Philmac Pty Limited v The Registrar of Trade Marks [2002] FCA 1551 | Case summary

Federal Court of Australia|2002-12-13|Before: Branson J, Mansfield J

The application of section 41(6) 70 Section 41(6) requires consideration of whether the Philmac mark does in fact distinguish the designated goods, having regard to the extent to which Philmac used the Philmac mark before the date of the filing of the application. As noted earlier, the application in its original form was filed with the Trade Marks Office on 8 June 1999. It was not contended by Philmac that, by reason of the amendment or proposed amendment of the Philmac application, the "filing date" for the purposes of applying s 41(6) of the Act should be some later date. 71 The evidence of Philmac's use of the colour terracotta applied to the insert and split ring of its rural B fittings is, save for two issues, uncontroversial. The first contested issue is whether the use of the colour terracotta by Philmac in the manner described in the application has, prior to the date of the application, constituted use of the colour so applied to the product as a trade mark. I have resolved that issue in favour of Philmac at [40] above. The further, more critical contention, goes to the extent to which, having regard to evidence of the use of the colour as a trade mark, the trade mark applied for does in fact distinguish its rural B fittings. 72 My findings about Philmac's use of the colour terracotta in its rural B fittings indicate generally why I consider that its use of the colour in that way does in fact distinguish its rural B fittings from those of other manufacturers or suppliers of rural B fittings, and has done so from August 1995. By its exposure by sales and by marketing and promotion I am satisfied the distinguishing characteristic was recognised and effective after the colour mark was first utilised. The other rural fittings available in Australia, apart from the Plasson product with a red insert quite different from the terracotta colour and possibly an Iplex product with a green insert (introduced in 2000) all have black inserts. On the evidence, the Plasson red insert was introduced not by way of use as a trade mark but to distinguish its rural fittings from its metric fittings. 73 I do not think that the use of a blue external nut by Iplex in its metric fittings affects my conclusion in any real way. It is a colour used on a product which is not substitutable for rural B fittings. Its use does not, I consider, inform the finding of fact I make in terms of s 41(6) in relation to the use of the colour terracotta in Pilmac's rural B fittings. 74 The question posited by s 41(6) is ultimately a question of fact: see Blount at 60. The style of marketing and promotion of Philmac's rural B fittings, and the evidence of the dealers, persuades me that by 8 June 1999 the colour terracotta as used in its rural B fittings did, and continues to, distinguish them from other rural fittings. In the years between 1995 and 1999, there had been sold some millions of the rural B fittings. The dealers, particularly those who stocked more than Philmac's rural fittings, described how customs use the colour, or the coloured "tail" or "insert", to identify and distinguish the rural B fittings. The dealers represented a geographical spread across several states of Australia. Hence, despite the absence of market survey evidence or the evidence of any independent marketing expert, I am satisfied in terms of s 41(6) of the Act that, because of the extent to which Philmac has used the colour terracotta in the inserts of its rural B fittings before 8 June 1999, it does in fact distinguish its rural B fittings as those of Philmac. 75 In my view, the advertising and other promotional material relied upon by Philmac leads to the conclusion that the colour of the inserts and split rings of its rural fittings was in fact used and presented as a point of difference between its product and the products of other traders. I am satisfied that the colour terracotta has been used in that way by Philmac to a significant extent in the period of time between its introduction in 1995 and the original filing of the application. I am also satisfied that, by reason of such use, the colour does in fact distinguish the relevant goods as being those of Philmac. In that respect I accept the evidence of the dealers as indicating that both they and their customers recognise the Philmac rural B fittings by reference to the terracotta coloured insert and that the colour on that part of the product is accordingly distinctive of Philmac's goods. 76 That conclusion is assisted by evidence that no other manufacturer of goods of the same class has in fact adopted the use of a colour similar to that adopted by the applicant in a manner that would diminish the factual distinctiveness of Philmac's rural B fitting. That is not to suggest that another manufacturer so adopting a similar colour would be improperly motivated: see the discussion at [51] - [55] above. It is simply to say that the colour terracotta has, by reason of the extent of Philmac's use of the colour in a market in which no other manufacturer has used that colour, become a point of difference between the goods of the applicant and the goods of those manufacturers. Mr Haysman in his oral evidence accepted that a competing manufacturer (Plasson) had applied the colour red to its rural fittings, and that there was scope for customer confusion in respect of that competing product and Philmac's product. However, I accept that such confusion went to the manner in which a customer might verbally describe the colour of each product - so that one person might describe the colour depicted in the Philmac application as terracotta, another red, another orange and another "reddy brown". I do not consider that confusion has a bearing on the distinctiveness of the goods themselves. The mark applied for is not the word "terracotta". Rather, it is the colour depicted visually in the application and applied to obtain a visual effect on the product itself. There was no evidence that the colour employed by the competing manufacturer might be or has been visually confused with the colour employed by the applicant. 77 Accordingly, with one significant qualification, I conclude that the use of the colour terracotta applied to the connecting inserts of Philmac's rural B fittings is capable of distinguishing, and does distinguish, Philmac's rural B fittings from the rural fittings and the rural B fittings of other persons. 78 There is, as indicated, an important reservation within that conclusion. The amended Philmac application before the Court relates to the terracotta colour as applied not only to the connecting insert of the rural B fittings, but also to the split ring. It was Philmac's evidence that the product is distributed and sold in its assembled form. In that form, the terracotta coloured connecting inserts of the product are visible to dealers and consumers. However, the split rings of the rural fittings are not visible unless the fitting is disassembled and the internal components exposed and inspected. Generally, the rural B fittings are presented and displayed in an assembled form, so the purchaser will not see the colour of the split ring until after purchase. In this regard, Mr Haysman's evidence was as follows: "Q: I was wondering why, in the advertisements, there's no depiction of the split ring by and large? A: Because when the product is in the store it appears in its assembled form and we don't believe that it's generally necessary to cut away the product and let people know what's inside. If they pick it up and it looks like that, that's what they're after. Q: .. So you are saying that farmers don't - when they go to the store - have a fiddle and pull it apart and have a look? A: they wouldn't generally need to … in my experience of watching people in stores they go up to the rack and they focus on the size and configuration that they want and then pick out the fittings and they don't pull them apart to check that all the bits and pieces are there. They take them as they are" 79 It is apparent from the range of advertising materials set out in paragraph [30] that the split ring of the rural fitting is not a visual feature of the product in its assembled form at all. The visual representations of the product are, almost without exception, images of the product in its assembled form. The evidence of the dealers referred only to the coloured insert as the distinctive feature of the rural B fittings. It was described in their evidence variously as the "orange end", the "orange or terracotta tail", the "orange tailed fitting", or simply as "the insert". Mr Stathy called it the "distinctive terracotta insert". Having regard to that evidence and the evidence of Mr Haysman, I do not accept that the colour terracotta applied to the split ring of the rural B fittings (as opposed to the insert itself) in fact distinguishes Philmac's rural B fittings from those of other manufacturers. Colour is a visual effect. Unless it is a visible feature of the goods in respect of which registration is sought, it cannot be capable of distinguishing those goods in the course of trade from the goods of other persons - just as the colour red applied to the internal components of an opaque product such as a television set is incapable of distinguishing that television set from the set of another manufacturer. The extent to which Philmac has used the coloured terracotta so far as it relates to the split ring of the rural B fittings must therefore be said to be minimal. It is confined to the occasions on which a customer or dealer disassembles the fitting. Were the Philmac application confined to the application of the colour terracotta to the split ring of the product (and not the insert) I would conclude that the mark had not been used to such an extent as to distinguish Philmac's rural B fittings from the rural fittings of other traders. That is because there is no evidence that the split ring is drawn to customers' attention as a distinguishing feature of the product, either in promotional materials or by virtue of its visibility on the product. It may be the case that, absent any other distinguishing feature, customers and dealers may indeed disassemble the fitting to ascertain whether the product had a terracotta coloured split ring and therefore whether it was a Philmac product. But that does not accord with how the evidence was presented by Philmac on the current application. 80 Conversely, were the amended application confined to the application of the colour terracotta to the connecting insert of the rural B fittings (and not the split ring), I would conclude that the mark so confined had been used to such an extent as to distinguish Philmac's rural B fittings from those of other traders. It has acquired distinctiveness by reason of such use, and it has done so by the date of the initial application. I am satisfied on the evidence before me that the insert has been to a significant extent drawn to the attention of dealers and end users as a distinguishing feature of Philmac's rural B fittings both by promotional material and by virtue of its visibility on those fittings as ordinarily constituted, displayed and sold. 81 It is apparent from the findings I have made that I have generally accepted the evidence of Philmac's witnesses, including of course that which emerged in cross-examination. I have also accepted the evidence of the witnesses called by the Registrar. In only one respect was there a direct contradiction of one witness with another, at least so far as I discerned, and that was not on an immediately relevant matter. Indeed, neither counsel made any submission that the evidence or any material part of the evidence of any particular witness should not be accepted. The submissions on matters of fact really concerned the conclusions which should be drawn from the evidence. The conclusions I have drawn are set out above.

conclusion 82 Counsel for the Registrar contended, as I understood his submission, that if the Court were minded to register the colour mark, the Philmac application should be further amended to describe more precisely the colour to be registered. Counsel for Philmac indicated a preparedness on the part of his client to do so. The capacity to permit such a refinement in an application clearly exists: see Genetics Institute Inc. v Kirin-Amgen Inc. (No.3) (1998) 41 IPR 325; Merck & Co. Inc. v Sankyo Co. Ltd (1992) 23 IPR 415. 83 In the light of my conclusions, putting aside that issue, I do not propose to accede to Philmac's application as amended. However, rather than reject the Philmac application as presently proposed to be amended, I propose to adjourn the application to give the parties the opportunity to consider these reasons. It may be that the Philmac application might proceed to registration to the extent that it is registrable, pursuant to ss 63 and 65(5) of the Act, by Philmac if it so chooses varying the terms of its proposed amended application by confining the mark applied for to the colour terracotta applied to the connecting inserts of plastic compression fittings for B class/ rural imperial sized polyethylene pipe. That will also give the parties the opportunity to consider what action is necessary, if any, on the part of Philmac to identify precisely the colour which is to constitute the mark. I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield J.

Associate: Dated: 12 December 2002 Counsel for the Applicant: Mr BN Caine

Solicitor for the Respondent: Australian Government Solicitor

Date of Hearing: 26 March 2002 and 4 April 2002

The representation referred to in that description is a cross-section image of the goods to which the application relates. The image is depicted below: The component labelled "Long Insert and Enhanced Barb Design" is the "insert" referred to in the Philmac application and the component labelled "Enhanced Grip Mechanism" is the "split ring" referred to in the Philmac application. As the nut depicted as the cut away section of the "Contoured Nut and Body Design" is screwed to the body of the object, it encases the split ring and tightens it. The section of the insert to which polyethylene pipe is to be attached remains partly protruding from the end of the object. Philmac also sought an order that the description of the goods in Class 17 which forms part of the Philmac application be amended to read: "Plastic compression fittings for B class/rural imperial sized polyethylene pipe". It then seeks an order that the decision to refuse registration of the Philmac application be reversed, and that the Philmac application be accepted for registration in respect of the described goods in Class 17. The Registrar, appearing on this appeal pursuant to s 196 of the Act, did not oppose those amendments to the Philmac application, provided that the appropriate documentation be filed to reflect those amendments on the public record. 8 The power to amend an application for the registration of a trade mark is vested in the Registrar by s 63 and s 65 of the Act. The parties accept that, on this application, that power is vested in the Court in lieu of the Registrar. Section 65 relevantly provides that an amendment may be made to the representation of a trademark if the amendment does not substantially affect the identity of the trade mark: s 65(2). An amendment may be made to any other particular specified in the application unless the amendment would have the effect of extending the rights that, apart from the amendment, the applicant would have had under the registration if it were granted: s 65(5). 9 I am satisfied that the proposed amendment does not substantially affect the identity of the trade mark or extend the rights Philmac would have under the registration if it were granted. The proposed amendment restricts the goods to which the trade mark will apply to a particular type of irrigation pipe fitting. Accordingly, I would give leave to Philmac to amend the Philmac application in the terms sought. I proceed to consider the application by way of appeal on that basis. I will hereafter refer to the Philmac application as proposed to be amended as "the Philmac application" unless it is necessary to distinguish between the original application and the proposed amended application. I will also call the mark in respect of which Philmac now seeks registration "the Philmac mark". For reasons which are obvious in the light of my conclusion in [79] hereof, I do not propose formally to make the amendment to the Philmac application until the parties have had an opportunity to consider these reasons for judgment. LEGISLATIVE BACKGROUND 10 An application for the registration of a trade mark in respect of goods is made pursuant to s 27 of the Act. Subsection (1) provides that a person may apply for the registration of a mark if: "(a) the person claims to be the owner of the trade mark; and (b) one of the following applies: (i) the person is using or intends to use the trade mark in relation to the goods and/or services; (ii) the person has authorised or intends to authorise another person to use the trade mark in relation to the goods and/or services; (iii) the person intends to assign the trade mark to a body corporate that is about to be constituted with a view to the use by the body corporate of the trade mark in relation to the goods and/or services." Section 31 of the Act imposes on the Registrar a duty to examine and report on whether the application has been made in accordance with the Act and whether there are grounds under Div 2 of the Act for rejecting it. After the examination, the Registrar must accept the application unless satisfied that either the application has not been made in accordance with the Act or that there are grounds for rejecting it: s 33. 11 Division 2 of the Act sets out the grounds on which an application for registration of a trade mark may be rejected. Section 41 provides that an application may be rejected on the grounds that the mark applied for does not distinguish the applicant's goods and services. As this appeal turns on the application of that section, it is desirable to set it out in full: "41(1) For the purposes of this section, the use of a trade mark by a predecessor in title of an application for the registration of a trade mark is taken to be a use of the trade mark by the applicant. (2) An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant's goods or services in respect of which the trade mark is sought to be registered ("designated goods or services") from the goods or services of other persons. (3) In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons. (4) Then, if the Registrar is still unable to decide the question, the following provisions apply. (5) If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services: (a) the Registrar is to consider whether, because of the combined effect of the following: i) the extent to which the trade mark is inherently adapted to distinguish the designated goods or services; ii) the use, or intended use, of the trade mark by the applicant; iii) any other circumstances; the trade mark does or will distinguish the designated goods or services as being those of the applicant; and (b) if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services - the trade mark is taken to be capable of distinguishing the applicant's goods or services from the goods or services of other persons; and (c) if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services - the trade mark is taken not to be capable of distinguishing the applicant's goods or services from the goods or services of other persons. (6) if the Registrar finds that the trade mark is not inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply: (a) if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant - the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons; (b) in any other case - the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons." 12 Section 17 of the Act defines a "trade mark" as follows: "… a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person". Under s 6, the term "sign" is defined to include the following or any combination of the following: "any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent". Prior to the introduction of the Act, the definition of a sign did not expressly anticipate that a colour of itself might constitute a sign and hence a trade mark: see s 6 Trade Marks Act 1955 (Cth). 13 In written and oral submissions the Registrar acknowledged that the Act now contemplates that a colour of itself may distinguish an applicant's goods from those of another and therefore constitute a trade mark. That would seem to follow from the definition of "sign". Moreover, a colour that is a "sign" for the purposes of s 17 may be the colour applied to the goods themselves. In Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd (1999) 44 IPR 551; [1999] FCA 816 at [19] Lehane J said: "… it hardly seems a sensible construction to limit 'colour' or 'scent' to a colour or scent used in relation to goods, but not as the colour or scent of the goods, or part of the goods, themselves …" 14 The effect of s 33 of the Act is that the Philmac application must be accepted unless the Registrar or, on appeal, the Court is satisfied that it has not been made in accordance with the Act or that there are grounds for rejecting it. The parties agreed that the only ground on which the application might be rejected was the ground set out in s 41(2) of the Act, namely, that the mark applied for in the Philmac application, either as originally expressed or in its proposed amended form, is not used as a trade mark and is not capable of distinguishing Philmac's goods from the goods of other persons. 15 The process by which the Registrar or the Court is to reach a conclusion under s 41(2) as to whether a trade mark is capable of distinguishing an applicant's goods is controlled by ss 41(3) to (6): see Blount per Branson J at 556. Subsection (3) provides that the first step in that process is to take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons. If that inquiry alone does not yield an answer to the question, subs (4) directs that the provisions set out in subs (5) and (6) apply. Subsection (5) sets out the process the Registrar or the Court is to follow where it determines under subs (3) that the trade mark is "to some extent" inherently adapted to distinguish the applicant's goods but is unable to determine on that basis alone that the trade mark is capableof distinguishing the goods. For reasons set out in [69] hereof, I do not need in this instance separately to consider the application of s 41(5) of the Act. Subsection (6) sets out the process the Registrar or the Court is to follow where it is determined under subs (3) that the trade mark is not inherently adapted to distinguish the applicant's goods from the goods of other persons. If it is found that a trade mark is not inherently adapted to distinguish the applicant's goods, it will nonetheless be "taken to be capable of distinguishing" the goods if the trade mark does in fact so distinguish those goods because of the extent to which the applicant has used the mark before filing the Philmac application. The Philmac application in its original form was filed on 8 June 1999. 16 The Act imposes a less demanding test for the registration of a trade mark than that previously imposed by the Trade Marks Act 1955 (Cth) in at least two respects. Firstly, unlike s 26 of the former legislation, s 41(2) of the Act now has the capacity to distinguish the applicant's goods or services from those of other persons as the qualifying criterion for registration. Secondly, s 41(6) now permits that qualifying criterion to be met to the satisfaction of the Registrar or of the Court if, by reason of the past use of the applicant's mark up to the time of the application for registration, the mark does in fact distinguish the applicant's goods or services from those of other persons. Section 41(3) preserves the "inherent adaptability" test as a means by which s 41(2) may be met. But it is no longer necessary to demonstrate that the trade mark is inherently adapted to distinguish the applicant's goods or services from those of other persons, as well as that it does in fact do so: cp Burger King Corporation v Registrar of Trade Marks (1973) 128 CLR 417 per Gibbs CJ at 426. See the discussion of those matters by Branson J in Blount at 55-60; followed by Wilcox J in Ocean Spray Cranberries Inc v Registrar of Trade Marks [2000] FCA 177 at [17]; [2000] 47 IPR 579 at 585. Hence, whilst previously it was the case that certain marks could never be registered even though they were in fact distinctive of the applicant's goods or services (e.g. Clark Equipment Co. v Registrar of Trade Marks (1964) 111 CLR 511 (Clark Equipment) per Kitto J at 515-516), that is no longer the case. CONSIDERATION 17 Philmac contended that the mark applied for is not only inherently adapted to distinguish but does in fact serve to distinguish Philmac's goods from goods of other manufacturers in the same class. It was contended, therefore, that the mark should not be rejected pursuant to s 41(2) because it was either capable (by reason of s 41(3)) or should be taken to be capable (by reason of either s 41(5) or 41(6)) of distinguishing Philmac's goods. Given the legislative process described above, it is therefore necessary to firstly consider whether, in accordance with s 27(1), Philmac is using or intends to use the Philmac mark as a trade mark in respect of the goods identified in the Philmac application, and if that question is answered affirmatively then to consider the extent to which the Philmac mark is inherently adapted to distinguish its goods: s 41(3), and then if necessary to address the questions identified by s 41(5) and s 41(6).

Is the Philmac mark inherently adapted to distinguish? 42 The concept of inherent adaptability to distinguish was considered by Kitto J in Clark Equipment. Lindgren J in Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks [2002] FCAFC 273 at [85] (Kenman) described Clark Equipment as "Probably the best known Australian authority on the notion conveyed" by that expression. Clark Equipment concerned an application for a word mark being the geographical name "Michigan" in respect of earth moving equipment. Kitto J noted at 514 that the Courts have always shown a disinclination to allow any person to obtain by registration under trade marks legislation a monopoly in what others may legitimately desire to use. Against that background, his Honour determined the appropriate test for inherent adaptability to distinguish to be as follows: "... the question whether a mark is adapted to distinguish [is to] be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives - in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess - will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it". Applying that test to the application before him, his Honour determined that the name "Michigan" used simpliciter, with no addition save a description or designation of the goods, was plainly not inherently, that is "in its own nature", adapted to distinguish the applicant's goods: at 515-517. 43 As a matter of fact, one colour will be distinctive of all other colours that are not deceptively similar to it, just as one word may be distinctive of all other words that are not deceptively similar. But to state that is not accurately to state the test to be applied under s 41(3) of the Act, as explained in Clark Equipment. If a properly motivated competing trader might think of a colour and wish to use it in connection with similar goods, the use of colour as a distinguishing feature of a trader's goods will not be inherently adopted to distinguish that trader's goods from those of others. See the remarks of French J in Kenman at [62]. 44 In my view, the question posited by s 41(3) should be addressed by reference to both the colour itself and the class of the goods to which the colour is applied. Importantly, the question of whether a mark is inherently adapted to distinguish certain goods must be considered independently of the effect of its use and registration: see generally DR Shanahan; Australian Law of Trade Marks and Passing Off, Law Book Company 1990, p 121. In 'Weldmesh' Trade Mark [1966] RPC 220 at 228 "inherently adapted" was said to mean "adapted of itself, standing on its own feet". That is a different concept from the capability of a mark to distinguish a trader's goods or services once registration is achieved and other persons are thereby precluded from using it. 45 In Kenman the Full Court determined an application for registration of a trade mark being the shape of the applicant's "millennium bug" confectionery. Lindgren J at [80] - [100] discussed the notion conveyed by the expression "inherently adapted to distinguish", agreeing with the observations of Gibbs J in Burger King Corporation v Registrar of Trade Marks (1973) 128 CLR 417 at 424 (discussed below at [48]) that inherent adaptability is something depending on the nature of the trade mark itself and is therefore not something that can be acquired. His Honour said at [84]: "Whether the [millennium] Bug shape is inherently adapted to distinguish can be tested by assessing how it would be perceived and understood by members of the public seeing items of confectionery of that shape for the first time, because this test excludes the possibility of a trade mark significance arising from use." 46 In Clark Equipment, Kitto J at 513 stated the question as being: "… whether the mark, considered quite apart from the effects of registration , is such that by its use the applicant is likely to attain his object of thereby distinguishing his goods from the goods of others". I have little doubt that the Philmac mark would indeed distinguish Philmac's goods from those of other traders if it were registered as a mark and other manufacturers were thereby precluded from using it in relation to the designated goods. But that is not presently the question for consideration. Stating the question in that way does no more than state that by securing a monopoly in a phrase, colour, smell or any other sign, a trader would, in using that sign, distinguish its goods or services from those of other traders. Whether a mark is capable of registration under the Act and by virtue of s 41(2) and (3) is a conceptually distinct question. 47 The test for inherent adaptability was further considered by Kitto J in FH Faulding & Co Ltd v Imperial Chemical Industries of Australia and New Zealand Ltd (1965) 112 CLR 537 (Faulding). The applicant Faulding had registered the word mark "barrier" in respect of protective skin cream. It claimed against the defendant for infringement of the mark. In its defence, the defendant denied that the mark was validly registered and sought that the mark be expunged from the Register. His Honour at 555 (with whom Barwick CJ and Windeyer J agreed) determined that it would be extremely difficult to categorise a descriptive word as distinctive: "It is not only difficult but surely impossible where the descriptiveness of the word refers to the distinguishing characteristic of a whole class of goods of which the goods of the proprietor are but examples. That this is the case with Barrier as applied to skin protective creams is put beyond doubt by the evidence in this case. But for the evidence, it might have been said that the word, though inherently suited to be used adjectivally for the purpose of referring to the distinguishing characteristic of skin protective creams generally, is not one which would spring instantly to the mind of a person who wanted a word for the purpose but had never known Barrier to be so employed. This might have been said with the general principle in mind that the question to be asked in order to test whether a word is adapted to distinguish one trader's goods from the goods of all others is whether the word is one which other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use upon or in connexion with their goods." 48 In Burger King Corporation v Registrar of Trade Marks (1973) 128 CLR 417 (Burger King) Gibbs J considered the inherent adaptability of the word "Whopper" to distinguish the applicant's goods. He concluded at 425 that although the word "Whopper" was a word which a trader might, without any improper motive, want to use to describe his goods if they were of an unusual size (and therefore could not be inherently adapted to distinguish), nevertheless, the word was capable, by reason of use, of distinguishing the applicant's goods. In the result, his Honour concluded that the word had (at least at the time of that judgment) not been used in Australia so as in fact to distinguish the applicant's goods. 49 Clark Equipment, Burger King, Faulding and Kenman reinforce the concept of inherent capability as something that depends on the intrinsic nature of the trade mark itself. Accordingly, inherent adaptability is not something that can be acquired. Nevertheless, the provisions of s 41 of the Act anticipate that, through use, a mark that is not inherently adapted to distinguish may in fact be taken to distinguish the applicant's goods from those of other traders: see s 41(6). Counsel for Philmac contended that there is a curious tension which arises by reason of s 41(3) and s 41(6). It was submitted that if a mark has no inherent capacity to distinguish, it could never achieve full distinctiveness in fact. The overriding concern, the submission goes, is one of public policy. Any conceptual tension between s 41(3) and 41(6) is not, in my view, terrain that need be traversed on this application. If the colour mark the subject of the Philmac application does not fall within s 41(3) as it is not inherently adapted to distinguish Philmac's goods, it may nonetheless be "taken to be" capable of distinguishing the designated goods or services from the goods or services of other persons if it falls within s 41(5) or s 41(6). 50 The Registrar correctly submitted that under the Act, there are no special rules which apply to colour marks compared to other features of goods which come within the definition of "sign". Nevertheless, the application of the test in Clark Equipment to the context of colour marks itself raises difficulties peculiar to the application presently before the Court. The test for inherent adaptability to distinguish set out in Clark Equipment, and followed since in a body of cases pertaining to the registration of word marks, provides that (at least) a word mark may be inherently capable of distinguishing an applicant's goods if it is not purely descriptive (as in Faulding) or geographical in origin (as in Clark Equipment itself). 51 In the present case, the test in Clark Equipment demands consideration of the likelihood that other traders actuated only by proper motives might think of the sign applied for, namely the colour terracotta, and want to use it in connection with similar goods in a manner which would infringe a registered mark granted in respect of it. The concept of a properly motivated competing trader was discussed by Buckley J in Blue Paraffin Trade Mark [1977] RPC 473 at 500: "Speaking for myself, I should describe the duty of the Registrar as this: that examining the facts he has also to survey the possible confusions or difficulties and the possible impairment of a right of innocent traders to do that which apart from the grant of the mark would be their natural mode of conducting their business." 52 There are, in my view three obvious respects in which the right referred to in that passage might be impaired by the registration of a mark of the type contemplated in the present case. 53 First, a trader might legitimately choose a colour to apply to goods to denote a meaning that that colour might ordinarily possess. For example, the concepts of hot, cold, environmentalism, danger, stop, go, communism, mourning and femininity are universally conveyed as colours. Accordingly, an application for the colour mark red applied to taps might fail to satisfy the test in Clark Equipment because the registration of such a mark would impair the right of other traders in taps from legitimately using that colour to convey the meaning it ordinarily possesses. The application would, in my judgment, be analogous to an application for registration of a purely descriptive word and the mark applied for would therefore not be inherently adapted to distinguish. That conclusion is consistent with international jurisprudence in respect of the registration of trade marks comprising colour applied to goods or parts of goods. The colour blue in relation to fertiliser pellets was precluded from trade mark protection by the United States Supreme Court because it had the utilitarian function of identifying the presence of nitrogen, and was therefore ornamentally functional: Nor-Am Chem. Co. v OM Scott & Sons Co, 44 USPQ 2d (BNA) 1316 at 1320; KL Davidson, "Supreme Court says Yes to Color, Pure and Simple: Qualitex Co v Jacobson Products" 1996 21 Dayton L Rev 855 at 861. 54 Secondly, a trader might legitimately choose a colour for its practical utility. That is, the colour may be a feature of a product that serves to improve the functionality or durability of the product. The function of visibility is, for example, served by the colour yellow; heat absorption by the colour black; light reflection by the colour white; military camouflage by a combination of khaki, brown and green. In the present case Philmac's evidence was that the colour black was ordinarily applied to polymer piping to serve the function of protecting the product from degradation through exposure to ultraviolet light. The shape mark cases properly indicate a reluctance to permit, by virtue of a trade mark registration, a permanent monopoly of matters of engineering design: Kenman per French J at [45]; Koninklijke Philips Electronics NV v Remington Products Australia Ltd (1999) 91 FCR 167; Philips Electronics NV v Remington Consumer Products (1997) 40 IPR 279 per Jacob J; British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281. In my view there is no reason why the functionality principles applied to the registration of shape marks should not also apply to the consideration of the application of colour marks. 55 Thirdly, a product may be produced in a particular colour being the naturally occurring result of the manufacturing process. Terracotta is a case in point. Were the applicant to apply for the registration of the colour terracotta to terracotta roof tiles or garden pots, the effect of granting the registration would be to force on other traders a method of manufacture that would involve a departure from the "natural mode" of conducting the business of manufacturing those terracotta products. 56 Whilst those are considerations that might preclude the registration of particular colours applied to particular goods under the test set out in Clark Equipment, in my view, they do not have any direct application to the present case. There is no suggestion that the colour terracotta conveys a particular meaning, nor does it serve any functional purpose in respect of fittings for rural B or imperial polyethylene irrigation piping. Nor is the colour a naturally occurring result of the manufacturing process of the goods in respect of which the application of the mark is sought. 57 Nevertheless, I have reached the conclusion that the Philmac mark is not inherently adapted to distinguish the goods of Philmac in respect of which the Philmac application is sought from the goods or services of other persons. I have reached that conclusion having regard to the fact that the range of colours available to an honestly motivated trader is in fact limited and that the colour terracotta the subject of application, or any shade of terracotta that might be deceptively similar to that colour, might naturally and legitimately occur to another trader as a choice of colour for application to goods in the same class. 58 In a scientific context, the range of colours available to traders for application to goods is in fact infinite. However, in the context of trade mark law that is not the case. In TGI Fridays Australia Pty Ltd v TGI Friday's Inc (2000) 100 FCR 358 Gummow J said at [18]: "The concept ... of adaption to distinguish is less difficult to grasp once it is appreciated that the statute is looking forward to the consequences of a grant of registration." 59 The consequences of a grant of registration, whether a logo, colour, scent, aspect of packaging or any other thing satisfying the statutory definition of a "sign" are two fold. First, the registration or pending registration of the mark is a ground for rejection of any subsequent application for registration of a mark that is identical or substantially identical or deceptively similar to it: s 44. Secondly, the registration gives rise to a right in the proprietor of the mark to an action for infringement in circumstances where another trader uses as a trade mark a sign that is substantially identical with, or deceptively similar to the trade mark in relation to goods or services in respect of which the trade mark is registered: s 120. 60 In the present application, the consequence of a grant of registration would be to prevent any other trader in goods of the same description from using not only that shade of terracotta specifically described and visually represented in the application in respect of the goods to which the application relates, but all other shades of colour that might be described as deceptively similar to that colour. That conclusion, in my judgment, is relevant to the legitimate or honest use test set out in Clark Equipment. That is, (to superimpose the words of the test to the context of colour marks) the limited palate of colours available to a trader at the very least renders it more likely that other persons trading in goods of the relevant kind and being actuated only by proper motives - in the exercise, that is to say, of the common right of the public to make honest use of the colours forming part of the common heritage, for the sake of the signification which they ordinarily possess - will think of a colour and want to use it in connection with similar goods in a manner which would infringe a registered trade mark granted in respect of it. Stating the proposition in that way equates it with what has become known in international jurisprudence as the "colour depletion" argument. 61 The USA Federal Court in Re Owens-Corning Fiberglas Corporation 774 F 2d 1116 (1985) (Pink Batts) rejected a "colour depletion theory" asserted in an earlier case. In Campbell Soup Co v Amrour & Co 138 F 2d 4 (7th Cir 1950) the applicant was denied registration of labels that were half red and half white. The Court held that if the applicant were to "monopolize red in all its shades the next manufacturer [could] monopolize orange in all its shades and the next yellow in the same way. Obviously, the list of colours would soon run out. The Court in Pink Batts considered that approach inconsistent with the legislative framework that provided that colour was capable of registration as a trade mark. It stated at 1122 that "where there is no competitive need for colors to remain available, the color depletion argument is an unreasonable restriction on the acquisition of trademark rights". 62 I consider the qualification in that statement to be of critical importance in this matter. In my view, it is not inconsistent with the conclusion in Pink Batts that in circumstances where there is a proven competitive need for colours to remain available, it is not an unreasonable restriction on the acquisition of trade mark rights to have regard to that competitive imperative and preclude the granting of a monopoly in a colour applied to goods. 63 In the present application I have concluded on the evidence that colour has been and continues to be applied to irrigation fittings and related products by manufacturers as a means of coding their products for measurement compatibility and other purposes. That evidence includes the evidence of Philmac that its products manufactured for export to overseas markets are coloured so as to identify them as products manufactured for that purpose, and evidence of the Registrar that Philmac's most significant market competitor Plasson has applied the colours red, burgundy and "red-pink" to its rural compression fittings since 1998. I note also the use by the manufacturer Iplex of the colour blue on the nuts of its metric compression fitting so as to identify it as a metric product. The use of colour as a means of distinguishing between products with different measurement and performance specifications is also evident in the broader irrigation market. In that context I have had regard to brochures or catalogues from several manufacturers including the following: James Hardie Irrigation Pty Ltd depicting the use of colour as a means of distinguishing between many ranges of products and individual products within each range, Netafim Australia depicting colour as a means of distinguishing between precipitation performance of sprinklers and Amiad Irrigation depicting colour as a means of indicating the flow rate of regulated drippers. 64 Having regard to that evidence, I have reached the conclusion that in the narrow class of goods in respect of which the Philmac application relates, and less relevantly in the wider irrigation market, there is indeed a competitive need for colours to remain available. That conclusion is relevant, in my view, to the test in Clark Equipment. The proven existence of a competitive need for colours to remain available in my view places the present application in the same class as an application for registration of a purely descriptive word. That is because the existence of that competition renders it more likely in fact that "other traders are likely, in the ordinary course of their business and without any improper motive to desire to use [it] in connection with their goods": see the discussion of Faulding at [47] above. 65 By approaching the matter in that way, despite what the USA Federal Court in Pink Batts defined as a "colour depletion argument", I do not mean to suggest that a single colour applied to goods may never be inherently adapted to distinguish an applicant's goods from those of other traders. Such a conclusion would be inconsistent with the provisions of the Act that contemplate that a colour may serve as a trade mark. The definition of a sign in the Act provides that a colour may be a sign in its own right, and not merely as an element of another species of sign such as a logo or aspect of packaging. It would therefore not be in accordance with the Act to reject a trade mark purely on the basis that rejection would secure a monopoly over part of what is in reality a limited resource. However, having regard to the above principles and the test in Clark Equipment, I consider that the circumstances in which a colour applied to goods will be inherently adapted to distinguish are limited to the following: · the colour does not serve a utilitarian function: that is, it does not physically or chemically produce an effect such as light reflection, heat absorption or the like; · the colour does not serve an ornamental function: that is, it does not convey a recognised meaning such as the denotation of heat or danger or environmentalism; · the colour does not serve an economic function: that is, it is not the naturally occurring colour of a product and registration of that colour in respect of that product would not thereby submit competing traders to extra expense or extraordinary manufacturing processes in order to avoid infringement; · the colour mark is not sought to be registered in respect of goods in a market in which there is a proven competitive need for the use of colour, and in which, having regard to the colour chosen and the goods on which it is sought to be applied, other properly motivated traders might naturally think of the colour use it in a similar manner in respect of their goods. 66 I have concluded that the mark applied for does not serve the functions set out in the first three of those points. The fourth point raises two considerations. First, whether there is a competitive need for the use of colour. I have concluded that on the present application there is such a need. Second, the likelihood of properly motivated traders naturally thinking of the relevant colour and wishing to apply it to their goods should be considered in the context of both the colour the subject of the application and the goods in respect of which registration of the trade mark is sought. It is to that second consideration that I now turn. 67 In cross-examination, the Managing Director of Philmac Pty Ltd, Mr Paul Haysman, gave evidence as to how Philmac determined that the colour terracotta should be applied to its goods. The following exchange is pertinent: "Q: So putting aside for a moment the extent of the use made by your company in sales - you say, do you, that there's nothing particularly distinctive about the terracotta colour compared with pink or red or yellow or any other colour. Is that right? A: It was chosen because my marketing team believed that it had some affinity to the earth but, beyond that, there's nothing magical about it. I mean, it doesn't have any particular properties. It doesn't glow in the dark or anything like that. It's just a colour that was - no pun intended - deemed to be fitting for the purpose and we've stuck with it. Q: Given the farm usage of these fittings, terracotta as you describe it [in the application] is particularly an apt colour for use on these compression fittings? A: We believe it to be for marketing purposes." I conclude from that evidence that Philmac struck on the colour terracotta not because it was an unnatural and unusual choice for application to compression fittings for irrigation piping, but because it was an obvious and apt choice for application to that type of goods. It follows that at the time of the Philmac application, another honest trader might also legitimately desire to apply the colour to the same class of goods. Were the colour chosen a lilac purple (a colour chosen by way of example only) the application might give rise to different considerations. While I am not prepared to hypothesise on such an application, in my view counsel for the Registrar correctly identified that in some circumstances the choice of a colour with respect to particular goods might on rare occasions amount to an 'out of left field choice' and therefore assist the registrability of a colour mark, notwithstanding the competitive need for the use of colour in the relevant market. It was submitted, and I am inclined to agree, that the application of the colour pink to insulation batts is such a case: see Pink Batts. In my view such an application might lead the Court to consider that the mark applied for was, to some extent, inherently adapted to distinguish and therefore cause the application to fall for consideration under the less stringent test set out in s 41(5) of the Act. Those considerations do not arise on this application. The colour terracotta, or any shade of colour deceptively similar to it, applied either to rural compression fittings or more generally to farming irrigation products is, in my view, a combination that an honest trader in those products might legitimately desire to use. 68 Applying the test in Clark Equipment, the Philmac mark is, therefore, not inherently adapted to distinguish Philmac's goods from those of other traders. 69 Having concluded pursuant to s 41(3) of the Act, that the mark the subject of the Philmac application is not inherently adapted to distinguish the designated goods from the goods or services of other persons, I am directed by s 41(4) to turn to s 41(6). It is not necessary to consider the application against the criteria set out in s 41(5) of the Act. That provision applies where the conclusion reached pursuant to s 41(3) of the Act is that the mark applied for is to some extent inherently adapted to distinguish. I have found that the Philmac mark applied for is to no extent inherently adapted to distinguish Philmac's goods from the goods of other traders.

Philmac Pty Limited v The Registrar of Trade Marks

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