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: