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[2003] FCA 997
procedural. Order 5 of the orders of 8 September 2003 was varied by substituting “24 September 2003” for “20 September 2003”; the application for a stay was otherwise dismissed with costs.
The applicants wanted to keep using their newspaper masthead while they sought permission to appeal, and possibly pursued an appeal, from orders restraining its use. Moore J accepted that changing the masthead could cause some disruption, but found that the asserted costs were not significant and that the other arguments did not justify suspending the orders. The stay was refused, with costs. The date in one order was extended from 20 to 24 September 2003.
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Melbourne Chinese Press Pty Ltd and Chinese Times Newspapers Pty Ltd, described in the reasons as the “ADN Publisher”, applied to stay final orders made by Conti J on 8 September 2003. They wanted the orders suspended while they sought leave to appeal and, if leave were granted, while the appeal was determined [1]. The respondent, Australian Chinese Newspapers Pty Ltd, was the “ANN Publisher”. It published the Australian New Newspaper or Australian New Report, while the applicants published the Australian Daily Newspaper. Both newspapers were in Chinese [1].
1 cited instrument linked from this judgment.
The dispute concerned a four-character masthead registered as the respondent’s trade mark. The applicants’ masthead also consisted of four Chinese characters. The reasons explain that the respondent’s masthead transliterated as “O Chau Sun Pao”, while the applicants’ masthead transliterated as “O Chau Yat Pao”. The first, second and fourth characters were substantially the same, but the third was entirely different [3]. The primary judge had made orders restraining infringement of the registered mark, including use of the applicants’ logo and other signs substantially identical with or deceptively similar to the registered mark in connection with printed matter and advertising services [2].
The stay application arose after a trial lasting eight days in late 2002 and two days in April 2003. The primary judge had accepted evidence from two newsagents concerning customers’ mistaken beliefs about which newspaper they had bought, and had also heard evidence from witnesses presented as experts on the appearance and meaning of the mastheads to Chinese readers [5]. The primary judge found that the applicants had deliberately adopted the contentious masthead to deceive and confuse buyers and prospective buyers [6]. Moore J recounted the primary judge’s reasons for finding deceptive similarity, including the similarities in size and colour, the shared characters, the overall visual impression, the evidence about a fleeting glance at a newspaper masthead, and the parties’ use of the marks for the same goods or services [7].
Those matters provide the background to Moore J’s decision, but the application before him was not the substantive appeal. The immediate question was whether the primary judge’s orders should operate while the applicants pursued appellate steps. Moore J dismissed the stay application with costs. He also varied order 5 by substituting 24 September 2003 for 20 September 2003.
Moore J began from the parties’ agreement about the applicable stay principle. A stay applicant need not show “special circumstances”; it is enough to show a reason warranting a favourable exercise of the Court’s broad discretion [8]. The judgment refers to Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65 for that proposition. The reasons do not formulate a mechanical checklist. Instead, Moore J assessed the asserted appeal grounds and the consequences of compliance in the context of the case.
The applicants relied on two broad kinds of considerations. First, they said the primary judge had arguably erred. Secondly, they relied on the history of their use of the masthead and the consequences of changing it, including cost, inconvenience and loss of face [8]. Moore J considered the practical consequences, but found that the identified costs of changing letterhead and business cards were not significant [8]. He accepted that the applicants might lose an association that had developed between their masthead and their newspaper readership [9]. That possibility did not, however, stand alone. The primary judge had found that the association was created through deliberate adoption of a masthead similar to the respondent’s mark, and the respondent had succeeded at trial. Moore J therefore did not treat the applicants’ continued use since September 2000 as decisive of the status quo [9].
The alleged errors concerning deceptive similarity were also considered in the limited setting of a stay application. Moore J observed that the third character was visually and linguistically different. He said that, without the evidence and findings before the primary judge, he would incline to the same view as Whitlam J, who had refused interlocutory relief in 2001 [10]. But the primary judge had heard expert evidence about how likely readers would understand the characters. As Moore J understood the draft notice of appeal, it did not challenge the reception or use of that evidence. The primary judge’s emphasis on the overall image of the four characters, rather than a word-by-word comparison, was relevant to why he had apparently placed less weight on the difference in the third character [10].
The applicants also challenged reliance on their alleged intention to deceive and on evidence of actual deception. Moore J did not conclude that those arguments lacked merit for the eventual appeal. He held only that, in the context of the stay application, the asserted errors were not obviously established. On intention, he referred to Australian Woollen Mills Ltd v F S Walton & Co Limited (1937) 58 CLR 641 at 656-657. He noted a possible question about whether the current statutory definition of “deceptively similar” in the Trade Marks Act 1995 (Cth), which he described as positing an objective comparison, affected the relevance of intention. He expressly left that question for possible consideration by the Full Court if the argument continued and leave was granted [11]. On actual deception, he was not satisfied that the primary judge had obviously given undue weight to evidence that had been admitted subject to a limited objection concerning relevance [12].
Finally, Moore J rejected the submission that the appeal would be rendered nugatory if the applicants had to stop using their masthead. He accepted that the applicants might lose benefits associated with continued use, but reasoned that success on appeal would not prevent them from adopting the masthead again. He noted that they had previously moved to a different masthead in September 2000 [12]. The asserted effect on the appeal therefore did not tip the discretionary balance in favour of a stay.
The judgment presents the applicable stay principle as an existing one, not a new rule. Before Moore J’s decision, the principle cited from Powerflex was that a party seeking a stay pending appeal did not have to prove special circumstances; it had to identify a reason that could warrant a favourable exercise of the Court’s broad discretion [8]. Moore J applied that approach to the particular consequences and arguments raised in this case.
The decision did not announce a new test for deceptive similarity. The primary judge had made findings about the marks, the readership and the evidence, and Moore J assessed whether the applicants’ asserted errors warranted a stay before any appeal had been decided [10]-[12]. His discussion of Australian Woollen Mills was similarly limited. He considered it difficult to say that the primary judge had erred in considering evidence of intention, given the law as it then stood, but identified a question about the statutory definition in the Trade Marks Act 1995 (Cth) for possible later consideration [11].
Accordingly, the source does not establish what the Full Court later decided about intention or deceptive similarity, or whether it granted leave to appeal. It records only Moore J’s view at the stay stage and the possibility that the statutory question could be argued later. The state of the law after this decision cannot be determined from this judgment alone.
At [8], Moore J said that a stay applicant “need not show special circumstances” and must demonstrate a reason that warrants a favourable exercise of the discretion. In plain English, the applicants did not face a special, elevated threshold, but they still had to persuade the Court that the circumstances justified suspending the orders.
At [9], Moore J acknowledged that the applicants might lose an existing association between their masthead and their readership. He placed that possibility alongside the primary judge’s findings and the respondent’s success at trial. In plain English, the fact that the applicants had been using the masthead for some time was relevant but did not automatically preserve that use during the appeal process.
At [10], Moore J identified the difficulty with the applicants’ argument about the third character. He recognised the difference, but noted that the primary judge had heard expert evidence about how likely readers would perceive the mastheads. In plain English, the stay application could not be assessed as though the trial evidence and findings did not exist.
At [11], Moore J left open whether the Trade Marks Act’s objective definition affected the treatment of intention to deceive. In plain English, the stay decision did not finally resolve how intention should fit into the substantive trade mark comparison.
At [12], Moore J reasoned that a successful appeal would not prevent the applicants from using the masthead again. In plain English, temporary compliance did not necessarily make the appeal pointless, because the applicants could re-adopt the masthead if they ultimately succeeded.
At [14], the formal result was that the stay application was dismissed with costs. The separate order varied the date in order 5 to 24 September 2003.
The decision is most directly relevant to applications to stay orders while an applicant seeks leave to appeal or pursues an appeal. Its stated starting point is the broad discretion and the absence of a requirement to prove special circumstances [8]. It also illustrates the kinds of practical consequences that may be put forward: costs of compliance, inconvenience, loss of an existing commercial association, and concern that compliance may diminish the value of an appeal [8]-[12].
The case also illustrates that appellate arguments may be considered at a preliminary level in a stay application. Here, the applicants alleged errors in the primary judge’s treatment of intention, actual deception and expert evidence [10]-[12]. Moore J did not determine the substantive trade mark appeal. His focus was whether those arguments, as presented at that stage, justified staying the operative orders.
The reasoning depends on particular features of this record. The primary judge had made findings after hearing evidence, including expert evidence about reader perception and evidence of actual confusion [5]-[7]. The respondent had succeeded at trial, and the alleged commercial association relied on by the applicants was considered against the primary judge’s finding of deliberate adoption [6], [9]. The decision should therefore not be read as establishing that costs, commercial disruption, or potential loss of an appeal’s practical value will always be insufficient. It shows how Moore J weighed those matters on the evidence and submissions before him.
This judgment contains no information about how later courts treated Moore J’s decision. It refers to earlier authorities, including Powerflex, Australian Woollen Mills, and Top Heavy Pty Ltd v Killin, and records the earlier interlocutory decision in the same dispute, [2001] FCA 10 [4], [7]-[8], [11]. Those references do not establish how any later court applied or interpreted the 2003 stay ruling.
Moore J anticipated that the Full Court might consider issues about the relevance of intention under the statutory definition of deceptive similarity if leave were granted and the argument continued [11]. He did not state whether leave was granted, whether an appeal was heard, or what the Full Court decided. Any account of later treatment would require sources beyond this judgment.
Several matters are expressly unresolved or not determined by this decision. First, Moore J left open whether the statutory definition of “deceptively similar” in the Trade Marks Act 1995 (Cth) affected whether intention to deceive should be considered. He said that question could await the Full Court if the argument continued and leave was granted [11].
Second, the judgment does not decide whether the primary judge was correct on the substantive trade mark question. Moore J assessed the asserted errors only in deciding whether to grant a stay. His observation that he would incline towards viewing the characters as materially different without the evidence and findings does not replace the primary judge’s determination or decide the appeal [10].
Third, the judgment does not determine the final appeal process or the applicants’ eventual ability to use the masthead. It records Moore J’s view that a successful appeal would not preclude future adoption of the masthead, but says nothing about the ultimate outcome of any appeal [12]-[14]. Nor does it resolve the possible difficulties concerning assessment of damages mentioned by the applicants; Moore J noted that the substance of the dispute was whether they could use the masthead [13].
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REASONS FOR JUDGMENT 1 This is an application by Melbourne Chinese Press Pty Ltd and Chinese Times Newspaper Pty Ltd ("the ADN Publisher") for orders staying orders made (in a final form) by Conti J on 8 September 2003. The stay is sought until the hearing and determination of an application for leave to appeal from those orders and, if leave is given, the determination of the appeal. His Honour's reasons for making the orders were published on 22 August 2003: see [2003] FCA 878. The successful applicant before the primary judge, Australian Chinese Newspaper Pty Ltd ("the ANN Publisher") publishes a newspaper called the Australian New Newspaper or the Australian New Report. The ADN publisher publishes a newspaper called the Australian Daily Newspaper. Both newspapers are in the Chinese language. The masthead of the Australian New Newspaper is a trade mark of the ANN Publisher registered under the Trade Marks Act 1995 (Cth) ("the Act"). 2 The proceedings before the primary judge were an application by the ANN Publisher to restrain the ADN Publisher from using a masthead which it alleged was, inter alia, an infringing mark because it was deceptively similar to the registered trade mark. An allegation was also made by the ANN Publisher that copyright in the masthead was breached but neither party relies on this aspect of the proceedings in this stay application. The relevant order made by the primary judge was: 2. Each of the respondents be restrained, by its servants, agents or otherwise from infringing Australian Registered Trade Mark No. 776305 (the "registered mark") by, without the licence of the applicant: (a) using the infringing logo upon or in relation to any printed matter (including without limitation any newspaper, magazine or periodical); (b) using the infringing logo in relation to any advertising services; (c) using any other logo or sign which is substantially identical with or deceptively similar to the registered mark upon or otherwise in relation to any printed matter; or (d) using any other logo or sign which is substantially identical with or deceptively similar to the registered mark in relation to any advertising services. In these orders the expression "infringing logo" means the sign consisting of the four Chinese characters, a reproduction of which has appeared upon the masthead of the respondents' newspaper and a further reproduction of which logo is annexed hereto. 3 The masthead of the ANN Publisher (the registered trade mark) and the contentious masthead of the ADN Publisher are both four Chinese characters. The masthead of the ANN Publisher transliterates to "O Chau Sun Pao" which means either "Australian New Newspaper" or "Australian New Report" in English. While there are some minor differences, the first, second and fourth Chinese character in the contentious masthead of the ADN Publisher are substantially the same as the trade mark. The third character is entirely different. The contentious masthead of the ADN Publisher transliterates to "O Chau Yat Pao" which means "Australian Daily Newspaper" in English. The graphic representation of each masthead is annexured to the primary judge's reasons for judgment. 4 Two matters of history should be mentioned. The first is that the ANN Publishers have been using the masthead to which the proceedings relate from 22 October 1996. The ADN Publishers have used the contentious masthead since 27 September 2000. Shortly after the proceedings were commenced on 5 January 2001, an application for an interlocutory injunction was heard and determined by Whitlam J: see [2001] FCA 10. His Honour refused to grant interlocutory relief on the basis that, inter alia, he was not satisfied there was a serious question to be tried concerning the allegation of infringement of the registered trade mark on the grounds of deceptive similarity. 5 The hearing before the primary judge took place over eight days in late 2002 and two days in April 2003. During the hearing, his Honour heard evidence from two newsagents concerning actual deception. It generally took the form of hearsay evidence concerning what each newsagent had been told by customers about believing one newspaper was in fact the other. His Honour accepted this evidence. His Honour also heard evidence from witnesses presented as experts concerning the form and meaning of the mastheads and how they might be understood by a typical reader of the newspaper who spoke and read Chinese. 6 His Honour made a finding that the ADN Publisher had deliberately adopted the contentious masthead to deceive and confuse. His Honour found at [123]: I find moreover that the evidence discloses the existence, at all material times, of a purpose adopted by the respondents to deceive and confuse buyers and prospective buyers of the applicant's newspaper with a view to attracting their patronage, as a consequence of an initial mistaken or unintended purchase at the counter. That objective was in my opinion pursued by Mr Roger Huang from about the time of his instructions given to Mr Kevin Chen, in about July or August 1996, to produce a new graphic design or layout for the respondents' font. As appears from the evidence of Messrs Yeo and Zhang, that purpose was to an extent achieved, at least in the short term. 7 The reasons why his Honour concluded that the masthead adopted by the ADN Publisher was deceptively similar were set out at [120] of his Honour's reasons: The applicant has established in my opinion a sound basis for its case that the respondents' current logo (which by reason of its font, colour and position on the first page of the newspaper was a badge of origin used to indicate a trade connection between the 'Daily Chinese Herald' and the respondents - Top Heavy Pty Ltd v Killin (1996) 34 IPR 282), adopted on 23 September 2000, is deceptively similar to the applicant's current logo adopted earlier on 22 August 1996, within s 120(1) of the Trade Marks Act, for the following reasons to be read cumulatively, and without any particular sequence of emphasis: (i) both are of similar size and use the same red colour; (ii) the only distinctive or distinguishing character of the respective logos is visually the third one; moreover the other three characters translate identically into Chinese as 'O Chau… Pao'; (iii) both logos owe their origins and historical development to the Li Shu style of font; although there are numerous styles of Li Shu, the style adopted for the respondents' current logo has been matched as closely as possible to Professor Huang's Li Shu style, even taking into account the different third character of the respective logos of the parties; (iv) Professor Huang's Li Shu style 'combines the Li Shu in Qing Dynasty', and the respondents' Li Shu style is 'influenced by Li Shu style in Qing Dynasty'; a synonym for 'style' in that context is 'typeface'; previously the respondents' logo was written in the Xing-Shu style; (v) a Chinese buyer tends to look at the impact of the image of the four characters, or their whole layout, such that they come together as one image or visual experience; thus the overall characters of the two logos look similar, especially when viewed 'scantily'; (vi) the 'dots' appearing in the respondents' logo, though not the same as those of the applicant's logo, have the overall appearance of being in the same style, and it is the overall appearance which is looked at, rather than individual components; or as put another way, the Chinese reader 'look[s] at the whole thing as one piece of graphic' and not 'word by word'; particularly is that so, when the Chinese viewer is engaged in making a fleeting glance at the masthead of a newspaper in the course of purchasing the same; (vii) most of the five strokes of both current mastheads are the same; and (viii) the goods or services in respect of which the applicant's trade mark is registered (ie printed matter being goods in class 16 and advertising being services in class 35) is the same as the respondents. 8 There was no issue about the principles to be applied in determining whether a stay should be granted. They are that the applicant for a stay pending an appeal need not show special circumstances and it is sufficient that the applicant for the stay to demonstrate a reason in an appropriate case to warrant a favourable exercise of the broad discretionary power to grant a stay: see Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65. The submissions in support of the stay fall broadly into two categories. One concerns arguable errors made by the primary judge which bear upon the prospects of success in the appeal, and the other concerns the circumstances preceding the judgment and the consequences of complying with the orders. As to the latter category, senior counsel for the ADN Publisher pointed to the fact that it has been using the contentious masthead for three years. He also pointed to evidence concerning the cost, inconvenience and loss of face associated with having to abandon that masthead and reverting either to an earlier version or some other version. Changes would need to be made to items such as letterhead and business cards. These last mentioned matters are, in my opinion, of no real moment as the amounts involved are not really significant. 9 It may well be, as some of the affidavit evidence in support of the stay tends to suggest, the ADN Publisher will lose the benefit of an existing association in the eyes of the readership presently between the contentious masthead and the Australian Daily Newspaper because of the overall impression created by that masthead. However, on the findings of the primary judge, that overall impression was one that the ADN Publisher sought to establish by deliberately creating a masthead similar to that of the ANN Publisher and in breach of its registered trade mark. I accept that the ADN Publisher's use of the contentious masthead might be viewed as the status quo since September 2000. However that has occurred against a background where litigation has been pending in this Court with the prospect that the ANN Publisher might succeed. Whatever the circumstances which might have existed since September 2000, a material part of those circumstances is now the success of the ANN Publisher before the primary judge and its prima facie entitlement to the fruits of its victory. 10 The more substantial aspect of this stay application is what is said to be the errors in the approach adopted by the primary judge. I put it that way because the masthead of the ANN Publisher is materially different from the contentious masthead used by ADN Publisher at least in the sense that the third character is visually quite different, means something entirely different and is pronounced differently. It was this consideration that underpinned the judgment of Whitlam J that there was no serious question to be tried on the question of infringement concerning deceptive similarity. From my part, unaided by the evidence before the primary judge and his findings, I would incline to the same view. However, the difficulty the ADN Publisher confronts in this application is that the primary judge received into evidence what was advanced as expert opinion about how the characters were likely to be understood by the likely average reader of both newspapers. As the draft notice of appeal is presently framed, I apprehend no challenge is made either to the reception or use made of this evidence. It is to be recalled that the fifth reason given by his Honour for concluding the masthead of the ADN Publisher was deceptively similar to the registered trade mark was that a Chinese reading buyer tends to look at the impact of the image of the four characters or the whole layout such that they come together in one image or visual experience. This would appear to be the reason why his Honour seemingly placed little weight on what I have just described as the material difference arising from the third character. 11 Senior counsel for the ADN Publisher did not submit that the learned primary judge misidentified the relevant principles. Rather the import of the submission was that, at least arguably, his Honour failed to apply them correctly. He adverted to several specific matters (apart from those already mentioned) which are said to illustrate error on the part of the primary judge. First it was submitted that his Honour erred in relying on his finding that the ADN Publisher had adopted the contentious masthead to deceive and confuse buyers or that this consideration was given undue weight by his Honour. Having regard to what was said by Dixon and McTiernan JJ in Australian Woollen Mills Ltd v F S Walton & Co Limited (1937) 58 CLR 641 at 656-657, it is difficult to accept that his Honour erred, as the law presently stands, in having regard to this evidence of intention. I should note, in passing however, that the legislation in force in 1937 did not, as I apprehend it, contain a definition of "deceptively similar" as now found in s 10 of the Act which posits an objective test requiring a comparison of two marks. Whether this has any relevance to the question of whether an intention to deceive is to be considered in a mix of considerations, is a matter that will await consideration by the Full Court in this matter if the argument continues to be advanced and leave is given. However, it cannot be said, at least in the context of this application, that it is clear his Honour gave undue weight to this consideration. 12 The second matter concerns the evidence of actual deception. The criticism made by senior counsel for the ADN Publisher was that the evidence relied on by his Honour, even though admitted against a limited objection concerning relevance, was evidence of little probative value. As I understand the criticism of his Honour's use of this evidence, it was that he gave it undue weight given its character. Again, in the context of this application, that is not obviously so. The third matter was that the appeal will be rendered nugatory if the primary judge's orders are not stayed. That is, the ADN Publisher will be required to abandon its present masthead and lose the benefits flowing from its continued use since September 2000. Accepting that may be so, it will not preclude the ADN Publisher, if it is successful in the appeal, adopting that masthead in the future as it did in September 2000 when moving from the masthead it had used since 1 November 1997. 13 I am not satisfied an order should be made staying the operation of the orders of the primary judge. At one point I raised with the parties the question of whether this appeal should be expedited. The parties were informed that if such an order was made it would be possible for the application for leave to appeal and any consequential appeal to be heard in the Full Court sittings in November this year. However I have decided, on reflection, that this is not a case that would warrant an order for expedition. While the application for leave to appeal and any appeal may raise points of substance and of potential significance, there is no reason apparent to me why they cannot await the determination of a Full Court in the ordinary course. While it is true, as senior counsel for the ADN Publisher submitted, difficulties may arise concerning the assessment of damages, I apprehend that the substance of the dispute between the parties is whether his client can use the contentious masthead. 14 I dismiss the stay application with costs. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment of Justice Moore.
S G Finch SC with S C G Burley Counsel for the applicant:
Counsel for the respondent: J V Nicholas SC with M Green
Solicitor for the respondent: Chris Lai & Associates
Melbourne Chinese Press Pty Ltd & Ors
Australian Chinese Newspapers Pty Ltd
Order 5 of the orders of 8 September 2003 was varied by substituting “24 September 2003” for “20 September 2003”; the application for a stay was otherwise dismissed with costs.