Apand Pty Ltd v The Kettle Chip Company Pty Ltd

IN THE FEDERAL COURT OF AUSTRALIA) NEW SOUTH WALES DISTRICT REGISTRY) No. NG 852 of 1995 GENERAL DIVISION ) ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: PEPISCO AUSTRALIA PTY LIMITED First Appellant PFI AUSTRALIA PTY LIMITED Second Appellant (First and Second Appellants together trading as FRITO-LAY AUSTRALIA) AND: THE KETTLE CHIP COMPANY PTY LIMITED Respondent CORAM: LOCKHART, SHEPPARD, SACKVILLE JJ PLACE: SYDNEY DATE: 15 FEBRUARY 1996 REASONS FOR JUDGMENT SHEPPARD J: The facts and the relevant sections of the Trade Marks Act 1955 ("the Act") have been referred to in the judgment of Sackville J which I have had the opportunity of reading. They are also dealt with in the comprehensive judgment of the trial judge, Lindgren J (1995) 132 ALR 286. The respondent ("Kettle") is the registered owner of a trade mark consisting of the word "Kettle". The mark is registered in Part A of the Register of Trade Marks in respect of "all goods in class 29, including potato based goods which

include or are comprised of potato". The product in question is potato chips. In 1989 Kettle commenced manufacturing potato chips using what is described as the batch cooking method. It sold this new style of potato chips successively under the names or labels, "The Kettle Chip", "The Kettle Chip Co.", and, since December 1993, simply "Kettle". In each case the packets have shown prominently on them a drawing of a cauldron with a fire underneath it. Kettle's venture into the potato chip market has been extremely successful. It is unnecessary to refer to the detail of its sales but they have been considerable. His Honour said (at 287-8) that the batch cooking method involves the dropping of peeled potato slices in a batch into vegetable oil or sunflower oil contained in large rectangular stainless steel gas fired vessels in which the potato slices are stirred. In the case of Kettle, the stirring is done by hand by cooks who stand behind the vessels. The temperature of the oil falls substantially and suddenly when the potato slices are dropped into it, then rises gradually as the cooking progresses. The cooking takes longer than under the conventional method. Potato chips produced by the batch cooking method have distinctive features. They are hard or brittle and so are said to be "crunchy". The expression "hard bite" is often used to refer to this quality. They are also said to have strong or "aggressive" flavours. The appellants ("Frito-Lay") also manufacture and market potato chips. Their premier brand and leading selling potato chip product in Australia is sold under the name "Thins" which is a registered trade mark. Frito-Lay has used this brand continuously since 1982. Thins have a strong presence in the snack food market. Frito-Lay has expended very substantial moneys on advertising and promoting the Thins brand. The problem in the present case was triggered by Frito-Lay's redesign of its packaging and promotional material early in 1995. Approximately half the front of the packet is occupied by the name "Thins". The packet has a vivid blue and white striped background. The word "Thins" is partly over this background and partly over a yellow circle perhaps intended to represent a potato chip. In the middle of the packet are the words: "DOUBLE CRUNCH Kettle Cooked Potato Chips". One needs to see the packet to understand the way in which the wording is set out and the setting in which the word "Kettle" appears. By distinguishing between the letters used in the expression "DOUBLE CRUNCH" and those used in the expression "Kettle Cooked Potato Chips" I have endeavoured to show that the former expression is emphasised more than the latter. Neither expression appears in print of the size in which the word "Thins" appears on the top half of the packet. The lower half of the packet indicates prominently the flavour of the chips inside the packet e.g. "Plain", "Jungle Curry" or "Sweet Chili". The back of the packets again show prominently the word "Thins" on the yellow circle. The word is followed by the expression "Double Crunch", the flavour and then the phrase "Kettle Cooked Potato Chips". In much smaller writing underneath this phrase is the statement, "Now your favourite Thins are kettle cooked." A description of the cooking process follows. Essentially the question to be determined is whether the word "Kettle" where it is used on the packaging is used by the appellant as a mark to distinguish and to identify its goods or whether the use of the word in the expression "Kettle Cooked" is merely a description of the way in which the chips are cooked. The relevant provisions of the Act are the definition of trade mark in s.6 and ss. 58, 62 and 64. Relevantly, a trade mark is defined to mean a mark used or proposed to be used in relation to goods or services for the purpose of indicating, or so as to indicate, a connection in the course of trade between the goods or services and a person who has the right, either as proprietor or as registered user, to use the mark. Section 58 provides that the registration of a trade mark in Part A or Part B of the Register, if valid, gives to the registered proprietor of the trade mark the right to the exclusive use of the trade mark in relation to the goods or services in respect of which the trade mark is registered. Section 62 provides that a registered trade mark is infringed by a person who, not being the registered proprietor of the trade mark or a registered user of the trade mark, uses a mark which is substantially identical with, or deceptively similar to, the trade mark, in the course of trade, in relation to goods or services in respect of which the trade mark is registered. Paragraph 64(1)(b) of the Act provides that the use in good faith by a person of a description of the character or quality of his goods or services does not constitute an infringement of a trade mark. His Honour found (at 297) that there was uncontradicted evidence that within the trade, the vessels in which the batch cooking of potato chips takes place, whether by Kettle or by Frito-Lay, are called variously "kettle cookers", "kettle fryers", "kettle batch cookers", "batch fryers", "cookers", "fryers" and "kettles". His Honour said that there was evidence that the vessels had been bought and sold as kettles. He said that in two applications which Kettle made for the registration of device marks under the Act, it described the goods in question as "hand fried potato chips cooked in a kettle". His Honour said that because of this evidence, and also because of its own corporate name and the description of the cooking process on the reverse side of some of its earlier packaging, Kettle could scarcely suggest that the expression "Kettle Cooked" did not provide one description of the method of cooking which had been used to produce its distinctive hard bite, aggressively flavoured potato chips. His Honour also said that, because of the fact that "Kettle" was sometimes used in the trade to refer to the large stainless steel cooking vessels in question, it followed that the expression "Kettle Cooked" would be readily understood within the trade. As his Honour said, however, the question in the present case concerns a use on the front of the packets directed to potential customers who are not familiar with the trade. His Honour asked himself the question, what do the words "Kettle Cooked" convey in those circumstances to ordinary persons likely to be purchasers of the chips. His Honour said (at 297-8): "In addressing this question I accept: (a) that, by and large, potential buyers will wish to decide instantly whether to buy such low price snack foods and will not have the time or inclination to study or ponder the significance of words used on the packets; (b) that a substantial number, but not all, of the potential buyers will be aware of the 'Kettle' potato chip; (c) that it may be an error to assume that a word always conveys 'meaning', because language may operate in a far more subtle way." His Honour said (at 298) that the words "Kettle Cooked" were directed to two classes of members of the public; those not aware of Kettle potato chips (referred to by his Honour as class 1 potential buyers) and those who were aware of them (referred to as class 2 potential buyers). His Honour referred to the meaning ascribed to the word "kettle" by dictionaries and continued (at 299) by saying that most members of the public would understand the word "kettle" to refer only to a portable covered metal vessel, with a spout and handle, used to boil water for domestic purposes, and that they would not be familiar with the other meanings given in the dictionary definitions. I shall refer to the dictionaries a little later on. Later his Honour said (at 299): "The expression 'kettle cooked' is a compound adjective. In the way in which Frito-Lay has used it on its packaging, it fulfils the grammatical function of signifying 'cooked by the use of a kettle'. Probably most class 1 potential buyers who read the words 'Kettle Cooked Potato Chips' would go on to conclude that the expression was being used to mean 'cooked in a kettle' and that the word 'kettle' must therefore be capable of referring to a large cooking vessel of some kind. Such readers would probably conclude that the manufacturer wished to convey that it was a positive feature of the chips in the packet that they had been cooked in a kettle. But they would be puzzled as to why the manufacturer would expect this piece of information to dispose people to buy, since they would understand that most other potential buyers, like themselves, would know only the familiar meaning of the word 'kettle'. These class 1 potential buyers might conclude that the manufacturer wished to convey that there was some advantage which readers could not be expected to understand arising from the fact that the particular potato chips had been cooked in a cooking vessel called a 'kettle' rather than by some other method. For the somewhat bemused class 1 potential buyers, one of the two classes supposedly contemplated by Frito-Lay, the use of 'Kettle Cooked' is purely descriptive. Class 2 potential buyers, those familiar with the Kettle chip, are in a different position. Kettle has attracted to the word 'Kettle' when used in relation to potato chips, a secondary meaning, namely, a relatively recently introduced hard bite strongly flavoured potato chip of the kind sold under the name 'Kettle' (see below). The effect of a reading of the word 'Kettle' in the expression 'Kettle Cooked Potato Chips' by a class 2 potential buyer is determined by that person's existing schema. The dominant relevant element of this is his acquaintance with the secondary meaning of 'Kettle' referred to. Such a reader is not troubled by the unfamiliarity with the unusual and perhaps technical use of the word which troubles class 1 potential buyers. the most distinctive word in the expression 'Kettle Cooked Potato Chips' is the word 'Kettle'. The words 'potato chips' tell him virtually nothing that he does not already know from the nature and location of the packets. The word 'cooked' is not particularly informative either. It is the word 'Kettle' which is calculated to impress and which takes his attention. The secondary meaning of the word is immediately suggested. He is not distracted by the possibility that 'Kettle Cooked' may have a specific denotation of 'cooked in a cooking vessel called a 'kettle'". His Honour went on to say (at 299-300): "Unlike such words as 'roasted', 'baked', 'home baked', 'fried' and 'pan fried', the expression 'kettle cooked' is not an expression in common use. The expression has been composed by Frito-Lay by the use of the familiar linguistic device of forming a compound adjective by the linking of a noun and a past participle. The grammatical meaning of the resultant compound adjective is not difficult to divine: 'cooked by the use of a kettle'. But obviously it is not this bland and purposeless description of a production process which Frito-Lay intends to convey or which is in fact conveyed. Rather, the expression is directed to those who have bought and tasted chips manufactured (cooked) by Kettle--'Kettle manufactured chips' (Kettle cooked chips). For them, the word 'Kettle' immediately suggests the hard bite aggressively flavoured kind of chip associated with the word 'Kettle'. For them, 'Kettle Cooked' means 'Kettle Style', or simply 'Kettle' (used as an adjective of taste and texture)." I see the force of this analysis. Nevertheless, I think that one has to be astute to the danger of endeavouring to classify or categorise too precisely the various types of customer who may buy these products or may be potential buyers of them. Many will not have any view about the matter at all. Others will not be familiar even with the kettle referred to by his Honour. Many households have not had kettles for years. The electric jug is at least as common as the electric kettle. There is no evidence about any of this and the exercise has a large degree of speculativeness and subjectiveness about it. I do think that there would be some people who would understand from the description "Kettle Cooked" that the chips were in fact cooked in a kettle of the type shown on the face of Kettle's packaging. In other words they would know that it was unlikely to refer to the conventional kettle that many householders have on their stoves or connected to an electric power point. After all, the dictionaries define the word "kettle" to include this meaning as a modern use of the word. Thus the Macquarie Dictionary (2nd rev. 1987) defines "kettle" to mean a portable container with a cover, a spout and a handle in which to boil water, any of various containers for cooking food, "melting glue etc", a fish kettle, and an open vessel for heating metals of low melting point. The expression "kettle of fish" is referred to. That, of course, is a very well used expression indicating, as the dictionary says, a mess, a muddle or an awkward state of affairs. To similar effect is the definition of "kettle" in the Oxford English Dictionary (2nd ed. 1989) which defines "kettle" to mean a vessel, commonly of metal, for boiling water or other liquids over a fire, a pot or cauldron and "now especially" a covered metal vessel with a spout used to boil water for domestic purposes. Those who say that something is "a pretty kettle of fish" probably do not think very much about the use of the word kettle in the phrase. They know what the phrase means. But many others would know that the meaning of "kettle" was not restricted to the conventional domestic tea kettle that is found in many households. His Honour concluded his analysis by saying that the expression "Kettle Cooked" was directed to those who had bought and tasted chips manufactured or cooked by the respondent, that is, they were kettle cooked chips. His Honour said that, to them, the word "kettle" immediately suggested the hard bite, aggressively flavoured kind of chip associated with the word "kettle". To them "Kettle Cooked" meant "Kettle Style" or simply "kettle" (used as an adjective of taste and texture). Eventually his Honour concluded (at 302) that the "unfamiliar and idiosyncratic" use of the word, its strong secondary meaning and the likely circumstances surrounding display and sale, combined to give it, to a substantial extent, the purpose and effect of distinguishing between Frito-Lay's potato chips and those of other manufacturers. Whatever one says about his Honour's categories and his analysis of the reactions of potential customers to the words "Kettle Cooked", I think it is clear that the expression "Kettle Cooked Potato Chips" used on both the front and back of the packaging is descriptive of the method whereby the potato chips are cooked. To those who know the full ambit of the meaning of the word "Kettle", that would be clear. But I agree that, for a variety of reasons it may not be clear to a majority of people. And, with respect, his Honour, in my opinion, is correct when he concludes that the word "kettle" in the context of the phrase in which it is used will convey to the customer the message that the potato chip which the customer buys will be crunchy and of the hard bite variety. One asks how did the customer gain this impression. The answer may be that the customer gleaned this from the words "Double Crunch" on the packaging. But I think it would be right to say that others, and perhaps the majority, would gain the impression because of familiarity with the style of chip manufactured by Kettle. Customers would know that if they bought Kettle chips, they would acquire such a product. Similarly, if they bought Frito-Lay's Thins, they would also expect that the potato chips would have similar characteristics. That would be because of Kettle's marketing and selling of products having those characteristics. Nevertheless, the question remains whether the use of the word "Kettle" in the phrase "Kettle Cooked Potato Chips" constitutes the use by Frito-Lay of Kettle's trade mark. The phrase is a descriptive one. There can be no doubt about that. But that does not mean that the presence of the word "Kettle" in the phrase will not amount to the use of the word "Kettle" in that context as a trade mark. Unless Frito-Lay has used "Kettle" as a mark, it will not be correct to say, as his Honour has, that the purpose and effect of the use of the word give it the purpose and effect of distinguishing between Frito-Lay's potato chips and those of other manufacturers. Earlier in his judgment, but particularly in support of this conclusion, his Honour relied on the judgment of Williams J in Mark Foys Limited v Davies Coop & Company Limited (1956) 95 CLR 190 at 205-6. Dixon CJ agreed in Williams J's judgment (at 195). Kitto J dissented. There the phrase in question was "Tub Happy". Dixon CJ and Williams J regarded it as a coined phrase. Kitto J had a different view; see at 206-7. With respect, I think Mark Foys is not helpful here because I do not regard the expression "Kettle Cooked" as coined. It is an ordinary English expression notwithstanding the fact that it may be said that many consumers will not understand its meaning unless they refer to a dictionary. Lindgren J also relied on the judgment of Gummow J in Johnson & Johnson Australia Pty Limited v Sterling Pharmaceuticals Pty Limited (1991) 30 FCR 326 at 347-8. Gummow J there said:

"When the issue is one of infringement, a pivotal question is whether the use complained of is use by the alleged infringer as a trade mark. The answer to that question requires an understanding of the 'purpose and nature' of the impugned use: see Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (the Shell case) (1963) 109 CLR 407 at 426, per Kitto J. As his Honour there points out, with reference to Edward Young & Co Ltd v Grierson Oldham & Co Ltd (1924) 41 RPC 548, and as s 66 of the present Act also indicates, the nature of the allegedly infringing use may be considered in the light of a usage common in the relevant trade. The relevant context, where the mark is a word mark, includes a consideration of the way in which the word has been displayed in relation to the goods and advertisements of which complaint is made: see Mars GB Ltd v Cadbury Ltd [1987] RPC 387 at 402, per Whitford J. Where the trade mark allegedly used by the defendant comprises ordinary English words (such as 'Page Three', considered by Slade J in News Group Newspapers Ltd v The Rocket Record Co Ltd [1981] FSR 89 at 102) then, as this decision illustrates, that circumstance may be taken into account by the court in the process of reasoning by which it accepts or rejects a submission that the use in question is not a trade mark use but a description of the goods in question. To say that is not to gainsay the point made by Dixon CJ in Mark Foys Ltd v Davies Coop and Co Ltd (the Tub Happy case) (1956) 95 CLR 190 at 194-195 that language is not always used to convey a single, clear idea; a mark may have a descriptive element but still serve as a badge of trade origin. However, where the issue is one of infringing use by use of a word mark (as in the present case), the fundamental question remains, to paraphrase what was said by Williams J in the same case (supra) (at 205), whether those to whom the user is directed are being invited to purchase the goods (or services) of the defendants which are to be distinguished from the goods of other traders 'partly because' (emphasis supplied) they are described by the words in question. Upon the present appeal, counsel for the respondent submitted that there is a trade mark use if the defendant applies the mark to packaging of goods 'so as to refer to those goods'. Counsel for the appellant submitted that this was to put the matter too widely and was an illegitimate attempt to expand the exclusive rights given by the Trade Mark legislation to something akin to a literary copyright. I agree. A similar submission had been put to Hill J and rejected (96 ALR at 306). To adapt what was said in the Shell case (supra) (and in this regard nothing decisive for this purpose turns upon the nature of the user there in question, a television advertisement), the true issue may be expressed as follows, as Kitto J put it (109 CLR at 425): 'With the aid of the definition of 'trade mark' in s 6 of the Act, the adverbial expression [use as a trade mark] may be expanded so that the question becomes whether, in the setting in which the particular pictures referred to were presented, they would have appeared to the television viewer as possessing the character of devices, or brands, which the appellant was using or proposing to use in relation to petrol for the purpose of indicating, or so as to indicate, a connection in the course of trade between the petrol and the appellant. Did they appear to be thrown on to the screen as being marks for distinguishing Shell petrol from other petrol in the course of trade?'" The mark in question in the Johnson & Johnson case was "caplets" designating a capsule shaped tablet. Gummow J concluded (at 351): "However, on the question of infringement, one asks whether, in the setting on the package on which 'Caplets' is depicted, it appears to possess the character of a word which Johnson & Johnson is using in relation to its paracetamol product, for the purpose of indicating or so as to indicate a connection in the course of trade between Johnson & Johnson and the contents of the package. Does Caplets appear as a mark for distinguishing a Johnson & Johnson product from other pain-killing products in the course of trade? In my view, in the circumstances as I have attempted to describe them, the appellant has not used 'Caplets' on its packaging so as to invite persons to purchase the product in the packaging which is to be distinguished from the products of other traders, partly because the term 'Caplets' is used in relation to them: cf the Tub Happy case (at 205)." Lockhart J and Burchett J reached the same conclusion. In the course of his judgement, Lockhart J said (at 339): "The fact that the word 'caplets' may not have found its way into the ordinary parlance of Australians does not deprive it of the characteristic of a descriptive word for the purposes of the law of trade marks. I confess to being unable to understand how the word, in association with pharmaceutical products, can have any meaning except as indicating the form or shape of the product. How the word could be said to be distinctive of a respondent's goods in the sense of a badge of origin is a proposition which prima facie I have difficulty in accepting. I see no intrinsic difference between it and words such as tablets or capsules except that they are now words of ordinary English usage, but that is a distinction of degree not quality. That is not to say that the word 'caplets', being, as I think it is, essentially a descriptive word, is not capable of being distinctive of a particular proprietor's products. The decided cases are replete with examples of descriptive words having a secondary or distinctive meaning. The real question in this case is whether it is one of those cases. The respondent has used the word Caplets in association with the words Panadol and Panadeine obviously because those words are very well known to consumers of paracetamol products. By placing Caplets underneath (or for that matter beside) each of those words may lead people to link the two, but that is a very different question from asking whether Caplets is used in a trade mark sense. However this is not to deny the possibility of using two marks as trade marks in the same packaging or advertisement: for example, see the Tub Happy case ('Exacto Cotton Garments -- Tub Happy Cotton Fresh Budget Wise'). Another way of expressing what I have said is that the word 'caplets' is essentially generic and that the evidence does not establish that it is a word which has acquired a secondary and distinctive meaning in Australia." Later Lockhart J said (at 340): "Accordingly, the essential matters to which I referred earlier are determinative of the result of this case which is that the word 'caplets' is essentially descriptive, albeit not yet a common English word, and that the evidence does not elevate it into a different or secondary sense as being distinctive of the respondent's goods, or for that matter those of the appellant. The placing of the word Caplets below or near the name of the analgesics Panadol and Panadeine in my opinion adds nothing by way of indicating that the goods come from the respondent. This indication is derived from the words Panadol and Panadeine themselves. The word by its nature is not readily capable of distinguishing the goods of a trader from other goods. They are essentially descriptive of the character or quality of goods." I refer also to the judgment of Burchett J (at 343-4). The question is whether Kettle has used the word "Kettle" in a descriptive sense or as a mark or as both. I find it difficult to escape the conclusion, contrary to that reached by his Honour, that the word is used in a phrase which is purely descriptive and not at all as a mark. As Gummow J said in Johnson & Johnson, a mark may have a descriptive element but still serve as a badge of trade origin. To similar effect are the words of Kitto J in the Shell case quoted by Gummow J at the end of the passage which I have cited from his judgment. In my opinion, the badge of origin of Frito-Lay's product is "Thins" and nothing more. It is true that the expression "Kettle Cooked" may have the secondary meaning found by Lindgren J. But the fact that it has will not turn that descriptive phrase into a badge of origin unless that is the effect of the words. In my opinion, they do not have that effect. The phrase may be regarded as an important part of the get-up of Frito-Lay's product. But that is not relevant to the question of trade mark infringement. It could be relevant to the issues raised by the causes of action for passing off and breach of s.52 of the Trade Practices Act 1974. But in my opinion, they do not establish any infringement of Kettle's trade mark. I agree with Sackville J that that conclusion makes it unnecessary to consider the terms of para. 64(1)(b) of the Act and the relationship between that provision and the provisions of ss.58 and 62. It seems to me that the claim for infringement is defeated by the conclusion that there was no use of the mark as such. It would only have been necessary to consider the provisions of para. 64(1)(b) of the Act if use of the mark was established but as part of a description of the character or quality of the goods. The question of good faith considered by his Honour would then have arisen for determination. It remains to say that I am in agreement with both Lindgren J and Sackville J in relation to the causes of action based on the Trade Practices Act and passing off. The get up of Frito-Lay's packaging varies markedly from the Kettle packaging. Plainly on the face of the packets, Kettle's product is "Kettle Chips" and Frito-Lay's product is "Thins". There is no similarity otherwise between the packaging except for the inclusion in the phrase earlier referred to of the word "Kettle" in Frito-Lay's packaging.

In the result, I would allow the appeal. The orders made by Lindgren J should be set aside and, in lieu thereof, it should be ordered that the application be dismissed with costs. Kettle should pay Frito-Lay's costs of the appeal. I certify that this and the seventeen (17) preceding pages are a true copy of the reasons for judgment herein of the Honourable Justice Sheppard.

IN THE FEDERAL COURT OF AUSTRALIA) NEW SOUTH WALES DISTRICT REGISTRY) No. NG 852 of 1995 GENERAL DIVISION ) ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: PEPSICO AUSTRALIA PTY LIMITED First Appellant PFI AUSTRALIA PTY LIMITED Second Appellant (First and Second Appellants together trading as FRITO-LAY AUSTRALIA) AND: THE KETTLE CHIP COMPANY PTY LIMITED Respondent Coram: Lockhart, Sheppard, Sackville JJ. Place: Sydney Date: 15 February, 1996 REASONS FOR JUDGMENT SACKVILLE J: The Proceedings The appellants appeal by leave against a declaration and orders made by a judge of this Court (Lindgren J.) in proceedings brought by the present respondent ("Kettle"): Kettle Chip Co Pty Ltd v Pepsico Australia Pty Ltd (1995) 132 ALR 286. His Honour declared that the appellants (like his Honour, I shall refer to them collectively by their trade name, "Frito-Lay") had infringed Kettle's registered trade mark

"by advertising, promoting and selling potato chips in packaging bearing the word "Kettle" appearing in the manner in which this word appears on the packaging attached to [the] orders."

His Honour ordered that Frito-Lay be restrained from infringing Kettle's trade mark, inter alia, by promoting or selling potato chips in, or by reference to, Frito-Lay's infringing packaging. The proceedings were stood over to set a timetable for an inquiry into damages, or an account of profits, at Kettle's election. Kettle has filed a notice of contention. By that notice it challenges the trial judge's findings that Frito-Lay had not engaged in misleading and deceptive conduct, in contravention of s.52 of the Trade Practices Act 1974 (Cth), and that Frito-Lay had not passed off its potato chips as those of Kettle. The Facts Kettle is the proprietor of trade mark No. A541078, registered in Part A of the Register of Trade Marks. The trade mark is the word "KETTLE" and is in respect of "all goods in class 29, including potato based goods which include or are comprised of potato". Class 29 includes "meats, fish, poultry and game... dried and cooked fruits and vegetables...edible oils and fats": Trade Marks Act 1955 (Cth) ("TM Act"), s.31(1); Trade Marks Regulations, 1958 (Cth), reg. 6; Sched.4, Part I. The registration is for a period of seven years from 29 August 1990.

Prior to August 1992, Kettle's corporate name was "The Kettle Cooked Chip Company Pty Ltd". In about November 1989, Kettle commenced manufacturing potato chips using what its chief executive described as a "batch cooking process". This process involves peeling and slicing potatoes and dropping them into rectangular steel gas-fired receptacles, in which the potato slices are stirred. In the case of Kettle, the potatoes are stirred by hand until cooked. The temperature of the oil in which the potatoes are cooked varies considerably during the process of cooking. Typically, the temperature falls when the potato slices are dropped into the oil and then rises gradually as the cooking progresses. Cooking by this method takes longer than the conventional method, to which I shall refer shortly. As his Honour found, Kettle was assisted in introducing this method of cooking by a United States corporation, Martins Potato Chip Company. That corporation produced what it described as a "kettle-cook'd potato chip". Until the batch cooking method was introduced into Australia, potato chips for commercial purposes were cooked by the conventional method. This involves a conveyor mechanism carrying a continuous flow of potato slices through an oil filled cooker. The chips are turned by the use of automatic paddles and a constant temperature is maintained. Potato chips produced by the batch cooking method are, as his Honour found, of a hard or brittle texture and can be described as "crunchy". Kettle originally manufactured two flavours, "Lightly Salted" and "Chilli Flavour". "Thai Spice" was introduced in December 1991; "Herb and Spice" in July 1992; and "Honey Baked Ham" in December 1993. These flavours are strong or "aggressive", but are added to the chips after they have been cooked. Kettle applied for registration of a trade mark, comprising a logo including the words "The Kettle Chip", on 21 April 1989. That application described the goods in relation to which the trade mark was sought as follows: "Hand fried potato chips cooked in a kettle. They are cholesterol free." An identical description was used in an application, dated 31 July 1990, for registration of a trade mark in the form of a large cauldron. From November 1989 to March 1992 Kettle marketed its chips in packets which featured the words "The Kettle Chip" in large and striking letters above a symbol of a cauldron with licks of steam. On the reverse side of the package, in small print, appeared the following: "Here at the Kettle Cooked Chip Company we hand cook our chips in large kettles in the old fashioned manner. ... Kettle cooking is an exacting slow process which gives our chips a unique crunchier texture with a more distinctive potato taste."

From March 1992 to July 1993 Kettle used a different package. The main features were the words "The Kettle Chip Co" in eye-catching blue letters, outlined in silver, and the cauldron symbol. The text quoted earlier was reproduced in smaller print on the reverse side. From July 1993 to December 1993 a further change occurred. The packets featured the words "The Kettle Chip" and retained the cauldron symbol. However, the word "Kettle" was much larger than the other words and the letters were in a striking blue colour, outlined in silver. This packet introduced a picture of a sunflower, reflecting the fact that in July 1993 Kettle commenced using sunflower oil rather vegetable oil to cook its potatoes. The reverse of the packet, in smaller print, contained the following statement: "The Kettle Chip Company now cook in a revolutionary new Sunflower Oil ... Our chips are now better, tastier, but still cooked by hand in the same old fashioned manner, one batch at a time, ensuring the great natural taste of the original Kettle Chip." From December 1993, the dominant features of the package used by Kettle have been the single word "Kettle" reproduced in large letters, the cauldron symbol and the image of a sunflower. The words quoted in the last paragraph are reproduced in small letters on the reverse of the package. The trial judge considered (at 290) that "the change in Kettle's name, the elimination of the references to cooking 'in large kettles' and to 'kettle cooking', and finally the elimination of any word other than 'Kettle' as a dominant word on the packet, all indicate a concern on Kettle's part to emphasise the use of that word as a name and to eliminate any suggestion that it was being used in a descriptive or generic sense." This form of packaging, for chilli flavoured chips, is reproduced in Appendix A to this judgment. The trial judge found that Kettle had enjoyed considerable success in marketing its chips, selling over 44 million packets between December 1989 and March 1995. Kettle's product has been distributed through a large variety of small outlets, such as service stations and bottle shops (known as the "route trade"). More recently, the chips have been supplied to supermarket chains. In total the chips have been distributed through about 10,000 outlets. In its marketing, Kettle has used the word "KETTLE", the cauldron symbol and, to a lesser extent, the expression "hand cooked". Kettle also manufactured and packaged potato chips for sale under licence by third parties, including Frito-Lay. Between September 1990 and March 1994, Kettle manufactured some 1,700,000 packets of chips for companies trading under the name "Hawker". These were called "KETTLE CHIPS", the words "Hawker KETTLE CHIPS" appearing on the packets. Between August 1991 and December 1994 Kettle manufactured and packaged about 4,800,000 packets of chips for Frito-Lay. These were marketed under the name "KETTLE CHIPS" and the packets carried the words "Lay's KETTLE CHIPS". The licensing agreement ended in May 1995. Like Kettle's own packets, the Hawker and Frito-Lay packets included the words "HAND COOKED POTATO CHIPS" and the cauldron symbol. Frito-Lay have been marketing potato chips in Australia under the name "THINS" since 1982. According to Frito-Lay's chief financial officer, Mr Riley, THINS is the biggest selling potato chip in Australia, and is supported by a large sales and marketing budget. The THINS line has undergone a number of transformations and in late 1994 some "line extensions" were under consideration by Frito-Lay. A line extension occurs where a new product, such as a new flavour or pack size, is added to the range of products marketed under the one brand. In November 1994 a market research company prepared a report for Frito-Lay, assessing potential developmental opportunities for the THINS brand of potato chips. The report noted that "crinkle-cut" chips had been the dominant segment of the market, but that trends suggested a growth in the market for thin-sliced products. The market research exposed consumers to three line extension concepts for THINS, namely, "THINS KETTLE COOKED POTATO CHIPS", "THINS DOUBLE CRUNCH KETTLE COOKED POTATO CHIPS" and "THINS FINE CUT CRINKLE". The preferred option, for marketing reasons, was "THINS KETTLE COOKED POTATO CHIPS". However, Frito-Lay's management was aware of the potential for legal problems from the use of the word "kettle". It was known that Kettle had succeeded in a claim based on s.52 of the Trade Practices Act 1974 and on passing off against another company, which had brought a line of potato chips produced by the conventional method on to the market under the name of "COUNTRY KETTLE". (The decision at first instance was given in favour of Kettle on 11 November 1993: The Kettle Chip Company Pty Ltd v Apand Pty Ltd (1993) 46 FCR 152 (FCA/Burchett J.). An appeal was dismissed on 30 September 1994: Apand Pty Ltd v The Kettle Chip Company Pty Ltd (1994) 52 FCR 474 (FCA/FC).) Frito-Lay obtained legal advice, which was against the preferred marketing option. As his Honour described it, the issue confronting Frito-Lay was how "KETTLE COOKED" might be used (as the marketing department wanted), but safely. The marketing department preferred the word "KETTLE" to be given prominence on the packet and preferred not to insert any sub-brand or line extension title between the "THINS" brand name and any reference on the packet to "KETTLE COOKED". Legal advice was to the effect that, if the phrase "KETTLE COOKED" was to be descriptive of the potato chips (and therefore not involve the use of "KETTLE" as a trade mark), a sub-brand or line extension title such as "DOUBLE CRUNCH" should be inserted between "THINS" and "KETTLE COOKED". The end result was a packet, which is reproduced in Appendix B. The packet has the word "THINS" at the top in large red letters (except that the letter "I" is in blue and in the form of an exclamation mark). The words "DOUBLE CRUNCH" appear within the boundaries of a yellow flash above and in larger letters than "KETTLE COOKED POTATO CHIPS". The reverse of the packet reproduces the same sequence of words in descending type size, but the flavour of the chips (for example, "Jungle Curry" or "Sweet Curry") appears in writing between "DOUBLE CRUNCH" and "KETTLE COOKED POTATO CHIPS". The text continues, in smaller letters, as follows: "Now your favourite ThinsÔ are kettle cooked. To create ThinsÔ Double Crunch, we take the finest quality potatoes, thinly slice them and then cook them to perfection in cholesterol free sunflower oil. As soon as they're crispy, we season them with a unique blend of jungle spices to create a hot, tropical taste sensation. Introducing Jungle Curry, another great flavour from ThinsÔ." The Trade Marks Legislation Section 24(1) of the TM Act provides that a trade mark is registrable in Part A of the Register if it contains or consists of, inter alia, "(c)an invented word; (d)a word not having direct reference to the character or quality of the goods or services in respect of which registration is sought and not being, according to its ordinary meaning, a geographical name or a surname; or (e)any other distinctive mark." The word "mark" is defined by s.6(1) to include "a device, brand, heading, label, ticket, name, signature, word, letter or numeral, or any combination thereof". "Trade mark" is defined by s.6(1) to mean, relevantly:

"a mark used or proposed to be used in relation to goods or services for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the goods or services and a person who has the right, either as proprietor or as registered user, to use the mark, whether with or without an indication of the identity of that person...".

The rights given by registration are dealt with in s.58(1): "58(1) Subject to this Act, the registration of a trade mark in Part A or Part B of the Register, if valid, gives to the registered proprietor of the trade mark the right to the exclusive use of the trade mark in relation to the goods or services in respect of which the trade mark is registered and to obtain relief in respect of infringement of the trade mark in the manner provided by this Act." Section 62(1) specifies the conduct that constitutes an infringement of trade marks: "62(1) A registered trade mark is infringed by a person who, not being the registered proprietor of the trade mark or the registered user of the trade mark using by way of permitted use, uses a mark which is substantially identical with, or deceptively similar to, the trade mark, in the course of trade, in relation to goods or services in respect of which the trade mark is registered." Section 6(3) provides as follows:

"For the purposes of this Act, a trade mark shall be deemed to be deceptively similar to another trade mark if it so nearly resembles that other trade mark as to be likely to deceive or cause confusion."

Section 64(1)(b) provides as follows: "64(1) Notwithstanding anything contained in this Act, the following acts do not constitute an infringement of a trade mark:- (a) ... (b) the use in good faith by a person of a description of the character or quality of his goods or services" ... . The Judgment Below The trial judge identified the issues under the TM Act as follows: (i) Did Frito-Lay's use of the word "KETTLE" on its packaging amount to use as a trade mark, such use being essential in order for a breach of s.62(1) of the TM Act to be established? (ii) If yes, was Frito-lay's use of the word substantially identical with or deceptively similar to the registered trade mark, for the purposes of s.62(1) of the TM Act? (iii) If yes to both (i) and (ii), did Frito-Lay's use of the word "KETTLE" in the words "KETTLE COOKED" constitute a use in good faith of "a description of the character or quality of [Frito-Lay's] goods" within the meaning of s.64(1)(b) of the TM Act? No challenge was made by Frito-Lay to the registration of the trade mark. His Honour (at 297) referred to uncontradicted evidence that the vessels in which batch cooking of potato chips takes place are described, within the trade, as "kettles" or "kettle cookers". He also referred to Kettle's application for registration of device marks, in which it described the goods as "hand fried potato chips cooked in a kettle". In these circumstances "Kettle could scarcely suggest that the expression 'Kettle Cooked' does not provide one description of the method of cooking which has been used to produce its distinctive hard bite, aggressively flavoured potato chip." His Honour then asked what the words "KETTLE COOKED", as used on the front of Frito-Lay's packets, would convey to potential customers in the "route trade" and in supermarkets. In this connection, he distinguished between two classes of persons: those who were not aware of the KETTLE potato chips ("class 1 potential buyers"), and those who are aware of the KETTLE potato chips ("class 2 potential buyers"). The trial judge referred to dictionary definitions of "kettle", all of which included a vessel for boiling water or other liquids. Despite the dictionary meanings, his Honour proceeded on the basis that most members of the public would understand the word "kettle" to refer only to a portable covered metal vessel, with spout and handle, used to boil water for domestic purposes. They would not be familiar with other dictionary meanings. On this basis, class 1 potential buyers would be puzzled, but would assume that the manufacturer wished to convey that there was some advantage (which they would not understand) arising from the fact that the potato chips had been cooked in a vessel called a kettle, rather than by some other method. For this "somewhat bemused class", "KETTLE COOKED" was a purely descriptive phrase. Class 2 potential buyers were in a different position. For these people the word "KETTLE" had attracted a secondary meaning, when used in relation to potato chips, namely, "a relatively recently introduced hard bite strongly flavoured potato chip of the kind sold under the name 'KETTLE'".

The use of the word "KETTLE" on Frito-Lay's packet immediately suggested the second meaning. The trial judge considered that the history of the design of Frito-Lay's packet and the use of the phrase "KETTLE COOKED" rather than, say, "BATCH COOKED" suggested that the phrase "was thought to have a selling power not to be accounted by a purely descriptive role". Mr Riley, Frito-Lay's chief financial officer, had agreed in cross-examination that the hard bite, heavily flavoured potato chip was known largely through the success of Kettle and of Frito-Lay's KETTLE CRISP. His Honour found that the secondary meaning had arisen from the use of "KETTLE" on the front of the packets and not from the small print on Kettle's packets which had been used from November 1989 to July 1993. He also noted that neither party had suggested that the cauldron device would have been understood by consumers to indicate that the potato chips were in fact hand cooked in a simple cauldron on an open fire. His Honour then considered whether Frito-Lay's use of the word "KETTLE" on the front of its packets was use as a trade mark, for the purposes of s.58(1) of the TM Act (at 302): "The question before me is whether Frito-Lay has been unlawfully using "Kettle" for the purpose of indicating, or so as to indicate, a connection in the course of trade between its own potato chips and itself, that is to say, for the purpose for which or in the manner in which registered trade marks may be used only by their proprietors or registered users.... It is only Kettle that is entitled to do this. For Frito-Lay to do so would be to trespass upon Kettle's monopoly given by sub-s 58(1) of the TM Act. Frito-Lay has sought, by taking the steps referred to earlier, to immunise the word "Kettle" against trade mark use. But in my view the attempt has not succeeded. The unfamiliar and idiosyncratic use of the word, its strong secondary meaning and the likely circumstances surrounding display and sale, combine to give it, to a substantial extent, the purpose and effect of distinguishing between Frito-Lay's potato chips and those of other manufacturers.... This is a form of trade mark use."

Since the trial judge found that the secondary meaning was evoked by the single word "KETTLE", he did not have to consider whether "KETTLE COOKED" was deceptively similar to the trade mark "KETTLE". His Honour nonetheless addressed the issue and found that, for a substantial number of class 2 potential buyers, the phrase would be likely to deceive or cause confusion and was therefore deceptively similar. His Honour continued (at 303): "Frito-Lay submits that a finding of infringement would be tantamount to granting to Kettle a monopoly over an ordinary word in the language - a form of copyright. I do not agree. A word may be "ordinary" when used in one way but extraordinary when used in another. I have referred to the familiar meaning of "kettle" earlier. According to that meaning, the word simply does not "fit" in the expression "Kettle Cooked". While grammatically "Kettle cooked" clearly means "cooked by the use of a kettle", because the notion of cooking in a kettle is extraordinary, it is not possible to view that expression when read by potential buyers in the "route trade" and in supermarkets as merely descriptive of a cooking process." His Honour then held that the words "KETTLE COOKED" had not been used "purely for the purpose of description" (F.H. Faulding & Co Ltd v Imperial Chemical Industries of Australia and New Zealand Ltd (1965) 112 CLR 537, at 543 per McTiernan J.) and was thus not within s.64(1)(b) of the TM Act. Moreover, Frito-Lay, although it acted honestly and on legal advice, had not acted in good faith within the meaning of s.64(1)(b). This was because it intended to render the word "KETTLE" generic, by invoking a sense of the word unfamiliar to the public. Frito-Lay's motives were mixed: it included describing the character and quality of the chips, but also included use of the trade mark for its own sake. Finally, his Honour noted that it was unnecessary to deal with Kettle's other claims. However, he was not persuaded that Kettle had made out its claim under either head (at 306): "It is clear from the format of Frito-Lay's packets that the manufacturer is "Thins". I do not think that the public would be misled or deceived into thinking that there was any connection between the manufacturer of the potato chips in those packets and Kettle. Kettle does not suggest that those potato chips were not cooked in a "kettle". Nor has Kettle attempted to make a case that they lack the distinctive qualities associated with, or are inferior in quality to, Kettle's own potato chips." It should be noted that the orders made by the trial judge restrain Frito-Lay from infringing Kettle's trade mark by using the words "KETTLE COOKED" in the manner in which the words appear on the front of Frito-Lay's packet. The orders also restrain Frito-Lay from using the words in the manner in which they appear in larger letters on the reverse of the packet. The orders do not extend to the use of the words in smaller type on the reverse of the packet. This form of order came about because Kettle raised no issue about the use of the phrase "KETTLE COOKED" in smaller words on the reverse of Frito-Lay's packet. The Submissions Mr Douglas QC, who appeared for Frito-Lay, took as his starting point the proposition that a registered trade mark is not infringed except by use of the mark as a trade mark: Mark Foy's Ltd v Davis Coop & Co Ltd (1956) 96 CLR 190 (the "Tub-Happy Case"), at 203-204, per Williams J., The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 (the "Shell Case"), at 422-424, per Kitto J. (with whom Dixon C.J., Taylor, and Owen J.J. agreed). He submitted that the words "KETTLE COOKED", had been used by Frito-Lay in the same manner as Kettle had used them until July 1993 - that is, as descriptive of the manner in which their potato chips were cooked. Mr Douglas contended that the placement, size and prominence of the words on the Frito-Lay packet showed that consumers would not be led to believe that the words were a trade mark or brand. It followed that the words were not used by Frito-Lay as a trade mark. Alternatively, Frito-Lay was entitled to rely on the defence afforded by s.64(2)(b) of the TM Act. Mr Douglas disputed the trial judge's finding that class 2 potential buyers would not understand the use of the phrase as descriptive, because it, or the word "KETTLE" alone, had acquired a secondary meaning. He submitted that it was a fundamental principle of trade mark law that where words that are initially descriptive subsequently acquire a secondary meaning, use of the words in their original meaning cannot be restrained by the proprietor of the trade mark. He relied on a passage from C. Wadlow, The Law of Passing-Off (1990), at 315 (which is repeated verbatim in the 2nd edition, 1995, at 389): "...a trader who chooses to use a name or mark which is prima facie descriptive of his goods, services or business runs the risk that the public will continue to use the term in its descriptive sense rather than identifying it with him. He must prove that the mark has acquired a secondary meaning as denoting his goods, and the burden of doing so is higher in proportion to the descriptive quality of the mark. Even if secondary meaning is proved two problems remain. One is that no trader can be prevented from using the word in its old descriptive sense if he avoids misrepresentation. The second is that other traders may use similar and equally descriptive names or marks as their own and will be allowed to do so even if a degree of confusion results." Mr Douglas submitted that, even if the use of the phrase by Frito-Lay had been used in its secondary sense, to describe a recently introduced, hard bite, strongly flavoured chip of the kind sold under the name "KETTLE", it was not used as a trade mark. It was used to describe a particular kind of potato chip, produced by a particular process. This was not a use for the purpose of indicating a connection between the Frito-Lay and the product, but for the purpose of describing the characteristics of the product. If, contrary to his primary submissions, Frito-Lay had used the words "KETTLE COOKED" as a trade mark, Mr Douglas submitted that it was neither substantially identical with Kettle's trade mark nor deceptively similar to it. Mr Douglas submitted that, in any event, Frito-Lay was entitled to rely on s.64(1)(b) of the TM Act. Frito-Lay had intended at all times to use the words "KETTLE COOKED" descriptively and, indeed, had done so in the same manner as Kettle itself. It had acted in accordance with its legal advice, that steps should be taken to ensure that the words were positioned and used in a descriptive manner of the cooking process. Frito-Lay had therefore acted in good faith for the purposes of s.64(1)(b). Mr Catterns QC, who appeared with Ms Goddard for Kettle, accepted that Kettle had to demonstrate that Frito-Lay had used the phrase "KETTLE COOKED" as a trade mark. He relied on the secondary meaning of the phrase "KETTLE COOKED" to support the proposition that Frito-Lay had not used the phrase as a description, but as a trade mark. Class 1 potential buyers had no understanding of the phrase. Accordingly, for them it could not be descriptive. Rather, it was an attempt to designate the new distinctive kind of potato chip which hitherto had been produced only by Kettle. Class 2 potential buyers would understand the phrase, as his Honour found, in its secondary sense. Frito-Lay were inviting the public to purchase their chips, by distinguishing them from other traders partly on the basis that they were "kettle cooked". Consumers would understand that the chips were hard bite and had a strong flavour because of the association with Kettle's chips. The phrase was not descriptive because the understanding of consumers came from the ordinary meaning of words themselves but from the understanding in consumers' minds that Kettle chips had certain characteristics. If the conclusion were reached that Frito-Lay had used the phrase "KETTLE COOKED" as a trade mark, Mr Catterns supported the trial judge's finding that it was deceptively similar to Kettle's registered trade mark. Mr Catterns contended that Frito-Lay could not rely on s.64(1)(b) of the TM Act, for two reasons. First, a finding that the phrase was used by Frito-Lay as a trade mark (as Mr Catterns had submitted should be made) was inconsistent with the finding that the phrase was used simply to describe the character or quality of the goods. If that is all Frito-Lay did, the use could not have been as a trade mark. Thus, Frito-Lay could not satisfy the terms of s.64(1)(b) of the TM Act. Secondly, Frito-Lay had not used the phrase in good faith. Frito-Lay had wished to use "KETTLE COOKED" as a brand name and had simply adopted a strategy designed to allow it to take advantage of the secondary meaning attaching to the phrase. Mr Catterns challenged his Honour's finding that Frito-Lay had acted honestly, since it could not sit comfortably with the finding that Frito-Lay did not act in good faith. Use as a Trade Mark - The Authorities The first question is whether Frito-Lay has used the words "KETTLE COOKED" as a trade mark. As Burchett J. observed in Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 (the "Caplets Case") (FCA/FC), at 342, this gives rise to the further question: "what is use as a trade mark?". Assistance is obtained from the principal Australian cases. The principle that use of a mark infringes the rights of the proprietor only if the use is "as a trade mark" was adopted by the High Court in the Tub Happy Case (Dixon C.J. and Williams J; Kitto J. dissenting, but not addressing this point), which applied the decision of the House of Lords in Irvings Yeast-Vite Ltd v Horsenail (1934) 51 RPC 110. The plaintiff in the Tub Happy Case had registered the words "Tub Happy" in respect of articles of clothing and had used the trade mark on labels and advertising for cotton dresses. The defendants proposed to use the words "Tub Happy Cotton Fresh" in connection with advertising for their "Exacto" brand cotton garments. The defendants claimed that the words "Tub Happy" were used in a "modern descriptive sense", in connection with their own trade mark, namely, "Exacto". In particular, they argued that their proposed use was not as a trade mark at all, but a laudatory or puffing expression to extol their own goods. Williams J. rejected the argument. His Honour held that the words "Tub Happy" did not refer to any character or quality of clothing. It was in the nature of a "coined phrase", which had no "definite or actual meaning" (at 201). Unlike the Yeast-Vite Case, the defendants were not using the plaintiff's trade mark to identify the plaintiff's goods for the purposes of making a comparison. (In the Yeast-Vite Case the defendant sold a preparation labelled "Yeast Tablets a substitute for Yeast-Vite".) His Honour put the matter this way (at 204-205): "They are advertising the words 'Tub Happy' and emphasising them in relation to their own cotton garments for the purpose of indicating a connection in the course of trade between the goods and themselves. The public are not being invited to compare the 'Exacto' goods of the defendants with the 'Tub Happy' goods of the plaintiff. They are being invited to purchase goods of the defendants which are to be distinguished from the goods of other traders partly because they are described as 'Tub Happy' goods." It was of considerable importance in the Tub Happy Case that the key phrase was not regarded as descriptive of the character or quality of the defendants' product. However, the case also illustrates that words can be used as a trade mark even though they are used in conjunction with the defendant's own distinctive trade mark. The Shell Case concerned the use of an image in a television advertisement, in the form of a caricature of a man having a large head resembling a drop of fluid (an "oil drop man"). Kitto J. (with whom Dixon C.J., Taylor and Owen JJ. agreed) considered whether the defendant's use of the image was "as a trade mark" by posing a further question (at 425): "...the question becomes whether, in the setting in which the particular pictures referred to were presented, they would have appeared to the television viewer as possessing the character of devices, or brands, which the appellant was using or proposing to use in relation to petrol for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the petrol and the appellant. Did they appear to be thrown on to the screen as being marks for distinguishing Shell petrol from other petrol in the course of trade?"

Kitto J. held that the purpose of the defendant's use of the images in the advertisement was to convey "by a combination of pictures and words a particular message about the qualities of Shell petrol". The oil drop figure was not being used "to serve the specific purpose of branding petrol in reference to its origin". The case emphasises the significance of the mark being used to show the origin of the goods and not simply to convey a message about the quality of the product. In the Caplets Case, Sterling held the trade mark for "CAPLETS" in respect of medicated tablets for human use. Johnson launched a paracetamol product called TYLENOL and used the word "CAPLETS" in advertising and packaging. One issue was whether Johnson had used the word as a trade mark or whether it had used the word in a descriptive sense, referring to the form or shape of the product. Lockhart J. observed that use of a trade mark is as a "badge of origin" (at 335). His Honour pointed out that the mere fact that a word is descriptive does not necessarily prevent it from being distinctive of someone's goods. As was said by Fletcher Moulton L.J. in Re Application by Joseph Crosfield & Sons Ltd ("Perfection") (1909) 26 RPC 837, a case to which Lockhart J. referred (at 857): "There is...no natural or necessary incompatibility between distinctiveness and descriptiveness in the case of words used as Trade Marks". Lockhart J. adopted the statement of Parker J. in Burberry's v J.C. Cording & Co Ltd (1909) 26 RPC 693 (Ch.D), at 704, that the fact that words are descriptive increases the difficulty of proving that they are distinctive of the goods of a particular manufacturer, although this can occur if the words acquire a secondary meaning. In order to become distinctive, descriptive words must acquire a new and secondary meaning and thus cease to be purely descriptive (at 336), citing Reddaway v Banham [1896] AC 199 (HL), at 213, per Lord Herschell. Lockhart J. accepted that the word "caplets" had not found its way into the ordinary parlance of Australians. This did not, however, deprive it of the characteristic of a descriptive word. It related to "the description or form or quality of the product rather than the trade identity of the product itself" (at 339). The context in which Johnson & Johnson had used the word showed that its use was essentially descriptive and not a badge of origin. A person looking at the packaging would assume that the word described the shape of the product or the dosage form. Burchett J. found useful the description of the function of a trade mark by the Supreme Court of the United States in Estate of P.D. Beckwith, Inc v Commissioner of Patents 252 US 538 (1920), at 543: "to point distinctively, either by its own meaning or by association, to the origin or ownership of the wares to which it is applied". Burchett J. also cited the comment of Whitford J. in Mars GB Ltd v Cadbury Ltd [1987] RPC 387 (Ch.D), at 402, that: "a trade mark is a flag planted to identify the fact that you are in a particular trader's territory".

In the preceding sentence of his judgment, Whitford J. had said that the existence of an association between words and a particular product is one thing and use as the trade mark is another. Burchett J. also emphasised the importance of the context in which the use of the mark takes place, pointing out that Kitto J. in the Shell Case (at 426) had accepted that the context can show that words are being used otherwise than as a trade mark. The fact that mere use of a trade mark was insufficient to establish infringement was illustrated by the sale of secondhand goods which retained their original brand name: Fender Australia Pty Ltd v Bevk (t/as Guitar Crazy) (1989) 25 FCR 161 (FCA/Burchett J.). (See now Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 49 FCR 89 (FCA/FC), to which I refer later.) In the context in which "CAPLETS" was used, which included illustrations of capsule-shaped tablets, the meaning of the word was clear to anyone examining the package (at 343-344). Gummow J. identified (at 347) the pivotal question as whether the use complained of is use by the alleged infringer as a trade mark. The answer requires an understanding of the purpose and nature of the impugned use. That must be assessed by reference to the context, including the way in which the words have been displayed. Gummow J. accepted that a mark may have a descriptive element, but still serve as a badge of trade origin. His Honour continued (at 347-348): "where the issue is one of infringing use by use of a word mark (as in the present case), the fundamental question remains, to paraphrase what was said by Williams J. [in the Tub Happy Case], whether those to whom the user is directed are being invited to purchase the goods (or services) of the defendants which are to be distinguished from the goods of other traders 'partly because' (emphasis supplied) they are described by the words in question." Gummow J. rejected a submission that there is a trade mark use if the defendant applies the mark to packaging of goods "so as to refer to those goods". This put the matter too broadly. As his Honour said (at 348): "The primary function of a trade mark...is that of distinguishing the commercial origin of goods or services sold under the mark. The registered mark serves to indicate, if not the actual origin of the goods or services, nor their quality as such, the origin of that quality in a particular business, whether known or unknown by name."

Gummow J. concluded (at 351) that Johnson had not used "CAPLETS" for the purpose of indicating a connection in the course of trade between it and the contents of the package. In Wingate Marketing Pty Ltd v Levi Strauss, one of the issues was whether Wingate's secondhand sale of jeans which retained Levi-Strauss' registered marks infringed Levi-Strauss' rights as proprietors of the marks. Sheppard J., with whom Wilcox J. agreed, held that Wingate had not used any of the Levi Strauss marks "as a trade mark". His Honour said this (at 111): "Members of the public acting reasonably are not misled or confused by the fact that in countless cases second hand products have attached to them original labels, many of which will consist of or contain the trade marks of a variety of manufacturers and distributors. Certainly they will not think that the second hand shop with which they deal is an offshoot of, or has some connection with, the original supplier of the product when new." Gummow J. reached the same result. However, his Honour traced the history of trade marks, to support the view (at 118) that modern legislation provides "for the creation of a distinct species of proprietary right". He rejected (at 119), as a general statement, the proposition that the law of registered trade marks, as distinct from passing off or other areas of law, is concerned with the prevention of injury to goodwill or the avoidance of misrepresentation, deception or confusion. Under the TM Act, for example, it is permissible, in certain circumstances, for two deceptively similar marks to remain on the register: NSW Dairy Corporation v Murray Goulburn Co-Operative Co Ltd (1990) 171 CLR 363. Once it is found that the defendant's mark is used as a trade mark, the fact that the defendant makes it clear that the commercial origin of the goods is some business other than the plaintiff's cannot assist (at 122, citing Saville Perfumery Ltd v June Perfect Ltd and Woolworth & Co Ltd (1941) 58 RPC 147, at 160-161, per Lord Greene MR). The infringement consists in using the mark as indicating origin. Thus the use of a mark which simply tells the truth may constitute an infringement. Gummow J. held (at 134-135) that the purpose and nature of the use of the Levi Strauss trade marks by Wingate was not to indicate a connection in the course of trade between the garments and Wingate. Rather, the purpose was to indicate by way of comparison or contrast the origins of the goods in a manner similar to the use of the mark in Irvings Yeast-Vite Ltd v Horsenail. See also Musidor BV v Tansing (1994) 52 FCR 363 (FCA/FC), at 376-377, per Gummow and Heerey JJ. The Present Case In the present case it is necessary to assess whether Frito-Lay has used the words "KETTLE COOKED" as a badge of trade origin of the potato chips marketed using the designation "THINS" and "DOUBLE CRUNCH". The mere fact that Frito-Lay has used the word "KETTLE", or the words "KETTLE COOKED", to refer to its chips does not establish that the use is for the purpose of indicating the origin of the chips, or the origin of their quality in a particular business. Nor is it enough to establish that words have been used as a badge of trade origin, or that they are used to convey a message about the quality or characteristics of the product to which they refer. The purpose and effect of the words are to be determined by having regard to the context in which they are used. In this connection, the fact that Frito-Lay has used the words in conjunction with its own distinctive mark ("THINS" and, perhaps, "DOUBLE CRUNCH") does not prevent the use being for the purpose of distinguishing its chips from those of other traders. However, the use of the distinctive marks on Frito-Lay's packets has a bearing on whether the words "KETTLE COOKED" have been used to show the commercial origin of the potato chips in the packets, or whether they have some other purpose and effect. It is necessary to consider the words used, as they present themselves to buyers or potential buyers of Frito-Lay's chips who are to form a view about what they are meant to connote: Tub Happy Case, at 200, per Williams J. and 207, per Kitto J., both citing In re Keystone Knitting Mills Ltd Trade Mark (1928) 45 RPC 421, at 426, per Lord Hanworth MR. The trial judge made several critical findings. First, that the words "KETTLE COOKED" provide one description of a method of cooking which has been used to produce a distinctive hard bite, aggressively flavoured chip. Secondly, that most members of the public (presumably of the kind likely to purchase chips) would understand the word "kettle" to refer only to a portable metal vessel with a spout and handle, used to boil water. Thirdly, that the word "KETTLE", when used in relation to potato chips, has acquired a secondary meaning, namely, a relatively recently introduced hard bite, strongly flavoured chip of the kind sold under the name "KETTLE". Fourthly, that the secondary meaning arose by reason of Kettle's prominent use of the word on its packets and on those of its licensees. It is appropriate to say something about the first and second findings. The first undoubtedly reflects the dictionary definitions of "kettle", to which his Honour referred, as well as Kettle's own use of the word before 1993. The dictionary definitions include, as either a primary or secondary meaning, a vessel for boiling water or other liquids over a fire. Thus the Macquarie Dictionary (2nd revised edition) gives this definition, in relation to cooking: "1. a portable container with a cover, a spout, and a handle, in which to boil water for making tea and other uses; teakettle. 2. any of various containers for cooking foods, melting glue, etc. 3. a fish kettle." In the same context, the New Shorter Oxford English Dictionary gives the following definition: "1. A vessel, usu. of metal, for boiling water or other liquids; spec. (a) a covered vessel with a spout and handle, used to boil water for domestic purposes (also tea-kettle); (b) (in full fish-kettle) a long usu. oval pan for cooking fish in liquid. Also, a kettle and its contents; the contents of a kettle; as much as a kettle will hold, a kettleful." I must confess that I have considerable difficulty in seeing how his Honour could have made the second finding, at least in the absence of evidence as to the proportion of the population who are familiar with the dictionary definition of "kettle" as including a vessel for boiling water or other liquids. (I shall refer to this as the subsidiary dictionary definition.) No such evidence was adduced in the present case. On the contrary, the market research report prepared for Frito-Lay in November 1994 stated that "[a]ll consumers were familiar with kettle-cooked chips". While this statement was not based on a study of a statistically significant sample, it suggests that considerable care should be exercised before concluding that few people understand accepted dictionary meanings of a word. The understanding among the community of the subsidiary dictionary definition may well vary among particular groups depending on such factors as age, familiarity with cooking techniques, liking (or otherwise) for fish and other matters not explored in the evidence. The groups most familiar with the subsidiary dictionary definition of "kettle" may or may not be those most likely to buy potato chips. With these reservations I am content to accept the trial judge's division of potential buyers into two broad classes - that is, those potential buyers who were aware of Kettle's potato chips and those who were not. However, I think each of the two classes should be further divided into those who are aware of the subsidiary dictionary definitions of "kettle" and those who are not, since the impact of the words used in the Frito-Lay packets is likely to differ, depending on familiarity with that definition. His Honour said that class 1 potential buyers would be puzzled on reading the words "KETTLE COOKED POTATO CHIPS". In my opinion, not all members of this group would be puzzled. Those who are aware of the dictionary meanings of the word "kettle" would understand the words used by Frito-Lay to mean that the chips had been produced by being cooked in a vessel in which liquid is boiled. While they might or might not appreciate the advantages of cooking potatoes in this manner, the words would make perfectly good sense as a description of the process used to produce the chips. For those potential buyers, the words are descriptive of a character or quality of the chips, namely, the fact that they are produced by being cooked in a kettle. For this sub-group, there is nothing remotely metaphorical about the phrase. Nor does it operate as a badge of trade origin. The phrase refers to a commonplace process for cooking potatoes. The second sub-group of class 1 potential buyers consists of those who are not familiar either with "KETTLE" chips or the subsidiary dictionary definitions. The likelihood is that, as the trial judge found, many in this sub-group would be puzzled by the words "KETTLE COOKED POTATO CHIPS" appearing on Frito-Lay's packets. But that does not mean that Mr Catterns is right in his submission that, for this sub-group, the words simply have no meaning and thus cannot be descriptive. To a buyer unfamiliar with the subsidiary dictionary definition or with the secondary meaning arising from the use of the word "KETTLE" on Kettle's packets, the most likely response is to assume that the words describe the process by which the potato chips are produced. Such a buyer may well be unsure as to the precise nature of the process and why it is thought to be advantageous. If sufficiently curious, the buyer would receive at least some enlightenment by studying the reverse of Frito-Lay's packet. The information there suggests that kettle cooking is a different process from that hitherto employed to produce THINS potato chips. But even if the puzzled buyer does not take that step, the words suggest to him or her a process by which the potato chips are produced. The fact that the words "KETTLE COOKED POTATO CHIPS" follow "DOUBLE CRUNCH" in large letters will indicate to this sub-group that the process has something to do with producing the desirable quality of crunchiness, which the chips are said to have. Whether or not the buyer makes that connection, the words do not suggest to him or her the commercial origin of the goods. That function is performed in Frito-Lay's packet by the dominance of the word "THINS" and also by the prominent use of the phrase "DOUBLE CRUNCH". As I have said, class 2 potential buyers can also be classified into two sub-groups. Some will be familiar, not only with the secondary meaning of the words "KETTLE COOKED", but with the subsidiary dictionary definition of the word "kettle". They see that Frito-Lay's packet plainly and prominently identifies the brand name, "THINS". They also see the words, "DOUBLE CRUNCH", which suggest a particular quality of the potato chips, namely, their crunchiness. Then follows the phrase "KETTLE COOKED POTATO CHIPS". This sub-group understands that potatoes can be cooked in a kettle, in the sense of a vessel. They also understand the word "kettle" to connote (as the trial judge found) a relatively recently introduced hard bite, strongly flavoured chip of the kind produced by Kettle. In my opinion, they would read the phrase "KETTLE COOKED POTATO CHIPS" as an ordinary English phrase, descriptive of the process by which the "THINS" potato chips achieve the qualities of crunchiness and strong flavouring. They would not read the phrase "KETTLE COOKED" as referring to the trade origins of the "THINS" potato chips. The final sub-group consists of potential buyers familiar with the secondary meaning associated with "KETTLE", but not aware of the subsidiary dictionary definition. This sub-group may well be puzzled by the significance of the phrase "KETTLE COOKED" on Frito-Lay's packets. But as with the sub-group which is familiar either with the secondary meaning or the subsidiary dictionary definition, this does not mean that the phrase is meaningless to this category of potential buyer. Nor does it mean that the phrase cannot be descriptive. The word "cooked" is, after all, a straightforward, everyday English word. In my opinion, this category of buyer is likely to assume that the words describe a process by which the potato chips are produced, even if he or she does not understand the precise nature of the process. Unlike class 1 potential buyers, however, this category of buyer of potato chips is likely to appreciate immediately the claimed advantages of the process. The advantages for them are that this particular kind of "THINS" potato chips has the hard bite and strongly flavoured qualities that had been introduced to the market by Kettle. As his Honour found, the buyer within this sub-group makes the association between "KETTLE COOKED" and the claimed hard bite, strongly flavoured qualities, in part at least, because of the secondary meaning arising from Kettle's prominent use of the word "KETTLE" on its packets and those of its licensees. The nature of this association, depending on the circumstances, might be important in a passing off action, or in proceedings under s.52 of the Trade Practices Act 1974. But it does not establish that the words are used by Frito-Lay in a manner that would be understood by the buyer as a badge of commercial origin of the goods. The most prominent word on the Frito-Lay's packet is "THINS". This is clearly a word which indicates the commercial origin of the chips and is used as a trade mark. The phrase "DOUBLE CRUNCH" arguably serves the same function, although this is less clear-cut. In any event, that phrase, also displayed prominently on the packet, imports to the potential buyer that the chips have a "crunch" quality. The fact that one and possibly two separate words or phrases are used as trade marks, does not necessarily mean that the same packet cannot contain a third set of words used as a trade mark. However, it is more difficult to reach the conclusion that the words have this purpose and effect if there are other words clearly used as a trade mark and the third set of words occupies a subsidiary position on the packaging. Having regard to the context in which they are used, it seems to me that the phrase "KETTLE COOKED POTATO CHIPS" conveys to this sub-group of potential buyers that the chips have been prepared by a cooking process which produces chips having particular qualities. These qualities include crunchiness and a strong or aggressive flavour. It is true that this sub-group of buyers or potential buyers would understand that the chips share these qualities with chips produced by one of Frito-Lay's competitors. Indeed, they might understand that the competitor had introduced this kind of product into the market place. But that is not inconsistent with the words being used to describe the qualities or characteristics of the products, rather than their commercial origin. I accept that words or phrases which describe or evoke the qualities or characteristics of products can also identify their commercial origin. But the phrase used in the present case - "KETTLE COOKED" - and its subsidiary position on the packet, reinforces the view that they would not be understood as a "badge of origin" of these potato chips. The point of departure from the conclusions reached by the trial judge can be seen from a passage already quoted. His Honour said (at 302) that the "unfamiliar and idiosyncratic use of the word ["KETTLE"], its strong secondary meaning and the likely circumstances surrounding display and sale, combine to give it, to a substantial extent, the purpose and effect of distinguishing between Frito-Lay's potato chips and those of other manufacturers." In my opinion, the factors referred to by his Honour indicate that the words used by Frito-Lay have the purpose and effect of describing qualities of the chips produced by Frito-Lay. The words have the effect of distinguishing between the qualities of those chips and those produced by means other than "kettle cooking". The words do not distinguish Frito-Lay's chips from those of Kettle. On the contrary, taking into account the secondary meaning found by the trial judge to be associated with the word "KETTLE", the words indicate to potential buyers that Frito-Lay's kettle cooked chips share some characteristics and qualities in common with Kettle's chips. Those characteristics and qualities distinguish this kind of potato chip from other kinds of chips, including Frito-Lay's own "THINS" lines produced by conventional cooking techniques. Other Authorities The trial judge observed, in my respectful opinion correctly, that the decided cases depend on their own facts and often involve matters of impression. Nonetheless, it is appropriate to refer to several of the cases cited by his Honour as lending support to the conclusion that there was a trade mark infringement by Frito-Lay. In James Watt Constructions Pty Ltd v Circle-E Pty Ltd [1970] 3 NSWR 481 (NSW S.Ct./Hope J.), the plaintiff was registered in Part B as the proprietor of the trade mark "Barrier Beam" in respect of electronically controlled machinery guards. The defendant, whose principal was formerly employed by the plaintiff as a supervisor, produced a pamphlet for its own electronic machine guards which used the words "BARRIER BEAM" printed in large capitals. Hope J. accepted (at 487) that the words "barrier" and "beam" could be used either separately or in conjunction with one another to "describe in some senses electronic machinery guards". However, their use in conjunction, except in relation to the plaintiff's goods, was "extremely limited". Hope J. held that the words "Barrier Beam" had acquired a secondary meaning of electronic machinery guards manufactured by the plaintiff and that the defendant's use was not as a description of the defendant's equipment, but as a trade name. His Honour referred to the layout of the pamphlet and the association of the words "Barrier Beam" with the descriptive words "Machine Guard" and "Equipment". In the present case, the layout of Frito-Lay's packet is of course different. In particular, the words "KETTLE COOKED POTATO CHIPS" follow Frito-Lay's brand name ("THINS") and another phrase ("DOUBLE CRUNCH") that may also be used as a trade mark. In James Watt, an unusual combination of words was used by the defendant; that combination precisely corresponded with the plaintiff's trade mark. In the present case, the single word "KETTLE" appears in a sequence of words in conformity with a recognised dictionary usage. In Berzins Specialty Bakeries Pty Ltd v Monty's Continental Bakery (Vic.) Pty Ltd (1987) 15 FCR 402 (FCA/Jenkinson J.) the respondent manufactured bread substantially in accordance with the opinion of a health writer, Nathan Pritikin. The applicant was registered in Australia as the proprietor of the trade mark "Pritikin", in respect of bread. The respondent sold its bread in a wrapper containing the following collocation of words:

The word "Pritikin" was substantially larger than the other words. Jenkinson J. held that the respondent had used the word as a trade mark. His Honour said this (at 407): "the prominence which the word is accorded on the wrapper, particularly in comparison with the words 'style bread' which indicate descriptive use of 'Pritikin', lead me to conclude that there is not in this case use of the word in good faith as a description of the character of the bread, but rather use of the word as a trade mark". As this passage shows (and, indeed, as the trial judge in the present case recognised) a great deal turned on the prominence given to the word "Pritikin" on the wrapper. In J.B. Stone & Co Ltd v Steelace Manufacturing Co Ltd (1929) 46 RPC 406 (CA), the plaintiffs were the registered proprietors of three trade marks in respect of steel belt lacing. The trade marks consisted of the device of an alligator, the word "Alligator" and a combination of the device and a word. The plaintiffs complained of an advertisement in which the defendant advertised "Steelace Belting (Alligator Patterns)". The defendant contended that it was describing a particular kind of steel belting. The Court of Appeal rejected the argument and held that the advertisement infringed the trade mark. In a passage cited by the trial judge in the present case, Lawrence L.J. said this (at 417): "In my judgment it is absurd to say that the registration of the fancy word 'Alligator' in respect of steel belt lacing interferes with the use by the Defendants of a bona fide description of the character and quality of their steel belt lacing. It is admitted that the word 'Alligator' has up to the present time been used upon or in connection with the goods manufactured by the Plaintiffs and upon or in connection with no other goods; and further it is proved that the Defendants themselves have for several years past carried on their business of manufacturing and selling steel belt lacing without using that word. In my opinion the object of Section 44 [equivalent to s.64(1)(b) of the TM Act] was to safeguard traders in cases where the registered trade mark consisted of more or less descriptive words forming part of the ordinary English language, without the use of which other traders would find some difficulty in describing certain qualities of their goods; but was never intended and does not operate to enable a trader to make use of a rival trader's registered trade mark consisting of a fancy word having no reference to the character and quality of the goods in order more readily to sell his own goods." In this passage, Lawrence L.J. emphasises that "Alligator" was a fancy word and that the equivalent to s.64(1)(b) was not intended to allow a trader to make use of a rival's trade mark consisting of such a word having no reference to the character and quality of the goods. In the present case the words "KETTLE COOKED POTATO CHIPS", as the trial judge accepted, are apt to describe the process whereby Frito-Lay produces its potato chips. The words do so by employing a recognised dictionary usage of the word which is the subject of the registered trade mark. Moreover, as Lord Hanworth MR noted (at 412) in Steelace, the advertisement in this case represented that the defendant was the sole manufacturer of lacing of the "Alligator pattern", adding force to the suggestion that the word was used in connection with the goods to indicate their origin. Frito-Lay's Intentions Mr Catterns relied on the developments within Frito-Lay that led to the words "KETTLE COOKED" being included on Frito-lay's packets. He did so primarily to support Kettle's argument that Frito-Lay had not used a description "in good faith" for the purposes of s.64(1)(b) of the TM Act. However, he also relied on Mr Riley's acknowledgment that consumers would understand that the hard, crunchy, strongly flavoured chip was of the type made by Kettle. Mr Riley's evidence supports the finding to this effect made by the trial judge. But, whatever the original intention of Frito-Lay's marketing department, the fact is that the packet ultimately produced by Frito-Lay did not reflect the wishes of that department, but rather was shaped by the legal advice Frito-Lay received. I do not think that it is helpful to assess the objectives that the marketing personnel sought to achieve, when considering whether Frito-Lay used the phrase "KETTLE COOKED" as a trade mark. As I have previously said, that is to be determined by considering the words as they present themselves to the persons who are to read them and form a view about what they are meant to connote. A Question of Impression? Mr Catterns submitted that the conclusions reached by the trial judge should not be disturbed because they were matters of impression. In Murray Goulburn Co-Operative Co Ltd v New South Wales Dairy Corporation (1990) 24 FCR 370 (aff'd (1990) 171 CLR 363), the Full Court of this Court (at 377) said that the decision whether the use of a mark is likely to deceive or cause confusion is, in the end, a "question of impression and common sense": see also Apand v Kettle Chip, at 483. The issue in respect of which I have reached a conclusion different to that of the trial judge is not whether the use of the mark by Frito-Lay was likely to deceive consumers, but whether Frito-Lay used the words "KETTLE" or "KETTLE COOKED" as a trade mark. In the absence of evidence of consumer understanding or response to packaging, there is an element of impression in determining how buyers or potential buyers would understand the words used on Frito-Lay's packet. However, the question to be determined goes beyond assessing the subjective understanding of consumers. In the present case, I have considerable doubts as to whether his Honour was warranted in finding that most members of the public would understand the word "kettle" to refer only to a portable vessel used to boil water. Leaving that to one side, in reaching the conclusion that Frito-Lay did not use the words "KETTLE" or "KETTLE COOKED" as a trade mark, I have not departed from his Honour's findings of fact. To the extent that these were based on impression, they have been accepted for the purposes of the judgment. Where I respectfully differ from his Honour is in relation to the inferences to be drawn from those findings on the issue of whether the purpose and effect of words used by Frito-Lay were to indicate the commercial origin of the potato chips. I do not think that this can properly be described as primarily a matter of impression. Conclusion on Use as a Trade Mark For these reasons, I conclude that Frito-Lay's use of the words "KETTLE", or "KETTLE COOKED", was not use as a trade mark. It therefore did not infringe Kettle's registered trade mark in respect of the word "KETTLE". Other Issues In view of this conclusion, it is not necessary for me to consider whether the mark used by Frito-Lay was deceptively similar to Kettle's trade mark. Nor is it necessary to consider whether Frito-Lay can bring itself within s.64(1)(b) of the TM Act. The Notices of Contention Mr Catterns submitted, albeit somewhat faintly, that Frito-Lay had passed off its product as associated with that of Kettle and had engaged in misleading and deceptive conduct. This is, however, a very different case from Apand v Kettle Chip, in which Kettle succeeded in similar claims against another party. In that case the respondent labelled its packets with the words "COUNTRY KETTLE" in large letters. There were also similarities between the respondent's get-up and that used by Kettle. Moreover, the respondent (unlike Frito-Lay) did not produce its chips by the batch cooking method, but used the conventional method. In the course of argument, Mr Catterns conceded that there was no similarity between the two get ups. This concession inevitably follows from the differences between the two packets and, in particular, the prominence of the mark "THINS" on Frito-Lay's packet. Mr Catterns submitted that, as a matter of impression, a consumer might be misled by Frito-lay's get up into a mistaken belief that there was a licence arrangement or other association between Kettle and Frito-Lay. His Honour rejected this contention and I think he was correct in doing so. Having regard to the form of words used and their placement on Frito-Lay's packet, I do not think that members of the relevant class of buyers, or potential buyers, would be deceived into thinking that there was any such association. This contention therefore fails.

Conclusion The appeal should be allowed and the orders below set aside. Kettle's application should be dismissed. Kettle should pay Frito-Lay's costs of the appeal and of the proceedings before the trial judge.

I certify that the preceding 45 pages and Appendices A and B (4 pages) are a true copy of the Reasons for Judgment of the Honourable Justice Sackville. Associate: Dated: 15 February, 1996 Heard: 27-28 November, 1995 Place: Sydney Decision: 15 February, 1996 Appearances: Mr F.M. Douglas QC, instructed by Allen, Allen & Hemsley, Solicitors, appeared for the appellants. Mr D.K. Catterns QC, with Ms S.J. Goddard, instructed by Freehill Hollingdale & Page, Solicitors, appeared for the respondent.