44 There is evidence that a reader will be ableto distinguish the two sets of characters but that does not mean that, in the circumstances of a purchase of a newspaper, a reader will do so. The primary judge accepted evidence that a reader would not do so. It cannot be said that Conti J failed to consider the meaning of the logo and the Trade Mark.
45 Conti J noted that the first, second and fourth characters translate identically into Chinese as 'O Chau Pao'. Mr Catterns urged upon us that we must take into account the different meaning of the third character. He drew upon the analogy of a reader of the English words 'Australian New Newspaper' handwritten in an italic style and 'Australian Daily Newspaper' printed in a computer font which looked like handwritten italics. Counsel submitted that, in that case, there would clearly be no trade mark infringement. Bearing in mind that, to draw an accurate analogy, 'Australian New Newspaper' would be a registered trade mark and in a distinctive font and style, we are of the view that, in these circumstances, where the logos are viewed 'scantily', the two sets of English words could be deceptively similar and cause confusion. Readers of English may, in the words of the primary judge at [120], 'look at the impact of the image of the [words],or their whole layout, such that they come together as one image or visual experience'. It is not a question of separating out what the applicants describe as 'the non-distinctive words' 'Australian' and 'Newspaper' to focus on the different words 'New' and 'Daily'. It is a matter of fact, unchallenged, that Chinese readers will see multiple characters as a single image.
46 The second important circumstance is that the logo not only adopts characters having a strong resemblance to those of the Trade Mark, but also adopts the Li Shu style of calligraphy used in the Trade Mark. When the former Xing-Shu style was used for the same four characters in the prior masthead, the evidence was that the differences between the prior masthead and the Trade Mark were striking, even at a casual glance.
47 If it is the visual impact of the calligraphy that creates the impression on the Chinese reader, the change in fonts would be 'crucial' to the confusion in the minds of consumers. As Professor Huang set out in his affidavit evidence:
'Where a particular piece of Chinese calligraphy is also used to indicate a product, such as cooking oil or soy sauce, then, for many readers, the form in which those characters are presented will be more recalled than the particular underlying Chinese characters. An experienced calligrapher can evoke a reader's memory of that cooking oil by using a similar calligraphic style without necessarily using any of the works in the name. To me, this indicates the cultural importance to Chinese readers of calligraphy and the use of fonts.'
48 It is true that MCP's calligraphy is computer generated, as distinct from the handwritten calligraphy used in the Trade Mark. However, although Professor Huang, the creator of the handwritten Li Shu style calligraphy used in the Trade Mark, said he could readily detect the difference between it and the computer generated calligraphy, this does not amount to evidence that consumers could or, in the circumstances of the purchase of a newspaper, would do so. The primary judge accepted evidence that Chinese readers in Australia would not necessarily make the distinction.
49 In relation to MCP's decision to adopt the Li Shu calligraphy, in lieu of the style of calligraphy previously used by it, it is appropriate to recall the comment by Dixon and McTiernan JJ in Woollen Mills at 657:
'But the examination made of the respondent's motives and good faith seems to us to leave the question of infringement and passing off very much in the same position as it stood in without it. The rule that if a mark or get-up for goods is adopted for the purpose of appropriating part of the trade or reputation of a rival, it should be presumed to be fitted for the purpose and therefore likely to deceive or confuse, no doubt, is as just in principle as it is wholesome in tendency. In a question how possible or prospective buyers will be impressed by a given picture, word or appearance, the instinct and judgment of traders is not to be lightly rejected, and when a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he has done is in fact likely to deceive. Moreover, he can blame no one but himself, even if the conclusion be mistaken that his trade mark or the get-up of his goods will confuse and mislead the public.'
50 A further matter raised by MCP is the evidence of two newsagents that was accepted by Conti J. Counsel said that the evidence was hearsay, that it was not relevant, and not persuasive. However, it is far from clear that the evidence should be regarded as hearsay evidence. The newsagents' evidence consisted partly of their observations of customers' behaviour, as customers picked up one newspaper and then replaced it with the other after a conversation with the newsagent. That evidence was certainly not hearsay. Each of the newsagents also recounted conversations in which customers indicated their state of mind. At common law, this evidence, also, would not have been hearsay: see the discussion in Concrete Constructions Pty Ltd v Plumbers and Gasfitters Employees' Union (No 2) (1987) 15 FCR 64 at 81. Under the Evidence Act 1995 (Cth), the situation appears to be a little different. Such evidence would appear to fall within the definition of hearsay in s 59 of that Act, but it is the subject of a specific exclusion from the hearsay rule: see s 72.
51 In any event, we were informed by counsel that the newsagents' evidence was admitted without objection by counsel for MCP, except as to its relevance. It is clear that the newsagents' evidence was relevant. Evidence of actual confusion is relevant to a claim of infringement by reason of deceptive similarity; it goes to the existence of a real and tangible danger of deception or confusion (Southern Cross at 595 and 597-8).
52 In relation to the persuasiveness of the newsagents' evidence, the assessment of the witnesses, who gave evidence translated into English of Chinese language conversations, was a matter for his Honour par excellence.
53 Mr Catterns did not challenge the factual finding that his clients had an intention to deceive but emphasised that there was no evidence or finding as to the reasons for any confusion. The finding made by his Honour at [123] was that it was the applicants' purpose, at all material times, 'to deceive and confuse buyers and prospective buyers of [ACN's] newspaper with a view to attracting their patronage' and that the intention was to an extent achieved from the time that the prior masthead was changed to the logo in September 2000. Counsel submitted that his Honour erred in failing to determine that it was the deceptive similarity of the two marks that was the cause of any confusion, rather than irrelevant considerations, such as the reputation of the respondent or the fact that both marks were red in colour. It was said that, in those circumstances, the evidence of consumers being misled was irrelevant, as they may have been misled by factors or a combination of factors not relevant to trade mark infringement.
54 We accept that a finding of intention cannot overcome an absence of deceptive similarity in an action for trade mark infringement. However, a finding of intention to deceive can have the relevance described in Woollen Mills and this is, in our opinion, the way in which the primary judge took that unchallenged finding into account.
55 It would seem to be correct that there was no direct evidence of the cause of the confusion. However, counsel for ACN point to the link between the time of actual confusion and MCP's change from the prior masthead to the logo.
56 The primary judge made mention of a number of factors to be read cumulatively, including the fact that the two marks were of similar size and the same colour. However, the finding of actual confusion did not figure in his Honour's reasons for concluding that the marks were deceptively similar. It was conceded by Mr Catterns that the red colour was not an innovation. Both parties had used the colour for some time, including during a period when there was no claim of infringement. His Honour made reference to that fact. He was clearly well aware that the prior masthead had been the same colour and that there was no allegation that the prior masthead infringed the Trade Mark. It is reasonable to conclude that these factors were not predominant in his reasoning and may not have amounted to more than a factor relevant to the issue of whether the logo was a badge of origin used to indicate a trade connection with MCP. It may have had relevance as part of the surrounding circumstances, to be considered with respect to the likelihood of deception or confusion, bearing in mind that the red colour had been used consistently by the parties since 1986 and 1987 respectively. The reference to the similarity in size of the respective marks may be considered the same way.
57 The primary judge also referred in his reasons to the reputation of ACN in the Trade Mark. That did not, however, figure in the specific reasons set out by his Honour for concluding that there was deceptive similarity. In context, that reference may have been to a circumstance that may have provided MCP with a reason to change the prior masthead to the logo to more closely resemble the Trade Mark.
58 It was not established that the perceived confusion of customers was for reasons other than MCP's adoption of the logo, creating a masthead similar in appearance to that of ACN. The evidence linked the confusion to the date of MCP's change from the prior masthead to the logo. In those circumstances, even if other factors contributed to the confusion, it cannot be said that the primary judge was in error in regarding the newsagents' evidence as indicative of actual confusion, that confusion being generated by the adoption by MCP of the logo. That finding was, at the least, implicit in his Honour's reasons.
(vii) Conclusion on the trade mark issue
59 The evidence establishes that purchasers of Chinese daily newspapers do not usually state the name of the newspaper which they desire to purchase; so similarities of sound and meaning do not play as important a part as they might in relation to some other goods (Woollen Mills at 658). In the context of the evidence of the circumstances of purchase, the primary judge's emphasis upon the visual similarity of the marks (rather than the different meaning conveyed by the third character) is understandable and does not reflect error. This emphasis reflects the accepted evidence in the case. His Honour was, however, mindful of the difference in appearance, sound and meaning of the third characters.
60 We are not persuaded that Conti J erred in holding that MCP infringed the Trade Mark.
The copyright case
61 The evidence is that the applicants chose, from pre-existing computer software, a style as close as possible to the Li Shu style of Professor Huang. Mr Catterns asserts that this finding is fatal to the case of copyright infringement.
62 Copyright was claimed only in the distinctive form and style in which the words 'O Chau Sun Pao' were visually expressed through the calligraphy of Professor Huang. However, that claim was made against the background of substantial similarity between the characters depicted by the calligraphy. It was not suggested that the mere adoption of Li Shu calligraphy would have amounted to breach of copyright if characters that were dissimilar had been used.
63 The primary judge concluded at [126] that MCP 'set about the adoption of a new logo of Chinese characters for the masthead of [MCP's] newspaper, being a course of action finalised and implemented on 23 September 2000, being a logo which constituted a trade mark at least deceptively similar to [ACN's] Registered Trade Mark No. 776305'. Having found that the masthead constituted an artistic work, his Honour said [at 127] that it became 'conceptually difficult' to avoid the conclusion that MCP:
'infringed [ACN's] copyright in that artistic work, by reason of an exercise in qualitative comparisons. [MCP] did much more, for instance, than reproduce their Chinese name, existing since 1 November 1997, in Li-Shu style, and as [ACN] has rightly submitted, it was no mere accident that [MCP] utilise[d] that style'.
His Honour said that, in view of his findings with respect to trade mark infringement, the conclusion that MCP copied a substantial part of the subject matter of ACN's copyright, within s 14(1)(a) of the Copyright Act 1968 (Cth) ('Copyright Act'), was 'virtuallyinevitable'.
64 Counsel for MCP submitted that the primary judge was in error in two ways:
'(a) by incorrectly merging the tests for deceptive similarity (trade mark infringement) and substantial reproduction (copyright infringement) in reaching a conclusion of copyright infringement; [and]
(b) by finding copyright infringement in the absence of a finding of copying.'
65 The submission is that his Honour did not properly assess 'substantial reproduction', or undertake any qualitative or quantitative analysis in examining the copyright case, but impermissibly relied on the conclusion of deceptive similarity of the two marks, which is based upon an analysis that takes account of imperfect recollection and the circumstances of the purchase.
66 Further, it was said, there could not be a finding of copying in circumstances where neither the basic form nor the order of the characters was part of the claimed work and where the applicants selected the font for the characters from a group of fonts that was commercially available in a software program. The characters were assembled in the same order as the prior masthead and were not created for the respondent in the handwritten calligraphy that was the distinctive style of the work.
67 Counsel for MCP submitted that, to choose to type four pre-existing words in the same order in a pre-existing font, even though the font was chosen to be as close as possible to the artistic work, is not to copy the work.
68 Counsel for ACN submitted:
'(a) The fact that the characters (as opposed to the style in which they were rendered) had been used by [MCP] prior to September 2000 might explain why [MCP] adopted those characters for use in its new masthead, but that is no answer to the allegation that when creating their new masthead they copied from, directly or indirectly, [ACN's] artistic work.
(b) Similarly, that [MCP] may have, when adopting their new masthead, used a set of type fonts forming part of the Founder Wits 3.0A Page Making program software is no answer to the allegation that in creating the new masthead in September 2000 [MCP] copied [ACN's] artistic work.
(c) Put another way, what [MCP] did here was, with the image of [ACN's] artistic work clearly in mind, take their existing masthead and transform it into one that would most closely resemble [ACN's] artistic work.
(d) The causal connection was clearly established for the purposes of the copyright claim and the Primary Judge's finding that [MCP] copied [ACN's] artistic work was virtually inevitable in light of other findings made by his Honour.
69 After a consideration of the test to be applied in determining whether there has been copying of a substantial part of the subject matter of the copyright within s 14(1)(a) of the Copyright Act, the primary judge held at [132]:
'The authoritative tests as to the taking or reproducing of a substantial part of the copyright have been established to my satisfaction. The inference open to be drawn is that whatever occurred as a result of the utilisation of a computer typesetting programme put in place by [MCP], [MCP] manipulated a substantial part of the artistic work the subject of [ACN's] logo, along with other fonts which they had purchased, in order to produce [MCP's] most recent logo. That substantial part so taken comprised in particular the essence of the first two and fourth characters of [ACN's] logo, taken as a visual impression of a totality of that logo, and for what it may matter, taken also by reference to the aggregate of the elements or features of [ACN's] logo. There is therefore in my opinion the requisite objective similarity. There is in my opinion a measure of objective similarity between [MCP's] most recent logo and [ACN's] artistic work, which has been rightly attributable by [ACN] to copying, rather than to the mere use or reflection by [MCP] of an unprotected idea or style.'
70 What that paragraph demonstrates is that his Honour undertook, as required by the authorities referred to by him in the immediately preceding paragraphs of his judgment, a side by side comparison of the artistic work and the alleged infringing work for the purpose of determining whether there was sufficient objective similarity. Of course, almost the same sets of characters were involved in each of the works, but there remained a question whether one of those sets of characters represented an act of copying from the other.
71 Having found objective similarity, Conti J made a finding that it was 'rightly attributable by [ACN] to copying, rather than to the mere use or reflection by [MCP] of an unprotected idea or style'. This finding was plainly open to his Honour in light of his rejection of the evidence called by MCP for the purpose of refuting the allegation of copying.
72 It is not in dispute that ACN's masthead, consisting of a particular set of four characters in the Li Shu style as handwritten by Professor Huang, is an artistic work. Copyright is claimed only in 'the distinctive form and style in which those words were visually painted and expressed through the calligraphy of Professor Huang'. It is not in dispute that MCP changed its masthead to mimic as much as possible that artistic work. It executed that result by means of a computer, rather than by means of a brush. The use of a computer as the means of copying does not preclude a breach of copyright. MCP's argument focuses attention not on what they did, but on how they achieved it. The resulting style, while able to be differentiated by an expert, was held by the primary judge to have the requisite objective similarity. That finding, which Conti J attributed to copying, is not challenged. The result of the copying was the same four characters used previously by MCP, but this time in the Li Shu style, similar to that of Professor Huang. We agree with his Honour's conclusion that breach of copyright was made out.
Disposition
73 In our opinion, the appropriate orders are that leave to appeal be granted but that the appeal be dismissed with costs.
I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Wilcox, Kiefel and Bennett.