the capacity of a mark to DISTINGUISH: the legal requirement
5 The parties agree that, for this proceeding, s 41 is to be applied in the form it took prior to amendments introduced by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth). In that form, s 41 of the Act provided:
41 Trade mark not distinguishing applicant's goods or services
(1) For the purpose of this section, the use of a trade mark by a predecessor in title of an applicant for the registration of the trade mark is taken to be a use of the trade mark by the applicant.
Note 1: For applicant and predecessor in title see section 6.
Note 2: If a predecessor in title had authorised another person to use the trade mark, any authorised use of the trade mark by the other person is taken to be a use of the trade mark by the predecessor in title (see subsection 7(3) and section 8).
(2) An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant's goods or services in respect of which the trade mark is sought to be registered (designated goods or services) from the goods or services of other persons.
Note: For goods of a person and services of a person see section 6.
(3) In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons.
(4) Then, if the Registrar is still unable to decide the question, the following provisions apply.
(5) If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services:
(a) the Registrar is to consider whether, because of the combined effect of the following:
(i) the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;
(ii) the use, or intended use, of the trade mark by the applicant;
(iii) any other circumstances;
the trade mark does or will distinguish the designated goods or services as being those of the applicant; and
(b) if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services ‒ the trade mark is taken to be capable of distinguishing the applicant's goods or services from the goods or services of other persons; and
(c) if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services ‒ the trade mark is taken not to be capable of distinguishing the applicant's goods or services from the goods or services of other persons.
Note 1: For goods of a person and services of a person see section 6.
Note 2: Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsection (1) and section 8).
(6) If the Registrar finds that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply:
(a) if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designed goods or services as being those of the applicant ‒ the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;
(b) in any other case ‒ the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.
Note 1: Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:
(a) the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or
(b) the time of production of goods or of the rendering of services.
Note 2: Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).
6 The pivotal provision is s 41(2), which requires an application for registration of a trade mark to be rejected if the mark is not capable of distinguishing the applicant's goods or services for which the mark is sought to be registered, from the goods or services of other persons. The remaining subsections of s 41 set out the framework by which that question is to be considered and answered. In Blount Inc v Registrar of Trade Marks (1998) 83 FCR 50, Branson J (at 56) said that these provisions:
… are designed to control the process by which the Registrar is to reach a conclusion as to whether the trade mark for which registration is sought is capable of distinguishing the applicant's goods or services in respect of which the trade mark is sought to be registered … If the trade mark is not so capable, the application for its registration must be rejected (s 41(2)).
7 In effect, a decision tree is provided, the first branch of which is s 41(3). Is the mark inherently adapted to distinguish the designated goods or services? As Branson J explained in Blount (at 56-58), for a given mark, the application of this subsection can lead to only one of three decisions, each having its own consequences. Those decisions are that:
the mark is inherently adapted to distinguish the designated goods or services; or
the mark is to some extent inherently adapted to distinguish the designated goods or services; or
the mark is not to any extent inherently adapted to distinguish the designated goods or services.
8 If the mark is inherently adapted to distinguish the designated goods or services, the conclusion might be reached that, by reason of that inherent adaptation alone, the mark is capable of distinguishing those goods or services as the applicant's goods or services. If that decision is reached, the application must be accepted, if there is no other ground to reject it.
9 However, the extent to which the mark is inherently adapted to distinguish the designated goods or services as the applicant's goods or services may be uncertain, with the result that one is unable to decide, on that basis alone, whether the mark is capable of achieving that end. In that state of affairs, one turns to consider whether, under s 41(5) of the Act, the mark does or will distinguish the designated goods or services. In that regard, attention is directed to the degree to which the mark is inherently adapted to distinguish, the use or intended use of the mark by the applicant, and "any other circumstances". The combined effect of these matters must be considered in order to come to a view as to whether the mark does or will, as a matter of fact, distinguish the designated goods or services as the applicant's goods or services. If the combined effect of these matters results in the affirmative decision that the trade mark does or will so distinguish the designated goods or services, the mark is taken to be capable of distinguishing those goods or services from the goods or services of other persons, and the application must be accepted if there is no other ground to reject it. If the combined effect of these considerations is otherwise, the mark is taken to be not capable of distinguishing the applicant's goods or services from the goods or services of other persons, and the application must be rejected.
10 If the mark is not to any extent inherently adapted to distinguish the designated goods or services, then one considers whether, under s 41(6) of the Act, the mark does, as a matter of fact, distinguish the designated goods or services as the applicant's goods or services. In that regard, attention is directed to the extent of the applicant's use of the mark before the filing date of the application. If the applicant establishes that, by that use, the trade mark does, as a matter of fact, distinguish the designated goods or services as the applicant's goods or services, the mark is to be taken to be capable of distinguishing those goods or services from the goods or services of other persons, and the application must be accepted, if there is no other ground to reject it. If, however, the applicant does not establish that fact, the mark is taken to be not capable of distinguishing the applicant's goods or services from the goods or services of other persons, and the application must be rejected.
11 What does it mean to say that a trade mark is inherently adapted to distinguish the goods or services of one person from the goods or services of another? The notion of inherent adaptation is one that concerns the intrinsic qualities of the mark itself, divorced from the effects or likely effects of registration. Where the mark consists solely of words, attention is directed to whether those words are taken from the common stock of language and, if so, the degree to which those words are, in their ordinary use, descriptive of the goods or services for which registration is sought, and would be used for that purpose by others seeking to supply or provide, without improper motive, such goods or services in the course of trade.
12 The classic statement of that condition is found in Kitto J's judgment in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 at 513 -514:
… The question is whether the mark, considered quite apart from the effects of registration, is such that by its use the applicant is likely to attain his object of thereby distinguishing his goods from the goods of others. In Registrar of Trade Marks v W & G Du Cros Ltd. (1913) (1) Lord Parker of Waddington, having remarked upon the difficulty of finding the right criterion by which to determine whether a proposed mark is or is not "adapted to distinguish" the applicant's goods, defined the crucial question practically as I have stated it, and added two sentences which have often been quoted but to which it is well to return for an understanding of the problem in a case such as the present. His Lordship said: "The applicant's chance of success in this respect (i.e. in distinguishing his goods by means of the mark, apart from the effects of registration) must, I think, largely depend upon whether other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connexion with their own goods. It is apparent from the history of trade marks in this country that both the Legislature and the Courts have always shown a natural disinclination to allow any person to obtain by registration under the Trade Marks Acts a monopoly in what others may legitimately desire to use." The interests of strangers and of the public are thus bound up with the whole question, as Hamilton LJ pointed out in the case of R J Lea, Ltd. (1); but to say this is not to treat the question as depending upon some vague notion of public policy: it is to insist that the question whether a mark is adapted to distinguish be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives - in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess - will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.
13 In Modena Trading Pty Ltd v Cantarella Bros Pty Ltd (2013) 215 FCR 16, the Full Court noted (at [67]) that Kitto J's statement has been consistently treated by this Court as setting out the general principle informing the inquiry as to whether a mark is inherently adapted to distinguish. Although Kitto J referred to the exercise of "the common right of the public to make honest use of words forming part of the common heritage for the sake of the signification which they ordinarily bear", the Full Court (at [74]) said:
74. Sections 41(2) and (3) is directed to the distinctiveness of an applicant's goods or services from those of other persons. We shall, for convenience, describe them as "traders". Accordingly, the inquiry is directed at least to traders with goods and services of the relevant kind and the likelihood, in a case such as this, of their thinking of and wanting to use the word(s) in question. The reference to "likelihood" by Kitto J in Clark Equipment was described by Gibbs J in Burger King Corp v Registrar of Trade Marks (1973) 128 CLR 417 at 425 as a reference to the possibility that another trader "might", without any improper motive, want to use the mark in relation to his or her goods. Depending on the goods and services involved, the class of traders may be very large or quite small. The inquiry may also have regard to the knowledge and practices of consumers as a relevant consideration informing the likely actions of the traders, but it will not necessarily be the focus of the inquiry.
14 In context, the first sentence of the above quote must be understood as referring to the distinctiveness of an applicant's mark in relation to the goods or services for which registration is sought.
15 At [84], the Full Court also explained:
84. The expressions "the common right of the public" and "common heritage" employed by Kitto J in Clark Equipment are fluid and their content will vary according to the particular case. It seems to us that they refer to the knowledge base, primarily, of the traders in the particular goods and services, for it is the question of their likely use of the mark which is to be considered, although as we have already observed, it may extend to potential consumers.
16 The descriptive capacity of words and their capability to distinguish the goods or services of one person from those of others will vary, depending on occasion and circumstance. There are no hard and fast rules. It should also be recognised that language continuously changes and develops. New words and phrases will enter the vernacular. Their newness will not necessarily exclude them from the "common heritage" to which Kitto J referred if they nevertheless function descriptively. I will return to that subject: see at [208]-[212] below. The decision whether a mark is inherently adapted to distinguish "requires a practical evaluative judgment about the effects of the relevant mark in the real world": Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks (2002) 122 FCR 494 at [47].
17 There is a further matter to be noted. The registrability of a mark, including whether it is capable of distinguishing the applicant's goods or services from the goods or services of others, must be assessed by reference to the scope of the registration that is sought. This has two aspects whose combined operation must be considered.
18 First, the registrability of a mark must be assessed by reference to the nature of the mark itself. Here, the mark is simply the words APP STORE. Apple does not seek to limit the mark by stylistic or device elements. In these reasons, I have adopted the convention of identifying such a mark by upper case lettering. However, should the mark proceed to registration as applied for, Apple would be entitled to a monopoly in the use of those words as a trade mark, in whatever form they might be rendered. The monopoly would extend to those words rendered in either a stylised or plain form, with or without capitalisation or partial capitalisation and whether or not, in that rendering, device elements are used. In short, upon registration, Apple's trade mark rights would extend to the use, as a trade mark, of simply those words in whatever form it chooses.
19 Secondly, the registrability of a mark must also be assessed by reference to the specification of the goods or services for which registration is sought. In the present case, this means Apple's designated services in Classes 35, 38 and 42, not the services that Apple in fact supplies as part of its App Store service (as to which, see [74]-[86] below). There is no necessary correlation between the two. There may be services which Apple supplies as part of its App Store service which are not included in those specified in its application. Similarly, there may be services specified in its application which Apple does not presently supply or has not supplied as part of its App Store service even though it has the requisite intention to do so. The touchstone must be Apple's designated services, which it has specified as:
Class 35: Retail store services featuring computer software provided via the Internet and other computer and electronic communication networks; retail store services featuring computer software for use on handheld mobile digital electronic devices and other consumer electronics.
Class 38: Telecommunication services; electronic transmission of computer software via the Internet and other computer and electronic communication networks; provision of connectivity services and access to electronic communications networks for transmission or reception of computer software.
Class 42: Maintenance, repair and updating of computer software and of handheld mobile digital electronic devices and other consumer electronics; providing information concerning computer software and web-based applications via the Internet and other computer and electronic communication networks; providing consulting services and technical troubleshooting support for computer software and for handheld mobile digital electronic devices and other consumer electronics; providing search engines for obtaining data via communications networks; providing temporary use of computer software and online facilities to enable users to access and download computer software; Internet services, namely, creating indexes of information, sites and other resources available on global computer networks for others; searching, browsing and retrieving information, sites, and other resources available on global computer networks and other communication networks for others.
20 The point is conveniently illustrated by reference to the designated services in Class 35. These are specified as "retail store services" having certain features. Although, in one aspect of the description, the retail store services are specified with respect to computer software of a particular kind ("for use on handheld mobile digital electronic devices and other consumer electronics"), there is no limitation in that description as to how the retail store service itself is to be supplied. In that aspect of the description, "retail store services" is apt to include retail store services supplied from a physical store in which the described software is provided "over the counter" or by other means, including electronic means. There is also no limitation on how the software is to be provided in the course of supplying the retail store service. In another aspect of the description of the designated services, the computer software (this time, unconfined as to its nature) is characterised as being provided by particular means ("via the Internet and other computer and electronic communication networks"). Even so, this does not necessarily mean that the retail store service itself does not extend to those supplied from a physical store. The specification speaks, in that regard, only of the mode of delivery of the computer software.
21 The description of Apple's App Store service in the evidence shows that it operates in an online environment. But the designated services for which Apple has applied in Class 35 are not limited to that environment. There is no dispute that they extend to that environment; but they also extend to retail store services provided by other means, including from a physical store.