Pioneer Kabushiki Kaisha v Registrar of Trade Marks

Pioneer Kabushiki Kaisha v Registrar of Trade Marks - [1977] HCA 56 - HCA 1977 case summary — Zoe

[18]

Mr. Fraser further deposed that Pioneer Australia had continually since October 1973 extensively used each of the marks on all the goods in respect of which they are registered (save television equipment) and that such use was still continuing. He gave details of the use that had been made of the marks as follows - Pioneer Australia had extensively advertised and promoted the sale of the goods under and by reference to and by the use of visual representations of both the marks and had sold the goods bearing those marks and had packaged them in packages bearing the marks and had also attached to them labels or "swing tickets" bearing the marks. Its order forms, contract notes, invoices, delivery dockets, manifests, and bills and accounts bore printed representations of both marks. All the stationery used by Pioneer Australia in carrying on its business in the promotion and sale of the goods bore printed visual representations of both trade marks. Pioneer Australia had also published and distributed substantial numbers of catalogues, price lists, sales and advertising brochures, display stands, placards, posters, advertising transfers, instruction manuals and booklets and other forms of literature, all of which bore visual representations of both marks. In addition warranty cards, warranty instructions, service order forms, service invoices and accounts, spare parts dockets, invoices and accounts and the packaging of spare parts had all been marked with each of the marks. It was said that there were approximately 77 classes of documents and articles used by Pioneer Australia in advertising and promoting the goods and in effecting their sale, distribution and servicing and that all of those bore printed visual representations of both marks. It was said that some of this material was printed in Japan and supplied by Pioneer Japan but most of it, including all stationery and forms, sales orders, contract notes, invoices, delivery documents and accounts were caused to be printed in Australia by and for Pioneer Australia. The trade marks were affixed at various prominent places in the premises where the goods were displayed. A number of these documents, labels and publications were exhibited to the affidavit. It was also sworn that Pioneer Australia had caused substantial advertising to be made in respect of the goods by way of television, radio, newspapers, trade journals, displays, brochures and catalogues. In all of this (save radio only) printed or visual representations of both marks were used. The extent of the advertising was illustrated by a statement that in the twelve months to September 1975 $439,000 was spent on advertising in that way and that in the following ten months to July 1976 some $665,000 was so spent.

[43]

It was argued for Pioneer Japan and Pioneer Australia that the Registrar's decisions, both interim and final, involved a number of fundamental misconceptions and that this had led him into error in his ultimate decision. The first of these points was that the Registrar was wrong in supposing that, until the introduction of the registered user provisions in 1948, the licensing of some other person to use a trade mark was fatal to its validity and that the purpose of the registered user provisions was to authorize such licensing without jeopardizing the mark. This argument thus criticizes the underlying conception involved in the first reason forming part of the interim reasons and in my opinion this criticism is well founded. It is no doubt true that at one time, and in particular after the decision of the House of Lords in Bowden Wire Ltd. v. Bowden Brake Co. Ltd. [1] , it was thought that any licensing of a mark placed its validity in jeopardy or indeed automatically made it incapable of remaining validly on the register. Subsequent cases however have demonstrated that all that that case decided was that if a registered trade mark is licensed it may become invalid if it ceases to show a connexion in the course of trade with the registered proprietor or otherwise becomes deceptive. In the United Kingdom the Trade Marks Act, 1938 introduced for the first time provisions enabling the assignment of trade marks without the goodwill of the business with which the mark was associated, and provisions for registered user agreements. These provisions did not change the law with respect to licensing in so far as it affected the validity of registration of the mark. It is not necessary for present purposes to trace the series of cases which have in substance shown that the decision in the Bowden Wire Case was based upon the fact that the marks had ceased to have any connexion in the course of trade with the registered proprietor and had become deceptive. The present position was stated in "Bostitch" Trade Mark [2] , a decision of Lloyd-Jacob J. In that case the registered proprietor of the mark was a United States company which during and after the war had allowed its British distributor to manufacture to its designs and to apply its registered mark "Bostitch" to the British made goods. There had been no registration of the British company as a registered user under the Act. On an application by the British company to have the mark expunged from the register, it was held that the reputation in the mark had remained with the United States company and that there was, by reason of the use of the registered proprietor's designs and know-how, a sufficient connexion in the course of trade between the British company's goods and the proprietor of the mark, so that the use was not deceptive. Lloyd-Jacob J., speaking of the registered user section in the Trade Marks Act, 1938 said [3] : "There is nothing anywhere in this section to justify the view that an arrangement between a registered proprietor of a trade mark and a party concerned to use such mark requires to be registered, still less that in the absence of registration, its effect upon the validity of the mark, if called in question, will be in any way different." He further pointed out that the existence of a registered user agreement would not nullify whatever effect actual user by a licensee would have had if the validity of the mark were challenged. The question would always be whether a connexion in the course of trade with the registered proprietor had been maintained and whether the mark had become deceptive. This view was followed by Cross J. in British Petroleum Co. Ltd. v. European Petroleum Distributors Ltd. [4] .

[65]

It was argued that Estex Clothing Manufacturers Pty. Ltd. v. Ellis and Goldstein Ltd. [21] decided that a retailer who sold imported goods bearing an Australian registered trade mark did not use the mark, and that therefore a "distributor" did not use a mark which was already on the goods. In my opinion the Estex Case is not authority for that proposition. It is authority for the proposition that the foreign owner of an Australian mark uses it in Australia when he sells goods for delivery abroad to Australian retailers and those retailers import them into Australia for sale and there sell them. It demonstrates that such a situation does not differ from that where he sells the goods for delivery in Australia to the retailer or where he advertises the goods in Australia. It was not necessary in that case to consider whether the retailer also used the mark because the only relevant question was whether the registered proprietor himself had used the mark in Australia. There is no doubt that if the retailer had on the same basis imported goods other than those of the registered proprietor but bearing its mark, he would have used the mark by infringing it. This is established by W.D. & H.O. Wills (Australia) Ltd. v. Rothmans Ltd. [22] (Fullagar J.); [23] (Full Court), where it was held that the only trade in the goods took place in the United States of America, because the importer was a consumer, not a trader. However in its joint judgment the Court observed [24] : "If a purchaser instead of smoking the cigarettes had attempted to resell the packets he would of course have used the trade mark and would have been liable to be sued for infringement under s. 53 of the Trade Marks Act." Thus if Pioneer Australia had done no more than import the goods and sell them by retail it would have used the mark, but in fact it did much more as the evidence referred to above demonstrates. This argument reflects the same misconception as to what constitutes use of a mark as underlies many of the submissions.

[67]

It was argued on behalf of the Registrar that the registration of Pioneer Australia as a registered user of the trade marks would be contrary to s. 74 (4) because "the registration would tend to facilitate trafficking in the trade mark". This expression has not been the subject of any judicial consideration. It was introduced as part of the registered user provisions in 1948 and was copied without alteration from s. 28 (6) of theTrade Marks Act 1938 U.K.. However it was inserted into an Act which gave it a markedly different context from the United Kingdom Act. The latter Act was the origin of the conception of registered users and was the first Act to contain a provision permitting the assignment of trade marks without the goodwill of the business with which they are associated. Under that Act stringent restrictions were imposed upon the right to assign as will be seen from an examination of s. 22. The committee appointed in 1938 to consider what alterations were desirable in the legislation with respect to trade marks, and presided over by Sir George Knowles, regarded the United Kingdom provisions dealing with assignments as "somewhat obscure and difficult to apply". Those provisions contained elaborate procedural safeguards against abuse of the newly conferred right to assign which involved at least significant delay, and the committee recommended against the adoption of the whole of the provisions in Australia. They recommended the provisions which now comprise s. 82 of the Act which provides for certain specific grounds of invalidity for such assignments and limits attacks on assignments to a period of three years after registration. It is easy enough on examining the elaborate provisions of the United Kingdom Act to visualize circumstances in which application to register a person as registered user could be used as a device to avoid the strict requirements with respect to assignment and yet achieve the same practical result. It appears to me that the principal objective of the prohibition on "trafficking" was to prevent the registered user provisions from being misused so as to avoid or evade the requirements with respect to assignment. The idea which is conveyed by the word "trafficking" is probably best stated in what Earl Loreburn said in the Bowden Wire Case [25] , viz.:

At a glance

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Before

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Judgment (77 paragraphs)

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Cases Cited (1)