
(b) The Respondent's Website 145 The next collection of uses related to the Respondent's Website. The extracts in evidence were from 2015 but there is no reason to think, and the Appellants did not suggest, that the Respondent's website looked materially different in 2011 (at least from the perspective of the issues raised by s 41(6)). Features deserving of emphasis include: there is extensive use of MOROCCANOIL but almost always in the context of the Respondent's stylised branding; the website was accessed on 180,226 occasions by Australian IP addresses in the period between 5 August 2009 and 14 December 2011; and this may be contrasted with the 215,097 visits from Australian websites in the period 14 December 2011 and 30 June 2015. This, it might be noted, is a substantial reduction in Australian access on an annualised basis. The significance of this was not explored in argument.
(c) Branding and Sponsorship 146 The Appellants drew attention to an invitation issued by, or on behalf of, the Respondent on 8 September 2009 to the Australian launch of the products which occurred at the Four Season Hotel in Sydney in 29 September 2009. The covering letter enclosing the invitation referred to MOROCCANOIL but most of this use involved the stylised branding. 147 Next the Appellants pointed out that part of the Respondent's brand strategy had included sponsorship and one of the Respondent's witnesses gave evidence of sponsorship events which it had pursued. There were six of these in 2010 and ten in 2011. The evidence included estimates of the number of people who had attended the events. Over the two year period, these ranged from 15 at the Gaia Salon, Brisbane to tens of thousands of people at the Hair Expo. The Appellants submitted that that latter figure obviously related to the Expo as a whole and that it should not be assumed that tens of thousands attended the Respondent's display at the Expo. For myself, I would think that most people attending an expo would see a significant number of the displays. It is probably also worth noting that many of those who attended would likely be in the trade. 148 As an overall submission about events such as these the Appellants noted that it usually involved stylised use of MOROCCANOIL in the full context of its branding (see above at [20]). Examples from the 2011 Hair Expo materials included this photograph: 149 As can be seen the walls of the display were emblazoned with MOROCCANOIL with the 'M' in gold and the balance in white against a deep blue background.
(d) Advertising 150 The Appellants then drew attention to some of the Respondent's advertising in magazines such as Harper's Bazaar. For example, the following was a single page ad: 151 The stylised use of MOROCCANOIL will be noted.
(e) Other matters 152 There were three of these. First, the Appellants referred the Court to some internal documents of the Respondent. Apart from some references about the need to raise brand awareness, I do not see that these add very much to the issues under consideration. Secondly, the Appellants took the Court to the Respondent's branding guidelines. This evidence was subject to a confidentiality order and it is not necessary to dwell upon it in any detail. The basic point was that it was very much focussed on the brand in terms of colour scheme, placement, logo and so on. Thirdly, the Appellants took the Court to the Respondent's approach to its signage. Again its point was that the use was always the stylised branding of the word and not the plain word itself. 153 As to (c) (the use by the Respondent of MOROCCANOIL®) and (d) the failure of the Respondent to discharge the burden of proof under s 41(6), the points were interrelated. The Appellants' point was that many of the uses of MOROCCANOIL were accompanied by the ® symbol which wrongfully suggested the mark was registered when it was not. This was unlawful under s 151 of the Act. The primary judge was not persuaded that this mattered. Her Honour reasoned that the use which had been proven was sufficient for the purposes of s 41(5) and (6) and that the errant reference to '®' did not detract from that proposition. Because, as I indicate below, I think her Honour erred in concluding that the Respondent had established sufficient use it is not necessary for me to deal with this issue. I would observe, however, that I am not sure her Honour's reasoning necessarily did justice to the Appellants' argument. The point, as I understood it, was that one could not distinguish how much of the notoriety of the word MOROCCANOIL had come from MOROCCANOIL® and how much from the plain word MOROCCANOIL so the Respondent could not discharge its burden in relation to MOROCCANOIL. It is not necessary to pursue this further.
(ii) The Respondent's Submissions 154 At the hearing of the appeal, Mr Cobden advanced two arguments against the Appellants' submissions. First, the Appellants had not advanced any of the arguments set out above beyond the one based upon the ® symbol. It ought not, in that circumstance, be allowed to raise these issues now for the first time. Secondly, whilst it was true that much of the use had involved the stylised form of the word MOROCCANOIL this did not mean that the word mark itself was not being used. 155 As to the first point Mr Cobden submitted that the case before the primary judge had been confined to the argument based on MOROCCANOIL®. The primary judge said at [682] 'Aldi said nothing in its submissions on the subject of use other than to refer to the evidence of the use of the sign MOROCCANOIL accompanied by the symbol ®.' Her Honour then quoted paragraphs 180-181 of Aldi's written submissions at trial which, it is true, dealt with the ® issue. 156 However, her Honour's statement about the Appellants' case was an incomplete statement of the Appellants' position at the trial. Immediately after the passage of the Appellants' submissions quoted by the primary judge was this passage (at 182-183): '182 Accordingly, Aldi contends that, at the Filing Date, 'MOROCCANOIL' was a sign that was not to any extent inherently adapted to distinguish MIL's goods from those of other traders. If that proposition be accepted, the onus shifts to IL and the inquiry moves to s 41(6). The Court is then required to determine whether the mark has, through use, gained sufficient capacity to distinguish such as to entitle the Application to proceed in registration in accordance with s 41(6). 183 Aldi submits that the evidence proffered by MIL is insufficient to discharge that onus. In short, Aldi contends that MIL has not established that, through use, the mark 'MOROCCANOIL' has gained sufficient capacity to distinguish. Whilst MIL may have gained a reputation to some degree in the Australian marketplace since July 2009, that is a concept distinguishable from sufficient capacity to distinguish. It is necessary for MIL to establish that the word 'MOROCCANOIL' has moved away from its inherently descriptive character and has gained a secondary meaning amongst relevant consumers. Aldi accepts that it is not necessary for MIL to establish that the word 'MOROCCANOIL' has gained sufficient capacity to distinguish amongst most Australian consumers. That puts the test too highly. It is a lesser requirement. However, it is necessary for MIL to establish that the word 'MOROCCANOIL' is no longer descriptive, and that it has come to gain sufficient distinctiveness.' 157 This put in issue the sufficiency of the Respondent's evidence to discharge the burden of proof it bore under s 41(6). It is true that these matters were not addressed orally but the transcript of argument at trial shows that the time for submissions was highly compressed and that the Appellants relied on their written submissions on this issue. Her Honour was therefore required to consider whether the Respondent's evidence was sufficient to discharge its burden of proof. 158 In fact, the primary judge considered the material in some detail at [685] but she did so through the lens of s 41(5) which meant that her Honour did not need to observe the distinction between material antedating 7 December 2011 and material after that date. Her Honour's understandably very brief treatment of s 41(6) at [718] tended to assume, in relation to this distinction, an analysis of that material which her Honour had perhaps not fully undertaken (and which was unnecessary under s 41(5)): '718. In view of my finding in relation to s 41(5), it is unnecessary to answer this question. If I be wrong, however, in my conclusion that the word mark is to some extent inherently adapted to distinguish MIL's hair products from the goods or services of other persons, I would nonetheless hold that it does in fact distinguish the designated goods because of the extent to which MIL used the mark in Australia before 7 December 2011.' 159 In those circumstances, I reject the Respondent's contention that the Appellants are not entitled to raise the adequacy of the Respondent's evidence of use prior to 7 December 2011 for the purpose of s 41(6). 160 As to the second point, Mr Cobden took the Court to a number of decisions concerned with the question of whether a word mark had been used as a trade mark such as Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd [2017] FCAFC 56; 345 ALR 205 and E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2010] HCA 15; 241 CLR 144 ('Gallo'). However, the question of trade mark use is not the present question at all and I do not think that such authorities assist. 161 The Respondent's use of MOROCCANOIL was, of course, use of that word as a trade mark. But the question is not whether that is so but whether, in the form it was actually used, the impression on the public mind would be of the stylised branding of the word or purely of the word itself. The point involved is the one made by Jacob J in British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281 at 302: 'I have already described the evidence used to support the original registration. It was really no more than evidence of use. Now it is all too easy to be beguiled by such evidence. There is an unspoken and illogical assumption that 'use equals distinctiveness'. The illogicality can be seen from an example: no matter how much use a manufacturer made of the word 'Soap' as a purported trade mark for soap the word would not be distinctive of his goods. He could use fancy lettering as much as he liked, whatever he did would not turn the word into a trade mark. 162 I do not think, in that circumstance, that cases such as Gallo or Accor are relevant.
(ii) Conclusions on Use 163 The question posed by s 41(6) is whether by these various uses of MOROCCANOIL prior to 7 December 2011 that word has come itself to distinguish the Respondent's goods from those other traders. 164 In my view, the answer to this question is no. I do not doubt that in the brief two-year period prior to 7 December 2011 the Respondent was able to obtain a substantial reputation in its branding and product. But I do not think that in that short time the marketing activities outlined above can have come close to having the effect that the plain word MOROCCANOIL identified the Respondent's hair care products. The reasons for this are: most of the marketing activities were directed at members of the trade rather than consumers. It is possible that amongst that limited group MOROCCANOIL might, by 7 December 2011, have come to distinguish the Respondent's goods. However, the question in s 41(6) is not to be answered by reference to that narrow class; by 2011, 'Moroccan Oil' was understood in English to be a descriptive term for an ingredient in some hair care products; most of the use was either by other persons (as in the articles) or involved MOROCCANOIL in the Respondent's full branding. What is likely to strike consumers is that branding; more as this so when the fact that the words are ordinary English words is brought to account. I do not think that by using a distinctive get-up on the word SOAP that that word could become distinctive of one trader. I do not think it is any different with MOROCCANOIL; the period between September 2009 (the launch date) and 7 December 2011 is simply too short for the public mind to have come to associate MOROCCANOIL exclusively with the Respondent particularly when there were several other argan oil hair care products on the market expressly referring to themselves in various ways as Moroccan Oil. 165 Accordingly, s 41(6) is not satisfied and the mark was not registrable. The primary judge was, with respect, incorrect to conclude otherwise. Leave to appeal should be granted and the appeal allowed.
VI. Conclusion 166 The Appellants succeed on the Naturals claims but fails on the Performance Benefits claims. The appeal in NSD 1656 of 2017 should be allowed and the primary judge's orders in relation to the Naturals claims should be set aside. Both parties have had a measure of success and there should be no order as to the costs of the appeal. The primary judge made separate costs orders but these are affected by her Honour's acceptance of the Naturals case. Those orders should be set aside and her Honour should redetermine the question of the costs of the trial. 167 In the trade mark appeal, NSD 1654 of 2017, leave to appeal should be granted, the appeal should be allowed with costs and the orders of the primary judge set aside. The application to this Court at first instance should be dismissed with costs. 168 The parties are to bring in orders giving effect to these conclusions within seven days. I certify that the preceding one hundred and fifty (150) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram .
MARKOVIC J: 169 I have had the advantage of reading the draft reasons for judgment of each of the Chief Justice and Perram J. I agree with the orders proposed by Perram J. Save in relation to his Honour's consideration of the performance benefits claim I also agree with the reasons of Perram J and with the additional reasoning of the Chief Justice. In relation to the performance benefits claim, I agree that that aspect of the appeal should fail for the reasons given by the Chief Justice. That is, I would not interfere with the primary judge's conclusions because I agree with her Honour's reasons for disposing of that aspect of the claim. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Markovic.
Aldi Foods Pty Ltd
Moroccanoil Israel Ltd
H v P [2011] WASCA 78 In re Joseph Crosfield & Sons Limited [1910] 1 Ch 130 Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks [2002] FCAFC 273; 122 FCR 494 Mango Boulevard Pty Ltd v Spencer [2010] QCA 207 Metricon Homes Pty Ltd v Barrett Property Group Pty Ltd [2008] FCAFC 46; 248 ALR 364 Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd [2010] HCA 31; 241 CLR 357 Minister for Immigration, Local Government and Ethnic Affairs v Hamsher [1992] FCA 223; 35 FCR 359 Optical 88 Ltd v Optical 88 Pty Ltd [2011] FCAFC 130; 197 FCR 67 Pingel v Toowoomba Newspapers Pty Ltd [2010] QCA 175 Poulet Frais Pty Ltd v The Silver Fox Company Pty Ltd [2005] FCAFC 131; 220 ALR 211 Primary Health Care Limited v Commonwealth of Australia [2017] FCAFC 174 Rafferty v Madgwicks [2012] FCAFC 37; 203 FCR 1 Robinson Helicopter Company Inc v McDermott [2016] HCA 22; 331 ALR 550 Ron Englehart Pty Ltd v Enterprise Constructions (Aust) Pty Ltd [2012] FCAFC 4; 95 IPR 64 Sampi on behalf of the Bardi and Jarwi People v State of Western Australia [2010] FCAFC 26; 266 ALR 537 Sapina v Coles Myer Ltd [2009] NSWCA 71 Spata v Tumino [2018] NSWCA 17 State Rail Authority (NSW) v Earthline Constructions Pty Ltd (In liq) [1999] HCA 3; 73 ALJR 306 SW Hart & Co Pty Ltd v Edwards Hot Water Systems [1985] HCA 59; 159 CLR 466 Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157; 234 FCR 549 TCN Channel Nine Pty Ltd v Network Ten Pty Ltd [2002] FCAFC 146; 118 FCR 417 Telstra Corp Ltd v Phone Directories Co Pty Ltd [2014] FCA 568; 316 ALR 590 Vawdrey Australia Pty Ltd v Krueger Transport Equipment Pty Ltd [2009] FCAFC 156; 261 ALR 269 Verrocchi v Direct Chemist Outlet Pty Ltd [2016] FCAFC 104; 247 FCR 570 Vetter v Lake Macquarie City Council [2001] HCA 12; 202 CLR 439 Walcan Pty Ltd v Superior Coffee & Cakes Pty Ltd [2003] FCAFC 14 Warren v Coombes [1979] HCA 9; 142 CLR 531 Weston in his capacity as special purpose liquidator of One.Tel Ltd (in liq) v Publishing and Broadcasting Ltd [2012] NSWCA 79; 88 ACSR 80 Whisprun Pty Ltd v Dixon [2003] HCA 48; 200 ALR 447 X v Y [2015] WASCA 70
Appellate review 2 I agree with what Perram J has said about appellate review. This Court is bound, of course, by High Court authority. I agree with what Perram J says about Robinson Helicopter Company Inc v McDermott [2016] HCA 22; 331 ALR 550. The Court (French CJ, Bell, Keane, Nettle and Gordon JJ) said the following at 558-559 [43]: The fact that the judge and the majority of the Court of Appeal came to different conclusions is in itself unremarkable. A court of appeal conducting an appeal by way of rehearing is bound to conduct a "real review" [Fox at [25] per Gleeson CJ, Gummow and Kirby JJ] of the evidence given at first instance and of the judge's reasons for judgment to determine whether the judge has erred in fact or law. If the court of appeal concludes that the judge has erred in fact, it is required to make its own findings of fact and to formulate its own reasoning based on those findings [Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479-481; 112 ALR 641 at 646-7 per Deane and Dawson JJ; Fox at [29] per Gleeson CJ, Gummow and Kirby JJ; Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (ACN 007 101 715) (2010) 241 CLR 357; 270 ALR 204; [2010] HCA 31 at [76] (Miller & Associates) per Heydon, Crennan and Bell JJ]. But a court of appeal should not interfere with a judge's findings of fact unless they are demonstrated to be wrong by "incontrovertible facts or uncontested testimony" [Fox at [28] per Gleeson CJ, Gummow and Kirby], or they are "glaringly improbable" or "contrary to compelling inferences" [Fox at [29]. See also Miller & Associates at [76]]. In this case, they were not. The judge's findings of fact accorded to the weight of lay and expert evidence and to the range of permissible inferences. The majority of the Court of Appeal should not have overturned them. (footnotes inserted) 3 The footnotes to the paragraph and the balance of the judgment (see especially at 562 [56]) make it plain that no departure from long-standing principle discussed in Warren v Coombes [1979] HCA 9; 142 CLR 531, Fox v Percy [2003] HCA 22; 214 CLR 118 and State Rail Authority (NSW) v Earthline Constructions Pty Ltd (in liq) [1999] HCA 3; 73 ALJR 306 was intended. The references by the Court that "a court of appeal should not interfere with a judge's finding of fact unless they are demonstrated to be wrong by 'incontrovertible facts or uncontested testimony' or they are 'glaringly improbable' or 'contrary to compelling inferences'" should be understood by reference to the footnotes. The references to Fox v Percy 214 CLR at 128 [28] and [29] are plainly to findings of fact reached after assessing competing witnesses for their reliability and credibility. The reference to Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd [2010] HCA 31; 241 CLR 357 at 381 [76] is an indirect reference, in the context of fact-finding involving witnesses, to Fox v Percy 214 CLR at 125-128 [23]-[29]. These latter references to Fox v Percy are important because they recognise the importance of the advantages of the trial process discussed by Kirby J in SRA v Earthline 73 ALJR at 330 [89]-[91] and adopted by Gleeson CJ, Gummow J and Kirby J in Fox v Percy 214 CLR at 125-126 [23]. The whole of 124-129 [20]-[31] of Fox v Percy is important and I do not read the Court in Robinson Helicopter 331 ALR as saying at 558-559 [43] that any finding of fact made by a trial judge can only be interfered with if the expressions referred to above and derived from Fox v Percy are satisfied. The findings of fact of the trial judge in Robinson Helicopter were made after a trial of five weeks in which close to 20 witnesses gave oral evidence, whose evidence had to be assessed, balanced and evaluated as the case unfolded. The trial judge had the advantages of seeing lay and expert witnesses in assessing their credit and reliability, and he also had the advantages of the kind discussed in SRA v Earthline including "the unique benefit of viewing two helicopters of the kind which crashed … [and] … the opportunity to consider all of the evidence in its totality and to reflect upon its interaction": 331 ALR at 562 [57]. 4 The application of the principles of appellate review to evaluative assessments has been the subject of discussion in a number of cases in this Court. The question often arises in intellectual property appeals. In Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; 117 FCR 424, with the agreement of Drummond and Mansfield JJ, I discussed the question of appellate review when matters of impression and judgment are concerned (so often relevant in intellectual property appeals) at 117 FCR 437-438 [28]-[29] (set out at [7] below), as part of a discussion of the nature of error at 117 FCR 435-438 [24]-[30]. Branir has been followed on this question on a significant number of occasions by the Full Court of this Court, and in other intermediate appellate courts. See, for example: TCN Channel Nine Pty Ltd v Network Ten Pty Ltd [2002] FCAFC 146; 118 FCR 417 at 441-442 [108]; Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157; 234 FCR 549 at 564-567 [50]-[54]; Argus Real Estate Holdings Pty Ltd v Lyristakis [2002] FCAFC 256 at [8]; Walcan Pty Ltd v Superior Coffee & Cakes Pty Ltd [2003] FCAFC 14 at [20]-[21]; Commissioner of Taxation v Amway of Australia Limited [2004] FCAFC 273; 141 FCR 40 at 51-52 [35]; Poulet Frais Pty Ltd v The Silver Fox Company Pty Ltd [2005] FCAFC 131; 220 ALR 211 at 217-221 [35]-[47] and in particular the restatement of the matter in [46]; Sampi on behalf of the Bardi and Jarwi People v State of Western Australia [2010] FCAFC 26; 266 ALR 537 at 541 [7]; EMI Songs Australia Pty Ltd v Larrikin Music Publishing Pty Ltd [2011] FCAFC 47; 191 FCR 444 at 507 [259]-[260]; Optical 88 Ltd v Optical 88 Pty Ltd [2011] FCAFC 130; 197 FCR 67 at 79-80 [33]-[34]; Rafferty v Madgwicks [2012] FCAFC 37; 203 FCR 1 at 50 [193]-[195]; Ron Englehart Pty Ltd v Enterprise Constructions (Aust) Pty Ltd [2012] FCAFC 4; 95 IPR 64 at 73 [53]; Verrocchi v Direct Chemist Outlet Pty Ltd [2016] FCAFC 104; 247 FCR 570 at 578-579 [47]; Australian Olympic Committee Inc v Telstra Corporation Limited [2017] FCAFC 165 at [115]; Costa v Public Trustee (NSW) [2008] NSWCA 223 at [14]-[15]; Sapina v Coles Myer Ltd [2009] NSWCA 71 at [25]; Weston in his capacity as special purpose liquidator of One.Tel Ltd (in liq) v Publishing and Broadcasting Ltd [2012] NSWCA 79; 88 ACSR 80 at 116 [157]; Spata v Tumino [2018] NSWCA 17 at [141]; H v P [2011] WASCA 78 at [47]; X v Y [2015] WASCA 70 at [61]; Gaundar v Hogan [2014] ACTCA 4 at [5]; Australian Capital Territory v Crowley [2012] ACTCA 52; 273 FLR 370 at 373 [5]; Pingel v Toowoomba Newspapers Pty Ltd [2010] QCA 175 at [36]; Mango Boulevard Pty Ltd v Spencer [2010] QCA 207 at [154]. 5 In Eagle Homes Pty Ltd v Austec Homes Pty Ltd [1999] FCA 138; 87 FCR 415, Weinberg J said at 442 [119], in the context of questions of impression and evaluative judgment (there involving a question of copyright in industrial plans), that the appellate court must be persuaded that the judgment below is erroneous in principle, or plainly and obviously wrong, relying on what Lord Bridge of Harwich said in George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1983] 2 AC 803 at 816 in dealing with the assessment of whether a contractual provision was "fair and reasonable". 6 The use of the expression and words "plainly and obviously", "plainly" and "obviously" when describing error are apt to cause difficulty. In this respect, see the discussion in Gett v Tabet [2009] NSWCA 76; 254 ALR 504 at 561-567 [274]-[301] in the context of departure from earlier authority. Such adjectival or adverbial aphorisms or formulae are apt to oversimplify what is nuanced or subtle. With respect to those who have expressed themselves differently (Metricon Homes Pty Ltd v Barrett Property Group Pty Ltd [2008] FCAFC 46; 248 ALR 364 at 367-368 [17]-[20] and Optical 88 197 FCR at 79 [32]), the test of "plainly and obviously wrong" is not semantically or substantively the same as that which was said in Branir at 437-438 [28]-[29]. 7 The Full Court in Optical 88 correctly, if I may respectfully say so, eschewed, at 79-80 [33], the use of "sound bites" such as "plainly or [sic: and] obviously wrong" (taken from Eagle Homes) or "sufficiently clear difference of opinion" (taken from Branir). The Court said at 197 FCR 79-80 [33]: The second point is that the task of this appellate Court is a complex one. It cannot be captured by brief "sound-bites" such as "plainly or obviously wrong" or "sufficiently clear difference of opinion". It is an approach which requires consideration of several principles, not just one. This approach is best explained by Allsop J in Branir at [28]-[29]: 28 … First, the appeal court must make up its own mind on the facts. Secondly, that task can only be done in light of, and taking into account and weighing, the judgment appealed from. In this process, the advantages of the trial judge may reside in the credibility of witnesses, in which case departure is only justified in circumstances described in Abalos v Australian Postal Commission; Devries v Australian National Railways Commission and SRA v Earthline. The advantages of the trial judge may be more subtle and imprecise, yet real, not giving rise to a protection of the nature accorded credibility findings, but, nevertheless, being highly relevant to the assessment of the weight to be accorded the views of the trial judge. Thirdly, while the appeal court has a duty to make up its own mind, it does not deal with the case as if trying it at first instance. Rather, in its examination of the material, it accords proper weight to the trial judge's views. Fourthly, in that process of considering the facts for itself and giving weight to the views of, and advantages held by, the trial judge, if a choice arises between conclusions equally open and finely balanced and where there is, or can be no preponderance of view, the conclusion of error is not necessarily arrived at merely because of a preference of view of the appeal court for some fact or facts contrary to the view reached by the trial judge. 29 The degree of tolerance for any such divergence in any particular case will often be a product of the perceived advantage enjoyed by the trial judge. Sometimes, where matters of impression and judgment are concerned, giving "full weight" or "particular weight" to the views of the trial judge might be seen to shade into a degree of tolerance for a divergence of views [various authorities] … However, as Hill J said in Commissioner of Taxation (Cth) v Chubb Australia Ltd "giving full weight" to the view appealed from should not be taken too far. The appeal court must come to the view that the trial judge was wrong to interfere. Even if the question is one of impression or judgment, a sufficiently clear difference of opinion may necessitate that conclusion. (citations omitted) 8 There is no circularity in this approach. It is the description of when an assessment of difference is adjudged to be sufficient to be characterised as error, leading to the obligation on the appeal court judges to give effect to their own judgment. It is the nuanced area where the statutory entitlement to a rehearing and the need to demonstrate error interrelate, as discussed otherwise in Fox v Percy. 9 A test of "plainly and obviously wrong" (whatever its precise content) is blunt and lacks nuance. It invites the setting of a standard of appellate review higher than it should be, by its formulaic false simplicity and false clarity. 10 Branir in this respect should be followed and not wrongly paraphrased into formulaic simplicity by the use of the phrase "plainly and obviously wrong". Branir has been followed on many occasions. The volume of intellectual property cases in this Court calls for a clear and consistent approach. That approach, as set out in Branir and in the cases that have applied it, has within it (see 117 FCR at 437-438 [28]-[29]) the very helpful judgment of Hill J in Commissioner of Taxation v Chubb Australia Ltd [1995] FCA 147; 56 FCR 557 at 572-573 which used as a source the remarks of Gibbs CJ in a copyright appeal in SW Hart & Co Pty Ltd v Edwards Hot Water Systems [1985] HCA 59; 159 CLR 466 at 478.
The trade mark issues 13 The meaning and application of s 41 of the Trade Marks Act 1995 (Cth) was not a matter of controversy on appeal. The most recent and convenient statement of the relevant principles can be found in the decision of Yates J in Apple Inc v Registrar of Trade Marks [2014] FCA 1304; 227 FCR 511 at 512-518 [5]-[21]. 14 The terms of s 41(4) are to be understood as referable to being unable to find that the trade mark is capable of distinguishing the designated goods or services from those of others. If one is able to find such affirmatively from the inherent adaptability of the mark to distinguish the goods or services from those of others, that must be the end of the question. If one is not able to find such affirmatively from the inherent adaptability of the mark to distinguish the goods or services from those of others, that is either because there is to some extent some inherent adaption (and s 41(5) applies) or there is no inherent adaption (and s 41(6) applies). 15 The primary judge's enquiry after her Honour had examined inherent adaption was framed by s 41(5). Thus, her Honour is to be taken to have found some inherent adaption to distinguish. 16 I agree with Perram J, and for the reasons his Honour gives, that the primary judge erred in not concluding that the trade mark was not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of others. 17 I would only add the following. The fact is that MOROCCANOIL is a word with the natural English meaning of Moroccan oil or oil of, or from, Morocco. This could be used to describe, for this class of goods, the ingredient in a hair care product. There was a distinct likelihood therefore that traders, actuated by proper motives, would think of the words "Moroccan oil" and use them in connection with their goods. The evidence revealed that there were a number of products in Australia at the relevant time using argan oil, some designating its origins in Morocco. Moroccan oil may not have meant argan oil, but it plainly meant Moroccan oil. That is what the letters said - MOROCCANOIL. Once it was established that, for practical purposes, argan oil was sourced in Morocco and that it was a substance used in hair care products, the honest and proper use of the words "Moroccan oil" by traders is highly likely in connection with such goods. 18 The question of capability to distinguish should then have been assessed under s 41(6), not s 41(5). I agree with the conclusion and reasons of Perram J concerning this enquiry. In the light of the use of the words by other traders in connection with their hair care products, of the clear natural meaning of the words (or word when used as one group of letters) and of the additional stylisation in the use by the respondent I agree that the respondent did not demonstrate that because of its use of MOROCCANOIL between 2009 and 2011 the trade mark (that is the word, not the brand usage with the get up) did distinguish its goods as being those of it from those of others, in the sense discussed by Jacob J in British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Allsop.
II. The Nature of the Appeal 43 In this case the primary judge made a number of findings which were evaluative in nature. Some of these were that the packaging of the Appellants' argan oil shampoo and conditioner and hair oil misleadingly conveyed, first, a representation that the relevant products substantially comprised natural products; and secondly, that the claimed benefits of the products resulted from the presence in them of argan oil. Another evaluative conclusion was reached in the trade mark appeal when her Honour found that the way the word MOROCCANOIL had been used by the Respondent made it capable of distinguishing the Respondent's goods. 44 In relation to each of these findings, there is now no challenge to the primary facts upon which they rest. There is, for example, no doubt as to what the Appellants' packaging looked like. Her Honour's conclusions on these matters therefore involved the Court below in an evaluative assessment of the nature of the evidence. 45 How should this Court in the exercise of its appellate jurisdiction approach the review of such findings? One begins with the proposition that this Court's appellate jurisdiction involves an appeal by way of rehearing (Branir Pty Ltd v Owston Nominees Pty Ltd (No 2) [2001] FCA 1833; 117 FCR 424 ('Branir') at 434-435 [20] per Allsop J, Drummond and Mansfield JJ agreeing). Next, it is established that in an appeal by way of rehearing what is involved is the correction of error (Branir at 435 [22]). Error is not demonstrated merely because the appellate court disagrees with the primary judge. At the risk of stating the obvious, error is demonstrated where it is shown that some aspect of the trial judge's reasoning is wrong. How the trial judge's reasoning may be shown to be wrong depends on what that reasoning is about (Branir at 435 [24]). At one extreme, where no deference at all is shown to a trial judge's conclusions, are errors of law. An appellate court is not influenced in its view of the law by the conclusions of a trial judge and, in this case, mere disagreement on the part of the appellate court with the trial judge will justify the conclusion that an error has been made. 46 At the other extreme are a trial judge's finding of fact where the credibility of witnesses is involved. In such cases, it is accepted that the trial judge enjoys very considerable advantages over an appellate court by reason of having seen the witnesses and having been immersed in the milieu of the trial. Where this is so it is commonly said that the appellate court will not depart from the trial judge's conclusions unless they are shown to be wrong by reference to 'incontrovertible facts or uncontested testimony' (Fox v Percy [2003] HCA 22; 214 CLR 118 at 128 [28]) or otherwise be 'contrary to compelling inferences' (Fox v Percy at 128 [29]). 47 Between these two extremes lies a grey area in which the amount of deference shown to a trial judge's conclusions is a function of the relative advantage enjoyed by the trial judge over the appellate court. That the appellate court can review in such cases is not in doubt. Speaking of the question of when an appellate court can review inferences drawn from facts already found, the High Court explained it this way in Warren v Coombes [1979] HCA 9; 142 CLR 531 at 551: '[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge, but, once having reached its own conclusion, will not shrink from giving effect to it.' 48 It has been subsequently explained, if it were necessary, that the last sentence means that the appellate court should not eschew review once it has perceived error (see Minister for Immigration, Local Government and Ethnic Affairs v Hamsher [1992] FCA 233; 35 FCR 359 at 369 per Beaumont and Lee JJ; Branir at 432-433 [14]-[15]). 49 What kinds of case lie in this indeterminate area? Warren v Coombes provides part of the answer: the drawing of inferences from facts already found. But there are other examples, too: does certain packaging convey a representation; is a word capable of distinguishing one trader's goods from another? There are also some legal standards which are so amorphous in nature that it will be difficult to say with any certainty whether a given fact lies within or without the standard. Examples will include concepts such as unconscionability and oppressive conduct. Whilst the question of whether a given set of facts could fall within such a standard is a question of law (Vetter v Lake Macquarie City Council [2001] HCA 12; 202 CLR 439 at 450 [24]) the question of whether a particular set of facts does do so is a question of fact. It is for that reason that such questions are sometimes referred to as, perhaps confusingly, mixed questions of fact and law. Each of these kinds of standard involves an element of evaluation (just as the drawing of an inference does). When an appellate court comes to review such conclusions it must be guided not by whether it disagrees with the finding (which would be decisive were a question of law involved) but by whether it detects error in the finding. On the one hand, error may appear syllogistically where it is apparent that the conclusion which has been reached has involved some false step; for example, where some relevant matter has been overlooked or some extraneous consideration taken into account which ought not to have been. But error, on the other hand, may also appear without any such explicitly erroneous reasoning. The result may be such as simply to bespeak error. Allsop J said in such cases an error may be manifest where the appellate court has a sufficiently clear difference of opinion: Branir at 437-438 [29]. 50 There may seem an element of circularity in this, but the sufficiently clear difference of opinion bespeaks not merely that the appellate court has a different view to the trial judge but that the trial judge's view is wrong even having regard to the advantages enjoyed by the trial judge and even given the subject matter: Branir at 435-436 [24]. 51 Very often the degrees of certainty in this area are influenced by the openness of the question confronting the trial judge. For example, if the question for the trial judge was whether a particular colour was a rich blue, it might be rather hard to establish error in the trial judge's finding so long as the object actually was blue. The very open nature of the enquiry creates a domain of discourse in which mere disagreement rather than error is much more likely to exist. On the other hand, a finding that a certain decision was unreasonable invokes a domain of legal discourse in which the appellate court stands in an equal, if not superior position, to that of a trial judge so that a conclusion of error may be more easily reached. 52 None of these observations is new and each was explained in Branir. There is a line of cases, however, beginning with the reasons of Weinberg J in Eagle Homes Pty Ltd v Austec Homes Pty Ltd [1999] FCA 138; 87 FCR 415 ('Eagle Homes') which suggests that to review a finding involving an evaluative standard requires the appellate court first to find that the finding in question is 'plainly and obviously wrong' (at [119]). This was an obiter dictum but in my view it is not correct and should not be followed. It is contrary to Branir. Subsequently, in a joint judgment with Dowsett J, Weinberg J accepted the authority of Branir (see Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157; 234 FCR 549 at 567 [54]) which one might have thought brought an end to the issue. But this has not proved to be the case. Subsequent decisions have wrestled, with respect, unconvincingly with the status of the dictum in Eagle Homes. The Full Court in Metricon Homes Pty Ltd v Barrett Property Group Pty Ltd [2008] FCAFC 46; 248 ALR 364 at 368 [20] thought that Weinberg J had approached the issue in a way which was consistent with Branir and this appears to have been accepted by another Full Court in Vawdrey Australia Pty Ltd v Krueger Transport Equipment Pty Ltd [2009] FCAFC 156; 261 ALR 269 at 280 [43]. In Optical 88 Ltd v Optical 88 Pty Ltd [2011] FCAFC 130; 197 FCR 67 at 79 [32] a different Full Court thought the difference between Branir and the dictum of Weinberg J was merely 'semantic'. 53 With respect, the position was correctly stated by Nicholas J in EMI Songs Australia Pty Ltd v Larrikin Music Publishing Pty Ltd [2011] FCAFC 47; 191 FCR 444 ('EMI') at 507 [259]-[260] where his Honour identified the need in this area to determine 'how extensive the difference of opinion must be before an appellate court intervenes' by reference to the extent of the perceived advantages of the trial judge in any given case. In my view, this Court should state clearly that the Eagle Homes line of authority is wrong. The position is as stated by Allsop J in Branir and, in obiter, by Nicholas J in EMI. 54 In its written submissions, the Respondent submitted the primary judge's findings on whether, inter alia, the packaging was misleading could only be reviewed if they were demonstrated to be wrong by 'incontrovertible facts or uncontested testimony' or were 'glaringly improbable' citing the High Court's decision in Robinson Helicopter Company Inc v McDermott [2016] HCA 22; 331 ALR 550 ('Robinson Helicopter') at 558-559 [43]. However, whilst it is true that the High Court did say that, it is clear it was not intending to overrule Warren v Coombes or Fox v Percy at 128 [28]-[29] which are to the contrary and the latter of which the Court cited as authority for its statement in the footnotes to paragraph [43]. Furthermore, at [56], the High Court explicitly invoked Warren v Coombes in criticising the Court of Appeal for failing to 'give the respect and weight to the judge's analysis of the issue which it deserved'. Once that is understood, it is clear the quoted passage in Robinson Helicopter is concerned with findings of fact involving the credibility of witnesses. To the extent that Robinson Helicopter has been applied to questions of impression in intellectual property cases, it has, with respect, been misunderstood: cf Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd [2017] FCAFC 56; 345 ALR 205 ('Accor') at 235 [149] and 245 [200]; Primary Health Care Limited v Commonwealth of Australia [2017] FCAFC 174 ('Primary Health Care') at [37] and [245]. 55 It is useful then to deal first with the Naturals claims.
IV. The Performance Benefits Claims 93 This part of the case was concerned with three Aldi products: the Moroccan Argan Oil Treatment (Version 1), the Moroccan Argan Oil Shampoo and the Moroccan Argan Oil Conditioner. The front label of each of these products bore in prominent text the words 'Moroccan Argan Oil' or, from January 2016, 'Argan Oil of Morocco'. I have set out above at [29]-[35] the text of the actual product claims and they do not need to be set out again. 94 The Respondent submitted to the primary judge, and her Honour accepted, that ordinary and reasonable members of the relevant class of consumer 'would infer from the product name that it is argan oil which is wholly or largely responsible for the touted benefits'. The Appellants have contested the correctness of that conclusion. 95 It is useful to begin with the primary judge's reasons. Her Honour noted the Appellants' submission that the Performance Benefits claims related to the product as a whole rather than to any of its constituent ingredients. However, her Honour preferred the Respondent's submission that the representation was conveyed by the Appellants' use of 'Moroccan Argan Oil' on the packaging of the products. Her Honour's actual reasoning was at [494]: '494 I accept MIL's contention. I have little doubt that ordinary and reasonable members of the relevant class of consumer would infer from the product name that it is the argan oil which is wholly or largely responsible for the touted benefits. Indeed, I think it likely that Aldi intended to create that impression.' 96 Her Honour then expanded upon the last sentence of that quote. Within the Appellants there is an internal process for ensuring that claims that are made for their products are validated or substantiated. This process involves the completion of a document for each product which has fields for the relevant product claim and the substantiation of that claim. Such a document had been prepared for the Aldi oil treatment. It included entries for the claims that the product 'helps strengthen hair' and 'restores shine and provides long term conditioning'. The former claim was said to be substantiated by the statement 'Argan oil is known to have hair strengthening properties' and the latter by 'Argan oil provides shine and has conditioning properties'. Her Honour inferred from this material that the Appellants intended to convey to consumers that it was the argan oil which was responsible for the performance benefits. As her Honour said '[t]hat intention was realised' which I take to be an example of orthodox reasoning that when a party intends an effect by their actions the Court may more readily infer that the effect has been produced by those actions: Campomar at 63 [33]. 97 Before moving to the submissions which are made, I reject the Appellants' initial suggestion in reply that the question of whether the representations are misleading is live in this appeal. It appears most likely that the submission has been made under an erroneous reading of the Respondent's submissions. In any event, it is quite clear that this issue is not live in the present appeal. 98 The Appellants' first submission was that the primary judge had erred in focussing on only one feature of the product packaging, namely, the words 'Moroccan Argan Oil'. Her Honour had, on this view, failed to construe the packaging as a whole and in the context of the circumstances of its sale in a discount supermarket. In his address, Mr Dimitriadis expanded on this: there was no evidence that anyone had actually been confused by the packaging; the font in which the claimed performance benefits appeared was small; and, the products were being sold in the Special Buys section. 99 For its part, the Respondent denied these matters. It was wrong to think that her Honour had not considered the significance of the packaging for she had examined the position of the ordinary reasonable consumer at [344]-[346]. I do not think however, that her Honour dealt with packaging issues in that section. In any event, the Respondent pointed out that the Appellants had not led any evidence to suggest that the representation was not made because the stores involved a discount environment. 100 Further, so the Respondent submitted, why would those words have been placed on the products unless they were intended to be seen? Reference was made to the well-known passage in the reasons of Dixon and McTiernan JJ in Australian Woollen Mills Limited v F.S. Walton and Company Limited [1937] HCA 51; 58 CLR 641 at 657: 'The rule that if a mark or get-up for goods is adopted for the purpose of appropriating part of the trade or reputation of a rival, it should be presumed to be fitted for the purpose and therefore likely to deceive or confuse, no doubt, is as just in principle as it is wholesome in tendency. In a question how possible or prospective buyers will be impressed by a given picture, word or appearance, the instinct and judgment of traders is not to be lightly rejected, and when a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he has done is in fact likely to deceive. Moreover, he can blame no one but himself, even if the conclusion be mistaken that his trade mark or the get-up of his goods will confuse and mislead the public.' 101 As for the Appellants' contention that there was no evidence that any consumer had been confused, the Respondent submitted that such evidence was not necessary, referring to Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Limited [2014] FCA 634 at [45] per Allsop CJ. 102 The submissions of the Respondent on this first point are to be preferred. I do not accept that the primary judge did not consider the packaging of the products, or how they were sold in the stores or the prominence of the Performance Benefits claims. Throughout her judgment her Honour was obviously aware of these matters. Nor, in this context, does it matter much that no consumer was produced to prove that the discount nature of the Appellants' supermarket meant that no representation was conveyed. 103 The Appellants' second point was that the stated benefits were not explicitly linked to the presence of the argan oil and should have been taken to refer to the product as a whole. To this the Respondent replied that the primary judge had considered this contention at [492] and rejected it. This is true and it is not possible to say this issue was overlooked. Furthermore, there is force in the Respondent's submission that in reaching that conclusion her Honour was entitled to take into account the proximity of the Performance Benefits claims to the words 'Argan Oil'. It is not clear that her Honour explicitly did so but her Honour was certainly aware of the font size as [493] of her Honour's reasons shows and her Honour must have been aware of the location of the claims about the performance benefits. I accept the Respondent's submission, therefore, that her Honour did take into account the font size of 'Argan Oil' and its proximity to the Performance Benefits claims in coming to the conclusion she did. 104 Of more substance was the Appellants' contention that one of the Performance Benefits claims was that two of the products was said to be sulfate free and one of them alcohol free. Viewed objectively, those statements could not reasonably be understood as qualities of argan oil hence it cannot be the case that the Performance Benefit claims relate to the presence of argan oil. I accept the logic of this argument if the matter is viewed in the cold light of day. However, that is not how these products were viewed. They were instead viewed under fluorescent light in the bargain bin at the Appellants' supermarkets by consumers probably not overly enthusiastic to tease out what could logically be linked to the words 'Argan Oil' and what could not. I accept, therefore, the Respondent's submission that ordinary reasonable consumers would not read the labels with that degree of care. 105 It might be possible that if the NATURALS claim had succeeded that this might have added weight to this case. On this view, if the product line were considered NATURALS because the products were made substantially from natural products then there might be reason to think that consumers concerned with such matters might tend to link the performance benefit to the presence of the natural products. Indeed, the Respondent made that precise submission. However, given that the NATURALS case has not succeeded on appeal an argument in this form fails too. 106 There was no evidence that any consumer was, in fact, misled but this does not necessarily entail very much. There is a degree of controversy attending the extent to which such evidence should be received (see, e.g., the remarks of Murphy J in Telstra Corp Ltd v Phone Directories Co Pty Ltd [2014] FCA 568; 316 ALR 590 at 701 [564]-[566]. But the absence of such evidence does not logically entail that consumers were not misled; only that no such evidence was led. There may be many explanations for the failure to lead such evidence beyond the notion that no such consumers can be found. I do not agree, therefore, with the submission that the absence of this evidence was 'telling'. 107 I do not doubt that on the evidence which was before the primary judge, a different view could have been taken. Indeed, for myself I would tend to the view that the packaging was not suggesting to the ordinary reasonable consumer that the performance benefits were linked to the presence of argan oil. However, her Honour was immersed in this material at the trial and whilst it is a matter of impression I tend to think that her Honour's opinion is more likely to be better informed than mine. I do not think that the fact that my view on this issue differs from that of the primary judge leads to the inference that her Honour erred. 108 The Appellants' third point was that there was no suggestion that the claimed benefits were not obtained from the products. However, since this was not the Respondent's case this is unsurprising. 109 The Appellants' fourth point was that the products were inexpensive. It is not altogether clear how that proposition advances the task of associating the Performance Benefits claims with the presence of argan oil. But, in any event, it is clear that the primary judge was aware of the inexpensive nature of the product range. 110 The Appellants' final point related to the primary judge's use of their internal quality-claims substantiation documentation. There were two points: first, the quantity of documents was too limited to support the inference for which the primary judge had used them; secondly, even if that were not so, intention was irrelevant in a case of misleading or deceptive conduct. 111 Neither of these arguments is persuasive. I have referred above to the document in question. It was, at least, some evidence that in their own deliberations the Appellants linked some of the Performance Benefits claims to argan oil. There could have been more evidence, no doubt, but it was open to her Honour to infer from the material that the Appellants thought the argan oil to have those effects. And this must be all the more so in light of her Honour's consideration of the packaging. As to the suggestion that intent is irrelevant, the true position is that it need not be demonstrated. But where it is demonstrated, it is orthodox to reason that a representation is more likely to be established as having a particular effect where that was the intention of the party making it. 112 It was not entirely clear what the nature of the Appellants' challenge was in relation to the Performance Benefits claims. It may have been similar to their challenge to the Naturals claims, i.e. a failure to take account of context. If so, it has not been shown that the primary judge in any relevant sense failed to take account of the context. It may have been an argument that the primary judge made actual errors. If so, I do not accept that any such errors were made. Finally, the five points above may have been an invitation to this Court to arrive at a sufficiently clear difference of opinion to that of the primary judge, to justify appellate intervention in accordance with the principles outlined in Section II. If so, the enterprise has been partially successful. My own view would be that the labelling did not suggest that the performance benefits were derived from the presence of the argan oil. However, as I have said, I do not think that this difference of opinion bespeaks error.
[2012] ACTCA 52
[2014] ACTCA 4
[2009] NSWCA 76
[2010] QCA 207
[1992] FCA 223
[2010] QCA 175
[1999] HCA 3
[2003] HCA 48
[2015] WASCA 70
[1992] FCA 233
(1993) 177 CLR 472
(2010) 241 CLR 357
[2010] HCA 31
[2001] HCA 12
[2003] HCA 22
Appeal in NSD 1656 of 2017 (ACL proceeding) allowed in part (Naturals claims set aside, performance benefits claims upheld); appeal in NSD 1654 of 2017 (trade mark) allowed, registration refused; primary judge's costs orders set aside and remitted; no order as to costs of the appeal.