Bayer Pharma Pty Ltd v Farbenfabriken Bayer Aktienge sellschaft

Bayer Pharma Pty Ltd v Farbenfabriken Bayer Aktienge sellschaft - [1965] HCA 71 - HCA 1960 case summary — Zoe

[8]

On 25th September 1958 the opponent instituted an appeal to this Court against each of the decisions, and the appeals are the proceedings now before me. The only possible ground for holding that the Court has jurisdiction to entertain the appeals is that s. 5 (4) preserves the operation, in respect of applications pending at the commencement of the 1955 Act, of s. 45 of the 1905 Act. Section 43 of the 1905 Act provided that any party aggrieved by the decision of the Registrar on an opposed application for registration might appeal to the Law Officer, and s. 44 provided for an appeal from the Law Officer to the Court. Section 45 enabled an appeal to be taken direct from the Registrar to the Court. In one of the present appeals I stated, at the request of the parties, a case for the opinion of the Full Court on the question whether s. 5 of the Trade Marks Act 1955 validly operates to make s. 45 of the Act of 1905, notwithstanding its repeal, apply in relation to the respondent's application for registration. This question the Full Court answered "Yes". It rejected a submission, which the respondent had advanced, that ss. 44 and 45 were an attempt to confer upon the Court functions lying outside the judicial power of the Commonwealth, and that the purported continuation of those provisions by s. 5 (4) was for that reason void: Farbenfabriken Bayer Aktiengesellschaft v. Bayer Pharma Pty. Ltd. [1] . The submission has been formally repeated before me, but of course the Full Court's decision disposes of it so far as I am concerned. The respondent now adds a new submission on s. 5 of the 1955 Act. It is, in effect, that so much of sub-s. (4) of that section as continues the operation of the 1905 Act in relation to an application for registration made before the commencement of the 1955 Act applies only to those provisions of the 1905 Act which govern the passage of the application through the office, and does not extend to s. 45. The contrary was assumed in the question which the Full Court answered; it was assumed throughout the argument before that Court; and it was assumed by all the members of the Court in giving judgment. But even unfortified by these considerations I should have no hesitation in holding that ss. 44 and 45 were provisions of the 1905 Act applying in relation to applications for the registration of trade marks, and that on the true construction of s. 5 (4) of the 1955 Act their operation is continued, notwithstanding their repeal, so as to empower the Court to entertain these appeals.

[9]

I must also notice another submission of the respondent. The notices of opposition, as I have mentioned, were lodged on 12th June 1952. They were in the name of the appellant, with the addition of the words "by its agent" followed by the signature of Mr Arthur S. Cave, a patent and trade mark attorney. There was lodged later in connexion with each application a document headed "Appointment of Agent and of Address for Service", whereby the appellant purported to appoint Mr Cave its agent in its name to oppose the applications and for that purpose to sign on its behalf all necessary documents. The execution of these documents by the appellant is not disputed, but attention is drawn to their date, which is 20th June 1952. There is no evidence that the notices of opposition were authorized by the appellant before being lodged. Yet the appellant must rely upon them for the validity of its oppositions and of the present appeals, because the day after their lodgment, 13th June 1952, was the latest possible day for the valid lodging of notices of opposition, since the applications had been advertised on 13th December 1951: R. v. Registrar of Trade Marks; Ex parte J. S. Staedtler [1] . Apart from questions arising out of the war with Germany, there would be no difficulty. The appellant's subsequent conduct, and in particular its appearance by counsel before the Deputy Registrar to support the oppositions, would clearly amount to or imply a ratification. But counsel for the respondent contended that the lodging of the notices of opposition was illegal and therefore could not be effectually ratified; and he cited Boston Deep Sea Fishing & Ice Co. Ltd. v. Farnham (Inspector of Taxes) [2] , and the passage there quoted from Lord Porter's speech in the Sovfracht Case [Sovfracht (V/O) v. Van Udens Scheepvaart en Agentur Maatschappij (N. V. Gebr.)] [1] . He seemed to concede that it would not be illegal for an enemy alien to lodge a notice of opposition, provided that he could manage to do so without the intervention of an agent - and indeed it might be difficult to contend that the law forbids all dealings between enemy aliens and officers of the Executive Government - but he argued that by reason of the law as to trading with the enemy the appellant could not lawfully appoint Mr Cave as its agent, and that the illegality of any purported appointment must have so tainted his lodging of the notices of opposition as to make the lodging illegal and therefore incapable of effectual ratification. I am not sure that I understand the argument, but it seems to me to lose sight of the fact that if Mr Cave's appointment as agent was void for illegality the only consequence upon the notices of opposition was that their lodgment was unauthorized. Why their lodgment should be on that account any less susceptible of ratification than any other act done in the name of a purported principal without antecedent authority, I do not see. The argument seemed to be based upon a notion that, in the case of an act done under a purported but ineffectual grant of authority, a ratification is a confirmation by the principal of the purported grant of authority, rather than an adoption by him of the unauthorized act. But the argument must be rejected for another reason also. It was based on an assumption that Australia was still at war with Germany on 12th June 1952. Investigation in the course of the hearing established, and the respondent's counsel in the end conceded, that Australia ceased to be at war with Germany on 9th July 1951. Confusion seems to have arisen because of a proclamation made by the Governor-General on 11th September 1952, reciting that by s. 3 of the Trading with the Enemy Act 1939-1947 Cth it was enacted that in that Act, unless the contrary intention should appear, "the present state of war" should mean the period from 9.30 p.m. on 3rd September 1939, according to standard time in the Australian Capital Territory, until the issue of a proclamation that war no longer existed, and declaring for the purposes of that Act that war no longer existed. But this cannot be relevant. The Trading with the Enemy Act made acts and transactions of certain kinds illegal, but the respondent does not and could not rely upon any of the descriptions provided by the Act except "any act or transaction which at common law constitutes trading with the enemy". This, however, can have no application here, for nothing done after 9th July 1951 could constitute trading with the enemy at common law, so far as concerns the war with Germany which began on 3rd September 1939.

[18]

If, then, the desired registrations are to be granted, it must be on the ground that the cross device, possesses a capacity, either inherent or acquired, to distinguish goods as being in a relevant sense the respondent's. First, then, is the cross device inherently adapted to produce this effect? I do not think that it is. In my opinion it merely provides a fancy method of presenting the name "Bayer", and it has no greater aptitude than has the name itself for distinguishing the proprietor's goods from those of other people who happen to be known as "Bayer". It seems to me beyond doubt that the name is the feature which makes the device what it is - the feature which stands out as the operative thing in it, and to which everything else is merely assistant - the feature which (to use a phrase of Lloyd Jacob J. [1] ) "would strike the eye and fix in the recollection". The dominant impression which the device gives is not adequately described as that of a cross formed by printing; it is an impression of the name "Bayer", arranged indeed in a particular way so that it appears twice yet with compactness and definition, but predominantly the name "Bayer". The effect produced by an application of the device to particular goods is essentially that of a branding of the goods with that name, albeit in a quaint manner; for, to some extent by the delimiting effect of the circle, and much more by the arrangement of the two words so that they intersect and share the one middle letter, attention is focussed on the identity of the words, and "Bayer" is impressed sharply on the mind. Throughout this case, the device has been referred to, by witnesses and counsel alike, as a "Bayer" Cross. That is exactly what it is: not in the sense that it is a cross device belonging to a person or corporation having "Bayer" as part of its name, but in the sense that it is in essence the word "Bayer", presented in the form of a cross. The case seems to me to be as clear as the Benz Case [2] and the Ludowici Case [1] .

[39]

In the meantime the Leverkusen Bayer Cross, the cross for which registration is sought in these proceedings, had been evolved by the German concern, I. G. Farbenindustrie A.G. It was not registered as a trade mark in the United Kingdom or in Australia; in those countries the London Bayer Cross continued in use until 1936. But when in that year the present respondent took over from Bayer Products Limited the Australian distribution of "Bayer" goods, I.G. Farbenindustrie A.G. gave the respondent instructions to discontinue the use of the London Bayer Cross and to substitute the Leverkusen Bayer Cross on goods thenceforth distributed. This was done. In view of the agreements which have been summarized above it must have been obvious to the respondent and, through the respondent, to the Sterling interests, that the common intention with which the German company was making the Leverkusen Cross available for use by the respondent and on which the respondent was adopting it was that it would be used as a trade mark for goods manufactured by the German company or with its consent and by its processes, and not otherwise. At the German company's direction (see par. 16 of Mr Ames' declaration) the respondent immediately sought registration of the Leverkusen cross as a trade mark in Australia. The Trade Marks Office objected that it was not a registrable trade mark, that it was a conventional and non-distinctive device formed by displaying in the form of a cross what was according to its ordinary signification a surname, and that it so closely resembled certain other trade marks as to be likely to deceive. The application was not carried further, because the objection of non-distinctiveness (at least) could not be overcome. As is shown by the letters in Ex. 31, the decision to drop the application was made by I. G. Farbenindustrie A.G. at Leverkusen, who then instructed the respondent to use the Leverkusen Cross for several years so that it should acquire distinctiveness, and then to apply again. The clear tenor of the letters is that the future use referred to was to be a use in connexion with goods of the German concern. The fact that the trade mark applications had been in the respondent's name seems to me to show simply that in the Bayer organization the respondent was regarded as the appropriate repository for Australian trade marks applicable to "Bayer" goods.

[40]

The respondent accordingly proceeded to supply Australian retailers with "Bayer" products bearing the Leverkusen Bayer Cross. They were in the main imported from Germany (or, in a few instances, from a Dutch subsidiary of the German organization) in packings ready for retail sale and already bearing the cross. Where not so imported (as in the case of Aspirin) they were packed, tabletted or compounded in Australia by outside manufacturers to the order of the respondent, from ingredients supplied by the Bayer organization in Germany, or else they were supplied to the respondent by Bayer Products Limited, having been manufactured in England from ingredients supplied by the Bayer organization in Germany in accordance with its processes and tested by it. The trade done was extensive, as may be seen from Exhibits J, K, L, M and N. Each package marketed by the respondent bore, in addition to the special trade mark of the product, such as "Atebrin", a representation of the Leverkusen Bayer Cross. The name of a German company, which appeared on the packages of goods made in Germany, was often though not always covered by a sticker bearing the name and address of the respondent; but there was frequently some indication of a German origin of the goods. In the ensuing three years, the goods were widely sold in Australia, and the respondent by extensive advertisement gave much publicity to the Leverkusen Bayer Cross. Very often both the respondent's name and the cross appeared on the goods or in advertising matter, and the respondent claims that the association of its name and the Leverkusen Bayer Cross gave rise to a reputation for the cross in Australia as indicating that the respondent was the local supplier of the goods on which it appeared. But it must be pointed out that often indications of German origin also appeared on the goods or in the advertising matter; and it seems to me much more likely that the inferred connexion would be between the cross and the "Bayer" organization generally than between the cross and the respondent company to the exclusion of other "Bayer" concerns. I refer particularly, as illustrating this point, to the pamphlets forming Ex. E, and the 1937 price list which is Ex. F. The price list is especially interesting, for it quite plainly attaches the name "Bayer" and the Leverkusen Bayer Cross to the "Bayer" organization centred on Germany, and implies that the respondent is a local manifestation of that organization, using Fassett & Johnson Limited as the Australian distributors of the organization's products. The same clearly appears from the booklet Ex. H, which proclaims its intention to serve the profession "as a concise guide to the pharmaceutical preparations issued by Bayer Pharma Limited, and prepared in the great pharmaceutical manufacturing and research laboratories of the I. G. Farbenindustrie A.G. known in Germany under the name "Bayer" ". Publicity was not lacking, in the years before the Second World War, for the Leverkusen Bayer Cross as the symbol of the German organization. In December 1938 (as Dr R. J. Noble testified) an elaborate brochure (Ex. G), printed in Germany and distributed in Australia, celebrated the jubilee of the organization. Fifty Years of Bayer Remedies it was entitled, the word "Bayer" taking the form of the Leverkusen Cross. No one could have read the brochure with the slightest attention and retained any idea that the cross had any connexion with the respondent company as distinguished from the Bayer organization as a whole. And the same applies to the diaries (Ex. 3) which were issued by way of advertisement to the medical profession and others in Australia. In relation to agricultural preparations it will suffice to mention the evidence of Mr N. S. Lane, managing director of a firm of agricultural chemical manufacturers, who distributed advertising matter provided by the respondent company, and displayed at film evenings which were given in Sydney and country centres a large sign representing the Leverkusen Bayer Cross picked out in lights above the Bayer works at Leverkusen.

[48]

Now, the evidence satisfies me that in 1949 there was a widespread belief that the respondent was the Australian distributor of all "Bayer" products of the classes here in question. To persons who held that belief it logically followed that goods of those classes would not be likely, under existing arrangements, to carry the Leverkusen Bayer Cross unless they had come onto the market through the respondent. But the evidence also satisfies me that in 1949 many persons, even though they held these beliefs, thought that the significance of the Leverkusen Bayer Cross was that the manufacturer was a "Bayer" concern, and in the fact of its being a "Bayer" concern they saw their guarantee of quality. Not that this was by any means the universal belief. Some people thought, contrary to the fact, that the cross indicated manufacture by the respondent. Professor Rubbo was one of these, and others included Mr Sampson, an employee of a firm of wholesale druggists, Mr McPherson a pharmaceutical chemist who began his apprenticeship as late as 1942, Mr Sage, and Mr Collinson, pharmaceutical chemists of longer experience, Mr Dougall, departmental manager for the Wholesale Drug Co. Ltd., and Mr Greig, the chief pharmacist of the Brisbane and South Coast Hospitals Board. Then too, Dr Coffey, Mr Culpitt, Mr Burns, Dr Rollison, Mr Baird, Dr Tulloch and Dr Johnson all thought that the Bayer Cross had come to indicate that the goods were marketed by the respondent and that the appellant warranted their quality, without indicating anything as to manufacture. Perhaps I should add Mr Cossar, a pharmaceutical chemist, and Mr Tupper, departmental manager of the Commonwealth Drug Co. Pty. Ltd., who both understood the Bayer Cross to indicate that goods had been "owned" by the respondent. But a formidable array of witnesses testified convincingly to views which, though not completely uniform, were inconsistent with the respondent's case. Each of them interpreted the cross as conveying an assurance which did not depend upon the identity of the distributor. To some, the assurance was simply that the goods were manufactured by a German concern which was thought of as "Bayer". Sir Herbert Schlink was one of these. After a long and varied medical career, he saw nothing in the cross except a reference to manufacture by the Leverkusen organization and a guarantee of the good quality which he associated with its products. He knew of the respondent, but thought it was the same as "the German Bayer". Sir Stanton Hicks, formerly Professor of Human Physiology and Pharmacology in the University of Adelaide, considered the Leverkusen Bayer Cross to be, in 1949, the trade mark of "the Bayer organization at Leverkusen". The respondent, with which he had had dealings, he thought of as having formerly been "the Bayer Leverkusen people trading in this country"; but he was told in 1948 that it had been taken over by the American interests. Without that knowledge he would have thought, if he had seen the Bayer Cross used by the respondent, that "Bayer" was operating in Australia; with it he would have thought there was "something wrong". Mr Orr, a pharmaceutical chemist who had been in business since 1922, was a witness who impressed me very much with his fairness and his clearness of thought and expression. One or two passages in his evidence are worth quoting. He knew that the war had led to "Bayer" goods being obtained from places other than Germany, but in 1949 his first reaction on seeing the Leverkusen Bayer Cross was still that the goods came from Bayer, Germany. They might, however, "come from almost anywhere". I quote the following questions and answers from the record of his cross examination:

[77]

In the same category is Dr Noble, former Under-Secretary and Director of the Department of Agriculture in New South Wales, one of the few witnesses who gave evidence as to agricultural preparations. To him, in 1949, the Bayer Cross meant that the product was "associated with an origin in Germany, an origin with the Bayer firm in Germany; that it had, perhaps, originated there, certainly (been) processed there, tested there; research had provided the firm with the knowledge which meant that it placed this product on the market." Then Mr H. M. Gordon, senior research officer of the C.S.I.R.O., spoke of veterinary products. In 1949, as previously, the cross conveyed to him a reference to "Bayer" in Germany. References on a package to another country he took to refer to their agents; and he assumed that the respondent, whose advertisements he had seen, was, "Bayer's agents" in Australia. Dr Straede, who had experience both as a pharmaceutical chemist and as a doctor, had long known the Bayer Cross as "the normal brand of Bayer's products", and to him "Bayer's were a firm in Germany". He did not know of the respondent as a separate organization. In 1957 he received from the respondent a form of affidavit in connexion with these proceedings, and even then he thought the sender was a branch of the German firm, "a part of Bayer" as he put it at one point in his evidence. Then there were other witnesses from various parts of Australia who gave generally similar evidence: Mr Kuchel, a former chief chemist of a manufacturing company in Melbourne, Mr Gabriel, a pharmacist with wholesale experience, Dr Eddy, a general practitioner in Melbourne, Mr Jolly, a pharmacist and departmental manager of a firm of wholesale druggists in Melbourne, Mr Whitelum, purchasing officer for a firm of manufacturing chemists in Adelaide, Dr Reilly, an ear, nose and throat specialist in Adelaide, Mr Mealor, a buyer for another firm of manufacturing chemists in Adelaide, and Dr Frazer, a Sydney specialist in psychiatry and arthritis. I quote a passage from the evidence of Dr Eddy, both because his views, being those of a general practitioner in practice since 1928, are likely to be representative of a considerable and important body of persons concerned in pharmaceuticals, and because he appeared to me a particularly careful, intelligent and genuine witness:

[125]

This is enough to dispose of the case, but I may add that even if I thought otherwise a consideration of the historical matters I have mentioned would lead me to exercise the discretion which the word "may" in s. 16 (3) would give me: In re Joseph Crosfield & Sons Ltd. [1] , by refusing to take into consideration the extent of any distinctiveness resulting from the respondent's use of the Leverkusen Bayer Cross. By way of preface on this aspect of the case, I may observe that it seems to me sufficiently clear from Exhibits AH, AJ, AK, AL and X, read with Dr Röttger's evidence, that the appellant is the beneficial owner of the business to which attaches the reputation of the Leverkusen Bayer Cross in so far as it indicates a connexion with a German manufacturing concern. In saying this I am not forgetting that one pharmaceutical factory of the old I. G. Farbenindustrie A.G. was at Hoechst and that this did not pass to the appellant; but no part of the "Bayer" goodwill appears to have been among the assets of that factory. So far as I can see, the goodwill belonged to the business at Leverkusen, irrespective of the locality of individual factories which that business controlled; and that business, with all its goodwill, I should conclude, passed to the appellant. But however this may be, the appellant has at least an interest to complain that after Bayer Crosses had long been used exclusively in relation to the products of German "Bayer" concerns, the Leverkusen Cross, having been devised by the German Bayer concern which existed in 1936, was introduced into this country by the respondent on instructions from that concern, and on the footing, mutually accepted, that it would be used only for goods manufactured by or with the consent of that concern; and that until the war it was in fact so used here by the respondent as the distributing agent for that concern. In these circumstances, I should not think it right so to exercise a judicial discretion that the user of the cross by the respondent after the Sterling interests had taken charge on the outbreak of war - a user departing so fundamentally from the arrangements under which the Leverkusen interests had made the cross available for use by the respondent - should be treated as a ground for granting the respondent such a monopoly that even the successors (whoever they may be) of the former German concern would be precluded from applying the cross to their goods. My reason would be simply the unfairness of such a result. But I rest my decision primarily upon the two conclusions of fact: first, that the use of the Leverkusen Bayer Cross in Australia in the period from 1939 to 1949 did not render it distinctive in this country of the respondent's goods; and, secondly, that the respondent's proposed use of the cross as a trade mark in Australia after 1949 would be characterized by such a degree of likelihood of deception as would disentitle it to protection in a court of justice.

[163]

Before proceeding to the substance of the appeals it is necessary to deal with several preliminary matters which were raised by the appellant. The first of these was a matter which went to the jurisdiction of the Court to hear the appeals from the Registrar and it had dual aspects. The applications in question were lodged pursuant to the Trade Marks Act 1905-1948 and the hearing before the Registrar took place in 1958 before the date, 1st August 1958, upon which the Trade Marks Act 1955 Cth came into operation. But his decision was not given until 5th September 1958. It is not contended that the repeal of the earlier Act by the 1955 Act deprived the Registrar of authority under s. 42 of the earlier Act to decide whether the application should be granted for s. 5 (4) of the 1955 Act provides that subject to an immaterial exception "the repealed Acts apply, notwithstanding their repeal, to and in relation to applications for the registration of trade marks made before the commencement of this Act and to and in relation to the registration of trade marks on those applications". What is contended, in the first place, is that the quoted provision merely extends the operation of those provisions of the earlier Act which govern the passage of an application for registration through the Trade Marks Office and that it does not extend the operation of those sections of the earlier Act (ss. 43, 44 and 45) which enable "any party aggrieved" to appeal from the decision of the Registrar in an opposed application to the Law Officer or to the Court. Secondly, it is said, that s. 44 of the earlier Act, under which these appeals were brought to this Court, is and was invalid because the function with which it purports to invest the Court is not a judicial function in the strict sense and is not part of the judicial power of the Commonwealth. Both submissions were rejected by Kitto J. The second submission had already been the subject of a decision of the Full High Court when the question which it raised was referred to it for decision at an earlier stage of these proceedings (Farbenfabriken Bayer Aktiengesellschaft v. Bayer Pharma Pty. Ltd. [1] ) and it is unnecessary to say more than that the question was then resolved against the appellant. The point, it may be said, was raised upon this appeal merely for the purpose of preserving the appellant's rights and no argument was advanced in support of it.

[169]

At the hearing of the appeal before Kitto J. it appeared that there was lodged with the Registrar a document in Form A appointing Mr Cave as the agent of the respondent but it further appeared that this document bore date 20th June 1952, that is to say some eight days after the lodging of the notices of opposition, and the contention is now raised that since the notices were signed by Mr Cave before he was appointed in writing as the respondent's agent, their lodgment was of no effect. We should add that the notices of opposition were lodged one day before the expiration of the longest period prescribed therefor by s. 38 and that there could be no further extension of that period: R. v. Registrar of Trade Marks; Ex parte J. S. Staedtler [1] . Of course, the effect of the appellant's contention, if accepted, would be that its applications were unopposed applications and that the Registrar should have proceeded under s. 47 of the Act to register the mark but what occurred was that the Registrar embarked upon the procedure provided for in Div. 3 of Pt IV of the earlier Act (hereinafter referred to as the Act). Presumably, pursuant to s. 40, he sent a duplicate of each notice of opposition to the applicant and thereafter the applicant filed counter-statements in accordance with reg. 53. Thereupon the procedure prescribed by reg. 54 was observed and the matters proceeded to a hearing before the Registrar in accordance with s. 42. No objection was made by the appellant to the Registrar proceeding in this manner and it is said that it was not until the appeal before Kitto J. had proceeded for some time that the appellant discovered that the document appointing Mr Cave as agent for the respondent bore date 20th June 1952. Very little, if anything, seems to have been made of this fact at the time but it does seem that in the closing addresses some attention was directed to the matter though how far the point became one of substance it is impossible to say. However, our firm view is that the submission should be rejected. In the first place the submission depended upon questions of fact which were not in issue before Kitto J. and which, even if the matter was adverted to at some time during the proceedings, were not the subject of investigation before him. It, of course, proceeds upon the double assumption that the date shown on the document is, in fact, the date upon which it was executed and that it was the only writing authorizing Mr Cave to act as the respondent's agent. No doubt if there were nothing else in the case one would be prepared to make the first assumption but the Registrar's report made pursuant to O. 66, r. 7 of the High Court Rules states quite unequivocally that "there was lodged with the said notices (of opposition) an Appointment of Agent appointing Arthur Stanley Cave as agent of Farbenfabriken Bayer Aktiengesellschaft". This statement forms part of the evidence in the case and, if correct, it would seem to suggest either that the document was wrongly dated or that another written authority was lodged with the notices. But these matters were never the subject of investigation. Moreover there is evidence that the respondent gave instructions for the notices of opposition to be lodged and, having regard to the circumstances of the case, it might well appear, if this aspect of the matter were investigated, that Mr Cave was instructed to do this by letter from Germany and, if this were so, that would be sufficient to comply with a regulation requiring that his appointment should be in writing. 1. (1936) 55 C.L.R. 271.

[170]

But there is, in our view, another reason why the submission should not be entertained and that is that the point was not open before Kitto J. or upon this appeal from his decision. The Act and Regulations make it clear beyond doubt that upon a hearing before the Registrar pursuant to s. 42 of the Act the matters for decision are those defined by the notice of opposition and the applicant's counter-statement and it is clear that none of the provisions of Div. 3 of Pt IV of the Act or of Div. 3 of Pt II of the Regulations come into play unless and until a notice of opposition has been duly lodged. Whether or not a notice of opposition has been duly lodged falls to be decided, in the first instance, by the Registrar as a prerequisite to pursuing the procedure outlined in Div. 3 of Pt IV of the Act and not in proceedings under that Division. If, therefore, the Registrar embarks on the procedure outlined in that Division in the absence of a notice of opposition or an effective notice of opposition it may well be open to the applicant to compel him by mandamus to grant the application pursuant to s. 47 as upon an accepted and unopposed application. Or, of course, if after having embarked upon the procedure outlined in Div. 3, it appeared to the Registrar that no valid notice of opposition had been lodged he might abandon those proceedings with a view to making a grant under s. 47. In those circumstances it would be open to an opponent to test the propriety of the Registrar's intended course of action upon an application for prohibition to restrain the making of a grant under that section and for mandamus to compel him to proceed to hear and determine the matter pursuant to s. 42. But, in our view, the objection which the appellant now seeks to raise was not and could not have been raised for determination in proceedings before the Registrar under Div. 3 and it could not be raised in the so-called appeal to this Court. We say "so-called appeal" because in strictness the appeal for which s. 45 purports to provide is a proceeding in the original jurisdiction of this Court to review the decision of the Registrar and the matters for decision upon any such review are precisely the same as those which were open before the Registrar. Accordingly, we are of the opinion that the appellant's submission on this point should be rejected.

[174]

The first question for consideration on this aspect of the case is whether the arrangement of the word "Bayer", twice used, constitutes the mark in question anything more than the name itself presented in a somewhat fancy manner. In other words, is the mark "any other distinctive mark" within the meaning of that expression as used in par. (e) of s. 16 (1) and not merely, in substance, a "name"? Kitto J. was of the opinion that this question should be resolved against the appellant and we agree with the reasons which led him to that conclusion. We do not repeat what his Honour said and we think it is sufficient for us to say, as he did in conclusion, that the case is as clear as In re Benz et Cie's Application [1] and Mangrovite Belting Ltd. v. J. C. Ludowici & Son Ltd. [2] . But we find it difficult to subscribe to the view that his Honour had no jurisdiction upon the appeal to him to make a special order if the circumstances of the case warranted such a course. The point that the mark was not registrable without such an order seems clearly to have been taken before the Registrar and it was open to him in proceedings before him to make an order of that character if he considered it proper on the evidence before him to do so but he formed the opinion that the mark presented features in the arrangement of the name "Bayer" which qualified it for registration as a distinctive mark and, therefore, that a special order was unnecessary. There was, therefore, fairly before the Registrar the issue whether the mark was of such a character as to require the making of a special order antecedently to registration and - as we see the case - the issue whether, if it was of such a character, a special order should be made. Indeed the Registrar said: "Had I not decided that the mark is a distinctive trade mark I would certainly be prepared to make an order deeming application 100643 distinctive of the applicant's goods in respect of "Aspirin" but in view of what I have decided I consider that such an Order is unnecessary." Aspirin, it should be said, is one of the multitude of products in which both the appellant and the respondent dealt at the time when the applications were lodged. An appeal to the Court, pursuant to s. 43, is not an appeal in the true sense at all; it is in essence a rehearing of the opposition proceedings and to us it seems that it must be taken to be within the jurisdiction of the Court in disposing of any matter so brought before it, to make any order which might have been made by the Registrar in the first instance. Accordingly, it was, we think, open to Kitto J. upon the appeal to him to make a special order if he considered that the circumstances of the case warranted such a course. But we hasten to add that the evidence in the case provided no justification for the making of a special order. By sub-s. (2) of s. 16 "distinctive" means adapted to distinguish the goods of the proprietor of the trade mark from those of other persons. And under sub-s. (3), in determining whether the trade mark is so adapted, the Registrar, Law Officer, or Court may, in the case of a trade mark in actual use, take into consideration the extent to which such user has rendered such trade mark in fact distinctive for the goods with respect to which it is proposed to be registered. A great deal has been said at different times as to the meaning of "distinctive" and "adapted to distinguish" but we confine ourselves to quoting what Isaacs J. said concerning these expressions in Thomson v. B. Seppelt & Sons Ltd. [1] and we do so because his observations related to the very provisions now under consideration and are not concerned with the different verbiage contained in later English and local trade marks legislation and because we think that they are entirely in accordance with the general body of authority on the subject. He said [2] :

[175]

Since the application is made under par. (e) of s. 16, sub-s. (1), the mark to be registrable must be a "distinctive" mark that does not fall within any other paragraph of that section. But to be "distinctive" it must comply with the statutory definition of distinctiveness in sub-s. (2), namely, it must be "adapted to distinguish the goods of the proprietor of the trade mark from those of other persons". The statutory criterion looks wholly to the future, and seeks to know "What will be the effect of the mark after registration?" Is it adapted in future trade to distinguish the proprietor's goods from those of other persons? That, however, does not mean "is the word adapted to acquire distinctiveness?" but "is the word instantly adapted to distinguish the proprietor's goods in his future trade?" This is brought out very distinctly in the judgment of Lord Wrenbury (then Buckley L.J.) in In re Leopold Cassella & Co.'s Application [1] , and quoted by Kennedy L.J. for the Court of Appeal in In re W. N. Sharpe Ltd.'s Trade Mark; W. N. Sharpe Ltd. v. Solomon Bros. Ltd. [2] That must in all fairness be so, because otherwise it would be enlisting registration itself as an aid in making a mark actually distinctive, and so preventing partly by statutory assistance other traders from using the mark if they so desired. (See Lord Parker's judgment in Registrar of Trade Marks v. W. & G. Du Cros Ltd. [1] .) In determining that question sub-s. 3 allows the past effect of actual user to be taken into consideration as an aid in determining the present adaptability of the mark to serve as a distinguishing symbol in the future. But that is the sole function of the past user. To our minds it is impossible to say that the name "Bayer" is, in the circumstances disclosed by the evidence, inherently adapted to distinguish the appellant's goods and the evidence concerning the actual user of the mark, or name, by the appellant signally fails to establish that at the time of the lodging of the applications the mark had, in fact, become distinctive of the goods in respect of which registration was sought. 1. (1913) 30 R.P.C. 177. 2. (1938) 61 C.L.R. 149. 3. (1925) 37 C.L.R. 305. 4. (1925) 37 C.L.R., at p. 312. 5. [1910] 2 Ch. 240, at p. 244. 6. (1914) 32 R.P.C. 15, at p. 24. 7. [1913] A.C., at p. 634.

[176]

Kitto J. has traced the history of the German Bayer organization, the means adopted to distribute its products throughout the world, the vicissitudes encountered and the changes made as the result of two world wars and it is undeniable, as he says, that the name "Bayer" and "the Bayer Cross", whether in its original form or as the "London Bayer Cross" or the "Leverkusen Bayer Cross" became over generations internationally recognized as referring to the German organization and its products and, therefore, as affording a particular assurance of quality. Indeed, at least until 1939, the mark was, by means of extensive advertising, held out to the public in Australia as having that significance and it is not surprising that the result followed, as Kitto J. found upon the evidence, that, at that time, the Leverkusen Bayer Cross "meant to a substantial portion of the community in Australia either primarily or exclusively a connexion by reason of manufacture with a "Bayer" organization, either German or at least not purely Australian and only secondarily and consequentially (when it meant it at all) a connexion with the respondent as the local distributor of the organization's products" [1] . This finding was, we think, inevitable upon the material before the learned Judge and it is not open to serious contest. But what is alleged is that in the ten years which intervened between 1939 and 1949, the significance of the mark, by reason of the appellant's user thereof during this period, wholly changed. The evidence shows that after the outbreak of war in 1939 the appellant continued trading though the shares of the German interests passed to the Controller of Enemy Property. But as stocks of Bayer manufactured products declined they were, as far as possible, replaced by products of American or English manufacture. The same form of packaging was retained though the actual country of origin was shown. This seems to have been the only material change in the appellant's course of trading. The "Leverkusen Cross" continued in use as "The Original Trade Mark" and "Bayer" continued to be "the name of merit". In 1941 there was "no substitute for quality in a Bayer product" and this was at a time when it was said that the appellant held "supplies of many Bayer preparations of pre-war origin". These are but samples of the publicity that was given to "Bayer" products in the earlier years of the war and there is not the slightest doubt that the mark was used during these years with much the same significance as it had been used for so many years in the past. At the same time it was apparent that no further supplies of products from the German Bayer organization could be obtained during war time and it was pointed out in the price lists issued for 1940 and 1941 that further supplies of products were being obtained from Bayer Products Limited, London, and the Bayer Company Inc. of New York, "an entirely American-owned and controlled organization". At a later stage, 1948, we find that "Bayer" continued to be "the name of merit" and an advertisement in that year specified three lists of products made respectively in England, Australia, and the United States. The Australian list was limited but it was stated that, "Bayer products come to the profession from our laboratories in England, America and Sydney. Well known, well made, and correctly controlled they are available from every pharmacist or drug wholesaler in Australasia. The trade mark is your protection and the hallmark of reliability". It may not be of great importance to observe that the appellant had no laboratories in England or the United States of America, but it is of some significance to notice that even at this stage the mark was being used by the appellant upon products manufactured and packaged by other companies in other countries and according to formulae which guaranteed the mark as "the hallmark of reliability". We find it unnecessary to dwell upon the publicity given to the mark and the manner of its use between 1939 and 1949; it is, we think, sufficient to say that the overall picture presented by the evidence leaves no doubt that the use made of the mark by the appellant was by no means calculated, nor did it in any substantial way tend, to obliterate the significance which it had acquired over a period of some fifty years or more. In particular, it cannot be said to have been of such a character as to render the mark distinctive for the goods of the appellant. We have formed these opinions upon consideration of the whole of the evidence and after giving full weight to the various criticisms advanced concerning the findings of fact which were made by the learned judge of first instance.

[182]

By 1923, however, the Bayer Company was seeking to re-enter the United Kingdom market and in that year an accommodation was reached between the Bayer Company and The Bayer Co. Inc. of New York which included an agreement for the formation of a new company in the United Kingdom. This agreement provided for the sharing between the parties of the profits of the company to be formed. On 26th May 1923 the new company, Bayer Products Ltd., was formed. In December 1925 the Bayer Company merged with other companies to form I. G. Farbenindustrie A.G., which forthwith adopted the Leverkusen Bayer Cross as the trade mark for all its pharmaceutical products, including those previously manufactured by the other merging companies. In 1926 an agreement was made between I. G. Farbenindustrie A.G. and The Bayer Co. Inc. which recorded that it was in contemplation that I. G. Farbenindustrie A.G. should acquire half the shares of Bayer Products Ltd., thus rendering unnecessary the profit-sharing provisions of the 1923 agreement. What was then in contemplation eventuated and Bayer Products Ltd. was then controlled for both shareholders by the Bayer division of I. G. Farbenindustrie A.G. The territory covered by the 1926 agreement included Australia and one of the provisions of that agreement was "with respect to all products manufactured by the I. G. or which I. G. has the right to market in the said territory" other than certain products "I. G. will bring the same to the Company and insofar as such products are capable of being exploited by popular advertising and are sold in individual packages or under trade marks or trade names and are adapted to be sold in drug stores and department stores, the Company shall be entitled exclusively to manufacture and/or sell the same. The Company must decide within six (6) months whether it will undertake the manufacture and/or sale of such products. If it is decided as aforestated that the Company shall not manufacture and/or sell the same, I. G. may cause the same to be marketed otherwise as it sees fit (but not using the "Bayer Cross" mark or the word "Bayer")".

[183]

Bayer Products Ltd. appointed Fassett & Johnson Limited its agent for the sale of "pharmaceutical agricultural and veterinary products merchanted or desired to be merchanted by the Company in Australasia and New Zealand" and it was stipulated that "all products shall be sold by the Agents in or under the original cartons and labels of the Company and not otherwise". Thereafter, for some years, Bayer products were for the most part sold in Australia by Bayer Products Ltd. under the London Cross trade mark and labelled with the country of origin. In 1935, however, a change was made by agreement between I. G. Farbenindustrie A.G. and The Bayer Co. Inc. of New York, and it was in accordance with this agreement that the appellant Bayer Pharma Pty. Limited was incorporated with its shares held equally by I. G. Farbenindustrie A.G. and Sterling Products Inc. Like Bayer Products Ltd., the appellant was controlled for the shareholders by the Bayer division of I. G. Farbenindustrie A.G. It was part of the agreement relating to the incorporation of the appellant that Bayer Products Ltd. should assign the goodwill of its business and its trade marks in Australia to the appellant. This, however, was found to be impracticable and the appellant, notwithstanding the sale of some goods under the London Cross trade mark, soon carried on its business using the Leverkusen Bayer Cross trade mark. So it was that the policy adopted for Germany ten years earlier was applied in Australia. It is not necessary to go into details of the trading which followed this change but, in general, bulk Aspirin and A.P.C. supplied by I. G. Farbenindustrie A.G. was compressed into tablets in Australia and put in packets with labels carrying the Leverkusen Bayer Cross and the appellant's name. Other products were imported and sold in packets labelled with the Leverkusen Bayer Cross and bearing the appellant's name printed either upon the packet itself or upon stickers covering the name of the overseas manufacturer printed on the packet. In this way it was hoped to make the Leverkusen Bayer Cross distinctive of the goods which the appellant distributed.

[186]

It is now necessary to return to the outbreak of war in 1939, which, of course, revolutionized the position of the appellant. In particular, the control of I. G. Farbenindustrie A.G. disappeared; the supply of German products ceased; and the company developed products of its own having nothing to do with I. G. Farbenindustrie A.G. - for example, Monacrin. It is upon what happened between 1939 and 1949 that the appellant relies to show that the Leverkusen Bayer Cross had by November 1949 become distinctive of goods which it sells. The strength of its contention stems from what must have been common knowledge during the war - that is, that goods sold in Australia under the Leverkusen Bayer Cross trade mark, except for stocks on hand at the outbreak of war, could have no connexion with Germany and, in particular, no connexion with the Bayer division of I. G. Farbenindustrie A.G. Anybody who with good reason in November 1939 associated the Leverkusen Bayer Cross upon goods in Australia with the Bayer organization in Germany could not, as the years went on, have reasonably continued to do so. Furthermore, during the war years and in post-war years, the appellant continued the attempt, begun in 1936 by the use of labels and stickers as already narrated, to associate the Leverkusen Bayer Cross with itself to the exclusion of any other person. To this attempt there was, however, always one reservation, namely, the intention of the appellant to keep for its goods the benefit of the long-standing international manufacturing reputation associated with the Leverkusen Bayer Cross. Accordingly, it was characteristic of its advertising that it used the words "the Original and Genuine" in relation to products described as Bayer products and to assert that such products are "endorsed by physicians all over the world" and are "true to the Bayer Standard". Furthermore, rather than assert that the Leverkusen Bayer Cross merely indicated the goods of the appellant, it was common for the appellant to assert that the mark indicated Bayer manufacture. So, for instance, it was claimed that Aspirin sold under the Leverkusen Bayer Cross was "the Bayer manufacture of Monoaceticacidester of Salicylic acid". It seems to me that both during the war and afterwards the appellant was seeking to derive advantage from the statement or suggestion that what it sold under the Leverkusen Bayer Cross were goods backed by the long-standing international manufacturing reputation of Bayer. It was unwilling to allow the reputation of Bayer products in Australia to rest merely upon identification with itself and it desired to keep to the fore their association with German "Bayer" ("the Original and Genuine") with its international manufacturing reputation. The last sentence from the quotation I have already made from the 1938 publication conveniently enough summarizes what the appellant was still asserting, viz. "The minute care which is taken in manufacture has earned for all "Bayer" products the reputation for reliability which is fitly expressed in the well-known symbol" - that is, the Leverkusen Bayer Cross. This was the case not only during the war but after the war when it could have been possible that some of the goods sold in Australia under the Leverkusen Bayer Cross came from Farbenfabriken Bayer or from the respondent or from some other Bayer organization. In these circumstances, it is not surprising that a number of reputable medical and pharmaceutical witnesses should depose that in November 1949 they associated the Leverkusen Bayer Cross with goods having some connexion with the German Bayer manufacturing organization. Counsel for the appellant severely criticized some of this evidence but, having examined it in the light of the appellant's own advertising, I do not think it was evidence that Kitto J. should have discarded as unreasonable. The fact that such beliefs were held in 1949 was in some measure a tribute to the success of the appellant's own endeavours to give its products the longstanding international reputation for skilful and reliable manufacture associated with the Leverkusen Bayer Cross. Kitto J., after an exhaustive review of the evidence, found as follows:

[187]

Now, the evidence satisfies me that in 1949 there was a wide-spread belief that the respondent was the Australian distributor of all "Bayer" products of the classes here in question. To persons who held that belief it logically followed that goods of those classes would not be likely, under existing arrangements, to carry the Leverkusen Bayer Cross unless they had come onto the market through the respondent. But the evidence also satisfied me that in 1949 many persons, even though they held these beliefs, thought that the significance of the Leverkusen Bayer Cross was that the manufacturer was a "Bayer" concern, and in the fact of its being a "Bayer" concern they saw their guarantee of quality [1] . But to my mind the evidence showed even further that in 1949 a body of professional persons did not hold the belief that all Bayer products sold in Australia under the Leverkusen Bayer Cross came from the appellant. There were witnesses who believed in 1949 that products sold under the Leverkusen Bayer Cross were the goods of German Bayer and did not regard the cross as identifying the goods of the appellant - for example, Mr Orr, Mr Scammell, Dr Noble, Dr Straede and Dr Eddy. His Honour's final conclusion was: To my mind the evidence I have discussed makes it quite impossible to conclude that by 1949 the Leverkusen Bayer Cross had become distinctive in Australia of goods distributed by the respondent. On the other hand, the evidence establishes in my opinion that a considerable number of people in this country would have been misled, or at least confused, if in 1949 the cross had been applied by the respondent to goods distributed by it but having no claim by reason of manufacture to be called "Bayer" goods [2] . The appellant is, of course, a Bayer concern and it would have been sufficient for it to have shown that the Leverkusen Bayer Cross had by November 1949 become identified with its goods to the exclusion of all others, notwithstanding that those who accepted that identification may, by reason of earlier trading, have been mistaken about the precise connexion between the appellant and those goods: cf. Trade Marks Act 1955, s. 118. However, to show that the cross had become its mark in Australia differentiating its goods from those of others, including other Bayer concerns, it was, having regard to the history of the mark, necessary for the appellant to establish that the reputation of the mark in Australia was no longer that of high-quality manufacture by a long-established business operating throughout the world, but had contracted to an indication that the goods sold thereunder in Australia were the appellant's goods. It was at these points that I think the appellant failed. 1. Ante, p. 305. 2. Ante, p. 314.

[194]

In the years 1938 and 1939 many persons in Australia were supplied through the appellant with a booklet, Fifty Years of Bayer Remedies, printed in Germany. Those who read it, and doubtless many did, would have noted in it an emphasis on the Bayer Cross as indicative of a world-wide organization, "proclaiming the word "Bayer" as a symbol uniting the head office in Leverkusen with the branches scattered throughout the world". They would have seen too the statements that "the minute care which is taken in manufacture has earned for all "Bayer" products the reputation for reliability which is fittingly expressed in the well-known symbol" - and "All our pharmaceutical products bear the "Bayer" Cross as a hallmark of their purity, their exact scientific basis, their clinical probity and, in short, of their excellence and reliability". Up to the time of the war these statements, and there were others like them in other circulars, necessarily operated on the minds of many members of the public, including medical practitioners, apothecaries and pharmacists. But it was urged that all this was obliterated by the war. The appellant's contention is that the use of the Bayer Cross and the name "Bayer" on goods marketed by it after 1939 on which its name and address appeared dispelled memories and earlier associations of the word and the symbol - that the symbol and the name had by 1949 become distinctive in this country of the appellant's goods. On this basis the appellant claims that the Bayer Cross should now belong to it, that it should be granted an exclusive right to use it. I agree with what Kitto J. said as to the unfairness of permitting such a result in the circumstances. And, more importantly, I think the evidence convincingly supports his Honour's two conclusions of fact, first, that the use of the Bayer Cross by the present appellant (the respondent in the proceedings before him) from 1939 onwards did not render that mark distinctive of its goods: secondly, that its use by the appellant as its trade mark in Australia would be deceptive in the sense that word has in trade mark law. The appellant seems to have been well content to get, and not to disclaim in any way, the advantage of the reputation that before the war the word "Bayer" and the Bayer Cross gave to goods that bore them. Indeed it even did something to preserve, notwithstanding the war, the impressions associated with the name and mark. For example, during and after the war Aspirin was sold by the appellant in packets which in their general get-up resembled those in which Aspirin of German manufacture had earlier been sold. These packets were labelled as "Bayer-tablets" of Aspirin, with the word "Genuine". They had the Bayer Cross on them and also a statement that this mark "indicates Aspirin of the Bayer Manufacture".

At a glance

Court

Decision date

Before

Source

Judgment (195 paragraphs)

Parties

Cited By (1)