the trade mark
22 Deckers is the registered owner of Australian trade mark numbered 785466. That trade mark is registered in respect of "footwear, including boots, shoes, and clogs". The trade mark has been registered since 12 February 1999. The trade mark includes the letters "UGG" below which appears the word "australia". Below "australia" appears the "sun device" logo. Each of the six Respondents to the s 31A application admit that Deckers is the registered owner of this trade mark.
23 Deckers also claims to be the owner of Australian trade mark numbered 1077762. That mark is constituted by the letters "UGG". Deckers has elected not to press its claim for infringement of this trade mark if it succeeds in its summary judgment application in relation to trade mark number 785466.
24 Deckers alleges against each of the six Respondents that he, she or it has imported, manufactured, sold and/or distributed footwear, boxes, leaflets and pamphlets bearing the trade mark numbered 785466. It is alleged that each of the six Respondents has, thereby, infringed or been a joint tortfeasor in the infringement of the trade mark by using a mark or marks which are substantially identical and/or deceptively similar to the trade mark in connection with the footwear in respect of which the mark is registered.
25 Each of these allegations is denied by Vladimir Vaysman, Hepbourne Pty Ltd and the Vaysmans in their Defences. They contend, further, that, at all material times, the mark has wrongly remained on the register and should be cancelled for reasons advanced in their Cross-Claims. Victoria Vaysman filed an agreed statement of facts in relation to contempt charges levelled against her. Save for referring to that statement, she and Samba Enterprises Pty Ltd denied the allegations of trade mark infringement.
26 Deckers' rights in relation to the registered trade mark are protected by various provisions of the Trade Marks Act. Section 20 provides:
"(1) If a trade mark is registered, the registered owner of the trade mark has, subject to this Part, the exclusive rights:
(a) to use the trade mark; and
(b) to authorise other persons to use the trade mark;
in relation to the goods and/or services in respect of which the trade mark is registered.
(2) The registered owner of a trade mark has also the right to obtain relief under this Act if the trade mark has been infringed.
…"
27 By s 120(1) it is provided that a registered trade mark will be infringed if a "person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered." Section 10 provides that a trade mark will be deceptively similar to a registered trade mark "if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion." Section 228 extends trade mark protection to goods exported from Australia.
28 Deckers relied on extensive evidence from Respondents who had been involved in the marketing of footwear which had been manufactured at the Moorabbin factory. Footwear found at the factory, labels, pamphlets and boxes were also tendered in evidence.
29 Leah Farley, Dianne Sommer, Gihan Ezzat and Joanne Strickland each swore affidavits and each was cross-examined. Each was a Respondent in the proceeding. Each had entered into an agreement with Deckers pursuant to which she agreed to pay compensation to Deckers and Deckers agreed to discontinue the proceeding against her. It was suggested to each witness during cross-examination that she had implicated the Vaysmans in the production and distribution of UGG footwear in order to secure favourable terms of settlement. Each of these four witnesses gave evidence confidently. The detail of their accounts was not seriously challenged. Indeed, most of it was corroborated by photographic evidence, by the observations made by others, and by material found at the Moorabbin factory and at a stall, conducted by Josef Vaysman, at the Victoria Market. I consider each of these witnesses to be a truthful witness and I accept the evidence given by them.
30 Leah Farley first became involved in the distribution of UGG products in December 2005. She was contacted by Vladimir Vaysman (the Fifth Respondent and son of the Vaysmans). He wanted her to sell the UGG products on eBay. She agreed. Vladimir Vaysman provided her with stock. The boots and the boxes in which they were packaged bore the "UGG australia" logo. The soles of the boots contained the word "UGG" adjacent to the sun device. Initially the boots were delivered to Ms Farley by Vladimir Vaysman.
31 From about June 2007 Ms Farley attended on a daily basis at the Moorabbin factory to collect boots for sale on eBay. One or other of the Vaysmans would usuallyanswer the door when she attended. She observed the Vaysmans engaged in the manufacture of the boots, either operating machinery or gluing Ugg australia labels on the boots. She saw Polina Vaysman cutting sheepskin pieces on a cutting machine. She observed Polina Vaysman giving bags of bootsto persons who Vladimir and Polina had advised her were selling Ugg branded boots at the Victoria Market.
32 Gihan Ezzat was approached by Victoria Vaysman in 2005 and asked to offer UGG branded footwear on eBay using eBay trading names operated by Ms Ezzat. She agreed. Initially, she was not involved in the packaging and despatch of boots to purchasers. In late 2006 Vladimir Vaysman and Victoria Vaysman commenced delivering UGG boxed products to Ms Ezzat so that she could despatch them to purchasers. During 2007 Victoria Vaysman asked Ms Ezzat to box the boots and agreed to pay her for performing that service. Ms Ezzat agreed. About the same time Victoria Vaysman told Ms Ezzat that the business had become so busy that neither she nor Vladimir Vaysman was able to continue delivering boots to her home. Victoria Vaysman told her that she would have to pick up stock from the Moorabbin factory. When Ms Ezzat attended the factory she observed people engaged in the manufacturing of footwear. She met and spoke to the Vaysmans, Vladimir Vaysman and Victoria Vaysman during these visits to the Moorabbin premises.
33 Joanne Strickland became involved in the marketing of UGG products in about mid-2006 when she was approached by Ms Farley. Ms Farley invited her to sell boots on eBay during busy periods. She did so between July 2006 and September 2006 and again between July 2007 and November 2007. During 2007 she attended at the Moorabbin factory. She dealt with Vladimir Vaysman and observed Josef and Polina Vaysman engaged in the manufacture of footwear. She also saw and spoke to Polina Vaysman during some of these visits.
34 Dianne Sommer was approached by Victoria Vaysman early in 2006 and invited to sell "genuine "UGG Australia" boots" on eBay. Ms Sommer agreed to do this. Initially, Ms Sommer was not responsible for the despatching of footwear which she had sold on eBay. She supplied a list of names and addresses of purchasers to Victoria Vaysman and the orders were met. Between March and August 2006 Ms Sommer did not seek to sell UGG products on eBay. In mid-August 2006 she was contacted by Vladimir Vaysman and invited to resume offering UGG products on eBay using her eBay trading name. He told her that once a sale had been made it would be necessary for her to come to the Moorabbin factory to collect the footwear and send it to the purchaser. She agreed to do this. During her visits to the factory she met the Vaysmans and Vladimir Vaysman. In Vladimir's absence, Polina Vaysman provided Ms Sommer with the boxed footwear. Ms Sommer observed Polina Vaysman sewing UGG australia labels on the heels of the footwear.
35 In the agreed statement of facts, Victoria Vaysman agreed that she had recruited Ms Sommer and Ms Ezzat to "act as her agents in promoting, advertising, offering for sale and selling on the internet sheepskin footwear under or by reference to the names "UGG Australia" and/or the UGG Logo … and/or the Sun Device … and personally delivered such footwear to them."
36 Mr Anthony Watson, a solicitor acting on behalf of Deckers, attended the Moorabbin factory on 13 November 2007 and 12 December 2007. He was involved in the execution of the search orders which had been made by the Court. During the 12 December 2007 search he observed that there were approximately 200 pairs of finished and partly constructed sheepskin footwear marked with the UGG logo, the word "australia" and the sun device on the premises. On the heels there was a cloth label on which the letters UGG appeared above the word "australia". On the soles the letters "UGG" appeared next to the sun logo. Adjacent to the letters "UGG" on both the heels and the soles appeared the symbol ®. This is the recognised symbol which the registered owner of a trade mark in Australia is entitled to place next to representations of its registered mark: cf s 151(5) of the Trade Marks Act.
37 Mr Josef Vaysman admitted in cross-examination that he was in charge of the Moorabbin factory when Mr Watson attended. Mr Vaysman also admitted that UGG branded footwear was manufactured at the Moorabbin factory. He specifically admitted gluing soles bearing the UGG branding on one pair of boots and to providing footwear products to a man who was later observed to be conducting a stall at the Victoria Market at which boots bearing the UGG mark were being offered for sale. Mr Vaysman also admitted that he knew that boots bearing the UGG labelling were being provided to various people (including Farley and Sommer) who were then selling them on the internet. He further admitted knowing the approximate prices at which the boots were sold on the internet.
38 This evidence satisfies me, beyond reasonable doubt, that the Vaysmans were actively involved in the manufacture, packaging and distribution of boots which had on their heels the "UGG australia" label and on their soles had embossed the letters "UGG" and the sun device. They packed the boots in boxes which had on one panel the "UGG australia" logo and, on an adjacent panel, the sun device. The boxes contained pamphlets and care labels which had on them the "UGG australia" logo.
39 I am also satisfied that Victoria Vaysman was an active participant in the marketing of these items. She did this by her own exertions and by recruiting others to sell the boots by advertising them for sale on eBay. She also gave instructions to those whom she recruited as to how the sales should be undertaken.
40 Deckers' case, insofar as it involves the allegation that the Respondents have infringed its registered trade mark number 785466, turns on the similarities between the registered trade mark and the marks appearing on the products made by the Vaysmans. It is alleged that the marks appearing on the "counterfeit" products were substantially identical or deceptively similar to the registered trade mark.
41 Each of the Vaysmans, Victoria Vaysman and Samba Enterprises Pty Ltd submits that the three elements of the registered trade mark (the letters "UGG", the word "australia" and the "sun device") do not all appear together on any of the boots or packaging made or used by the Respondents. The letters "UGG" appear above the word "australia" on a label attached to the heel of the boots. The letters "UGG" and what Deckers claimed to be a representation of the sun logo are embossed on the soles of the boots. The letters "UGG" appear above the word "australia" on one panel of the boxes. The sun logo appears separately on an adjacent panel. The care instruction card and the information booklet which were included in each box each had on the front page the letters "UGG" and the word "australia" underneath. They contend that the mark, absent the sun device, cannot be deceptively similar to the registered trade mark. Similarly it is said that the sun device, appearing separately, cannot be regarded as being deceptively similar to the registered mark.
42 In order to determine whether the marks appearing on the boots manufactured by the Vaysmans and on the boxes, pamphlets and cards were deceptively similar to the registered trade mark it is necessary for the Court to have regard to all of the surrounding circumstances, including the circumstances in which the marks were used, the circumstances in which the goods were bought and sold and the characteristics of the persons who might be expected to be purchasers of the footwear: see Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 at 383. A visual comparison of word marks is necessary but not decisive: Wingate Marketing Pty Limited v Levi Strauss & Co (1994) 49 FCR 89 at 104-5. In making the comparison the Court is concerned to form a judgment about whether there is a real risk that customers might be confused as to the provenance of the goods on the assumption that the customers may have only an "imperfect recollection" of the registered mark: see Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1979] RPC 410at 423; Re Rysta Ltd's Application, (1943) 60 RPC 87 at 108. See generally: Shanahan's Australian Law of Trade Marks and Passing Off (4th ed) at 253-265.
43 Victoria Vaysman and Samba Enterprises Pty Ltd submit that, where an element or feature of a trade mark is "inherently non distinctive" or lacks "any capacity to distinguish", that feature, appearing alone, will not attract statutory protection. This is particularly the case, so it was contended, where the element is a word: see Sports Break Travel Pty Ltd v P & O Holidays Ltd (2000) 50 IPR 51; [2000] FCA 924 at [23].
44 These submissions may have had some attraction had the word "australia" appeared separately on the boots or elsewhere. It did not. Wherever it appeared it appeared in lower case under the capital letters "UGG" (with the middle G larger than either of the other two letters) and, on the boots, and the boxes closely adjacent to the sun device.
45 A consumer examining the boots and the boxes would not see any element of the registered trade mark in isolation. They would be conscious of the appearance of each element. In De Cordova v Vick Chemical Co. (1951) 68 RPC 103 at 105-106 the Privy Council observed that:
"… a mark is infringed by another trader if, even without using the whole of it upon or in connection with his goods, he uses one or more of its essential features. The identification of an essential feature depends partly on the Court's own judgment and partly on the burden of the evidence that is placed before it."
This passage was quoted with approval by the Full Court in Crazy Ron's Communications Pty Ltd v Mobileworld Communications Pty Ltd (2004) 209 ALR 1 at 20 [84]. Their Lordships also observed (at 106) that:
"It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole."
46 Having regard to the whole of the circumstances (including a visual comparison of the registered trade mark with the devices appearing on the products manufactured and/or distributed by the Respondents), I am left in no doubt that there exists a real likelihood of confusion and deception as to the provenance of the boots. There is a remarkable visual similarity between the lettering and other parts of the registered trade mark and the marks used by the Respondents. The impression created and, in my view, intended to be created, is that the boots were manufactured by Deckers, the owner of the registered trade mark. This conclusion is further supported by the use of the symbol ® next to the letters UGG. This is plainly an attempt to suggest that the boots had been manufactured by the owner of the registered trade mark.
47 The six Respondents also claim that registered trade mark number 785466 has wrongly remained on the Register of Trade Marks at relevant times and that it should be cancelled for various reasons which appear in the Cross-Claim of Vladimir Vaysman, Hepbourne Pty Ltd and the Vaysmans.
48 They rely on s 88 of the Trade Marks Act which relevantly provides:
(1) Subject to subsection (2) and section 89, a prescribed court may, on the application of an aggrieved person or the Registrar, order that the Register be rectified by:
(a) cancelling the registration of a trade mark; or
(b) removing or amending an entry wrongly made or remaining on the
Register; or
(c) entering any condition or limitation affecting the registration of a trade mark that ought to be entered.
(2) An application may be made on any of the following grounds, and on no other grounds:
(a) …
(b) …
(c) because of the circumstances applying at the time when the
application for rectification is filed, the use of the trade mark is likely
to deceive or cause confusion …
The Vaysmans, Victoria Vaysman and Samba Enterprises Pty Ltd contend that there is, at least, a reasonable prospect that they will be successful in establishing that the trade mark should be cancelled by order of the Court.
49 This argument can only succeed if the Court were to make orders, on the Cross-Claim, cancelling the trade mark's registration and if those orders operated retrospectively so that the trade mark was treated as not being registered, at least, since 2005. The Respondents were unable to point to any authority which supported the proposition that an order, made under s 88, had other than prospective effect.
50 Ordinarily, orders made by a Court, under power conferred by legislation, will operate prospectively. If the legislature wishes the Court to have power to make orders with retrospective effect it expressly so provides: see, for example, s 16(1)(a) of the Administrative Decisions (Judicial Review) Act 1977 (Cth). The Trade Marks Act itself provides for certain orders, made by the Registrar, to have retrospective effect: see ss 79 and 98. No equivalent provisions are to be found in s 88.
51 There are good reasons why the cancellation of the registration of a trade mark should only operate prospectively. Were it otherwise the integrity of the Register would be compromised. Those who rely on it to determine whether or not a particular trade mark was registered and protected under the Trade Marks Act could not be certain that a particular registration might not subsequently be cancelled to their detriment.
52 Such considerations influenced the decision of Flick J in E. & J. Gallo Winery v Lion Nathan Pty Limited (No 2) (2008) 78 IPR 334; [2008] FCA 1005.
53 In that case his Honour had determined to exercise the power conferred on the Court by s 101(2) of the Trade Marks Act to direct the Registrar to remove a trade mark from the register on the ground of non-use. The parties disagreed as to whether the order for removal should operate prospectively or should be made effective from an earlier date on which the 3 year non-use period had concluded. His Honour determined that the order should operate prospectively. His Honour's first reason (at [7]) for rejecting the invitation to make the order retrospective in effect was that:
… there is considered to be a significant public interest in maintaining the integrity of the Register established pursuant to s 207 of the Act. That public interest may be prejudiced if it is subject to orders of this Court ordering the Registrar to remove a mark as from a date which may in some cases be years prior to the date of delivery of judgment. Such orders, if made, may only be productive of considerable uncertainty.
54 His Honour also noted the absence of any specific provision in s 101 allowing for the retrospective operation of orders and, in this regard, compared that section with ss 79 and 98. In my view these considerations have equal force in relation to orders made under s 88. Orders made under it do not operate retrospectively.
55 I am fortified in coming to this conclusion by the decision of Lightman J in Second Sight Ltd v Novell UK Ltd [1995] RPC 423. His Lordship there considered the operation of s 32(1) of the Trade Marks Act 1938 (UK) which like s 88, provided for expunging entries on the register, inter alia, on the grounds that they had been made "without sufficient cause" or that they "wrongly remain[ed] on the register …" He held (at 429) that he could "find neither in the language used nor in principle any grounds upon which it can sensibly be held that such a determination under an application under … section 32 can have any retrospective effect …"
56 If the Vaysmans succeed, at trial, on their Cross-Claim founded on s 88, any orders will be prospective in nature. Such a favourable outcome for them can and will have no bearing on the question of whether or not they infringed Deckers' trade mark in the period between 2005 and 2007. That trade mark was registered under the Trade Marks Act at all relevant times and was protected by the provisions of that Act.
57 The Respondents provided no evidence which assisted their opposition to Deckers' application for summary judgment.
58 The pleadings and the evidence establish, in my view, that the Respondents have no reasonable prospects of defending Deckers' trade mark infringement claim.
59 Deckers is entitled to summary judgment on its claim that Hepbourne Pty Ltd, Vladimir Vaysman, the Vaysmans, Victoria Vaysman and Samba Enterprises Pty Ltd infringed its trade mark numbered 785466 on multiple occasions in 2005, 2006 and 2007.