Anchorage Capital Partners Pty Limited v ACPA Pty Ltd

Counsel for the Respondents/Cross-Claimants: Mr AJL Bannon SC, Mr C Dimitriadis SC and Mr R Clark

Solicitor for the Respondents/Cross-Claimants: Herbert Smith Freehills

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 149 of 2014

BETWEEN: ANCHORAGE CAPITAL PARTNERS PTY LIMITED

AND: ANCHORAGE CAPITAL PARTNERS PTY LIMITED

JUDGE: PERRAM J DATE OF ORDER: 21 AUGUST 2015 WHERE MADE: SYDNEY

1. The application be dismissed.
2. The respondents file any submissions within 28 days on the issues of costs and the exercise of the discretion.
3. The applicant file any submissions in response within a further 28 days.
4. Submissions not to exceed 10 pages. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 149 of 2014

BETWEEN: ANCHORAGE CAPITAL PARTNERS PTY LIMITED

AND: ANCHORAGE CAPITAL PARTNERS PTY LIMITED

JUDGE: PERRAM J DATE: 21 AUGUST 2015 PLACE: SYDNEY

Introduction 1 This is an intellectual property case about two firms with a very similar name. The applicant is called Anchorage Capital Partners Pty Ltd and is an Australian corporation. The second respondent is a Delaware limited liability corporation called Anchorage Capital Group LLC. Both of these firms have similar business models in that both raise money from professional investors which they then invest to make a profit. There are differences between them as to the kinds of investments they make and the manner in which they raise their funds. The applicant is involved in what its executives called the turnaround business which involves acquiring a controlling interest in a struggling business, fixing it up and then on-selling it at a profit. The second respondent by contrast, does not generally make that kind of investment. Rather, it acquires, broadly speaking, distressed debt or equity positions at a discount to their true value and then disposes of them at a profit when the true value is later realised. The applicant was at pains to distinguish the nature of these two kinds of business. I accept they are different. 2 The applicant started life in 2007 in Sydney at premises in Bridge Street. The second respondent has operated from New York since 2003 but in 2011 it established a presence in the Suncorp Tower on George Street in the Sydney central business district through its wholly owned subsidiary, the first respondent. The first respondent had been preceded in that role for a short time by another entity called Aviron Capital Advisors Pty Ltd which was controlled by an executive of the second respondent and which provided consultancy services to the second respondent. The first respondent described itself on signage in the lobby of the Suncorp Tower as 'ACPA a subsidiary of Anchorage Capital Group LLC'. The situation was aggravated in June 2013 when the applicant decided to move to the Suncorp Tower. At that time the applicant asked the first respondent to remove from its lobby signage the reference to Anchorage Capital Group. After a lot of discussion and debate this was done in September 2013. 3 On 26 May 2011 the applicant sought to register the trade marks ANCHORAGE, ANCHORAGE CAPITAL and ANCHORAGE CAPITAL PARTNERS in class 36 in respect of various financial services ('the ANCHORAGE marks'). The applicant described its services for the purposes of its registration applications as follows: 'Acquisition for financial investment; administration of financial affairs; advisory services relating to financial investment; conducting of financial transactions; financial advisory services for companies; asset management; financial fund management; financial investment management services; financial transaction services; all the aforementioned services targeted towards special situations and mismanaged or underperforming companies to help improve their financial performance.' 4 These marks were subsequently registered and 26 May 2011 is therefore the priority date. The applicant's primary case is that the respondents have been infringing its trade marks by using the names ANCHORAGE, ANCHORAGE CAPITAL and ANCHORAGE CAPITAL GROUP ('the US ANCHORAGE names') and email addresses of the form @anchoragecap.com and @acpa.anchoragecap.com ('the ANCHORAGE email addresses') in the provision of financial services in Australia. Its second case is that the respondents have engaged in passing off and misleading and deceptive conduct contrary to law. The respondents deny this and cross-claim to have the ANCHORAGE marks expunged from the register on the grounds that the applicant is not their owner by reason of prior use by the second respondent. They also allege that the registration of the marks is misleading or unlawful. The applicant denies this and says that the respondents are either estopped from pursuing such a claim or that the second respondent's prior use was unlawful because it was providing unlicensed financial services. 5 I have concluded that: (i) the respondents did not infringe the ANCHORAGE marks by using the US ANCHORAGE names as alleged; (ii) the respondents have not engaged in passing off or misleading and deceptive conduct; (iii) the respondents are not estopped from seeking to remove the ANCHORAGE marks from the register; and (iv) the applicant is not the owner of the marks so that the Court's power to remove them from the register is enlivened. The suggested illegalities in the second respondent's prior use are not well-founded and, even if they were, are irrelevant. 6 The parties agreed that I should receive further submissions on how the discretion thereby arising should be exercised. The appropriate order is, therefore, that the applicant's application be dismissed. I will direct the parties to exchange any further submissions on the questions of (a) the exercise of the discretion to remove the marks from the register and (b) costs on Wednesday 30 September 2015 at noon. I will decide the balance of the matter on the papers. The submissions of the parties are not to exceed 10 pages, be single spaced or contain footnotes.

Have the respondents infringed the applicant's trademarks? 7 The answer to this question is 'No'. The business of the second respondent has the two aspects to which I have referred above, viz investment and fund raising. 8 As to investment activities, the evidence shows that from 2003 to the present the second respondent has engaged in substantial investment activities in Australia using the US ANCHORAGE names and email addresses ending with @anchoragecap.com. Email addresses of that kind involve a use of the word ANCHORAGE. The correspondence has consisted of a volume of documentation, principally emails, to various entities within the commercial milieu in Australia, most of which is directed at, or relating to, attempts to acquire equity or debt interests in local businesses. There is no present need to set it out. It consists of the appearance of the US ANCHORAGE names in signature blocks, address fields, and email addresses as well as various references to ANCHORAGE in the bodies of the documents. This period (2003 - present) includes one date range up to 26 May 2011, when it is relevant to the prior use issues, and another date range from that date to now, when it is relevant to the infringement issues. 9 The evidence also shows that the first respondent has used the name 'ACPA Pty Ltd a subsidiary of Anchorage Capital Group' and email addresses ending with @acpa.anchoragecap.com' in relation to work it was doing for the second respondent. These actions have also involved uses of the US ANCHORAGE names after the priority date. I reject the respondents' submissions that the first respondent did nothing but provide advice to its parent. Its role of assisting the second respondent resulted in frequent contact between its four staff and participants in the finance industry in Sydney. It is apparent that in those dealings its staff used the US ANCHORAGE names to indicate the relationship between the first and second respondents. An executive of the first respondent, Mr Howes, gave evidence to the contrary out of, I think, an excess of enthusiasm. I do not accept that evidence. The first respondent's staff have also used business cards to introduce themselves which bear the words 'ACPA in association with Anchorage Capital Group LLC'. Again, this involved a use of the words ANCHORAGE and ANCHORAGE CAPITAL. I conclude that whilst in its direct activities the first respondent used its own name the reality is that it assisted the second respondent in its transactional work in Australia. In the course of doing so it used the US ANCHORAGE names. It did not do so, however, until after June 2011 when it was incorporated. 10 Before the applicant commenced business in 2007, the second respondent was involved in investments in Australia using the above names in relation to Sons of Gwalia, Paladin Resources, Perilya Limited and PBL Media. It had also been involved in a number of transactions which, for whatever reason, never came to ultimate fruition. These were at least nine in number and included dealings in relation to Litigation Lending Services Ltd (a litigation funder), Flight Centre and Xstrata. In each of these the US ANCHORAGE names were used. After the applicant commenced business in 2007, the second respondent continued to use the same names in relation to other investment activities in Australia including investments in Alinta, i-Med, Fortescue Metals, Centro, Wesfarmers, ANZ, QBE Insurance, Fitness First, Colorado Brands, Norton Gold Fields, PBL/Nine Entertainment, Spotless and Gunns. Many of these related to, or were part of, transactions having a high profile. This was particularly true of the Alinta transaction. Some of this occurred after the priority date: PBL, Spotless and Gunns. 11 As to its fund raising activities, the evidence does not establish that the second respondent sought to raise funds in Australia after the priority date (although it does show limited attempts to raise funds in early 2007 prior to the applicant commencing business). In drawing that conclusion I am aware that the second respondent became a creditor of PBL in 2011. However, this was not the result of a loan business but instead of as a result of the acquisition of another party's debt position. That acquisition is not to be characterized as the provision by the second respondent of a credit service to PBL. Its correct characterisation is as a manifestation of the second respondent's basic business investment. The second respondent was at pains not to be seen as a loan originator as it indicated in an email of 16 February 2007 ('Per our call Anchorage does not sign commitment letters on behalf of our funds. Our lawyers' view is that signing commitment letters could be interpreted as loan origination'). 12 The applicant puts its case solely on s 120(1) of the Trade Marks Act 1995 (Cth) ('the Act') ('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'). In this case it is necessary that the applicant therefore establish that: (a) the signs used by the respondents were substantially identical or deceptively similar to the applicant's trademarks; and (b) that the respondents used those signs 'in relation to goods or services in respect of which the trade mark is registered'. 13 As to (a), I accept that the first respondent's use of the US ANCHORAGE names was substantially identical or deceptively similar to all three registered of the ANCHORAGE marks. In particular: ANCHORAGE is identical to ANCHORAGE; Anchorage Capital Group LLC is deceptively similar both to ANCHORAGE CAPITAL and ANCHORAGE CAPITAL PARTNERS. As to the ANCHORAGE email addresses, @anchoragecap.com is deceptively similar to ANCHORAGE CAPITAL but @acpa.anchoragecap.com is not. I do not accept that the first respondent's use of 'ACPA Pty Ltd a subsidiary of Anchorage Capital Group LLC' was deceptively similar to any of the marks. 14 However, this is by the by. This is because, as to (b), I do not accept that either respondent has, since the priority date, used the US ANCHORAGE names 'in relation to goods and services in respect of which the trade mark is registered'. Neither respondent is shown to have dealt with or provided any services in Australia after the priority date. 15 Consequently, no infringement under s 120(1) can be established against either respondent. They were not using the US ANCHORAGE names as trademarks to distinguish their services because they were not dealing with or providing services when they used the names. Their use was not trademark use - the US ANCHORAGE names were not being used as a badge of origin in the sense that they were not being used to indicate a connexion in the course of trade between the only service actually provided by the second respondent, that of funds management, and the second respondent: Coca-Cola Company v All-Fect Distributors Ltd (1999) 96 FCR 107 at 115 [19] (FC). There is simply no evidence that either respondent provided any of their funds management services to anyone in Australia after the priority date. What they have done is trade in their own names. This is not trade mark use.

Would there have been any defences to infringement?

(i) First Respondent 16 Had I concluded that the first respondent had infringed the ANCHORAGE marks I would have accepted its defence under s 122(1)(b)(i) of the Act that its use of the phrase 'ACPA a subsidiary of Anchorage Capital Group LLC' was use in good faith to indicate a characteristic of the first respondent's services, namely, the relationship between those services and the second respondent as its subsidiary. As to good faith, as I explain later at [29], there was nothing improper in the first respondent's use of the names despite the convoluted case the applicant advanced to the contrary. As to the question of a characteristic, I accept that being a subsidiary of another company can be correctly described as a characteristic. On the other hand, as I have indicated above, the first respondent also used the US ANCHORAGE names in the course of its dealings with third parties in Australia. On these occasions, it did not identify itself as a subsidiary of the second respondent and the defence is therefore not available.

(ii) Second Respondent 17 Had I concluded that the second respondent had infringed the marks under s 120(1), I would have upheld its defence under s 122(1)(a)(i) that it had used the marks in good faith as its own name. As to good faith, as I explain later at [29] in these reasons, whilst the second respondent was aware of the existence of the applicant from early 2011, there is nothing which supports the proposition that its use of its own name after that time was other than in good faith. As to use as its own name, I am satisfied that its use of ANCHORAGE, ANCHORAGE CAPITAL and ANCHORAGE CAPITAL GROUP were all uses of its own name. Contrary to the submissions of the applicant, neither SAP Australia Pty Ltd v Sapient Australia Pty Ltd (1999) 45 IPR 169 at 181 [43] nor Optical 88 Ltd v Optical 88 Pty Ltd (2011) 197 FCR 67 at 89 [66] (FC) establish that the defence cannot be made out where a defendant has used only part of a name. Indeed to the contrary, I accept that, depending on the context, a contraction of a full name may be use of a name under s 122(1)(a)(i), just as leaving off expressions such as 'Ltd' does not make the defence unavailable: Parker-Knoll Ltd v Knoll International Ltd [1962] RPC 265 at 275. 18 I would also have accepted the second respondent's defences based on ss 122(1)(f) and 122(1)(fa) of the Act because, as I explain below at [43], I am satisfied that the second respondent is entitled to register its names as trade marks. I would not have accepted its defence under s 124 because whilst I have accepted that it used the names as trade marks in early 2007 this appears to have been an isolated incident and s 124 is only enlivened by continuous use.

Has the applicant established that the respondents engaged in passing off or misleading and deceptive conduct? 19 The answer to this question is 'No'. The applicant sues the respondents for passing off and misleading and deceptive conduct contrary to ss 18 and 29 of the Australian Consumer Law (being Sch 2 of the Competition and Consumer Act 2010 (Cth)) and ss 12DA, 12DB(1)(e) and (f) of the Australian Securities and Investments Commission Act 2001 (Cth). The only consumers of the applicant's or the respondents' services are those institutional investors who invest money in their respective funds. The applicant had two such funds called Anchorage Capital Partners Fund I and Anchorage Capital Partners Fund II. It raised money for these funds by approaching institutional investors and making presentations to them using the ANCHORAGE marks. The investors were large institutional entities such as Goldman Sachs and Macquarie Bank who had a correspondingly high degree of sophistication. The idea that these kinds of finance houses would have invested tens of millions of dollars into the wrong fund because of the similarity in names is implausible. It is true that a set of rugby tickets was once sent to the applicant in May 2011 which had been intended to be sent to the respondents but I do not accept that this proves anything beyond a mistake at a secretarial level. In the context of the markets in which the applicant moved it was not misleading that two firms had the same name. 20 Even if such a claim had any substance, I would still have rejected it because the use by the respondents of the US ANCHORAGE names was not factually misleading or deceptive; indeed, far from it. For an entity called Anchorage Capital Group LLC to call itself Anchorage Capital Group LLC or even Anchorage or Anchorage Capital is not misleading, still less deceptive. So too, for the first respondent to use the phrase 'ACPA a subsidiary of Anchorage Capital Group LLC' is a correct statement and is not misleading - ACPA is, indeed, a subsidiary of the second respondent. One might ask rhetorically what the respondents were meant to call themselves? This problem could only be averted if one could extract from the respondents' use of their own names some glancing suggestion that they were associated with the applicant but I discern no trace of such a suggestion. For completeness I would have accepted that the applicant had a reputation in the private equity sphere sufficient to maintain this case.

Are the respondents estopped by their acquiescence from seeking to remove the applicant's marks from the register? 21 The answer to this question is 'No'. The applicant attempted to put this argument in its final submissions on the basis of a conventional estoppel but I am satisfied this was neither its pleaded case nor the case which it opened. It would be unfair to permit it to run such a case at the heel of the hunt. A claim for conventional estoppel would have raised issues about the existence of a common assumption adopted by the parties. That was not a case the respondent was required to meet and it had different evidentiary nuances, such as the respondents' state of mind, which did not arise on the case as pleaded and opened and it would be procedurally unfair now to permit the applicant to pursue such a case. 22 As to the case it opened and pleaded, the applicant contended that the respondents had acquiesced in its use and registration of the ANCHORAGE names and that, in reliance upon that acquiescence, it had registered them and continued to use them. Three acts of acquiescence were relied upon: (a) informing the applicant at a meeting in 2011 that the respondents did not and would not be using the ANCHORAGE marks, after and in reliance upon which the applicant then sought and obtained registration of the marks; (b) the incorporation of the first respondent using the name ACPA rather than Anchorage Capital Partners Australia Pty Ltd; and, (c) the seeking by the respondents of permission from the applicant to put a sign in its reception area which read 'ANCHORAGE CAPITAL GROUP'. 23 I reject each purported act of acquiescence. As to (a), the applicant's case was centrally constructed on a meeting which took place between Mr Howes of the first respondent and Mr Briggs of the applicant at the applicant's then premises in Bridge Street. This meeting certainly occurred and was held at the instigation of the applicant as a result of concerns that the two businesses were being mistaken for each other. This had been brought to a head by the misdelivered rugby tickets referred to above. It was the applicant's case as opened that this meeting took place before the time at which it had sought registration of the ANCHORAGE marks, which was on 26 May 2011. By the end of the trial, it was no longer in dispute that this could not possibly be correct and that the critical meeting had occurred on 10 June 2011. Nothing said by Mr Howes at that meeting could, therefore, have influenced the applicant to decide to register the marks, which decision it had taken and effected weeks beforehand. 24 In any event, I do not accept that Mr Howes ever told Mr Briggs that the second respondent would not be using the name ANCHORAGE to describe the second respondent's business when transacting in Australia although I do accept that he did say that the first respondent would not be using the name (Mr Howes accepted that this was so). In this regard, I found Mr Howes' evidence inherently likely. Anchorage Capital Group LLC was the name of the second respondent - there was no reason for Mr Howes to promise that it would stop using its own name. 25 Although Mr Briggs gave evidence that Mr Howes did say this I do not accept that Mr Briggs' evidence in this regard was reliable. He was adamant that the meeting had occurred in May 2011 even though he had no particular reason to recall such a fact with any certainty and he remained adamant even when confronted with evidence which suggested that this was not so. For example, he was unmoved by the fact that his secretary had distributed by email Mr Howes' card to other members of the applicant's staff on 10 June 2011 or by the reference in an email sent by Mr Howes to Mr Briggs on 22 June 2011 to their meeting 'the other week'. Ultimately Mr Howes' diary was produced and it showed beyond argument that the meeting was on 10 June 2011; even then Mr Briggs refused to accept what was obvious. 26 I find that Mr Howes did not say that the second respondent would not be using the US ANCHORAGE names and, further, that the applicant had no regard to anything Mr Howes said in deciding to seek registration of the marks on 26 May 2011. I accept Mr Howes' version of the meeting and reject Mr Briggs' to the extent it is inconsistent. For completeness, I reject the evidence of another director of the applicant, Mr Cave, and the applicant's office manager, Ms Scarf, that the meeting was held in May 2011. Mr Cave was not there and although Ms Scarf was, both are contradicted by the entry in Mr Howes' diary. In addition, both witnesses' ability to recall at the trial in December 2014 and January 2015 whether a particular meeting happened in May or June 2011 without being able to identify any reason for such elephantine precision was not credible. 27 As to (b), after the meeting between Mr Howes and Mr Briggs the second respondent sought registration of the trade mark 'ACPA' on 15 June 2011 and incorporated the first respondent on 23 June 2011 under the same name. I accept the applicant's submission that ACPA most likely stood for Anchorage Capital Partners Australia Pty Ltd. However, I do not think that the name of the first respondent had any impact upon the applicant's decision-making processes. Mr Briggs was quite aware after the meeting on 10 June 2011 that the second respondent was going to continue to use the US ANCHORAGE names in Australia. In any event, the applicant had already committed itself to using the ANCHORAGE marks when it applied for their registration on 26 May 2011. Indeed, the legal advice the applicant received at the time it was considering whether to make that application explicitly referred to the existence of the second respondent and the fact that it was using the US ANCHORAGE names. Indeed, presciently, it contemplated that the second respondent might even eventually put forward a prior use defence. In those circumstances, I do not accept that the applicant relied upon the fact that the first respondent was called ACPA or that the second respondent sought registration of the mark ACPA. Mr Briggs denied receiving this advice. I reject that evidence, which is implausible. 28 As to (c), in May 2012, nearly a year after Mr Howes and Mr Briggs met, the first respondent sought the agreement of the applicant to erect a sign in its reception area which would have read ANCHORAGE CAPITAL GROUP. The applicant characterised this as a recognition by the first respondent that it was not entitled to use the name and needed the applicant's permission. I do not agree. Mr Howes knew there were sensitivities about the name of the two businesses and the sign was a trivial matter in the larger scheme. I conclude that Mr Howes was seeking to avoid unnecessary confrontation over a sign. I do not find that he was seeking permission because he knew the first respondent needed it. It was said that Mr Howes' credit was deleteriously affected by his unwillingness to agree that what had happened was a seeking of permission on his part. I do not agree. Mr Howes did not accept counsel's suggestion because it was simply not a fair characterisation of what occurred. His credit was unaffected. In saying that, I am aware that I have rejected Mr Howes' evidence about the extent of use by the first respondent but I have thought that an instance of over-enthused exaggeration rather than an indication of dishonesty. In any event, even if I had thought that Mr Howes had sought such a permission, the applicant in no way relied upon that conduct in continuing to use the ANCHORAGE marks. It had committed itself to the use of its name the preceding May. 29 The estoppel case therefore fails. A consequence of these conclusions about the meeting between Mr Howes and Mr Briggs is that I do not accept that the respondents have in any way acted in bad faith. The second respondent has continued to use the US ANCHORAGE names just as it always has and has never suggested that it would not do so. There is no evidence that it is seeking somehow to exploit confusion surrounding the names. The fact that the respondents became aware of the applicant from no later than May 2011 does not provide any basis for a conclusion of bad faith.

Is the power to remove the applicant's registration of the marks enlivened? 30 The answer to this question is 'Yes'. The respondents claim that the marks were liable to be removed from the register for the following reasons: (a) the applicant was not the owner of the marks (there having been prior use) (ss 88(2)(a) and 58 of the Act); (b) there was a likelihood of confusion (ss 88(2)(a), (c) and 60 of the Act); and (c) the registration of the marks had been contrary to law (ss 88(2)(a) and 42(b) of the Act). 31 For the following reasons, I accept that the power to remove the marks is enlivened by reason of (a) but not (b) or (c).

(a) Applicant not owner of marks: sections 88(2)(a) and 58 32 It was not in dispute that the applicant would not be the owner of the ANCHORAGE marks if prior to the earlier of its first use of the marks in Australia another person in the course of trade in Australia used a mark which was substantially identical with the registered marks in relation to the same kinds of services for which the applicant's marks were registered: The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 423-424 per Kitto J; Moorgate Tobacco Co Ltd v Philip Morris Ltd [No 2] (1984) 156 CLR 414 at 432 per Deane J (with whom Gibbs CJ, Mason, Wilson and Dawson JJ agreed). 33 The debate between the parties was fourfold: (a) whether there was an additional requirement that it should be shown that the earlier user of the mark was entitled to its exclusive use; (b) whether it was shown that the second respondent had used substantially identical marks to the ANCHORAGE marks in the course of trade; (c) whether it was open to the respondents to rely on use of substantially identical marks by other members of the second respondent's group; and, (d) if so, whether such use was established. 34 As to (a), the applicant relied upon a passage in Re Hicks's Trade Mark (1897) 22 VLR 636 (FC) at 639-640 where Holroyd J, speaking for the Court, said that for a person to be the proprietor of a mark he 'must have claimed to be the proprietor, and the word "proprietor" must be taken to mean the person entitled to the exclusive use of that name'. However, this is not a statement that to establish prior use one must establish that the prior user had an exclusive right to use the name. What it is saying is that in order to obtain registration one needs to show that no-one else has been using the name as a trade mark in respect of the same goods or services. What follows from Re Hicks's Trade Mark is not, as the applicant submits, that it is necessary for the second respondent to show that it had a right to prevent others from using the US ANCHORAGE names; rather, the point of the second respondent's prior use is to show that the applicant's use was itself not exclusive. 35 As to (b), subject to the next paragraph the evidence shows that between 2004 and 2007 the second respondent was engaged principally in one kind of activity in Australia and that was seeking to make, and arranging, investments in Australian businesses. For the reasons I have given in relation to the issue of infringement, I am not persuaded that any of the second respondent's uses of the US ANCHORAGE names associated with those activities was trade mark use. If I am wrong in my conclusion about the lack of trade mark use in the infringement debate, that will only have the effect of substantially increasing the amount of prior use in the expungement claim. This may suggest, subject to the issue of whether the discretion to expunge should actually be exercised, that the applicant's case was doomed before it began. The second respondent's activities in Australia did not change substantially across the whole period. Its use was either trade mark use, in which case the second respondent's prior use case would succeed, or it was not, in which case the applicant's infringement suit would fail. Either way, the applicant would lose. 36 Be that as it may the evidence shows that on 25 and 30 January 2007 (before the applicant commenced business) the second respondent sent potential institutional investors a presentation made up of slides entitled 'ANCHORAGE CAPITAL GROUP' with the words 'ACP, ACC, & ASC FUNDS OVERVIEW' by which it sought to solicit investments in some of its funds. Although the applicant disputed this, I am satisfied that this was sent on behalf of the second respondent (which was confusingly not then called Anchorage Capital Group LLC). Although the presentation was said to be provided by an entity then bearing that name it was expressed to be sent on behalf of Anchorage Capital Group LLC and that entity's affiliates which included the second respondent (which, as I have said, was then known by another name). I accept that this was trademark use in the course of trade. The second respondent was seeking to provide its fund management services to investors using the US ANCHORAGE names. 37 A case was also advanced that in the solicitors' correspondence between the parties prior to the commencement of these proceedings, the respondents' solicitors had failed to contradict the applicant's claim. I find that submission difficult to square with the statement in the respondents' solicitors' letter of 21 June 2013, 'Our clients consider that your client's broad and vague assertions and allegations have no basis'. 38 Whilst I accept that the two uses in January 2007 referred to in [36] were very slight compared to the second respondent's much more substantial investment activities, it is established in the case of a foreign trader seeking to establish a local reputation that that kind of very slight use will suffice: The Seven Up Company v O.T. Ltd (1947) 75 CLR 203 at 211. 39 As to whether substantial identity is established, the second respondent was certainly using ANCHORAGE in its presentations and ANCHORAGE is identical with the applicant's ANCHORAGE mark. It was also using ANCHORAGE CAPITAL which was identical with the applicant's ANCHORAGE CAPITAL mark. I do not accept that its use of either ANCHORAGE CAPITAL or ANCHORAGE CAPITAL GROUP were substantially identical with ANCHORAGE CAPITAL PARTNERS or ANCHORAGE. 40 As to (c), I do not accept that the respondents are limited in their efforts in seeking to show that others besides the applicant had used the marks as trademarks prior to the priority date to showing that the second respondent had done so. It emerged during the trial that the investment funds which are administered by the second respondent are held by a variety of other legal entities within the second respondent's group of companies. The second respondent acts as the investment manager for these various funds and the role of these entities is largely passive, that is to say, it is the second respondent which conducts the business of investing, even if the money which is invested is owned by these other entities in the group. The contracts evidencing the nature of the second respondent's role with the various funds were incomplete but largely supported this view. In any event, this was also the effect of Mr Fitzpatrick's evidence, which I accept. Although it was submitted that I should not find this, I accept that Mr Fitzpatrick was employed by the second respondent from 2005 until 2011. This was his evidence in chief. Following a bewildering cross-examination by Mr Leopold SC which confusingly exploited the fact that the second respondent swapped names with another entity now called Anchorage Advisers LLC in 2010, Mr Fitzpatrick momentarily agreed that he was employed by this other entity. The cross-examination was confusing and unfair and I regard this answer as having no probative value. 41 Despite that, from time to time - and particularly in transactional documents - the names of these other Anchorage entities do appear. This information emerged at the trial as a by-product of time consuming efforts by the applicant to rebut the second respondent's case that it had used the US ANCHORAGE names in Australia. The tactic was to show that such use as there had been was by other members of its group. It was misconceived because, whilst it might well show that the second respondent had not on all occasions been the user of the US ANCHORAGE names, it was of no use in resisting the second respondent's argument that the applicant was not the owner of the marks because others had been using them as trademarks for the same services before the priority date. I do not accept that the applicant should be protected from the legal consequences of its own evidentiary misadventures. I therefore accept that the respondents are entitled to rely upon uses of the US ANCHORAGE names by the other members of its group which the applicant has succeeded in showing were also using the names. 42 As to (d), there were a number of instances prior to 2007 in which various fund entities within the second respondent's group used the US ANCHORAGE names in transactions in Australia. Often these were not related to negotiations to acquire interests (which were generally conducted by the second respondent) but were more closely tied to the settlement elements of the transactions. For the reasons I have already given, however, I do not think that any of these arrangements involved the use by these entities of the names as trademarks in the course of their trade. They were not attempting to distinguish their services from those of others using the names because they were not providing services by passively investing in Australian businesses. On the other hand, I do accept that the two presentations referred to above in relation to (b) also establish trademark use of the names by each of the entities on whose behalf they were sent (that is, all of the affiliates within the group) and not just the second respondent. 43 In those circumstances, I conclude that the second respondent and its affiliates used the US ANCHORAGE names in relation to the provision by them of funds management services on two occasions in January 2007 before the priority date and that this use was sufficient to mean that the applicant was not the owner of the ANCHORAGE and ANCHORAGE CAPITAL marks. The power to remove the marks from the register is enlivened under s 88(1)(a) of the Act. A corollary of this conclusion is that the second respondent was entitled to seek registration of the ANCHORAGE and ANCHORAGE CAPITAL names as trademarks. It was for that reason that I would have upheld the second respondent's defence based on ss 122(1)(f) and 122(1)(fa): see above at [18].

(b) Likelihood of confusion: sections 88(2)(a) and (c) and 60 44 Section 88(1)(a) will be enlivened by s 60 via s 88(2)(a) only if the US ANCHORAGE names had acquired before the priority date a reputation in respect of the services for which the applicant's marks are registered. I have found that the second respondent only used the ANCHORAGE names to distinguish services on two occasions in respect of its fund raising activities in January 2007. I do not accept that it had developed a reputation in Australia in the names in respect of those services. Consequently, s 60 does not apply and provides no basis to exercise the power in s 88(1)(a). 45 The question for s 88(2)(c) is whether, at the time rectification was sought, the use of the ANCHORAGE marks by the applicant was likely to deceive or cause confusion. I do not think that it was. None of the relevant consumers in this market would ever be confused by the marks. They were making substantial institutional investments, not buying washing detergent.

(c) The registration of the marks was contrary to law: sections 88(2)(a) and 42(b) 46 The suggested illegalities were breaches of provisions such as ss 18 or 29 of the Australian Consumer Law and ss 12DA, 12DB(1)(e) or (f) of the Australian Securities and Investments Commission Act 2001 (Cth), i.e., misleading and deceptive conduct. For the reasons I have just given, I do not accept that the registration of the marks would have been misleading or deceptive.

Defences to prior use 47 I have dealt with the alleged estoppel above at section 5. An additional defence raised by the applicant was a contention that any prior use by the second respondent was unlawful because it involved dealing in financial products without an Australian Financial Services Licence, hence engaging in the provision of financial services without a licence contrary to s 911A(1) of the Corporations Act 2001 (Cth). If I may respectfully borrow a phrase from the reasons for judgment of Quinn J in The Hearing Clinic (Niagara Falls) Inc v 866073 Ontario Ltd [2014] ONSC 5831 (7 October 2014) at [1466], 'the light is growing dim as we descend to the bottom of the complaints barrel'. I reject this argument for at least two reasons. First, I do not accept that the fact that a business was acting illegally in some ways provides a defence to a claim relating to its trade marks. The use of the US ANCHORAGE names was not a breach of the Corporations Act. Secondly, the second respondent's investment activities in Australia did not involve the conduct of a business here so that they cannot constitute the conduct of a financial services business even if they were providing a financial service.

Is there is a discretion once the power is enlivened? 48 Uninstructed by authority, I would agree with the conclusion of Branson J in EOS Australia Pty Ltd v Expo Tomei Pty Ltd (1998) 42 IPR 277 at 286-287 that the word 'may' in s 88(1) means 'must' and that no discretion arises. However, a Full Court concluded in Crazy Ron's Communications Pty Ltd v Mobileworld Communications Pty Ltd (2004) 209 ALR 1 at 29 [129] that the power was discretionary. In doing so the Court relied upon the conclusions of the High Court in Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 at 80-81 [87] to similar effect but in relation to earlier provisions whose wording is, in my opinion, materially different. It seems to me, therefore, that there may be reason to doubt the correctness of this aspect of Crazy Ron's. However, as a trial judge I am bound by it and conclude that the power is discretionary.

Facts relevant to the exercise of the discretion 49 Although I am yet to hear argument on whether the discretion should be exercised to expunge the marks from the register the following matters may be relevant to that exercise. 50 I do not find that the applicant's executives deliberately chose the name ANCHORAGE knowing of the second respondent's business. The witnesses called by the applicant on this issue were its senior executives, Mr Cave, Mr Briggs and Mr Wong. They gave evidence that they were not aware of the second respondent when they met in early 2007 (with a Mr Brennan) to form the applicant and select its name. They said that they had sat in an office in Bridge Street and, over several hours and possibly, although not certainly, over several meetings tried to work out a good name for the new business they were setting up (each man was coming from an earlier business). They had used a dictionary and starting at 'A' had initially come up with the word ANCHOR. 51 Mr Wong's wife thought that ANCHOR had an unfortunate rhyming connotation. In any event, they eventually settled on ANCHORAGE which, to my mind, does not necessarily allay Mrs Wong's concerns, although it potentially contributes a splendid new word to the language. As this process was undertaken, Mr Cave, apparently, would duck out of the room and check on a computer to see if each domain name was available. His searches revealed to him that anchoragecapital.com was already taken but he was not fussed by this because pretty much every .com domain name was taken. On the other hand, anchoragecapital.com.au was available and that was good enough for him. He checked www.anchoragecapital.com and saw that there was no website. At the time that he did these checks the second respondent had not yet established its website, which did not occur until 2009. 52 The respondents submitted that it was implausible that these men did not know of the second respondent's business. I have found this a difficult question to resolve but have come to the conclusion that I am not prepared to find that their evidence about it was false. I accept that the second respondent's business in the United States was significant and that, as at 2007, it had been engaged in quite a few significant transactions in this country. I also accept that Mr Briggs, Mr Wong and especially Mr Cave are very experienced businessmen. In order to assess whether it was impossible that they would not have heard of the second respondent in 2007 I would need to know a lot more about the industry than I presently do. More importantly, I do not think that these men would have set up the business with the name ANCHORAGE if they had truly appreciated that the second respondent was operating in Australia. Nor do I think that the fact that the domain name anchoragecapital.com was already reserved should have put them on notice. For all they knew, it was owned by a company selling knitting needles, particularly because there was no website. I therefore do not find either that they knew or that they ought to have known of the second respondent's activities. 53 In reaching that conclusion I have taken account of what I regard as the unsatisfactory nature of Mr Briggs' and Mr Cave's evidence as to when the meeting between Mr Briggs and Mr Howes occurred. I accept that the applicant and its witnesses made a concerted attempt to put before the Court a case that the applicant had applied for registration of the ANCHORAGE names in reliance upon what Mr Howes had allegedly told Mr Briggs. I am satisfied that the applicant, and here I mean at least Mr Cave and Mr Briggs, was perfectly aware that the decision to register the ANCHORAGE marks was made after the receipt of detailed advice from Minter Ellison, which advice referred to the possibility that the second respondent might seek to expunge the marks for prior use. That advice showed that the applicant knew all about the existence of the second respondent, what it was doing and the implications for its trademark application and that it was upon that advice that the applicant relied in pursuing the registration application. The evidence given by the applicant's witnesses thereafter that they had acted because of what Mr Howes had told them cannot have been believed by them to have been true at that the time that they gave it. This reflects poorly on their credit but it does not cause me to alter my view of their reasons for choosing the ANCHORAGE name in 2007.

(a) Evidence 54 During the course of the trial Mr Fitzpatrick gave evidence that he overheard members of the team at the second respondent referring to the second respondent as 'ANCHORAGE'. Given the size of the team, Mr Fitzpatrick's knowledge of what they were doing and the physical proximity of the staff to each I accept that this material may be admitted. Although I accept Mr Fitzpatrick's evidence about this was sincere, I doubt his ability to recall this level of detail at this remove of time and believe it more likely to be an innocent reconstruction. I have placed no weight upon it.

11. Conclusions 55 The application will be dismissed. I will hear the parties further on whether the ANCHORAGE and ANCHORAGE CAPITAL marks should now be removed from the register in light of my findings and on the question of costs. The respondents are to file any submissions on those issues within 28 days hereof and the applicant any submissions in response within a further 28 days. I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.