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[2009] FCAFC 14
respondent. Appeals dismissed; appellant (Health World) to pay respondent's (Shin-Sun's) costs of the appeals; no order as to costs in relation to the notices of contention (orders dated 17 February 2009).
Health World sought to remove Shin-Sun's registered mark HEALTHPLUS on multiple grounds. The trial judge found some substantive complaints but held Health World lacked the necessary standing as an 'aggrieved person' to seek rectification. The Full Court (Perram J, Emmett and Besanko JJ) agreed: standing under s 88(1) requires a real possibility of legal or practical disadvantage, not merely an allegation of deceptive similarity; Health World failed to show it had that interest (notably it lacked the requisite reputation or intention to use HEALTHPLUS independently). The appeals were dismissed and costs awarded to Shin-Sun.
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Health World Limited sought to have Shin-Sun Australia Pty Ltd's registered word mark HEALTHPLUS removed from the Register under the Trade Marks Act 1995 (Cth). The proceedings followed earlier skirmishes between the parties, including earlier applications and oppositions (see the earlier interlocutory decision referenced at [10]). Shin-Sun's mark HEALTHPLUS covered a range of health products (paras 6-9). Health World marketed a probiotic product under the name INNER HEALTH PLUS since May 2000 (para 9).
At first instance Jacobson J considered several grounds advanced by Health World: that Shin-Sun did not intend to use the mark as at 7 May 2001 (s 59 / s 92 grounds); that HEALTHPLUS was deceptively similar to INNER HEALTH PLUS (s 60); that Shin-Sun had not used the mark in the period relevant to non‑use expungement (s 92); and that use of HEALTHPLUS was confusing at the time Health World applied for rectification (s 88(2)(c)) (paras 11-19). The primary judge found some substantive grounds proven (notably non‑use and confusion in part) but held that Health World lacked standing as an 'aggrieved person' and dismissed Health World's applications for rectification.
Health World appealed to the Full Court. Perram J (with Emmett and Besanko JJ concurring) dismissed the appeals on the single decisive ground that Health World lacked standing (paras 1-4, 44). Perram J explained at length why mere allegation of deceptive similarity was insufficient to constitute aggrievement absent reputation or some demonstrable legal or practical disadvantage (paras 23-36). The court declined to decide the remaining substantive issues because standing was dispositive and, in line with the guidance from the High Court, declined to create obiter on issues unlikely to assist or be considered fruitfully on further appeal (paras 45-48).
The formal orders were that the appeals be dismissed, Health World pay Shin-Sun's costs of the appeals, and no order as to costs in respect of the notices of contention (orders dated 17 February 2009).
Central to the Full Court's decision was the statutory requirement that an application under s 88(1) must be brought by an "aggrieved person" and analogous requirements for s 92. Perram J accepted the established articulation of that requirement: to be an "aggrieved person" an applicant must show a reasonable possibility of being appreciably disadvantaged in a legal or practical sense by the register remaining unrectified (citing the formulation in Ritz, and following the approach accepted in Kraft and Campomar) (para 23). This was not a mere formal or low threshold that would allow officious intervenors to besiege the register; it requires a meaningful link between the applicant and the potential adverse effect of the registration.
When standing is relied upon by reference to deceptive similarity under s 60, there is a two-layered enquiry. Section 60 itself hinges on the reputation of a pre-existing trade mark and whether the later mark is deceptively similar because of that reputation. But standing under s 88(1) requires the applicant to have an interest in that reputation such that any deceptive similarity would cause a legal or practical disadvantage to the applicant (paras 25-26). Perram J therefore explained that showing deceptive similarity between two marks does not, without more, give an applicant standing: the applicant must show reputation or goodwill in respect of the earlier mark that would make the deceptive similarity harmful to it (paras 24-26, 35-36).
In this case, although the primary judge had found there was a reputation for INNER HEALTH PLUS as a probiotic product (para 28), he also found that HEALTHPLUS and INNER HEALTH PLUS were not deceptively similar (paras 125-126 quoted at 29). Because deceptive similarity was not made out, the reputational overlap required to create standing did not arise. Health World sought to rely on other arguments, prima facie rules that traders in the same classes are aggrieved, subsequent conduct by Shin-Sun, and other litigation, but Perram J rejected these as insufficient to establish aggrievement at the relevant date of the rectification application (paras 31-44). The prima facie rule was rebutted by evidence that Health World intended to use HEALTHPLUS only incidentally as part of the INNER HEALTH PLUS mark, thereby removing the chance to exploit the opportunity to use HEALTHPLUS independently (paras 32-34). Subsequent conduct by Shin-Sun (letters, defensive proceedings) occurred after the application date and did not retroactively confer standing (paras 40-43).
Finally, the court exercised appellate restraint: having resolved that standing was lacking, it was neither necessary nor desirable to decide the remaining substantive issues, save to observe the principles governing when an appellate court may or may not decide issues that do not arise for final disposition (paras 45-48).
Before this decision the line of authorities construing the "aggrieved person" or "person aggrieved" concept under trade marks law was well established. The Full Court relied on Ritz (McLelland J), Kraft, and Campomar to restate that aggrievement requires a reasonable possibility of appreciable legal or practical disadvantage, and that this is not satisfied by mere officious interference or common informers (para 23, 31-33).
This Full Court decision reiterates and clarifies two points:
After this decision, the law remains that standing is a meaningful threshold; applicants must show a tangible link to the reputational or practical disadvantage they allege. The decision also underscores that standing is assessed at the date of application (paras 40-43), and subsequent conduct is of limited value.
Note: Campomar was referred to as having been reversed by the High Court on other grounds but not on the "aggrieved person" point; Perram J relied on the Campomar approach for standing (para 23).
"An applicant is aggrieved if there is a reasonable possibility of the applicant being appreciably disadvantaged in a legal or practical sense by the register remaining unrectified." (para 23)
"What is necessary to establish standing to expunge a mark in reliance on s 60 ... is not the same as what is required by s 60 itself. ... the applicant [must] have an interest in the reputation of the mark..." (para 26)
"Absent reputation, the possibility of deceptive similarity is both superfluous and insufficient." (para 36)
On subsequent conduct: the 4 April 2007 letter did not create standing as at 13 February 2006 (paras 40-43).
This decision is directly triggered where:
Particular fact patterns where the ratio will be instructive:
Within the reasons, Perram J referred to the High Court decision in the Campomar litigation: Campomar's treatment of 'aggrieved person' was not disturbed by the High Court on that specific point (para 23). The judgment also invokes Kuru v New South Wales to outline appellate restraint: intermediate appellate courts should weigh whether to decide issues unnecessary to disposal of an appeal (paras 45-48). The Full Court applied these authorities to decline to decide substantive issues once standing was resolved against the appellant.
Beyond those references, this judgment itself provides a clear statement that subsequent conduct by the registered owner or by parties after the relevant date will not routinely create standing. Later courts confronted with analogous standing contests will rely on the approach taken here: require demonstrable reputational or practical disadvantage, treat the trader-in-same-class prima facie rule as rebuttable, and assess standing at the date of application.
(Practitioners should check post-2009 authority for any further elaboration or departure from these propositions; this judgment reinforces existing Full Court approaches and the constraining principle that standing cannot be reduced to mere allegations of deceptive similarity.)
Practical takeaways for practitioners: before commencing an expungement or rectification application, ensure the claimant can demonstrably show reputation/goodwill or a concrete legal/practical interest likely to be harmed by the registration; document independent intention to exploit the contested mark where relying on the prima facie trader rule; and focus on evidence relevant as at the date of application because later conduct will seldom cure a standing deficiency.
the applicant, or the applicant and the predecessor in title of the applicant, have continuously used the applicant's trade mark for a period:
(a) beginning before the priority date for the registration of the other trade mark in respect of:
(i) the similar goods or closely related services; or
(ii) the similar services or closely related goods; and
(b) ending on the priority date for the registration of the applicant's trade mark.
3.2 Although our client has not had an opportunity to examine the material submitted by Health World in support of its claim for registration based on Section 44(4), it is clear from the evidence filed by Health World in the proceedings that the mark has not been used, in respect of all goods specified in the Application, for a period beginning before the priority date of our client's Australian trade mark no. 874755 HEALTHPLUS.
3.3 For this reason, our client submits that pursuant to Section 38, an error has occurred in the acceptance of the application. Our client submits that the Registrar ought not to have accepted the trade mark application in respect of the range of goods specified, as no evidence of use could have been provided by HealthWorld in respect of this range of goods. …
43 Health World's argument is that the passages contain an implicit assertion that s 44(1) applied and, hence, that the two marks were substantially identical or, at least, deceptively similar. There is no doubt, I think, that the letter sought to cavil with the registrar's actions under s 44(4). So too, it cannot be doubted that the registrar had proceeded on the basis that the two marks were substantially identical or deceptively similar. However, to write a letter disagreeing with the registrar's conclusions on s 44(4) need not entail an acceptance of the correctness of the registrar's position on the issue of substantial identicality or deceptive similarity, and still less, I think, an assertion of that position. It would have been possible to argue that s 44(1) was inapplicable. However, it cannot be said that by disagreeing with the registrar's conclusions about s 44(4) Shin-Sun actively asserted the registrar's position on s 44(1). Indeed, it would have been possible for Shin-Sun to have done both at the same time which somewhat undermines the notion that the denial of one entailed the acceptance of the other. It follows that this argument must be rejected too. 44 For those reasons, the conclusion of the primary judge that Health World lacked standing under s 88(1) was correct. No separate argument was advanced in relation to s 92 so that his Honour's conclusion that Health World lacked standing for the application pursuant to that provision must also be upheld. Shin-Sun proffered an undertaking during the course of the appeal to limit HEALTHPLUS to pharmaceutical products excluding probiotics. Given that Health World has no standing to vary the register there is no occasion to consider whether any such undertaking should be accepted.
The remaining issues 45 The above conclusion is sufficient to dispose of both appeals. There have been recent statements by the High Court about the duty of intermediate appellate courts, upon disposing of an appeal on a single decisive issue, to decide issues which do not arise. The most recent of these is Kuru v New South Wales (2008) 246 ALR 260. In that case, the appellant complained of assault by the police. He succeeded in the NSW District Court and obtained damages in the amount of $418,265. In its appeal to the NSW Court of Appeal the State contested both its liability and the quantum. The Court of Appeal unanimously allowed the appeal on liability but did not deal with the quantum issues. A majority of the High Court (Gleeson CJ, Gummow, Kirby and Hayne JJ; Heydon J dissenting) restored the trial judge's conclusion on liability. That left unresolved the issue of quantum in the Court of Appeal. 46 At 260 [12] the majority said: The appeal to this court should be allowed. There was neither statutory nor common law justification for the police remaining on the appellant's premises. The matter must be remitted to the Court of Appeal for consideration of the outstanding issues about damages. That outcome means that this court cannot make orders disposing finally of the dispute between the parties. This court has said on a number of occasions that, although there can be no universal rule, it is important for intermediate courts of appeal to consider whether to deal with all grounds of appeal, not just with what is identified as the decisive ground. If the intermediate court has dealt with all grounds argued and an appeal to this court succeeds, this court will be able to consider all the issues between the parties and will not have to remit the matter to the intermediate court for consideration of grounds of appeal not dealt with below. 47 It is, I think, important to emphasise that the Court did not say that such findings had to be made. Rather, it merely exhorted intermediate Courts to consider whether to do so. That consideration, I venture to suggest, involves an assessment of the following matters: first, an assessment, so far as is possible, of the likelihood of there being a grant of special leave; secondly, an assessment, if special leave were to be granted, of whether the High Court would deal with the matters raised in any notice of contention or, instead, remit those back to the intermediate appellate court. In assessing that question it is pertinent to note the inappropriateness, generally speaking, of the High Court being asked to deal with factual matters. On the other hand, where the remaining issues are pure questions of law this may be a lesser consideration. Thirdly, the cost consequences to the parties, if special leave is granted but a remitter ensues; fourthly, an assessment of the intermediate appellate court's own workload. None of those factors is decisive in itself and, it may be accepted, the notion of gauging the prospect of a grant of special leave is problematic. 48 I approach the matter on the basis that the primary judge's approach to the question of standing was a straightforward application of this Court's decision in Campomar. A grant of special leave is unlikely but not impossible. On the other hand, the remaining issues are legal arguments which could be dealt with by the High Court were it minded to grant special leave. In that circumstance, a remitter of those issues is reasonably unlikely. That being so, it is less likely to be a productive use of the resources of this Court to create obiter dicta which are unlikely to assist anyone. For those reasons I do not propose to consider the remaining issues. 49 A substantial part of the appeal was spent on those issues. In that circumstance the appropriate costs order is that Health World pay Shin-Sun's costs of both appeals and that there be no order as to costs in relation to the notices of contention. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.
Associate: Dated: 17 February 2009 Counsel for the Appellant: Mr R Cobden SC with Mr J S Cooke
Counsel for the Respondent: Mr D K Catterns QC with Ms J Baird SC and Ms P Arcus
Health World Limited
Shin-Sun Australia Pty Ltd
30 There are three comments which should be made. First, his Honour referred to the precise passage in Campomar in which Sackville J had explained that the mere allegation that two marks were deceptively similar would not suffice to establish standing but that there needed to be a reputational impact as well. Secondly, his Honour had, by then, expressly considered the reputation of the INNER HEALTH PLUS mark. Thirdly, his Honour had concluded that the two marks were not deceptively similar. So viewed, Health World's submission that the trial judge treated the standing requirement as being merely whether the two marks were deceptively similar must be rejected. His Honour clearly had in mind that the reputation of INNER HEALTH PLUS was such that, if the marks had been deceptively similar, he would have concluded that Health World was aggrieved. To embrace Health World's argument it would be necessary to conclude that his Honour's extensive treatment of the reputation of the INNER HEALTH PLUS mark was a frolic and his reference to the critical passage in Campomar a confection. Ockham's razor suggests a simpler solution. The trial judge did not reason as Health World alleges. 31 Once it is accepted that the two marks are not deceptively similar and that their reputations do not intersect it is difficult to identify what interest of Health World is affected by the registration of HEALTHPLUS. Health World suggested five matters in answer to that difficulty. First,it contended that in view of the long history of dispute between Health World and Shin-Sun it could not be described as an "interferer" or "common informer". The significance of that denial can be seen from statements of principle to the effect that the "person aggrieved" test was designed as a low threshold to prevent officious interference or mere common informers: Powell v Birmingham Vinegar Brewery Co Ltd [1894] AC 8 ("Powell") at 10 per Lord Herschell LC, 14 per Lord Ashbourne; Kraft (1996) 65 FCR 104 at 113 per Sackville J (Sheppard and Tamberlin JJ agreeing). However, accepting that Health World has demonstrated that it is not an officious interferer or a common informer, it does not follow that it is an aggrieved person; membership of one class is not proved by demonstrating non-membership of another class. 32 Secondly, it was submitted that where an applicant for expungment deals or intends to deal in goods of the same class, or similar to, as that for which the trade mark is registered, that fact is prima facie sufficient evidence of it being a person aggrieved. The existence of that prima facie rule is well-established: see Powell at 10 per Lord Herschell LC, 12 per Lord Watson, 14 per Lord Ashbourne, 15 per Lord Shand; Farley (Aust) Pty Ltd v J R Alexander & Sons (Queensland) Pty Ltd (1946) 75 CLR 487 at 491-492 per Williams J; Shell Co of Australia Ltd v Rohm & Haas Co (1949) 78 CLR 601 at 606 per Williams J; Continental Liqueurs Pty Ltd v G F Heublein & Bro Inc (1960) 103 CLR 422 at 427 per Kitto J; Daiquiri Rum Trade Mark [1969] RPC 600 at 615 per Lord Pearce; Ritz at 195-196 per McLelland J; Kraft at 113 per Sackville J (Sheppard and Tamberlin JJ agreeing). 33 Shin-Sun submitted that analysis of those cases revealed the prima facie rule was a manifestation of the general test and hence had to be tied back to the effect on the applicant in a practical or legal sense. So viewed, where the intention to trade in the same class is obscure or fantastic, the rule does not apply. This may well be true. However, for myself, I think it is more useful to look at that matter as an element tending to rebut the prima facie rule. This, I believe, was the approach taken by the Full Court in Kraft (1996) 65 FCR 104 at 113 where Sackville J (with whom Sheppard and Tamberlin JJ agreed) said: A trader who has dealt in the same class of goods as the registered proprietor and shows that he or she could use the mark, establishes a prima facie case that he or she is a person aggrieved for the purposes of a removal application. The inference may be rebutted by evidence from the objector, demonstrating that the applicant would not take advantage of the opportunity to use the mark, but in the absence of such evidence the prima facie inference remains.
(1998) 85 FCR 331
(1960) 103 CLR 422
(1946) 75 CLR 487
(2005) 64 IPR 495
(2008) 246 ALR 260
(1996) 65 FCR 104
(1988) 15 NSWLR 158
(1949) 78 CLR 601
(2000) 202 CLR 45
Appeals dismissed; appellant (Health World) to pay respondent's (Shin-Sun's) costs of the appeals; no order as to costs in relation to the notices of contention (orders dated 17 February 2009).