Use as a Trade Mark
36 The respondents submitted that in any event their conduct does not amount to use as a trade mark in the necessary manner. The conduct alleged against the respondents is merely the sale of the shoe, and not any ancillary marketing, brochures or packaging. A problem encountered in the protection of shape marks is that the distinctive aspects of the mark that distinguish the commercial origins of the goods can be protected, but the functional shape cannot. In Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd (1999) 91 FCR 167 at 182 [44] ("Philips v Remington"), Lehane J considered the nature of the use that will constitute infringement:
"The legal test is not in doubt. There are a number of well known formulations and there is no need to repeat a large selection of them. The test derives from the definition of "trade mark" itself:
'With the aid of the definition of "trade mark" in s 6 of the Act, the adverbial expression may be expanded so that the question becomes whether, in the setting in which the particular pictures referred to were presented, they would have appeared to the television viewer as possessing the character of devices, or brands, which the appellant was using or proposing to use in relation to petrol for the purpose of indicating, or so as to indicate, a connection in the course of trade between the petrol and the appellant…. (Shell at 425)'"
37 The sale of the shoes in this case, must therefore indicate a connection in the course of trade between the infringing goods and Diesel. The respondents submitted that as the alleged infringing shoes do not bear the stylised letter "D", and therefore effectively do not contain branding, their sale cannot indicate any connection with Diesel and therefore that sale does not amount to an infringement of the sole mark (or the shape mark). Put another way, the respondents have not used the stylised D, the essential element of the mark, as a sign to establish any trade connection with Diesel.
38 In Philips v Remington Lehane J considered the sale and marketing of a triple headed rotary shaver, in which Philips claimed trade mark monopoly. Lehane J found that the manufacturing of the alleged infringing shaver by Remington alone did not constitute trade mark use, as it was not a use of the shape to denote origin (see pars [49]‑[50]).
39 The respondents therefore submitted that the mere creation of the functional shape of a mark is not to use it as a trade mark. The applicants must prove reputation in the distinctive shape, here the distinctive cross‑hatched sole pattern, such that the creation of that pattern on the sole of the respondents' shoes could denote that the origin of the respondents' shoes is in fact Diesel.
40 On appeal in Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd (2000) 100 FCR 90 ("Philips on appeal"), Burchett J noted at 100 [12]:
"In my opinion, merely to produce and deal in goods having the shape, being a functional shape, of something depicted by a trade mark (here the marks do depict, one more completely than the other, a working part of a triple rotary shaver) is not to engage in a "use" of the mark "upon or in physical or other relation to, the goods" within s 7(4), or to "use" it "in relation to the goods" within s 20(1). "Use" and "use", in those contexts, convey the idea of employing the mark, (first) as something that can be "upon" or serve in a "relation" to the goods, and (and secondly) so as to fulfil a purpose, being the purpose of conveying information about their commercial origin. The mark is added, as something distinct from the goods. It may be closely bound up with the goods, as when it is written upon them, or stamped into them, or moulded onto them … But in none of these cases is the mark devoid of a separate identity from that of the goods. The alternative ways of using a trade mark in relation to goods do not include simply using the goods themselves as the trade mark. The reason is plain: it is to be assumed that goods in the mark are useful, and if they are useful, other traders may legitimately wish to produce similar goods (unless, of course, there are, for the time being, subsisting patent, design or other rights to prevent them from doing so), and it follows that a mark consisting of nothing more than the goods themselves could not distinguish their commercial origin, which is the function of the mark: Johnson & Johnson at 342 and 348‑9."
41 The endorsement contained on the shape mark suggests that something more than the functional shape is required in order to constitute infringement. The absence of the stylised D on the infringing footwear, which is an essential element of the mark by the terms of the endorsement, indicates that the reproduction of the goods themselves, the footwear, cannot distinguish the commercial origin of the infringing footwear and is therefore not use of the mark.
42 The applicants submitted that shape marks can be registered where the goods remain distinct from the mark, and that Philips on appeal stated that the mark may be "closely bound up with the goods" (at par [12] per Burchett J). The applicant relied upon Coca‑Cola and BP and again submitted that the Court must determine whether the shape sufficiently distinguishes the goods to the extent that it becomes a mark in its own right. This determination requires a consideration of context and representations of the cause of origin that would be the subject matter of evidence at trial.
43 The respondents submitted that the cause of action for trade mark infringement was bound to fail because merely trading in a product bearing a shape did not amount to trade mark use. It was submitted that there could be no suggestion of infringing a trade mark merely by selling shoes bearing the shape the subject of the trade mark. The respondents relied upon Philips v Remington and Philips on appeal. In Philips on appeal, Burchett J said at 103‑104 (par [16]):
"It does not follow that a shape can never be registered as a trade mark if it is the shape of the whole or a part of the relevant goods, so long as the goods remain distinct from the mark. Some special shape of a container for a liquid may, subject to the matters already discussed, be used as a trade mark, just as the shape of a medallion attached to goods might be so used. A shape may be applied, as has been said, in relation to goods, perhaps by moulding or impressing, so that it becomes a feature of their shape, though it may be irrelevant to their function. Just as a special word may be coined, a special shape may be created as a badge of origin. But that is not to say that the 1995 Act has invalidated what Windeyer J said in Smith Kline. The special cases where a shape of the goods may be a mark are cases falling within, not without, the principle he expounded. For they are cases where the shape that is a mark is 'extra', added to the inherent form of the particular goods as something distinct which can denote origin. The goods can still be seen as having, in Windeyer J's words, 'an existence independent of the mark' which is imposed upon them."
(See also Coca‑Cola at pars [24], [25]‑[36], [39]‑[41]; BP at pars [23], [60], [62] and [65]).
44 The applicant put its submission in the following terms:
"The issue becomes one of determining whether the shape sufficiently distinguishes the goods as to become a mark in its own right, being fundamentally an issue for trial after consideration of context and in particular representations as to source of origin."
I am disposed to accept this submission at the present stage. I consider it too early to determine whether the matter can simply be resolved, as the respondents put it, on the basis simply that "merely trading in a product bearing a shape does not amount to trade mark use". It may well be that there are issues of evidence in context which are relevant in the determination of this issue.