N.V. Sumatra Tobacco Trading Company v British American Tobacco Services Limited

JUDGE: GREENWOOD J DATE: 14 NOVEMBER 2011 PLACE: BRISBANE

Introduction 1 These proceedings concern the disposition of the costs of the principal proceeding. Judgment was given in the principal proceeding on 9 September 2011. These reasons are to be read together with the orders made and reasons for judgment published on 9 September 2011. 2 By order 6 of the orders made on 9 September 2011, the parties were directed to file and serve written submissions in relation to the costs of the principal proceeding. Written submissions have been received from both parties. The parties were also directed to indicate in their written submissions whether they wished to be heard orally in relation to the issue of costs in which event the Court would nominate a date for the hearing of oral submissions. Otherwise, the reserved costs would be determined on the papers. 3 The respondent requested to be heard orally in support of written submissions and accordingly the hearing was listed for 10 November 2011. Much of the argument in relation to the exercise of the discretion as to costs under s 43(2) of the Federal Court of Australia Act 1976 (the "Federal Court Act") was dealt with in the written submissions. Some additional matters were, however, addressed in the course of oral submissions in relation to the disposition of the costs reserved on 8 December 2010 of and incidental to the respondent's Notice of Motion filed 25 October 2010. By that motion, the respondent ("BAT") sought an order that the applicant ("NVS") provide further security for BAT's costs of the principal proceeding and an order setting aside NVS's Notice to Produce on the ground that the notice was oppressive having regard to the field of documents required to be produced.

Background 4 The principal proceeding concerned an application in the original jurisdiction by way of an appeal under s 56 of the Trade Marks Act 1995 (Cth) (the "Act") brought by NVS from a decision of the delegate of the Registrar of Trade Marks made under s 55 of the Act to refuse registration of two trade marks of NVS, namely, LUCKY DRAW (Application No. 963426) and LUCKY DREAM (Application No. 963428). Those applications were opposed by BAT. 5 At [2] to [9] of the principal judgment, the following background matters are set out which might conveniently be recited contextually in these reasons: 2. Each application was filed on 25 July 2003 in respect of goods in Class 34 of the Register described as "cigarettes, cigarette filters, kretek cigarettes, cigarette papers, white cigarettes, ashtrays (not made of precious metal), cigars, tobacco, lighters, matches, smokers' articles". LUCKY DREAM was accepted on 20 November 2003 and LUCKY DRAW was accepted on 1 December 2003. 3. The registration of each NVS trade mark was opposed by the respondent, British American Tobacco Australia Services Limited ("BAT") on the footing that at the priority date of 25 July 2003 each NVS trade mark was deceptively similar to BAT's registered trade marks LUCKIES (Trade Mark 81923) registered 31 July 1944 and LUCKY STRIKE (Trade Mark 151409) registered on 5 November 1958, both of which are registered in respect of Class 34 goods described as "manufactured tobacco": the s 44(1) ground of opposition. 4. BAT also contended that by the priority date each registered trade mark had acquired a reputation in Australia and because of that reputation the use by NVS of each of its trade marks, said to be deceptively similar to BAT's registered trade marks, would be likely to deceive or cause confusion: the s 60 ground of opposition. 5. BAT also contended that each NVS trade mark contained a particular connotation such that use of each trade mark in relation to the field of goods for which registration was sought would be likely to deceive or cause confusion: the s 43 ground of opposition. 6. Although it will be necessary to consider the precise findings of the Registrar's delegate, it is sufficient for present purposes to note these matters. The delegate concluded that no apparent basis had been established "… for any potential customer to entertain a reasonable doubt that LUCKY DREAM or LUCKY DRAW was a deliberate variation of either LUCKY STRIKE or LUCKIES and intended to indicate a common trade source" (para 26 of the delegate's decision) and thus deceptive similarity had not been established. However, the delegate concluded that having regard to the opponent's evidence, each of NVS's trade marks proposed for registration were deceptively similar to BAT's LUCKIES trade mark (para 28). The delegate found at para 27 that the "prospect of outright mistake" by some salespersons becomes significant, as a request for "a packet of Luckies" would mean LUCKY STRIKE or the product sold under the trade marks LUCKY DRAW or LUCKY DREAM. 7. The delegate found it unnecessary to consider the extent of BAT's reputation for the purposes of s 60 of the Act (para 29). 8. The delegate understood the s 43 argument to be that the word "LUCKY" is singular, unusual and entirely fanciful in the context of cigarettes and tobacco products and thus "has connotations of being a product of [BAT]" and inferentially the trade mark LUCKY STRIKE was said to have that connotation at the priority date. The delegate concluded that use of the trade mark would not be likely to deceive or cause confusion because only a "particularly credulous consumer would speculate that [LUCKY DRAW or LUCKY DREAM], implicitly or explicitly, indicated a connection with [BAT]" (paras 31 and 32 of the delegate's decision). 9. Accordingly, the delegate refused to register either trade mark having found the s 44 ground of opposition established in relation to BAT's LUCKIES registered trade mark. 6 NVS's grounds of appeal are set out at [10] of the principal judgment. I will not repeat those matters in these reasons. For present purposes, it is sufficient to say that NVS contended that the delegate erred in applying s 44 of the Act by failing to have regard to the opposed marks in the form applied for and by finding that the opposed marks were deceptively similar to BAT's trade mark LUCKIES. NVS also contended that the delegate erred in applying s 44 of the Act by having regard to the trade reputation claimed by BAT to subsist in its trade marks LUCKIES and LUCKY STRIKE rather than the marks as registered. 7 Apart from BAT's contentions in relation to s 44(1), BAT, by its Notice of Cross-Appeal, sought orders that the delegate's decision be varied such that the grounds of opposition under ss 43 and 60 of the Act be found to be established. Aspects of those grounds are described at [12] to [15] of the principal judgment and those paragraphs might also be conveniently recited, contextually, in these reasons: 12. As to the s 60 grounds, BAT says that the delegate ought to have considered s 60; a finding ought to have been made that each opposed trade mark is deceptively similar to the LUCKY STRIKE trade mark; each of BAT's trade marks had acquired a reputation in Australia before the priority date; because of that reputation, use of the opposed marks would be likely to deceive or cause confusion; and, having regard to findings of fact that ought to have been made, s 60 required consideration (grounds 5(a) to (e)). 13. As to s 43, BAT says that s 43 was made out because both opposed marks are deceptively similar to the LUCKIES trade mark (as found) and also to the LUCKY STRIKE trade mark; the delegate failed to have regard to the reputation subsisting in LUCKIES and LUCKY STRIKE in rejecting the notion that a consumer would implicitly or explicitly find a connection between LUCKY DREAM, LUCKY DRAW and BAT; and, having regard to findings of fact that ought to have been made, s 43 has been established (grounds 6(a) to (e)). 14. The remaining grounds recite a series of matters that BAT contends ought to have been the subject of findings of fact. It is not necessary to set out all of those matters in these reasons particularly since an appeal under s 56 is a hearing de novo: Blount Inc. v Registrar of Trade Marks (1998) 83 FCR 50 per Branson J at 59; (1998) 40 IPR 498 at 506; Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 per French J at [32] and [33]; (1999) 45 IPR 411. 15. However, a synthesis of the grounds of cross-appeal is this: the delegate wrongly found that LUCKY DRAW and LUCKY DREAM would not ordinarily be shortened to Luckies (for the reasons recited at ground 7(a) to (e)); LUCKY DRAW and LUCKY DREAM would ordinarily be abbreviated to Luckies (ground 8); uncommitted casual smokers and third party purchasers of cigarettes are likely to be more error-prone in the purchase transaction than other smokers (grounds 9 and 10); even though some people know LUCKIES is an abbreviation for LUCKY STRIKE, those people will nevertheless be deceived or confused by use of LUCKY DRAW or LUCKY DREAM (grounds 11 and 12); LUCKY DRAW and LUCKY DREAM sound and look like LUCKY STRIKE (ground 14); each of LUCKY DRAW, LUCKY DREAM and LUCKY STRIKE have comparable meanings and all three connote "good fortune" and "chance" (grounds 15, 16, 17, 18 and 19); a likelihood of confusion between LUCKY STRIKE and LUCKY DREAM would arise out of the use of LUCKY DREAM by NVS (grounds 20 and 21); because the meanings are not distinctly different, a suggestion of sub-branding by BAT arises (grounds 22 and 23); and, because the meanings of LUCKY DRAW, LUCKY DREAM and LUCKY STRIKE are comparable, potential consumers may think that LUCKY DRAW and LUCKY DREAM are a deliberate variation of LUCKY STRIKE or LUCKIES thus suggestive of a common trade origin within BAT's broader family of "LUCKY" trade marks. 8 In the result, BAT was partially successful on the s 44(1) question. BAT was unsuccessful in the sense that it failed to establish that NVS's trade marks LUCKY DRAW or LUCKY DREAM bore any visual or phonetic resemblance to BAT's LUCKY STRIKE mark. BAT was successful in demonstrating the s 44(1) ground in relation to its LUCKIES mark. 9 BAT was also successful on its s 60 ground in the cross-appeal. It failed on the s 43 ground. NVS was successful on the "similar goods" point under s 44(1)(a)(i) in the sense that BAT's registered trade marks were registered in respect of Class 34 goods described as "manufactured tobacco" whereas NVS had sought registration of its two trade marks in respect of a field of Class 34 goods which went beyond manufactured tobacco goods to include "ashtrays (not made of precious metal), lighters, matches and smokers' articles". Accordingly, BAT's pre-existing trade marks in issue in the proceedings did not prevent registration of NVS's trade marks in respect of those confined goods. 10 Accordingly, NVS contends that although BAT was substantially successful in the principal proceeding, it was not entirely successful and the areas of differential success ought to be reflected in a discount applied to the costs of the proceeding in the exercise of the discretion under s 43(2) with the result that NVS contends that it ought to pay BAT's costs of and incidental to the proceeding discounted to 70% of those costs.

The principles to be applied in the exercise of the discretion under s 43(2) of the Federal Court Act 11 The principles governing the exercise of the discretion are authoritatively set out in the judgment of Gleeson CJ, Gummow, Hayne and Crennan JJ in Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52 at [25] to [34] in the course of which their Honours address aspects of the High Court's decision in Oshlack v Richmond River Council (1998) 193 CLR 72 and especially the observations of Gaudron and Gummow JJ in Oshlack. The principles are well understood. They are most recently addressed in Kazar (Liquidator) v Kargarian; In the Matter of Frontier Architects Pty Ltd (In Liq) [2011] FCAFC 136 at [1] to [11] and [43] to [47]. 12 Although the discretion conferred by s 43(2) of the Federal Court Act is unconfined, absolute and unfettered, the authorities recognise that the public interest in the quelling of controversies and the administration of justice is secured by recognising that the discretion is to be exercised according to settled principle. Settled principle guides the exercise of the discretion and recognises that the modern embodiment of the discretion has escaped "arterial hardening" (as discussed in Oshlack per Gaudron and Gummow JJ at [38]) and has avoided elevating the guiding principles into narrow legal rules controlling the exercise of the discretion (as explained in Norbis v Norbis (1986) 161 CLR 513 per Brennan J at 537; Wilson and Dawson JJ at 533). 13 Their Honours in Foots observe at [25] that the award of costs is "… discretionary but generally that discretion is exercised in favour of the successful party" [emphasis added]. Of course, there are no automatic or absolute rules atrophying the true underlining scope of the discretion. 14 As NVS's submissions recognise, BAT was substantially successful in the proceeding. Hence the concession that NVS ought to pay 70% of BAT's costs of and incidental to the appeal by NVS and BAT's cross-appeal. As to the apportionment of costs, these principles are relevant to the exercise of the discretion. 15 Where substantial costs are incurred as a consequence of questions being put in issue in the proceeding, unsuccessfully, that is a factor properly to be taken into account in the exercise of the discretion to order costs (JMVB Enterprises Pty Ltd v Camoflag Pty Ltd (No. 2) [2007] FCAFC 6 per Emmett, Stone and Bennett JJ at [8]. Their Honours in JMVB also said this at [8]: Quite apart from the difficulty of doing so, it is undesirable to endeavour to apportion costs among different issues with any degree of precision. Further, it is often undesirable to formulate costs orders in a way that requires detailed analysis of work done by a taxing officer to determine whether particular costs were incurred in relation to particular issues. Any attempt to do so can involve the incurring of further unnecessary costs. 16 Their Honours also observed at [7] that when results are mixed, "… it is an appropriate exercise of the Court's discretion to take account of the respective success or failure of the parties in relation to various issues". However, the exercise of the discretion as to costs ought not to result in parties being dissuaded from canvassing all issues material to the resolution of the controversy (see [7] JMVB; Doric Products Pty Ltd v Lockwood Security Products Pty Ltd (2002) 54 IPR 495 at 497-498; Dodds Family Investments Pty Ltd v Lane Industries Ltd (1993) 26 IPR 261 per Gummow, French and Hill JJ at 271 (lns 42 - 45)). Whilst the discretion to apportion costs will be exercised only in "the most exceptional circumstances", however, where a "considerable part of the trial" is taken up with "determining issues upon which a party fails" (Dodds at 271, lns 45-50), it is a proper exercise of the discretion to reduce the costs allowed to that party. In Dodds, their Honours observed at 272 that: Generally speaking, and notwithstanding the considerations referred to by Toohey J [being the observations in Hughes v Western Australian Cricket Association (Inc) (1986) 8 ATPR 40-748 at 48, 136] and the other authorities mentioned above, the demands of the community for greater economy and efficiency in the conduct of litigation may properly be reflected in a qualification of the presumption that a successful party is entitled to all its costs. … Where there is a mixed outcome in the proceedings, the question of apportionment is very much a matter of discretion for the trial judge. Mathematical precision is illusory and the exercise of the discretion will often depend upon matters of impression and evaluation. 17 The question of apportionment ought to take account of the substance of the outcomes; whether a considerable part of the trial is taken up in determining issues upon which a party fails; whether the evidence relevant to the matters on which the party failed nevertheless overlapped with other issues in the controversy upon which the party was successful; whether it was reasonable to agitate the issue even though the party was unsuccessful; and, not cast undue analysis upon whether a successful party has been unsuccessful on "particular issues" in the context of its predominant success in the controversy overall. As to success on particular issues, Goldberg J said this in Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No. 2) [2000] FCA 602 at [54]: [A] court should be reluctant to embrace the proposition that, as a general rule, it is appropriate to undertake an [i]nquiry as to who was successful in relation to particular issues in a case to determine whether there should be an apportionment of costs against a successful party. A court should not be too ready to disallow costs simply because a party has failed upon an issue, unless it be quite a separate and distinct issue from the issues in respect of which it succeeded or unless there be some element of unreasonableness or inappropriate conduct in relation to that issue. 18 See also Black & Decker Inc v GMCA Pty Ltd (No. 3) [2008] FCA 932 at [7] per Heerey J; BHP Coal Pty Ltd & Ors v O & K Orenstein & Koppel AG & Ors (No. 2) [2009] QSC 64 per McMurdo J at [8]; Ramsden v Federal Commissioner of Taxation [2004] FCA 681 per Spender J at [11]; Waterman v Gerling Australia Insurance Co Pty Ltd (No. 2) [2005] NSWSC 1111 per Brereton J at [10]; Alborn v Stephens [2010] QCA 58 per Muir JA at [8] (Holmes JA and Daubney J agreeing); and, Clark v Commissioner of Taxation (No. 2) [2010] FCA 889 per Greenwood J at [39]. 19 As to the factors of substantial success and overlapping grounds, in the exercise of the discretion, Jacobson, Lander and Foster JJ said this in Telstra Corporation Limited v Australian Competition Tribunal (No. 2) [2009] FCAFC 34 at [14]: In our view, Telstra has substantially succeeded in the application which it brought in this Court. Whilst it may be recognised that it did not succeed on every ground which it argued, many of those grounds overlapped with other grounds on which it did succeed and in any event, it ultimately succeeded in having the Tribunal's decision set aside. Telstra's aim in bringing its application to this Court was to have the Tribunal's decision set aside and to require the Tribunal to reconsider its exemption applications. It achieved this aim.

The contentions 20 NVS contends that BAT ought to recover only 70% of its costs of and incidental to the appeal and cross-appeal for these reasons. 21 First, BAT was not wholly successful in the proceeding. It failed on the s 43 ground and was only partially successful on the s 44(1) ground. 22 Secondly, NVS was successful in its appeal to the Federal Court at least to the extent of securing registration of its two marks in respect of the Class 34 goods described as ashtrays (not made of precious metal), lighters, matches and smokers' articles. The costs order ought to reflect that success. NVS contends that it enjoyed a right to registration of the marks in respect of those goods and was compelled to embark upon an appeal to the Court to demonstrate that entitlement. NVS says that its success on this footing is meaningful and not merely tokenism. 23 Thirdly, NVS says that BAT chose to expand the scope of the proceedings by raising the s 43 ground and it failed on that ground. 24 Fourthly, a large part of the evidence called in the proceeding by BAT went to the issue of reputation which concerned both the s 43 and s 60 grounds. Since BAT was unsuccessful on the s 43 ground, the costs order ought to reflect the burden of the substantial evidence on that ground, specifically. 25 Fifthly, much of the documentation produced under the Notice to Produce by BAT was not called in aid of its case at trial and not put to BAT's witnesses. 26 Sixthly, findings were made at trial which resulted in the rejection of or little weight being attributed to aspects of the evidence of BAT's expert Professor Hajek; the evidence of Ms Hands; and, the evidence of Mr Courtney. 27 Seventhly, BAT chose to put in issue grounds under s 43 and s 60 by way of a cross-appeal in circumstances where, it is said, the s 60 ground was an unnecessary expansion of the controversy. That follows, it is said, because success by BAT on the issues alive under s 44(1) would have resolved the matter entirely as the s 60 ground (as the legislation stood at the material time), was predicated upon a finding of deceptive similarity. NVS contended that as the s 44 ground also required a finding of deceptive similarity, s 60, raising as it did the additional matters or reputation, did not ultimately provide BAT with an alternate means to prevent registration should they fail on the s 44 ground. 28 In response, BAT says this. 29 First, the substance of the entire proceeding concerned NVS's contended right to registration of its two trade marks directed to the principal Class 34 goods of cigarettes, cigarette filters, kretek cigarettes, cigarette papers, white cigarettes, cigars and tobacco. In respect of those principal Class 34 goods, NVS was unsuccessful in its appeal. These goods represented what is said to be the real object of the proceeding and these principal goods correspond with "manufactured tobacco" being the description of the Class 34 goods for which BAT's pre-existing trade marks LUCKIES and LUCKY STRIKE were registered. 30 Secondly, NVS was therefore successful in a minor and limited part of its proceeding. 31 Thirdly, that part of the proceeding concerning NVS's entitlement to registration in respect of ashtrays (not made of precious metal), lighters, matches and smokers articles was principally a matter of legal submissions and consumed very little time in the trial. 32 Fourthly, by contrast, BAT says that it succeeded in its opposition to NVS's registration of its trade marks for the principal goods under Class 34 and succeeded on its s 60 ground. 33 Fifthly, BAT says that although it did not succeed on the s 43 ground, that ground concerned the question of a connotation and argument on the s 43 ground was confined to closing submissions with the issues directed to that ground occupying "negligible hearing time at the trial". 34 Sixthly, although BAT was not successful to the extent that it relied upon the LUCKY STRIKE trade mark, the evidence of use adduced at the trial in relation to the LUCKY STRIKE trade mark was the same evidence or substantially the same evidence required to be adduced in relation to the LUCKIES mark. Since the overlap of issues and evidence was substantial, it cannot be said that extensive time was consumed at the trial on the unsuccessful issue and nor can it be said that it was unreasonable for BAT to agitate the issues in relation to the LUCKY STRIKE trade mark. 35 Seventhly, BAT says that it was, in substance, the successful party in the proceeding. It succeeded in the s 60 ground and was substantially successful on the s 44 ground. BAT says that the consequence of BAT succeeding on the s 44 ground (to the extent it did so) and the s 60 ground is that NVS is not permitted to register either of its trade marks in relation to cigarettes, cigarette filters, kretek cigarettes, cigarette papers, white cigarettes, cigars and tobacco. 36 Eighthly, BAT contends that NVS's success in respect of the Class 34 goods for which it secured registration is a pyrrhic victory as NVS is not entitled to distribute goods marked with the trade marks by operation of the Tobacco Advertising Prohibition Act 1992 (Cth) (the "Tobacco Act").

The exercise of the discretion under s 43(2) 37 As to these contentions and cross-contentions, the position seems to me to be this. 38 BAT was substantially successful in the proceeding overall. 39 It is correct to say that the principal focus of the proceeding was, at least in terms of the time occupied at the trial and in submissions, NVS's assertion of a right to registration of each of its trade marks in respect of the Class 34 goods described as cigarettes, cigarette filters, kretek cigarettes, cigarette papers, white cigarettes and cigars. In that sense, BAT's description of the principal object of the proceeding (in terms of the time occupied in the conduct of the proceeding), as one of securing registration of NVS's trade marks in connection with the sale and distribution of cigarettes and cigarette products (apart from those Class 34 goods described as ashtrays not made of precious metal), lighters, matches and smokers' articles (the "related articles") is correct. BAT successfully resisted NVS's appeal as to that principal focus although not so, as to the related articles, and BAT was substantially successful in its cross-appeal. BAT successfully resisted orders for the dismissal of its opposition and the registration of each of NVS's trade marks as to cigarettes and manufactured tobacco products. 40 Although NVS was successful in securing registration of both marks in the category of Class 34 goods described as the related articles, the principal controversy at least in terms of the evidence, was concerned with the relationship between NVS's two trade marks, hypothetical use of those trade marks in connection with cigarettes (or tobacco) products, BAT's pre-existing registered trade marks and the use of those trade marks in connection with cigarettes (or tobacco) products. 41 It is also correct to say however that NVS secured relief by force of the appeal in terms of registration of its two trade marks in connection with at least some of the goods the subject of the application for registration. Although these related goods did not occupy the focus of attention at trial or consume any substantial factual inquiry at trial, it is correct to say that NVS secured remedial orders for registration at least to some extent by reason of the appeal proceeding. Nevertheless, in considering the exercise of the discretion, an important consideration involves making an assessment of the weight and burden in the conduct of the proceeding of that part of the controversy in which NVS was successful (and BAT unsuccessful) and then determining to what extent it is appropriate, in all the circumstances, to weigh in the exercise of the discretion NVS's success on that limited part of the controversy in recognising that BAT was substantially successful overall (recognising, of course, that NVS starts from the position that it ought to pay 70% of BAT's costs of the proceeding). 42 It seems to me that the order for costs should, in part, reflect a recognition that NVS sought the intervention of the Court by way of an appeal and was successful to a limited extent in obtaining particular relief. 43 BAT contends that the value of the relief NVS obtained is, as a matter of practical reality, diminished having regard to the limited utility of the order as NVS is prohibited from applying the registered trade marks to the related goods by operation of the Tobacco Act. The questions for determination in the principal proceeding concerned the grounds of opposition to NVS's trade marks and whether BAT had discharged the onus of making out any of the grounds it agitated in the proceeding. 44 It seems to me that whether the subsequent use of NVS's trade marks, once registered, upon or in connection with the particular Class 34 related goods, complies with the Tobacco Act or not, is not relevant to the question of the content or burden of a costs order in connection with matters arising under the Trade Marks Act 1995 (Cth) as agitated in the principal proceeding. 45 The value of the remedy obtained by NVS is ultimately a matter for NVS. However, the scope of the remedy obtained was much more limited than that sought in the proceeding, at least as measured by the time dedicated to that part of the proceeding, in the conduct of the proceeding. 46 As to the reputation issues, the s 60 ground of cross-appeal, the evidence of reputation, the s 43 ground of cross-appeal and the relationship between evidence of sale of tobacco products in connection with the trade marks LUCKIES and LUCKY STRIKE, the position seems to me to be this. 47 BAT put in issue in the appeal each of the factual matters relevant to s 44(1). 48 Notwithstanding the range of possible outcomes in respect of the s 44 issues, BAT was also entitled, under the Trade Marks Act, to cross-appeal by raising issues going to the ss 43 and 60 grounds. Raising those grounds put in issue matters going to whether each of BAT's relevant trade marks had acquired a reputation in Australia. The evidence of reputation was directed to the sale of cigarettes in and by reference to each of BAT's trade marks; the circumstances of use; the method of description by distributors, retailers and users of cigarettes sold under and by reference to LUCKY STRIKE and LUCKIES; the sale and chronology of sales of those products; and, a propensity to abbreviate. 49 The evidence dealt with the question of hypothetical use (in the context of that historical evidence) of the trade marks LUCKY DREAM and LUCKY DRAW in connection with cigarettes. On these issues, BAT was substantially successful. 50 Although BAT was unsuccessful in connection with issues going to LUCKY STRIKE, I am satisfied that there was substantial overlap in the grounds and the evidence going to LUCKY STRIKE and LUCKIES, in the conduct of the proceedings overall. The question of whether hypothetical use of LUCKY DREAM and LUCKY DRAW in connection with cigarette products would be likely to deceive or cause confusion relied upon the totality of the evidence. 51 Whilst it is true that the evidence of Ms Hands and aspects of the evidence of Professor Hajek was rejected or given little weight, and the evidence of Mr Courtney was given no weight (as he could not be cross-examined), these evidential matters do not provide a basis for reducing the body of costs that might otherwise be the subject of an order in BAT's favour recognising that BAT substantially achieved the result it sought to achieve in resisting NVS's appeal and maintaining its cross-appeal. 52 Although NVS criticises the contended failure on the part of BAT to take its principal witnesses to the substantial body of documentation produced by BAT as a result of the service of NVS's Notice to Produce (material going to reputation, sales and such matters), the position is that NVS contested the issue of reputation and ultimately, in the face of the data, conceded that it could not contend that BAT had not made out a reputation in Australia for its two relevant trade marks although, of course, NVS continued to assert that the reputation did not simply reside in the two trade marks but resided in those trade marks together with the controlled and managed get-up for the product involving the Rondel (that is, the coloured circle), otherwise described as "the whole package" (or entire design and livery), and not simply the two BAT trade marks. 53 I am not satisfied that the issues going to s 43 occupied any substantial additional time in the proceeding or submissions. 54 Having regard to all of these considerations, I am satisfied that the discretion under s 43(2) ought to be exercised by making an order that BAT be awarded the costs (discounted as to the amount) of the principal proceeding on the footing that it was substantially successful on the Appeal and the Cross-Appeal. I accept however that because NVS was partially successful in respect of some of the Class 34 goods, its remedial entitlement, to that extent, was secured only by reason of an appeal to the Federal Court. NVS will be ordered to pay 85% of BAT's costs of and incidental to NVS's Appeal and BAT's Cross-Appeal. NVS's success in demonstrating a right to that remedy (although much more limited than that sought in the proceeding), ought to be reflected in the costs order. 55 There are two outstanding matters concerning earlier Notices of Motion. 56 The first concerns the Notice of Motion which was the subject of orders and reasons for judgment published on 16 October 2008. The parties agree that the appropriate order is that each party bear its own costs of and incidental to BAT's application for security for costs determined on 16 October 2008. 57 An order in those terms will be made. 58 The second outstanding matter concerns the reservation of costs in connection with the Notice of Motion of 25 October 2010. That Notice of Motion addressed two questions. The first concerned a further application for security for costs. Although BAT sought further security of approximately $145,000.00, it ultimately obtained an order for security in an amount of $89,000.00, BAT was nevertheless substantially successful on that part of the application. 59 The second aspect of the motion concerned a challenge to the Notice to Produce issued by NVS. In the result, the Court ordered on 8 December 2010 that the Notice to Produce issued by NVS on 27 September 2010 be set aside. The Notice to Produce was found to be too wide by reason of the definitional term "Report". Leave was given to NVS to issue a further Notice to Produce in terms of the earlier notice dated 27 September 2010 in which the definitional term "Report" was modified to mean "a document being a survey report or market report or market research report which contains findings or statistical data arising out of a survey, market analysis or market research". 60 Although NVS explains the difficulties it confronted in seeking to frame a Notice to Produce which captured the relevant field of documents in a disciplined way, the ultimate result was that BAT successfully set aside the existing Notice to Produce. It seems to me however that NVS did not act unreasonably in seeking to secure access to the relevant documents and leave was given to issue a further Notice to Produce subject to the definitional variation. The issues in relation to the Notice to Produce were heard and determined together with the issues in relation to security for costs. 61 NVS will be ordered to pay 75% of BAT's costs of and incidental to the Notice of Motion filed 25 October 2010. 62 NVS contends that all of the issues relevant to the disposition of the costs in the principal proceeding are addressed in the written submissions. NVS says that additional costs have been incurred in connection with the oral hearing in support of those submissions. NVS also says that although BAT sought to be heard orally in support of its submissions (which gave rise to the listing of the matter for further oral submissions), no order for costs as to the oral hearing ought to be made. In other words, these costs could have been avoided and the issue of costs could have been determined on the papers but for BAT's election to request an oral hearing. 63 If the parties are content to have the issue of costs arising out of a trial determined on the papers the Court ought to be willing to accommodate that position. However, if one of the parties wishes to be heard orally in support of its submissions, the Court, as a matter of principle, ought not lightly foreclose that opportunity. 64 In these proceedings, a significant body of costs is likely to have been incurred and the question of the content and burden of any costs order is a matter on which a party may well wish to be heard. In principle, the Court ought to accommodate that opportunity without penalising any party by failing to incorporate within the costs orders, the costs incurred in relation to the oral hearing. 65 In this case, a further consideration is that issues in relation to the costs of the Notice of Motion of 25 October 2010 were more comprehensively addressed in the oral submissions than in the written submissions. 66 Accordingly, I do not propose to order that each party bear its own costs of and incidental to the oral hearing in relation to costs conducted on 10 November 2011. 67 Those costs ought to form part of the costs the subject of the overall order for costs of the Appeal and Cross-Appeal. I certify that the preceding sixty-seven (67) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.