Asia Television Ltd v Yau's Entertainment Pty Ltd

Cross claim for revocation of trade mark 2 The first applicant, ATV, is the proprietor of four Australian trade marks, each being registered from 13 March 1989. The mark is the same - a "triquetra" device registered in relation to four classes of goods. 3 The substance of Yau's Entertainment's cross claim is set out in the following paragraphs of the amended points of cross claim: "23. On 13 March 1989, ATV had no intention in good faith: (a) to use in Australia; or (b) to authorise the use in Australia; or (c) to assign to a body corporate for use by it in Australia; the trade mark the subject of ATV's trade mark registrations. Particulars ATV has not used the trade mark the subject of its trade mark registrations prior to 13 March 1989. At no time prior to or subsequent to 13 March 1989 has ATV by itself or its agents carried on business of supplying any of the goods covered by its trade mark registrations. 24. ATV has not for a continuous period of three years ending one month before the day on which the cross-claim was filed in these proceedings: (a) used in Australia; or (b) used in good faith in Australia; the trade mark the subject of its trade mark registrations. 25. By reason of the matters set out in paragraphs 23 and 24 above, ATV's trade mark registrations are liable to be removed from the Register for non-use." ATV denies each of these allegations. 4 The registration of the marks was governed by the Trade Marks Act 1955 (Cth), which was repealed by the Trade Marks Act 1995 (Cth), but they are now registered trade marks for the purposes of the 1995 Act. Removal of a trade mark from the Register for non-use is now dealt with in Pt 9 of the 1995 Act. Section 92 (so far as it is relevant) is as follows: "92. … (4) An application under subsection (1) or (3) ("non-use application") may be made on either or both of the following grounds, and on no other grounds: (a) that, on the day on which the application for the registration of the trade mark was filed, the applicant for registration had no intention in good faith: (i) to use the trade mark in Australia; or (ii) to authorise the use of the trade mark in Australia; or (iii) to assign the trade mark to a body corporate for use by the body corporate in Australia; in relation to the goods and/or services to which the non-use application relates and that the registered owner: (iv) has not used the trade mark in Australia; or (v) has not used the trade mark in good faith in Australia; in relation to those goods and/or services at any time before the period of one month ending on the day on which the non-use application is filed; (b) that the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non-use application is filed, and, at no time during that period, the person who was then the registered owner: (i) used the trade mark in Australia; or (ii) used the trade mark in good faith in Australia; in relation to the goods and/or services to which the application relates. …" 5 It will be observed that the pleading does not precisely set forth the elements in s 92(4)(a) or s 92(4)(b). Counsel for Yau's Entertainment made clear in the course of submissions that he was relying upon s 92(4)(b). 6 Section 100 of the 1995 Act is in the following terms: "100(1) In any proceedings relating to an opposed application, it is for the opponent to rebut: (a) any allegation made under paragraph 92(4)(a) that, on the day on which the application for the registration of the trade mark was filed, the applicant for registration had no intention in good faith: (i) to use the trade mark in Australia; or (ii) to authorise the use of the trade mark in Australia; or (iii) to assign the trade mark to a body corporate for use by the body corporate in Australia; in relation to the goods and/or services to which the opposed application relates ("relevant goods and/or services"); or (b) any allegation made under paragraph 92(4)(a) that the trade mark has not, at any time before the period of one month ending on the day on which the opposed application was filed, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services; or (c) any allegation made under paragraph 92(4)(b) that the trade mark has not, at any time during the period of 3 years ending one month before the day on which the opposed application was filed, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services. (2) For the purposes of paragraph 1(b), the opponent is taken to have rebutted the allegation that the trade mark has not, at any time before the period referred to in that paragraph, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services if: (a) the opponent has established that the trade mark or the trade mark with additions or alterations not substantially affecting its identity, was used in good faith by its registered owner in relation to those goods or services before that period; or (b) in a case where the trade mark has been assigned but a record of the assignment has not been entered in the Register: (i) the opponent has established that the trade mark, or the trade mark with additions or alterations not substantially affecting its identity, was used in good faith by the assignee in relation to those goods or services before that period and that that use was in accordance with the terms of the assignment; and (ii) the Registrar or the court is of the opinion that it is reasonable, having regard to all the circumstances of the case, to treat the use of the trade mark by the assignee before that period as having been a use of the trade mark in relation to those goods or services by the registered owner. (3) For the purposes of paragraph 1(c), the opponent is taken to have rebutted the allegation that the trade mark has not, at any time during the period referred to in that paragraph, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services if: (a) the opponent has established that the trade mark, or the trade mark with additions or alterations not substantially affecting its identity, was used in good faith by its registered owner in relation to those goods or services during that period; or (b) in a case where the trade mark has been assigned but a record of the assignment has not been entered in the Register: (i) the opponent has established that the trade mark, or the trade mark with additions or alterations not substantially affecting its identity, was used in good faith by the assignee of the trade mark in relation to those goods or services during that period and that that use was in accordance with the terms of the assignment; and (ii) the Registrar or the court is of the opinion that it is reasonable, having regard to all the circumstances of the case, to treat the use of the trade mark by the assignee during that period as having been a use of the trade mark in relation to those goods or services by the registered owner; or (c) the opponent has established that the trade mark was not used by its registered owner in relation to those goods and/or services during that period because of circumstances (whether affecting traders generally or only the registered owner of the trade mark) that were an obstacle to the use of the trade mark during that period." 7 Section 8 is in the following terms: "8.(1) A person is an "authorised user" of a trade mark if the person uses the trade mark in relation to goods or services under the control of the owner of the trade mark. (2) The use of a trade mark by an authorised user of the trade mark is an "authorised use" of the trade mark to the extent only that the user uses the trade mark under the control of the owner of the trade mark. (3) If the owner of a trade mark exercises quality control over goods or services: (a) dealt with or provided in the course of trade by another person; and (b) in relation to which the trade mark is used; the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner. (4) If: (a) a person deals with or provides, in the course of trade, goods or services in relation to which a trade mark is used; and (b) the owner of the trade mark exercises financial control over the other person's relevant trading activities; the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner. (5) Subsections (3) and (4) do not limit the meaning of the expression "under the control of" in subsections (1) and (2)." 8 The relevant portions of s 7 are as follows: 7. … (3) An authorised use of a trade mark by a person (see section 8) is taken, for the purposes of this Act, to be a use of the trade mark by the owner of the trade mark. (4) In this Act: "use of a trade mark in relation to goods" means use of the trade mark upon, or in physical or other relation to, the goods (including second-hand goods). (5) In this Act: "use of a trade mark in relation to services" means use of the trade mark in physical or other relation to the services." 9 ATV relies on the fact that Yau's Entertainment has been supplied with video master tapes, that bear the ATV logo, for copying and sale with the logo in Australia by Yau's Entertainment or its licensees. Furthermore, the evidence is that ATV manufactured a large variety of advertising and promotional material, including pins, diaries, flags, advertising cardboard posters, stickers, T-shirts and inserts, and, between 1 January and 31 May 1998, a quantity of such materials was shipped to Yau's Entertainment for use by it in relation to the sale of the video tapes in Australia. It is submitted that this use is just as much use as was the supply of goods from an overseas manufacturer to Australian retailers for resale by those retailers (Estex Clothing Manufacturers Pty Ltd v Ellis & Goldstein Ltd (1966-1967) 116 CLR 254). I am inclined to think that this is correct. I am satisfied that the logo is equivalent to the registered marks for relevant purposes (s 7(1)). Whilst, in relation to the tapes, there is the step of the local party reproducing the tape which was not present in Estex, I do not regard that as a critical distinction. 10 There is, however, a more fundamental reason why the application is misconceived. For many years, the logo has been used extensively in relation to goods offered to the public by Yau's Entertainment and its licensees, pursuant to the successive licence agreements which were analysed in the first judgment. In my opinion, Yau's Entertainment was an authorised user of the mark, as it used the mark in relation to the video tapes under the control of the owner of the trade mark within the meaning of s 8(1). Yau's Entertainment would not have had access to the master tapes except under cover of the licences, and would have had no authority to reproduce video tapes including the logo were it not for the licences. In my opinion, this is the very type of control envisaged by the section. The relief which is being sought in this case is a practical illustration of that control. 11 It was submitted for Yau's Entertainment that, here, the very breaches of the licence which ATV is complaining about show that it was not exercising actual control of the kind which is envisaged by the section. In my opinion, this kind of control is not required by the section. This submission suffers from the same kind of misconception as was exposed in the authoritative analysis of a similar issue under the 1955 Act by Aickin J in Pioneer Kabushiki Kaisha v Registrar of Trade Marks (1977) 137 CLR 670 particularly at 680-690 in a passage which is no doubt the source of the drafting of the present section. At 683 his Honour said: "These cases demonstrate that the essential requirement for the maintenance of the validity of a trade mark is that it must indicate a connexion in the course of trade with the registered proprietor, even though the connexion may be slight, such as selection or quality control or control of the user in the sense in which a parent company controls a subsidiary. Use by either the registered proprietor or a licensee (whether registered or otherwise) will protect the mark from attack on the ground of non-user, but it is essential both that the user maintains the connexion of the registered proprietor with the goods and that the use of the mark does not become otherwise deceptive. Conversely registration of a registered user will not save the mark if there ceases to be the relevant connexion in the course of trade with the proprietor or the mark otherwise becomes deceptive." 12 That concept is carried into the 1995 Act by the terms of s 17: "17. A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person." 13 The evidence establishes that, as I held in my previous judgment, the reputation of ATV and its programmes was significant amongst the Australian Chinese population. Use of the mark "ATV" is calculated to identify the goods with the proprietor of the mark, even though distributed by Yau's Entertainment and its licensees. Furthermore, in my view, the circumstance that the actual licensor was a wholly owned subsidiary of the registered proprietor does not alter the proper analysis of the situation. (See generally Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227, 237-240; Apand Pty Ltd v Kettle Chip Co Pty Ltd (1994) 52 FCR 474, 484G-486C; Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 49 FCR 89 per Gummow J at 136E; Amalgamated Television Services Pty Ltd v Foxtel Digital Cable Television Pty Ltd (1995) 60 FCR 483, 500). 14 The consequence is that the cross claim for revocation must be dismissed.

Relief 15 The applicants allege infringement of copyright, infringement of trade marks, passing off and breaches of s 52 of the Trade Practices Act 1974 (Cth) based upon unauthorised use of the ATV name and logo. It is unnecessary to set out the pleadings. Once the termination of licence was found to be valid, it follows, without the need for elaboration, that the applicants have established that the conduct of Yau's Entertainment thereafter involved the pleaded infringement of copyright, infringement of trade mark, passing off and breaches of s 52 of the Trade Practices Act. This is a sufficient basis for the injunctive relief which was left outstanding in the first judgment to await a decision on trade mark revocation, for the order for delivery up which is sought in the amended application, and for monetary relief as sought in relation to that period. 16 An issue of principle has arisen as to the period prior to termination for which monetary relief should be granted. Whilst the question of assessment is for a separate hearing, it is convenient to consider the issue now as it affects preparation for that hearing. I rejected the claim of authorisation by Yau's Entertainment. I have found that objective conduct which would constitute the breaches claimed actually occurred from June 1998 until termination and thereafter. Yau's Entertainment says that I cannot, or should not, go beyond what I have said in par 44 and par 45 of the first judgment. Counsel submitted that, having found against his client on the authorisation point partly because there was no objective evidence of the conduct in question until June 1998, it would be unfair to find infringement at an earlier period. 17 Counsel for the applicants submitted, firstly, that the issue is foreclosed by admissions on the pleadings, and, secondly, that Yau's Entertainment should not be permitted to put a case which is inconsistent with the sworn evidence of the two principal witnesses called by it. In my view, what I said in the previous judgment does not amount to a finding on an issue such as to formally preclude the applicant's submission. It was not expressed as such, and did not have that effect. On the other hand, I do not think that the fact that the witnesses had conceded (in fact, claimed) the relevant facts in evidence preclude Yau's Entertainment from now arguing for a different position. An evidentiary admission, whilst clearly of significance, does not bind the tribunal of fact. 18 However, an admission on the pleadings does bind a party. It seems to me that pars 7, 9 and 12 of the defence and par 12 and par 21B of the cross-claim do admit the material facts which would prove the various breaches alleged from 1992. Counsel for the applicants points out that, in view of the pleadings, it did not undertake investigations into the earlier period for the purposes of the hearing on liability. No application has been made to withdraw any admissions, and, in any event, I would not grant leave to do so at this stage. 19 The consequence is that I find infringement of copyright and trade mark, passing off and breach of s 52 of the Trade Practices Act as alleged since 1992. This means that preparation for the quantum hearing should include the whole of this period. It does not follow that the admissions which have been made compel any conclusion as to the scale of the prohibited conduct. The question of exemplary damages will be considered at the quantum hearing. 20 As to licence fees, I found in the first judgment that the relevant licence agreement required the supply of programmes produced by ATV. The consequence is that, leaving aside cl 16, there is only a small amount owing, even on the case for the applicants. In these circumstances, this issue, and the related question of liquidated damages pursuant to cl 16, can be left for the quantum hearing.

Cross claims 21 The finding as to valid termination of the licence denies entitlement to the relief sought in pars 1, 2, 3, 5, 6 and 7. I have already dealt with par 4. The relief claimed in par 8 was abandoned at the hearing. The cross-claim will be dismissed with costs.

Order 22 I will stand the matter over for a short period for the applicants to bring in short minutes of order to give effect to this judgment, deal with future progress, and for argument (if necessary) as to costs. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Solicitor for the Respondent: Frank Low Yeung & Co